Canarc Updates Preliminary Economics for the New Polaris Gold Mine Project, BC; $1500 Gold Price and $0.71 Exchange Rate Improve NPV to US$333 Million and 56% IRR After Tax __________________________________________________________________________________________
Canarc Updates Preliminary Economics for the New Polaris Gold Mine
Project, BC; $1500 Gold Price and $0.71 Exchange Rate Improve NPV to
US$333 Million and 56% IRR After Tax
__________________________________________________________________________________________
Vancouver, Canada – May 20, 2020 – Canarc Resource Corp. (TSX: CCM, OTC-QB: CRCUF,
Frankfurt: CAN) announces that an update of the gold price and exchange rate within the
range of sensitivities in the 2019 preliminary economic assessment (“PEA”) of the high -
grade New Polaris gold mine project in northwestern British Columbia significantly
improves the anticipated economics of the project.
The 2019 PEA used a base case gold price of US$1300 per oz and a $CDN: $US exchange rate
of 0.77 to generate an after-tax Net Present Value (“NPV”) of US$216 million and an after-tax
Internal Rate of Return (“IRR”) of 38%. At a US$1500 per oz gold price and a 0.71$CAD:
USD exchange rate , the forecasted economics significantly improve to a US$333
million after-tax NPV and a 56% after-tax IRR.
Other benefits of the lower exchange rate include reductions of the cash operating cost
from US$433 per oz gold to US$400 per oz gold, and of the payback period from 2.7
years to 1.9 years. All parameters and conditions of the NI43-101 PEA by Moose Mountain
Technical Services (“Moose Mountain”) dated February 28, 2019 PEA remain unchanged.
Scott Eldridge, Canarc’s CEO, stated: “These updated economic assumptions clearly
demonstrate the potential for our New Polaris gold mine project to become a high-margin, low-
cost gold mine. The 2019 PEA incorporated flotation, bio-oxidation and CIL plant circuits to
produce doré gold bars, a game -changer that offers substantial operational and financial
advantages over prior plans to ship flotation concentrates by barge and truck to offshore
facilities for final processing.”
Summary of New Polaris Operating & Financial Parameters:
• Post-tax internal rate of return improves to 56% from 38%
• Post-tax net present value at 5% improves to US$333 million from US$216 million
• Post-tax project payback improves to 1.9 years from 2.7 years
• Cash operating cost decreases to US$400 per oz gold from US$433 per oz gold
• Mine production of 2.3 million tonnes grading 10.3 grams per tonne over an 8.7-year
mine life
• Mill throughput of 750 tonnes per day with a process recovery of 90.5% to produce a
total of 693,000 oz. gold
• Average annual life of mine production: 80,000 oz. gold
CANARC RESOURCE CORP.
810-625 Howe Street
Vancouver, BC V6C 2T6
T: 604.685.9700
F: 604.6685 -9744
www. canarc.net
CCM: TSX
CRCUF: OTCQ B
Canarc is evaluating the potential to build and operate a 750 tonne per day gold mine at New
Polaris using flotation to produce a high grade gold sulfide concentrate, bio-oxidation to
oxidize the concentrates, and leaching of th e oxidized concentrates to produce 80,000
ounces of gold per year in doré bars onsite.
On a pre-tax basis, the undiscounted life-of-mine cash flow totals CA$847 million with a 68%
IRR and a 1.7 year pay-back period; compared to a undiscounted cash flow total of CA$554
million, a 47% IRR and a 2.3 pay-back period in the PEA. Given the conceptual nature of the
PEA, there is no certainty that the preliminary economic assessment will be realized.
Summary of Mineral Resources, LOM Production and Updated Economics
Mineral Resource
Indicated resources of 1,686,000 tonnes at 10.8 g/t Au,
Inferred resources of 1,483,000 tonnes at 10.2 g/t Au.
PEA Production 2,306,000 tonnes (subset of Mineral Resource)
Production Rate 750 tonnes per day
Au Grade 10.3 grams per tonne
Au Recovery 90.5% gold into doré
Average Output 80,000 oz gold per year
Mine life 8.7 years
Gold Price US $ 1500 per oz
Exchange Rate US $ 1.00 = CA$ 1.408
Initial Capital Cost US $111 million
Cash Cost US $ 400 per oz
Cash Flow (LOM) After-Tax
CA$ 664 million
NPV (5%) CA$ 469 million
NPV (8%) CA$ 383 million
Pre-Tax / After Tax
Internal Rate of Return 68% / 56%
Payback Period (years) 1.7 / 1.9
Notes for Mineral Resource Estimate:
• The Mineral Resource Estimate was prepared by Sue Bird, P.Eng. in accordance with CIM Definition Standards and NI
43-101, with an effective date of February 28, 2019.
