---





CONSOLIDATED FINANCIAL STATEMENTS



YEARS ENDED DECEMBER 31, 2007 and 2006







(Expressed in Canadian Dollars, unless otherwise
stated)

---

Managements Report on Internal Control over Financial
  Reporting

The management of Great Basin Gold Ltd. is responsible for establishing
  and maintaining adequate internal control over financial reporting. The United
  States Securities and Exchange Act of 1934 in Rule 13a-15(f ) and 15d-15(f )
  defines this as a process designed by, or under the supervision of, the companys
  principal executive and principal financial officers and effected by the companys
  board of directors, management and other personnel, to provide reasonable assurance
  regarding the reliability of financial reporting and the preparation of financial
  statements for external purposes in accordance with generally accepted accounting
  principles and includes those policies and procedures that:

 Pertain to the maintenance of records that, in reasonable detail, accurately
  and fairly reflect the transactions and dispositions of the assets of the company;
  
   Provide reasonable assurance that transactions are recorded as necessary to
  permit preparation of financial statements in accordance with generally accepted
  accounting principles, and that receipts and expenditures of the company are
  being made only in accordance with authorizations of management and directors
  of the company; and 
   Provide reasonable assurance regarding prevention or timely detection of unauthorized
  acquisition, use or disposition of the companys assets that may have a
  material effect on the financial statements.

Because of its inherent limitations, internal control over financial
  reporting may not prevent or detect misstatements. Also, projections of any
  evaluation of effectiveness of internal control over financial reporting to
  future periods are subject to risk that controls may become inadequate because
  of changes in conditions, or that the degree of compliance with the policies
  or procedures may deteriorate.

Management assessed the effectiveness of the companys internal
  control over financial reporting as at December 31, 2007. In making this assessment,
  the companys management used the criteria, established in Internal Control-Integrated
  Framework issued by the Committee of Sponsoring Organizations of the Treadway
  Commission (COSO).

Management has excluded Hollister Ventures Corporation which
  was acquired in an asset acquisition during 2007, from its assessment of internal
  control over financial reporting as at December 31, 2007. Hollister Ventures
  Corporation is a wholly owned subsidiary of the company whose total assets of
  $101 million and net loss of $27 million of Great Basin Gold Ltds consolidated
  financial statements as at and for the year ended December 31, 2007.

Based upon this assessment, management concluded that the companys
  internal control over financial reporting was effective as at December 31, 2007.

The effectiveness of the companys internal control over
  financial reporting as at December 31, 2007 has been audited by PricewaterhouseCoopers
  LLP, our independent auditors, as stated in their report which appears herein.

|/s/ Ferdi Dippenaar         |  | /s/ Lou van Vuuren      | 
|--------------------------- |  | ----------------------- | 
|Chief Executive Officer     |  | Chief Financial Officer | 
|                            |  |                         | 
|Vancouver, British Columbia |  |                         | 
|March 31, 2008              |  |                         | 

---

|                       |                                                                                                                                                                                                                                                      
|---------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|AUDITORS
      REPORT | PricewaterhouseCoopers LLP
      Chartered Accountants
      PricewaterhouseCoopers Place
      250 Howe Street, Suite 700
      Vancouver, British Columbia
      Canada V6C 3S7
      Telephone +1 (604) 806 7000
      Facsimile +1 (604) 806 7806

To the Shareholders of Great Basin Gold Ltd.

We have completed an integrated audit of Great Basin Gold
  Ltd.s (the Company) 2007 consolidated financial statements
  and of its internal control over financial reporting as at December 31, 2007.
  Our opinions, based on our audits, are presented below.

Consolidated financial statements

We have audited the accompanying consolidated balance sheet
  of the Company as at December 31, 2007, and the related consolidated statement
  of operations and comprehensive loss, statement of shareholders equity
  and deficit and statement of cash flows for the year ended December 31, 2007.
  These financial statements are the responsibility of the Companys management.
  Our responsibility is to express an opinion on these financial statements based
  on our audit.

We conducted our audit of the Companys financial statements
  in accordance with Canadian generally accepted auditing standards and the standards
  of the Public Company Accounting Oversight Board (United States). Those standards
  require that we plan and perform an audit to obtain reasonable assurance about
  whether the financial statements are free of material misstatement. An audit
  of financial statements includes examining, on a test basis, evidence supporting
  the amounts and disclosures in the financial statements. A financial statement
  audit also includes assessing the accounting principles used and significant
  estimates made by management, as well as evaluating the overall financial statement
  presentation. We believe that our audit provides a reasonable basis for our
  opinion.

In our opinion, the consolidated financial statements referred
  to above present fairly, in all material respects, the financial position of
  the Company as at December 31, 2007, and the results of its operations, and
  its cash flows for the year ended December 31, 2007, in accordance with Canadian
  generally accepted accounting principles.

The consolidated financial statements of the Company as at
  December 31, 2006 and for the year then ended were audited by other auditors
  who expressed an opinion without reservation on those statements in their report
  dated March 16, 2007 and on the reconciliation to US generally accepted accounting
  principles on March 30, 2007.

Internal control over financial reporting

We have also audited the Companys internal control over
  financial reporting as at December 31, 2007, based on criteria established in
  Internal Control - Integrated Framework issued by the Committee of Sponsoring
  Organizations of the Treadway Commission (COSO). The Companys
  management is responsible for maintaining effective internal control over financial
  reporting and for its assessment of the effectiveness of internal control over
  financial reporting, included in the accompanying Managements Report
  on Internal Control over Financial Reporting. Our responsibility is to
  express an opinion on the effectiveness of the Companys internal control
  over financial reporting based on our audit.

We conducted our audit of internal control over financial
  reporting in accordance with the standards of the Public Company Accounting
  Oversight Board (United States). Those standards require that we plan and perform
  the audit to obtain reasonable assurance about whether effective internal control
  over financial reporting was maintained in all material respects. An audit of
  internal control over financial reporting includes obtaining an understanding
  of internal control over financial reporting, assessing the risk that a material
  weakness exists, testing and evaluating the design and operating effectiveness
  of internal control based on the assessed risk, and performing such other procedures
  as we consider necessary in the circumstances. We believe that our audit provides
  a reasonable basis for our opinion.

PricewaterhouseCoopers refers to the
  Canadian firm of PricewaterhouseCoopers LLP and the other member firms of PricewaterhouseCoopers
  International Limited, each of which is a separate and independent legal entity.

---



A Companys internal control over financial reporting
  is a process designed to provide reasonable assurance regarding the reliability
  of financial reporting and the preparation of financial statements for external
  purposes in accordance with generally accepted accounting principles. A Companys
  internal control over financial reporting includes those policies and procedures
  that (i) pertain to the maintenance of records that, in reasonable detail, accurately
  and fairly reflect the transactions and dispositions of the assets of the Company;
  (ii) provide reasonable assurance that transactions are recorded as necessary
  to permit preparation of financial statements in accordance with generally accepted
  accounting principles, and that receipts and expenditures of the Company are
  being made only in accordance with authorizations of management and directors
  of the Company; and (iii) provide reasonable assurance regarding prevention
  or timely detection of unauthorized acquisition, use, or disposition of the
  Companys assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over
  financial reporting may not prevent or detect misstatements. Also, projections
  of any evaluation of effectiveness to future periods are subject to the risk
  that controls may become inadequate because of changes in conditions, or that
  the degree of compliance with the policies or procedures may deteriorate.

As described in Management's Report on Internal Control over
  Financial Reporting, management has excluded Hollister Ventures Corporation
  from its assessment of internal control over financial reporting as at December
  31, 2007 because it was acquired by the Company during 2007. We have also excluded
  Hollister Ventures Corporation from our audit of internal control over financial
  reporting. Hollister Ventures Corporation is a wholly owned subsidiary of the
  Company whose total assets and net loss represent $101 million and $27
  million, respectively, of the Companys consolidated financial statement
  amounts as at and for the year ended December 31, 2007.

In our opinion, the Company maintained, in all material respects,
  effective internal control over financial reporting as at December 31, 2007,
  based on criteria established in Internal Control  Integrated Framework
  issued by the COSO.



Chartered Accountants
  Vancouver, British Columbia 
  March 31, 2008

Comments by Auditors for U.S. Readers on Canada 
  U.S. Reporting Difference

In the United States, reporting standards for auditors require
  the addition of an explanatory paragraph (following the opinion paragraph) when
  there is a change in accounting principles that has a material effect on the
  comparability of the Companys financial statements, such as the change
  in accounting for financial instruments as described in note 3 to the consolidated
  financial statements. Our report to the shareholders dated March 31, 2008, is
  expressed in accordance with Canadian reporting standards which do not require
  a reference to such a change in accounting principles in the auditors
  report when the change is properly accounted for and adequately disclosed in
  the financial statements.



Chartered Accountants
  Vancouver, British Columbia
  March 31, 2008

(2)

---

GREAT BASIN GOLD LTD. Consolidated Balance
Sheets(Expressed in Canadian Dollars)

|                                             |  |         |  |   | December 31  |   |   | December 31 |  
|-------------------------------------------- |  | ------- |  | - | ------------ | - | - | ----------- | -
|                                             |  | Note    |  |   | 2007         |   |   | 2006        |  
|Assets                                       |  |         |  |   |              |   |   |             |  
|                                             |  |         |  |   |              |   |   |             |  
|Current assets                               |  |         |  |   |              |   |   |             |  
|Cash and cash equivalents                    |  |         |  | $ | 78,362,954   |   | $ | 33,964,436  |  
|Amounts receivable                           |  | 11(a)   |  |   | 3,737,903    |   |   | 426,349     |  
|Inventory                                    |  | 6       |  |   | 199,185      |   |   | 53,437      |  
|Due from related parties                     |  | 14      |  |   | 408,638      |   |   | 173,455     |  
|Held-for-trading financial instruments       |  | 9(c)    |  |   | 833,000      |   |   |            |  
|Prepaid expenses                             |  |         |  |   | 811,208      |   |   | 539,991     |  
|                                             |  |         |  |   | 84,352,888   |   |   | 35,157,668  |  
|Property, plant and equipment                |  | 7       |  |   | 14,295,727   |   |   | 1,472,501   |  
|Reclamation deposits                         |  | 8       |  |   | 1,720,456    |   |   | 103,702     |  
|Investments                                  |  | 9(a)    |  |   |             |   |   | 2,274,649   |  
|Available-for-sale financial instruments     |  | 9(a)(b) |  |   | 3,326,084    |   |   |            |  
|Investments in associates                    |  | 10      |  |   | 7,203,973    |   |   |            |  
|Mineral
      property interests             |  | 11      |  |   | 218,413,930  |   |   | 110,910,000 |  
|Total Assets                                 |  |         |  | $ | 329,313,058  |   | $ | 149,918,520 |  
|                                             |  |         |  |   |              |   |   |             |  
|Liabilities and Shareholders' Equity         |  |         |  |   |              |   |   |             |  
|                                             |  |         |  |   |              |   |   |             |  
|Current liabilities                          |  |         |  |   |              |   |   |             |  
|Accounts payable and accrued liabilities     |  |         |  | $ | 6,099,246    |   | $ | 1,330,823   |  
|Due to related parties                       |  | 14      |  |   | 22,098       |   |   |            |  
|                                             |  |         |  |   | 6,121,344    |   |   | 1,330,823   |  
|                                             |  |         |  |   |              |   |   |             |  
|Future income taxes                          |  | 15      |  |   | 33,983,164   |   |   | 18,837,000  |  
|Site reclamation obligations                 |  | 12      |  |   | 1,416,964    |   |   | 405,000     |  
|                                             |  |         |  |   | 35,400,128   |   |   | 19,242,000  |  
|Shareholders' equity                         |  |         |  |   |              |   |   |             |  
|Share capital                                |  |         |  |   | 389,451,022  |   |   | 201,457,592 |  
|Warrants                                     |  | 13(c)   |  |   | 17,934,934   |   |   | 1,252,000   |  
|Contributed surplus                          |  | 13(d)   |  |   | 12,197,791   |   |   | 7,863,472   |  
|Deficit                                      |  |         |  |   | (132,395,033 | ) |   | (81,227,367 | )
|Accumulated
      other comprehensive income |  |         |  |   | 602,872      |   |   |            |  
|                                             |  |         |  |   | 287,791,586  |   |   | 129,345,697 |  
|                                             |  |         |  |   |              |   |   |             |  
|Total Liabilities and Shareholders' Equity   |  |         |  | $ | 329,313,058  |   | $ | 149,918,520 |  
|                                             |  |         |  |   |              |   |   |             |  
|Nature of operations                         |  | 1       |  |   |              |   |   |             |  
|Segment disclosure                           |  | 17      |  |   |              |   |   |             |  
|Contingencies and commitments                |  | 18      |  |   |              |   |   |             |  
|Subsequent events                            |  | 19      |  |   |              |   |   |             |  

See accompanying notes to consolidated financial
statements.

Approved by the Board of Directors

|/s/ Ferdinand Dippenaar | /s/ Ronald W. Thiessen
|----------------------- | ----------------------
|Ferdinand Dippenaar     | Ronald W. Thiessen    
|Chief Executive Officer | Director              

5

---

GREAT BASIN GOLD LTD.Consolidated Statement of
Operations and Comprehensive Loss(Expressed in Canadian Dollars)

|                                                                      |  |        |  |   | Years
      ended December 31 |  
|--------------------------------------------------------------------- |  | ------ |  | - | ----------------------------- | -
|                                                                      |  |        |  |   | 2007                          |  
|                                                                      |  | Note   |  |   |                               |  
|                                                                      |  |        |  |   |                               |  
|                                                                      |  |        |  |   |                               |  
|Expenses (income)                                                     |  |        |  |   |                               |  
|                                                                      |  |        |  |   |                               |  
|Exploration and pre-development
      (see schedule)                  |  |        |  | $ | 42,044,831                    |  
|Accretion of reclamation obligation                                   |  |        |  |   | 37,466                        |  
|Conference and travel                                                 |  |        |  |   | 1,474,495                     |  
|Foreign exchange loss (gain)                                          |  |        |  |   | 2,532,752                     |  
|Other income - proceeds from Bulk
      Sample                        |  |        |  |   | (2,695,599                    | )
|Interest and other income                                             |  |        |  |   | (3,725,837                    | )
|Legal, accounting, and audit                                          |  |        |  |   | 1,235,634                     |  
|Office and administration                                             |  |        |  |   | 17,655,463                    |  
|Shareholder communications                                            |  |        |  |   | 431,526                       |  
|Trust and filing                                                      |  |        |  |   | 359,877                       |  
|(Gain) loss on disposal of assets                                     |  | 11(c)  |  |   | (992,684                      | )
|Loss before the undernoted and income taxes                           |  |        |  |   | 58,357,924                    |  
|Loss from associate                                                   |  | 10 (c) |  |   | 796,027                       |  
|Gain on sale of investments                                           |  | 11(c)  |  |   |                              |  
|Fair value of financial instruments
      held-for-trading received   |  | 9(c)   |  |   | (937,365                      | )
|Fair value adjustment on financial instruments
      held-for-trading |  | 9(c)   |  |   | 104,365                       |  
|Mark-to-market adjustment on investments                              |  |        |  |   |                              |  
|Loss before income taxes                                              |  |        |  |   | 58,320,951                    |  
|Future income tax recovery                                            |  | 15     |  |   | (7,153,285                    | )
|Loss for the year                                                     |  |        |  | $ | 51,167,666                    |  
|                                                                      |  |        |  |   |                               |  
|Other comprehensive income                                            |  |        |  |   |                               |  
|Unrealized gain on available-for-sale financial
      instruments     |  | 9(a)   |  |   | (538,061                      | )
|Other comprehensive
      income                                      |  |        |  | $ | (538,061                      | )
|                                                                      |  |        |  |   |                               |  
|Total comprehensive
      loss                                        |  |        |  | $ | 50,629,605                    |  
|                                                                      |  |        |  |   |                               |  
|                                                                      |  |        |  |   |                               |  
|Basic and diluted loss per share                                      |  | 4(j)   |  | $ | 0.31                          |  
|                                                                      |  |        |  |   |                               |  
|Weighted average number of common shares outstanding                  |  |        |  |   | 166,098,884                   |  

See accompanying notes to consolidated financial
statements.

6

---

GREAT BASIN GOLD LTD.Consolidated Statements of
Shareholders' Equity and Deficit(Expressed in Canadian Dollars)

Year
      ended
    
    
    
    
    
    Year
      endedNote
    
    
    
    
    
      December 31, 2007
    
    
    
    
    
      December 31, 2006Number of
    
    
    
    
    
    Number ofCommon shares
    
      
    
    
    shares
    
    
    
    
    
    sharesBalance at beginning of the year
    
      
    
    
    113,411,713
    
    $
    201,457,592
    
    
    93,685,379
    
    $
    161,228,635Fair value of options exercised
    
      
    
    
    
    
    
    2,005,064
    
    
    
    
    
    753,849Private placement, net of share issue
      costs
    
      
    
    
    
    
    
    
    
    
    3,333,334
    
    
    7,033,683Shares issued for cash, net of share issue costs
    
      13 (e)
    
    
    57,500,000
    
    
    121,427,869
    
    
    11,200,000
    
    
    23,058,915Share purchase options exercised
    
      13 (b)
    
    
    3,015,830
    
    
    5,111,184
    
    
    1,193,000
    
    
    1,782,510Shares issued for Burnstone Gold Property, July 2006
    
      
    
    
    
    
    
    
    
    
    4,000,000
    
    
    7,600,000Shares issued for Hecla Ventures
      Corp., April 2007
    
      13 (f)
    
    
    7,930,214
    
    
    19,666,931
    
    
    
    
    
    Shares issued to Tranter Burnstone (Pty) Ltd, October
      2007
    
      13 (g)
    
    
    19,938,650
    
    
    36,323,195
    
    
    
    
    
    Share purchase warrants exercised
    
      13 (c)
    
    
    1,599,495
    
    
    3,459,187
    
    
    
    
    
    Balance at end
      of the year
    
      
    
    
    203,395,902
    
    $
    389,451,022
    
    
    113,411,713
    
    $
    201,457,592Number of
    
    
    
    
    
    Number ofShare purchase warrants
    
      
    
    
    warrants
    
    
    
    
    
    warrantsBalance at beginning of the year
    
      
    
    
    2,672,000
    
    $
    1,252,000
    
    
    
    
    $
    Warrants issued pursuant to share
      issuance
    
      13 (e)
    
    
    28,750,000
    
    
    16,210,226
    
    
    672,000
    
    
    159,000Warrants issued pusuant Tranter
      transaction
    
      13 (h)
    
    
    1,684,312
    
    
    1,178,815
    
    
      
    
    
      Warrants issued for Burnstone Gold
      Property
    
      
    
    
    
    
    
    
    
    
    2,000,000
    
    
    1,093,000Exercised
    
      13 (c)
    
    
    (1,599,495
    )
    
    (688,689
    )
    
    
    
    
    Expired
    
      13 (c)
    
    
    (73,615
    )
    
    (17,418
    )
    
    
    
    
    Balance at end of the year
    
      
    
    
    31,433,202
    
    $
    17,934,934
    
    
    2,672,000
    
    $
    1,252,000Contributed surplusBalance at beginning of the year
    
      
    
    
    
    
    $
    7,863,472
    
    
    
    
    $
    5,007,211Non-cash stock-based compensation
    
      13 (b)
    
    
    
    
    
    5,633,276
    
    
    
    
    
    3,610,110Share purchase options exercised,
      credited to share capital
    
      13 (d)
    
    
    
    
    
    (2,005,064
    )
    
    
    
    
    (753,849
    )Fair value of share purchase warrants
      exercised
    
      13 (c)
    
    
    
    
    
    688,689
    
    
    
    
    
    Fair value of share purchase warrants expired
    
      13 (c)
    
    
    
    
    
    17,418
    
    
    
    
    
    Balance at end of the year
    
      
    
    
    
    
    $
    12,197,791
    
    
    
    
    $
    7,863,472DeficitBalance at beginning of the year
    
      
    
    
    
    
    $
    (81,227,367
    )
    
    
    
    $
    (69,610,556
    )Net loss for the year
    
      
    
    
    
    
    
    (51,167,666
    )
    
    
    
    
    (11,616,811
    )Balance at end of the year
    
      
    
    
    
    
    $
    (132,395,033
    )
    
    
    
    $
    (81,227,367
    )Accumulated Other Comprehensive
      IncomeAdjustment to opening balance - change in
      accounting policy
    
      9(a)
    
    
    
    
    $
    64,811
    
    
    
    
    $
    Unrealized gain on available-for-sale financial
      instruments
    
      9(a)
    
    
    
    
    
    538,061
    
    
    
    
    
    Balance at end of the year
    
      
    
    
    
    
    $
    602,872
    
    
    
    
    $
    TOTAL SHAREHOLDERS' EQUITY
    
      
    
    
    
    
    $
    287,791,586
    
    
    
    
    $
    129,345,697


See accompanying notes to consolidated financial
statements.

