---



GREAT BASIN GOLD LTD.
  CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED
  DECEMBER 31, 2004, 2003, and 2002

(Expressed in Canadian Dollars, unless otherwise stated)

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| | KPMG LLP                         | Telephone | (604) 691-3000
| | -------------------------------- | --------- | --------------
| | Chartered Accountants            | Fax       | (604) 691-3031
| | PO Box 10426 777 Dunsmuir Street | Internet  | www.kpmg.ca   
| | Vancouver BC V7Y 1K3             |           |               
| | Canada                           |           |               

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
  Great Basin Gold Ltd.

We have audited the accompanying consolidated balance sheets
  of Great Basin Gold Ltd. as of December 31, 2004 and 2003 and the consolidated
  statements of operations, deficit and cash flows for each of the years in the
  three-year period ended December 31, 2004. These consolidated financial statements
  are the responsibility of the Company's management. Our responsibility is to
  express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with 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 whether
  the financial statements are free of material misstatement. An audit includes
  examining, on a test basis, evidence supporting the amounts and disclosures
  in the financial statements. An 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 audits provide
  a reasonable basis for our audit opinion.

In our opinion, the consolidated financial statements referred
  to above present fairly, in all material respects, the financial position of
  Great Basin Gold Ltd. as of December 31, 2004 and 2003 and the results of its
  operations and its cash flows for each of the years in the three-year period
  ended December 31, 2004 in accordance with Canadian generally accepted accounting
  principles.

As discussed in note 3(o) to the consolidated financial statements,
  the Company changed its method of accounting for asset retirement obligations
  in 2004.

Canadian generally accepted accounting principles vary in
  certain significant respects from accounting principles generally accepted in
  the United States of America. Information relating to the nature and effect
  of such differences is presented in note 10 to the consolidated financial statements.

KPMG LLP (signed)


Chartered Accountants

Vancouver, Canada

February 25, 2005

KPMG LLP, a Canadian limited liability partnership is the Canadian
  member firm of KPMG International, a Swiss cooperative

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

|                                                        |   | As at December
      31 |  
|------------------------------------------------------- | - | ----------------------- | -
|                                                        |   | 2004                    |  
|                                                        |   |                         |  
|Assets                                                  |   |                         |  
|                                                        |   |                         |  
|Current assets                                          |   |                         |  
|Cash and equivalents                                    | $ | 17,199,548              |  
|Amounts receivable
      (note 7)                       |   | 242,498                 |  
|Investments (note
      5(c))                           |   | 271,000                 |  
|Prepaid expenses                                        |   | 126,175                 |  
|                                                        |   | 17,839,221              |  
|                                                        |   |                         |  
|Reclamation deposits(note
      5(a))                   |   | 64,668                  |  
|Mineral property interests(note
      5)                |   | 98,630,000              |  
|                                                        |   |                         |  
|                                                        | $ | 116,533,889             |  
|                                                        |   |                         |  
|Liabilities and Shareholders'
      Equity              |   |                         |  
|                                                        |   |                         |  
|Current liabilities                                     |   |                         |  
|Accounts payable
      and accrued liabilities (note 7) | $ | 752,166                 |  
|                                                        |   |                         |  
|Future income taxes(note
      8)                       |   | 18,997,000              |  
|                                                        |   |                         |  
|Shareholders' equity                                    |   |                         |  
|Share capital (note
      6)                            |   | 143,341,453             |  
|Warrants (note 6(d))                                    |   | 11,360,000              |  
|Contributed surplus
      (note 6(h))                   |   | 4,531,055               |  
|Deficit                                                 |   | (62,447,785             | )
|                                                        |   | 96,784,723              |  
|Nature of operations (note 1)                           |   |                         |  
|Commitments (note 5)                                    |   |                         |  
|Contingencies (note 5(a))                               |   |                         |  
|Subsequent events (notes 5(b),
      5(c) and 6(d))     |   |                         |  
|                                                        |   |                         |  
|                                                        |   |                         |  
|                                                        | $ | 116,533,889             |  

Approved by the Board of Directors

|/s/ Ronald W. Thiessen | /s/ Jeffrey R. Mason
|---------------------- | --------------------
|                       |                     
|Ronald W. Thiessen     | Jeffrey R. Mason    
|Director               | Director            

---

GREAT BASIN GOLD LTD.Consolidated Statements of Operations
  (Expressed in Canadian dollars)

|                                                                           |   | Years ended
      December 31 |  
|-------------------------------------------------------------------------- | - | ----------------------------- | -
|                                                                           |   | 2004                          |  
|                                                                           |   |                               |  
|Expenses                                                                   |   |                               |  
|Accounting, audit and legal                                                | $ | 282,257                       |  
|Conference and travel                                                      |   | 207,195                       |  
|Corporate capital taxes                                                    |   | –                             |  
|Depreciation                                                               |   | –                             |  
|Exploration (schedule)                                                     |   | 7,691,396                     |  
|Financial advisory and finders' fees                                       |   | 106,360                       |  
|Foreign exchange                                                           |   | (3,114,370                    | )
|Interest and other                                                         |   | (506,330                      | )
|Office and administration                                                  |   | 893,194                       |  
|Shareholder communications                                                 |   | 232,389                       |  
|Stock-based compensation - exploration (note 6(c))                         |   | 754,066                       |  
|Stock-based compensation - operations and administration
      (note 6(c)) |   | 1,719,288                     |  
|Trust and filing                                                           |   | 226,159                       |  
|Loss before the following                                                  |   | (8,491,604                    | )
|Future income tax recovery                                                 |   | 1,924,867                     |  
|Recovery of accounts receivable previously written off                     |   | –                             |  
|Gain on sale of investments (note 5(a))                                    |   | –                             |  
|Loss for the year                                                          | $ | (6,566,737                    | )
|                                                                           |   |                               |  
|Basic and diluted loss per share                                           | $ | (0.08                         | )
|                                                                           |   |                               |  
|Weighted average number of common shares outstanding                       |   | 85,370,853                    |  

Consolidated Statements of Deficit
  (Expressed in Canadian dollars)

|                           |   | Years ended
      December 31 |  
|-------------------------- | - | ----------------------------- | -
|                           |   | 2004                          |  
|Deficit, beginning of year | $ | (55,881,048                   | )
|Loss for the year          |   | (6,566,737                    | )
|                           |   |                               |  
|Deficit, end of the year   | $ | (62,447,785                   | )

---

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

|                                                                          |   | Years ended December 31 |  
|------------------------------------------------------------------------- | - | ----------------------- | -
|                                                                          |   | 2004                    |  
|Cash provided by (used for):                                              |   |                         |  
|                                                                          |   |                         |  
|Operating activities                                                      |   |                         |  
|Loss for the year                                                         | $ | (6,566,737              | )
|Items not involving
      cash                                            |   |                         |  
|Depreciation                                                              |   | –                       |  
|Stock-based
      compensation expense                                    |   | 2,473,354               |  
|Unrealized
      foreign exchange gain                                    |   | (2,758,234              | )
|Future
      income tax recovery                                          |   | (1,924,867              | )
|Warrants
      received for property option agreement (note 5(c))         |   | (271,000                | )
|Changes in non-cash
      operating working capital                       |   |                         |  
|Amounts
      receivable                                                  |   | 524,368                 |  
|Prepaid
      expenses                                                    |   | (36,501                 | )
|Accounts payable
      and accrued liabilities                            |   | (66,010                 | )
|                                                                          |   | (8,625,627              | )
|Investing activities                                                      |   |                         |  
|Short-term investments                                                    |   | –                       |  
|Reclamation deposits                                                      |   | –                       |  
|Mineral property acquisition costs                                        |   | (125,040                | )
|                                                                          |   | (125,040                | )
|Financing activities                                                      |   |                         |  
|Common shares issued for cash,
      net of issue costs                   |   | 4,755,070               |  
|Increase (decrease) in cash and equivalents                               |   | (3,995,597              | )
|Cash and equivalents, beginning of year                                   |   | 21,195,145              |  
|                                                                          |   |                         |  
|Cash and equivalents, end of year                                         | $ | 17,199,548              |  
|                                                                          |   |                         |  
|Supplementary information                                                 |   |                         |  
|Taxes paid                                                                | $ | –                       |  
|Non-cash financing
      and investing activities                         |   |                         |  
|Shares issued for
      property option agreement (note 5(b))             | $ | 32,780,000              |  
|Warrants issued for
      property option agreement (note 5)              | $ | 11,360,000              |  
|Warrants received
      for mineral property option agreement             | $ | 271,000                 |  
|Fair value
      of stock options transferred to share capital on options |   |                         |  
|exercised
      from contributed surplus                                  | $ | 239,915                 |  
|Increase in mineral
      property for future income taxes                | $ | 23,696,867              |  

