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

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Shareholder Update: Review of 2006 and Outlook for 2007


Bradford Cooke, Chairman and CEO of Canarc Resource Corp. (
trading symbols CCM: TSX, CRCUF: OTC-BB and CAN: DB-Frankfurt) provides shareholders with the following review of Canarc’s accomplishments in 2006 and its plans for 2007.

2006 In Review

Gold posted another solid year of gains in 2006, closing at US$638 per oz, up 23% on the year, and peaking at US$722 per oz in April. Given the strong fundamentals (rising investment demand and tightening mine supply) and the weakening US dollar last year, gold remained in a firm uptrend typical of the five year-old secular bull market.

Junior gold stocks followed gold higher in Q1, 2006, then fell with the now familiar late spring sell-off, but they closed generally higher at year-end. Canarc’s share price rose 55% to test the CA $0.90 mark in April and again in November and closed at CA$0.78, up 35% on the year.

Last year, Canarc set out a new, three-pronged growth strategy to more aggressively create shareholder value. The primary goal was the advancement of its core asset, the New Polaris gold project in north-western B.C. through a major infill drilling program. 

The New Polaris infill drilling program was expanded late last summer and yet was still successfully completed by year-end and only 5% over-budget.  Approximately CA$5.2 million was invested at New Polaris, mainly on drilling 24,394 m (80,033 ft) of core in 69 holes along the C vein system to vertical depths of 577 m (1890 ft) below surface, on a major fuel purchase and mobilization to the mine-site and on related environmental, metallurgical and engineering studies.

Drill results established excellent continuity of the high grade gold mineralization, including the discovery of the first-ever occurrence of visible gold at New Polaris along the deep south-west margin of the drill grid, and the intersection of the widest veins yet at New Polaris along the deep north-east edge of the drill grid. In fact, six of the best gold intercepts ever drilled at New Polaris were completed in 2006, as shown in the attached table.

Canarc also accomplished its second goal for 2006 of completing more exploration work at the Benzdorp gold project in Suriname in order to attract financing or a partner. The Benzdorp project did experience some delays, first in obtaining Suriname government permits to complete the airborne geophysical survey and second, in receiving the sample assays from the assay lab for the soil geochemical program.  However, all field work and assaying at Benzdorp were successfully completed by year-end and Canarc now expects to report on the results within a few weeks.

The third goal of acquiring at least one new property is still a work in progress. Management reviewed several attractive gold projects in Mexico and elsewhere last year and completed negotiations on the first new project acquisition, which is anticipated to close shortly.

Hole

From

Length

Gold

Length

Gold

(no.)

(m)

(m)

(gpt)

(ft)

(opt)

 

 

 

 

 

 

06-300SW-8

303.30

35.0

8.9

114.8

0.26

Incl.

307.50

1.5

35.3

4.9

1.03

 

 

 

 

 

 

06-1615E-8

346.40

6.2

44.7

20.3

1.30

Incl.

350.80

1.0

108.0

3.3

3.18

 

 

 

 

 

 

06-1768E-1A

225.80

16.5

23.1

54.1

0.67

Incl.

237.00

2.3

48.6

7.5

1.42

 

 

 

 

 

 

06-1615E-9

439.50

12.4

16.1

40.7

0.47

Incl.

451.00

0.9

118.5

3.0

3.45

 

 

 

 

 

 

06-270SW-3

239.50

24.5

7.4

80.4

0.22

Incl.

242.15

0.85

30.4

2.8

0.88

 

 

 

 

 

 

061676E-5B

257.20

14.0

10.9

45.9

0.32

Incl.

260.60

0.9

44.7

3.0

1.30

 

 

 

 

 

 

True widths range from 60% to 90% of core lengths.

In addition to the New Polaris project, Canarc saw significant progress on its three other gold properties, as well as accomplishing several corporate objectives. Some of the highlights in 2006 were as follows:

January

Jack McClintock, ex-global exploration manager for BHP Billiton, appointed President

February

Bellavista gold mine in Costa Rica reached commercial production

March

CA$3.5 million financing closed for New Polaris

April

Affiliate Aztec Metals raised CA$1.1 million in financing for poly-metallic projects

May

Sara Kreek gold project transferred for US$400,000 plus US$50,000 per year royalty

June

Initial drill results from New Polaris very positive, including 22.4 gpt over 4.8 m

July

Continued solid drill results from New Polaris, including 15.3 gpt over 5.5 m

August

Large airborne geophysical survey completed at Benzdorp, Suriname

September

First ever occurrence of visible gold at New Polaris returned 44.7 gpt over 6.2 m

October

CA$4.0 million financing closed for New Polaris and Benzdorp

November

Affiliate Aztec Metals acquired three polymetallic exploration projects in Mexico

December

Extensive soil geochemical survey completed at Benzdorp

Outlook for 2007

This year, Canarc plans to pick up the pace of project acquisitions, exploration and development even further as management pursues its three-pronged growth strategy to create a diversified mid-tier gold producer.  With the secular bull market for gold still in place, Canarc’s new focus should help to create substantial value for shareholders in 2007.

An updated, NI 43-101 resource estimate for the New Polaris gold project is scheduled for release in January and the conceptual mine plan and initial economic assessment should be completed in Q1, 2007.  Subject to positive results, Canarc plans a major feasibility program of environmental studies, dewatering the old mine workings, deepening the mine shaft, developing a new drift from the shaft bottom over to the C vein, trial mining of a bulk sample and further infill drilling.

The objectives of this work program will be to establish proven and probable reserves around the new drift, estimate future mining costs, complete metallurgical testing to finalize the process flow-sheet and expand the measured and indicated resources. This would allow Canarc to pursue a feasibility study, government permitting and project financing in 2008 in anticipation of mine construction in 2009.

In addition to the New Polaris gold mine project, Canarc plans to pursue a financing or partner for the Benzdorp gold exploration project in 2007 in order to advance the project through the next phase of drilling.  Other substantial property transactions are currently under consideration for 2007, with a view to accelerating Canarc’s status as a diversified gold explorer, developer and producer.

At year-end, Canarc held about CA$4.2 million in cash and marketable securities, of which approximately CA$1.8 million is flow-through funds reserved for New Polaris.

James Moors, B.Sc., P.Geo, Vice President, Exploration, is the Qualified Person supervising the 2006 drill program on the New Polaris property.  He has instituted a Quality Control sampling program of blanks, duplicates and standards to ensure the integrity of all assay results.  All drill core is split by Canarc personnel at the New Polaris camp, and then flown to Vancouver for assay by ALS Chemex.  The core samples are dried, crushed, split and a 30-gram sub-sample is taken for analysis.  Gold content is determined by fire assay with a gravimetric finish on samples containing greater than 1 gpt Au, and other trace elements are analyzed by atomic absorption.  ALS Chemex also uses its own standards for quality control checks.

Canarc Resource Corp. is a growth-oriented, gold resource company listed on the TSX (symbol CCM), the OTC-BB (symbol CRCUF) and the DB-Frankfurt (symbol CAN).  The Company is focused on advancing its core asset, the New Polaris gold mine project, towards mine development and on acquiring, exploring and developing other attractive gold projects.

CANARC RESOURCE CORP.
Per:

/s/ Bradford J. Cooke

Bradford J. Cooke
Chairman and C.E.O.

For more information, please contact Gregg Wilson, 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 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.

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