Canarc Receives Positive Feasibility Study on DP Gold Deposit, Sara Kreek
Property, Suriname; Commercial Production Recommended, Operating Costs
Estimated At Only US$62 Per Oz.
Vancouver, British Columbia, Canada,
August 16, 1999
Bradford J. Cooke, President and C.E.O of Canarc Resource Corp. (CCM-TSE)
is pleased to announce that the Company has received a positive feasibility
study for the DP gold deposit on the Sara Kreek property in east central
Suriname. The study by Ross Glanville & Associates Ltd. recommends
commercial production at an estimated operating cost of only US$62 per oz.
The DP gold deposit is one of several small lode gold prospects discovered
by Canarc on the Sara Kreek property. Canarc owns an 80% net profit
interest in these lode prospects as well as a 80% net profit interest (50%
after payback) in the Sara Kreek placer gold mine through its 80%
shareholding in Sara Kreek Resource Corporation N.V. The Sara Kreek Placer
Gold Mine production rose 36% in 1998, and is on track to jump another 18%
this year, operated by our partner, Suriname Wylap Development Co. Ltd.
The DP prospect was discovered in 1995 and has been systematically trenched
along a 150 m strike length, still open at both ends and at depth.
Mineable ore reserves total 65,000 tonnes grading 7.5 gpt gold, for more
than 16,000 oz. contained gold. Much of the gold is visible free gold
associated with quartz veins.
The deposit can be mined by a shallow open pit measuring 250 m x 100 m x 30
m over an 8� month period at an 8:1 strip ratio. The ore occurs in soft
saprolite (clay altered rock) that requires no drilling or blasting.
Saprolite gold ore is then screened, crushed, milled, and concentrated
using gravity methods to recover more than 85% of the gold in a concentrate
assaying more than 100 oz per ton (over 160 oz per ton in some
At US$275 gold, the mine will generate US$3.5 million in gross revenues on
net capital costs of US$1.05 million ($82 per oz) and total operating costs
of US$0.81 million ($62 per oz) for a net present value of US$1.474
million, generating a 150% internal rate of return on capital invested.
Even at US$225 gold, "the project is still economically viable" according
to Ross Glanville & Associates. At that gold price, two-thirds of all
South African gold production and half of all North American gold mines
will be unprofitable on a cash cost basis. If total costs are actually
considered, an even greater number of mines will be losing money.
The DP mine, with total operating costs of only US$62 per oz, will be one
of the lowest cost gold mines in the world. Alternatively, Canarc can
reduce the capital costs significantly by contracting out the mining and
operating costs would still be less than US$100 per oz.
The DP mine will be environmentally sound as none of the ore, waste or
processed products are in any way toxic and no chemicals of any sort are to
be used. This is in contrast to the current practices of illegal small
miners, who dump mercury into the creeks, or large conventional miners, who
often utilize cyanide in gold ore processing. The total area of surface
disturbance will be less than 0.1 sq km.
The DP gold deposit economics can improve in at least three different ways:
- the price of gold could rise to say, US$300 per oz. in which case the
net present value jumps 20% to US$1.763 million.
- the deposit could easily be significantly larger as it is still open
along strike and at depth. In fact, the DP deposit is just one of several
gold prospects found along a 7 km long shear zone that has returned strong
geochemical gold anomalies over its entire length. For example, the EB
prospect only 2 km away previously returned trench and drill hole interse-
ctions such as 13.6 gpt over 10.0 m., 5.0 gpt over 9.1 and 7.0 gpt over
- the deposit could easily be significantly higher grade as the 90 kg
metallurgical test sample returned bulk grades of up to 25 gpt and grab
sampling by Glanville returned individual samples grading up to 1076 gpt
(31.38 oz./ton) and 1853 gpt (54.04 oz./ton).
Stated Bradford Cooke, "The positive feasibility study certainly confirms
management's opinion that the high grade gold potential of the Sara Kreek
property has barely been uncovered. We envisage producing gold eventually
from several small high grade open pits that could eventually coalesce into
one large gold mining operation with plus million oz. potential."
Canarc now plans to assess the alternatives for project financing,
including debt financing or a joint venture. Discussions with the Suriname
government and our Suriname partner will also be initiated regarding the
possible exploitation, export and taxation of the gold.
Canarc Resource Corp. is a growth-oriented, international gold exploration
and mining company. Production increased 36% last year at the Company's
Sara Kreek (80%) mine. Reserves and resources now total 2 million oz. at
the New Polaris (100%) and Bellavista (18% after payback) 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 and "CRCUF" on the OTC Bulletin Board.
For further information contact Robert Carriere, Investor Relations at (604) 685-9700 or visit our website: www.canarc.net.
ON BEHALF OF THE BOARD OF DIRECTORS
CANARC RESOURCE CORP.
Bradford J. Cooke
President and CEO
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