American Bonanza Continuing To Advance Copperstone Project

VANCOUVER, BC - American Bonanza Gold Corp. has developed a strategy to continue advancing the Copperstone project through feasibility and into production. Development of a low cost, scale-able mining operation is the strategy designed to provide the cash flow required for further growth and development, and is particularly important amid the current market conditions. Brian P. Kirwin, Pesident and CEO said, ?Bonanza's business has never been more exciting and the potential to become a gold producer is within reach.
We founded the company in the year 2000 through a reverse takeover of a dormant company that was entangled in bankruptcy, but it controlled a 25% interest in the Copperstone deposit in Arizona. While those were very difficult days in the gold industry, we completed the reverse takeover and over the next couple of years increased Bonanza's ownership of the Copperstone project to 100%. Since then, Copperstone has remained Bonanza's lead project.?
Between 2001 and 2006, Bonanza completed substantial drilling campaigns (over 400 holes totalling over 150,000 feet) that defined the high grade measured, indicated and inferred resources at Copperstone. Over the past couple of years Bonanza has been studying the best way to put Copperstone into production while also completing further exploration drilling to increase the size of the resource.
Currently Bonanza is working on a feasibility study to examine various methods for placing Copperstone into production. The last two years of drilling has identified two zones with significant potential to increase the size of the resources. The main objective now is to finish the feasibility study during the first half of 2009, make a production decision and commence permitting and construction.
?We are looking at building the mine at Copperstone in a staged process; starting with a small gold recovery plant that would provide high returns and low start-up costs. After a year or two of operating at the initial capacity, the project may be able to generate the capital to allow construction of a larger gold mine and recovery plant. Bonanza is examining several alternatives for completing this strategy. The strategy and initial size of the operation will be chosen based on what makes the most sense going forward, and will get Copperstone into production while closely managing working capital.
Significant background work has been completed, including environmental preparation work and engineering work, which should help shorten the permitting timeline. Copperstone is a pre-disturbed site and has power and water supplies in place and on site. The high grade gold mineralization has been accessed in underground workings: Bonanza completed a tunnel into a zone 80 feet long grading 1.2 ounces per ton gold (previously announced), so we know where the first production should come from. Copperstone is in a pro-mining area and the deposit is clean metallurgically, meaning it is easier to extract gold and do so without generating acid mine drainage and other environmental challenges that many gold deposits must overcome.
Bonanza is on schedule to complete the feasibility study in the first half of 2009, and we hope to soon thereafter have a production decision for Copperstone. We hope to see rapid permitting times, rapid construction times, and possibly be in production within a year of making a production decision,? Kirwin said.
The Northway Project in Quebec is a joint venture with Agnico-Eagle, a mid-sized growing gold producer in Canada. The joint venture includes both Agnico-Eagle's Vezza deposit and American Bonanza's Northway deposit. Agnico-Eagle is the operator of the joint venture, and has invested considerable infrastructure into the area. The joint venture is drilling Bonanza's half of the deposit with the aim to increase the resources above a certain cut-off grade that would make the gold deposits economic for mining.