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Monday, May 09, 2016 7:49:07 AM
Vancouver, Canada – May 09, 2016 – Canarc Resource Corp. (TSX: CCM, OTC-BB: CRCUF, Frankfurt: CAN) (“Canarc” or the “Company”) announces that it has signed a definitive agreement with Endeavour Silver Corp. (TSX: EDR, NYSE: EXK) pursuant to which Canarc will sell to Endeavour 100% of the shares of Canarc’s wholly-owned subsidiary, Oro Silver Resources Ltd., which indirectly holds a 100% interest in the El Compas Gold-Silver Mine Project (“El Compas”) in Zacatecas, Mexico, in consideration for 2,147,239 free-trading common shares of Endeavour, with an aggregate deemed value of CAD$10.5 million (the “Sale Transaction”).
The Endeavour shares will be issued at a deemed price of CAD$4.89 per share, equal to the volume-weighted average trading price on the TSX for the 10 trading-day period immediately prior to May 6, 2016. As additional consideration, Endeavour will assume Canarc’s obligation to deliver an aggregate of 165 troy ounces of gold (or the US Dollar equivalent) to Marlin Gold Mining Ltd. (“Marlin”) in three equal payments of 55 troy ounces which are due in October 2016, 2017 and 2018. The foregoing gold delivery obligation was incurred by Canarc in connection with its acquisition of El Compas from Marlin.
Closing of the Sale Transaction will take place following receipt of all necessary regulatory approvals and other customary closing conditions, no later than June 30, 2016. The Sale Transaction was negotiated by Canarc management and approved by the independent directors of Canarc, with Chairman and director Bradford Cooke abstaining from any deal discussions and the Board meeting to review and approve the Sale Transaction, due to his status as a director and officer of Endeavour.
Rationale for Sale Transaction and Benefits to Canarc
Opportunity for Canarc to turn a C$2 million investment into C$10.5 million in less than one year, making this a highly profitable transaction for the company
Canarc’s enhanced treasury with no need to take on secured debt obligations, allows the company to continue actively seeking and pursue even more substantial growth M&A opportunities aimed to create additional value for our shareholders
Places Canarc in the strongest financial position that it has been in for many years
Provides Canarc with a generous profit while eliminating the risks associated with the development, financing and start-up of a new mining operation
Endeavour shares have significant upside potential that could further increase Canarc’s treasury
A conference call to discuss the Sale Transaction will be held on Monday, May 9, 2016 at 9:00 AM PST (noon EST). To participate in the conference call, please dial the following:
Vancouver Toll : +1-604-638-5345
Toronto Toll: +1-416-915-3227
Canada/USA Bilingual TF: 1-800-319-7310
Callers should dial in 5 – 10 min prior to the scheduled start time and simply ask to join the Canarc call.
Conference Call Passcode When prompted, please enter: 35755
Mr. Catalin Chiloflischi, CEO of Canarc, stated: “This transaction is a very positive step forward for Canarc. By turning a $2 million investment into a $10.5 million sale in less than one year, Canarc will now have sufficient capital to pursue other larger and more advanced M&A opportunities with a goal to create even more value for our shareholders.”
“Catalin Chiloflischi”
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