GREAT BASIN GOLD LTD.
                        CONSOLIDATED FINANCIAL STATEMENTS

                                   YEARS ENDED

                        DECEMBER 31, 2002, 2001 and 2000

            (Expressed in Canadian Dollars, unless otherwise stated)



<PAGE>



AUDITORS' REPORT TO THE
BOARD OF DIRECTORS OF
GREAT BASIN GOLD LTD.

We have audited the  consolidated  balance sheets of Great Basin Gold Ltd. as at
December  31,  2002 and  2001 and the  consolidated  statements  of  operations,
deficit  and cash  flows for each of the years in the three  year  period  ended
December 31, 2002.  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 in accordance with Canadian  generally accepted auditing
standards  and auditing  standards  generally  accepted in the United  States of
America.  Those  standards  require  that we plan and perform an audit to obtain
reasonable  assurance  whether  the  financial  statements  are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management, as well as evaluating the overall financial statement presentation.

In our opinion,  these consolidated  financial statements present fairly, in all
material respects, the financial position of the Company as at December 31, 2002
and 2001 and the  results of its  operations  and its cash flows for each of the
years in the three year  period  ended  December  31,  2002 in  accordance  with
Canadian generally accepted  accounting  principles.



"KPMG LLP"

Chartered Accountants

Vancouver, Canada

May 9, 2003




KPMG LLP, a Canadian owned limited liability  partnership  established under the
laws of Ontario,  is the  Canadian  member firm of KPMG  International,  a Swiss
nonoperating association.




<PAGE>


<TABLE>
<CAPTION>
GREAT BASIN GOLD LTD.
CONSOLIDATED BALANCE SHEETS
(Expressed in Canadian dollars)

                                                                                                       As at December 31
                                                                                                   2002                         2001
                                                                                           ------------                ------------
ASSETS

CURRENT ASSETS

<S>                                                                                        <C>                         <C>
   Cash and equivalents ....................................................               $ 14,489,637                $  1,434,465
   Short-term investments ..................................................                        -                     5,046,267
   Amounts receivable ......................................................                    185,635                      42,657
   Prepaid expenses (note 7) ...............................................                    670,623                     995,881
                                                                                           ------------                ------------
                                                                                             15,345,895                   7,519,270

RECLAMATION DEPOSITS .......................................................                      7,500                       7,500
EQUIPMENT (note 4) .........................................................                        -                         3,336
MINERAL PROPERTY INTERESTS (note 5) ........................................                  5,878,351                   5,583,350
                                                                                           ------------                ------------
                                                                                           $ 21,231,746                $ 13,113,456
                                                                                           ============                ============
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

   Accounts payable and accrued liabilities ................................               $  2,188,842                $     25,493

SHAREHOLDERS' EQUITY

   Share capital (note 6) ..................................................                 66,757,818                  55,953,415
   Contributed surplus (note 6(i)) .........................................                    669,627                         -
   Deficit .................................................................                (48,384,541)                (42,865,452)
                                                                                           ------------                ------------
                                                                                             19,042,904                  13,087,963

Nature of operations (note 1)
Commitments (note 5)
Contingencies (note 5(a) and (d))
Subsequent events (note 6(b), (c) and (h))
                                                                                           ------------                ------------
                                                                                           $ 21,231,746                $ 13,113,456
                                                                                           ============                ============

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

</TABLE>


<PAGE>


<TABLE>
<CAPTION>

GREAT BASIN GOLD LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in Canadian dollars)

                                                                                                  Years ended December 31
                                                                                               2002            2001             2000
                                                                                       ------------    ------------    -------------
EXPENSES

<S>                                                                                    <C>             <C>             <C>
  Conference and travel ........................................................       $    189,000    $    109,137    $    138,976
  Corporate capital taxes ......................................................             34,779          23,969          20,609
  Depreciation .................................................................              3,336           3,331           3,678
  Exploration (schedule) .......................................................          3,370,385       2,877,074      10,151,779
  Financial advisory and finders' fees .........................................            464,000             -               -
  Foreign exchange .............................................................            (96,846)            -               -
  Interest and other ...........................................................           (147,474)       (364,125)       (402,654)
  Legal, accounting and audit ..................................................            275,954         306,038         155,464
  Office and administration  (note 6(c)) .......................................          1,129,373         461,331       1,009,270
  Shareholder communications ...................................................            240,702          81,192         190,893
  Trust and filing .............................................................             55,880          11,667          37,630
                                                                                       ------------    ------------    ------------
LOSS BEFORE OTHER ITEM .........................................................         (5,519,089)     (3,509,614)    (11,305,645)
Write down of mineral property interests (note 5(c)) ...........................                -        (5,555,292)            -
                                                                                       ------------    ------------    ------------
LOSS FOR THE YEAR ..............................................................       $ (5,519,089)   $ (9,064,906)   $(11,305,645)
                                                                                       ============    ============    ============
Basic and diluted loss per share ...............................................       $      (0.13)   $      (0.24)   $      (0.37)
                                                                                       ============    ============    ============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING ...........................         43,785,007      38,182,137      30,481,267
                                                                                       ============    ============    ============
</TABLE>


<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF DEFICIT
(Expressed in Canadian dollars)

                                                                                                  Years ended December 31
                                                                                               2002            2001             2000
                                                                                       ------------    ------------    ------------

<S>                                                                                    <C>             <C>             <C>
Deficit, beginning of year .....................................................       $(42,865,452)   $(33,800,546)   $(22,494,901)
Loss for the year ..............................................................         (5,519,089)     (9,064,906)    (11,305,645)
                                                                                       ------------    ------------    ------------
Deficit, end of the year .......................................................       $(48,384,541)   $(42,865,452)   $(33,800,546
                                                                                       ============    ============    ============

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
</TABLE>


<PAGE>

<TABLE>
<CAPTION>

GREAT BASIN GOLD LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in Canadian dollars)

                                                                                     Years ended December 31
                                                                                2002            2001            2000
                                                                        ------------    ------------    ------------
CASH PROVIDED BY (USED FOR)

OPERATING ACTIVITIES

<S>                                                                      <C>             <C>             <C>
       Loss for the year .............................................   $ (5,519,089)   $ (9,064,906)   $(11,305,645)
       Items not involving cash
          Depreciation ...............................................          3,336           3,331           3,678
          Depreciation included in exploration expenses ..............            -            12,504          69,209
          Non-cash stock-based compensation expense ..................        374,627             -               -
          Write-down of mineral property interests ...................            -         5,555,292             -
       Changes in non-cash operating working capital
          Amounts receivable .........................................       (142,978)         51,599         (11,984)
          Prepaid expenses ...........................................        325,258        (296,982)       (157,082)
          Accounts payable and accrued liabilities ...................      2,163,349        (444,764)        362,677
                                                                         ------------    ------------    ------------
                                                                           (2,795,497)     (4,183,926)    (11,039,147)
                                                                         ------------    ------------    ------------

INVESTING ACTIVITIES

       Short-term investments ........................................      5,046,267       4,858,502      (7,921,749)
       Purchase of equipment .........................................            -               -           (31,696)
       Mineral property acquisition costs ............................             (1)        (75,745)            -
                                                                         ------------    ------------    ------------
                                                                            5,046,266       4,782,757      (7,953,445)
                                                                         ------------    ------------    ------------

FINANCING ACTIVITIES

       Common shares and warrants issued for cash, ...................     10,804,403         (31,245)     16,473,344
             net of issue costs
                                                                         ------------    ------------    ------------
INCREASE (DECREASE) IN CASH AND EQUIVALENTS ..........................     13,055,172         567,586      (2,519,248)
Cash and equivalents, beginning of year ..............................      1,434,465         866,879       3,386,127
                                                                         ------------    ------------    ------------
CASH AND EQUIVALENTS, END OF YEAR ....................................   $ 14,489,637    $  1,434,465    $    866,879
                                                                         ============    ============    ============


SUPPLEMENTARY INFORMATION

       TAXES PAID ....................................................   $      2,779    $     23,969    $     20,609
       NON-CASH FINANCING AND INVESTING ACTIVITIES

       Warrants issued in connection with mineral property agreement .   $    295,000    $       -       $       -
       Warrants received in connection with mineral property agreement   $  1,933,000    $       -       $       -


SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

</TABLE>


<PAGE>


<TABLE>
<CAPTION>

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

                                                                        Burnstone         Ivanhoe            Other            TOTAL
                                                                     ------------    ------------     ------------     ------------

