American Bonanza Announces Closing of $1,000,000 Private Placement, Execution of Earn-In Agreement and Update on Previously-Announced Non-Brokered Private Placement of Units

VANCOUVER, BRITISH COLUMBIA--(Marketwired - July 4, 2013) -

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

American Bonanza Gold Corp. (TSX:BZA) ("Bonanza" or the "Company") is pleased to announce that, further to its news release of June 12, 2013, it has entered into an earn-in agreement with Suparna Gold Corp. (TSX VENTURE:SUG) ("Suparna") in connection with the proposed mineral property acquisition and joint venture (the "Transaction") whereby Suparna may acquire up to a 60% interest in certain mining claims and property comprising the Southwest target (the "Southwest Target") at the Company's Copperstone gold mine in La Paz County, Arizona (the "Copperstone Mine").

The Company is also pleased to announce that, as previously announced on June 12, 2013, the Company has completed a private placement financing with Suparna of a secured convertible debenture (the "Debenture") for proceeds of $1,000,000 (the "Offering"). The Debenture is convertible into units (each, a "Unit") comprised of one common share in the capital of the Company and one-half of one common share purchase warrant. Subsequent to the Company's previous announcement of the Offering on June 12, 2013, the Company agreed to amend the pricing of the Offering. The Debenture is convertible into Units at a price of $0.06 per Unit (compared to the previously-announced conversion price of $0.08 per Unit), and each whole warrant underlying the Units is exercisable to acquire an additional common share of the Company at a price of $0.10 per share (as compared to the previously-announced exercise price of $0.12 per warrant). All other terms of the Offering remain the same. The warrants issued in connection therewith are exercisable for a period of 12 months from the date of issuance. The Debenture will bear interest at a rate of 12% per annum, calculated and payable monthly in cash, and will mature two years after its date of issue.

The Company intends to use the net proceeds of the Offering to fund the continued ramp up of production at the Company's Copperstone Gold Mine in a timely manner and for general corporate purposes.

Update on Unit Financing

The Company announces an update on the previously-announced non-brokered private placement of $0.05 units (the "Unit Offering") comprised of one common share in the capital of the Company and one-half of one common share purchase warrant. Each whole warrant issuable in connection with the Unit Offering is exercisable at a price of $0.08 warrant for a period of 12 months from the date of issuance. As previously announced, the Unit Offering will be completed in two tranches. In connection with the first tranche of the Unit Offering and pursuant to the revised pricing of the Offering, the Company will offer up to 19,999,334 units (compared to the 24,166,000 units as previously announced by the Company on June 12, 2013) for gross proceeds of up to $999,966.70 (compared to the gross proceeds of $1,208,300 as previously announced).

Pursuant to the second tranche of the Unit Offering, the Company will issue up to 200,000,000 units for gross proceeds of up to $10,000,000. The Company has adjourned its annual general meeting (the "AGM") until July 10, 2013 to approve the issuance of up to 200,000,000 units in connection with the second tranche of the Unit Offering. The second tranche of the Unit Offering is subject to receipt of shareholder approval which will be sought at the adjourned AGM to be held on July 10, 2013.

The units will be made available by way of private placement exemptions in Canada and may be offered in other jurisdictions where they can be issued on a private placement basis, exempt from any prospectus, registration or other similar requirements. In connection with the Unit Offering, the Company will pay finder's fees in the amount of up to 7% of the gross proceeds raised to arms-length finders.

The Unit Offering is subject to the final approval of the TSX.

About Bonanza

Bonanza is operating the newly constructed Copperstone Mine in Arizona. For more information please visit Bonanza's website at www.americanbonanza.com.

AMERICAN BONANZA GOLD CORP.

Brian Kirwin, President & Chief Executive Officer

We seek safe harbour