Drilling Returns Additional High Grade Gold Intercepts From New Polaris Project, BC

October 3, 2006

October 3, 2006 - Vancouver, Canada - Canarc Resource Corp. (CCM: TSX and CRCUF: OTC-BB) announces that recent infill drilling at the New Polaris project in northwestern British Columbia has returned additional high-grade gold intercepts, including 23.0 gpt gold over 5.9 m (0.67 oz per ton over 19.4 ft) and 43.4 gpt gold over 2.0 m (1.27 opt over 6.6 ft) in hole 270SW-2.

Drilling highlights from five of the latest six drill holes were as follows:

Hole	From	Length	Gold	Length	Gold
(No.)	(m)	(m)	(gpt)	(ft)	(opt)
1768E-2	259.2	3.5	17.9	11.5	0.52
incl.	260.9	0.4	27.0	1.3	0.79
1768E-3	329.6	2.5	9.1	8.2	0.27
incl.	331.7	0.4	19.2	1.3	0.56
270SW-2	201.6	5.9	23.0	19.4	0.67
incl.	202.6	2.0	43.4	6.6	1.27
270SW-3	239.5	12.65	7.4	41.5	0.22
incl.	242.15	0.85	30.4	2.8	0.88
and	262.0	2.0	17.5	6.6	0.51
incl.	262.0	0.9	28.0	3.0	0.82
330SW-11	361.0	2.5	6.6	8.2	0.19
True widths range from approximately 64% to 87% of core lengths.

Drill hole 300SW-9A intersected an uncharacteristically narrow width of low-grade mineralization immediately adjacent to an uncharacteristically wide part of the #1 fault.  The nearest up-dip drill hole, 300SW-8, intersected 8.9 gpt gold over 35.0 m.  The nearest down-dip drill hole, 330SW-11, intersected 6.6 gpt over 2.5 m on the other side of the #1 fault.  Therefore, it would appear that the C vein in hole 300SW-9A has been at least partially cut-off or off-set by the #1 fault.

For drill hole locations, refer to the C Veins Longitudinal Section on Canarc’s website - New Polaris Project. All previous drill holes are shown as solid circles, proposed 2006 hole locations are shown as open circles and the holes reported in this news release are shown as stars. Note that this year’s drill hole numbers refer to location along the section lines, not chronological sequence. Therefore, previous drill holes located along the section lines will cause some gaps to appear in this year’s drill hole number sequence.

Each of the drill holes reported herein are within the central part of the C vein system proximal to the #1 fault and fill in gaps in the previous drill hole pattern. The strong arsenopyrite (quartz-carbonate) mineralization intersected in these holes is consistent with most previous drill holes within the C vein.

James Moors, B.Sc., P.Geo, Vice President, Exploration, is the Qualified Person supervising the 2006 drill program on the New Polaris property.  He has instituted a Quality Control sampling program of blanks, duplicates and standards to ensure the integrity of all assay results.  All drill core is split by Canarc personnel at the New Polaris camp, and then flown to Vancouver for assay by ALS Chemex.  The core samples are dried, crushed, split and a 30-gram sub-sample is taken for analysis.  Gold content is determined by fire assay with a gravimetric finish on samples containing greater than 1 gpt Au, and other trace elements are analyzed by atomic absorption.  ALS Chemex also uses its own standards for quality control checks.

Canarc Resource Corp. is a growth-oriented, gold exploration company listed on the TSX (symbol CCM) and the OTC-BB (symbol CRCUF).  The Company’s principal asset is its 100% interest in the New Polaris gold deposit, British Columbia. 

CANARC RESOURCE CORP.
Per:

/s/ Bradford J. Cooke

Bradford J. Cooke

Chairman and C.E.O.

For more information, please contact Gregg Wilson at Toll Free: 1-877-684-9700,  tel: (604) 685-9700, fax: (604) 685-9744, email: invest@canarc.net or visit our website, www.canarc.net.  The TSX Exchange has neither approved nor disapproved the contents of this news release.

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Certain statements contained herein regarding the Company and its operations constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995.  All statements that are not historical facts, including without limitation statements regarding future estimates, plans, objectives, assumptions or expectations of future performance, are “forward-looking statements”.  We caution you that such “forward looking statements” involve known and unknown risks and uncertainties that could cause actual results and future events to differ materially from those anticipated in such statements.  Such risks and uncertainties include fluctuations in precious metal prices, unpredictable results of exploration activities, uncertainties inherent in the estimation of mineral reserves and resources, fluctuations in the costs of goods and services, problems associated with exploration and mining operations, changes in legal, social or political conditions in the jurisdictions where the Company operates, lack of appropriate funding and other risk factors, as discussed in the Company’s filings with Canadian and American Securities regulatory agencies.  The Company expressly disclaims any obligation to update any forward-looking statements.  We seek safe harbour.