Canarc Resource Corp. (CCM:TSX and CRCUF:OTC-BB) announced today plans for a CA$2.7 million, 60 hole, Phase 3 in-fill drilling program in 2006 at the New Polaris gold property located 60 km south of Atlin in northwest British Columbia. New Polaris is one of the largest undeveloped pure gold deposits in western Canada.

Drilling will commence in the 2nd quarter, 2006 and should be completed by the end of the 3rd quarter so that a new resource estimate, conceptual mine plan, initial economic evaluation and mine permit application can be completed by year-end.

Canarc owns a 100% interest (subject to a 10% net profit royalty) in the New Polaris property, a former high-grade, underground gold mine that produced 231,000 oz of gold between 1939 and 1951. From 1990 to 1997, Canarc invested over CA$15 million exploring New Polaris to outline an historic resource of 1.3 million oz gold contained within 3.6 million tons grading 0.36 oz per ton (not NI 43-101 compliant, not to be relied upon, see additional comments below).

The planned Phase 3 program will target the C and Y vein systems and is designed to develop an NI 43-101 compliant measured, indicated and inferred gold resource containing a minimum 600,000 oz that will serve as the basis for an initial nine year mine life. The 2006 drill program will consist of 18,600 metres (61,000 ft) of diamond drilling in approximately 60 holes to in-fill drill a 365 m by 350 m strike and dip area of the C vein and a 60 m by 275 m strike and dip area of the Y vein, as shown in the attached longitudinal and cross sections.

Previous drilling within the areas of the proposed in-fill drill program returned a weighted average grade and thickness of 0.46 opt (14.3 gpt) gold over an average core length of 14.6 feet (4.5m) for the C vein and 0.50 opt (17.1 gpt) over an average core length of 15.7 feet (4.8 m) for the Y vein.
Results of prior drill holes are shown in the attached table.  Both veins remain open down dip and to a certain extent along strike.

After completing a new resource estimate, Canarc plans to refine the conceptual mine plan, complete an initial economic evaluation and enter into the provincial mine development permitting process in the fourth quarter of 2006. The New Polaris project would then move to full feasibility and permitting in 2007.

In the past two years, the provincial and federal governments granted all necessary approvals and permits to Redcorp Ventures Ltd. for the construction of road access and development of a large underground poly-metallic mine at the Tulsequah Project immediately adjacent to New Polaris. As Redcorp’s environmental studies for the Tulsequah project are now public documents, Canarc should be able to utilize these studies to speed up the permitting of the New Polaris Project.

Initial metallurgical testing done on New Polaris ores in 2004 shows very high gold recoveries are possible.  Up to 96.6% of the gold is recoverable into concentrate by grinding the ore to 95% minus 200 mesh and then running it through 3 cycles of rougher floatation. Pressure leaching and bio-oxidation tests of the floatation concentrates followed by cyanide leaching of the oxidized cons achieved overall gold recoveries of 95% and 88.9% respectively.

The preferred metallurgical alternative now under consideration for New Polaris is the shipping of gold concentrates to an existing third party processing facility elsewhere in North America, similar to the past production of the New Polaris mine. From 1938 to 1951, New Polaris gold concentrates were shipped by barge to the smelter in Tacoma, WA. Additional metallurgical tests work will be needed for the final feasibility study on New Polaris.

Bradford Cooke, M.Sc., P.Geo., Chairman and CEO and James Moors, B.Sc., P.Geo., Vice President Exploration of Canarc are the Qualified Persons who prepared the contents of this news release.  Although the historic resource reported by Canarc in 1997 was prepared on the basis of over 200 drill holes and the historic data and technical procedures are considered to be valid, the Company has not yet done sufficient new work to verify the previous resource estimate and therefore this historic resource should not be relied upon.  It does however provide a reasonable indication of the property potential and a guide to further exploration and so is considered relevant.

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, 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.

WARNING:  The TSX has neither approved nor disapproved the contents of this news release.  For more information, please contact Gregg Wilson at tel: Toll Free: (877)-684-9700, Phone: (604) 685-9700, fax:(604)685-9744, email [email protected] or visit our website, www.canarc.net.

Table 1: C Vein Intersections in area to be infill drilled

Table 2: Y Vein Intersections in area to be infill drilled