Bradford Cooke, President and CEO of Canarc Resource Corp. (“Canarc”), provides shareholders with the following review of the Third Quarter and the outlook for the Fourth Quarter of fiscal 2003. During the past quarter, Canarc focused on advancing its two main gold projects, Benzdorp and New Polaris.
At Benzdorp, a significant new gold discovery was announced on the basis of positive results from the Phase 1 drilling program. At New Polaris, good progress was made, albeit slowly, on resource modelling, metallurgical optimization and conceptual engineering for a scoping study. Canarc shares gained CA$ 0.40 (82 %) during the quarter to close at CA$ 0.99 in response to the Benzdorp discovery and the US $38 rise (11 %) in the gold price to US $384 during the same period.
Subsequent to the end of the third quarter, Canarc closed a CA $ 3 million private placement financing. The proceeds will be used to carry out a Phase 2 drill program of approximately 100 holes at Benzdorp as well as a 3 hole deep drill program at New Polaris.
The Phase 1 drilling program commenced in late June and the first 8 holes in the first prospect area, JQA, each intersected porphyry gold mineralization from top to bottom, averaging between 0.5 gpt and 1.0 gpt gold over an area of 250 m by 250 m, open in all directions. Canarc has now completed 28 drill holes over an area 750 m long by 1,150 m wide and porphyry gold mineralization has been intersected in most of the drill holes.
While the gold grades appear low, they actually rank in the top 25% of porphyry gold-copper mines worldwide. The reported gold grades may also understate the actual gold grades, given that the Phase 1 drill program has only averaged 75% core recoveries (lost core likely means lost gold also).
The surface area of the JQA prospect tested by the Phase 1 drilling has the potential for 450 million tonnes (15 million oz) to only 250 m in depth. One key to profitable operations for porphyry mines lies in their economies of scale. Porphyry gold deposits typically contain from 200 million tonnes up to 1 billion tonnes of ore reserves and so the mines range in size from 20,000 up to 100,000 tonnes per day.
Another key to the mine economics at Benzdorp could be saprolite ore, which forms a 50 to 100 m thick surface blanket over the bedrock mineralization due to alteration from rainwater over the millennia. Saprolite is a free-digging, soft, rusty, clay ore that can often be mined without drilling, blasting or crushing and processed by simple gravity methods without flotation or cyanidation.
Clearly Benzdorp is still in the early stages of an exploration discovery. However, both the size and economics of the JQA target give it substantial upside potential and there remain several other prospects yet to drill.
Work continued on a scoping study of this 1.3 million oz. (Not NI43-101 Compliant) high grade gold deposit, with emphasis on detailed modelling of an initial 650,000 oz. resource suitable for the first 10 year mine plan. Metallurgical testing continued to optimize the gold recoveries (up to 97%) into a saleable sulphide concentrate grading up to 125 gpt gold.
Preliminary engineering and costing is being completed for a 600 tpd , high grade underground mine feeding a simple crush-grind-float process plant with seasonal shipping of the cons by barge and train to autoclave facilities in Nevada. The scoping study should be completed in the fourth quarter.
In the course of resource modelling, a compelling deep footwall “C vein” drill target was identified below the old mine workings. Canarc plans to test this target as well as other deep vein prospects with a three hole drill program in the fourth quarter.
The outlook in the Fourth Quarter for both gold in general and Canarc in particular is bright. Gold appears ready to test the US $390.00 per oz. ceiling once again and Canarc plans to complete assaying of drill core from the Phase 1 drill program at Benzdorp and launch new drill programs on both the Benzdorp and New Polaris properties.
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 1.3 million oz. (Not NI43-101 Compliant) New Polaris gold deposit located in northwestern British Columbia and its option on the huge Benzdorp gold property in Suriname. Major shareholders include Barrick Gold Corp. and Kinross Gold Corp.