7

---

GREAT BASIN GOLD LTD. Consolidated Statements of Cash
Flows(Expressed in Canadian Dollars)

|                                                                      |   | Years ended December 31 |  
|--------------------------------------------------------------------- | - | ----------------------- | -
|                                                                      |   | 2007                    |  
|                                                                      |   |                         |  
|                                                                      |   |                         |  
|Operating activities                                                  |   |                         |  
|Loss for the year                                                     | $ | (51,167,666             | )
|Items not involving cash                                              |   |                         |  
|Depreciation                                                          |   | 1,056,497               |  
|Future income tax recovery                                            |   | (7,153,285              | )
|Gain on sale of investment                                            |   |                        |  
|(Gain) loss on sale of assets                                         |   | (992,684                | )
|Assets written off                                                    |   | 1,236                   |  
|Mark-to-market adjustment on investments                              |   |                        |  
|Fair value adjustment on financial instruments
      held-for-trading |   | 104,365                 |  
|Fair value of financial instruments
      held-for-trading received   |   | (937,365                | )
|Non-cash stock-based compensation expense                             |   | 5,633,276               |  
|Provision for site reclamation
      cost                             |   | 289,660                 |  
|Unrealized foreign exchange loss                                      |   | (2,193,712              | )
|Loss from associate                                                   |   | 796,027                 |  
|Accretion reclamation obligation                                      |   | 37,466                  |  
|Changes in non-cash operating working capital                         |   |                         |  
|Amounts receivable                                                    |   | (3,311,554              | )
|Prepaid expenses                                                      |   | (271,217                | )
|Inventory                                                             |   | (145,748                | )
|Accounts payable and accrued liabilities                              |   | 3,951,908               |  
|Taxation paid                                                         |   | (238,107                | )
|Dividends received                                                    |   | (17,640                 | )
|Cash used in operating
      activities                               |   | (54,558,543             | )
|                                                                      |   |                         |  
|Investing activities                                                  |   |                         |  
|Mineral property acquisition costs                                    |   | (11,727,860             | )
|Acquire shares in Rand Mutual Assurance                               |   | (60                     | )
|Dividends received                                                    |   | 17,640                  |  
|Proceeds on sale of investments                                       |   |                        |  
|Proceeds on sale of assets                                            |   | 1,001,236               |  
|Cost on sale of assets                                                |   | (6,789                  | )
|Purchase of equipment                                                 |   | (12,978,896             | )
|Purchase of shares in Rusaf Gold Limited                              |   | (8,000,000              | )
|Purchase of Hecla Ventures Corp.                                      |   | (50,791,500             | )
|Purchase of shares on exercise of Lumina warrants                     |   |                        |  
|Purchase of shares in Kryso Resources Plc                             |   | (448,503                | )
|Reclamation deposits                                                  |   | (1,616,754              | )
|Cash used in investing activities                                     |   | (84,551,486             | )
|                                                                      |   |                         |  
|Financing activities                                                  |   |                         |  
|Common shares issued for cash, net of issue costs                     |   | 183,710,476             |  
|Advances to related parties                                           |   | (213,085                | )
|Cash generated from
      financing activities                        |   | 183,497,391             |  
|                                                                      |   |                         |  
|Increase in cash and cash equivalents                                 |   | 44,387,362              |  
|Cash acquired through the purchase of Hecla
      Ventures Corp.      |   | 11,156                  |  
|Cash and cash equivalents,
      beginning of year                    |   | 33,964,436              |  
|                                                                      |   |                         |  
|Cash and cash equivalents,
      end of year                          | $ | 78,362,954              |  
|                                                                      |   |                         |  
|Supplementary information (note 16)                                   |   |                         |  

See accompanying notes to consolidated financial
statements.

8

---

GREAT BASIN GOLD LTD.Consolidated Schedules of
Exploration and Pre-development Expenses(Expressed in Canadian
Dollars)

|                                                                |  |      |  |   | Year
      ended |   |   | Year
      ended | 
|--------------------------------------------------------------- |  | ---- |  | - | ---------------- | - | - | ---------------- | 
|Mineral Property Interests                                      |  |      |  |   | December 31      |   |   | December 31      | 
|                                                                |  | Note |  |   | 2007             |   |   | 2006             | 
|Burnstone - Pre-development                                     |  |      |  |   |                  |   |   |                  | 
|Metallurgical plant                                             |  |      |  | $ | 186,837          |   | $ |                 | 
|Vertical shaft                                                  |  |      |  |   | 508,530          |   |   |                 | 
|Pre-development expenses incurred during the year               |  |      |  |   | 695,367          |   |   |                 | 
|Cumulative pre-development expenditures beginning of year       |  |      |  |   |                 |   |   |                 | 
|Cumulative
      pre-development expenditures, end of year      |  |      |  |   | 695,367          |   |   |                 | 
|                                                                |  |      |  |   |                  |   |   |                  | 
|Hollister - Pre-development                                     |  |      |  |   |                  |   |   |                  | 
|Equipment rental and services                                   |  |      |  |   | 1,937,187        |   |   |                 | 
|Surface infrastructure                                          |  |      |  |   | 2,942,261        |   |   |                 | 
|Underground access and infrastructure                           |  |      |  |   | 6,682,426        |   |   |                 | 
|Operational
      costs                                         |  |      |  |   | 6,289,421        |   |   |                 | 
|Pre-development expenses before the
      following             |  |      |  |   | 17,851,295       |   |   |                 | 
|Office and
      administration                                 |  |      |  |   | 498,990          |   |   |                 | 
|Pre-development expenses incurred during
      the year         |  |      |  |   | 18,350,285       |   |   |                 | 
|Cumulative
      pre-development expenditures beginning of year |  |      |  |   |                 |   |   |                 | 
|Cumulative pre-development expenditures, end of
      year      |  |      |  |   | 18,350,285       |   |   |                 | 
|                                                                |  |      |  |   |                  |   |   |                  | 
|Burnstone - Exploration                                         |  |      |  |   |                  |   |   |                  | 
|Assays and analysis                                             |  |      |  |   | 122,805          |   |   | 82,082           | 
|Depreciation                                                    |  |      |  |   | 443,666          |   |   | 119,103          | 
|Drilling                                                        |  |      |  |   | 2,427,840        |   |   | 939,705          | 
|Engineering                                                     |  |      |  |   | 27,034           |   |   | 246,864          | 
|Environmental, socio-economic and land                          |  |      |  |   | 12,666           |   |   | 140,183          | 
|Equipment rental                                                |  |      |  |   | (21,900          | ) |   | 5,647            | 
|Geological                                                      |  |      |  |   | 279,522          |   |   | 149,289          | 
|Graphics                                                        |  |      |  |   | 15,727           |   |   | 2,821            | 
|Property fees and exploration option payments                   |  |      |  |   | 22,907           |   |   | 105,089          | 
|Site activities                                                 |  |      |  |   | (20,884          | ) |   | 267,581          | 
|Provision for site reclamation cost                             |  |      |  |   |                 |   |   | 405,000          | 
|Transportation                                                  |  |      |  |   | 3,788            |   |   | 4,874            | 
|Exploration expenses before the following                       |  |      |  |   | 3,313,171        |   |   | 2,468,238        | 
|Office and administration                                       |  |      |  |   | 92,612           |   |   | 335,357          | 
|Exploration expenses incurred during the year                   |  |      |  |   | 3,405,783        |   |   | 2,803,595        | 
|Cumulative exploration expenditures beginning of year           |  |      |  |   | 24,327,572       |   |   | 21,523,977       | 
|Cumulative
      exploration expenditures, end of year          |  |      |  |   | 27,733,355       |   |   | 24,327,572       | 
|                                                                |  |      |  |   |                  |   |   |                  | 
|Hollister - Exploration                                         |  |      |  |   |                  |   |   |                  | 
|Assays and analysis                                             |  |      |  |   | 425,298          |   |   | 14,291           | 
|Depreciation                                                    |  |      |  |   | 612,831          |   |   | 494              | 
|Drilling                                                        |  |      |  |   | 2,880,079        |   |   | 389,823          | 
|Engineering                                                     |  |      |  |   | 1,170,116        |   |   | 118,469          | 
|Environmental, socio-economic and
      land                    |  |      |  |   | 1,574,917        |   |   | 511,970          | 
|Equipment rental                                                |  |      |  |   | 24,350           |   |   |                 | 
|Freight                                                         |  |      |  |   | 47,292           |   |   |                 | 
|Geological                                                      |  |      |  |   | 606,237          |   |   | 401,164          | 
|Graphics                                                        |  |      |  |   | 52,026           |   |   | 26,724           | 
|Property fees and exploration option payments                   |  |      |  |   | 168,334          |   |   | 155,814          | 
|Site activities                                                 |  |      |  |   | 725,672          |   |   | 29,408           | 
|Transportation                                                  |  |      |  |   | 68,656           |   |   | 17,606           | 
|Exploration expenses before the
      following                 |  |      |  |   | 8,355,808        |   |   | 1,665,763        | 
|Office and
      administration                                 |  |      |  |   | 233,565          |   |   | 226,326          | 
|Exploration expenses incurred during the
      year             |  |      |  |   | 8,589,373        |   |   | 1,892,089        | 
|Cumulative
      exploration expenditures beginning of year     |  |      |  |   | 25,192,512       |   |   | 23,300,423       | 
|Cumulative exploration expenditures, end of year                |  |      |  |   | 33,781,885       |   |   | 25,192,512       | 

9

---

GREAT BASIN GOLD LTD.Consolidated Schedules of
Exploration and Pre-development Expenses(Expressed in Canadian
Dollars)

|                                                                                |  |        |  |   | Year
      ended |  |   | Year
      ended | 
|------------------------------------------------------------------------------- |  | ------ |  | - | ---------------- |  | - | ---------------- | 
|Mineral Property Interests                                                      |  |        |  |   | December 31      |  |   | December 31      | 
|                                                                                |  | Note   |  |   | 2007             |  |   | 2006             | 
|                                                                                |  |        |  |   |                  |  |   |                  | 
|                                                                                |  |        |  |   |                  |  |   |                  | 
|Other - Exploration                                                             |  |        |  |   |                  |  |   |                  | 
|Assays and analysis                                                             |  |        |  |   | 100,271          |  |   | 74,931           | 
|Drilling                                                                        |  |        |  |   | 195,976          |  |   | 326,054          | 
|Engineering                                                                     |  |        |  |   | 20,109           |  |   | 45,853           | 
|Environmental, socio-economic and
      land                                    |  |        |  |   | 4,316            |  |   | 1,268            | 
|Equipment rental                                                                |  |        |  |   | 46,383           |  |   | 20,291           | 
|Freight                                                                         |  |        |  |   | 14,450           |  |   |                 | 
|Geological                                                                      |  |        |  |   | 273,369          |  |   | 320,260          | 
|Graphics                                                                        |  |        |  |   | 18,408           |  |   | 35,308           | 
|Property fees and exploration option payments                                   |  |        |  |   | 84,363           |  |   | 1,419            | 
|Site activities                                                                 |  |        |  |   | 253,184          |  |   | 118,182          | 
|Transportation                                                                  |  |        |  |   | 55,968           |  |   | 22,437           | 
|Exploration expenses before the
      following                                 |  |        |  |   | 1,066,797        |  |   | 966,003          | 
|Office and
      administration                                                 |  |        |  |   | 29,820           |  |   | 131,250          | 
|Exploration expenses incurred during the
      year                             |  |        |  |   | 1,096,617        |  |   | 1,097,253        | 
|Cumulative
      exploration expenditures beginning of year                     |  |        |  |   | 1,431,474        |  |   | 334,221          | 
|Cumulative exploration expenditures, end of year                                |  |        |  |   | 2,528,091        |  |   | 1,431,474        | 
|                                                                                |  |        |  |   |                  |  |   |                  | 
|Burnstone - Bulk Sampling                                                       |  |        |  |   |                  |  |   |                  | 
|Establishment work                                                              |  |        |  |   | 697,457          |  |   | 393,129          | 
|Equipment rental and services                                                   |  |        |  |   | 1,047,259        |  |   | 185,314          | 
|Surface infrastructure                                                          |  |        |  |   | 836,042          |  |   | 536,019          | 
|Portal construction                                                             |  |        |  |   | 308,660          |  |   | 322,257          | 
|Underground access and infrastructure                                           |  |        |  |   | 4,000,468        |  |   | 443,229          | 
|Optimisation                                                                    |  |        |  |   | 523,543          |  |   |                 | 
|Operational costs                                                               |  |        |  |   | 3,348,964        |  |   | 966,521          | 
|Property fees                                                                   |  |        |  |   |                 |  |   | 60,742           | 
|Pre-development expenses before the following                                   |  |        |  |   | 10,762,393       |  |   | 2,907,211        | 
|Office and administration                                                       |  |        |  |   | 320,274          |  |   | 395,000          | 
|Pre-development expenses incurred during the year                               |  |        |  |   | 11,082,667       |  |   | 3,302,211        | 
|Cumulative pre-development expenditures beginning of year                       |  |        |  |   | 3,302,211        |  |   |                 | 
|Cumulative
      pre-development expenditures, end of year                      |  |        |  |   | 14,384,878       |  |   | 3,302,211        | 
|                                                                                |  |        |  |   |                  |  |   |                  | 
|Total pre-development and exploration expenses before
      the following       |  |        |  |   | 42,044,831       |  |   | 8,007,215        | 
|Office and administration                                                       |  | 13 (c) |  |   | 1,175,261        |  |   | 1,087,933        | 
|Total pre-development and exploration expenses incurred
      during the year   |  |        |  |   | 43,220,092       |  |   | 9,095,148        | 
|Cumulative pre-development and exploration expenditures
      beginning of year |  |        |  |   | 54,253,769       |  |   | 45,158,621       | 
|Cumulative
      pre-development and exploration expenditures, end of year      |  |        |  | $ | 97,473,861       |  | $ | 54,253,769       | 

See accompanying notes to consolidated financial
statements.

10

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|1. | Nature of operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Great Basin Gold Ltd. (Great Basin or the Company) is
      incorporated under the laws of the Province of British Columbia and its
      principal business activity is the exploration and development of mineral
      property interests. The Companys principal mineral property interests are
      the Hollister Gold Property (Hollister) (formerly Ivanhoe Gold Property)
      located in Nevada, United States of America (USA), and the Burnstone
      Gold Property (Burnstone) located in the Republic of South Africa
      (South Africa) (note 11).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Company is in the process of exploring and developing
      its mineral property interests and has not yet obtained the required
      mining rights and permits to commence mining activities. The underlying
      value and the recoverability of the amounts shown for mineral property
      interests and equipment are entirely dependent upon the existence of
      economically recoverable mineral reserves, the ability of the Company to
      obtain the necessary financing to complete the exploration and development
      of the mineral property interests, and future profitable production or
      proceeds from the disposition of the mineral property interests.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|2. | Basis of preparation and principles of
      consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | These financial statements have been prepared in
      accordance with Canadian Generally Accepted Accounting Principles, which
      as described in note 20, differ in certain respects from accounting
      principles generally accepted in the United States of America.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The principal accounting policies applied in the
      preparation of these financial statements are set out below. These
      policies have been consistently applied in all years presented, unless
      otherwise stated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | These consolidated financial statements include the accounts
        of the Company and its wholly- owned subsidiaries. All significant intercompany
        balances and transactions have been eliminated.
      Subsidiaries:are those entities in which the Company
        has an interest of more than one half of the voting rights or otherwise
        has power to govern the financial and operating policies, are consolidated.
        Subsidiaries are consolidated from the date on which control is acquired
        and are no longer consolidated when control ceases. The purchase method
        of accounting is used to account for the acquisition of subsidiaries.
        The cost of an acquisition is measured as the fair value of the assets
        given up, shares issued or liabilities undertaken at the date of acquisition
        plus costs directly attributable to the acquisition. Identifiable assets
        acquired and liabilities and contingent liabilities assumed in a business
        combination are measured initially at their fair values at acquisition
        date. Non-controlling interests are recorded at a proportion of the net
        identifiable assets acquired. The excess of the cost of acquisition over
        the fair value of the Companys share of the identifiable net assets
        acquired is recorded as goodwill. In situations of successive share purchases
        when control already existed at the date of further acquisition, no fair
        value adjustment is made to the identifiable net assets acquired and any
        excess/deficit purchase price over the carrying value of non-controlling
        interests acquired are accounted for in shareholders' equity. Where necessary,
        accounting policies of subsidiaries has been changed to ensure consistency
        with the policies adopted by the Company.

11

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|2. | Basis of preparation and principles of consolidation
      (continued)
|-- | ----------------------------------------------------------------------

| |                                             | Incorporation  | Ownership percentage
| | ------------------------------------------- | -------------- | --------------------
| | Great Basin Gold Inc.                       | Nevada, USA    | 100%                
| | Rodeo Creek Gold Inc.                       | Nevada, USA    | 100%                
| | Antler Peak Gold Inc.                       | Nevada, USA    | 100%                
| | Ganes Creek Ventures Corp.                  | Alaska, USA    | 100%                
| | Hollister Ventures Corp.                    | Nevada, USA    | 100%                
| | Touchstone Resources Company                | Nevada, USA    | 100%                
| | Southgold Exploration (Proprietary) Limited | South Africa   | 100%                
| | N5C Resources Inc.                          | Cayman Islands | 100%                
| | N6C Resources Inc.                          | Cayman Islands | 100%                
| | Great Basin Gold RSA (Proprietary) Limited  | South Africa   | 100%                

Associates:are those entities
in which the Company has a material long term interest and in respect of which
the group exercises significant influence over operational and financial
policies, normally owning between 20% and 50% of the voting equity, but which it
does not control.

Investments in associates are accounted
for using the equity method of accounting and are initially recognized at cost.
The companys share of its associates post-acquisition profits or losses is
recognized in the income statement. Cumulative post-acquisition movements are
adjusted against the carrying amount of the investment. When the companys share
of losses in an associate equals or exceeds its interest in the associate,
including any other unsecured receivables, the company does not recognize
further losses, unless it has incurred obligations or made payments on behalf of
the associate.

| |                    | Incorporation | Ownership percentage
| | ------------------ | ------------- | --------------------
| | Rusaf Gold Limited | BC, Canada    | 37%                 

|3. | New accounting pronouncements                                                                                                                                                                                                                    
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                  
|   | The Canadian Institute of Charted Accountants (CICA)
      has issued three new standards which affect the financial disclosures and
      results of operations of the Company for interim and annual periods
      beginning January 1, 2008.

12

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|3. | New accounting pronouncements
(continued)                                                                                                                                                                                                                                                                
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                          
|   | Section 1535  Capital Disclosures                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                          
|   | This Section establishes standards for disclosing
      information about an entitys capital and how it is managed. Under this
      standard the Company will be required to disclose the following, based on
      the information provided internally to the entitys key management
      personnel:
|   |                                                                                                                                                                                                                                                                                                          
|   | (i)                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                          
|   | (ii)                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                          
|   | (iii)                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                          
|   | (iv)                                                                                                                                                                                                                                                                                                     

Section 3031  Inventories

The Section prescribes the accounting
treatment for inventories and provides guidance on the determination of costs
and its subsequent recognition as an expense, including any write-down to net
realizable value. It also provides guidance on the cost formula that are used to
assign costs to inventories. The Company is currently in the process of
evaluating the impact this will have on the Companys financial statements.

Section 3862  Financial Instruments
 Disclosures

This Section requires entities to
provide disclosure of quantitative and qualitative information in their
financial statements that enable users to evaluate (a) the significance of
financial instruments for the entitys financial position and performance; and
(b) the nature and extent of risks arising from financial instruments to which
the entity is exposed during the period and at the balance sheet date, and
managements objectives, policies and procedures for managing such risks.
Entities will be required to disclose the measurement basis or bases used, and
the criteria used to determine classification for different types of
instruments.

The Section requires specific
disclosures to be made, including the criteria for:

| | (i)   | designating financial assets and liabilities as held for
      trading;                                                  
| | ----- | -------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                          
| | (ii)  | designating financial assets as available-for-sale;
      and                                                            
| |       |                                                                                                                          
| | (iii) | determining when impairment is recorded against the
      related financial asset or when an allowance account is
  used.

The Company is currently in the process
of evaluating the impact this will have on the Companys financial statements.

