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Trading Symbol TSE:CCM SHAREHOLDER UPDATE Review of 2000 and Outlook for 2001 Vancouver, British Columbia, Canada, February 28, 2001 Bradford Cooke, President and CEO of Canarc Resource Corp. provides the following review of Canarc’s gold and silver projects in 2000 and outlook for 2001. In summary, last year was again difficult for the mining industry in general and the junior sector in particular. The gold price remained near its 20 year low below US$300 per oz. and the equity market for gold companies was effectively dormant. One year ago, Canarc management decided set a strategy of maximizing our existing projects in 2000. In particular, we focused on 1) project financing for a second small gold mine on the Sara Kreek property in Suriname, 2) an IPO financing for Canarc’s subsidiary, Minera Aztec Silver Corp. and 3) obtaining the title owed to us on the Benzdorp project in Suriname. I regret to report that in each of these initiatives we were disappointed by a lack of success. After receiving initial expressions of interest from investors and completing a feasibility study for the proposed DP Mine at Sara Kreek, we found the low gold price and the national election in Suriname effectively curtailed investment interest. After receiving an offer from Canaccord Capital to take Aztec public, and completing a Prospectus, we had Canaccord renege on the Offering due to market conditions. After numerous communications with the Ministry of Natural Resources and trips to Suriname, to try and secure title to Benzdorp, we found the new government simply needed more time to address the numerous economic and social issues facing it. After such a challenging year, our outlook for 2001 is certainly more positive than our experience of 2000. Management has initiated a new strategy to acquire attractive new gold-silver projects for joint venture and drilling while acquisition costs are still depressed. Project Review and Outlook Benzdorp - Last year, the previous Suriname government effectively ignored Canarc’s repeated attempts to effect our right to title on the Benzdorp property. The new government was more responsive to Canarc’s requests but they informed us other pressing issues needed to be dealt with first. A new Board of Directors for Canarc’s partner at Benzdorp, the state mining company, Grassalco, was announced two weeks ago. We are still awaiting the appointment of a new Management Director for Grassalco. The new Minister of Natural Resources must also decide what the role of Grassalco will be in the gold sector. Then Canarc can resume our quest to receive the Benzdorp titles owed to us. We are optimistic that progress will be made later this year. Sara Kreek - The placer mine was cash flow positive until April but has been break even since then due to the low gold price. No changes are foreseen in 2001 and no progress will be made on the proposed DP Mine until the market for financing improves. Bellavista - Operating partner, Wheaton River, recently received its final environmental permits and government approvals to proceed with construction of the proposed Bellavista gold mine in Costa Rica. However, the mine requires US$350 gold forward sales and a US$300 spot gold price in order to close financing for the project. The Bellavista mine is expected to produce 60,000 oz. per year over a 7.3 year mine life with total cash operating costs of US$179 per oz. and a capital cost of US$28 million. Canarc received its annual pre-production cash payment of US$117,750 in January. Minera Aztec Silver Corp. Lobo 3 - Mill City International completed an airborne magnetic survey on the Lobo 3 property last year and then decided to drop their option last month. Lobo 6 & 8 - Noranda Minerals carried out a small drill program on the Lobo 6 and 8 properties but failed to reach bedrock and dropped their option in Q2. Lobo 4,9,10,14,15,16,17,18,19,20 - Far West Mining carried out a large drill program on the Lobo 14 property, and surface exploration surveys on the other Lobo properties. Drilling located a deep, low grade silver vein zone adjacent to the La Paz mine. Far West subsequently advised Aztec that no further work is planned in 2001. Nopalera - Canaccord Capital agreed to complete an IPO financing for Aztec but after the Prospectus was prepared, Canaccord reneged due to market conditions. As a result, Aztec could not meet its obligations on Nopalera and subsequently dropped its option on the property. GNC - Homestake planned a small drill program last year on the GNC property adjacent to their Eskay Creek mine. However, the program was postponed due to snow until this coming year. New Polaris - Canarc’s main asset remained on the back burner last year pending higher gold prices and the change of provincial government anticipated this year. The Company has agreed to rent its camp out to a heli-ski operation in March as a means of creating some minor income. New Projects - Management’s strategy for 2001 is to acquire additional gold-silver projects in North America that can either be quickly and inexpensively explored by in-house personnel or joint ventured with larger partners for more aggressive drilling programs. Two early stage polymetallic prospects have been identified in B.C. and three drill-ready, gold-silver properties are under negotiation in Mexico. We have chosen not to join the platinum-palladium rush because the supply-demand fundamentals are not strong, notwithstanding the huge run-up in the price of palladium last year. We think it will fall back this year. Management firmly believes the gold and silver markets are near bottom. The main factor influencing precious metal prices in the near term is the availability of supply from central banks and private inventories. Demand growth remained steady and that should continue into the foreseeable future. Now is the time to be acquiring attractive gold-silver properties while acquisition costs are low. Canarc management remain focused on making new acquisitions and new discoveries as the only way to create real shareholder value under the current market conditions. Shareholders are invited to contact us at (604) 685-9700 for more detailed updated on our progress throughout the year.
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