---



CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2011 AND 2010

(Expressed in Canadian Dollars, unless otherwise
stated)

1

---

Managements Report on Internal Control over Financial
Reporting

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

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

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

Management assessed the effectiveness of
  the Companys internal control over financial reporting as of December 31, 2011.
  In making this assessment, the Companys management used the criteria,
  established in Internal Control-Integrated Framework issued by the Committee of
  Sponsoring Organizations of the Treadway Commission (COSO).

Based upon this assessment, management concluded that the
Companys internal control over financial reporting was effective as of December
31, 2011.

The effectiveness of the Companys internal control over
financial reporting as at December 31, 2011 has been audited by
PricewaterhouseCoopers Inc., our independent auditors, as stated in their report
which appears herein.

/s/ Ferdinand
      Dippenaar
    
    /s/
      Lourens A. van VuurenChief Executive Officer
    
    Chief Financial Officer


Vancouver, British Columbia March 30, 2012

2

---

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Great Basin Gold
Ltd.

In our opinion, the accompanying consolidated statements of
financial position and the related consolidated statements of loss,
comprehensive loss, changes in equity and cash flows present fairly, in all
material respects, the financial position of Great Basin Gold Ltd. and its
subsidiaries at December 31, 2011, December 31, 2010 and January 1, 2010, and
the results of their operations and their cash flows for the two years ended
December 31, 2011 in conformity with International Financial Reporting Standards
as issued by the International Accounting Standards Board. Also in our opinion,
the Company maintained, in all material respects, effective internal control
over financial reporting as of December 31, 2011, based on criteria established
in Internal Control - Integrated Frameworkissued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). The Company's
management is responsible for these financial statements, for maintaining
effective internal control over financial reporting and for its assessment of
the effectiveness of internal control over financial reporting, included in the
accompanying Managements Report on Internal Control over Financial Reporting.
Our responsibility is to express an opinion on these financial statements and on
the Company's internal control over financial reporting based on our audit
(which was an integrated audit in 2011). We conducted our audits in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement and whether effective internal control over financial reporting was
maintained in all material respects. Our audits of the financial statements
included examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. Our audit of internal control over financial
reporting included obtaining an understanding of internal control over financial
reporting, assessing the risk that a material weakness exists, and testing and
evaluating the design and operating effectiveness of internal control based on
the assessed risk. Our audits also included performing such other procedures as
we considered necessary in the circumstances. We believe that our audits provide
a reasonable basis for our opinion.

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

|PricewaterhouseCoopers Inc,2 Eglin
Road, Sunninghill 2157, Private Bag X36, Sunninghill 2157, South Africa 
T:
+27 (11) 797 4000, F: +27 (11) 797 5800,www.pwc.co.za
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------

Executive: S P Kana (Chief Executive Officer) T P Blandin de
Chalain D J Fölscher P J Mothibe S Subramoney F Tonelli 
Resident Director in
Charge: E R Mackeown 
The Company's principal place of business is at 2 Eglin
Road, Sunninghill where a list of directors' names is available for
inspection.
Reg. no. 1998/012055/21, VAT reg.no. 4950174682

3

---

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

PricewaterhouseCoopers Inc.

Johannesburg, Republic of South Africa

March 30, 2012

4

---

|GREAT BASIN GOLD LTD.                                                   |  |              |  |          |   |  |         |  
|----------------------------------------------------------------------- |  | ------------ |  | -------- | - |  | ------- | -
|Consolidated Statements of Loss                                         |  |              |  |          |   |  |         |  
|For the years ended December 31, 2011 and 2010                          |  |              |  |          |   |  |         |  
|Expressed in
      thousands of Canadian dollars, except per share data |  |              |  |          |   |  |         |  
|                                                                        |  |              |  |          |   |  |         |  
|                                                                        |  | Note         |  | 2011     |   |  | 2010    |  
|                                                                        |  |              |  | $ '000   |   |  | $ '000  |  
|                                                                        |  |              |  |          |   |  |         |  
|Revenue                                                                 |  | 25           |  | 170,324  |   |  | 99,706  |  
|                                                                        |  |              |  |          |   |  |         |  
|Cost of operations                                                      |  |              |  |          |   |  |         |  
|Production cost                                                         |  |              |  | (101,543 | ) |  | (65,683 | )
|Depletion charge                                                        |  |              |  | (5,553   | ) |  | (6,673  | )
|Depreciation charge                                                     |  |              |  | (12,679  | ) |  | (3,427  | )
|                                                                        |  |              |  |          |   |  |         |  
|Expenses                                                                |  |              |  |          |   |  |         |  
|Exploration expenses                                                    |  |              |  | (9,616   | ) |  | (10,450 | )
|Pre-development expenses                                                |  |              |  | (17,703  | ) |  | (13,397 | )
|Corporate and administrative cost                                       |  |              |  | (7,950   | ) |  | (7,630  | )
|Environmental impact study                                              |  |              |  | (2,232   | ) |  | (2,580  | )
|Foreign exchange gain - net                                             |  |              |  | 2,079    |   |  | 4,641   |  
|Salaries and compensation                                               |  |              |  |          |   |  |         |  
|Salaries and wages                                                      |  |              |  | (8,701   | ) |  | (7,528  | )
|Share
      based payments expense                                      |  | 18
      (b) |  | (4,912   | ) |  | (4,887  | )
|Profit (loss) from operating
      activities                           |  |              |  | 1,514    |   |  | (17,908 | )
|Interest expense                                                        |  | 20 (a)       |  | (24,614  | ) |  | (64     | )
|Interest income                                                         |  | 20 (b)       |  | 1,562    |   |  | 1,827   |  
|Net interest
      (expense) income                                     |  | 20
      (c) |  | (23,052  | ) |  | 1,763   |  
|Loss from operating activities after net
      interest                 |  |              |  | (21,538  | ) |  | (16,145 | )
|Impairment of loan due from related party                               |  | 10           |  | (13,680  | ) |  |        |  
|Loss on derivative instruments - net                                    |  | 21           |  | (30,096  | ) |  | (9,958  | )
|Loss before income taxes                                                |  |              |  | (65,314  | ) |  | (26,103 | )
|Income tax recovery (expense)                                           |  | 22 (a)       |  | 47,577   |   |  | (1,038  | )
|Net loss for
      the year                                             |  |              |  | (17,737  | ) |  | (27,141 | )
|                                                                        |  |              |  |          |   |  |         |  
|Basic and diluted
      loss per share                                  |  |              |  | (0.04    | ) |  | (0.08   | )
|                                                                        |  |              |  |          |   |  |         |  
|Weighted average
      number of common shares outstanding (thousands)  |  |              |  | 459,099  |   |  | 358,711 |  

The accompanying notes are an integral part of these
consolidated financial statements

5

---

|GREAT BASIN GOLD LTD.                                                         |  |              |  |          |   |  |         |  
|----------------------------------------------------------------------------- |  | ------------ |  | -------- | - |  | ------- | -
|Consolidated Statements of Comprehensive Loss                                 |  |              |  |          |   |  |         |  
|For the years ended December 31, 2011 and 2010                                |  |              |  |          |   |  |         |  
|Expressed in
      thousands of Canadian dollars                              |  |              |  |          |   |  |         |  
|                                                                              |  |              |  | 2011     |   |  | 2010    |  
|                                                                              |  | Note         |  | $ '000   |   |  | $ '000  |  
|                                                                              |  |              |  |          |   |  |         |  
|                                                                              |  |              |  |          |   |  |         |  
|Net loss for the year                                                         |  |              |  | (17,737  | ) |  | (27,141 | )
|                                                                              |  |              |  |          |   |  |         |  
|Other comprehensive loss                                                      |  |              |  |          |   |  |         |  
|Changes in fair value of financial instruments                                |  | 8            |  |         |   |  | 603     |  
|Realized gain on available-for-sale
      financial instruments upon transfer |  | 8            |  |         |   |  | (1,530  | )
|Cumulative
      translation adjustment                                       |  | 18
      (e) |  | (100,159 | ) |  | 26,395  |  
|Other comprehensive (loss) income for the year                                |  |              |  | (100,159 | ) |  | 25,468  |  
|                                                                              |  |              |  |          |   |  |         |  
|Comprehensive loss for the year                                               |  |              |  | (117,896 | ) |  | (1,673  | )

The accompanying notes are an integral part of these
consolidated financial statements

6

---

|GREAT BASIN GOLD LTD.                                       | 
|----------------------------------------------------------- | 
|Consolidated Statements of Financial
      Position         | 
|Expressed in thousands of Canadian dollars                  | 
|                                                            | 
|                                                            | 
|                                                            | 
|Assets                                                      | 
|Current assets                                              | 
|Cash and cash equivalents                                   | 
|Trade and other receivables                                 | 
|Inventories                                                 | 
|Available-for-sale financial assets                         | 
|Financial assets at fair value through
      profit or loss | 
|Other current
      assets                                  | 
|                                                            | 
|Non-current assets                                          | 
|Inventories                                                 | 
|Loan due from related party                                 | 
|Property, plant and equipment                               | 
|Restricted cash                                             | 
|Other assets                                                | 
|Deferred income
      tax assets                            | 
|Total assets                                                | 
|                                                            | 
|Liabilities                                                 | 
|Current liabilities                                         | 
|Trade and other payables                                    | 
|Current portion of long term debt                           | 
|Current portion of other liabilities                        | 
|                                                            | 
|Non-current liabilities                                     | 
|Long term debt                                              | 
|Other liabilities                                           | 
|Site reclamation
      obligations                          | 
|Total liabilities                                           | 
|                                                            | 
|Equity                                                      | 
|Share capital                                               | 
|Warrants                                                    | 
|Contributed surplus                                         | 
|Accumulated other comprehensive (loss)
      income         | 
|Deficit                                                     | 
|Total equity                                                | 
|                                                            | 
|Total liabilities and equity                                | 

The accompanying notes are an integral part of these
consolidated financial statements

Approved by the Board of Directors

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

7

---

GREAT BASIN GOLD LTD.Consolidated Statements of Changes in EquityFor the years ended December 31, 2011 and 2010Expressed in
      thousands of Canadian dollarsAccumulatedotherContributed
    
    
    **comprehensive**Share capital
    
    
    Warrants
    
    
    surplus
    
    
    **income (loss)**
    
    
    Deficit
    
    
    Total(note 18(a))
    
    
    (note 18(c))
    
    
    (note 18(d))
    
    
    (note 18(e))$'000
    
    
    $'000
    
    
    $'000
    
    
    $'000
    
    
    $'000
    
    
    $'000Balance - January 1, 2010
    
    567,596
    
    
    13,104
    
    
    74,403
    
    
    927
    
    
    (326,770
    )
    
    329,260Net loss for the year
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (27,141
    )
    
    (27,141
    )Other comprehensive income
    
    -
    
    
    -
    
    
    -
    
    
    25,468
    
    
    -
    
    
    25,468Comprehensive income (loss) for the year
    
    -
    
    
    -
    
    
    -
    
    
    25,468
    
    
    (27,141
    )
    
    (1,673
    )Employee share optionsValue of services recognized (note 18(b))
    
    -
    
    
    -
    
    
    7,469
    
    
    -
    
    
    -
    
    
    7,469Proceeds on issuing shares
    
    14,308
    
    
    -
    
    
    (5,212
    )
    
    -
    
    
    -
    
    
    9,096WarrantsProceeds on issuing shares
      (note 18(c)(i) and 18(c)(iii))
    
    100,290
    
    
    (5,811
    )
    
    -
    
    
    -
    
    
    -
    
    
    94,479Fair value of share purchase warrants expired
      (note 18(c)(ii))
    
    -
    
    
    (1,185
    )
    
    1,185
    
    
    -
    
    
    -
    
    
    -Deferred income tax on expired
      share purchase warrants
    
    -
    
    
    -
    
    
    (169
    )
    
    -
    
    
    -
    
    
    (169
    )Shares issued for settlement of senior secured
      notes (note 15(c))
    
    8,012
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    8,012Shares issued for mineral properties
    
    19,243
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    19,243Balance - December 31, 2010
    
    709,449
    
    
    6,108
    
    
    77,676
    
    
    26,395
    
    
    (353,911
    )
    
    465,717Balance - January 1, 2011
    
    709,449
    
    
    6,108
    
    
    77,676
    
    
    26,395
    
    
    (353,911
    )
    
    465,717Net loss for the year
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (17,737
    )
    
    (17,737
    )Other comprehensive loss
    
    -
    
    
    -
    
    
    -
    
    
    (100,159
    )
    
    -
    
    
    (100,159
    )Comprehensive loss for the year
    
    -
    
    
    -
    
    
    -
    
    
    (100,159
    )
    
    (17,737
    )
    
    (117,896
    )Employee share optionsValue of services recognized (note
      18(b))
    
    -
    
    
    -
    
    
    8,407
    
    
    -
    
    
    -
    
    
    8,407Proceeds on issuing shares
    
    7,463
    
    
    -
    
    
    (2,794
    )
    
    -
    
    
    -
    
    
    4,669WarrantsProceeds on issuing shares (note 18(a)(ii) and
      18(c)(i))
    
    35,393
    
    
    (6,053
    )
    
    -
    
    
    -
    
    
    -
    
    
    29,340Fair value of share purchase warrants
      expired (note 18(c)(i))
    
    -
    
    
    (55
    )
    
    55
    
    
    -
    
    
    -
    
    
    -Deferred income tax on expired share purchase
      warrants
    
    -
    
    
    -
    
    
    (7
    )
    
    -
    
    
    -
    
    
    (7
    )Proceeds on issuance of shares in public
      offering 
      (net of transaction costs) (note 18(a)(i))
    
    81,175
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    81,175Other (note 18(a)(iii))
    
    163
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    163Balance - December 31, 2011
    
    833,643
    
    
    -
    
    
    83,337
    
    
    (73,764
    )
    
    (371,648
    )
    
    471,568


The accompanying notes are an integral part of these
consolidated financial statements

8

---

|GREAT BASIN GOLD LTD.                                                |  |          |   |  |          |  
|-------------------------------------------------------------------- |  | -------- | - |  | -------- | -
|Consolidated Statements of Cash Flows                                |  |          |   |  |          |  
|For the years ended December 31, 2011 and 2010                       |  |          |   |  |          |  
|Expressed in
      thousands of Canadian dollars                     |  |          |   |  |          |  
|                                                                     |  | 2011     |   |  | 2010     |  
|                                                                     |  | $ '000   |   |  | $ '000   |  
|Operating activities                                                 |  |          |   |  |          |  
|Loss for the year                                                    |  | (17,737  | ) |  | (27,141  | )
|Items not involving cash                                             |  |          |   |  |          |  
|Production non-cash charges                                          |  | 2,895    |   |  | 4,213    |  
|Depletion                                                            |  | 5,553    |   |  | 6,673    |  
|Depreciation                                                         |  | 13,356   |   |  | 226      |  
|Exploration non-cash charges                                         |  | 150      |   |  | 291      |  
|Pre-development non-cash charges                                     |  | 1,163    |   |  | 1,077    |  
|Share donation                                                       |  | 163      |   |  |         |  
|Unrealized foreign exchange gain                                     |  | (5,252   | ) |  | (6,613   | )
|Share based payments expense                                         |  | 4,912    |   |  | 4,887    |  
|Impairment of loan due from related party                            |  | 13,680   |   |  |         |  
|Loss on derivative instruments
      - net                           |  | 29,904   |   |  | 9,958    |  
|Deferred income tax recovery                                         |  | (49,685  | ) |  | (169     | )
|Adjusted for                                                         |  |          |   |  |          |  
|Interest expense                                                     |  | 24,614   |   |  | 64       |  
|Interest income                                                      |  | (1,562   | ) |  | (1,827   | )
|Changes in non-cash operating working capital                        |  |          |   |  |          |  
|Trade and other receivables                                          |  | (5,442   | ) |  | (5,200   | )
|Other current assets                                                 |  | (1,201   | ) |  | (408     | )
|Inventories                                                          |  | (9,094   | ) |  | 6,812    |  
|Trade
      and other payables                                       |  | 17,773   |   |  | 4,432    |  
|Net cash generated from (utilized by) operating activities           |  | 24,190   |   |  | (2,725   | )
|                                                                     |  |          |   |  |          |  
|Investing activities                                                 |  |          |   |  |          |  
|Advance to related party                                             |  | (4,506   | ) |  | (1,072   | )
|Net proceeds on sale of financial
      instruments                  |  |         |   |  | 3,527    |  
|Purchase of property, plant and equipment                            |  | (159,114 | ) |  | (229,529 | )
|Additions to restricted cash                                         |  |         |   |  | (6,204   | )
|Interest income                                                      |  | 562      |   |  | 1,600    |  
|Reclamation deposits                                                 |  | (847     | ) |  | (62      | )
|Net cash utilized
      by investing activities                      |  | (163,905 | ) |  | (231,740 | )
|                                                                     |  |          |   |  |          |  
|Financing activities                                                 |  |          |   |  |          |  
|Common shares and warrants issued for cash,
      net of issue costs |  | 115,184  |   |  | 103,500  |  
|Proceeds on issuance of debt                                         |  | 135,321  |   |  | 72,478   |  
|Repayment of debt                                                    |  | (80,214  | ) |  | (6,811   | )
|Interest expense                                                     |  | (19,148  | ) |  | (10,513  | )
|Net cash generated from financing activities                         |  | 151,143  |   |  | 158,654  |  
|                                                                     |  |          |   |  |          |  
|Increase (decrease) in cash and cash
      equivalents               |  | 11,428   |   |  | (75,811  | )
|Cash and cash equivalents, beginning of year                         |  | 12,855   |   |  | 89,464   |  
|Foreign exchange movement on cash and cash equivalents               |  | 1,466    |   |  | (798     | )
|                                                                     |  |          |   |  |          |  
|Cash and cash equivalents, end of year                               |  | 25,749   |   |  | 12,855   |  

Refer note 23 of the notes to the consolidated financial
statements for supplementary information to the cash flow statement. The
accompanying notes are an integral part of these consolidated financial
statements

9

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|1. | Nature of operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Great Basin Gold Ltd. is incorporated under the laws of
      the Province of British Columbia and its registered address is 1108-1030
      West Georgia Street, Vancouver BC, Canada. Great Basin Gold Ltd.,
      including its subsidiaries (Great Basin or the Company), is a mineral
      exploration and development company with two operating assets, both in the
      production build-up phase, the Hollister Project on the Carlin Trend in
      Nevada, USA and the Burnstone Project in the Witwatersrand Goldfields in
      South Africa. Over and above further exploration being conducted at the
      above mentioned properties, greenfields exploration is being undertaken in
      Tanzania and Mozambique.                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|2. | Basis of preparation and adoption of
IFRS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Company prepares its consolidated financial
      statements in accordance with Canadian Generally Accepted Accounting
      Principles (GAAP) as set out in the Handbook of the Canadian Institute
      of Chartered Accountants (CICA Handbook). In 2010, the CICA Handbook was
      revised to incorporate International Financial Reporting Standards
      (IFRS) as issued by the International Accounting Standards Board
      (IASB) and to require publicly accountable enterprises to apply these
      standards effective for years beginning on or after January 1, 2011.
      Accordingly, these are the Companys first annual consolidated financial
      statements prepared in accordance with IFRS as issued by the IASB. In
      these financial statements, the term Canadian GAAP refers to Canadian
      GAAP before the adoption of IFRS.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The consolidated financial statements have been prepared
      in compliance with IFRS as issued by the IASB. Subject to certain
      transition elections and exceptions disclosed in note 29, the Company has
      consistently applied the accounting policies used in the preparation of
      its opening IFRS statement of financial position at January 1, 2010
      throughout all periods presented, as if these policies had always been in
      effect. Note 29 discloses the impact of the transition to IFRS on the
      Companys reported financial position, financial performance and cash
      flows, including the nature and effect of significant changes in
      accounting policies from those used in the Companys consolidated
      financial statements for the year ended December 31, 2010 prepared under
      Canadian GAAP.                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The consolidated financial statements have been prepared
      under the historical cost convention, as modified by the revaluation of
      certain financial assets and financial liabilities (including derivative
      instruments) at fair value through profit or loss.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | These financial statements consolidate the accounts of
      the Company and its subsidiaries which the Company controls by having the
      power to govern the financial and operating policies. Subsidiaries are all
      entities, including special purpose entities, over which the group has the
      power to govern the financial and operating policies generally
      accompanying a shareholding of more than one half of the voting
    rights.                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Subsidiaries are fully consolidated from the date on
      which control is obtained by the Company and are de-consolidated from the
      date that control ceases. Intercompany transactions, balances, income and
      expenses, and income and losses are eliminated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

10

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|2. | Basis of preparation and adoption of IFRS
      (continued)                                                                                                                                                                                                                                                                            
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                        
|   | Accounting standards and amendments issued but not yet
      adopted                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                        
|   | Unless otherwise noted, the following revised standards
      and amendments are effective for annual periods beginning on or after
      January 1, 2013 with earlier application permitted. The Company has not
      yet assessed the impact of these standards and amendments or determined
      whether it will early adopt them.
|   |                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                        

11

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|2. | Basis of preparation and adoption of IFRS
      (continued)                     
|-- | --------------------------------------------------------------------------------
|   |                                                                                 
|   | Accounting standards and amendments issued but not yet
      adopted (continued)
|   |                                                                                 
|   |                                                                                 
|   |                                                                                 
|   |                                                                                 
|   |                                                                                 
|   |                                                                                 
|   |                                                                                 
|   |                                                                                 
|   |                                                                                 
|   |                                                                                 
|   |                                                                                 
|   |                                                                                 
|   |                                                                                 
|   |                                                                                 

12

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|2. | Basis of preparation and adoption of IFRS
      (continued)                                                                                                                                                                                                                                                                                                         
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                     
|   | Accounting standards and amendments issued but not yet
      adopted (continued)                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                     
|3. | Significant accounting policies                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                     
|   | (a) Segment reporting                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                     
|   | Operating segments are reported in a manner consistent
      with the internal reporting provided to the chief operating
      decision-maker. The chief operating decision-maker is responsible for
      allocating resources and assessing performance of the operating segments
      and has been identified as the Chief Executive Officer of the
    Company.

13

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|3. | Significant accounting policies
  (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | (b) Foreign currency translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Functional and presentation currency                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Items included in the financial statements of each
      consolidated entity in the Companys group are measured using the currency
      of the primary economic environment in which the entity operates (the
      functional currency). The functional currency of the Burnstone property
      is the South African Rand (ZAR) and for the Hollister and Esmeralda
      properties it is the United States Dollar (US$). The Canadian Dollar
      ($) is the presentation currency for the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The financial statements of entities that have a
      functional currency different from that of the Company (foreign
      operations) are translated into Canadian dollars as follows: assets and
      liabilities  at the closing rate at the date of the statement of
      financial position, and income and expenses  at the average rate of the
      period (unless this average is not a reasonable approximation of the
      cumulative effect of the rates prevailing on the transaction dates, in
      which case income and expenses are translated at the rate on the dates of
      the transactions). All resulting changes are recognized in other
      comprehensive income as cumulative translation adjustments.                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Transactions and balances                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Foreign currency transactions are translated into the
      functional currency using the exchange rates prevailing at the dates of
      the transactions. Foreign exchange gains and losses resulting from the
      settlement of foreign currency transactions and from the translation at
      exchange rates of monetary assets and liabilities denominated in
      currencies other than an entities functional currency are recognized in
      the statement of income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | (c) Property, plant and equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Property, plant and equipment are recorded at cost less
      accumulated depreciation or depletion and impairments/reversals.
      Subsequent costs are included in the assets carrying amount only when it
      is probable that future economic benefits associated with the asset will
      flow to the Company and the cost of the addition can be measured reliably.
      All other repairs and maintenance are charged to expenses during the
      financial period in which they are incurred. Major renovations are
      depreciated over the remaining useful life of the related asset or to the
      date of the next major renovation, whichever is sooner. The assets
      residual values and useful lives are reviewed, and adjusted if
      appropriate, at the beginning of each financial year. Gains and losses on
      disposal are determined by comparing net sale proceeds with the carrying
      amount and recorded in other income.

14

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|3. | Significant accounting policies
  (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (c) Property, plant and equipment (continued)
      Mineral
    properties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Company capitalizes mineral property acquisition
      costs on a property-by-property basis. Mineral property acquisition costs
      include the cash consideration and the fair market value of common shares
      issued for mineral property interests, based on the trading price of the
      shares at the time the acquisition is closed. Payments relating to a
      property acquired under an option or joint venture agreement, where such
      payments are made at the sole discretion of the Company, are recorded in
      the accounts upon payment. Exploration expenditures are charged to profit
      or loss as incurred. Pre-development costs incurred subsequent to a
      development decision, but prior to the receipt of all necessary permits
      and licenses for commercial mining operations are charged to profit or
      loss as incurred.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Mine infrastructure and assets under
      construction                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Mine infrastructure includes processing plant facilities,
      surface infrastructure and development expenditures. Development
      expenditures incurred to develop new ore bodies, or subsequent to the
      commencement of commercial production, to increase productive capacity or
      to define further mineralization in existing ore bodies are capitalized to
      assets under construction and transferred to mine infrastructure costs
      upon commissioning. Costs include pre-production expenditure incurred
      during the development of a mine and the present value of related future
      decommissioning costs. Where a depreciable asset is used in the
      construction of mine infrastructure, the depreciation is capitalized
      against mine infrastructure costs.                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Depreciation and depletion of mine infrastructure and
      mineral properties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Depreciation of mine infrastructure costs and the
      depletion of mineral properties are computed by the units-of-production
      method based on estimated proven and probable mineral reserves as well as
      an allocation from mineral resources not yet included in mineral reserves.
      Proven and probable mineral reserves reflect estimated quantities of
      economically recoverable reserves which can be recovered in the future
      from known mineral deposits. The allocated resources included in the
      units-of-production are calculated on the probability of estimated
      quantities of mineral resources to be converted into economically
      recoverable mineral reserves over the life- of-mine. Depreciation of mine
      infrastructure commence when the asset is available for use.                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Mining equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Mining equipment includes underground trackless mining
      equipment and other moveable underground and surface equipment with
      estimated useful lives generally less than the life-of- mine. These assets
      are depreciated on a straight line basis over their estimated useful
      lives, which is generally between 3 and 7 years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

15

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|3. | Significant accounting policies
  (continued)                                                                                       
|-- | ------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                     
|   | (c) Property, plant and equipment (continued)
      Other assets                                                                    
|   |                                                                                                                                     
|   | Other assets are depreciated over their estimated useful
      lives on a straight line basis and have been calculated as
  follows:

Buildings, including fixtures and
      improvements
    10 yearsVehicles
    3  7 yearsComputers
    3 yearsOffice furniture and fixtures
    5 years


Land is not depreciated.

