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

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News Release

September 14, 2006 - Vancouver, Canada - From time to time the B.C. Securities Commission (“BCSC”) selects listed companies like Canarc Resource Corp. for a technical disclosure review.  As a result of a recent review by the B.C. Securities Commission, Canarc is issuing this news release to clarify past disclosures.

New Polaris Project

NI 43-101 requires listed companies to file updated technical reports to support the disclosures in their annual information forms (“AIF”).  Canarc last filed a technical report on its New Polaris project, British Columbia in 2002.  However, from 2002 to 2005, the Company completed initial infill drilling programs and metallurgical tests at New Polaris without filing an updated technical report. Canarc has therefore been placed on the defaulting issuers list and it will remain on the list until it files an updated technical report.  Management is preparing an updated, non-independent NI 43-101 technical report and revised AIF covering the work carried out from 2002 to 2005, to be filed as soon as reasonably possible, likely mid-October 2006.  In addition, an independent NI 43-101 technical report covering the 2006 work program had already been commissioned for completion by year-end.

Since 2002, Canarc has made disclosures in certain news releases, shareholder updates, corporate presentations, website information, AIF’s and MDA’s regarding a 1.3 million ounce gold resource estimate for New Polaris. These disclosures were not in compliance with NI 43-101 because the estimate did not meet the definition of a historic resource, it was not disclosed according to NI 43-101 standards and it was not supported by a technical report.  Canarc therefore retracts its previous statements regarding this resource estimate and restates the previous historic estimates that comply with the NI 43-101 definition of historic resources at the end of this news release.

NI 43-101 permits disclosure of economic analysis only on current resources, not conceptual targets or historic estimates.  Since 2003, Canarc has made disclosures in its corporate presentations and news releases about a “Target Economic Model” stating the company targets for reserves, production rate, capital costs, operating costs, gold price, cash flows and mine life.  However, Canarc did not have a current resource or reserve at New Polaris on which to base such statements so the Company retracts its previous statements regarding a “Target Economic Model”.

In past news releases, references were made to the company’s intent to enter into future mine planning, economic evaluation, project permitting and a feasibility study. In addition, past e-mails, website information, news releases and corporate presentations referred to the New Polaris project as “potentially western Canada’s next high grade gold mine”.  However, as no current resource has yet been identified on the New Polaris property on which to base such statements, Canarc wishes to clarify these that each step is contingent on the successful completion of the prior step, and there is no certainty that Canarc will enter into mine planning, economic evaluation, project permitting or a feasibility study nor that New Polaris will become western Canada’s next high grade gold mine.

Since 2003, Canarc has made disclosures in certain news releases, shareholder updates, corporate presentations, and website information stating that Canarc’s goal is to delineate a minimum 550,000 to 650,000 oz, NI 43-101 compliant resource estimate.  For greater clarity, this 550,000 to 650,000 oz exploration target should have been expressed as a range of 1.2 to 1.6 million tons grading 0.4 to 0.5 oz per ton. The potential tonnages and grades are conceptual in nature, they are based on previous drill results that defined the approximate length, thickness, depth and grade of the portion of the historic resource to be infill drilled in the 2006 work program, there has been insufficient exploration to define a current resource as yet and Canarc cautions that there is a risk further exploration will not result in the delineation of a current resource.

The Canarc website has carried links to certain third party reports. The links that contained information not compliant with NI 43-101 have been removed from the website.

Benzdorp Project

Since 2003, Canarc has carried out exploration work including diamond drilling and initial metallurgical tests on the Benzdorp project in Suriname.  However, the Company has not filed a technical report on Benzdorp so Canarc has been placed on the defaulting issuers list and it will remain there until an NI 43-101 report is filed.  Management is preparing an updated, non-independent NI 43-101 technical report and revised AIF covering the work carried out from 2003 to 2005, to be filed as soon as reasonably possible, likely mid-October 2006. In addition, an independent NI 43-101 technical report reviewing the past and current exploration results has been commissioned for completion by year-end.

