---

| | MANAGEMENT'S
      DISCUSSION AND ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

|1.1  | DATE                                                        | 2 
|---- | ----------------------------------------------------------- | --
|     |                                                             |   
|     | 1.2 OVERVIEW                                                | 2 
|     |                                                             |   
|     | 1.2.1 HOLLISTER PROPERTY, NEVADA, USA                       | 4 
|     |                                                             |   
|     | 1.2.2 BURNSTONE PROPERTY, MPUMALANGA PROVINCE, SOUTH AFRICA | 10
|     |                                                             |   
|     | 1.2.3 CASINO PROPERTY, YUKON, CANADA                        | 14
|     |                                                             |   
|     | 1.2.4 GANES CREEK PROPERTY, ALASKA, USA                     | 14
|     |                                                             |   
|     | 1.2.5 TSETSERA PROPERTY, MOZAMBIQUE                         | 15
|     |                                                             |   
|     | 1.2.6 RUSAF GOLD LIMITED, TANZANIA                          | 16
|     |                                                             |   
|     | 1.2.7 KRYSO RESOURCES PLC                                   | 17
|     |                                                             |   
|     | 1.2.8 MARKET TRENDS                                         | 17
|     |                                                             |   
|1.3  | SELECTED ANNUAL INFORMATION                                 | 18
|     |                                                             |   
|1.4  | SUMMARY OF QUARTERLY RESULTS                                | 19
|     |                                                             |   
|1.5  | RESULTS OF OPERATIONS                                       | 20
|     |                                                             |   
|1.6  | LIQUIDITY                                                   | 21
|     |                                                             |   
|1.7  | CAPITAL RESOURCES                                           | 23
|     |                                                             |   
|1.8  | OFF-BALANCE SHEET ARRANGEMENTS                              | 23
|     |                                                             |   
|1.9  | CONTRACTUAL OBLIGATIONS                                     | 23
|     |                                                             |   
|1.10 | TRANSACTIONS WITH RELATED PARTIES                           | 24
|     |                                                             |   
|1.11 | FOURTH QUARTER                                              | 24
|     |                                                             |   
|1.12 | PROPOSED TRANSACTIONS                                       | 25
|     |                                                             |   
|1.13 | CRITICAL ACCOUNTING ESTIMATES                               | 26
|     |                                                             |   
|1.14 | CHANGES IN ACCOUNTING POLICIES INCLUDING INITIAL ADOPTION   | 27
|     |                                                             |   
|1.15 | NEW ACCOUNTING PRONOUNCEMENTS                               | 29
|     |                                                             |   
|1.16 | FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS                 | 31
|     |                                                             |   
|1.17 | OTHER MD&A REQUIREMENTS                                     | 31
|     |                                                             |   
|     | 1.17.1 DISCLOSURE OF OUTSTANDING SHARE DATA                 | 31
|     |                                                             |   
|     | 1.17.2 DISCLOSURE CONTROLS AND PROCEDURES                   | 32
|     |                                                             |   
|     | 1.17.3 INTERNAL CONTROL OVER FINANCIAL REPORTING            | 33

1

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

1.1        Date

This Managements Discussion and Analysis ("MD&A") should
be read in conjunction with the audited consolidated financial statements of
Great Basin Gold Ltd. ("Great Basin", or the "Company") for the year ended
December 31, 2007 which are prepared in accordance with Canadian Generally
Accepted Accounting Principles and are available through the internet on SEDAR
at www.sedar.com. All dollar amounts herein are expressed in Canadian Dollars
unless stated otherwise.

This MD&A is prepared as of March 31, 2008.

This discussion includes certain statements that may be
      deemed "forward-looking statements" and information. These forward-looking statements constitute "forward-looking statements" within
      the meaning of Section 27A of theSecurities Act of 1933andSection 21E of theSecurities Exchange Act
      of 1934.All statements in this discussion, other than statements
      of historical facts, that address future production, reserve potential,
      exploration drilling, exploitation activities and events or developments
      that the Company expects to take place in the future are forward-looking
      statements and information. Although the Company believes the expectations
      expressed in such forward-looking statements and information are based on
      reasonable assumptions, such statements are not guarantees of future
      performance and actual results or developments may differ materially from
      those in the forward-looking statements and information. Factors that
      could cause actual results to differ materially from those in
      forward-looking statements include market prices, exploitation and
      exploration successes, drilling and development results, continued
      availability of capital and financing and general economic, market or
      business conditions. Investors are cautioned that any such statements are
      not guarantees of future performance and actual results or developments
      may differ materially from those stated herein.


Cautionary Note to
      Investors Concerning Estimates of Measured and Indicated ResourcesThis management discussion and analysis uses the term
      measured resources and indicated resources. The Company advises
      investors that while those terms are recognized and required by Canadian
      regulations, the U.S. Securities and Exchange Commission does not
      recognize them. Investors are cautioned not to assume that any part or
      all of mineral deposits in thesecategories will ever be converted
      into reserves.


Cautionary Note to
      Investors Concerning Estimates of Inferred ResourcesThis management discussion and analysis uses the term
      inferred resources. The Company advises investors that while this term
      is recognized and required by Canadian regulations, the U.S. Securities
      and Exchange Commission does not recognize it. Inferred resources have a
      great amount of uncertainty as to their existence, and as to their
      economic and legal feasibility. It cannot be assumed that all or any part
      of a mineral resource will ever be upgraded to a higher category. Under
      Canadian rules, estimates of Inferred Mineral Resources may not form the
      basis of economic studies, except in rare cases. Investors are
      cautioned not toassume that any part or all of an inferred
      resource exists, or is economically or legally mineable.


1.2         Overview

Great Basin Gold Limited ("Great Basin" or the "Company") is
  a mineral exploration company that is currently focused on two advanced stage
  projects: Hollister Development Block (HDB) Project, which
  covers about 5% of the Hollister Property on the Carlin Trend in Nevada, USA
  and the Burnstone Gold Projectin the Witwatersrand goldfields in South
  Africa.

2

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

The main activities by the Company in the year ended December
  31, 2007 were:

Hollister Property

- Completion of the purchase of the earn-in interest of Hecla Mining Company
      in the Hollister Development Block Project for US$60 million;
- Completion of financing that raised a gross amount of $150 million for
      the Company, to purchase Heclas earn-in interest on the Hollister
      Development Block and the funding of continued exploration and development
      at the HDB;
- Completion of the Hollister Feasibility Study. Results of the study indicate
      robust returns for a 400 ton per day underground operation and a 6 year
      mine life. Ongoing drilling at Hollister continues to return excellent results,
      indicating the potential to increase both the production rate and life of
      mine of the project.

- Completion of the transition of services and management from Hecla to the
      Company at the Hollister Development Block Project.
- Continuation of the development of the Hollister Project, making progress
      with permits and completing a further 2,346 ft (715 m) pre-development in
      final quarter of 2007, totaling 13,000 ft (3,962 m) for the project to date.

Burnstone Property

- Completion of the Black Economic Empowerment Transaction on the Burnstone
  Project.
- Announcement of an increase in mineral resources at Burnstone.
- Announced results of the optimization of the May 2006 Burnstone Feasibility
  Study, indicating a 19% increase in annual average production to 254,000
  ounces per annum.
- Completion of 4,209 ft (1,283 m) of the 7,590 ft (2,314 m) underground
  decline at Burnstone in South Africa (total metres achieved, including all
  secondary pre-development, is 5,016 ft (1,529 m)) The reef will be intercepted
  at 7,040 ft (2,146 m).
- The Department of Minerals and Energy (DME) acknowledged receipt of the
  application for a mining right by the Burnstone Project. The processing
  thereof is underway.

Corporate

- Completion of the appointment of senior management at both Hollister and
      Burnstone operations.
- Entered into a transaction to acquire 37% of the outstanding shares of
      Rusaf Gold Ltd (Rusaf) for total consideration of $12 million,
      payable $8 million cash and $4 million in Great Basin common shares. Rusaf,
      or its subsidiaries, hold prospecting rights in Tanzania and Russia. Subsequent
      to this transaction, on February 14, 2008, Great Basin announced that it
      had entered into an agreement whereby Great Basin will acquire the total
      remaining share capital of Rusaf for a total consideration of $14.4 million,
      payable in approximately 4.9 million Great Basin Gold common shares.

3

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

- Receipt of a settlement of $1 million in cash from CRS Copper Resources
      Inc., a subsidiary of Western Copper Corp., to exercise its option and acquire
      the Companys 100% working interest in the Casino property in Yukon,
      Canada.
- Great Basin signed a Letter of Intent (LOI) on June 8, 2007,
      whereby the Company can earn an 80% interest in all hard rock mineral rights
      on the Ganes Creek Property in Alaska by expending a total of US$ 3 million
      in exploration expenditures over a period of 3 years. The Ganes Creek Property
      is held by CW Properties LLC. (CWM), based in Talkeetna, Alaska,
      USA.
- The Company entered into an unincorporated Joint Venture agreement on July
      11, 2007 with GS Minase Refnaria Limitade (GSR). The purpose
      of the Joint Venture is to establish a gold exploration and mining business
      in Mozambique, whereby the Company will have the exclusive right to earn
      in up to 80% into all GSRs properties.

During 2008 the Company will continue looking at other ways to
  expand the asset and production base of the company.

The Company also expects to reach development milestones at Hollister
  and Burnstone:

- At Hollister, production is expected to begin during the second quarter.
    The production is currently limited to 120,000 oz under current permitting
    over a period of 5 years, 80,000 oz of which is expected to be attained in
    2008.

- At Burnstone, current permitting allows for the completion of the bulk
      sample at Burnstone and to the next stage of development inclusive of the
      sinking of a second outlet in the form of a vertical shaft. Full commercial
      production is, however, subject to the granting of a mining right by the
      South African Department of Minerals and Energy. The application for the
      mining right was submitted in September 2007 and accepted by the DME. The
      processing and approval of an application for a mining right by the DME
      generally takes approximately 12 months to complete.

1.2.1    Hollister Property, Nevada, USA

The Hollister Property is located in the northeastern part of
the Carlin Trend, approximately 80 km (50 mi) from Elko, Nevada. Great Basins
exploration efforts at Hollister from 1997-2001 resulted in the discovery and
delineation of several high-grade gold-silver vein systems on the HDB. The main
vein systems are called the Clementine, Gwenivere and South Gwenivere.

Purchase of Hecla Interest in the HDB

Pursuant to Earn-In and Joint Operating Agreements entered into
in August 2002 between Great Basin and Hecla Mining Company, Hecla could vest in
a 50% working interest in the HDB.

On February 21, 2007, the Company announced that it would purchase
  Heclas interest in the HDB which was held by Heclas subsidiary,
  Hecla Ventures Corporation (HVC), for a total consideration of US$60 million
  comprising US$45 million in cash and US$15 million in Great Basin common shares
  (approximately 7.93 million shares). Great Basin conducted a public offering
  of its shares to finance the purchase, fund ongoing exploration programs and
  provide working capital. The public offering closed and the HVC transaction
  was completed on April 19, 2007.

4

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

The appointment of the Senior Management Team has been completed
  and the continued development of the project is progressing well. Hollister
  obtained a permit for a second decline and an escape raise. The escape raise
  will serve as a second outlet and is a prerequisite for the commissioning of
  stoping activities. Development is continuing and the development of the escape
  raise has commenced.

