Canarc Resources Corp. TSX-V:CCM - OTC-BB:CRCUF
     
 

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Bradford Cooke, Chairman and CEO of Canarc Resource Corp. (CCM: TSX and CRCUF: OTC-BB), is pleased to provide the following review of 2005 and the outlook for 2006.

2005 in Review

After being range-bound between US$415 and US$455 for much of 2005, the gold price took off in the 4th quarter to close at a 25 year high of US$519 per oz, up 18% on the year. Having primarily tracked the devaluation of the US dollar over the first four years of this bull market, gold finally rose against all major currencies in 2005 due in part to sharply higher investment demand. Gold finally appears to be resuming its role as the currency of last resort in a world of ever-increasing political, social and economic instability.

Junior gold stocks rallied briefly early in the year, then sank into the doldrums of a 6 month correction before rising on a tide of sharply higher trading volumes through year-end. The TSX/S&P Composite Index closed at 11,272 up 14% in 2005, driven largely by rising metal and oil demand and therefore prices.

Similarly, Canarc’s share price also drifted lower for months before moving up sharply in the 4th quarter, and closing at CA$0.58 per share price for a gain of 7% in 2005. The impetus for the recently escalating share price came not only from the rising gold price but also from the numerous high grade gold drill intercepts in the recently completed, 10-hole, in-fill drilling program on the New Polaris property in northwestern B.C.

In 2005, Canarc focused primarily on trying to find a partner for its large Benzdorp gold project in Suriname, and on the additional surface and airborne exploration work needed to upgrade other gold prospects on the property for drilling. The Company also carried out a Phase 2 in-fill drilling program at New Polaris in order to advance this gold asset towards the feasibility and permitting stage.

Due to delays with contractors, we are still awaiting the final results of the surface geochemical and airborne geophysics surveys at Benzdorp but they should be available in the coming weeks. However, the robust drill results from New Polaris were announced in December and planning is now well underway for an aggressive final phase of in-fill drilling in 2006.

Outlook for 2006

With the appointment of Jack McClintock (most recently Global Exploration Manager of BHP-Billiton) as the new President and COO on January 1, Canarc is clearly charting a more aggressive course to creating shareholder value. Management has set in a motion a three-pronged strategy for growth in 2006:

  1. Complete the in-fill drilling needed at New Polaris to define a 600,000 oz, NI 43-101 compliant, measured and indicated resource (part of the 1.3 million oz historic resource, not compliant with NI 43-101 and not to be relied upon), finalize the conceptual mine plan, carry out an initial economic assessment and enter the mine permitting process for a 65,000 oz per year operation, potentially western Canada’s next high grade gold mine.
  2. Complete the exploration work needed at Benzdorp to attract an industry partner or financier so that the project can move forward without draining Canarc’s treasury. Suriname is finally starting to attract other exploration and mining companies and Benzdorp has multiple gold prospects, either high grade or bulk tonnage, that hold significant exploration potential.
  3. Complete at least one substantial new property acquisition to complement the compelling upside potentials of New Polaris and Benzdorp. Management is aggressively pursuing new opportunities for growth in the gold sector.

At year-end Canarc held about CA$3.1 million in cash and marketable securities, thanks in large part to the success of Canarc’s affiliate, Endeavour Silver Corp. Canarc had an the opportunity to sell half its shareholdings in Endeavour last year but still holds about 2% of the outstanding Endeavour shares.

In the same way we were able to create value for Canarc through re-activating Endeavour, management has identified some project opportunities for the re-activation of a dormant Canarc subsidiary, now called Aztec Metals. Aztec is currently pursuing attractive base metal properties with a view to going public and will follow the Endeavour model once it reaches “critical mass”.

Although the metals markets may be due for a correction soon, management is still quite bullish the gold price will seek new highs in 2006. We appreciate the support of our many shareholders, and we can all look forward to a more rewarding year of growth for the Company.

Canarc Resource Corp. is a growth-oriented, gold exploration and mining company listed on the TSX (symbol CCM) and the OTC-BB (symbol CRCUF).  The Company’s principal assets are its 100% interest in the New Polaris gold deposit in British Columbia and its 80% option on the Benzdorp gold property in Suriname.  Major shareholders include Barrick Gold Corp. and Kinross Gold Corp.

On Behalf of the Board of Directors
CANARC RESOURCE CORP.

/s/ Bradford J. Cooke

Bradford J. Cooke
Chairman and C.E.O.

For more information, please contact Gregg Wilson at Toll Free: 1-877-684-9700,  tel: (604) 685-9700, fax: (604) 685-9744, email: invest@canarc.net or visit our website, www.canarc.net.  The TSX Exchange has neither approved nor disapproved the contents of this news release.