---

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

|                                                    |   | Burnstone  |  |   | Ivanhoe    |  |   | Other    |   |   | Total      |  
|--------------------------------------------------- | - | ---------- |  | - | ---------- |  | - | -------- | - | - | ---------- | -
|Exploration expenses during 2004                    |   |            |  |   |            |  |   |          |   |   |            |  
|Assays and analysis                                 | $ | 199,979    |  | $ | 22,046     |  | $ | 3,414    |   | $ | 225,439    |  
|Drilling                                            |   | 4,368,621  |  |   | 133,946    |  |   | –        |   |   | 4,502,567  |  
|Engineering                                         |   | 625,221    |  |   | 76,174     |  |   | –        |   |   | 701,395    |  
|Environmental, socio-economic and land              |   | 84,237     |  |   | 39,210     |  |   | –        |   |   | 123,447    |  
|Geological                                          |   | 1,208,134  |  |   | 83,253     |  |   | 34,998   |   |   | 1,326,385  |  
|Graphics                                            |   | 43,483     |  |   | 11,024     |  |   | 5,919    |   |   | 60,426     |  
|Property fees and exploration option
      payments |   | 85,839     |  |   | 258,716    |  |   | 54,758   |   |   | 399,313    |  
|Site activities                                     |   | 286,888    |  |   | 62,950     |  |   | 3,995    |   |   | 353,833    |  
|Transportation                                      |   | 206,527    |  |   | 51,727     |  |   | 11,337   |   |   | 269,591    |  
|Proceeds on option agreements                       |   | –          |  |   | –          |  |   | (271,000 | ) |   | (271,000   | )
|                                                    |   | 7,108,929  |  |   | 739,046    |  |   | (156,579 | ) |   | 7,691,396  |  
|Stock-based compensation (note 6(c))                |   | 671,776    |  |   | 71,257     |  |   | 11,033   |   |   | 754,066    |  
|Incurred during 2004                                |   | 7,780,705  |  |   | 810,303    |  |   | (145,546 | ) |   | 8,445,462  |  
|Cumulative expenditures, December 31, 2003          |   | 10,738,956 |  |   | 22,098,348 |  |   | (27,900  | ) |   | 32,809,404 |  
|Cumulative expenditures, December 31, 2004          | $ | 18,519,661 |  | $ | 22,908,651 |  | $ | (173,446 | ) | $ | 41,254,866 |  
|                                                    |   |            |  |   |            |  |   |          |   |   |            |  
|Exploration expenses during 2003                    |   |            |  |   |            |  |   |          |   |   |            |  
|Assays and analysis                                 | $ | 183,350    |  | $ | 2,746      |  | $ | –        |   | $ | 186,096    |  
|Drilling                                            |   | 4,920,811  |  |   | 5,317      |  |   | –        |   |   | 4,926,128  |  
|Engineering                                         |   | 463,576    |  |   | 27,413     |  |   | –        |   |   | 490,989    |  
|Environmental, socio-economic and land              |   | 17,235     |  |   | 86,836     |  |   | –        |   |   | 104,071    |  
|Geological                                          |   | 1,308,197  |  |   | 63,159     |  |   | –        |   |   | 1,371,356  |  
|Graphics                                            |   | 36,944     |  |   | 3,435      |  |   | –        |   |   | 40,379     |  
|Property fees and exploration option payments       |   | 19,374     |  |   | 263,292    |  |   | 1,454    |   |   | 284,120    |  
|Site activities                                     |   | 269,496    |  |   | 39,696     |  |   | 495      |   |   | 309,687    |  
|Transportation                                      |   | 193,958    |  |   | 20,834     |  |   | –        |   |   | 214,792    |  
|                                                    |   | 7,412,941  |  |   | 512,728    |  |   | 1,949    |   |   | 7,927,618  |  
|Stock-based compensation (note 6(c))                |   | 735,189    |  |   | 50,851     |  |   | 193      |   |   | 786,233    |  
|Incurred during 2003                                |   | 8,148,130  |  |   | 563,579    |  |   | 2,142    |   |   | 8,713,851  |  
|Cumulative expenditures, December 31, 2002          |   | 2,590,826  |  |   | 21,534,769 |  |   | (30,042  | ) |   | 24,095,553 |  
|Cumulative expenditures, December 31, 2003          | $ | 10,738,956 |  | $ | 22,098,348 |  | $ | (27,900  | ) | $ | 32,809,404 |  
|                                                    |   |            |  |   |            |  |   |          |   |   |            |  
|Exploration expenses during 2002                    |   |            |  |   |            |  |   |          |   |   |            |  
|Assays and analysis                                 | $ | 215        |  | $ | 897        |  | $ | –        |   | $ | 1,112      |  
|Drilling                                            |   | –          |  |   | 4,241      |  |   | –        |   |   | 4,241      |  
|Engineering                                         |   | 156,603    |  |   | 90,086     |  |   | –        |   |   | 246,689    |  
|Environmental, socio-economic and land
      fees   |   | 14,464     |  |   | 314,108    |  |   | 537      |   |   | 329,109    |  
|Equipment rentals and leases                        |   | 1,609      |  |   | 7,469      |  |   | –        |   |   | 9,078      |  
|Exploration option payments                         |   | 2,094,760  |  |   | –          |  |   | –        |   |   | 2,094,760  |  
|Exploration option payments received                |   | –          |  |   | –          |  |   | (50,000  | ) |   | (50,000    | )
|Geological                                          |   | 189,292    |  |   | 125,741    |  |   | –        |   |   | 315,033    |  
|Graphics                                            |   | 3,033      |  |   | 32,516     |  |   | –        |   |   | 35,549     |  
|Reclamation                                         |   | –          |  |   | 83,288     |  |   | –        |   |   | 83,288     |  
|Site activities                                     |   | 46,963     |  |   | 78,096     |  |   | –        |   |   | 125,059    |  
|Transportation                                      |   | 13,926     |  |   | 27,793     |  |   | –        |   |   | 41,719     |  
|                                                    |   | 2,520,865  |  |   | 764,235    |  |   | (49,463  | ) |   | 3,235,637  |  
|Stock-based compensation (note 6(c))                |   | 69,961     |  |   | 64,787     |  |   | –        |   |   | 134,748    |  
|Incurred during 2002                                |   | 2,590,826  |  |   | 829,022    |  |   | (49,463  | ) |   | 3,370,385  |  
|Cumulative expenditures, December 31, 2001          |   | –          |  |   | 20,705,747 |  |   | 19,421   |   |   | 20,725,168 |  
|Cumulative expenditures, December 31, 2002          | $ | 2,590,826  |  | $ | 21,534,769 |  | $ | (30,042  | ) | $ | 24,095,553 |  

---

GREAT BASIN GOLD LTD.
  Notes to the Consolidated Financial Statements 
  Years ended December 31, 2004, 2003 and 2002 
  (Expressed in Canadian Dollars)

|1.  | Nature of operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    | Great Basin Gold Ltd. ("Great Basin" or the "Company")
        was incorporated under the laws of the Province of British Columbia and
        its principal business activity is the exploration of mineral property
        interests. The Company’s principal mineral property interests are
        the Ivanhoe Property located in Nevada, United States of America, and
        the Burnstone Gold Property located in the Republic of South Africa (note
        5).                                                                                                                                                                                                                            
|   
|    | The Company is in the process of exploring its mineral
        property interests and has not yet determined whether its mineral property
        interests contain economically recoverable mineral reserves. The underlying
        value and the recoverability of the amounts shown for mineral property
        interests 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 presentation and principles of consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|    | These financial statements have been prepared in accordance with Canadian
          generally accepted accounting principles. The results of applying measurement
          accounting principles generally accepted in the United States are set
          out in note 10.
        These consolidated financial statements include the accounts of the
          Company and its wholly-owned subsidiaries. All material intercompany
          balances and transactions have been eliminated.                                                                                                                                                                                                       
|   
|3.  | Significant accounting policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(a) | Cash and equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|    | Cash and 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) | Short-term investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|    | Short-term investments include highly liquid investments
        with terms to maturity of three to twelve months when purchased. Short-term
        investments are carried at the lower of cost plus accrued interest and
        quoted fair market value.                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(c) | Reclamation deposits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|    | Reclamation deposits are recorded at cost.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|(d) | Investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|    | Investments capable of reasonably prompt liquidation
        are carried at the lower of cost and quoted market value. Investments
        where the Company has the ability to exercise significant influence are
        accounted for on the equity basis where the investment is initially recorded
        at cost and subsequently adjusted for the Company’s share of the
        income or loss and capital transactions of the investee, less provision,
        if any, for permanent impairment in value.                                                                                                                                                                                   
|   

---

GREAT BASIN GOLD LTD.
  Notes to the Consolidated Financial Statements 
  Years ended December 31, 2004, 2003 and 2002 
  (Expressed in Canadian Dollars)

|(e) | Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    | Equipment is stated at cost less accumulated depreciation.
        Depreciation is provided on a straight-line basis over three to five years,
        which represents the estimated useful lives of the related equipment.
        Depreciation on equipment used directly on exploration projects is included
        in exploration expenses until the related property is placed into production.                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|(f) | Mineral property interests                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|    | Exploration expenses incurred prior to determination
        of the feasibility of mining operations, periodic option payments and
        administrative expenditures are expensed as incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|    | Mineral property acquisition costs and exploration
        and development expenditures incurred subsequent to the determination
        of the feasibility of mining operations are capitalized until the property
        to which they relate is placed into production, sold, allowed to lapse
        or abandoned. Mineral property acquisition costs include the cash consideration
        and the fair value of common shares and warrants issued for mineral property
        interests, pursuant to the terms of the relevant agreement. These costs
        are amortized over the estimated life of the property following commencement
        of commercial production, or written off if the property is sold, allowed
        to lapse or abandoned, or when an impairment in value has been determined
        to have occurred.
|   
|(g) | Share capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|    | The Company records proceeds from share issuances
        net of issue costs. Shares issued for consideration other than cash are
        valued at the quoted market price on the date the agreement to issue the
        shares was reached.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|(h) | Foreign currency translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|    | All of the Company’s foreign operations are
        considered integrated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|    | Monetary assets and liabilities of the Company and
        its integrated foreign operations 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 depreciation, are translated at the average exchange rates for
        the period. Depreciation 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.                                                                                       
|   
|(i) | Loss per common share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|    | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   