May 2007 Resource Estimate for the HDB

A first phase 55,000 ft (16,750 m) underground drilling program
  was completed over the twelve months ending February 2007. The program intersected
  high grade gold and silver values over expected widths. Several new veins were
  also discovered.

Drilling was done at 100 ft (30 m) spacing. A resource estimate
  was announced in May 2007, as tabulated below:

RESOURCE CATEGORY
      Cut-Off Au oz/ton
      TONS
      TONNES
      GRADE Au oz/ton
      GRADE Au g/t
      OUNCES Au
      GRADE Ag oz/ton
      GRADE Ag g/t
      OUNCES Ag
      Ounces Au EquivalentMEASURED
      0.25
      560,000
      508,000
      1.04
      35.77
      584,000
      6.09
      208.91
      3,413,000
      646,0000.35
      448,000
      406,000
      1.23
      42.20
      551,000
      6.98
      239.27
      3,124,000
      608,000INDICATED
      0.25
      343,000
      311,000
      1.00
      34.45
      344,000
      5.09
      174.58
      1,744,000
      376,0000.35
      280,000
      254,000
      1.16
      39.87
      326,000
      5.78
      198.13
      1,618,000
      355,000MEASURED & INDICATED
      0.25
      903,000
      819,000
      1.03
      35.32
      929,000
      5.71
      195.77
      5,157,000
      1,022,0000.35
      728,000
      660,000
      1.20
      41.30
      877,000
      6.52
      223.54
      4,742,000
      962,000INFERRED
      0.25
      805,000
      731,000
      1.08
      37.13
      872,000
      3.94
      134.92
      3,169,000
      930,0000.35
      627,000
      569,000
      1.31
      44.85
      820,000
      4.32
      148.11
      2,707,000
      869,000


|Notes: | (1) Mineral resources that are not mineral reserves do
      not have demonstrated economic viability.                                                   
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|       | (2) Gold equivalent in table above was calculated by
      using the following metal prices: US$550/oz Au and US$10/oz Ag.                               
|       | No metal recoveries have been
      applied.                                                                                                             
|       | (3) Highlighted cut-off 0.25 oz/ton was used in a 2006
      preliminary assessment. Final cut-off and recoveries are subject to
      feasibility study.

The mineral resources were estimated by a combination of
kriging and inverse distance by G.J. van der Heever, Pr.Sci.Nat., of Geologix
Mineral Resource Consultants (Pty) Ltd., an independent Qualified Person. A
National Instrument 43-101 technical report has been filed on www.sedar.com.

Bulk Sampling

Drifting on the veins continues. The material is extracted and
  stockpiled on surface. A 5,000-ton, bulk sample was trucked to a facility owned
  by Newmont Mining Company in April 2007 for test milling. Good recoveries were
  obtained and 2,090 oz of gold and 24,050 oz of silver (2,527 oz gold equivalent1)
  were recovered.

_______________________________________________1
Gold equivalent is based on metal prices of US$550/oz for gold and US$10/oz for
silver and recoveries of 90% for gold and 80% for silver.

5

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

An additional 3,100-ton bulk sample was trucked to Jerritt Canyon
  process facility for milling and gold recovery in September 2007 in terms of
  an agreement for purchase and sale of ore. This agreement provides for the non-exclusive
  selling of up to 20,000 tons of ore.

The sample had a head grade of 0.708 oz (24.28 g/t) of gold per
  ton and 6 oz (205.72 g/t) of silver per ton, delivering 1,976 oz of gold and
  14,835 oz of silver, or a total of 2,246 equivalent gold ounces.1

Although the agreement for purchase and sale of ore provides
  for the extension of the agreement within a month of the completion of the processing
  of the 20,000 tons of ore, the extension is subject to negotiations in good
  faith to conclude a further agreement.

Hollister Feasibility Study

On July 12, 2007, the results of a feasibility study were announced
  for a 400 ore tons per day underground operation, mining the high-grade gold-silver
  mineralization from the Gwenivere, Clementine and South Gwenivere vein systems
  and trucking it to an off-site toll milling facility.

Using, a gold price of US$550/oz and a silver price of US$10.00/oz,
  the pre-tax results from the study indicate a very robust 105.6% pre-tax internal
  rate of return (IRR) and net present value (NPV)of US$122.9
  million (5% discount rate). The key parameters and results are summarized in
  the table below:

Proven and probable reserves 
        At 0.28 oz/ton cut-off
      868,500 tons grading 1.01 oz/ton gold and 
        4.3 oz/ton silverProduction Rate
      400
        ore tons/dayRecoveries
      90% gold 
        80% silverAverage Annual Production
      150,000 oz gold equivalent1Life of Mine Production (recovered)
      834,000 oz gold 
        3,663,000 oz silverStart up Capital
        Cost
      $52
        millionOperating Costs Mining Toll milling Trucking
      General & Administration
    $175/ton $42/ton $29/ton
      $28/tonCash Cost
    $214/equivalent oz1Total Cost
    $282/equivalent oz1Life of Mine
    6
      yearsPayback
    1.5
      yearsInternal
      Rate of Return
    105.6%Net Present
      Value (5% discount rate)
    $122.9 million


1Gold equivalent is
calculated using the above gold and silver prices and the formula: Au-eq oz
= Au oz + (Ag oz x Ag price/Au price)

At a gold price of US$650/oz, the NPV of the project at a 5%
discount rate increases to $185 million and the IRR to 155%.

The feasibility study was completed by consultants under the
  supervision of Johan Oelofse, P.Eng., and Chief Operating Officer of Great Basin
  and reviewed by Associated Geoscience Ltd (AG). The independent qualified person
  for the National Instrument 43-101 is Peter Cain, Ph.D, P.Eng, of AG. Additional
  details can be found in the Companys news release of that date or in the
  technical report for the study was filed on www.sedar.com.

6

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

|All information contained in this management
        discussion relating to the contents of the Feasibility Study, including
        but not limited to statements of the Hollister project's potential and
        information such as capital and operating costs, production summary, and
        financial analysis, are "forward looking statements" within the definition
        of the United States Private Securities Litigation Reform Act of 1995.
        The Feasibility Study was prepared to quantify the Hollister project's
        capital and operating cost parameters and to determine the project's likelihood
        of feasibility and optimal production rate. The capital and operating
        cost estimates which were used have been developed based on detailed capital
        cost to production level relationships. 
        The following are the principal risk factors and uncertainties which,
        in management's opinion, are likely to most directly affect the ultimate
        feasibility of the Hollister project. The mineralized material at the
        Hollister project is currently classified as a measured and indicated
        resources, and a portion of it qualifies under Canadian mining disclosure
        standards as a proven and probable reserve, but readers are cautioned
        that no part of the Hollister project's mineralization is yet considered
        to be a reserve under US mining standards as all necessary mining permits
        would be required in order to classify the project's mineralized material
        as an economically exploitable reserve. Although final feasibility work
        has been done to confirm the mine design, mining methods and processing
        methods assumed in the Feasibility Study, construction and operation of
        the mine depend on securing environmental and other permits on a timely
        basis. Authorization has been received for bulk sampling. Additional permits
        have yet to be applied for and there can be no assurance that required
        permits can be secured or secured on a timely basis. Although costs, including
        design, procurement, construction and on-going operating costs and metal
        recoveries have been established at a level of detail required for a feasibility
        study, the actual amounts could be materially different from those contained
        in the Feasibility Study. The proposed operation would rely on third party
        toll treating and ore purchasing agreements for metal recoveries. There
        can be no assurance that the infrastructure facilities can be accessed
        on a timely and cost-effective basis. Energy risks include the potential
        for significant increases in the cost of fuel and electricity. The Feasibility
        Study assumes specified, long-term prices levels for gold. The price of
        this metal is historically volatile, and the Company has no control of
        or influence on its price which is determined in international markets.
        There can be no assurance that the price of gold will continue at current
        levels or that it will not decline below the prices assumed in the Feasibility
        Study. Prices for gold have been below the price ranges assumed in Feasibility
        Study at times during the past ten years, and for extended periods of
        time. The project may require additional financing, probably a combination
        of debt and equity financing. Although interest rates are at historically
        low levels, there can be no assurance that debt and/or equity financing
        will be available on acceptable terms. Other general risks include those
        ordinary to large construction projects, including the general uncertainties
        inherent in engineering and construction cost, the need to comply with
        generally increasing environmental obligations, and accommodation of local
        and community concerns.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Underground Drilling

The Phase one drilling tested to an average depth of only 500
  ft (150 m) below the upper contact of the Ordovician host rocks of the veins
  systems.

Drilling in phase two (resources expansion) has intersected mineralization
  at an approximate depth of 920 ft (280 m) below the contact. This is being followed
  up with more drilling at depth. In addition, the current drilling is testing
  parallel veins and lateral extensions to the known vein systems. The Phase 2
  program was completed in mid November. New results announced at that time are
  tabulated below.

Vein System
      Drill Hole
        ID
      Significant InterceptsVein Intersection(ft)
      **Sample
        Interval** **(ft)**
      Drilled
        Thickness **(ft)**
      Est. True
        Width (ft)
      Analytical
        ResultsFrom
      To
      From
      To
      
      
      Au (oz/t)
      **Au (g/t)**
      **Ag (oz/t)**
      Ag (g/t)Clementine
      HDB-183
      No significant vein interceptsClementine
      HDB-184
      192.0
      195.3
      192.0 194.0
      194.0 195.3
      3.3 2.0 1.3
      3.1 1.9 1.2
      0.486 0.167 0.942
      16.06 5.69 32.02
      11.06 0.80 27.08
      379.1 27.1 920.7Exploration
      HDB-185
      No significant vein interceptsExploration
      HDB-186
      No significant vein interceptsClementine
      HDB-187
      No significant vein interceptsGwenivere
      HDB-188
      No significant vein interceptsGwenivere
      HDB-189
      511.9
      512.4
      
      0.5
      0.4
      0.346
      11.86
      13.83
      498.0


7

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

|Vein System           | Drill Hole ID                      | Significant Intercepts                                                 
|--------------------- | ---------------------------------- | -----------------------------------------------------------------------
|Vein Intersection(ft) | **Sample
      Interval** **(ft)** | Drilled Thickness
      **(ft)**                                       
|                      |                                    | From                                                                   
|Gwenivere             | HDB-190                            | 130.1 140.0 207.4
      324.0 342.4                                    
|Gwenivere             | HDB-191                            | 81.0 321.2                                                             
|Gwenivere             | HDB-192                            | 276.0                                                                  
|Gwenivere             | HDB-193                            | 159.6 212.0 267.9                                                      
|Gwenivere             | HDB-194                            | 114.2 167.0 196.5
      272.0 284.7 311.3 338.0
      367.2 410.0 553.5
|Exploration           | HDB-195A                           | 347.5                                                                  
|Clementine            | HDB-196                            | 107.9 221.0 252.0                                                      
|Clementine            | HDB-197                            | 188.5                                                                  
|Clementine            | HDB-198                            | No significant intercepts                                              
|Clementine            | HDB-199                            | 171.7 245.7                                                            
|Clementine            | HDB-200A                           | *No preliminary significant
      intercepts: Awaiting assay returns.* 

The Company initiated further drilling programs to confirm and
  expand on the good results achieved to date. The programs are described below
  and commenced in the fourth quarter.

