Canarc Resource Corp.

Canarc Resource Corp. is a junior mining company that was incorporated in January 1987. Canarc carries out its operations through a number of wholly and partially owned subsidiaries located in North, Central and South America. Currently, the company is focusing on the acquisition, exploration and, if warranted, development of precious metal properties in Canada, Costa Rica and Suriname.

Canarc’s principal property is its 100%-owned New Polaris gold project located in northwestern British Columbia. Another key project held by the company is its Benzdorp property in the Republic of Suriname which is also prospective for gold.

In addition, Canarc currently holds 2% or about 660,000 of the outstanding shares of Endeavour Silver Corp. (EDR:TSX) a Canadian-based company with silver operations in Mexico. The value of Endeavour’s shares have appreciated significantly since December 31, 2005, when they were last reported on Canarc’s financial statements. The company also holds approximately 19.5% or 2.7 million shares of Aztec Metals Corp., a private company that is actively evaluating base metal projects with the intention of becoming publicly traded.

New Polaris Property

The New Polaris property is located in the Atlin Mining Division in B.C. about 40 miles east of Juneau, Alaska. This 2,956-acre project is 100% owned by Canarc and is subject to a 15% net profit interest which may be reduced by the company to 10% net profit interest within one year of commercial production by issuing 150,000 common shares to Rembrandt Gold Mines Ltd.

Discovered in 1929 and mined from 1939 until 1951, approximately 238,000 ounces of gold were extracted from the top 1,000 feet of three main intersecting shear zones. Since 1988, Canarc has invested more than $16 million and drilled 160,000 feet of core in 209 drill holes to outline an estimated 1.3 million ounce inferred resource at New Polaris which is not National Instrument (NI) 43-101 compliant. A three-year development program to build a 65,000 ounce per year high-grade gold mine has been proposed. The company’s target economic model assumes a capital cost of US$35 million, an operating cost of US$180 per ounce and annual cash flow of US$11 million during a mine life of at least 20 years.

During 2006, Canarc intends to carry out an expanded phase 3 infill drilling program of approximately 65 holes totalling 20,000 metres of core at New Polaris. This phase of drilling is anticipated to bring 600,000 ounces of the historic resource to a NI 43-101 compliant status. The 2006 work program will also include a conceptual mine plan, initial economic assessment and additional environmental studies needed to enter into the provincial mine permitting process.

Diamond drilling, environmental studies and related site work are expected to commence in May 2006 with completion slated for October 2006.

Benzdorp Property

The 138,000 hectare Benzdorp property is located in southeastern Suriname in South America. Canarc has the option to earn up to an 80% interest in this property, which has over 1 million ounces of historical gold production from mining of alluvial deposits. Every creek over a 10 km strike length on the property has been mined for gold, which indicates that additional gold prospect areas could be discovered in the surrounding hills.

At the end of its 2005 exploration program, Canarc had reached the US$5 million level of exploration expenditures required as part of its option to earn up to 80% in the Benzdorp property. The company currently holds a 40% interest and is required to make certain cash payments and complete a feasibility study in order to fully vest the 80% option.

In the first half of 2006, Canarc plans to complete 300 km of line cutting and collect greater than 7,000 soil samples on the property. In addition, Canarc has also commenced a 4,000 km high-resolution airborne magnetic and radiometric survey over prospective portions of the property in order to provide improved geological detail and to assist in identifying the structures controlling gold mineralization. Once this phase of exploration is completed, Canarc will be able to prioritize the gold prospect areas for future trenching and drilling.

Bellavista Property

Canarc also holds a 5.7% to 20.2% net profit interest in the Bellavista property, located near Miramar, Costa Rica. Glencairn Gold Corporation (GGG:TSX) owns a 100% working interest in the property, and has completed construction of a 60,000 ounce gold per year, open pit, heap leach gold mine which commenced commercial production in December 2005. Canarc has a net profit interest in Bellavista which entitles the company to 5.7% of the net profits during the first payback period, increasing to 10.4% during the second payback period and then to 20.2% of net profits thereafter. The Bellavista mine has estimated proven and probable ore reserves of 11.2 million tonnes containing a projected 555,000 ounces of mineable gold. At a gold recovery rate of 78.6%, Bellavista can produce an average of 60,000 ounces of gold per year with a mine life of 7.3 years and a cash cost of US$257 per ounce.

Recent Financing

On March 20, 2006, Canarc closed a $3,525,599 flowthrough financing through the issuance of 4,299,511 flowthrough common shares at a price of $0.82 per share.