---







CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDEDDECEMBER 31,
2008 and 2007









(Expressed in Canadian Dollars, unless otherwise
stated)

---

Managements Report on Internal Control over Financial
Reporting

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

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

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

Management assessed the effectiveness of the companys internal
control over financial reporting as at December 31, 2008. In making this
assessment, the companys management used the criteria, established in Internal
Control-Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO).

Management has excluded GBG Rusaf Gold Limited and its subsidiaries
  which were acquired in an asset acquisition during 2008, from its assessment
  of internal control over financial reporting as at December 31, 2008. GBG Rusaf
  Gold represents total assets of $1.6 million and net loss of $8 million of Great
  Basin Gold Ltds consolidated financial statements as at and for the year
  ended December 31, 2008.

During the 2008 fiscal year, no changes occurred in the Companys
  internal controls over financial reporting that materially affected, or are
  reasonably likely to materially affect, our internal control over financial
  reporting.

Based upon this assessment, management concluded that the
companys internal control over financial reporting was effective as at December
31, 2008.

The effectiveness of the companys internal control over
financial reporting as at December 31, 2008 has been audited by
PricewaterhouseCoopers LLP, our independent auditors, as stated in their report
which appears herein.



/s/ Ferdinand
      Dippenaar
    
    /s/
      Lou van VuurenChief Executive Officer
    
    Chief Financial Officer


Vancouver, British Columbia

March 23, 2009

2

---



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

INDEPENDENT AUDITORS REPORT

To the Shareholders of Great Basin Gold Limited

We have completed integrated audits of Great Basin Gold
Limiteds (the Company) 2008 and 2007 consolidated financial statements and of
its internal control over financial reporting as at December 31, 2008. Our
opinions, based on our audits, are presented below.

Consolidated financial statements

We have audited the accompanying consolidated balance sheets of
Great Basin Gold Limited as at December 31, 2008 and December 31, 2007, and the
related consolidated statements of operations and comprehensive (loss) income,
shareholders equity and deficit and cash flows for each of the years then
ended. These financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial position of the
Company as at December 31, 2008 and December 31, 2007 and the results of its
operations and its cash flows for each of the years then ended in accordance
with Canadian generally accepted accounting principles.

Internal control over financial reporting

We have also audited Great Basin Gold Limiteds internal
control over financial reporting as at December 31, 2008, based on criteria
established in Internal Control - Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO). The Companys
management is responsible for maintaining effective internal control over
financial reporting and for its assessment of the effectiveness of internal
control over financial reporting, included in the accompanying Management's
Report on Internal Control over Financial reporting. Our responsibility is to
express an opinion on the Companys internal control over financial reporting
based on our audit.

We conducted our audit of internal control over financial
reporting in accordance with the standards of the Public Company Accounting
Oversight Board (United States).

3

---



---

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

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

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

As described in Management's Report on Internal Control over
  Financial Reporting, management has excluded GBG Rusaf Gold Limited and its
  subsidiaries from its assessment of internal control over financial reporting
  as at December 31, 2008 because it was acquired by the Company during 2008.
  We have also excluded GBG Rusaf Gold Limited and its subsidiaries from our audit
  of internal control over financial reporting. GBG Rusaf Gold Limited is a wholly
  owned subsidiary of the Company whose total assets and net loss represent $1.6
  million and $8 million, respectively, of the Companys consolidated financial
  statement amounts as at and for the year ended December 31, 2008.

In our opinion, the Company maintained, in all material respects,
  effective internal control over financial reporting as at December 31, 2008
  based on criteria established in Internal Control  Integrated Framework
  issued by the COSO.



*/s/ PricewaterhouseCoopers LLP*

Chartered AccountantsVancouver, BC, Canada
March 23, 2009

4

---

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

|                                                 |  |        |  |   | December 31  |   |   | December 31  |  
|------------------------------------------------ |  | ------ |  | - | ------------ | - | - | ------------ | -
|                                                 |  | Note   |  |   | 2008         |   |   | 2007         |  
|Assets                                           |  |        |  |   |              |   |   |              |  
|                                                 |  |        |  |   |              |   |   |              |  
|Current assets                                   |  |        |  |   |              |   |   |              |  
|Cash and cash equivalents                        |  | 6      |  | $ | 33,549,118   |   | $ | 78,362,954   |  
|Restricted cash                                  |  | 25(b)  |  |   | 4,064,100    |   |   |             |  
|Amounts receivable                               |  | 7      |  |   | 4,940,950    |   |   | 3,737,903    |  
|Inventory                                        |  | 8      |  |   | 8,246,093    |   |   | 199,185      |  
|Due from related parties                         |  | 18     |  |   | 23,174       |   |   | 408,638      |  
|Held-for-trading financial
      instruments     |  | 9      |  |   | 79,960       |   |   | 833,000      |  
|Other receivable                                 |  | 10     |  |   | 912,900      |   |   |             |  
|Prepaid expenses                                 |  | 11     |  |   | 890,183      |   |   | 811,208      |  
|                                                 |  |        |  |   | 52,706,478   |   |   | 84,352,888   |  
|Property, plant and equipment                    |  | 12     |  |   | 48,849,185   |   |   | 14,295,727   |  
|Reclamation deposits                             |  | 13     |  |   | 2,886,539    |   |   | 1,720,456    |  
|Available-for-sale financial instruments         |  | 14     |  |   | 899,624      |   |   | 3,326,084    |  
|Investments in associate                         |  | 15     |  |   |             |   |   | 7,203,973    |  
|Mineral property interests                       |  | 16     |  |   | 259,858,656  |   |   | 218,413,930  |  
|Total Assets                                     |  |        |  | $ | 365,200,482  |   | $ | 329,313,058  |  
|                                                 |  |        |  |   |              |   |   |              |  
|Liabilities and Shareholders' Equity             |  |        |  |   |              |   |   |              |  
|                                                 |  |        |  |   |              |   |   |              |  
|Current liabilities                              |  |        |  |   |              |   |   |              |  
|Accounts payable and accrued
      liabilities   |  | 17     |  | $ | 26,276,562   |   | $ | 6,099,246    |  
|Due to related parties                           |  | 18     |  |   | 252,854      |   |   | 22,098       |  
|Current portion of long term borrowings          |  | 19(c)  |  |   | 916,745      |   |   |             |  
|                                                 |  |        |  |   | 27,446,161   |   |   | 6,121,344    |  
|                                                 |  |        |  |   |              |   |   |              |  
|Long term borrowings                             |  | 19     |  |   | 62,060,594   |   |   |             |  
|Future income taxes                              |  | 20     |  |   | 14,747,392   |   |   | 33,983,164   |  
|Site
      reclamation obligations               |  | 21     |  |   | 3,738,380    |   |   | 1,416,964    |  
|                                                 |  |        |  |   | 80,546,366   |   |   | 35,400,128   |  
|Shareholders' equity                             |  |        |  |   |              |   |   |              |  
|Share capital                                    |  | 22(a)  |  |   | 428,656,646  |   |   | 390,139,711  |  
|Warrants                                         |  | 22(c)  |  |   | 24,005,896   |   |   | 17,934,934   |  
|Contributed surplus                              |  | 22(d)  |  |   | 21,599,521   |   |   | 11,509,102   |  
|Deficit                                          |  |        |  |   | (217,267,111 | ) |   | (132,395,033 | )
|Accumulated other comprehensive income           |  |        |  |   | 213,003      |   |   | 602,872      |  
|                                                 |  |        |  |   | 257,207,955  |   |   | 287,791,586  |  
|                                                 |  |        |  |   |              |   |   |              |  
|Total
      Liabilities and Shareholders' Equity |  |        |  | $ | 365,200,482  |   | $ | 329,313,058  |  
|                                                 |  |        |  |   |              |   |   |              |  
|Nature of operations                             |  | 1      |  |   |              |   |   |              |  
|Segment disclosure                               |  | 24     |  |   |              |   |   |              |  
|Contingencies and commitments                    |  | 25; 16 |  |   |              |   |   |              |  
|Subsequent events                                |  | 26     |  |   |              |   |   |              |  

See accompanying notes to consolidated financial
statements.

|Approved by the Board of Directors |                       
|---------------------------------- | ----------------------
|                                   |                       
|/s/ Ferdinand Dippenaar            | /s/ Ronald W. Thiessen
|Ferdinand Dippenaar                | Ronald W. Thiessen    
|                                   |                       
|Chief Executive Officer            | Director              

5

---

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

|                                                                         |  |      |  |   | Years ended December 31 |  
|------------------------------------------------------------------------ |  | ---- |  | - | ----------------------- | -
|                                                                         |  | Note |  |   | 2008                    |  
|                                                                         |  |      |  |   |                         |  
|Revenue                                                                  |  |      |  | $ | 24,716,323              |  
|                                                                         |  |      |  |   |                         |  
|(Expenses) income                                                        |  |      |  |   |                         |  
|Production cost                                                          |  |      |  |   | (18,177,231             | )
|Depletion charge                                                         |  |      |  |   | (6,344,218              | )
|Exploration expenses (see schedule)                                      |  |      |  |   | (23,902,737             | )
|Pre-development expenses (see schedule)                                  |  |      |  |   | (62,597,563             | )
|Accretion of reclamation obligation                                      |  |      |  |   | (31,722                 | )
|Conference and travel                                                    |  |      |  |   | (1,607,065              | )
|Foreign exchange loss                                                    |  |      |  |   | (2,737,378              | )
|Legal, accounting, and audit                                             |  |      |  |   | (1,759,612              | )
|Office and administration                                                |  |      |  |   | (7,396,242              | )
|Other income                                                             |  |      |  |   | 176,877                 |  
|Salaries and compensation                                                |  |      |  |   |                         |  
|Salaries and wages                                                       |  |      |  |   | (6,844,782              | )
|Stock-based compensation                                                 |  |      |  |   | (9,082,504              | )
|Shareholder communications                                               |  |      |  |   | (698,978                | )
|Trust and filing                                                         |  |      |  |   | (664,131                | )
|Loss before the undernoted and income taxes                              |  |      |  |   | (116,950,963            | )
|Fair value of financial instruments held-for-trading                     |  | 9    |  |   | 15,820                  |  
|Gain on sale of assets                                                   |  |      |  |   | 173,490                 |  
|Transaction cost                                                         |  |      |  |   | (18,768                 | )
|Interest expense                                                         |  |      |  |   | (1,273,694              | )
|Interest income                                                          |  |      |  |   | 2,357,564               |  
|Loss from associate                                                      |  | 15   |  |   | (351,446                | )
|Unrealized loss
      on held-for-trading financial instruments          |  | 9    |  |   | (768,860                | )
|Loss before income taxes                                                 |  |      |  |   | (116,816,857            | )
|Future income
      tax recovery                                         |  | 20   |  |   | 31,944,779              |  
|Loss for the year                                                        |  |      |  | $ | (84,872,078             | )
|                                                                         |  |      |  |   |                         |  
|Other comprehensive (loss) income                                        |  |      |  |   |                         |  
|Unrealized (loss) gain on available-for-sale financial
      instruments |  | 14   |  |   | (2,701,263              | )
|Unrealized gain on foreign exchange translation
      of self-sustaining |  |      |  |   | 2,311,394               |  
|foreign operations                                                       |  |      |  |   |                         |  
|Other comprehensive (loss) income                                        |  |      |  | $ | (389,869                | )
|                                                                         |  |      |  |   |                         |  
|Total comprehensive loss for the year                                    |  |      |  | $ | (85,261,947             | )
|                                                                         |  |      |  |   |                         |  
|                                                                         |  |      |  |   |                         |  
|Basic and diluted
      loss per share                                   |  |      |  | $ | (0.40                   | )
|                                                                         |  |      |  |   |                         |  
|Weighted average
      number of common shares outstanding               |  |      |  |   | 211,282,760             |  

See accompanying notes to consolidated financial statements.

6

---

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

Year
        ended
      
      
      Year
        endedNote
      
      
      December
        31, 2008
      
      
      December
        31, 2007Number of
      
      
      
      
      
      Number ofCommon shares
      
      
      
      
      shares
      
      
      
      
      
      sharesBalance at beginning of the year
      
      
      
      
      203,395,902
      
      $
      390,139,711
      
      
      113,411,713
      
      $
      201,457,592Fair value of options exercised
      
      
      
      
      
      
      
      2,076,452
      
      
      
      
      
      2,005,064Fair value of warrants exercised
      
      
      
      
      
      
      
      545,894
      
      
      
      
      
      688,689Shares issued for cash, net of share issue costs
      
      
      
      
      
      
      
      
      
      
      57,500,000
      
      
      121,427,869Share purchase options exercised
      
      
      
      
      2,250,386
      
      
      4,655,242
      
      
      3,015,830
      
      
      5,111,184Shares issued for Hecla Ventures Corp., April 2007
      
      
      
      
      
      
      
      
      
      
      7,930,214
      
      
      19,666,931Shares issued to Tranter Burnstone
        (Pty) Ltd, October 2007
      
      
      
      
      
      
      
      
      
      
      19,938,650
      
      
      36,323,195Shares issued to CW Properties LLC, February 2008
      
      22(e)
      
      
      10,000
      
      
      29,700
      
      
      
      
      
      Shares issued for Rusaf Gold Limited,
        April 2008
      
      22(f)
      
      
      6,613,636
      
      
      22,787,802
      
      
      
      
      
      Shares issued for Rusaf Gold Limited, July 2008
      
      22(g)
      
      
      22,041
      
      
      76,923
      
      
      
      
      
      Shares issued for Puma Gold (Pty) Ltd,
        July 2008
      
      22(h)
      
      
      1,862,354
      
      
      6,648,604
      
      
      
      
      
      Rusaf share purchase warrants exercised, October 2008
      
      22(d)(i)
      
      
      13,333
      
      
      18,409
      
      
      
      
      
      Share purchase warrants exercised
      
      22(c)
      
      
      998,890
      
      
      1,677,909
      
      
      1,599,495
      
      
      3,459,187Balance at end
        of the year
      
      
      
      
      215,166,542
      
      $
      428,656,646
      
      
      203,395,902
      
      $
      390,139,711Number of
      
      
      
      
      
      Number ofShare purchase warrants
      
      
      
      
      warrants
      
      
      
      
      
      warrantsBalance at beginning of the year
      
      
      
      
      31,433,202
      
      $
      17,934,934
      
      
      2,672,000
      
      $
      1,252,000Warrants issued pursuant to Senior
        Secured Notes
      
      22(c)(iv)
      
      
      18,746,000
      
      
      6,616,856
      
      
      
      
      
      Warrants issued pursuant to share issuance
      
      22(c)(ii)
      
      
      
      
      
      
      
      
      28,750,000
      
      
      16,210,226Warrants issued pursuant to Tranter
        transaction
      
      22(c)(iii)
      
      
      
      
      
      
      
      
      1,684,312
      
      
      1,178,815Exercised
      
      22(c)(i)
      
      
      (998,890
      )
      
      (545,894
      )
      
      (1,599,495
      )
      
      (688,689
      )Expired
      
      
      
      
      
      
      
      
      
      
      (73,615
      )
      
      (17,418
      )Balance at end
        of the year
      
      
      
      
      49,180,312
      
      $
      24,005,896
      
      
      31,433,202
      
      $
      17,934,934Contributed surplusBalance at beginning of the year
      
      
      
      
      
      
      $
      11,509,102
      
      
      
      
      $
      7,863,472Stock-based compensation
      
      22(b)
      
      
      
      
      
      10,411,804
      
      
      
      
      
      5,633,276Share purchase options exercised, credited
        to share capital
      
      
      
      
      
      
      
      (2,076,452
      )
      
      
      
      
      (2,005,064
      )Rusaf share purchase options exercised, credited to
        share capital
      
      22(d)(i)
      
      
      
      
      
      (8,409
      )
      
      
      
      
      Fair value of share purchase warrants
        expired
      
      
      
      
      
      
      
      
      
      
      
      
      
      17,418Options and
        warrants issued on acquisition of Rusaf Gold Limited
      
      22(d)(i)
      
      
      
      
      
      1,763,476
      
      
      
      
      
      Balance at end of the year
      
      
      
      
      
      
      $
      21,599,521
      
      
      
      
      $
      11,509,102DeficitBalance at beginning of the year
      
      
      
      
      
      
      $
      (132,395,033
      )
      
      
      
      $
      (81,227,367
      )Net loss for the year
      
      
      
      
      
      
      
      (84,872,078
      )
      
      
      
      
      (51,167,666
      )Balance at end
        of the year
      
      
      
      
      
      
      $
      (217,267,111
      )
      
      
      
      $
      (132,395,033
      )Accumulated other comprehensive incomeBalance at beginning of the year
      
      
      
      
      
      
      $
      602,872
      
      
      
      
      $
      64,811Unrealized (loss) gain on available-for-sale financial
        instruments
      
      14
      
      
      
      
      
      (2,701,263
      )
      
      
      
      
      538,061Accumulated unrealized gain on foreign
        exchange translation of
      
      
      
      
      
      
      
      2,311,394
      
      
      
      
      
      self-sustaining foreign operationsBalance at end of the year
      
      
      
      
      
      
      $
      213,003
      
      
      
      
      $
      602,872TOTAL SHAREHOLDERS' EQUITY
      
      
      
      
      
      
      $
      257,207,955
      
      
      
      
      $
      287,791,586


See accompanying notes to consolidated financial statements.

7

---

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

|                                                                   |   | Years ended December 31 |  
|------------------------------------------------------------------ | - | ----------------------- | -
|                                                                   |   | 2008                    |  
|                                                                   |   |                         |  
|Operating activities                                               |   |                         |  
|Loss for the year                                                  | $ | (84,872,078             | )
|Items not involving cash                                           |   |                         |  
|Depreciation                                                       |   | 3,100,780               |  
|Future income tax recovery                                         |   | (31,944,779             | )
|Gain on sale of assets                                             |   | (173,490                | )
|Assets written off                                                 |   |                        |  
|Unrealized loss on held-for-trading financial
      instruments    |   | 768,860                 |  
|Fair value of financial instruments
      held-for-trading         |   | (15,820                 | )
|Loss from associate                                                |   | 351,446                 |  
|Non-cash stock-based compensation
      expense (note 22(b))       |   | 10,411,804              |  
|Provision for site reclamation cost                                |   | 478,953                 |  
|Unrealized foreign exchange loss
      (gain)                      |   | 5,216,445               |  
|Accretion reclamation obligation                                   |   | 31,722                  |  
|Amortization charge                                                |   | 18,768                  |  
|Depletion charge                                                   |   | 6,344,218               |  
|Interest accrual                                                   |   | 1,837,874               |  
|Changes in non-cash operating working capital                      |   |                         |  
|Amounts receivable                                                 |   | (713,984                | )
|Prepaid expenses                                                   |   | 249,427                 |  
|Inventory                                                          |   | (8,046,908              | )
|Accounts
      payable and accrued liabilities                     |   | 20,078,224              |  
|Cash used in operating activities                                  |   | (76,878,538             | )
|                                                                   |   |                         |  
|Investing activities                                               |   |                         |  
|Mineral property acquisition costs                                 |   | (2,690,291              | )
|Acquire shares in Rand Mutual Assurance                            |   | (5                      | )
|Proceeds on sale of assets                                         |   | 471,306                 |  
|Purchase of equipment                                              |   | (34,552,892             | )
|Purchase of shares in Rusaf Gold Limited                           |   |                        |  
|Purchase of Hecla Ventures Corp.                                   |   |                        |  
|Transfer to restricted cash                                        |   | (4,064,100              | )
|Purchase of shares in Kryso Resources Plc                          |   | (274,798                | )
|Reclamation deposits                                               |   | (1,181,398              | )
|Cash used in investing activities                                  |   | (42,292,178             | )
|                                                                   |   |                         |  
|Financing activities                                               |   |                         |  
|Common shares issued for cash, net of issue costs                  |   | 6,247,772               |  
|Advances received from long term borrowings                        |   | 65,954,894              |  
|Advances to other parties                                          |   | (985,000                | )
|Advances from (to) related parties                                 |   | 616,220                 |  
|Cash generated from
      financing activities                     |   | 71,833,886              |  
|                                                                   |   |                         |  
|(Decrease) increase in cash and cash equivalents                   |   | (47,336,830             | )
|Cash acquired through the acquisition of Puma
      Gold (Pty) Ltd |   | 5,987                   |  
|Cash acquired through the acquisition of Rusaf Gold Limited        |   | 4,494,976               |  
|Cash acquired through the acquisition of Hecla
      Ventures Corp |   |                        |  
|Cash and cash equivalents, beginning of year                       |   | 78,362,954              |  
|Foreign exchange                                                   |   | (1,977,969              | )
|                                                                   |   |                         |  
|Cash and cash equivalents, end of year                             | $ | 33,549,118              |  

Refer note 23 of the notes to the consolidated financial statements
  for supplementary information to the cash flow statement.