8

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

- A further 29,000 ft (8,800 m) of in-fill drilling from underground will
      target areas mainly within the current delineated Gwenivere and Clementine
      vein structures, to boost the increase resources and the confidence of the
      mineral resources; and
- An additional 58,000 ft (17,700 m) underground drilling is designed to
      rapidly test the depth extension of the known resources and to bring any
      new resources to as high a confidence level as possible. Currently mineralization
      has only been outlined to an average depth of approximately 200 meters below
      the Ordovician unconformity.

Surface Drilling

Ongoing surface exploration has been testing targets defined
  by historical drilling as well as more recent geophysical resistivity surveys.
  Gold intercepts in drill hole H7-246 are in an unexplored area within the Hatter
  Zone. These results have renewed interest in this area and resulted in the identification
  of additional targets that will be tested by drilling. Results from the surface
  exploration are confirming both the prospectivity of the entire Hollister property.

Vein System
      Drill Hole ID
      Description
      Sample Interval **(ft)**
      Drilled Thickness (ft)
      Analytical ResultsFrom
      To
      Au (oz/t)
      Au (g/t)
      Ag (oz/t)
      Ag (g/t)Hatter
      H6-222
      Stockwork
      1077.6
      1080.4
      2.8
      0.184
      6.308
      0.16
      5.7Hatter
      H6-222
      Veinlets
      1377.0
      1384.6
      7.6
      0.188
      6.43
      0.933
      33.96Hatter Graben
      H7-246
      Pre-collar
      40
      45
      5.0
      1.206
      41.348
      0.13
      4.3Hatter Graben
      H7-246
      Veinlets
      1898.4
      1902.2
      3.8
      1.148
      39.359
      P
      P


P = Pending

Additional surface exploration commenced during the fourth quarter
  of 2007, encompassing 78,000 ft (23,800 m) of drilling, mainly testing anomalous
  zones defined by historical drill data within an approximate 1 mile (1.6 km)
  radius of the current underground infrastructure. These areas are located in
  the Hatter Zone to the east of the current decline infrastructure, where a number
  of historical drill-defined anomalies still remain to be tested.

Plans for 2008

The Company will continue with the development and delivery of
  the Hollister Project, which is planned to produce some 80 000 to 100 000 ounces
  in 2008. Actual development activities are well underway to achieve this. Capital
  Expenditure of approximately US$34 million is planned for the period. The Company
  also plans to incur operating costs of US$28 million at these operations for
  an average of US$400/oz for the period.

With regard to exploration activities, the Company plans to incur
  expenditure of approximately US$ 14 million during 2008. The focus of the exploration
  program would be to continue with infill drilling from the lateral underground,
  drilling at depth and strike to determine the extent of the vein system at the
  HDB, as well as surface drilling activities in and outside the HDB, on prospective
  target areas that were previously demarcated.

9

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

1.2.2     Burnstone Property, Mpumalanga
  Province, South Africa

The Burnstone Property is in the South Rand area of the Witwatersrand
  goldfields located approximately 50 mi (80 km) southeast of Johannesburg, near
  the town of Balfour. The property lies in open, rolling countryside that has
  excellent infrastructure, including paved highways, railroads and power lines.

Black Economic Empowerment

Great Basin closed the Subscription and Acquisition Agreement
  on October 1, 2007 between Great Basin and Tranter Gold (Proprietary) Limited
  (Tranter Gold), which had been entered into on August 8, 2007.

Tranter Burnstone (Proprietary) Limited (Tranter Burnstone),
  a subsidiary of Tranter Gold, subscribed for 812 new ordinary shares in Southgold
  Exploration (Proprietary) Limited (Southgold), a wholly-owned subsidiary
  of Great Basin, for a purchase consideration of $38 million (R260 million) in
  cash, which, following the issue and allotment of the new Southgold shares,
  constituted 26% of the entire issued share capital of Southgold. Following the
  implementation of the Southgold subscription, N6C Resources Inc., a wholly-owned
  subsidiary of Great Basin, purchased the new Southgold shares from Tranter Burnstone
  in exchange for the issue of 19,938,650 new common shares in Great Basin to
  Tranter Burnstone. There is an agreed lock-up period of at least 3 years during
  which Tranter cannot trade the Great Basin shares. The total purchase consideration
  amounted to $38 million (ZAR260 million). Resulting from this transaction, Tranter
  Gold being the shareholder of 75% of the issued share capital in Tranter Burnstone,
  became entitled to appoint a director to the boards of both GBG and Southgold
  for as long as it holds a qualifying shareholding in GBG. Tranter Gold is further
  prohibited from disposing of the GBG shares or doing anything else that might
  impact on the BEE credentials of Southgold for the period of three years or
  such longer period for which Southgold requires BEE equity participation in
  order for its prospecting and mining rights to remain valid.

In addition to the issuance of the 19,938,650 new common shares
  in Great Basin, 1,684,312 Great Basin warrants were issued to the parties involved
  with the transaction. These warrants are exercisable within three years and
  are subject to a mandatory conversion should the Great Basin share price reach
  $7 (ZAR45.72) .

On October 1, 2007 Investec advanced an amount of ZAR 200 million
  to Tranter Burnstone for the exclusive purpose of subscribing for the Southgold
  shares. The security for the loan comprised amongst others a loan guarantee
  in terms of which N5C Resources Inc, N6C Resources Inc or Rodeo Creek Gold Inc
  (all wholly-owned subsidiaries of the Company) is obliged in the event of default
  by Tranter Burnstone on any of its interest repayments to Investec at any time
  in the first four years to lend not more than ZAR 80 million to Tranter Burnstone
  (Refer 1.2.2) . This guarantee pertains only to the interest accrued on the
  amount advanced by Investec to Tranter and will not exceed ZAR 80 million.

The issue and allotment of the new Great Basin shares, constitutes
  approximately 9.3% of the issued share capital of Great Basin on a fully diluted
  basis.

In October 2000 Southgold entered into a Prospecting Agreement
  with, amongst others, GFL Mining Services Limited (a subsidiary of Gold Fields
  Limited) (GFL) in terms of which Southgold was entitled to prospect
  for minerals on certain mineral rights owned by GFL and in terms of which Southgold
  was granted an option to acquire these mineral rights.

10

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

Southgold exercised the option to acquire the mineral rights
  and the consideration was payable in a cash component (on date of acquisition)
  of $6.4 million (ZAR33.5 million) and a net smelter royalty component payable
  on any gold extracted from the acquired mineral rights.

As part of the BEE transaction, Southgold entered into the
  Memorandum of Agreement in terms of which Southgold paid $11.6 million (ZAR80million)
  to GFL in full and final settlement of the net smelter royalty payable in terms
  of the Prospecting Agreement. The value of this net smelter royalty was calculated
  on net present values prevailing at the date of the transaction framework agreement
  and agreed upon by Southgold and GFL.

By concluding this BEE transaction, Great Basin complied with
  the provisions of section 22 of the Mineral and Petroleum Resources Development
  Act, 2002, which enabled the company to submit its application for the Mining
  Rights over the Burnstone Project, which was submitted in September 2007.

The Department of Minerals and Energy (DME) acknowledged
  receipt of the application for a mining right and the processing thereof is
  underway. The processing and granting of an application for a mining right by
  the DME takes in the order of 12 months to complete.

Underground Development

The positive results of a Feasibility Study on a portion of
  the property called Area 1 were announced in May 2006. The first of a two-stage
  development program began in July 2006 with the development of an access decline.
  Work is ongoing; to the end of this quarter approximately 4,209 ft (1,283 m)
  of the planned 7,590 ft (2,314 m) of decline development were completed. Once
  completed a bulk sampling of 27 million tons is planned. The phase one program
  (bulk sampling) is scheduled for completion in the second half of 2008.

Optimisation of Feasibility Study

Since the initial feasibility report filed in May 2006, additional
  surface exploration drilling and mine planning has taken place. Inclusion of
  Area 2 for consideration of mining, and expansion of Area 1 have increased the
  available ounces of gold that can be accessed for development and extraction
  at the Burnstone Project from 2.4 million ounces to 3.5 million ounces, an increase
  of 46%.

An Optimisation of the May 2006 Feasibility Study was completed
  in June 2007, based on mineral resources in Area 1 and 2 as estimated to January
  2007. In the Optimisation study, Area 1 was reevaluated, the mine design was
  improved and proven technology incorporated. This mining region is planned to
  be accessed through a single decline for personnel and equipment with a vertical
  shaft with a depth of 1,625 ft (495 m) being used for the hoisting of ore and
  waste. The Area 2 will be accessed through a twin decline for personnel and
  equipment as well as the extraction of ore and waste. The two operations are
  in close proximity and will share surface infrastructure, systems and business
  services. Under the optimized scenario, the annual production rate is increased
  by 19% to 254,000 ounces.

The key results from the optimized study, based on a long
  term gold price of US$550/oz, an exchange rate of South African Rand (ZAR)
  7.50 to the US Dollar (US$) and a discount rate of 5%, are summarized below:

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

Proven and probable reserves 
        at a 4 g/t cut-off.
      24.1 million tonnes @ 4.5 grams of gold per
        tonne 
        or 3.5 million ozMetallurgical Recovery
      95%Recovered Gold (LoM)
      3.3 million ozAverage Annual Gold Recovery
      254,000 oz during mill lifePre-production period
      4 years to end of 2009Mill start-up (100,000 tonnes per month)
      Jan 2010Mill full production @ 175,000 tonnes per month
      8.5 years to March 2020All-in capital and operating costs
      US$355 per oz 
        ZAR 82,917 per kilogramCash mine operating costs
      US$283 per ounce 
        ZAR 66,091 per kilogramCapital Cost
      US$238 million 
        ZAR 1,787 millionLife of Mine
      19 years including 4 years pre-productionIRR 
        NPV (5%) 
        NPV (10%)
      23.5% 
        US$322 million 
        US$156 millionPayback
      42/3 years after mill start-up


At a gold price of US$650 the NPV of the project at a 5% discount
  rate increases to US$519 million and the IRR to 31.97% .

The Technical Report on the Optimised Feasibility Study is based
  on a full review of the results of the components by Derek Rance, P.Eng., of
  Behre Dolbear & Company, who is an independent qualified person as defined
  by National Instrument 43-101. Individual components were completed by South
  African consulting firms:

- Geology and mineral resources were reviewed and updated for the Feasibility
      Study by HM Meadon, Pr.Sci.Nat., HM Exploration CC, and GJ van der Heever,
      Pr.Sci.Nat., GeoLogix Mineral Resource Consultants (Pty) Ltd.
- Mineral reserves, mine planning and design aspects were developed by Turgis
      Consulting (Pty) Ltd., under the supervision of Clive Brown, Pr.Eng.
- Mill process and plant design work was done by MDM Ferroman, and metallurgical
      testwork by Mintek Laboratories, all under the supervision of David Dodd,
      SAIMM, of MDM Ferroman.
- Environmental & permitting, tailings, water supply and infrastructure
      studies were conducted by Knight Piesold (Pty) Ltd. and other subcontractors,
      under the supervision of Joanna Goeller, Environmental Impact Assessment
      Practitioner and R.J. Scheurenberg, Pr.Eng.

