American Bonanza Gold Corp





Permits

EA/FONSI

Mine Plan of Operation
Overview


  • Recently completed positive feasibility study indicates a robust economic profile including:
    • Gold Production averages 46,000 ounces/year for first 3 years.
    • Cash Production cost of US $415 per ounce produced.
    • Capital Cost of US $17.7 million (includes indirect costs).
    • Capital investment payback period of 13 months.
    • Total Gold produced 231,000 ounces of gold.
    • NPV of Base Case is US $51 million (after tax, discounted).
    • IRR of Base Case is 96% return.
    • Pre-tax Cash Flow of US $104 million (undiscounted, using spot gold price of US $1104 per ounce - December 28, 2009).
  • 256,431 Ounces of Gold Proven and Probable Mineral Reserve - please refer to Resource page
  • 313,183 Ounces of Gold Measured and Indicated resources - at a 10.35 grams per ton gold grade. - please refer to Resource page
  • 144,892 Ounces of Gold Inferred Resources, which are in addition to the Measured and Indicated Resources - at a 12.21 grams per ton gold grade. - please refer to Resource page
  • Significant expansion potential identified: South Pit Gold Zone and Reserves area open to expansion.
  • Permitting expected to be completed during the fourth quarter of 2010.
  • Wholly owned property in a World Class Gold Province.
Qualified Person

The resource estimate was prepared by Jonathan Brown., M.B.A., C.P.G., a qualified person. The reserve estimate was prepared by Tom Buchholz, B.S. Eng - MMSA QPM, a qualified person. The estimates are effective as of February 2, 2010. Details of the key assumptions, parameters, and methods used to estimate the mineral reserves and resources, and information regarding the extent to which the mineral resources and reserves may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant issues is contained in a technical report entitled "NI 43-101 Technical Feasibility Report Copperstone Project, La Paz County, Arizona" effective February 2, 2010 and revised January 10, 2011, prepared for American Bonanza Gold Corp. by Dr. Corby Anders, Allihies Inc., MMSA QP, C. Eng FlChemE, Tom Buchholz, BS Eng. MMSA, Chris Pratt, LPG and Jonathan Brown, M.B.A., C.P.G.. To review this report in its entirety, follow this link. Mineral resources that are not mineral reserves to not have demonstrated economic viabililty.

* The information on the Copperstone Mine has been summarized from a technical report entitled "NI 43-101 Technical Feasibility Report Copperstone Project, La Paz County, Arizona" effective February 2, 2010 and revised January 10, 2011, prepared for American Bonanza Gold Corp. by Dr. Corby Anders, Allihies Inc., MMSA QP, C. Eng FlChemE, Tom Buchholz, BS Eng. MMSA, Chris Pratt, LPG and Jonathan Brown, M.B.A., C.P.G.. To review this report in its entirety, please follow this link.


The Corporation is focused on the development of a gold mine at Copperstone. Contact us should you be interested in any of our exploration properties.

Cone Crusher



Jaw Crusher



Copperstone Mill Photos



The Copperstone Project is located in western Arizona within the Walker Lane mineral belt where it intersects gold provinces in Southern California and Western Arizona. These provinces host a total known gold endowment of over 40 million ounces of gold. Copperstone is located within a lesser-known, globally significant, high grade gold province.

The Corporation holds a 100 percent leasehold interest in the Copperstone Project. The landlord is The Patch Living Trust and the lease is for a 10 year term starting June 12, 1995 and was renewed on June 12, 2005. The lease is renewable by the Corporation for one or more ten-year terms at the Corporation's option under the same terms and conditions. The Corporation is obligated to pay for all permitting and state lease bonding, insurance, taxes, and to pay a sliding scale gross royalty.

