Canagold Resources Ltd. — Capital/Financing Update 2020

Oct 16, 2020

FORM 51-102F3

MATERIAL CHANGE REPORT

Item 1: Name and Address of Company

Canarc Resource Corp. (the “ Company ”) 810 – 625 Howe Street Vancouver, British Columbia V6C 2T6

Item 2: Date of Material Change

October 7, 2020

Item 3: News Release

The news release was disseminated on October 8, 2020 through Accesswire and filed on SEDAR.

Item 4: Summary of Material Change

The Company announced that it has closed the first tranche of its non-brokered private placement (the “ Private Placement ”) consisting of the issuance of 40,000,000 units (each, a “ Unit ”) at a purchase price of $0.08 per Unit.

Item 5: Full Description of Material Change

The Company announces that it has closed the first tranche of the Private Placement, previously announced by the Company in press releases dated August 19, 2020 and September 3, 2020. The first tranche of the Private Placement consisted of the issuance of 40,000,000 at a purchase price of $0.08 per Unit for total proceeds of $3,200,000. Each Unit consists of one common share in the capital of the Company and one-half of one common share purchase warrant (each whole warrant, a “ Warrant ”), with each Warrant entitling the holder to acquire one additional common share of the Company at an exercise price of $0.13 for a period expiring on October 7, 2022. If the daily volume-weighted average price of the Company’s common shares is equal to or greater than $0.20 for a period of 10 consecutive trading days, the Company will have the right to accelerate the expiry date of the Warrants by giving written notice to the Warrant holders that the Warrants will expire on the date that is 30 days from the date notice is provided by the Company to the Warrant holders. Finders’ fees of 6% were payable in cash on certain portions of the first tranche of the Private Placement.

The securities issued in the first tranche of the Private Placement are subject to a four-month plus one day hold period ending on February 8, 2021, in accordance with applicable securities laws and the policies of the Toronto Stock Exchange (the “ Exchange ”). The Private Placement is subject to the final acceptance of the Exchange.

Use of proceeds will be for exploration of the Company’s gold projects and to strengthen its working capital.

Scott Eldridge, the Chief Executive Officer and a director, Garry Biles, the President and Chief Operating Officer, Bradford Cook, the Chairman and a director, Martin Burian, a director, Andrew Bowering, a director and Deepak Malhotra, a director (collectively, the “ Insiders ”), participated in the Private Placement by purchasing an aggregate of 5,625,000 Units in the first tranche of the Private Placement. There has not been a material change in the percentage of the outstanding securities of the Company that are individually owned by the Insiders. The participation of the Insiders in the Private Placement constitutes a related party transaction pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“ MI 61-101 ”). The Company is exempt from the requirements to obtain formal valuation and minority shareholder approval in connection with the participation of the Insiders in the Private Placement pursuant to the exemptions contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101, respectively. The Private Placement was unanimously approved by the directors of the Company.

2

Cautionary Note Regarding Forward-Looking Statements

This material change report contains “forward-looking statements” within the meaning of the United States private securities litigation reform act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities legislation. Statements contained in this material change report that are not historic facts are forward-looking information that involves known and unknown risks and uncertainties. Forward-looking statements in this material change report include, but are not limited to, statements with respect to the planned closing of the second tranche of the Private Placement, and the planned use of proceeds from the Private Placement. In certain cases, forward-looking statements can be identified by the use of words such as “plans”, “has proven”, “expects” or “does not expect”, “is expected”, “potential”, “appears”, “budget”, “scheduled”, “estimates”, “forecasts”, “at least”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “should”, “might” or “will be taken”, “occur” or “be achieved”.

Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and other factors include, among others, risks related to regulatory approvals, risks related to the uncertainties inherent in the estimation of mineral resources; commodity prices; changes in general economic conditions; market sentiment; currency exchange rates; the Company’s ability to continue as a going concern; the Company’s ability to raise funds through equity financings; risks inherent in mineral exploration; risks related to operations in foreign countries; future prices of metals; failure of equipment or processes to operate as anticipated; accidents, labor disputes and other risks of the mining industry; delays in obtaining governmental approvals; government regulation of mining operations; environmental risks; title disputes or claims; limitations on insurance coverage and the timing and possible outcome of litigation. Although the Company has attempted to identify important factors that could affect the Company and may cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, do not place undue reliance on forward-looking statements. All statements are made as of the date of this material change report and the Company is under no obligation to update or alter any forward-looking statements except as required under applicable securities laws.

Item 6: Reliance on subsection 7.2 of National Instrument 51-102

N/A.

Item 7: Omitted Information

N/A.

Item 8: Executive Officer

The following executive officer of the Company is knowledgeable about the material change disclosed in this report and may be contacted as follows:

Scott Eldridge Chief Executive Officer (604) 685-9700

Item 9: Date of Report

October 16, 2020