13

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|3. | New accounting pronouncements
(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Section 3064  Goodwill and Intangible
    Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Effective January 1, 2009, Section 3064 replaces Handbook
      Section 3062, Goodwill and Intangible Assets and establishes revised
      standards for the recognition, measurement, presentation and disclosure of
      goodwill and intangible assets. The new standard also provides guidance
      for the treatment of preproduction and start-up costs and requires that
      these costs be expense as incurred. The Company is currently in the
      process of evaluating the impact this will have on the Companys financial
      statements.                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4. | Significant accounting policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Cash and cash equivalents consist of cash and highly
      liquid investments, having maturity dates of three months or less from the
      date of acquisition, that are readily convertible to known amounts of
      cash.                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Amounts receivable are recognised initially at fair value
      and subsequently measured at amortised cost using the effective interest
      method, less provision for impairment. A provision for impairment of
      receivables is established when there is objective evidence that the
      Company will not be able to collect all amounts due, according to the
      original terms of receivables. The amount of the provision is the
      difference between the assets carrying amount and the present value of
      estimated future cash flows, discounted at the effective interest rate.
      The amount of the provision is recognised in the income
  statement.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Inventories, which include stores and materials, are
      measured at the lower of cost and net realizable value after appropriate
      allowances for redundant and slow moving items. Net realizable value is
      the estimated selling price in the ordinary course of business less the
      estimated cost of completion and the estimated cost necessary to perform
      the sale. Stores and materials consist of consumable stores and are valued
      at weighted average cost.                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Equipment is stated at cost less accumulated
      amortization. Amortization is provided on a straight- line basis over
      three to five years, which represents the estimated useful lives of the
      related equipment. Amortization on equipment used directly on exploration
      projects is included in exploration expenses until such time the
      exploration expenditure is being capitalized.                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Property is shown at cost and is not depreciated.
      Improvements and fixtures are being amortized over a period of 10
      years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The assets fair values and useful lives are reviewed,
      and adjusted if appropriate, at each balance sheet
date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

14

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|4. | Significant accounting policies
  (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Company capitalizes mineral property acquisition
      costs on a property-by-property basis. Exploration expenditures and option
      payments incurred prior to the determination of the feasibility of mining
      operations and the decision to commence development are charged to
      operations as incurred.                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Pre-development costs incurred prior to a development
      decision are charged to operations as incurred. Development expenditures
      incurred subsequent to a development decision, to increase production, or
      to extend the life of existing production are capitalized, except as noted
      below. Such acquisition costs and deferred development expenditures are
      amortized over the estimated life of the property, or written off to
      operations if the property is abandoned, allowed to lapse, or if there is
      little prospect of further work being carried out by the Company or its
      option to joint venture partners.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Mineral property acquisition costs include the cash
      consideration and the fair market value of common shares issued for
      mineral property interests, based on the trading price of the shares at
      the time the acquisition is closed and shares issued pursuant to the terms
      of the relevant agreement. Payments relating to a property acquired under
      and option or joint venture agreement, where such payments are made at the
      sole discretion of the Company, are recorded in the accounts upon
      payment.                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Administrative expenditures are expensed as
    incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The amount presented for mineral property interests
      represents costs incurred to date and accumulated acquisition costs, less
      write-downs, and does not necessarily reflect present or future
    values.                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Long-lived assets are reviewed for impairment whenever
      events or changes in circumstances indicate that the carrying amount may
      not be recoverable. An impairment loss is recognized as the amount by
      which the assets carrying amount exceeds its recoverable amount. The
      recoverable amount is the higher of an assets fair value less costs to
      sell and its value in use.                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | For the purposes of assessing impairment, assets are
      grouped at the lowest levels for which there are separately identifiable
      cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | (g)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Company uses the asset and liability method of
      accounting for income taxes. Under this method, future income tax assets
      and liabilities are computed based on differences between the carrying
      amount of existing assets and liabilities on the balance sheet and their
      corresponding tax values, using the substantively enacted income tax rates
      expected to apply to taxable income in the years in which those temporary
      differences are expected to be recovered or
settled.                                                                                                                                           

15

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|4. | Significant accounting policies
  (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | (g)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Future income tax assets also result from unused loss
      carry forwards and other deductions. Future tax assets are recognized to
      the extent that they are considered more likely than not to be realized.
      The carrying value of future income tax assets is adjusted, if necessary,
      by the use of a valuation allowance to reflect the estimated realizable
      amount.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | (h)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Estimated long-term asset retirement obligations,
      comprising pollution control, rehabilitation and mine closure, are based
      on the Company's environmental management plans in compliance with current
      technological, environmental and regulatory requirements. The net present
      values of expected rehabilitation cost estimates are recognised and
      provided for in full in the financial statements. The estimates are
      reviewed annually and are discounted using rates that reflect inflation
      and the time value of money. The discount rate used is based on a pre-tax
      credit adjusted risk-free rate that is adjusted to reflect the current
      market assessments of the time value of money and the risks specific to
      the obligation. Annual changes in the provision consist of finance costs
      relating to the change in the present value of the provision and
      inflationary increases in the provision estimate, as well as changes in
      estimates. The present value of environmental disturbances created as well
      as changes to estimates is expensed under exploration expenses against an
      increase in the rehabilitation provision. Rehabilitation costs incurred
      that is included in the estimates is charged to the provision. The cost of
      ongoing current programmes to prevent and control pollution is charged
      against income as incurred.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company records proceeds from share issuances net of
      issue costs. Shares issued for consideration other than cash or in a
      business combination are valued at the quoted market price on the date
      issued.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | (j)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Basic loss per common share is calculated by dividing the
      loss available to common shareholders by the weighted average number of
      common shares outstanding during the year. For all years presented, loss
      available to common shareholders equals the reported loss.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Diluted loss per common share is calculated using the
      treasury stock method. Under the treasury stock method, the weighted
      average number of common shares outstanding used for the calculation of
      diluted loss per share assumes that the proceeds to be received on the
      exercise of dilutive share options and warrants are used to repurchase
      common shares at the average market price during the year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | In the Companys case, basic and diluted loss per share
      are the same as the effect of the outstanding stock options (note 13(b))
      and warrants (note 13(c)) would be anti-dilutive.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

16

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|4. | Significant accounting policies
  (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | (k)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | The Companys functional currency is the Canadian dollar
      as the Canadian dollar is the currency of the primary economic environment
      in which the Company operates. All of the Companys foreign operations are
      considered integrated with those of the Companys domestic operations and
      use the Canadian dollar as their functional currency.                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | All of the Companys foreign operations are considered
      integrated therefore monetary assets and liabilities denominated in a
      foreign currency are translated into Canadian dollars at exchange rates in
      effect at the balance sheet date. Non-monetary assets and liabilities are
      translated at historical exchange rates unless such items are carried at
      market, in which case they are translated at the exchange rates in effect
      on the balance sheet date. Revenues and expenses, except amortization, are
      translated at the average exchange rates for the period. Amortization is
      translated at the same exchange rate as the assets to which it relates.
      Gains or losses on translation are recorded in the statement of
      operations.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | (l)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | The preparation of financial statements requires
      management to make estimates and assumptions that affect the reported
      amounts of assets and liabilities and disclosure of contingent assets and
      liabilities at the date of the financial statements and the reported
      amounts of revenues and expenses during the reporting period. Significant
      areas requiring the use of management estimates relate to impairment of
      mineral property interests, determination of reclamation obligations,
      assumptions used in determining the fair value of non-cash stock-based
      compensation and warrants and determination of valuation allowances for
      future income tax liabilities. Actual results could differ from these
      estimates.               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | (m)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | The primary reporting format of the Company is by
      business segment. As there is only one business segment, being the
      exploration and development of mineral properties relevant disclosures are
      given in the financial statements. The secondary reporting format is by
      geographical analysis by origin (note 17). The accounting policies of the
      segments are the same as those described in the accounting policy notes to
      the Companys financial statements.                                                                                                                                                                                                                                                                                                    

17

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|4. | Significant accounting policies
  (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | (n)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Company has an equity-settled, stock-based
      compensation plan, where the Company grants stock options to certain
      employees and non-employees. Non-employees are those individuals over whom
      the Company does not exercise, nor have the right to exercise sufficient
      control to establish an employer-employee relationship as determined by
      law.                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | For employees equity stock-based payments are measured at
      fair value of the equity instruments at the date of grant. The deferred
      stock-based compensation is expensed over the vesting period using the
      graded method, based on the Companys estimate of the shares that are
      expected to eventually vest. For non-employees equity stock-based payments
      are measured at fair value of the equity instruments over the vesting
      periods, the expense of which is being recognized on each vesting
    date.                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Company used the Black Scholes model in determining
      the fair value of the options granted. At each balance sheet date, the
      Company revises its estimates of the number of options that are expected
      to become exercisable. It recognizes the impact of the revision of
      original estimates, if any, in the income statement, with a corresponding
      adjustment to equity.                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Consideration received on the exercise of stock options
      is recorded as share capital and the related contributed surplus is
      transferred to share capital.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | (o)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Company accounts for variable interest entities
      (VIE) in accordance with CICA Accounting Guideline 15, Consolidation of
      Variable Interest Entities (AcG15). AcG15 prescribes the application of
      consolidation principles for entities that meet the definition of a VIE.
      An enterprise holding other than a voting interest in a VIE could, subject
      to certain conditions, be required to consolidate the VIE if it is
      considered its primary beneficiary whereby it would absorb the majority of
      the VIEs expected losses, receive the majority of its expected residual
      returns, or both.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | (p)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Certain of the prior years comparative figures have been
      restated to conform to the presentation adopted for the current
    year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

18

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|4. | Significant accounting policies
  (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | (q)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | CICA Handbook Section 1506, Accounting Changes,
      establishes standards and new disclosure requirements for the reporting of
      changes in accounting policies and estimates and the reporting of error
      corrections. It also clarifies that a change in accounting policy can be
      made only if it is a requirement under Canadian GAAP or if it provides
      reliable and more relevant financial statement information. Voluntary
      changes in accounting policies require retrospective application to prior
      period financial statements, unless the retrospective effects of the
      changes are impracticable to determine, in which case the retrospective
      application may be limited to the assets and liabilities of the earliest
      period practicable with a corresponding adjustment made to opening
      retained earnings. This Section is effective for fiscal years beginning on
      or after January 1, 2007.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | (r)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Revenue represents gold sales and is recognized when the
      risks and rewards of ownership has passed to the
buyer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

|5. | Changes in accounting policies                                                                                                                                                                                                                                                                                                                           
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                          
|   | Effective January 1, 2007, the Company adopted the
      following new accounting standards issued by the CICA relating to
      financial instruments. As required by the transitional provisions of these
      new standards, these standards have been adopted on a prospective basis
      with no restatement to prior period financial
statements.

| | (a) | Financial Instruments  Recognition and Measurement
      (Section 3855)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | This standard sets out criteria for the recognition and
      measurement of financial instruments for fiscal years beginning on or
      after October 1, 2006. This standard requires all financial instruments
      within its scope, including derivatives, to be included on a Companys
      balance sheet and measured either at fair value or, in certain
      circumstances when fair value may not be considered most relevant, at cost
      or amortized cost. Changes in fair value are to be recognized in the
      statement of operations or comprehensive income (loss), depending on the
      classification of the related instruments.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | All financial assets and liabilities are recognized when
      the entity becomes a party to the contract creating the asset or
      liability. As such, any of the Companys outstanding financial assets and
      liabilities at the effective date of adoption are recognized and measured
      in accordance with the new requirements as if these requirements had
      always been in effect. Any changes to the fair values of assets and
      liabilities prior to January 1, 2007 are recognized by adjusting opening
      deficit or opening accumulated other comprehensive income
  (loss).                                                  

19

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|5. | Changes in accounting policies
  (continued)
|-- | --------------------------------------------

| | (a) | Financial Instruments  Recognition and Measurement
      (Section 3855) (continued)
| | --- | ------------------------------------------------------------------------------------

All financial instruments are
classified into one of the following five categories: held for trading,
held-to-maturity, loans and receivables, available-for-sale financial assets, or
other financial liabilities. Initial and subsequent measurement and recognition
of changes in the value of financial instruments depends on their initial
classification:

| | • | Held for trading financial instruments are measured at
      fair value. All changes in fair value are included in the period in which
      they arise.                                                                                                                                                                                                                                                             
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                      
| | • | All derivative financial instruments are measured at fair
      value, even when they are part of a hedging relationship. Changes in fair
      value are included in the statement of operations in the period in which
      they arise, except for hedge transactions which qualify for hedge
      accounting treatment in which case gains and closes are recognized in
      other comprehensive income (loss).
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                      
| | • | Held-to-maturity investments, loans and receivables, and
      other financial liabilities are initially measured at fair value and
      subsequently measured at amortized cost. Amortization of premiums or
      discounts and losses due to impairment are included in the statement of
      operations.                                                                                                       
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                      
| | • | Available-for-sale financial assets are measured at fair
      value. Changes in fair value are included in other comprehensive income
      until the gain or loss is recognized in the statement of operations.                                                                                                                                                                                                    

In accordance with this new standard,
the Company has classified its financial instruments as follows:

| | • | Marketable securities are classified as
      available-for-sale securities. Such securities are measured at fair market
      value in the consolidated financial statements with unrealized gains or
      losses recorded in other comprehensive income (loss). At the time
      securities are sold or otherwise disposed of, gains or losses are included
      in the loss for the period.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                  
| |   | The Companys shares in Kryso Resources Plc. are
      classified as available-for- sale financial instruments. $64,811 was
      credited to the opening balance of accumulated other comprehensive income
      to account for the fair value adjustment required upon adoption of the
      standard and $538,061 for the current year fair value adjustment (note
      9(a)).               
| |   |                                                                                                                                                                                                                                                                                                                                                                                                  
| | • | Derivative financial instruments are classified as
      held-for-trading securities. Such securities are measured at fair market
      value in the consolidated financial statements and all changes in fair
      value are included in the statement of operations in the period in which
      they arise.                                                                                  

20

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|5. | Changes in accounting policies
  (continued)
|-- | --------------------------------------------

| | (a) | Financial Instruments  Recognition and Measurement
      (Section 3855) (continued)
| | --- | ------------------------------------------------------------------------------------

| |   | The Companys warrants in Kryso Resources Plc. are
      classified as held-for- trading financial instruments (note 9(c)).                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                      
| | • | The carrying amounts of cash and cash equivalents,
      amounts receivable, reclamation deposits, and accounts payable and accrued
      liabilities are recorded at amortized cost.

| | (b) | Hedging (Section 3865)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     | This new standard specifies
        the circumstances under which hedge accounting is permissible and how
        hedge accounting may be performed. The Company currently does not have
        any hedging agreements.                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (c) | Comprehensive Income (Section
        1530)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     | Comprehensive income is the
        change in the Companys shareholder equity that results from transactions
        and other events from other than the Companys shareholders and includes
        items that would not normally be included in the statement of operations,
        such as unrealized gains or losses on available-for-sale investments.
        This standard requires certain gains and losses that would otherwise be
        recorded as part of the statement of operations to be presented in other
        comprehensive income until it is considered appropriate to recognize
        into the statement of operations.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     | This standard requires the presentation
        of comprehensive income, and its components in a separate financial statement
        that is displayed with the same prominence as the other financial statements.
        Accordingly, the Company now includes the account accumulated other
        comprehensive income in the shareholders equity section of
        the consolidated balance sheet.                                                                                                                                                                                                                                           

|6. | Inventory
|-- | ---------

| |                      |   | December 31 |  |   | December 31 | 
| | -------------------- | - | ----------- |  | - | ----------- | 
| |                      |   | 2007        |  |   | 2006        | 
| | Stores and materials | $ | 199,185     |  | $ | 53,437      | 

21

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|7. | Property, plant and
equipment
|-- | -----------------------------

December
        31, 2007
      
      
      December
        31, 2006Accumulated
      
      
      Net book
      
      
      
      
      
      Accumulated
      
      
      Net bookCost
      
      
      amortization
      
      
      value
      
      
      Cost
      
      
      amortization
      
      
      valueProperty
      $
      3,084,488
      
      $
      31,418
      
      $
      3,053,070
      
      $
      -
      
      $
      -
      
      $
      -Plant underconstruction
      
      5,927,751
      
      
      -
      
      
      5,927,751
      
      
      -
      
      
      -
      
      
      -Computers
      
      331,350
      
      
      94,929
      
      
      236,421
      
      
      118,670
      
      
      21,520
      
      
      97,150Officefurnitureand fixtures
      
      123,520
      
      
      29,256
      
      
      94,264
      
      
      65,001
      
      
      8,286
      
      
      56,715Siteequipment
      
      6,827,935
      
      
      2,157,540
      
      
      4,670,395
      
      
      1,301,213
      
      
      86,747
      
      
      1,214,466Vehicles
      
      365,517
      
      
      51,690
      
      
      313,827
      
      
      108,432
      
      
      4,262
      
      
      104,170$
      16,660,560
      
      $
      2,364,833
      
      $
      14,295,727
      
      $
      1,593,316
      
      $
      120,815
      
      $
      1,472,501


|   | As at December 31, 2007, $5,927,751 (2006 - $nil) of
      plant and equipment is under construction and is not being
    amortized.
|-- | ------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                     
|8. | Reclamation deposits                                                                                                                
|   |                                                                                                                                     
|   | The continuity of reclamation deposits on the
      consolidated balance sheet is as follows:                                       

| | Balance, December 31, 2006                  | $ | 103,702   |  
| | ------------------------------------------- | - | --------- | -
| | Changes during the period                   |   |           |  
| | Guarantee  Burnstone Property              |   | 144,000   |  
| | Investments  Burnstone Property            |   | 155,498   |  
| | Reclamation Bond  Hollister
      Property |   | 1,326,100 |  
| | Exchange loss                               |   | (8,844    | )
| | Balance, December 31, 2007                  | $ | 1,720,456 |  

The components of reclamation deposits
on the consolidated balance sheet are as follows:

| |                                  |   | Hollister |   |   | Burnstone |  |   |           |  
| | -------------------------------- | - | --------- | - | - | --------- |  | - | --------- | -
| |                                  |   | property  |   |   | property  |  |   | Total     |  
| | Balance, December 31, 2006       | $ | 103,702   |   | $ | -         |  | $ | 103,702   |  
| | Changes during the period        |   |           |   |   |           |  |   |           |  
| | Guarantee and investments        |   | -         |   |   | 299,498   |  |   | 299,498   |  
| | Reclamation Bond                 |   | 1,326,100 |   |   | -         |  |   | 1,326,100 |  
| | Exchange loss                    |   | (8,844    | ) |   | -         |  |   | (8,844    | )
| | Balance, December
      31, 2007 | $ | 1,420,958 |   | $ | 299,498   |  | $ | 1,720,456 |  

22

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|8. | Reclamation deposits (continued)                                                                                                                                                                                                                                                                                                                                                                           
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                            
|   | As at December 31, 2007 the Company assumed a $1,326,100
      Reclamation Bond from Hecla Limited (Hecla) with the United States
      Bureau of Land Management in respect of reclamation of the Hollister
      Property and had placed deposits for guarantees of $299,498 in favor of
      the South African Department of Minerals and Energy for the reclamation of
      the Burnstone Property.
|   |                                                                                                                                                                                                                                                                                                                                                                                                            
|9. | Financial instruments                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Available-for-sale financial
  instruments                                                                                                                                                                                                                                                                                                                                                                 

| |                                              |  | Number of  |  |   |           | 
| | -------------------------------------------- |  | ---------- |  | - | --------- | 
| |                                              |  | shares     |  |   | Amount    | 
| | Balance, January 1, 2007                     |  | 10,000,000 |  | $ | 2,274,649 | 
| | Unrealized gain (note 9(a))                  |  | -          |  |   | 64,811    | 
| | Addition  Kryso shares (note 9(a))          |  | 1,908,429  |  |   | 448,503   | 
| | Addition  Rand Mutual Assurance (note 9(b)) |  | 20         |  |   | 60        | 
| | Unrealized gain  Kryso shares (note 9(a))   |  | -          |  |   | 538,061   | 
| | Balance, December
      31, 2007             |  | 11,908,449 |  | $ | 3,326,084 | 

The components of available-for-sale
financial instruments are:

| |                                          |  |            |  |   |           |  |   | Fair value |  |   |           | 
| | ---------------------------------------- |  | ---------- |  | - | --------- |  | - | ---------- |  | - | --------- | 
| |                                          |  | Number     |  |   | Cost      |  |   | adjustment |  |   | Amount    | 
| | Kryso Resources Plc  Shares (note 9(a)) |  | 11,908,429 |  | $ | 2,723,152 |  | $ | 602,872    |  | $ | 3,326,024 | 
| | Rand Mutual
      Assurance (note 9(b))  |  | 20         |  |   | 60        |  |   | -          |  |   | 60        | 
| | Balance, December 31, 2007               |  | 11,908,449 |  | $ | 2,723,212 |  | $ | 602,872    |  | $ | 3,326,084 | 

| | (a) | Kryso Resources Plc.- Shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | In December 2006, the Company entered into a share
      purchase agreement to acquire common shares of Kryso Resources Plc
      (Kryso), a mineral resources and exploration company exploring gold and
      precious metal deposits in Central Asia.                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | Kryso is a publicly traded company on the AIM market of
      the London Stock Exchange. Pursuant to the share purchase agreement, the
      Company purchased approximately 15% of the equity in Kryso with the
      purchase of 10,000,000 shares at 10 pence per share for a total payment of
      GBP1,000,000 ($2,274,649). The unrealized gain on available-for-sale
      securities to December 31, 2006 of $64,811 was reported as an adjustment
      to the opening balance of accumulated other comprehensive income (note
      5(a)).
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | On October 2, 2007 the Company acquired an additional
      1,908,429 shares in terms of a public placement undertaken by Kryso
      Resources Plc. This ensured that the company maintained its 15%
      shareholding in the issued share capital of Kryso. The shares were issued
      at 11.5 pence per share and the total consideration of GBP219,469
      ($448,503) was settled in cash.                                                                                                                                                  

23

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|9. | Financial instruments (continued)                         
|-- | ----------------------------------------------------------
|   |                                                           
|   | Available-for-sale financial instruments
      (continued)

| | (a) | Kryso Resources Plc.- Shares (continued)                                                                                                                                                                                                                                                                                                                                                                   
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | The unrealized gain of $538,061 for the year ended
      December 31, 2007 is reported in the current year under other
      comprehensive income and was calculated based on the closing price of
      14.25 pence per share and an exchange rate of $1.96:1GBP.                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                            
| | (b) | The Rand Mutual Assurance Company Limited -
      Shares                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | The Rand Mutual Assurance Company Limited (RMA) is a
      mutual which caters for the compensation of occupational injuries
      specifically in the mining industry. The Company was granted 20 shares
      from RMA based on its contributions to the fund during the year. Dividends
      to the value of $17,640 have been earned during the 2007 year and are
      included under other income.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | Held-for-trading financial instruments                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                            
| | (c) | Kryso Resources Plc. 
Warrants                                                                                                                                                                                                                                                                                                                                                                            

| |                                    |  | Number of |  |   |          |  
| | ---------------------------------- |  | --------- |  | - | -------- | -
| |                                    |  | warrants  |  |   | Amount   |  
| | Addition  Kryso warrants received |  | 5,000,000 |  | $ | 937,365  |  
| | Unrealized
      loss  warrants   |  | -         |  |   | (104,365 | )
| | Balance, December 31, 2007         |  | 5,000,000 |  | $ | 833,000  |  

In terms of the share purchase
agreement entered into during December 2006 (note 9(a)), the Company would be
granted 5,000,000 warrants from Kryso Resources Plc. upon shareholder
approval.