(d) Impairment of non-financial
assets

Property, plant and equipment are
reviewed for impairment when events or changes in circumstances indicate that
the carrying amount may not be recoverable.

An impairment loss is recognized for
the amount by which the assets carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an assets fair value less costs to sell
and value in use.

Mineral property acquisition costs
capitalized in early stage exploration projects are evaluated based on available
technical data with reference to market related resource ounce prices.

For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows (cash-generating units). Non-financial assets
that suffered an impairment are reviewed for possible reversal of the impairment
at each reporting date.

(e) Financial instruments

Financial assets and liabilities are
recognized when the Company becomes a party to the contractual provisions of the
instrument. Financial assets are derecognized when the rights to receive cash
flows from the assets have expired or have been transferred and the Company has
transferred substantially all risk and rewards of ownership. On derecognition of
a financial asset, the difference between the carrying amount and the sum of the
consideration received and any cumulative gain or loss recognized in other
comprehensive income is recognized in profit or loss.

Financial liabilities are derecognized
when the obligation specified in the contract is discharged, cancelled or
expires. On derecognition of a financial liability, the difference between the
carrying amount of the liability extinguished or transferred to another party
and the amount paid is included in profit or loss.

Financial assets and liabilities are
offset and the net amount is reported in the statement of financial position
when there is a legally enforceable right to offset and settle the recognized
amounts on a net basis, or to realize the asset and settle the liability
simultaneously.

16

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|3. | Significant accounting policies
  (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | (e) Financial instruments (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Financial assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The Company classifies its financial assets in the
      following categories: loans and receivables, at fair value through profit
      and loss and available-for-sale.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | (i) Loans and receivables                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Loans and receivables are non-derivative financial assets
      with fixed or determinable payments that are not quoted in an active
      market. Loans and receivables are initially recognized at fair value plus
      transaction costs and are subsequently measured at amortized cost using
      the effective interest method less a provision for impairment.                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The Companys loans and receivables consist of trade and
      other receivables, cash and cash equivalents, loan due from related party
      and other assets. Loans and receivables are classified as current, except
      for those items which are expected to be paid beyond twelve months, which
      are classified as non-current.                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Cash and cash equivalents consist of cash in hand and
      short-term 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | (ii) Financial assets at fair value through profit or
    loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | A financial asset is classified in this category if
      acquired principally for the purpose of selling in the short-term or if so
      designated by management in terms of specified criteria. Financial
      instruments in this category are recognized initially and subsequently at
      fair value through profit or loss and are classified as current assets if
      they are either held for trading or are expected to be realized within 12
      months of the statement of financial position date.                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | (iii) Available-for-sale                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Available-for-sale investments are non-derivatives that
      are either designated in this category or not classified in any of the
      other categories. The Companys available-for-sale assets comprised
      investments in equity instruments, which were recognized initially at fair
      value plus transaction costs and subsequently carried at fair value. Gains
      and losses arising from re-measurement were recognized in other
      comprehensive income and were moved from accumulated other comprehensive
      income to the statement of income upon disposal. Available-for-sale
      investments were classified as current assets as management expected to
      dispose of it within twelve months.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Financial liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | (i) Debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Debt is initially recognized at fair value, net of
      transaction cost incurred, and subsequently measured at amortized cost.
      Any difference between the proceeds (net of transaction costs) and the
      redemption value is amortized over the expected repayment term using the
      effective interest method. Fees paid on the establishment of loan
      facilities are recognized as transaction costs of the loan, are
      capitalized as a pre-payment for liquidity services and amortized over the
      period of the facility to which is relates.                                                                                                                                                          

17

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|3. | Significant accounting policies
  (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | (e) Financial instruments (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Financial liabilities (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | (i) Debt (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | A compound financial instrument is a debt security with
      an embedded conversion option, such as a convertible bond, and requires
      the separate recognition of the liability and equity component. The
      liability component of a compound financial instrument is recognized
      initially at the fair value of a similar liability that does not have an
      equity conversion option. The equity component is recognized initially at
      the difference between the fair value of the compound financial instrument
      as a whole and the fair value of the liability component. Any directly
      attributable transaction costs are allocated to the liability and equity
      components in proportion to their initial carrying amounts. Subsequent to
      initial recognition, the liability component of a compound financial
      instrument is measured at amortized cost using the effective interest
      method. The equity component of a compound financial instrument is not
      re-measured subsequent to initial recognition.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Debt is classified as current liabilities unless the
      Company has an unconditional right to defer settlement of the liability
      for at least 12 months after the statement of financial position
    date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | (ii) Derivatives                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Debt agreements entered into required the Company to
      execute a series of Zero Cost Collar hedge structures. These derivative
      structures are initially recognized at fair value through profit or loss
      and are subsequently measured at fair value with the changes in the
      estimated fair value in the statement of financial position as either a
      derivative asset or derivative liability at each reporting date being
      reported in profit or loss in the period to which it relates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | (iii) Financial guarantees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Financial guarantees are reflected as other liabilities
      on the statement of financial position, recognized at fair value on
      inception and subsequently carried at amortized cost.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | (iv) Trade and other payables                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Trade and other payables are obligations to pay for goods
      or services that have been acquired in the ordinary course of business
      from suppliers and are classified as current liabilities if payment is due
      within one year or less. If not, they are presented as non-current
      liabilities. Trade payables are recognized initially at fair value and
      subsequently measured at amortized cost using the effective interest
      method.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | (f) Impairment of financial assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | At each reporting date, the Company assesses whether
      there is objective evidence that a financial asset (other than a financial
      asset classified as fair value through profit or loss) is impaired.
      Evidence of impairment may include indications that the debtors are
      experiencing significant financial difficulty, default or delinquency in
      interest or principal payments and the probability that they will enter
      bankruptcy or other financial reorganization.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

18

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|3. | Significant accounting policies
  (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | (f) Impairment of financial assets
    (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | For equity securities, a significant or prolonged decline
      in the fair value of the security below its cost is also evidence that the
      assets are impaired.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | If such evidence exists, the Company recognizes an
      impairment loss, calculated as the difference between the amortized cost
      of the loan or receivable and the present value of the estimated future
      cash flows, discounted using the instruments original effective interest
      rate. The carrying amount of the asset is reduced by this amount either
      directly or indirectly through the use of an impairment
  provision.                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Impairment losses on financial assets carried at
      amortized cost are reversed in subsequent periods if the amount of the
      loss decreases and the decrease can be related objectively to an event
      occurring after the impairment was recognized.                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | (g) Inventories                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Inventories, which include, precious metals in process,
      unprocessed ore and stores and materials, are measured at the lower of
      cost and net realizable value. Net realizable value is the estimated
      selling price in the ordinary course of business less the estimated cost
      of completion and the estimated cost necessary to perform the
  sale.                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Precious metals in process consist of unrefined precious
      metals and gold in lock-up, which are valued at average production costs
      plus allocated overhead expenses. Unprocessed ore consists of surface
      stockpiles and is valued at the average production costs plus allocated
      overhead expenses. Stores and materials consist of consumables and are
      valued at the weighted average cost.                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | (h) Leases                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Leases in which a significant portion of the risks and
      rewards of ownership are retained by the lessor are classified as
      operating leases. Payments made under operating leases are charged against
      operating profits on a straight line basis related to the period the
      assets concerned will be used.                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Finance leases are capitalized at the lower of the fair
      value of the leased property or present value of minimum lease payments
      measured at inception of the lease with the related lease obligation
      recognized at the same amount. Finance lease payments are allocated using
      the rate implicit in the lease, which is included in finance costs, and
      the capital repayment, which reduces the liability to the lessor. If there
      is reasonable certainty that the lessee will obtain ownership by the end
      of the lease term, the period of expected use is the useful life of the
      asset; otherwise the asset is depreciated over the shorter of the lease
      term and its useful life.

19

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|3. | Significant accounting policies
  (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | (i) Borrowing costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | General and specific borrowing costs directly
      attributable to the acquisition, construction or production of qualifying
      assets, which are assets that necessarily take a substantial period of
      time to get ready for their intended use or sale, are added to the cost of
      those assets, until such time as the assets are substantially ready for
      their intended use or sale. All other borrowing costs are recognized in
      profit or loss in the period in which they are incurred.                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Investment income earned on the temporary investment of
      specific borrowings pending their expenditure on qualifying assets is
      deducted from the borrowing cost eligible for capitalization.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | (j) Income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Tax is recognized in the statement of income, except to
      the extent that it relates to items recognized in other comprehensive loss
      or directly in equity. In this case, the tax is also recognized in other
      comprehensive loss or directly in equity, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The current income tax charge is calculated on the basis
      of the tax laws enacted or substantively enacted at the statement of
      financial position date in the countries where the Company and its
      subsidiaries operate and generate taxable income. Management periodically
      evaluates positions taken in tax returns with respect to situations in
      which applicable tax regulation is subject to interpretation. It
      establishes provisions where appropriate on the basis of amounts expected
      to be paid to the tax authorities.                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Deferred income tax is recognized, using the liability
      method, on temporary differences arising between the tax bases of assets
      and liabilities and their carrying amounts in the consolidated financial
      statements, 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. However, deferred income tax is
      not accounted for if it arises from initial recognition of an asset or
      liability in a transaction other than a business combination that at the
      time of the transaction affects neither the accounting nor taxable income
      or loss.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Deferred income tax assets are recognized only to the
      extent that it is probable that future taxable profit will be available
      against which the temporary differences can be utilized.
      Deferred income
        tax is provided on temporary differences arising on investments in
        subsidiaries, except for deferred income tax liability where the timing of
        the reversal of the temporary difference is controlled by the Company and
        it is probable that the temporary difference will not reverse in the
        foreseeable future.                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Deferred income tax assets and liabilities are offset
      when there is a legally enforceable right to offset current tax assets
      against current tax liabilities and when the deferred income tax assets
      and liabilities relate to income taxes levied by the same taxation
      authority on either the same taxable entity or different entities where
      there is an intention to settle the balances on a net basis.
      Interest
        received from and paid to the tax authorities are classified as interest
        income and expense.                                                                                                                                                       

20

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|3. | Significant accounting policies
  (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | (k) Site reclamation obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Estimated long-term asset retirement obligations,
      comprising continuous pollution control during the reclamation process,
      rehabilitation and mine closure, are based on the Company's environmental
      management plans in compliance with current technological, environmental
      and regulatory requirements.                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The net present values of expected rehabilitation cost
      estimates are recognized and provided for in full in the financial
      statements. The estimates are reviewed annually and are discounted using
      rates that reflect inflation and the time value of money.                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The discount rate used is based on a pre-tax credit
      adjusted risk-free rate that is adjusted to reflect the current market
      assessments of the time value of money and the risks specific to the
      obligation. Annual changes in the provision consist of finance costs
      relating to the change in the present value of the provision and
      inflationary increases in the provision estimate, as well as changes in
      estimates.                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The present value of environmental disturbances created
      as well as changes to estimates are expensed under operating expenses
      against an increase in the rehabilitation provision for those projects for
      which a decision to develop has not been taken. Change in estimates for
      projects in the development and production phase is capitalized and
      amortised over the life of mine on the units-of-production method.
      Rehabilitation costs incurred that are included in the estimates are
      charged to the provision. The cost of ongoing current programmes to
      prevent and control pollution is charged against income as
  incurred.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | (l) Share capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The Company records proceeds from share issuances net of
      issue costs. Shares issued for consideration other than cash or in a
      business combination are valued at the quoted market price on the date
      issued.                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | (m) Loss per common share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Basic loss per common share is calculated by dividing the
      loss available to common shareholders by the weighted average number of
      common shares outstanding during the year. For all years presented, loss
      available to common shareholders equals the reported loss.                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Diluted loss per common share is calculated using the
      treasury stock method. Under the treasury stock method, the weighted
      average number of common shares outstanding used for the calculation of
      diluted loss per share assumes that the proceeds to be received on the
      exercise of dilutive share options and warrants are used to repurchase
      common shares at the average market price during the year.                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | In years when the Company records a net loss, the effect
      of the share options and warrants would be anti-dilutive and accordingly
      basic and diluted loss per share are the same.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | (n) Share based payments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The Company has an equity-settled, share based payment
      plan, where the Company grants share options to certain employees and
      non-employees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

21

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|3. | Significant accounting policies
  (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | (n) Share based payments (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Non-employees are individuals over whom the Company does
      not exercise, nor have the right to exercise, sufficient control to
      establish an employer-employee relationship as determined by law. Equity
      share based payments are measured at the fair value of the equity
      instruments at the date of grant. The deferred share based compensation is
      expensed over the vesting period using the graded method, based on the
      Companys estimate of the shares that are expected to eventually
    vest.                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The Company used an option pricing model in determining
      the fair value of the options granted. At each statement of financial
      position date, the Company revises its estimates of the number of options
      that are expected to become exercisable. It recognizes the impact of the
      revision of original estimates, if any, in profit or loss, with a
      corresponding adjustment to equity. Consideration received on the exercise
      of share options is recorded as share capital and the related contributed
      surplus is transferred to share capital.                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | When unvested options are forfeited the Company reverses
      previously recognized charges to profit or loss. The value of forfeited
      vested options remains in contributed surplus.                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | (o) Revenue recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The Company recognizes revenue, measured at the fair
      value of the consideration received or receivable, when the amount of
      revenue can be reliably measured; when it is probable that future economic
      benefits will flow to the entity; the significant risks and rewards of
      ownership have been transferred to the customer and collection of the
      sales price is reasonably assured.
      These criteria are typically met when
        significant risk and rewards of ownership of gold and other precious
        metals, including metal bearing ore, are transferred to the
        buyer.        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Interest income is recognized using the effective
      interest method.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|4. | Critical accounting estimates and
  judgments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The preparation of financial statements requires
      management to use judgment in applying its accounting policies and
      estimates and assumptions about the future. Estimates and other judgments
      are continuously evaluated and are based on managements experience and
      other factors, including expectations about future events that are
      believed to be reasonable under the circumstances. These estimates may
      have a significant impact on the financial statements.                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | (a) Mineral resources and reserves estimates and
      the impact on the carrying value of property, plant and equipment and
      depreciation and depletion charges                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Mineral resources and reserves are estimated by
      professional geologists and engineers in accordance with recognized
      industry, professional and regulatory standards. These estimates require
      inputs such as future metal prices, future operating costs, and various
      technical, geological, engineering and construction parameters. Changes in
      any of these inputs could cause a significant change in the estimated
      resources and reserves, which in turn could have a material effect on the
      carrying value of property, plant and equipment and depreciation and
      depletion charges.

22

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|4. | Critical accounting estimates and judgments
      (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | (a) Mineral resources and reserves estimates and
      the impact on the carrying value of property, plant and equipment and
      depreciation and depletion charges (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The carrying value of property, plant and equipment are
      considered in terms of the remaining useful life of the particular asset.
      These estimates are prepared by engineers in accordance with their
      knowledge and experience in the mining industry. Re-assessment of the
      remaining useful life could cause a significant change in the carrying
      value recorded for property, plant and equipment.                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Depreciation and depletion of mineral properties and mine
      infrastructure is calculated and charged to earnings on the
      unit-of-production method. Proven and probable mineral reserves as well as
      an allocation of mineral resources not yet included in the mineral
      reserves are used in the unit-of-production method. The allocation of
      mineral resources included in the calculation of depreciation and
      depletion is based on managements estimates of resources to be converted
      into economical mineable reserves over the life of the project based on
      historical project and industry data on similar ore bodies. Changes to the
      mineral reserves and resources will impact on the depreciation and
      depletion charges recorded in earnings.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | (b) Inventories and the allocation of ore
      development, indirect mining and overhead expenses to production and
      underground development costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Inventories are measured at the lower of cost or net
      realizable value. Net realizable value is the estimated selling price in
      the ordinary course of business less the estimated cost of completion and
      the estimated cost necessary to perform the sale. Production costs include
      allocated ore development and overhead expenses and constitute the cost of
      an inventory item. The determination of estimated selling prices,
      estimated completion and selling costs, and cost allocations are done by
      management in accordance with their knowledge and experience in the mining
      industry. Additional information obtained in the future might impact on
      the allocation of these expenses.                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | (c) Site reclamation obligations and the
      determination of accretion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Upon the completion of any mining activities, the Company
      will ordinarily be required to undertake environmental reclamation
      activities in accordance with local and/or industry standards. The
      estimated costs of these reclamation activities are dependent on labour
      costs, the environmental impact of the Company's operations, the
      effectiveness of the chosen reclamation techniques and applicable
      government environmental standards. Refer to note 17 for more details
      about assumptions used in estimating the future reclamation
    obligation.                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | (d) Share based payments expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | From time to time, the Company grants share purchase
      options to directors, employees, and service providers. The Company uses
      an option pricing model to estimate a value for these options. This model,
      and other models which are used to value options, require inputs such as
      expected volatility, expected life to exercise, and interest rates. Refer
      to note 18(b) for more details about the inputs used in valuing the share
      based payment expense.                                                                                                                                                                                                                                                                                                               

23

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|4. | Critical accounting estimates and judgments
      (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | (e) Valuation of equity components                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The Company from time to time may grant share purchase
      warrants as part of its capital raising and conclusion of business
      transactions. The Company uses an option pricing model to estimate a value
      for these warrants. This model, and other models which are used to value
      the warrants, require inputs such as expected volatility, expected life to
      exercise, and interest rates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | A compound financial instrument is a debt security with
      an embedded conversion option and requires the separate recognition of the
      liability and equity component. The fair value of the liability portion of
      the convertible bond was determined using a market interest rate for an
      equivalent debt instrument. This amount was recorded as a liability and
      the remainder of the proceeds was allocated to the conversion option and
      is recognized under contributed surplus. Refer to note 15(a) for more
      details about assumptions used in estimating the residual amount of the
      convertible debentures.                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | (f) Deferred income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Deferred income tax assets and liabilities are computed
      based on differences between the carrying amount of existing assets and
      liabilities on the statement of financial position and their corresponding
      tax values, using the substantively enacted income tax rates expected to
      apply to taxable income in the years in which those temporary differences
      are expected to be recovered or settled. Deferred income tax assets also
      result from unused loss carry forwards and other deductions. Deferred tax
      assets are recognized to the extent that they are considered more likely
      than not to be realized.                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | (g) Financial instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | If the value for a financial instrument cannot be
      obtained from an active market, the Company establishes fair value by
      using valuation techniques. These include the use of recent arms length
      transactions, reference to other instruments that are substantially the
      same, discounted cash flow analysis, estimated market related interest
      rates, and option pricing models refined to reflect the issuers specific
      circumstances.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | (h) Mine development and production start
    date                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Development of a project commence following the positive
      evaluation of the project feasibility and a conscious development decision
      by the Company. Various factors, including capital and production costs
      estimates, future metal prices as well as the extraction method of the
      minerals, might impact on the feasibility of a project during the
      development phase which are continuously evaluated and monitored as new
      information becomes available. The production start date is determined by
      evaluating the construction status of a project with specific reference to
      the availability of the major components required to commence with
      uninterrupted production of saleable metal. This decision is made prior to
      completion of the construction phase taking into account the various
      required technical performance levels of major asset components within the
      project. Subsequent events following the predetermined production start
      date is not taken into account.

24

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|5. | Cash and cash
equivalents
|-- | -------------------------

| |                                |  | December
      31 |  |  | December
      31 |  |  | January
      1 | 
| | ------------------------------ |  | ----------------- |  |  | ----------------- |  |  | --------------- | 
| |                                |  | 2011              |  |  | 2010              |  |  | 2010            | 
| |                                |  | $000             |  |  | $000             |  |  | $000           | 
| | Cash at bank and on hand       |  | 19,606            |  |  | 2,929             |  |  | 1,298           | 
| | Short-term bank
      deposits |  | 6,143             |  |  | 9,926             |  |  | 88,166          | 
| |                                |  | 25,749            |  |  | 12,855            |  |  | 89,464          | 

Short-term bank deposits are composed
of investments with maturity dates of three months or less, call accounts and
money market investments, which are available on 24 hour notice, and bankers
acceptances which are readily convertible to known cash amounts.

|6. | Trade and other
receivables
|-- | ---------------------------

| |                    |  | December
      31 |  |  | December
      31 |  |  | January
      1 | 
| | ------------------ |  | ----------------- |  |  | ----------------- |  |  | --------------- | 
| |                    |  | 2011              |  |  | 2010              |  |  | 2010            | 
| |                    |  | $000             |  |  | $000             |  |  | $000           | 
| | Trade receivables  |  | 9,566             |  |  | 3,949             |  |  | 385             | 
| | HST/VAT receivable |  | 4,097             |  |  | 4,808             |  |  | 3,388           | 
| | Other receivables  |  | 397               |  |  | 583               |  |  | 1,280           | 
| |                    |  | 14,060            |  |  | 9,340             |  |  | 5,053           | 

Trade and other receivables were fully
performing as of December 31, 2011.

|7. | Inventories
|-- | -----------

| |                            |  | December
      31 |  |  | December
      31 |  |  | January
      1 | 
| | -------------------------- |  | ----------------- |  |  | ----------------- |  |  | --------------- | 
| |                            |  | 2011              |  |  | 2010              |  |  | 2010            | 
| |                            |  | $000             |  |  | $000             |  |  | $000           | 
| | Stores and materials       |  | 4,699             |  |  | 3,534             |  |  | 735             | 
| | Unprocessed ore            |  | 2,437             |  |  | 3,220             |  |  | 19,481          | 
| | Precious metals in process |  | 20,556            |  |  | 11,686            |  |  | 6,096           | 
| |                            |  | 27,692            |  |  | 18,440            |  |  | 26,312          | 

| |             |  | December
      31 |  |  | December
      31 |  |  | January
      1 | 
| | ----------- |  | ----------------- |  |  | ----------------- |  |  | --------------- | 
| |             |  | 2011              |  |  | 2010              |  |  | 2010            | 
| |             |  | $000             |  |  | $000             |  |  | $000           | 
| | Non-current |  | 7,998             |  |  | 6,880             |  |  | -               | 
| | Current     |  | 19,694            |  |  | 11,560            |  |  | 26,312          | 
| |             |  | 27,692            |  |  | 18,440            |  |  | 26,312          | 

Cost of operations recognized in the
statement of income consists of direct and indirect mining costs, overhead
costs, royalties, depreciation of mining equipment and depletion of mineral
properties. The cost of inventories recognized as an expense and included in
cost of operations was $119.8 million (2010: $75.8 million).

Inventories include precious metals in
process of $2.1 million carried at net realizable value (2010: $nil).

Non-current inventories comprise of
gold in lock-up in metallurgical plants which are expected to be realized upon
plant clean-up or dismantling.

25

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|8. | Available-for-sale financial
  assets
|-- | -------------------------------------

| |                                                      |  | December
      31 |  |  | December
      31 |   |  | January
      1 | 
| | ---------------------------------------------------- |  | ----------------- |  |  | ----------------- | - |  | --------------- | 
| |                                                      |  | 2011              |  |  | 2010              |   |  | 2010            | 
| |                                                      |  | $000             |  |  | $000             |   |  | $000           | 
| | Balance, beginning of the year                       |  | -                 |  |  | 4,961             |   |  | 900             | 
| | Fair value upon (disposal) addition                  |  | -                 |  |  | (5,564            | ) |  | 1,035           | 
| | Unrealized fair value gain until disposal
      date |  | -                 |  |  | 603               |   |  | 3,026           | 
| | Balance, end of
      the year                       |  | -                 |  |  | -                 |   |  | 4,961           | 

The Company disposed of its entire
investment in Kryso Resources Plc (Kryso) during June 2010 for net proceeds of
$3.5 million (GBP2.2 million). At disposal date the carrying value of the
investment was $5.6 million (GBP3.6 million), which was calculated based on the
closing price of GBP15.15 pence per share and an exchange rate of
$1.55:1GBP.

The Company reclassified unrealized
fair value gains of $2.6 million (GBP1.7 million) and $1.1 million foreign
exchange losses ($1.5 million net) from other comprehensive income to current
loss, resulting in a net realized gain of $0.5 million (GBP0.3 million) (refer
note 21) and $1.1 million foreign exchange loss being recorded in current
loss.

|9. | Financial assets at fair value through profit or
      loss
|-- | -----------------------------------------------------------

| |                                                       |  | December
      31 |  |  | December
      31 |   |  | January
      1 | 
| | ----------------------------------------------------- |  | ----------------- |  |  | ----------------- | - |  | --------------- | 
| |                                                       |  | 2011              |  |  | 2010              |   |  | 2010            | 
| |                                                       |  | $000             |  |  | $000             |   |  | $000           | 
| | Balance, beginning of the year                        |  | -                 |  |  | 207               |   |  | 80              | 
| | Unrealized fair value (loss) gain until disposal date |  | -                 |  |  | (33               | ) |  | 127             | 
| | Disposal at fair value                                |  | -                 |  |  | (174              | ) |  | -               | 
| | Balance, end of
      the year                        |  | -                 |  |  | -                 |   |  | 207             | 

In June 2010 the Company disposed of
its investment in Kryso warrants, carried at its fair value of $0.17 million,
for net proceeds of $0.1 million (GBP0.07 million), resulting in a net loss of
$0.07 million (GBP0.04 million) recognized in current loss (refer note 21).

|10. | Related party balances and
  transactions
|--- | -----------------------------------------

Related party transactions are recorded
at the exchange amount which is the amount of consideration paid or
received.