<S>                               <C> <C>                            <C>             <C>              <C>              <C>
Cumulative expenditures, December 31, 1999 ......................    $        -      $  7,693,170     $      3,145     $  7,696,315
Exploration expenses during 2000
   Assays and analysis ..........................................             -           759,908              -            759,908
   Depreciation .................................................             -            69,209              -             69,209
   Drilling .....................................................             -         6,152,644              -          6,152,644
   Engineering ..................................................             -           201,585              -            201,585
   Environmental, socio-economic and land fees ..................             -           371,982            3,950          375,932
   Equipment rentals and leases .................................             -           172,804              -            172,804
   Geological ...................................................             -         1,810,934              -          1,810,934
   Site activities ..............................................             -           329,335              420          329,755
   Transportation ...............................................             -           279,008              -            279,008
                                                                     ------------    ------------     ------------     ------------
Incurred during the year ........................................             -        10,147,409            4,370       10,151,779
                                                                     ------------    ------------     ------------     ------------

Cumulative expenditures, December 31, 2000 ......................             -        17,840,579            7,515       17,848,094
Exploration expenses during 2001
   Assays and analysis ..........................................             -           159,672              517          160,189
   Depreciation .................................................             -            12,504              -             12,504
   Drilling .....................................................             -         1,155,733              -          1,155,733
   Engineering ..................................................             -           121,935              -            121,935
   Environmental, socio-economic and land fees ..................             -           357,784           11,389          369,173
   Equipment rentals and leases .................................             -           (12,278)             -            (12,278)
   Geological ...................................................             -           775,396              -            775,396
   Site activities ..............................................             -           201,421              -            201,421
   Transportation ...............................................             -            93,001              -             93,001
                                                                     ------------    ------------     ------------     ------------
Incurred during the year ........................................             -         2,865,168           11,906        2,877,074
                                                                     ------------    ------------     ------------     ------------

Cumulative expenditures, December 31, 2001 ......................             -        20,705,747           19,421       20,725,168
Exploration expenses during 2002
   Assays and analysis ..........................................             215             897              -              1,112
   Drilling .....................................................             -             4,241              -              4,241
   Engineering  (note 6(c)) .....................................         161,267          92,769              -            254,036
   Environmental, socio-economic and land fees  (note 6(c)) .....          15,354         333,428              537          349,319
   Equipment rentals and leases .................................           1,609           7,469              -              9,078
   Exploration option payments ..................................       2,094,760             -                -          2,094,760
   Exploration option payments received .........................             -               -            (50,000)         (50,000)
   Geological  (note 6(c)) ......................................         253,699         168,525              -            422,224
   Graphics .....................................................           3,033          32,516              -             35,549
   Reclamation ..................................................             -            83,288              -             83,288
   Site activities ..............................................          46,963          78,096              -            125,059
   Transportation ...............................................          13,926          27,793              -             41,719
                                                                     ------------    ------------     ------------     ------------
Incurred during the year ........................................       2,590,826         829,022          (49,463)       3,370,385
                                                                     ============    ============     ============     ============
Cumulative expenditures, December 31, 2002 ......................    $  2,590,826    $ 21,534,769     $    (30,042)    $ 24,095,553
                                                                     ============    ============     ============     ============

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

</TABLE>


<PAGE>


GREAT BASIN GOLD LTD.
Notes to Consolidated Financial Statements
Year ended December 31, 2002
(Expressed in Canadian Dollars)


1.   NATURE OF OPERATIONS

     Great Basin Gold Ltd.  ("Great Basin" or the  "Company")  was  incorporated
     under  the laws of the  Province  of  British  Columbia  and its  principal
     business  activity is the exploration of mineral  property  interests.  The
     Company's  principal  mineral  property  interests are the Ivanhoe Property
     located  in  Nevada,  United  States of  America,  and the  Burnstone  Gold
     Property located in the Republic of South Africa (note 5).

     The Company is in the process of exploring its mineral  property  interests
     and has not yet determined  whether its mineral property  interests contain
     mineral  reserves that are economically  recoverable.  The underlying value
     and the  recoverability of the amounts shown for mineral property interests
     are  entirely  dependent  upon the  existence of  economically  recoverable
     mineral  reserves,  the  ability of the  Company  to obtain  the  necessary
     financing  to  complete  the  exploration  and  development  of the mineral
     property   interests,   confirmation  of  the  Company's  interest  in  the
     underlying mineral properties, and future profitable production or proceeds
     from the disposition of the mineral property interests.


2.   BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

     These  financial  statements have been prepared in accordance with Canadian
     generally  accepted  accounting  principles  ("GAAP").  These  consolidated
     financial   statements   include  the  accounts  of  the  Company  and  its
     wholly-owned   subsidiaries.   All  material   intercompany   balances  and
     transactions have been eliminated.


3.   SIGNIFICANT ACCOUNTING POLICIES

(A)  CASH AND EQUIVALENTS

     Cash and equivalents consist of cash and highly liquid investments,  having
     maturity dates of three months or less from the date of  acquisition,  that
     are readily convertible to known amounts of cash.

(B)  SHORT-TERM INVESTMENTS

     Short-term  investments  include  highly liquid  investments  with terms to
     maturity of three to twelve months when purchased.  Short-term  investments
     are  carried at the lower of cost plus  accrued  interest  and quoted  fair
     market value.

(C)  RECLAMATION DEPOSITS

     Reclamation deposits are recorded at cost.

(D)  INVESTMENTS

     Investments  capable of reasonably  prompt  liquidation  are carried at the
     lower of cost and quoted  market value.  Investments  where the Company has
     the ability to exercise  significant  influence  are  accounted  for on the
     equity  basis  where  the  investment  is  initially  recorded  at cost and
     subsequently  adjusted  for the  Company's  share of the income or loss and
     capital transactions of the investee, less provision, if any, for permanent
     impairment in value.

(E)  EQUIPMENT

     Equipment is stated at cost less accumulated depreciation.  Depreciation is
     provided  on  a  straight-line  basis  over  three  to  five  years,  which
     represents   the   estimated   useful  lives  of  the  related   equipment.
     Depreciation on equipment used directly on exploration projects is included
     in  exploration   expenses  until  the  related  property  is  placed  into
     production.

(F)  MINERAL PROPERTY INTERESTS

     Exploration  expenses incurred prior to determination of the feasibility of
     mining operations, periodic option payments and administrative expenditures
     are expensed as incurred.

     Mineral  property   acquisition   costs  and  exploration  and  development
     expenditures incurred subsequent to the determination of the feasibility of
     mining  operations  are deferred until the property to which they relate is
     placed  into  production,  sold,  allowed  to lapse or  abandoned.  Mineral
     property  acquisition  costs  include the cash  consideration  and the fair
     value of common shares and warrants issued for mineral property  interests,
     pursuant to the terms of the relevant agreement.  These costs are amortized
     over  the  estimated  life  of  the  property  following   commencement  of
     commercial  production,  or written off if the property is sold, allowed to
     lapse or abandoned,  or when an impairment in value has been  determined to
     have occurred.

(G)  SHARE CAPITAL

     The Company  records  proceeds  from share  issuances  net of issue  costs.
     Shares  issued for  consideration  other than cash are valued at the quoted
     market price on the date the agreement to issue the shares was reached.

(H)  FOREIGN CURRENCY TRANSLATION

     All of the Company's foreign operations are considered integrated.

     Monetary  assets  and  liabilities  of  the  Company's  integrated  foreign
     operations are translated into Canadian dollars at exchange rates in effect
     at  the  balance  sheet  date.  Non-monetary  assets  and  liabilities  are
     translated  at historical  exchange  rates unless such items are carried at
     market,  in which case they are  translated at the exchange rates in effect
     on the balance sheet date. Revenues and expenses, except depreciation,  are
     translated at the average  exchange rates for the period.  Depreciation  is
     translated  at the same  exchange  rate as the assets to which it  relates.
     Gains or losses on translation are recorded in the statement of operations.

(I)  LOSS PER COMMON SHARE

     Basic loss per common share is calculated by dividing the loss available to
     common  shareholders  by the  weighted  average  number  of  common  shares
     outstanding during the period. For all periods 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
     stock  options and warrants  are used to  repurchase  common  shares at the
     average market price during the period.

(J)  FAIR VALUE OF FINANCIAL INSTRUMENTS

     The  carrying  amounts  of cash and  equivalents,  short-term  investments,
     amounts receivable,  reclamation deposits, and accounts payable and accrued
     liabilities  approximate  fair value due to their  short term  nature.  The
     quoted market value of the warrants  received from Hecla Mining  Company is
     disclosed  in note  5(a).  Fair  value  estimates  are  made at the date of
     issuance,  and  at  the  balance  sheet  date,  based  on  relevant  market
     information and information about the financial instruments.

