Kerr Mines and American Bonanza Enter Into Definitive Agreement

Kerr Mines Inc.) and American Bonanza Gold Corp. announced that the two companies have entered into a definitive arrangement agreement as of April 10, 2014

Based on the arrangement agreement each American Bonanza shareholder will be entitled to receive 0.53 of a common share (each whole share, a "Kerr Mines Share") of Kerr Mines for every one (1) common share of American Bonanza (an "American Bonanza Share") held by American Bonanza shareholders subject to adjustment, pursuant to a plan of arrangement under the Business Corporations Act (British Columbia).

 In addition, each holder of the outstanding stock options and common share purchase warrants of American Bonanza (the "American Bonanza Options") will receive such number of replacement options or warrants of Kerr Mines equal to the product of the number of American Bonanza Shares based upon the Exchange Ratio.

Currently, Kerr Mines 475,527,608 Kerr Mines Shares outstanding and American Bonanza has 234,396,111 American Bonanza Shares outstanding. In addition, pursuant to the Arrangement, American Bonanza will issue up to an additional 928,000,000 American Bonanza Shares prior to closing of the Transaction to settle certain outstanding indebtedness. The board of directors of each of the companies have approved the Arrangement.

The Arrangement must be approved by two-thirds of the votes cast by shareholders present and voting at the special meeting of American Bonanza shareholders called to consider the Arrangement. The board of directors of Bear Lake has unanimously resolved to recommend that its shareholders vote their securities in favour of the Arrangement.

The Arrangement is subject to the approval of the Supreme Court of British Columbia and all applicable regulatory authorities, including the Toronto Stock Exchange ("TSX"). Completion of the Arrangement is further subject to Kerr Mines shareholder approval and additional conditions set out in the Arrangement Agreement. Kerr Mines and American Bonanza expect to close the transaction on or about June 20, 2014.

As approved by the shareholders of Kerr Mines at the annual and special meeting of the shareholders of Kerr Mines held on December 19, 2013, the Kerr Mines shares will, following completion of the Arrangement and the American Bonanza Transaction, be consolidated on a 1 for 15 basis.

A copy of the Arrangement Agreement will be filed on SEDAR and will be available for viewing under the profiles of Kerr Mines and American Bonanza at www.sedar.com.

American Bonanza Gold operates the Copperstone Mine in western Arizona and owns mine sites in Nevada and Southeastern Califorinia.

Kerr Mines is based in the Larder Lake-Cadillac Break and owns the historic Kerr-Addison mine near Virginiatown, Ontario as well as the McGarry Mine Site. In February, 2014, Kerr Mines reached an agreement arrangement with Bear Lake Gold and is awaiting shareholder approval to finalize that agreement.