The Corporation's current objective is to put Copperstone into production during 2011.  In 2010, the Company announced the positive results of its NI 43-101 Technical Feasibility Report Copperstone Project, La Paz County, Arizona" effective February 2, 2010 and revised January 10, 2011, prepared for American Bonanza Gold Corp. by Dr. Corby Anders, Allihies Inc., MMSA QP, C. Eng FlChemE, Tom Buchholz, BS Eng. MMSA, Chris Pratt, LPG and Jonathan Brown, M.B.A., C.P.G.  (the "Study") at Copperstone (see Feasibility Study for details). The Study began during 2009 and was designed to update the preliminary economic assessment completed by AMEC on March 27, 2006.  The Study began during 2009 and was designed to update the preliminary economic assessment completed by AMEC on March 27, 2006.
Location


The Copperstone property is located in La Paz County, Arizona, United States. The closest communities are Quartzite, located 16 km to the south and Parker, located 40 km to the north. Phoenix is 106 km east of the Copperstone property. The property is accessible from Phoenix on Interstate 10 to Quartzite and Route 95 from Quartzite. An 8 km unpaved mine road connects the property to Route 95.


Title


The Copperstone property consists of 284 contiguous un-patented Federal mineral claims comprising 5,680 acres. The land is under the jurisdiction of the United States Bureau of Land Management (BLM). The Patch Living Trust ("PLT") of Scottsdale, Arizona owns the title to the 284 mineral claims. In June 1995, the Copperstone property was leased from PLT by APMI for a 10 year term and was renewed on June 12, 2005. The annual claim fees payable to the BLM are approximately US$30,000. An annual US$30,000 advance royalty is payable to PLT under the terms of the lease and is subject to a 1 percent production gross royalty so long as the price of gold in US dollars is less than US$350 per ounce (royalty increases to 6 percent as price of gold increases to over US$551 per ounce).


Geology


Copperstone occurs within the "Basin and Range" province of the south-western USA. The regional geology is strongly influenced by Tertiary age detachment faults and younger high angle normal faults. The Copperstone gold deposit is related to the Moon Mountain or Copper Peak detachment fault. Gold mineralization at Copperstone occurs principally within the moderate to low-angle Copperstone Fault which has been interpreted to be a listric fault associated with the underlying Moon Mountain detachment fault. Gold occurs as native flakes within fault breccia, gouge and shear zones related to the faulting. The wall and host rocks are typically Triassic sediments and Jurassic quartz latite volcanics. Gold is commonly associated with hematite, chlorite, quartz, manganese oxide and copper oxide mineralization.


Mining History


During the period 1987 to 1993, Cyprus Minerals ("Cyprus") operated a 2,500 ton per day open-pit mine at Copperstone that produced 500,000 ounces of gold from the Copperstone fault. The mine was closed at the economic limit of open-pit mining. Total mine production was 6,000,000 tons at a grade of 0.11 ounces/ton (3.8 g/t) gold. Gold recovery for the life of mine was 89 percent. The strip ratio of the pit was 10:1. Cyprus drilled 496 reverse circulation and 73 core holes for a total of 569 holes. Following the mine closure in 1993, Cyprus reclaimed the tailings pond and removed the Carbon-in-Pulp mill. Office, shop and warehouse facilities remain at the site. Furthermore, the 69 kv power line and substation remains in service, together with the three water wells with a 200 hp pumping capacity.


Feasibility Study

The Copperstone Gold Mine is estimated it will produce on average 45,891 ounces of gold annually for the first 3 years, and have a capital investment payback period of only 13 months. The Study details a total capital cost of US$17.74 million, including working capital, G&A startup, reclamation bonding, and contingencies. The Study estimates the cash production cost to be US$415 per ounce of gold produced.

The After Tax Net Present Value ("AT-NPV") of the mine is US$51,291,204 and the Internal Rate of Return ("IRR") is 96.3% in the base case using a future gold price estimate of $962 per ounce and a 5% discount rate. Using the current spot gold price ($1104 per ounce on www.kitco.com on December 28, 2009) the AT-NPV rises to $68,089,302 and the IRR increases to 120.5%. The table below provides a range of economic results at various gold price assumptions.

