Canarc Updates NI 43-101 Preliminary Economic Assessment Report,
Improves Project Economics for the New Polaris Gold Mine Project, BC
Vancouver, Canada � January 6, 2010 - Canarc Resource Corp. (CCM:
TSX and CRCUF: OTC-BB) announces that an updated NI
43-101 preliminary economic assessment report (�PEA�) by Moose Mountain
Technical Services (Moose Mountain�) on the New Polaris gold mine project
in northwestern British Columbia has significantly improved the estimated
project economics for an 80,000 oz per year gold mine.
In the new base case preliminary economic model,
higher gold prices appear to have a significant positive impact on the New
Polaris gold mine project economics. Using new base case parameters for the
gold price ($US 900 per oz), $CA /$US exchange rate (0.95) and cash costs
(US$383 per oz), the updated Moose Mountain PEA generates a discounted (5%)
after-tax Net Present Value (�NPV�) of CA$68.6 million with an after-tax
Internal Rate of Return (�IRR�) of 25.8% and a 2.7 year pay-back period.
Click here to listen to Chairman and CEO Bradford
Cooke�s video commentary on this release: http://canarc.net/news/index.php?content_id=261
On a pre-tax basis, the undiscounted life-of-mine
cash flow totals $153.6 million with a 32.0% IRR and a 2.6 year pay-back
period. Given the conceptual nature of the PEA, there is no certainty
that the preliminary economic assessment will be realized. However,
Moose Mountain concludes that �the
base case mine model for New Polaris has the potential for positive results
and therefore further work is recommended to optimize the project and
complete a feasibility study.�
Moose Mountain was retained by Canarc in 2007 to
complete a PEA on New Polaris, the results were disclosed in a news release
dated August 20, 2007 and their report was filed on SEDAR on October 4,
2007. A revised economic analysis for New Polaris incorporating a
higher gold price, lower $CA/$US exchange rate and new off-site treatment
terms was disclosed in a news release dated January 7, 2009. In November,
2009, the British Columbia Securities Commission (�BCSC�) notified Canarc
that their review of both the 2007 Moose Mountain report and the 2009
Canarc news release identified issues of non-compliance with NI
43-101. Today�s news release and the updated NI 43-101 preliminary
economic assessment report by Moose Mountain were prepared at the request
of the BCSC.
The
base case mine model is summarized below:
Scheduled Resources
|
806,000 tonnes measured and
indicated grading 13.2 gpt Au (after dilution) and 944,000 tonnes
inferred grading 11.9 gpt Au (after dilution) and a 9 gpt cutoff
|
Production Rate
|
600 tonnes per day
|
Grade
|
12.5 grams per tonne (diluted
20%)
|
Recoveries
|
91% gold into concentrate
|
Output
|
80,000 oz gold per year
|
Mine life
|
8 years
|
|
|
The updated preliminary
economic parameters are as follows:
|
Gold Price
|
US$ 900 per oz
|
Exchange Rate
|
US$ 0.95 = CA$ 1.00
|
Capital Cost
|
CA$90.5 million
|
Cash Cost
|
US$ 383 per oz (excluding
off-sites)
|
|
|
Cash Flow (LoM)
|
Pre-Tax After-Tax
CA $153.6
million
CA$103.6 million
|
NPV (5%)
|
CA$104.9
million
CA$ 68.6 million
|
NPV (8%)
|
CA$ 83.2
million
CA$ 52.9 million
|
NPV (10%)
|
CA$ 71.0
million
CA$ 44.1 million
|
|
|
|
Pre-Tax
After Tax
|
Internal Rate of Return
|
32.0%
25.8%
|
Payback
Period
|
2.6
years
2.7 years
|
The New
Polaris gold mine project is located in northwestern British Columbia about
100 kilometres (�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 metre (�m�) 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 gpt gold based on a
historic cutoff grade of around 4.5 gpt 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 1000 m along strike by up to 800 m down dip, still open
for expansion.
The
gold is refractory and 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.
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. An NI
43-101 resource estimate by Giroux Consultants Ltd. dated March 14, 2007
was based on ordinary kriging of 192 recent drill holes and 1,432 gold
assay intervals constrained within four main mineralized zones.
Using a
9 gram per tonne (gpt) gold cutoff grade, the measured in-situ resource
totaled 173,000 tonnes grading 14.4 gpt gold and the indicated in-situ
resource totaled 696,000 tonnes grading 15.1 gpt gold for a total of
870,000 tonnes measured and indicated grading 15.0 gpt gold, containing
419,000 oz gold. An additional inferred in-situ resource was
estimated at 1,149,000 tonnes grading 14.1 gpt gold containing 519,000 oz
gold.
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. However, the mine plan only takes into account approximately
75% of the total estimated resources at a 9 gpt cut-off grade.