Loan due from related party

| |                                               |  | December
      31 |   |  | December
      31 |  |  | January
      1 | 
| | --------------------------------------------- |  | ----------------- | - |  | ----------------- |  |  | --------------- | 
| |                                               |  | 2011              |   |  | 2010              |  |  | 2010            | 
| |                                               |  | $000             |   |  | $000             |  |  | $000           | 
| | Balance, beginning of the year                |  | 13,372            |   |  | -                 |  |  | -               | 
| | Cash advances                                 |  | 4,506             |   |  | 1,072             |  |  | -               | 
| | Transfer from restricted cash (note
      12) |  | -                 |   |  | 11,737            |  |  | -               | 
| | Interest earned (note 20(b))                  |  | 1,000             |   |  | 227               |  |  | -               | 
| | Impairment provision                          |  | (13,680           | ) |  | -                 |  |  | -               | 
| | Foreign
      exchange                        |  | (1,414            | ) |  | 336               |  |  | -               | 
| | Balance, end of the year                      |  | 3,784             |   |  | 13,372            |  |  | -               | 

26

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|10. | Related party balances and transactions
      (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | In 2007 the Company completed a series of transactions in
      order to achieve compliance with South Africas post-apartheid legislation
      designed to facilitate participation by historical disadvantages South
      Africans (HDSAs) in the mining industry. This legislation is reflected
      in the South African Mining Charter and required the Company to achieve a
      target of 26% ownership by HDSA in the Companys South African projects by
      2014. In order to comply with these requirements, Tranter Burnstone (Pty)
      Ltd (Tranter), an HDSA company, acquired 19,938,650 Great Basin treasury
      common shares for $38 million (ZAR260 million) which, because it involved
      indirect economic participation in both the Hollister and Burnstone
      projects, was deemed equivalent to a 26% interest in Burnstone. Tranter
      borrowed ZAR200 million ($27 million) from Investec Bank Ltd (Investec),
      a South African bank, to partly fund the purchase of the shares and the
      Company gave a loan guarantee in favour of Tranter limited of ZAR140 ($19
      million) million. A loan of $15.5 million (ZAR 123 million) was advanced
      to Tranter under the guarantee agreement to enable Tranter to meet its
      payment obligation to Investec.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | As a result of this loan the remaining guarantee
      available, as at December 31, 2011, is $2.2 million (ZAR17 million) (refer
      note 16(a)).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | Any advances to Tranter are due to be repaid in
      installments from 2014 to 2017, with interest accruing at the South
      African prime interest rate plus 2%. Security for any advances made
      includes a second charge against any shares of the Company held by Tranter
      (second to Investec).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | The fair value of the security, based on the prolonged
      decline in the Companys share price, was deemed inadequate and the
      Company raised a fair value impairment provision of $13.7 million (ZAR100
      million) against the loan to provide for its exposure to potential future
      repayment losses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|11. | Property, plant and
equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

| |                                    |  |            |   |  |                |   |  |           |   |  | Assets       |   |  |        |   |  |         |  
| | ---------------------------------- |  | ---------- | - |  | -------------- | - |  | --------- | - |  | ------------ | - |  | ------ | - |  | ------- | -
| |                                    |  | Mineral    |   |  | Mine           |   |  | Mine      |   |  | under        |   |  | Other  |   |  |         |  
| |                                    |  | properties |   |  | infrastructure |   |  | equipment |   |  | construction |   |  | assets |   |  | Total   |  
| |                                    |  | $000      |   |  | $000          |   |  | $000     |   |  | $000        |   |  | $000  |   |  | $000   |  
| |                                    |  |            |   |  |                |   |  |           |   |  |              |   |  |        |   |  |         |  
| | At January 1, 2010                 |  |            |   |  |                |   |  |           |   |  |              |   |  |        |   |  |         |  
| | Cost                               |  | 177,092    |   |  | 16,657         |   |  | 36,457    |   |  | 139,792      |   |  | 10,037 |   |  | 380,035 |  
| | Accumulated depreciation           |  | (9,285     | ) |  | (192           | ) |  | (8,999    | ) |  | -            |   |  | (2,278 | ) |  | (20,754 | )
| |                                    |  |            |   |  |                |   |  |           |   |  |              |   |  |        |   |  |         |  
| | Net book value                     |  | 167,807    |   |  | 16,465         |   |  | 27,458    |   |  | 139,792      |   |  | 7,759  |   |  | 359,281 |  
| |                                    |  |            |   |  |                |   |  |           |   |  |              |   |  |        |   |  |         |  
| | Year ended December 31,
      2010 |  |            |   |  |                |   |  |           |   |  |              |   |  |        |   | 
| | At January 1, 2010                 |  | 167,807    |   |  | 16,465         |   |  | 27,458    |   |  | 139,792      |   |  | 7,759  |   |  | 359,281 |  
| | Additions                          |  | 19,399     |   |  | 54             |   |  | 23,405    |   |  | 277,592      |   |  | 2,100  |   |  | 322,550 |  
| | Transfers                          |  | -          |   |  | 9,474          |   |  | -         |   |  | (9,474       | ) |  | -      |   |  | -       |  
| | Depletion and depreciation         |  | (6,158     | ) |  | (1,774         | ) |  | (8,231    | ) |  | -            |   |  | (645   | ) |  | (16,808 | )
| | Foreign exchange
      differences |  | 1,944      |   |  | (1,155         | ) |  | 1,767     |   |  | 27,345       |   |  | 450    |   |  | 30,351  |  
| | At
      December 31, 2010         |  | 182,992    |   |  | 23,064         |   |  | 44,399    |   |  | 435,255      |   |  | 9,664  |   |  | 695,374 |  

27

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|11. | Property, plant and equipment
  (continued)
|--- | -------------------------------------------

| |                                |  |            |   |  |                |   |  |           |   |  | Assets       |   |  |        |   |  |          |  
| | ------------------------------ |  | ---------- | - |  | -------------- | - |  | --------- | - |  | ------------ | - |  | ------ | - |  | -------- | -
| |                                |  | Mineral    |   |  | Mine           |   |  | Mine      |   |  | under        |   |  | Other  |   |  |          |  
| |                                |  | properties |   |  | infrastructure |   |  | equipment |   |  | construction |   |  | assets |   |  | Total    |  
| |                                |  | $000      |   |  | $000          |   |  | $000     |   |  | $000        |   |  | $000  |   |  | $000    |  
| | At December 31, 2010           |  |            |   |  |                |   |  |           |   |  |              |   |  |        |   |  |          |  
| | Cost                           |  | 197,723    |   |  | 24,958         |   |  | 62,049    |   |  | 435,255      |   |  | 12,549 |   |  | 732,534  |  
| | Accumulated depreciation       |  | (14,731    | ) |  | (1,894         | ) |  | (17,650   | ) |  | -            |   |  | (2,885 | ) |  | (37,160  | )
| | Net book value                 |  | 182,992    |   |  | 23,064         |   |  | 44,399    |   |  | 435,255      |   |  | 9,664  |   |  | 695,374  |  
| |                                |  |            |   |  |                |   |  |           |   |  |              |   |  |        |   |  |          |  
| | Year ended December 31, 2011   |  |            |   |  |                |   |  |           |   |  |              |   |  |        |   | 
| | At January 1, 2011             |  | 182,992    |   |  | 23,064         |   |  | 44,399    |   |  | 435,255      |   |  | 9,664  |   |  | 695,374  |  
| | Additions                      |  | 85         |   |  | 389            |   |  | 11,443    |   |  | 138,151      |   |  | 898    |   |  | 150,966  |  
| | Transfers                      |  | -          |   |  | 482,985        |   |  | -         |   |  | (482,985     | ) |  | -      |   |  | -        |  
| | Depletion and depreciation     |  | (5,354     | ) |  | (9,103         | ) |  | (9,634    | ) |  | -            |   |  | (1,508 | ) |  | (25,599  | )
| | Foreign exchange differences   |  | (12,869    | ) |  | (37,015        | ) |  | (6,077    | ) |  | (43,280      | ) |  | (1,287 | ) |  | (100,528 | )
| | At December 31,
      2011     |  | 164,854    |   |  | 460,320        |   |  | 40,131    |   |  | 47,141       |   |  | 7,767  |   |  | 720,213  |  
| |                                |  |            |   |  |                |   |  |           |   |  |              |   |  |        |   |  |          |  
| | At December 31, 2011           |  |            |   |  |                |   |  |           |   |  |              |   |  |        |   |  |          |  
| | Cost                           |  | 185,404    |   |  | 470,913        |   |  | 64,460    |   |  | 47,141       |   |  | 11,959 |   |  | 779,877  |  
| | Accumulated
      depreciation |  | (20,550    | ) |  | (10,593        | ) |  | (24,329   | ) |  | -            |   |  | (4,192 | ) |  | (59,664  | )
| | Net book value                 |  | 164,854    |   |  | 460,320        |   |  | 40,131    |   |  | 47,141       |   |  | 7,767  |   |  | 720,213  |  

Mine infrastructure and equipment
include borrowing costs of $2.5 million (2010: $30.6 million) which were
capitalized during the year (refer note 20).

Mineral properties of $119.5 million
consisting of the Hollister, Esmeralda and Burnstone properties and fixed assets
of $554 million have been pledged as security for the term loans (refer note
15(d) and 15(e)).

Mining equipment includes leased assets
with net book values as set out below. These assets are pledged as security for
the related finance leases (refer note 15(b)).

| |                                |  | December
      31 |   |  | December
      31 |   |  | January
      1 |  
| | ------------------------------ |  | ----------------- | - |  | ----------------- | - |  | --------------- | -
| |                                |  | 2011              |   |  | 2010              |   |  | 2011            |  
| |                                |  | $000             |   |  | $000             |   |  | $000           |  
| | Cost                           |  | 5,451             |   |  | 10,250            |   |  | 2,545           |  
| | Accumulated
      depreciation |  | (981              | ) |  | (1,211            | ) |  | (392            | )
| | Net book value                 |  | 4,470             |   |  | 9,039             |   |  | 2,153           |  

Mineral properties

| | Mineral properties
      consist of the following: |  |             |  |  |             |  |  |           | 
| | -------------------------------------------------- |  | ----------- |  |  | ----------- |  |  | --------- | 
| |                                                    |  | December 31 |  |  | December 31 |  |  | January 1 | 
| |                                                    |  | 2011        |  |  | 2010        |  |  | 2011      | 
| |                                                    |  | $000       |  |  | $000       |  |  | $000     | 
| | Mineral properties subject to
      depletion      |  | 116,287     |  |  | 134,582     |  |  | 138,624   | 
| | Mineral
      properties not subject to depletion  |  | 48,567      |  |  | 48,410      |  |  | 29,183    | 
| |                                                    |  | 164,854     |  |  | 182,992     |  |  | 167,807   | 

28

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|11. | Property, plant and equipment
  (continued)
|--- | -------------------------------------------

Mineral properties
(continued)

The components of mineral properties
subject to depletion on the consolidated statements of financial position are as
follows:

| |                                |  | Hollister |   |  | Burnstone |   |  | December
      31 |  
| | ------------------------------ |  | --------- | - |  | --------- | - |  | ----------------- | -
| |                                |  | Property  |   |  | Property  |   |  | 2011              |  
| |                                |  | $000     |   |  | $000     |   |  | $000             |  
| | Balance, beginning of the year |  | 50,668    |   |  | 83,914    |   |  | 134,582           |  
| | Depletion                      |  | (5,192    | ) |  | (162      | ) |  | (5,354            | )
| | Foreign exchange               |  | 995       |   |  | (13,936   | ) |  | (12,941           | )
| | Balance, end of
      the year |  | 46,471    |   |  | 69,816    |   |  | 116,287           |  

Depletion of $1.8 million relating to
stockpiled tons and ounces in process was capitalized to the value of the
unprocessed ore and precious metals in process (2010: $1.7 million) (refer note
7).

The components of mineral properties not subject to depletion on the
  consolidated statements of financial position are as follows:

| |                                |  | Tanzanian  |  |  | Esmeralda |  |  |       |  |  | December
      31 | 
| | ------------------------------ |  | ---------- |  |  | --------- |  |  | ----- |  |  | ----------------- | 
| |                                |  | Properties |  |  | Property  |  |  | Other |  |  | 2011              | 
| |                                |  | $000      |  |  | $000     |  |  | $000 |  |  | $000             | 
| | Balance, beginning of the year |  | 45,127     |  |  | 3,074     |  |  | 209   |  |  | 48,410            | 
| | Reclamation asset              |  | -          |  |  | 85        |  |  | -     |  |  | 85                | 
| | Foreign exchange               |  | -          |  |  | 72        |  |  | -     |  |  | 72                | 
| | Balance, end of
      the year |  | 45,127     |  |  | 3,231     |  |  | 209   |  |  | 48,567            | 

The Company disposed of its investment
in Kurils Resources during the 2011 year. The mineral property had a zero value
ascribed since acquisition.

The Company entered into an agreement
in June 2011 whereby it granted Shanta Gold Limited (Shanta) the option,
following the fulfillment of the conditions precedent, to acquire an 80%
interest in the Companys wholly-owned subsidiary, Shield Resources Limited
(Shield), who is the holder of various prospecting licenses in the Lupa region
of Tanzania.

In consideration for providing Shanta
with the exclusive right to acquire the shares in Shield, Shanta is obliged to
issue ordinary shares to the value of US$7 million and Shanta warrants to the
value of US$7 million (at an implied value of 35p each) to the Company.
Furthermore Shanta has to fund a US$12 million exploration program, spread over
a period of 3 years ending December 31, 2013 and make additional payments
depending on the number of gold ounce resources discovered. Shanta will acquire
the 80% equity interest in Shield upon the completion of the exploration
program.

Certain conditions precedent to affect
the transaction remained outstanding on December 31, 2011 and is expected to be
satisfied during the second quarter of 2012.

29

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|12. | Restricted cash
|--- | ---------------

| |                                |  | December
      31 |  |  | December
      31 |   |  | January
      1 |  
| | ------------------------------ |  | ----------------- |  |  | ----------------- | - |  | --------------- | -
| |                                |  | 2011              |  |  | 2010              |   |  | 2010            |  
| |                                |  | $000             |  |  | $000             |   |  | $000           |  
| | Balance, beginning of the year |  | -                 |  |  | 2,439             |   |  | 4,171           |  
| | Payment                        |  | -                 |  |  | 5,882             |   |  | -               |  
| | Interest earned                |  | -                 |  |  | 322               |   |  | 352             |  
| | Fair value adjustment          |  | -                 |  |  | 2,423             |   |  | (2,342          | )
| | Loan advanced (note 10)        |  | -                 |  |  | (11,737           | ) |  | -               |  
| | Foreign exchange               |  | -                 |  |  | 671               |   |  | 258             |  
| | Balance, end of the year       |  | -                 |  |  | -                 |   |  | 2,439           |  

Restricted cash represented cash on a
security call deposit with Investec which has been utilized in 2010 for the loan
to Tranter made under the guarantee provided by the Company (refer note 10 and
note 16(a)).

|13. | Other assets                                                                        
|--- | ------------------------------------------------------------------------------------
|    |                                                                                     
|    | Other assets consist of reclamation deposits and the
      continuity is as follows:

| |                                             |  | December
      31 |   |  | December
      31 |   |  | January
      1 |  
| | ------------------------------------------- |  | ----------------- | - |  | ----------------- | - |  | --------------- | -
| |                                             |  | 2011              |   |  | 2010              |   |  | 2010            |  
| |                                             |  | $000             |   |  | $000             |   |  | $000           |  
| | Balance, beginning of the year              |  | 4,719             |   |  | 4,590             |   |  | 2,887           |  
| | Guarantee security  Burnstone Property     |  | 315               |   |  | 144               |   |  | 188             |  
| | Investments  Burnstone
      Property      |  | 276               |   |  | 354               |   |  | 244             |  
| | Reclamation Bond  Esmeralda Property       |  | -                 |   |  | -                 |   |  | 1,362           |  
| | Reclamation Bond  Hollister
      Property |  | 273               |   |  | 84                |   |  | -               |  
| | Hypothecation lifted                        |  | -                 |   |  | (400              | ) |  | -               |  
| | Foreign exchange                            |  | (256              | ) |  | (53               | ) |  | (91             | )
| | Balance, end of
      the year              |  | 5,327             |   |  | 4,719             |   |  | 4,590           |  

The components of reclamation deposits
on the consolidated statements of financial position are as follows:

| |                                    |  | Hollister    |  |  | Burnstone    |   |  | Esmeralda    |  |  |             |  
| | ---------------------------------- |  | ------------ |  |  | ------------ | - |  | ------------ |  |  | ----------- | -
| |                                    |  | Property     |  |  | Property     |   |  | Property     |  |  | December 31 |  
| |                                    |  | (note 13(a)) |  |  | (note 13(b)) |   |  | (note 13(c)) |  |  | 2011        |  
| |                                    |  | $000        |  |  | $000        |   |  | $000        |  |  | $000       |  
| | Balance, beginning of the year     |  | 1,823        |  |  | 1,709        |   |  | 1,187        |  |  | 4,719       |  
| | Guarantee security and investments |  | -            |  |  | 591          |   |  | -            |  |  | 591         |  
| | Reclamation bond                   |  | 273          |  |  | -            |   |  | -            |  |  | 273         |  
| | Foreign exchange                   |  | 49           |  |  | (332         | ) |  | 27           |  |  | (256        | )
| | Balance, end of the year           |  | 2,145        |  |  | 1,968        |   |  | 1,214        |  |  | 5,327       |  

(a) Hollister Property

As at December 31, 2011, the Company
had posted $2.1 million (US$2.1 million) in reclamation deposits with the United
States Bureau of Land Management in respect of exploration drilling and trial
mining on certain areas of the Hollister Property (2010: $1.8 million (US$1.8
million)).

30

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|13. | Other assets (continued)                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | (b) Burnstone Property                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | As at December 31, 2011, the Company placed investments
      and deposits of $2 million (ZAR15.6 million) for guarantees of $3.9
      million (ZAR31 million) in favor of the South African Department of
      Mineral Resources for the reclamation of the Burnstone Property (2010:
      Investment and deposits of $1.7 million (ZAR11.3 million) for guarantees
      of $2 million (ZAR13.1 million)).                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | (c) Esmeralda Property                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | As at December 31, 2011 the Company had posted cash
      surety and bonding of $1.2 million (US$1.2 million) in reclamation
      deposits with the Division of Environmental Protection of the Nevada
      States Department of Conservation and Natural Resources and the Forest
      Service of the United States Department in respect of future reclamation
      of the Esmeralda Property (2010: $1.2 million (US$1.2 million)).
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                           
|14. | Trade and other
payables                                                                                                                                                                                                                                                                                                                                                                                                                  

| |                    |  | December
      31 |  |  | December
      31 |  |  | January
      1 | 
| | ------------------ |  | ----------------- |  |  | ----------------- |  |  | --------------- | 
| |                    |  | 2011              |  |  | 2010              |  |  | 2010            | 
| |                    |  | $000             |  |  | $000             |  |  | $000           | 
| | Trade payables     |  | 14,079            |  |  | 9,165             |  |  | 7,317           | 
| | Accrued expenses   |  | 28,645            |  |  | 50,875            |  |  | 21,077          | 
| | Leave liability    |  | 2,434             |  |  | 1,691             |  |  | 812             | 
| | Gold sales advance |  | 10,880            |  |  | -                 |  |  | -               | 
| |                    |  | 56,038            |  |  | 61,731            |  |  | 29,206          | 

The Company negotiated an unsecured
$14.8 million (US$15 million) gold sales advance with its bullion off taker, RK
Finance Trust 1, during October 2011. The advance bears interest at an effective
interest rate of 11.29% (refer note 20(b)) and the remaining balance will be
repaid in 4 monthly installments over the period ending April 2012.

|15. | Long term debt
|--- | --------------

| | Non-current
      portion of long term debt |  |             |  |  |             |  |  |           | 
| | ------------------------------------------- |  | ----------- |  |  | ----------- |  |  | --------- | 
| |                                             |  | December 31 |  |  | December 31 |  |  | January 1 | 
| |                                             |  | 2011        |  |  | 2010        |  |  | 2010      | 
| |                                             |  | $ 000      |  |  | $ 000      |  |  | $ 000    | 
| | Convertible debentures (note15(a))          |  | 97,669      |  |  | 91,677      |  |  | 86,304    | 
| | Finance lease liabilities (note 15(b))      |  | 71          |  |  | 436         |  |  | 644       | 
| | Term loan I (note 15(d))                    |  | 125,879     |  |  | 63,949      |  |  | -         | 
| | Term loan II
      (note 15(e))             |  | 38,456      |  |  | -           |  |  | -         | 
| |                                             |  | 262,075     |  |  | 156,062     |  |  | 86,948    | 

31

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|15. | Long term debt (continued)
|--- | --------------------------

Current portion of long term
debt

| |                                        |  | December
      31 |  |  | December
      31 |  |  | January
      1 | 
| | -------------------------------------- |  | ----------------- |  |  | ----------------- |  |  | --------------- | 
| |                                        |  | 2011              |  |  | 2010              |  |  | 2010            | 
| |                                        |  | $ 000            |  |  | $ 000            |  |  | $ 000          | 
| | Convertible debentures (note 15(a))    |  | 843               |  |  | -                 |  |  | -               | 
| | Finance lease liabilities (note 15(b)) |  | 2,902             |  |  | 6,955             |  |  | 724             | 
| | Senior secured notes (note 15(c))      |  | -                 |  |  | 40,101            |  |  | 43,044          | 
| | Term loan I (note 15(d))               |  | 280               |  |  | 6,460             |  |  | -               | 
| | Term loan II (note 15(e))              |  | 16,346            |  |  | -                 |  |  | -               | 
| |                                        |  | 20,371            |  |  | 53,516            |  |  | 43,768          | 

The continuity of long term debt is as
follows:

| |                                         |  | December
      31 |   |  | December
      31 |   |  | January
      1 |  
| | --------------------------------------- |  | ----------------- | - |  | ----------------- | - |  | --------------- | -
| |                                         |  | 2011              |   |  | 2010              |   |  | 2010            |  
| |                                         |  | $ 000            |   |  | $ 000            |   |  | $ 000          |  
| | Balance, beginning of the year          |  | 209,578           |   |  | 130,716           |   |  | 36,204          |  
| | New debt                                |  | 135,321           |   |  | 75,942            |   |  | 91,045          |  
| | New leases                              |  | 1,989             |   |  | 7,261             |   |  | -               |  
| | Transaction cost                        |  | (6,525            | ) |  | (3,707            | ) |  | (6,594          | )
| | Repayment of debt and interest          |  | (94,010           | ) |  | (25,092           | ) |  | (918            | )
| | Settlement loss on senior secured notes |  | 8,817             |   |  | -                 |   |  | -               |  
| | Amortized transaction cost              |  | 1,231             |   |  | 505               |   |  | -               |  
| | Interest expense                        |  | 25,476            |   |  | 30,406            |   |  | 17,077          |  
| | Foreign exchange                        |  | 569               |   |  | (6,453            | ) |  | (6,098          | )
| | Balance, end of
      the year          |  | 282,446           |   |  | 209,578           |   |  | 130,716         |  

Aggregate future payments, inclusive
of interest

| |                                        |  |         |  |  | Less
      than 1 |  |  |             |  |  | More
      than | 
| | -------------------------------------- |  | ------- |  |  | ----------------- |  |  | ----------- |  |  | --------------- | 
| |                                        |  | Total   |  |  | year              |  |  | 1  5 years |  |  | 5 years         | 
| |                                        |  | $ 000  |  |  | $ 000            |  |  | $ 000      |  |  | $ 000          | 
| | Convertible debentures (note 15(a))    |  | 156,438 |  |  | 10,120            |  |  | 146,318     |  |  | -               | 
| | Finance lease liabilities (note 15(b)) |  | 3,061   |  |  | 2,980             |  |  | 81          |  |  | -               | 
| | Term loan I (note 15(d))               |  | 145,503 |  |  | 6,313             |  |  | 139,190     |  |  | -               | 
| | Term loan II (note
      15(e))        |  | 59,442  |  |  | 18,650            |  |  | 40,792      |  |  | -               | 
| |                                        |  | 364,444 |  |  | 38,063            |  |  | 326,381     |  |  | -               | 

32

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|15. | Long term debt (continued)
|--- | --------------------------

(a) Convertible debentures

| |                                         |  | December
      31 |   |  | December
      31 |   |  | January
      1 |  
| | --------------------------------------- |  | ----------------- | - |  | ----------------- | - |  | --------------- | -
| |                                         |  | 2011              |   |  | 2010              |   |  | 2010            |  
| |                                         |  | $000             |   |  | $000             |   |  | $000           |  
| | Balance, beginning of the year          |  | 91,677            |   |  | 86,304            |   |  | -               |  
| | Principal amount                        |  | -                 |   |  | -                 |   |  | 126,500         |  
| | Transaction cost                        |  | -                 |   |  | -                 |   |  | (6,594          | )
| | Equity
      component (note 18(d))     |  | -                 |   |  | -                 |   |  | (35,455         | )
| | Liability component                     |  | 91,677            |   |  | 86,304            |   |  | 84,451          |  
| | Amortized interest expense (note 20(a)) |  | 16,955            |   |  | 15,886            |   |  | 1,853           |  
| | Interest payments                       |  | (10,120           | ) |  | (10,513           | ) |  | -               |  
| | Balance, end of
      the year          |  | 98,512            |   |  | 91,677            |   |  | 86,304          |  

| |             |  | December
      31 |  |  | December
      31 |  |  | January
      1 | 
| | ----------- |  | ----------------- |  |  | ----------------- |  |  | --------------- | 
| |             |  | 2011              |  |  | 2010              |  |  | 2010            | 
| |             |  | $000             |  |  | $000             |  |  | $000           | 
| | Non-current |  | 97,669            |  |  | 91,677            |  |  | 86,304          | 
| | Current     |  | 843               |  |  | -                 |  |  | -               | 
| |             |  | 98,512            |  |  | 91,677            |  |  | 86,304          | 

An aggregate of $126.5 million
principal amount of 8% senior unsecured convertible debentures at a price of
$1,000 per Debenture were issued on November 12, 2009. The Debentures mature on
November 30, 2014 (the Maturity date) and bear interest at the rate of 8% per
annum. Interest is payable semi-annually in arrears on May 30 and November 30 of
each year. The Debentures are direct senior unsecured obligations of the Company
and are guaranteed by certain of the Companys subsidiaries.