8

---

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

|                                                             |  |      |  |   | Year
      ended |   |   | Year
      ended |  
|------------------------------------------------------------ |  | ---- |  | - | ---------------- | - | - | ---------------- | -
|Mineral Property Interests                                   |  |      |  |   | December 31      |   |   | December 31      |  
|                                                             |  | Note |  |   | 2008             |   |   | 2007             |  
|Burnstone - Exploration                                      |  |      |  |   |                  |   |   |                  |  
|Assays and analysis                                          |  |      |  | $ | 40,817           |   | $ | 122,805          |  
|Depreciation                                                 |  |      |  |   |                 |   |   | 443,666          |  
|Drilling                                                     |  |      |  |   | 2,342,178        |   |   | 2,427,840        |  
|Engineering                                                  |  |      |  |   | 62,128           |   |   | 27,034           |  
|Environmental, socio-economic and land                       |  |      |  |   | (77,592          | ) |   | 12,666           |  
|Equipment rental                                             |  |      |  |   | 19,461           |   |   | (21,900          | )
|Geological                                                   |  |      |  |   | 669,751          |   |   | 279,522          |  
|Graphics                                                     |  |      |  |   | 5,596            |   |   | 15,727           |  
|Property fees and exploration option payments                |  |      |  |   | 7,749            |   |   | 22,907           |  
|Site activities                                              |  |      |  |   | 182,379          |   |   | (17,096          | )
|Exploration expenses before the following                    |  |      |  |   | 3,252,467        |   |   | 3,313,171        |  
|Office and administration                                    |  |      |  |   | 56,895           |   |   | 92,612           |  
|Exploration expenses incurred during the year                |  |      |  |   | 3,309,362        |   |   | 3,405,783        |  
|Cumulative exploration expenditures, beginning of year       |  |      |  |   | 27,733,355       |   |   | 24,327,572       |  
|Cumulative
      exploration expenditures, end of year       |  |      |  |   | 31,042,717       |   |   | 27,733,355       |  
|Hollister - Exploration                                      |  |      |  |   |                  |   |   |                  |  
|Assays and analysis                                          |  |      |  |   | 1,348,040        |   |   | 425,298          |  
|Depreciation                                                 |  |      |  |   |                 |   |   | 612,831          |  
|Drilling                                                     |  |      |  |   | 8,316,210        |   |   | 2,880,079        |  
|Engineering                                                  |  |      |  |   | 66,888           |   |   | 1,170,116        |  
|Environmental, socio-economic and land                       |  |      |  |   | 1,086,029        |   |   | 1,574,917        |  
|Equipment rental                                             |  |      |  |   |                 |   |   | 24,350           |  
|Freight                                                      |  |      |  |   |                 |   |   | 47,292           |  
|Geological                                                   |  |      |  |   | (19,146          | ) |   | 606,237          |  
|Graphics                                                     |  |      |  |   | 3,578            |   |   | 52,026           |  
|Property fees and exploration option
      payments          |  |      |  |   | 133,747          |   |   | 168,334          |  
|Site
      activities                                        |  |      |  |   | 281,851          |   |   | 794,328          |  
|Exploration expenses before the
      following              |  |      |  |   | 11,217,197       |   |   | 8,355,808        |  
|Office and
      administration                              |  |      |  |   | 196,221          |   |   | 233,565          |  
|Exploration expenses incurred during the
      year          |  |      |  |   | 11,413,418       |   |   | 8,589,373        |  
|Cumulative
      exploration expenditures, beginning of year |  |      |  |   | 33,781,885       |   |   | 25,192,512       |  
|Cumulative exploration expenditures, end of year             |  |      |  |   | 45,195,303       |   |   | 33,781,885       |  
|Rusaf Gold - Exploration                                     |  |      |  |   |                  |   |   |                  |  
|Assays and analysis                                          |  |      |  |   | 938,192          |   |   |                 |  
|Depreciation                                                 |  |      |  |   | 218,553          |   |   |                 |  
|Drilling                                                     |  |      |  |   | 2,492,273        |   |   |                 |  
|Engineering                                                  |  |      |  |   | 186,313          |   |   |                 |  
|Environmental, socio-economic and
      land                 |  |      |  |   | 13,091           |   |   |                 |  
|Equipment rental                                             |  |      |  |   | 477,055          |   |   |                 |  
|Freight                                                      |  |      |  |   | 450,618          |   |   |                 |  
|Geological                                                   |  |      |  |   | 935,816          |   |   |                 |  
|Graphics                                                     |  |      |  |   | 16,494           |   |   |                 |  
|Property fees and exploration option payments                |  |      |  |   | 329,373          |   |   |                 |  
|Site activities                                              |  |      |  |   | 1,481,027        |   |   |                 |  
|Exploration expenses before the following                    |  |      |  |   | 7,538,805        |   |   |                 |  
|Office and administration                                    |  |      |  |   |                 |   |   |                 |  
|Exploration expenses incurred, since acquisition             |  |      |  |   | 7,538,805        |   |   |                 |  
|Cumulative exploration expenditures, beginning of year       |  |      |  |   |                 |   |   |                 |  
|Cumulative
      exploration expenditures, since acquisition |  | 15   |  |   | 7,538,805        |   |   |                 |  

9

---

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

|                                                       |  |       |  |   | Year
      ended |  |   | Year
      ended | 
|------------------------------------------------------ |  | ----- |  | - | ---------------- |  | - | ---------------- | 
|Mineral Property Interests                             |  |       |  |   | December 31      |  |   | December 31      | 
|                                                       |  | Note  |  |   | 2008             |  |   | 2007             | 
|Other - Exploration                                    |  |       |  |   |                  |  |   |                  | 
|Assays and analysis                                    |  |       |  | $ | 284,553          |  | $ | 100,271          | 
|Depreciation                                           |  |       |  |   | 14,459           |  |   |                 | 
|Drilling                                               |  |       |  |   | 6,605            |  |   | 195,976          | 
|Engineering                                            |  |       |  |   | 62,721           |  |   | 20,109           | 
|Environmental, socio-economic and land                 |  |       |  |   |                 |  |   | 4,316            | 
|Equipment rental                                       |  |       |  |   | 139,746          |  |   | 46,383           | 
|Freight                                                |  |       |  |   | 141,198          |  |   | 14,450           | 
|Geological                                             |  |       |  |   | 473,250          |  |   | 273,369          | 
|Graphics                                               |  |       |  |   |                 |  |   | 18,408           | 
|Property fees and exploration option
      payments    |  |       |  |   | 103,863          |  |   | 84,363           | 
|Site activities                                        |  |       |  |   | 384,967          |  |   | 253,184          | 
|Transportation                                         |  |       |  |   | 29,790           |  |   | 55,968           | 
|Exploration expenses before the following              |  |       |  |   | 1,641,152        |  |   | 1,066,797        | 
|Office and administration                              |  |       |  |   |                 |  |   | 29,820           | 
|Exploration expenses incurred during the year          |  |       |  |   | 1,641,152        |  |   | 1,096,617        | 
|Cumulative exploration expenditures, beginning of year |  |       |  |   | 2,528,091        |  |   | 1,431,474        | 
|Cumulative
      exploration expenditures, end of year |  |       |  |   | 4,169,243        |  |   | 2,528,091        | 
|                                                       |  |       |  |   |                  |  |   |                  | 
|Total exploration expenses before the following        |  |       |  |   | 23,649,621       |  |   | 12,735,776       | 
|Office and administration                              |  | 22(b) |  |   | 253,116          |  |   | 355,997          | 
|Total exploration expenses incurred during the year    |  |       |  |   | 23,902,737       |  |   | 13,091,773       | 
|Cumulative exploration expenditures, beginning of year |  |       |  |   | 64,043,331       |  |   | 50,951,558       | 
|Cumulative
      exploration expenditures, end of year |  |       |  | $ | 87,946,068       |  | $ | 64,043,331       | 

See accompanying notes to consolidated financial statements.

10

---

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

|                                                                 |  |       |  |   | Year
      ended |  |   | Year
      ended | 
|---------------------------------------------------------------- |  | ----- |  | - | ---------------- |  | - | ---------------- | 
|Mineral Property Interests                                       |  |       |  |   | December 31      |  |   | December 31      | 
|                                                                 |  | Note  |  |   | 2008             |  |   | 2007             | 
|Burnstone - Pre-development                                      |  |       |  |   |                  |  |   |                  | 
|Mine development                                                 |  |       |  |   |                  |  |   |                  | 
|Establishment work                                               |  |       |  | $ | 193,475          |  | $ | 697,457          | 
|Equipment rental and services                                    |  |       |  |   | 892,541          |  |   | 1,047,259        | 
|Surface infrastructure                                           |  |       |  |   | 658,127          |  |   | 836,042          | 
|Portal construction                                              |  |       |  |   | 1,292,687        |  |   | 308,660          | 
|Underground access and infrastructure                            |  |       |  |   | 5,558,031        |  |   | 4,000,468        | 
|Depreciation                                                     |  |       |  |   | 1,144,751        |  |   |                 | 
|Other cost                                                       |  |       |  |   |                  |  |   |                  | 
|Access road                                                      |  |       |  |   | 470,575          |  |   |                 | 
|Optimisation                                                     |  |       |  |   |                 |  |   | 523,543          | 
|Operational cost                                                 |  |       |  |   | 4,801,643        |  |   | 3,348,964        | 
|Long hole stoping pilot project                                  |  |       |  |   | 192,504          |  |   |                 | 
|Waste rock dump                                                  |  |       |  |   | 27,063           |  |   |                 | 
|Metallurgical plant                                              |  |       |  |   |                 |  |   | 186,837          | 
|Vertical shaft                                                   |  |       |  |   | 7,778,719        |  |   | 508,530          | 
|Energy project                                                   |  |       |  |   | 86,256           |  |   |                 | 
|Permanent
      infrastructure - surface                         |  |       |  |   | 582,674          |  |   |                 | 
|Pre-development expenses before the
      following              |  |       |  |   | 23,679,046       |  |   | 11,457,760       | 
|Office and
      administration                                  |  |       |  |   | 414,214          |  |   | 320,274          | 
|Pre-development expenses incurred during
      the year          |  |       |  |   | 24,093,260       |  |   | 11,778,034       | 
|Cumulative
      pre-development expenditures, beginning of year |  |       |  |   | 15,080,245       |  |   | 3,302,211        | 
|Cumulative pre-development expenditures, end of year             |  |       |  |   | 39,173,505       |  |   | 15,080,245       | 
|                                                                 |  |       |  |   |                  |  |   |                  | 
|Hollister - Pre-development                                      |  |       |  |   |                  |  |   |                  | 
|Depreciation                                                     |  |       |  |   | 1,673,964        |  |   |                 | 
|Equipment rental and services                                    |  |       |  |   | 712,008          |  |   | 1,937,187        | 
|Surface infrastructure                                           |  |       |  |   | 1,880,509        |  |   | 2,942,261        | 
|Underground access and infrastructure
      development          |  |       |  |   | 24,562,157       |  |   | 6,682,426        | 
|Operational
      costs                                          |  |       |  |   | 9,013,695        |  |   | 6,289,421        | 
|Pre-development expenses before the
      following              |  |       |  |   | 37,842,333       |  |   | 17,851,295       | 
|Office and
      administration                                  |  |       |  |   | 661,970          |  |   | 498,990          | 
|Pre-development expenses incurred during
      the year          |  |       |  |   | 38,504,303       |  |   | 18,350,285       | 
|Cumulative
      pre-development expenditures, beginning of year |  |       |  |   | 18,350,285       |  |   |                 | 
|Cumulative pre-development expenditures, end of year             |  |       |  |   | 56,854,588       |  |   | 18,350,285       | 
|                                                                 |  |       |  |   |                  |  |   |                  | 
|Total pre-development expenses before the
      following        |  |       |  |   | 61,521,379       |  |   | 29,309,055       | 
|Office and
      administration                                  |  | 22(b) |  |   | 1,076,184        |  |   | 819,264          | 
|Total pre-development expenses incurred
      during the year    |  |       |  |   | 62,597,563       |  |   | 30,128,319       | 
|Cumulative pre-development
      expenditures, beginning of year |  |       |  |   | 33,430,530       |  |   | 3,302,211        | 
|Cumulative pre-development expenditures, end of year             |  |       |  | $ | 96,028,093       |  | $ | 33,430,530       | 

See accompanying notes to consolidated financial statements.

11

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|1. | Nature of operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Great Basin Gold Ltd. (Great Basin or the Company) is
      incorporated under the laws of the Province of British Columbia and is a
      pre-production mining company engaged in the acquisition, exploration and
      development of precious metal deposits. The Company currently has two
      material projects both of which are at the test-mining stage, namely (a)
      the Hollister gold project, acquired in 1997, and which is located on the
      Carlin Trend goldfield in Nevada, USA (the Hollister Property) and (b)
      the Burnstone gold project, acquired in 2002, and which is located in the
      Witwatersrand Basin goldfield in South Africa (the Burnstone
      Property).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | At the Hollister Property, an initial feasibility study
      was completed in 2007 on a portion of the property called the Hollister
      Development Block (HDB). An underground exploration and development
      program is underway to conduct test mining and to obtain bulk samples. At
      the Burnstone Property, an initial feasibility study was completed in
      2006, followed by an optimized feasibility study that was completed in
      2007. The development of an access decline and vertical shaft are now
      underway.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Company also acquired the Esmeralda property in
      Nevada during December 2008 primarily for the metallurgical plant on the
      facility and is also conducting early stage exploration on a number of
      other prospects, primarily in Africa and Russia.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|2. | Basis of preparation and principles of
      consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | These financial statements have been prepared in
      accordance with Canadian Generally Accepted Accounting Principles, as
      described in note 27, differ in certain respects from accounting
      principles generally accepted in the United States of America.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The principal accounting policies applied in the
      preparation of these financial statements are set out below. These
      policies have been consistently applied in all years presented, unless
      otherwise stated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | These consolidated financial statements include the accounts
        of the Company and its wholly- owned subsidiaries. All significant intercompany
        balances and transactions have been eliminated.
      Subsidiaries:are those entities in which the Company
        has an interest of more than one half of the voting rights or otherwise
        has power to govern the financial and operating policies. Subsidiaries
        are consolidated from the date on which control is acquired and are no
        longer consolidated when control ceases. The purchase method of accounting
        is used to account for the acquisition of subsidiaries. The cost of an
        acquisition is measured as the fair value of the assets given up, shares
        issued or liabilities undertaken at the date of acquisition plus costs
        directly attributable to the acquisition. Identifiable assets acquired
        and liabilities and contingent liabilities assumed in a business combination
        are measured initially at their fair values at acquisition date. Non-controlling
        interests are recorded at a proportion of the net identifiable assets
        acquired. The excess of the cost of acquisition over the fair value of
        the Companys share of the identifiable net assets acquired is recorded
        as goodwill.

12

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

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

| |                                             | Incorporation          | Ownership percentage
| | ------------------------------------------- | ---------------------- | --------------------
| | GBG Rusaf Gold Limited                      | Canada                 | 100%                
| | Great Basin Gold Inc.                       | Nevada, USA            | 100%                
| | Rodeo Creek Gold Inc.                       | Nevada, USA            | 100%                
| | Antler Peak Gold Inc.                       | Nevada, USA            | 100%                
| | Hollister Ventures Corp.                    | Nevada, USA            | 100%                
| | Touchstone Resources Company                | Nevada, USA            | 100%                
| | Ganes Creek Ventures Corp.                  | Alaska, USA            | 100%                
| | N5C Resources Inc.                          | Cayman Islands         | 100%                
| | N6C Resources Inc.                          | Cayman Islands         | 100%                
| | Great Basin Gold RSA (Proprietary) Limited  | South Africa           | 100%                
| | Southgold Exploration (Proprietary) Limited | South Africa           | 100%                
| | Puma Gold (Proprietary) Limited             | South Africa           | 100%                
| | Boulder Investments Ltd                     | Cyprus                 | 100%                
| | Franklyn Ltd                                | British Virgin Islands | 100%                
| | Goldtone Ltd                                | British Virgin Islands | 100%                
| | Graceholme Finance Ltd                      | British Virgin Islands | 100%                
| | Kurils Projects Holdings Ltd                | British Virgin Islands | 100%                
| | Kurils Resources Holdings Ltd               | British Virgin Islands | 100%                
| | Kurils Resources LLC                        | Russia                 | 100%                
| | Premier Resources Ltd                       | Tanzania               | 100%                
| | Protocol Exploration Ltd                    | Tanzania               | 100%                
| | Reef Miners Ltd                             | Tanzania               | 100%                
| | Shield Resources Ltd                        | Tanzania               | 100%                

On January 1, 2008 the Company held 37%
of Rusaf Gold Limited, and on April 1, 2008 the Company acquired the remaining
63% of the fully diluted equity shares of Rusaf (refer note 16(c)).

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

Investments in associates are accounted
for using the equity method of accounting and are initially recognized at cost.
The companys share of its associates post-acquisition profits or losses is
recognized in the income statement.

Cumulative post-acquisition movements
  are adjusted against the carrying amount of the investment. When the companys
  share of losses in an associate equals or exceeds its interest in the associate,
  including any other unsecured receivables, the company does not recognize further
  losses, unless it has incurred obligations or made payments on behalf of the
  associate.

13

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|3. | New accounting pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Canadian Institute of Chartered Accountants (CICA)
      has issued the following new standards which affect the financial
      disclosures and results of operations of the Company for interim and
      annual periods beginning January 1, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Section 3064 and 1000  Goodwill and intangible
      assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Section 3064 replaces CICA 3062 and establishes standards
      for the recognition, measurement and disclosure of goodwill and intangible
      assets. CICA 1000 is amended to clarify criteria for recognition of an
      asset. CICA 3450 is replaced by guidance in CICA 3064. The new
      pronouncements are effective for interim and annual financial statements
      for years beginning on/after October 1, 2008. The Company is currently in
      the process of evaluating the impact this will have on the Companys
      financial statements.                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4. | Significant accounting policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (a)        
      Cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Cash and cash equivalents consist of cash and highly
      liquid investments, having maturity dates of three months or less from the
      date of acquisition, that are readily convertible to known amounts of
      cash.                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (b)        
      Amounts receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Amounts receivable are recognized initially at fair value
      and subsequently measured at amortised cost using the effective interest
      method, less provision for impairment. A provision for impairment of
      receivables is established when there is objective evidence that the
      Company will not be able to collect all amounts due, according to the
      original terms of receivables. The amount of the provision is the
      difference between the assets carrying amount and the present value of
      estimated future cash flows, discounted at the effective interest rate.
      The amount of the provision is recognized in the income
  statement.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (c)        
      Inventory                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Inventories, which include unprocessed ore, stores and
      materials, are measured at the lower of cost and net realizable value. Net
      realizable value is the estimated selling price in the ordinary course of
      business less the estimated cost of completion and the estimated cost
      necessary to perform the sale. Unprocessed ore consists of surface
      stockpiles and is valued at the average production costs plus allocated
      overhead expenses. Stores and materials consist of consumables and are
      valued at the lower of weighted average cost or net realizable value, less
      allowance for redundant items.                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (d)        
      Property, plant and equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Equipment is stated at cost less accumulated
      amortization. Amortization is provided on a straight- line basis over
      three to seven years, which represents the estimated useful lives of the
      related equipment. Amortization of equipment used directly on exploration
      projects is included in exploration expenses.                                                                                                                                                                                                                                                                                                                                              

14

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|4. | Significant accounting policies
  (continued)                                                                                                  
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                
|   | *(d)*       
      *Property, plant and equipment (continued)*                                                                                 
|   |                                                                                                                                                
|   | Land is shown at cost and is not depreciated.
      Improvements and fixtures to buildings are being amortized over a period
      of 10 years.
|   |                                                                                                                                                
|   | Other estimated useful lives of assets have been
      calculated as follows:                                                                  

Leased assets
    3  7 yearsVehicles
    3  7 yearsComputers
    3 yearsOffice furniture and fixtures
    5 years


Assets under construction are not
depreciated.

Capitalized mine development costs
include expenditure incurred to develop new orebodies, following the receipt of
all necessary permits and licenses to permit sustained mining activities. Where
funds have been borrowed specifically to finance a project, the amount of
interest capitalized represents the actual borrowing costs incurred. Mine
development costs are capitalized to the extent they provide access to gold
bearing deposit and have future economic benefit.

Depreciation, depletion and
amortization of mine development costs are computed by the units-of-production
method based on estimated proven and probable mineral reserves. Proven and
probable mineral reserves reflect estimated quantities of economically
recoverable reserves which can be recovered in the future from known mineral
deposits. These reserves are amortized from the date on which production begins.

*(e)*       
*Mineral property interests*

The Company capitalizes mineral
property acquisition costs on a property-by-property basis. Mineral property
acquisition costs are subject to impairment tests for long lived assets.
Exploration expenditures and option payments incurred prior to the determination
of the feasibility of mining operations and the decision to commence development
are charged to operations as incurred.

Pre-development costs incurred prior to
a development decision and the receipt of all necessary permits and licenses for
sustained mining operations are charged to operations as incurred. Development
expenditures incurred subsequent to the commencement of commercial production to
increase productive capacity or to extend the life of existing production are
capitalized under mine development costs.

Mineral property acquisition costs
include the cash consideration and the fair market value of common shares issued
for mineral property interests, based on the trading price of the shares at the
time the acquisition is closed. Payments relating to a property acquired under
an option or joint venture agreement, where such payments are made at the sole
discretion of the Company, are recorded in the accounts upon payment.

Administrative expenditures are
expensed as incurred.