NI 43-101 permits disclosure of mineral potential only expressed as ranges of quantity and grade and accompanied by certain information and cautionary statements.  Since 2003, Canarc has made disclosures in certain news releases, shareholder updates, corporate presentations, website information, AIF’s and MDA’s regarding the exploration potential of the JQA prospect on the Benzdorp project without including certain information and cautionary statements as required by NI 43-101.  Canarc therefore retracts its previous statements regarding exploration potential and conceptual targets as there is no technical report filed to support such statements.

Since 2003, Canarc has made disclosures in its corporate presentations about a “Target Economic Model” stating the company targets for reserves, production rate, capital costs, operating costs, gold price, cash flows and mine life.  In addition, past news releases made references to the economic mine model for JQA as having some similarities to certain porphyry gold copper mines, including the saprolite mining economics of Brasilia (Paracatu) and Sao Francisco and the bedrock mining economics of Baja de Alumbrera and Chapada.  However, Canarc did not have a current resource or reserve at Benzdorp on which to base such statements so the Company retracts its previous statements regarding the potential economics of JQA.

Certain news releases in early 2004 referred to Canarc’s intent to complete an initial resource estimate for JQA by the end of the second quarter 2004.  However, the Company did not provide timely updates on the status or delays of this initial resource estimate.  The decision to commission an estimate will be made after the Company receives the independent NI 43-101 technical report reviewing the past and current exploration results for Benzdorp.

Since 2003, Canarc has made disclosures in certain news releases, shareholder updates, corporate presentations, and website information referring to the porphyry-type gold-copper mineralization at JQA, including a geological comparison to the Boddington porphyry-type gold-copper deposit Canarc’s geological comparison of JQA to Boddington was based on comparable geology, mineralization, alteration and grades. However, the Company did not intend to imply that early stage exploration results from JQA were sufficient to draw a comparison in size and grade between the JQA and the Boddington deposit.

In certain news releases in 2003, reference was made to the similarity of gold grades in drill core from JQA to the gold grade of other large gold-copper deposits without stating other parameters for comparison such as copper grade.  Most of these deposits contain a large part of their value as copper. At the time, Canarc did not have any copper assays, only gold assays and drill core observations. Canarc retracts those statements as JQA did not have evidence of comparable grades and early stage drill results should not be compared with defined reserves and resources.

In past news releases, references were made to the possibility that poor core recoveries in the saprolite at JQA were causing the gold grades to be underestimated.  This supposition was based on management’s past experience drilling gold mineralization in saprolite. Canarc retracts these statements as no statistical study has been completed to prove or disprove the possibility that the lower core recoveries were underestimating the gold grade.

Bellavista Project

In 2003, Glencairn Gold Corp., the owner/operator of the Bellavista gold mine project in Costa Rica, released their mineral reserves and feasibility study; in 2004 they financed the construction of the mine and at the end of 2005 Glencairn declared commercial production. Canarc currently holds a 5.5% net profit interest (royalty) in Bellavista that rises to 20.3% after the payback periods.  Since 2003, Canarc has quoted Glencairn’s various reserve statements and economic projections for Bellavista.  Given the small royalty nature of Canarc’s interest in Bellavista, the fact that Canarc has never spent any funds on Bellavista since acquiring the royalty, that Canarc only re-iterates the project information published by Glencairn and the fact that Glencairn has filed technical reports pertaining to Bellavista, Canarc has treated Bellavista as a non-material asset and accordingly, has not filed its own technical report. Glencairn reports reserves for the Bellavista Mine as of December 31, 2005 as 8.41 million tonnes grading 1.46 gpt gold (proven) and 1.81 million tonnes grading 1.81 gpt gold (probable).  For more detailed information on the Bellavista project, readers are referred to Glencairn’s website: www.glencairngold.com or www.sedar.com.  