Holders may convert their Debentures
into Common Shares at any time prior to maturity based on an initial conversion
ratio of 465.1163 Common Shares per $1,000 principal amount of Debentures
(equivalent to an initial conversion price of $2.15 per Common Share).

The Debentures may not be redeemed by
the Company prior to November 30, 2012. From November 30, 2012 to the Maturity
Date, the Company may redeem all or a portion of the Debentures at a price equal
to 100% of the principal amount being redeemed, plus accrued and unpaid
interest, if any, if the weighted average trading price of the Common Shares
exceed 135% of the conversion price for 20 consecutive trading days.

The fair value of the liability
component and the equity component were calculated on issuance of the
debentures. The fair value of the liability component, included in long term
borrowings, was calculated using an estimated market related interest rate of
16.5%. The residual amount, representing the value of the equity component, is
included in shareholders equity in contributed surplus (refer note 18(d)). The
liability component continues to be presented on the amortized cost basis, until
extinguished on conversion or maturity of the debentures. The equity component
is calculated upon the issuance of the debentures and is not changed in
subsequent periods.

33

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|15. | Long term debt (continued)
|--- | --------------------------

(b) Finance lease
liabilities

| |                                |  | December
      31 |   |  | December
      31 |   |  | January
      1 |  
| | ------------------------------ |  | ----------------- | - |  | ----------------- | - |  | --------------- | -
| |                                |  | 2011              |   |  | 2010              |   |  | 2010            |  
| |                                |  | $000             |   |  | $000             |   |  | $000           |  
| | Balance, beginning of the year |  | 7,391             |   |  | 1,368             |   |  | 2,437           |  
| | Principal debt amount          |  | 1,989             |   |  | 7,261             |   |  | -               |  
| | Interest expense (note 20(a))  |  | 990               |   |  | 598               |   |  | 120             |  
| | Payments                       |  | (6,511            | ) |  | (2,241            | ) |  | (918            | )
| | Foreign exchange               |  | (886              | ) |  | 405               |   |  | (271            | )
| | Balance, end of
      the year |  | 2,973             |   |  | 7,391             |   |  | 1,368           |  

| |             |  | December
      31 |  |  | December
      31 |  |  | January
      1 | 
| | ----------- |  | ----------------- |  |  | ----------------- |  |  | --------------- | 
| |             |  | 2011              |  |  | 2010              |  |  | 2010            | 
| |             |  | $000             |  |  | $000             |  |  | $000           | 
| | Non-current |  | 71                |  |  | 436               |  |  | 644             | 
| | Current     |  | 2,902             |  |  | 6,955             |  |  | 724             | 
| |             |  | 2,973             |  |  | 7,391             |  |  | 1,368           | 

During 2008 the Company financed site
equipment for its Nevada operations through a finance lease agreement with
Sandvik Customer Finance LLC. The principal debt amount, plus interest at 6.5%,
was repaid in 36 equal installments, with the final installment payment made in
October 2011.

During 2011, the Company continued to
finance site equipment for its Burnstone Property through finance lease
agreements with Sandvik Mining and Construction RSA (Proprietary) Limited. The
principal amounts are being repaid in 12 equal installments and interest is
charged at 22.4% on outstanding capital.

The finance leases are collateralized
by the leased assets which had a carrying value of $4.5 million at December 31,
2011 (2010: $9 million) (refer note 11).

(c) Senior secured notes

| |                                               |  | December
      31 |   |  | December
      31 |   |  | January
      1 |  
| | --------------------------------------------- |  | ----------------- | - |  | ----------------- | - |  | --------------- | -
| |                                               |  | 2011              |   |  | 2010              |   |  | 2010            |  
| |                                               |  | $000             |   |  | $000             |   |  | $000           |  
| | Balance, beginning of the year                |  | 40,101            |   |  | 43,044            |   |  | 33,767          |  
| | Early settlement of 6,925 notes               |  | -                 |   |  | (8,479            | ) |  | -               |  
| | Settlement of 3,000 notes                     |  | -                 |   |  | (3,859            | ) |  | -               |  
| | Settlement of 41,575 notes                    |  | (50,533           | ) |  | -                 |   |  | -               |  
| | Settlement loss                               |  | 8,817             |   |  | -                 |   |  | -               |  
| | Transaction fees (note 20(a))                 |  | -                 |   |  | (243              | ) |  | -               |  
| | Amortized interest expense
      (note 20(a)) |  | 2,049             |   |  | 12,214            |   |  | 15,104          |  
| | Foreign exchange                              |  | (434              | ) |  | (2,576            | ) |  | (5,827          | )
| | Balance, end of the year                      |  | -                 |   |  | 40,101            |   |  | 43,044          |  

34

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|15. | Long term debt (continued)
|--- | --------------------------

(c) Senior secured notes
(continued)

| |             |  | December
      31 |  |  | December
      31 |  |  | January
      1 | 
| | ----------- |  | ----------------- |  |  | ----------------- |  |  | --------------- | 
| |             |  | 2011              |  |  | 2010              |  |  | 2010            | 
| |             |  | $000             |  |  | $000             |  |  | $000           | 
| | Non-current |  | -                 |  |  | -                 |  |  | -               | 
| | Current     |  | -                 |  |  | 40,101            |  |  | 43,044          | 
| |             |  | -                 |  |  | 40,101            |  |  | 43,044          | 

On December 12, 2008, the Company
closed a senior secured note financing, issuing a total of 51,500 units and
raising gross proceeds of US$51.5 million which netted approximately $39 million
(US$32 million) following prepayment of 24 months of interest and other costs of
the offering. Each unit consisted of a senior secured note (a note) in the
principal amount of US$1,000 (principal) and 350 common share purchase
warrants (refer note 18(c)(i)).

The notes carried interest at 14% per
annum and were guaranteed on a joint and several basis by all of the Companys
Nevada subsidiaries and were collateralized by their assets, being the Hollister
Property and all other Nevada assets and matured at 120% of principal.

The notes contained a put option
whereby the holder could put the notes to the Company for repayment after
December 12, 2010 with all unpaid notes maturing on December 12, 2011.

The
  Company successfully negotiated the cancellation of the put option on 29,500
  notes and settled 6,925 notes in May 2010 at a nominal loss. The $8.5 million
  (US$8.3 million) was settled by the issuance of 2,234,168 common shares to the
  note holders at a price of $1.75 (US$1.72) (refer note 23) and cash payments of
  $4.6 million (US$4.5 million).

Through a second agreement, the put
option on a further 12,000 notes was also cancelled in October 2010 and the
Company settled 3,000 notes in December 2010 at 127% of principal by the
issuance of 1,460,601 common shares to the note holders at a price of = $2.81
(refer note 23). The $4.1 million (US$4.1 million) payment consisted of the $3.9
million (US$3.8 million) settlement and the transaction fees of $0.2 (US$0.2
million). The 3,000 notes were settled at a nominal loss.

On March 15, 2011, the Company applied
$50.5 million (US$51.4 million) from the Term loan II proceeds towards full and
final settlement of the remaining 41,575 notes (refer note 15(e)). The liability
was settled at an accounting loss of $8.8 million (US$8.9 million) calculated as
the difference between the settlement amount on date of settlement and the
carrying value.

35

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|15. | Long term debt (continued)
|--- | --------------------------

(d) Term loan I

| |                                                        |  | December
      31 |   |  | December
      31 |   |  | January
      1 | 
| | ------------------------------------------------------ |  | ----------------- | - |  | ----------------- | - |  | --------------- | 
| |                                                        |  | 2011              |   |  | 2010              |   |  | 2010            | 
| |                                                        |  | $000             |   |  | $000             |   |  | $000           | 
| | Balance, beginning of the year                         |  | 70,409            |   |  | -                 |   |  | -               | 
| | Principal amount                                       |  | -                 |   |  | 50,224            |   |  | -               | 
| | Additional amount advanced                             |  | 66,511            |   |  | 25,718            |   |  | -               | 
| | Accrued interest (note 20(a))                          |  | 3,288             |   |  | 1,708             |   |  | -               | 
| | Facility arrangement fees                              |  | (4,346            | ) |  | (3,464            | ) |  | -               | 
| | Amortized facility arrangement fees (note
      20(a)) |  | 855               |   |  | 505               |   |  | -               | 
| | Repayment of debt and interest                         |  | (10,518           | ) |  | -                 |   |  | -               | 
| | Foreign exchange                                       |  | (40               | ) |  | (4,282            | ) |  | -               | 
| | Balance, end of the year                               |  | 126,159           |   |  | 70,409            |   |  | -               | 

| |             |  | December
      31 |  |  | December
      31 |  |  | January
      1 | 
| | ----------- |  | ----------------- |  |  | ----------------- |  |  | --------------- | 
| |             |  | 2011              |  |  | 2010              |  |  | 2010            | 
| |             |  | $000             |  |  | $000             |  |  | $000           | 
| | Non-current |  | 125,879           |  |  | 63,949            |  |  | -               | 
| | Current     |  | 280               |  |  | 6,460             |  |  | -               | 
| |             |  | 126,159           |  |  | 70,409            |  |  | -               | 

In May 2010, the Company closed a $50
million (US$47 million) term facility agreement (Term loan I) and subsequently
increased the facility by $25.7 million (US$25 million) in August 2010.

In December 2011, the Company
successfully negotiated the restructuring of Term loan I, thereby increasing the
facility to $152.6 million (US$150 million) and extending repayment to 2016.
$132 million (US$130 million) of the restructured facility was drawn down on
December 15, 2011 with an additional $20.3 million (US$20 million) available for
future draw down on December 31, 2011.

The restructured facility now has a
maximum term of 5 years from the December 15, 2011 draw down and capital will be
repaid in 16 quarterly consecutive installments, commencing on March 15, 2013.
The interest rate for Term loan I is linked to the US$ London interbank offered
rate (US$ LIBOR) at a premium of 4% above US$ LIBOR and is fixed on a
quarterly basis. Refer to note 27, Interest rate risk for details of the US$
LIBOR rate.

The Company has the option to early
settle the loan at no additional cost.

The Burnstone Property, its assets and
certain subsidiary guarantees serve as security for the facility (refer note
11).

Term loan I contains certain financial
covenants, customary to facilities of this nature, and includes borrower
tangible net worth, debt to equity ratio, debt service cover ratio, a loan life
cover ratio and available liquidity. As at December 31, 2011, the Company
assessed and complied with all covenants (refer note 26).

Refer to note 16(b)(i) for details of
the hedge structure entered into under the Term loan I agreement.

36

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|15. | Long term debt (continued)
|--- | --------------------------

(e) Term loan II

| |                                                        |  | December
      31 |   |  | December
      31 |  |  | January
      1 | 
| | ------------------------------------------------------ |  | ----------------- | - |  | ----------------- |  |  | --------------- | 
| |                                                        |  | 2011              |   |  | 2010              |  |  | 2010            | 
| |                                                        |  | $000             |   |  | $000             |  |  | $000           | 
| | Balance, beginning of the year                         |  | -                 |   |  | -                 |  |  | -               | 
| | Principal amount                                       |  | 68,810            |   |  | -                 |  |  | -               | 
| | Accrued interest (note 20(a))                          |  | 2,194             |   |  | -                 |  |  | -               | 
| | Facility arrangement fees                              |  | (2,179            | ) |  | -                 |  |  | -               | 
| | Amortized facility arrangement
      fees (note 20(a)) |  | 376               |   |  | -                 |  |  | -               | 
| | Repayment of debt and interest                         |  | (16,328           | ) |  | -                 |  |  | -               | 
| | Foreign exchange                                       |  | 1,929             |   |  | -                 |  |  | -               | 
| | Balance, end of
      the year                         |  | 54,802            |   |  | -                 |  |  | -               | 

| |             |  | December
      31 |  |  | December
      31 |  |  | January
      1 | 
| | ----------- |  | ----------------- |  |  | ----------------- |  |  | --------------- | 
| |             |  | 2011              |  |  | 2010              |  |  | 2010            | 
| |             |  | $000             |  |  | $000             |  |  | $000           | 
| | Non-current |  | 38,456            |  |  | -                 |  |  | -               | 
| | Current     |  | 16,346            |  |  | -                 |  |  | -               | 
| |             |  | 54,802            |  |  | -                 |  |  | -               | 

The Company closed a $69 million (US$70
million) term loan in March 2011 (Term loan II).

Term loan II is being repaid
  in 16 remaining quarterly consecutive installments. The interest rate for Term
  loan II is linked to the US$ LIBOR at a premium of 3.75% above US$ LIBOR and is
  fixed on a quarterly basis. Refer to note 27, Interest rate risk for details of
  the US$ LIBOR rate.

The Hollister project and a surety signed by the Company
  serve as security for the loan (refer note 11).

Term loan II contains certain financial
covenants customary to facilities of this nature and includes borrower tangible
net worth, debt to equity ratio, debt service cover ratio and a loan life cover
ratio. As at December 31, 2011, the Company assessed and complied with all
covenants (refer note 26).

Refer to note 16(b)(ii) for details of
the hedge structure entered into under the Term loan II agreement.

37

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|16. | Other liabilities
|--- | -----------------

Non-current portion of other
liabilities

| |                                              |  | December
      31 |  |  | December
      31 |  |  | January
      1 | 
| | -------------------------------------------- |  | ----------------- |  |  | ----------------- |  |  | --------------- | 
| |                                              |  | 2011              |  |  | 2010              |  |  | 2010            | 
| |                                              |  | $ 000            |  |  | $ 000            |  |  | $ 000          | 
| | Financial guarantee (note 16(a))             |  | -                 |  |  | 2,597             |  |  | -               | 
| | Zero cost collar program I (note 16(b)(i))   |  | 17,834            |  |  | 9,822             |  |  | -               | 
| | Zero cost collar program II (note 16(b)(ii)) |  | 13,363            |  |  | -                 |  |  | -               | 
| |                                              |  | 31,197            |  |  | 12,419            |  |  | -               | 

Current portion of other
liabilities

| |                                                    |  | December
      31 |  |  | December
      31 |  |  | January
      1 | 
| | -------------------------------------------------- |  | ----------------- |  |  | ----------------- |  |  | --------------- | 
| |                                                    |  | 2011              |  |  | 2010              |  |  | 2010            | 
| |                                                    |  | $ 000            |  |  | $ 000            |  |  | $ 000          | 
| |                                                    |  |                   |  |  |                   |  |  |                 | 
| | Financial guarantee (note 16(a))                   |  | 2,165             |  |  | -                 |  |  | -               | 
| | Zero cost collar program I (note 16(b)(i))         |  | 666               |  |  | 278               |  |  | -               | 
| | Zero cost collar
      program II (note 16(b)(ii)) |  | 219               |  |  | -                 |  |  | -               | 
| |                                                    |  | 3,050             |  |  | 278               |  |  | -               | 

The continuity of other liabilities is
as follows:

| |                                                              |  | December
      31 |   |  | December
      31 |   |  | January
      1 | 
| | ------------------------------------------------------------ |  | ----------------- | - |  | ----------------- | - |  | --------------- | 
| |                                                              |  | 2011              |   |  | 2010              |   |  | 2010            | 
| |                                                              |  | $ 000            |   |  | $ 000            |   |  | $ 000          | 
| | Balance, beginning of the year                               |  | 12,697            |   |  | -                 |   |  | -               | 
| | Fair value of guarantee (note 16(a))                         |  | -                 |   |  | 2,597             |   |  | -               | 
| | Fair value upon inception  ZCC I (note
      16(b)(i))      |  | 35,911            |   |  | 3,606             |   |  | -               | 
| | Fair value upon inception  ZCC II (note 16(b)(ii))          |  | 7,301             |   |  | -                 |   |  | -               | 
| | Fair value upon novation  ZCC I (note
      16(b)(i))       |  | (18,295           | ) |  | -                 |   |  | -               | 
| | Marked-to-market adjustments  ZCC I (note 16(b)(i))         |  | 7,688             |   |  | 6,860             |   |  | -               | 
| | Marked-to-market adjustments  ZCC II (note
      16(b)(ii)) |  | (11,502           | ) |  | -                 |   |  | -               | 
| | Foreign exchange                                             |  | 447               |   |  | (366              | ) |  | -               | 
| | Balance, end of the year                                     |  | 34,247            |   |  | 12,697            |   |  | -               | 

(a) Financial guarantee

In 2010, the Company, through
Southgold, provided a guarantee to lend up to $17.6 million (ZAR 140 million) to
Tranter to cover any shortfall in interest or principal repayments on the loan
outstanding by Tranter to Investec.

The fair value of the guarantee was
determined by reference to the Companys exposure to potential future losses
under the guarantee. The probability of future losses under the guarantee
agreement, and therefore the fair value of the guarantee, is dependent on the
estimated fair value of the security granted by Tranter on grant date of the
guarantee. Future assessments are not required unless a change to the
contractual relationship results in a change in fair value.

Refer to note 10 for details of the
loan advanced to Tranter.

38

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|16. | Other liabilities
(continued)
|--- | -----------------------------

| | (b) Derivatives
| | ---------------
| |                
| |                
| |                
| |                
| |                
| |                
| |                
| |                
| |                
| |                

| |                         |  | December
      9 |  |  | December
      31 | 
| | ----------------------- |  | ---------------- |  |  | ----------------- | 
| |                         |  | 2011             |  |  | 2010              | 
| | Gold price (per ounce)  |  | US$1,710         |  |  | US$1,419          | 
| | Risk free interest rate |  | 0.27% - 0.66%    |  |  | 0.25% - 1.34%     | 
| | Expected life           |  | 1 - 24 months    |  |  | 1 - 36 months     | 
| | Gold price volatility   |  | 19.93% - 32.52%  |  |  | 17.3% - 27%       | 

The fair value on inception, following
novation, and subsequent marked-to-market movement until December 31, 2011 were
calculated using an option pricing model with inputs based on the following
assumptions:

| |                         |  | December
      31 |  |  | December
      9  | 
| | ----------------------- |  | ----------------- |  |  | ----------------- | 
| |                         |  | 2011              |  |  | 2011              | 
| | Gold price (per ounce)  |  | US$1,564          |  |  | US$1,710          | 
| | Risk free interest rate |  | 0.33% - 1.285%    |  |  | 0.27% - 1.30%     | 
| | Expected life           |  | 1 - 60 months     |  |  | 0.5  60.5 months | 
| | Gold price volatility   |  | 20.35% - 32%      |  |  | 19.93% - 33.5%    | 

The pricing and delivery dates of the
put and call options are presented in note 16(b)(iv).

(ii) Zero cost collar program
II

In connection with Term loan II (refer
note 15(e)), the Company executed a ZCC hedge program for a total 117,500 gold
ounces over a period of four years, commencing in January 2012, on March 10,
2011.

39

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|16. | Other liabilities
(continued)
|--- | -----------------------------

(b) Derivatives (continued)

(ii) Zero cost collar program II
(continued)

The fair value upon inception and
subsequent marked-to-market movements were calculated using an option pricing
model with inputs based on the following assumptions:

| |                         |  | December
      31 |  |  | March 10        | 
| | ----------------------- |  | ----------------- |  |  | --------------- | 
| |                         |  | 2011              |  |  | 2011            | 
| | Gold price (per ounce)  |  | US$1,564          |  |  | US$1,410        | 
| | Risk free interest rate |  | 0.33% - 1.06%     |  |  | 0.40% - 1.91%   | 
| | Expected life           |  | 1 - 48 months     |  |  | 10 - 57 months  | 
| | Gold price volatility   |  | 20.35% - 30.76%   |  |  | 19.65% - 26.26% | 

The pricing and delivery dates of the
put and call options are presented in note 16(b)(iv).

(iii) Classification

The fair values of the derivative
instruments as of December 31, 2011 are as follows:

Asset
    
    
    Liability
    
    
    Netderivatives
    
    
    derivatives
    
    
    derivativesStatement of
    
    
    Estimated
    
    
    Estimated
    
    
    EstimatedDerivatives not designated as
    
    financial position
    
    
    fair value
    
    
    fair value
    
    
    fair valuehedging
      instruments
    
    classification
    
    
    $000
    
    
    $000
    
    
    $000Commodity contracts (gold)  ZCC 1
    
    Other liabilities
    
    
    16,900
    
    
    (34,734
    )
    
    (17,834
    )Commodity
      contracts (gold)  ZCC 2
    
    Other liabilities
    
    
    5,900
    
    
    (19,263
    )
    
    (13,363
    )22,800
    
    
    (53,997
    )
    
    (31,197
    )Commodity contracts (gold)  ZCC 1
    
    Current other liabilities
    
    
    11
    
    
    (677
    )
    
    (666
    )Commodity contracts (gold)  ZCC 2
    
    Current other liabilities
    
    
    26
    
    
    (245
    )
    
    (219
    )37
    
    
    (922
    )
    
    (885
    )


(iv) Gold delivery
positions

The Companys gold delivery positions
as at December 31, 2011 are as follows:

Put options

2012
    
    
    2013
    
    
    2014
    
    
    2015
    
    
    2016
    
    
    TotalStrike
      price
    
    
    AU oz
    
    
    AU oz
    
    
    AU oz
    
    
    AU oz
    
    
    AU oz
    
    
    AU ozZCC  1
    $
    900
    
    
    21,312
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    21,312ZCC  1
    $
    950
    
    
    -
    
    
    28,506
    
    
    -
    
    
    -
    
    
    -
    
    
    28,506ZCC  1
    $
    1,200
    
    
    -
    
    
    -
    
    
    34,008
    
    
    39,768
    
    
    41,880
    
    
    115,656ZCC  2
    $
    1,050
    
    
    10,500
    
    
    36,000
    
    
    36,000
    
    
    35,000
    
    
    -
    
    
    117,50031,812
    
    
    64,506
    
    
    70,008
    
    
    74,768
    
    
    41,880
    
    
    282,974


40

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|16. | Other liabilities
(continued)
|--- | -----------------------------

(b) Derivatives (continued)

(iv) Gold delivery positions
(continued)

Call options

Strike
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    2015
    
    
    2016
    
    
    Totalprice
    
    
    AU oz
    
    
    AU oz
    
    
    AU oz
    
    
    AU oz
    
    
    AU oz
    
    
    AU ozZCC  1
    $
    1,890
    
    
    10,656
    
    
    14,253
    
    
    17,004
    
    
    19,884
    
    
    20,940
    
    
    82,737ZCC  1
    $
    1,930
    
    
    10,656
    
    
    14,253
    
    
    17,004
    
    
    19,884
    
    
    20,940
    
    
    82,737ZCC  2
    $
    1,930
    
    
    10,500
    
    
    36,000
    
    
    36,000
    
    
    35,000
    
    
    -
    
    
    117,50031,812
    
    
    64,506
    
    
    70,008
    
    
    74,768
    
    
    41,880
    
    
    282,974


|17. | Site reclamation obligations                                                                                                     
|--- | ---------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                  
|    | The continuity of site closure and reclamation provision
      costs related to the Companys mineral properties is as
  follows:

| |                                |  | December
      31 |   |  | December
      31 |  |  | January
      1 |  
| | ------------------------------ |  | ----------------- | - |  | ----------------- |  |  | --------------- | -
| |                                |  | 2011              |   |  | 2010              |  |  | 2010            |  
| |                                |  | $000             |   |  | $000             |  |  | $000           |  
| | Balance, beginning of the year |  | 5,660             |   |  | 3,990             |  |  | 3,738           |  
| | Accretion                      |  | 317               |   |  | 280               |  |  | 154             |  
| | Change in estimate             |  | 501               |   |  | 1,354             |  |  | 455             |  
| | Foreign exchange               |  | (467              | ) |  | 36                |  |  | (357            | )
| | Balance, end of the year       |  | 6,011             |   |  | 5,660             |  |  | 3,990           |  

The components of the site reclamation
obligation are as follows:

| |                                 |  | December
      31 |  |  | December
      31 |  |  | January
      1 | 
| | ------------------------------- |  | ----------------- |  |  | ----------------- |  |  | --------------- | 
| |                                 |  | 2011              |  |  | 2010              |  |  | 2010            | 
| |                                 |  | $000             |  |  | $000             |  |  | $000           | 
| | Burnstone property (note 17(a)) |  | 3,005             |  |  | 2,917             |  |  | 1,368           | 
| | Hollister property (note 17(b)) |  | 1,704             |  |  | 1,553             |  |  | 1,426           | 
| | Esmeralda property (note 17(c)) |  | 1,248             |  |  | 1,137             |  |  | 1,141           | 
| | Other properties                |  | 54                |  |  | 53                |  |  | 55              | 
| |                                 |  | 6,011             |  |  | 5,660             |  |  | 3,990           | 

(a) Burnstone Property

The estimated amount of the reclamation
costs to remove infrastructure, capping and backfilling of the decline, vertical
shaft and demolishing of the metallurgical plant and subsequent property
rehabilitation including re-vegetation and fertilization, adjusted for estimated
inflation at 7.10% per year (2010: 6.32%), is $4.3 million (ZAR34 million)
(2010: $4.7 million (ZAR31 million)) and is expected to be spent over a period
of approximately three years beginning in 2036. The credit-adjusted risk free
rate at which the estimated future cash flows have been discounted is 8.67%
(2010: 8.29%), to arrive at a net present value of $3 million (ZAR23.9 million)
(2010: $2.9 million (ZAR19.3 million)).