15

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|4. | Significant accounting policies
  (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | (f)        
      Impairment of non-financial assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Long-lived assets are reviewed for impairment whenever
        events or changes in circumstances indicate that the carrying amount may
        not be recoverable. The recoverable amount is determined on the basis
        of estimated undiscounted future cash flows to be derived from the asset
        group.
      Early stage exploration projects are evaluated based on
        available technical data with reference to market related resource ounce
        prices.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | If the recoverable amount is less than the carrying value
      of the asset group, the fair value of the asset group is estimated. An
      impairment loss is recognized as the amount by which the assets carrying
      amount exceeds its estimated fair value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | For the purposes of assessing impairment, assets are
      grouped at the lowest levels for which there are separately identifiable
      cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | (g)        
      Income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company uses the asset and liability method of
      accounting for income taxes. Under this method, future income tax assets
      and liabilities are computed based on differences between the carrying
      amount of existing assets and liabilities on the balance sheet and their
      corresponding tax values, 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 tax assets are recognized to the extent that they
      are considered more likely than not to be realized. The carrying value of
      future income tax assets is adjusted, if necessary, by the use of a
      valuation allowance to reflect the estimated realizable amount.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | (h)        
      Site reclamation obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Estimated long-term asset retirement obligations,
      comprising pollution control, rehabilitation and mine closure, are based
      on the Company's environmental management plans in compliance with current
      technological, environmental and regulatory requirements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The net present values of expected rehabilitation cost
      estimates are recognized and provided for in full in the financial
      statements. The estimates are reviewed annually and are discounted using
      rates that reflect inflation and the time value of money. The discount
      rate used is based on a pre- tax credit adjusted risk-free rate that is
      adjusted to reflect the current market assessments of the time value of
      money and the risks specific to the obligation. Annual changes in the
      provision consist of finance costs relating to the change in the present
      value of the provision and inflationary increases in the provision
      estimate, as well as changes in estimates. The present value of
      environmental disturbances created as well as changes to estimates is
      expensed under exploration expenses against an increase in the
      rehabilitation provision for those projects for which a decision to
      develop has not been taken. Change in estimates for projects in the
      development phase is capitalized and amortised over the life of mine on
      the units-of-production method. Rehabilitation costs incurred that are
      included in the estimates are charged to the provision. The cost of
      ongoing current programmes to prevent and control pollution is charged
      against income as incurred.

16

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|4. | Significant accounting policies
  (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | *(i)*        
      Share capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company records proceeds from share issuances net of
      issue costs. Shares issued for consideration other than cash or in a
      business combination are valued at the quoted market price on the date
      issued.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | (j)        
      Loss per common share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Basic loss per common share is calculated by dividing the
      loss available to common shareholders by the weighted average number of
      common shares outstanding during the year. For all years presented, loss
      available to common shareholders equals the reported loss.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Diluted loss per common share is calculated using the
      treasury stock method. Under the treasury stock method, the weighted
      average number of common shares outstanding used for the calculation of
      diluted loss per share assumes that the proceeds to be received on the
      exercise of dilutive share options and warrants are used to repurchase
      common shares at the average market price during the year.                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | In years when the Company records a net loss, the effect
      of the stock options and warrants would be anti-dilutive and accordingly
      basic and diluted loss per share are the same.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | (k)        
      Use of estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The preparation of financial statements requires
      management to make estimates and assumptions that affect the reported
      amounts of assets and liabilities and disclosure of contingent assets and
      liabilities at the date of the financial statements and the reported
      amounts of revenues and expenses during the reporting period. Significant
      areas requiring the use of management estimates relate to impairment of
      mineral property interests, determination of reclamation obligations, the
      determination of the fair values of financial instruments, assumptions
      used in determining the fair value of non-cash stock-based compensation
      and warrants and determination of valuation allowances for future income
      tax liabilities. Actual results could differ from these
  estimates.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | (l)        
      Segment disclosure                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The primary reporting format of the Company is by
      business segment. As there is only one business segment, being the
      exploration and development of mineral properties relevant disclosures are
      given in the financial statements. The secondary reporting format is by
      geographical analysis by origin (note 24). The accounting policies of the
      segments are the same as those described in the accounting policy notes to
      the Companys financial statements.                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | *(m)*        
      Stock-based compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company has an equity-settled, stock-based
      compensation plan, where the Company grants stock options to certain
      employees and non-employees. Non-employees are those individuals over whom
      the Company does not exercise, nor have the right to exercise, sufficient
      control to establish an employer-employee relationship as determined by
      law.                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

17

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|4. | Significant accounting policies
  (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | (m)        
      Stock-based compensation (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | For employees, equity stock-based payments are measured
      at the fair value of the equity instruments at the date of grant. The
      deferred stock-based compensation is expensed over the vesting period
      using the graded method, based on the Companys estimate of the shares
      that are expected to eventually vest. For non-employees equity stock-based
      payments are measured at fair value of the equity instruments over the
      vesting periods, the expense of which is being recognized on each vesting
      date.                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Company used the Black Scholes model in determining
      the fair value of the options granted. At each balance sheet date, the
      Company revises its estimates of the number of options that are expected
      to become exercisable. It recognizes the impact of the revision of
      original estimates, if any, in the income statement, with a corresponding
      adjustment to equity. Consideration received on the exercise of stock
      options is recorded as share capital and the related contributed surplus
      is transferred to share capital.                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | When unvested options are forfeited the Company reverses
      previously recognized charges to the income statement. The value of vested
      options remains in contributed surplus.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | (n)        
      Revenue recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Revenue is recognized at the fair value of the
      consideration received or receivable to the extent that it is probable
      that economic benefits will flow to the Company and revenue can be
      reliably measured. The sale of gold and other precious metals, including
      metal bearing ore, is recognized when the significant risks and rewards of
      ownership of the products are transferred to the buyer.                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | *(o)*        
      Long-term borrowings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Borrowings are initially recognized at fair value net of
      transaction cost incurred and subsequently measured at amortized cost, and
      are amortized to the repayment amount over the expected term to repayment
      using the effective interest method.                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | (p)        Leased
      assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Assets subject to finance leases are capitalized at the
        lower of fair value or present value of minimum lease payments measured
        at inception of the lease with the related lease obligation recognized
        at the same amount. Capitalized lease assets are depreciated over their
        estimated useful lives. Finance lease payments are allocated using the
        rate implicit in the lease, which is included in finance costs, and the
        capital repayment, which reduces the liability to the lessor.
      Operating lease rentals are charged against operating profits
        in a systematic manner related to the period the assets concerned will
        be used.

18

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|4. | Significant accounting policies
  (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | (q)        Foreign
      currency translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Items included in the financial statements of each of the
      Companys subsidiaries are measured using the currency of the primary
      economic environment in which the entity operates (the functional
      currency).                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The Companys integrated foreign operations translate
      monetary assets and liabilities denominated in a foreign currency into
      Canadian dollars at exchange rates in effect at the balance sheet date.
      Non-monetary assets and liabilities are translated at historical exchange
      rates. Revenues and expenses, except amortization, are translated at the
      average exchange rates for the period. Amortization is translated at the
      same exchange rate as the assets to which it relates. Gains or losses on
      translation are recorded in the statement of operations.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Translation differences on non-monetary items, such as
      equities held at fair value through profit or loss, are reported as part
      of their fair value gain or loss. Translation differences on non- monetary
      items, such as equities classified as available-for-sale financial assets,
      are included in other comprehensive income in equity.                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The results and financial position of all self sustaining
      entities (none of which has the currency of a hyperinflationary economy)
      that have a functional currency different from the presentation currency
      are translated into the presentation currency as
follows:                                                                                                                                                                                                                                                                                                                     

| | • | assets and liabilities for each balance sheet presented
      are translated at the closing rate at the date of that balance sheet;                                                                                                                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | • | income and expenses for each income statement presented
      are translated at monthly average exchange rates (unless this average is
      not a reasonable approximation of the cumulative effect of the rates
      prevailing on the transaction dates, in which case income and expenses are
      translated at the rates prevailing at the date of the transaction); and
| | • | all resulting exchange differences are recognized as a
      separate component of equity (accumulated other comprehensive income).                                                                                                                                                                                                                                             

When a foreign operation is sold, such
exchange differences are recognized in the income statement as part of the gain
or loss on sale.

The Company re-assessed the functional
currency of its development projects in Nevada as well as South Africa and
concluded that the functional currency of both projects should be amended to the
currency of the primary economic environment in which the projects are being
developed. Due to the stage of development at both projects the operations are
no longer regarded as integrated foreign operations effective July 1, 2008.

The functional currency of the
Burnstone project is the South African Rand (ZAR) and for the Hollister project
it is the United States Dollar (US$). The Canadian Dollar remains the
presentation currency for the Company.

19

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|5. | Adoption of new accounting policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Effective January 1, 2008, the Company adopted the
      following accounting standards updates issued by the Canadian Institute of
      Chartered Accountants (CICA). These new standards have been adopted on a
      prospective basis with no restatement to prior period financial
      statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | 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 completed a 100,000,000 unit offering on March 13, 2009 and
        thereby raising gross proceeds of $130 million to fund the development
        of the Burnstone project. The Company has granted to the Underwriters
        an over-allotment option to acquire additional Common Shares in an aggregate
        amount of up to 15% of the aggregate number of Common Shares sold pursuant
        to the Offering. This Over-Allotment Option, if exercised, would result
        in total gross proceeds from the offering of up to $149,500,000.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The Company's access to future equity financing is always
      uncertain. During 2008 the Company also raised secured long term debt to
      fund its development operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | In addition to the unit offering closed on March 13,
      2009, the Company had working capital of $25 million as at December 31,
      2008. Management has assessed the Company to be a going concern based on
      the available cash and cash resources.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The Companys objectives when managing capital
  are:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

| | • | To safeguard the Companys
        ability to continue as a going concern, so that it can provide returns
        for shareholders and benefits for other stakeholders, and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | • | To provide an adequate return
        to shareholders by pricing products commensurately with the level of risk.                                                           

The Company considers the items
included in the consolidated statement of shareholders equity as capital. The
Company manages the capital structure and makes adjustments to it in the light
of changes in economic conditions and the risk characteristics of the underlying
assets. In order to maintain or adjust the capital structure, the Company may
issue new shares through private placements, sell assets to reduce debt or
return capital to shareholders. The Company is not subject to externally imposed
capital requirements.

(c)Section 3031  Inventories

This standard requires that inventories
be measured at the lower of cost and net realizable value, and includes guidance
on the determination of cost, including allocation of overheads and other costs.
The standard also requires that similar inventories within a consolidated group
be measured using the same method. It also requires the reversal of previous
write-downs to net realizable value when there is a subsequent increase in the
value of inventories.

The adoption of the Standard had no
impact on the Companys statement of operations. Inventories are valued
consistent with prior years at the lower of cost or net realizable value.

20

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|5. | Adoption of new accounting policies
    (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | (d)       
      Financial Instruments  Disclosure (Section 3862) and Presentation
      (Section 3863)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Financial instruments are initially measured at fair
      value when the Company becomes a party to their contractual arrangements.
      Transaction costs are included in the initial measurement of financial
      instruments, except financial instruments classified as at fair value
      through profit and loss. The subsequent measurement of financial
      instruments is dealt with below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | A financial asset is derecognized when the right to
      receive cash flows from the asset has expired or the Company has
      transferred its rights to receive cash and either (a) has transferred
      substantially all the risks and rewards of the asset, or (b) has neither
      transferred nor retained substantially all the risks and rewards of the
      asset, but has transferred control of the assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | A financial liability is derecognized when the obligation
      under the liability is discharged, cancelled or expires.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | On derecognition of a financial asset, the difference
      between the proceeds received or receivable and the carrying amount of the
      asset is included in income or loss.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | On derecognition of a financial liability, the difference
      between the carrying amount of the liability extinguished or transferred
      to another party and the amount paid is included in income or
  loss.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Cash and cash equivalents are non-derivative financial
      assets which consist of cash and highly liquid investments and are readily
      convertible to known amounts of cash. These held-for-trading financial
      assets are recognized at fair value and are included in current
    assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Loans and receivables are non-derivative financial assets
      with fixed or determinable payments that are not quoted in an active
      market. They arise when the Company provides money, goods or services
      directly to a debtor with no intention of trading the receivable. They are
      initially recognized at fair value and subsequently measured at amortized
      cost. They are included in current assets, except for maturities greater
      than 12 months after the balance sheet date. These are classified as
      non-current assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Available-for-sale financial assets are non-derivatives
      that are either designated in this category or not classified in any of
      the other categories. They are included in non-current assets unless
      management intends to dispose of the investment within 12 months of the
      balance sheet date. Purchases and sales of investments are recognized on
      trade-date, the date on which the Company commits to purchase or sell the
      asset. Investments are initially recognized at cost plus transaction costs
      for all financial assets. Investments are derecognized when the rights to
      receive cash flows from the investments have expired or have been
      transferred and the Company has transferred substantially all risks and
      rewards of ownership. Available-for-sale financial assets are subsequently
      carried at fair value. Unrealized gains and losses arising from changes in
      the fair value of investments classified as available-for-sale are
      recognized in equity. When securities classified as available-for-sale are
      sold or impaired, the accumulated fair value adjustments are included in
      the income statement. The fair values of quoted investments are based on
      current bid prices. If the value for a financial instrument cannot be
      obtained from an active market, the Company establishes fair value by
      using valuation techniques.

21

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|5. | Adoption of new accounting policies
    (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | These include the use of recent arms length
      transactions, reference to other instruments that are substantially the
      same, discounted cash flow analysis, and option pricing models refined to
      reflect the issuers specific circumstances. The Company assesses at each
      balance sheet date whether there is objective evidence that a financial
      asset or a group of financial assets is impaired. In the case of equity
      securities classified as available-for-sale, a significant or prolonged
      decline in the fair value of the security below its cost is considered in
      determining whether the securities are impaired. If, in the opinion of the
      directors, an other than temporary decline in value exists for
      available-for-sale financial assets, the cumulative loss  measured as the
      difference between the acquisition cost and the current fair value, less
      any impairment loss on that financial asset previously recognized in
      profit or loss  is removed from equity and recognized in the income
      statement.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Financial assets at fair value through profit or loss
      have two sub-categories: 'financial assets held- for-trading', and those
      designated at fair value through profit and loss at inception. A financial
      asset is classified in this category if acquired principally for the
      purpose of selling in the short term or if so designated by management.
      Derivatives are also categorized as 'held-for-trading' unless they are
      designated as hedges. Assets in this category are classified as current
      assets if they are either held for trading or are expected to be realized
      within 12 months of the balance sheet date.                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The following table sets out the movement of the
      Companys financial asset investments, which are accounted for as
      available-for-sale, or held-for-trading as defined by CICA 3855,
      Financial Instruments  Recognition and Measurement. No items were
      classified as held-to- maturity during the year. The carrying amounts
      and fair values of financial assets are as
follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

December
        31, 2008
      
      
      December
        31, 2007Designation
      
      
      Estimated fair
      
      
      Carrying
      
      
      Estimated fair
      
      
      Carryingvalue
      
      
      value
      
      
      value
      
      
      valueCash and equivalents
      
      Held-for-trading
      
      $
      33,549,118
      
      $
      33,549,118
      
      $
      78,362,954
      
      $
      78,362,954Restricted cash
      
      Held-for-trading
      
      
      4,064,100
      
      
      4,064,100
      
      
      -
      
      
      -Amounts receivable
      
      Loans & receivables
      
      
      4,940,950
      
      
      4,940,950
      
      
      3,737,903
      
      
      3,737,903Due from related
      
      Loans & receivables
      
      
      23,174
      
      
      23,174
      
      
      408,638
      
      
      408,638partiesHeld-for-trading
      
      Held-for-trading
      
      
      79,960
      
      
      79,960
      
      
      833,000
      
      
      833,000financial instrumentsOther receivable
      
      Loans & receivables
      
      
      912,900
      
      
      912,900
      
      
      -
      
      
      -Reclamation deposits
      
      Other
      
      
      2,886,539
      
      
      2,886,539
      
      
      1,720,456
      
      
      1,720,456Available-for-sale
      
      Available-for-sale
      
      
      899,624
      
      
      899,624
      
      
      3,326,084
      
      
      3,326,084financial instrumentsTotal financial assets
      
      
      
      $
      47,356,365
      
      $
      47,356,365
      
      $
      88,389,035
      
      $
      88,389,035 22


---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|5. | Adoption of new accounting policies
    (continued)
|-- | ---------------------------------------------------
|   |                                                    
|   | (d)                                                
|   |                                                    
|   | (i)                                                

| |                                  |   | Available-for-sale |   |   | Held-for-trading |   |   | Total       |  
| | -------------------------------- | - | ------------------ | - | - | ---------------- | - | - | ----------- | -
| | At January 1, 2008               | $ | 3,326,084          |   | $ | 79,195,954       |   | $ | 82,522,038  |  
| | Acquired during the year         |   | 274,803            |   |   | 15,820           |   |   | 290,623     |  
| | Cash movements during the year   |   | -                  |   |   | (44,813,836      | ) |   | (44,813,836 | )
| | Transferred to restricted cash   |   | -                  |   |   | 4,064,100        |   |   | 4,064,100   |  
| | Movements in fair value          |   | (2,701,263         | ) |   | (768,860         | ) |   | (3,470,123  | )
| |                                  |   |                    |   |   |                  |   |   |             |  
| | Balance, December 31, 2008       | $ | 899,624            |   | $ | 37,693,178       |   | $ | 38,592,802  |  
| |                                  |   |                    |   |   |                  |   |   |             |  
| | At January 1, 2007               | $ | 2,274,649          |   | $ | 33,964,436       |   | $ | 36,239,085  |  
| | Acquired during the year         |   | 448,563            |   |   | 937,365          |   |   | 1,385,928   |  
| | Cash movements during the year   |   | -                  |   |   | 44,398,518       |   |   | 44,398,518  |  
| | Movements in fair
      value    |   | 602,872            |   |   | (104,365         | ) |   | 498,507     |  
| |                                  |   |                    |   |   |                  |   |   |             |  
| | Balance, December
      31, 2007 | $ | 3,326,084          |   | $ | 79,195,954       |   | $ | 82,522,038  |  

The exposure of the Companys financial
assets to currency risk is as follows:

December 31, 2008GBP
    
    
    US$
    
    
    ZAR
    
    
    CAD
    
    
    TotalCash and equivalents
    $
    -
    
    $
    17,133,275
    
    $
    16,025,198
    
    $
    390,645
    
    $
    33,549,118Restricted cash
    
    -
    
    
    -
    
    
    4,064,100
    
    
    -
    
    
    4,064,100Amounts receivable
    
    -
    
    
    3,776,320
    
    
    861,369
    
    
    303,261
    
    
    4,940,950Due from related parties
    
    -
    
    
    -
    
    
    23,174
    
    
    -
    
    
    23,174Held-for-tradingfinancial instruments
    
    79,960
    
    
    -
    
    
    -
    
    
    -
    
    
    79,960Loans
    
    912,900
    
    
    -
    
    
    -
    
    
    -
    
    
    912,900Reclamation deposits
    
    -
    
    
    61,874
    
    
    604,065
    
    
    2,220,600
    
    
    2,886,539Available-for-salefinancial instruments
    
    899,566
    
    
    -
    
    
    58
    
    
    -
    
    
    899,624Total financial assets
    $
    1,892,426
    
    $
    20,971,469
    
    $
    21,577,964
    
    $
    2,914,506
    
    $
    47,356,365


The exposure of the Companys financial
assets to interest rate risk as at December 31, 2008 is limited to its
investment in cash and cash equivalents of $33,549,118 as well as reclamation
deposits and restricted cash which are invested at floating rates.

23

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|5. | Adoption of new accounting policies
    (continued)
|-- | ---------------------------------------------------
|   |                                                    
|   | (d)                                                
|   |                                                    
|   | (i)                                                

December 31, 2007GBP
    
    
    US$
    
    
    ZAR
    
    
    CAD
    
    
    TotalCash and equivalents
    $
    -
    
    $
    (235,889
    )
    $
    35,511,548
    
    $
    43,087,295
    
    $
    78,362,954Amounts receivable
    
    -
    
    
    2,817,453
    
    
    661,918
    
    
    258,532
    
    
    3,737,903Due from related
      parties
    
    -
    
    
    -
    
    
    13,679
    
    
    394,959
    
    
    408,638Held-for-tradingfinancial instruments
    
    833,000
    
    
    -
    
    
    -
    
    
    -
    
    
    833,000Reclamation deposits
    
    -
    
    
    50,358
    
    
    299,498
    
    
    1,370,600
    
    
    1,720,456Available-for-salefinancial instruments
    
    3,326,024
    
    
    -
    
    
    60
    
    
    -
    
    
    3,326,084Total financial assets
    $
    4,159,024
    
    $
    2,631,922
    
    $
    36,486,703
    
    $
    45,111,386
    
    $
    88,389,035


The exposure of the Companys financial
assets to interest rate risk as at December 31, 2007 is limited to its
investment in cash and cash equivalents of $78,362,954 as well as reclamation
deposits which are invested at floating rates.

