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Canarc Resource Corp. (CCM: TSX and CRCUF: OTC-BB) announces that the first four drill holes of the Phase 1 in-fill drilling program on the New Polaris property in northwestern B.C. have returned multiple high grade gold intercepts.

The main mineralized drill intercepts in each of these four holes returned a weighted average of 25.61 gpt gold (0.75 opt) over a 5.3 m (17.4 ft) core length. True widths of the veins are estimated to be 85 to 90% of the core lengths. Assay results are as follows:

The Phase 1, 10 hole in-fill drilling program was completed ahead of schedule, thereby allowing for an 11th hole to be drilled. Drill core samples from the last 7 holes have been sent out for assay and results are anticipated in early January, 2005.

These 11 holes were drilled on a 100 ft (30m) lateral (eg. 5100, 5200 etc) by 100 ft down-dip (SE1, SE2) spacing to test the C zones below the lowest underground mine level, the 600 level. Two principal mineralized intercepts were intersected in each hole reflecting the two sub-parallel, en echelon shear-veins interpreted to date, the Upper C Zone and Lower C Zone.

The first 4 drill holes tested the area down dip of two old stopes in the Lower C zone on the 600 level immediately east of the #1 fault, a late brittle fault which bisects the C zones into east and west segments. A 1989 drill-hole (C89-18A) in this area returned 37.7 gpt gold (1.1 opt) over a 5.1 m (16.6 foot) core length. Additional high grade intercepts from previous drilling up to a further 200 ft. east are shown on the accompanying longitudinal section.

A larger Phase 2 continuation of this in-fill drilling program is now being planned for 2005 (subject to financing) to both define and extend the known C zones at 100 ft intervals over a 1200 foot (366m) strike length and for 1400 feet (427m) down-dip. It will also target two of the known Y zones over a 500 ft. (152m) strike length and 1200 feet (366 m) down dip.

The purpose of the in-fill drilling program is to outline at least a 550,000 oz resource amenable to a feasibility study for a 65,000 oz per yr high grade, underground gold mine with a minimum 8-year mine-life. New Polaris was previously estimated to contain a 1.3 million oz (Not NI43-101 Compliant) gold resource (3.6 million tons grading 0.36 opt gold, not NI 43-101 compliant) based on 202 drill holes. The deposit is still open for expansion.

Bradford Cooke, Canarc’s President and C.E.O., stated “These multiple high grade drill intercepts confirm our long held opinion that New Polaris has the potential to be western Canada’s next high grade, underground gold mine. Our re-activation of the New Polaris project coincides not only with higher gold prices but also with the pending development of the large Tulsequah Chief copper-zinc-gold-silver mine and road access of Redcorp Ventures, immediately adjacent to the New Polaris property.”

James Moors, B.Sc., P.Geo, is the Qualified Person who supervised the 2004 drilling program on the New Polaris property. He has instituted a Quality Control sampling program of blanks to ensure the integrity of all assay results. All drill core was split by Canarc personnel at the New Polaris camp, and then flown to Vancouver for assay by ALS Chemex. The core samples were dried, crushed, split and a 30-gram subsample was taken for analysis. Gold content was determined by fire assay with an atomic absorption finish (FA-AA) and other trace elements were analyzed by atomic absorption. ALS Chemex also uses its own standards for quality control checks.

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 1.3 million oz (Not NI43-101 Compliant) New Polaris gold deposit located in northwestern British Columbia and its 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.

Bradford J. Cooke President and C.E.O.

Sep 14, 2006

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