The shareholders of Kryso approved the
issuance of the warrants on July 11, 2007. The warrants are each exercisable at
a price of 15 pence for a common share of Kryso over five years and expire in
2012. The warrants were granted in accordance with the agreement concluded in
December 2006. The exercise of the warrants required the approval of Krysos
shareholders which was obtained at their shareholders meeting.

On date of grant the warrants had an
estimated fair value of $937,365 (using expected volatility of 72.2%, risk free
interest rate of 5%, dividends of nil, remaining life of approximately 5 years
and an exchange rate of $2.15:1GBP) which were recorded in the statement of
operations.

24

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|9. | Financial instruments (continued)                       
|-- | --------------------------------------------------------
|   |                                                         
|   | Held-for-trading financial instruments
      (continued)

| | (c) | Kryso Resources Plc.  Warrants
  (continued)                                                                                                                                                                                                            
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                          
| |     | The investment was fair valued on December 31, 2007 based
      on the assumptions detailed above, expected volatility of 72.5% and an
      exchange rate of $1.96:1GBP. The unrealized loss of $104,365 is reported
      in the current year net loss.

|10. | Investments in
associates
|--- | -------------------------

| |                                          |   | December 31 |   |   | December 31 | 
| | ---------------------------------------- | - | ----------- | - | - | ----------- | 
| |                                          |   | 2007        |   |   | 2006        | 
| |                                          |   |             |   |   |             | 
| | Underlying book value of shares acquired | $ | 3,991,304   |   | $ | -           | 
| | Excess ascribed to mineral properties    |   | 4,008,696   |   |   | -           | 
| | Share of loss                            |   | (796,027    | ) |   | -           | 
| |                                          | $ | 7,203,973   |   | $ | -           | 

On June 28, 2007, the Company entered
into an agreement with Rusaf Gold Ltd. (Rusaf) gaining the right to acquire
approximately 37% of the fully diluted common shares of Rusaf for total
consideration of $12 million, payable $8 million cash and $4 million in Great
Basin common shares. Rusaf is a Canadian registered exploration company,
operating from Dar Es Salaam, Tanzania, with 100% owned subsidiary companies
that hold prospecting rights to properties in Tanzania and Russia.

The transaction was structured in three
tranches of which the first tranche closed on June 28, 2007 with the payment of
$2,000,000 for 3,333,333 common shares at $0.60 per share.

The second tranche of the purchase was
subject to satisfaction of certain conditions, which were met on July 20, 2007
and enabled the Company to acquire a further 10,000,000 shares at a price of
$0.60 per share for an aggregate payment in cash to Rusaf of $6,000,000. As of
the conclusion of this tranche the Company obtained significant influence over
Rusaf and had to equity account for its share of post-acquisition losses.

The third and final tranche is subject
to certain conditions being met, including the completion of the acquisition by
Rusaf of New Africa Mining Fund Nominees Tanzania (Pty) Ltds participation
interest in the Lupa Goldfields Joint Venture. The third tranche will constitute
the Company to acquire an additional 6,666,667 shares at a price of $0.60 per
share to be paid by the issuance of Great Basin shares equal to the value of $4
million, based on the arithmetical average closing price of the Great Basin
shares on the Toronto Stock Exchange for the twenty trading days immediately
preceding receipt of the final shares.

Subsequent to December 31, 2007 this
third tranche was cancelled and replaced by a new agreement whereby the Company
will acquire the remaining 67% of Rusaf for a total consideration of $14.4
million, payable in approximately 4.9 million Great Basin Gold common shares
(note 19(a)).

25

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|10. | Investments in associates (continued)                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                         
|    | The results of Rusaf for the period since acquisition of
      the investment on July 20, 2007 to December 31, 2007 as adjusted to agree
      to the accounting policies of the Company are as
follows:

| |                              |   | 100%       |   |   | 37%      |  
| | ---------------------------- | - | ---------- | - | - | -------- | -
| |                              |   |            |   |   |          |  
| | Income                       | $ | 142,452    |   | $ | 52,707   |  
| | Expenses                     |   | (1,137,962 | ) |   | (421,046 | )
| | Exploration cost capitalized |   | (1,155,913 | ) |   | (427,688 | )
| |                              | $ | (2,151,423 | ) | $ | (796,027 | )

At December 31, 2007, the balance sheet
of Rusaf Gold Limited was as follows:

| |                                    |   | 100%       |   |   | 37%       |  
| | ---------------------------------- | - | ---------- | - | - | --------- | -
| |                                    |   |            |   |   |           |  
| | Current assets                     | $ | 5,867,996  |   | $ | 2,171,159 |  
| | Non-current assets                 |   | 13,308,807 |   |   | 4,924,259 |  
| | Exploration cost capitalized       |   | (1,155,913 | ) |   | (427,688  | )
| |                                    | $ | 18,020,890 |   | $ | 6,667,730 |  
| |                                    |   |            |   |   |           |  
| |                                    |   |            |   |   |           |  
| | Current liabilities                | $ | 103,158    |   | $ | 38,168    |  
| | Future Income Tax                  |   | 3,211,048  |   |   | 1,188,088 |  
| | Shareholders equity               |   | 15,862,597 |   |   | 5,869,162 |  
| | Exploration cost
      capitalized |   | (1,155,913 | ) |   | (427,688  | )
| |                                    | $ | 18,020,890 |   | $ | 6,667,730 |  

|11. | Mineral property
interests
|--- | --------------------------

| |                                               |   | December 31 |  |   | December 31 | 
| | --------------------------------------------- | - | ----------- |  | - | ----------- | 
| | Mineral Property
      Acquisition Costs, net |   | 2007        |  |   | 2006        | 
| |                                               |   |             |  |   |             | 
| | Hollister Property (note 11(a))               | $ | 95,156,279  |  | $ | 3,945,348   | 
| | Burnstone Property (note 11(b))               |   | 123,257,650 |  |   | 106,964,650 | 
| | Casino Property (note 11(c))                  |   | -           |  |   | 1           | 
| | Kirkland Lake
      Property (note 11(d))     |   | 1           |  |   | 1           | 
| |                                               | $ | 218,413,930 |  | $ | 110,910,000 | 

26

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|11. | Mineral property interests
  (continued)
|--- | ----------------------------------------

| | (a) | Hollister Property, Elko County, Nevada, United States
      of America (continued)
| | --- | -----------------------------------------------------------------------------------

| |                                               |   | December 31 |  |   | December 31 | 
| | --------------------------------------------- | - | ----------- |  | - | ----------- | 
| |                                               |   | 2007        |  |   | 2006        | 
| | Balance, beginning of the year                | $ | 3,945,348   |  | $ | 3,945,348   | 
| | Acquisition of interest held by third parties |   | 91,210,931  |  |   |            | 
| | Balance, December 31, 2007                    | $ | 95,156,279  |  | $ | 3,945,348   | 

From 1997 to 1999, the Company acquired
  a 100% working interest in the Hollister Property.

During 1998, the Company entered into
  an agreement for the acquisition of a group of claims that form part of the
  Hollister Property. This agreement, with a term of up to four 20-year terms,
  provides for annual advance royalty payments of US$50,000 per year until 2017
  and thereafter increases to US$55,000 per year from 2018 to 2037. The claims
  are subject to net smelter return royalties ranging from 2% to 5%.

In August 2002, the Company entered
into Earn-In and Joint Operating Agreements (the Earn-In Agreement) with Hecla
Ventures Corp. (Hecla or HVC), an affiliate of Hecla Mining Company. These
agreements provided that Hecla would vest in a 50% working interest in the
Hollister Development Block (HDB), which is a portion of the Hollister
Property.

On February 20, 2007, the Company
entered into a share purchase agreement to acquire Hecla Ventures Corp. which
held the 50% earn-in rights and certain tangible assets in the HDB for a total
consideration of US$60 million.

The transaction was concluded on April
19, 2007 when the Company acquired 100% of the issued and outstanding shares of
HVC from its parent, Hecla Limited, thereby effectively acquiring the remaining
50% of the HDB. HVCs only business and primary asset was the 50% working
interest in the HDB in which GBG owned the other 50%.

The purchase price paid for HVC was
US$60 million, comprising US$45 million in cash and the remaining US$15 million
payable in 7,930,214 GBG common shares.

The aggregate purchase price was
$70,618,292, calculated as follows:

| | Cash payment (US$45 million)                    | $ | 50,791,500 | 
| | ----------------------------------------------- | - | ---------- | 
| | Issuance of 7,930,214 Great Basin common shares |   | 19,666,931 | 
| | Share issue cost                                |   | 159,861    | 
| |                                                 | $ | 70,618,292 | 

27

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|11. | Mineral property interests
  (continued)
|--- | ----------------------------------------

| | (a) | Hollister Property, Elko County, Nevada, United States
      of America (continued)                                                                                                                                                                                                     
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                         
| |     | The value of the 7,930,214 Great Basin common shares
      issued to Hecla Mining Limited was determined based on the closing market
      price of Great Basin's common shares on the date the shares were issued
      and the acquisition closed (April 19, 2007 at $2.48 per share).
| |     |                                                                                                                                                                                                                                                                                         
| |     | The fair value of the assets acquired and liabilities
      assumed at the date of acquisition is as
follows:                                                                                                                                                                           

| | Cash                              | $ | 11,156      |  
| | --------------------------------- | - | ----------- | -
| | Plant and equipment               |   | 903,826     |  
| | Accounts payable                  |   | (816,515    | )
| | Reclamation obligation            |   | (722,304    | )
| | Mineral property                  |   | 91,210,931  |  
| | Future income tax
      liability |   | (19,968,802 | )
| |                                   | $ | 70,618,292  |  

| |     | The results of operations of HVC have been included in
      the consolidated financial statements of the Company commencing April 20,
      2007.                                                                                                                                  
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                     
| |     | An amount of $1,239,125 (US$ 1,250,000) is retained by
      Hecla in respect of the successful establishment of the Hollister Ventures
      Corp. 401K and related pension plans. This interest free amount is carried
      on the balance sheet under amounts receivable.       
| |     |                                                                                                                                                                                                                                                                                     
| |     | As at December 31, 2007 and 2006, the Company had posted
      $1,420,958 and $103,702 respectively in reclamation deposits with the
      United States Bureau of Land Management ("BLM") in respect of exploration
      drilling on certain areas of the Hollister Gold Property.
| |     |                                                                                                                                                                                                                                                                                     
| |     | These deposits will be released by the BLM upon the
      conclusion of the exploration and related reclamation programs on these
      areas (note 8).                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                     
| | (b) | Burnstone Property, Republic of South
  Africa                                                                                                                                                                                                                                      

| |                                               |   | December 31 |  |   | December 31 | 
| | --------------------------------------------- | - | ----------- |  | - | ----------- | 
| |                                               |   | 2007        |  |   | 2006        | 
| |                                               |   |             |  |   |             | 
| | Balance, beginning of the year                | $ | 106,964,650 |  | $ | 94,684,650  | 
| | Settlement Agreement:                         |   |             |  |   |             | 
| | Issuance of 4 million common
      shares     |   | -           |  |   | 7,600,000   | 
| | Issuance of 2 million share purchase warrants |   | -           |  |   | 1,093,000   | 
| | Share and warrant issuance
      costs        |   | -           |  |   | 23,774      | 
| | Future income tax provision                   |   | -           |  |   | 3,563,226   | 
| | Royalty settlement (note
      (iv))          |   | 11,568,000  |  |   | -           | 
| | Future income tax provision                   |   | 4,725,000   |  |   | -           | 
| |                                               | $ | 123,257,650 |  | $ | 106,964,650 | 

28

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|11. | Mineral property interests
  (continued)
|--- | ----------------------------------------

| | (b) | Burnstone Property, Republic of South Africa
      (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | In November 2002, the Company entered into an option
      agreement (the "Option to Purchase Agreement") with Southgold Exploration
      (Proprietary) Limited (Southgold) and the then shareholders of Southgold
      (the Former Southgold Shareholders) to purchase on a staged basis, up to
      100% of Southgold.                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | Southgold is a private South African company that at the
      time of acquisition by the Company held rights to acquire a 100% interest
      in the Burnstone Property in the Republic of South Africa, subject to a
      statutory requirement that a percentage of its equity or the property be
      owned by Historically Disadvantaged South Africans (HDSA). Under South
      African mineral legislation, Southgold must achieve an HDSA ownership
      target of 15% by April 2009 and 26% by April 2014.                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | Upon signing the Option to Purchase Agreement the Company
      paid US$1.25 million ($2,007,561) to the Former Southgold Shareholders and
      also agreed to conduct a US$1.5 million work program prior to April 30,
      2003, which was completed. The Company exercised its option to purchase
      the shares of the Former Southgold Shareholders and completed the purchase
      of Southgold by making payments of cash and Great Basin common shares and
      share purchase warrants to the Former Southgold Shareholders in two staged
      tranches, as described below.                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | The Great Basin shares issued to the Former Southgold
      Shareholders pursuant to the two tranches and the Settlement Agreement
      (described in (iii)below) are subject to a voting trust agreement,
      pursuant to which the holders have undertaken to vote with Great Basin
      management until the earlier of (i) April 30, 2008, or (ii) the time they
      dispose of such shares in accordance with the Option to Purchase Agreement
      (the Agreement). The Former Southgold Shareholders are entitled to
      nominate two members to the Board of Directors of the Company, of which
      one has been nominated and elected.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | The Company's mineral rights, other than those acquired
      from GFL and Randex (see (iv)below), were held under option with
      "old order" mineral right holders, the State, or Municipalities. The
      Company has converted the "old order" rights to "new order" rights.
      Certain of the mineral right options were later amended to extend the
      options and it was acknowledged that the Mineral and Petroleum Resources
      Development Act was likely to become effective during the existence of the
      options.                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | The amendments also provided that should the mineral
      rights lapse during the period of the options so that the Company is not
      able to exercise the option to purchase the mineral rights, the Company
      would nevertheless pay the purchase price should a mining right be granted
      to the Company by the Department of Minerals and Energy over these
      properties. The potential purchase price is ZAR 7,716,715 (Rand)
      (approximately $1,275,573).                                                                                                                                                                        

29

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|11. | Mineral property interests
  (continued)
|--- | ----------------------------------------

| | (b) | Burnstone Property, Republic of South Africa
      (continued)
| | --- | --------------------------------------------------------------

| | (i)   | Tranche One of the Southgold Option to Purchase
      Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |       | On April 30, 2003, the Company exercised tranche one of
        the Option to Purchase Agreement and acquired the right to 49% of the
        outstanding common shares of Southgold for payments totaling US$2 million
        ($2,768,990) cash and the issuance of 10 million Great Basin common shares
        and 5 million Great Basin share purchase warrants. The shares were valued
        at their quoted market value and the warrants were valued at their estimated
        fair value. A finders fee, to a maximum of US$1 million, was payable
        as the Company acquired Southgold and made expenditures on the Burnstone
        Gold Property.
      This finder's fee totaling US$1 million ($1,258,154) was
        paid in 2003 and was included in acquisition costs.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (ii)  | Tranche Two of the Southgold Option to Purchase
      Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |       | On January 31, 2004, the Company exercised tranche two of
      the Option to Purchase Agreement and issued 11 million Great Basin common
      shares and 5.5 million Great Basin share purchase warrants to acquire the
      remaining 51% of the shares of Southgold. The shares were valued at their
      quoted market value and the warrants were valued at their estimated fair
      value.                                                                                                                                                                                                                                                                                                                                                                                             
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |       | The warrants were exercisable at US$0.75 for one year
      from the date of issuance and were subject to an accelerated expiry
      provision under certain circumstances. In January 2005, the 5.5 million
      share purchase warrants issued pursuant to this tranche were exercised by
      the warrant holders, for proceeds to the Company of US$4,125,000
      ($5,018,062).                                                                                                                                                                                                                                                                                                                                                                                                          
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (iii) | Settlement Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |       | In July 2006, the Company settled all remaining potential
      obligations to the Former Southgold Shareholders under the Option to
      Purchase Agreement pursuant to a settlement agreement dated May 26, 2006,
      and issued 4 million Great Basin common shares and 2 million Great Basin
      share purchase warrants. The shares were valued at their quoted market
      value at the time of issue and the warrants were valued at their estimated
      fair value. The Company has accounted for this issuance as additional
      consideration for the shares of Southgold.                                                                                                                                                                                                    
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |       | The warrants are exercisable at US$1.80 for two years
      from the date of issuance and are subject to an accelerated expiry
      provision under certain circumstances. Subsequent to December 31, 2006, it
      was resolved by way of board resolution, passed on February 15, 2007, to
      allow the exercise price to be in ZAR. The warrants are exercisable at ZAR
      12.90 per warrant.                                                                                                                                                                                                                                                                                                                                                                                          

30

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|11. | Mineral property interests
  (continued)
|--- | ----------------------------------------

| | (b) | Burnstone Property, Republic of South Africa
      (continued)
| | --- | --------------------------------------------------------------

| | (iii) | Settlement Agreement (continued)                                                                                                                                 
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                  
| |       | The fair values of the share purchase warrants issued
      above were estimated using a Black-Scholes option pricing model with the
      following assumptions:

| |                         | **Settlement** |                  |               
| | ----------------------- | -------------- | ---------------- | --------------
| |                         | Agreement      | Tranche two      | Tranche one   
| | Calculation date        | July 18, 2006  | January 31, 2004 | April 30, 2003
| | Risk free interest rate | 4%             | 3%               | 3%            
| | Expected life           | 2.0 years      | 1.0 years        | 1.0 years     
| | Expected volatility     | 56%            | 78%              | 85%           
| | Expected dividends      | nil            | nil              | nil           
| | Exercise price          | US$1.80        | US$0.75          | US$0.75       
| | Market price            | $1.84          | $2.98            | $1.38         

| | (iv) | Acquisition costs of mineral rights from GFL and
      Randex                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |      | On October 10, 2003, pursuant to a prospecting agreement
      (the Prospecting Agreement) dated October 17, 2000 between GFL Mining
      Services Limited (GFL), Randex Limited (Randex), and Southgold,
      Southgold elected to purchase certain mineral rights held by GFL and
      Randex within the Burnstone Property which were not covered under
      Southgold's then-existing rights, for ZAR 35 million ($6,695,598) subject
      to a net smelter return royalty ranging from 1% to 2% (tiered to the gold
      price), and payable to GFL. The Company funded Southgold's purchase of
      these rights. Current South African legislation abolished private
      ownership of mineral rights (and, possibly, royalties which are bound with
      those rights) and replaced them with a system which vests mineral tenure
      in the State.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |      | Under the terms of the Prospecting Agreement, in the
      event of a change in the mineral rights regime in South Africa, the
      parties agreed to negotiate amendments to the Prospecting Agreement, if
      possible without causing undue hardship to each of the parties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |      | Under the terms of the Memorandum of Agreement signed
      under the Black Economic Empowerment Transaction Framework Agreement
      Southgold paid $11.6 million (ZAR80 million) to GFL in full and final
      settlement of the net smelter royalty payable in terms of the Prospecting
      Agreement (described in (v)). On October 1, 2007 Southgold paid GFL
      the amount of $11.6 million (ZAR80 million) and included this amount in
      the capitalized cost of mineral properties.                                                                                                                                                                                                                                                                                                                                                                      

