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Bradford Cooke, President and CEO of Canarc Resource Corp. presents shareholders with this review of the Second Quarter, 2002 and our plans for the Third Quarter.� Over the past three months, Canarc continued to focus on negotiating with our partner Grassalco to resolve the outstanding issues regarding the Benzdorp property in Suriname.

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I am pleased to say that we are about to conclude an amending property agreement to allow Canarc to return to work at Benzdorp.� Some work still remains to incorporate the local company to hold the concession titles but management is now optimistic that this can be accomplished early in the Third Quarter 2002.

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In the meantime, we saw a continued revival of the gold price with an 8% rise to US$330 in the Second Quarter before pulling back.� Gold stocks recorded even greater gains as Canarc jumped a further 220% to a high of CA$0.59 per share before settling in the $0.40 range.� Several gold mining and exploration companies completed financings providing strong evidence that the capital markets have developed a healthy appetite for gold stocks.

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The first leg up in the new gold cycle peaked in June at US$330 per oz and both gold and gold stocks have pulled back since then to consolidate some of the gains.� Management firmly believes that gold should enter a longer and stronger second leg up starting in the Third Quarter.� It is only a matter of time before Canarc�s stock price starts to reflect the true value of our gold assets.� However, the real upside in our shares lies in exploring and developing the potential of gold properties like Benzdorp and New Polaris.

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Our goal for the Third Quarter will be to finalize the local incorporation and title transfer aspects of the revised Benzdorp agreement, consider a small financing and commence the next phase of exploration trenching on this exciting property.� Shareholders and investors are now welcome to visit our new website, www.canarc.net, which went live today.

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ON BEHALF OF THE BOARD OF DIRECTORS

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CANARC RESOURCE CORP.

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Bradford J. Cooke

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President and CEO