Canarc Acquires the Strategic Lobo 3 Property near Zacatecas, Mexico; Grants 50% Option to Mill City International Inc.
March 5, 1998

Vancouver, British Columbia, Canada, March 5, 1998....Canarc Resource Corp. has acquired by staking a 100% interest in the Lobo 3 property, totalling 19,600 hectares, in San Luis Potosi State, Mexico.  The property (see attached map) is located adjacent to the claims of Western Copper/Teck Corp., some 20 km northeast of their new discovery, within the Fresnillo silver district in Zacatecas State.

Zacatecas is not only the location of a major new mineral find, the Fresnillo area has produced more than 750 million oz. silver historically, one of the largest silver mining camps in the world.  Deposits here typically contain several million tons grading 100 to 1000 gpt Ag, 1 to 5% Pb, 2 to 10% Zn, with copper and gold credits.

The silver deposits are almost always associated with younger, buried Tertiary intrusions, whereas the massive sulfide deposits appear to be related to an older Cretaceous volcanic belt.  Just as the Western Copper/Teck deposit was discovered by drilling a blind geophysical anomaly underneath valley-fill pediment, so Canarc believes the potential to find additional deposits on the Lobo 3 property by geophysical and drilling methods is excellent.

The Lobo 3 property was staked to cover a high priority target area based on a data compilation of two known mineral occurrences, favourable Cretaceous rock formations, five aeromagnetic highs and three geochemical silver anomalies.  The prospects for Lobo 3 fall into two general deposit types:  Western Copper-type Cu-Zn-Pb-Ag-Au, volcanogenic massive sulfide deposits and Fresnillo-type Ag-Pb-Zn-Cu sediment-hosted mantos, skarns and veins.

Mill City International Inc. (MIY-VSE) has been granted an option to earn a 50% interest in Lobo 3 by paying US$200,000, issuing 200,000 shares and spending US$2,000,000 over a 2 year period.  An additional 100,000 shares will be issued upon completion of a bankable feasibility study on the project.  Canarc, as operator, has proposed an exploration program consisting of aeromagnetic surveying ground geophysics and diamond drilling over the next several months.

Canarc has an agreement to sell the other 50% interest in Lobo 3 to a subsidiary company focused on acquiring and developing silver projects in the Americas.  Canarc has also staked other properties in the Zacatecas area and is now seeking partners for joint venture.

Godfrey Walton, Vice President of Exploration for Canarc, noted that, "Our property portfolio in the Zacatecas area affords Canarc excellent exposure to both a new discovery area as well as a prolific silver district.  Because we were able to compile a unique data set to evaluate targets for staking, the Lobo 3 property has discrete prospects already identified for immediate follow-up. 
By securing a joint venture on this property, Canarc will also maintain its low risk-low cost approach to new projects."

Canarc Resource Corp. is a growth-oriented, international gold exploration and
mining company.  Major shareholders include Barrick Gold Corp. and Echo Bay
Mines Ltd.  The Company's common shares trade under the symbol "CCM" on the Toronto Stock Exchange.
 

Canarc Resource Corp. is a growth-oriented, international gold exploration and mining company with active projects worldwide. Major shareholders include Barrick Gold Corp. and Echo Bay Mines Ltd. The Company's common shares trade under the symbol "CCM" on the Toronto Stock Exchange.