---



CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2009 and 2008



(Expressed in Canadian Dollars, unless otherwise
stated)

1

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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, 2009.
  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).

During the 2009 fiscal year, no changes occurred in the
Companys internal controls over financial reporting that materially affected,
or are reasonably likely to materially affect, our internal control over
financial reporting.

Based upon this assessment, management concluded that the
Companys internal control over financial reporting was effective as of December
31, 2009.

The effectiveness of the Companys internal control over
financial reporting as at December 31, 2009 has been audited by
PricewaterhouseCoopers LLP, our independent auditors, as stated in their report
which appears herein.

|/s/ Ferdinand
      Dippenaar |  | /s/ Lourens A. van Vuuren
|----------------------------- |  | -------------------------
|Chief Executive Officer       |  | Chief Financial Officer  
|                              |  |                          
|Vancouver, British Columbia   |  |                          
|March 22, 2010                |  |                          

2

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

INDEPENDENT AUDITORS REPORT

To the Shareholders of Great Basin Gold Limited

We have completed integrated audits of Great  Basin Gold Limited’s (the “Company”) 2009 and 2008 consolidated financial  statements and of its internal control over financial reporting as at  December 31, 2009.  Our  opinions, based on our audits, are presented below.

Consolidated financial statements

We have audited the accompanying consolidated balance sheets of Great Basin Gold Limited as at December 31, 2009 and December 31, 2008, and the related consolidated statements of operations and comprehensive loss, statement of shareholders’ equity and deficit and statement of cash flows for each of the years then ended.  These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as at December 31, 2009 and December 31, 2008 and the results of its operations and its cash flows for each of the years then ended in accordance with Canadian generally accepted accounting principles.

Internal control over financial reporting

We have also audited the Company’s internal control over financial reporting as at December 31, 2009, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).  The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying “Management’s Report on Internal Control over Financial Reporting”.  Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

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

“PricewaterhouseCoopers” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership, or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate legal entity.

3

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

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

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as at December 31, 2009 based on criteria established in Internal Control — Integrated Framework issued by the COSO.

/s/ PricewaterhouseCoopers LLP

Chartered Accountants
  Vancouver, BC
March 22, 2010

4

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

|                                                    |  |            |   | December 31  |   |   | December 31  |  
|--------------------------------------------------- |  | ---------- | - | ------------ | - | - | ------------ | -
|                                                    |  | Note       |   | 2009         |   |   | 2008         |  
|Assets                                              |  |            |   |              |   |   |              |  
|Current assets                                      |  |            |   |              |   |   |              |  
|Cash and cash equivalents                           |  | 8          | $ | 89,464,362   |   | $ | 33,549,118   |  
|Amounts receivable                                  |  | 9          |   | 5,053,346    |   |   | 4,940,950    |  
|Inventory                                           |  | 10         |   | 26,312,072   |   |   | 8,246,093    |  
|Available-for-sale financial
      instruments      |  | 11         |   | 4,960,683    |   |   | 899,624      |  
|Held-for-trading financial instruments              |  | 12         |   | 207,452      |   |   | 79,960       |  
|Other assets                                        |  |            |   | 3,302,634    |   |   | 5,867,183    |  
|Due from
      related parties                      |  | 17         |   |             |   |   | 23,174       |  
|                                                    |  |            |   | 129,300,549  |   |   | 53,606,102   |  
|Property, plant and equipment                       |  | 13         |   | 191,474,362  |   |   | 48,849,185   |  
|Reclamation deposits                                |  | 14         |   | 4,590,267    |   |   | 2,886,539    |  
|Mineral
      property interests                    |  | 15         |   | 222,918,688  |   |   | 259,858,656  |  
|Total Assets                                        |  |            | $ | 548,283,866  |   | $ | 365,200,482  |  
|                                                    |  |            |   |              |   |   |              |  
|Liabilities and Shareholders' Equity                |  |            |   |              |   |   |              |  
|                                                    |  |            |   |              |   |   |              |  
|Current liabilities                                 |  |            |   |              |   |   |              |  
|Accounts payable and accrued liabilities            |  | 16         | $ | 29,206,015   |   | $ | 26,276,562   |  
|Due to related parties                              |  | 17         |   |             |   |   | 252,854      |  
|Current
      portion of long term borrowings       |  | 18         |   | 43,768,157   |   |   | 916,745      |  
|                                                    |  |            |   | 72,974,172   |   |   | 27,446,161   |  
|                                                    |  |            |   |              |   |   |              |  
|Long term borrowings                                |  | 18         |   | 86,947,674   |   |   | 62,060,594   |  
|Future income taxes                                 |  | 19         |   | 10,659,240   |   |   | 14,747,392   |  
|Site reclamation obligations                        |  | 20         |   | 3,990,230    |   |   | 3,738,380    |  
|                                                    |  |            |   | 101,597,144  |   |   | 80,546,366   |  
|Shareholders' equity                                |  |            |   |              |   |   |              |  
|Share capital                                       |  | 21 (a)     |   | 567,596,040  |   |   | 428,656,646  |  
|Warrants                                            |  | 21 (c)     |   | 13,103,653   |   |   | 24,005,896   |  
|Contributed surplus                                 |  | 21 (d)     |   | 83,266,446   |   |   | 21,599,521   |  
|Deficit                                             |  |            |   | (265,712,738 | ) |   | (217,267,111 | )
|Accumulated
      other comprehensive (loss) income |  |            |   | (24,540,851  | ) |   | 213,003      |  
|                                                    |  |            |   | 373,712,550  |   |   | 257,207,955  |  
|                                                    |  |            |   |              |   |   |              |  
|Total Liabilities and Shareholders' Equity          |  |            | $ | 548,283,866  |   | $ | 365,200,482  |  
|                                                    |  |            |   |              |   |   |              |  
|Nature of operations                                |  | 1          |   |              |   |   |              |  
|Segment disclosure                                  |  | 23         |   |              |   |   |              |  
|Contingencies and commitments                       |  | 15 (c); 24 |   |              |   |   |              |  
|Subsequent events                                   |  | 25         |   |              |   |   |              |  

