Copperstone Gold Mine Makes Significant Progress

VANCOUVER - American Bonanza Gold Corp. reported that the 100% owned Copperstone gold mine in Arizona continued to make significant progress during December. During December, Copperstone recovered more ounces of gold into concentrate than in any previous month, and maintained production from the underground mine and the development mining. The Company is encouraged with the recent progress as it continues towards its goal of achieving commercial production, estimated for the first quarter of 2013.

During December, ore was available for mining in five zones, which is similar to performance during November. This is a significant achievement towards bringing mine output to design levels of 450 tons per day of ore. The five zones are developed, with access, power distribution, and water management being maintained as development mining continues to advance.

The main objective for the development mining program is now to provide access to two additional zones over the next month. This will provide ore available for mining subsequent to the zones which are currently being mined. A dedicated development mining team continues towards deployment during January to continue the acceleration of the development mining.

Ore extraction rates during December continued at an improved level. Total rock mined during December averaged 612 tons per day. Ore mined during December averaged 310 tons per day (a 29 day month due to holidays), with development mining averaging 302 tons per day. Overall, these mining rates represent an improvement over November. The average daily ore mined represents about 68% of the targeted design rate of 450 tons of ore per day, slightly better than November, and roughly double the ore mining rate in October.

During December, the mine performance continued at an average of nearly 5 rounds of mining progress per day, similar to performance during November. (A round at Copperstone is eight feet of mining advance resulting from one phase of drilling, blasting and mucking. Although this varies according to rock type, one round at Copperstone generally contains roughly 100 tons of rock).

Ore tonnage processed through the gold plant during December was steady relative to performance in November. Ore processed during December averaged 334 tons per day (28 operating days due to the holidays), which is 74% of the designed rate of 450 tons per day. The processing throughput is currently limited by tailings handling. This limitation is currently being investigated with a view toward raising the tonnage that can be pumped to the tailings impoundment. The milling facility as designed is capable of processing higher tonnage, and will do so in the future as the few remaining issues are resolved.

Mill recovery during December averaged 68%, reflecting the effects of colder temperatures negatively impacting performance of the flotation chemicals and availability of the normal chemicals requiring the use of alternatives. These limitations have been addressed by heating these reagents and finding alternate sources of chemicals. Initial indications from the January are encouraging, with the recovery rate increasing to 81% for that period.

Ore processing rates are expected to improve when the tailings management system issues are resolved, and early indications are that the recovery rates are already improving. These two areas have the potential to significantly improve the number of ounces of gold recovered into concentrates.

Concentrate grades for the gravity circuit averaged 48 ounces of gold per ton (November: 25 ounces of gold per ton), and the flotation concentrate grades averaged 69 ounces of gold per ton (November: 13 ounces per ton). These concentrate grades are substantial improvements over the November performance. A total of 1,118 ounces of gold were recovered in concentrate during December, which is a substantial improvement over the 650 ounces of gold that were recovered in concentrate during November. The ounces of gold recovered during December were primarily adversely impacted by gold recovery rates in the mill, limitations on mill throughput, and limitations resulting from mine tonnage output. Early indications are that the shortcomings in the ore transport and handling systems experienced in November largely been resolved during December.

The company's address is Suite 1238, 200 Granville Street, Vancouver, BC V6C 1S4, (604) 688-7523, fax: (604) 681-0122, email: [email protected].