Updated Scoping Study Beefs Up Canarc’s New Polaris

Work on a preliminary assessment for the New Polaris gold project, in northwestern B. C., has yielded improved economics for owner Canarc Resource (CCM-T, CRCUF-O).

The improvement over Canarc’s original preliminary study in 2007 is due to a higher gold price, lower Canadian dollar, and cheaper offsite concentrate treatment terms. With a gold price of US$750 per oz. and an exchange rate of US80¢ to the Canadian dollar, the project’s pretax internal rate of return (IRR) is now estimated at 29%. The study put the pretax net present value (NPV) at $88 million at a 5% discount rate, $68 million at an 8% discount rate, and $57 million at a 10% discount rate.

That compares with a pretax IRR of 14.9% and a pretax NPV of $32.6 million at a 5% discount rate in the 2007 study.

At a cutoff grade of 9 grams gold per tonne, measured and indicated resources are 806,000 tonnes grading 13.2 grams gold, while inferred resources stand at 944,000 tonnes of 11.9 grams gold.

Canarc is envisaging a 600-tonne-per-day operation with ore grading 12.5 grams gold. A 91% gold recovery rate is expected. The company sees a mine at New Polaris producing 80,000 oz. gold per year over an eight-year mine life, based on measured and indicated resources, plus some inferred resources.

Capital costs for the project are projected at $91 million, and cash costs are forecast at US$329 per oz. gold, excluding offsite costs such as concentrate processing.

The property is 96 km south of Atlin, B. C., and 64 km northeast of Juneau, Alaska, close to Redcorp Ventures’ (RDV-T, RDFVF-O) Tulsequah Chief polymetallic mine, which is under construction.

The New Polaris deposit is comprised of three mineralized veins on a 12-sq.-km property located on the site of the past-producing Polaris-Taku mine, which last operated in 1951. New Polaris is subject to a 15% net profit interest royalty, which Canarc can reduce to 10%.

The property lies on the eastern flank of the Coast Range Mountains, amid steep and rugged topography. Elevations in the area range from sea level to 2,600 metres. There is no road access, but the project can be reached by helicopter from Atlin or Juneau, or by an ocean-going barge. There is no electric power line in the area.

Canarc has 81.5 million shares fully diluted. On Sept. 30, Canarc had working capital of US$331,000, of which US$13,000 was in cash. In December, the company closed a $100,000 private placement. At presstime, the company’s shares traded at 8¢ in a 12-month window of 3.5-43.5¢.