31

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|11. | Mineral property interests
  (continued)
|--- | ----------------------------------------

| | (b) | Burnstone Property, Republic of South Africa
      (continued)
| | --- | --------------------------------------------------------------

| | (v)  | Black Economic Empowerment Transaction Framework
      Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |      | On February 22, 2007, the Company entered into a
      framework agreement whereby it expected to achieve compliance with the
      requirements of South Africas broad-based Black Economic Empowerment Act
      (BEE) in order to secure its new order prospecting rights in respect of
      Burnstone.                                                                                                                                                                                                                                                                              
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |      | In terms of the framework, Tranter Gold (Proprietary)
      Limited (Tranter), a BEE company, purchased approximately 19.94 million
      shares (the BEE Shares) in Great Basin for ZAR 260 million
      (approximately US$37 million), which on that date represented
      approximately 14.5% of the common shares in the Company. Tranter thereby
      acquired a qualifying indirect interest in the Burnstone Gold Project as
      required under South Africas broad-based black economic empowerment
      act.                                                            
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |      | Under the framework agreement, Gold Fields Limited (Gold
      Fields) and its subsidiary GFL agreed to sell to the Company the net
      smelter royalty (NSR) held by GFL on future gold production from the
      Burnstone Project (described in (iv))for ZAR80 million, which
      extinguished the Companys obligation in respect of the NSR. GFL donated
      the proceeds of its sale of the NSR to Tranter to allow Tranter to finance
      ZAR 70 million of the cost of the BEE Shares with the balance financed
      from other financial sources available to Tranter.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (vi) | Execution of the Transaction Framework
      Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |      | On October 1, 2007, Tranter Burnstone (Proprietary)
      Limited (Tranter Burnstone) subscribed for and was allotted and issued
      with 812 new ordinary shares (the Southgold Shares) in the issued share
      capital of Southgold Exploration (Proprietary) Limited (Southgold), a
      wholly owned subsidiary of Great Basin.                                                                                                                                                                                                                                              
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |      | The aggregate subscription price paid by Tranter
      Burnstone to Southgold was $38 million (ZAR260 million). The 812 new
      ordinary shares constituted 26% of the issued share capital of
      Southgold.                                                                                                                                                                                                                                                                                                                                                                           
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |      | Subsequent to the completion of the above, N6C Resources
      Inc. (N6C Inc.), a wholly owned subsidiary of Great Basin, purchased the
      Southgold shares from Tranter Burnstone. Against the sale and registration
      of transfer of the Southgold shares from Tranter Burnstone to N6C Inc.,
      Great Basin issued 19,938,650 common shares in the issued share capital of
      Great Basin to Tranter Burnstone.                                                                                                                                                           

32

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|11. | Mineral property interests
  (continued)
|--- | ----------------------------------------

| | (b) | Burnstone Property, Republic of South Africa
      (continued)
| | --- | --------------------------------------------------------------

| | (vi) | Execution of the Transaction Framework Agreement
      (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |      | The 19,938,650 common shares represented approximately
      9.3% of the fully diluted issued share capital of the Company. The Great
      Basin shares once issued to Tranter Burnstone, were admitted to trading on
      the JSE Limited on the same day (October 1, 2007).                                                                                                                                                                                                                                                                                                                                                                   
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |      | Resulting from this transaction, Tranter Gold being the
      shareholder of 75% of the issued share capital in Tranter Burnstone,
      became entitled to appoint a director to the boards of both of GBG and
      Southgold for as long as it holds a qualifying shareholding in GBG.
      Tranter Gold is further prohibited from disposing of the GBG Shares or
      doing anything else that might impact on the BEE credentials of Southgold
      for the period of three years or such longer period for which Southgold
      requires BEE equity participation in order for its prospecting and mining
      rights to remain valid.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |      | In addition to the issue and allotment of the 19,938,650
      common shares in Great Basin, the Company provided a total of 1,684,312
      Great Basin warrants to Investec (1,263,234) and Tranter Gold (421,078)
      respectively. Each warrant is convertible into one Great Basin common
      share at $3 (ZAR20.78) on or before October 1, 2010. The warrants are
      subject to GBG having the right to require exercise of the warrants if the
      market price equals or exceeds $7 (ZAR45.72) (Refer note 13(h)).                                                                                                              
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |      | Both the Great Basin common shares as well as the
      warrants issued in terms of this transaction were valued by independent
      valuation specialists in order to determine the fair value for accounting
      purposes.                                                                                                                                                                                                                                                                                                                                                                                                                   
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |      | On February 22, 2007, the date on which the Transaction
      Framework Agreement were announced, the value of the Great Basin shares
      were $38 million (R260 million). The transaction was concluded on October
      1, 2007 and resulted in the common shares and warrants being valued on the
      transaction date, taking into account the restrictions as defined in the
      Subscription and Acquisition Agreement.                                                                                                                                                                                                               
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |      | On the date of the transaction, the fair value of the
      shares and warrants were estimated at between $34 million (ZAR236 million)
      for the shares and $1.2 million (ZAR8 million) for the warrants and $37
      million (ZAR257 million) for the shares and $1.2 (R8million) for the
      warrants using expected volatility of 62.74%, risk free rate of 8.93%,
      dividends of nil (Refer note 13(g) and 13(h)).                                                                                                                                                                                                                 

33

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|11. | Mineral property interests
  (continued)
|--- | ----------------------------------------

| | (b) | Burnstone Property, Republic of South Africa
      (continued)
| | --- | --------------------------------------------------------------

| | (vi) | Puma Option                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | Puma Gold (Proprietary) Limited ("Puma") is a private
      South African company which holds prospecting and option contracts over
      certain portions of the farm Doornhoek 577 IR located on the eastern edge
      of the Burnstone Property. These options give Puma the right to explore
      and acquire certain mineral rights on this farm. Pursuant to an Option to
      Purchase Agreement dated November 4, 2006, the Company agreed to fund
      exploration drilling and related assaying work and other direct
      exploration costs totaling US$100,000 ($120,000) on this property, which
      has been met by the Company.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | In terms of the option agreement, these farms represent
      approximately 435,000 of the ounces in the additional measured and 29,000
      of the ounces in the additional indicated t Burnstone, using a 400 cmg/t
      cut-off.                                                                                                                                                                                                                                                                                                                                                                                                                
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | The option period granted by Puma was extended beyond its
      expiry date of June 21, 2007, subject to the funding of two boreholes 700
      meters deep or to the Main Reef horizon otherwise known as the South Reef
      or Nigel Reef and the sampling and analysis of samples in progress. The
      option price was increased from US$2.00 to US$8.00 per contained resource
      gold ounce. The extended option is valid up to 14 days after receipt of
      the assay of the last bore hole by the parties, receipt of which is still
      pending.                                                                                 
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | Subject to certain conditions precedent, the Company
      expects to exercise the option in order to secure rights in these portions
      of Doornhoek 557IR.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

| | (c) | Casino Property, Whitehorse Mining District, Yukon,
      Canada                                                                                                                                                                                                                                                                                             
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                              
| |     | The Company owned a group of 161 mineral claims, some of
      which are subject to a 5% net profits from production royalty.                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                              
| |     | During the period from 2000 to 2006 the Company granted
      options on the Casino property to various parties in exchange for cash and
      equity securities. During the year ended December 31, 2006 the Company
      recognized a gain of $112,005 on the sale of the equity securities
      received in connection with the options.                
| |     |                                                                                                                                                                                                                                                                                                                                                              
| |     | On August 17, 2007, to acquire the Companys interest in
      the Casino Property, Western Copper Corp., through its subsidiary CRS
      Copper Resources Inc., exercised the option and paid a total consideration
      of $1,000,000 in cash, resulting in the transfer of the Casino Property to
      CRS Copper Resources Inc for a gain of $993,210.
| |     |                                                                                                                                                                                                                                                                                                                                                              
| |     | In the event that a decision is made to put the Casino
      Property into commercial production, Western Copper Corp. will pay the
      Company an additional $1 million.                                                                                                                                                                                  

34

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|11. | Mineral property interests
  (continued)
|--- | ----------------------------------------

| | (d) | Kirkland Lake Property, Ontario, Canada                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | In 1992, the future economic benefit of the Kirkland Lake
      property became uncertain, and while the property was not abandoned, there
      were no plans to make further significant expenditures on the property.
      Accordingly, the property was written down to a nominal amount.                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | The Company continues to maintain the property in good
      standing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (e) | Ganes Creek Property, Alaska, USA                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | The Company signed an agreement, effective November 14,
      2007, whereby it will earn an 80% interest in all hard rock mineral rights
      on the Ganes Creek Property in Alaska by expending a total of US$3 million
      in exploration expenditures over a period of 3 years. The Ganes Creek
      Property is held by CW Properties LLC (CWM), based in Talkeetna, Alaska,
      USA.                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | Pursuant to the agreement, a minimum of US$500,000 in
      exploration expenditures needs to be incurred in 2007; an additional
      US$1.3 million in expenditures by the end of 2008; and a final US$1.2
      million in expenditures by the end of 2009. The company can also increase
      its interest in the property at a production decision by purchasing the
      remaining 20% at fair market value should CWM not wish to participate in
      any development costs. CWM would retain a 2% Net Smelter Royalty of which
      1% could be purchased by Great Basin for US$2 million.                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (f) | Tsetsera Property, Mozambique, Africa                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | The Company concluded a Joint Venture Agreement to enter
      into an unincorporated joint venture with G S Minase Refinaria Limitade
      (GSR) in Mozambique on August 20, 2007 (the JV). The purpose of the JV
      is to establish a gold exploration and mining business in Mozambique,
      whereby the company will have the exclusive right to explore all GSRs
      properties.                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | The Company will have an 80% interest in the JV, and has
      committed to exploration expenditures of approximately US$2 million over a
      three year period on the Tsetsera Property, which is located 80 km south
      of Manica in Mozambique, and other properties over which GSR holds mineral
      rights.                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | Should any financing be required for the conducting of
      any mining activities, each of the parties shall contribute to such
      financing needs in proportion to their interests in the JV. Should GSR not
      be in a position to contribute such finance required by the JV in respect
      of any property or project, Great Basin shall have the right of first
      refusal to buy GSRs remaining 20% share. The consideration payable in
      respect of the 20% share will be settled in either cash or Great Basin
      shares and the value will be based on resources reported at that time and
      valued at fair market price. GSR however will retain a 3% Net Smelter
      Royalty.

35

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|12. | Site reclamation obligations                                                                                           
|--- | -----------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                        
|    | The provision for site closure and reclamation costs
      related to the Companys mineral properties is as
  follows:

| | Balance, December 31, 2006                        | $ | 405,000   |  
| | ------------------------------------------------- | - | --------- | -
| |                                                   |   |           |  
| | Changes during fiscal 2007:                       |   |           |  
| | Accretion                                         |   | 37,466    |  
| | Recognition of obligation acquired
      from HVC |   | 722,304   |  
| | Foreign exchange valuation difference             |   | (141,683  | )
| | Additional obligation recognized                  |   | 393,877   |  
| | Balance, December
      31, 2007                  | $ | 1,416,964 |  

The components of the site reclamation
obligation are as follows:

| | Burnstone Property (note 12(a))  | $ | 507,168   | 
| | -------------------------------- | - | --------- | 
| | Hollister Property (note 12 (b)) |   | 857,475   | 
| | Other properties                 |   | 52,321    | 
| | Balance, December
      31, 2007 | $ | 1,416,964 | 

| | (a) | Burnstone Property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | The estimated amount of the reclamation costs to remove
      infrastructure, capping and backfilling of the decline and subsequent
      property rehabilitation including re-vegetation and fertilization,
      adjusted for estimated inflation at 6% per year, is $2.3 million (ZAR 13.8
      million) and is expected to be spent over a period of approximately three
      years beginning in 2023. The credit- adjusted risk free rate at which the
      estimated future cash flows have been discounted is 8%, to arrive at a net
      present value of $507,168.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (b) | Hollister Property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | The estimated amount of the reclamation costs to remove
      infrastructure, capping and backfilling of the decline and subsequent
      property rehabilitation including re-vegetation and fertilization,
      adjusted for estimated inflation at 3% per year, is $1.1 million (US$ 1.1
      million) and is expected to be spent from 2015. The credit-adjusted risk
      free rate at which the estimated future cash flows have been discounted is
      3.5%, to arrive at a net present value of
$857,475.                                                         

36

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|13. | Share capital
|--- | -------------

| | (a) | Authorized share capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | The Companys authorized share capital consists of an
      unlimited number of common shares without par value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (b) | Share option plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | The Company has a share option plan approved by the
      shareholders that allows it to grant options to a maximum number of
      eligible shares equaling a rolling percentage of up to 12.5% of the
      Company's outstanding common shares, calculated from time to time, subject
      to regulatory terms and approval, to its directors, employees, officers,
      and consultants. The exercise price of each option is set by the Board of
      Directors at the time of grant but cannot be less than the market price
      (less permissible discounts) on the Toronto Stock Exchange.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | Pursuant to the option plan, if outstanding options are
      exercised, or expire, and/or the number of issued and outstanding common
      shares of the Company increases, then the options available to grant under
      the plan increase proportionately. Options can have a maximum term of ten
      years and typically terminate 30 days following the termination of the
      optionees employment or engagement, except in the case of retirement or
      death. Vesting of options is at the discretion of the Board of Directors
      at the time the options are granted.          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | The continuity of share purchase options is as
      follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

| |                            |  | Weighted |  |  |            |   |  | Contractual      | 
| | -------------------------- |  | -------- |  |  | ---------- | - |  | ---------------- | 
| |                            |  | average  |  |  |            |   |  | weighted average | 
| |                            |  | exercise |  |  | Number of  |   |  | remaining life   | 
| |                            |  | price    |  |  | options    |   |  | (years)          | 
| | Balance, December 31, 2005 |  | $1.41    |  |  | 5,242,000  |   |  | 2.60             | 
| | Granted                    |  | $2.21    |  |  | 5,505,000  |   |  |                  | 
| | Exercised                  |  | $1.49    |  |  | (1,193,000 | ) |  |                  | 
| | Forfeited                  |  | $1.47    |  |  | (214,000   | ) |  |                  | 
| | Balance, December 31, 2006 |  | $1.87    |  |  | 9,340,000  |   |  | 2.47             | 
| | Granted                    |  | $2.70    |  |  | 6,024,000  |   |  |                  | 
| | Exercised                  |  | $1.69    |  |  | (3,015,830 | ) |  |                  | 
| | Forfeited                  |  | $2.19    |  |  | (630,000   | ) |  |                  | 
| | Balance, December 31, 2007 |  | $2.32    |  |  | 11,718,170 |   |  | 2.37             | 

37

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|13. | Share capital
(continued)
|--- | -------------------------

| | (b) | Share option plan (continued)                                 
| | --- | --------------------------------------------------------------
| |     |                                                               
| |     | Options outstanding at December 31, 2007 are as
      follows:

| |                      |  |          |  |  | Number of   |  |  | Number of   | 
| | -------------------- |  | -------- |  |  | ----------- |  |  | ----------- | 
| |                      |  | Exercise |  |  | options     |  |  | options     | 
| | Expiry date          |  | price    |  |  | outstanding |  |  | exercisable | 
| | December 19, 2008    |  | $1.62    |  |  | 1,650,000   |  |  | 1,650,000   | 
| | March 31, 2009       |  | $2.07    |  |  | 1,561,002   |  |  | 740,668     | 
| | March 31, 2009       |  | $2.45    |  |  | 180,000     |  |  | 120,000     | 
| | April 30, 2009       |  | $2.07    |  |  | 57,500      |  |  | 57,500      | 
| | April 30, 2009       |  | $2.45    |  |  | 354,000     |  |  | 354,000     | 
| | October 23, 2009     |  | $2.07    |  |  | 133,334     |  |  | -           | 
| | April 18, 2010       |  | $2.68    |  |  | 1,332,000   |  |  | 759,834     | 
| | December 31, 2010    |  | $1.14    |  |  | 680,000     |  |  | 680,000     | 
| | April 30, 2011       |  | $2.45    |  |  | 1,255,000   |  |  | 836,666     | 
| | November 8, 2011     |  | $2.45    |  |  | 90,000      |  |  | 60,000      | 
| | April 18, 2012       |  | $2.68    |  |  | 2,395,334   |  |  | 444,000     | 
| | July 5, 2010         |  | $2.77    |  |  | 720,000     |  |  | 240,000     | 
| | August 22, 2010      |  | $2.10    |  |  | 305,000     |  |  | 101,667     | 
| | September 4, 2010    |  | $2.24    |  |  | 150,000     |  |  | -           | 
| | September 11, 2010   |  | $2.54    |  |  | 175,000     |  |  | -           | 
| | November 9, 2010     |  | $3.12    |  |  | 680,000     |  |  | -           | 
| | Total                |  |          |  |  | 11,718,170  |  |  | 6,044,335   | 
| | Average option price |  |          |  |  | $2.32       |  |  | $2.08       | 

| |                                                     |  | Weighted |  |  |            |  |  |                       | 
| | --------------------------------------------------- |  | -------- |  |  | ---------- |  |  | --------------------- | 
| |                                                     |  | average  |  |  |            |  |  | Weighted average      | 
| |                                                     |  | exercise |  |  | Number of  |  |  | remaining contractual | 
| | Range of Exercise
      Price  Outstanding Options |  | price    |  |  | options    |  |  | life (years)          | 
| | $ 1.00 - $ 1.24                                     |  | $1.14    |  |  | 680,000    |  |  | 3.00                  | 
| | $ 1.50 - $ 1.74                                     |  | $1.62    |  |  | 1,650,000  |  |  | 0.97                  | 
| | $ 2.00 - $ 2.24                                     |  | $2.09    |  |  | 2,206,836  |  |  | 1.58                  | 
| | $ 2.25 - $ 2.49                                     |  | $2.45    |  |  | 1,879,000  |  |  | 2.78                  | 
| | $ 2.50 - $ 2.99                                     |  | $2.69    |  |  | 4,622,334  |  |  | 2.92                  | 
| | $ 3.00 - $ 3.50                                     |  | $3.12    |  |  | 680,000    |  |  | 2.86                  | 
| | Total                                               |  | $2.32    |  |  | 11,718,170 |  |  | 2.37                  | 

| |                                                     |  | Weighted         |  |  |           | 
| | --------------------------------------------------- |  | ---------------- |  |  | --------- | 
| |                                                     |  | average exercise |  |  | Number of | 
| | Range of Exercise
      Price  Exercisable options |  | price            |  |  | options   | 
| | $ 1.00 - $ 1.24                                     |  | $1.14            |  |  | 680,000   | 
| | $ 1.50 - $ 1.74                                     |  | $1.62            |  |  | 1,650,000 | 
| | $ 2.00 - $ 2.24                                     |  | $2.07            |  |  | 899,835   | 
| | $ 2.25 - $ 2.49                                     |  | $2.45            |  |  | 1,370,666 | 
| | $
      2.50 - $ 2.99                               |  | $2.69            |  |  | 1,443,834 | 
| | Total                                               |  | $2.08            |  |  | 6,044,335 | 

38

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|13. | Share capital
(continued)
|--- | -------------------------

| | (b) | Share option plan (continued)                                                                                                                                                                                                                                                                                                                                                                                                 
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     | The exercise prices of all share purchase options granted
      were at or above the market price at the grant date. Using an option
      pricing model with the assumptions noted below, the estimated fair value
      of options granted for the years ended December 31, 2007 and 2006, which
      have been included under office and administration in the consolidated
      statements of operations, is as follows:

| |                                                  |   | Year ended December 31 | 
| | ------------------------------------------------ | - | ---------------------- | 
| |                                                  |   | 2007                   | 
| | Exploration                                      |   |                        | 
| | Engineering                                      | $ | 596,320                | 
| | Environmental, socio-economic and land           |   | 166,230                | 
| | Geological                                       |   | 412,711                | 
| | Exploration and pre-development schedule         |   | 1,175,261              | 
| | Operations and administration                    |   | 4,458,015              | 
| | Total compensation cost recognized in office and |   |                        | 
| | administration, credited to contributed surplus  | $ | 5,633,276              | 

The weighted-average assumptions used
to estimate the fair value of options vesting during the respective years were
as follows:

| |                         | Years ended December 31
| | ----------------------- | -----------------------
| |                         | 2007                   
| |                         |                        
| | Risk free interest rate | 4%                     
| | Expected life           | 3.5 years              
| | Expected volatility     | 57%                    
| | Expected dividends      | Nil                    

39

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|13. | Share capital
(continued)
|--- | -------------------------

| | (c) | Share purchase warrants                                                                               
| | --- | ------------------------------------------------------------------------------------------------------
| |     |                                                                                                       
| |     | The continuity of share purchase warrants during the year
      ended December 31, 2007 is as follows:

Outstanding
    
    
    
    OutstandingExercise
    December
    
    
    
    DecemberExpiry dates
    price
    31,
      2006
    Issued
    Exercised
    Expired
    31,
      2007May 18, 2007
    $2.60
    672,000
    -
    (598,385)
    (73,615)
    -July 18, 2008
    US$1.801
    2,000,000
    -
    (1,001,110)
    -
    998,890April 20, 2009
    $3.50
    -
    28,750,000
    -
    -
    28,750,000September 30,2010
    ZAR20.78
    -
    1,684,312
    -
    -
    1,684,3122,672,000
    30,434,312
    (1,599,495)
    (73,615)
    31,433,202