• A Mineral Resource is a concentration or occurrence of solid material of economic interest in the Earth’s crust in such
form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction. The location,
quantity, grade or quality, continuity and other geological characteristics of a Mineral Resource are known, estimated
or interpreted from specific geological evidence and knowledge, including sampling.
• Mineral Resources are reported within a confining underground shape targeting mineralization over 4.0 g/t . The 4.0
g/t target includes the following considerations: gold price of US$1, 300/oz, exchange rate of 0.77 US$:C A$; Payable
gold % of 99. 9%, Offsite refining costs of US$ 7/oz, mining costs of C A$65.20/t, process costs of C A$62.70/t, G&A
(General and Administration) costs of CA$37.00, sustaining capital costs of CA$19.83/t, and a 90.5% process recovery.
• An Indicated Mineral Resource is that part of the Mineral Resource for which quantity, grade or quality, densities, shape
and physical characteristics are est imated with sufficient confidence to allow the application of Modifying Factors in
sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence
is derived from adequately detailed and reliable exploration, sampling and testing and is sufficient to assume geological
and grade or quality continuity between points of observation.
• An Inferred Mineral Resource is that part of the Mineral Resource for which quantity and grade or quality are estimated
on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify
geological and grade or quality continuity. It is reasonably expected that the majority of Inferred Mineral Resources
could be upgraded to Indicated Mineral Resources with continued exploration.
• Factors that may affect the estimates include: metal price assumptions, changes in interpretations of mineralization
geometry and continuity of mineralization zones, changes to kriging assumptions, metallurgical recovery assumptions,
operating cost assumptions, confidence in the modifying factors, including assumptions that surface rights to allow
mining infrastructure to be constructed will be forthcoming, delays or other issues in reaching a greements with local
or regulatory authorities and stakeholders, and changes in land tenure requirements or in permitting requirement.
Project Description:
The 100% owned New Polaris gold mine project is located in north -western British
Columbia about 100 kilometers (“km”) south of Atlin, BC and 60 km northeast of Juneau,
Alaska. There is no road access at present to the property, but year-round access is available
via light aircraft from either Juneau or Atlin to a 400 met er airstrip on the property, and
summer access is possible via shallow draft barge from Juneau.
The property consists of 61 contiguous Crown-granted mineral claims and one modified grid
claim covering 2,100 acres. All claims are 100% owned and held by New Polaris Gold Mines
Ltd., a wholly owned subsidiary of Canarc, subject to a 15% net profit interest held by
Rembrandt Gold Mines Ltd. that can be reduced to a 10% net profit interest.
The deposit is an early Tertiary, mesothermal gold mineralized vein system occupying shear
zones cross-cutting late Paleozoic andesitic volcanic rocks. It was mined by underground
methods from 1938 to 1942, and from 1946 to early 1951, producing approximately 245,000
oz gold from 740,000 tonnes of ore at an average grade of 10.3 g/t gold. Three main veins
(“AB, C and Y”) were mined to a maximum depth of 150 m and have been traced by drilling
for up to 1,000 m along strike by up to 800 m down dip, still open for expansion.
The gold occurs dominantly in finely disseminated arsenopyrite within the stock-work veins
and altered wall-rocks. The next most abundant mineral is pyrite, followed by minor stibnite
and a trace of sphalerite. Individual mineralized zones range up to 250 m in length and up to
14 m in width but mineralized widths more commonly average around 2 to 5 m.
Mineral Resource Estimate:
Canarc explored the “C” vein system between 1988 and 1997, and carried out infill drilling
in 2003 through 2006, to better define the continuity and grade of the vein systems. The total
New Polaris database consists of 1,056 diamond drill holes with a total of 31,514 sample
intervals. A Mineral Resource Estimate dated February 2 8, 2019 was based on ordinary
kriging of 174 drill holes , 1,464 gold assay intervals and 1,320 m of drill intercepts within
modelled domains.
Targeting mineralization over 4.0 gram per tonne (g/t) gold, a confining shape has
delineated a Mineral Resource Estimate:
• Indicated Mineral Resource totals 1,687,000 tonnes grading 10.8 g/t gold containing
586,000 oz gold.
