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Trading Symbol  TSE:CCM

Canarc Initiates Arbitration with Grassalco; Seeks Compensation for and Resolution of Grassalco's Defaults Under the Benzdorp Property Agreement, Suriname

Vancouver, British Columbia, Canada,
March 18, 1999

Canarc Resource Corp. announces that it has filed for arbitration of a dispute with its Surinamese partner, Grassalco, regarding compensation for, and resolution of, various Grassalco defaults under the Canarc-Grassalco agreement governing the Benzdorp property in the Republic of Suriname. Pursuant to the agreement, the arbitration has been filed under the UNCITRAL (United Nations Commission on International Trade Law) rules with the London Court of Arbitration in London, England.

Canarc is seeking to have Grassalco honour its obligations to incorporate a Suriname corporation, issue shares of the corporation to Canarc and transfer its mineral titles for the Benzdorp concessions to that corporation. Grassalco was to have met these obligations over 2 years ago and although Canarc repeatedly asked Grassalco to meet its commitments and Grassalco constantly promised to do so, it has not done so.

As a result of their breaches of the agreement, Grassalco has caused significant damages to Canarc, including the withdrawal of Placer Dome last August from an option agreement with Canarc to explore the Benzdorp property and if successful, construct and operate a large gold mine at Benzdorp. Canarc is therefore seeking compensation from Grassalco for millions of dollars in cash and other forms of compensation.

Canarc Resource Corp. is a growth-oriented, international gold exploration and mining company. Production increased 36% last year to 9500 oz. at the Company's Sara Kreek (80%) mine . Reserves and resources now total 2 million oz. at the New Polaris (100%) and Bellavista (18%) projects. Our large exploration portfolio includes joint ventures with Homestake and Noranda. Major shareholders include Barrick Gold and Echo Bay Mines. The Company's common shares trade under the symbol "CCM" on the Toronto Stock Exchange.

For further information contact Robert Carriere, Investor Relations at (604) 685-9700 or visit our website:


Bradford J. Cooke

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