American Bonanza Nears Startup of Copperstone Gold Mine

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 27, 2011) - American Bonanza Gold Corp. BZAABGFF(PINK SHEETS: ABGFF) ("Bonanza") is pleased to announce that the Copperstone gold mine is in the final phase of construction prior to the commissioning of the Copperstone gold processing plant, which is scheduled to commence before the end of October.

All major surface administrative construction projects are complete, including new offices, upgraded or new maintenance and truck wash facilities, water distribution systems, power distribution systems, warehouse facilities, and a new assay laboratory. All processing plant and crusher equipment has been installed, with final electrical wiring and piping to be completed by the end of October. All medium voltage electrical wiring to the motor control centers is complete, and all other electrical wiring is nearing completion. The crusher back wall and dump pocket are on schedule to be complete before the end of October.

Earth work and installation of the double lining system for the tailings impoundment are complete. Emplacement of the sand overlay for the tailings impoundment is expected to be complete by the end of October. Installation of the tailings pipeline is on schedule for completion before the end of October.

Bonanza's mining permits allow mining of ore for treatment in the gold processing plant after the two declines have joined at the north end of the mine, thus providing multiple escape routes and enhanced ventilation. This work is scheduled for completion by the end of October, and would allow for the mining of ore to commence thereafter.

Dry commissioning of the gold processing plant is scheduled to begin near the end of October. During the dry commissioning phase, components of the processing circuit will be individually tested starting with the crushing circuit and grinding mills. Upon successful dry commissioning, the plant will run on water to test for leaks. Upon completion of the water test, non-mineralized rock will be introduced to wet test all circuits and optimize pumping in preparation for the introduction of mineralized rock into the plant.

Bonanza has completed its transition from contract mining to owner mining. All essential mining equipment has been purchased, with several of the major components already delivered to site and at work. Bonanza anticipates improvements in the mining production rate and reduced costs associated with mining as a result of this transition. Copperstone remains on track for a fourth quarter, 2011, mine and mill startup process, with the goal of achieving full production rates by the end of the year.

About Bonanza

Bonanza is nearing completion of the construction activities at the Copperstone gold mine, which will allow for re-activation of mining at the construction-stage Copperstone gold mine. Bonanza is well financed 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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