(K)  USE OF ESTIMATES

     The  preparation  of  financial  statements  in  conformity  with  Canadian
     generally  accepted  accounting  principles  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 the  impairment  of  mineral  property
     interests,   determination   of  reclamation   obligations  and  rates  for
     depreciation, as well as the assumptions used in determining the fair value
     of non-cash  stock-based  compensation  and warrants.  Actual results could
     differ from these estimates.

(L)  SEGMENT DISCLOSURES

     The Company  operates in a single  segment,  being  exploration  of mineral
     properties,  within the  geographic  areas  disclosed in note 9. Other than
     exploration  expenses,  substantially all of the Company's net expenses are
     incurred in Canada.

(M)  STOCK-BASED COMPENSATION (see also note 3(n))

     The Company has a stock option plan which is  described  in note 6(c).  The
     Company accounts for all non-cash  stock-based  payments to  non-employees,
     and  employee  awards  that are  direct  awards  of  stock,  that  call for
     settlement in cash or other assets, or that are stock  appreciation  rights
     which call for settlement by the issuance of equity instruments, granted on
     or after January 1, 2002, using the fair value based method.

     Under the fair value based method,  stock-based  payments to  non-employees
     are measured at the fair value of the consideration  received,  or the fair
     value of the equity instruments issued, or liabilities incurred,  whichever
     is more  reliably  measurable.  The  fair  value  of  non-cash  stock-based
     payments to non-employees is periodically  re-measured  until  counterparty
     performance  is complete,  and any change  therein is  recognized  over the
     period and in the same manner as if the  Company  had paid cash  instead of
     paying with or using equity instruments.  The cost of non-cash  stock-based
     payments to non-employees that are fully vested and  non-forfeitable at the
     grant date is measured and recognized at that date.

     No  compensation  cost is required to be  recorded  for all other  non-cash
     stock-based employee  compensation awards.  Consideration paid by employees
     upon the  exercise  of stock  options is  credited  to share  capital.  The
     Company  presents in the notes to the  financial  statements  the pro forma
     loss and loss per share had the fair value  method been used to account for
     employee non-cash stock-based compensation awards (note 6(c)).

     Under the fair value based method, compensation cost attributable to awards
     to employees that are direct awards of stock, or stock appreciation  rights
     which  call for  settlement  by the  issuance  of  equity  instruments,  is
     measured  at fair value at the grant date and  recognized  over the vesting
     period.  Compensation  cost  attributable to awards to employees which call
     for  settlement  in cash or other  assets is  measured at fair value at the
     grant date and recognized over the vesting period.  For awards that vest at
     the  end  of  a  vesting  period,  compensation  cost  is  recognized  on a
     straight-line  basis; for awards that vest on a graded basis,  compensation
     cost is recognized on a pro-rata basis over the vesting period.

(N)  CHANGE IN ACCOUNTING POLICY - STOCK-BASED COMPENSATION

     Effective January 1, 2002, the Company adopted the new  Recommendations  of
     the Canadian Institute of Chartered  Accountants relating to the accounting
     for stock-based  compensation and other stock-based payments. Under the new
     standard,  payments  to  non-employees,  and to  employees  awards that are
     direct awards of stock,  that call for  settlement in cash or other assets,
     or that are stock  appreciation  rights  which call for  settlement  by the
     issuance  of equity  instruments,  are  accounted  for using the fair value
     method  and is  included  in  operations,  with an  offset  to  contributed
     surplus.  No  compensation  expense  is  recorded  for all  other  non-cash
     stock-based employee  compensation awards;  however pro-forma disclosure of
     net income and  earnings  per share,  had the  Company  used the fair value
     method, is presented (note 6(c)).

     Prior to the  adoption of the new  standard,  no  compensation  expense was
     recorded for the  Company's  stock-based  incentive  plans when the options
     were granted.  Any consideration paid by those exercising stock options was
     credited to share capital upon receipt.

     The new Recommendations are applied prospectively. The adoption of this new
     standard has resulted in no changes to amounts previously reported.

(O)  INCOME TAXES

     The Company uses the asset and liability  method of  accounting  for income
     taxes.  Under this method,  future  income tax assets and  liabilities  are
     computed  based on  differences  between  the  carrying  amount of existing
     assets and  liabilities  on the balance sheet and their  corresponding  tax
     values, generally using the substantively enacted income tax rates expected
     to  apply  to  taxable  income  in  the  years  in  which  those  temporary
     differences  are  expected to be recovered  or settled.  Future  income tax
     assets also result from unused loss carry  forwards  and other  deductions.
     Future tax assets are  recognized  to the extent  that they are  considered
     more likely than not to be realized.  The  valuation  of future  income tax
     assets is adjusted,  if necessary,  by the use of a valuation  allowance to
     reflect the estimated realizable amount.

(P)  COMPARATIVE FIGURES

     Certain of the prior  years'  comparative  figures  have been  restated  to
     conform with the presentation adopted for the current year.


4.   EQUIPMENT

                                  Accumulated          Net Book
     2002                                Cost       Deprecation            Value
     ----                         -----------       -----------         --------
     Computer ....................   $127,795          $127,795         $      -
     Field .......................    349,631           349,631                -
     Office ......................    300,678           300,678                -
                                     --------          --------         --------
                                     $778,104          $778,104         $      -
                                     ========          ========         ========


                                  Accumulated          Net Book
     2001                                Cost      DepreciatioN            Value
     ----                         -----------      ------------         --------
     Computer ...................    $127,795          $125,495         $  2,300
     Field ......................     349,631           349,631                -
     Office .....................     300,678           299,642            1,036
                                     --------          --------         --------
                                     $778,104          $774,768         $  3,336
                                     ========          ========         ========


5.   MINERAL PROPERTY INTERESTS

                                                            As at December 31
                                                      --------------------------
MINERAL PROPERTY ACQUISITION COSTS, NET ...........          2002           2001
                                                      -----------    -----------

Ivanhoe Property (note 5(a))

   Balance, beginning of the year .................   $ 5,583,348    $ 5,507,603
   Incurred during the year .......................       295,000         75,745
   Estimated fair value of Hecla Warrants received.    (1,933,000)           -
                                                      -----------    -----------
   Balance, end of the year .......................     3,945,348      5,583,348

Hecla Warrants (note 5(a))

   Balance, beginning of the year .................           -              -
   Estimated fair value of Hecla Warrants received      1,933,000            -
                                                      -----------    -----------
   Balance, end of the year .......................     1,933,000            -

                                                      -----------    -----------
Ivanhoe Property ..................................     5,878,348      5,583,348

Burnstone Gold Property (note 5(b)) ...............             1            -
Casino Property (note 5(c)) .......................             1              1
Kirkland Lake Property (note 5(d)) ................             1              1
Bissett Creek Property (note 5(e)) ................            -             -
                                                      -----------    -----------
                                                      $ 5,878,351    $ 5,583,350
                                                      ===========    ===========


(A)  IVANHOE PROPERTY

     Elko County, Nevada, United States of America

     On August 13, 1997,  the Company and  Cornucopia  Resources Ltd. (now Quest
     Investment   Corporation,   formerly   Stockscape.com   Technologies  Inc.)
     ("Cornucopia") entered into an agreement to acquire a 100% working interest
     in the  Ivanhoe  Property  on the  Carlin  Trend  in  Nevada  from  Newmont
     Exploration Limited ("Newmont").

     Pursuant to the terms of the  agreement,  the Company earned a 75% interest
     in the Ivanhoe  Property in  consideration  for payments  totalling  US$5.0
     million as follows:

     (i)  US$1 million to Newmont;

     (ii) 150% of the amount  invested  in shares of  Cornucopia  (being  US$1.2
          million); and

     (iii) US$2.8 million on exploration and related costs.

     The Company also issued aggregate finders' fees of 125,000 shares, based on
     expenditures  on the project,  and interim  financing  guarantees of 98,125
     shares. The financing guarantee shares were issued to certain principals of
     Hunter  Dickinson  Inc. (note 7), which acted as an agent of the Company in
     negotiating and guaranteeing aspects of the transaction.

     The agreement  provided that  exploration and related costs include 150% of
     any  amounts  paid by the  Company  on behalf  of  Cornucopia  pursuant  to
     Cornucopia's  reclamation obligations under the agreement.  Newmont has and
     will  continue to manage and complete an approved  mine closure plan of the
     1.1 square mile area of former mining  operations  already funded by US$4.5
     million.  The agreement also provided that overruns will be funded 33% each
     by  Newmont,  the Company and  Cornucopia  up to a total  overrun of US$1.5
     million,  and thereafter 75% by Newmont,  with the balance payable pro rata
     by the Company and Cornucopia. Ownership of and further expenditures on the
     Ivanhoe Property were to be on a 75% Company and 25% Cornucopia  basis, but
     was amended as per below.