---

GREAT BASIN GOLD LTD.
  Notes to the Consolidated Financial Statements
  Years ended December 31, 2004, 2003 and 2002
  (Expressed in Canadian Dollars)

|    | 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, diluted loss per share is the same as basic loss per share as the
        effect of the outstanding options and warrants would be anti-dilutive.                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(j) | Fair value of financial instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|    | The carrying amounts of cash and equivalents, amounts
        receivable, reclamation deposits, and accounts payable and accrued liabilities
        approximate fair values due to their short term nature. The fair value
        of investments at December 31, 2004 is estimated to be $226,000.                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|    | Fair value estimates are made at the date of issuance,
        and at the balance sheet date, based on relevant market information and
        information about the financial instruments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|(k) | Use of estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|    | 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 and
        assumptions used in determining the fair value of non-cash stock-based
        compensation and warrants. Actual results could differ from these estimates.       
|   
|(l) | Segment disclosures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|    | The Company operates in a single segment, being
        exploration of mineral properties within the geographic areas disclosed
        in note 9. Other than exploration expenses and mineral property acquisition
        costs, which are disclosed in the schedule of exploration expenses and
        in note 5 respectively, substantially all of the Company’s net expenses
        are incurred in Canada.                                                                                                                                                                                                                                                                                                         
|   
|(m) | Stock-based compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|    | The Company has a share option plan which is described
        in note 6(c). The Company records all stock-based payments granted on
        or after January 1, 2003 using the fair value method. In 2002, the Company
        accounted for stock-based compensation to employees by the settlement
        method whereby no compensation expense was recorded for options granted
        at the quoted market value and consideration received on exercise of stock
        options was recorded as share capital. Options granted to non-employees
        in 2002 were accounted for using the fair value method. Prior to 2002,
        all stock-based compensation was accounted for using the settlement method.
|   
|    | Under the fair value method, stock-based payments
        are measured at the fair value of the consideration received or the fair
        value of the equity instruments issued or liabilities incurred, whichever
        is more reliably measurable and are charged to operations over the vesting
        period. The offset is credited to contributed surplus. Consideration received
        on the exercise of stock options is recorded as share capital and the
        related contributed surplus is transferred to share capital.                                                                                                                                                                           
|   

---

GREAT BASIN GOLD LTD.
  Notes to the Consolidated Financial Statements 
  Years ended December 31, 2004, 2003 and 2002 
  (Expressed in Canadian Dollars)

|(n) | Income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    | 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, generally 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. 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 valuation of future
        income tax assets is adjusted, if necessary, by the use of a valuation
        allowance to reflect the estimated realizable amount.
|   
|(o) | Asset retirement obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|    | During the year ended December 31, 2004, the Company
        adopted the Canadian Institute of Chartered Accountants ("CICA") Handbook
        Section 3110 "Asset Retirement Obligations" ("HB 3110"). This new
        standard recognizes statutory, contractual or other legal obligations
        related to the retirement of tangible long-lived assets when such obligations
        are incurred, if a reasonable estimate of fair value can be made. These
        obligations are measured initially at fair value and the resulting costs
        capitalized to the carrying value of the related asset. In subsequent
        periods, the liability is adjusted for any changes in the amount or timing
        and for the discounting of the underlying future cash flows. The capitalized
        asset retirement cost is amortized to operations over the life of the
        asset.                                            
|   
|    | Prior to the adoption of HB 3110, the Company had
        accounted for reclamation and closure costs by accruing an amount associated
        with the retirement of tangible long-lived assets as a charge to operations
        over the life of the asset.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|    | The Company adopted HB 3110 retroactively with a
        restatement of prior periods presented, however, the adoption of HB 3110
        resulted in no changes to amounts previously presented.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|(p) | Comparative figures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|    | Certain of the prior years’ comparative figures
        have been restated to conform with the presentation adopted for the current
        year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   

---

GREAT BASIN GOLD LTD.
  Notes to the Consolidated Financial Statements 
  Years ended December 31, 2004, 2003 and 2002 
  (Expressed in Canadian Dollars)

|4. | Equipment
|-- | ---------

| |           |  |   | December 31, 2004 |  |   | December 31, 2003 | 
| | --------- |  | - | ----------------- |  | - | ----------------- | 
| |           |  |   |                   |  |   | Accumulated       | 
| | Equipment |  |   | Cost              |  |   | depreciation      | 
| | Computer  |  | $ | 127,795           |  | $ | 127,795           | 
| | Field     |  |   | 349,631           |  |   | 349,631           | 
| | Office    |  |   | 300,678           |  |   | 300,678           | 
| |           |  | $ | 778,104           |  | $ | 778,104           | 

|5. | Mineral property interests
|-- | --------------------------

| |                                               |   | December 31 |  |   | December 31 | 
| | --------------------------------------------- | - | ----------- |  | - | ----------- | 
| | Mineral Property Acquisition Costs,
      net |   | 2004        |  |   | 2003        | 
| |                                               |   |             |  |   |             | 
| | Ivanhoe Property (note 5(a))                  | $ | 3,945,348   |  | $ | 3,945,348   | 
| | Burnstone Gold Property (note 5(b))           |   | 94,684,650  |  |   | 26,722,743  | 
| | Casino Property (note 5(c))                   |   | 1           |  |   | 1           | 
| | Kirkland Lake Property (note 5(d))            |   | 1           |  |   | 1           | 
| |                                               |   |             |  |   |             | 
| |                                               | $ | 98,630,000  |  | $ | 30,668,093  | 

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

| |                                                       |   | Years ended December 31 | 
| | ----------------------------------------------------- | - | ----------------------- | 
| |                                                       |   | 2004                    | 
| | Ivanhoe Property                                      |   |                         | 
| | Balance, beginning of the period                      | $ | 3,945,348               | 
| | Incurred during the period                            |   | –                       | 
| | Estimated
      fair value of Hecla Warrants received |   | –                       | 
| | Balance, beginning and end of the period              |   | 3,945,348               | 
| |                                                       |   |                         | 
| | Hecla Warrants                                        |   |                         | 
| | Balance, beginning of the period                      |   | –                       | 
| | Exercise of Hecla Warrants                            |   | –                       | 
| | Estimated
      fair value of Hecla Warrants received |   | –                       | 
| | Balance, end of the period                            |   | –                       | 
| |                                                       |   |                         | 
| | Ivanhoe Property                                      | $ | 3,945,348               | 

---

GREAT BASIN GOLD LTD.
  Notes to the Consolidated Financial Statements
  Years ended December 31, 2004, 2003 and 2002
  (Expressed in Canadian Dollars)

| | In 1997, the Company and an unrelated company acquired
        a 100% working interest in the Ivanhoe Property on the Carlin Trend in
        Nevada from Newmont Exploration Limited ("Newmont"). The Company earned
        a 75% interest in the Ivanhoe Property in consideration for payments totaling
        US$5 million. In 1999, the Company acquired the remaining 25% interest
        in the Ivanhoe Property from the unrelated party for consideration of
        2,750,000 common shares of the Company and 250,000 warrants to purchase
        additional shares of the company at $2.00 per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | As part of the acquisition agreement, Newmont agreed
        to manage and complete an approved mine closure plan of the 1.1 square
        mile area of former mining operations already funded by US$4.5 million.
        The agreement provided that overruns would be funded 33% by Newmont and
        75% by the Company up to a total overrun of US$1.5 million, and thereafter
        75% by Newmont and 25% by the Company. The Company paid US$77,725
        over the period 2000 to 2004 as its share of the overruns and anticipates
        paying a further US$40,000 to December 31, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | During 1998, the Company entered into an agreement
        for a group of claims that form part of the Ivanhoe 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 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"), an affiliate of Hecla Mining Company.
        These agreements provide that Hecla would vest in a 50% working interest
        in the Hollister Development Block, which is a portion of the Ivanhoe
        Property, subject to a purchase royalty in favor of Great Basin, provided
        that Hecla funds a US$21.8 million two-stage advanced exploration
        and development program, or otherwise achieves commercial production,
        and issues 4 million Hecla Mining Company share purchase warrants (the
        "Hecla Warrants") to Great Basin. In 2002, 2 million share purchase warrants
        exercisable at US$3.73 per share were issued by Hecla to the Company.
        Using an option pricing model, the fair value of the issued Hecla Warrants
        on the agreement date was included in Mineral Property Interests and was
        estimated to be $1,933,000.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | One million Hecla Warrants will be required to be
        issued upon Hecla proceeding to Stage 2 activities, and the remaining
        1 million Hecla Warrants will be issuable upon the completion of Stage
        2 and completion of the earn-in.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | During 2003, the Hecla Warrants issued in 2002 were
        exercised into shares which were subsequently sold by the Company. The
        net proceeds of $6,312,426 received resulted in a gain of $4,379,426,
        which was reflected in the results of operations during 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | Concurrent with and in proportion to the Hecla Warrants,
        the Company agreed to issue 2 million share purchase warrants (the "Great
        Basin Warrants") to Hecla. In 2002, 1 million share purchase warrants
        exercisable at Cdn$1.55 per share expiring on August 2, 2004 were
        issued by the Company to Hecla (note 6(d)). The fair value of the issued
        Great Basin Warrants on the agreement date was estimated to be $295,000
        and was included in the cost of the Ivanhoe Property. Of the Great Basin
        Warrants issued, 250,000 warrants were exercised in January 2004 and the
        balance expired unexercised. The remaining 1 million Great Basin Warrants
        will be required to be issued in two tranches of 500,000 warrants per
        tranche concurrent with the issuance of the Hecla Warrants.                                                                                                                                                                                              

