2005

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Shareholder Update: Second Quarter Review 2005

Bradford Cooke, President and CEO of Canarc Resource Corp. (CCM: TSX and CRCUF: OTC-BB) provides the following review of the Second Quarter 2005 and the outlook for the Third Quarter.

During Q2 2005, Canarc continued to facilitate due diligence by gold companies of the Benzdorp property with a view to a possible joint venture for development of the project, and of the Bellavista mine for a possible sale of Canarc’s interest.

Exploration work resumed at Benzdorp with the commencement of a US$ 250,000, 6-month program of grid preparation, soil sampling, airborne geophysics, core re-logging and geological compilation.  The purpose of the program is to better define zones of higher grade mineralization at JQA and other gold prospect areas for drilling.

Glencairn Gold, owner/operator of the new Bellavista gold mine in Costa Rica, completed construction of a 65,000 oz gold per year, open pit, heap leach gold mine and poured its first gold bars.

Canarc commissioned an independent valuation of its interest in Bellavista by Pincock, Allen, Holt.  At US$ 425 gold, and using Glencairn’s base case production model, Canarc’s interest should generate
US$ 4.6 million in total cash-flows, and the net present value (NPV) is US$ 2.3 million discounted at 10%.

Canarc also strengthened its Board of Directors and management team.

William Price brings to the Board a wealth of knowledge in the financial world, having recently retired as the Chairman, CEO and CIO of RCM Capital Management LLC and Global CIO of Allianz Global Investors AG.  Philip Yee as new CFO, Bruce Bried as new VP Mining and James Moors as new VP Exploration add real depth to our exploration and mining capabilities as the Company moves forward with development of the New Polaris gold project.

Work has resumed at the New Polaris property, including the mapping of a possible road route to the Taku Inlet, in preparation for the Phase 2 in-fill drilling and pre-feasibility program.  This drilling program is subject to Canarc augmenting its working capital from the possible sale of assets such as its Bellavista interest.

Results are expected this quarter from the soil sampling program of the van Heemstra gold prospect area on the Benzdorp property.  A new digitized geologic model is being developed for the JQA discovery zone based on all drilling and trenching to date.

Minera Aztec Silver Corp., a 63% owned subsidiary of Canarc, has initiated a consolidation, re-financing and re-activation of that company in order to pursue new acquisitions.  Aztec’s strategy will be to focus on high grade, producing or near-term production opportunities in base metals, especially zinc.

Management will also continue to evaluate new gold opportunities for Canarc along the same lines - high grade, producing or near-term production opportunities to complement the development of New Polaris.

Canarc Resource Corp. is a growth-oriented, gold exploration and mining company listed on the TSX (symbol CCM) and the OTC-BB (symbol CRCUF).  The Company’s principal assets are its 100% interest in the New Polaris gold deposit in British Columbia and its 80% option on the Benzdorp gold property in Suriname.  Major shareholders include Barrick Gold Corp. and Kinross Gold Corp.

On Behalf of the Board of Directors
CANARC RESOURCE CORP.

/s/ Bradford J. Cooke

Bradford J. Cooke
President 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: [email protected] or visit our website, www.canarc.net.  The TSX Exchange has neither approved nor disapproved the contents of this news release.