Copperstone Economic Sensitivities at various Gold Prices:

Gold Price Case

Gold Price (US$/Oz)

IRR (%)

Undiscounted pre-tax Cash Flow (US$)

Net Cumulative After-Tax Cash Flow (US$)

Net Present Value After-Tax (US$) (Discounted)

Very Low

$650

17.0%

$7,380,073

$7,380,073

 $4,488,124

Low

$850

74.3%

$50,162,532

$47,461,378

$37,194,541

Base Case

$962

96.3%

$74,169,910

$64,763,463

$51,291,204

Spot

$1104

120.5%

$104,496,256

$85,434,230

$68,089,302

High

$1250

145.1%

$135,727,452

$106,035,800

$84,874,376

 Very High

$1400

170.4%

$167,814,296

$126,868,118

$101,878,924



The Study results indicate a total of 256,430 ounces of gold can be mined from current known diluted Proven and Probable Mineral Reserves during the 6.3 year mine life at Copperstone. The Study also indicates a cash production cost of $415 per ounce of gold. Bonanza plans to continue the rapidly progressing permitting process, and move Copperstone to production during 2010.

The Study supports a trackless underground mining operation, delivering ore to an on-site crushing, grinding, gravity concentration and finally flotation concentration of the gold bearing ore. The flotation concentrate will be shipped off-site to a gold recovery plant in the southwestern United States. The mine and recovery plant have been designed to reduce capital costs and speed permitting timelines while maintaining high rates of return.

Highlights of results from the Study include (results shown are for the Base Case, except the Spot Gold price case which uses Spot gold price of $1104 as discussed above):


Net Present Value Base Case: $51 million (USD)
Net Present Value Spot Gold Case: $68 million (USD)
Internal Rate of Return: 96%
Gold Production: 25,000 to 55,000 ounces per year
Mine Life: 6.3 years with expansion potential
Payback Period: 13 months
Capital Cost: $17.74 million (USD), including contingencies, working capital, reclamation bonding, etc.
Total Mined Ounces: 256,431 ounces
Total Gold Recovered: 230,700 ounces
Average Resource Grade (M&I;): 0.302 oz per ton, 10.4 grams per tonne
Cash Production Cost: $415 per ounce of gold produced
Total Production Cost: $624 per ounce of gold produced
Permit Timeline Target: July 2010


The Base Case is on an After Tax basis, with future cash flows discounted to present. Key Base Case assumptions for the Study include:

Gold Price: $962 per ounce of gold (USD)
Discount Rate: 5%
Production Rate: 450 tons per day = 157,500 tons per year
Cumulative Mine Production (P&P;): 1.0 million tons @ a diluted grade of 0.256 ounces per ton (8.76 grams per tonne) gold
Cash operating costs: $95.64 per ton of ore milled
Mining: $60.64 per ton mined, including development
Processing ore: $21.75 per ton milled
G&A;: $13.25 per ton milled
Mining dilution: 10.3% at zero gold grade
Tax Regime U.S. Federal, Arizona State
Gold Recovery: 90%
Cutoff Grade: 0.131 ounces/ton (4.5 grams per tonne gold)


This financial analysis has been estimated based on the diluted Proven and Probable Mineral Reserves which are derived from only the Measured and Indicated Mineral Resources. The cost estimates are based on contract mining and processing of the flotation concentrates at off-site processing facilities located in the southwestern United States. The Study report and associated documentation are filed on SEDAR.

Mineral Reserves

Classification Tons Grade (oz Au/t) Cont. Ounces
Proven 996,202 0.256 255,253
Probable 6,413 0.184 1,178
Proven & Probable 1,002,615 0.256 256,431



These Mineral Reserves at Copperstone were calculated by Chris Fedora, under the supervision of Tom Buchholz, B.S. Eng, MMSA-QPM under NI43-101, both acting through Vezer's Industrial Professionals, an independent consulting firm contracted by Bonanza to perform underground mine design, stope planning, mine scheduling, and calculate mineral reserves. Reserves were calculated using the Key Base Case assumptions set out above.

