American Bonanza Gold Corp


Bonanza has signed a definitive agreement for the sale of its 100% owned Taurus Prject in the historic mining camp of Cassiar, British Columbia, to Cusac Gold Mines Ltd. ("Cusac"). Total consideration is up to Cdn. $11,000,000 plus 3 million Cusac Shares.

As part of Cusac's proposed merger with Hawthorne Gold Corporation ("Hawthorne"), Bonanza has agreed to the assignment to Hawthorne of the option agreement dated June 7, 2007 between Bonanza and Cusac. The assigned agreement amends the terms of the original option agreement and requires Hawthorne to pay $6 million over two years, consisting of $1 million by December 22, 2007, $2 million by June 22, 2008, $1.5 million by June 22, 2009 and $1.5 million by December 22, 2009. A further $3 million is payable upon completion of a positive feasibility study recommending production, or production, whichever comes first. Pursuant to the agreement, Hawthorne is required to issue 250,000 common shares to Bonanza on or before December 22, 2008. Bonanza agreed to the removal of the $2 million bonus payment which would have been payable if the price of gold closes above US $800 per ounce for a period of 100 consecutive days.