Presidents Letter to Shareholders
April 23, 2002
Bradford Cooke, President and CEO of Canarc Resource Corp. is pleased
to provide shareholders with this review of the year 2001 and our outlook
In summary, the past year was one of consolidation and retrenchment in
the gold mining industry. Large gold companies like Newmont, Franco Nevada
and Normandy merged and some small gold companies folded. Canarc grew
smaller as all staff were laid off but we have survived and are stronger
The gold price remained close to its 20 year low, although it has moved
up 6% in the last three months, part of a solid 12% uptrend in the past
year. Gold stocks have also shown renewed life recently - most major
gold stocks are up 30 to 60% from their year lows and selected junior
resource stocks have more than doubled.
Canarc is now well positioned to reap the benefits of better gold and
resource markets in 2002. Our main gold property assets are all intact,
we have no significant debt, our burn rate is low and the company holds
over $800,000 in marketable securities. Management also hopes to finally
resolve the Benzdorp property situation in Suriname early this year so
Canarc can get back to work developing this large gold prospect.
Benzdorp, Suriname: In 2001, the new government of Suriname slowly but
surely took measures to reactivate the gold mining sector of their economy.
Early in the year, a new Board of Directors was appointed to Grassalco,
the state mining company and Canarc’s partner at Benzdorp. By year-end,
the government concluded that different state gold mining companies should
be formed to assume Grassalco’s gold property portfolio.
Grassalco’s operating agreement with Cambior was amended to reduce
the government’s participating interest in Gros Rosebel to 5%, reduce
the tax rate to 30% and provide cheap hydroelectric power so that Cambior
can commence construction of the Gros Rosebel mine in 2002.
Canarc anticipates that the new state gold mining company will also be
Canarc’s new partner for the Benzdorp project. Amendments to the
existing Benzdorp operating agreement are needed in order to allow Canarc
to get back to work at Benzdorp in 2002.
Last but not least, the government finally read into Parliament the foreign
investment legislation that had been pending for 10 years. This is indeed
good news for both foreign investors as well as the Republic of Suriname.
Sara Kreek, Suriname: The Sara Kreek placer mine continues to operate
at break even under current gold prices. The proposed new DP lode mine
still requires financing or a partner in order to proceed.
Bellavista, Costa Rica: Canarc was approached by Wheaton River last year
to reduce the annual pre-production cash payments they pay us. We elected
to accept part of this year’s payment and all of next year’s
payment in shares of Wheaton River at $0.50 per share. Canarc now holds
over 500,000 Wheaton River shares for short-term investment purposes.
The shares are up 100% to $1.00 at this time.
Clara, Mexico: Canarc’s 65% owned subsidiary, Minera Aztec Silver
Corporation, holds an option to earn a 100% interest in the Clara high
sulphidation gold - silver prospect in Jalisco, Mexico. Aztec intends
to seek additional financing or a joint venture partner in order to drill
this large attractive target.
GNC, British Columbia: Homestake did not carry out any exploration work
in 2001 on our 33% owned GNC claims adjacent to their Eskay Creek mine
in northwestern B.C.
New Polaris, British Columbia: The New Polaris project has been on care
and maintenance since 1997 pending higher gold prices. Our neighbour,
Redfern Resources, completed a feasibility study on their Tulsequah Chief
copper-zinc-gold-silver orebody in 1998 and has been seeking permitting
to proceed with mine and road development since that time.
Most recently, The B.C. Supreme Court came down with a decision setting
aside Redfern’s requirement for a new Environmental Review. Instead,
the Court directed the new B.C. government to deal directly with native
concerns about development and Redfern’s application for their project
permits. This should accelerate Redfern’s government approval, which
would also be very good news for Canarc’s New Polaris project.
Management’s survival strategy for 2001 has worked. One year ago,
we predicted that gold would bottom and Canarc should be well positioned
to participate in the next rally. It would appear that a new gold uptrend
is now underway.
At Canarc, we remain focused on developing our gold projects as the principal
means of creating shareholder value. I would like to thank all of our
shareholders for their support over the past four difficult years. As
always, you are invited to contact us for updates, comments or questions.
ON BEHALF OF THE BOARD OF DIRECTORS
CANARC RESOURCE CORP.
“Bradford J. Cooke”
Bradford J. Cooke
President and CEO