Second Quarter Review, 2001
Vancouver, British Columbia, Canada, July 5, 2001
Bradford Cooke, President and CEO of Canarc Resource Corp. is pleased to provide this review of the Second Quarter and plans for the Third Quarter.
Over the past three months, Canarc slashed its operating costs to a minimum level sustainable under current market conditions, and closed a private placement with major shareholders to provide Canarc with working capital.
The Company welcomed two new Directors to the Board and thanked two retiring Directors for their years of service. Canarc dropped all of the silver properties in Mexico held by its 65% owned subsidiary after our joint venture partner relinquished their interest but the Company also acquired a new, prospective, gold-silver property in Mexico.
Last but not least, management continues to work with the government of Suriname in order to receive the mineral title owed to us on the Benzdorp property. The Sara Kreek placer mine continues to operate near a break-even basis.
· Canarc laid off its geological and support staff, incurring a one-time severance cost but significantly reducing its ongoing operating costs. Technical personnel remain available on a consulting basis.
· The Company closed a CA$450,000 private placement financing to pay off current accounts and provide working capital into 2002. Exercise of the warrants will provide Canarc with up to $600,000 in additional proceeds.
· Mr. Leonard Harris is a metallurgical engineer who held senior management positions with Newmont and directed the development of Newmont’s huge Yanacocha gold mine in Peru. Leonard is currently an active Director of Glamis Gold, Corriente Resources, and several other companies.
· Mr. Stephen Peck is an economist who co-founded the investment firm of Weiss, Peck and Greer and acted as Vice Chairman of the New York Stock Exchange in the early 1970’s. Stephen is currently an active Director of several companies and acts as Chairman of the Board of Trustees for the Mount Sinai Hospital/School of Medicine and Mount Sinai/NYU Health.
· All of the silver properties in Mexico held by Canarc subsidiary, Minera Aztec Silver, were returned to the government after joint venture partner, Far West Mining, relinquished their interest. Although some silver mineralization was intersected in drilling, and several attractive targets remained to be drilled, the depth of overburden, low silver price and high holding costs made it impractical to continue with the project.
· Minera Aztec acquired an attractive, new, high sulfidation, gold-silver prospect in Jalisco, Mexico called the Clara property. Clara is a large, intensively altered, high sulfidation, gold-silver prospect with rock chip assays up to 25 gpt gold and 148 gpt silver that is essentially ready to drill. Canarc is seeking a senior partner to joint venture the drilling and development of this property.
The Company’s focus in the third quarter will be on moving the Benzdorp and Clara projects forward. With the recent activity in the price of gold and gold stocks, it would appear that now is the time to prepare for a better gold market.
CANARC RESOURCE CORP.
Bradford J. Cooke
President and CEO
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