---

GREAT BASIN GOLD LTD.
  Notes to the Consolidated Financial Statements 
  Years ended December 31, 2004, 2003 and 2002 
  (Expressed in Canadian Dollars)

| | Since 2002, Hecla performed engineering and permitting
        work in furtherance of an underground development program and obtained
        the necessary permits to complete the Stage 1 underground development,
        drilling, and pre-feasibility work. The program budget for Stage 1 is
        estimated in the Earn In Agreement to cost US$10.3 million, with work
        to be completed in the 12 months from when the permits were issued in
        May 2004. Hecla commenced physical work on the site in October 2004. To
        vest its 50% working interest, Hecla must, upon completion of Stage 1,
        elect to proceed to Stage 2 within 60 days. Following such an election,
        the Stage 2 program of US$11.5 million is expected to be completed
        over the ensuing 12 months and consists of underground production development
        and procurement of production equipment and surface facilities, with an
        overall goal to develop the Hollister Development Block to the point of
        commercial production. Under the Earn In Agreement, Hecla would be the
        operator of the Stage 1 and Stage 2 work programs, and would continue
        as the operator should a positive production decision be made.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | The Earn In Agreement expires in August 2006. Hecla
        has stated that it interprets the program and budget and the Earn In Agreement
        differently than does the Company. The Company is of the position that
        Hecla has purported to amend the Earn In Agreement in a way that would
        combine, at least in part, the earn-in requirements of Stages 1 and 2.
        If accepted by the Company, such changes could result in an extended option
        period for Hecla to complete Stage 1 and corresponding uncertainty for
        the requirements, timing of and costs to complete Stage 2. The Company
        and Hecla have had discussions regarding these issues, but there has been
        no mutually-confirmed resolution. The Company is currently unable to predict
        whether these issues will result in a formal legal dispute, nor is it
        able to predict the outcome of any such dispute if initiated.                                                                                                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | A sliding scale royalty on Hecla’s share of
        production is payable in cash or in kind by Hecla to Great Basin. At a
        cash operating profit per ounce of gold equivalent in the range of US$100-200
        per ounce, the royalty is equal to US$50 per ounce. The royalty would
        become payable by Hecla once it has recovered 115% of its Stage 1 and
        2 pre-production expenditures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | As at December 31, 2004 and 2003, the Company had
        posted US$53,800 in reclamation deposits with the Bureau of Land Management
        ("BLM") in respect of exploration drilling on certain areas of the Ivanhoe
        Property. These deposits will be released by the BLM upon the conclusion
        of the exploration and related reclamation programs on these areas.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | In 2003, the Company entered into an agreement with
        Atna Resources Ltd. ("Atna") whereby the Company could acquire a 70% interest
        in Atna's Golden Cloud Property, located in Elko County, Nevada, by spending
        US$2.5 million on exploration and development over five years, making
        certain cash payments to Atna, and by assuming underlying option and property
        maintenance payments. During the year ended December 31, 2004, the Company
        chose not to continue further exploration work at the Golden Cloud Property
        and terminated the option.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

---

GREAT BASIN GOLD LTD.
  Notes to the Consolidated Financial Statements 
  Years ended December 31, 2004, 2003 and 2002 
  (Expressed in Canadian Dollars)

|(b) | Burnstone Gold Property 
|--- | ------------------------
|    | Republic of South Africa
|    |                         
|   

| |                                                       |   | Years ended December 31 | 
| | ----------------------------------------------------- | - | ----------------------- | 
| |                                                       |   | 2004                    | 
| |                                                       |   |                         | 
| | Balance, beginning of the year                        | $ | 26,722,743              | 
| | Amount capitalized on signing of agreement            |   | –                       | 
| | Tranche One:                                          |   |                         | 
| | Issuance of 10 million common shares at $1.38         |   | –                       | 
| | Issuance of 5 million share
      purchase warrants   |   | –                       | 
| | Cash (US$2 million)                                   |   | –                       | 
| | Finder's fees                                         |   | –                       | 
| |                                                       |   |                         | 
| | Tranche Two:                                          |   |                         | 
| | Issuance of 11 million common shares at $2.98         |   | 32,780,000              | 
| | Issuance of 5.5 million
      share purchase warrants |   | 11,360,000              | 
| | Finder's fees                                         |   | 125,040                 | 
| | Future income tax provision                           |   | 23,696,867              | 
| |                                                       |   |                         | 
| | Mineral rights acquired from GFL and Randex           |   |                         | 
| | Cash (35 million South African rand)                  |   | –                       | 
| |                                                       |   |                         | 
| | Balance, end of year                                  | $ | 94,684,650              | 

| | In November 2002, the Company entered into an option
        agreement (the "Option Agreement") with a private South African company,
        Southgold Exploration (Proprietary) Limited ("Southgold"), and its shareholders,
        to acquire on a staged basis up to 100% of Southgold. Southgold has the
        right to acquire an 100% interest in the Burnstone Gold Property covering
        approximately 265 square kilometers of the Witwatersrand goldfield in
        the Republic of South Africa, subject to a statutory requirement that
        a percentage of its equity or of the property be owned by Historically
        Disadvantaged South Africans ("HDSA"). In terms of South African mineral
        legislation, Southgold must achieve an HDSA ownership target of 15% by
        April 2009 and 26% by April 2014.                                                                                                                                                                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Prior to November 2002, Southgold had entered into
        a joint venture agreement with Tranter Investments (Proprietary) Limited
        ("Tranter"), an HDSA partner, whereby Tranter was granted an
        option, exercisable on completion of a bankable feasibility study, to
        acquire a 20% participating joint venture interest in the Burnstone project
        by repaying to Southgold's then-shareholders 20% of historic costs to
        that exercise date. Under the Option Agreement, the amount paid by Tranter
        for its 20% share would be paid to the former Southgold shareholders.
        Tranter would thereafter maintain its 20% participating joint venture
        interest by funding its pro-rata share of all development, construction
        and property costs after the completion of a bankable feasibility study.
        The joint venture agreement was subject to the satisfaction of certain
        conditions which were not timely met. Great Basin has indicated to Tranter
        its preparedness to consider a request from Tranter to extend or modify
        the agreement on mutually acceptable terms and conditions.

---

GREAT BASIN GOLD LTD.
  Notes to the Consolidated Financial Statements 
  Years ended December 31, 2004, 2003 and 2002 
  (Expressed in Canadian Dollars)

| | Upon signing the Option Agreement in
        November 2002, the Company paid US$1.25 million ($2,007,561) for
        the right to acquire the option and to explore the Burnstone gold property,
        and also agreed to conduct a US$1.5 million work program prior to
        April 30, 2003 (which was undertaken and completed). Pursuant to the Option
        Agreement, the Company then had the option to purchase Southgold by making
        cash and Great Basin common share and share purchase warrant payments
        to Southgold’s shareholders in two staged tranches.                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | The mineral rights acquired from GFL
        and Randex (see (iii) below) constitute approximately 36% of the property
        under option. The remaining mineral rights are held under option with
        "old order" mineral right holders. The Company is in the process of converting
        the "old order" rights to "new order" rights. In the event that all mineral
        right options are exercised and the options are exercised at the end of
        each contract, the maximum cost to the Company would be approximately
        ZAR 81 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | On April 30, 2003, the Company exercised
        tranche one of the Option Agreement and acquired the right to 49% of the
        outstanding common shares of Southgold for payments totalling 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 totalling $1,258,154
        was paid in 2003 and was included in acquisition costs.                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | 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. The warrants were exercised
        during 2003 by Southgold’s shareholders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | On January 31, 2004, the Company exercised
        tranche two of the Option Agreement and issued 11 million common shares
        and 5.5 million 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. All
        Great Basin shares issued to Southgold shareholders are subject to a voting
        trust agreement, pursuant to which the holders have undertaken to vote
        with Great Basin management for a period of five years. Additional shares
        may become issuable by Great Basin to Southgold’s former shareholders
        depending on certain outcomes with respect to the Bankable Feasibility
        Study, such as the quantity of gold reserves (to a maximum of 1.5 million
        shares), gold production costs (to a maximum of 0.5 million shares), and
        the actual cost of the study (to a maximum of 7.5 million shares).
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | 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. Subsequent to December 31,
        2004, the 5.5 million share purchase warrants issued pursuant to this
        tranche were exercised by the warrant holders, for proceeds of approximately
        US$4.1 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

---

GREAT BASIN GOLD LTD.
  Notes to the Consolidated Financial Statements 
  Years ended December 31, 2004, 2003 and 2002 
  (Expressed in Canadian Dollars)

| | As Southgold had no material assets or liabilities
        other than its interest in the Burnstone Gold Property, the consideration
        given for the shares of Southgold, including the future income tax effects,
        was allocated to mineral property acquisition costs.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                      
| | The fair values of the share purchase warrants were
        estimated on the date of the exercise of each tranche using a Black-Scholes
        option pricing model with the following assumptions:                                                                                 

| |                         | Tranche two      | Tranche one    | 
| | ----------------------- | ---------------- | -------------- | 
| |                         | January 31, 2004 | April 30, 2003 | 
| | Risk free interest rate | 3%               | 3%             | 
| | Expected life           | 1.0 years        | 1.0 years      | 
| | Expected volatility     | 78%              | 85%            | 
| | Expected dividends      | nil              | nil            | 
| | Exercise price          | US$0.75          | US$0.75        | 
| | Market price            | C$2.98           | C$1.38         | 

| | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Acquisition costs of mineral rights from GFL and Randex
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | On October 10, 2003, pursuant
        to a Prospecting Agreement between GFL Mining Services Limited ("GFL"),
        Randex Limited ("Randex"), and Southgold, Southgold elected to purchase
        certain mineral rights held by GFL and Randex totaling 11,563 hectares
        within the Burnstone Property which were not covered under Southgold's
        then-existing rights, for 35 million South African Rand ("ZAR") ($6,695,598).
        The Company funded Southgold's purchase of these rights by way of a cash
        payment. Additional consideration for the purchase of these mineral rights
        consists of a net smelter royalty, ranging from 1% to 2% (tiered to the
        gold price), and payable to GFL. Current South African legislation abolishes
        private mineral title and, possibly, private royalties, and replaces them
        with a system vesting mineral tenure in the state. Under the Prospecting
        Agreement, in the event of a change in the mineral rights regime in South
        Africa, the parties have agreed to negotiate amendments to the Prospecting
        Agreement, if possible without causing undue hardship to each of the parties.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (iv)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Puma Option                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Puma Gold (Proprietary)
        Limited ("Puma") is a private South African company which holds prospecting
        and option contracts over four portions of the farm Doornhoek 577 IR located
        on the eastern edge of the Burnstone Property, of which one portion was
        dropped by the Company in October 2004. These options give Puma the right
        to explore and acquire certain mineral rights on this farm. Pursuant to
        the Option Agreement, the Company agreed to fund 1,500 meters of exploration
        drilling and related assaying work and other direct exploration costs
        totaling US$100,000 ($120,000) on this property. To December 31,
        2004, the exploration spending and drilling commitments had been met.                                                                                                                                                                                                                                                                                                                                                                                                                                            