12


---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

All information contained in this discussion
          and analysis relating to the contents of the Optimised Feasibility Study,
          including but not limited to statements of the Burnstone project's potential
          and information such as capital and operating costs, production summary,
          and financial analysis and reserves, are "forward looking statements"
          within the definition of the United States Private Securities Litigation
          Reform Act of 1995. The Optimised Feasibility Study was prepared to
          quantify the Burnstone project's capital and operating cost parameters
          and to determine the project's likelihood of feasibility and optimal
          production rate. The capital and operating cost estimates which were
          used have been developed based on detailed capital cost to production
          level relationships.
        The following are the principal risk factors and uncertainties
          which, in management's opinion, are likely to most directly affect the
          ultimate feasibility of the Burnstone project. The mineralized material
          at the Burnstone project is currently classified as a measured and indicated
          resource, and a portion of it qualifies under Canadian mining disclosure
          standards as a proven and probable reserve, but readers are cautioned
          that no part of the Burnstone projects mineralization is yet considered
          to be a reserve under US Securities and Exchange Commission standards
          as all necessary mining permits would be required in order to classify
          the projects mineralized material as an economically exploitable
          reserve. Although final feasibility work has been done to confirm the
          mine design, mining methods and processing methods assumed in the Optimised
          Feasibility Study, construction and operation of the mine and processing
          facilities depend on securing environmental and other permits on a timely
          basis. Authorization has been received for bulk sampling. Additional
          permits have yet to be applied for and there can be no assurance that
          required permits can be secured or secured on a timely basis. Although
          costs, including design, procurement, construction and on-going operating
          costs and metal recoveries have been established at a level of detail
          required for a feasibility study, actual amounts could be materially
          different from those contained in the Optimised Feasibility Study. There
          can be no assurance that these infrastructure facilities can be developed
          on a timely and cost-effective basis. Energy risks include the potential
          for significant increases in the cost of fuel and electricity. The Optimised
          Feasibility Study assumes specified, long-term prices levels for gold.
          The price of this metal is historically volatile, and the Company has
          no control of or influence on its price which is determined in international
          markets. There can be no assurance that the price of gold will continue
          at current levels or that it will not decline below the prices assumed
          in the Optimised Feasibility Study. Prices for gold have been below
          the price ranges assumed in Optimised Feasibility Study at times during
          the past ten years, and for extended periods of time. The project will
          require major financing, probably a combination of debt and equity financing.
          Although interest rates are at historically low levels, there can be
          no assurance that debt and/or equity financing will be available on
          acceptable terms. Other general risks include those ordinary to very
          large construction projects, including the general uncertainties inherent
          in engineering and construction cost, the need to comply with generally
          increasing environmental obligations, and accommodation of local and
          community concerns. The economics of the Burnstone Project are sensitive
          to the US Dollar and South African Rand exchange rate and this rate
          has been subject to large fluctuations in the last several years.


Surface Drilling


In February 2008, the mineral resources were updated based on
  work in 2007 and a database of 245 holes. Although the undiluted average grade
  has decreased by 16% to 6.9 g/t, total contained gold in the measured and indicated
  resources has increased by 41% to approximately 11 million ounces. At the cutoff
  grade of 400 cmg/t gold (the equivalent of 4 g/t over 1 m) highlighted below,
  3.2 million ounces of gold have been added to the total measured and indicated
  resources (an increase of 41%) and approximately 2.0 million ounces have been
  added to the inferred resources (an increase of 486%).

BURNSTONE GOLD PROJECT MINERAL
        RESOURCES1 JANUARY 2008Category
      Cut-off (cmg/t)
      Tonnes (millions)
      Grade (g/t)
      Contained Gold2
        (ounces)Measured
      350
      39.0
      7.56
      9,474,000400
      33.8
      7.80
      8,484,000Indicated
      350
      15.7
      4.95
      2,503,000400
      15.1
      4.89
      2,372,000Measured & Indicated
      350
      54.7
      6.81
      11,977,200400
      48.9
      6.90
      10,856,000Inferred
      350
      18.6
      4.42
      2,642,000400
      17.0
      4.37
      2,394,000


Notes to table:(1) Mineral resources that are not mineral reserves do not have demonstrated
  economic viability. 
  (2) Metallurgical recoveries are assumed to be 100%.

The estimates were done using a geostatistical method by Deon
  van den Heever, Pr.Sci.Nat., of Geologix Mineral Resource Consultants (Pty)
  Ltd., an independent Qualified Person as defined by National Instrument 43-101.

13

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

Additional drilling is currently underway within and southwest
  of Area 1, in what is referred to as Area 4. The objective of this program is
  to expand the known resources and identify new areas of interest. Approximately
  49,200 ft (15,000 m) are planned in drill holes at 1,970 ft (600 m) spacing
  in Area 4 alone, at an estimated cost of $2.4 million (ZAR15 million). The planned
  program has commenced and, during the third quarter, 16,100 ft (4,907 m) of
  the planned 49,200 ft (15,000 m) had been drilled.

Plans for 2008

At Burnstone the Company plans to develop the decline to the
  position where the first reef drive will be established to commence with the
  26,000 tonne bulk sample in the second part of the year. In addition, while
  the development of the decline is expected to continue to shaft position, the
  shaft sinking contractor will continue with site establishment with the objective
  of sinking the shaft down to 501 m below surface. The Company also plans to
  commence with the refurbishment of the metallurgical plant which was purchased
  in 2007.

Exploration will continue at Burnstone, the focus being Area
  4 which is adjacent to Area 1.The plan is to increase the resource of the Burnstone
  Project area.

1.2.3     Casino Property, Yukon, Canada

Western Copper Corp., through its subsidiary CRS Copper Resources
  Inc. exercised the option to acquire the Companys 100% working interest
  in the Casino property in Yukon, Canada for the amount of $1 million on August
  17, 2007. The full consideration of $1 million was received in cash on the date
  the option was exercised and the property transferred to CRS Copper Resources
  Inc. In the event that a decision is made to put the Casino Property into commercial
  production, the Western Copper Corp. will pay Great Basin an additional $1 million.

1.2.4Ganes Creek Property,
  Alaska, USA

Great Basin signed an agreement, effective November 14, 2007,
  whereby the Company will earn an 80% interest in all hard rock mineral rights
  on the Ganes Creek Property in Alaska by expending a total of US$3 million in
  exploration expenditures over a period of 3 years. The Ganes Creek Property
  is held by CW Properties LLC (CWM), based in Talkeetna, Alaska,
  USA.

Pursuant to the agreement, a minimum of US$500,000 in exploration
  expenditures needs to be incurred in 2007; an additional US$1.3 million in expenditures
  by the end of 2008; and a final US$1.2 million in expenditures by the end of
  2009. The company can also increase its interest in the property at a production
  decision by purchasing the remaining 20% at fair market value should CWM not
  wish to participate in any development costs. CWM would retain a 2% Net Smelter
  Royalty of which 1% could be purchased by Great Basin for US$2 million.

The Ganes Creek Property is located in Alaska, 440 km northwest
  of Anchorage and 40 km northwest of McGrath. The property is situated in the
  Tintina Gold Belt, which hosts the 20 million ounce Donlin Creek Project, located
  some 110 km to the northeast and held by NovaGold Resources and Barrick Gold.
  The mineral rights held by CWM at Ganes Creek total 15,402 acres, comprising
  thirty-nine 40-acre state claims, seventy 160-acre state claims and fourteen
  federal patents, containing 90 patented claims with a total area of 2,628 acres.

14

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

The Ganes Creek Project occupies the western portion of a 19km
  long area of gold anomalies, hard rock prospects and placer deposits aligned
  along the Yankee-Ganes Creek fault zone. The Yankee-Ganes Creek fault is sub-parallel
  to the major transcurrent Nixon-Iditarod fault. Regional geologic mapping has
  identified the eastern Innoko district (including Ganes Creek Project) as the
  structurally offset, northern extension of the Donlin trend of deposits and
  gold prospects. The Donlin trend is truncated by the Iditarod fault zone some
  80 miles (130 km) to the southwest of the Ganes Creek Property.

Historical work on the property has identified intrusive-related
  gold showings as well as high grade shear- and vein-associated gold occurrences.
  Numerous showings are proximal to the regional Yankee-Ganes Creek fault, close
  to the eastern boundary of the property. Unverified historical production at
  the Independence Mine in the same area was reported to be 500 ounces gold at
  an average grade of 1 ounce gold per ton.

During the 2007 field season approximately 9,711 linear metres
  of exploration trenches were built. These trenches were constructed primarily
  on existing roads, trails, and ridges. Towards the end of the season, definition
  trenches followed up on prospective areas located subsequent to initial exploration
  trenches.

Approximately 1,685 rock samples were taken from exploration
  trenches. Trenches constructed in September at Breccia Ridge and the Spaulding
  Spur road (~4,0303 ft (1228 m)) were not sampled due to time constraints and
  left open to be sampled in the 2008 field season.

A majority of these rock samples were taken as continuous chip
  samples from newly exposed bedrock along trench walls and road bases. Continuous
  chip samples ranged from 1 to 4 m in length and were sampled according to lithologic
  control. Select samples of quartz veins, distinct alteration and mineralization
  were included within the chip sample stream. Trenches and samples were photographed
  and have been catalogued in the computer database.

All rock samples were sent to Alaska Assay Labs located in Fairbanks
  Alaska from which results are being expected during the second quarter of 2008

1.2.5Tsetsera Property,
  Mozambique

The Company concluded a Joint Venture Agreement to enter into
  an unincorporated joint venture with G S Minase Refnaria Limitade (GSR)
  in Mozambique on August 20, 2007 (the JV). The purpose of the JV
  is to establish a gold exploration and mining business in Mozambique, whereby
  the Company will have the exclusive right to explore all GSRs properties.

The Company will have an 80% interest in the JV, and has committed
  to exploration expenditures of approximately US$2 million over a three year
  period on the Tsetsera Property, which is located 80 km south of Manica in Mozambique,
  and other properties over which GSR holds mineral rights.

Should any financing be required for the conducting of any mining
  activities, each of the parties shall contribute to such financing needs in
  proportion to their interests in the JV. Should GSR not be in a position to
  contribute such finance required by the JV in respect of any property or project,
  Great Basin shall have the right of first refusal to buy GSRs remaining
  20% share. The consideration payable in respect of the 20% share will be settled
  in either cash or Great Basin shares and the value will be based on resources
  reported at that time and valued at fair market price. GSR however will retain
  a 3% Net Smelter Royalty.

15

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

The Company will manage the JV and will be responsible for the
  day to day management of the exploration and other activities to be conducted.

GSR currently owns the 17 square km Tsetsera Property. The property
  was worked historically by artisanal miners, who crushed quartz vein material
  and panned gold from the fines. The artisinal miners have exposed over 985 ft
  (300 m) strike length of quartz veins, 5 to 60 cm in width, within a phyllite
  (strongly metamorphosed sediments). Rock samples taken during a field visit
  returned gold assay values between 0.22 g/t and 26.8 g/t from grab samples,
  and a chip sample across a 60 cm quartz vein returned 5.6 g/t Au. No other work
  has been completed on the property.

