Canarc Resource Corp (C-CCM) - News Release

Canarc to spin off Mexican gold projects to subsidiary

2007-11-19 12:58 PT - News Release
Shares issued 71,734,505
CCM Close 2007-11-16 C$ 0.45

Mr. Bradford Cooke reports

CANARC TO SPIN-OUT ITS MEXICAN GOLD PROJECTS TO SUBSIDIARY COMPANY "CAZA GOLD CORP." AND DISTRIBUTE SHARES OF CAZA GOLD TO CANARC SHAREHOLDERS

Canarc Resource Corp. plans to spin out its Mexican gold projects to a wholly owned subsidiary company, Caza Gold Corp., and distribute approximately 80 per cent of its shares of Caza Gold pro rata to Canarc shareholders under a plan of arrangement.

The purpose of the spinoff and distribution is for Canarc shareholders to realize the full potential of Canarc's Mexican gold projects by advancing them through the financing of Caza Gold. Caza Gold intends to carry out sufficient work on these projects so that it can apply for a listing of its shares on a Canadian recognized stock exchange in 2008.

As of the date of record for the distribution, Canarc shareholders will receive one common share of Caza Gold (approximately 80 per cent of the Caza Gold common shares in total) for each five common shares of Canarc Resource. In addition, Canarc will initially retain approximately 20 per cent of its Caza Gold shares as an investment. Canarc will continue to use its contacts and expertise in Mexico to generate gold opportunities for the benefit of Caza Gold.

The date of record will be determined by the company after receipt of court, shareholder and regulatory approvals. Canarc anticipates providing shareholders with additional details of the proposed transaction through an information circular in relation to convening an extraordinary general meeting of the shareholders for shareholders to vote on the proposed distribution. The final structure of the share distribution that will be recommended to shareholders will be determined after further consultation with tax counsel.

Bradford Cooke, chairman and chief executive officer of Canarc, commented, "The spinoff of Canarc's Mexican gold projects benefits shareholders in two ways: firstly, it puts shares of the new company directly into the hands of Canarc shareholders under a plan of arrangement, and secondly, it allows the financing of Mexican gold projects through the new company without diluting Canarc's share capital."

Caza Gold will initially share management with Canarc but it is anticipated that a new management team will be appointed after the distribution. Caza Gold will then seek financing and a listing in order to continue acquiring and exploring strategic gold projects in Mexico. Canarc intends to focus on enhancing the value of its core asset, the New Polaris gold mine project in British Columbia, and on pursuing strategic gold property acquisitions in Canada and the United States.

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