Like the Boddington gold deposit in Western Australia (0.8 gpt gold, 0.12 % copper), by-product copper in the Benzdorp porphyry gold mineralization could potentially make a significant contribution to project value. However, it should be noted that no metallurgical tests have been carried out yet to establish copper recoveries from bedrock mineralization. Metallurgical testing on core samples is planned for the 1 st Quarter of 2004.
In November and December 2003, the Phase 1 drill program was extended to include an additional ten drill holes. Four holes were targeted to extend the JQA gold mineralization for 100m to the east, three holes were drilled up to 500m further east under the laterite cap of the JQE prospect area, and three holes were completed to test the Roche Kreek prospect some 5 km to the south. Initial assay results should be available by the end of January 2004.
A major Phase 2 drill program is planned for 2004, to commence in late January 2004 using two drill rigs, once the Phase 1 data are compiled and interpreted. A second larger drill rig (Longyear Super 38) has already been mobilized to the Benzdorp property and a John Deere 450 bulldozer and related equipment are in transit.
In summary, 2003 was a very successful year for the Benzdorp project. A total of 38 drill holes were completed and extensive, porphyry-type gold and copper mineralization in the JQA prospect area was delineated to depths of 75 m over an area measuring at least 600m by 500m, open in several directions for expansion.
Godfrey Walton, M.Sc., P.Geo, is the Qualified Person supervising the Phase 1 drilling program on the Benzdorp property. He has instituted a Quality Control program of blanks and duplicates to ensure the integrity of all assay results.
All drill core is split by Canarc personnel at the Benzdorp camp, and then flown to Parimaribo for shipment to FILAB, a large European commercial lab company operating in Cayenne , French Guyana. The core samples are then dried, crushed, split and a 30-gram subsample is taken for analysis. Gold is determined by fire assay with an atomic absorption finish and copper is analyzed by inductively coupled plasma spectroscopy. FILAB is using its own standards for quality control checks. Canarc will also be sending reject samples from FILAB to other laboratories for additional quality assurance checks.
Canarc owns 40% and holds an option to earn up to 80% of the voting shares of Benzdorp Gold N.V., the local company that holds the Benzdorp concession titles. Our partner, Grassalco, a state mining company, will ultimately own 20% of the voting shares which gives it the right to receive either a floating net revenue interest (NSR) of 1.5% to 6% based on the price of gold or a 20% net profits interest (NPI) after Canarc recovers all of its capital investment with interest.
Canarc also announces it has agreed to a non-brokered CA $105,000 flow-through financing. The private placement is for 100,000 units at CA $1.05 per unit, each unit consisting of one flow-through common share and one-half common share purchase warrant. Each full warrant can be exercised to purchase an additional non-flow-through common share at CA $1.25 within a two year period. The shares and warrants are subject to the standard four month hold period, and a 7% finders fee is payable in cash. The subscriber is the Mineral Fields 2003 Flow-Through Limited Full Partnership, which will receive a tax write-off relating to Canadian exploration expenditures. The proceeds will be used to fund in part a drilling program on the New Polaris property 2004.