Field work started in July 2007 on the ground in Mozambique.
  Mapping and sampling of the surface exposures commenced and a total of 17.5
  line km have been mapped. A shear zone hosting the surface quartz vein showing
  was mapped out over a strike length of 2.5 km.

Abundant inactive local workings were identified during the mapping.
  At least 4 steeply dipping quartz veins were identified and mapped out over
  2,625  5,250 ft (800-1600 m) strike length that varies in width from 20
  cm to greater than 50cm. Representative samples were taken of the veins and
  results are pending.

A total of 25.6 line km have been cut and cleared in anticipation
  of geophysical surveys. Soil sampling at 200 m x 25 m centres will be completed
  along the same cut lines. Forty-four rock samples have been taken from the surface.
  All samples are being sent to ALS Chemex Labs in Johannesburg, RSA for analysis.

1.2.6     Rusaf Gold Limited, Tanzania

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

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

The second tranche of the purchase was subject to satisfaction
  of certain conditions, which were met on July 20, 2007 and enabled the Company
  to be issued 10,000,000 shares at a price of $0.60 per share for an aggregate
  payment in cash to Rusaf of $6 million.

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

16

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

Subsequent to December 31, 2007 this third tranche was cancelled
  and replaced by a new agreement whereby the Company will acquire the remaining
  63% of Rusaf for a total consideration of $14.4 million, payable in approximately
  4.9 million Great Basin Gold common shares.

1.2.7Kryso Resources
  Plc

In December 2006, the Company entered into a share purchase agreement
  to acquire common shares of Kryso Resources Plc (Kryso), a mineral
  resources and exploration company exploring gold and precious metal deposits
  in Central Asia.

Kryso is a publicly traded company on the AIM market of the London
  Stock Exchange. Pursuant to the share purchase agreement, the Company acquired
  approximately 15% of the equity in Kryso with the subscription of 10,000,000
  shares at 10 pence per share for a total payment of GBP1 million ($2,274,649).

On July 11, 2007 the Company received 5,000,000 warrants from
  Kryso. The warrants are exercisable at a price of 15 pence for a common share
  of Kryso over two years. The exercise of the warrants required the approval
  of Krysos shareholders which was obtained at their shareholders meeting.

On October 2, 2007 the Company acquired an additional 1,908,429
  shares in terms of a public placement undertaken by Kryso. This ensured that
  the company maintained its 15% shareholding in the issued share capital of Kryso.
  The shares were issued at 11.5 pence per share and the total consideration of
  GBP219,469 ($448,266) was settled in cash.

1.2.8Market Trends

The gold price averaged US$697/oz in 2007, increasing from US$410/oz
  in 2004, to US$445/oz in 2005, and US$604/oz in 2006. In 2008, gold prices have
  been increasing more rapidly since late 2007, averaging US$926/oz to late March,
  2008. The silver price averaged US$6.69/oz in 2004, US$7.32/oz in 2005, US$11.55/oz
  in 2006 and US$13.38/oz in 2007. Silver prices continue to follow gold, averaging
  US$17.58/oz in 2008 to late March, 2008.

17

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

**1.3** **Selected Annual Information**

In thousands of Canadian dollars, except per-share figures and
  number of shares. Small differences arise from rounding.

|                                                                 |   | As at
      and for the years ended |  
|---------------------------------------------------------------- | - | ----------------------------------- | -
|                                                                 |   | December 31                         |  
|                                                                 |   | 2007                                |  
|                                                                 |   |                                     |  
|Current assets                                                   | $ | 84,353                              |  
|Mineral properties                                               |   | 218,414                             |  
|Other assets                                                     |   | 26,546                              |  
|Total assets                                                     |   | 329,313                             |  
|                                                                 |   |                                     |  
|Current liabilities                                              |   | 6,121                               |  
|Future income taxes and other liabilities                        |   | 35,400                              |  
|Shareholders
      equity                                       |   | 287,792                             |  
|Total liabilities and shareholders equity                       |   | 329,313                             |  
|                                                                 |   |                                     |  
|Working capital1                                                 |   | 78,232                              |  
|                                                                 |   |                                     |  
|Expenses (income)                                                |   |                                     |  
|                                                                 |   |                                     |  
|Exploration and pre-development                                  |   | 42,045                              |  
|Accretion of reclamation obligation                              |   | 37                                  |  
|Conference and travel                                            |   | 1,475                               |  
|Foreign exchange loss (gain)                                     |   | 2,533                               |  
|Other income  proceeds from
      bulk sample                   |   | (2,696                              | )
|Interest and other income                                        |   | (3,726                              | )
|Legal, accounting and audit                                      |   | 1,236                               |  
|Office and administration                                        |   | 17,655                              |  
|Shareholder communications                                       |   | 432                                 |  
|Trust and filing                                                 |   | 360                                 |  
|(Gain) loss on disposal of fixed assets                          |   | (993                                | )
|Loss before the under noted and income taxes                     |   | 58,358                              |  
|Loss from associate                                              |   | 796                                 |  
|Fair value financial instruments held-for-trading
      received |   | (937                                | )
|Fair value financial instruments
      held-for-trading          |   | 104                                 |  
|(Gain) loss on sale of investments                               |   |                                    |  
|Mark-to-market adjustment on investments                         |   |                                    |  
|Loss before income taxes                                         |   | 58,321                              |  
|Future income tax recovery                                       |   | (7,153                              | )
|Loss for the year                                                | $ | 51,168                              |  
|                                                                 |   |                                     |  
|Basic and diluted
      loss per share                           | $ | 0.31                                |  
|                                                                 |   |                                     |  
|Weighted average number of common shares                         |   |                                     |  
|outstanding                                                      |   | 166,098,884                         |  

1 Working capital refers to the net amount available
  after current liabilities are netted against current assets and is considered
  a non-GAAP measure.

18

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

**1.4** **Summary of Quarterly Results**

In thousands of Canadian dollars, except per-share figures and
  number of shares. Small differences may arise due to rounding.

|                                 |   | Dec 31  |   |   | Sept 30 |   |   | Jun 30  |   |   | Mar 31  |   |   | Dec 31  |   |   | Sep 30  |   |   | Jun 30  |   |   | Mar 31  |  
|-------------------------------- | - | ------- | - | - | ------- | - | - | ------- | - | - | ------- | - | - | ------- | - | - | ------- | - | - | ------- | - | - | ------- | -
|                                 |   | 2007    |   |   | 2007    |   |   | 2007    |   |   | 2007    |   |   | 2006    |   |   | 2006    |   |   | 2006    |   |   | 2006    |  
|Current assets                   |   | 84,353  |   |   | 74,871  |   |   | 102,735 |   |   | 30,768  |   |   | 35,158  |   |   | 39,989  |   |   | 42,570  |   |   | 16,985  |  
|Mineral properties               |   | 218,414 |   |   | 203,838 |   |   | 203,796 |   |   | 110,910 |   |   | 110,910 |   |   | 110,910 |   |   | 98,630  |   |   | 98,630  |  
|Other assets                     |   | 26,546  |   |   | 25,796  |   |   | 10,290  |   |   | 4,238   |   |   | 3,851   |   |   | 1,408   |   |   | 141     |   |   | 96      |  
|Total assets                     |   | 329,313 |   |   | 304,505 |   |   | 316,821 |   |   | 145,916 |   |   | 149,919 |   |   | 152,307 |   |   | 141,341 |   |   | 115,711 |  
|                                 |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |  
|Current liabilities              |   | 6,121   |   |   | 3,158   |   |   | 3,048   |   |   | 3,307   |   |   | 1,331   |   |   | 1,064   |   |   | 965     |   |   | 516     |  
|Future income taxes and other    |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |  
|Liabilities                      |   | 35,400  |   |   | 36,311  |   |   | 38,325  |   |   | 17,255  |   |   | 19,242  |   |   | 15,355  |   |   | 14,675  |   |   | 19,964  |  
|Shareholders equity             |   | 287,792 |   |   | 265,036 |   |   | 275,448 |   |   | 125,354 |   |   | 129,346 |   |   | 135,888 |   |   | 125,701 |   |   | 95,231  |  
|Total liabilities and            |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |  
|shareholders equity             |   | 329,313 |   |   | 304,505 |   |   | 316,821 |   |   | 145,916 |   |   | 149,919 |   |   | 152,307 |   |   | 141,341 |   |   | 115,711 |  
|                                 |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |  
|Working capital1                 |   | 78,232  |   |   | 71,713  |   |   | 99,687  |   |   | 27,461  |   |   | 33,827  |   |   | 38,925  |   |   | 41,605  |   |   | 16,469  |  
|                                 |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |  
|Expenses (income)                |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |  
|Exploration & pre-               |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |  
|development                      |   | 17,650  |   |   | 9,394   |   |   | 9,891   |   |   | 5,110   |   |   | 4,087   |   |   | 2,320   |   |   | 960     |   |   | 640     |  
|Accretion cost - ARO             |   | 8       |   |   | 9       |   |   | 10      |   |   | 10      |   |   | -       |   |   | -       |   |   | -       |   |   | -       |  
|Amortization                     |   | -       |   |   | -       |   |   | -       |   |   | -       |   |   | (15     | ) |   | 8       |   |   | 6       |   |   | 1       |  
|Conference and travel            |   | 399     |   |   | 596     |   |   | 264     |   |   | 216     |   |   | 406     |   |   | 169     |   |   | 302     |   |   | 200     |  
|Foreign exchange loss (gain)     |   | 46      |   |   | 2,397   |   |   | 623     |   |   | (533    | ) |   | 750     |   |   | (480    | ) |   | (2,706  | ) |   | 580     |  
|Other income  proceeds from     |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |  
|bulk sample                      |   | (391    | ) |   | (1,094  | ) |   | (1,211  | ) |   | -       |   |   | -       |   |   | -       |   |   | -       |   |   | -       |  
|Interest and other income        |   | (1,603  | ) |   | (971    | ) |   | (800    | ) |   | (352    | ) |   | (412    | ) |   | (467    | ) |   | (254    | ) |   | (145    | )
|Legal, accounting and audit      |   | 527     |   |   | 263     |   |   | 297     |   |   | 149     |   |   | 176     |   |   | 131     |   |   | 128     |   |   | 106     |  
|Office and administration        |   | 6,575   |   |   | 4,550   |   |   | 4,526   |   |   | 2,004   |   |   | 1,914   |   |   | 2,029   |   |   | 2,272   |   |   | 1,034   |  
|Shareholder communications       |   | 128     |   |   | 158     |   |   | 85      |   |   | 61      |   |   | 75      |   |   | 64      |   |   | 109     |   |   | 89      |  
|Trust and filing                 |   | 82      |   |   | 64      |   |   | 121     |   |   | 93      |   |   | 130     |   |   | 7       |   |   | 11      |   |   | 86      |  
|Loss (profit) on fixed assets    |   | 1       |   |   | (994    | ) |   | -       |   |   | -       |   |   | 1       |   |   | -       |   |   | -       |   |   | -       |  
|Loss before under noted and      |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |  
|taxes                            |   | 23,422  |   |   | 14,372  |   |   | 13,806  |   |   | 6,758   |   |   | 7,111   |   |   | 3,781   |   |   | 828     |   |   | 2,591   |  
|Loss from associate              |   | 459     |   |   | 3372    |   |   | -       |   |   | -       |   |   | -       |   |   | -       |   |   | -       |   |   | -       |  
|Fair value financial instruments |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |  
|held-for-trading received        |   | (937    | ) |   | -       |   |   | -       |   |   | -       |   |   | -       |   |   | -       |   |   | -       |   |   | -       |  
|Fair value financial instruments |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |  
|held-for-trading                 |   | 104     |   |   | -       |   |   | -       |   |   | -       |   |   | -       |   |   | -       |   |   | -       |   |   | -       |  
|Profit on sale of investments    |   | -       |   |   | -       |   |   | -       |   |   | -       |   |   | (1      | ) |   | (35     | ) |   | (76     | ) |   | -       |  
|Mark-to-market adjustments       |   | -       |   |   | -       |   |   | -       |   |   | -       |   |   | 1       |   |   | -       |   |   | (11     | ) |   | (202    | )
|                                 |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |  
|Loss before taxes                |   | 23,048  |   |   | 14,7092 |   |   | 13,806  |   |   | 6,758   |   |   | 7,112   |   |   | 3,746   |   |   | 741     |   |   | 2,389   |  
|Future income tax (recovery)     |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |  
|expense                          |   | (4,110  | ) |   | (945    | ) |   | (850    | ) |   | (1,248  | ) |   | 1,326   |   |   | (1,718  | ) |   | (1,980  | ) |   | -       |  
|Loss (income) for the period     |   | 18,938  |   |   | 13,7642 |   |   | 12,956  |   |   | 5,510   |   |   | 8,438   |   |   | 2,028   |   |   | (1,239  | ) |   | 2,389   |  
|Basic and diluted loss (income)  |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |  
|per share                        | $ | 0.10    |   | $ | 0.08    |   | $ | 0.08    |   | $ | 0.05    |   | $ | 0.07    |   | $ | 0.02    |   | $ | (0.01   | ) | $ | 0.03    |  
|Weighted average number of       |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |  
|common shares outstanding        |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |  
|(thousands)                      |   | 202,635 |   |   | 180,963 |   |   | 166,044 |   |   | 113,610 |   |   | 112,967 |   |   | 111,308 |   |   | 99,627  |   |   | 93,870  |  

