BRIEF-American Bonanza and Kerr Mines Inc enter into an agreement to merge

Jan 23 (Reuters) - American Bonanza Gold Corp BZA.TO :

* American Bonanza and Kerr Mines Inc enter into an agreement to merge

* American bonanza gold-co shareholder entitled to receive 0.53 of Kerr Mines

common shares for about every one common share of co

* In connection with deal, Co may settle certain outstanding unsecured debt

through issue of American Bonanza shares

* May settle certain outstanding unsecured indebtedness through the issue of

American Bonanza shares

* Loan and break fee of $500,000 payable by American Bonanza in event of

termination of the transaction in certain circumstances

* Says terms of settlements not yet determined, but expected to result in issue

of about 337 million American Bonanza shares

* Says Co's shares issued to settle indebtedness will be exchanged for Kerr

Mines shares

* Upon completion, Kerr Mines board to be reconstituted to consist of 5

nominees of Kerr Mines and 2 nominees of American Bonanza

* Rpt-american bonanza gold - under terms kerr mines has advanced $1 mln to co

to satisfy certain amounts payables outstanding of co

* Source text for Eikon News Search ID:nMKW84250a

* Further company coverage BZA.TO

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