(ii)     
 Financial Liabilities

The carrying amounts and fair values of
financial liabilities are as follows:

| |                              |   | December
      31, 2008 |  |   | December
      31, 2007 | 
| | ---------------------------- | - | ----------------------- |  | - | ----------------------- | 
| |                              |   | Estimated fair          |  |   | Carrying                | 
| |                              |   | value                   |  |   | value                   | 
| | Accounts payable and accrued | $ | 26,276,562              |  | $ | 26,276,562              | 
| | liabilities                  |   |                         |  |   |                         | 
| | Due to related parties       |   | 252,854                 |  |   | 252,854                 | 
| | Long-term debt               |   | 62,977,339              |  |   | 62,977,339              | 
| |                              |   |                         |  |   |                         | 
| | Total financial liabilities  | $ | 89,506,755              |  | $ | 89,506,755              | 

The exposure of the Companys financial
liabilities to currency risk is as follows:

| | December 31, 2008                 |   |            |  |   |            |  |   |         |  |   |            | 
| | --------------------------------- | - | ---------- |  | - | ---------- |  | - | ------- |  | - | ---------- | 
| |                                   |   |            |  |   |            |  |   |         |  |   |            | 
| |                                   |   | US$        |  |   | ZAR        |  |   | CAD     |  |   | Total      | 
| | Accounts payable and accrued      |   |            |  |   |            |  |   |         |  |   |            | 
| | liabilities                       | $ | 13,499,596 |  | $ | 11,864,996 |  | $ | 911,970 |  | $ | 26,276,562 | 
| | Due to related parties            |   | -          |  |   | 214,840    |  |   | 38,014  |  |   | 252,854    | 
| | Long-term debt                    |   | 36,203,403 |  |   | 26,773,936 |  |   | -       |  |   | 62,977,339 | 
| |                                   |   |            |  |   |            |  |   |         |  |   |            | 
| | Total financial
      liabilities | $ | 49,702,999 |  | $ | 38,853,772 |  | $ | 949,984 |  | $ | 89,506,755 | 

24

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|5. | Adoption of new accounting policies
    (continued)
|-- | ---------------------------------------------------
|   |                                                    
|   | (d)                                                
|   |                                                    
|   | (ii)                                               

| | December 31, 2007            |   |           |  |   |           |  |   |         |  |   |           | 
| | ---------------------------- | - | --------- |  | - | --------- |  | - | ------- |  | - | --------- | 
| |                              |   |           |  |   |           |  |   |         |  |   |           | 
| |                              |   | US$       |  |   | ZAR       |  |   | CAD     |  |   | Total     | 
| | Accounts payable and accrued |   |           |  |   |           |  |   |         |  |   |           | 
| | liabilities                  | $ | 1,441,580 |  | $ | 4,076,921 |  | $ | 580,745 |  | $ | 6,099,246 | 
| | Due to related parties       |   | -         |  |   | 21,053    |  |   | 1,045   |  |   | 22,098    | 
| |                              |   |           |  |   |           |  |   |         |  |   |           | 
| | Total financial liabilities  | $ | 1,441,580 |  | $ | 4,097,974 |  | $ | 581,790 |  | $ | 6,121,344 | 

The exposure of the Companys floating
rate interest-bearing financial liabilities as at December 31, 2008 is as
follows:

| |                          |   | Less than 1 |  |   | 2  5 years |  |   | More than 5 | 
| | ------------------------ | - | ----------- |  | - | ----------- |  | - | ----------- | 
| |                          |   | year        |  |   |             |  |   | years       | 
| |                          |   |             |  |   |             |  |   |             | 
| | Project finance facility | $ | -           |  | $ | 33 million  |  | $ | 15 million  | 
| | (refer note 19(a))       |   |             |  |   |             |  |   |             | 
| |                          |   |             |  |   |             |  |   |             | 
| | Total                    | $ | -           |  | $ | 33 million  |  | $ | 15 million  | 

Interest rate is linked to the
Johannesburg inter banking borrowing rate (JIBAR) with an average premium of
2.25% above JIBAR. As at December 31, 2008 JIBAR was 12.06% .

The Senior Secured Notes issued in
December 2008 and finance lease facility have fixed interest rates of 14% and
6.5% respectively and are therefore excluded from the above analysis (refer note
19(b) and 19(c) respectively). The remainder of the Companys financial
liabilities is not exposed to interest rate risk as they are of a non-interest
bearing nature.

(iii)        Financial
Instrument Risk Exposure and Risk Management

The Company is exposed in varying
degrees to a variety of financial instrument related risks. The Board approves
and monitors the risk management processes, inclusive of documented treasury
policies, counterparty limits, controlling and reporting structures. The types
of risk exposure and the way in which such exposure is managed, is provided for
as follows:

Credit Risk

Credit risk is the risk of an
unexpected loss if a customer or third party to a financial instrument fails to
meet its contractual obligations and is primarily attributable to liquid
financial assets.

The Companys cash and cash equivalents,
  reclamation deposits and restricted cash are held through large Canadian and
  South African financial institutions. Cash equivalents are composed of financial
  instruments issued by Canadian and South African Banks with high investment-grade
  ratings and restricted cash of a margin call facility with a large South African
  financial institution (refer note 25(b)). The Company does not have financial
  assets that are invested in asset backed commercial paper.

25

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|5. | Adoption of new accounting policies
    (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | (d) Financial
      Instruments  Disclosure (Section 3862) and Presentation (Section 3863)
      (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | (iii)    Financial Instrument
      Risk Exposure and Risk Management (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Credit Risk (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Amounts receivable and other receivables consist mainly
      of trade receivables and a deposit due from a recognized, creditworthy
      third party (refer note 7(a)). The Companys GST/VAT receivables consist
      of general sales tax due from the Government of Canada and South Africa
      respectively.                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The Company also advanced a convertible loan to a
      publicly traded company (refer note 10). This loan has passed its due
      date, however by not more than 3 months and was not considered to be
      impaired. The loan accrued interest under the terms of the original
      agreement and the Company expects repayment during 2009.                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The Companys investments in held-for-trading and
      available-for-sale instruments are detailed in note 6, 9 and 14.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The carrying amount of financial assets recorded in the
      financial statements, net of any allowances for losses, represents the
      Companys maximum exposure to credit risk.                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Liquidity Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Liquidity risk is the risk that the Company will not be
      able to meet its financial obligations as they fall due.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | To mitigate this risk the Company monitors its spending
      plans, repayment obligations and cash resources and takes actions with the
      objective of ensuring that there is sufficient capital in order to meet
      short term business requirements, after taking into account cash flows
      from operations and the Companys holdings of cash and cash equivalents.
      The Company believes that these sources will be sufficient to cover the
      likely short and long term operating cash requirements. Contractual
      obligated cash flow requirements as at December 31, 2008 are as
      follows:

| |                                          |   | Total       |  |   | Less
      than 1 year |  |   | 2  5
      years |  |   | More
      than 5 years | 
| | ---------------------------------------- | - | ----------- |  | - | ---------------------- |  | - | ----------------- |  | - | ----------------------- | 
| |                                          |   |             |  |   |                        |  |   |                   |  |   |                         | 
| | Accounts payable and accrued liabilities | $ | 26,276,562  |  | $ | 26,276,562             |  | $ | -                 |  | $ | -                       | 
| | Due to related parties                   |   | 252,854     |  |   | 252,854                |  |   | -                 |  |   | -                       | 
| | Operating leases                         |   | 822,874     |  |   | 182,066                |  |   | 640,808           |  |   | -                       | 
| | Asset retirement obligations             |   | 3,738,380   |  |   | -                      |  |   | -                 |  |   | 3,738,380               | 
| | Project finance facility                 |   | 47,952,443  |  |   | -                      |  |   | 33,254,676        |  |   | 14,697,767              | 
| | Senior secured notes                     |   | 75,272,400  |  |   | -                      |  |   | 75,272,400        |  |   | -                       | 
| | Finance lease liability                  |   | 2,673,840   |  |   | 916,745                |  |   | 1,757,095         |  |   | -                       | 
| | Total                                    | $ | 156,989,353 |  | $ | 27,628,227             |  | $ | 110,924,979       |  | $ | 18,436,147              | 

26

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|5. | Adoption of new accounting policies
    (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | (d)       
      Financial Instruments  Disclosure (Section 3862) and Presentation
      (Section 3863) (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | (iii)      Financial
      Instrument Risk Exposure and Risk Management (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Liquidity Risk (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Funding for on-going development projects of the Company
      is expected to be provided by a combination of cash flow from operations,
      available cash resources and borrowings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The company is in ongoing negotiations with a group of
      banks for credit facilities to finance the development and construction of
      the Burnstone mine, however, there is no certainty of the Company
      successfully securing the facilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Market Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The significant market risk exposures to which the
      Company is exposed are foreign exchange risk, interest rate risk and
      commodity price risk, which are discussed further below. In addition the
      Company is exposed to price increases in cost of labour, energy and
      equipment which might influence the ultimate capital investment in the
      development of the Companys projects and operational cost.                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Foreign exchange risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Companys capital and other income is denominated in
      Canadian dollars, whilst revenue is denominated in United States dollars
      (US$). However, the Companys operating expenses are primarily incurred
      in US$ and South African Rand (ZAR). The results of the Companys
      operations are subject to currency transaction risk and currency
      translation risk. The operating results and financial position of the
      Company are reported in Canadian dollars in the Companys consolidated
      financial statements. The fluctuation of the US$ and ZAR in relation to
      the Canadian dollar will consequently have an impact upon the
      profitability of the Company and may also affect the value of the
      Companys assets and the amount of shareholders equity.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company has not entered into any agreements or
      purchased any instruments to hedge possible currency risks at this
      time.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | At December 31, 2008, the Company is exposed to currency
      risk through the following foreign denominated assets and liabilities
      (refer note 5(d) (i) and (ii)):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

GBP
    
    
    US$
    
    
    ZAR
    
    
    CAD
    
    
    TotalFinancial assets
    $
    1,892,426
    
    $
    20,971,469
    
    $
    21,577,964
    
    $
    2,914,506
    
    $
    47,356,365Financial liabilities
    
    -
    
    
    (49,702,999
    )
    
    (38,853,772
    )
    
    (949,984
    )
    
    (89,506,755
    )Net
      exposure
    $
    1,892,426
    
    $
    (28,731,530
    )
    $
    (17,275,808
    )
    $
    1,964,522
    
    $
    (42,150,390
    ) 27


---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|5. | Adoption of new accounting policies
    (continued)                                                                                                                                                                                                                                                                              
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                  
|   | (d)                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                  
|   | (iii)                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                  
|   | Foreign exchange risk (continued)                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                  
|   | Based on the aforementioned net exposure as at December
      31, 2008, and assuming that all other variables remain constant, a 10%
      depreciation or appreciation of the Canadian dollar against the respective
      currencies would result in an increase/decrease as set out below in the
      Companys net earnings.

GBP
    
    
    US$
    
    
    ZAR
    
    
    CAD
    
    
    TotalIncrease/decrease
    $
    190,300
    
    $
    (2,873,153
    )
    $
    (1,726,263
    )
    $
    -
    
    $
    (4,409,116
    )


Interest rate risk

Interest rate risk is the risk that the
fair value or future cash flows of a financial instrument will fluctuate because
of changes in market interest rates.

In respect of financial assets, the
Companys policy is to invest cash at floating interest rates and cash reserves
are to be maintained in cash equivalents in order to maintain liquidity, while
achieving a satisfactory return for shareholders. Fluctuations in interest rates
impact marginally on the value of cash and equivalents and reclamation deposits.

In respect of the Companys financial
liabilities, the Senior Secured Notes issued in December 2008 and finance lease
facility have fixed interest rates and are therefore not subject to interest
rate risk. The interest rate on the project financing is variable with the
Johannesburg inter banking borrowing rate (JIBAR).

Based on the amount owing on the
project financing facility as at December 31, 2008, and assuming that all other
variables remain constant, a 1% change in the JIBAR would result in an
increase/decrease of $0.3 million in the interest accrued by the Company per
annum.

The remainder of the Companys
financial liabilities is not exposed to interest rate risk as they are of a
non-interest bearing nature.

Commodity price risk

The value of the Companys mineral
resource properties is related to the price of gold and the outlook for this
mineral. The Company does not have any hedging or other commodity based risks in
respect of its operations.

28

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|5. | Adoption of new accounting policies
    (continued)                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Commodity price risk (continued)                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Gold prices historically fluctuated widely and are
      affected by numerous factors outside of the Companys control, including,
      but not limited to, industrial and retail demand, central bank lending,
      forward sales by producers and speculators, levels of worldwide
      production, short-term changes in supply and demand because of speculative
      hedging activities, and certain other factors related specifically to
      gold.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|6. | Cash and cash
equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                      

| |                  |   | December 31 |  |   | December 31 | 
| | ---------------- | - | ----------- |  | - | ----------- | 
| |                  |   | 2008        |  |   | 2007        | 
| | Cash             | $ | 709,598     |  | $ | 4,296,897   | 
| | Cash equivalents |   | 32,839,520  |  |   | 74,066,057  | 
| |                  | $ | 33,549,118  |  | $ | 78,362,954  | 

|   | Cash equivalents are composed of short-term investments
      with maturity dates of three months or less, call accounts and money
      market investments which are available on 24 hour notice and bankers
      acceptances which are readily convertible to known cash amounts, issued by
      Canadian and South African Banks with high investment-grade
  ratings.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                            
|7. | Amounts receivable                                                                                                                                                                                                                                                                                                                                                         

| |                               |   | December 31 |  |   | December 31 | 
| | ----------------------------- | - | ----------- |  | - | ----------- | 
| |                               |   | 2008        |  |   | 2007        | 
| | GST/VAT receivable            | $ | 1,415,918   |  | $ | 604,109     | 
| | Deposit (note 7(a))           |   | 1,523,256   |  |   | 1,239,125   | 
| | Refund due from Hecla Limited |   | -           |  |   | 1,546,606   | 
| | Trade receivables             |   | 1,812,550   |  |   | -           | 
| | Other debtors                 |   | 189,226     |  |   | 348,063     | 
| |                               | $ | 4,940,950   |  | $ | 3,737,903   | 

(a)Deposit

In connection with the February 20, 2007
  share purchase agreement an amount of $1,523,256 (US$1,250,621) is being retained
  by Hecla Limited in respect of the successful establishment of the Hollister
  Ventures Corp. 401K and related pension plans. This condition was met by October
  1, 2008 and the amount is due to be refunded to the Company on April 1, 2009.

29

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|8. | Inventory
|-- | ---------

| |                      |   | December 31 |  |   | December 31 | 
| | -------------------- | - | ----------- |  | - | ----------- | 
| |                      |   | 2008        |  |   | 2007        | 
| | Stores and materials | $ | 501,505     |  | $ | 199,185     | 
| | Unprocessed ore      |   | 7,744,588   |  |   | -           | 
| |                      | $ | 8,246,093   |  | $ | 199,185     | 

|9. | Held-for-trading financial
  instruments
|-- | ----------------------------------------

| | Kryso Resources Plc.               |  | Number of |  |   | December 31 |   |  | Number of |  |   | December 31 |  
| | ---------------------------------- |  | --------- |  | - | ----------- | - |  | --------- |  | - | ----------- | -
| |                                    |  | warrants  |  |   | 2008        |   |  | warrants  |  |   | 2007        |  
| | Balance, beginning of the year     |  | 5,000,000 |  | $ | 833,000     |   |  | -         |  | $ | -           |  
| | Addition  Kryso warrants received |  | 1,086,956 |  |   | 15,820      |   |  | 5,000,000 |  |   | 937,365     |  
| | Unrealized loss  warrants         |  | -         |  |   | (768,860    | ) |  | -         |  |   | (104,365    | )
| | Balance, December
      31         |  | 6,086,956 |  | $ | 79,960      |   |  | 5,000,000 |  | $ | 833,000     |  

Under the terms of a share purchase
agreement entered into during December 2006, with Kryso Resources Plc (Kryso),
the Company was granted 5,000,000 warrants (First grant), exercisable at a price
of 15 pence per common share until July 11, 2012.

On date of grant the warrants had an
estimated fair value of $937,365, which was revalued to $833,000 on December 31,
2007.

Under the terms of the April 2008
Convertible loan agreement entered into (refer note 10), the Company was granted
an additional 1,086,956 warrants from Kryso (Second grant) exercisable at 15
pence per common share until October 31, 2010. On date of grant the warrants had
an estimated fair value of $15,820.

The warrants were fair valued on
December 31, 2008 based on the assumptions summarized below and an exchange rate
of $1.79:1GBP.

| |                         | First
      grant | Second
      grant
| | ----------------------- | ----------------- | ------------------
| | Expected volatility     | 75.52%            | 75.31%            
| | Risk free interest rate | 4.5%              | 4.25%             
| | Dividend                | Nil               | Nil               
| | Remaining life          | 3.5 years         | 1.8 years         

|    | The unrealized loss of $768,860 is reported in the net
      loss for the year ended December 31, 2008.
|--- | -------------------------------------------------------------------------------------------------------
|    |                                                                                                        
|10. | Other receivables                                                                                      

| | Kryso Resources Plc.           |   | December 31 |   |   | December 31 | 
| | ------------------------------ | - | ----------- | - | - | ----------- | 
| |                                |   | 2008        |   |   | 2007        | 
| | Balance, beginning of the year | $ | -           |   | $ | -           | 
| | Convertible loan               |   | 985,000     |   |   | -           | 
| | Interest accrued               |   | 17,900      |   |   | -           | 
| | Foreign
      exchange         |   | (90,000     | ) |   | -           | 
| | Balance, December 31           | $ | 912,900     |   | $ | -           | 

30

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|10. | Other receivables (continued)                                                                                                                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                  
|    | During April 2008 the Company granted a convertible
      unsecured interest free loan facility to Kryso to the value of GBP500,000
      ($985,000), due on October 31, 2008. In connection with the facility, the
      Company received warrants (refer note 9).                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                  
|    | The loan remained outstanding on the repayment date and
      the Company elected to be repaid and not to convert the loan. As at
      December 31, 2008, the amount remained outstanding and, under the terms of
      the agreement, the Company accrued for default interest on the outstanding
      balance from the repayment date at 12%.
|    |                                                                                                                                                                                                                                                                                                                                                  
|11. | Prepaid expenses                                                                                                                                                                                                                                                                                                                                 

| |                      |   | December 31 |  |   | December 31 | 
| | -------------------- | - | ----------- |  | - | ----------- | 
| |                      |   | 2008        |  |   | 2007        | 
| | Insurance            | $ | 518,278     |  | $ | 680,045     | 
| | Other                |   | 371,905     |  |   | 131,163     | 
| | Balance, December 31 | $ | 890,183     |  | $ | 811,208     | 

|12. | Property, plant and
equipment
|--- | -----------------------------

| | December 31, 2008                   |   |            |  |   |              |  |   |            | 
| | ----------------------------------- | - | ---------- |  | - | ------------ |  | - | ---------- | 
| |                                     |   |            |  |   | Accumulated  |  |   | Net book   | 
| |                                     |   | Cost       |  |   | amortization |  |   | Value      | 
| | Land and buildings                  | $ | 3,458,030  |  | $ | 119,774      |  | $ | 3,338,256  | 
| | Mine development                    |   | 7,293,864  |  |   | -            |  |   | 7,293,864  | 
| | Assets under construction           |   | 14,661,221 |  |   | -            |  |   | 14,661,221 | 
| | Site equipment                      |   | 22,421,886 |  |   | 3,958,820    |  |   | 18,463,066 | 
| | Leased assets                       |   | 2,769,566  |  |   | 32,971       |  |   | 2,736,595  | 
| | Vehicles                            |   | 1,910,334  |  |   | 492,478      |  |   | 1,417,856  | 
| | Computers                           |   | 946,391    |  |   | 389,818      |  |   | 556,573    | 
| | Office furniture
      and fixtures |   | 770,741    |  |   | 388,987      |  |   | 381,754    | 
| |                                     |   |            |  |   |              |  |   |            | 
| |                                     | $ | 54,232,033 |  | $ | 5,382,848    |  | $ | 48,849,185 | 

| | December 31, 2007                   |   |            |  |   |              |  |   |            | 
| | ----------------------------------- | - | ---------- |  | - | ------------ |  | - | ---------- | 
| |                                     |   |            |  |   | Accumulated  |  |   | Net book   | 
| |                                     |   | Cost       |  |   | amortization |  |   | Value      | 
| | Land and buildings                  | $ | 3,084,488  |  | $ | 31,418       |  | $ | 3,053,070  | 
| | Assets under construction           |   | 5,927,750  |  |   | -            |  |   | 5,927,750  | 
| | Site equipment                      |   | 6,827,935  |  |   | 2,157,540    |  |   | 4,670,395  | 
| | Vehicles                            |   | 365,517    |  |   | 51,690       |  |   | 313,827    | 
| | Computers                           |   | 331,350    |  |   | 94,929       |  |   | 236,421    | 
| | Office furniture
      and fixtures |   | 123,520    |  |   | 29,256       |  |   | 94,264     | 
| |                                     |   |            |  |   |              |  |   |            | 
| |                                     | $ | 16,660,560 |  | $ | 2,364,833    |  | $ | 14,295,727 | 

31

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|12. | Property, plant and equipment
(continued)                                                                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                             
|    | As at December 31, 2008, $21,955,085 (December 2007,
      $5,927,750), comprising of capitalized Burnstone mine development cost and
      plant and equipment under construction, is not being amortized.                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                             
|    | Equipment held under finance leases is amortized over its
      useful life of 7 years. Amortization of $32,971 was recorded for the year.
      The carrying value of these assets was $2,736,595 as at December 31, 2008
      (2007: nil). Leased assets are pledged as security for the related finance
      leases (refer note 19(c)).
|    |                                                                                                                                                                                                                                                                                                                                             
|13. | Reclamation deposits                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                             
|    | The continuity of reclamation deposits on the
      consolidated balance sheets are as follows:                                                                                                                                                                                                                                             

| |                                        |   | December 31 |   |   | December 31 |  
| | -------------------------------------- | - | ----------- | - | - | ----------- | -
| |                                        |   | 2008        |   |   | 2007        |  
| | Balance, beginning of the year         | $ | 1,720,456   |   | $ | 103,702     |  
| | Guarantee  Burnstone Property         |   | 144,210     |   |   | 144,000     |  
| | Investments  Burnstone
      Property |   | 185,221     |   |   | 155,498     |  
| | Reclamation Bond  Hollister Property  |   | 850,000     |   |   | 1,326,100   |  
| | Guarantee  Puma Gold                  |   | 1,967       |   |   | -           |  
| | Exchange loss                          |   | (15,315     | ) |   | (8,844      | )
| | Balance, December 31                   | $ | 2,886,539   |   | $ | 1,720,456   |  

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

| |                            |   | Hollister          |  |   | Burnstone          |   |   |           |  
| | -------------------------- | - | ------------------ |  | - | ------------------ | - | - | --------- | -
| |                            |   | property           |  |   | property           |   |   |           |  
| |                            |   | (note
      13(a)) |  |   | (note
      13(b)) |   |   | Total     |  
| | Balance, December 31, 2007 | $ | 1,420,958          |  | $ | 299,498            |   | $ | 1,720,456 |  
| | Guarantee and investments  |   | -                  |  |   | 331,398            |   |   | 331,398   |  
| | Reclamation bond           |   | 850,000            |  |   | -                  |   |   | 850,000   |  
| | Exchange gain (loss)       |   | 11,515             |  |   | (26,830            | ) |   | (15,315   | )
| | Balance, December 31, 2008 | $ | 2,282,473          |  | $ | 604,066            |   | $ | 2,886,539 |  

(a)Hollister Property

As at December 31, 2008 and 2007, the
Company had posted $2,282,473 (US$1,824,886) and $1,420,958 (US$1,324,886)
respectively in reclamation deposits with the United States Bureau of Land
Management ("BLM") in respect of exploration drilling and mine development on
certain areas of the Hollister Property.

