American Bonanza Announces Filing of Preliminary Prospectus for Proposed Equity Offering

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 8, 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 obtained a receipt for a preliminary short form prospectus filed with the securities regulatory authorities in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, and New Brunswick in connection with a proposed offering of up to 44,000,000 units (the "Units") at a price of $0.35 per Unit to raise aggregate gross proceeds of up to $15,400,000 (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.

The Offering is being led by Wellington West Capital Markets Inc. (the "Agent"). On December 2, 2010, the Company announced a private placement of 40,000,000 units at a price of $0.35 per unit. In order to comply with certain regulatory requirements, the Company and the Agent determined to restructure the previously announced private placement into a prospectus offering.

Bonanza will also grant to the Agent an over-allotment option (the "Over-Allotment Option"), exercisable at any time for a period of 30 days after the closing of the Offering, to purchase up to an additional 6,000,000 Common Shares at a price of $0.34 per Common Share and/or an additional 3,000,000 Warrants at a price of $0.01 per Warrant, or a combination thereof, for an additional gross proceeds to Bonanza of up to $2,100,000, to cover over-allotments, if any, and for market stabilization purposes.

Upon closing of the Offering, Bonanza will pay the Agent a cash commission equal to 6% of the gross proceeds of the Offering (including gross proceeds raised under to the Over-Allotment Option). As additional compensation, the Company will grant to the Agent a non-assignable option (the "Compensation Option") to purchase such number of Common Shares as is equal to 6% of the number of Units sold under the Offering, including any Units under the Over-Allotment Option.

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 TSX.

A copy of the Company's preliminary prospectus is available on the SEDAR website at www.sedar.com.

This news release is not an offer of securities for sale in the United States. The Common Shares, Warrants, Warrant Shares, Compensation Options and Common Shares issuable upon the exercise of the Warrants and Compensation Options 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 130 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