announces that it has signed a Letter of Offer (the “Letter”) with Balmoral Resources Ltd.

(“Balmoral”) for Balmoral to purchase four of Bonanza’s eastern Canadian exploration

properties. Under the terms of the Letter, Bonanza and Balmoral will enter into a Purchase

Agreement for Balmoral to purchase Bonanza’s rights in the Fenelon, Northway-Noyon, La

Martiniere and Northshore properties. In consideration, Balmoral will make a one-time cash

payment to Bonanza of Cdn $3.7 million dollars and issue 4.5 million common shares of

Balmoral to Bonanza subject to certain resale restrictions. Using the August 31, 2010 Balmoral

share price, the total current value of this transaction to Bonanza is over $7 million.

Final closure of the Bonanza Agreement is subject to completion of legal due diligence by

Balmoral, signing of the formal purchase agreement, completion by Balmoral of a minimum

financing of $5.0 million or such amount necessary for Balmoral to meet minimum listing

conditions on the TSXV in relation to the transaction, and the approval of the TSXV and TSX.

There can be no assurance that the purchase will be completed as proposed or at all.

The proceeds of this transaction will be applied to the development of the 100% owned

Copperstone gold mine in Arizona. Bonanza has purchased a milling and flotation circuit for

Copperstone and continues to make progress through the permitting process begun in late 2009.

Brian Kirwin, President and CEO commented: “We are very pleased with this transaction as it

provides further resources for Bonanza to continue the development of the Copperstone gold

mine, which is our primary objective in the near term. Balmoral is led by experienced mining

professionals and Bonanza’s share position in Balmoral provides our shareholders with exposure

to further upside of these properties and we look forward to Balmoral’s future success.”

The following highlights from the feasibility study entitled “NI 43-101 Technical Feasibility

Report, Copperstone Project, La Paz County, Arizona” dated February 2, 2010 (the “Study”) can

be viewed on

during inter-day trading on August 31, 2010) the AT-NPV is $84.9 million and a capital payback

period of less than 6 months. The table below provides a range of economic results at various

gold price assumptions.

Low $850 74.3% $50,162,532 $37,194,541

High $1400 170.4% $167,814,296 $101,878,924

The feasibility 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. Note that all numbers may not add up to total due to rounding.

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.

Bonanza is working to re-activate mining at the preproduction-stage Copperstone Gold Mine in

Arizona. Bonanza has approximately 129.1 million shares outstanding, and has no debt. Please

visit our website at