Canarc Options Properties in Indonesia to Rio Tinto

Vancouver, British Columbia, Canada,
August 14, 1997

Vancouver, British Columbia, Canada, August 14, 1997.....Canarc Resource Corp. is pleased to announce that its 78% subsidiary, IndoAsia Gold Ltd., has optioned two (2) of its Indonesian properties to the Rio Tinto group ("Rio Tinto"). Rio Tinto, a dual listed Anglo-Australian company, is one of the largest mining groups in the world. Rio Tinto has been active in Indonesia for a significant period of time.

If Rio Tinto exercises its option over either or both blocks, it will in respect of each block be required to carry IndoAsia Gold through to completion of a bankable feasibility study, repay IndoAsia's sunk exploration costs (approximately US$150,000 per block) and make annual cash payments totalling US$540,000 per block over the next nine years (unless there is an earlier decision to mine) to earn a 90% interest in each block.

To earn its 90% interest, Rio Tinto must meet all statutory expenditure commitments on each block. During the General Survey Period, Rio Tinto will need to spend a minimum of approximately US$300,000 per block, and during the first three years of the Exploration Period Rio Tinto will need to spend a minimum expenditure commitment over the first four years of approximately US$2.5 million per block.

The two (2) blocks, known as Gatec and Hatec, are located in the Central Kalimantan gold belt. They are west of the Kelian gold mine, majority owned and managed by Rio Tinto, and north of the Mount Muroo gold mine, owned by Aurora Gold. Gatec and Hatec are located on trend with the main tertiary volcanic and magmatic belt and trending structures recognized in the Mount Muro and Kelian deposits. Sintang intrusions, which are an important element in the formation of the epithermal gold deposits on Kalimantan, are common in the area. The Gatec and Hatec blocks are therefore well located near known gold mines and in a geological setting favourable for epithermal gold deposits. Canarac has completed an airborne geophisical survey and structural interpretation of radar imagery on the two blocks and has identified several targets requiring follow up work.

Canarc, through IndoAsia Gold Ltd., holds thirteen 7th generation COWs which have been reviewed by the Indonesian government and are tentatively scheduled for signing early in the fall. Canarc recently signed Confidentiaility Agreements with several major and medium sized mining companies who are interested in the Company's remaining land holdings in Kalimantan. Four companies have taken a strong interest in other properties in the land package and are continuing with their data and ground evaluation.

The Kalimantan gold belt is still an excellent place to find world class gold deposits. Many major gold companies continue to be active in the area despite the publicized problems of the last 5 to 6 months. Canarc, through IndoAsia Gold Ltd., intends to continue its exploration efforts in Indonesia through joint ventures on its COW holdings. Canarc recently settled a lawsuit with one of its contractors in Indonesia, in part through the issuance of 206,897 shares at $2.00 per share. IndoAsia Gold Ltd. has also been evaluating the potential acquisition of other precious metal projects, principally in the U.S.A. and Mexico.

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.