Copperstone Gold Project Update

 

VANCOUVER, BC - American Bonanza Gold Corp. reported the commencement of mine permitting activities at the 100% owned Copperstone Gold Project in Arizona. In late September, Bonanza filed its Mining Plan of Operations with the United States Department of the Interior's Bureau of Land Management ("BLM"). The BLM will be the lead governmental agency with oversight of Bonanza's mining operations.

The submission of the Copperstone Mining Plan of Operations initiates the mine permitting process. Permit applications are currently being prepared for submission to the Arizona Department of Environmental Quality, the Arizona Department of Water Resources, the US BLM (additional submissions), local governmental authorities, the US Environmental Protection Agency, and other regulatory agencies.

Bonanza has assembled a team of industry-leading mining and environmental consulting firms to expedite the permitting and mine development process; all are underway and making good progress. Included are: Schlumberger Water Management Consultants (lead permit coordinator, tailing site facility design, hydrological planning), Call & Nicholas International Geotechnical Consultants (geomechanical studies for underground mining and backfilling), Vezer's Industrial Professionals (underground mine design, stope planning, mine scheduling), and Continental Metallurgical Services (feasibility report, metallurgical study, mill design, construction scheduling).

The Copperstone Gold project produced nearly one-half million ounces of gold between 1987 and 1993. After several years of exploration and resource drilling, and pre-mining studies, Bonanza is currently planning the re-activation of mining on the project, moving from the open pit surface mining of the past to underground mining of high grade gold mineralization in the future.

Mine development advantages for Copperstone are substantial and should result in a shorter than typical mine permitting process and will reduce the capital cost for development of the new underground mine. Copperstone is a modern previously mined site with a clean, non-sulfide bearing mineral resource, and the current mine plan calls for no additional disturbance to the public lands. The mine plan has been designed to have a very low environmental impact, and this design should contribute to a permitting process that is more rapid than is typical for new mine development.

Existing infrastructure consists of a power line and substation, and three water wells, all sufficient for the new mine at Copperstone, along with an office, maintenance shops and a laboratory building. High grade gold mineralization in the D-Zone that is scheduled for Year One production has already been exposed in a 600 meter decline driven by Bonanza.

The South Pit Zone, the Southwest Zone, and several earlier stage exploration targets have the potential to significantly extend the mine life beyond current gold resources and improve overall economic returns. The potential for these gold zones, which lie outside of the current resources, to extend the mine life at Copperstone will be evaluated subsequent to the current economic study.

Bonanza continues to work toward completion of the Copperstone Feasibility Study. Recently, in order to maintain a predictable timetable and continuity of the Study, Bonanza has been compelled to make a change to the makeup of the team of subcontractors. As a consequence, the new estimated completion date for the Feasibility Study is now mid-November.

Although the decision to make the change is difficult, Bonanza management believes that it is essential to make the change in order to develop the Copperstone project as expeditiously and predictably as possible, and has a high degree of confidence in the Feasibility Study team and the new timetable. Work will continue over the next seven weeks, and results will be announced as soon as available.

The Copperstone Property is located in western Arizona within the Walker Lane mineral belt where it intersects gold provinces in Southern California and Western Arizona. These provinces host a total known gold endowment of over 40 million ounces of gold.

The company s address is Suite 305 - 675 West Hastings St., Vancouver, BC V6B 1N2, (604) 688-7523, fax: (604) 681-0122, email: info@americanbonanza.com.