(b)Burnstone Property

As at December 31, 2008 the Company placed
  investments and deposits for guarantees of $604,066 (ZAR4,607,669) in favor
  of the South African Department of Minerals and Energy for the reclamation of
  the Burnstone Property.

32

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|14. | Available-for-sale financial
  instruments
|--- | ------------------------------------------

| |                                    |   | December 31 |   |   | December 31 | 
| | ---------------------------------- | - | ----------- | - | - | ----------- | 
| |                                    |   | 2008        |   |   | 2007        | 
| | Balance, beginning of the year     | $ | 3,326,084   |   | $ | 2,274,649   | 
| | Kryso shares (note 14(a))          |   |             |   |   |             | 
| | Change in accounting policy        |   | -           |   |   | 64,811      | 
| | Addition                           |   | 274,798     |   |   | 448,503     | 
| | Unrealized (loss) gain             |   | (2,701,263  | ) |   | 538,061     | 
| | Rand Mutual Assurance (note 14(b)) |   |             |   |   |             | 
| | Addition                           |   | 5           |   |   | 60          | 
| | Balance, December
      31         | $ | 899,624     |   | $ | 3,326,084   | 

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

| |                             |  |            |  |   |           |  |   | Fair value |   |   |         | 
| | --------------------------- |  | ---------- |  | - | --------- |  | - | ---------- | - | - | ------- | 
| |                             |  | Shares     |  |   | Cost      |  |   | adjustment |   |   | Amount  | 
| | Kryso Resources Plc         |  | 13,401,335 |  | $ | 2,997,950 |  | $ | (2,098,391 | ) | $ | 899,559 | 
| | Rand Mutual
      Assurance |  | 22         |  |   | 65        |  |   | -          |   |   | 65      | 
| | Balance, December 31, 2008  |  |            |  | $ | 2,998,015 |  | $ | (2,098,391 | ) | $ | 899,624 | 

| |                                |  |               |  |  | Rand Mutual | 
| | ------------------------------ |  | ------------- |  |  | ----------- | 
| |                                |  | Kryso         |  |  | Assurance   | 
| |                                |  | Resources Plc |  |  |             | 
| | Balance, beginning of the year |  | 11,908,429    |  |  | 20          | 
| | Acquired                       |  | 1,492,906     |  |  | 2           | 
| | Total, December 31, 2008       |  | 13,401,335    |  |  | 22          | 

(a)        Kryso Resources
Plc - Shares

Kryso is a publicly traded company on
the AIM market of the London Stock Exchange. The shares were acquired at an
original cost of $2,723,152 and were subsequently revalued to their fair value
of $3,326,024 on December 31, 2007, which was calculated based on the closing
price of 14.25 pence per share and an exchange rate of $1.96:1GBP.

On January 1, 2008, the Company held
11,908,429 equal to 15% of the common shares issued by Kryso Resources Plc
(Kryso), a mineral resources and exploration company exploring gold and
precious metal deposits in Central Asia.

On August 6, 2008 the Company acquired
a further 1,492,906 shares during a private placement by Kryso at a total
consideration of GBP134,362 (9 pence per share).

An unrealized loss of $2,701,256 for
  the year ended December 31, 2008 is reported in the Statement of operations
  and comprehensive loss under other comprehensive loss and was calculated based
  on the closing price of 3.75 pence per share and an exchange rate of $1.79:1GBP.
  The decrease in the fair value of the investment is considered to be temporary.

33

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|14. | Available-for-sale financial instruments
      (continued)                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | (b)        The Rand
      Mutual Assurance Company Limited - Shares                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The Rand Mutual Assurance Company Limited (RMA) is a
      mutual which caters for the compensation of occupational injuries
      specifically in the mining industry. The Company was granted 2 shares from
      RMA based on its contributions to the fund during the year. Dividends to
      the value of $17,640 have been earned during the 2007 year and are
      included under the comparative figures for other income. No dividends were
      received during 2008.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|15. | Investments in
associates                                                                                                                                                                                                                                                                                                                                                                                                                                                           

| |                                          |   | December 31 |   |   | December 31 |  
| | ---------------------------------------- | - | ----------- | - | - | ----------- | -
| |                                          |   | 2008        |   |   | 2007        |  
| | Balance, beginning of the year           | $ | 7,203,973   |   | $ | -           |  
| | Underlying book value of shares acquired |   | -           |   |   | 3,991,304   |  
| | Excess ascribed to mineral properties    |   | -           |   |   | 4,008,696   |  
| | Share of loss                            |   | (351,446    | ) |   | (796,027    | )
| | Mineral property acquired (note 16(c))   |   | (6,852,527  | ) |   | -           |  
| | Balance, December
      31               | $ | -           |   | $ | 7,203,973   |  

|    | During 2007, the Company acquired the investment in Rusaf
      Gold Limited (Rusaf) at an accumulated cost of $8,000,000 and recognized
      an equity loss of $796,027.                                
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                             
|    | During the quarter ended March 31, 2008, the Company
      recognized $351,446 loss in the statement of operations as its 37% equity
      portion of Rusafs results for the period.                       
|    |                                                                                                                                                                                                             
|    | On April 1, 2008 the Company acquired the remaining 63%
      of the fully diluted equity shares of Rusaf and subsequently allocated the
      investment to mineral properties acquired (refer note 16(c)).
|    |                                                                                                                                                                                                             
|16. | Mineral property
interests                                                                                                                                                                                  

| |                                               |   | December 31 |  |   | December 31 | 
| | --------------------------------------------- | - | ----------- |  | - | ----------- | 
| | Mineral Property
      Acquisition Costs, net |   | 2008        |  |   | 2007        | 
| | Hollister Property (note 16(a))               | $ | 88,623,915  |  | $ | 95,156,279  | 
| | Burnstone Property (note 16(b))               |   | 122,165,098 |  |   | 123,257,650 | 
| | Rusaf Property (note 16(c))                   |   | 36,466,782  |  |   | -           | 
| | Puma Property (note 16(d))                    |   | 8,618,467   |  |   | -           | 
| | Esmeralda Property (note 16(e))               |   | 3,762,713   |  |   | -           | 
| | Kirkland Lake Property (note 16(f))           |   | 1           |  |   | 1           | 
| | Other (note 16(g))                            |   | 221,680     |  |   | -           | 
| |                                               | $ | 259,858,656 |  | $ | 218,413,930 | 

34

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|16. | Mineral property interests (continued)                                                
|--- | --------------------------------------------------------------------------------------
|    |                                                                                       
|    | (a)       
      Hollister Property, Elko County, Nevada, United States of
    America

| |                                               |   | December 31 |   |   | December 31 | 
| | --------------------------------------------- | - | ----------- | - | - | ----------- | 
| |                                               |   | 2008        |   |   | 2007        | 
| | Balance, beginning of the year                | $ | 95,156,279  |   | $ | 3,945,348   | 
| | Depletion charge                              |   | (6,344,218  | ) |   | -           | 
| | Foreign exchange                              |   | (188,146    | ) |   | -           | 
| | Acquisition of interest held by third parties |   | -           |   |   | 91,210,931  | 
| | Balance, December 31                          | $ | 88,623,915  |   | $ | 95,156,279  | 

On April 19, 2007, the Company acquired
Hecla Ventures Corp. (HVC), which held the remaining 50% earn-in rights and
certain tangible assets in the Hollister Development Block, from Hecla Limited
for a total consideration of US$60 million plus share issue costs ($70,618,292).
The consideration was paid in a combination of cash (US$45 million) and shares
(7.93 million shares valued at US$15 million).

The fair value of the assets acquired
and liabilities assumed at the date of acquisition was as follows:

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

During the 2008 year 80,305 gold
equivalent ounces were extracted from this property resulting in a depletion
charge of $6,344,218.

(b)        Burnstone
Property, Republic of South Africa

| |                                |   | December 31 |   |   | December 31 | 
| | ------------------------------ | - | ----------- | - | - | ----------- | 
| |                                |   | 2008        |   |   | 2007        | 
| | Balance, beginning of the year | $ | 123,257,650 |   | $ | 106,964,650 | 
| | Settlement Agreement:          |   |             |   |   |             | 
| | Royalty settlement             |   | -           |   |   | 11,568,000  | 
| | Future income tax provision    |   | -           |   |   | 4,725,000   | 
| | Foreign exchange               |   | (1,092,552  | ) |   | -           | 
| | Balance, December
      31     | $ | 122,165,098 |   | $ | 123,257,650 | 

In November 2002, the Company entered
into an option agreement (the "Option to Purchase Agreement") with Southgold
Exploration (Proprietary) Limited (Southgold) and the then shareholders of
Southgold to purchase on a staged basis, up to 100% of Southgold, which owned
the Burnstone Property.

The option to purchase agreement was
  exercised in three tranches through payment of cash, issuing of shares and issuing
  of warrants. The acquisition was completed in July 2006.

35

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|16. | Mineral property interests (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | (b)       
      Burnstone Property, Republic of South Africa (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Royalty settlement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | On October 10, 2003, pursuant to a prospecting agreement
      (the Prospecting Agreement) dated October 17, 2000 between GFL Mining
      Services Limited (GFL), Randex Limited (Randex), and Southgold,
      Southgold elected to purchase certain mineral rights held by GFL and
      Randex within the Burnstone Property which were not covered under
      Southgold's then-existing rights, for ZAR35 million ($6,695,598) subject
      to a net smelter return royalty ranging from 1% to 2% (tiered to the gold
      price), and payable to GFL.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | On October 1, 2007, under the terms of the Memorandum of
      Agreement signed under the Black Economic Empowerment Transaction
      Framework Agreement, Southgold paid $11.6 million (ZAR80 million) to GFL
      in full and final settlement of the net smelter royalty payable, which was
      included in the capitalized cost of mineral properties.                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Black Economic Empowerment Transaction                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | On February 22, 2007, the Company entered into a
      framework agreement to achieve compliance with the requirements of South
      Africas broad-based Black Economic Empowerment Act in order to secure the
      new order prospecting rights in respect of Burnstone.                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | On October 1, 2007, Tranter Burnstone (Proprietary)
      Limited (Tranter Burnstone) subscribed for and was allotted and issued
      with 812 new ordinary shares (the Southgold Shares) in the issued share
      capital of Southgold, a wholly owned subsidiary of Great Basin.                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The aggregate subscription price paid by Tranter
      Burnstone to Southgold was $38 million (ZAR260 million). The 812 new
      ordinary shares constituted 26% of the issued share capital of
      Southgold.                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Subsequent to the completion of the above, N6C Resources
      Inc. (N6C Inc.), a wholly owned subsidiary of Great Basin, purchased the
      Southgold shares from Tranter Burnstone in exchange for 19,938,650 common
      shares of Great Basin issued to Tranter Burnstone.                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | In addition to the issue and allotment of the 19,938,650
      common shares in Great Basin, the Company provided a total of 1,684,312
      Great Basin warrants to Investec Limited (1,263,234) who financed the
      transaction and Tranter Gold (421,078), respectively. The warrants are
      exercisable at ZAR20.78 per share until September 2010 and Great Basin may
      require they be exercised under certain conditions.                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Both the Great Basin common shares and the warrants
      issued in connection with this transaction were valued by independent
      valuation specialists in order to determine the fair value for accounting
      purposes.                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | On February 22, 2007, the date on which the Transaction
      Framework Agreement was announced, the value of the Great Basin shares was
      $38 million (R260 million). The transaction was concluded on October 1,
      2007 and resulted in the common shares and warrants being valued on the
      transaction date, taking into account the restrictions as defined in the
      Subscription and Acquisition Agreement.                                                                                                                                   

36

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|16. | Mineral property interests (continued)                                                                                                                                                                                                                                                                                                        
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                               
|    | (b)                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                               
|    | On the date of the transaction, the fair value of the
      shares and warrants was estimated between $34 million (ZAR236 million) for
      the shares and $1.2 million (ZAR8 million) for the warrants and $37
      million (ZAR257 million) for the shares and $1.2 million (ZAR8 million)
      for the warrants (refer note 22(c)(iii)).
|    |                                                                                                                                                                                                                                                                                                                                               
|    | (c)                                                                                                                                                                                                                                                                                                                                           

| |                                               |   | December 31 |  |   | December 31 | 
| | --------------------------------------------- | - | ----------- |  | - | ----------- | 
| |                                               |   | 2008        |  |   | 2007        | 
| | Balance, beginning of the year                | $ | -           |  | $ | -           | 
| | Acquisition of interest held by third parties |   | 36,466,782  |  |   | -           | 
| | Balance, December 31                          | $ | 36,466,782  |  | $ | -           | 

On April 1, 2008 the Company concluded
the asset acquisition of Rusaf (refer note 15).

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

The Company acquired a further
10,000,000 shares on July 20, 2007 at a price of $0.60 per share for an
aggregate payment in cash to Rusaf of $6,000,000.

On April 1, 2008, the Company acquired
the remaining 63% of Rusaf for a consideration of $22,883,180, payable in
6,613,636 Great Basin Gold common shares. The exchange ratio was one Great Basin
Gold share for every 4.5 Rusaf shares.

In addition to the shares issued on
April 1, 2008 the Company agreed to issue up to 1,062,034 Great Basin common
shares to the former Rusaf shareholders upon exercise of share purchase warrants
and share options held by them. The exchange ratio agreed was one Great Basin
share for every 4.5 Rusaf shares. On July 22, 2008 the Company issued 22,041
shares valued at $3.49 per share in terms of warrants exercised by the former
Rusaf shareholders.

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

The Company also agreed to spend a minimum
  of $7 million and up to a maximum of $20 million to explore the newly acquired
  properties during the first three years from closing of the transaction on April
  1, 2008. The increased expenditure is contingent upon gold discoveries above
  a threshold of 500,000 ounces in size on certain mineral prospects formerly
  held by Rusaf.

37

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|16. | Mineral property interests (continued)                                        
|--- | ------------------------------------------------------------------------------
|    |                                                                               
|    | (c)        Rusaf
      Properties, Russia and Republic of Tanzania (continued)
|    |                                                                               
|    | The aggregate purchase price was $31,662,942, calculated
      as follows:    

| | Cash
      payment                                      | $ | 8,000,000  |  
| | ------------------------------------------------------- | - | ---------- | -
| | Equity loss recognized to date of acquisition (note 15) |   | (1,147,473 | )
| | Issuance of 6,613,636 Great Basin common
      shares   |   | 22,883,180 |  
| | Additional 22,041 shares issued to Rusaf shareholders   |   | 76,923     |  
| | Fair value of share options and warrants                |   | 1,763,476  |  
| | Transaction costs                                       |   | 86,836     |  
| |                                                         | $ | 31,662,942 |  

The value of the 6,613,636 and 22,041
Great Basin common shares issued was determined based on the closing market
price of Great Basins common shares on the respective dates the shares were
issued and the acquisition closed (April 1, 2008 at $3.46 per share; July 22,
2008 at $3.49 per share) (refer to note 22(f) and (g)).

The fair value of $1,763,476 estimated
for the 1,062,034 future GBG shares to be issued was calculated using the Black
Scholes option pricing model based on a risk free interest rate of 2.99%,
expected life between 1 month and 4 years and 59% volatility and was recorded as
contributed surplus (refer note 22(d)(i)).

No fair value was allocated to the
shares to be issued to the former Rusaf shareholders on resource discoveries due
to the fact that the Company currently does not have adequate exploration data
available to determine the probability of future share issuances. Any shares
issued upon resolution of this contingency will be allocated to the acquisition
cost of mineral properties.

The acquisition was accounted for as a
purchase of assets and the preliminary fair value of the assets acquired and
liabilities assumed at the date of acquisition are as follows:

| | Cash
      and cash equivalents          | $ | 4,494,976   |  
| | ---------------------------------------- | - | ----------- | -
| | Receivables and prepaid expenses         |   | 489,063     |  
| | Property and equipment                   |   | 637,825     |  
| | Exploration advances                     |   | 328,402     |  
| | Accounts payable and accrued liabilities |   | (94,866     | )
| | Mineral properties                       |   | 36,466,782  |  
| | Future income tax liability              |   | (10,659,240 | )
| |                                          | $ | 31,662,942  |  

The allocation to mineral properties
and future income tax liability balance is subject to change as the valuation
process is completed.

The results of operations of Rusaf have
  been included in the consolidated financial statements of the Company commencing
  April 1, 2008.

38

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|16. | Mineral property interests (continued)                  
|--- | --------------------------------------------------------
|    |                                                         
|    | (d)        Puma
      Property, Republic of South Africa

| |                                               |   | December 31 |   |   | December 31 | 
| | --------------------------------------------- | - | ----------- | - | - | ----------- | 
| |                                               |   | 2008        |   |   | 2007        | 
| | Balance, beginning of the year                | $ | -           |   | $ | -           | 
| | Acquisition of interest held by third parties |   | 9,223,272   |   |   | -           | 
| | Foreign exchange                              |   | (604,805    | ) |   | -           | 
| | Balance, December
      31                    | $ | 8,618,467   |   | $ | -           | 

Puma Gold (Proprietary) Limited
("Puma") is a private South African company which holds prospecting and option
contracts located on the eastern edge of the Burnstone Property.

On July 31, 2008 the Company issued
1,862,354 Great Basin common shares as consideration for a 100% interest in the
assets of Puma. The shares were valued at the closing price of $3.57 on July 31,
2008 for a total consideration price of $6,648,604 (refer note 22(h)).

The acquisition was accounted for as a
purchase of assets and the preliminary fair value of the assets acquired and
liabilities assumed at the date of acquisition are as follows:

| | Cash
      and cash equivalents   | $ | 5,987      |  
| | --------------------------------- | - | ---------- | -
| | Accounts payable                  |   | (4,226     | )
| | Mineral property                  |   | 9,223,272  |  
| | Future income tax
      liability |   | (2,576,429 | )
| |                                   | $ | 6,648,604  |  

The allocation to mineral properties
and future income tax liability balance is subject to change as the valuation
process is completed.

(e)        Esmeralda
Property, Mineral County, Nevada, United States of America

| |                                       |   | December 31 |  |   | December 31 | 
| | ------------------------------------- | - | ----------- |  | - | ----------- | 
| |                                       |   | 2008        |  |   | 2007        | 
| | Balance, beginning of the year        | $ | -           |  | $ | -           | 
| | Acquisition of mine and mill property |   | 2,403,600   |  |   | -           | 
| | Transfer tax and filing fees          |   | 7,875       |  |   | -           | 
| | Reclamation asset                     |   | 1,318,763   |  |   | -           | 
| | Foreign exchange                      |   | 32,475      |  |   | -           | 
| | Balance, December
      31            | $ | 3,762,713   |  | $ | -           | 

The Company purchased the Esmeralda
property on November 30, 2008 from Metallic Ventures (U.S.), Inc. for an
aggregate consideration of $2,403,600 (US$2,000,000). The Esmeralda Mine and
Property Mill consist of patented and unpatented mining claims, fee lands, water
rights and a mill.

Estimated reclamation liabilities of
$1,318,763 (US$1,082,728) has been capitalized to the Esmeralda property (refer
note 21).

39

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|16. | Mineral property interests (continued)                                                                                                                                                                                                                                                        
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                               
|    | (f)                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                               
|    | In 1992, the future economic benefit of the Kirkland Lake
      property became uncertain, and while the property was not abandoned, there
      were no plans to make further significant expenditures on the property.
      Accordingly, the property was written down to a nominal amount.
|    |                                                                                                                                                                                                                                                                                               
|    | The Company continues to maintain the property in good
      standing.                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                               
|    | (g)                                                                                                                                                                                                                                                                                           

| |                                  |   | December 31 |  |   | December 31 | 
| | -------------------------------- | - | ----------- |  | - | ----------- | 
| |                                  |   | 2008        |  |   | 2007        | 
| | Balance, beginning of the year   | $ | -           |  | $ | -           | 
| | Ganes Creek Property (note g(i)) |   | 118,865     |  |   | -           | 
| | Tsetsera Property (note g(ii))   |   | 102,815     |  |   | -           | 
| | Balance, December
      31       | $ | 221,680     |  | $ | -           | 

(i)Ganes Creek
Property, Alaska, USA

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

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.

Pursuant to the agreement, the Company
issued 10,000 shares on February 4, 2008 to CWM and remitted two cash payments
of US$40,000 each. The shares were valued at the prevailing quoted price of
$2.97 per share and were recorded as mineral properties (refer note 22(e)).

(ii) Tsetsera Property, Mozambique,
Africa

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

The Company has 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 in Mozambique,
  and other properties over which GSR holds mineral rights.

40

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|16. | Mineral property interests
  (continued)
|--- | ----------------------------------------

(g)        Other Properties
(continued)

(ii) Tsetsera Property, Mozambique,
Africa (continued)

Should any financing be required for
the conducting of any mining activities, each of the parties are required to
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.