• Inferred Mineral Resource totals 1,483,000 tonnes grading 10.2gpt gold containing
485,000 oz gold.
The ROM production tonnes are a subset of the Mineral Resources and are within a confining
shape targeting mineralization over 6.0 g/t gold . The mine plan uses a combination of
conventional cut and fill and longhole stoping, depending on mineralization thickness and
continuity. Development will include a decline from surface, extraction drifts on sublevels
across the footwall of the orebody, and ventilation raises to the surface.
An onsite mill will produce a float concentrate feeding a bio -leaching and CIL plant to
produce doré. Process water will go through the ASTER treatment process and reclaim
water will be stored in surface settling ponds near the plant.
Tails will be thickened with 42% being pumped underground to a paste plant and dispersal
system into mined out voids and the remaining 58% filtered to a semi -dry state and hauled
and dumped into a secure co-disposal facility (CDF) with waste rock from the underground
development.
Cash costs include all costs to produce a gold -sulphide concentrate followed by Bio -
Oxidation and CIL leaching process to produce doré gold bars at site.
This preliminary economic assessment is based on resources, not reserves, and a portion of
the modeled resources in the mine plan are in the inferred resource category. Given the
inherent uncertainties of resources, especially inferred resources compared to reserves, the
New Polaris gold mine project cannot yet be considered to have proven economic viability.
Qualified Person
The Qualified Person (“QP”) pursuant to NI 43-101 for the PEA report is Marc Schulte, P. Eng.
"Scott Eldridge”
____________________
Scott Eldridge, Chief Executive Officer
CANARC RESOURCE CORP.
About Canarc - Canarc Resource Corp. is a growth -oriented gold exploration company
focused on generating superior shareholder returns by discovering, exploring and
developing strategic gold deposits in North America. The Company is currently advancing
two core assets, each with substantial gold resources, and has initiated a high impact
exploration strategy to acquire and explore new properties that have district -scale gold
discovery potential. Canarc shares trade on the TSX: CCM and the OTCQB: CRCUF.
For More Information - Please contact:
Scott Eldridge, CEO
Toll Free: 1-877-684-9700 | Tel: (604) 685-9700 | Cell: (604) 722-5381
Email: [email protected] | Website: www.canarc.net
Cautionary Note Regarding Forward-Looking Statements
This news release contains “forward-looking statements” within the meaning of the United States private securities litigation
reform act of 1995 and “forward -looking information” within the meaning of applicable Canadian securities legislation.
Statements contained in this news release that are not historic facts are forward-looking information that involves known and
unknown risks and uncertainties. Forward -looking statements in this news release include, but are not limited to, statements
with respect to the future performance of Canarc, and the Company's plans and exploration programs for its mineral
properties, including the timing of such plans and programs. In certain cases, forward-looking statements can be identified by
the use of words such as "plans", "has proven", "expects" or "does not expect", "is expected", "potential", "appears", "budge t",
"scheduled", "estimates", "forecasts", "at least", "intends", "anticipates" or "does not anticipate", or "believes", or variations of
such words and phrases or state that certain actions, events or results "may", "could", "would", "should", "might" or "will b e
taken", "occur" or "be achieved".
Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Company to be materially different from any future results, performance or
achievements expressed or implied by the forward-looking statements. Such risks and other factors include, among others, the
Company’s ongoing due diligence review in relation to the Acquisition, risks related to the uncertainties inherent in the
estimation of mineral resou rces; commodity prices; changes in general economic conditions; market sentiment; currency
exchange rates; the Company's ability to continue as a going concern; the Company's ability to raise funds through equity
financings; risks inherent in mineral exploration; risks related to operations in foreign countries; future prices of metals; failure
of equipment or processes to operate as anticipated; accidents, labor disputes and other risks of the mining industry; delays in
obtaining governmental approvals; government regulation of mining operations; environmental risks; title disputes or claims;
limitations on insurance coverage and the timing and possible outcome of litigation. Although the Company has attempted to
identify important factors that could affect the Company and may cause actual actions, events or results to differ materially
from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be
as anticipated, estimated or intended. There ca n be no assurance that forward -looking statements will prove to be accurate,
as actual results and future events could differ materially from those anticipated in such statements. Accordingly, do not place
undue reliance on forward-looking statements. All statements are made as of the date of this news release and the Company is
under no obligation to update or alter any forward-looking statements except as required under applicable securities laws.