     On March 2, 1999, the Company  entered into an agreement to acquire the 25%
     interest  in the  Ivanhoe  Property  owned  by  Touchstone  Resources  Ltd.
     ("Touchstone"),  a wholly owned subsidiary of Cornucopia, for consideration
     of 2,750,000 common shares of the Company and 250,000 warrants  exercisable
     to purchase additional shares of the Company at $2.00 per share to June 30,
     2000. These warrants were exercised  during 2000. In addition,  the Company
     assumed  Cornucopia's  reclamation  obligations with respect to the Ivanhoe
     Property.

     During 1998,  the Company  entered into an agreement  for a group of claims
     that form part of the Ivanhoe Property. This agreement with a term of up to
     four  20 year  terms  provides  for  annual  advance  royalty  payments  of
     US$50,000  per year until 2017 and  increase to  US$55,000 in years 2018 to
     2037. The claims are subject to net smelter return ("NSR")  royalties of 2%
     to 5%.

     In November  1999,  the Company  entered  into an  agreement to acquire 109
     claims  adjoining  the Ivanhoe  Property for  US$50,000  and 75,000  common
     shares of the Company.

     During 1999, cumulative reclamation  expenditures exceeded US$6,000,000 and
     as required by the  agreement,  the Company  contributed  25% of the excess
     from  1999 to 2002.  Newmont  has  advised  that in order to  complete  the
     reclamation, the following property reclamation costs are budgeted over the
     next three years:

                     Total Reclamation      The Company's 25%
     Year                        Costs                  Share
     ----            -----------------      -----------------

     2003                  US$  25,042             US$  6,260
     2004                       25,042                  6,260
     2005                      161,042                 40,261
                           -----------             ----------
                           US$ 211,126             US$ 52,781
                           ===========             ==========

     During 2000, 2001 and 2002, US$51,992,  US$19,828 and US$4,996 respectively
     was paid to Newmont for the Company's 25% share of actual reclamation costs
     incurred.  US$52,781  ($83,288)  (2001 - $nil) has been accrued at December
     31, 2002.

     On August 28, 2000, Touchstone was served with a civil summons filed in the
     United States  District Court of Northern  Nevada by United States Fidelity
     and Guaranty  Company ("US  Fidelity")  as  plaintiff,  naming  Touchstone,
     Cornucopia and Vista Gold Holdings Inc. and certain of their  affiliates as
     defendants,  claiming  US$793,583.  The  civil  action  resulted  from  the
     reclamation  obligations  concerning  the  Mineral  Ridge  Mine  in  Nevada
     pursuant to which US Fidelity  issued a  reclamation  bond in the amount of
     US$1,600,000 to the Bureau of Land Management (the "BLM") in 1996.  Mineral
     Ridge  Resources,  Inc.,  the  operator of the mine,  was a  subsidiary  of
     Cornucopia until Cornucopia sold its holdings to Vista Gold Holdings,  Inc.
     As a  consequence  of  Mineral  Ridge  Resources,  Inc.  having  filed  for
     bankruptcy  protection and having abandoned the project,  the BLM had taken
     over the project and had  demanded  release of the bond.  US Fidelity  held
     approximately  US$950,000 in  collateral  securing the bond and had brought
     action to recover the unsecured balance of US$793,583. Touchstone was named
     as a  defendant  because  it is one  of the  parties  to  the  contract  of
     indemnity. Under the terms of the March 2, 1999 agreement pursuant to which
     the Company acquired  Touchstone from Cornucopia,  Cornucopia  acknowledged
     its  obligation  to indemnify  and save  harmless the Company from any such
     claims.

     The Company is of the view that no  material  cost or loss will be incurred
     by Touchstone or the Company as a consequence  of this action,  as on April
     26, 2002 the US District  Court for the  District  of Nevada  accepted  the
     stipulation  for dismissal (no costs or damages)  without  prejudice of all
     action  by  US  Fidelity  against  all  parties   including  Great  Basin's
     subsidiary, Touchstone.

     In July 2001, the Company  entered into an agreement to acquire  sixty-five
     unpatented lode mining claims for US$50,000 ($75,745) and subsequently paid
     the full  amount.  The claims  adjoin the  northwest  corner of the Ivanhoe
     Property.

     On June 10, 2002,  the Company  entered into a letter  agreement with Hecla
     Mining Company  concerning  exploration,  development and production on the
     Company's  Ivanhoe  property and on August 2, 2002,  the formal Earn-in and
     Joint Operating Agreements were signed with Hecla Ventures Corp. ("Hecla"),
     an affiliate of Hecla Mining Company.  These agreements  provide that Hecla
     will vest in a 50% working  interest in the  Hollister  Development  Block,
     which is a portion of the Ivanhoe  Property,  subject to a purchase royalty
     in favor of Great  Basin,  provided  that  Hecla  funds a  US$21.8  million
     two-stage  advanced  exploration  and  development  program,  or  otherwise
     achieves commercial  production,  and issues 4 million Hecla Mining Company
     share  purchase  warrants (the "Hecla  Warrants") to Great Basin (2 million
     share purchase warrants exercisable at US$3.73 per share expiring on August
     2, 2004 have been issued to December 31, 2002).

     Using an option pricing model,  the fair value of the issued Hecla Warrants
     on the agreement date was estimated to be  $1,933,000,  based on the August
     2, 2002 closing price of Hecla Mining  Company shares of US$3.41 on the New
     York Stock Exchange ("NYSE") (also based on the following assumptions: risk
     free interest rate of 3%; expected life of 2 years;  expected volatility of
     25% and  expected  dividends of nil),  and is included in Mineral  Property
     Interests.  The Hecla  Warrants are not listed on a public stock  exchange.
     Any proceeds received on the sale of the Hecla Warrants, or the sale of the
     shares of Hecla Mining Company  received on exercise of the Hecla Warrants,
     will be credited  against  the total  cost,  including  this  amount,  when
     realized.  Based on the December 31, 2002 closing  price of Hecla shares on
     the NYSE of US$5.06,  the fair value of the Hecla  Warrants at December 31,
     2002 was estimated to be $2,660,000.  Concurrent  with and in proportion to
     the Hecla  Warrants,  the Company  agreed to issue 2 million share purchase
     warrants (the "Great Basin  Warrants")  to Hecla (1 million share  purchase
     warrants  exercisable at Cdn$1.55 per share expiring on August 2, 2004 have
     been issued to December 31, 2002) (note 6(d)). The fair value of the issued
     Great Basin  Warrants on the  agreement  date was  estimated to be $295,000
     (based on the same  assumptions  stated in note 6(c)) and has been included
     in the cost of the Ivanhoe Property.

     Hecla has  commenced  engineering  and  permitting  work to  facilitate  an
     underground  development program. Upon receipt of applicable permits, Hecla
     is expected to complete the Stage 1 underground development,  drilling, and
     prefeasibility  program  estimated  in the  Earn-in  Agreement  at  US$10.3
     million,  in  approximately  12 months.  To vest its 50% working  interest,
     Hecla must,  upon completion of Stage 1, proceed to Stage 2 within 60 days.
     The Stage 2 program of US$11.5 million is expected to be completed over the
     following 12 months and consists of underground  production development and
     procurement of production equipment and surface facilities, with an overall
     goal to essentially develop the Hollister Development Block to the point of
     commercial production.  Hecla will be the operator of the Stage 1 and Stage
     2 work  programs,  and will  continue  as the  operator  should a  positive
     production decision be made.

     A sliding  scale  Purchase  Price Royalty on Hecla's share of production is
     payable  in cash or in kind by Hecla to Great  Basin.  At a cash  operating
     profit per ounce of gold  equivalent in the range of US$100-200  per ounce,
     the  royalty is equal to US$50 per ounce.  The  Royalty  will be payable by
     Hecla  commencing at the point it has  recovered  115% of its Stage 1 and 2
     pre-production expenditures.

(B)  BURNSTONE GOLD PROPERTY

     Republic of South Africa ("RSA")

     On November 5, 2002,  the Company  entered into an Option  Agreement  ("the
     Agreement")  with a private South African  company,  Southgold  Exploration
     (Proprietary) Limited ("Southgold"),  and its shareholders, to acquire on a
     staged basis up to 100% of Southgold. Southgold has the right to acquire an
     80% interest in the Burnstone  Gold  Property  covering  approximately  400
     square kilometres of the Witwatersrand goldfield in the RSA.