1 Working capital refers to the net amount available
  after current liabilities are netted against current assets and is considered
  a non-GAAP measure.2Loss from associate for the quarter ended September 30, 2007 was
  revised to provide for information which became available subsequent to date
  of filing.

19

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

**1.5** **Results of Operations**

For the year ended December 31, 2007, the Group incurred a loss
  of $51,167,666 as compared to a loss of $11,616,811 in fiscal 2006. The increase
  in the loss is due mainly to higher exploration and pre-development costs incurred
  as a result of the Group purchasing Hecla Mining Companys (Hecla)
  50% earn-in rights in the Hollister Development Block (HDB) project
  in April 2007. Subsequent to this date, the Company incurred 100% of the costs
  with regard to the development of HDB.

| | a) | Pre-development and exploration costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | The increased expenditure at HDB as well as the additional
        pre-development and exploration activities at the Burnstone project increased
        the total exploration and pre-development costs to $42,044,831 compared
        to $8,007,215 in 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | Exploration costs increased to $3,313,171 (2006 - $2,468,238)
        for the Burnstone Property, mainly due to the increase in drilling activities
        during the year. Included in the 2006 year is once of costs for site reclamation
        of $405,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | At the Hollister Property, exploration costs increased
        to $8,355,808 (2006 - $1,665,763). The major contributors to this increase
        relate to $2,880,079 for drilling (2006  $389,823), $1,574,917 for
        environmental management (2006  $511,970), $606,237 for geological
        costs (2006  $401,164) and $425,298 for assays and analysis (2006
         $14,291). Site activities and engineering increased significantly
        over the 2007 year to $725,672 and $1,170,116 respectively (2006 - $29,408;
        $118,469) due to the takeover of functions from Hecla and the increased
        pre- development of the Hollister property.                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | Pre-development cost incurred during the year at the
        Hollister Property consist of equipment rental and services ($1,937,187),
        surface infrastructure ($2,942,261), underground access and infrastructure
        ($6,682,426) and operational cost and site activities ($6,289,421).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | At the Burnstone Property the focus remained on further
        exploration to expand and upgrade the mineral resources in Area 1 and
        Area 2 as well as the construction of the decline, including surface infrastructure,
        for the bulk sampling program and future mining activities. For the year
        ended December 31, 2007, total costs incurred for the bulk sampling program
        included surface infrastructure of $836,042 (2006 - $536,019), $4,000,468
        (2006 - $443,229) underground and access infrastructure, establishment
        work of $697,457 (2006 - $393,129), $1,047,259 (2006 - $185,314) equipment
        rental and services, $308,660 (2006 - $322,257) portal construction and
        operational costs of $3,348,964 (2006 - $966,521). Construction of the
        vertical shaft and metallurgical plant commenced during the third quarter
        of 2007 at initial cost of $508,530 and $186,837 respectively.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | In addition to activities at Burnstone and Hollister,
        a further $1,066,797 (2006  $966,003) was incurred on other exploration
        activities. Costs were mainly incurred during the exploration in Alaska
        (Ganes Creek) and Mozambique (Tsetsera project). Other costs were in respect
        to the farms Roodepoort 598IR, Rietfontein 561IR and Rietbult Estates
        505IR which are outlying portions within the greater option area of the
        Burnstone Property.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

20

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

| | b) | Foreign exchange                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | The $1,855,404 foreign exchange gain recognized in 2006
        turned around to a foreign exchange loss of $2,532,752 in 2007 due to
        a weaker South African Rand vis-à-vis the Canadian Dollar.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | c) | Office and administration                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | Office and administration costs increased to $17,655,463
        in 2007 compared to $7,249,189 in 2006, mainly due to additional administrative
        activities required to support the increased exploration and development
        activities at Burnstone as well as the management of the Nevada operations
        taken over from Hecla. In addition the Company increased its staff compliment
        since the third quarter of 2006, including executive personnel in its
        offices in Johannesburg, South Africa. The increase in staff also had
        the result that the Company recognized $5,633,276 in stock- based compensation
        expense during 2007 compared to $3,610,110 in 2006.

| | d) | Interest received and other income                                                                                                                                                                                                                                             
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                
| |    | Interest income and other income increased to $3,725,837
        in 2007 (2006 - $1,278,543) mainly due to the impact of higher cash balances
        on hand after the capital raising as well as the increase in the South
        African interest rate since December 2006.
| |    |                                                                                                                                                                                                                                                                                
| |    | Other income was earned from the treatment of bulk samples
        from the Hollister property to the amount of $2,695,599.                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                
| | e) | Loss from associate                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                
| |    | The Company acquired a 37% share in Rusaf Gold Limited
        (Rusaf) in July 2007, resulting in a loss from associate of
        $796,027 being recognized.                                                                                                                
| |    |                                                                                                                                                                                                                                                                                
| | f) | (Gain)/loss on disposal of assets                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                
| |    | During 2007 $992,684 (2006 - $916) was recognized as
        profit on disposal of assets, which mainly relates to the gain on the
        disposal of the option held over the Casino Property.                                                                               

**1.6** **Liquidity**

Historically, the Company's sole source of funding has been the
  issuance of equity securities for cash, primarily through private placements
  to sophisticated investors and institutions. The Company's access to exploration
  financing when the financing is not transaction-specific is always uncertain.
  There can be no assurance of continued access to significant equity funding
  in order for the Company to meet its planned business objectives.

On April 19, 2007 the Company completed a public offering of
  57.5 million units at a price of $2.60 per unit, raising gross proceeds of $149,500,000.
  Each unit consisted of one common share and one-half of a common share purchase
  warrant of the company. The common shares and warrants comprising the units
  separated immediately upon the closing of the transaction.

21

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

Each whole purchase warrant entitles the holder thereof to purchase
  one common share of the company at a price of $3.50 per share until April 20,
  2009. The fair value of the warrants has been estimated to be $16,210,226 based
  upon the Black Scholes option pricing model and the following assumptions:

Risk free interest rate
      4%Expected life
      2 yearsExpected volatility
      57%Expected dividends
      Nil


The Company paid to the underwriters a commission of $9,870,000
  and incurred other share issue costs of approximately $1,991,905 for net proceeds
  of approximately $137,638,095.

The net proceeds from this issuance were used to fund the purchase
  of Hecla Ventures Corp. as well as to fund the continuing exploration and development
  at the Hollister Development Block Project and for working capital.

On February 20, 2007 the Company entered into a share purchase
  agreement to buy Hecla Ventures Corp. which held certain tangible assets and
  the right under an earn-in agreement to acquire a 50% working interest in the
  Hollister Development Block, for a cash payment of US$45 million and the issuance
  of common shares of the Company to the value of US$15 million. The transaction
  was concluded on April 19, 2007 with 7,930,214 shares being issued at $2.48
  each.

Under the BEE deal concluded on October 1, 2007, the Companys
  wholly-owned subsidiary N6C Resources Inc. (N6C) purchased the Southgold
  shares from Tranter Burnstone. Against the sale of registration of transfer
  of the Southgold shares from Tranter Burnstone to N6C, the Company issued 19,938,650
  common shares in the issued share capital of Great Basin to Tranter Burnstone.
  The fair value of which have been calculated at $36,323,195, after a fair value
  allocation of $1,178,815 to warrants and payment of marketable securities tax
  (South Africa) to the value of $93,990. The share and warrant valuations were
  performed by independent valuation specialists using assumptions as detailed
  under 1.2.2.

At December 31, 2007, the Company had working capital of approximately
  $78.2 million, which is sufficient to fund its exploration programs, operating
  costs and working capital for the next twelve months. The Company will need
  to raise additional funds to complete its Hollister and Burnstone developments,
  that being through debt financing or further capital raising.

The Company has no long term debt, capital lease obligations,
  operating leases or any other long term obligations, other than maintenance
  payments on the mineral properties and routine office leases.

As part of the financing of the BEE transaction, done through
  Investec, Great Basin was allocated project funding to the value of $56.7 million
  (R400 million) with no hedging obligations attached to it. The Company is able
  to decide if it will make use of these facilities and will be able to draw down
  this funding in two tranches of $28.8 million (R200 million) each should the
  funding be taken up by the Company. The term for each tranche of this funding
  facility is 7 years with quarterly repayments commencing 24 months after the
  first draw down. Interest will be capitalized and is payable on a quarterly
  basis at a rate of JIBAR plus a margin of 2.25% . These facilities will be used
  to fund the Burnstone Project as and when necessary. The Company is under no
  obligation to make use of this facility and is currently assessing various financing
  options.

22

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

The Company has no "Purchase Obligations", defined as any agreement
  to purchase goods or services that is enforceable and legally binding on the
  Company that specifies all significant terms, including: fixed or minimum quantities
  to be purchased; fixed, minimum or variable price provisions; and the approximate
  timing of the transaction.

**1.7** **Capital Resources**

At December 31, 2007, Great Basin had working capital of approximately
  $78.2 million, as compared to $33.8 million at December 31, 2006. The Company
  has no debt.

