Shareholder Update - First Quarter Review 2007
May 1, 2007
Bradford Cooke, Chairman and CEO of Canarc Resource Corp. (TSX: CCM, OTC-BB: CRCUF, DBFrankfurt: CAN) provides the following review of the First Quarter 2007 and the outlook for the Second Quarter.
First Quarter Review
In Q1 2007, Canarc announced positive year-end results from both the New Polaris gold mine and Benzdorp gold exploration projects. The Company closed its first new gold property acquisitions in Mexico, the Providencia and Los Arrastres properties. Canarc also appointed two seasoned mining professionals to its senior management team.
Mr. Bruce Bried, P. Eng., the new President and Chief Operating Officer, brings to Canarc a wealth of experience in the mining business. He was most recently the Vice President, Mining for both Canarc Resource Corp. and Endeavour Silver Corp., where he oversaw the initial mine engineering of the New Polaris gold project in northwestern B.C., as well as the development and start-up of operations at Endeavour’s Guanacevi silver mines project in Durango, Mexico. Bruce is looking forward to transitioning Canarc from a pure gold explorer to a diversified gold explorer-developer-producer.
Garry Biles, P. Eng., joins Canarc as the new Vice President, Mining and General Manager of the New Polaris Gold Project. Garry was most recently the General Manager of the Bellavista gold mine in Costa Rica for Glencairn Gold, where he supervised the development of Bellavista from the start-up stage through to commercial production in December 2005. Garry’s primary responsibility will be to manage the New Polaris gold mine project from the pre-feasibility stage through feasibility to production if warrented.
At New Polaris, the 2006 infill drilling program was successful in delineating continuous, thick, high grade gold mineralization within the C vein system. The Company released an updated NI 43-101 resource estimate in February 2007 that outlined measured and indicated resources of 519,000 oz gold contained in 1,288,000 tonnes grading 12.5 gpt gold (measured resource of 271,000 tonnes grading 11.89 gpt and indicated resource of 1,017,000 tonnes grading 12.71 gpt) and inferred resources totaling 636,000 oz gold contained in 1,628,000 tonnes grading 12.2 gpt gold, using a 6 gpt gold cutoff grade, still open for expansion in other veins and at depth.
Mine engineering and dewatering of the old underground workings got underway in Q1, 2007 and the project has now moved into the pre-feasibility phase.
At Benzdorp, recent sampling of a newly discovered quartz vein in the MM pit on the property in Suriname assayed 39.7 gpt gold over a 2 m horizontal channel sample and 9.3 gpt gold over a 2 m vertical channel sample. A representative grab sample from the same vein returned 28.8 gpt gold. The MM vein was discovered by local poknokkers, who have excavated a pit 20 m deep, are currently processing the quartz vein and mineralized saprolite through a small hammer mill and are recovering the gold in a sluice box. The MM vein is just one of several new gold discoveries sampled by Canarc in late 2006-early 2007.
A program of additional poknokker pit mapping and sampling, 58 km of geochemical soil sampling, and bulldozer trenching of high priority gold prospect areas got underway in Q1, 2007.
During the 1st Quarter, 2007, Glencairn Gold Corporation, the owner/operator of the Bellavista gold mine in Costa Rica, announced that the mine produced 38,830 oz gold in 2006 at a realized sale price of US$595 per oz and a cash operating cost of US$316 per oz. Proven and probable reserves at year-end were 7.9 million tonnes grading 1.44 gpt and containing 365,500 oz gold.
In addition, Glencairn reports measured and indicated resources of 421,300 oz gold grading 1.5 gpt within 8.7 million tonnes. Canarc currently holds a 5.5% net profit royalty in Bellavista, subject to certain initial deductions by Glencairn.
Last but not least, Canarc’s affiliated company, Aztec Metals Corp., announced it has completed the acquisition of five polymetallic projects in Mexico, including two new projects, Los Pericos and Matehuala, in Q1, 2007. Phase 1 exploration programs are now underway.
Second Quarter Outlook
Canarc’s three-pronged growth strategy focusing on New Polaris, Benzdorp and material new gold acquisitions in Mexico should continue to enhance shareholder value in the 2nd Quarter.
At New Polaris, Canarc plans to complete the conceptual mine plan for and preliminary economic assessment of building a 65,000 oz per year high grade underground gold mine at New Polaris. An Alimak raise climber was reinstalled in the mine shaft and the mine dewatering program now underway should be completed in Q2, 2007.
Subject to positive results, Canarc plans a feasibility program of environmental studies, driving a decline from the bottom of the mine shaft, developing one or more new drifts within the C vein, trial mining of a bulk sample and the shipping and processing of a representative portion for final metallurgical testing to finalize the process flow sheet.
At Benzdorp, the exploration work program of geochemical soil sampling, poknokker pit mapping and sampling and bulldozer trenching to better define high priority gold prospect areas for diamond drilling will continue in Q2, 2007.
At Providencia, the Phase 1 exploration program of geochemical soil sampling, geological mapping and machine trenching of the Providencia and San Feliz gold prospect areas along strike from the old mines will get underway shortly. The old mine dumps will also be sampled to identify mineralized material of sufficient grade to ship to local plants for custom processing in order to generate short term cash-flow.
A Phase 2 program of diamond drilling the high priority gold targets is planned to commence in the 3rd Quarter, contingent upon receiving positive results from the Phase 1 program.
As of March 31, 2007, Canarc held cash and marketable securities totalling CA $3.0 million. The Company is well financed to fund current work at New Polaris, Benzdorp and Providencia and the evaluation of new acquisition opportunities in Mexico out of working capital.
James Moors, B.Sc., P.Geo, Vice President, Exploration, is the Qualified Person responsible for QA/QC, the exploration programs and geological modelling on the New Polaris and Benzdorp properties. Gary Giroux, MASc., P. Eng., is the Qualified Person who prepared the updated NI 43-101 resource estimate on New Polaris. For sampling and assaying procedures on each project, please refer to the project news releases dated February 1 and 14, 2007 on the Company website or SEDAR. For the production, reserve and resource information regarding the Bellavista Mine, please refer to the news releases of Glencairn Gold Corporation found on their website or SEDAR.
CANARC RESOURCE CORP.
/s/ Bradford J. Cooke
Bradford J. Cooke
Chairman and C.E.O.
For more information, please contact Gregg Wilson at Toll Free: 1-877-684-9700, tel: (604) 685-9700, fax: (604) 685-9744, email: [email protected] 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.