These Mineral Reserves are based on a Resource cutoff grade of 4.5 g/tonne gold, and capped at 171 g/tonne gold. The mine has been designed primarily as a trackless drift and fill mining operation, with ramp access and paste backfilling. Mining dilution across the life of the project is estimated at 10.3%. Pre-production development and mining of gold bearing Reserves are planned to begin in the D-Zone, north of the existing open pit, where Bonanza has exposed Proven Mineral Reserves in a tunnel driven from the north end of the open pit. Truck haulage is planned for transporting the ore from the underground mine to the surface processing facility.

Mineral Resources

Mineral Resources identified at Copperstone and included in the Study (which include the Mineral Reserves set out above) are set out in the below table:

Classification Tons Grade (oz Au/t) Contained Ounces
Measured 1,029,000 0.302 311,083
Indicated 9,000 0.230 2,101
Measured & Indicated 1,038,000 0.302 313,183
Inferred 369,000 0.357  144,892


These Mineral Resources at Copperstone were calculated as of January 29, 2010 by Telesto Nevada Inc.; the QP under NI43-101 is Jon Brown, M.B.A., C.P.G., who is in the employ of Telesto Nevada Inc. Telesto is an independent consulting firm contracted by Bonanza to perform such activities. These Mineral Resources are based on a cutoff grade of 5.1 g/t gold, and capped at 171 g/t gold.

Resource calculation methods differ between the current Resources and the 2006 Resources in that the current Resources contain a small number of new drill holes, and utilize smaller resource blocks (5'x5'x3') which should better model the mineral deposit compared to the 2006 Resources which used larger blocks (18'x12'x6'), and the current Resources utilize a more conservative interpolation method (Inverse Distance Cubed) compared to the 2006 Resources which were kriged.

Mineral Resource Cutoff Grade Analysis

The Study also examined the Measured, Indicated Mineral and Inferred Resources at various gold cutoff grades, which are set out in the below tables:

Measured and Indicated Resources at Various Cut-Off Grades

Gold Grade Cutoff (g/t Gold)

Tonnes

Grade

Contained Grams of Gold

Contained Ounces of Gold

5.1

941,357

10.35

9,741,086

313,183

6.9

536,731

13.71

7,358,194

236,572



Inferred Resources at Various Cut-Off Grades

Gold Grade Cutoff (g/t Gold)

Tonnes

Grade (g/t Gold)

Contained Grams of Gold

Contained Ounces of Gold

5.1

369,000

12.21

4,506,648

144,892

6.9

240,000

15.60

3,750,305

120,575



This cutoff grade analysis indicates that a significant portion of the Resources are available for mining at higher cutoff grades, which suggests resiliency with respect to gold price risk.

Previous NI 43-101 compliant Mineral Resources

As previously announced, the current Coppperstone Mineral Resources are an update to the Mineral Resources estimated, effective January, 2006, by AMEC E&C Services, an independent, respected international mining engineering firm, under contract with Bonanza. The 2006 Mineral Resource estimates were based on a cutoff grade of 5.1 g/t gold, with gold assay grades capped at 137 g/t gold and are presented for comparison purposes in the following table:

Resource Classification

Tonnes

Grade (g/t Gold)

Contained Ounces of Gold

Measured

  10,400

20.9

    7,005

Indicated

960,000

10.6

327,924

Measured + Indicated

970,400

10.7

334,929

Additional Inferred

189,600

10.9

 66,266



These Mineral Resources can be compared to the January 2006 NI43-101 compliant Mineral Resources shown below in the "Previous NI 43-101 Compliant Mineral Resources" section. The current Resources show a significant increase in ounces of gold contained in Measured Resources from 7,005 ounces to 311,183 ounces of gold, and a corresponding reduction (327,924 ounces compared to current 2,101 ounces) of gold in Indicated Resources as material is converted from Indicated Resources to the Measured Resources category.