41

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|17. | Site reclamation obligations (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | (b) Hollister Property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | The estimated amount of the reclamation costs to remove
      infrastructure, capping and backfilling of the decline and subsequent
      property rehabilitation including re-vegetation and fertilization,
      adjusted for estimated inflation at 2.2% per year (2010: 2%), is $1.7
      million (US$1.6 million) (2010: $1.6 million (US$1.6 million)) and is
      expected to be spent from 2020. The credit- adjusted risk free rate at
      which the estimated future cash flows have been discounted is 2% (2010:
      2.63%), to arrive at a net present value of $1.7 million (US$1.7 million)
      (2010: $1.6 million (US$1.6 million)).
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | (c) Esmeralda Property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | The estimated amount of the reclamation costs to remove
      infrastructure and subsequent property rehabilitation, adjusted for
      estimated inflation at 2.2% per year (2010: 2%), is $1.2 million (US$1.2
      million) (2010: $1.2 million (US$1.2 million)) and expected to be spent
      from 2020. The credit-adjusted risk free rate at which the estimated
      future cash flows have been discounted is 2% (2010: 2.63%), to arrive at a
      net present value of $1.2 (US$1.2 million) on December 31, 2011(2010: $1.1
      million (US$1.1 million)).                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|18. | Share capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | (a) Authorized share capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | The Companys authorized share capital consists of an
      unlimited number of common shares without par value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | The continuity of the Companys outstanding shares is as
      follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

| |                                                                         |  | December
      31 |  |  | December
      31 |  |  | January
      1 | 
| | ----------------------------------------------------------------------- |  | ----------------- |  |  | ----------------- |  |  | --------------- | 
| |                                                                         |  | 2011              |  |  | 2010              |  |  | 2010            | 
| |                                                                         |  | (thousands)       |  |  | (thousands)       |  |  | (thousands)     | 
| | Balance, beginning of the year                                          |  | 414,015           |  |  | 334,158           |  |  | 215,167         | 
| | Share options exercised (note 18(b))                                    |  | 3,095             |  |  | 6,085             |  |  | 1,124           | 
| | Share warrants exercised (note 18(a)(ii))                               |  | 24,694            |  |  | 59,504            |  |  | -               | 
| | Shares issued for settlement of senior secured notes (note
      15(c)) |  | -                 |  |  | 3,695             |  |  | -               | 
| | Shares issued for mineral properties                                    |  | -                 |  |  | 10,573            |  |  | 20              | 
| | Public offering (note 18(a)(i))                                         |  | 33,827            |  |  | -                 |  |  | 115,000         | 
| | Equity line shares issued                                               |  | -                 |  |  | -                 |  |  | 2,847           | 
| | Other (note
      18(a)(iii))                                           |  | 100               |  |  | -                 |  |  | -               | 
| | Balance, end of the year                                                |  | 475,731           |  |  | 414,015           |  |  | 334,158         | 

(i) Share issuance  Public
offering, February 2011

The Company completed a public
offering on February 23, 2011 whereby it issued 33,827,250 common shares at a
price of $2.55 per share thereby raising gross proceeds of $86.3 million.

42

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|18. | Share capital (continued)
|--- | -------------------------

(a) Authorized share capital
(continued)

(i) Share issuance  Public
offering, February 2011 (continued)

The Company paid the underwriters a
fee of $4.3 million and incurred other share issue costs of approximately $0.8
million for net proceeds of $81.2 million which have been recorded as share
capital.

(ii) Share issuance  Exercised
warrants

Warrant holders exercised 5,349,999 of
the $1.25 senior secured notes warrants during the first 5 months of 2011.The
Company then offered a $0.07 early exercise discount to warrant holders in June
2011, thereby ensuring the exercise of another 19,344,980 warrants at $1.18.

Each warrant entitled the holder thereof to purchase one common share and the
  Company accordingly recorded $35.4 million, consisting of the 24,694,979
  warrants proceeds, fair value and $0.2 million transaction costs, as share
  capital (refer note 18(c)(i)).

(iii) Share issuance  Donation

The Company issued 100,000 shares,
valued at the $1.63 share price prevailing on date of issuance, as a donation on
June 17, 2011.

(b) Share option plan

The Company has a share option plan
approved by the shareholders that allows it to grant options to a maximum number
of eligible shares equaling a rolling percentage of up to 12.5% of the Company's
outstanding common shares, calculated from time to time, subject to regulatory
terms and approval, to its directors, employees, officers and consultants.

The exercise price of each option is
set by the Board of Directors at the time of grant but cannot be less than the
market price (less permissible discounts) on the Toronto Stock Exchange.

Pursuant to the option plan, if outstanding options are exercised, expire,
  and/or the number of issued and outstanding common shares of the Company
  increases, the options available to grant under the plan increase
  correspondingly. Options can have a maximum term of ten years and typically
  terminate 30 days following the termination of the optionees employment or
  engagement, except in the case of retirement or death.

Vesting of options is at the discretion
of the Board of Directors at the time the options are granted.

43

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|18. | Share capital (continued)
|--- | -------------------------

(b) Share option plan
(continued)

The continuity of share purchase
options is as follows:

| |                            |   |                  |  |  |                   |   |  | Contractual weighted   | 
| | -------------------------- | - | ---------------- |  |  | ----------------- | - |  | ---------------------- | 
| |                            |   | Weighted average |  |  | Number of options |   |  | average remaining life | 
| |                            |   | exercise price   |  |  | (thousands)       |   |  | (years)                | 
| | Balance, January 1, 2010   | $ | 1.64             |  |  | 16,935            |   |  | 2.52                   | 
| | Granted                    | $ | 1.83             |  |  | 7,700             |   |  |                        | 
| | Cancelled                  | $ | 1.65             |  |  | (150              | ) |  |                        | 
| | Exercised (note 18(a))     | $ | 1.49             |  |  | (6,085            | ) |  |                        | 
| | Expired                    | $ | 3.04             |  |  | (97               | ) |  |                        | 
| | Forfeited                  | $ | 1.84             |  |  | (1,862            | ) |  |                        | 
| | Balance, December 31, 2010 | $ | 1.75             |  |  | 16,441            |   |  | 2.26                   | 
| | Granted                    | $ | 2.27             |  |  | 10,615            |   |  |                        | 
| | Cancelled                  | $ | 2.12             |  |  | (200              | ) |  |                        | 
| | Exercised (note 18(a))     | $ | 1.51             |  |  | (3,095            | ) |  |                        | 
| | Expired                    | $ | 2.14             |  |  | (1,910            | ) |  |                        | 
| | Forfeited                  | $ | 2.12             |  |  | (3,893            | ) |  |                        | 
| | Balance, December 31, 2011 | $ | 1.97             |  |  | 17,958            |   |  | 2.22                   | 

Options outstanding at December 31,
2011 are as follows:

| |                      |   |                |  |   | Number of options |  |   | Number of options | 
| | -------------------- | - | -------------- |  | - | ----------------- |  | - | ----------------- | 
| |                      |   |                |  |   | outstanding       |  |   | exercisable       | 
| | Expiry date          |   | Exercise price |  |   | (thousands)       |  |   | (thousands)       | 
| | February 11, 2012    | $ | 1.75           |  |   | 1,151             |  |   | 1,151             | 
| | April 18, 2012       | $ | 2.68           |  |   | 90                |  |   | 90                | 
| | July 15, 2012        | $ | 1.49           |  |   | 233               |  |   | 233               | 
| | October 9, 2012      | $ | 1.65           |  |   | 252               |  |   | 252               | 
| | February 10, 2013    | $ | 1.78           |  |   | 157               |  |   | 87                | 
| | March 26, 2013       | $ | 1.74           |  |   | 1,805             |  |   | 1,074             | 
| | April 10, 2013       | $ | 3.60           |  |   | 110               |  |   | 110               | 
| | August 3, 2013       | $ | 1.81           |  |   | 431               |  |   | 324               | 
| | November 9, 2013     | $ | 2.96           |  |   | 350               |  |   | 233               | 
| | January 14, 2014     | $ | 1.35           |  |   | 625               |  |   | 625               | 
| | February 11, 2014    | $ | 1.75           |  |   | 690               |  |   | 690               | 
| | March 11, 2014       | $ | 2.46           |  |   | 4,208             |  |   | 1,516             | 
| | April 12, 2014       | $ | 1.49           |  |   | 2,130             |  |   | 2,130             | 
| | July 5, 2014         | $ | 1.97           |  |   | 630               |  |   | 210               | 
| | July 15, 2014        | $ | 1.49           |  |   | 100               |  |   | 100               | 
| | September 26, 2014   | $ | 2.02           |  |   | 980               |  |   | -                 | 
| | October 17, 2014     | $ | 1.64           |  |   | 800               |  |   | -                 | 
| | November 21, 2014    | $ | 1.33           |  |   | 400               |  |   | -                 | 
| | March 26, 2015       | $ | 1.74           |  |   | 1,241             |  |   | 850               | 
| | March 11, 2016       | $ | 2.46           |  |   | 1,175             |  |   | 392               | 
| | May 5, 2016          | $ | 2.36           |  |   | 400               |  |   | 133               | 
| | Total                |   |                |  |   | 17,958            |  |   | 10,200            | 
| | Average option price |   |                |  | $ | 1.97              |  | $ | 1.86              | 

Cancelled options were accounted for in
accordance with IFRS 2 where any carry forward cost not yet recognized was
recognized immediately in profit or loss. Costs previously recognized on
forfeited options were, upon forfeiture, reversed through the current years
profit or loss.

44

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|18. | Share capital (continued)
|--- | -------------------------

(b) Share option plan
(continued)

| |                                       |   | Weighted |  |  |             |  |  |                            | 
| | ------------------------------------- | - | -------- |  |  | ----------- |  |  | -------------------------- | 
| |                                       |   | average  |  |  | Number of   |  |  | Weighted average remaining | 
| | Range of Exercise Price  Outstanding |   | exercise |  |  | options     |  |  | contractual life           | 
| | Options                               |   | price    |  |  | (thousands) |  |  | (years)                    | 
| | $ 1.25 - $ 1.49                       | $ | 1.45     |  |  | 3,488       |  |  | 2.20                       | 
| | $ 1.50 - $ 1.74                       | $ | 1.71     |  |  | 4,098       |  |  | 2.12                       | 
| | $ 1.75 - $ 1.99                       | $ | 1.81     |  |  | 3,059       |  |  | 1.32                       | 
| | $ 2.00 - $ 2.24                       | $ | 2.02     |  |  | 980         |  |  | 2.74                       | 
| | $ 2.25 - $ 2.49                       | $ | 2.45     |  |  | 5,783       |  |  | 2.75                       | 
| | $ 2.50 - $ 2.99                       | $ | 2.90     |  |  | 440         |  |  | 1.54                       | 
| | $
      3.50 - $ 3.99                 | $ | 3.60     |  |  | 110         |  |  | 1.28                       | 
| | Total                                 | $ | 1.97     |  |  | 17,958      |  |  | 2.22                       | 

| |                                       |   | Weighted       |  |  |                   | 
| | ------------------------------------- | - | -------------- |  |  | ----------------- | 
| | Range of Exercise Price  Exercisable |   | average        |  |  | Number of options | 
| | options                               |   | exercise price |  |  | (thousands)       | 
| | $ 1.25 - $ 1.49                       | $ | 1.46           |  |  | 3,088             | 
| | $ 1.50 - $ 1.74                       | $ | 1.73           |  |  | 2,176             | 
| | $ 1.75 - $ 1.99                       | $ | 1.78           |  |  | 2,462             | 
| | $ 2.25 - $ 2.49                       | $ | 2.45           |  |  | 2,041             | 
| | $ 2.50 - $ 2.99                       | $ | 2.88           |  |  | 323               | 
| | $ 3.50 - $ 3.99                       | $ | 3.60           |  |  | 110               | 
| | Total                                 | $ | 1.86           |  |  | 10,200            | 

The exercise prices of all share
purchase options granted were at or above the market price at the grant
date.

The estimated fair value of options
granted for the years ended December 31, 2011 and 2010 have been accounted for
as follows:

| |                                                                                        |  | Years ended December 31 |  
| | -------------------------------------------------------------------------------------- |  | ----------------------- | -
| |                                                                                        |  | 2011                    |  
| |                                                                                        |  | $000                   |  
| | Total compensation cost recognized,
      credited to contributed surplus (note 18(d)) |  | 8,407                   |  
| | Compensation cost allocated to development expenses                                    |  | -                       |  
| | Compensation cost allocated to production
      cost                                   |  | (3,399                  | )
| | Compensation cost capitalized on Burnstone mine development
      (note 23)            |  | (96                     | )
| | Compensation cost allocated to bonus provision                                         |  | -                       |  
| | Share based
      compensation expense                                                 |  | 4,912                   |  

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

| |                         |  | Years ended December 31 | 
| | ----------------------- |  | ----------------------- | 
| |                         |  | 2011                    | 
| | Risk free interest rate |  | 2.42%                   | 
| | Expected life           |  | 3.4 years               | 
| | Expected volatility     |  | 80%                     | 
| | Expected dividends      |  | Nil                     | 

45

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|18. | Share capital (continued)
|--- | -------------------------

(b) Share option plan
(continued)

Out of plan options to acquire 677,766
shares at an exercise price of $0.60 and expiry date of June 1, 2012, remain
outstanding in connection with the 2009 acquisition of Rusaf Gold (refer note
18(d)(i)).

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

| |                    |   |          |  |   | Outstanding |  |  |             |  |  |             |   |   | Outstanding | 
| | ------------------ | - | -------- |  | - | ----------- |  |  | ----------- |  |  | ----------- | - | - | ----------- | 
| |                    |   |          |  |   | April 1     |  |  |             |  |  |             |   |   | December 31 | 
| | Expiry dates       |   | Exercise |  |   | 2008        |  |  | Exercised   |  |  | Expired     |   |   | 2011        | 
| |                    |   | price    |  |   | (thousands) |  |  | (thousands) |  |  | (thousands) |   |   | (thousands) | 
| | December 31, 2010  | $ | 0.25     |  |   | 20          |  |  | -           |  |  | (20         | ) |   | -           | 
| | December 31, 2010  | $ | 0.40     |  |   | 144         |  |  | -           |  |  | (144        | ) |   | -           | 
| | June 1, 2012       | $ | 0.60     |  |   | 678         |  |  | -           |  |  | -           |   |   | 678         | 
| |                    |   |          |  |   | 842         |  |  | -           |  |  | (164        | ) |   | 678         | 
| | Fair value ($000) |   |          |  | $ | 1,656       |  |  | -           |  |  | ($ 323      | ) | $ | 1,333       | 

(c) Share purchase warrants

The continuity of share purchase
warrants during the year is as follows:

| | December 31, 2011                 |   |          |  |  |             |  |  |             |   |  |             |   |  |             | 
| | --------------------------------- | - | -------- |  |  | ----------- |  |  | ----------- | - |  | ----------- | - |  | ----------- | 
| |                                   |   |          |  |  | Outstanding |  |  |             |   |  |             |   |  | Outstanding | 
| |                                   |   |          |  |  | December 31 |  |  |             |   |  |             |   |  | December 31 | 
| |                                   |   | Exercise |  |  | 2010        |  |  | Expired     |   |  | Exercised   |   |  | 2011        | 
| | Expiry dates                      |   | price    |  |  | (thousands) |  |  | (thousands) |   |  | (thousands) |   |  | (thousands) | 
| | December 12, 2011 (note 18(c)(i)) | $ | 1.25     |  |  | 24,918      |  |  | (224        | ) |  | (24,694     | ) |  | -           | 
| |                                   |   |          |  |  | 24,918      |  |  | (224        | ) |  | (24,694     | ) |  | -           | 

| | December 31, 2010                 |   |          |  |  |             |  |  |             |   |  |             |   |  |             | 
| | --------------------------------- | - | -------- |  |  | ----------- |  |  | ----------- | - |  | ----------- | - |  | ----------- | 
| |                                   |   |          |  |  | Outstanding |  |  |             |   |  |             |   |  | Outstanding | 
| |                                   |   |          |  |  | January 1   |  |  |             |   |  |             |   |  | December 31 | 
| |                                   |   | Exercise |  |  | 2010        |  |  | Expired     |   |  | Exercised   |   |  | 2010        | 
| | Expiry dates                      |   | price    |  |  | (thousands) |  |  | (thousands) |   |  | (thousands) |   |  | (thousands) | 
| | December 12, 2011 (note 18(c)(i)) | $ | 1.25     |  |  | 26,994      |  |  | -           |   |  | (2,076      | ) |  | 24,918      | 
| | October 1, 2010 (note 18(c)(ii))  |   | ZAR20.78 |  |  | 1,684       |  |  | (1,684      | ) |  | -           |   |  | -           | 
| | October 15,2010 (note 18(c)(iii)) | $ | 1.60     |  |  | 57,500      |  |  | (72         | ) |  | (57,428     | ) |  | -           | 
| |                                   |   |          |  |  | 86,178      |  |  | (1,756      | ) |  | (59,504     | ) |  | 24,918      | 

(i) Senior secured notes  warrants

On December 12, 2008, the Company
completed the issuance of 51,500 senior secured notes at a price of US$1,000 per
note for gross proceeds of US$51.5 million (refer note 15(c)). Each note also
granted its holder 350 warrants. Each warrant entitled the holder thereof to
subscribe to one common share of the Company at a price of $1.80 per share over
a 36 month term and had no mandatory conversion by the holder.

46

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|18. | Share capital (continued)
|--- | -------------------------

(c) Share purchase warrants
(continued)

(i) Senior secured notes  warrants
(continued)

The Company also granted 721,000
warrants, calculated at 4% of the 18,025,000 warrants issued to the note holders
and subject to the same terms as set out above, to the agent.

The Equity offering that closed on
March 13, 2009 (refer note 18(c)(ii)) triggered the anti-dilution protection on
the warrants and the exercise price of these warrants was adjusted to $1.25
(from $1.80) per common share and the number of common shares which may be
acquired increased to 26,994,240 (including agents warrants). No additional
fair value was recorded with the increase of the warrants.

During 2011, warrant holders exercised
24,694,979 of the warrants (2010: 2 million) before the December 12, 2011
expiration date (refer note 18(a)(ii)), with only 223,501 warrants expiring
unexercised.

The estimated fair value of $6.1
million was credited to share capital upon exercise of the warrants (2010: $0.5
million) with the remaining $54,785 being transferred to the contributed surplus
reserve upon expiry (refer note 18(d)).

(ii) October 2007 Black Economic
Empowerment transaction (BEE transaction)

In terms of the October 2007 BEE
transaction, the Company issued a total of 1,684,312 Great Basin warrants. Each
warrant was convertible into one Great Basin common share at ZAR20.78 ($3) on or
before October 1, 2010. The warrants were subject to the Company having the
right to require exercise of the warrants if the market price equals or exceeds
ZAR45.72 ($7). The warrants expired unexercised on October 1, 2010.

The estimated fair value of $1.2
million (ZAR8 million) (using expected volatility of 62.74%, risk free interest
rate of 8.93%, dividends of nil and remaining life of approximately 2 years) of
the warrants was therefore transferred to the contributed surplus reserve (refer
note 18(d)) on October 1, 2010.

(iii) March 2009 Public
offering

The Company completed a public
offering on March 13, 2009 whereby it issued 115,000,000 units (the Units) at
a price of $1.30 per Unit. Each Unit consisted of one common share (each, a
Common Share) in the capital of the Company and one-half of one common share
purchase warrant (each whole common share purchase warrant, a Warrant) of the
Company.

Each Warrant entitled the holder
thereof to purchase one Common Share at a price of $1.60 until expiry on October
15, 2010.

On the date of issuance, the fair
value of the 57,500,000 warrants was estimated at $0.10 per warrant and the
Company recorded $5.3 million as fair value of warrants. The valuation was
performed by using an option pricing model.

47

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|18. | Share capital (continued)
|--- | -------------------------

(c) Share purchase warrants
(continued)

(iii) March 2009 Public offering
(continued)

Warrant holders exercised 57,427,856
warrants before the October 15, 2010 expiration date, with only 72,144 warrants
expiring unexercised.

The estimated fair value of $5.3
million was credited to share capital upon exercise of the warrants with the
remaining $6,660 being transferred to the contributed surplus reserve upon
expiry.

(d) Contributed surplus

The continuity of contributed surplus
components is:

December 31, 2011December 31
    
    
    
    
    
    December 312010
    
    
    Movement
    
    
    2011$000
    
    
    $000
    
    
    $000Fair value of warrants issued which
      expired unexercised (note 18(c)(i))
    
    17,634
    
    
    55
    
    
    17,689Deferred income tax on expired warrants
    
    (1,463
    )
    
    (7
    )
    
    (1,470
    )Fair value of warrants and options
      available to Rusaf share holders (note 18(b) and 18(d)(i))
    
    1,755
    
    
    -
    
    
    1,755Accumulated share based compensation; net of amount
      transferred to share capital upon exercise of options (note 18(b))
    
    33,159
    
    
    5,613
    
    
    38,772Convertible bond equity component
      (note 15(a))
    
    35,455
    
    
    -
    
    
    35,455Deferred income
      tax on convertible bond equity component
    
    (8,864
    )
    
    -
    
    
    (8,864
    )77,676
    
    
    5,661
    
    
    83,337


December 31, 2010January 1
    
    
    
    
    
    December 312010
    
    
    Movement
    
    
    2010$000
    
    
    $000
    
    
    $000Fair value of warrants issued which expired
      unexercised (note 18(c)(ii) and 18(c)(iii))
    
    16,449
    
    
    1,185
    
    
    17,634Deferred income tax on expired warrants
    
    (1,294
    )
    
    (169
    )
    
    (1,463
    )Fair value of warrants and options
      available to Rusaf share holders (note 18(d)(i))
    
    1,755
    
    
    -
    
    
    1,755Accumulated share based compensation; net of amount
      transferred to share capital upon exercise of options (note 18(b))
    
    30,902
    
    
    2,257
    
    
    33,159Convertible bond equity component
      (note15(a))
    
    35,455
    
    
    -
    
    
    35,455Deferred income
      tax on convertible bond equity component
    
    (8,864
    )
    
    -
    
    
    (8,864
    )74,403
    
    
    3,273
    
    
    77,676


48

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|18. | Share capital (continued)
|--- | -------------------------

(d) Contributed surplus
(continued)

(i) Warrants and options available
to former Rusaf shareholders

The fair value of $1.8 million
estimated for the 1,062,033 future Great Basin shares to be issued upon exercise
of warrants and options available to former Rusaf shareholders was calculated
using an option pricing model based on a risk free interest rate of 2.99%,
expected life between 1 month and 4 years, 59% volatility and nil dividends, and
was recorded as contributed surplus in 2008.

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

| |                    |   |          |  |   | Outstanding |  |  |             |   |  |             |   |   | Outstanding | 
| | ------------------ | - | -------- |  | - | ----------- |  |  | ----------- | - |  | ----------- | - | - | ----------- | 
| |                    |   | Exercise |  |   | April 1     |  |  |             |   |  |             |   |   | December 31 | 
| | Expiry dates       |   | price    |  |   | 2008        |  |  | Exercised   |   |  | Expired     |   |   | 2011        | 
| |                    |   |          |  |   | (thousands) |  |  | (thousands) |   |  | (thousands) |   |   | (thousands) | 
| | April 11, 2008     | $ | 0.25     |  |   | 49          |  |  | (22         | ) |  | (27         | ) |   | -           | 
| | September 6, 2008  | $ | 0.75     |  |   | 27          |  |  | (13         | ) |  | (14         | ) |   | -           | 
| | September 15, 2008 | $ | 0.75     |  |   | 42          |  |  | -           |   |  | (42         | ) |   | -           | 
| | March 16, 2009     | $ | 0.75     |  |   | 93          |  |  | -           |   |  | (93         | ) |   | -           | 
| | May 17, 2009       | $ | 0.75     |  |   | 9           |  |  | -           |   |  | (9          | ) |   | -           | 
| |                    |   |          |  |   | 220         |  |  | (35         | ) |  | (185        | ) |   | -           | 
| | Fair value ($000) |   |          |  | $ | 108         |  |  | ($ 8        | ) |  | ($ 100      | ) | $ | -           | 

Refer to note 18(b) for the continuity
of share options since acquisition.