Pursuant to the agreement, the Company
remitted two cash payments of US$50,000 each, which were recorded as mineral
properties.

|17. | Accounts payable and accrued
  liabilities
|--- | ------------------------------------------

| |                            |   | December 31 |  |   | December 31 | 
| | -------------------------- | - | ----------- |  | - | ----------- | 
| |                            |   | 2008        |  |   | 2007        | 
| | Trade payables             | $ | 12,250,484  |  | $ | 1,395,828   | 
| | Accrued liabilities        |   | 10,339,911  |  |   | 4,106,527   | 
| | Royalty accrual            |   | 1,139,881   |  |   | -           | 
| | Leave liability            |   | 681,540     |  |   | 200,891     | 
| | Bonus provision            |   | 1,864,746   |  |   | 396,000     | 
| | Balance, December
      31 | $ | 26,276,562  |  | $ | 6,099,246   | 

|18. | Related party balances and
  transactions
|--- | -----------------------------------------

| | Due from related parties                              |   | December 31 |  |   | December 31 | 
| | ----------------------------------------------------- | - | ----------- |  | - | ----------- | 
| |                                                       |   | 2008        |  |   | 2007        | 
| | Hunter Dickinson Services Inc. (note 18(a))           | $ | -           |  | $ | 394,959     | 
| | Tranter Gold
      (Proprietary) Limited (note 18(b)) |   | 23,174      |  |   | 13,679      | 
| | Balance, December 31                                  | $ | 23,174      |  | $ | 408,638     | 

| | Due to related parties                          |   | December 31 |  |   | December 31 | 
| | ----------------------------------------------- | - | ----------- |  | - | ----------- | 
| |                                                 |   | 2008        |  |   | 2007        | 
| | CEC Engineering Ltd (note 18(c))                | $ | -           |  | $ | 1,045       | 
| | Tranter Gold (Proprietary) Limited (note 18(b)) |   | 214,840     |  |   | 21,053      | 
| | Hunter Dickinson Services Inc. (note 18(a))     |   | 38,014      |  |   | -           | 
| | Balance, December
      31                      | $ | 252,854     |  | $ | 22,098      | 

41

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|18. | Related party balances and transactions
      (continued)
|--- | ---------------------------------------------------------

| | Reimbursement for related party
      expenses and services |   |             |  |   |             | 
| | ----------------------------------------------------------- | - | ----------- |  | - | ----------- | 
| | rendered                                                    |   | December 31 |  |   | December 31 | 
| |                                                             |   | 2008        |  |   | 2007        | 
| | CEC Engineering Ltd (note 18(c))                            | $ | 1,807       |  | $ | 36,771      | 
| | Hunter Dickinson Services Inc. (note 18(a))                 | $ | 559,904     |  | $ | 974,067     | 
| | Plateau Resources (Proprietary) Limited
      (note 18(d))  | $ | 22,751      |  | $ | 156,286     | 
| | Tranter Gold (Proprietary) Limited (note 18(b))             | $ | 25,700      |  | $ | 670,042     | 

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

Related party balances receivable
(payable) are included under current assets and liabilities on the consolidated
balance sheets.

(a)Hunter Dickinson Services Inc.

Hunter Dickinson Services Inc. (HDI),
formerly Hunter Dickinson Inc, is a private company owned equally by one private
and eight public companies. HDI has a director in common with the Company and
provides 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 September 25, 2007.

(b)Tranter Gold (Proprietary) Limited (Tranter Gold)

Tranter Gold is a wholly-owned
subsidiary of Tranter Burnstone and has a director in common with the Company.
The Company provides Tranter Gold with certain accounting and administrative
services on rates negotiated while the officer was dealing at arms length with
the Company.

During the year ended December 31, 2008
Tranter Gold provided Southgold with geological services in the amount of
$212,710 (ZAR1,638,753) (2007: $21,053 (ZAR146,202)), negotiated at arms length.

(c)CEC
Engineering Ltd. (CEC Engineering)

CEC Engineering is a private company
owned by a former director of the Company, which provided engineering and
project management services on an arms-length basis and under normal commercial
terms.

(d)Plateau Resources (Proprietary) Limited (Plateau)

Plateau is a wholly-owned subsidiary
  of Anooraq Resources Corporation, a Canadian company which has certain directors
  in common with the Company. Plateau rented premises and other facilities to
  the Company pursuant to a cost-sharing agreement based on a full cost recovery
  basis.

42

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|19. | Long term borrowings
|--- | --------------------

| |                                         |   | December 31 |  |   | December 31 | 
| | --------------------------------------- | - | ----------- |  | - | ----------- | 
| |                                         |   | 2008        |  |   | 2007        | 
| | Balance, beginning of the year          | $ | -           |  | $ | -           | 
| | Project finance facility (note 19(a))   |   | 26,773,936  |  |   | -           | 
| | Senior secured notes (note
      19(b)) |   | 33,766,950  |  |   | -           | 
| | Finance lease liability (note 19(c))    |   | 1,519,708   |  |   | -           | 
| | Balance, December 31                    | $ | 62,060,594  |  | $ | -           | 

Aggregate future payments, inclusive
of interest

| |                             |   | Less than 1 |  |   | 2  5 years |  |   | More than 5 | 
| | --------------------------- | - | ----------- |  | - | ----------- |  | - | ----------- | 
| |                             |   | year        |  |   |             |  |   | years       | 
| | Project finance facility    | $ | -           |  | $ | 33,254,676  |  | $ | 14,697,767  | 
| | Senior secured notes        |   | -           |  |   | 75,272,400  |  |   | -           | 
| | Finance lease liability     |   | 916,745     |  |   | 1,757,095   |  |   | -           | 
| |                             |   |             |  |   |             |  |   |             | 
| | Total financial liabilities | $ | 916,745     |  | $ | 110,284,171 |  | $ | 14,697,767  | 

(a)Project finance facility

| |                                           |   | December 31 |   |   | December 31 | 
| | ----------------------------------------- | - | ----------- | - | - | ----------- | 
| |                                           |   | 2008        |   |   | 2007        | 
| | Balance, beginning of the year            | $ | -           |   | $ | -           | 
| | Principal amount                          |   | 26,040,000  |   |   | -           | 
| | Accrued interest                          |   | 1,113,710   |   |   | -           | 
| | Facility arrangement fees                 |   | (596,468    | ) |   | -           | 
| | Amortized facility arrangement
      fees |   | 18,768      |   |   | -           | 
| | Foreign exchange                          |   | 197,926     |   |   | -           | 
| | Balance, December 31                      | $ | 26,773,936  |   | $ | -           | 

As of December 31, 2008 the Company
utilized a ZAR200 million ($26 million) South African Rand denominated project
finance facility. This facility is collateralized by a first mortgage bond over
the Burnstone project.

The facility has a term of 7 years with
  quarterly repayments of ZAR18 million ($2 million) commencing September 2010.
  Interest rates are linked to the Johannesburg inter banking borrowing rate (JIBAR)
  with an average premium of 2.25% above JIBAR. As at December 31, 2008 JIBAR
  was 12.06% .

43

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|19. | Long term borrowings (continued)     
|--- | -------------------------------------
|    |                                      
|    | (b)        Senior
      secured notes

| |                                |   | December 31 |   |   | December 31 | 
| | ------------------------------ | - | ----------- | - | - | ----------- | 
| |                                |   | 2008        |   |   | 2007        | 
| | Balance, beginning of the year | $ | -           |   | $ | -           | 
| | Principal amount               |   | 57,819,944  |   |   | -           | 
| | Pre-paid interest              |   | (18,042,304 | ) |   | -           | 
| | Transaction cost               |   | (5,816,203  | ) |   | -           | 
| | Amortized interest expense     |   | 706,432     |   |   | -           | 
| | Foreign exchange               |   | (900,919    | ) |   | -           | 
| | Balance, December 31           | $ | 33,766,950  |   | $ | -           | 

On December 12, 2008, the Company
closed a senior secured note financing (the Note Financing), issuing a total
of 51,500 units and raising gross proceeds of US$51,500,000 which netted
approximately $39 million (US$32 million) following prepayment of 24 months of
interest and other costs of the offering. Each unit consisted of a senior
secured note (a Note) in the principal amount of US$1,000 and 350 common share
purchase warrants (the Note Financing Warrants). Each Note Financing Warrant
entitles the holder to purchase one common share in the capital of the Company
at a price of $1.80 per share on or before December 12, 2011.

These warrants are subject to
anti-dilution rights, including certain anti-dilution rights triggered by the
issuance of common shares at a price less than the exercise price, but have a
minimum exercise price of $1.11 per common share (refer note 26(c)).

Each Note matures at 120% of principal
  on the earlier of December 12, 2011 and certain stated events, including a change
  of control. The Notes are also repayable at the election of the holder on 30
  days notice after November 12, 2010. The Notes bear interest of 14% per annum.
  The Notes are guaranteed on a joint and several basis by all of the Companys
  Nevada subsidiaries and collateralized by their assets, being the Hollister
  Property and all other Nevada assets (refer note 27(d))

The fair value of the debt and equity
  components of the notes was apportioned using the relative fair value method
  with the fair value assigned to the warrants being recorded in equity (refer
  note 22(c)(iv)).

The main covenant is that the Company
shall from and after June 30, 2009, maintain a stockpile of ore delivered from
the Hollister mine in excess of 7,500 metric tonnes, containing in excess of
10,000 ounces of gold equivalent and, from and after September 30, 2009, the
Company will maintain a stockpile of ore delivered from the Hollister mine in
excess of 15,000 metric tonnes and containing in excess of 20,000 ounces of gold
equivalents for the duration of the Notes.

44

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|19. | Long term borrowings (continued)        
|--- | ----------------------------------------
|    |                                         
|    | (c)        Finance
      lease liability

| |                                |   | December 31 |   |   | December 31 | 
| | ------------------------------ | - | ----------- | - | - | ----------- | 
| |                                |   | 2008        |   |   | 2007        | 
| | Balance, beginning of the year | $ | -           |   | $ | -           | 
| | Principal debt amount          |   | 2,505,706   |   |   | -           | 
| | Interest expense               |   | 17,732      |   |   | -           | 
| | Payments                       |   | (66,931     | ) |   | -           | 
| | Foreign exchange               |   | (20,054     | ) |   | -           | 
| | Balance, December
      31     | $ | 2,436,453   |   | $ | -           | 

| |                      |   | December 31 |  |   | December 31 | 
| | -------------------- | - | ----------- |  | - | ----------- | 
| |                      |   | 2008        |  |   | 2007        | 
| | Non-current          | $ | 1,519,708   |  | $ | -           | 
| | Current              |   | 916,745     |  |   | -           | 
| | Balance, December 31 | $ | 2,436,453   |  | $ | -           | 

|    | On November 15, 2008 the Company financed site equipment
      through a finance lease agreement with Sandvik Customer Finance LLC. The
      principal debt amount will be repaid in 36 equal installments. Interest is
      charged at 6.5% on outstanding capital and is being calculated on the
      15thof each month.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                              
|    | The finance lease is collateralized by the leased assets
      which had a carrying value of $2,736,595 at December 31, 2008 (refer note
      12).                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                              
|20. | Future income taxes                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                              
|    | The estimated tax effect of the significant components
      within the Companys future tax liability was as
follows:                                                                                                                                                                                                       

| |                          |   | December 31 |   |   | December 31 |  
| | ------------------------ | - | ----------- | - | - | ----------- | -
| |                          |   | 2008        |   |   | 2007        |  
| | Future income tax assets |   |             |   |   |             |  
| | Mineral properties       | $ | -           |   | $ | 1,876,000   |  
| | Loss carry forwards      |   | 48,432,765  |   |   | 23,428,000  |  
| | Equipment                |   | 18,146,538  |   |   | 253,000     |  
| | Other                    |   | 9,213,242   |   |   | 4,276,000   |  
| | Subtotal                 |   | 75,792,545  |   |   | 29,833,000  |  
| | Valuation allowance      |   | (33,464,849 | ) |   | (20,899,000 | )
| | Future income tax asset  |   | 42,327,697  |   |   | 8,934,000   |  

45

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|20. | Future income taxes
(continued)
|--- | -------------------------------

| |                                       |   | December 31 |   |   | December 31 |  
| | ------------------------------------- | - | ----------- | - | - | ----------- | -
| |                                       |   | 2008        |   |   | 2007        |  
| | Future income tax liability           |   |             |   |   |             |  
| | Mineral property interests            |   | (54,903,967 | ) |   | (42,917,164 | )
| | Senior secured debt                   |   | (2,171,121  | ) |   | -           |  
| | Future income tax
      liability     |   | (57,075,089 | ) |   | (42,917,164 | )
| |                                       |   |             |   |   |             |  
| | Net future income
      tax liability | $ | 14,747,392  |   | $ | 33,983,164  |  

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

| |                                                               |   | December 31 |   |   | December 31 |  
| | ------------------------------------------------------------- | - | ----------- | - | - | ----------- | -
| |                                                               |   | 2008        |   |   | 2007        |  
| | Combined Canadian federal and provincial
      statutory rate |   | 31.0%       |   |   | 34.12%      |  
| |                                                               |   |             |   |   |             |  
| | Income tax at statutory rates                                 | $ | (36,213,226 | ) | $ | (19,899,108 | )
| | Difference in foreign tax rates                               |   | 377,774     |   |   | 1,224,142   |  
| | Valuation allowance                                           |   | 4,500,522   |   |   | 7,558,472   |  
| | Other non-deductible items, Canada                            |   | 4,532,798   |   |   | (660,948    | )
| | Change due to foreign exchange                                |   | (4,243,626  | ) |   | (357,470    | )
| | Change in tax rate                                            |   | (218,366    | ) |   | 642,518     |  
| | Benefit of unrealized foreign exchange gain
      (loss) not  |   |             |   |   |             |  
| | included in income                                            |   | (758,387    | ) |   | 303,426     |  
| | Other                                                         |   | 77,732      |   |   | 4,035,683   |  
| | Future income tax
      recovery                              |   | (31,944,779 | ) | $ | (7,153,285  | )

At December 31, 2008, the Company had
  available losses for income tax purposes in Canada totaling approximately $9.2
  million (2007  $1.1 million), expiring in various years from 2009 to 2028.
  The Company has available resource tax pools in Canada of approximately $4.9
  million (2007  $4.8 million), which may be carried forward and utilized
  to reduce resource income.

Included in these resource tax pools
  is $3.1 million (2007  $2.9 million) which is successored, and consequently
  can only be utilized against taxable income from specific mineral properties.

At December 31, 2008, the Company had
  a net operating loss carry forward for United States income tax purposes of
  approximately $116.8 million (US$95.9 million) (2007  $45.3 million (US$45.7
  million)) which, if not utilized to reduce United States taxable income in future
  periods, expire through the year 2028. These available tax losses may only be
  applied to offset future taxable income from the Company's current United States
  subsidiaries.

Approximately $11 million (US$9 million)
  of the above United States losses are subject to limitation under Section 382.
  Accordingly, the Company's ability to utilize these losses each year may be
  limited. Furthermore, additional ownership changes under Section 382 may have
  occurred, which may further limit the availability of net operating losses.

46

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|20. | Future income taxes (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | At December 31, 2008, the Company had available losses
      for income tax purposes in South Africa totaling approximately $7 million
      (ZAR52 million) and available unredeemed capital of approximately $101
      million (ZAR770 million), which may be carried forward and utilized to
      reduce future resource income.                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | The future income tax liability arising from mineral
      properties is based substantially on South African rand and United States
      dollar-denominated assets and tax balances. These balances decreased
      mainly due to movement in recognized timing differences and foreign
      exchange movements. The Company also recognized future income tax
      liabilities of $10.7 million and $2.6 million from the acquisition of
      Rusaf and Puma respectively, which reflects temporary differences related
      to the accounting and tax values of the respective entities identifiable
      assets and liabilities.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|21. | Site reclamation obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | The provision for site closure and reclamation costs
      related to the Companys mineral properties is as
  follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

| |                                                      |   | December 31 |  |   | December 31 |  
| | ---------------------------------------------------- | - | ----------- |  | - | ----------- | -
| |                                                      |   | 2008        |  |   | 2007        |  
| | Balance, beginning of the year                       | $ | 1,416,964   |  | $ | 405,000     |  
| | Accretion                                            |   | 38,086      |  |   | 37,466      |  
| | Recognition of obligation
      acquired - Hollister |   | -           |  |   | 722,304     |  
| | Recognition of obligation acquired - Esmeralda       |   | 1,318,763   |  |   | -           |  
| | Change in estimate                                   |   | 728,224     |  |   | 393,877     |  
| | Foreign exchange                                     |   | 236,343     |  |   | (141,683    | )
| | Balance, December 31                                 | $ | 3,738,380   |  | $ | 1,416,964   |  

The components of the site reclamation
obligation are as follows:

| |                                 |   | December 31 |  |   | December 31 | 
| | ------------------------------- | - | ----------- |  | - | ----------- | 
| |                                 |   | 2008        |  |   | 2007        | 
| | Burnstone property (note 21(a)) | $ | 706,363     |  | $ | 507,168     | 
| | Hollister property (note 21(b)) |   | 1,648,967   |  |   | 857,475     | 
| | Esmeralda property (note 21(c)) |   | 1,318,763   |  |   | -           | 
| | Other properties                |   | 64,287      |  |   | 52,321      | 
| | Balance, December 31            | $ | 3,738,380   |  | $ | 1,416,964   | 

(a)        Burnstone
Property

The estimated amount of the reclamation
costs to remove infrastructure, capping and backfilling of the decline and
subsequent property rehabilitation including re-vegetation and fertilization,
adjusted for estimated inflation at 6.5% per year, is $0.85 million (ZAR6.5
million) and is expected to be spent over a period of approximately three years
beginning in 2025. The credit-adjusted risk free rate at which the estimated
future cash flows have been discounted is 7.2%, to arrive at a net present value
of $706,363 (refer note 16(b)).

47

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|21. | Site reclamation obligations (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | The estimated amount of the reclamation costs to remove
      infrastructure, capping and backfilling of the decline and subsequent
      property rehabilitation including re-vegetation and fertilization,
      adjusted for estimated inflation at 2.5% per year, is $1.8 million (US$1.5
      million) and is expected to be spent from 2015. The credit-adjusted risk
      free rate at which the estimated future cash flows have been discounted is
      3.75%, to arrive at a net present value of $1.65 million (refer note
      16(a)).                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | In terms of the Asset Purchase Agreement (refer note
      16(e)), the Company also acquired the future reclamation liability over
      the Esmeralda property. The estimated amount of the reclamation costs to
      remove infrastructure and subsequent property rehabilitation is $1.3
      million (US$1.1 million). The Esmeralda Property is on care and
      maintenance, with the mine and mill fully permitted for operations. As
      long as the Property continues to be on care and maintenance status, no
      reclamation activities related to final site restoration are
    required.                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|22. | Share capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | The Companys authorized share capital consists of an
      unlimited number of common shares without par value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | The Company has a share option plan approved by the
      shareholders that allows it to grant options to a maximum number of
      eligible shares equaling a rolling percentage of up to 12.5% of the
      Company's outstanding common shares, calculated from time to time, subject
      to regulatory terms and approval, to its directors, employees, officers,
      and consultants.                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | The exercise price of each option is set by the Board of
        Directors at the time of grant but cannot be less than the market price
        (less permissible discounts) on the Toronto Stock Exchange.
      Pursuant to the option plan, if outstanding options are
        exercised, or expire, and/or the number of issued and outstanding common
        shares of the Company increases, then the options available to grant under
        the plan increase correspondingly. Options can have a maximum term of
        ten years and typically terminate 30 days following the termination of
        the optionees employment or engagement, except in the case of retirement
        or death.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | Vesting of options is at the discretion of the Board of
      Directors at the time the options are granted.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

48

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|22. | Share capital (continued)                                    
|--- | -------------------------------------------------------------
|    |                                                              
|    | (b)        
      Share option plan (continued)              
|    |                                                              
|    | The continuity of share purchase options is as
      follows:

| |                            |                  |                   | Contractual weighted  
| | -------------------------- | ---------------- | ----------------- | ----------------------
| |                            | Weighted average | Number of options | average remaining life
| |                            | exercise price   |                   | (years)               
| | Balance, December 31, 2006 | $1.87            | 9,340,000         | 2.47                  
| | Granted                    | $2.70            | 6,024,000         |                       
| | Exercised                  | $1.69            | (3,015,830)       |                       
| | Forfeited                  | $2.19            | (630,000)         |                       
| | Balance, December 31, 2007 | $2.32            | 11,718,170        | 2.37                  
| | Granted                    | $3.09            | 9,913,503         |                       
| | Exercised                  | $2.07            | (2,250,386)       |                       
| | Expired                    | $1.62            | (1,090,000)       |                       
| | Forfeited                  | $2.62            | (1,048,891)       |                       
| | Balance, December 31, 2008 | $2.82            | 17,242,396        | 2.30                  

Options outstanding at December 31, 2008 are as follows:

| |                      |                | Number of options | Number of options
| | -------------------- | -------------- | ----------------- | -----------------
| | Expiry date          | Exercise price | outstanding       | exercisable      
| | March 31, 2009       | $2.07          | 739,668           | 739,668          
| | March 31, 2009       | $2.45          | 100,000           | 100,000          
| | April 30, 2009       | $2.07          | 45,000            | 45,000           
| | April 30, 2009       | $2.45          | 228,500           | 228,500          
| | April 18, 2010       | $2.68          | 1,873,167         | 1,287,501        
| | December 31, 2010    | $1.14          | 400,000           | 400,000          
| | April 30, 2011       | $2.45          | 1,255,000         | 1,255,000        
| | November 8, 2011     | $2.45          | 90,000            | 90,000           
| | April 18, 2012       | $2.68          | 1,332,000         | 888,000          
| | July 5, 2010         | $2.77          | 453,334           | 280,001          
| | August 22, 2010      | $2.10          | 305,000           | 203,333          
| | September 4, 2010    | $2.24          | 100,000           | 50,000           
| | September 11, 2010   | $2.54          | 175,000           | 116,667          
| | November 9, 2010     | $3.12          | 633,334           | 430,000          
| | February 4, 2011     | $3.00          | 2,312,227         | 754,443          
| | February 18, 2011    | $2.95          | 50,000            | 16,667           
| | March 18, 2011       | $3.57          | 470,000           | 156,667          
| | April 10, 2011       | $3.60          | 2,145,000         | 715,000          
| | May 21, 2011         | $3.47          | 476,666           | 170,000          
| | August 18, 2011      | $2.78          | 1,200,000         | 400,000          
| | April 10, 2013       | $3.60          | 1,603,500         | 534,500          
| | May 21, 2013         | $3.60          | 110,000           | 36,667           
| | October 30, 2011     | $1.50          | 1,145,000         | -                
| | Total                |                | 17,242,396        | 8,897,614        
| | Average option price |                | $2.82             | $2.72            