The continuity of share purchase
warrants during the year ended December 31, 2006 is as follows:

Outstanding
    
    
    
    OutstandingExercise
    December 31
    
    
    
    December 31Expiry dates
    price
    2005
    Issued
    Exercised
    Expired
    2006May 18, 2007
    $2.60
    -
    672,000
    -
    -
    672,000July 18, 2008
    US$1.801
    -
    2,000,000
    -
    -
    2,000,000-
    2,672,000
    -
    -
    2,672,000


Note 1: In February 2007, the exercise
price of the warrants expiring July 18, 2008 was changed to ZAR 12.90.

| | (d) | Contributed surplus                         
| | --- | --------------------------------------------
| |     |                                             
| |     | The components of contributed surplus
  are:

| |                                                                   |   | December 31 |   |   | December 31 |  
| | ----------------------------------------------------------------- | - | ----------- | - | - | ----------- | -
| |                                                                   |   | 2007        |   |   | 2006        |  
| | Fair value of warrants issued which expired
      unexercised     | $ | 238,668     |   | $ | 221,250     |  
| | Accumulated stock-based compensation                              |   | 14,699,262  |   |   | 9,065,986   |  
| | Share purchase options exercised, credited
      to share capital |   | (3,428,828  | ) |   | (1,423,764  | )
| | Fair value of
      share purchase warrants exercised             |   | 688,689     |   |   |            |  
| | Total contributed surplus                                         | $ | 12,197,791  |   | $ | 7,863,472   |  

40

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|13. | Share capital
(continued)
|--- | -------------------------

| | (e) | Share issuance, April 2007- Public
  offering                                                                                                                                                                                                                                                                                                                                                                                          
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | On April 19, 2007, the Company completed an offering of
      57,500,000 units at a price of $2.60 per unit for gross proceeds of
      $149,500,000. Each unit consisted of one common share and one- half of a
      common share purchase warrant of the company. The common shares and
      warrants comprising the units have separated immediately upon the closing
      of the transaction.                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | Each whole purchase warrant entitles the holder thereof
      to purchase one common share of the company at a price of $3.50 per share
      until April 20, 2009. The 28,750,000 warrants have been recorded with an
      estimated fair value of $16,210,226 (using expected volatility of 56.9%,
      risk free interest rate of 4%, dividends of nil, a share price of $2.48
      and remaining life of approximately 2 years).
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | The Company paid the underwriters a commission of
      $9,870,000 and incurred other share issue costs of approximately
      $1,991,905 for net proceeds of $137,638,095 of which $121,427,869 has been
      recorded as share capital and $16,210,226 as warrants.                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (f) | Share issuance, April 2007- acquisition Hecla Ventures
      Corp.                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | The Company completed the financing of the agreement to
      purchase Heclas 50% earn-in rights and certain tangible assets in the HDB
      with the issuance of 7,930,214 common shares on April 19, 2007. The shares
      have been valued at their quoted price of $2.48 per share on the date of
      issuance.                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (g) | Share issuance, October 2007- conclusion Tranter
      Burnstone transaction                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | On October 1, 2007 the Company issued 19,938,650 common
      shares to Tranter Burnstone (Proprietary) Limited ("Tranter Burnstone"), a
      subsidiary of Tranter Gold (Proprietary) Limited (Tranter Gold), in
      exchange for Tranter Burnstones 812 new ordinary shares held in Southgold
      Exploration (Pty) Ltd. The total purchase consideration of ZAR260 million
      ($38 million) was received in cash.          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | The fair value of the transaction has been determined by
      independent valuation specialists, taking into account the following
      restrictions as defined in the Subscription and Acquisition
    Agreement:                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | •                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | •                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | •                                                                                                                                                                                                                                                                                                                                                                                                                                      

41

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|13. | Share capital
(continued)
|--- | -------------------------

| | (g) | Share issuance, October 2007- conclusion Tranter
      Burnstone transaction (continued)                                                                                                                         
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                  
| |     | The following inputs have been used to determine the
      theoretical value of the put option, applicable to the shares over a 3 to
      7 year lock-in period, using the Black Scholes option pricing
  model:

Spot price (on grant date)
    ZAR 21.48Risk-free rate
    8.93 % - 8.31%Strike price
    ZAR 27.76  ZAR 37.55Dividend yield
    NilVolatility
    62.74%


| |     | The value of each option has been calculated between ZAR
      8.70 and ZAR 12.35 for the 3 and 7 year lock-in respectively and a
      marketability discount between 40% and 45% was applied.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     | Based on the above assumptions the fair market value of
      the Tranter transaction was estimated to be between $34 million (ZAR 236
      million) and $37 million (ZAR 257 million) on a non- marketable minority
      basis on October 1, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     | Net proceeds of $ 37,502,010 (ZAR 259 million), after
      $93,990 (ZAR 650,000) marketable securities tax paid in South Africa, was
      received of which $36,323,195 (ZAR 250.8 million) has been recorded as
      share capital and $1,178,815 (ZAR 8.2 million) as warrants (Refer note
      13(h)).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (h) | Warrants issuance, October 2007- conclusion Tranter
      Burnstone transaction                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     | In addition to the issue and allotment of the 19,938,650
        common shares in Great Basin, the Company provided a total of 1,684,312
        Great Basin warrants to Investec, who provided a portion of the financing
        for the investment by Tranter Gold in Southgold (1,263,234), and Tranter
        Gold (421,078) respectively. Each warrant is convertible into one Great
        Basin common share at $3 (ZAR20.78) on or before October 1, 2010. The
        warrants are subject to GBG having the right to require exercise of the
        warrants if the market price equals or exceeds $7 (ZAR45.72)
      On the date of the transaction, the estimated fair value
        of the warrants were estimated at $1.2 million (ZAR8 million). The fair
        value was calculated using a option pricing model and based upon the following
        assumptions: expected volatility of 62.74%; risk free rate of 8.93% and
        dividends of nil.

42

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|14. | Related party balances and
  transactions
|--- | -----------------------------------------

| | Due from Related Parties                             |   | December 31 |  |   | December 31 | 
| | ---------------------------------------------------- | - | ----------- |  | - | ----------- | 
| |                                                      |   | 2007        |  |   | 2006        | 
| |                                                      |   |             |  |   |             | 
| | Hunter Dickinson Inc. (note 14(a))                   | $ | 394,959     |  | $ | 119,506     | 
| | Plateau Resources (Proprietary) Limited (note 14(d)) |   | -           |  |   | 53,949      | 
| | Tranter Gold (Proprietary) Limited (note 14(e))      |   | 13,679      |  |   |            | 
| |                                                      | $ | 408,638     |  | $ | 173,455     | 

| | Due to Related Parties                                |   | December 31 |  |   | December 31 | 
| | ----------------------------------------------------- | - | ----------- |  | - | ----------- | 
| |                                                       |   | 2007        |  |   | 2006        | 
| |                                                       |   |             |  |   |             | 
| | Tranter Gold (Proprietary) Limited (note
      14(e)) | $ | 21,053      |  | $ | -           | 
| | CEC Engineering
      Ltd. (note 14(b))               | $ | 1,045       |  |   | -           | 
| |                                                       | $ | 22,098      |  | $ | -           | 

| | Reimbursement for related party expenses and services
      rendered |   | Years ended December 31 | 
| | -------------------------------------------------------------------- | - | ----------------------- | 
| |                                                                      |   | 2007                    | 
| | Hunter Dickinson Inc. (note 14(a))                                   | $ | 974,067                 | 
| | CEC Engineering Ltd. (note 14(b))                                    | $ | 36,771                  | 
| | Pangea Exploration (Proprietary) Limited
      (note 14(c))          | $ |                        | 
| | Plateau Resources (Proprietary) Limited (note 14(d))                 | $ | 156,286                 | 
| | Tranter Gold (Proprietary) Limited (note
      14(e))                | $ | 670,042                 | 

Related party transactions are recorded
at the exchange amount which is the amount of consideration paid or received as
agreed to by the parties.

Related party balances receivable
(payable), which are non-interest bearing and are due on demand, are included in
amounts receivable (accounts payable and accrued liabilities) on the
consolidated balance sheets. Related party balances receivable arise from
advances by the Company for normal course in-progress services and near-term
planned exploration and other work on the mineral properties.

| | (a) | Hunter Dickinson Inc. ("HDI") is a private company owned
      equally by nine public companies, one of which was the Company. HDI has
      certain directors in common with the Company and provides geological,
      corporate development, administrative and management services to, and
      incurs third party costs on behalf of, the Company and its subsidiaries on
      a full cost recovery basis pursuant to an agreement dated December 31,
      1996.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (b) | CEC Engineering Ltd. is a private company owned by a
      director of the Company that provides engineering and project management
      services at market related prices.                                                                                                                                                                                                                                                                                            

43

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|14. | Related party balances and transactions
      (continued)
|--- | ---------------------------------------------------------

| | (c) | Pangea Exploration (Proprietary) Limited (Pangea) is a
      private company of which a director of the Company is an officer. Pangea
      provided certain accounting and administrative services to the Company on
      rates negotiated while the officer was dealing at arms length with the
      Company.                                                                                                                                                                                                                                                                                              
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (d) | Plateau Resources (Proprietary) Limited (Plateau) is a
      wholly-owned subsidiary of Anooraq Resources Corporation, a Canadian
      company which has certain directors in common with the Company. Plateau
      rent premises and other facilities to the Company pursuant to a
      cost-sharing arrangement based on a full cost recovery basis.                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (e) | Tranter Gold (Proprietary) Limited (Tranter Gold) is a
      private company of which a director of the Company is an officer. Tranter
      Gold is also the Companys Black Economic Empowerment partner and holds
      approximately 9% of the Companys share capital.                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | During the year ended December 31, 2007 the Company
      provided bridge financing to Tranter Gold in anticipation of the
      finalization of the BEE transaction. The bridging loan of $575,818 was
      settled in full on conclusion of the BEE transaction on October 1, 2007.
      The Company also provides Tranter Gold with certain accounting and
      administrative services on rates negotiated while the officer was dealing
      at arms length with the Company. During the year Tranter Gold provided
      Southgold with geological services to the value of $21,053
      (ZAR146,202).

|15. | Income taxes                                                                                                          
|--- | ----------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                       
|    | The estimated tax effect of the significant components
      within the Companys future tax liability was as
follows:

| |                                       |   | December 31 |   |   | December 31 |  
| | ------------------------------------- | - | ----------- | - | - | ----------- | -
| |                                       |   | 2007        |   |   | 2006        |  
| | Future income tax assets              |   |             |   |   |             |  
| | Mineral properties                    | $ | 1,876,000   |   | $ | 2,641,000   |  
| | Loss carry forwards                   |   | 23,428,000  |   |   | 14,081,000  |  
| | Equipment                             |   | 253,000     |   |   | 107,000     |  
| | Other                                 |   | 4,276,000   |   |   | 1,370,000   |  
| | Subtotal                              |   | 29,833,000  |   |   | 18,199,000  |  
| | Valuation allowance                   |   | (20,899,000 | ) |   | (13,341,000 | )
| | Net future income tax asset           |   | 8,934,000   |   |   | 4,858,000   |  
| |                                       |   |             |   |   |             |  
| | Future income tax liability           |   |             |   |   |             |  
| | Mineral property interests            |   | (42,917,164 | ) |   | (23,695,000 | )
| | Net future income
      tax liability | $ | (33,983,164 | ) | $ | (18,837,000 | )

44

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|15. | Income taxes (continued)                                                                                                                                                                                                      
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                               
|    | Income tax expense differs from the amount that would
      result from applying the Canadian federal and provincial tax rates to
      earnings before income taxes. These differences result from the following
      items:

| |                                                               |   | December 31 |   |   | December 31 |  
| | ------------------------------------------------------------- | - | ----------- | - | - | ----------- | -
| |                                                               |   | 2007        |   |   | 2006        |  
| | Combined Canadian federal and provincial
      statutory rate |   | 34.12%      |   |   | 34.12%      |  
| |                                                               |   |             |   |   |             |  
| | Income tax at statutory rates                                 | $ | (19,899,108 | ) | $ | (4,773,000  | )
| | Difference in foreign tax rates                               |   | 1,224,142   |   |   | 412,000     |  
| | Valuation allowance                                           |   | 7,558,472   |   |   | 1,925,000   |  
| | Other non-deductible items, Canada                            |   | (660,948    | ) |   | 2,061,000   |  
| | Change due to foreign exchange                                |   | (357,470    | ) |   | (679,000    | )
| | Change in tax rate                                            |   | 642,518     |   |   | (643,000    | )
| | Benefit of unrealized foreign exchange gain
      (loss) not  |   |             |   |   |             |  
| | included in income                                            |   | 303,426     |   |   | (721,000    | )
| | Other                                                         |   | 4,035,683   |   |   | 46,371      |  
| | Future income tax
      recovery                              | $ | (7,153,285  | ) | $ | (2,371,629  | )

At December 31, 2007, the Company had
available losses for income tax purposes in Canada totaling approximately $1.1
million (2006  $10.3 million), expiring in various years from 2008 to 2027. The
Company has available resource tax pools in Canada of approximately $4.8 million
(2006  $7.8 million), which may be carried forward and utilized to reduce
resource income. Included in these resource tax pools is $2.9 million (2006 
$2.9 million) which is successored, and consequently can only be utilized
against taxable income from specific mineral properties.

At December 31, 2007, the Company had a
net operating loss carry forward for United States income tax purposes of
approximately US$45.7 million (2006  US$17.0 million) which, if not utilized to
reduce United States taxable income in future periods, expire through the year
2027. These available tax losses may only be applied to offset future taxable
income from the Company's current United States subsidiaries.

Future utilization of United States
loss carryforwards is subject to certain limitations under provisions of the
Internal Revenue Code including limitations subject to Section 382, which
relates to a 50 percent change in control over a three-year period, and are
further dependent upon the Company attaining profitable operations. An ownership
change occurred on June 30, 1999 with respect to Touchstone Resources Company, a
wholly-owned subsidiary of the Company incorporated in the United States.
Therefore, approximately $1.6 million of the above United States losses are
subject to limitation under Section 382. Accordingly, the Company's ability to
utilize these losses may be limited to approximately US$100,000 per year.
Furthermore, the Company potentially incurred an ownership change under Section
382 at some time after June 1999. If so, an additional US$2.1 million of the
United States losses will be subject to a similar annual limitation.

45

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|15. | Income taxes (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | In addition, the Company has an available resource tax
      pool in the United States of approximately US$5 million (2006  US$3.8
      million).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | The future income tax liability arising from mineral
      properties is based substantially on South African rand-denominated assets
      and tax balances. As at December 31, 2007, the increase in future income
      tax liability since December 31, 2006 was due to the decrease in the value
      of the South African Rand compared to the Canadian dollar, changes in
      timing differences and the difference between the tax and accounting basis
      of shares issued pursuant to the Southgold Settlement Agreement (note
      11(b)(iii)).                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | FASB Interpretation No. 48  Accounting for
      Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109
      (Accounting for Income Taxes) (FIN 48)                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | In June 2006, the Financial Accounting Standards Board
      (FASB) issued FIN 48 to create a single model to address accounting for
      uncertainty in tax positions. FIN 48 clarifies the accounting for income
      taxes, by prescribing a minimum recognition threshold a tax position is
      required to meet before being recognized in the financial statements. FIN
      48 also provides guidance on de- recognition, measurement, classification,
      interest and penalties, accounting in interim periods, disclosure and
      transition. FIN 48 was effective for fiscal years beginning after December
      15, 2006.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | For Canadian GAAP purposes the Company adopted the
      provision of FIN 48 on January 1, 2007 which did not have a material
      impact on the consolidated financial position or results of
    operations.                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | The Company did not have any unrecognized tax benefits as
      at January 1, 2007. There were no additions to or reductions for tax
      positions during the year. As a result, the balance as at December 31,
      2007 is nil.                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | The Company recognizes accrued interest and penalties
      related to unrecognized tax benefits in operating expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | The Company is subject to taxes in Canada, United States
      and South Africa. The tax years which remain subject to examination as of
      December 31, 2007 for Canada, United States and South Africa include 2000
      to present, 1997 to present and 2002 to present,
  respectively.                                                                                                                                                                                                                                                                                                                                                

46

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|16. | Additional cash flow information
|--- | --------------------------------
|    |                                 
|    | Supplementary information:      

| |                                                                           |   | December 31 |  |   | December 31 | 
| | ------------------------------------------------------------------------- | - | ----------- |  | - | ----------- | 
| |                                                                           |   | 2007        |  |   | 2006        | 
| | Fair value of stock options transferred to
      share capital on options |   |             |  |   |             | 
| | exercised from contributed surplus                                        | $ | 2,005,064   |  | $ | 753,849     | 
| | Fair value of warrants issued with short
      form prospectus offering   | $ | 16,210,226  |  | $ | 159,000     | 
| | Warrants issued for property settlement                                   | $ |            |  | $ | 1,093,000   | 
| | Warrants issued pursuant BEE Transaction                                  | $ | 1,178,815   |  | $ |            | 
| | Common shares issued for property settlement                              | $ | 19,666,931  |  | $ | 7,600,000   | 
| | Increase in mineral property for future
      income taxes                | $ | 19,968,802  |  | $ | 3,563,226   | 

Cash and cash equivalents consist of
the following items:

| |                  |   | December 31 |  |   | December 31 | 
| | ---------------- | - | ----------- |  | - | ----------- | 
| |                  |   | 2007        |  |   | 2006        | 
| |                  |   |             |  |   |             | 
| | Cash             | $ | 4,296,897   |  | $ | 947,927     | 
| | Cash equivalents | $ | 74,066,057  |  | $ | 33,016,509  | 
| |                  | $ | 78,362,954  |  | $ | 33,964,436  | 

|    | Cash equivalents consist of short-term investments with
      maturity dates of three months or less, call accounts and money market
      investments which are available on 24 hour notice and bankers acceptances
      which are readily convertible to known cash amounts.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                
|17. | Segment disclosure                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                
|    | The Company operates in a single reportable operating
      segment, the exploration and development of mineral properties. Geographic
      information is as follows:                                                                                                        

| | Assets                                             |   | December 31 |  |   | December 31 | 
| | -------------------------------------------------- | - | ----------- |  | - | ----------- | 
| |                                                    |   | 2007        |  |   | 2006        | 
| |                                                    |   |             |  |   |             | 
| | Canada                                             |   |             |  |   |             | 
| | Assets other than mineral
      property interests | $ | 56,796,521  |  | $ | 31,308,371  | 
| | Mineral property
      interests                   |   | 1           |  |   | 2           | 
| |                                                    |   |             |  |   |             | 
| | United States                                      |   |             |  |   |             | 
| | Assets other than mineral
      property interests |   | 5,890,010   |  |   | 394,917     | 
| | Mineral property
      interests                   |   | 95,156,279  |  |   | 3,945,348   | 
| |                                                    |   |             |  |   |             | 
| | South Africa                                       |   |             |  |   |             | 
| | Assets other than mineral
      property interests |   | 48,212,597  |  |   | 7,305,232   | 
| | Mineral property interests                         |   | 123,257,650 |  |   | 106,964,650 | 
| |                                                    |   |             |  |   |             | 
| | Total assets                                       | $ | 329,313,058 |  | $ | 149,918,520 | 

47

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|18. | Contingencies and commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | The Company, through its subsidiaries, N5C Resource Inc.,
      N6C Resources Inc. and Rodeo Creek Gold Inc. signed a loan guarantee
      agreement in terms of the conclusion of the transaction with Tranter
      Burnstone (Pty) Ltd (Tranter Burnstone).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | Tranter Burnstone borrowed $29 million (R200million) from
      Investec to settle a portion of the purchase consideration of $38 million
      (ZAR 260 million) for the 812 Southgold shares. The security for the loan
      comprised, amongst others, a loan guarantee in terms of which N5C
      Resources Inc., N6C Resources Inc. or Rodeo Creek Gold Inc. are obliged,
      in the event of default by Tranter Burnstone on any of its interest
      payments to Investec, at any time for the first four years to lend not
      more than $11.6 million (ZAR80 million) to Tranter Burnstone in order to
      settle such repayment obligations. The loan, if granted, will be secured
      by the Great Basin Gold Ltd shares held by Tranter Burnstone second to the
      security over these shares held by Investec for the $29 million (ZAR 200
      million) loan advanced.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|19. | Subsequent events                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | Subsequent to December 31,
2007,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

| | (a) | Rusaf Gold Ltd acquisition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     | The Company announced on February 14, 2008 that it had
      entered into an agreement with Rusaf Gold Ltd (Rusaf) whereby it will
      purchase the remaining 63% of the fully diluted equity shares of Rusaf for
      a total consideration of $14.4 million, payable in approximately 4.9
      million Great Basin Gold common shares. The exchange ratio was one Great
      Basin Gold share for every 4.5 Rusaf shares. For the year ended December
      31, 2007 the Companys investment of 37% in the issued common stock of
      Rusaf was recognized as an investment in associate (note 10) and the
      Company has equity accounted for its share of post-acquisition losses
      incurred.                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     | The acquisition terms also provide for additional Great
      Basin Gold shares to be issued in the first three years from closing,
      contingent upon gold discoveries involving more than 500,000 ounces on
      certain mineral prospects currently held by Rusaf. In the event of such
      discoveries, the Company will issue shares valued at the higher of current
      or then-prevailing market price to the former Rusaf shareholders on the
      basis of valuing these gold ounces at US$15/oz for inferred resources and
      US$40/oz for measured and indicated resources (subject to a minimum
      average cut-off grade of 1.5 grams per tonne or 0.04 oz per ton). The
      Company has also agreed to spend between $7 million and $19 million in
      exploring Rusafs properties during this period depending on independent
      advice as to the likelihood of exploration
success.