(e) Accumulated other comprehensive
income (loss)

The continuity of accumulated other
comprehensive income (loss) components is:

| | December 31, 2011                    |  |             |  |  |          |   |  |             |  
| | ------------------------------------ |  | ----------- |  |  | -------- | - |  | ----------- | -
| |                                      |  | December 31 |  |  |          |   |  | December 31 |  
| |                                      |  | 2010        |  |  | Movement |   |  | 2011        |  
| |                                      |  | $000       |  |  | $000    |   |  | $000       |  
| | Foreign currency translation reserve |  | 26,395      |  |  | (100,159 | ) |  | (73,764     | )
| |                                      |  | 26,395      |  |  | (100,159 | ) |  | (73,764     | )

| | December 31, 2010                                                   |  |           |  |  |          |   |  |             | 
| | ------------------------------------------------------------------- |  | --------- |  |  | -------- | - |  | ----------- | 
| |                                                                     |  | January 1 |  |  |          |   |  | December 31 | 
| |                                                                     |  | 2010      |  |  | Movement |   |  | 2010        | 
| |                                                                     |  | $000     |  |  | $000    |   |  | $000       | 
| | Fair value adjustments on
      available-for-sale financial assets |  | 927       |  |  | (927     | ) |  | -           | 
| | Foreign
      currency translation reserve                          |  | -         |  |  | 26,395   |   |  | 26,395      | 
| |                                                                     |  | 927       |  |  | 25,468   |   |  | 26,395      | 

49

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|19. | Employee benefits expense                                                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                      
|    | Compensation awarded to key management                                                                                                               
|    |                                                                                                                                                      
|    | Compensation awarded to key management comprises the
      following and is included under salaries and compensation in the
      statements of loss.

| |                                           |  | December
      31 |  |  | December
      31 | 
| | ----------------------------------------- |  | ----------------- |  |  | ----------------- | 
| |                                           |  | 2011              |  |  | 2010              | 
| |                                           |  | $000             |  |  | $000             | 
| | Salaries and short-term employee benefits |  | 4,497             |  |  | 3,865             | 
| | Share based
      payments                |  | 3,921             |  |  | 4,212             | 
| |                                           |  | 8,418             |  |  | 8,077             | 

|20. | Finance income and costs
|--- | ------------------------

(a) Interest expense

| |                                                            |  | December
      31 |   |  | December
      31 |  
| | ---------------------------------------------------------- |  | ----------------- | - |  | ----------------- | -
| |                                                            |  | 2011              |   |  | 2010              |  
| |                                                            |  | $000             |   |  | $000             |  
| | Convertible debentures (note 15(a))                        |  | 16,955            |   |  | 15,886            |  
| | Finance leases (note 15(b))                                |  | 990               |   |  | 598               |  
| | Senior secured notes (note 15(c))                          |  | 2,049             |   |  | 11,971            |  
| | Term loan I  interest (note 15(d)                         |  | 3,288             |   |  | 1,708             |  
| | Term loan I  facility arrangement
      fee (note 15(d))  |  | 855               |   |  | 505               |  
| | Term loan II  interest (note 15(e))                       |  | 2,194             |   |  | -                 |  
| | Term loan II  facility arrangement
      fee (note 15(e)) |  | 376               |   |  | -                 |  
| | Gold sales advance (note 14)                               |  | 419               |   |  | -                 |  
| | Other                                                      |  | 3                 |   |  | -                 |  
| | Interest expense                                           |  | 27,129            |   |  | 30,668            |  
| | Less: amounts capitalized to qualifying assets (note 11)   |  | (2,515            | ) |  | (30,604           | )
| | Total interest
      expense                               |  | 24,614            |   |  | 64                |  

(b) Interest income

| |                                             |  | December
      31 |  |  | December
      31 | 
| | ------------------------------------------- |  | ----------------- |  |  | ----------------- | 
| |                                             |  | 2011              |  |  | 2010              | 
| |                                             |  | $000             |  |  | $000             | 
| | Short-term bank deposits                    |  | 562               |  |  | 1,600             | 
| | Loan due
      from related party (note 10) |  | 1,000             |  |  | 227               | 
| | Total interest income                       |  | 1,562             |  |  | 1,827             | 

(c) Net interest (expense) income

| |                  |  | December
      31 |   |  | December
      31 |  
| | ---------------- |  | ----------------- | - |  | ----------------- | -
| |                  |  | 2011              |   |  | 2010              |  
| |                  |  | $000             |   |  | $000             |  
| | Interest expense |  | (24,614           | ) |  | (64               | )
| | Interest income  |  | 1,562             |   |  | 1,827             |  
| |                  |  | (23,052           | ) |  | 1,763             |  

50

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|21. | Loss on derivative instruments 
  net
|--- | --------------------------------------

| |                                                                                                            |  | December
      31 |   |  | December
      31 |  
| | ---------------------------------------------------------------------------------------------------------- |  | ----------------- | - |  | ----------------- | -
| |                                                                                                            |  | 2011              |   |  | 2010              |  
| |                                                                                                            |  | $000             |   |  | $000             |  
| | Fair value upon inception of ZCC  1
      (restructured) (note 16(b)(i))                                  |  | 35,911            |   |  | 3,606             |  
| | Fair value upon inception of ZCC  2 (note 16(b)(ii))                                                      |  | 7,301             |   |  | -                 |  
| | Fair value upon novation of ZCC  1 (note
      16(b)(i))                                                  |  | (18,295           | ) |  | -                 |  
| | Marked-to-market adjustments ZCC  1 (note 16(b)(i))                                                       |  | 7,688             |   |  | 6,860             |  
| | Marked-to-market adjustments ZCC  2 (note
      16(b)(ii))                                                |  | (11,502           | ) |  | -                 |  
| | Loss on settlement of senior secured notes (note 15(c))                                                    |  | 8,817             |   |  | -                 |  
| | Loss on delivery of hedged gold positions
      (note 16(b)(i))                                            |  | 193               |   |  | -                 |  
| | Net realized gain on available-for-sale financial assets
      (note 8)                                    |  | -                 |   |  | (489              | )
| | Net realized loss on held-for-trading
      financial assets at fair value through profit or loss (note 9) |  | -                 |   |  | 67                |  
| | Other                                                                                                      |  | (17               | ) |  | (86               | )
| |                                                                                                            |  | 30,096            |   |  | 9,958             |  

|22. | Taxation
|--- | --------

(a) Income tax

| |                                                        |  | December
      31 |   |  | December
      31 |  
| | ------------------------------------------------------ |  | ----------------- | - |  | ----------------- | -
| |                                                        |  | 2011              |   |  | 2010              |  
| |                                                        |  | $000             |   |  | $000             |  
| | Income taxes (paid) recovered (note 23)                |  | (3                | ) |  | 9                 |  
| | Deferred income tax asset recognized                   |  | 49,678            |   |  | -                 |  
| | Nevada net proceeds tax (note 23)                      |  | (2,105            | ) |  | (1,216            | )
| | Deferred income
      tax recovery on expired warrants |  | 7                 |   |  | 169               |  
| |                                                        |  | 47,577            |   |  | (1,038            | )

The income tax charged directly to
contributed surplus in equity, during the year is as follows:

| |                                                  |  | December
      31 |  |  | December
      31 | 
| | ------------------------------------------------ |  | ----------------- |  |  | ----------------- | 
| |                                                  |  | 2011              |  |  | 2010              | 
| |                                                  |  | $000             |  |  | $000             | 
| |                                                  |  |                   |  |  |                   | 
| | Deferred income tax recovery on expired warrants |  | 7                 |  |  | 169               | 

The income tax expense differs from the
amount that would result from applying the Canadian federal and provincial tax
rates to loss before income taxes. A reconciliation of the tax charged in the statement of income to the prevailing estimated Canadian federal
and provincial tax, if the statutory tax rates were applied, is set out in the following table:

51

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|22. | Taxation (continued)
|--- | --------------------

(a) Income tax (continued)

| |                                                                         |  | December
      31 |   |  | December
      31 |  
| | ----------------------------------------------------------------------- |  | ----------------- | - |  | ----------------- | -
| |                                                                         |  | 2011              |   |  | 2010              |  
| |                                                                         |  | $000             |   |  | $000             |  
| | Combined Canadian federal and provincial
      statutory rate           |  | 26.5%             |   |  | 28.5%             |  
| |                                                                         |  |                   |   |  |                   |  
| | Income tax recovery at statutory rates                                  |  | 17,308            |   |  | 7,436             |  
| | Difference in foreign tax rates                                         |  | (8,637            | ) |  | 360               |  
| | Tax losses for which no deferred income tax
      assets are recognized |  | (2,342            | ) |  | (9,133            | )
| | Utilization of previously unrecognized tax losses                       |  | 58,952            |   |  | -                 |  
| | Other non-deductible items                                              |  | (9,808            | ) |  | 1,890             |  
| | Change in effective tax rate                                            |  | (6,950            | ) |  | (1,386            | )
| | Amounts reported through equity                                         |  | 7                 |   |  | 169               |  
| | Other                                                                   |  | 1,155             |   |  | 833               |  
| | Deferred income tax recovery                                            |  | 49,685            |   |  | 169               |  
| | Nevada net proceeds tax                                                 |  | (2,105            | ) |  | (1,216            | )
| | Income taxes (paid) recovered                                           |  | (3                | ) |  | 9                 |  
| |                                                                         |  | 47,577            |   |  | (1,038            | )

(b) Deferred taxation

The analysis of net deferred tax assets
is as follows:

| |                                                                     |  | December
      31 |  |  | December
      31 | 
| | ------------------------------------------------------------------- |  | ----------------- |  |  | ----------------- | 
| |                                                                     |  | 2011              |  |  | 2010              | 
| |                                                                     |  | $000             |  |  | $000             | 
| | Deferred tax assets to be recovered after
      more than 12 months |  | 27,510            |  |  | -                 | 
| | Deferred tax
      assets to be recovered within 12 months          |  | 23,571            |  |  | -                 | 
| |                                                                     |  | 51,081            |  |  | -                 | 

Deferred income tax assets are
recognized to the extent that the realization of the related tax benefit through
future taxable profits is probable. At December 31, 2011 the Company recognized
a net deferred tax asset of $51 million (US$50 million) in respect of its Nevada
operations net operating loss carry-forwards and resource tax pools as it
became evident that there is a high probability that these operations will
timeously generate adequate taxable profits and that losses and resource pools
will be utilized prior to their expiry.

52

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|22. | Taxation (continued)
|--- | --------------------

(b) Deferred taxation
(continued)

The continuity of deferred income tax
assets and liabilities recognized (2010: unrecognized) is as follows:

| | December 31, 2011                        |  |             |   |  |                    |   |  |           |   |  |             |  
| | ---------------------------------------- |  | ----------- | - |  | ------------------ | - |  | --------- | - |  | ----------- | -
| |                                          |  |             |   |  | Charged (credited) |   |  |           |   |  |             |  
| |                                          |  | December
31 |   |  | to statement of    |   |  | Foreign   |   |  | December 31 |  
| |                                          |  | 2010        |   |  | income             |   |  | Exchange1 |   |  | 2011        |  
| |                                          |  | $000       |   |  | $000              |   |  | $000     |   |  | $000       |  
| |                                          |  |             |   |  |                    |   |  |           |   |  |             |  
| | Tax losses                               |  | 60,675      |   |  | (12,848            | ) |  | 1,004     |   |  | 48,831      |  
| | Provisions                               |  | 1,607       |   |  | 330                |   |  | 46        |   |  | 1,983       |  
| | Fair value losses                        |  | -           |   |  | 4,623              |   |  | 130       |   |  | 4,753       |  
| | Other temporary differences              |  | 546         |   |  | 904                |   |  | 39        |   |  | 1,489       |  
| | Benefit of tax attributes not recognized |  | (59,280     | ) |  | 58,952             |   |  | 328       |   |  | -           |  
| | Deferred
      tax assets                |  | 3,548       |   |  | 51,961             |   |  | 1,547     |   |  | 57,056      |  
| |                                          |  |             |   |  |                    |   |  |           |   |  |             |  
| | Mineral properties                       |  | (49         | ) |  | (176               | ) |  | (6        | ) |  | (231        | )
| | Accelerated tax depreciation             |  | (2,559      | ) |  | (1,934             | ) |  | (112      | ) |  | (4,605      | )
| | Other
      temporary differences        |  | (940        | ) |  | (173               | ) |  | (26       | ) |  | (1,139      | )
| | Deferred tax liabilities                 |  | (3,548      | ) |  | (2,283             | ) |  | (144      | ) |  | (5,975      | )
| |                                          |  |             |   |  |                    |   |  |           |   |  |             |  
| | Net deferred tax asset                   |  | -           |   |  | 49,678             |   |  | 1,403     |   |  | 51,081      |  

| | December 31, 2010                              |  |           |   |  |                    |   |  |           |   |  |             |  
| | ---------------------------------------------- |  | --------- | - |  | ------------------ | - |  | --------- | - |  | ----------- | -
| |                                                |  |           |   |  | Charged (credited) |   |  |           |   |  |             |  
| |                                                |  | January 1 |   |  | to statement of    |   |  | Foreign   |   |  | December 31 |  
| |                                                |  | 2010      |   |  | income             |   |  | exchange1 |   |  | 2010        |  
| |                                                |  | $000     |   |  | $000              |   |  | $000     |   |  | $000       |  
| |                                                |  |           |   |  |                    |   |  |           |   |  |             |  
| | Tax losses and resource pools                  |  | 57,932    |   |  | 6,063              |   |  | (3,320    | ) |  | 60,675      |  
| | Provisions                                     |  | -         |   |  | 1,665              |   |  | (58       | ) |  | 1,607       |  
| | Other temporary differences                    |  | 378       |   |  | 188                |   |  | (20       | ) |  | 546         |  
| | Benefit of
      tax attributes not recognized |  | (57,539   | ) |  | (5,003             | ) |  | 3,262     |   |  | (59,280     | )
| | Deferred tax assets                            |  | 771       |   |  | 2,913              |   |  | (136      | ) |  | 3,548       |  
| |                                                |  |           |   |  |                    |   |  |           |   |  |             |  
| | Mineral properties                             |  | (52       | ) |  | -                  |   |  | 3         |   |  | (49         | )
| | Accelerated tax depreciation                   |  | (713      | ) |  | (1,952             | ) |  | 106       |   |  | (2,559      | )
| | Other temporary differences                    |  | (6        | ) |  | (961               | ) |  | 27        |   |  | (940        | )
| | Deferred tax
      liabilities                 |  | (771      | ) |  | (2,913             | ) |  | 136       |   |  | (3,548      | )
| |                                                |  |           |   |  |                    |   |  |           |   |  |             |  
| | Net
      deferred tax asset                   |  | -         |   |  | -                  |   |  | -         |   |  | -           |  

1Foreign exchange
translation included in Foreign Currency Translation Reserve, a component of
Other Comprehensive Income in equity.

53

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|22. | Taxation (continued)
|--- | --------------------

(b) Deferred taxation
(continued)

At December 31, 2011, the Companys
unrecognized net deferred tax assets, per income tax jurisdiction, comprise the
following:

| |                    |  | December
      31 |  |  | December
      31 |  
| | ------------------ |  | ----------------- |  |  | ----------------- | -
| |                    |  | 2011              |  |  | 2010              |  
| |                    |  | $000             |  |  | $000             |  
| | Canada             |  |                   |  |  |                   |  
| | Losses             |  | 22,026            |  |  | 16,170            |  
| | Other              |  | 1,585             |  |  | (2,486            | )
| | South Africa       |  |                   |  |  |                   |  
| | Losses             |  | 22,320            |  |  | 5,008             |  
| | Unredeemed capital |  | 27,657            |  |  | 36,071            |  
| | Other              |  | 16,488            |  |  | (8,688            | )
| | Tanzania           |  |                   |  |  |                   |  
| | Losses             |  | 3,162             |  |  | 2,588             |  
| |                    |  | 93,238            |  |  | 48,663            |  

At December 31, 2011, the Company had
available losses for income tax purposes in Canada totaling approximately $88.1
million (2010: $64.7 million), expiring in various years from 2026 to 2031. The
Company has available resource tax pools in Canada of approximately $4.4 million
(2010: $4.4 million), which may be carried forward and utilized to reduce
taxable income. Included in these resource tax pools is $3.1 million (2010: $3.1
million) which is successored, and consequently can only be utilized against
taxable income from specific mineral properties. No deferred income tax assets
were raised on the Canadian losses and resource pools as the Canadian companies
reflect a history of losses at December 31, 2011.

At December 31, 2011, the Company had
available losses for income tax purposes in South Africa totaling approximately
$108 million (ZAR834 million) (2010: $18 million (ZAR120 million)) as well as
available unredeemed capital of approximately $654 million (ZAR5,050 million)
(2010: $594 million (ZAR3,932 million)), which may be carried forward and
utilized to reduce future taxable income. The Burnstone Project is still in
production build-up phase and therefore reflects a history of taxable losses and
accordingly the Company did not recognize the South African net deferred income
tax assets.

In addition to the unrecognized
deferred income tax assets noted above, the Company also has unrecognized
deferred income tax assets in Tanzania of $3.2 million (2010: $2.6 million) in
respect of losses amounting to $10.5 million (2010: $8.6 million) on its
exploration activities. These losses can be carried forward indefinitely and
applied against future taxable income, but due to the uncertainty associated
with greenfields exploration projects where no development decision has been
made, the Company did not recognize the deferred income tax assets.

54

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|23. | Additional cash flow
information
|--- | --------------------------------

December
      31
    
    
    December
      312011
    
    
    2010$000
    
    
    $000Income taxes (paid) recovered (note 22(a))
    
    (3
    )
    
    9Nevada net proceeds tax paid (note 22(a))
    
    (2,105
    )
    
    (1,216
    )Non-cash investing activities:Shares issued for settlement of Rusaf
      contingent payment requirements
    
    -
    
    
    19,243Accrued interest capitalized to property, plant and
      machinery (note 11)
    
    2,515
    
    
    30,604Changes in reclamation estimate capitalized
      to property, plant and equipment
    
    575
    
    
    1,362Changes in accounts payable and accrued liabilities
      included in property, plant and equipment
    
    18,972
    
    
    25,828Changes in amounts receivable included in
      property, plant and equipment
    
    -
    
    
    1,093Share based compensation capitalized (refer note 18(b))
    
    96
    
    
    1,475Non-cash financing activities:Fair value of stock options and warrants
      transferred from contributed surplus to share capital on options and
      warrants exercised
    
    8,847
    
    
    11,023Shares issued for early settlement of senior secured notes
      (note 15(c))
    
    -
    
    
    3,910Shares issued for settlement of 3,000
      senior secured notes (note 15(c))
    
    -
    
    
    4,102


|24. | Contractual commitment and
  contingencies
|--- | ------------------------------------------

| | December 31, 2011          |  |             |  |  |             |  |  |             |  |  |       | 
| | -------------------------- |  | ----------- |  |  | ----------- |  |  | ----------- |  |  | ----- | 
| |                            |  | Less than 1 |  |  | Between 1   |  |  | More than 5 |  |  |       | 
| |                            |  | year        |  |  | and 5 years |  |  | years       |  |  | Total | 
| |                            |  | $000       |  |  | $000       |  |  | $000       |  |  | $000 | 
| | Operating lease obligation |  | 203         |  |  | -           |  |  | -           |  |  | 203   | 
| | Guarantee                  |  | 2,178       |  |  | -           |  |  | -           |  |  | 2,178 | 
| | Other                      |  | 97          |  |  | 402         |  |  | 398         |  |  | 897   | 
| |                            |  | 2,478       |  |  | 402         |  |  | 398         |  |  | 3,278 | 

| | December 31, 2010          |  |             |  |  |             |  |  |             |  |  |       | 
| | -------------------------- |  | ----------- |  |  | ----------- |  |  | ----------- |  |  | ----- | 
| |                            |  | Less than 1 |  |  | Between 1   |  |  | More than 5 |  |  |       | 
| |                            |  | year        |  |  | and 5 years |  |  | years       |  |  | Total | 
| |                            |  | $000       |  |  | $000       |  |  | $000       |  |  | $000 | 
| | Operating lease obligation |  | 247         |  |  | 244         |  |  | -           |  |  | 491   | 
| | Guarantee                  |  | 5,163       |  |  | 2,613       |  |  | -           |  |  | 7,776 | 
| | Other                      |  | 192         |  |  | 393         |  |  | 389         |  |  | 974   | 
| |                            |  | 5,602       |  |  | 3,250       |  |  | 389         |  |  | 9,241 | 

The Company is contractually committed
to make the payments set out above in respect of an operating lease for rental
of its corporate office.

Refer to note 10 and note 16(a) for
details on the ZAR140 million ($17.6 million) guarantee provided by the Company
to cover any shortfall in interest or principal repayments on the loan
outstanding by Tranter to Investec.

Other obligations include nominal
environmental obligations.

55

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|25. | Segment reporting
|--- | -----------------

The Company operates in reportable
operating segments to deliver on its strategy to explore, develop and explode
mineral properties. Management has determined the operating segments based on
the reports reviewed by the Company's Chief Operating Decision Maker ("CODM")
that are used to make strategic decisions. The Company's CODM is its Chief
Executive Officer.

Segment statement of income 
December 2011

| |                                                     |  | North      |   |  | South      |   |  |            |   |  |         |   |  |          |  
| | --------------------------------------------------- |  | ---------- | - |  | ---------- | - |  | ---------- | - |  | ------- | - |  | -------- | -
| |                                                     |  | American   |   |  | African    |   |  | Tanzanian  |   |  |         |   |  |          |  
| |                                                     |  | operations |   |  | operations |   |  | operations |   |  | Other1  |   |  | Total    |  
| |                                                     |  | $000      |   |  | $000      |   |  | $000      |   |  | $000   |   |  | $000    |  
| | Revenue                                             |  | 135,199    |   |  | 35,125     |   |  | -          |   |  | -       |   |  | 170,324  |  
| | Cost of operations                                  |  |            |   |  |            |   |  |            |   |  |         |   |  |          |  
| | Production cost                                     |  | (60,827    | ) |  | (40,716    | ) |  | -          |   |  | -       |   |  | (101,543 | )
| | Depletion charge                                    |  | (5,063     | ) |  | (490       | ) |  | -          |   |  | -       |   |  | (5,553   | )
| | Depreciation charge                                 |  | (3,933     | ) |  | (8,746     | ) |  | -          |   |  | -       |   |  | (12,679  | )
| | Expenses                                            |  |            |   |  |            |   |  |            |   |  |         |   |  |          |  
| | Exploration expenses                                |  | (8,069     | ) |  | (365       | ) |  | (1,182     | ) |  | -       |   |  | (9,616   | )
| | Pre-development expenses                            |  | (17,703    | ) |  | -          |   |  | -          |   |  | -       |   |  | (17,703  | )
| | Corporate and administrative cost                   |  | (219       | ) |  | (719       | ) |  | (587       | ) |  | (6,425  | ) |  | (7,950   | )
| | Environmental impact study                          |  | (2,232     | ) |  | -          |   |  | -          |   |  | -       |   |  | (2,232   | )
| | Foreign exchange (loss) gain                        |  | -          |   |  | (27        | ) |  | 10         |   |  | 2,096   |   |  | 2,079    |  
| | Salaries and compensation                           |  |            |   |  |            |   |  |            |   |  |         |   |  |          |  
| | Salaries and wages                                  |  | -          |   |  | -          |   |  | -          |   |  | (8,701  | ) |  | (8,701   | )
| | Share based
      compensation                      |  | -          |   |  | -          |   |  | -          |   |  | (4,912  | ) |  | (4,912   | )
| | Profit (loss) from operating activities             |  | 37,153     |   |  | (15,938    | ) |  | (1,759     | ) |  | (17,942 | ) |  | 1,514    |  
| | Interest expense                                    |  | (3,005     | ) |  | (899       | ) |  | -          |   |  | (20,710 | ) |  | (24,614  | )
| | Interest income                                     |  | -          |   |  | 1,392      |   |  | -          |   |  | 170     |   |  | 1,562    |  
| | Net interest
      (expense) income                 |  | (3,005     | ) |  | 493        |   |  | -          |   |  | (20,540 | ) |  | (23,052  | )
| | Profit (loss) from operating                        |  |            |   |  |            |   |  |            |   |  |         |   |  |          |  
| | activities after net interest                       |  | 34,148     |   |  | (15,445    | ) |  | (1,759     | ) |  | (38,482 | ) |  | (21,538  | )
| | Impairment of loan due from related party           |  | -          |   |  | (13,680    | ) |  | -          |   |  | -       |   |  | (13,680  | )
| | (Loss) profit on
      derivative instruments  net |  | (13,209    | ) |  | 16         |   |  | -          |   |  | (16,903 | ) |  | (30,096  | )
| | Profit (loss) before income taxes                   |  | 20,939     |   |  | (29,109    | ) |  | (1,759     | ) |  | (55,385 | ) |  | (65,314  | )
| | Income tax
      recovery (expense)                 |  | 47,573     |   |  | -          |   |  | (3         | ) |  | 7       |   |  | 47,577   |  
| | Net profit (loss) for the year                      |  | 68,512     |   |  | (29,109    | ) |  | (1,762     | ) |  | (55,378 | ) |  | (17,737  | )

1 Corporate entities

56

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|25. | Segment reporting
(continued)
|--- | -----------------------------

Segment statement of income 
December 2010

| |                                                         |  | North      |   |  | South      |   |  |            |   |  |         |   |  |         |  
| | ------------------------------------------------------- |  | ---------- | - |  | ---------- | - |  | ---------- | - |  | ------- | - |  | ------- | -
| |                                                         |  | American   |   |  | African    |   |  | Tanzanian  |   |  |         |   |  |         |  
| |                                                         |  | operations |   |  | operations |   |  | operations |   |  | Other1  |   |  | Total   |  
| |                                                         |  | $000      |   |  | $000      |   |  | $000      |   |  | $000   |   |  | $000   |  
| | Revenue                                                 |  | 99,706     |   |  | -          |   |  | -          |   |  | -       |   |  | 99,706  |  
| | Cost of operations                                      |  |            |   |  |            |   |  |            |   |  |         |   |  |         |  
| | Production cost                                         |  | (65,683    | ) |  | -          |   |  | -          |   |  | -       |   |  | (65,683 | )
| | Depletion charge                                        |  | (6,673     | ) |  | -          |   |  | -          |   |  | -       |   |  | (6,673  | )
| | Depreciation charge                                     |  | (3,427     | ) |  | -          |   |  | -          |   |  | -       |   |  | (3,427  | )
| | Expenses                                                |  |            |   |  |            |   |  |            |   |  |         |   |  |         |  
| | Exploration expenses                                    |  | (8,202     | ) |  | (522       | ) |  | (1,726     | ) |  | -       |   |  | (10,450 | )
| | Pre-development expenses                                |  | (13,397    | ) |  | -          |   |  | -          |   |  | -       |   |  | (13,397 | )
| | Corporate and administrative cost                       |  | (49        | ) |  | -          |   |  | (134       | ) |  | (7,447  | ) |  | (7,630  | )
| | Environmental impact study                              |  | (2,580     | ) |  | -          |   |  | -          |   |  | -       |   |  | (2,580  | )
| | Foreign exchange (loss) gain                            |  | -          |   |  | -          |   |  | (71        | ) |  | 4,712   |   |  | 4,641   |  
| | Salaries and compensation                               |  |            |   |  |            |   |  |            |   |  |         |   |  |         |  
| | Salaries and wages                                      |  | -          |   |  | -          |   |  | -          |   |  | (7,528  | ) |  | (7,528  | )
| | Share based
      compensation                          |  | -          |   |  | -          |   |  | -          |   |  | (4,887  | ) |  | (4,887  | )
| | Loss from operating activities                          |  | (305       | ) |  | (522       | ) |  | (1,931     | ) |  | (15,150 | ) |  | (17,908 | )
| | Interest expense                                        |  | (64        | ) |  | -          |   |  | -          |   |  | -       |   |  | (64     | )
| | Interest income                                         |  | -          |   |  | -          |   |  | -          |   |  | 1,827   |   |  | 1,827   |  
| | Net interest
      (expense) income                     |  | (64        | ) |  | -          |   |  | -          |   |  | 1,827   |   |  | 1,763   |  
| | Loss from operating activities
      after net interest |  | (369       | ) |  | (522       | ) |  | (1,931     | ) |  | (13,323 | ) |  | (16,145 | )
| | Loss on derivative
      instruments  net              |  | -          |   |  | -          |   |  | -          |   |  | (9,958  | ) |  | (9,958  | )
| | Loss before income taxes                                |  | (369       | ) |  | (522       | ) |  | (1,931     | ) |  | (23,281 | ) |  | (26,103 | )
| | Income tax
      (expense) recovery                     |  | (1,216     | ) |  | -          |   |  | (4         | ) |  | 182     |   |  | (1,038  | )
| | Net loss for the year                                   |  | (1,585     | ) |  | (522       | ) |  | (1,935     | ) |  | (23,099 | ) |  | (27,141 | )

1 Corporate entities

Refined precious metals were sold to RK
Mine Finance Trust I (RK Mine) under the terms of an off-take agreement.