49

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|22. | Share capital (continued)                     
|--- | ----------------------------------------------
|    |                                               
|    | (b)        Share
      option plan (continued)

| |                                       | Weighted |            |                           
| | ------------------------------------- | -------- | ---------- | --------------------------
| |                                       | average  |            |                           
| | Range of Exercise Price  Outstanding | exercise | Number of  | Weighted average remaining
| | Options                               | price    | options    | contractual life (years)  
| | $ 1.00 - $ 1.24                       | $1.14    | 400,000    | 2.00                      
| | $ 1.50 - $ 1.74                       | $1.50    | 1,145,000  | 2.83                      
| | $ 2.00 - $ 2.24                       | $2.09    | 1,189,668  | 0.73                      
| | $ 2.25 - $ 2.49                       | $2.45    | 1,673,500  | 1.96                      
| | $ 2.50 - $ 2.99                       | $2.71    | 5,083,501  | 2.18                      
| | $ 3.00 - $ 3.49                       | $3.09    | 3,422,227  | 2.09                      
| | $ 3.50 - $ 3.99                       | $3.60    | 4,328,500  | 3.07                      
| | Total                                 | $2.82    | 17,242,396 | 2.30                      

| |                                       | Weighted       |                  
| | ------------------------------------- | -------------- | -----------------
| | Range of Exercise Price  Exercisable | average        |                  
| | options                               | exercise price | Number of options
| | $ 1.00 - $ 1.24                       | $1.14          | 400,000          
| | $ 2.00 - $ 2.24                       | $2.08          | 1,038,001        
| | $ 2.25 - $ 2.49                       | $2.45          | 1,673,500        
| | $ 2.50 - $ 2.99                       | $2.70          | 2,988,836        
| | $ 3.00 - $ 3.49                       | $3.10          | 1,354,443        
| | $
      3.50 - $ 3.99                 | $3.60          | 1,442,834        
| | Total                                 | $2.72          | 8,897,614        

The exercise prices of all share
purchase options granted were at or above the market price at the grant date.
The options have been valued using an option pricing model with the assumptions
noted below, the estimated fair value of options granted for the years ended
December 31, 2008 and 2007, have been included in the consolidated statements of
operations, as follows:

| |                                                                   |   | Years ended December 31 | 
| | ----------------------------------------------------------------- | - | ----------------------- | 
| |                                                                   |   | 2008                    | 
| | Exploration and pre-development                                   | $ | 1,329,300               | 
| | Operations and administration                                     |   | 9,082,504               | 
| | Total compensation cost recognized, credited
      to contributed |   |                         | 
| | surplus                                                           | $ | 10,411,804              | 

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

| |                         | Years ended December 31
| | ----------------------- | -----------------------
| |                         | 2008                   
| | Risk free interest rate | 3.52%                  
| | Expected life           | 3.4 years              
| | Expected volatility     | 62%                    
| | Expected dividends      | Nil                    

50

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|22. | Share capital (continued)                                                     
|--- | ------------------------------------------------------------------------------
|    |                                                                               
|    | (c)        Share
      purchase warrants                                      
|    |                                                                               
|    | The continuity of share purchase warrants during the year
      is as follows:

December 31, 2008Outstanding
    
    
    
    
    
    
    
    
    
    
    
    OutstandingExercise
    
    
    December
    
    
    
    
    
    
    
    
    
    
    
    DecemberExpiry dates
    
    price
    
    
    31,
      2007
    
    
    Issued
    
    
    Exercised
    
    
    Expired
    
    
    31,
      2008July 18, 2008(note 22(c)(i))
    
    ZAR12.90
    
    
    998,890
    
    
    -
    
    
    (998,890
    )
    
    -
    
    
    -April 20, 2009(note 22(c)(ii))
    
    $3.50
    
    
    28,750,000
    
    
    -
    
    
    -
    
    
    -
    
    
    28,750,000September 30, 2010(note 22(c)(iii))
    
    ZAR20.78
    
    
    1,684,312
    
    
    -
    
    
    -
    
    
    -
    
    
    1,684,312December 12, 2011(note
      22(c)(iv))
    
    $1.80
    
    
    -
    
    
    18,746,000
    
    
    -
    
    
    -
    
    
    18,746,00031,433,202
    
    
    18,746,000
    
    
    (998,890
    )
    
    -
    
    
    49,180,312


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


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

(i)Burnstone June
2006 Settlement agreement

In July 2006, the Company issued
2,000,000 warrants to the former Southgold shareholders, pursuant to a
settlement agreement dated May 26, 2006. The warrants were exercisable at
US$1.80 for two years from the date of issuance and were subject to an
accelerated expiry provision under certain circumstances. It was resolved by way
of board resolution, passed on February 15, 2007, to allow the exercise price to
be in ZAR. The warrants were exercisable at ZAR12.90 per warrant.

The fair value of the share purchase
warrants were estimated using a Black-Scholes option pricing model with the
following assumptions: Risk free interest rate of 4%; expected life of 2 years;
expected volatility of 56% and nil dividends.

(ii)April 2007
Public offering

On April 19, 2007, the Company
completed an offering of 57,500,000 units at a price of $2.60 per unit. Each
unit consisted of one common share and one-half of a common share purchase
warrant of the Company. The common shares and warrants comprising the units have
separated immediately upon the closing of the transaction.

51

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|22. | Share capital (continued)                           
|--- | ----------------------------------------------------
|    |                                                     
|    | (c)        Share
      purchase warrants (continued)

(ii) April 2007 Public offering
(continued)

Each whole purchase warrant entitles
the holder thereof to purchase one common share of the company at a price of
$3.50 per share until April 20, 2009. The 28,750,000 warrants have been recorded
with an estimated fair value of $16,210,226 (using expected volatility of 56.9%,
risk free interest rate of 4%, dividends of nil, a share price of $2.48 and
remaining life of approximately 2 years).

(iii) October 2007 Black Economic
Empowerment transaction

In terms of the October 2007 BEE transaction,
  the Company provided a total of 1,684,312 Great Basin warrants. 1,263,234 warrants
  were granted to Investec, who provided a portion of the financing for the investment
  by Tranter Gold in Southgold, and Tranter Gold received 421,078. Each warrant
  is convertible into one Great Basin common share at $3 (ZAR20.78) on or before
  October 1, 2010. The warrants are subject to GBG having the right to require
  exercise of the warrants if the market price equals or exceeds $7 (ZAR45.72).
  On the date of the transaction, the estimated fair value of the warrants was
  estimated at $1.2 million (ZAR8 million). The fair value was calculated using
  an option pricing model and based upon the following assumptions: expected volatility
  of 62.74%; risk free rate of 8.93% and dividends of nil.

(iv) Senior secured notes -
warrants

On December 12, 2008, the Company
completed the issuance of 51,500 senior secured notes at a price of US$1,000 per
note for gross proceeds of US$51,500,000. Each note also granted its holder 350
warrants. Each warrant entitles the holder thereof to subscribe to one common
share of the Company at a price of $1.80 per share over a 36 month term and has
no mandatory conversion by the holder.

These warrants are subject to
anti-dilution rights, including certain anti-dilution rights triggered by the
issuance of common shares at a price less than the exercise price, but have a
minimum exercise price of $1.11 per common share (refer note 26(c)).

The Company also granted 721,000
warrants, subject to the same terms as setout above, to the agent. The number of
these warrants was calculated at 4% of the 18,025,000 warrants issued to the
note holders. The fair value was calculated using an option pricing model and
based upon the following assumptions: expected volatility of 82.60%; risk free
rate of 3.10% and dividends of nil.

Based on the above valuation and
adjusted for apportioned transaction cost, the relative fair value of the
18,746,000 warrants was estimated at $6.6 million (US$5.3 million) (refer note
19(b)).

52

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|22. | Share capital (continued)                   
|--- | --------------------------------------------
|    |                                             
|    | (d)      
       Contributed surplus        
|    |                                             
|    | The components of contributed surplus
  are:

| |                                                                       |   | December 31 |   |   | December 31 |  
| | --------------------------------------------------------------------- | - | ----------- | - | - | ----------- | -
| |                                                                       |   | 2008        |   |   | 2007        |  
| | Fair value of warrants issued which expired
      unexercised         | $ | 238,668     |   | $ | 238,668     |  
| | Fair value of warrants and options available to Rusaf share           |   |             |   |   |             |  
| | holders (note 22(d)(i))                                               |   | 1,763,476   |   |   | -           |  
| | Fair value of Rusaf warrants exercised, credit to share
      capital |   |             |   |   |             |  
| | (note 22(d)(i))                                                       |   | (8,409      | ) |   | -           |  
| | Accumulated stock-based compensation                                  |   | 25,111,066  |   |   | 14,699,262  |  
| | Share purchase options exercised, credited to share
      capital     |   | (5,505,280  | ) |   | (3,428,828  | )
| | Total contributed
      surplus                                       | $ | 21,599,521  |   | $ | 11,509,102  |  

(i)Warrants and
options available to former Rusaf shareholders

The fair value of $1,763,476 estimated
for the 1,062,033 future Great Basin shares to be issued was calculated using
the Black Scholes option pricing model based on a risk free interest rate of
2.99%, expected life between 1 month and 4 years and 59% volatility and was
recorded as contributed surplus.

The continuity of these warrants since
  acquisition is set out below:

OutstandingExercise
    
    
    Outstanding
    
    
    
    
    
    
    
    
    December 31Expiry dates
    
    price
    
    
    April
      1, 2008
    
    
    Exercised
    
    
    Expired
    
    
    2008April 11, 2008
    
    $0.25
    
    
    48,706
    
    
    (22,041
    )
    
    (26,665
    )
    
    -September 6, 2008
    
    $0.75
    
    
    27,037
    
    
    (13,333
    )
    
    (13,704
    )
    
    -September 15, 2008
    
    $0.75
    
    
    42,222
    
    
    -
    
    
    (42,222
    )
    
    -March 16, 2009
    
    $0.75
    
    
    93,333
    
    
    -
    
    
    -
    
    
    93,333May 17, 2009
    
    $0.75
    
    
    8,518
    
    
    -
    
    
    -
    
    
    8,518Balance, December 31, 2008
    
    
    
    
    219,816
    
    
    (35,374
    )
    
    (82,591
    )
    
    101,851Fair value
    
    
    
    $
    107,909
    
    
    ($ 8,409
    )
    
    ($ 35,269
    )
    $
    64,231


The continuity of these options since
acquisition is set out below:

OutstandingExercise
    
    
    Outstanding
    
    
    
    
    
    
    
    
    December 31Expiry dates
    
    price
    
    
    April
      1, 2008
    
    
    Exercised
    
    
    Expired
    
    
    2008December 31, 2010
    
    $0.25
    
    
    19,999
    
    
    -
    
    
    -
    
    
    19,999December 31, 2010
    
    $0.40
    
    
    144,443
    
    
    -
    
    
    -
    
    
    144,443June 1, 2012
    
    $0.60
    
    
    677,776
    
    
    -
    
    
    -
    
    
    677,776Balance, December 31, 2008
    
    
    
    
    842,218
    
    
    -
    
    
    -
    
    
    842,218Fair value
    
    
    
    $
    1,655,567
    
    
    -
    
    
    -
    
    $
    1,655,567 53


---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|22. | Share capital (continued)                                                                                                                                                                                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                              
|    | (e)                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                              
|    | On February 4, 2008, the Company issued 10,000 shares to
      CWM in terms of the earn-in agreement on the Ganes Creek property. The
      shares have been valued at their quoted price of $2.97 per share on the
      date of issuance and the value was recorded as mineral properties (refer
      note 16(g)(i)).                     
|    |                                                                                                                                                                                                                                                                                                                                              
|    | (f)                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                              
|    | On April 1, 2008, the Company issued 6,613,636 shares to
      the former shareholders of Rusaf Gold Limited. The shares have been valued
      at their quoted price of $3.46 per share on the date of issuance and the
      value was recorded as mineral properties. Share issue costs of $95,379
      were incurred (refer note 16(c)).
|    |                                                                                                                                                                                                                                                                                                                                              
|    | (g)                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                              
|    | On July 22, 2008, the Company issued 22,041 shares to the
      former shareholders of Rusaf Gold Limited. The shares have been valued at
      their quoted price of $3.49 per share on the date of issuance at $76,923
      and the value was recorded as mineral properties (refer note
  16(c)).                                        
|    |                                                                                                                                                                                                                                                                                                                                              
|    | (h)                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                              
|    | On July 31, 2008, the Company concluded an acquisition
      whereby it issued 1,862,354 Great Basin common shares as consideration for
      the purchase price of Puma. The shares were valued at the closing price of
      $3.57 on July 31, 2008 for a total value of $6,648,604 (refer note
      16(d)).                              
|    |                                                                                                                                                                                                                                                                                                                                              
|23. | Additional cash flow information                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                              
|    | Supplementary information:                                                                                                                                                                                                                                                                                                                   

| |                                                                           |   | December 31 |  |   | December 31 | 
| | ------------------------------------------------------------------------- | - | ----------- |  | - | ----------- | 
| |                                                                           |   | 2008        |  |   | 2007        | 
| |                                                                           |   |             |  |   |             | 
| |                                                                           |   |             |  |   |             | 
| | Interest paid                                                             | $ | 53,418      |  | $ | -           | 
| | Taxation paid                                                             | $ | -           |  | $ | -           | 
| |                                                                           |   |             |  |   |             | 
| | Non-cash financing and investing activities:                              |   |             |  |   |             | 
| |                                                                           |   |             |  |   |             | 
| | Fair value of stock options transferred to share capital on
      options |   |             |  |   |             | 
| | exercised from contributed surplus                                        | $ | 2,076,452   |  | $ | 2,005,064   | 
| | Fair value of warrants issued with Senior secured notes                   | $ | 6,616,856   |  | $ | -           | 
| | Fair value of warrants issued with short
      form prospectus offering   | $ | -           |  | $ | 16,210,226  | 
| | Warrants issued pursuant BEE Transaction                                  | $ | -           |  | $ | 1,178,815   | 
| | Common shares issued for property
      settlement                        | $ | 29,648,274  |  | $ | 19,666,931  | 
| | Increase in mineral property for future income taxes                      | $ | 13,235,669  |  | $ | 19,968,802  | 

54

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|24. | Segment disclosure                                                                                                                                                     
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                        
|    | The Company operates in a single reportable operating
      segment, the exploration and development of mineral properties. Geographic
      information is as follows:

| | Assets                                             |   | December 31 |  |   | December 31 | 
| | -------------------------------------------------- | - | ----------- |  | - | ----------- | 
| |                                                    |   | 2008        |  |   | 2007        | 
| | Canada                                             |   |             |  |   |             | 
| | Assets other than mineral property interests       | $ | 22,610,226  |  | $ | 56,796,521  | 
| | Mineral property interests                         |   | 1           |  |   | 1           | 
| | Tanzania                                           |   |             |  |   |             | 
| | Assets other than mineral
      property interests |   | 1,551,261   |  |   | -           | 
| | Mineral property interests                         |   | 36,466,782  |  |   | -           | 
| | United States                                      |   |             |  |   |             | 
| | Assets other than mineral property interests       |   | 27,542,387  |  |   | 5,890,010   | 
| | Mineral property interests                         |   | 92,505,493  |  |   | 95,156,279  | 
| | South Africa                                       |   |             |  |   |             | 
| | Assets other than mineral
      property interests |   | 53,637,952  |  |   | 48,212,597  | 
| | Mineral property interests                         |   | 130,886,380 |  |   | 123,257,650 | 
| | Balance, December 31                               | $ | 365,200,482 |  | $ | 329,313,058 | 

| | Revenue       |   | December 31 |  |   | December 31 | 
| | ------------- | - | ----------- |  | - | ----------- | 
| |               |   | 2008        |  |   | 2007        | 
| | United States |   |             |  |   |             | 
| | Ore sales     | $ | 24,716,323  |  | $ | -           | 

|    | During 2008 the Company generated gross revenue of
      $24,716,323 (US$23,162,143) from its Hollister operation. The ore was sold
      to Newmont Mining Corporation under the terms of various toll milling
      agreements.                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|25. | Contingencies and commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | (a)    
   Guarantee                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | The Company, through its subsidiaries, N5C Resource Inc.,
      N6C Resources Inc. and Rodeo Creek Gold Inc. signed a loan guarantee
      agreement pursuant to the conclusion of the transaction with Tranter
      Burnstone.                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | On October 1, 2007, Tranter Burnstone borrowed $29
      million (R200million) from Investec to settle a portion of the purchase
      consideration of $38 million (ZAR 260 million) for the 812 Southgold
      shares. The security for the loan comprised, amongst other items, a loan
      guarantee which require N5C Resources Inc., N6C Resources Inc. or Rodeo
      Creek Gold Inc., in the event of default by Tranter Burnstone on any of
      its interest payments to Investec, at any time for the first four years,
      to lend not more than $11.6 million (ZAR80 million) to Tranter Burnstone
      in order to settle such repayment obligations.

55

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|25. | Contingencies and commitments (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | The loan agreement with Investec requires Tranter Burnstone to deposit cash into a margin call account if the underlying value of the shares held by Tranter in Great Basin Gold is less than the outstanding loan and accrued
interest. The decrease in the share price of the Company since September 2008 triggered the requirement for a cash deposit into the margin account.                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | The Company, through its subsidiary Southgold, advanced $3.3 million (ZAR25 million) on October 10, 2008 and $0.8 million (ZAR6 million) on October 21, 2008 on Tranter Burnstones behalf to Investec Limited
(Investec) to fund the short fall in a margin call account relating to a 2007 loan agreement between Tranter Burnstone and Investec. The funds deposited in this account accrue interest at an average rate of 11% per annum.                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Tranter Burnstone defaulted on depositing the remaining cash requirement to the margin account, and the Company has been advised that Investec served Tranter with a notice of default in December 2008. The refund of the
Companys cash deposited into the margin account is currently under discussion with Investec. The release of the funds deposited by the Company is contingent upon the share price of the Company exceeding the stated trigger price (ZAR15.98 per
share for 10 days trading) and the approval for the full re-instatement of the facilities by the Investec Credit Committee, and accordingly, the amount recoverable from this deposit may change by a material amount when this contingency is
resolved.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|26. | Subsequent events                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Subsequent to December 31, 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

56

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|26. | Subsequent events (continued)
|--- | -----------------------------
|    |                              
|    | (b)                          
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    | (c)                          
|    |                              
|    |                              

57

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|27. | Reconciliation with United States Generally Accepted
      Accounting Principles                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | Great Basin Gold Ltd. (the Company) prepares its
      consolidated financial statements in accordance with Canadian Generally
      Accepted Accounting Principles (Canadian GAAP) which principles differ
      in certain respects from those applicable in the United States (US GAAP)
      and from practices prescribed by the United States Securities and Exchange
      Commission (SEC). Had the Company applied US GAAP, certain items on the
      statements of operations, deficit and balance sheets would have been
      reported as follows:

| |                                                                            |   | As at        |   |   | As at        |  
| | -------------------------------------------------------------------------- | - | ------------ | - | - | ------------ | -
| |                                                                            |   | December 31  |   |   | December 31  |  
| | Consolidated Balance Sheets                                                |   | 2008         |   |   | 2007         |  
| |                                                                            |   |              |   |   |              |  
| | Total assets under
      Canadian GAAP                                     | $ | 365,200,482  |   | $ | 329,313,058  |  
| | Adjustments under US GAAP                                                  |   |              |   |   |              |  
| | Investments (note
      27(b)(i))                                          |   |             |   |   |             |  
| | Total assets under US GAAP                                                 | $ | 365,200,482  |   | $ | 329,313,058  |  
| |                                                                            |   |              |   |   |              |  
| | Total liabilities under Canadian
      GAAP                                | $ | 107,992,527  |   | $ | 41,521,472   |  
| | Adjustments under US
      GAAP                                            |   |              |   |   |              |  
| | Recognize warrants issued
      for property as liability (note 7(b)(ii))  |   |             |   |   | 545,893      |  
| | Recognize
      warrants issued for BEE as liability (note 27(b)(iii))     |   | 1,178,815    |   |   | 1,178,815    |  
| | Mark-to-market adjustment
      on warrants (note 27(b)(iii))              |   |             |   |   | 382,895      |  
| | Mark-to-market
      adjustment on warrants  BEE (note 27(b)(iii))        |   | (235,638     | ) |   | (179,540     | )
| | Total liabilities under US GAAP                                            | $ | 108,935,704  |   | $ | 43,449,535   |  
| |                                                                            |   |              |   |   |              |  
| | Share capital, warrants, contributed
      surplus and                     |   |              |   |   |              |  
| | accumulated other
      comprehensive income                               |   |              |   |   |              |  
| | under Canadian GAAP                                                        | $ | 474,475,066  |   | $ | 420,186,619  |  
| | Adjustments under US GAAP:                                                 |   |              |   |   |              |  
| | Stock-based compensation (note
      27(a))                                |   | 2,658,000    |   |   | 2,658,000    |  
| | Warrants
      exercised in prior periods                                  |   | (3,695,159   | ) |   | (3,695,159   | )
| | Recognize warrants issued for
      property as liability (note 27(b)(ii)) |   |             |   |   | (545,893     | )
| | Recognize warrants issued for
      BEE as liability (note 27(b)(iii))     |   | (1,178,815   | ) |   | (1,178,815   | )
| | Share capital and contributed surplus under US GAAP                        | $ | 472,259,092  |   | $ | 417,424,752  |  
| |                                                                            |   |              |   |   |              |  
| | Consolidated
      Statements of Operations                                |   |              |   |   |              |  
| |                                                                            |   |              |   |   |              |  
| | Deficit under Canadian GAAP                                                | $ | (217,267,111 | ) | $ | (132,395,033 | )
| | Reverse translation adjustment on adoption
      of Financial instruments  |   |              |   |   |              |  
| | (note 27(b)(i))                                                            |   |             |   |   | 64,811       |  
| | Adjustments under US GAAP:                                                 |   |              |   |   |              |  
| | Stock-based compensation (note 27(a))                                      |   | (2,658,000   | ) |   | (2,658,000   | )
| | Investments (note 27(b)(i))                                                |   |             |   |   |             |  
| | Mark-to-market adjustment on warrants (note
      27(b))                   |   |             |   |   | (447,706     | )
| | Mark-to-market adjustment on
      warrants exercised in prior periods     |   | 3,695,159    |   |   | 3,695,159    |  
| | Mark-to-market adjustment on warrants  BEE (note 27(b)(iii))              |   | 235,638      |   |   | 179,540      |  
| | Deficit under US GAAP                                                      | $ | (215,994,314 | ) | $ | (131,561,229 | )

58

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|27. | Reconciliation with United States Generally Accepted
      Accounting Principles (continued)
|--- | --------------------------------------------------------------------------------------------

| |                                                                   |   | As at       |   |   | As at       |  
| | ----------------------------------------------------------------- | - | ----------- | - | - | ----------- | -
| | Consolidated Statements of Operations                             |   | December 31 |   |   | December 31 |  
| |                                                                   |   | 2008        |   |   | 2007        |  
| |                                                                   |   |             |   |   |             |  
| | Loss for the year under Canadian GAAP                             | $ | (84,872,078 | ) | $ | (51,167,666 | )
| | Mark-to-market
      adjustment on warrants (note 27(b))          |   | 438,993     |   |   | (342,166    | )
| | Loss for the year, US GAAP                                        | $ | (84,433,085 | ) | $ | (51,509,832 | )
| | Other
      comprehensive (loss) income under Canadian GAAP       |   | (389,869    | ) |   | 538,061     |  
| | Comprehensive loss                                                | $ | (84,822,954 | ) | $ | (50,971,771 | )
| |                                                                   |   |             |   |   |             |  
| | Basic and diluted loss per share for the
      year under US GAAP |   |             |   |   |             |  
| | (note
      4(j))                                                 | $ | (0.40       | ) | $ | (0.31       | )

There are no differences between
Canadian GAAP and US GAAP in the calculation of basic and diluted loss per share
for the years ended December 31, 2008 and 2007.