At December 31, 2007, the Company had 203,395,902 common shares
  issued and outstanding. There have been no material changes to the number of
  shares outstanding as of the date of this MD&A.

**1.8** **Off-Balance Sheet Arrangements**

On October 1, 2007 Investec advanced an amount of ZAR 200 million
  to Tranter Burnstone for the exclusive purpose of subscribing for the Southgold
  shares. The security for the loan comprised amongst others a loan guarantee
  in terms of which N5C Resources Inc, N6C Resources Inc or Rodeo Creek Gold Inc
  (all wholly-owned subsidiaries of the Company) is obliged in the event of default
  by Tranter Burnstone on any of its interest repayments to Investec at any time
  in the first four years to lend not more than ZAR 80 million to Tranter Burnstone
  (Refer 1.2.2) . This guarantee pertains only to the interest accrued on the
  amount advanced by Investec to Tranter and will not exceed ZAR 80 million.

**1.9** **Contractual obligations**

Payments
        due by periodLess than
      
      3-5
      More than 5Total
      one
        year
      1
        to 3 years
      years
      yearsContractual obligation
      US$5 million
      Nil
      US$5 million
      Nil
      NilLong term debt obligations
      Nil
      Nil
      Nil
      Nil
      NilOperating lease obligations
      Nil
      Nil
      Nil
      Nil
      NilPurchase obligations
      Nil
      Nil
      Nil
      Nil
      NilOther
      Nil
      Nil
      Nil
      Nil
      NilTotal
      US$5 million
      Nil
      US$5 million
      Nil
      Nil


The Company signed an agreement, effective November 14, 2007,
  whereby the Company earns 80% interest in all the hard rock mineral rights on
  the Ganes Creek Property in Alaska by expending a total of US$3 million in exploration
  expenditures over a period of 3 years. The Ganes Creek Property is held by CW
  Properties LLC, based in Talkeetna, Alaska, USA.

On August 20, 2007, the Company concluded a Joint Venture Agreement
  to enter into an unincorporated joint venture with GS Minase Refnaria Limitade
  (GSR) in Mozambique. The purpose of the Joint Venture in to establish
  a gold exploration and mining business in Mozambique, whereby the Company will
  have the exclusive right to explore all GSRs properties. The Company will
  have an 80% interest in the Joint Venture and has committed to exploration expenditures
  of approximately US$2 million over a 3 year period on the Tsetsera Property,
  which is located 80 km south of Manica, Mozambique and other properties over
  which GSR holds mineral rights.

23

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

The term purchase obligation means an agreement to purchase goods
  or services that is enforceable and legally binding on the registrant that specifies
  all significant terms, including: fixed or minimum quantities to be purchased;
  fixed, minimum or variable price provisions; and the approximate timing of the
  transaction.

**1.10** **Transactions with Related Parties**

Hunter Dickinson Inc. ("HDI") is a private company owned by nine
  public companies, one of which was the Company. HDI has certain directors in
  common with the Company and provides geological, corporate development, administrative
  and management services to, and incurs third party costs on behalf of, the Company
  and its subsidiaries on a full cost recovery basis pursuant to an agreement
  dated December 31, 1996. During the year ended December 31, 2007, the Company
  paid HDI $974,067, compared to $1,755,870 during fiscal 2006, for these services.

The Company announced on September 27, 2007 that it had reached
  an agreement with HDI to terminate the services contract for a $350,000 termination
  fee, funded through the issue of 135,659 Great Basin common shares to HDI. Pending
  approval, the shares will be issued at $2.58, the 30 day volume weighted average
  price trading on the TSX proceeding August 31, 2007, which is the effective
  date of the cancellation of the agreement. The agreement was subject to TSX
  approval and was subsequently revised on January 1, 2008 whereby the issuance
  of shares was replaced by a cash settlement of $350,000, payment of which is
  expected to be finalized during the second quarter of 2008.

During the year ended December 31, 2007, the Company paid $36,771
  (2006  $112,348) to a private company owned by a director, for engineering
  and project management services at the exchange amount.

The Company paid $156,286 (2006  $198,642) during 2007
  to a private company which has certain directors in common with the Company.
  The Company rents its premises from the private company pursuant to a cost-sharing
  arrangement with no profit element involved.

During the year ended December 31, 2007 the company provided
  bridge financing to its Black Economic Empowerment partner, Tranter Gold (Pty)
  Ltd. (Tranter Gold). The agreement was concluded in anticipation of the finalization
  of the BEE transaction and provided Tranter Gold with interest free bridging
  facilities until the date of the transaction. The bridging loan of $575,818
  was settled in full on conclusion of the BEE transaction on October 1, 2007.
  The Company also provides Tranter Gold with certain accounting and administrative
  services at rates negotiated at arms length with the Company. Amount receivable
  for such services provided during 2007 was $13,679 at December 31, 2007. During
  the 2007 year Tranter Gold provided Southgold, a wholly-owned subsidiary of
  the Company, with geological services to the value of $21,053 (ZAR146,202).

**1.11** **Fourth Quarter**

Loss for the quarter ended December 31, 2007 was $18,938,000
  compared to $8,438,000 for the corresponding quarter in fiscal 2006. The quarter
  saw continuous increased exploration and development activity on both the Burnstone
  Property and the Hollister Property. Also higher office and administrative expenditure
  due to the increased support required for the pre-development activities as
  well as the management cost of the Nevada operations taken over from Hecla.

24

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

The increased expenditure was offset by increased interest income
  due to higher cash and equivalents during the quarter as compared to the corresponding
  quarter in 2006. The Company acquired a 37% share in Rusaf Gold Limited (Rusaf)
  in July 2007, resulting in a loss from associate of $459,435 being recognized
  in the quarter. The Companys investment in Kryso warrants are being considered
  to be a financial instrument held for trading. The $833,000 net fair value adjustments
  had to be recognized in the income statement.

Total exploration costs were $17,649,683 for the current quarter
  compared to $4,087,417 for the corresponding quarter in fiscal 2006. The main
  costs for the current quarter were $12,326,734 for bulk sample and pre-development
  (2006 - $1,615,527). Other exploration costs which increased significantly compared
  with the comparative quarter in 2006 were: drilling $1,353,451 (2006 - $1,011,855),
  environmental $701,571 (2006 - $342,429), geological $562,071 (2006 - $299,379)
  and site activities $802,312 (2006  $191,165).

**1.12** **Proposed Transactions**

The Company announced on February 14, 2008 that it has entered
  into an agreement with Rusaf Gold Ltd (Rusaf) whereby it will purchase
  the remaining 63% of the fully diluted equity shares of Rusaf for a total consideration
  of $14.4 million, payable in approximately 4.9 million Great Basin Gold common
  shares. The exchange ratio was one Great Basin share for every 4.5 Rusaf shares.
  For the year ended December 31, 2007 the Companys investment of 37% in
  the issued common stock of Rusaf was recognized as an investment in associate
  and the Company has equity accounted for its share of post-acquisition losses
  incurred.

The acquisition terms also provide for additional Great Basin
  Gold shares to be issued in the first three years from closing, contingent upon
  gold discoveries involving more than 500,000 ounces on certain mineral prospects
  currently held by Rusaf. In the event of such discoveries, the Company will
  issue shares valued at the higher of current or then-prevailing market price
  to the former Rusaf shareholders on the basis of the valuing these gold ounces
  at US$15/oz for inferred resources and US$40/oz for measured and indicated resources
  (subject to a minimum average cut-off grade of 1.5 grams per tonne or 0.04 oz
  per ton).

The Company has also agreed to spend a minimum of $7 million
  and up to a maximum of $19 million in exploring Rusafs properties during
  this period depending on independent advice as to the likelihood of exploration
  success.

The Rusaf acquisition is subject to the approval of Rusaf shareholders,
  certain judicial orders, as well as Toronto Stock Exchange and other regulatory
  approvals. Assuming all such conditions are met in the ordinary course, the
  parties are targeting completion of the transaction for the second calendar
  quarter of 2008.

To date the Toronto Stock Exchange approved the transaction subject
  to the condition that no more that 50,900,000 common shares of the Company may
  be issued or made issuable pursuant to the agreement without the express consent
  of the TSX. In terms of the agreement 4.9 million Great Basin Gold Ltd shares
  will be issued as consideration for the remaining Rusaf share capital. As set
  out above, the Company will further issue Great Basin Gold Ltd shares within
  the next three years from closing of the transaction, to the then former Rusaf
  shareholders. The issuance of these shares is pending the results of future
  exploration and the number thereof currently uncertain, however will be limited
  under the current number of shares approved by the TSX.

25

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

**1.13** **Critical Accounting Estimates**

The Company's accounting policies are presented in note 4 of
  the most recent annual consolidated financial statements and a description of
  a change in accounting policy is set out in 1.13 of this document. The preparation
  of consolidated financial statements in accordance with generally accepted accounting
  principles requires management to select accounting policies and make estimates.
  Such estimates may have a significant impact on the financial statements.

These estimates include:

- mineral resources and reserves
- the carrying values of mineral properties,
- the carrying values of property, plant and equipment,
- the valuation of stock-based compensation expense, and
- the estimation of asset retirement obligations.
- the valuation of warrants
- the determination of valuation allowance for future income taxes

Actual amounts could differ from the estimates used and, accordingly,
  affect the results of operations.

|(a) | Mineral resources and reserves, and the carrying
        values of mineral properties, and of property, plant and equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | Mineral resources and reserves are estimated by professional
        geologists and engineers in accordance with recognized industry, professional
        and regulatory standards. These estimates require inputs such as future
        metals prices, future operating costs, and various technical geological,
        engineering, and construction parameters. Changes in any of these inputs
        could cause a significant change in the estimated resources and reserves,
        which in turn could have a material effect on the carrying value of property,
        plant and equipment. The carrying value of mineral properties is also
        dependant on the valuation used for the common shares and warrants of
        the Company issued for the acquisition of mineral properties.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | The value of the common shares issued is the fair market
        value, based on the trading price of the shares at the agreement and announcement
        date, pursuant to the terms of the relevant agreement. The Company uses
        the Black-Scholes pricing model to estimate a value for the warrants issued
        upon the acquisition of a property. This model, and other models which
        are used to value options and warrants, require inputs such as expected
        volatility, expected life to exercise, and interest rates. Changes in
        any of these inputs could cause a significant change in the carrying value
        initially recorded for mineral properties.                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | The carrying value of property, plant and equipment
        are considered in terms of the remaining useful life of the particular
        asset. These estimates are done by engineers in accordance with their
        knowledge and experience in the mining industry. Re-assessment of the
        remaining useful life could cause a significant change in the carrying
        value initially recorded for property, plant and equipment.                                                                                                                                                                                                                                                                                                                                                             