The results of the Study also demonstrate a significant increase in ounces of gold contained in Inferred Resources, from 66,266 ounces previously to a current 144,892 ounces. The previous Inferred Resources were located at several locations around the property and included little or no mineralization from the South Pit Target, which was discovered and drilled subsequent to the 2006 Resource calculations. In the current Study, the Inferred Resources are all located in the South Pit Target, which will be further explored as exciting potential for expansion of the Mine.

Copperstone Economic Sensitivities at various discount rates:

Discount Rate Case

Discount Rate (%)

IRR (%)

Undiscounted pre-tax Income (US$)

Net Cumulative After-Tax Cash Flow (US$)

Net Present Value After-Tax (US$)(Discounted) 

Very Low

0

97.2%

$74,169,910

$65,571,347

 $64,763,463

Low

3

97.2%

$74,169,910

$65,571,347

$58,904,720

Base Case

5

97.2%

$74,169,910

$65,571,347

$51,291,204

High

7

97.2%

$74,169,910

$65,571,347

$46,878,448

Very High

8

97.2%

$74,169,910

$65,571,347

$44,844,903



These economic results using various discount rates to discount the value of future cash flows from mining operations were calculated using the Key Base Case assumptions set out above, with the only variable being the discount rate. While in the current economic environment the risk free rate of return on capital is near 2%, and the site location in Arizona generally would not attract an increase in the discount rate to reflect country risk, the Study uses 5% to maintain the conservative nature of the estimates.

Processing Plant

The Study compiles and reviews the detailed metallurgical testing that has been completed, in order to select an appropriate processing method and to optimize process operating parameters. Samples of various ore types and grades have been prepared and sent to various laboratories and testing facilities for metallurgical testing. These laboratories include: Hazen Research--1986--Cyanide Leaching; Hazen Research--1986--Mineralogy; Cyprus Metallurgy--1986-Phase I to III--Cyanidation and Flotation; Resource Development Inc.--1999--Cyanide Leaching; McClelland Laboratories--2000--Cyanidation, Gravity and Flotation; Echo Bay Minerals--2001--Flotation; McClelland Laboratories--2005--Cyanidation, Gravity, Flotation; CAMP--2009--Gravity and Flotation. The testing consisted of cyanidation studies including bottle roll and column leach tests, gravity concentration tests, flotation studies including flotation only and flotation tests followed by cyanidation, and reagent consumption tests.

Metallurgical test work supports gold recoveries of 90% utilizing a process which involves crushing, grinding, gravity gold recovery, and floating a gold concentrate followed by offsite recovery of gold from the concentrate. This is the circuit designed for the Study.

The results indicate that the gravity recoverable gold potential in the 2009 composite samples appears very good at about 25-40% at typical weight recoveries (1.0% to 1.25%) used to produce a salable material with a gold content from 8 to 15 ounces of gold per ton. Bulk gold flotation recoveries are reasonable and at a grind of 200 mesh with direct flotation recoveries of about 70 to 75% are indicated and when combined with gravity, 86 to 94% recoveries are achievable

Permitting Copperstone

In November 2009, another milestone on the road to mine development was met, as the Copperstone Mine Plan of Operations was accepted as complete by the United States Department of the Interior's Bureau of Land Management ("BLM"). The BLM is the lead governmental agency with oversight of Bonanza's mining operations.

Permit applications are currently being prepared for submission to the Arizona Department of Environmental Quality, the Arizona Department of Water Resources, the US BLM (additional submissions), local governmental authorities, the US Environmental Protection Agency, and other regulatory agencies. Schlumberger Water Management Consultants is an industry-leading environmental and engineering consulting firm and is Bonanza's lead permit coordinator for Copperstone, and is also providing tailing site facility design and hydrological planning for the mine development.

The Copperstone site has substantial mine development advantages which could result in a shorter than typical mine permitting process and reduce the capital cost for the new underground mine. Copperstone is a modern previously mined site with a clean, non-sulfide bearing mineral resource, and the current mine plan calls for no additional disturbance to the public lands. The mine plan has been designed to have a very low environmental impact, and this design could contribute to a permitting process that is more rapid than is typical for new mine development.

