February 4th, 2013 Canarc Resource, which has a substantial resource footprint across British Columbia and the Yukon, with their primary focus currently being on the past-producing 1.1M oz New Polaris gold mine in northwestern BC (100% interest on just under 3k acres, roughly 0.36 opt), reported a major move today with entry into a strategic mine acquisition partnership (SMAP) alongside trusted associate, Canford Capital Ltd., that will focus on expanding operations in North America.
Chairman and CEO of CRCUF, Bradford Cooke, called it the start of a "new era" for Canarc, which has been a junior gold exploration firm for many years now, building up a considerable envelope of resource targets. The experience in areas beyond exploration contained within Canarc's management team is impressive. After all, this is the same Cooke who successfully spun off Endeavour Silver Corp. (NYSE:EXK) back in 2004, running that company to over $7.00/share and capturing significant contiguous space in some of Mexico's top silver districts. The nascent, mutually-binding framework of an eventual and more formal strategic joint venture partnership agreement now inked, markets can now look forward to an upwardly formalized SMAP from the companies by approximately the start of March.
Cooke detailed the company's plans to aggressively go after a new, undisclosed opportunity which was identified during finalization of the proposed option and joint venture agreement covering New Polaris. With the financial muscle of Canford at their disposal, Canarc will be laser-focused on acquiring/operating this recently-identified underperforming target, which is located in a historic district and has massive expansion potential. This deal opens up the considerable mineralization at New Polaris and enables advancement to the feasibility stage of that project while also putting on the table acquisition of the company's first operating gold mine in North America.
When you stack the development potential at Canarc's Tay LP site (100% interest on some 19.8k acres with some nice intercepts like 1.48 gpt over 30.2 feet), which is smack in the middle of the Yukon's hot Tintina Gold Belt, and their Windfall Hills properties in BC (100% interest on roughly 2.37k acres with rock chip and assay samples up to 5.7 gpt and 1.0 gpt respectively) up against this huge new milestone partnership move, CRCUF suddenly looks extremely hot for a stock trading at around $0.21.
Looking more closely at the specific details of the SMAP, we see Canarc will manage the framework, taking a leadership role in identification and evaluation of potential targets, including the proper timing/capital metrics. Targets agreed upon as valid acquisition opportunities by both parties will then be rigorously vetted by Canarc's due diligence, with Canarc subsequently arranging 100% of any debt financing requirements. Canford will own a 51% interest and Canarc 49% until debt financing is repaid upon exiting a given opportunity, with the interest values then being reversed upon debt repayment.
Canford is set to exercise half the warrants obtained during the previously announced $1.1M private placement equity financing deal, purchasing 5.65M common shares of Canarc at $0.15 each upon closing of the first acquisition opportunity. Canarc will then grant Canford an exclusive 60-day option agreement execution window to earn as much as 51% interest in New Polaris, for some $30M in additional E&D investment (again, upon the closing day of the first opportunity).
A huge deal that brings the kinetic energy needed to put Canarc into the stratosphere. This E&D mash-up is now a force to be reckoned with in the junior gold space and investors will be eager to get a closer look at that unnamed, underperforming target as details emerge.
For more information on Canarc Resource, please visit Canarc.net
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