CANARC RESOURCE CORP. ANALYSIS
Canarc Resource Corp. is a growth-oriented, gold exploration company listed on the TSX (CCM) and the OTC-BB (CRCUF). Canarc is currently focused on exploring its recently acquired Tay LP gold property in south-central Yukon and seeking a partner to advance its 1.1 million oz, high grade, underground, New Polaris gold mine project in north-western British Columbia to the feasibility stage. In the third quarter of 2010, Cap-Ex Ventures Ltd. (TSX-V: CEV), ("Cap-Ex") who have an option on Canarc's Tay-LP property in the Yukon completed a 470 kilometer, helicopter-borne, VTEM geophysical survey over the Tay-LP gold property. Upon receipt of the geophysical data and interpretive maps from the geophysical contractor, Cap-Ex will prioritize the most favourable targets for follow-up in 2011 with more detailed ground geophysics, geological mapping and diamond drilling.
Canarc's management continues to seek strategic alternatives such as a joint venture or other means to advance the New Polaris high grade gold project to mine development and a full feasibility study. Discussions are currently underway with several parties. The company is also look for and acquiring attractive gold exploration and mining projects in North America to further expand it's base in the precious metals for the current boom in the industry that is expected to go on for many years.
On November 23rd 2010 Canarc announced that it had arranged a non-brokered private placement equity financing of up to approximately CA$2.0 million to fund the company for the 2011 year. With Barrick Gold Corp. as a shareholder in Canarc and the coming year funding in place for 2011 and an expanding asset base in projects, Canarc stands as a good buy out target for a major company like Barrick. The buying out of junior companies like Canarc by the big producers that are hungry for resource base replacement will increase into a frenzy in the next two years until it ends in a bidding war for the junior exploration companies. With this in mind you can be sure that Canarc will be a prime target and that it's share price will reflect this. Canarc needs to hold out as long as possible to bid up it's share price before a buy out offer is made which will give the best share swap ratio with the new big company stock that current share holders will get. It is possible that Carnac will keep forming joint ventures with smaller companies but I expect that the frenzy for resource asset base will mushroom and Canarc will be capture by a large company like Barrick which will be a major pluss for the current stock holders of Canarc. A recent event that turns the tide in the direction of Canarc becoming a producer in the short term and it's commitment to expand its resource base is the purchase of the Relief Canyon Gold Mine assets in Nevada. Canarc announced on December 21nd 2010 that it was the successful bidder to acquire a largely built and permitted, open pit, heap leach gold mine through a bankruptcy court auction held in Reno, Nevada. Canarc has agreed to purchase the Relief Canyon gold mine assets from Firstgold Corporation for US$11 million, subject to a due diligence period expiring February 4, 2011. See the news release for all the details. What this shows is possibly Canarc's turn to be a producer on the short term using this new acquired property with both the Tay LP gold property in south-central Yukon and the 1.1 million oz, high grade, underground, New Polaris gold mine project in north-western British Columbia as future developments. Canarc's management is expanding their options now as either a producer that will stay independent or as a take over by a larger company