Capital Cost Estimates

The Study results estimate a total Capital Cost of $17.74 million. This includes direct costs for procurement and construction totaling $9.8 million, which includes the processing plant, including purchase and installation of the crushing and grinding circuits, the gravity and flotation recovery circuits, and buildings, communications, etc with an estimated cost of $5.2 million, and direct costs also include $2.7 million for pre-production underground mine development, and lastly, direct costs include $1.7 million for tailings management and reclaim systems. Indirect costs included in the Capital Cost estimate are: $2.9 million for working capital, $1.1 million for reclamation bonding, $0.4 million for owner's costs, $2.3 million for other indirect costs, and finally, a contingency budget of $1.3 million.

Ongoing capital required for further tailings impoundment expansion, bonding, reclamation, and demobilization of the contractor are estimated at $1.6 million. These costs are budgeted to be derived from operating cash flow after mine operations have commenced.

The Capital Cost estimates in the Study report represent a total estimated preproduction cost to design, procure, construct, and commission the various facilities described in this study to bring the Copperstone Mine back into gold production. According to the authors of the report, the estimate is categorized as Feasibility level with an expected accuracy range of ±7.5% at the bottom line. All costs are expressed in first quarter 2009 US dollars, with no allowance for escalation or interest during construction. The estimate covers the direct field costs of completing the project, plus the indirect costs associated with design, construction and commissioning of the facilities.

The Copperstone Mine produced nearly one-half million ounces of gold between 1987 and 1993 through open pit mining. Existing infrastructure which remains from this time or which has been subsequently installed by Bonanza is considerable, and serves to reduce the current capital requirements for the mine. Existing infrastructure includes a 69 KV power line and substation and three water wells, all sufficient for the new mine at Copperstone. Additional infrastructure on site includes offices, maintenance shops and a laboratory building. High grade gold mineralization in the D-Zone that is scheduled for Year One mining production has already been accessed in a 600 meter long underground tunnel driven by Bonanza.

Operating Cost Estimates

The Study results estimate a total Mine Operating Cost of US$95.64 per ton of ore processed. This includes a mining cost of US$60.64 per ton of ore and waste mined, a gold recovery cost of US$21.75 per ton of ore processed, and US$13.25 per ton of ore processed for G&A and corporate costs.

The Mine Operating Cost estimates in the Study report represent the total estimated mining and gold production costs, and total corporate costs to accomplish gold production as designed in the new underground mine planned at Copperstone. According to the authors of the report, the estimate is categorized as Feasibility level with an expected accuracy range of ±7.5% at the bottom line. All costs are expressed in first quarter 2009 US dollars. The estimate covers the costs of mining, processing and administering operations to produce gold. Stated another way, the cash production cost of producing one ounce of gold at Copperstone is calculated in the Study results to be US$415 per ounce of gold produced. The total production cost of producing one ounce of gold at Copperstone is similarly calculated to be US$624 per ounce of gold produced.

The Copperstone Development Team

Along with Bonanza's personnel, Bonanza has assembled a team of industry-leading mining and environmental consulting firms to expedite the mine development and permitting process; all are underway and making good progress. Included are: Schlumberger Water Management Consultants (lead permit coordinator, tailing site facility design, hydrological planning), Call & Nicholas International Geotechnical Consultants (geomechanical studies for underground mining and backfilling), Vezer's Industrial Professionals (underground mine design, stope planning, mine scheduling, mineral reserves), Telesto Nevada Inc. (mineral resources), and Continental Metallurgical Services (feasibility report, metallurgical study, mill design, economics, construction scheduling).

Technical information regarding the Copperstone project required to be disclosed under NI 43-101 can be found in the Study. Information regarding risks and uncertainties relating to the Copperstone project development can be found in our annual information form, filed on SEDAR, and specific risks related to the results of the Study can be found in our news release dated February 3, 2010, also available on SEDAR.