48

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|19. | Subsequent events
(continued)
|--- | -----------------------------

| | (a) | Rusaf Gold Ltd acquisition (continued)                                                                                                                                                                                                                                                                                                                                                    
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                           
| |     | The Rusaf acquisition is subject to the approval of Rusaf
      shareholders, certain judicial orders, as well as Toronto Stock Exchange
      and other regulatory approvals. Assuming all such conditions are met in
      the ordinary course, the parties are targeting completion of this
      transaction for the second calendar quarter of 2008.                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                           
| | (b) | Stock options granted                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                           
| |     | The Company granted 2,630,003 options on February 4, 2008
      with an exercise price of $3 per common share and an expiry date of
      February 4, 2011.                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                           
| |     | A further 3,385,000 options were also approved by the
      Compensation Committee, which will be granted to the CEO, directors and
      executive staff subsequent to the filing of the financial statements. The
      pricing of these options was deferred to be determined after the release
      of the Companys 2007 results based on a 5 day weighted average on the
      TSX.
| |     |                                                                                                                                                                                                                                                                                                                                                                                           
| | (c) | Service agreement with Related Party  Hunter
      Dickinson Inc.                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                           
| |     | The Company agreed on January 1, 2008 to an addendum to a
      Corporate Services Agreement dated September 25, 2007 with HDI, whereby it
      will settle a cancellation fee of $350,000 in cash and not by the issuance
      of Great Basin common stock. The transaction was concluded accordingly and
      the Companys share was returned to treasury.                          

|20. | Reconciliation with United States Generally Accepted
      Accounting Principles                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | Great Basin Gold Ltd. (the Company) prepares its
      consolidated financial statements in accordance with Canadian Generally
      Accepted Accounting Principles (Canadian GAAP) which principles differ
      in certain respects from those applicable in the United States (US GAAP)
      and from practices prescribed by the United States Securities and Exchange
      Commission (SEC). Had the Company applied US GAAP, certain items on the
      statements of operations, deficit and balance sheets would have been
      reported as follows:

49

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|20. | Reconciliation with United States Generally Accepted
      Accounting Principles (continued)
|--- | --------------------------------------------------------------------------------------------

| |                                                                            |   | As at        |   |   | As at       |   |   | As at       |  
| | -------------------------------------------------------------------------- | - | ------------ | - | - | ----------- | - | - | ----------- | -
| |                                                                            |   | December 31  |   |   | December 31 |   |   | December 31 |  
| | Consolidated
      Balance Sheets                                          |   | 2007         |   |   | 2006        |   |   | 2005        |  
| |                                                                            |   |              |   |   |             |   |   |             |  
| | Total assets under Canadian GAAP                                           | $ | 329,313,058  |   | $ | 149,918,520 |   | $ | 116,689,495 |  
| | Adjustments under US GAAP                                                  |   |              |   |   |             |   |   |             |  
| | Investments (note 20(b)(i))                                                |   |             |   |   | 64,811      |   |   |            |  
| | Total assets
      under US GAAP                                           | $ | 329,313,058  |   | $ | 149,983,331 |   | $ | 149,983,331 |  
| |                                                                            |   |              |   |   |             |   |   |             |  
| | Total liabilities under Canadian GAAP                                      | $ | 41,521,472   |   | $ | 20,572,823  |   | $ | 20,064,205  |  
| | Adjustments under US GAAP                                                  |   |              |   |   |             |   |   |             |  
| | Recognize warrants issued for property as
      liability (note 20(b)(ii)) |   | 545,893      |   |   | 1,093,000   |   |   |            |  
| | Recognize warrants issued for
      BEE as liability (note 20(b)(ii))      |   | 1,178,815    |   |   |            |   |   |            |  
| | Mark-to-market adjustment on warrants (note
      20(b)(iii))              |   | 382,895      |   |   | (74,000     | ) |   |            |  
| | Mark-to-market adjustment on warrants  BEE
      (note 20(b)(iii))        |   | (179,540     | ) |   |            |   |   |            |  
| | Total
      liabilities under US GAAP                                      | $ | 43,449,535   |   | $ | 21,591,823  |   | $ | 20,064,205  |  
| |                                                                            |   |              |   |   |             |   |   |             |  
| | Share capital, warrants, contributed surplus and
      accumulated other   |   |              |   |   |             |   |   |             |  
| | comprehensive
      income under Canadian GAAP                             | $ | 420,186,619  |   | $ | 210,573,064 |   | $ | 166,235,846 |  
| | Adjustments under US GAAP:                                                 |   |              |   |   |             |   |   |             |  
| | Stock-based compensation (note
      20(a))                                |   | 2,658,000    |   |   | 2,658,000   |   |   | 2,658,000   |  
| | Warrants exercised in prior periods                                        |   | (3,695,159   | ) |   | (3,695,159  | ) |   | (3,695,159  | )
| | Recognize warrants issued for
      property as liability (note 20(b)(ii)) |   | (545,893     | ) |   | (1,093,000  | ) |   |            |  
| | Recognize warrants issued for BEE as liability (note 20(b)(iii))           |   | (1,178,815   | ) |   |            |   |   |            |  
| | Share capital and contributed surplus under US GAAP                        | $ | 417,424,752  |   | $ | 208,442,905 |   | $ | 165,198,687 |  
| |                                                                            |   |              |   |   |             |   |   |             |  
| | Deficit under Canadian GAAP                                                | $ | (132,395,033 | ) | $ | (81,227,367 | ) | $ | (69,610,556 | )
| | Reverse translation adjustment on adoption of Financial                    |   |              |   |   |             |   |   |             |  
| | instruments
      (note 20(b)(i))                                          |   | 64,811       |   |   |            |   |   |            |  
| | Adjustments under US GAAP:                                                 |   |              |   |   |             |   |   |             |  
| | Stock-based compensation (note
      20(a))                                |   | (2,658,000   | ) |   | (2,658,000  | ) |   | (2,658,000  | )
| | Investments (note 20(b)(i))                                                |   |             |   |   | 64,811      |   |   |            |  
| | Mark-to-market adjustment on
      warrants (note 20(b))                   |   | (447,706     | ) |   | 74,000      |   |   | 45,000      |  
| | Mark-to-market adjustment on warrants
      exercised in prior             |   |              |   |   |             |   |   |             |  
| | periods                                                                    |   | 3,695,159    |   |   | 3,695,159   |   |   | 3,695,159   |  
| | Mark-to-market adjustment on warrants  BEE
      (note 20(b)(iii))        |   | 179,540      |   |   |            |   |   |            |  
| | Reduction of gain on sale of
      investments due to prior year mark-     |   |              |   |   |             |   |   |             |  
| | to-market adjustment                                                       |   |             |   |   |            |   |   | (45,000     | )
| | Deficit under US GAAP                                                      | $ | (131,561,229 | ) | $ | (80,051,397 | ) | $ | (68,573,397 | )

50

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|20. | Reconciliation with United States Generally Accepted
      Accounting Principles (continued)
|--- | --------------------------------------------------------------------------------------------

| |                                                             |   | Year ended  |   |   | Year ended  |   |   | Year ended  |  
| | ----------------------------------------------------------- | - | ----------- | - | - | ----------- | - | - | ----------- | -
| |                                                             |   | December 31 |   |   | December 31 |   |   | December 31 |  
| | Consolidated
      Statements of Operations                 |   | 2007        |   |   | 2006        |   |   | 2005        |  
| | Loss for the year under Canadian GAAP                       | $ | 51,167,666  |   | $ | 11,616,811  |   | $ | 1,563,771   |  
| | Adjustments under US GAAP:                                  |   |             |   |   |             |   |   |             |  
| | Reduction of loss on sale of investments
      due to prior |   |             |   |   |             |   |   |             |  
| | year mark-to-market adjustment (note 20(b))                 |   |            |   |   |            |   |   | (45,000     | )
| | Mark-to-market adjustment on warrants (note 20(b))          |   | 342,166     |   |   | (74,000     | ) |   |            |  
| | Loss for the year, US GAAP                                  | $ | 51,509,832  |   | $ | 11,542,811  |   | $ | 1,518,771   |  
| |                                                             |   |             |   |   |             |   |   |             |  
| | Other comprehensive income under Canadian                   |   |             |   |   |             |   |   |             |  
| | GAAP:                                                       |   | (538,061    | ) |   |            |   |   |            |  
| | Adjustment for
      unrealized holding gain                |   |             |   |   |             |   |   |             |  
| | (note 20(b))                                                |   |            |   |   | (64,811     | ) |   |            |  
| | Comprehensive
      loss                                    | $ | 50,971,771  |   | $ | 11,478,000  |   | $ | 1,518,771   |  
| |                                                             |   |             |   |   |             |   |   |             |  
| | Basic and diluted loss per share for the year               |   |             |   |   |             |   |   |             |  
| | under US GAAP (note 4(j))                                   | $ | 0.31        |   | $ | 0.11        |   | $ | 0.02        |  

| |     | There are no differences between Canadian GAAP and US
      GAAP in the calculation of basic and diluted loss per share for the years
      ended December 31, 2007 and 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     | There are no material differences between Canadian GAAP
      and US GAAP in the consolidated statements of cash flows for the years
      ended December 31, 2007 and 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (a) | Stock based compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     | In the year ended December 31, 2003 the Company adopted
      the fair value based method of accounting for employee stock-based
      compensation as prescribed by FASB Statement No. 123, Accounting for
      Stock-Based Compensation(SFAS 123). The Company adopted the fair
      value method on a prospective basis from January 1, 2003 as permitted by
      FASB Statement No. 148, Accounting for Stock-Based Compensation 
      Transition and Disclosure, and amendment of FASB Statement No. 123.
      The prospective adoption of this new US GAAP policy creates no differences
      with the Companys stock-based compensation expense reported under
      Canadian GAAP.                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     | In December 2004, the Financial Accounting Standards
      Board ("FASB") issued Statement of Financial Accounting Standards No. 123
      (revised 2004), "Share-Based Payment (SFAS 123(R), which is a
      revision of SFAS 123. SFAS 123(R) supersedes APB Opinion No. 25,
      Accounting for Stock Issued to Employees. Generally, the approach
      in SFAS 123(R) requires all share-based payments to employees, including
      grants of employee stock options, to be recognized in the income statement
      based on their fair values. Pro forma disclosure is no longer an
      alternative. As the Company currently uses the fair value method to
      account for all stock option grants this statement did not have any
      material impact on the financial statements when it was adopted on January
      1, 2006.

51

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|20. | Reconciliation with United States Generally Accepted
      Accounting Principles (continued)
|--- | --------------------------------------------------------------------------------------------

| | (a) | Stock based compensation (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | Prior to 2003 under US GAAP, the Company accounted for
      its employee stock option plan under the principles of Accounting
      Principles Board Opinion No. 25, Accounting for Stock Issued to
      Employees(APB 25) and other Interpretations. No compensation
      expense was recognized under APB 25 because the exercise price of the
      Companys employee stock options equalled the market price of the
      underlying stock on the date of the grant.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | For the years ended December 31, 2007 and 2006, there
      were no differences in stock-based compensation expense in respect of
      employee and non-employee share options which would be required to be
      charged to operations under both Canadian and US GAAP.                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | As SFAS 123 was adopted on a prospective basis, there is
      $2,658,000 historical difference in contributed surplus and deficit
      relating to the period prior to adoption. In terms of this Statement the
      cumulative effect of initially applying this Statement, if any, is
      recognized as of the required effective date. Under Canadian GAAP no
      provision was made for the recognition of the cumulative effect upon
      adoption of CICA 3870.   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (b) | Fair value of financial
  instruments                                                                                                                                                                                                                                                                                                                                                                                                                                           

| | (i) | US GAAP requires investments classified as
      available-for-sale securities to be recorded at fair value in accordance
      with SFAS 115, Accounting for Certain Investments in Debt and Equity
      Securities(SFAS 115). Unrealized gains and losses are recorded in
      a separate component of shareholders' equity with the year-over-year
      change, net of the related tax effect, recorded as other comprehensive
      income (loss), except for declines in fair value that are determined to be
      other than temporary. These declines in value are charged to the statement
      of operations, which is similar to Canadian GAAP.                                                                          
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | US GAAP requires a company to present comprehensive
      income (loss) in accordance with SFAS 130, Reporting Comprehensive
      Income, which establishes standards for reporting and display of
      comprehensive income (loss), its components and accumulated balances.
      Comprehensive income (loss) comprises net income (loss) and all changes to
      shareholders equity except those resulting from investments by owners and
      distributions to owners. As at December 31, 2006, the fair value of the
      Companys available-for-sale securities increased by $64,811, which
      resulted in an adjustment to recognize the unrealized holding gain of the
      same amount in other comprehensive income.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | Effective January 1, 2007, the Company adopted
      Financial Instruments  Recognition and Measurement (Section 3855)the new accounting standard issued by the Canadian Institute of
      Chartered Accountants (CICA) relating to financial instruments. This
      standard sets out criteria for the recognition and measurement of
      financial instruments for fiscal years beginning on or after October 1,
      2006.                                                                                                                                                                                                                                                                                                       

52

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|20. | Reconciliation with United States Generally Accepted
      Accounting Principles (continued)
|--- | --------------------------------------------------------------------------------------------

| | (b) | Fair value of financial instruments
    (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | This standard requires all financial instruments within
      its scope, including derivatives, to be included on a Companys balance
      sheet and measured either at fair value or, in certain circumstances when
      fair value may not be considered most relevant, at cost or amortized cost.
      Changes in fair value are to be recognized in the statements of operations
      or comprehensive income, depending on the classification of the related
      instruments.                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | As required by the transitional provisions of these new
      standards, these standards have been adopted on a prospective basis with
      no restatement to prior period financial statements. All financial assets
      and liabilities are recognized when the entity becomes a party to the
      contract creating the asset or liability. As such, any of the Companys
      outstanding financial assets and liabilities at the effective date of
      adoption are recognized and measured in accordance with the new
      requirements as if these requirements had always been in effect. Any
      changes to the fair values of assets and liabilities prior to January 1,
      2007 are recognized by adjusting opening deficit or opening accumulated
      other comprehensive income. The adjustment to opening accumulated other
      comprehensive income was $64,811.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | Under US GAAP, warrants issued by the Company that are
      denominated in currencies other than Canadian dollars would be accounted
      for as a derivative liability pursuant to SFAS
133.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

| | (ii)  | During 2006, the Company issued 2,000,000 of such
      warrants and assigned the issued warrants a value of $1,093,000. At
      December 31, 2006, the fair value of these warrants was estimated at
      $1,019,000 resulting in a mark-to-market gain of $74,000 that would have
      been recorded under US GAAP. During the 2007 year 1,001,110 of the
      warrants were exercised. The fair value of the remaining warrants was
      estimated at $928,788 at December 31, 2007 resulting in a mark-to- market
      loss of $382,895 that would have been recognised under US GAAP.
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |       | Under Canadian GAAP the fair value of the warrants were
      recognized under equity in 2006. The $547,107 fair value of the 1,001,110
      warrants exercised was re-allocated to contributed surplus.                                                                                                                                                                                                                                                                                                                                                                                       
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (iii) | During 2007, the Company issued 1,684,312 of such
      warrants upon the conclusion of the BEE transaction and assigned the
      issued warrants a value of $1,178,815. At December 31, 2007, the fair
      value of these warrants was estimated at $999,275 resulting in a
      mark-to-market gain of $179,540 recognized under US GAAP. Under Canadian
      GAAP the warrants were recognized at fair value with no fair value
      adjustment required on December 31, 2007.                                                                                                         

| | (c) | Other
| | --- | -----

| | (i) | The following additional information would be presented
      if these consolidated financial statements were presented in accordance
      with US GAAP with respect to amounts receivable:
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

53

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|20. | Reconciliation with United States Generally Accepted
      Accounting Principles (continued)
|--- | --------------------------------------------------------------------------------------------

| | (c) | Other (continued)
| | --- | -----------------

| |                                     |   | As At December 31 | 
| | ----------------------------------- | - | ----------------- | 
| |                                     |   | 2007              | 
| | General and value added sales taxes | $ | 604,109           | 
| | Other receivables                   |   | 1,894,669         | 
| | Deposit                             |   | 1,239,125         | 
| | Total                               | $ | 3,737,903         | 

| | (ii) | The following additional information would be presented
      if these consolidated financial statements were presented in accordance
      with US GAAP with respect to amounts payable and accrued
    liabilities:
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                  |   | As At December 31 | 
| | -------------------------------- | - | ----------------- | 
| |                                  |   | 2007              | 
| | Accounts payable                 | $ | 1,395,828         | 
| | Accrued liabilities              |   |                   | 
| | Other                            |   | 3,095,774         | 
| | Annual bonuses                   |   | 396,000           | 
| | Site equipment - Burnstone       |   | 740,686           | 
| | Site
      equipment  Hollister |   | 470,958           | 
| | Total                            | $ | 6,099,246         | 

| | (iii) | Under Canadian GAAP the investment in Rusaf Gold Ltd was
      equity accounted for from July 20, 2007 when the Company obtained
      significant influence (note 10). Under US GAAP the acquisition is
      classified as a stepped acquisition. The Company is required to apply the
      equity method from the day of the first investment, that being June 28,
      2007.
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                   
| |       | Due to the short time frame between the first and second
      tranche and a review of the monthly expenses for Rusaf, it was concluded
      that the impact of the movement in the equity reserves for Rusaf during
      the period on the consolidated accounts of the Company would be immaterial
      and therefore no adjustment was made under US
GAAP.                  

| | (d) | Additional disclosures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     | The Company meets the definition of a development stage
      enterprise under SFAS 7, Accounting and Reporting by Development Stage
      Enterprises(SFAS 7) and under AcG Enterprises in the development
      stage in Canadian GAAP. Pursuant to the rules and regulations of the SEC,
      a mining company in the exploration stage should not refer to itself as a
      development stage company in its financial statements, even though such
      Company should comply with SFAS 7.

