Canarc Resource Corp. (TSX: CCM, OTC-BB: CRCUF, Frankfurt: CAN) announces that it has received approval from the U.S. Bureau of Land Management for a drilling campaign at its Fondaway Canyon property in Nevada. The program consists of 7 core holes totaling 2,700 meters in 5 target areas at depths of up to 400 meters; drilling is expected to start on or about September 15th, 2017. The program will cost approximately $850,000 CDN and will be funded from existing cash.

The principal objectives of the drilling program are to test for extensions of mineralization to depth below shallowly-drilled mineralized zones at the South Mouth, Pack Rat, South Pit and Colorado zones, and for the down-dip continuation of mineralization in the Half Moon – Stibnite area. Drilling will also focus on the corners of the structural dilation zone (see July 5, 2017 news release) where gold mineralization is particularly enhanced.

South Mouth

South Mouth is a broad area of mineralization up to 300 m wide by at least 700 m long. Historic drilling tested to only about 125 m deep, with most holes shorter than 100 m. Canarc will complete 2 holes across the mineralized area in an effort to extend mineralization 100 to 200 m below previously-tested levels. South Mouth mineralization was not included in the recent Fondaway resource calculations (43-101 Technical Report available on SEDAR).

Pack Rat

Like South Mouth, Pack Rat is a broad area of mineralization tested by shallow historic drilling; only 2 of the 39 holes drilled exceed 80 m. The gold mineralization occurs in steeply-dipping shear zones and vein stockworks in the southwest corner of the district-scale, structural dilation zone. Mineralization is known over a 180 m vertical range and remains open at depth and along strike. Canarc will complete 1 angle hole across the mineralized area in an effort to extend mineralization 100 to 200 m below previously-tested levels. Pack Rat mineralization was not included in the recent Fondaway resource calculations (43-101 Technical Report available on SEDAR).

South Pit

The South Pit target lies in the southeast corner of the district-scale structural dilation zone at the intersection of northeast-striking and east-striking mineralized structures. The intersection is marked by high-grade gold (e.g., 15.75 g/t Au over 0.5 m, Canarc sample). The northeast structure is at least 25 m wide and at least 200 m long, with samples exceeding 3 g/t away from the intersection. Canarc will complete 1 drill hole to test the intersection area.

Half Moon – Stibnite

The Half Moon – Stibnite target lies at the northeast corner of the dilation zone at the intersection of northeast-striking and east-striking mineralized shear zones and veins. Gold mineralization occurs within a broad envelope of stockwork veining which is about 175 m thick and has been tested down dip for about 350 m. The deepest historic drill intersection in the area is 4.2 g/t Au over 16.8 m including 7.8 g/t over 3 m and 6.7 g/t over 5.8 m (hole 02FC-4). The Company will complete one hole to test about 100 m below the historic holes.

Colorado

Colorado is a broad mineralized area (about 200 m by 300 m) marking the northwest corner of the dilation zone that contains strongly-altered and mineralized dikes, high-grade veins and shear zones, and broad lower-grade mineralization hosted in altered shale. Canarc’s rock-chip samples returned 5.0 g/t Au over 2 m, 10.7 g/t Au over 4 m and 24.0 g/t Au over 2 m in steep and low-angle shear/vein zones. The Company will complete 2 deep holes across the area to test below previous drilling and confirm the high-grade mineralization in the area of hole TF-114.

* Drill hole gold composites do not necessarily equate to true widths.

Qualified Person:

Dr. Jacob Margolis is a qualified person, as defined by National Instrument 43-101, and has approved the technical information in this news release. Dr. Margolis is engaged as a consultant to Canarc Resource Corp.

“Catalin Kilofliski”