Qualified Person

The resource estimate was prepared by Jonathan Brown., M.B.A., C.P.G., a qualified person. The reserve estimate was prepared by Tom Buchholz, B.S. Eng - MMSA QPM, a qualified person. The estimates are effective as of February 2, 2010. Details of the key assumptions, parameters, and methods used to estimate the mineral reserves and resources, and information regarding the extent to which the mineral resources and reserves may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant issues is contained in a technical report entitled "NI 43-101 Technical Feasibility Report Copperstone Project, La Paz County, Arizona" effective February 2, 2010 and revised January 10, 2011, prepared for American Bonanza Gold Corp. by Dr. Corby Anders, Allihies Inc., MMSA QP, C. Eng FlChemE, Tom Buchholz, BS Eng. MMSA, Chris Pratt, LPG and Jonathan Brown, M.B.A., C.P.G.. To review this report in its entirety, follow this link. Mineral resources that are not mineral reserves to not have demonstrated economic viabililty.

Important Information


CAUTIONARY NOTE REGARDING RESOURCE AND RESERVE ESTIMATES

The Resource and Reserve estimates included in this website are estimates and no assurances can be given that the indicated level of gold production will be achieved. Such estimates are expressions of judgment based on knowledge, mining experience, analysis of drilling and sampling results and industry practices. Valid estimates made at any given time may significantly change when new information becomes available, and reserve estimates established at any given time may, as a result of macro-economic or other factors, cease to be valid in the future. While the Company believes that the resource and reserve estimates included in this website are accurate, by their nature resource and reserve estimates are imprecise and depend to a certain extent upon statistical inferences which may ultimately prove unreliable. If such estimates are inaccurate or are reduced in the future, this could have a material adverse impact on the Company, and adversely affect the results of the Study. Investors are cautioned not to assume that any part or all of the mineral deposit will ever be extracted or processed at a profit.

US Investors are cautioned that the reserve estimates disclosed in this website have been calculated pursuant to Canadian standards, and may not be considered "reserves" by the U.S. Securities and Exchange Commission.

CAUTIONARY NOTE CONCERNING ESTIMATES OF MEASURED, INDICATED AND INFERRED MINERAL RESOURCES

This website uses the terms "Measured and Indicated Mineral Resources". Bonanza advises US investors that while those terms are recognized and required by Canadian regulators, the U.S. Securities and Exchange Commission does not recognize them. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves.

This website also uses the term "Inferred Mineral Resources". Bonanza advises US investors that while this term is recognized and required by Canadian regulators, the U.S. Securities and Exchange Commission does not recognize it. "Inferred Mineral Resources" have a great deal of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors are cautioned not to assume that part or all of an Inferred Resource exists, or is economically or legally mineable.

FORWARD LOOKING INFORMATION ("FLI")

This website includes certain statements that may be deemed "forward-looking statements" or "forward-looking information". Forward-looking statements relate to future events or future performance and reflect Bonanza's management's expectations or beliefs regarding future events and include, but are not limited to, statements with respect to the estimation of mineral reserves and mineral resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, success of mining operations, environmental risks, permitting and approval timelines, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. These forward-looking statements are made as of the date of this document and Bonanza does not intend, and does not assume any obligation, to update these forward-looking statements except as required by law. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include changes in metals prices, changes in the availability of funding for mine development, unanticipated changes in key management personnel, risks related to possible variations in ore reserves, grade or recovery rates, accidents, labor disputes and other risks inherent to the mining industry, delays in obtaining governmental approvals or financing or both, changes to the costs and technical design associated with the completion of underground mine development or construction of processing facilities, and general economic conditions, as well as those factors detailed from time to time in Bonanza's financial statements and management's discussion and analysis of those statements, all of which are filed and available for review at www.sedar.com. While Bonanza has attempted to identify important factors that could cause actual actions, events, or results to differ materially from those described in forward-looking statements, mining is an inherently risky business and there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly investors should not place undue reliance on forward-looking statements.. For more information on the Company and the risks and challenges of its business, investors should review the Company's financial statements, Annual Information Form, the Study and other disclosure available on the Company's website www.americanbonanza.com and on www.sedar.com and investors should review the Company's annual filing on Form 20F with the United States Securities Commission.

