American Bonanza Announces $14 Million Private Placement

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 2, 2010) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR OVER UNITED STATES NEWSWIRE SERVICES.

American Bonanza Gold Corp. (TSX:BZA) ("Bonanza" or the "Company") is pleased to announce that it has entered into an agreement with Wellington West Capital Markets Inc. (the "Agent") in connection with a best efforts private placement of 40,000,000 units (the "Units") at a price of $0.35 per Unit to raise aggregate gross proceeds of $14,000,000 (the "Offering"). Each Unit will consist of one common share of Bonanza and one-half of one common share purchase warrant (each whole warrant, a "Warrant"). Each Warrant will entitle the holder thereof to purchase one common share of Bonanza (a "Warrant Share") at a price of $0.45 per Warrant Share for 18 months following the closing of the Offering.

Bonanza will also grant to the Agent an option, exercisable at any time up to 48 hours prior to the closing of the Offering, to over-allot the Offering by up to 10,000,000 additional Units of Bonanza at a price of $0.35 per Unit for additional gross proceeds to the Company of up to $3,500,000.

Bonanza plans to use the net proceeds from the Offering to advance the ongoing development of its 100% owned Copperstone gold mine in Arizona and for general corporate purposes.

The Offering is scheduled to close on or about December 23, 2010 and is subject to certain conditions typical for a transaction of this nature and the receipt of all necessary regulatory approvals, including the approval of the Toronto Stock Exchange.

The Units to be issued pursuant to the Offering will be subject to a four-month restricted resale period, such period to commence upon the closing of the Offering.

This news release is not an offer of Units for sale in the United States. The Common Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration.

About Bonanza

Bonanza is working to re-activate mining at the preproduction-stage Copperstone gold mine in Arizona. Bonanza has 129 million shares outstanding and has no debt. For more information please visit Bonanza's website at www.americanbonanza.com.

AMERICAN BONANZA GOLD CORP.

Brian Kirwin, President & Chief Executive Officer

This news release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, including the likelihood of commercial mining and possible future financings are forward-looking statements. Although Bonanza 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 unsuccessful exploration results, changes in the price of gold, changes in the availability of funding for mineral exploration and/or development, unanticipated changes in key management personnel and general economic conditions. Mining exploration and development is an inherently risky business. Accordingly the actual events may differ materially from those projected in the forward-looking statements. For more information on Bonanza and the risks and challenges of its business, investors should review Bonanza's annual filing on Form 20-F with the U. S. Securities commission and its home jurisdiction filings that are available at www.sedar.com.

For more information, please contact