Canarc reports better project economics for New Polaris

Canarc Resource (CCM-T) has announced improved returns calculated for the New Polaris gold project in northwestern B.C.

The better project economics is due to a higher gold price, lower Canadian dollar, and cheaper off-site concentrate treatment terms. With these favourable inputs, including a gold price of US$750 per oz. and an exchange rate of US80¢ per one Canadian dollar, the project’s pre-tax internal rate of return (IRR) is 29%. The pre-tax net present value (NPV) is $88 million at a 5% discount rate, $68 million at an 8% discount rate, and $57 million at a 10% discount rate.

These figures are based on resources on the property, since reserves have not been defined, so the project does not yet have proven economic viability. 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 tonne grading 11.9 grams gold.

The anticipated mine would mill 600 tonnes per day grading 12.5 grams gold. A 91% gold recovery rate is expected. The mine would produce 80,000 oz. gold per year, and mine life is projected at 8 years, based on the life of the measured and indicated resources plus some of the inferred resources.

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

The New Polaris deposit consists of three mineralized veins. The project covers 12 sq. km, and is located on the site of the past-producing Polaris-Taku mine, which operated until 1951. It is 96 km south of Atlin, B.C., and 64 km northeast of Juneau, Alaska. It lies in close proximity to Redcorp Ventures’ (RDV-T) Tulsequah Chief property. New Polaris is subject to a 15% net profit interest royalty, which Canarc holds an option to 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. Precipitation is about 1,500 millimetres per year. There is no road access, and 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 September 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 are trading at 8¢. They have been trading in a 3.5¢-43.5¢ range in a 12-month window.