Appointment of Director and Year End Review

Vancouver, British Columbia, Canada,
May 29, 1997

Vancouver, British Columbia, Canada, May 29, 1997.....Canarc Resource Corp. is pleased to announce the appointment of Walter J. Riva to the Board of Directors. Mr. Riva brings to the Canarc Board many years of business experience in the mining industry.

Walter Riva started his career in the late 1940's as an underground coal miner and mining engineer, rising through the ranks to become C.E.O. of Canmore Mines Ltd. Amongst the many senior technical and corporate positions Walter has held, the most recent was as C.E.O., President and then Chairman of Kaiser Resources Ltd., Westar Mining and B.C. Resources in the early 1980's.

Mr. Riva has played a prominent role in the Canadian Institute of Mining and Metallurgy, ultimately active as its President in 1984. Walter also played a key technical role in the coal industry as the co-inventor of the patented form-coke process and the coal pelletizing process.

Mr. Riva will play a significant advisory role on strategic acquisitions and corporate matters as Canarc grows from gold explorer to producer status through the development of its New Polaris project in northwestern British Columbia.

The other directors elected at the Company's Annual General Meeting are Bradford Cooke, President and C.E.O., Chris Theodoropoulos, Derek Bullock and Bradley Aelicks. Mr. Craig Angus has stepped down from the Board and Canarc thanks him for his service to the Company.

YEAR END REVIEW: Canarc Resource Corp. turned in another year of solid growth in 1996, achieving most of the goals management set out for the Company last January.

Most importantly, our renewed focus on developing the Polaris deposit in northwestern British Columbia allowed us to raise $9.2 million through a special warrant financing and commence a major feasibility program onsite. New gold prospect areas were identified within the mine workings based on a comprehensive review of historic sampling and drilling data. By year end, underground drilling on the AJ mine level discovered some significant gold-mineralized shear zones that should expand the geological resource base. Management's view is that Polaris represents one of the largest gold deposits in Western Canada and it has the potential to become a significant producing mine over the next 3 years.

In Suriname, Canarc dramatically expanded its property portfolio in 1996 through the option of several new projects, all of which have either historic or current alluvial gold production. After more than three years of negotiations, Canarc also secured an option on the Benzdorp property, the largest historic and current alluvial gold producing property in the country, proof that patience does indeed have its rewards. By year end, the Company had launched a Phase I exploration program on several of these new properties, as well as a Phase 2 exploration program at Sara Kreek. Our partner at Sara Kreek also had a good year, producing 2,200 oz. of placer gold production on behalf of our joint venture. Sara Kreek and Benzdorp are now "drill-ready" and represent Canarc's next opportunity to make a significant gold find.

Canarc also undertook in 1996 the successful acquisition of a large mineral land holding in the Central Kalimantan Gold Belt in Indonesia. Unfortunately, Canarc's share price dropped sharply in reaction to the Bre-X fiasco. Even though management's strategy of acquiring a large prospective landholding in the Kalimantan Gold Belt using "other peoples' money" was a resounding success, the stock has been unduly punished due to a selloff in the junior mining sector. We wish to reassure our shareholders that (a) Canarc has no intention of spending its own money in Indonesia, (b) our subsidiary company, IndoAsia Gold Ltd., has temporarily halted all exploration work to preserve cash, (c) some of our junior partners have dropped out of our joint venture agreements thereby returning 100% property interests to IndoAsia, (d) management has initiated joint venture discussions with a number of major mining companies who have expressed strong interest in certain properties, and (e) we remain confident that the Company's valuable assets will ultimately be reflected in a stronger share price.

Last but not least, significant progress was made on other projects in the Company: our partner on the Bellavista project on Costa Rica completed a positive feasibility study recommending commercial production, three properties in Chihuahua Mexico hold promise for epithermal gold-silver deposits and new property acquisitions in Senegal moved closer to completion.

Some exploration disappointments were also recorded, specifically on the Baramita and Ianna properties in Guyana. As a result, Canarc and Echo Bay agreed to cease exploration on Baramita and look for another property on which to continue our strategic alliance.

On the financial front, Canarc recorded an 18% rise in total assets and shareholder equity to US$25,967,000, cash and marketable securities increased 7% to US$5,719,000, and G & A expenditures dropped 41% to US$3,161,000, including a US$1,592,000 writedown in resource properties and marketable securities.

In the stock market, Canarc's common shares jumped 100% to Cdn$3.00 in the first half of 1996 but then tailed off 50% to close at Cdn$2.00 by year end. Given that Cdn$2.00 per share represents a market valuation of only US$22 per resource oz. for Polaris and Bellavista, management feels that Canarc shares continue to offer investors solid value as well as growth.

Canarc shareholders can look forward to a threshold year in 1997. We hope to complete the onsite feasibility work program at Polaris and drill for new gold discoveries in Suriname. Canarc management is also reviewing potential mine acquisitions as a means to enhance our growth. Given the depressed share prices of all gold stocks at this time, "Opportunities abound in times of distress".

We thank our shareholders and employees for their support as we continue to focus on growth through the discovery and development of gold deposits worldwide.

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 as well as on the following exchanges: Vancouver: Vista-CCM, Frankfurt: Third Market Segment-CAN, Berlin: Over the Counter-CAN, NASD: Electronic Bulletin Board-CRCUF.