     Prior to November 2002,  Southgold  entered into a joint venture  agreement
     with  Tranter  Investments  (Proprietary)  Limited  ("Tranter"),   a  Black
     Economic Empowerment Group ("BEEG") partner, whereby Tranter will acquire a
     20% interest in the Burnstone project subject to certain  conditions,  that
     were  required  to be  completed  by March 31,  2003.  Tranter  would  then
     maintain  its 20%  participating  joint  venture  interest  by funding  its
     pro-rata share of all  development,  construction  and property costs after
     the  completion  of a Bankable  Feasibility  Study.  Tranter would have the
     right,  subject to certain  conditions,  to purchase on commercial terms an
     additional 6%  participation  interest in the Burnstone Joint Venture.  Not
     all conditions  were met by March 31, but Southgold and Tranter are working
     together  along  with  Great  Basin to extend  the  agreement  on  mutually
     acceptable terms and conditions.

     On signing the Agreement, the Company paid US$1.25 million ($2,007,561) for
     the right to acquire the option and to explore the Burnstone  Gold Property
     and also agreed to conduct a US$1.5 million work program prior to April 30,
     2003.  The Company can  exercise  its option and  complete  the purchase of
     Southgold by making cash and Great Basin share and share  purchase  warrant
     payments to Southgold's shareholders in two staged tranches, totalling US$2
     million,  21 million  Great Basin shares and 10.5 million Great Basin share
     purchase  warrants  exercisable  at  US$0.75  for one year from the date of
     issuance.  The  share  purchase  warrants  will  be  subject  to  a  45-day
     accelerated  expiry in the event that Great Basin's  common shares trade on
     the TSX Venture  Exchange  over a 20-day  weighted  average per share price
     equal to or greater than US$1.50 per common share.

     On exercise of tranche  one,  the Company  will  acquire 49% of  Southgold,
     providing  it  exercises  tranche two, for payments to be made on or before
     April 30, 2003  totalling  US$2 million cash and the issuance of 10 million
     Great  Basin  common  shares  and 5  million  Great  Basin  share  purchase
     warrants. The Company gave notice to exercise tranche one on April 29, 2003
     and is moving to complete the closing.  A finder's fee of  approximately 2%
     is payable, to a maximum of US$1 million, as the Company acquires Southgold
     and makes  expenditures  on  Burnstone  Property.  To  December  31,  2002,
     $164,000  of this  finder's  fee had been  accrued.  The  remaining  51% of
     Southgold  can be acquired by a second  tranche of  payments,  on or before
     January 31, 2004,  of 11 million  Great Basin common shares and 5.5 million
     Great Basin share purchase warrants. If a Bankable Feasibility Study is not
     completed  by January  31,  2004,  the  Company  can make 50% of the second
     tranche  payments on each of January 31, 2004 and July 31, 2004.  Any Great
     Basin shares issued to Southgold shareholders are subject to a voting trust
     agreement,   whereby  the  holders  undertake  to  vote  with  Great  Basin
     management  for a period  of five  years.  Southgold  shareholders  will be
     entitled to nominate  two members to the Board of Directors of Great Basin.
     Additional  shares  may  become  issuable  by Great  Basin  to  Southgold's
     shareholders  depending  on certain  outcomes  with respect to the Bankable
     Feasibility  Study, such as the quantity of gold reserves,  gold production
     costs, and the actual cost of the study.

     As noted above,  the Company is committed to an initial US$1.5 million work
     program,   including  in-fill  drilling  at  Burnstone.  This  program  was
     completed  prior to April 30,  2003.  This  initial work program was agreed
     upon by a Management  Committee  consisting of  representatives  from Great
     Basin,   Southgold   and  Tranter.   Results  from  this  program  will  be
     incorporated into a Bankable Feasibility Study.

(C)  CASINO PROPERTY

     Whitehorse Mining District, Yukon, Canada

     The Company owns a group of 161 mineral  claims,  some of which are subject
     to a 5% net profits from production  royalty.  During May 2000, the Company
     granted  an  option  whereby  Wildrose  Resources  Ltd.  ("Wildrose"),  the
     optionee,  can earn the  right to  purchase  55  claims  for $1 on the 20th
     anniversary of the option  agreement.  As  consideration,  the optionee has
     agreed to incur all annual filing fees and assessment work on the 55 claims
     under option and 83 other claims. Alternatively,  the optionee may purchase
     the 55 claims for a one time payment of $200,000 without further obligation
     in respect of the Company's 83 claims.  Should the optionee  acquire the 55
     claims, the optionee would be subject to a further 5% net profits interest,
     payable to the Company.

     During  fiscal  2001,  the  acquisition  costs  associated  with the Casino
     Property  were  written  down  to a  nominal  amount  to  reflect  extended
     depressed  conditions in the metal markets,  and the Company's intention to
     defer  work on the  property  pending a  sustained  recovery  both of metal
     prices and the economy.

     On July 15, 2002,  the Company  agreed to option the Casino  property  (the
     "Property") to CRS Copper Resources Ltd.  ("CRS"),  subject to existing net
     profits royalty  agreements and the Wildrose option  agreement on a portion
     of the  Casino  property.  Under the terms of the  agreement,  Great  Basin
     granted CRS an option  ("the  Option") to  purchase  100% of Great  Basin's
     interest  in  the  claims  and  interests   comprising   the  Property  for
     $1,000,000,  plus applicable taxes, payable at the option of CRS in cash or
     CRS common  shares,  provided that CRS shares are listed on the TSX Venture
     Exchange or another  recognized  exchange (the "Exchange") and have certain
     minimum trading volumes.

     The Option may be exercised  at any time from the date of the  agreement to
     July 15, 2007, subject to written notice and confirmation that the terms of
     the Option have been met. If CRS elects to terminate the agreement  without
     exercising the Option or allows it to lapse,  CRS must pay to Great Basin a
     "break  fee" of $25,000,  plus  applicable  taxes.  CRS is required to make
     interim option payments to Great Basin at the time that CRS is listed on an
     Exchange,  of 100,000 CRS shares, plus warrants to purchase another 100,000
     shares for a period of two years at an exercise  price which  reflects  the
     maximum  discount  for the  prevailing  CRS market  price  permitted by the
     policies of the  Exchange.  CRS will issue a further such  warrants on each
     anniversary  date  thereafter to a maximum of warrants to purchase  300,000
     CRS shares.  If CRS is not listed by  December  31,  2002,  CRS must pay to
     Great Basin $50,000 plus  applicable  taxes, in lieu of the 100,000 shares,
     to keep the Option in good  standing.  This CRS option payment was received
     by the Company in December 2002. A further $50,000 plus taxes is payable on
     December  31,  2003 if CRS is not  listed  by that  date.  Great  Basin may
     terminate  the  Option  on or after  December  31,  2003,  unless  the cash
     payments  have been made,  in which  event the Option  can be  extended  to
     accommodate a listing no later than December 31, 2004 (and  providing  that
     such a listing is continued thereafter).

     CRS has the  right to  conduct  exploration  work on or in  respect  of the
     Property at its cost,  or to make  payments in lieu to keep the Property in
     good  standing  during  the  period  of the  Option.  If the  Option is not
     exercised and is terminated,  CRS is required to pay Property holding costs
     for a minimum period of two years from the effective date of termination.

     In the event the  Option is  exercised  and a  decision  is made to put the
     Property into commercial production, CRS will pay to Great Basin $1,000,000
     in cash, plus applicable taxes, within 30 days of that decision.

(D)  KIRKLAND LAKE PROPERTY

     Ontario, Canada

     In 1992, the future  economic  benefit of the Kirkland Lake property became
     uncertain, and while the property was not abandoned, there were no plans or
     financial  resources  to  make  further  significant  expenditures  on  the
     property. Accordingly, the property was written down to $1.

     The  Company  continues  to maintain  the  Kirkland  Lake  property in good
     standing.

(E)  BISSETT CREEK PROPERTY

     Ontario, Canada

     In 1992, the future economic benefit of the Bissett Creek graphite property
     became  uncertain.  While not  abandoned,  there were no plans or financial
     resources  to  make  further  significant  expenditures  on  the  property.
     Accordingly, the property was written off.

