American Gem Corporation announces 12.3 million carat increase in Sapphire Resource - total now stands at 62.9 million carats.

HELENA, Mont.--(BUSINESS WIRE)--March 14, 1995-- American Gem Corporation (TSE and VSE trading symbol "GEM") announced today that testing supervised by the Toronto based consulting firm of Watts, Griffis and McOuat, Ltd., had increased its sapphire resource base by 12.3 million carats. That equates to a 24.5 percent increase in the total sapphire resource defined to date. American Gem's total sapphire resource now stands at 62.9 million carats.

American Gem Corporation Chairman and CEO, Greg Dahl, stated, "These test results are particularly exciting because they are the result of a small amount of infill drilling and trenching. In addition to substantial increases in the resource base, the quality of the resource was also significantly enhanced. Moreover, American Gem Corporation has tested less than 5 percent of its land holdings in Montana."

Gem Mountain, near Philipsburg, Montana continues to be the premiere sapphire resource of American Gem Corporation, with the total resource defined by testing increasing from 35.5 million carats to 47.7 million carats. Furthermore, on Gem Mountain values start at grass roots -- there is no overburden in most areas tested. In addition, testing at Dry Cottonwood Creek uncovered a previously unknown sapphire resource in the upper drainage which appears to have significant potential. American Gem Corporation controls all of the new area which is of interest.

CONTACT: American Gem Corp.

Gregory Dahl

Chairman and CEO

Tel: [phone]

Fax: [phone]