American Bonanza Gold Corp.

American Bonanza Gold Corp.

October 21, 2013 08:00 ET

American Bonanza Provides Corporate Update

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Oct. 21, 2013) - American Bonanza Gold Corp. (TSX:BZA)(OTCQX:ABGFF) ("Bonanza" or "Company") wishes to provide shareholders with an update on operations at their 100% owned Copperstone gold mine in Arizona.

On October 11, 2013, the Company announced that mining and milling operations would be temporarily suspended, as it was unable to generate sufficient revenue to meet its on-going operational costs. Factors contributing to this decision included the need to maintain a consistent flow of ore to the mill on an on-going basis and the need to implement better mining methods to consistently improve dilution, backfilling, and development requirements to achieve the expected grade as per the Feasibility Study.

During the temporary suspension, the company is actively seeking additional capital and plans to support ongoing engineering and redesign of the underground mine in order to achieve design production capacity at the mine.

Care & Maintenance Update

All operation costs have been eliminated. The labor force has been reduced to a Care & Maintenance crew, and the mine and mill equipment have been shut down in an orderly manner and all appropriate equipment stored for reuse. The mine has been placed on Care & Maintenance, and is being pumped to ensure that the mine remains dry and does not fill with water. All regulatory, permit, and insurance issues have been identified and are being maintained.

A Care & Maintenance team of 9 is working at the Copperstone mine, including a manager, mine superintendent, mine engineer, controller, accountant/human resource, and security guards. Mine planning and operational programs are currently being refined on-site by a team of 5 led by the Company's Chief Operating Officer. These activities are part of a planned three-stage mine Care & Maintenance program, with the goal of enabling the mine to rapidly move forward and re-commence operations in order to achieve design rates:

Stage One: Detailed underground drilling to further delineate the ore body location and support engineering and development of new stope designs. The objective of this drilling is to reduce dilution during mining and improve ore extraction rates, resulting in greater ore output from the underground mine.
Stage Two: Development mining to improve underground infrastructure and provide a sufficient number of working areas to improve future ore production. Stage two plans also include mining of ore prior to the restart of milling operations. The planned result is the development of sufficient ore stock piles of consistently high grade ore that will provide a steady feed to the mill via the re-worked mine plan.
Stage Three: Re-starting the mill with the goal of rapidly achieving design production rates.

Stage One

The Company has already begun the implementation of an underground drill campaign with a complete drilling plan already completed. Request for Proposals have been requested from several drilling companies. These proposals will be reviewed in the next couple of weeks with drilling expected to commence upon completion of new financing.

Stage Two

Prior to the start of the Care & Maintenance period, Copperstone had made good underground development mining progress into several new C and D zone targets. Copperstone had been mining from four production headings and was in the process of accessing the new areas recently being developed

A new mine plan will be developed in the next weeks, once the Care & Maintenance programs are finalized. The development of the new mine plan will include updating the C and D zones to take advantage of recent development mining progress, and examine alternative mining methods to be employed in those areas.

A new approach to access the B-Zone is being examined, using a new decline and tying in the new decline to the old Cypress Decline/Adit. Focus on the new B-Zone plan will be a priority, as it has the potential to open up a completely new Zone and add significantly more mining areas.

Upon completion of the design work, development in the B-Zone is planned to commence. As the new B-Zone decline is collared and work crews are cycling appropriately, design and planning will also focus on completing the development work for new stoping designs in the C and D zone.

The review of the mine plan in the C and D zone targets will focus on long-hole stoping techniques, cast stoping, and other methods that effectively reduce or eliminate cemented backfill and should increase ore tonnage output. Bonanza will also focus on improvements to the backfilling cycles.

Stage Three

The goal is to achieve an ore stock-pile sufficient for a minimum 30 days of milling operations before the team at Copperstone re-commences mill operations. The long term goal is to provide a consistent feed of high-grade ore delivered to the mill from the mine. The mill has performed well and has delivered reliable gold recoveries since April 2012.

The plan is to rehire staff on an as needed basis with full staffing being completed by the start-up of the mill. A plan and schedule will be developed and implement over the next few weeks as the details are completed.

Financing Progress

The Company is currently in negotiations with several significant finance groups, and discussions are progressing during the Care & Maintenance period with a goal of providing sufficient capital to resume full long term operations at the mine. The Company will continue to update shareholders on progress regarding the financing in the near future. In the meantime, the Company is working with potential and existing financing sources to raise sufficient capital to conduct the Care & Maintenance programs at the mine.

The Company also announces the resignation of Robert McKnight as director of American Bonanza Gold Corp. to pursue other business interests. The Company would like to thank Mr McKnight for his many years of service and valuable contributions to the Company, and wishes him continued success.

Doug Wood, P. Geo the Vice President of Exploration of the Company, is the "qualified person" as defined in NI 43-101 who has reviewed and approved the technical information in this news release.

About American Bonanza Gold Corp: Bonanza is operating the newly constructed Copperstone gold mine in Arizona. For more information please visit Bonanza's website at

AMERICAN BONANZA GOLD CORP. Brian Kirwin, President & Chief Executive Officer

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