Canarc to acquire Suntac interest

A series of transactions proposed by Canarc Resource (VSE) is expected to result in the company owning 37% of Suntac Minerals (VSE).

Suntac’s key asset is an option to earn a 60% interest in the Polaris-Taku gold property, a former producer on the Tulsequah River in northwestern British Columbia.

The proposed acquisition is still subject to regulatory approval and to the approval of Canarc shareholders. It calls for a non-arms length purchase of 605,000 Suntac shares for $272,250 and a further 1.5 million Suntac shares in exchange for the issuance of about 525,000 Canarc shares.

Canarc will also privately acquire 300,000 Suntac shares in exchange for 100,000 of its shares. And it agreed to subscribe on a private placement basis for one million units of Suntac (one share and one warrant) at 60 cents per unit. Once these transactions are completed, Canarc would own about 3.18 million Suntac shares.

Canarc is best known for its holdings in the Eskay Creek region north of Stewart, most of which are still in the early stages of exploration. The proposed acquisition of an interest in Suntac would provide exposure to an advanced project with production potential.

The Polaris-Taku project has preliminary reserves estimated to exceed 1.6 million tons grading 0.45 oz. gold per ton based on old mine reserves, extensive underground sampling and more than 1,000 diamond drill holes.

In the past, the gold-arsenopyrite deposit typically required roasting prior to gold recovery. Canarc President Brad Cooke said the company has initiated preliminary discussions with the Golden Bear operating company which uses a fully permitted fluid bed roaster at its Golden Bear mine, some 60 km to the southeast.

The company is also investigating other recovery techniques, including the redox pressure leach process, the high pressure autoclave process and direct shipping of gold-arsenic concentrates to smelters as was done in the past. A phased, multimillion- dollar surface drilling and underground development program is being planned to begin this June at the Polaris-Taku property, contingent on financing.