26

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

|(b) | Site reclamation costs (asset retirement obligations)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | Upon the completion of any mining activities, the Company
        will ordinarily be required to undertake environmental reclamation activities
        in accordance with local and/or industry standards. The estimated costs
        of these reclamation activities are dependent on labour costs, the environmental
        impacts of the Company's operations, the effectiveness of the chosen reclamation
        techniques, and on applicable government environmental standards. Changes
        in any of these factors could cause a significant change in the reclamation
        expense charged in a period.                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(c) | Stock-based compensation expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | From time to time, the Company may grant share purchase
        options to directors, employees, and service providers. The Company uses
        the Black-Scholes option pricing model to estimate a value for these options.
        This model, and other models which are used to value options, require
        inputs such as expected volatility, expected life to exercise, and interest
        rates. Changes in any of these inputs could cause a significant change
        in the stock-based compensation expense charged in a period.                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(d) | Warrants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | The Company grants share purchase warrants as part of
        its capital raising and under the conclusion of business transactions.
        The Company uses the Black-Scholes option pricing model to estimate a
        value for these warrants. This model, and other models which are used
        to value the warrants, require inputs such as expected volatility, expected
        life to exercise, and interest rates. Changes in any of these inputs could
        cause a significant change in the fair value attributed to warrants issued
        in a period.                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(e) | Future income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | Future income tax assets and liabilities are computed
        based on differences between the carrying amount of existing assets and
        liabilities on the balance sheet and their corresponding tax values, using
        the substantively enacted income tax rates expected to apply to taxable
        income in the years in which those temporary differences are expected
        to be recovered or settled. Future income tax assets also result from
        unused loss carry forwards and other deductions. Future tax assets are
        recognized to the extent that they are considered more likely than not
        to be realized.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | The carrying value of future income tax assets is adjusted,
        if necessary, by the use of a valuation allowance to reflect the estimated
        realizable amount.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

|1.14 | Changes in Accounting Policies including Initial
        Adoption                                                                                                                                                                                                                                                                                 
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                   
|     | Effective January 1, 2007, the Company adopted the following
        new accounting standards issued by the Canadian Institute of Chartered
        Accountants (CICA) relating to financial instruments. These
        new standards have been adopted on a prospective basis with no restatement
        to prior period financial statements.

27

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

| | (a) | Financial Instruments  Recognition
        and Measurement (Section 3855)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     | This standard sets out criteria for the recognition
        and measurement of financial instruments for fiscal years beginning on
        or after October 1, 2006. This standard requires all financial instruments
        within its scope, including derivatives, to be included on a Companys
        balance sheet and measured either at fair value or, in certain circumstances
        when fair value may not be considered most relevant, at cost or amortized
        cost. Changes in fair value are to be recognized in the statements of
        operations and comprehensive income.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     | All financial assets and liabilities are recognized
        when the entity becomes a party to the contract creating the item. As
        such, any of the Companys outstanding financial assets and liabilities
        at the effective date of adoption are recognized and measured in accordance
        with the new requirements as if these requirements had always been in
        effect. Any changes to the fair values of assets and liabilities prior
        to January 1, 2007 are recognized by adjusting opening deficit or opening
        accumulated other comprehensive income.  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     | All financial instruments are classified into
        one of the following five categories: held for trading, held-to-maturity,
        loans and receivables, available-for-sale financial assets or other financial
        liabilities. Initial and subsequent measurement and recognition of changes
        in the value of financial instruments depends on their initial classification:                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     | In accordance with this new standard, the
        Company has classified its financial instruments as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

28

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

| |     | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | The Companys investment in Kryso Resources
        Plc. warrants are classified as held for trading financial instruments.
        Such instruments are measured at fair market value in the consolidated
        financial statements and all gains and losses are included in net earnings
        in the period in which they arise.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                         
| |     | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | The carrying amounts of cash and cash equivalents, amounts
        receivable, reclamation deposits, accounts payable and accrued liabilities
        are recorded at amortized cost.                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                         
| | (b) | Hedging (Section 3865)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                         
| |     | This new standard specifies the circumstances
        under which hedge accounting is permissible and how hedge accounting may
        be performed. The Company currently does not have any hedges as it has
        a policy of non-hedging.                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                         
| | (c) | Comprehensive Income (Loss) (Section 1530)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                         
| |     | Comprehensive income (loss) is the change
        in shareholders equity during a period from transactions and other
        events from non-owner sources. This standard requires certain gains and
        losses that would otherwise be recorded as part of net earnings to be
        presented in other comprehensive income (loss) until it is
        considered appropriate to recognize in net earnings. This standard requires
        the presentation of comprehensive income (loss), and its components in
        a separate financial statement that is displayed with the same prominence
        as the other financial statements.

The following accounting policy was applied during the year ended
  December 31, 2007:

| | (i) | Investment in associates                                                                                                                                                                                                                                                                                                                                                     
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                              
| |     | Associates are those entities in which the group has
        a material long term interest and in respect of which the group exercises
        significant influence over operational and financial policies, normally
        owning between 20% and 50% of the voting equity, but which it does not
        control.                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                              
| |     | Investments in associates are accounted for by using
        the equity method of accounting and are initially recognized at cost.
        The companys share of its associates post-acquisition profits
        or losses is recognized in the income statement. Cumulative post-acquisition
        movements are adjusted against the carrying amount of the investment.
| |     |                                                                                                                                                                                                                                                                                                                                                                              
| |     | When the companys share of losses in an associate
        equals or exceeds its interest in the associate, including any other unsecured
        receivables, the company does not recognize further losses, unless it
        has incurred obligations or made payments on behalf of the associate.                                                                        

**1.15** **New accounting pronouncements**

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

29

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

Section 1535  Capital Disclosures

This Section establishes standards for disclosing information
  about an entitys capital and how it is managed. Under this standard the
  Company will be required to disclose the following, based on the information
  provided internally to the entitys key management personnel:

|(i)   | qualitative information about its objectives, policies
        and processes for managing capital,                                   
|----- | -------------------------------------------------------------------------------------------------------------------------------------
|(ii)  | summary quantitative data about what it manages as capital                                                                           
|(iii) | whether during the period it complied with any externally
        imposed capital requirements to which it is subject.               
|(iv)  | when the company has not complied with such externally
        imposed capital requirements, the consequences of such non-compliance.

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

Section 3862  Financial Instruments  Disclosures

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

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

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

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

Section 3064  Goodwill and Intangible Assets

Effective January 1, 2009, Section 3064 replaces Handbook Section
  3062, Goodwill and Intangible Assets and establishes revised standards
  for the recognition, measurement, presentation and disclosure of goodwill and
  intangible assets. The new standard also provides guidance for the treatment
  of preproduction and start-up costs and requires that these costs be expense
  as incurred. The Company is currently in the process of evaluating the impact
  this will have on the Companys financial statements.

30

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

**1.16** **Financial Instruments and Other Instruments**

Please refer to Section 1.14 above.

The Company used the Black-Scholes option pricing model to estimate
  the fair value of its financial instruments held-for-trading. On date of grant
  the warrants have been estimated at an estimated fair value of $937,365 (using
  expected volatility of 72.2%, risk free interest rate of 5%, dividends of nil
  and remaining life of approximately 5 years).

The investment was fair valued on December 31, 2007 based on
  the assumptions detailed above, expected volatility of 72.5% and an exchange
  rate of $1.96:1GBP. The unrealized loss of $104,365 is reported in the current
  year net loss. The fair value of financial instruments available-for-sale was
  calculated on the prevailing share price on December 31, 2007 of 14.25 pence
  per share and an exchange rate of $1.96:1GBP.

**1.17** **Other MD&A Requirements**

Additional information relating to the Company, including the
  Company's Annual Information Form, is available on SEDAR at www.sedar.com.

1.17.1      Disclosure of Outstanding
  Share Data

The following details the share capital structure as at March
  31, 2008, the date of this MD&A. These figures may be subject to minor accounting
  adjustments prior to presentation in future consolidated financial statements.

31

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

Exercise
      NumberEquity type
      Expiry
        date
      price
      granted
      TotalCommon shares
      
      
      
      204,508,931Share purchase options
      December 19, 2008
      $ 1.62
      1,500,000March 31, 2009
      $ 2.07
      1,184,668March 31, 2009
      $ 2.45
      180,000April 30, 2009
      $ 2.07
      47,500April 30, 2009
      $ 2.45
      249,000April 18, 2010
      $ 2.68
      1,332,000December 31, 2010
      $ 1.14
      400,000April 30, 2011
      $ 2.45
      1,255,000November 8, 2011
      $ 2.45
      90,000April 18, 2012
      $ 2.68
      2,297,000July 5, 2010
      $ 2.77
      720,000August 22, 2010
      $2.10
      305,000September 4, 2010
      $2.24
      150,000September 11, 2010
      $2.54
      175,000November 9, 2010
      $3.12
      680,000February 4, 2011
      $3.00
      2,580,003
      13,145,171Warrants
      July 18, 2008
      ZAR12.90*
      618,861April 20, 2009
      $ 3.50
      28,750,000September 30, 2010
      ZAR21.78
      1,684,31231,053,173Fully diluted shares
      
      
      
      248,707,275


* - In February 2007, the exercise price of the warrants was
  changed from US$1.80 to the South African Rand equivalent on February 15, 2007,
  that being ZAR12.90.

1.17.2      Disclosure Controls and
  Procedures

The Chief Executive Officer (CEO) and Chief Financial
  Officer (CFO) are responsible for establishing and maintaining adequate
  disclosure controls and procedures. Disclosure controls and procedures are designed
  to ensure that information required to be disclosed in the Companys filings
  under securities legislation is accumulated and communicated to management,
  including the CEO and CFO as appropriate, to allow timely decisions regarding
  public disclosure. They are designed to provide reasonable assurance that all
  information required to be disclosed in these filings is recorded, processed,
  summarized and reported within the time periods specified in securities legislation.
  The Company reviews its disclosure controls and procedures; however, it cannot
  provide an absolute level of assurance because of the inherent limitations in
  control systems to prevent or detect all misstatements due to error or fraud.

The Companys management, including the CEO and CFO, conducted
  an evaluation of the effectiveness of the design and operation of the Companys
  disclosure controls and procedures as of December 31, 2007. Based on this evaluation,
  the CEO and CFO have concluded that the Companys disclosure controls and
  procedures are effective.

32

---

| | MANAGEMENT'S DISCUSSION AND
      ANALYSIS YEAR ENDED DECEMBER 31, 2007 | 
| | ----------------------------------------------------------------------- | 

1.17.3      Internal Control over
  Financial Reporting

Management is responsible for establishing and maintaining adequate
  internal control over financial reporting to provide reasonable assurance regarding
  the reliability of financial reporting and the preparation of financial statements
  for external purposes in accordance with GAAP. Internal control over financial
  reporting includes those policies and procedures that: (1) pertain to the maintenance
  of records that in reasonable detail accurately and fairly reflect the transactions
  and dispositions of the assets of the Company, (2) provide reasonable assurance
  that transactions are recorded as necessary to permit preparation of financial
  statements in accordance with GAAP, and that receipts and expenditures of the
  Company are being made only in accordance with authorizations of management
  and directors of the Company, and (3) provide reasonable assurance regarding
  prevention or timely detection of unauthorized acquisition, use or disposition
  of the Companys assets that could have a material effect on the financial
  statements.

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

The Companys management has evaluated the effectiveness
  of internal control over financial reporting. Based on this evaluation, management
  has concluded that internal control over financial reporting was effective as
  of December 31, 2007. During the Companys fourth quarter, there were no
  changes in the Companys internal control over financial reporting that
  have materially affected or are reasonably likely to affect its internal control
  over financial reporting.

33

---