MINESITE.com February 27, 2003
Canarc Offers An Each Way Bet On Projects In British Columbia and Suriname.
Minews is planning a campaign to improve the presentational skills of company directors touring London in an attempt to interest investors in their shares. So few of them seem to appreciate that a shaft of humour now and then keeps listeners on their toes and there is no reason to repeat every word that appears on the slideshow. Most investors can read and most want the concise version, not a long drawn out sermon. As the man said, if you cannot get the message across in 15 minutes, you are wasting your time. In no way is this campaign meant to be patronising, but having heard two chief executives give concise descriptions of their companies in one morning. – John Ryder of Dianor Resources and Bradford Cooke of Canarc Resource Corporation – the message was driven home.
John Ryder is an Irishman so has the ‘gift of the gab’ in addition to a real knowledge of his subject which is diamonds from various source rocks. Minews wrote about his company last week so there is not much to add at this stage , though there should be a swathe of news in the coming weeks. Bradford Cooke is a Canadian and Canarc is his life, or has been for the past fifteen years since he founded it, and he is determined that he and his shareholders will make money out of it. It is listed on the Toronto stock exchange and offers an interesting each way bet as it has two large gold deposits ready for development, one in British Columbia and the other in Suriname, a small producing mine and varying interests in some other projects at different stages of maturity.
Its main asset at this stage is the New Polaris gold project in northwestern British Columbia . Over the past ten years Canarc has spent around C$20 million exploring around what was a high grade underground producing mine and has come up with a resource of 1.3 million ounces of gold which is open in all directions. The plan at that time was to develop the resource further to at least 2 million ounces, but Bre-X put an end to all hopes of rising more exploration funds and the company went into semi-hibernation for a while. Now it has come back to life at a good time in the gold cycle and Brad Cooke is determined to push into production one way or another.
Inherited from past operators at Polaris there are several miles of underground workings and almost 200 holes have been drilled into the deposit, so there is not much that Canarc does not know about it. At a value of , say, C$10 per resource ounce it would be worth the current market capitalisation of Canarc, so the rest of its assets would be in the price for nothing. The problem lies in the metallurgy which has meant that the gold price has to be at least US350/oz before a robust feasibility study can be anticipated. At the moment more work is being done on the metallurgy and this may cut the anticipated capital and operating costs significantly. The alternative would be to go into partnership with another company producing gold from similar ore which might give Canarc access to an autoclaves or Biox circuit.
The other major asset is the Benzdorp gold prospect on a greenstone belt in Suriname , South America. This was originally discovered back in 1997 and it was joint ventured with Placer Dome for a couple of years. The major eventually pulled out for reasons of its won and only now does Canarc have full title. So far the company has spent around C$2 million on exploration and is convinced that it is onto a large gold porphyry system with the potential for several million ounces. ‘It looks like being 1g/t in every direction’, is how Brad Cooke describes it. This is low grade, but the first drill target JQA gives grades from trenching varying from 0.5 to 1.5 g/t and it could extend for a kilometre in each direction. Brad Cooke makes comparisons with the Brasilia mine operated profitably by RioTinto a few hundred miles south in Brazil where money is made out of a resource of 320 million tonnes grading 0.4 g/t.
Also in Suriname, Canarc has an 80 per cent interest in the Sara Kreek gold mine. This is a small open pit operation run by a local partner which produced 10,000 ounces in 2001. At that time it only broke even, but the movement in the gold price since then should have taken it into profit. Canarc also has an 18 per cent carried interest after payback in the 2 million ounce Bellavista gold deposit in Cost Rica where the well publicised Wheaton River is operator. So far a reserve amounting to 550,000 ounces has been proven and this should be brought into production by heap leach in fairly short order. The important thing is that it adds C$118,000 annually to the cash flow from Sara Kreek and this enables Canarc to cover its basic overheads.