54

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|20. | Reconciliation with United States Generally Accepted
      Accounting Principles (continued)
|--- | --------------------------------------------------------------------------------------------

| | (d) | Additional disclosures – (Unaudited)                                                                                                                                                                                                                               
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                    
| |     | Under SFAS 7, the Company is required to provide
      additional disclosures from its date of inception, or the date the Company
      was reactivated to undertake development stage activities.                                                                 
| |     |                                                                                                                                                                                                                                                                    
| |     | Consolidated summarized statements of operations and
      deficit and cash flows since January 1, 1998, the date the Company was
      considered to be reactivated to undertake development stage activities, to
      December 31, 2007 are presented as follow:

| |                                                                                    |   | Period
      from |  
| | ---------------------------------------------------------------------------------- | - | ----------------- | -
| |                                                                                    |   | January 1, 1998   |  
| |                                                                                    |   | to December 31,   |  
| | Consolidated
      statements of operations and deficit                            |   | 2007              |  
| |                                                                                    |   |                   |  
| | Mineral property exploration and
      reclamation                                 | $ | 93,533,520        |  
| | General and administration, salaries, professional fees,
      and other           |   | 38,907,265        |  
| | Other income                                                                       |   | (11,999,310       | )
| | Net loss for the period from January 1, 1998 to December
      31, 2007, being the |   |                   |  
| | deficit accumulated during the exploration
      stage                             |   | 120,441,475       |  
| | Opening deficit
      accumulated during the development stage, January 1, 1998    |   | 11,119,754        |  
| |                                                                                    |   |                   |  
| |                                                                                    |   |                   |  
| | Ending deficit accumulated during the development stage,
      December 31, 2007   | $ | 131,561,229       |  

| |                                                      |   | Period
      from          |  
| | ---------------------------------------------------- | - | -------------------------- | -
| |                                                      |   | January 1, 1998            |  
| | Consolidated
      statements of cash flows          |   | to
      December 31, 2007 |  
| |                                                      |   |                            |  
| | Operating activities                                 | $ | (111,543,152               | )
| | Investing activities                                 |   | (100,890,406               | )
| | Financing activities                                 |   | 288,863,150                |  
| |                                                      |   |                            |  
| | Increase in cash and cash and cash
      equivalents |   | 76,429,592                 |  
| | Cash and cash equivalents  January 1, 1998          |   | 1,922,206                  |  
| | Acquired through business acquisition                |   | 11,156                     |  
| | Cash and cash
      equivalents  December 31, 2007  | $ | 78,362,954                 |  

55

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|20. | Reconciliation with United States Generally Accepted
      Accounting Principles (continued)
|--- | --------------------------------------------------------------------------------------------

|                                     |  | Common
      Shares |  |  |            |  |  |            |   |  |          |  |  |             |  |  |             |  
|------------------------------------ |  | ------------------- |  |  | ---------- |  |  | ---------- | - |  | -------- |  |  | ----------- |  |  | ----------- | -
|                                     |  |                     |  |  |            |  |  |            |   |  |          |  |  |             |  |  |             |  
|                                     |  |                     |  |  |            |  |  |            |   |  |          |  |  |             |  |  |             |  
|                                     |  | Issue               |  |  | Number of  |  |  |            |   |  |          |  |  | Contributed |  |  |             |  
|                                     |  | Price               |  |  | shares     |  |  | Amount     |   |  | Warrants |  |  | surplus     |  |  | Deficit     |  
|                                     |  | $                   |  |  |            |  |  | $          |   |  | $        |  |  | $           |  |  | $           |  
|                                     |  |                     |  |  |            |  |  |            |   |  |          |  |  |             |  |  |             |  
|Balance, January 1, 1998             |  |                     |  |  | 14,161,171 |  |  | 22,790,760 |   |  |         |  |  |            |  |  | (11,119,754 | )
|                                     |  |                     |  |  |            |  |  |            |   |  |          |  |  |             |  |  |             |  
|Escrow shares                        |  | 0.01                |  |  | 750,000    |  |  | 7,500      |   |  |         |  |  |            |  |  |            |  
|Exercise of options                  |  | 1.28                |  |  | 41,875     |  |  | 53,600     |   |  |         |  |  |            |  |  |            |  
|Private placement                    |  | 2.00                |  |  | 1,704,600  |  |  | 2,983,088  |   |  |         |  |  |            |  |  |            |  
|For mineral property interests       |  | 1.43                |  |  | 162,500    |  |  | 232,624    |   |  |         |  |  |            |  |  |            |  
|Loan guarantee                       |  | 2.05                |  |  | 98,125     |  |  | 201,156    |   |  |         |  |  |            |  |  |            |  
|Loss for the year                    |  | -                   |  |  |           |  |  |           |   |  |         |  |  |            |  |  | (6,819,118  | )
|Stock based compensation             |  | -                   |  |  |           |  |  |           |   |  |         |  |  | 372,000     |  |  |            |  
|                                     |  |                     |  |  |            |  |  |            |   |  |          |  |  |             |  |  |             |  
|Balance, December 31, 1998           |  |                     |  |  | 16,918,271 |  |  | 26,268,728 |   |  |         |  |  | 372,000     |  |  | (17,938,872 | )
|                                     |  |                     |  |  |            |  |  |            |   |  |          |  |  |             |  |  |             |  
|Exercise of warrants                 |  | 1.16                |  |  | 1,834,600  |  |  | 2,126,428  |   |  |         |  |  |            |  |  |            |  
|Exercise of options                  |  | 1.17                |  |  | 1,276,800  |  |  | 1,488,069  |   |  |         |  |  |            |  |  |            |  
|Private placement                    |  | 1.30                |  |  | 4,864,335  |  |  | 6,011,841  |   |  |         |  |  |            |  |  |            |  
|For donations                        |  | 2.50                |  |  | 4,000      |  |  | 10,000     |   |  |         |  |  |            |  |  |            |  
|For mineral property interests       |  | 1.28                |  |  | 2,825,000  |  |  | 3,606,250  |   |  |         |  |  |            |  |  |            |  
|Loss for the year                    |  | -                   |  |  |           |  |  |           |   |  |         |  |  |            |  |  | (6,313,029  | )
|Stock based compensation             |  | -                   |  |  |           |  |  |           |   |  |         |  |  | 1,385,000   |  |  |            |  
|                                     |  |                     |  |  |            |  |  |            |   |  |          |  |  |             |  |  |             |  
|Balance, December 31, 1999           |  |                     |  |  | 27,723,006 |  |  | 39,511,316 |   |  |         |  |  | 1,757,000   |  |  | (24,251,901 | )
|                                     |  |                     |  |  |            |  |  |            |   |  |          |  |  |             |  |  |             |  
|Exercise of warrants                 |  | 1.31                |  |  | 5,312,331  |  |  | 6,983,902  |   |  |         |  |  |            |  |  |            |  
|Exercise of options                  |  | 1.30                |  |  | 146,800    |  |  | 190,297    |   |  |         |  |  |            |  |  |            |  
|Private placement                    |  | 2.00                |  |  | 5,000,000  |  |  | 9,299,145  |   |  |         |  |  |            |  |  |            |  
|Loss for the year                    |  | -                   |  |  |           |  |  |           |   |  |         |  |  |            |  |  | (11,346,645 | )
|Stock based compensation             |  | -                   |  |  |           |  |  |           |   |  |         |  |  | 41,000      |  |  |            |  
|                                     |  |                     |  |  |            |  |  |            |   |  |          |  |  |             |  |  |             |  
|Balance, December 31, 2000           |  |                     |  |  | 38,182,137 |  |  | 55,984,660 |   |  |         |  |  | 1,798,000   |  |  | (35,598,546 | )
|                                     |  |                     |  |  |            |  |  |            |   |  |          |  |  |             |  |  |             |  
|Share issuance costs                 |  | -                   |  |  |           |  |  | (31,245    | ) |  |         |  |  |            |  |  |            |  
|Loss for the year                    |  | -                   |  |  |           |  |  |           |   |  |         |  |  |            |  |  | (9,924,906  | )
|Stock based compensation             |  | -                   |  |  |           |  |  |           |   |  |         |  |  | 860,000     |  |  |            |  
|                                     |  |                     |  |  |            |  |  |            |   |  |          |  |  |             |  |  |             |  
|Balance, December 31, 2001           |  |                     |  |  | 38,182,137 |  |  | 55,953,415 |   |  |         |  |  | 2,658,000   |  |  | (45,523,452 | )
|                                     |  |                     |  |  |            |  |  |            |   |  |          |  |  |             |  |  |             |  
|Exercise of warrants                 |  | 1.00                |  |  | 2,257,000  |  |  | 2,257,000  |   |  |         |  |  |            |  |  |            |  
|Exercise of options                  |  | 0.96                |  |  | 679,900    |  |  | 656,018    |   |  |         |  |  |            |  |  |            |  
|Private placement                    |  | 1.50                |  |  | 5,742,327  |  |  | 7,891,385  |   |  |         |  |  |            |  |  |            |  
|Warrants issued for mineral property |  | -                   |  |  |           |  |  |           |   |  | 295,000  |  |  |            |  |  |            |  
|Stock based compensation             |  | -                   |  |  |           |  |  |           |   |  |         |  |  | 374,627     |  |  |            |  
|Loss for the year                    |  | -                   |  |  |           |  |  |           |   |  |         |  |  |            |  |  | (4,792,089  | )
|                                     |  |                     |  |  |            |  |  |            |   |  |          |  |  |             |  |  |             |  
|Balance, December 31, 2002           |  |                     |  |  | 46,861,364 |  |  | 66,757,818 |   |  | 295,000  |  |  | 3,032,627   |  |  | (50,315,541 | )

56

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|20. | Reconciliation with United States Generally Accepted
      Accounting Principles (continued)
|--- | --------------------------------------------------------------------------------------------

|                                             |  | Common
      Shares |  |             |  |  |             |  |  |          |   |  |             |   |  |             |   | 
|-------------------------------------------- |  | ------------------- |  | ----------- |  |  | ----------- |  |  | -------- | - |  | ----------- | - |  | ----------- | - | 
|                                             |  |                     |  |             |  |  |             |  |  |          |   |  |             |   |  |             |   | 
|                                             |  |                     |  |             |  |  |             |  |  |          |   |  |             |   |  |             |   | 
|                                             |  | Issue               |  | Number of   |  |  |             |  |  |          |   |  | Contributed |   |  |             |   | 
|                                             |  | Price               |  | shares      |  |  | Amount      |  |  | Warrants |   |  | surplus     |   |  | Deficit     |   | 
|                                             |  | $                   |  |             |  |  | $           |  |  | $        |   |  | $           |   |  | $           |   | 
|                                             |  |                     |  |             |  |  |             |  |  |          |   |  |             |   |  |             |   | 
|Balance, December 31, 2002 (brought forward) |  |                     |  | 46,861,364  |  |  | 66,757,818  |  |  | 295,000  |   |  | 3,032,627   |   |  | (50,315,541 | ) | 
|                                             |  |                     |  |             |  |  |             |  |  |          |   |  |             |   |  |             |   | 
|Exercise of warrants                         |  | 1.51                |  | 6,541,943   |  |  | 7,683,994   |  |  |         |   |  |            |   |  |            |   | 
|Exercise of options                          |  | 1.43                |  | 3,636,600   |  |  | 5,204,175   |  |  |         |   |  |            |   |  |            |   | 
|Private placement                            |  | 1.80                |  | 5,600,000   |  |  | 9,416,731   |  |  |         |   |  |            |   |  |            |   | 
|Shares issued for mineral property           |  | 1.38                |  | 10,000,000  |  |  | 13,800,000  |  |  |         |   |  |            |   |  |            |   | 
|Fair value of stock options exercised        |  | -                   |  |            |  |  | 430,000     |  |  |         |   |  | (430,000    | ) |  |            |   | 
|Loss for the year                            |  | -                   |  |            |  |  |            |  |  |         |   |  |            |   |  | (13,043,469 | ) | 
|Stock based compensation                     |  | -                   |  |            |  |  |            |  |  |         |   |  | 2,131,739   |   |  |            |   | 
|Exercise of warrants - fair value            |  | -                   |  |            |  |  | 7,019,962   |  |  |         |   |  |            |   |  |            |   | 
|                                             |  |                     |  |             |  |  |             |  |  |          |   |  |             |   |  |             |   | 
|Balance, December 31, 2003                   |  |                     |  | 72,639,907  |  |  | 110,312,680 |  |  | 295,000  |   |  | 4,734,366   |   |  | (63,359,010 | ) | 
|                                             |  |                     |  |             |  |  |             |  |  |          |   |  |             |   |  |             |   | 
|Exercise of warrants                         |  | 1.81                |  | 2,137,772   |  |  | 3,785,490   |  |  |         |   |  |            |   |  |            |   | 
|Exercise of options                          |  | 1.16                |  | 835,700     |  |  | 969,580     |  |  |         |   |  |            |   |  |            |   | 
|Shares issued for mineral property           |  | 2.98                |  | 11,000,000  |  |  | 32,780,000  |  |  |         |   |  |            |   |  |            |   | 
|Fair value of stock options exercised        |  | -                   |  |            |  |  | 239,915     |  |  |         |   |  | (239,915    | ) |  |            |   | 
|Loss for the year                            |  | -                   |  |            |  |  |            |  |  |         |   |  |            |   |  | (3,695,616  | ) | 
|Warrants expired unexercised                 |  | -                   |  |            |  |  |            |  |  | (221,250 | ) |  | 221,250     |   |  |            |   | 
|Exercise of warrants - fair value            |  | -                   |  |            |  |  | 73,750      |  |  | (73,750  | ) |  |            |   |  |            |   | 
|Stock based compensation                     |  | -                   |  |            |  |  |            |  |  |         |   |  | 2,473,354   |   |  |            |   | 
|                                             |  |                     |  |             |  |  |             |  |  |          |   |  |             |   |  |             |   | 
|Balance, December 31, 2004                   |  |                     |  | 86,613,379  |  |  | 148,161,415 |  |  |         |   |  | 7,189,055   |   |  | (67,054,626 | ) | 
|                                             |  |                     |  |             |  |  |             |  |  |          |   |  |             |   |  |             |   | 
|Exercise of warrrants                        |  | 0.91                |  | 5,500,000   |  |  | 5,018,062   |  |  |         |   |  |            |   |  |            |   | 
|Exercise of options                          |  | 0.96                |  | 1,572,000   |  |  | 1,509,120   |  |  |         |   |  |            |   |  |            |   | 
|Exercise of warrants - fair value            |  | -                   |  |            |  |  | 2,844,879   |  |  |         |   |  |            |   |  |            |   | 
|Stock base compensation                      |  | -                   |  |            |  |  |            |  |  |         |   |  | 476,156     |   |  |            |   | 
|Loss for the year                            |  | -                   |  |            |  |  |            |  |  |         |   |  |            |   |  | (1,518,771  | ) | 
|                                             |  |                     |  |             |  |  |             |  |  |          |   |  |             |   |  |             |   | 
|Balance, December 31, 2005                   |  |                     |  | 93,685,379  |  |  | 157,533,476 |  |  |         |   |  | 7,665,211   |   |  | (68,573,397 | ) | 
|                                             |  |                     |  |             |  |  |             |  |  |          |   |  |             |   |  |             |   | 
|Exercise of options                          |  | 1.49                |  | 1,193,000   |  |  | 1,782,510   |  |  |         |   |  |            |   |  |            |   | 
|Shares issued for cash net of issue costs    |  | 2.25                |  | 11,200,000  |  |  | 23,058,915  |  |  |         |   |  |            |   |  |            |   | 
|Private placement net of issue costs         |  | 2.25                |  | 3,333,334   |  |  | 7,033,683   |  |  |         |   |  |            |   |  |            |   | 
|Shares issued for mineral property           |  | 1.90                |  | 4,000,000   |  |  | 7,600,000   |  |  |         |   |  |            |   |  |            |   | 
|Fair value of stock options exercised        |  | -                   |  |            |  |  | 753,849     |  |  |         |   |  | (753,849    | ) |  |            |   | 
|Compensation warrants                        |  | -                   |  |            |  |  |            |  |  | 159,000  |   |  |            |   |  |            |   | 
|Stock based compensation                     |  | -                   |  |            |  |  |            |  |  |         |   |  | 3,610,110   |   |  |            |   | 
|Loss for the year                            |  | -                   |  |            |  |  |            |  |  |         |   |  |            |   |  | (11,478,000 | ) | 
|                                             |  |                     |  |             |  |  |             |  |  |          |   |  |             |   |  |             |   | 
|Balance, December 31, 2006                   |  |                     |  | 113,411,713 |  |  | 197,762,433 |  |  | 159,000  |   |  | 10,521,472  |   |  | (80,051,397 | ) | 

57

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|20. | Reconciliation with United States Generally Accepted
      Accounting Principles (continued)
|--- | --------------------------------------------------------------------------------------------

|                                                    |  | Common
      Shares |  |  |             |  |  |             |  |  |            |   |  |             |   |  |              |  
|--------------------------------------------------- |  | ------------------- |  |  | ----------- |  |  | ----------- |  |  | ---------- | - |  | ----------- | - |  | ------------ | -
|                                                    |  |                     |  |  |             |  |  |             |  |  |            |   |  |             |   |  |              |  
|                                                    |  |                     |  |  |             |  |  |             |  |  |            |   |  |             |   |  |              |  
|                                                    |  | Issue               |  |  | Number of   |  |  |             |  |  |            |   |  | Contributed |   |  |              |  
|                                                    |  | Price               |  |  | shares      |  |  | Amount      |  |  | Warrants   |   |  | surplus     |   |  | Deficit      |  
|                                                    |  | $                   |  |  |             |  |  | $           |  |  | $          |   |  | $           |   |  | $            |  
|                                                    |  |                     |  |  |             |  |  |             |  |  |            |   |  |             |   |  |              |  
|Balance, December 31, 2006 (brought forward)        |  |                     |  |  | 113,411,713 |  |  | 197,762,433 |  |  | 159,000    |   |  | 10,521,472  |   |  | (80,051,397  | )
|                                                    |  |                     |  |  |             |  |  |             |  |  |            |   |  |             |   |  |              |  
|Adoption of accounting policy                       |  | -                   |  |  |            |  |  |            |  |  |           |   |  |            |   |  |             |  
|Exercise of options                                 |  | 1.69                |  |  | 3,015,830   |  |  | 5,111,184   |  |  |           |   |  |            |   |  |             |  
|Shares issued for cash net of issue costs           |  | 2.11                |  |  | 57,500,000  |  |  | 121,427,869 |  |  |           |   |  |            |   |  |             |  
|Shares issued for Hecla Ventures Corp.              |  | 2.48                |  |  | 7,930,214   |  |  | 19,666,931  |  |  |           |   |  |            |   |  |             |  
|Shares issued for Tranter Burnstone Pty Ltd         |  | 1.82                |  |  | 19,938,650  |  |  | 36,323,195  |  |  |           |   |  |            |   |  |             |  
|Share purchase warrants exercised                   |  | 2.16                |  |  | 1,599,495   |  |  | 3,459,187   |  |  |           |   |  |            |   |  |             |  
|Fair value of stock options exercised               |  | -                   |  |  |            |  |  | 2,005,064   |  |  |           |   |  | (2,005,064  | ) |  |             |  
|Compensation warrants exercised                     |  | -                   |  |  |            |  |  | 141,582     |  |  | (141,582   | ) |  |            |   |  |             |  
|Compensation warrants expired                       |  | -                   |  |  |            |  |  |            |  |  | (17,418    | ) |  | 17,418      |   |  |             |  
|Fair value of warrants exercised                    |  | -                   |  |  |            |  |  | 547,107     |  |  |           |   |  |            |   |  |             |  
|Warrants issued persuant to share issuance          |  | -                   |  |  |            |  |  |            |  |  | 16,210,226 |   |  |            |   |  |             |  
|Stock based compensation                            |  | -                   |  |  |            |  |  |            |  |  |           |   |  | 5,633,276   |   |  |             |  
|Loss for the year                                   |  | -                   |  |  |            |  |  |            |  |  |           |   |  |            |   |  | (51,509,832  | )
|Fair value adjustment
      - financial instruments |  | -                   |  |  |            |  |  |            |  |  |           |   |  |            |   |  |             |  
|                                                    |  |                     |  |  |             |  |  |             |  |  |            |   |  |             |   |  |              |  
|Balance, December 31, 2007                          |  |                     |  |  | 203,395,902 |  |  | 386,444,552 |  |  | 16,210,226 |   |  | 14,167,102  |   |  | (131,561,229 | )

| | (e) | Impact of recent United States accounting
      pronouncements
| | --- | --------------------------------------------------------------

| | (1) | The FASB issued Statement of Financial Accounting
      Standards (SFAS) No. 157, Fair Value Measurements(SFAS 157).
      SFAS 157 defines fair value, establishes a framework for measuring fair
      value in generally accepted accounting principles and expands disclosures
      about fair value measurements. Effective for financial statements issued
      for fiscal years beginning after November 15, 2007, and interim periods
      within those fiscal years, however there is partial deferral to November
      2008 relating to non-financial assets and liabilities. The Company is
      currently evaluating the impact of the adoption of this Standard on the
      Companys results of operations and financial position.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (2) | The FASB issued Statement of Financial Accounting
      Standards (SFAS) No. 159, Fair Value Options for Financials Assets
      and Liabilities(SFAS 159). SFAS 159 permits entities to choose to
      measure many financial instruments and certain other items at fair value.
      Effective for years beginning after November 15, 2007. The Company is
      currently evaluating the impact of the adoption of this Standard on the
      Companys results of operations and financial
position.                                                                                                                                                                                                                                            

58

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2007 and 2006               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|20. | Reconciliation with United States Generally Accepted
        Accounting Principles  (continued)
|--- | ------------------------------------------------------------------------------------------------

| | (e) | Impact of recent United States accounting
      pronouncements (continued)
| | --- | --------------------------------------------------------------------------

| | (3) | The FASB Emerging Issues Committee (EITF) issued EITF
      06-01, Consideration given by a service provider to a manufacturer or
      reseller of equipment(EITF 06-01).EITF 06- 01 addresses the
      accounting for consideration given by a service provider to a manufacturer
      or reseller of equipment necessary for an end-customer to receive service
      from the service provider. Effective for years beginning after June 15,
      2007. The Company is currently evaluating the impact of the adoption of
      this Standard on the Companys results of operations and financial
      position.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (4) | The FASB issued Statement of Financial Accounting
      Standards (SFAS) No. 141(R), Revised 2007 Business Combinations.
      This Statement replaces FASB Statement No. 141, Business Combinations(SFAS141(R)).SFAS141(R) improves the relevance,
      representational faithfulness, and comparability of the information that a
      reporting entity provides in its financial reports about a business
      combination and its effects. This Statement establishes principles and
      requirements for how the acquirer recognizes and measures the identifiable
      assets acquired, liabilities assumed, and any noncontrolling interest in
      the acquire; recognizes and measures the goodwill acquired in the business
      combination or a gain from a bargain purchase and determines what
      information to disclose to enable users of the financial statements to
      evaluate the nature and financial effects of the business combination.
      This Statement applies prospectively to business combinations for which
      the acquisition date is on or after the beginning of the first annual
      reporting period beginning on or after December 15, 2008. The impact of
      SFAS141(R) cannot be determined until such time as the Company completes a
      business combination.

59

---