---

GREAT BASIN GOLD LTD.
  Notes to the Consolidated Financial Statements 
  Years ended December 31, 2004, 2003 and 2002 
  (Expressed in Canadian Dollars)

|    | Upon completion of the required exploration work,
        the Company may acquire 100% of the shares of Puma by paying US$2
        per proven, probable, and indicated ounce of gold (adjusted for mining
        and geological dilution) determined in a bankable feasibility study, to
        a maximum of US$500,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(c) | Casino Property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | Whitehorse Mining District, Yukon, Canada                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|    | The Company owns a group of 161 mineral claims,
        some of which are subject to a 5% net profits from production royalty.
        During May 2000, the Company granted an option whereby Wildrose Resources
        Ltd., the optionee, could earn the right to purchase 55 claims for $1
        on the 20th anniversary of the option agreement. As consideration, the
        optionee agreed to incur all annual filing fees and assessment work on
        the 55 claims under option and 83 other claims. Alternatively, the optionee
        may purchase the 55 claims for a one time payment of $200,000 without
        further obligation in respect of the Company’s 83 claims. Should
        the optionee acquire the 55 claims, the optionee would be subject to a
        further 5% net profits interest, payable to the Company.                                                       
|   
|    | During fiscal 2001, the $5.5 million of acquisition
        costs associated with the Casino Property were written down to a nominal
        amount.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|    | On July 15, 2002, the Company agreed to option the
        Casino Property (the "Property") to CRS Copper Resources Ltd. ("CRS"),
        subject to existing net profits royalty agreements and the Wildrose option
        agreement on a portion of the Casino property. Under the terms of the
        agreement, Great Basin granted CRS an option (the "Option") to purchase
        100% of Great Basin’s interest in the claims and interests comprising
        the Property for $1,000,000, plus applicable taxes, payable at the
        option of CRS in cash or CRS common shares, provided that CRS shares are
        listed on a recognized stock exchange and have certain minimum trading
        volumes.                                                                                                                                                                                  
|   
|    | The Option may be exercised at any time from the
        date of the agreement to July 15, 2007, subject to written notice and
        confirmation that the terms of the Option have been met. CRS was required
        to make interim option payments to Great Basin at the time that CRS is
        listed on a stock exchange, of warrants to purchase 100,000 shares for
        a period of two years at an exercise price which reflects the maximum
        discount for the prevailing CRS market price permitted by the policies
        of the relevant stock exchange. CRS would issue further warrants on each
        anniversary date thereafter to a maximum of warrants to purchase 300,000
        CRS shares.                                                                                                                                                                             
|   
|    | In June 2003, CRS listed on the TSX Venture Exchange
        under the name Lumina Copper Corp. ("Lumina") and accordingly, the Company
        received warrants to purchase 100,000 shares at an exercise price of $1.80
        until May 23, 2005. These warrants were exercised by the Company in October
        2003 and the related shares were then sold. In May 2004, the Company received
        warrants to purchase 100,000 shares at an exercise price of $5.80
        until May 21, 2006. These warrants were recorded as investments with an
        estimated fair value of $271,000 (using a volatility of 85%, risk
        free interest rate of 3%, dividends of nil, and an expected life of 2
        years), with an offset to exploration expenses. Subsequent to December
        31, 2004, these warrants were exercised by the Company and the related
        shares were sold.
|   

---

GREAT BASIN GOLD LTD.
  Notes to the Consolidated Financial Statements 
  Years ended December 31, 2004, 2003 and 2002 
  (Expressed in Canadian Dollars)

|    | Subsequent to December 31, 2004, the Company received
        from Lumina a further 100,000 warrants to purchase 100,000 shares at an
        exercise price of $9.22 until March 14, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | Lumina has the right to conduct exploration work
        on or in respect of the Property at its cost, or to make payments in lieu
        to keep the Property in good standing during the period of the Option.
        If Lumina elects to terminate the agreement without exercising the Option
        or allows it to lapse, Lumina must pay to Great Basin a "break fee" of
        $25,000, plus applicable taxes. If the Option is not exercised and
        is terminated, Lumina is required to pay Property holding costs for a
        minimum period of two years from the effective date of termination.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | In the event the Option is exercised and a decision
        is made to put the Property into commercial production, Lumina agreed
        to pay Great Basin $1 million, plus applicable taxes, in cash within
        30 days of that decision.                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(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 or financial resources to make further significant
        expenditures on the property. Accordingly, the property was written down
        to $1.                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | The Company continues to maintain the property in
        good standing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|6.  | Share capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(a) | Authorized share capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | The Company’s authorized share capital consists
        of an unlimited number of common shares without par value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | At the Annual and Extraordinary General Meeting
        of Shareholders held on June 22, 2004, shareholders approved the increase
        in authorized share capital from 200,000,000 common shares to an unlimited
        number of common shares.                                                                                                                                                                                                                                                                                                                                                                  

---

GREAT BASIN GOLD LTD.
  Notes to the Consolidated Financial Statements 
  Years ended December 31, 2004, 2003 and 2002 
  (Expressed in Canadian Dollars)

|(b) | Issued and outstanding common shares
|--- | ------------------------------------

| |                                                                          | Number of  |  |   |             | 
| | ------------------------------------------------------------------------ | ---------- |  | - | ----------- | 
| |                                                                          | Shares     |  |   | Amount      | 
| | Balance, December 31, 2001                                               | 38,182,137 |  | $ | 55,953,415  | 
| | Share purchase options exercised (note 6(c))                             | 179,900    |  |   | 156,018     | 
| | Share purchase warrants exercised
      (note 6(e))                      | 2,007,000  |  |   | 2,007,000   | 
| | Agent's share purchase options exercised (note
      6(e))               | 500,000    |  |   | 500,000     | 
| | Agent's share purchase warrants
      exercised (note 6(e))              | 250,000    |  |   | 250,000     | 
| | Private placement, May 2002, net of issue costs
      (note 6(f))        | 5,616,612  |  |   | 7,700,570   | 
| | Private
      placement, August 2002, net of issue costs (note 6(g))     | 125,715    |  |   | 190,815     | 
| | Balance, December 31, 2002                                               | 46,861,364 |  |   | 66,757,818  | 
| | Share purchase options exercised
      (note 6(c))                       | 3,636,600  |  |   | 5,204,175   | 
| | Fair value of stock options allocated to shares
      issued on exercise | –          |  |   | 430,000     | 
| | Share purchase warrants exercised
      (note 6(d))                      | 6,541,943  |  |   | 9,883,994   | 
| | Private placement, January 2003, net of issue
      costs (note 6(h))    | 5,600,000  |  |   | 9,416,731   | 
| | Shares issued for Burnstone
      Gold Property,                         |            |  |   |             | 
| | May 2003 (note
      5(b))                                               | 10,000,000 |  |   | 13,800,000  | 
| | Balance, December 31, 2003                                               | 72,639,907 |  |   | 105,492,718 | 
| | Fair value of stock options allocated
      to shares issued on exercise | –          |  |   | 239,915     | 
| | Share purchase options exercised
      (note 6(c))                       | 835,700    |  |   | 969,580     | 
| | Share purchase warrants exercised (note 6(d))                            | 2,137,772  |  |   | 3,859,240   | 
| | Shares issued for Burnstone
      Gold Property, January 2004            |            |  |   |             | 
| | (note 5(b))                                                              | 11,000,000 |  |   | 32,780,000  | 
| | Balance, December
      31, 2004                                         | 86,613,379 |  | $ | 143,341,453 | 

|(c) | Share option plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    | The Company has a share option plan approved by
        the shareholders that allows it to grant options, subject to regulatory
        terms and approval, to its directors, employees, officers, and consultants
        to acquire up to 14,600,000 common shares. As at December 31, 2004, 7,735,300
        of these options were outstanding, 4,671,200 had been exercised, and 2,193,500
        remained available to grant. 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.
        Options have a maximum term of ten years and terminate 30 days following
        the termination of the optionee’s employment or term of engagement,
        except in the case of retirement or death. Vesting of options is made
        at the discretion of the Board of Directors at the time the options are
        granted.
|   

---

GREAT BASIN GOLD LTD.
  Notes to the Consolidated Financial Statements 
  Years ended December 31, 2004, 2003 and 2002 
  (Expressed in Canadian Dollars)

| | The continuity of share purchase options is as follows:
| | -------------------------------------------------------

| |                            |               |            |   | Contractual   
| | -------------------------- | ------------- | ---------- | - | --------------
| |                            | Weighted      |            |   | weighted      
| |                            | average       |            |   | average       
| |                            | exercise      | Number of  |   | remaining life
| |                            | price         | options    |   | (years)       
| | Balance, December 31, 2001 | $  0.95       | 2,711,900  |   | 3.74          
| | Granted                    | $  1.44       | 4,174,800  |   |               
| | Exercised                  | $  0.87       | (179,900   | ) |               
| | Expired or cancelled       | $  1.68       | (56,700    | ) |               
| | Balance, December 31, 2002 | $  1.24       | 6,650,100  |   | 2.38          
| | Granted                    | $  1.83       | 2,667,500  |   |               
| | Exercised                  | $ 
      1.43 | (3,636,600 | ) |               
| | Balance, December 31, 2003 | $  1.39       | 5,681,000  |   | 2.20          
| | Granted                    | $  1.68       | 2,960,000  |   |               
| | Exercised                  | $  1.16       | (835,700   | ) |               
| | Cancelled                  | $ 
      2.61 | (70,000    | ) |               
| | Balance, December 31, 2004 | $ 1.52        | 7,735,300  |   | 2.07          

| | The exercise prices of all share purchase options
        granted during each year were equal to the market price at the grant date.
        Using an option pricing model with the assumptions noted below, the estimated
        fair value of all options granted during 2004 and 2003, and the estimated
        fair value of options granted to non-employees during 2002, which have
        been reflected in the consolidated statements of operations, is as follows:
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                                   |   | Year ended December 31 | 
| | ------------------------------------------------- | - | ---------------------- | 
| |                                                   |   | 2004                   | 
| | Exploration                                       |   |                        | 
| | Engineering                                       | $ | 257,905                | 
| | Environmental, socioeconomic and land             |   | 38,384                 | 
| | Geological                                        |   | 457,777                | 
| |                                                   |   | 754,066                | 
| | Operations and administration                     |   | 1,719,288              | 
| | Total compensation cost recognized in operations, |   |                        | 
| | credited to contributed surplus                   | $ | 2,473,354              | 

