Canarc - Positive Feasibility Study Received on Bellavista Property, Costa Rica; Environmental Impact Statement Filed; Optimization Studies Now Underway by Minera Rayrock.

VANCOUVER, British Columbia--(BUSINESS WIRE)--May 7, 1996-- Canarc Resource Corp. (CCM.TSE) has received from Minera Rayrock Inc., the project operator, a management overview of a positive feasibility study recently completed by Fluor Daniel Inc. on the Bellavista gold project in Costa Rica. Canarc owns an 18.3 percent net profits carried interest in Bellavista, including minimum annual cash payments of U.S. $117,750 from Minera Rayrock.

Minera Rayrock believes that the development of the Bellavista project will be based on a combination of open pit and underground mining as this will provide the greatest economic return. Total gold resources for the Bellavista project are estimated at 1,958,000 oz., contained in 37.4 million tonnes grading 1.63 gpt using a 0.7 gpt cutoff grade. Mineable reserves total 905,000 oz. gold equivalent contained in 13.0 million tonnes grading 2.10 gpt.

Fluor Daniels' optimum economic model for Bellavista gave a net after tax rate of return on capital (DCFIRR) of 16.5 percent over a 9.8 year mine life, on the following basis: -0-

Mill Throughput      4,000 tpd
Annual Production    70 to 90,000 opy
Head Grade           1.76 gpt (open pit) and
                     3.70 gpt (underground)
Gold Recovery        88 percent to 90 percent
Mine Life            9.8 years+
Gold Price           U.S. $400
Capital Cost         U.S. $55 million
Operating Cost       U.S. $230 per oz. before royalties
Gross Revenues       U.S. $315 million
Net Cash flow        U.S. $57 million after capital recovery
Payback Period       4 to 5 years-0-

Rayrock believes that Fluor Daniels' economic model can be optimized in several ways, to allow for used equipment and less ore dilution. In particular, both the capital and operating costs could be reduced by at least 10 percent and that the gold recovery will be 1 percent to 2 percent higher than that utilized by Fluor. Collectively, these items could increase the net cash flow by an additional 10 to 15 million dollars.

There is also good potential for the discovery of additional mineralization, particularly to the north of the known deposit and at depth. Other areas with exploration potential have been identified to the south of the deposit and elsewhere on the Bellavista property. Rayrock has filed its environmental impact study with the government of Costa Rica and optimization studies are now underway to improve the project economics further. Canarc intends to review on an ongoing basis its strategy with regard to Bellavista as more information comes available.

Stated Bradford Cooke, President and CEO of Canarc, "Although Canarc only holds an 18 percent carried interest in Bellavista, this advanced gold project has grown significantly in the past two years. We are looking forward to a production decision from Rayrock in 1996."

Canarc Resource Corp. is a growth-oriented international gold exploration and mining company with active projects worldwide. Major shareholders include Barrick Gold Corp. (4 percent) and Echo Bay Mines Ltd. (10 percent).

ON BEHALF OF THE BOARD OF DIRECTORS

CANARC RESOURCE CORP.

Bradford J. Cooke

President

CONTACT: Canarc Resource Corp.

Robert Carriere,

Manager of Investor Relations

604/685-9700