VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 7, 2012) - American Bonanza Gold Corp. (News - Market indicators)(OTCQX:ABGFF)(PINKSHEETS:ABGFF) ("Bonanza" or "Company") is pleased to announce that the Copperstone gold mine has achieved several significant milestones as the operation moves towards full production. The crushing and grinding facilities and the gold processing plant have completed commissioning and have recently operated for one week at 79% of the 450 tons per day design capacity during the final week of January 2012.

The gold processing plant is now treating ore grade rock, having run waste and low grade rock for several weeks as part of the startup process. Head grades during the final week of January average 0.21 ounces per ton of gold although data is still being analyzed and this result is subject to minor revision. The head grades are scheduled to rise during February as the processing plant works through the low grade rock which has been stockpiled at surface for startup. 

The processing plant is performing well, as indicated by the consistent and low grade tailings assays, in the order of 0.03 ounces per ton gold during the final week of January. Low gold grades in the tailings indicate that most of the gold being fed into the plant is being collected in the gravity and flotation circuits where high grade concentrates are being produced. The gold processing plant has been treating ore grade rock for a short time, and accordingly performance estimates are very preliminary in nature. During the coming months, as more substantial tonnage is processed, the performance results will become more reliable. 

Gold reporting to the gravity circuit in the processing plant is higher than expected, and as a result, the gravity circuit is being expanded to optimize recoveries. A Gemini gold table has been added to the gravity circuit and a second Knelson concentrator is being added. These steps to optimize the gravity circuit recoveries are aimed at improving overall performance of the gold processing plant. 

During the final week of January, overall gold recovery was 84%, although this result is subject to minor revision as the data are finalized. Bonanza's objective is to maintain the low tailings grade as the head grade increases, which would have the effect of increasing the overall gold recovery. Additionally, optimization of the gravity circuit is aimed at improving the gold recovery over the next several months. The gold grades of the gravity concentrates and the flotation concentrates were in line with or exceeded target grades for the final full week of January. As more tonnage of ore grade rock is processed, these concentrate grades and other processing plant performance measures will become more reliably measurable.

Underground mine performance continues to increase to design levels. Ore and development waste are being mined in approximately equal amounts. While not enough mining history has been developed to comprehensively compare the grade of the recently mined ore with the anticipated grades from the reserves, early indications are that ore being mined exceeds the grade as modeled in the reserve calculations. Surface ore stockpiles are currently in excess of 4,000 tons of ore, which will allow the gold processing plant to continue increasing throughput as the mine tonnages increase to provide feed to the processing plant.

The underground mine is nearing the completion of startup activities, with equipment, infrastructure, and personnel resources steadily improving. During the coming months, as the gold processing plant works through the ore already stockpiled on the surface, Bonanza's objective is to steadily bring the underground mine output up to target levels.

The Copperstone assay lab is operational, as are the surface office facilities, communication systems, truck wash bay, fuel depot, and other infrastructure necessary for the operation of the mine. Plans have been formulated for resource expansion drilling, and the underground drilling rig owned by Bonanza is being refurbished as personnel are being hired to conduct the drilling campaign along with the assistance of Bonanza's exploration personnel. While preliminary in nature, the current exploration plan has the goal of commencing underground resource expansion drilling during March of 2012.

This release was reviewed by Douglas Wood, P.G., Vice President, Exploration of Bonanza, a non-independent Qualified Person within the meaning of NI 43-101. 

About Bonanza

Bonanza is operating the newly constructed Copperstone gold mine in Arizona. 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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