     In January 1997,  the Company  reached an agreement to sell its interest in
     the Bissett Creek graphite property to an arm's length private company (the
     "Purchaser")  for a production  royalty  equal to $32 per tonne of graphite
     concentrate produced,  net of existing royalties,  and subject to an annual
     minimum preproduction royalty of $30,000 per year. Under the agreement, the
     Purchaser  assumed all existing  property  royalties  and mineral  property
     maintenance  requirements.  Subsequent  to December 31, 1997,  the required
     royalty payments were never made to the Company.  Accordingly,  the Company
     believed the Purchaser  was in default of the  agreement  and in 1999,  the
     Company commenced an action to cure the default or re-obtain ownership.

     In February  2001,  the Company was served with a statement of claim by the
     Purchaser,  alleging that the Purchaser  suffered  damages of $3,037,000 as
     compensation for the loss of an alleged agreement to sell the Bissett Creek
     property that it had negotiated with an arm's length purchaser. In December
     2001,  the property was returned to the original owner and was written off,
     as the Company  believed that the claim was without merit. In May 2002, the
     claim was  settled by an  agreement  signed  between  the  Company  and the
     Purchaser.  Under the  agreement,  the  Purchaser  dismissed the action and
     agreed to return all the documents related to the property.


6.   SHARE CAPITAL

(A)  AUTHORIZED SHARE CAPITAL

     The Company's  authorized  share  capital  consists of  200,000,000  (2001:
     100,000,000)  common shares  without par value.  The increase in authorized
     share  capital  during 2002 was approved at the annual  general  meeting of
     shareholders held on June 28, 2002.

(B)  ISSUED AND OUTSTANDING COMMON SHARES

<TABLE>
<CAPTION>

                                                                                                        Number of
                                                                                                           Shares             Amount
                                                                                                        ----------     ------------

<S>               <C> <C>                                                                               <C>            <C>
Balance, December 31, 1999 ......................................................................       27,723,006     $ 39,511,316
Issued during 2000:
   Share purchase options exercised .............................................................          146,800          190,297
   Share purchase warrants exercised ............................................................        5,312,331        6,983,902
   Private placement, August 2000, net of issue costs (note 6(e)) ...............................        5,000,000        9,299,145
                                                                                                        ----------     ------------
Balance, December 31, 2000 ......................................................................       38,182,137       55,984,660
Additional share issue costs ....................................................................              -            (31,245)
                                                                                                        ----------     ------------
Balance, December 31, 2001 ......................................................................       38,182,137       55,953,415
Issued during 2002:
   Share purchase options exercised (note 6(c)) .................................................          179,900          156,018
   Share purchase warrants exercised (note 6(e)) ................................................        2,007,000        2,007,000
   Agent's share purchase options exercised (note 6(e)) .........................................          500,000          500,000
   Agent's share purchase warrants exercised (note 6(e)) ........................................          250,000          250,000
   Private placement, May 2002, net of issue costs (note 6(f)) ..................................        5,616,612        7,700,570
   Private placement, August 2002, net of issue costs (note 6(g)) ...............................          125,715          190,815
                                                                                                        ----------     ------------
BALANCE, DECEMBER 31, 2002 ......................................................................       46,861,364     $ 66,757,818
                                                                                                        ==========     ============
</TABLE>


(C)  SHARE OPTION PLAN

     The Company  has a share  option plan  approved  by the  shareholders  that
     allows it to grant options,  subject to regulatory  terms and approval,  to
     its  employees,  officers,  directors  and  consultants  to  acquire  up to
     8,195,000 common shares, of which 6,650,100 are outstanding at December 31,
     2002. The exercise price of each option is set by the Board of Directors at
     the time of grant but cannot be less than market  price,  less  permissible
     discounts, on the TSX Venture Exchange.  Options have a maximum term of ten
     years and terminate 30 days  following the  termination  of the  optionee's
     employment  or term of  engagement,  except in the case of death,  in which
     case they  terminate on the earlier of the option  expiration  date and one
     year from the date of death.  Vesting of options is made at the  discretion
     of the Board of Directors at the time the options are granted.

     The continuity of share purchase options is:

                                                                     Contractual
                                          Weighted                      weighted
                                           average       Number          average
                                          exercise           of   remaining life
                                             price      options          (years)
                                          --------     --------   --------------

Balance, December 31, 1999 ..............   $ 1.18    2,147,700             1.58
   Granted ..............................   $ 1.75       31,800
   Exercised ............................   $ 1.30     (146,800)
   Expired or cancelled .................   $ 2.06      (39,600)
                                            ------    ---------             ----
Balance, December 31, 2000 ..............   $ 1.16    1,993,100             0.29
   Granted ..............................   $ 0.65    2,720,000
   Expired or cancelled .................   $ 1.15   (2,001,200)
                                            ------    ---------             ----
Balance, December 31, 2001 ..............   $ 0.95    2,711,900             3.74
   Granted* .............................   $ 1.44    4,174,800
   Exercised ............................   $ 0.87     (179,900)
   Expired or cancelled..................   $ 1.68      (56,700)
                                            ------    ---------             ----
BALANCE, DECEMBER 31, 2002 ..............   $ 1.24    6,650,100             2.38
                                            ======    =========             ====

          * 725,500 of non-employee  stock options which were granted on May 24,
          2002, exercisable at $1.70 per share, were repriced to $1.17 per share
          on December 11, 2002, with no change to the expiry date.

     As at December 31, 2002,  6,551,100 of the options  outstanding  had vested
     with optionees.

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

Exploration
     Engineering ...........................................            $  7,347
     Environmental, socioeconomic and land .................              20,210
     Geological ............................................             107,191
                                                                        --------
                                                                         134,748
Office and administration ..................................             239,879
                                                                        --------
TOTAL COMPENSATION COST RECOGNIZED IN OPERATIONS,
   CREDITED TO CONTRIBUTED SURPLUS .........................            $374,627
                                                                        ========

     Had the Company used the fair value method to determine  compensation  cost
     for directors,  officers and employees,  the Company's loss, basic loss per
     share, and diluted loss per share would have been as follows:

<TABLE>
<CAPTION>
                                                                                                                             Diluted
                                                                                                       Basic loss           loss per
2002                                                                                      Loss          per share              share
----                                                                               -----------         ----------      -------------

<S>                                                                                <C>                 <C>             <C>
As reported ...............................................................        $(5,519,089)        $    (0.13)     $      (0.13)
Estimated fair value of non-cash stock-based
    compensation to directors, officers and employees .....................         (1,204,907)             (0.03)            (0.03)
                                                                                   -----------         ----------      -------------
PRO-FORMA .................................................................        $(6,723,996)        $    (0.16)     $      (0.16)
                                                                                   ===========         ==========      =============
</TABLE>


     The weighted-average assumptions used to estimate the fair value of options
     granted during the year were:

     Risk free interest rate                                                  3%
     Expected life                                                    2.07 years
     Expected volatility                                                     50%
     Expected dividends                                                      nil

     Summary of the options outstanding at December 31, 2002 is as follows:

                                                             Option    Number of
     Expiry date                                              price      options
     -----------                                             ------    ---------
     February 12, 2003 ...................................   $ 0.96       10,000
     June 11, 2003 .......................................   $ 0.90       33,300
     June 26, 2003 .......................................   $ 0.97       30,000
     September 11, 2003 ..................................   $ 0.55        1,000
     November 21, 2003 ...................................   $ 0.63      100,000
     December 27, 2003 ...................................   $ 0.75        5,000
     December 30, 2003 ...................................   $ 1.70    2,109,300
     December 30, 2003 ...................................   $ 1.17      721,500
     January 10, 2006 ....................................   $ 0.96    2,030,000
     January 10, 2006 ....................................   $ 0.63      300,000
     December 20, 2004 ...................................   $ 1.17      238,000
     December 20, 2007 ...................................   $ 1.17    1,072,000
                                                             ------    ---------
     AVERAGE OPTION PRICE AND TOTALS .....................   $ 1.24    6,650,100
                                                             ======    =========

     Subsequent  to December  31,  2002,  163,000  options  were  exercised  for
     proceeds of $176,154. Also subsequent to December 31, 2002, 300,000 options
     with an  exercise  price of $1.80 for a two year  period  were  granted  to
     non-employees.