---

GREAT BASIN GOLD LTD.
  Notes to the Consolidated Financial Statements 
  Years ended December 31, 2004, 2003 and 2002 
  (Expressed in Canadian Dollars)

| | Had the Company used the fair value method during
        the year ended December 31, 2002 to determine compensation cost for directors,
        officers and employees, the Company's loss, and basic and diluted loss
        per share would have been as follows:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                                     |   |            |   |   | Basic and        |  
| | --------------------------------------------------- | - | ---------- | - | - | ---------------- | -
| |                                                     |   |            |   |   | diluted loss per |  
| | 2002                                                |   | Loss       |   |   | share            |  
| | As reported                                         | $ | (5,519,089 | ) | $ | (0.13            | )
| | Estimated fair value of stock-based compensation to |   |            |   |   |                  |  
| | directors,
      officers and employees             |   | (1,204,907 | ) |   | (0.03            | )
| | Pro-forma                                           | $ | (6,723,996 | ) | $ | (0.16            | )

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

| |                                  |   | 2004      |  |   | 2003      |  |   | 2002      | 
| | -------------------------------- | - | --------- |  | - | --------- |  | - | --------- | 
| | Risk free interest rate          |   | 3%        |  |   | 3%        |  |   | 3%        | 
| | Expected life                    |   | 2.6 years |  |   | 2.2 years |  |   | 2.1 years | 
| | Expected volatility              |   | 64%       |  |   | 85%       |  |   | 50%       | 
| | Expected dividends               |   | nil       |  |   | nil       |  |   | nil       | 
| | Weighted average grant date fair |   |           |  |   |           |  |   |           | 
| | value of options                 | $ | 0.83      |  | $ | 0.82      |  | $ | 0.41      | 

---

GREAT BASIN GOLD LTD.
  Notes to the Consolidated Financial Statements 
  Years ended December 31, 2004, 2003 and 2002 
  (Expressed in Canadian Dollars)

| | Options outstanding at December 31, 2004 are as follows:
| | --------------------------------------------------------

| |                      |          |  |   | Number of   |  | Number of   | 
| | -------------------- | -------- |  | - | ----------- |  | ----------- | 
| |                      | Exercise |  |   | options     |  | options     | 
| | Expiry date          | price    |  |   | outstanding |  | exercisable | 
| | January 31, 2005     | $  1.80  |  |   | 241,300     |  | 241,300     | 
| | July 29, 2005        | $  1.32  |  |   | 300,000     |  | 300,000     | 
| | July 29, 2005        | $  1.50  |  |   | 750,000     |  | 750,000     | 
| | July 29, 2005        | $  1.70  |  |   | 15,000      |  | 15,000      | 
| | September 8, 2005    | $  1.97  |  |   | 100,000     |  | 100,000     | 
| | November 30, 2005    | $  2.50  |  |   | 670,000     |  | 670,000     | 
| | November 30, 2005    | $  2.69  |  |   | 55,000      |  | 55,000      | 
| | November 30, 2005    | $  2.76  |  |   | 100,000     |  | 100,000     | 
| | January 10, 2006     | $  0.96  |  |   | 1,572,000   |  | 1,572,000   | 
| | November 30, 2005    | $  1.59  |  |   | 180,000     |  | 110,000     | 
| | November 30, 2005    | $  1.75  |  |   | 460,000     |  | 360,000     | 
| | November 30, 2005    | $  1.62  |  |   | 120,000     |  | –           | 
| | December 20, 2007    | $  1.17  |  |   | 1,072,000   |  | 1,072,000   | 
| | December 19, 2008    | $  1.62  |  |   | 2,100,000   |  | 2,100,000   | 
| | Total                |          |  |   | 7,735,300   |  | 7,445,300   | 
| |                      |          |  |   |             |  |             | 
| | Average option price |          |  | $ | 1.52        |  |             | 

|(d) | Share purchase warrants                                    
|--- | -----------------------------------------------------------
|   
|    | The continuity of the number of share purchase warrants is:
|   

|Financial statement    |   |            |   |   |          |   |   |           |   |   |            |   |            |   |           |  |            |  
|---------------------- | - | ---------- | - | - | -------- | - | - | --------- | - | - | ---------- | - | ---------- | - | --------- |  | ---------- | -
|note reference         |   | 6(e)       |   |   | 6(f)     |   |   | 5(a)      |   |   | 6(g)       |   | 5(b)(i)    |   | 5(b)(ii)  |  |            |  
|Expiry date            |   | June 3,    |   |   | Dec. 27, |   |   | August 2, |   |   | Jan. 30,   |   | April 30,  |   | Jan. 31,  |  |            |  
|                       |   | 2003       |   |   | 2003     |   |   | 2004      |   |   | 2004       |   | 2004       |   | 2005      |  |            |  
|Exercise price         | $ | 1.65       |   | $ | 1.85     |   | $ | 1.55      |   | $ | 1.80       |   | US $0.75   |   | US $0.75  |  | TOTAL      |  
|Balance, Dec. 31, 2002 |   | 5,616,612  |   |   | 125,715  |   |   | 1,000,000 |   |   | –          |   | –          |   | –         |  | 6,742,327  |  
|Issued                 |   | –          |   |   | –        |   |   | –         |   |   | 3,304,000  |   | 5,000,000  |   | –         |  | 8,304,000  |  
|Exercised              |   | –          |   |   | (125,715 | ) |   | –         |   |   | (1,416,228 | ) | (5,000,000 | ) | –         |  | (6,541,943 | )
|Expired                |   | (5,616,612 | ) |   | –        |   |   | –         |   |   | –          |   | –          |   | –         |  | (5,616,612 | )
|Balance, Dec. 31, 2003 |   | –          |   |   | –        |   |   | 1,000,000 |   |   | 1,887,772  |   | –          |   | –         |  | 2,887,772  |  
|Issued                 |   | –          |   |   | –        |   |   | –         |   |   | –          |   | –          |   | 5,500,000 |  | 5,500,000  |  
|Exercised              |   | –          |   |   | –        |   |   | (250,000  | ) |   | (1,887,772 | ) | –          |   | –         |  | (2,137,772 | )
|Expired                |   | –          |   |   | –        |   |   | (750,000  | ) |   | –          |   | –          |   | –         |  | (750,000   | )
|Balance, Dec. 31, 2004 |   | –          |   |   | –        |   |   | –         |   |   | –          |   | –          |   | 5,500,000 |  | 5,500,000  |  

| | Subsequent to December 31, 2004, the 5,500,000 outstanding warrants were
      exercised.
| | -----------------------------------------------------------------------------------------

---

GREAT BASIN GOLD LTD.
  Notes to the Consolidated Financial Statements 
  Years ended December 31, 2004, 2003 and 2002 
  (Expressed in Canadian Dollars)

| | The continuity of warrants on the consolidated balance sheets
      is as follows: |   |            |  
| | ---------------------------------------------------------------------------------- | - | ---------- | -
| |                                                                                    |   |            |  
| | Warrants, December 31, 2002                                                        | $ | 295,000    |  
| | Changes during
      2003                                                          |   |            |  
| | Warrants issued for Burnstone Gold Property (note 5(b)(i))                         |   | 2,200,000  |  
| | Exercised during 2003, credited to share capital                                   |   | (2,200,000 | )
| | Balance, December 31, 2003                                                         |   | 295,000    |  
| | Changes during
      2004:                                                         |   |            |  
| | Exercised during 2004, credited to share capital                                   |   | (73,750    | )
| | Expired during 2004, credited to contributed surplus                               |   | (221,250   | )
| | Warrants issued for Burnstone
      Gold Property (note 5(b)(ii))                  |   | 11,360,000 |  
| | Balance, December 31, 2004                                                         | $ | 11,360,000 |  

|(e) | Private placement financing, May 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    | On May 23, 2002, the Company entered into a financing
        agreement with LOM to raise up to $7.8 million by way of a private
        placement. The placement, which closed on June 3, 2002, consisted of 5,207,233
        units at a price of $1.50 per unit. A further 409,379 units of Great
        Basin were issued as a commission pursuant to this private placement,
        for a total issuance of 5,616,612 units. Each unit was comprised of one
        common share and a common share purchase warrant exercisable to purchase
        an additional share at $1.65 until June 3, 2003. These warrants expired
        unexercised.
|   
|(f) | Private placement financing, August 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|    | On August 27, 2002, the Company completed a private
        placement financing of 125,715 units at a price of $1.65 per unit.
        Each unit was comprised of one common share and a common share purchase
        warrant exercisable at $1.85 until December 27, 2003. All these warrants
        were exercised during the year ended December 31, 2003.                                                                                                                                                                                                                                                                                         
|   
|(g) | Private placement financing, January 2003                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|    | On January 30, 2003, the Company completed a private
        placement financing of 5,600,000 units at a price of $1.80 per unit.
        Each unit was comprised of one common share and one half of a common share
        purchase warrant. Each common share purchase warrant was exercisable into
        one common share at $1.80 per common share until January 30, 2004.                                                                                                                                                                                                                                                                       
|   
|    | In connection with the private placement, the Company
        granted to the agents an Option to purchase 336,000 units at $1.80
        per unit until January 30, 2004. Upon exercise of the Option, the agents
        were issued a total of 336,000 common shares, and warrants to purchase
        an additional 168,000 common shares. All of these warrants had been exercised
        by January 2004.                                                                                                                                                                                                                                         
|   

