Mr. Greg Gibson reports

KERR SEEKS SHAREHOLDER CONSENT FOR ACQUISITION OF AMERICAN BONANZA

Kerr Mines Inc. intends to issue up to 594,228,760 common shares pursuant to the terms of an arrangement agreement dated April 10, 2014, between Kerr Mines, American Bonanza Gold Corp. and a wholly owned subsidiary of Kerr Mines.

Pursuant to the terms and conditions of the arrangement agreement, Kerr Mines will acquire all of the issued and outstanding common shares in the capital of American Bonanza pursuant to a plan of arrangement. Assuming completion of the arrangement, American Bonanza shareholders will receive 0.53 of a Kerr share for each American Bonanza share held. In addition, each holder of the outstanding stock options of American Bonanza and common share purchase warrants of American Bonanza will receive such number of replacement stock options of Kerr Mines and/or common share purchase warrants of Kerr Mines equal to the product of the number of American Bonanza shares based upon the exchange ratio.

The current holders of American Bonanza options and American Bonanza warrants shall have their American Bonanza options and/or American Bonanza warrants exchanged for Kerr options and/or Kerr warrants, as applicable, which shall expire on the earlier of the current expiry date of the corresponding American Bonanza options and/or American Bonanza warrants and the first anniversary of the date of completion of the arrangement. The number of Kerr options and/or Kerr warrants (rounded to the nearest whole number) shall be equal to the product of the number of American Bonanza options and/or American Bonanza warrants outstanding immediately prior to completion of the arrangement and 0.53. The exercise price per Kerr share subject to any such Kerr option and/or Kerr warrant shall be an amount (rounded to the nearest cent) equal to the quotient of the exercise price per American Bonanza option and/or American Bonanza warrant divided by 0.53. The obligations of American Bonanza under the American Bonanza options and the American Bonanza warrants as so exchanged shall be assumed by Kerr Mines.

The aggregate number of Kerr shares which could be issued in connection with the arrangement (consisting of the 594,228,760 Kerr shares issued at the closing of the arrangement, the 5,088,530 Kerr shares issuable upon the exercise of the Kerr warrants issued at the closing of the arrangement and the 2,418,017 Kerr shares issuable upon the exercise of the Kerr options granted at the closing of the arrangement) would be up to 601,735,307 Kerr shares. This would represent 82.5 per cent of the issued and outstanding Kerr shares immediately prior to the arrangement on a non-diluted basis.

Completion of the arrangement will be conditional upon Kerr Mines and American Bonanza obtaining requisite shareholder approval, all required regulatory approvals, including the Toronto Stock Exchange, and the satisfaction of any conditions imposed by the TSX on the arrangement.

The arrangement is an arm's-length transaction. The arrangement will not materially affect control of Kerr Mines and no shareholder or combination of shareholders are acting together to influence the outcome of the arrangement.

Pursuant to the terms of the arrangement, Brian Kirwin, the current president, chief executive officer and a director of American Bonanza, and Wayne Tisdale, a current director of American Bonanza, will be appointed to the board of directors of Kerr. Otherwise, no other insiders will be created as a result of the arrangement, including any person becoming an insider of Kerr by virtue of holding more than 10 per cent of the issued and outstanding Kerr shares.

An application has been filed with the TSX for conditional approval of the arrangement. Pursuant to Section 607(g)(i) of the TSX company manual, the TSX will require Kerr Mines to obtain shareholder approval for the arrangement because the aggregate number of Kerr shares issuable pursuant to the arrangement is greater than 25 per cent of the number of Kerr shares which will be outstanding, on a non-diluted basis, prior to the date of closing of the arrangement.

Pursuant to the policies of the TSX, the TSX will give consideration to permitting Kerr Mines to provide the TSX with written evidence that holders of more than 50 per cent of the voting securities of Kerr Mines are familiar with the terms of the arrangement and are in favour of it rather than holding a special meeting of shareholders to obtain shareholder approval. Management of Kerr Mines will seek to obtain written evidence of such consent. If management of Kerr Mines is successful in obtaining such evidence of shareholder approval of the arrangement, shareholder approval will not be required to be obtained at a special meeting of the shareholders.

A copy of the arrangement agreement is available on SEDAR under the profiles of Kerr Mines and American Bonanza.

We seek Safe Harbor.