Bonanza provides the following specific risk disclosure so investors are aware of the risks associated with certain statements contained in this website which may be deemed "forward looking statements", or "forward looking information", referenced to the section of this website which provides the information or statement. The below specific risk disclosure is in addition to the risk disclosure set out above. Investors are cautioned to read the below risk related information together with the above statements and Bonanza's other risk disclosures. Sensitivity analysis set out in the Study indicates that Copperstone project economics are most sensitive to gold price and metal recovery, so these parameters, among others, represent risks common to most types of FLI thus it is unavoidable that the below sections are in some respects similar. What is presented below is a discussion of the most salient risks to each type of FLI, in order of decreasing risk to the fruition of the FLI. These are current risk discussions and subject to change based on changing macro-economic and market conditions.

Information regarding the economics of mining at the Copperstone project set out in the Study, including the following types of information set out in this website, "Copperstone Economic Sensitivities at various Gold Prices" "Highlights of results from the Feasibility Study", "Key Base Case input parameters", "Gold Recovery Plant" and similar information including the quote from the President and CEO, include FLI. Specific risks associated with this FLI include: (i) the risk that gold prices may rise or fall in the future, which would improve or degrade this type of FLI; the risk that macro-economic conditions change to adjust the risk-free return on capital, thus affecting the discount rate used in these cash flow projections -- a rise in the discount rate would reduce the present value of the project; (ii) the risk that capital and labor costs may rise or fall in the future, thus degrading or improving the project economics; (iii) tax structures and taxation rates may change in the future to the detriment or benefit of the project economics; (iv) the risk that equity, debt and corporate markets are not sufficiently robust to allow the project to be financed; (v) risks related to gold recoveries and the availability of off-site gold from concentrate recovery facilities, the lack of which would cause an increase in capital costs and a likely delay to obtaining permits; (vi) delays in obtaining governmental approvals; (vii) risks related to possible variations in ore reserves, grade or recovery rates; (viii) availability of key personnel to provide services which while currently good, may become difficult, potentially leading to delays in obtaining permits and conducting operations; (ix) accidents, labor disputes and other risks inherent to the mining industry; (x) inflation, which could affect cost estimates and negatively affect project economics; (xi)delays in obtaining financing to commence mining operations, all of which may affect the attainment of these FLI. The Company has assessed these risks using among other things Monte Carlo simulations which indicate these likelihood that these risks are realized and preclude the FLI from coming to fruition is limited. This type of FLI, economic summary data, is affected by most of the risks associated with the project because it is bottom line economic results type information.

"Permitting Copperstone" and similar information: Specific risks associated with these statements include: delays in obtaining governmental approvals; determinations by government agencies adverse to Bonanza's interests; application of more stringent requirements by governmental agencies than that expected by the current fast track process applied to previously mined properties, changes in law and regulations, in particular environmental regulations, and availability of key personnel to provide services, which, while currently good, may expand or contract; all of which may affect the attainment of this FLI.

"Copperstone Summary" and similar information concerning the potential to expand the project: Specific risks associated with this disclosure: geologic risk inherent in the discovery and quantification of mineral resources -- additional drilling may provide information that reduces or enhances the economic prospect of current Inferred Resources; which may affect the attainment of this FLI.


Video Gallery

Copperstone Exploration Model

Copperstone Model Video


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Minesite Aerial Tour



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Technical Reports

 Copperstone Project, La Paz County, Arizona - NI 43-101 Technical Feasibility Report dated January 10, 2011.
 Appendix to the Feasibility Study, January 2011.
 Copperstone property - Amec 43-101 Technical Report dated March 27, 2006
 Technical Report on the Copperstone Gold Property by Michael R. Pawlowski dated Jan. 31, 2005
 Geological Report for the Copperstone Gold Property by Mine Development Associates dated October 26, 2000
 Copperstone Gold Project Scoping Study by MRDI Canada dated February, 1999

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