---

GREAT BASIN GOLD LTD.
  Notes to the Consolidated Financial Statements 
  Years ended December 31, 2004, 2003 and 2002 
  (Expressed in Canadian Dollars)

|(h) | Contributed surplus                                                                         
|--- | --------------------------------------------------------------------------------------------
|   
|    | The continuity of contributed surplus on the consolidated balance sheet
      is as follows:
|   

| | Balance, December 31, 2001                                           | $ | –         |  
| | -------------------------------------------------------------------- | - | --------- | -
| | Changes during 2002:                                                 |   |           |  
| | Non-cash
      stock-based compensation to non-employees (note 6(c)) |   | 374,627   |  
| | Balance, December 31, 2002                                           |   | 374,627   |  
| | Changes during 2003:                                                 |   |           |  
| | Non-cash stock-based compensation (note 6(c))                        |   | 2,131,739 |  
| | Share
      purchase options exercised, credited to share capital    |   | (430,000  | )
| | Balance, December 31, 2003                                           |   | 2,076,366 |  
| | Changes during 2004:                                                 |   |           |  
| | Warrants expired unexercised                                         |   | 221,250   |  
| | Non-cash stock-based compensation
      (note 6(c))                  |   | 2,473,354 |  
| | Share purchase options
      exercised, credited to share capital    |   | (239,915  | )
| | Balance, December
      31, 2004                                     | $ | 4,531,055 |  

The components of contributed surplus are:

| |                                                                   |   | December 31 |   |   | December 31 |  
| | ----------------------------------------------------------------- | - | ----------- | - | - | ----------- | -
| |                                                                   |   | 2004        |   |   | 2003        |  
| | Fair value of warrants issued which expired
      unexercised     | $ | 221,250     |   | $ | –           |  
| | Accumulated stock-based compensation                              |   | 4,979,720   |   |   | 2,506,366   |  
| | Share purchase
      options exercised, credited to share capital |   | (669,915    | ) |   | (430,000    | )
| | Contributed surplus                                               | $ | 4,531,055   |   | $ | 2,076,366   |  

---

GREAT BASIN GOLD LTD.
  Notes to the Consolidated Financial Statements 
  Years ended December 31, 2004, 2003 and 2002 
  (Expressed in Canadian Dollars)

|7. | Related party balances and transactions
|-- | ---------------------------------------

| | Related party
      balances receivable (payable) |   |                              |  |   | December
      31 |   |   | December 31 |  
| | ------------------------------------------------- | - | ---------------------------- |  | - | ----------------- | - | - | ----------- | -
| |                                                   |   |                              |  |   | 2004              |   |   | 2003        |  
| | Hunter Dickinson Inc.
      (a)                   |   |                              |  | $ | 4,350             |   | $ | (456,369    | )
| | Hunter Dickinson Group Inc. (a)                   |   |                              |  |   | (3,424            | ) |   | (4,879      | )
| |                                                   |   |                              |  |   |                   |   |   |             |  
| |                                                   |   |                              |  |   |                   |   |   |             |  
| | Reimbursement for
      third party expenses and  |   |                              |  |   |                   |   |   |             |  
| | services rendered                                 |   | Year ended
      December 31 | 
| |                                                   |   | 2004                         |  |   | 2003              |   |   | 2002        |  
| | Hunter Dickinson Inc.
      (a)                   | $ | 1,002,431                    |  | $ | 1,411,849         |   | $ | 463,382     |  
| | Hunter Dickinson Group Inc. (a)                   |   | 12,800                       |  |   | 22,320            |   |   | 17,735      |  
| | CEC Engineering Ltd.
      (b)                    |   | 102,372                      |  |   | 118,987           |   |   | 89,508      |  

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

| | (a) | Hunter Dickinson Inc. and Hunter Dickinson Group
        Inc. are private companies with certain directors in common with the Company,
        that provide technical, geological, corporate development, administrative
        and management services to, and incur third party costs on behalf of,
        the Company on a full cost recovery basis.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) | During the year ended December 31, 2004, the Company
        paid $102,372 to CEC Engineering Ltd., a private company owned by
        a director of the Company, for engineering and project management services
        at market rates.                                                                                                               
|

---

GREAT BASIN GOLD LTD.
  Notes to the Consolidated Financial Statements 
  Years ended December 31, 2004, 2003 and 2002 
  (Expressed in Canadian Dollars)

|8. | Income taxes                                                                                                                                                                                                                                     
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                  
|   | Substantially all of the difference between the
        actual income tax recovery of $1,924,867 (2003 – $nil) and
        the expected income tax recovery based on statutory tax rates relates
        to the benefit of losses not recognized.
|   |                                                                                                                                                                                                                                                  
|   | As at December 31, 2004 the tax effect of the significant
        components within the Company’s future tax asset (liability) were
        as follows:                                                                                          

| |                                               |   | December 31 |   |   | December 31 |  
| | --------------------------------------------- | - | ----------- | - | - | ----------- | -
| |                                               |   | 2004        |   |   | 2003        |  
| | Future income tax assets                      |   |             |   |   |             |  
| | Mineral properties                            | $ | 2,763,000   |   | $ | 6,686,000   |  
| | Loss carry forwards                           |   | 7,773,000   |   |   | 8,437,000   |  
| | Equipment                                     |   | 81,000      |   |   | 88,000      |  
| | Subtotal                                      |   | 10,617,000  |   |   | 15,211,000  |  
| | Valuation
      allowance                     |   | (10,617,000 | ) |   | (13,870,000 | )
| | Net future income tax asset                   |   | –           |   |   | 1,341,000   |  
| | Future income tax liability                   |   |             |   |   |             |  
| | Mineral properties                            |   | (18,997,000 | ) |   | (1,341,000  | )
| | Net future
      income tax asset (liability) | $ | (18,997,000 | ) | $ | –           |  

| | At December 31, 2004, the Company had available losses
        for income tax purposes in Canada totaling approximately $5.5 million
        (2003 - $6.9 million), expiring in various years from 2005 to 2011.
        The Company has available resource tax pools in Canada of approximately
        $7.4 million (2003 - $7.4 million), which may be carried forward
        and utilized to reduce future taxes related to resource income. Included
        in these resource tax pools is $2.9 million (2003 - $2.9 million)
        which is successored, and consequently can only be utilized from taxable
        income from specific mineral properties.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | At December 31, 2004, the Company had net operating
        loss carry forwards for United States income tax purposes of approximately
        US$14.2 million (2003 - US$13.6 million) which, if not utilized
        to reduce United States taxable income in future periods, expire through
        the year 2022. These available tax losses may only be applied to offset
        future taxable income from the Company’s current United States subsidiaries.
        In addition, the Company has available resource tax pools in the United
        States of approximately US$3.6 million (2003 - US$3.6 million).                                          

---

GREAT BASIN GOLD LTD.
  Notes to the Consolidated Financial Statements 
  Years ended December 31, 2004, 2003 and 2002 
  (Expressed in Canadian Dollars)

|9. | Segment disclosure                                                                                                                                                                            
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                               
|   | The Company considers itself to operate in a single
        reportable operating segment, the exploration and development of mineral
        properties. Geographic information is as follows:

| | Assets                                             |   | December 31 2004 |  |   | December 31 2003 | 
| | -------------------------------------------------- | - | ---------------- |  | - | ---------------- | 
| | Canada                                             |   |                  |  |   |                  | 
| | Assets other
      than mineral property interests | $ | 16,918,017       |  | $ | 21,211,606       | 
| | Mineral property interests                         |   | 2                |  |   | 2                | 
| |                                                    |   |                  |  |   |                  | 
| | United States                                      |   |                  |  |   |                  | 
| | Assets
      other than mineral property interests |   | 130,937          |  |   | 88,313           | 
| | Mineral property interests                         |   | 3,945,348        |  |   | 3,945,348        | 
| |                                                    |   |                  |  |   |                  | 
| | Republic of South Africa                           |   |                  |  |   |                  | 
| | Assets other
      than mineral property interests |   | 854,935          |  |   | 833,200          | 
| | Mineral property interests                         |   | 94,684,650       |  |   | 26,722,743       | 
| |                                                    |   |                  |  |   |                  | 
| | Total assets                                       | $ | 116,533,889      |  | $ | 52,801,212       | 

|10. | Differences between Canadian and United States generally accepted accounting
      principles                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | These financial statements have been prepared in
        accordance with Canadian generally accepted accounting principles ("Canadian
        GAAP"). A description of United States generally accepted accounting principles
        ("US GAAP") and rules prescribed by the United States Securities and Exchange
        Commission ("SEC") that result in material measurement differences from
        Canadian GAAP follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(a) | United States Statement of Financial Accounting Standards
        No. 123 ("SFAS 123"), "Accounting for Stock-Based Compensation",
        requires that stock-based compensation be accounted for based on a fair
        value methodology, although in certain instances it allows the effects
        to be disclosed in the notes to the financial statements rather than in
        the statement of operations. SFAS 123 also allows an entity to continue
        to measure compensation costs for stock-based compensation plans using
        the intrinsic value based method of accounting as prescribed by APB Opinion
        No. 25 ("APB 25"). To December 31, 2002, the Company had elected to measure
        compensation cost for its plans using APB 25 for US GAAP purposes. As
        a result of changes to Canadian GAAP for the year ended December 31, 2002,
        there were no material differences in the treatment by the Company with
        respect to stock based compensation under US and Canadian GAAP for the
        year ended December 31, 2002.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | United States Statement of Financial Accounting Standards
        148 ("SFAS 148"), "Accounting for Stock-Based Compensation -
        Transition and Disclosure - an amendment of FASB Statement No. 123",
        permits a company to adopt a fair value methodology on a prospective basis.
        Effective January 1, 2003, for US GAAP purposes, the Company prospectively
        adopted the fair value method of accounting for stock-based compensation,
        a treatment consistent with the accounting treatment used for Canadian
        GAAP.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