In addition, unprocessed ore was sold
under the terms of ore purchase agreements to Newmont Mining Corporation during
2010.

57

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|25. | Segment reporting
(continued)
|--- | -----------------------------

Statement of financial position

| | December 31, 2011 |  |            |  |  |            |  |  |            |  |  |         |  |  |         | 
| | ----------------- |  | ---------- |  |  | ---------- |  |  | ---------- |  |  | ------- |  |  | ------- | 
| |                   |  | North      |  |  | South      |  |  |            |  |  |         |  |  |         | 
| |                   |  | American   |  |  | African    |  |  | Tanzanian  |  |  |         |  |  |         | 
| |                   |  | operations |  |  | operations |  |  | operations |  |  | Other1  |  |  | Total   | 
| |                   |  | $000      |  |  | $000      |  |  | $000      |  |  | $000   |  |  | $000   | 
| |                   |  |            |  |  |            |  |  |            |  |  |         |  |  |         | 
| | Total assets      |  | 180,682    |  |  | 613,772    |  |  | 45,392     |  |  | 10,464  |  |  | 850,310 | 
| |                   |  |            |  |  |            |  |  |            |  |  |         |  |  |         | 
| | Total liabilities |  | 100,198    |  |  | 174,941    |  |  | 19         |  |  | 103,584 |  |  | 378,742 | 

| | December 31, 2010 |  |            |  |  |            |  |  |            |  |  |        |  |  |         | 
| | ----------------- |  | ---------- |  |  | ---------- |  |  | ---------- |  |  | ------ |  |  | ------- | 
| |                   |  | North      |  |  | South      |  |  |            |  |  |        |  |  |         | 
| |                   |  | American   |  |  | African    |  |  | Tanzanian  |  |  |        |  |  |         | 
| |                   |  | operations |  |  | operations |  |  | operations |  |  | Other1 |  |  | Total   | 
| |                   |  | $000      |  |  | $000      |  |  | $000      |  |  | $000  |  |  | $000   | 
| |                   |  |            |  |  |            |  |  |            |  |  |        |  |  |         | 
| | Total assets      |  | 115,797    |  |  | 579,380    |  |  | 45,744     |  |  | 14,462 |  |  | 755,383 | 
| |                   |  |            |  |  |            |  |  |            |  |  |        |  |  |         | 
| | Total liabilities |  | 56,713     |  |  | 137,451    |  |  | 55         |  |  | 95,447 |  |  | 289,666 | 

| | January 1, 2010   |  |            |  |  |            |  |  |            |  |  |        |  |  |         | 
| | ----------------- |  | ---------- |  |  | ---------- |  |  | ---------- |  |  | ------ |  |  | ------- | 
| |                   |  | North      |  |  | South      |  |  |            |  |  |        |  |  |         | 
| |                   |  | American   |  |  | African    |  |  | Tanzanian  |  |  |        |  |  |         | 
| |                   |  | operations |  |  | operations |  |  | operations |  |  | Other1 |  |  | Total   | 
| |                   |  | $000      |  |  | $000      |  |  | $000      |  |  | $000  |  |  | $000   | 
| |                   |  |            |  |  |            |  |  |            |  |  |        |  |  |         | 
| | Total assets      |  | 128,855    |  |  | 259,938    |  |  | 26,537     |  |  | 77,842 |  |  | 493,172 | 
| |                   |  |            |  |  |            |  |  |            |  |  |        |  |  |         | 
| | Total liabilities |  | 58,234     |  |  | 17,300     |  |  | 97         |  |  | 88,281 |  |  | 163,912 | 

1 Corporate entities

Additions to non-current
assets

| | December 31, 2011   |  |            |  |  |            |  |  |            |   |  |        |  |  |         | 
| | ------------------- |  | ---------- |  |  | ---------- |  |  | ---------- | - |  | ------ |  |  | ------- | 
| |                     |  | North      |  |  | South      |  |  |            |   |  |        |  |  |         | 
| |                     |  | American   |  |  | African    |  |  | Tanzanian  |   |  |        |  |  |         | 
| |                     |  | operations |  |  | operations |  |  | operations |   |  | Other1 |  |  | Total   | 
| |                     |  | $000      |  |  | $000      |  |  | $000      |   |  | $000  |  |  | $000   | 
| |                     |  |            |  |  |            |  |  |            |   |  |        |  |  |         | 
| | Non-current assets2 |  | 7,353      |  |  | 143,641    |  |  | (117       | ) |  | 89     |  |  | 150,966 | 

| | December 31, 2010   |  |            |  |  |            |  |  |            |  |  |        |  |  |         | 
| | ------------------- |  | ---------- |  |  | ---------- |  |  | ---------- |  |  | ------ |  |  | ------- | 
| |                     |  | North      |  |  | South      |  |  |            |  |  |        |  |  |         | 
| |                     |  | American   |  |  | African    |  |  | Tanzanian  |  |  |        |  |  |         | 
| |                     |  | operations |  |  | operations |  |  | operations |  |  | Other1 |  |  | Total   | 
| |                     |  | $000      |  |  | $000      |  |  | $000      |  |  | $000  |  |  | $000   | 
| |                     |  |            |  |  |            |  |  |            |  |  |        |  |  |         | 
| | Non-current assets2 |  | 9,430      |  |  | 292,029    |  |  | 19,336     |  |  | 1,755  |  |  | 322,550 | 

1 Corporate entities2 Additions to
non-current assets exclude other than financial instruments and deferred tax
assets

58

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|26. | Capital disclosures                                                                                                                                                                                                                                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                         
|    | The Companys objectives when managing capital
  are:                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                         
|    | The Company considers the items included in the
      consolidated statement of shareholders equity and borrowings as capital.
      The Company manages the capital structure and makes adjustments to it in
      the light of changes in economic conditions and the risk characteristics
      of the underlying assets.           
|    |                                                                                                                                                                                                                                                                                                                                         
|    | In order to maintain or adjust the capital structure, the
      Company may issue new shares through private placements and public
      offerings, enter into new debt arrangements, sell assets to reduce debt or
      return capital to shareholders.                                                                               
|    |                                                                                                                                                                                                                                                                                                                                         
|    | Term loan I and Term loan II entered into (refer note
      15(d) and 15(e)) dictates certain requirements in respect of capital
      management. These covenants are considered and impacts on the capital
      management strategies of the Company.                                                                                
|    |                                                                                                                                                                                                                                                                                                                                         
|    | These covenants are standard to loan agreements of this
      nature and include:                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                         
|    | As at December 31, 2011, the Company complied with these
      requirements.                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                         
|27. | Financial instruments                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                         
|    | Fair Value Hierarchy                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                         
|    | Financial instruments recognized at fair value on the
      consolidated statement of financial position must be classified in one of
      the following three fair value hierarchy values:                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                         
|    | Financial Assets                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                         
|    | The following table sets out the movement of the
      Companys financial asset investments, which are accounted for as
      available-for-sale, at fair value through profit or loss, loans and
      receivables or other as defined by IFRS 7, Financial Instruments. No
      items were classified as held-to-maturity.

59

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|27. | Financial instruments
(continued)
|--- | ---------------------------------

Financial Assets (continued)

The carrying amounts, fair values and
levels per the fair value hierarchy of financial assets are as follows:

| | December 31, 2011           |  |                           |  |  |                 |  |  |                |  |  |          | 
| | --------------------------- |  | ------------------------- |  |  | --------------- |  |  | -------------- |  |  | -------- | 
| |                             |  |                           |  |  |                 |  |  | Estimated fair |  |  | Carrying | 
| |                             |  |                           |  |  | Fair value      |  |  | value          |  |  | value    | 
| |                             |  | Designation               |  |  | hierarchy level |  |  | $000          |  |  | $000    | 
| | Cash and cash equivalents   |  | Loans & receivables       |  |  | N/A             |  |  | 25,749         |  |  | 25,749   | 
| | Trade and other receivables |  | Loans & receivables       |  |  | N/A             |  |  | 14,060         |  |  | 14,060   | 
| | Loan due from related party |  | Loans & receivables       |  |  | N/A             |  |  | 3,784          |  |  | 3,784    | 
| | Other assets                |  | Loans
      & receivables |  |  | N/A             |  |  | 5,327          |  |  | 5,327    | 
| | Total financial assets      |  |                           |  |  |                 |  |  | 48,920         |  |  | 48,920   | 

| | December 31, 2010           |  |                           |  |  |                 |  |  |                |  |  |          | 
| | --------------------------- |  | ------------------------- |  |  | --------------- |  |  | -------------- |  |  | -------- | 
| |                             |  |                           |  |  |                 |  |  | Estimated fair |  |  | Carrying | 
| |                             |  |                           |  |  | Fair value      |  |  | value          |  |  | value    | 
| |                             |  | Designation               |  |  | hierarchy level |  |  | $000          |  |  | $000    | 
| | Cash and cash equivalents   |  | Loans & receivables       |  |  | N/A             |  |  | 12,855         |  |  | 12,855   | 
| | Trade and other receivables |  | Loans & receivables       |  |  | N/A             |  |  | 9,340          |  |  | 9,340    | 
| | Loan due from related party |  | Loans & receivables       |  |  | N/A             |  |  | 13,372         |  |  | 13,372   | 
| | Other assets                |  | Loans
      & receivables |  |  | N/A             |  |  | 4,719          |  |  | 4,719    | 
| | Total financial assets      |  |                           |  |  |                 |  |  | 40,286         |  |  | 40,286   | 

| | January 1, 2010                                       |  |                                      |  |  |                 |  |  |                |  |  |          | 
| | ----------------------------------------------------- |  | ------------------------------------ |  |  | --------------- |  |  | -------------- |  |  | -------- | 
| |                                                       |  |                                      |  |  |                 |  |  | Estimated fair |  |  | Carrying | 
| |                                                       |  |                                      |  |  | Fair value      |  |  | value          |  |  | value    | 
| |                                                       |  | Designation                          |  |  | hierarchy level |  |  | $000          |  |  | $000    | 
| | Cash and cash equivalents                             |  | Loans & receivables                  |  |  | N/A             |  |  | 89,464         |  |  | 89,464   | 
| | Trade and other receivables                           |  | Loans & receivables                  |  |  | N/A             |  |  | 5,053          |  |  | 5,053    | 
| | Available-for-sale financial assets                   |  | Available-for-sale                   |  |  | 1               |  |  | 4,961          |  |  | 4,961    | 
| | Financial assets at fair value through profit or loss |  | At fair value through profit or loss |  |  | 1               |  |  | 207            |  |  | 207      | 
| | Restricted cash                                       |  | Loans & receivables                  |  |  | N/A             |  |  | 2,439          |  |  | 2,439    | 
| | Other assets                                          |  | Loans
      & receivables            |  |  | N/A             |  |  | 4,590          |  |  | 4,590    | 
| | Total financial assets                                |  |                                      |  |  |                 |  |  | 106,714        |  |  | 106,714  | 

60

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|27. | Financial instruments
(continued)
|--- | ---------------------------------

Financial Assets (continued)

Movements in loans and receivables,
available-for-sale and at fair value through profit or loss financial assets
were as follows:

| |                                |  |             |   |  |            |   |  | At fair
      value |   |  |         |  
| | ------------------------------ |  | ----------- | - |  | ---------- | - |  | ------------------- | - |  | ------- | -
| |                                |  | Loans &     |   |  | Available- |   |  | through
    profit  |   |  |         |  
| |                                |  | receivables |   |  | for-sale   |   |  | or loss             |   |  | Total   |  
| |                                |  | $000       |   |  | $000      |   |  | $000               |   |  | $000   |  
| | At January 1, 2010             |  | 101,546     |   |  | 4,961      |   |  | 207                 |   |  | 106,714 |  
| | Cash movements during the year |  | (63,802     | ) |  | -          |   |  | -                   |   |  | (63,802 | )
| | Disposal                       |  | -           |   |  | (5,564     | ) |  | (174                | ) |  | (5,738  | )
| | Movements in fair
      value  |  | 2,542       |   |  | 603        |   |  | (33                 | ) |  | 3,112   |  
| |                                |  |             |   |  |            |   |  |                     |   |  |         |  
| | Balance, December 31, 2010     |  | 40,286      |   |  | -          |   |  | -                   |   |  | 40,286  |  
| | Cash movements during the year |  | 8,618       |   |  | -          |   |  | -                   |   |  | 8,618   |  
| | Movements in fair
      value  |  | 16          |   |  | -          |   |  | -                   |   |  | 16      |  
| | Balance, December 31, 2011     |  | 48,920      |   |  | -          |   |  | -                   |   |  | 48,920  |  

Financial Liabilities

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

| | December 31, 2011                 |  |                |  |  |                |  |  |          | 
| | --------------------------------- |  | -------------- |  |  | -------------- |  |  | -------- | 
| |                                   |  |                |  |  | Estimated fair |  |  | Carrying | 
| |                                   |  |                |  |  | value          |  |  | value    | 
| |                                   |  | Designation    |  |  | $000          |  |  | $000    | 
| | Trade and other payables1         |  | Amortized cost |  |  | 51,071         |  |  | 51,071   | 
| | Other liabilities                 |  |                |  |  | 34,247         |  |  | 34,247   | 
| | Debt                              |  | Amortized cost |  |  | 283,116        |  |  | 282,446  | 
| | Total
      financial liabilities |  |                |  |  | 368,434        |  |  | 367,764  | 

| | December 31, 2010                 |  |                |  |  |                |  |  |          | 
| | --------------------------------- |  | -------------- |  |  | -------------- |  |  | -------- | 
| |                                   |  |                |  |  | Estimated fair |  |  | Carrying | 
| |                                   |  |                |  |  | value          |  |  | value    | 
| |                                   |  | Designation    |  |  | $000          |  |  | $000    | 
| | Trade and other payables1         |  | Amortized cost |  |  | 57,119         |  |  | 57,119   | 
| | Other liabilities                 |  |                |  |  | 12,697         |  |  | 12,697   | 
| | Debt                              |  | Amortized cost |  |  | 253,894        |  |  | 209,578  | 
| | Total
      financial liabilities |  |                |  |  | 323,710        |  |  | 279,394  | 

| | January 1, 2010             |  |                |  |  |                |  |  |          | 
| | --------------------------- |  | -------------- |  |  | -------------- |  |  | -------- | 
| |                             |  |                |  |  | Estimated fair |  |  | Carrying | 
| |                             |  |                |  |  | value          |  |  | value    | 
| |                             |  | Designation    |  |  | $000          |  |  | $000    | 
| | Trade and other payables1   |  | Amortized cost |  |  | 26,584         |  |  | 26,584   | 
| | Debt                        |  | Amortized cost |  |  | 131,496        |  |  | 130,716  | 
| | Total financial liabilities |  |                |  |  | 158,080        |  |  | 157,300  | 

1 Non-financial liabilities are
excluded from the trade and other payables balance, as this analysis is required
only for financial instruments.

Other liabilities consist of the
initial fair value of the guarantee in favour of Investec and the fair value of
the ZCC hedge programs (refer note 16(a), 16(b) and 16(c)).

61

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|27. | Financial instruments
(continued)
|--- | ---------------------------------

Financial Instrument Risk Exposure
and Risk Management

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

Credit Risk

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

The Companys cash and cash equivalents and other assets,
  consisting of reclamation deposits, are held through large Canadian and South
  African financial institutions. Cash equivalents are composed of financial
  instruments issued by Canadian and South African Banks with high
  investment-grade ratings. The Company does not have financial assets that are
  invested in asset backed commercial paper.

Trade and other receivables consist
mainly of trade receivables and HST/VAT. The Companys HST/VAT receivables
consist substantially of value added tax due from the Government of South
Africa. Trade receivables consist of gold sales due under the off-take agreement
with RK Mine, a reputable physical metal trading company. Gold receivables are
settled within two days of transfer.

Refer to note 10 for a discussion on
the Companys credit risk exposure associated with the loan due from related
party.

The status of the Companys investments
in financial assets is detailed in notes 5, 6, 8, 9, 12 and 13.

The carrying amount of financial assets
recorded in the financial statements, net of any allowances for losses,
represents the Companys maximum exposure to credit risk.

Liquidity Risk

The financial statements have been
prepared on a going concern basis, which contemplates the realization of assets
and the settlement of liabilities in the normal course of business. Liquidity
risk is the risk that the Company will not be able to meet its financial
obligations as they fall due.

The Company takes cognizance of the
start-up risks associated with new projects management and mitigate this risk by
monitoring its spending plans, repayment obligations and cash resources and
taking actions with the objective of ensuring that there is sufficient capital
in order to meet short term business requirements, after taking into account
cash flows from operations and the Companys holdings of cash and cash
equivalents.

Delivering on planned production from
both the Nevada and South African operations remains essential to the Companys
ability to fund its operations and meet its debt repayment obligations in the
near term.

62

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|27. | Financial instruments
(continued)
|--- | ---------------------------------

Financial Instrument Risk Exposure
and Risk Management (continued)

Liquidity Risk
(continued)

Contractually obligated cash flow
requirements, including interest, as at December 31, 2011, are as follows:

| |                           |  |         |  |  |                  |  |  |             |  |  | More
      than 5 | 
| | ------------------------- |  | ------- |  |  | ---------------- |  |  | ----------- |  |  | ----------------- | 
| |                           |  | Total   |  |  | Less than 1 year |  |  | 1  5 years |  |  | years             | 
| |                           |  | $000   |  |  | $000            |  |  | $000       |  |  | $000             | 
| | Trade and other payables1 |  | 51,071  |  |  | 51,071           |  |  | -           |  |  | -                 | 
| | Convertible debentures    |  | 156,438 |  |  | 10,120           |  |  | 146,318     |  |  | -                 | 
| | Finance lease liability   |  | 3,061   |  |  | 2,980            |  |  | 81          |  |  | -                 | 
| | Term loan I               |  | 151,834 |  |  | 6,313            |  |  | 145,521     |  |  | -                 | 
| | Term loan II              |  | 61,296  |  |  | 19,114           |  |  | 42,182      |  |  | -                 | 
| | Operating leases          |  | 203     |  |  | 203              |  |  | -           |  |  | -                 | 
| | Guarantee                 |  | 2,178   |  |  | 2,178            |  |  | -           |  |  | -                 | 
| | Other                     |  | 897     |  |  | 97               |  |  | 402         |  |  | 398               | 
| | Total                     |  | 426,978 |  |  | 92,076           |  |  | 334,504     |  |  | 398               | 

1 Non-financial liabilities are
excluded from the trade and other payables balance, as this analysis is required
only for financial instruments.

The Company executed a $50 million
public offering during March 2012 (refer note 28 (a)). Net proceeds from the
Offering will be used towards working capital for the development and ramp up of
the Burnstone Mine.

Market Risk

The significant market risks to which
the Company is exposed are foreign exchange risk, interest rate risk and
commodity price risk, which are discussed further below. In addition, the
Company is exposed to price increases in cost of labour, energy and equipment
which might influence the ultimate capital investment in the development of the
Companys projects and operational costs.

Foreign Exchange Risk

The Companys capital and other income
is denominated in Canadian dollars, whilst revenue is denominated in US$.
However, the Companys operating expenses are primarily incurred in US$ and ZAR.
The results of the Companys operations are subject to currency transaction risk
and currency translation risk.

The operating results and financial
position of the Company are reported in Canadian dollars in the Companys
financial statements. The fluctuation of the US$ and ZAR in relation to the
Canadian dollar will consequently have an impact on the profitability of the
Company and may also affect the value of the Companys assets and the amount of
shareholders equity.

The Company has not entered into any
agreements or purchased any instruments to hedge possible currency risks at this
time.

63

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|27. | Financial instruments
(continued)
|--- | ---------------------------------

Financial Instrument Risk Exposure
and Risk Management (continued)

Foreign Exchange Risk
(continued)

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

| | December 31, 2011           |  |        |  |  |        |  |  |       |  |  |        | 
| | --------------------------- |  | ------ |  |  | ------ |  |  | ----- |  |  | ------ | 
| |                             |  | US$    |  |  | ZAR    |  |  | $     |  |  | Total  | 
| |                             |  | $000  |  |  | $000  |  |  | $000 |  |  | $000  | 
| | Cash and cash equivalents   |  | 10,515 |  |  | 15,086 |  |  | 148   |  |  | 25,749 | 
| | Trade and other receivables |  | 9,705  |  |  | 4,329  |  |  | 26    |  |  | 14,060 | 
| | Loan due from related party |  | -      |  |  | 3,784  |  |  | -     |  |  | 3,784  | 
| | Other assets                |  | 3,359  |  |  | 1,968  |  |  | -     |  |  | 5,327  | 
| | Total financial assets      |  | 23,579 |  |  | 25,167 |  |  | 174   |  |  | 48,920 | 

| | December 31, 2010           |  |        |  |  |        |  |  |       |  |  |        | 
| | --------------------------- |  | ------ |  |  | ------ |  |  | ----- |  |  | ------ | 
| |                             |  | US$    |  |  | ZAR    |  |  | $     |  |  | Total  | 
| |                             |  | $000  |  |  | $000  |  |  | $000 |  |  | $000  | 
| | Cash and cash equivalents   |  | 8,426  |  |  | 2,632  |  |  | 1,797 |  |  | 12,855 | 
| | Trade and other receivables |  | 3,886  |  |  | 5,398  |  |  | 56    |  |  | 9,340  | 
| | Loan due from related party |  | -      |  |  | 13,372 |  |  | -     |  |  | 13,372 | 
| | Other assets                |  | 3,010  |  |  | 1,709  |  |  | -     |  |  | 4,719  | 
| | Total financial assets      |  | 15,322 |  |  | 23,111 |  |  | 1,853 |  |  | 40,286 | 

| | January 1, 2010                                       |  |       |  |  |       |  |  |        |  |  |        |  |  |         | 
| | ----------------------------------------------------- |  | ----- |  |  | ----- |  |  | ------ |  |  | ------ |  |  | ------- | 
| |                                                       |  | GBP   |  |  | US$   |  |  | ZAR    |  |  | $      |  |  | Total   | 
| |                                                       |  | $000 |  |  | $000 |  |  | $000  |  |  | $000  |  |  | $000   | 
| | Cash and cash equivalents                             |  | -     |  |  | 3,345 |  |  | 20,146 |  |  | 65,973 |  |  | 89,464  | 
| | Trade and other receivables                           |  | -     |  |  | 774   |  |  | 3,953  |  |  | 326    |  |  | 5,053   | 
| | Available-for-sale financial assets                   |  | 4,961 |  |  | -     |  |  | -      |  |  | -      |  |  | 4,961   | 
| | Financial assets at fair value through profit or loss |  | 207   |  |  | -     |  |  | -      |  |  | -      |  |  | 207     | 
| | Restricted cash                                       |  | -     |  |  | -     |  |  | 2,439  |  |  | -      |  |  | 2,439   | 
| | Other assets                                          |  | -     |  |  | 2,637 |  |  | 1,104  |  |  | 849    |  |  | 4,590   | 
| | Total financial assets                                |  | 5,168 |  |  | 6,756 |  |  | 27,642 |  |  | 67,148 |  |  | 106,714 | 

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

| | December 31, 2011                 |  |         |  |  |        |  |  |        |  |  |         | 
| | --------------------------------- |  | ------- |  |  | ------ |  |  | ------ |  |  | ------- | 
| |                                   |  | US$     |  |  | ZAR    |  |  | $      |  |  | Total   | 
| |                                   |  | $000   |  |  | $000  |  |  | $000  |  |  | $000   | 
| | Trade and other payables1         |  | 29,655  |  |  | 21,251 |  |  | 165    |  |  | 51,071  | 
| | Other liabilities                 |  | 32,082  |  |  | 2,165  |  |  | -      |  |  | 34,247  | 
| | Debt                              |  | 183,934 |  |  | -      |  |  | 98,512 |  |  | 282,446 | 
| | Total financial
      liabilities |  | 245,671 |  |  | 23,416 |  |  | 98,677 |  |  | 367,764 | 

1Non-financial liabilities are excluded
from the trade and other payables balance, as this analysis is required only for
financial instruments.

64

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|27. | Financial instruments
(continued)
|--- | ---------------------------------

Financial Instrument Risk Exposure
and Risk Management (continued)

Foreign Exchange Risk
(continued)

| | December 31, 2010                 |  |         |  |  |        |  |  |        |  |  |         | 
| | --------------------------------- |  | ------- |  |  | ------ |  |  | ------ |  |  | ------- | 
| |                                   |  | US$     |  |  | ZAR    |  |  | $      |  |  | Total   | 
| |                                   |  | $000   |  |  | $000  |  |  | $000  |  |  | $000   | 
| | Trade and other payables1         |  | 12,918  |  |  | 43,644 |  |  | 557    |  |  | 57,119  | 
| | Other liabilities                 |  | 10,100  |  |  | 2,597  |  |  | -      |  |  | 12,697  | 
| | Debt                              |  | 111,118 |  |  | 6,783  |  |  | 91,677 |  |  | 209,578 | 
| | Total
      financial liabilities |  | 134,136 |  |  | 53,024 |  |  | 92,234 |  |  | 279,394 | 

| | January 1, 2010             |  |        |  |  |        |  |  |        |  |  |         | 
| | --------------------------- |  | ------ |  |  | ------ |  |  | ------ |  |  | ------- | 
| |                             |  | US$    |  |  | ZAR    |  |  | $      |  |  | Total   | 
| |                             |  | $000  |  |  | $000  |  |  | $000  |  |  | $000   | 
| | Trade and other payables1   |  | 10,893 |  |  | 15,343 |  |  | 348    |  |  | 26,584  | 
| | Debt                        |  | 44,412 |  |  | -      |  |  | 86,304 |  |  | 130,716 | 
| | Total financial liabilities |  | 55,305 |  |  | 15,343 |  |  | 86,652 |  |  | 157,300 | 

1 Non-financial liabilities are
excluded from the trade and other payables balance, as this analysis is required
only for financial instruments.