The Net
Present Values are life of mine net cash flows shown at various discount
rates. The Internal Rates of Return assume 100% equity
financing. Cash costs include all site-related costs to produce a
gold-sulphide concentrate but offsite costs for concentrate transportation
and processing were treated as deductions against sales. The preferred
processing alternative entails reducing the ore to a bulk gold-sulphide
concentrate and shipping the concentrate to existing autoclave facilities
in Nevada for the production of dore gold bars.
The
project economics are most sensitive to variations in the gold price and
least sensitive to changes in capital and operating costs, as shown by the
following sensitivity analysis:
New
Polaris AFTER-TAX CASH FLOW
SENSITIVITY ANALYSIS
|
Description of Sensitivity
|
NPV (5%)
|
NPV (8%)
|
NPV (10%)
|
|
|
|
|
|
CAD (000)
|
CAD (000)
|
CAD (000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold $US700/oz -22%
|
$
6,898
|
($
1,333)
|
($
5,883)
|
|
|
|
|
Gold $US800/oz -11%
|
$
37,961
|
$
26,072
|
$
19,431
|
|
|
|
|
Base Case $US900/oz
|
$
68,625
|
$
52,934
|
$
44,132
|
|
|
|
|
Gold $US1000/oz +11%
|
$
99,136
|
$
79,582
|
$
68,590
|
|
|
|
|
Gold $US1100/oz +22%
|
$ 129,516
|
$ 106,044
|
$
92,831
|
|
|
|
|
|
|
|
|
|
|
|
|
Grade -10%
|
$
41,041
|
$
28,778
|
$
21,924
|
|
|
|
|
Grade -5%
|
$
54,895
|
$
40,942
|
$
33,126
|
|
|
|
|
Base Case Grade 12.5 gpt
|
$
68,625
|
$
52,934
|
$
44,132
|
|
|
|
|
Grade +5%
|
$
82,355
|
$
64,925
|
$
55,138
|
|
|
|
|
Grade +10%
|
$
96,085
|
$
76,917
|
$
66,144
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Cost -10%
|
$
73,625
|
$
57,917
|
$
49,093
|
|
|
|
|
Capital Cost -5%
|
$
71,125
|
$
55,425
|
$
46,613
|
|
|
|
|
Base Case $90M Capital
|
$
68,625
|
$
52,934
|
$
44,132
|
|
|
|
|
Capital Cost +5%
|
$
66,125
|
$
50,442
|
$
41,652
|
|
|
|
|
Capital Cost +10%
|
$
63,625
|
$
47,951
|
$
39,172
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Cost -10%
|
$
80,415
|
$
63,261
|
$
53,360
|
|
|
|
|
Operating Cost -5%
|
$
74,520
|
$
58,097
|
$
48,881
|
|
|
|
|
Base Case
|
$
68,625
|
$
52,934
|
$
44,132
|
|
|
|
|
Operating Cost +5%
|
$
62,730
|
$
47,770
|
$
39,383
|
|
|
|
|
Operating Cost +10%
|
$
56,835
|
$
42,606
|
$
34,634
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange rate $0.85 -10%
|
$
97,327
|
$
78,013
|
$
67,156
|
|
|
|
|
Exchange rate $0.90 -5%
|
$
82,184
|
$
64,781
|
$
55,009
|
|
|
|
|
Base Case $0.95
|
$
68,625
|
$
52,934
|
$
44,132
|
|
|
|
|
Exchange rate $1.00 +5%
|
$
56,414
|
$
42,264
|
$
34,337
|
|
|
|
|
Exchange rate $1.05 +10%
|
$
45,276
|
$
32,488
|
$
25,336
|
|
|
|
|
The
Qualified Person (�QP�) pursuant to NI 43-101 for the updated preliminary
economic assessment report is Jim Gray, P. Eng.
Canarc
Resource Corp. is a growth-oriented, gold exploration company
listed on the TSX (CCM) and the OTC-BB (CRCUF). Canarc is currently
focused on seeking a partner to advance its New Polaris gold mine project
in north-western British Columbia to the feasibility stage and on acquiring
attractive new gold exploration and mining projects in North America.
Barrick Gold Corp. is a shareholder.
CANARC
RESOURCE CORP.
Per:
/s/
Bradford J. Cooke
Bradford
J. Cooke
Chairman and C.E.O.
For
more information, please contact Gregg Wilson at Toll Free: 1-877-684-9700,
tel: (604) 685-9700, fax: (604) 685-9744, email: info@canarc.net or visit our website,
www.canarc.net.
CAUTIONARY
DISCLAIMER � FORWARD LOOKING STATEMENTS
Certain
statements contained herein constitute "forward-looking
statements" within the meaning of the United States Private Securities
Litigation Reform Act of 1995. All statements that are not historical
facts, including without limitation statements regarding future estimates,
plans, objectives, assumptions or expectations of future performance, are
"forward-looking statements". We caution you that such
"forward-looking statements" involve known and unknown risks and
uncertainties, as discussed in the Company's filings with Canadian and
United States securities agencies. The Company expressly
disclaims any obligation to update any forward-looking statements other
than as required by applicable law. We seek safe harbour.
|