Bradford Cooke, Chairman and CEO of Canarc Resource Corp. (CCM: TSX and CRCUF: OTC-BB) provides the following review of the First Quarter 2006 and the outlook for the Second Quarter.
First Quarter Review
In Q1 2006, Canarc set out to strengthen its management team and finance its key projects. I am pleased to say the company was successful on all fronts, and the foundations for more aggressive growth this year are firmly in place.
In January 2006, Canarc announced the appointment of Mr. Jack McClintock, B.Sc., MBA, as its new President and Chief Operating Officer. Bradford Cooke, the previous President and Company founder, assumed the role of Chairman and will continue as the Chief Executive Officer. Mr. McClintock most recently held the position of global Exploration Manager for BHP Billiton, the worldís largest mining company, based in Melbourne, Australia. He brings to Canarc a wealth of experience in the exploration and mining business, both for hands-on project management as well as senior management.
The company released plans for a CA$2.7 million, 60 hole, Phase 3 in-fill drilling program in 2006 at the New Polaris gold property located 60 km south of Atlin in northwest British Columbia. New Polaris is one of the largest undeveloped pure gold deposits in western Canada. Drilling will commence in the 2nd quarter, 2006 and should be completed by the end of the 3rd quarter so that a new resource estimate, conceptual mine plan, initial economic evaluation and mine permit application can be completed by year-end.
To finance the New Polaris project, Canarc raised CA$3.5 million in two private placements of flow-through common shares. Dundee Securities Corporation acted as Canarcís Agent in a brokered private placement of 3,850,000 flow-through common shares at CA$0.82 per share for total proceeds of CA$3,157,000. Canarc also completed a non-brokered private placement to an additional 450,000 flow-through common shares at CA$0.82 per share for additional proceeds of CA$369,000.
Canarc also made progress on its Benzdorp property in Suriname, identifying several new gold prospect areas. Benzdorp is one of the largest historic gold districts in Suriname, with past alluvial mine production estimated at over 1 million ounces gold. In 2005, Canarc completed 33 km of line-cutting and collected 1189 soil samples in the Van Heemstra Kreek area, on the north part of the property. A total of 96 anomalous samples exceeded 0.25 gpt gold, including 10 samples that assayed more than 1.0 gpt gold. Two large new gold prospect areas were outlined, referred to as VHA and VHB. The VHA target is 650 m long by up to 600 m wide, and is possibly related to two separate quartz-sericite schist and quartz vein exposures, one of which assayed over 3 gpt gold in a grab sample. The VHB target is 400 m long by 200 m wide, with peak values up to 1.7 gpt gold.
Glencairn Gold Corporation, the owner/operator of the new Bellavista gold mine in Costa Rica, declared it had reached commercial production. The mine produced 4,257 oz gold in December, 2005, or 85% of the 5,000 oz per month rated capacity. Bellavista is expected to produce 60,000 oz gold per year, at an estimated cash cost of US$ 257 per oz. Canarc holds a royalty interest amounting to 5.6% of net profits during the 1st payback period, rising to 10.4% during the 2nd payback period and 20.2% of net profit thereafter.
Last but not least, Canarcís affiliated company, Aztec Metals Corp., completed a name change, share consolidation, rights offering, shares for debt settlement and CA$1.1 million private placement financing for working capital. Canarc previously held approximately 63% of Minera Aztec and currently owns 2.7 million shares (19.5%) and 0.5 million warrants (17% fully diluted) of Aztec Metals. Aztec Metals is actively evaluating base metal projects with precious metal credits for acquisition, principally in Mexico and Peru.
Second Quarter Outlook
Canarcís three pronged growth strategy focusing on New Polaris, Benzdorp and a material new gold acquisition in 2006 should continue to enhance shareholder value in the Second Quarter.
In Q2 2006, Canarc will commence an expanded 65 hole, 20,000 m, Phase 3 in-fill drilling program at New Polaris.
The airborne geophysical survey over Benzdorp was recently completed and data evaluation will be carried out in Q2 to interpret the geology and structures as they relate to gold mineralization.
New property evaluations are already underway in Mexico and Peru with a view to making at least one material acquisition in Q3 2006.
In addition, management is working on some new developments regarding Canarcís non-core assets including the Sara Kreek project, the Bellavista mine royalty and Aztec Metals.
As of March 31, 2006, Canarc held cash and marketable securities totalling CA $7.2 million, of which CA $3.5 million is reserved for New Polaris. The Company is well financed to fund further work at Benzdorp and the evaluation of acquisition opportunities out of working capital.
On Behalf of the Board of Directors
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 Exchange has neither approved nor disapproved the contents of this news release.