(D)  SHARE PURCHASE WARRANTS

<TABLE>
<CAPTION>

         The continuity of share purchase warrants is:

Note Reference                                        6(e)              6(f)              6(g)              5(a)
                                                 March 15,            June 3,          Dec. 27,         August 2,
Expiry date ............................              2002               2003              2003              2004
Exercise price .........................             $1.00              $1.65             $1.85             $1.55             TOTAL
                                                ----------         ----------        ----------        ----------         ----------

<S>                                              <C>                <C>              <C>               <C>                <C>
Balance, December 31, 2000 .............         2,500,000                -                 -                 -           2,500,000
   Issued ..............................               -                  -                 -                 -                 -
   Exercised ...........................               -                  -                 -                 -                 -
                                                ----------         ----------        ----------        ----------         ----------
Balance, December 31, 2001 .............         2,500,000                -                 -                 -           2,500,000
   Issued ..............................               -            5,616,612           125,715         1,000,000         6,742,327
   Exercised ...........................        (2,007,000)               -                 -                 -          (2,007,000)
   Expired .............................          (493,000)               -                 -                 -            (493,000)
                                                ----------         ----------        ----------        ----------         ----------

BALANCE, DECEMBER 31, 2002 .............                -           5,616,612           125,715         1,000,000         6,742,327
                                                ==========         ==========        ==========        ==========         =========

</TABLE>


(E)  SPECIAL WARRANT PRIVATE PLACEMENT, AUGUST 2000

     On August 9, 2000,  the Company  entered  into a financing  agreement  with
     Loewen  Ondaatje  McCutcheon  Limited ("LOM") to raise up to $10 million by
     way of a private placement of special warrants.  The placement consisted of
     5,000,000  special  warrants at $2.00 per  special  warrant.  Each  special
     warrant was exchanged upon prospectus clearance, which occurred on December
     19,  2000,  for one unit  consisting  of one common share and one half of a
     common  share  purchase  warrant  for no  further  consideration.  One full
     warrant  was  exercisable  at $2.50  into a common  share for one year (see
     below).  LOM  received  a fee of  $600,000  and a  compensation  option  to
     purchase  500,000  units at $2.00 per unit for a twelve  month  period from
     closing.

     On  February  23,  2001,  the Company  amended  the terms of the  2,500,000
     outstanding share purchase warrants, 500,000 agent's share purchase options
     and 250,000  agent's share  purchase  warrants.  The exercise  price of the
     options and warrants was reduced to $1.00 from $2.50, but was subject to an
     accelerated  expiry of 30 days if the  Company's  shares  traded on the TSX
     Venture  Exchange for ten consecutive days at a price of at least $1.20 per
     share. The term of the options and warrants was extended for one year until
     August 16, 2002. At February 14, 2002, the accelerated expiry condition was
     met and the warrants  and options were set to expire on March 15, 2002.  By
     March 15, 2002, the agent's options and warrants and 2,007,000 of the share
     purchase  warrants  had been  exercised.  The  remaining  493,000  warrants
     expired unexercised.

(F)  PRIVATE PLACEMENT FINANCING, MAY 2002

     On May 23, 2002, the Company entered into a financing agreement with LOM to
     raise up to $7.8  million  by way of a private  placement.  The  placement,
     which closed on June 3, 2002,  consisted  of 5,207,233  units at a price of
     $1.50 per unit.  409,379  units of Great Basin were issued as a  commission
     pursuant to this  private  placement,  for a total  issuance  of  5,616,612
     units.  Each unit is  comprised  of one common  share and a share  purchase
     warrant  exercisable to purchase an additional share at $1.65 until June 3,
     2003. If the shares have a closing price of at least $2.50 per share on the
     TSX Venture  Exchange  over any 10  consecutive  trading  day  period,  the
     warrants will be subject to a 45 day accelerated expiry.

(G)  PRIVATE PLACEMENT FINANCING, AUGUST 2002

     On August 27, 2002, the Company completed a private placement  financing of
     125,715 units at a price of $1.65 per unit.  Each unit was comprised of one
     common share and a common share purchase warrant exercisable at $1.85 until
     December 27, 2003. The warrants are subject to an accelerated  expiry of 45
     days if the Company's  shares trade on the TSX Venture Exchange at or above
     $2.78 for ten consecutive trading days.

(H)  FINANCING SUBSEQUENT TO DECEMBER 31, 2002

     On January 30, 2003,  the Company  completed a brokered  private  placement
     financing  of 5,600,000  units at a price of $1.80 per unit.  Each unit was
     comprised  of one  common  share  and one half of a common  share  purchase
     warrant  exercisable  at $1.80 per common share until January 30, 2004. The
     Company  issued  336,000  warrants to the agent for this private  placement
     that  entitle the agent to purchase  336,000  units at $1.80 per unit for a
     twelve month period.

(I)  CONTRIBUTED SURPLUS

     Balance, December 31, 2001 and 2000 ............................  $    -
     Changes during 2002:
        Non-cash stock-based compensation to non-employees (note 6(c))   374,627
        Great Basin Warrants issued pursuant to Hecla Earn-in
             Agreement, August 2002 (note 5(a)) .....................    295,000
                                                                        --------
     CONTRIBUTED SURPLUS, DECEMBER 31, 2002 .........................   $669,627
                                                                        ========


7.   RELATED PARTY TRANSACTIONS AND BALANCES
<TABLE>
<CAPTION>


      REIMBURSEMENT FOR THIRD PARTY EXPENSES AND SERVICES RENDERED                             Years ended December 31,
                                                                                         2002                2001               2000
                                                                                  -----------         -----------        -----------

<S>                                                                               <C>                 <C>                <C>
       Hunter Dickinson Inc. (a) ..............................................   $ 1,027,802         $ 1,173,389        $ 1,866,656
       Mainland Exploration Limited Partnership (b) ...........................   $       -           $       -          $   350,000
                                                                                  ===========         ===========        ===========
</TABLE>

<TABLE>
<CAPTION>


     PREPAID EXPENSES .........................................................   December 31         December 31
                                                                                         2002                2001
                                                                                  -----------         -----------

<S>                                                                               <C>                 <C>
     Hunter Dickinson Inc. (a) ................................................   $   694,846         $   991,301
     Hunter Dickinson Group Inc. (a) ..........................................       (43,153)                -
     Other prepaid expenses ...................................................        18,930               4,580
                                                                                  -----------         -----------
                                                                                  $   670,623         $   995,881
                                                                                  ===========         ===========
</TABLE>


     (a)  Hunter  Dickinson  Inc.  and Hunter  Dickinson  Group Inc. are private
          companies  with certain  common  directors  that  provide  geological,
          corporate development,  administrative and management services to, and
          incur  third  party  costs on behalf  of,  the  Company on a full cost
          recovery basis.

     (b)  Mainland  Exploration  Limited  Partnership  ("Mainland") is a limited
          partnership  that provides  merger,  acquisition,  financing and other
          corporate  services.   Certain  directors  of  the  Company  are  also
          directors of Mainland's general partner.

     (c)  Related party balances receivable,  which are non-interest bearing and
          are  payable on  demand,  are  included  in  prepaid  expenses  on the
          consolidated  balance  sheets.  Payable  balances  arise from services
          having been received  from, and third party costs having been paid by,
          the related party in excess of amounts that have been prepaid.


8.   INCOME TAXES

     Substantially  all of the difference  between the actual income tax expense
     (recovery) of $nil and the expected  income tax recovery based on statutory
     tax rates relates to the benefit of losses not recognized.

     As at December 31, 2002 the tax effect of the significant components within
     the Company's future tax asset (liability) were as follows:

<TABLE>
<CAPTION>

                                                                                                             December 31
                                                                                                      2002                      2001
                                                                                              ------------             -------------
     FUTURE INCOME TAX ASSETS

<S>                                                                                           <C>                      <C>
        Mineral properties ............................................................       $  4,722,000             $  4,878,000
        Loss carry forwards ...........................................................         10,842,000                9,640,000
        Other tax pools ...............................................................            279,000                  351,000
                                                                                              ------------             -------------
        Subtotal ......................................................................         15,843,000               14,869,000
        Valuation allowance ...........................................................        (13,944,000)             (12,970,000)
                                                                                              ------------             -------------
        Net future income tax asset ...................................................          1,899,000                1,899,000
     FUTURE INCOME TAX LIABILITY

        Mineral properties ............................................................         (1,899,000)              (1,899,000)
                                                                                              ------------             -------------
     Net future income tax asset (liability) ..........................................       $        -               $        -
                                                                                              ============             =============

</TABLE>

     At December  31,  2002,  the Company  has  available  losses for income tax
     purposes  in  Canada  totaling  approximately  $7.7  million  (2001  - $5.4
     million), expiring at various times from 2003 to 2009. The Company also has
     capital losses  available of $1.0 million (2001 - $1.0 million),  which can
     be used to offset  future  capital  gains.  The Company also has  available
     resource tax pools in Canada of  approximately  $7.4  million  (2001 - $7.4
     million),  which may be carried forward and utilized to reduce future taxes
     and income.  Included in the $7.4 million (2001 - $7.4 million) of resource
     tax pools is $2.9 million (2001 - $2.9 million) that is successored,  which
     can only be utilized from taxable income from specific mineral properties.

