Benzdorp, Suriname, a major
gold discovery in the making
Developing a 65,000 oz/year gold mine at New Polaris, B.C.
Marino Pieterse
Goldletter I N T E R N A T I O N A L
Mar 8, 2005
 Carnarc
Resource Corp.
(Cdn$ 0.56 - TSX: CCM)
Company profile
Canarc Resource Corp. is a small-cap gold exploration and
mining company. Its focus is on exploring a potential major new
gold discovery on its Benzdorp property (80%) in Suriname; and
developing a high-grade 65,000 oz. per year gold mine on its
New Polaris gold property (100% owned) in northwestern British
Columbia.
Canarc also owns an 80% interest
in the 5,000 oz. per year Sara Kreek mine and property in Suriname;
a 33% carried interest in the Eskay Creek property, northwestern
British Columbia; and up to a 20% net profit interest in the
60,000 oz. per year Bellavista mine now under construction in
Costa Rica.
Overview of projects
New Polaris Property, British
Columbia
Canarc's core asset is the
1.3 million oz gold deposit on its New Polaris property covering
2,956 acres in northwestern British Columbia, approximately 100
kilometres south of Atlin on the west bank of the Tulsequah River.
Discovered in 1929 and mined intermittently until 1951, approximately
232,000 ounces gold were mined from the top 1,000 feet of three
main intersecting shear zones. The property was acquired by Canarc
in 1992, and drilling of 157,000 feet in 216 holes over the past
12 years has delineated an initial resource (not compliant with
N.I. 43-101) below and beyond the old mine workings estimated
at 3.6 million tons grading 0.36 oz/ ton gold, or 1.3 million
oz gold. The deposit is still wide open for expansion.
 New
Polaris is on track to become Western Canada's next gold producer.
A three-year development program to build a 65,000 oz/year high-grade
gold mine has been proposed. The target economic model accounts
for a capital cost of US$ 35 million, an operating cost of US$
180 per ounce and an annual cash flow of US$ 11 million during
the mine life exceeding 20 years.
In January 2005, Canarc announced
multiple high-grade gold intercepts from the completed Phase
I in-fill drilling program. Ten holes (for a total of 2,441 metres
of core) were drilled in late 2004 on a 30 m spacing in the C
Zones over an initial 152 metres strike length by 61 metres down-dip
below the deposit. All 10 drill holes returned high-grade gold
intercepts over significant widths such as 0.93 opt gold over
8.05 m and 0.34 opt gold over 14.3 m in two main sub-parallel,
en-echelon, shear veins, the "Upper C and Lower C".
A Phase 2, 50 to 70 hole in-fill
drilling program is now being planned for 2005 (subject to financing)
to continue extending the known C Zones. The purpose of the drilling
is to establish at least a 600,000 ounces reserve amenable to
a feasibility study to build a 65,000 per year high-grade, underground
gold mine.
Benzdorp Property, Suriname
 The 138,000
hectare Benzdorp property (80% option), located in southeastern
Suriname, 280 km from Paramaribo, has over 1 million ounces of
historical gold production from mining of alluvial deposits;
every creek over a 10 km strike length has been mined for gold,
indicating that more gold prospect areas are likely to be found
in the surrounding hills. Current placer gold production by garimpeiros
is estimated 5,000 to 10,000 ounces per year from the Benzdorp
property.
By the end of the summer of
2004, Canarc announced that the Phase 2 deep drilling program
had intersected significant gold and copper values within the
JQA gold porphyry zone of mineralization. The best significant
gold intersections are 1.14g/t Au over a length of 169 meters,
0.52 g/t Au over a length of 237 meters. Economically prospective
copper grades intersected over bulk mineable widths in the underlying
bedrock include 0.13% copper over a length of 42.67 metres and
134 metres, 0.16% copper over a length of 69.54 metres. The gold
intersections are hosted by quartz stockworks with associated
potassic and propyllitic alteration, confirming the porphyry
nature of goldcopper mineralization at the JQA prospect.
JQA displays distinct similarities
to the 10 million ounce Boddington porphyry gold-copper deposit
(400 million tonnes grading 0.8 g/t gold and 0.12% copper) now
being developed by Newmont-Anglogold- Newcrest in western Australia.
The JQA prospect is just one
of the 12 gold prospect areas identified by Canarc along the
easternmost 10% of the 138,000 hectare Benzdorp property. Most
of the other gold project areas along the 20 kilometre long gold
belt have not yet been drilled. In fact, less than 30% of the
JQA target area was drill tested and substantial potential remains
to be tested. A 10 to 20 hole exploration drilling program is
being assessed for Benzdorp in order to establish an initial
gold resource at JQA and to test other gold targets.
Having received numerous expressions
from major gold companies, Canarc turned its focus in the last
quarter of 2004 to seeking a strategic partner for Benzdorp.
Discussions are now underway.
Sara Kreek Gold Mine, Suriname
The Sara Kreek gold mine (80%
Canarc) is a small placer mine in Suriname that produces about
5,000 ounces gold per year. Three small but high-grade open-pit
oxide prospects have also been found that could support a low-cost
lode mining operation on the property.
Bellavista Gold Deposit,
Costa Rica
Construction of the US$ 26
million Bellavista gold mine in Costa Rica is on track to be
completed and commence gold production in the second quarter
of 2005. Canarc holds up to 20% net profits interest (after payback)
in the Bellavista project, including an annual pre-production
cash payment from majority owner and operator, Glencairn Gold
Corporation. The Bellavista gold mine is scheduled to produce
60,000 oz per year for 7 years at projected cash operating costs
of US$ 198 per ounce. Mineable ore reserves currently stand at
555,000 ounces contained in 11.2 million tonnes ore grading 1.54
g/t gold, but significant additional gold resources have been
previously delineated.
Corporate / Finance
In October 2004, Canarc announced
the subscription of a Cdn$ 487,500 non-brokered private placement
for 750,000 flow-through common shares at Cdn$ 0.65 per share.
The proceeds have been used to complete the Phase I in-fill drilling
program at the New Polaris Property. Based on 58.3 shares issued,
Canarc
has a market capitalisation of Cdn$ 32.7 million. The current
working capital is Cdn$ 0.5 million.
Marino
G. Pieterse
Goldletter I N T E R N A T I O N A L
Goldletter International is published monthly
by Marino G. Pieterse, Gold Research Centre, Castricum, the Netherlands.
Information and investment comments are independently and thoroughly
researched and believed correct. No guaranty of absolute accuracy
can be given however. Investment decisions are fully made for
own risk. Editorial address: P.O. Box 200, 1900 AE Castricum,
the Netherlands tel.:+31-251-320735 fax: +31-251-321110 e-mail:
info@goldresearchcentre.com
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