First Quarter Review 2003

Bradford Cooke, President and CEO of Canarc Resource Corp. provides shareholders with this review of the First Quarter, 2003 and the outlook for the Second Quarter.

Significant new developments were achieved in several areas over the past three months;

1) New metallurgical test work on a mini-bulk sample of high-grade gold ore from the New Polaris mine site in northwestern British Columbia significantly increased the anticipated gold recoveries for the project. Previous metallurgical studies recovered up to 90% of the gold in New Polaris ores but new flotation and leaching tests indicate up to 98.7% of the gold can now be recovered through standard procedures.
2) Recent trench results from the JQA prospect area on the Benzdorp property in Suriname confirmed the discovery of a broad zone of porphyry-style gold mineralization, open in all directions and showing excellent gold recoveries from saprolite ore. Mineralization averaging almost 1 gpt has now been found over widths up to 550m along a length of 1500m.
3) Canarc also closed a CA $650,000 private placement financing of 1.25 million units at CA $0.52 per unit, most of which was taken up by existing shareholders. Working capital exceeded CA $1 million at March 31, 2003.

Both the gold price and Canarc’s share price were quite volatile during the quarter. Gold broke above US $330 per oz, ran to US $390 on Iraq war fears and fell as low as US $322 on the early fall of the Hussein regime. The slow US economy and ever-rising budget and trade deficits should continue to weigh heavily on the US dollar and therefore positive for the price of gold. Canarc’s share price rose from CA $0.35 per share to a high of CA $0.79 per share before settling back in the CA $0.40 to $0.50 range.

The outlook for the second quarter is bright as Canarc plans a busy three months advancing the New Polaris and Benzdorp projects:

1) Additional metallurgical work on New Polaris ores will assess the gold recoveries by bio leaching and its potential to substantially reduce both capital and operating costs for the project. The resource model is being optimized to allow for mine planning and to bring it onto compliance with Policy 43-101. A scoping study will then be completed to re-assess the mine plan, process options and project economies. Management should then be in a position to decide how to proceed with a final drilling permitting and feasibility program for the New Polaris project.
2) An aggressive Phase 1 drilling program is planned to get underway shortly on the Benzdorp property in order to test the bulk tonnage potential of the JQA prospect area. Additional metallurgical test work will be conducted on saprolite and bedrock drill core to confirm low cost process options. Management can then decide how aggressive the Phase 2 drilling program should be.

Shareholders can look forward to a number of material accomplishments over the next three months.


Bradford J. Cooke
President and CEO




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