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Trading Symbol  TSE:CCM

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. gold.

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 metallurgical tests).

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:

  1. 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.
  2. 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 13.5 m.
  3. 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:


Bradford J. Cooke
President and CEO

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News through this format, please E-Mail us at [email protected].

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