---

GREAT BASIN GOLD LTD.
  Notes to the Consolidated Financial Statements 
  Years ended December 31, 2004, 2003 and 2002 
  (Expressed in Canadian Dollars)

| | For the years ended December 31, 2004, 2003, and
        2002 there were no differences in stock-based compensation expense in
        respect of non-employee share options which would be required to be charged
        to operations under US GAAP, and therefore no differences exist. However,
        for US GAAP purposes stock-based compensation expense would be allocated
        based on the nature of the services provided.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | US GAAP requires investments in 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 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.                                                                                                                                                                                                                                                                                                                                                                                           
|   
|    | Under US GAAP, the Hecla Warrants (note 5(a)) would
        be considered derivative financial instruments and would be accounted
        for under SFAS 133, "Accounting for Derivative Instruments and Hedging
        Activities" ("SFAS 133"), until they are exercised. Once exercised,
        the shares of Hecla Mining Company received would be considered an available-for-sale
        security and would be accounted for under SFAS 115. SFAS 133 requires
        that all derivative financial instruments be recognized in the financial
        statements and measured at fair value. Changes in the fair value of a
        derivative financial instrument are charged to operations if the instrument
        does not qualify as a hedge, or other comprehensive income, a separate
        component of shareholders' equity, if it does qualify as a hedge.     
|   
|    | Under US GAAP, the Lumina warrants (note 5(c)) would
        also be considered derivative financial instruments and would be accounted
        for under SFAS 133 until they were exercised. Once exercised, the shares
        of Lumina Copper Corp. received would be considered an available-for-sale
        security and would be accounted for under SFAS 115. At December 31, 2004,
        the fair value of the Lumina warrants was estimated to be $226,000,
        and consequently, a charge of $45,000 was recorded to operations as
        a mark-to-market adjustment.                                                                                                                                                                                                                                                                                                
|   
|    | In April 2005, subsequent to the Company's year
        end, the Canadian Institute of Chartered Accountants ("CICA") issued new
        and amended accounting standards for recognition, measurement and disclosure
        of financial instruments, hedges and comprehensive income. One of the
        new standards requires companies to present comprehensive income and its
        components, as well as net income, in their financial statements. The
        new standards are effective for interim and annual financial statements
        for fiscal years beginning on or after October 1, 2006. Earlier adoption
        is permitted only as of the beginning of a fiscal year ending on or after
        December 31, 2004. Consequently, under Canadian GAAP, the Company is not
        permitted to report comprehensive income for any of the periods presented.

---

GREAT BASIN GOLD LTD.
  Notes to the Consolidated Financial Statements 
  Years ended December 31, 2004, 2003 and 2002 
  (Expressed in Canadian Dollars)

|(c) | United States Statement of Financial Accounting
        Standards No. 143 ("SFAS 143"), "Accounting for Asset Retirement Obligation",
        requires a company to record the fair value of an asset retirement obligation
        as a liability in the period in which it incurs a legal obligation associated
        with the retirement of tangible long-lived assets that result from the
        acquisition, construction, development and/or normal use of the assets.
        The company also records a corresponding asset which is amortized over
        the life of the asset. Subsequent to the initial measurement of the asset
        retirement obligation, the obligation will be adjusted at the end of each
        period to reflect the passage of time (accretion expense) and changes
        in the estimated future cash flows underlying the obligation (asset retirement
        cost).                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    | The Company has adopted SFAS 143 effective
        January 1, 2003 and has determined there is no material difference between
        Canadian GAAP and US GAAP as (i) the Company’s Ivanhoe property’s
        reclamation obligation is similar to amounts accrued under Canadian GAAP,
        (ii) the Burnstone Gold property and Casino property have indeterminable
        asset retirement obligations due to the exploration stage of such mineral
        properties, and (iii) no significant disturbance has occurred the Kirkland
        Lake property.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(d) | In August 2001, the Financial Accounting
        Standards Board ("FASB") issued Statement of Financial Accounting Standards
        No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets"
        ("SFAS 144"). SFAS 144 addresses financial accounting and reporting for
        the impairment or disposal of long-lived assets. This statement requires
        that long-lived assets be reviewed for impairment whenever events or changes
        in circumstances indicate that the carrying amount of an asset may not
        be recoverable. Recoverability of assets to be held and used is measured
        by a comparison of the carrying amount of an asset to future net cash
        flows expected to be generated by the asset. If the carrying amount of
        an asset exceeds its estimated future cash flows, an impairment charge
        is recognized in the amount by which the carrying amount of the asset
        exceeds the fair value of the asset. SFAS 144 also broadens the definition
        of discontinued operations to include all distinguishable components of
        an entity that will be eliminated from ongoing operations. The Company
        adopted SFAS 144 on January 1, 2003, on a prospective basis, and there
        are no material differences between the treatment under Canadian and US
        GAAP.
|   
|(e) | Pursuant to US GAAP, the Company would
        be considered a development stage company as the Company is devoting efforts
        to establishing commercially viable mineral properties. However, the identification
        of the Company as such for accounting purposes does not impact the measurement
        principles applied in these consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(f) | Impact of recent United States accounting
        pronouncements:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|    | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

---

GREAT BASIN GOLD LTD.
  Notes to the Consolidated Financial Statements 
  Years ended December 31, 2004, 2003 and 2002 
  (Expressed in Canadian Dollars)

| |  | accounting pursuant to APB 25 as was provided in
        the original SFAS 123. Accordingly, public entities are required to use
        the fair value of method of accounting for stock-based compensation and
        other share-based payments. This amended statement was early adopted by
        the Company by adopting the transitional provisions of SFAS 148 in fiscal
        2003. Adoption of this amended US standard does not result in a significant
        difference between Canadian GAAP and US GAAP.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)  | During 2004, FASB issued Statement of Financial
        Accounting Standards No. 153 "Exchanges of Nonmonetary Assets",
        which amends Opinion 29 to eliminate the exception for nonmonetary exchanges
        of similar productive assets and replaces it with a general exception
        for exchanges of nonmonetary assets that do not have commercial substance.
        Adoption of this standard is not expected to have a material effect on
        the Company’s consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (iii) | At December 31, 2004, for US GAAP purposes, the
        Company adopted FASB Interpretation No. 46R, "Consolidation of Variable
        Interest Entities" ("FIN 46R"). Pursuant to FIN 46R, under US GAAP
        the Company is required to consolidate variable interest entities ("VIEs"),
        where it is the entity’s Primary Beneficiary. VIEs are entities
        in which equity investors do not have the characteristics of a controlling
        financial interest or do not have sufficient equity at risk for the entity
        to finance its activities without additional subordinated financial support
        from other parties. The Primary Beneficiary is the party that has exposure
        to a majority of the expected losses and/or expected residual returns
        of the VIE. To December 31, 2004, there has been no impact on the Company's
        consolidated financial statements from the adoption of FIN 46R.

---

GREAT BASIN GOLD LTD.
  Notes to the Consolidated Financial Statements
  Years ended December 31, 2004, 2003 and 2002
  (Expressed in Canadian Dollars)

The effect of the above differences between Canadian GAAP
  and US GAAP on the Company's consolidated balance sheets and consolidated statements
  of operations and deficit is summarized as follows:

|                                                                 |   | As at        |   |   | As at        |  
|---------------------------------------------------------------- | - | ------------ | - | - | ------------ | -
|                                                                 |   | December 31, |   |   | December 31, |  
|Consolidated Balance Sheets                                      |   | 2004         |   |   | 2003         |  
|                                                                 |   |              |   |   |              |  
|Total Assets                                                     |   |              |   |   |              |  
|Total Assets under Canadian GAAP                                 | $ | 116,533,889  |   | $ | 52,801,212   |  
|Adjustments under US GAAP                                        |   |              |   |   |              |  
|Mark-to-market adjustment on warrants                            |   | (45,000      | ) |   | –            |  
|Total assets
      under US GAAP                                 | $ | 116,488,889  |   | $ | 52,801,212   |  
|                                                                 |   |              |   |   |              |  
|Total liabilities under Canadian and US GAAP                     | $ | 19,749,166   |   | $ | 818,176      |  
|                                                                 |   |              |   |   |              |  
|Share capital and contributed surplus under Canadian GAAP        | $ | 147,872,508  |   | $ | 107,864,084  |  
|Adjustments under US GAAP:                                       |   |              |   |   |              |  
|Stock-based compensation (a)                                     |   | 2,658,000    |   |   | 2,658,000    |  
|Share capital and contributed surplus under US GAAP              | $ | 150,530,508  |   | $ | 110,522,084  |  
|                                                                 |   |              |   |   |              |  
|Deficit under Canadian GAAP                                      | $ | (62,447,785  | ) | $ | (55,881,048  | )
|Adjustments under US GAAP:                                       |   |              |   |   |              |  
|Stock-based compensation
      (a)                               |   | (2,658,000   | ) |   | (2,658,000   | )
|Mark-to-market adjustment
      on warrants (b)                  |   | (45,000      | ) |   | 727,000      |  
|Reduction of gain on sale
      of investments due to prior year |   |              |   |   |              |  
|mark-to-market adjustment (b)                                    |   | –            |   |   | (727,000     | )
|Deficit under US GAAP                                            | $ | (65,150,785  | ) | $ | (58,539,048  | )

|                                                      |   | Year ended   |  |   | Year ended   |  |   | Year ended   |  
|----------------------------------------------------- | - | ------------ |  | - | ------------ |  | - | ------------ | -
|                                                      |   | December 31, |  |   | December 31, |  |   | December 31, |  
|Consolidated Statements of Operations                 |   | 2004         |  |   | 2003         |  |   | 2002         |  
|Loss for the year under Canadian GAAP                 | $ | 6,566,737    |  | $ | 7,496,507    |  | $ | 5,519,089    |  
|Adjustments under US GAAP:                            |   |              |  |   |              |  |   |              |  
|Mark-to-market
      adjustment on warrants (b)       |   | 45,000       |  |   | –            |  |   | (727,000     | )
|Reduction of gain on
      sale of investments due to |   |              |  |   |              |  |   |              |  
|prior
      year mark-to-market adjustment (b)        |   | –            |  |   | 727,000      |  |   | –            |  
|Loss for the year under US GAAP                       | $ | 6,611,737    |  | $ | 8,223,507    |  | $ | 4,792,089    |  
|                                                     
|Basic and diluted loss per share for the year under   |   |              |  |   |              |  |   |              |  
|US GAAP                                               | $ | 0.08         |  | $ | 0.14         |  | $ | 0.11         |  

There are no material differences between Canadian GAAP and
  US GAAP in the consolidated statements of cash flows for the years ended December
  31, 2004, 2003, and 2002.

---