American Bonanza Gold Corp

Copperstone Air Photo showing Target Zones & Development

 July 16, 2002
Joint Venture on Gold Bar and Pamlico

 AMERICAN BONANZA GOLD MINING CORP. ("American Bonanza") is pleased to announce that it has signed a letter of intent with Mask Resources Inc. ("Mask") a member of the Varshney Capital group of companies whereby Mask may acquire up to 49% of American Bonanza's wholly owned Gold Bar and Pamlico projects, both located in Nevada. The agreement is subject to all necessary approvals and execution of a formal definitive agreement.

In order to acquire up to a 49% interest on a vest in basis in both the Gold Bar and Pamlico projects, Mask will make a cash payment of $100,000 and issue 800,000 Mask shares and fund exploration expenditures of $3,600,000 over a three-year period. American Bonanza has retained a back-in right to increase its interest to 70% from 51% at the conclusion of the three-year period by reimbursing Mask for 200% of its cumulative exploration expenditures.

The Gold Bar project is in Nevada and is centered on the Main Gold Bar Open Pit, which operated from 1987 to 1994. The milling operation produced 485,200 ounces of gold. The target lies at depth where the "feeder structures" are expected to pass through the Roberts Mountains Formation, an excellent host for high grade, large, Carlin-type deposits similar to Meikle and Deep Star. Continued data compilation is required to refine the target using 3-D software.

The Pamlico project is located in the Walker Lane gold trend of Nevada, and has received little modern exploration. American Bonanza's results to date are very encouraging, having identified numerous very high-grade gold anomalies at surface, in the historic underground workings, and in drilling. The Bonanza grade targets are currently drill ready.

American Bonanza continues with its plan to develop the high-grade Copperstone project, with an estimated total resource of 2.1 million tons at an average uncut grade of 0.58 ounces of gold per ton, containing over 1.2 million ounces of gold.

About American Bonanza

American Bonanza is engaged in the acquisition, exploration and development of high-grade precious metal properties. American Bonanza's innovative metallogenic techniques developed at considerable expense represent state-of-the-art tools for modern exploration in the Great Basin of the American Southwest. The exploration technology required pioneering in terms of data analysis, hardware and software applications and will be the catalyst for future corporate growth.

Additional information about American Bonanza and its properties can be obtained at . For further information please contact Brian Kirwin, President and Chief Executive Officer (775) 824-0707 or Giulio T. Bonifacio, Executive Vice President and Chief Financial Officer (604) 699-0023.


(signed) Brian Kirwin

President and Chief Executive Officer

The TSX Venture Exchange has not reviewed and does not accept responsibility
for the adequacy or accuracy of this release.

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