There are no material differences
between Canadian GAAP and US GAAP in the consolidated statements of cash flows
for the years ended December 31, 2008 and 2007.

(a)        Stock based
compensation

In the year ended December 31, 2003 the
Company adopted the fair value based method of accounting for employee
stock-based compensation as prescribed by FASB Statement No. 123, Accounting
for Stock-Based Compensation (SFAS 123). The Company adopted the fair
value method on a prospective basis from January 1, 2003 as permitted by FASB
Statement No. 148, Accounting for Stock-Based Compensation  Transition and
Disclosure, and amendment of FASB Statement No. 123. The prospective
adoption of this new US GAAP policy creates no differences with the Companys
stock-based compensation expense reported under Canadian GAAP.

In December 2004, the Financial
Accounting Standards Board ("FASB") issued Statement of Financial Accounting
Standards No. 123 (revised 2004), "Share-Based Payment (SFAS 123(R),
which is a revision of SFAS 123. SFAS 123(R) supersedes APB Opinion No. 25,
Accounting for Stock Issued to Employees. Generally, the approach in
SFAS 123(R) requires all share-based payments to employees, including grants of
employee stock options, to be recognized in the income statement based on their
fair values. Pro forma disclosure is no longer an alternative. As the Company
currently uses the fair value method to account for all stock option grants this
statement did not have any material impact on the financial statements when it
was adopted on January 1, 2006.

Prior to 2003 under US GAAP, the
Company accounted for its employee stock option plan under the principles of
Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees (APB 25) and other Interpretations. No compensation expense was
recognized under APB 25 because the exercise price of the Companys employee
stock options equalled the market price of the underlying stock on the date of
the grant.

59

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|27. | Reconciliation with United States Generally Accepted
      Accounting Principles (continued)                                                                                                                                                                                                                                                                                                                                                                                 
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | For the years ended December 31, 2008, 2007 and 2006,
      there were no differences in stock-based compensation expense in respect
      of employee and non-employee share options which would be required to be
      charged to operations under both Canadian and US GAAP.                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | As SFAS 123 was adopted on a prospective basis, there is
      $2,658,000 historical difference in contributed surplus and deficit
      relating to the period prior to adoption. In terms of this Statement the
      cumulative effect of initially applying this Statement, if any, is
      recognized as of the required effective date. Under Canadian GAAP no
      provision was made for the recognition of the cumulative effect upon
      adoption of CICA 3870.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

60

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|27. | Reconciliation with United States Generally Accepted
      Accounting Principles (continued)
|--- | --------------------------------------------------------------------------------------------
|    |                                                                                             
|    | (b)                                                                                         
|    |                                                                                             
|    |                                                                                             
|    |                                                                                             
|    |                                                                                             
|    |                                                                                             
|    |                                                                                             
|    |                                                                                             
|    |                                                                                             
|    |                                                                                             
|    |                                                                                             
|    |                                                                                             
|    |                                                                                             
|    |                                                                                             
|    |                                                                                             
|    |                                                                                             
|    |                                                                                             
|    |                                                                                             
|    |                                                                                             

61

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|27. | Reconciliation with United States Generally Accepted
      Accounting Principles (continued)
|--- | --------------------------------------------------------------------------------------------
|    |                                                                                             
|    | (c)                                                                                         
|    |                                                                                             
|    |                                                                                             
|    |                                                                                             
|    |                                                                                             

| |                                     |   | December 31 |  |   | December 31 | 
| | ----------------------------------- | - | ----------- |  | - | ----------- | 
| |                                     |   | 2008        |  |   | 2007        | 
| | General and value added sales taxes | $ | 1,415,918   |  | $ | 604,109     | 
| | Trade debtors                       |   | 1,812,550   |  |   | -           | 
| | Other receivables                   |   | 189,226     |  |   | 1,894,669   | 
| | Deposit                             |   | 1,523,256   |  |   | 1,239,125   | 
| | Total                               | $ | 4,940,950   |  | $ | 3,737,903   | 

(ii)       Amounts payable and
accrued liabilities

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

| |                      |   | December 31 |  |   | December 31 | 
| | -------------------- | - | ----------- |  | - | ----------- | 
| |                      |   | 2008        |  |   | 2007        | 
| | Accounts payable     | $ | 12,250,484  |  | $ | 1,395,828   | 
| | Accrued liabilities  |   |             |  |   |             | 
| | Burnstone            |   | 7,099,680   |  |   | 740,686     | 
| | Hollister            |   | 4,277,431   |  |   | 470,958     | 
| | Other                |   | 784,221     |  |   | 3,095,774   | 
| | Annual
      bonuses |   | 1,864,746   |  |   | 396,000     | 
| | Total                | $ | 26,276,562  |  | $ | 6,099,246   | 

(iii)     
Rusaf equity accounting

Under Canadian GAAP the investment in
Rusaf Gold Ltd was equity accounted for from July 20, 2007 when the Company
obtained significant influence (note 15). Under US GAAP the acquisition is
classified as a stepped acquisition. The Company is required to apply the equity
method from the day of the first investment, that being June 28, 2007.

Due to the short time frame between
  the first and second tranche and a review of the monthly expenses for Rusaf,
  it was concluded that the impact of the movement in the equity reserves for
  Rusaf during the period on the consolidated accounts of the Company would be
  immaterial and therefore no adjustment was made under US GAAP.

| | (d) | FASB Interpretation No. 48  Accounting for
        Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109
        (Accounting for Income Taxes) (FIN 48)
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In June 2006, the Financial Accounting Standards Board (FASB) issued
  FIN 48 to create a single model to address accounting for uncertainty in tax
  positions. FIN 48 clarifies the accounting for income taxes, by prescribing
  a minimum recognition threshold a tax position is required to meet before being
  recognized in the financial statements.

62

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|27. | Reconciliation with United States Generally Accepted
      Accounting Principles (continued)                                                                                                                                                                                                                                                                                                                                      
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | (d)                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | FIN 48 also provides guidance on de-recognition,
      measurement, classification, interest and penalties, accounting in interim
      periods, disclosure and transition. FIN 48 was effective for fiscal years
      beginning after December 15, 2006.                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | The Company adopted the provisions of FIN 48 on January
      1, 2007, which did not have a material impact on the consolidated
      financial position or results of operations, and reported no unrecognized
      tax benefits for the year ending December 31, 2007. For December 31, 2008,
      there were no increases or decreases in unrecognized tax benefits as a
      result of tax positions taken in a prior year.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | There were also no increases or decreases in unrecognized
      tax benefits from tax positions taken in the current year. As a result,
      there are no unrecognized tax benefits at December 31, 2008. As there were
      no unrecognized tax benefits at December 31, 2008, there are also no
      unrecognized tax benefits that could affect the effective tax rate if
      recognized.                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | There were no interest and penalties recognized on the
      statement of operations or the statement of financial position. The
      Companys policy is to recognize accrued interest and penalties related to
      unrecognized tax benefits in operating expenses.                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | The Company is subject to taxes in Canada, United States,
        South Africa, Tanzania and Russia.
      The following tax years remain subject to examination as
        of December 31, 2008 by major tax jurisdiction:                                                                                                                                                                                                       

| | Canada       | 2001 to present
| | ------------ | ---------------
| | United Sates | 1998 to present
| | South Africa | 2002 to present
| | Tanzania     | 1996 to present
| | Russia       | 2006 to present

(e)        Additional
disclosures

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

63

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|27. | Reconciliation with United States Generally Accepted
      Accounting Principles (continued)                                                                                                                                                                                                                                                                                                                                                                                          
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | (e)       
      Additional disclosures (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Under SFAS 7, the Company is required to provide additional
        disclosures from its date of inception, or the date the Company was reactivated
        to undertake development stage activities.
      Consolidated summarized statements of operations and deficit
        and cash flows since January 1, 1998, the date the Company was considered
        to be reactivated to undertake development stage activities, to December
        31, 2008 are presented as follow:

| |                                                                                            |   | Period from January |  
| | ------------------------------------------------------------------------------------------ | - | ------------------- | -
| | Consolidated statements of operations and deficit                                          |   | 1, 1998 to December |  
| | (Unaudited)                                                                                |   | 31, 2008            |  
| | Mineral property exploration and
      reclamation                                         | $ | (179,838,946        | )
| | General and administration, salaries, professional fees,
      and other                   |   | (69,729,679         | )
| | Other income                                                                               |   | 44,694,065          |  
| | Net loss for the period from January 1, 1998 to December
      31, 2007, being the deficit |   |                     |  
| | accumulated during the exploration stage                                                   |   | (204,874,560        | )
| | Opening deficit
      accumulated during the development stage, January 1, 1998            |   | (11,119,754         | )
| | Ending deficit accumulated during the development stage,
      December 31, 2008           | $ | (215,994,314        | )

| | Consolidated statements of cash flows               |   | Period from January |  
| | --------------------------------------------------- | - | ------------------- | -
| |                                                     |   | 1, 1998 to December |  
| | (Unaudited)                                         |   | 31, 2008            |  
| | Operating activities                                | $ | (188,421,690        | )
| | Investing activities                                |   | (139,118,484        | )
| | Financing activities                                |   | 356,632,936         |  
| | Increase in cash and cash equivalents               |   | 29,092,762          |  
| | Cash and cash equivalents  January 1, 1998         |   | 1,922,206           |  
| | Acquired through business acquisitions              |   | 4,512,119           |  
| | Foreign exchange                                    |   | (1,977,969          | )
| | Cash and cash
      equivalents  December 31, 2008 | $ | 33,549,118          |  

64

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|27. | Reconciliation with United States Generally Accepted
      Accounting Principles (continued)                       
|--- | -------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                    
|    | (e)        Additional
        disclosures (continued)
      Consolidated statements of change in equity (Unaudited)

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

65

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|27. | Reconciliation with United States Generally Accepted
      Accounting Principles (continued)
|--- | --------------------------------------------------------------------------------------------
|    |                                                                                             
|    | (e)       
      Additional disclosures (continued)                                         
|    |                                                                                             
|    | Consolidated statements of change in equity
      (Unaudited) (continued)                   

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

66

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|27. | Reconciliation with United States Generally Accepted
      Accounting Principles (continued)
|--- | --------------------------------------------------------------------------------------------
|    |                                                                                             
|    | (e)        
      Additional disclosures (continued)                                        
|    |                                                                                             
|    | Consolidated statements of change in equity
      (Unaudited) (continued)                   

|                                                |  | Common
      Shares |  |  |             |  |  |             |  |  |            |   |  |             |   |  |                  |  
|----------------------------------------------- |  | ------------------- |  |  | ----------- |  |  | ----------- |  |  | ---------- | - |  | ----------- | - |  | ---------------- | -
|                                                |  |                     |  |  |             |  |  |             |  |  |            |   |  |             |   |  |                  |  
|                                                |  |                     |  |  |             |  |  |             |  |  |            |   |  |             |   |  |                  |  
|                                                |  | Issue               |  |  | Number of   |  |  |             |  |  |            |   |  | Contributed |   |  |                  |  
|                                                |  | Price               |  |  | shares      |  |  | Amount      |  |  | Warrants   |   |  | surplus     |   |  | Retained deficit |  
|                                                |  | $                   |  |  |             |  |  | $           |  |  | $          |   |  | $           |   |  | $                |  
|                                                |  |                     |  |  |             |  |  |             |  |  |            |   |  |             |   |  |                  |  
|Balance, December 31, 2006 (brought             |  |                     |  |  |             |  |  |             |  |  |            |   |  |             |   |  |                  |  
|forward)                                        |  |                     |  |  | 113,411,713 |  |  | 197,762,433 |  |  | 159,000    |   |  | 10,521,472  |   |  | (80,051,397      | )
|                                                |  |                     |  |  |             |  |  |             |  |  |            |   |  |             |   |  |                  |  
|Adoption of accounting policy                   |  | -                   |  |  |            |  |  |            |  |  |           |   |  |            |   |  |                 |  
|Exercise of options                             |  | 1.69                |  |  | 3,015,830   |  |  | 5,111,184   |  |  |           |   |  |            |   |  |                 |  
|                                                |  |                     |  |  |             |  |  |             |  |  |            |   |  |             |   |  |                  |  
|Shares issued for cash net of issue costs       |  | 2.11                |  |  | 57,500,000  |  |  | 121,427,869 |  |  |           |   |  |            |   |  |                 |  
|Shares issued for Hecla Ventures Corp.          |  | 2.48                |  |  | 7,930,214   |  |  | 19,666,931  |  |  |           |   |  |            |   |  |                 |  
|                                                |  |                     |  |  |             |  |  |             |  |  |            |   |  |             |   |  |                  |  
|Shares issued for Tranter Burnstone Pty Ltd     |  | 1.82                |  |  | 19,938,650  |  |  | 36,323,195  |  |  |           |   |  |            |   |  |                 |  
|Share purchase warrants exercised               |  | 2.16                |  |  | 1,599,495   |  |  | 3,459,187   |  |  |           |   |  |            |   |  |                 |  
|Fair value of stock options exercised           |  | -                   |  |  |            |  |  | 2,005,064   |  |  |           |   |  | (2,005,064  | ) |  |                 |  
|Compensation warrants exercised                 |  | -                   |  |  |            |  |  | 141,582     |  |  | (141,582   | ) |  |            |   |  |                 |  
|Compensation warrants expired                   |  | -                   |  |  |            |  |  |            |  |  | (17,418    | ) |  | 17,418      |   |  |                 |  
|Fair value of warrants exercised                |  | -                   |  |  |            |  |  | 547,107     |  |  |           |   |  |            |   |  |                 |  
|                                                |  |                     |  |  |             |  |  |             |  |  |            |   |  |             |   |  |                  |  
|Warrants issued persuant to share issuance      |  | -                   |  |  |            |  |  |            |  |  | 16,210,226 |   |  |            |   |  |                 |  
|Stock based compensation                        |  | -                   |  |  |            |  |  |            |  |  |           |   |  | 5,633,276   |   |  |                 |  
|Loss for the year                               |  | -                   |  |  |            |  |  |            |  |  |           |   |  |            |   |  | (51,509,832      | )
|                                                |  |                     |  |  |             |  |  |             |  |  |            |   |  |             |   |  |                  |  
|Fair value adjustment - financial instruments   |  | -                   |  |  |            |  |  |            |  |  |           |   |  |            |   |  |                 |  
|Mark-to-market fair value adjustment            |  | -                   |  |  |            |  |  |            |  |  |           |   |  |            |   |  |                 |  
|                                                |  |                     |  |  |             |  |  |             |  |  |            |   |  |             |   |  |                  |  
|Balance, December 31, 2007                      |  |                     |  |  | 203,395,902 |  |  | 386,444,552 |  |  | 16,210,226 |   |  | 14,167,102  |   |  | (131,561,229     | )
|                                                |  |                     |  |  |             |  |  |             |  |  |            |   |  |             |   |  |                  |  
|Fair value of options exercised                 |  |                     |  |  | -           |  |  | 2,076,452   |  |  | -          |   |  | (2,076,452  | ) |  | -                |  
|Fair value of warrants exercised                |  |                     |  |  | -           |  |  | 545,894     |  |  |            |   |  | -           |   |  | -                |  
|Share purchase options exercised                |  | 2.07                |  |  | 2,250,386   |  |  | 4,655,242   |  |  | -          |   |  | -           |   |  | -                |  
|Shares issued to CW Properties LLC,             |  |                     |  |  |             |  |  |             |  |  |            |   |  |             |   |  |                  |  
|February 2008                                   |  | 2.97                |  |  | 10,000      |  |  | 29,700      |  |  | -          |   |  | -           |   |  | -                |  
|Shares issued for Rusaf Gold Limited, April     |  |                     |  |  |             |  |  |             |  |  |            |   |  |             |   |  |                  |  
|2008                                            |  | 3.45                |  |  | 6,613,636   |  |  | 22,787,802  |  |  | -          |   |  | -           |   |  | -                |  
|Shares issued for Rusaf Gold Limited, July      |  |                     |  |  |             |  |  |             |  |  |            |   |  |             |   |  |                  |  
|2008                                            |  | 3.49                |  |  | 22,041      |  |  | 76,923      |  |  | -          |   |  | -           |   |  | -                |  
|Shares issued for Puma Gold (Pty) Ltd, July     |  |                     |  |  |             |  |  |             |  |  |            |   |  |             |   |  |                  |  
|2008                                            |  | 3.57                |  |  | 1,862,354   |  |  | 6,648,604   |  |  | -          |   |  | -           |   |  | -                |  
|Rusaf share purchase warrants exercised,        |  |                     |  |  |             |  |  |             |  |  |            |   |  |             |   |  |                  |  
|October 2008                                    |  | 1.38                |  |  | 13,333      |  |  | 18,409      |  |  |            |   |  |             |   |  |                  |  
|Share purchase warrants exercised               |  | 1.68                |  |  | 998,890     |  |  | 1,677,909   |  |  | -          |   |  | -           |   |  | -                |  
|Warrants issued persuant to Senior Secured      |  |                     |  |  |             |  |  |             |  |  |            |   |  |             |   |  |                  |  
|Notes                                           |  |                     |  |  |             |  |  |             |  |  | 6,616,856  |   |  | -           |   |  | -                |  
|Stock based compensation                        |  |                     |  |  | -           |  |  | -           |  |  | -          |   |  | 10,411,804  |   |  | -                |  
|Options and warrants issued on acquisition of   |  |                     |  |  |             |  |  |             |  |  |            |   |  |             |   |  |                  |  
|Rusaf Gold Limited                              |  |                     |  |  | -           |  |  | -           |  |  | -          |   |  | 1,755,067   |   |  | -                |  
|Loss for the period                             |  |                     |  |  | -           |  |  | -           |  |  | -          |   |  |             |   |  | (84,433,085      | )
|Unrealized (loss) gain on available-for-sale    |  |                     |  |  |             |  |  |             |  |  |            |   |  |             |   |  |                  |  
|financial instruments                           |  |                     |  |  | -           |  |  | -           |  |  | -          |   |  | -           |   |  | -                |  
|Accumulated unrealized loss on foreign          |  |                     |  |  |             |  |  |             |  |  |            |   |  |             |   |  |                  |  
|exchange translation of self-sustaining foreign |  |                     |  |  |             |  |  |             |  |  |            |   |  |             |   |  |                  |  
|operations                                      |  |                     |  |  | -           |  |  | -           |  |  | -          |   |  | -           |   |  | -                |  
|                                                |  |                     |  |  |             |  |  |             |  |  |            |   |  |             |   |  |                  |  
|Balance, December 31, 2008                      |  |                     |  |  | 215,166,542 |  |  | 424,961,487 |  |  | 22,827,082 |   |  | 24,257,521  |   |  | (215,994,314     | )

67

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|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2008 and 2007               
|(Expressed in Canadian
      Dollars unless otherwise stated)

|27. | Reconciliation with United States Generally
        Accepted Accounting Principles (continued)
|--- | ----------------------------------------------------------------------------------------------
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