American Bonanza Gold Corp.
TSX : BZA

American Bonanza Gold Corp.

January 21, 2011 09:26 ET

American Bonanza Closes $17.5 Million Financing

Over-Allotment Option Exercised in Full Proceeds to Be Used for Copperstone Mine

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 21, 2011) -

THIS PRESS RELEASE IS NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO US NEWS AGENCIES

American Bonanza Gold Corp. (TSX:BZA) ("Bonanza" or the "Company") announces that it has closed the previously announced marketed public offering of units including those issued pursuant to the over-allotment option, which was exercised in full by Wellington West Capital Markets Inc. (the "Agent") (the "Offering"). A total of 50 million units were sold, at a price of $0.35 per unit, for gross proceeds of $17.5 million. Each unit consists of one common share and one half of one warrant, with each whole warrant entitling the holder to purchase a further common share at a price of $0.45 per common share at any time until July 21, 2012. The warrants will not be listed for trading. The Company paid the Agent a cash commission equal to 6% of the gross proceeds of the Offering, and issued to the Agent warrants to purchase 2,963,700 common shares at a price of $0.38 per common share, exercisable until July 21, 2012.

The proceeds of the Offering will be used to bring the Copperstone Mine into production, and for general working capital.

The securities offered have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any U.S. state securities laws, and may not be offered or sold in the United States or to United States persons absent registration or any applicable exemption from the registration requirement of the U.S. Securities Act and applicable U.S. state securities laws. This release does not constitute an offer to sell, or the solicitation of an offer to buy securities in the United States, nor will there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About Bonanza

Bonanza is working to re-activate mining at the preproduction-stage Copperstone Mine in Arizona. Bonanza has approximately 180 million shares outstanding and has no debt. For more information please visit Bonanza's website at www.americanbonanza.com.

AMERICAN BONANZA GOLD CORP.

Brian Kirwin, President & Chief Executive Officer

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