At December 31, 2011, the Company is
exposed to currency risk through the following foreign currency denominated
assets and liabilities:

| |                             |  | US$      |   |  | ZAR     |   |  | $       |   |  | Total    |  
| | --------------------------- |  | -------- | - |  | ------- | - |  | ------- | - |  | -------- | -
| |                             |  | $000    |   |  | $000   |   |  | $000   |   |  | $000    |  
| | Financial assets            |  | 23,579   |   |  | 25,167  |   |  | 174     |   |  | 48,920   |  
| | Financial
      liabilities |  | (245,671 | ) |  | (23,416 | ) |  | (98,677 | ) |  | (367,764 | )
| | Net exposure                |  | (222,092 | ) |  | 1,751   |   |  | (98,503 | ) |  | (318,844 | )

Based on the aforementioned net
exposure as at December 31, 2011, and assuming that all other variables remain
constant, a 10% depreciation or appreciation of the $ against the respective
currencies would result in a net variance on the statement of financial position
as set out below.

| |              |  | US$    |  |  | ZAR   | 
| | ------------ |  | ------ |  |  | ----- | 
| |              |  | $000  |  |  | $000 | 
| | Net exposure |  | 22,209 |  |  | 175   | 

The Companys exposure to foreign
exchange fluctuations charged to the statement of income is limited to the US$
denominated Term loan I. A 10% depreciation of appreciation of the $ against the
US$ would result in a $12.6 million foreign exchange profit or loss to the
statement of income, calculated on the outstanding balance as of December 31,
2011.

Interest Rate Risk

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

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

65

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|27. | Financial instruments
(continued)
|--- | ---------------------------------

Financial Instrument Risk Exposure
and Risk Management (continued)

Interest Rate Risk
(continued)

The exposure of the Companys financial
assets to interest rate risk as at December 31, 2011 was limited to its
investment in cash and cash equivalents of $25.7 million (2010: $12.9 million)
as well as other assets which are invested at floating rates.

The exposure of the Companys floating
rate interest-bearing financial liabilities as at December 31, 2011 is as
follows:

| |              |  | Less
      than 1 |  |  |             |  |  | More
      than 5 | 
| | ------------ |  | ----------------- |  |  | ----------- |  |  | ----------------- | 
| |              |  | year              |  |  | 2  5 years |  |  | years             | 
| |              |  | $000             |  |  | $000       |  |  | $000             | 
| | Term loan I  |  | 6,313             |  |  | 145,521     |  |  | -                 | 
| | Term loan II |  | 19,114            |  |  | 42,182      |  |  | -                 | 
| |              |  | 25,427            |  |  | 187,703     |  |  | -                 | 

Term loan I

The interest rate is linked to the US$
LIBOR at a premium of 4% above US$ LIBOR and is fixed on a quarterly basis. The
floating rate on December 31, 2011 was 4.5437% (US$ LIBOR of 0.5435% plus 4%
premium) (refer note 15(d)).

Term loan II

The interest rate is linked to the US$
LIBOR at a premium of 3.75% above US$ LIBOR and is fixed on a quarterly basis.
The floating rate on December 31, 2011 was 4.0971% (US$ LIBOR of 0.3471% plus
3.75% premium) (refer note 15(e)).

The impact of a change in the variable
portion (US$ LIBOR) of the floating rates is nominal.

The Companys other
  borrowings have fixed interest rates and are therefore not exposed to
  fluctuation in interest rates (refer note 15(a) and 15(b)). The remainder of the
  Companys financial liabilities is not exposed to interest rate risk as it is of
  a non-interest bearing nature.

Commodity Price Risk

The value of the Companys mineral
resource properties is related to the price of gold and silver and the outlook
for these minerals. The Company does not follow a hedging strategy to manage its
exposure to commodity prices and only enter into commodity hedge structures to
the level required by certain financing transactions (refer note 16(b)).

The net value of these structures as
recorded in the statement of financial position fluctuate in a response to
movement in the underlying valuation drivers which include gold price (spot
price as well as the forward curve), interest rates and time to delivery of the
ounces in the structure. The movement in spot gold price is regarded the main
valuation driver with an approximate $30 million fair value movement in the
structure for each 10% movement in the gold price (using December 31, 2011 spot
gold price and fair value as reference with all other valuation drivers
remaining constant).

66

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|27. | Financial instruments (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | Financial Instrument Risk Exposure and Risk Management
      (continued)
      Commodity Price Risk (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | Gold and silver prices historically fluctuated widely and
      are affected by numerous factors outside of the Companys control,
      including, but not limited to, industrial and retail demand, central bank
      lending, forward sales by producers and speculators, levels of worldwide
      production, short-term changes in supply and demand because of speculative
      hedging activities, global economic stability and certain other
      factors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|28. | Subsequent events                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | Subsequent to December 31, 2011                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | (a) Public offering                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | The Company closed a $50 million public offering on March
      30, 2012 with the proceeds from this transaction mainly being utilized for
      working capital requirements during the production build-up at the
      Burnstone Mine. The Company issued 66.7 million units on closing this
      transaction, for gross proceeds of $50 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | A unit consists of one Great Basin common share and one
      half of a purchase warrant. The warrants are exercisable at $0.90 per
      warrant and will expire on March 30, 2014.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | The 15% over-allotment option granted to the Underwriters
      remains open for a period of 30 days following the closing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | (b) Third party advances                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | Tranter has been notified by Investec that it is
      currently in breach of the requirements of its loan agreement due to an
      unfunded cash margin call as a consequence of the decline in the value of
      the Great Basin common shares serving as collateral for the loan. The
      Company advanced $0.6 million (ZAR5 million) since January 2012 under the
      Guarantee agreement to assist Tranter to meet the margin call requirements
      and approximately $1.6 million (ZAR12 million) remains available to meet
      the unfunded cash margin of approximately $6 million (ZAR45 million). The
      Company is seeking, through ongoing discussions with Investec and Tranter,
      to assist Tranter to remedy their breach position and meet their future
      loan obligations. Whilst the outcome of the discussions is uncertain, the
      Company does not expect the outcome of these discussions to affect its
      current compliance with the Mining Charter or near term cash
  flow.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | (c) Gold Fields royalty arbitration                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | The Company has received notification from Gold Fields
      Limited ("Gold Fields") that it intends to seek rescission of a 2007
      agreement under which Gold Fields cancelled a 2% net smelter royalty over
      a majority of Area 1 of the Burnstone Mine. Under that transaction, which
      was part of the Tranter transaction described in note 10, Gold Fields
      cancelled the royalty for consideration of $11 million (ZAR 80 million),
      that was paid by Great Basin in 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

67

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|28. | Subsequent events (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | (c) Gold Fields royalty arbitration
    (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | On the condition that Gold Fields should receive certain
      Mining Charter score card credits from the South African government, Gold
      Fields donated the proceeds to Tranter which Tranter used to part fund the
      acquisition of the Great Basin shares. As Gold Fields has not received
      these credits, the Company and Gold Fields have been discussing a mutually
      acceptable settlement that will not impact on the transformation agenda of
      the South African Government.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | On March 12, 2012, Gold Fields gave notice of arbitration
      to the Company in respect of this matter. Management does not expect this
      issue to have an impact on the Company's near term cash-flow, development
      or production targets.                                                                                                                                                                                                                                                      

68

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|29. | Transition to IFRS                                                                             
|--- | -----------------------------------------------------------------------------------------------
|    |                                                                                                
|    | The effect of the Companys transition to IFRS, described
      in note 2, is summarized below.
|    |                                                                                                
|    | (a)                                                                                            

December 31, 2010
    
    
    January 1, 2010$'000
    
    
    $'000
    
    
    $'000
    
    
    $'000
    
    
    $'000
    
    
    $'000Note
    
    **Cdn GAAP**
    
    
    Adj
    
    
    IFRS Cdn
    
    
    **GAAP**
    
    
    Adj
    
    
    IFRSAssetsCurrent assetsCash and cash equivalents
    
    
    
    12,855
    
    
    -
    
    
    12,855
    
    
    89,464
    
    
    -
    
    
    89,464Amounts receivable
    
    
    
    9,340
    
    
    -
    
    
    9,340
    
    
    5,053
    
    
    -
    
    
    5,053Inventory
    
    
    
    11,560
    
    
    -
    
    
    11,560
    
    
    26,312
    
    
    -
    
    
    26,312Available-for-sale financial instruments
    
    
    
    -
    
    
    -
    
    
    -
    
    
    4,961
    
    
    -
    
    
    4,961Held-for-trading financial
      instruments
    
    
    
    -
    
    
    -
    
    
    -
    
    
    207
    
    
    -
    
    
    207Other assets
    
    
    
    1,283
    
    
    -
    
    
    1,283
    
    
    865
    
    
    -
    
    
    86535,038
    
    
    -
    
    
    35,038
    
    
    126,862
    
    
    -
    
    
    126,862Inventory
    
    
    
    6,880
    
    
    -
    
    
    6,880
    
    
    -
    
    
    -
    
    
    -Loans due from related parties
    
    
    
    13,372
    
    
    -
    
    
    13,372
    
    
    -
    
    
    
    
    
    -Property, plant and equipment
    
    
    
    512,384
    
    
    -
    
    
    512,384
    
    
    191,474
    
    
    -
    
    
    191,474Reclamation deposits
    
    
    
    4,719
    
    
    -
    
    
    4,719
    
    
    4,590
    
    
    -
    
    
    4,590Restricted cash
    
    
    
    -
    
    
    -
    
    
    -
    
    
    2,439
    
    
    -
    
    
    2,439Mineral
      property interests
    
    29 (a)(i)
    
    245,649
    
    
    (62,659
    )
    
    182,990
    
    
    222,919
    
    
    (55,112
    )
    
    167,807Total Assets
    
    
    
    818,042
    
    
    (62,659
    )
    
    755,383
    
    
    548,284
    
    
    (55,112
    )
    
    493,172Liabilities and Shareholders' EquityCurrent liabilitiesAccounts payable and accrued
      liabilities
    
    
    
    61,731
    
    
    -
    
    
    61,731
    
    
    29,206
    
    
    -
    
    
    29,206Current portion of long term borrowings
    
    
    
    53,516
    
    
    -
    
    
    53,516
    
    
    43,768
    
    
    -
    
    
    43,768Current portion of other liabilities
    
    
    
    278
    
    
    -
    
    
    278
    
    
    -
    
    
    -
    
    
    -115,525
    
    
    -
    
    
    115,525
    
    
    72,974
    
    
    -
    
    
    72,974Long term borrowings
    
    
    
    156,062
    
    
    -
    
    
    156,062
    
    
    86,948
    
    
    -
    
    
    86,948Future income taxes
    
    29 (a)(i);(ii)
    
    18,939
    
    
    (18,939
    )
    
    -
    
    
    10,659
    
    
    (10,659
    )
    
    -Other liabilities
    
    
    
    12,419
    
    
    -
    
    
    12,419
    
    
    -
    
    
    -
    
    
    -Site reclamation obligations
    
    
    
    5,660
    
    
    -
    
    
    5,660
    
    
    3,990
    
    
    -
    
    
    3,990Total liabilities
    
    
    
    308,605
    
    
    (18,939
    )
    
    289,666
    
    
    174,571
    
    
    (10,659
    )
    
    163,912Shareholders' equityShare capital
    
    
    
    709,449
    
    
    -
    
    
    709,449
    
    
    567,596
    
    
    -
    
    
    567,596Warrants
    
    
    
    6,108
    
    
    -
    
    
    6,108
    
    
    13,104
    
    
    -
    
    
    13,104Contributed surplus
    
    29 (a)(ii)
    
    86,540
    
    
    (8,864
    )
    
    77,676
    
    
    83,267
    
    
    (8,864
    )
    
    74,403Deficit
    
    29 (a)(iv)
    
    (294,625
    )
    
    (59,286
    )
    
    (353,911
    )
    
    (265,713
    )
    
    (61,057
    )
    
    (326,770
    )Accumulated other comprehensive income (loss)
    
    29 (a)(iii)
    
    1,965
    
    
    24,430
    
    
    26,395
    
    
    (24,541
    )
    
    25,468
    
    
    927509,437
    
    
    (43,720
    )
    
    465,717
    
    
    373,713
    
    
    (44,453
    )
    
    329,260Total
      Liabilities and Shareholders' Equity
    
    
    
    818,042
    
    
    (62,659
    )
    
    755,383
    
    
    548,284
    
    
    (55,112
    )
    
    493,172


69

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|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|29. | Transition to IFRS
(continued)
|--- | ------------------------------

| | (a) | Reconciliation of equity and comprehensive loss as
      previously reported under Canadian GAAP to IFRS
  (continued)
| | --- | ----------------------------------------------------------------------------------------------------------------------

Year ended December 31, 2010$ '000
    
    
    $ '000
    
    
    $ '000Note
    
    Cdn GAAP
    
    
    Adj
    
    
    IFRSRevenue
    
    
    
    99,706
    
    
    
    
    
    99,706(Expenses) incomeProduction cost
    
    
    
    (70,326
    )
    
    
    
    
    (70,326
    )Depletion charge
    
    29 (a)(i)
    
    (8,444
    )
    
    1,771
    
    
    (6,673
    )Exploration expenses
    
    
    
    (10,450
    )
    
    
    
    
    (10,450
    )Pre-development expenses
    
    
    
    (13,397
    )
    
    
    
    
    (13,397
    )Corporate and administrative cost
    
    
    
    (7,630
    )
    
    
    
    
    (7,630
    )Environmental impact study
    
    
    
    (2,580
    )
    
    
    
    
    (2,580
    )Foreign exchange gain - net
    
    
    
    4,641
    
    
    
    
    
    4,641Salaries and compensationSalaries and wages
    
    
    
    (7,528
    )
    
    
    
    
    (7,528
    )Stock-based compensation
    
    
    
    (4,887
    )
    
    
    
    
    (4,887
    )Loss before the undernoted and income taxes
    
    
    
    (20,895
    )
    
    1,771
    
    
    (19,124
    )Interest expense
    
    
    
    (64
    )
    
    
    
    
    (64
    )Interest income
    
    
    
    1,827
    
    
    
    
    
    1,827Net realized gain on available-for-sale financial
      instruments
    
    
    
    489
    
    
    
    
    
    489Net realized loss on held-for-trading
      financial instruments
    
    
    
    (67
    )
    
    
    
    
    (67
    )Net unrealized gain (loss) on held-for-trading
      financial instruments
    
    
    
    86
    
    
    
    
    
    86Net unrealized loss on
      held-for-trading financial instruments recognized
    
    
    
    (3,606
    )
    
    
    
    
    (3,606
    )Net
      unrealized market-to-market adjustments on held-for-trading financial
      instruments
    
    
    
    (6,860
    )
    
    
    
    
    (6,860
    )Loss before income taxes
    
    
    
    (29,090
    )
    
    1,771
    
    
    (27,319
    )Taxes recovered
    
    
    
    9
    
    
    
    
    
    9Future income tax recovery
    
    
    
    169
    
    
    
    
    
    169Loss for the
      year
    
    
    
    (28,912
    )
    
    1,771
    
    
    (27,141
    )Other comprehensive income (loss)Unrealized gain on available-for-sale
      financial instruments
    
    
    
    603
    
    
    
    
    
    603Realized gain on available-for-sale financial
      instruments upon transfer
    
    
    
    (1,530
    )
    
    
    
    
    (1,530
    )Unrealized gain (loss) on foreign exchange
      translation of self-sustaining foreign operations
    
    29 (a)(i)
    
    27,433
    
    
    (1,038
    )
    
    26,395Other
      comprehensive income (loss)
    
    
    
    26,506
    
    
    (1,038
    )
    
    25,468Total
      comprehensive loss for the year
    
    
    
    (2,406
    )
    
    733
    
    
    (1,673
    )Basic and diluted
      loss per share
    
    
    
    (0.08
    )
    
    
    
    
    (0.08
    )Weighted average
      number of common shares outstanding (thousands)
    
    
    
    358,711
    
    
    
    
    
    358,711


(i) Mineral property interests

Under Canadian GAAP the fair value
allocation on acquisition of mineral properties, treated as asset acquisitions,
included a gross-up of deferred tax on the allocated fair value with the debit
entry capitalized to the mineral property and the credit entry accounted for as
a future income tax (deferred tax) liability. An IFRS adjusting entry in the
amount of $65 million was processed on the January 1, 2010 balance sheet to
eliminate the future income tax entry accounted for on acquisition of mineral
properties.

70

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|29. | Transition to IFRS
(continued)
|--- | ------------------------------

| | (a) | Reconciliation of equity and comprehensive loss as
      previously reported under Canadian GAAP to IFRS (continued)                                                                                                                                                                                                                                                                                                                                                                                               
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | (i) Mineral property interests
  (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | The adjustment to the values of mineral properties also
      affected other comprehensive income as well as depletion charges recorded
      in 2009 and 2010 on the Hollister mineral property. The impact on other
      comprehensive income relates to the foreign exchange translation of these
      mineral properties. Adjusting entries were processed to mineral
      properties, accumulated other comprehensive income (refer (iii) below) and
    deficit (refer (iv) below).                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | (ii) Future income taxes (deferred
  taxes)                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | In addition to the adjustment to future income taxes as
      noted in (i) above an additional adjustment was processed to eliminate the
      future income tax liability recognized under Canadian GAAP on the
      temporary difference between the accounting and tax base of mineral
      properties. Under IFRS, deferred taxes should not be recognized for the
      acquisition of assets that do not constitute a business combination and
      had no income statement impact on initial recognition.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | A third adjustment to future income taxes was processed
      to account for a deferred tax liability on the temporary difference
      between the convertible debt instruments tax and accounting bases. Under
      IFRS the debit entry is recognized with the equity component of this
      compounded financial instrument in contributed surplus.                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | (iii) Accumulated other comprehensive
    income                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | In accordance with IFRS transitional provisions, the
      Company has elected to reset the foreign cumulative translation adjustment
      (CTA), which includes gains and losses arising from the translation of
      foreign operations, at the date of transition to IFRS.                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | The following is a summary of transition adjustments to
      the Companys accumulated other comprehensive loss from Canadian GAAP to
      IFRS:                                                                                                                                                                                                                                                                                                                                                                 

| |                                                                                     |  | December
      31 |  |  | January
      1 |  
| | ----------------------------------------------------------------------------------- |  | ----------------- |  |  | --------------- | -
| |                                                                                     |  | 2010              |  |  | 2010            |  
| |                                                                                     |  | $ 000            |  |  | $ 000          |  
| | Accumulated other comprehensive income
      (loss) as reported under Canadian GAAP |  | 1,965             |  |  | (24,541         | )
| | IFRS adjustments decrease:                                                          |  |                   |  |  |                 |  
| | Deferred income tax on mineral
      properties (note 29(a)(i))                     |  | 6,441             |  |  | 7,479           |  
| | Cumulative translation adjustment (note 29(a)(iii))                                 |  | 17,989            |  |  | 17,989          |  
| | Accumulated other comprehensive income as reported under
      IFRS                 |  | 26,395            |  |  | 927             |  

71

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|29. | Transition to IFRS (continued)
|--- | ------------------------------
|    |                               
|    | (a)                           
|    |                               
|    |                               
|    |                               
|    |                               

| |                                                           |  | December
      31 |   |  | January
      1 |  
| | --------------------------------------------------------- |  | ----------------- | - |  | --------------- | -
| |                                                           |  | 2010              |   |  | 2010            |  
| |                                                           |  | $ 000            |   |  | $ 000          |  
| | Deficit as reported under Canadian GAAP                   |  | (294,625          | ) |  | (265,713        | )
| | IFRS adjustments (increase) decrease:                     |  |                   |   |  |                 |  
| | Mineral properties (note 29(a)(i) and (ii))               |  | (54,530           | ) |  | (54,530         | )
| | 2008 depletion (note 29(a)(i))                            |  | 1,657             |   |  | 1,657           |  
| | 2009 depletion (note 29(a)(i))                            |  | 941               |   |  | 941             |  
| | 2010 depletion (note 29(a)(i))                            |  | 1,771             |   |  | -               |  
| | Convertible debt (note 29(a)(ii))                         |  | 8,864             |   |  | 8,864           |  
| | Cumulative translation adjustment (note
      29(a)(iii)) |  | (17,989           | ) |  | (17,989         | )
| | Deficit as
      reported under IFRS                      |  | (353,911          | ) |  | (326,770        | )

(b) Adjustments to the statement of
cash flows

The transition from Canadian GAAP to
IFRS had no significant impact of cash flows generated by the Company except
that, under IFRS, cash flows relating to interest are classified in a consistent
manner under operating, investing or financing activities each period. Under
Canadian GAAP, cash flows relating to interest were classified under operating
activities.

(c) Other transition elections and
accounting policy choices

| | (i)  | Property, Plant and Equipment                                                                                                                                                                                                                                                                                                                                                                                          
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                        
| |      | The Company has elected to continue valuing Property,
      Plant and Equipment on the cost model. Significant assets within the
      Company were all constructed or acquired within the last 3 years, with the
      result that the book value of the assets remains a fair reflection of
      market prices.                                                                                                     
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                        
| |      | Assets under construction over the last 3 years included
      the refurbishment and optimization of the Esmeralda plant and construction
      of the Burnstone mine. Construction costs were grouped into significant
      components with the depreciation models set up to deprecate these
      components separately over their estimated useful life. No other
      significant assets exist within the Group.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (ii) | Exploration expenses                                                                                                                                                                                                                                                                                                                                                                                                   
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                        
| |      | The Company has elected to continue with its policy to
      expense exploration expenses as permitted under IFRS 6  Exploration for
      and Evaluation of Mineral Resources.                                                                                                                                                                                                                                       

72

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|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|29. | Transition to IFRS
(continued)
|--- | ------------------------------

(c) Other transition elections and
accounting policy choices (continued)

| | (iii) | Functional currency                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |       | The functional currency of each subsidiary within the
      Group has been assessed in terms of IAS 21- The effects of changes in
      foreign exchange rates. No material differences were noted from this
      assessment compared to the assessment previously prepared under Canadian
      GAAP.                                                                                                                                                                                                                                   
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (iv)  | Borrowing costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |       | Under Canadian GAAP, specific borrowing costs were
      allocated to the construction of any qualifying asset and were capitalized
      during the period of time that is required to complete and prepare the
      asset for its intended use. General borrowing costs eligible for
      capitalization were determined by applying a capitalization rate to the
      expenditure on qualifying assets. The conversion to IAS 23  Borrowing
      costs, had no material impact on the Companys capitalized borrowing
      costs.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (v)   | Site reclamation obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |       | Under IFRS, reclamation obligations are required to be
      re-measured in line with changes in discount rates, and timing or amount
      of costs to be incurred. The conversion to IAS 37  Provisions, Contingent
      Liabilities and Contingent Assets, had no material impact on the Companys
      reclamation obligations.                                                                                                                                                                                                    

(d) Accounting policies

The transition to IFRS did not have a
material impact on the Companys accounting policies, except for the following
policies which were impacted on change-over to IFRS:

(i) Foreign currency translation

Functional and presentation currency

Items included in the financial
statements of each consolidated entity in the Companys group are measured using
the currency of the primary economic environment in which the entity operates
(the functional currency). The functional currency of the Burnstone property
is the South African Rand (ZAR) and for the Hollister and Esmeralda properties
it is the United States Dollar (US$). The Canadian Dollar ($) is the
presentation currency for the Company.

The financial statements of entities
that have a functional currency different from that of the Company (foreign
operations) are translated into Canadian dollars as follows: assets and
liabilities  at the closing rate at the date of the statement of financial
position, and income and expenses  at the average rate of the period (unless
this average is not a reasonable approximation of the cumulative effect of the
rates prevailing on the transaction dates, in which case income and expenses are
translated at the rate on the dates of the transactions). All resulting changes
are recognized in other comprehensive income as cumulative translation
adjustments.

73

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|29. | Transition to IFRS
(continued)
|--- | ------------------------------

(d) Accounting policies
(continued)

(i) Foreign currency translation
(continued)

Transactions and balances

Foreign currency transactions are
translated into the functional currency using the exchange rates prevailing at
the dates of the transactions. Foreign exchange gains and losses resulting from
the settlement of foreign currency transactions and from the translation at
exchange rates of monetary assets and liabilities denominated in currencies
other than an entities functional currency are recognized in the statement of
income.

(ii) Income taxes

Tax is recognized in the statement of
income, except to the extent that it relates to items recognized in other
comprehensive loss or directly in equity. In this case, the tax is also
recognized in other comprehensive loss or directly in equity, respectively.

The current income tax charge is
calculated on the basis of the tax laws enacted or substantively enacted at the
statement of financial position date in the countries where the Company and its
subsidiaries operate and generate taxable income. Management periodically
evaluates positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It establishes
provisions where appropriate on the basis of amounts expected to be paid to the
tax authorities.

Deferred income tax is recognized,
using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the consolidated
financial statements, 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. However, deferred income tax is not
accounted for if it arises from initial recognition of an asset or liability in
a transaction other than a business combination that at the time of the
transaction affects neither the accounting nor taxable income or loss.

Deferred
  income tax assets are recognized only to the extent that it is probable that
  future taxable profit will be available against which the temporary differences
  can be utilized.

Deferred income tax is provided on temporary differences
  arising on investments in subsidiaries, except for deferred income tax liability
  where the timing of the reversal of the temporary difference is controlled by
  the Company and it is probable that the temporary difference will not reverse in
  the foreseeable future.

Deferred income tax assets and
liabilities are offset when there is a legally enforceable right to offset
current tax assets against current tax liabilities and when the deferred income
tax assets and liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different entities where there is
an intention to settle the balances on a net basis. Interest received from and
paid to the tax authorities are classified as interest income and expense.

74

---

|GREAT BASIN GOLD LTD.                               
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years
      ended December 31, 2011 and 2010

|29. | Transition to IFRS
(continued)
|--- | ------------------------------

(e) Financial statement presentation
changes

The transition to IFRS resulted in the
following financial statement presentation changes:

| | (i)  | Property, plant and equipment consist of property, plant
      and equipment and mineral properties, previously presented as a separate
      line item on the statement of financial position.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                
| | (ii) | Other assets consist of reclamation deposits, previously
      presented as a separate line item on the statement of financial
      position.                                                 

75

---