     At  December  31,  2002,  the  Company  also has net  operating  loss carry
     forwards for United  States  income tax purposes of  approximately  US$14.6
     million (2001 - US$13.7  million)  which,  if not utilized to reduce United
     States taxable  income in future  periods,  expires  through the year 2021.
     These  available  tax losses may only be applied to offset  future  taxable
     income from the Company's current United States  subsidiaries and a portion
     are limited to  approximately  6% per year.  In  addition,  the Company has
     available  resource tax pools in the United States of approximately  US$3.9
     million (2001 - US$4.1  million),  which are being  deducted over a 10 year
     period starting with the year they were incurred.


9.   SEGMENTED INFORMATION

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

<TABLE>
<CAPTION>

                                                                                                      2002                      2001
                                                                                               -----------               -----------

     Canada
<S>                                                                                            <C>                       <C>
        Assets excluding mineral property interests .................................          $15,327,770               $ 7,522,606
        Mineral property interests ..................................................            1,933,002                         2

     United States
        Assets excluding mineral property interests .................................                7,500                     7,500
        Mineral property interests ..................................................            3,945,348                 5,583,348

     Republic of South Africa
        Assets excluding mineral property interests .................................               18,125                       -
        Mineral property interests ..................................................                    1                       -
                                                                                               -----------               -----------
     Total assets                                                                              $21,231,746               $13,113,456
                                                                                               ===========               ===========
</TABLE>


     Substantially all of the Company's capital expenditures during fiscal 2002,
     2001 and 2000 were made in Canada.  The Company has an option  right on the
     Burnstone  Gold  Property  located in the  Republic of South  Africa  (note
     5(b)).


10.  DIFFERENCES   BETWEEN  CANADIAN  AND  UNITED  STATES   GENERALLY   ACCEPTED
     ACCOUNTING PRINCIPLES

     As disclosed in note 2, these  financial  statements  have been prepared in
     accordance with Canadian generally accepted accounting  principles ("GAAP")
     which, for purposes of the Company, conform, in all material respects, with
     United States GAAP except as described below.

(A)  STOCK-BASED COMPENSATION

     Statement of Financial  Accounting Standards ("SFAS") No. 123 requires that
     share-based   compensation   be  accounted   for  based  on  a  fair  value
     methodology,  although it allows the effects of share-based compensation to
     employees to be disclosed in the notes to the financial  statements  rather
     than in the  statement  of  operations.  SFAS 123 also  allows an entity to
     continue to measure  compensation costs for share-based  compensation plans
     using the  intrinsic  value based method of accounting as prescribed by APB
     Opinion No. 25 ("APB 25"). For US GAAP purposes, the Company has elected to
     account for all non-cash stock-based  compensation plans to employees using
     the intrinsic value method. The share-based compensation expense in respect
     of the  repricing of share  options  granted to  employees,  under US GAAP,
     would be $nil for the year ended  December  31,  2002 (2001 - $630,000  and
     2000 - $nil).

     Under US GAAP, share options granted to non-employees for services rendered
     to the Company are required to be accounted  for based on the fair value of
     the services provided,  or the consideration  issued. The compensation cost
     is  measured  based on the fair value of share  options  granted,  with the
     compensation cost being charged to operations.

     As of January 1, 2002, the Company has adopted the new  recommendations  of
     Canadian  Institute  of  Chartered   Accountants   respecting   stock-based
     compensation (note 2(n)). Accordingly, there are no material differences in
     the treatment by the Company of stock-based  compensation under US GAAP and
     Canadian GAAP for the year ended December 31, 2002.

     The  share-based  compensation  expense in respect  of  non-employee  share
     options,  based upon the fair value of the options using an option  pricing
     model,  which was required to be charged to operations  under US GAAP,  and
     not under  Canadian GAAP, for the year ended December 31, 2001 was $230,000
     and for the year ended December 31, 2000 was $41,000.

(B)  FAIR VALUE OF FINANCIAL INSTRUMENTS

     US  GAAP  requires  investments  in  available-for-sale  securities  to  be
     recorded at fair value in accordance with SFAS 115, "ACCOUNTING FOR CERTAIN
     INVESTMENTS IN DEBT AND EQUITY SECURITIES". Unrealized gains and losses are
     recorded as other  comprehensive  income  (see  below)  which is a separate
     component of shareholders'  equity,  except for declines in fair value that
     are  determined  to be other than  temporary.  These  declines in value are
     charged to the statement of operations, which is similar to Canadian GAAP.

     US GAAP  requires  the Company to present  comprehensive  income  (loss) in
     accordance  with  SFAS  130,  "REPORTING   COMPREHENSIVE   INCOME",   which
     establishes  standards for reporting  and display of  comprehensive  income
     (loss),  its  components and  accumulated  balances.  Comprehensive  income
     (loss) comprises net income (loss) and all changes to shareholders'  equity
     except those  resulting  from  investments by owners and  distributions  to
     owners.

     Under US GAAP, the Hecla Warrants would be considered  derivative financial
     instruments  and would be  accounted  for under SFAS 133,  "ACCOUNTING  FOR
     DERIVATIVE  INSTRUMENTS AND HEDGING ACTIVITIES",  until they are exercised.
     Once  exercised,  the  shares of Hecla  Mining  Company  received  would be
     considered an available-for-sale  security and would be accounted for under
     SFAS 115. SFAS 133 requires that all  derivative  financial  instruments be
     recognized in the financial  statements and measured at fair value. Changes
     in the fair  value of a  derivative  financial  instrument  are  charged to
     operations if the instrument  does not qualify as a hedge, or to operations
     or other  comprehensive  income,  a  separate  component  of  shareholders'
     equity, if it does qualify as a hedge.

     Canadian  GAAP does not  allow the  presentation  of  comprehensive  income
     (loss).

(C)  SUMMARY OF EFFECT OF DIFFERENCES IN CANADIAN AND US GAAP

     The effect of the above  differences  between  Canadian GAAP and US GAAP on
     the balance sheet and statement of operations  and deficit is summarized as
     follows:

<TABLE>
<CAPTION>

     SHARE CAPITAL AND CONTRIBUTED SURPLUS                                                                2002                  2001
                                                                                                  ------------          ------------

<S>                                                                                               <C>                   <C>
     Share capital and contributed surplus under Canadian GAAP ...............................    $ 67,427,445          $ 55,953,415
     Share-based compensation ................................................................       2,658,000             2,658,000
                                                                                                  ------------          ------------
     SHARE CAPITAL AND CONTRIBUTED SURPLUS UNDER US GAAP .....................................    $ 70,085,445          $ 58,611,415
                                                                                                  ============          ============


     DEFICIT                                                                                              2002                  2001
                                                                                                  ------------          ------------
     Deficit under Canadian GAAP .............................................................    $ 48,384,541          $ 42,865,451
     Share-based compensation ................................................................       2,658,000             2,658,000
     Mark-to-market adjustment, Hecla Warrants (note 5(a)) ...................................        (727,000)                  -
                                                                                                  ------------          ------------
     DEFICIT UNDER US GAAP ...................................................................    $ 50,315,541          $ 45,523,451
                                                                                                  ============          ============




     TOTAL ASSETS                                                                                         2002                  2001
                                                                                                  ------------          ------------

     Total assets under Canadian GAAP ........................................................    $ 21,231,746          $ 13,113,456
     Mark-to-market adjustment, Hecla Warrants ...............................................         727,000                   -
                                                                                                  ------------          ------------
     TOTAL ASSETS UNDER US GAAP ..............................................................    $ 21,958,746          $ 13,113,456
                                                                                                  ============          ============
</TABLE>

<TABLE>
<CAPTION>

     LOSS FOR THE YEAR                                                         2002                    2001                    2000
                                                                       ------------            ------------            ------------

<S>                                                                    <C>                     <C>                     <C>
     Loss for the year under Canadian GAAP ......................      $  5,519,089            $  9,064,905            $ 11,305,645
     Share-based compensation ...................................               -                   860,000                  41,000
     Mark-to-market adjustment, .................................          (727,000)                    -                       -
        Hecla Warrants (note 5(a))
                                                                       ------------            ------------            ------------
     LOSS FOR THE YEAR UNDER US GAAP ............................      $  4,792,089            $  9,924,905            $ 11,346,645
                                                                       ============            ============            ============
     LOSS PER SHARE UNDER US GAAP ...............................      $      (0.13)           $      (0.26)           $      (0.37)
                                                                       ============            ============            ============
</TABLE>