New Polaris Historic Resource  Estimates

The following historic estimates comply with the current NI 43-101 definition of historic resources and are restated here for clarity. They pre-date, are different from, and form part of the basis for the non-compliant 1.3 million ounce resource estimate referred to in previous news releases. Beacon Hill (1988) carried out an estimate of probable and possible resources within the old mine workings based on historic exploration drilling and underground sampling and production records.  Giroux (1995) carried out an estimate of probable and possible resources based on diamond drilling by Canarc and its predecessors below and beyond of the old mine workings.  These two estimates cover different parts of the New Polaris gold deposit with no overlap and therefore are additive.  Canarc believes these historic resource estimates are reliable because they are based on extensive historic data and they were independently estimated.  Canarc believes the historic resource is relevant because the current infill drilling program is targeting a portion of the historic resource for the proposed new independent technical report.  However, as Canarc has not verified the classification of these resources, it is not treating them as current resources and they should not be relied upon. The probable and possible categories in the following table correspond roughly to the indicated and inferred categories according to NI 43-101 standards.

New Polaris Historic Resource Estimates

 

 

 

 

 

 

 

Probable Resources

Possible Resources

Zone

In-Situ

Diluted

In-Situ

Diluted

 

Tons

Grade

Tons

Grade

Tons

Grade

Tons

Grade

 

(SDT)

(oz/SDT)

(SDT)

(oz/SDT)

(SDT)

(oz/SDT)

(SDT)

(oz/SDT)

 

 

 

 

 

 

 

 

 

Beacon Hill (1988)

 

 

 

 

 

 

 

Upper

 

 

 

 

 

 

 

 

Levs.

53,440

0.37

67,800

0.29

41,560

0.35

53,450

0.27

Lower

 

 

 

 

 

 

 

 

Levs

50,170

0.50

64,410

0.39

45,000

0.48

58,760

0.37

 

 

 

 

 

 

 

 

 

Subtotal

103,610

0.43

132,210

0.33

85,560

0.42

112,210

0.32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Giroux (1995)

 

 

 

 

 

 

 

Y Zone

210,000

0.461

262,500

0.369

987,000

0.469

1,124,000

0.375

AB Zone

78,000

0.403

89,700

0.350

508,000

0.387

584,000

0.337

C Zone

85,700

0.426

98,500

0.370

595,000

0.425

684,000

0.370

 

 

 

 

 

 

 

 

 

Subtotal

373,000

0.441

450,700

0.365

2,090,000

0.467

2,502,000

0.365

 

Totals

476,610

0.44

582,910

0.36

2,175,560

0.44

2,614,210

0.36

Note:  Giroux calculated an in situ resource, not a diluted resource so Canarc calculated the diluted Giroux resource for comparison purposes using the same 15% dilution factor used by Beacon Hill.

Benzdorp Mineral Potential

Bradford Cooke, MSc., P.Geo., is the Qualified Person who reviewed the technical information contained in this news release.

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 asset is its 100% interest in the New Polaris gold mine project, British Columbia.  Shareholders include Barrick Gold Corp. and Kinross Gold Corp.

CANARC RESOURCE CORP.
Per

/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.

CAUTIONARY DISCLAIMER – FORWARD LOOKING STATEMENTS

Certain statements contained herein regarding the Company and its operations constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995.  All statements that are not historical facts, including without limitation statements regarding future estimates, plans, objectives, assumptions or expectations of future performance, are “forward-looking statements”.  We caution you that such “forward looking statements” involve known and unknown risks and uncertainties that could cause actual results and future events to differ materially from those anticipated in such statements.  Such risks and uncertainties include fluctuations in precious metal prices, unpredictable results of exploration activities, uncertainties inherent in the estimation of mineral reserves and resources, fluctuations in the costs of goods and services, problems associated with exploration and mining operations, changes in legal, social or political conditions in the jurisdictions where the Company operates, lack of appropriate funding and other risk factors, as discussed in the Company’s filings with Canadian and American Securities regulatory agencies.  The Company expressly disclaims any obligation to update any forward-looking statements.  We seek safe harbour.

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