See accompanying notes to consolidated financial
statements.

Approved by the Board of Directors

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

5

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

|                                                                                                   |  |           |       | Years ended December 31 |      
|-------------------------------------------------------------------------------------------------- |  | --------- | ----- | ----------------------- | -----
|                                                                                                   |  | Note      |       | 2009                    |      
|                                                                                                   |  |           |       |                         |      
|Revenue                                                                                            |  |           | $     | 33,737,518              |      
|(Expenses) income                                                                                  |  |           |       |                         |      
|Production cost                                                                                    |  |           |       | (20,614,777             | )    
|Depletion charge                                                                                   |  |           |       | (3,178,627              | )    
|Exploration expenses (see schedule)                                                                |  |           |       | (16,592,052             | )    
|Pre-development expenses (see schedule)                                                            |  |           |       | (25,868,727             | )    
|Accretion of reclamation obligation                                                                |  |           |       | (83,211                 | )    
|Conference and travel                                                                              |  |           |       | (1,553,685              | )    
|Corporate social responsibility                                                                    |  |           |       | (1,084,425              | )    
|Environmental impact study                                                                         |  |           |       | (982,591                | )    
|Foreign exchange gain (loss)                                                                       |  |           |       | 2,548,889               |      
|Legal, accounting, and audit                                                                       |  |           |       | (883,575                | )    
|Mineral properties written off                                                                     |  | 15 (f)(i) |       | (154,065                | )    
|Office and administration                                                                          |  |           |       | (4,150,504              | )    
|Other income                                                                                       |  |           |       | 92,702                  |      
|Salaries and compensation                                                                          |  |           |       |                         |      
|Salaries and wages                                                                                 |  |           |       | (6,628,032              | )    
|Stock-based compensation                                                                           |  | 21 (b)    |       | (8,283,947              | )    
|Shareholder communications                                                                         |  |           |       | (500,639                | )    
|Trust and
      filing                                                                             |  |           |       | (335,651                | )    
|Loss before the undernoted and income taxes                                                        |  |           |       | (54,515,399             | )    
|(Loss) gain on sale of assets                                                                      |  |           |       | (14,520                 | )    
|Transaction cost                                                                                   |  |           |       |                        |      
|Interest expense                                                                                   |  |           |       | (144,265                | )    
|Interest income                                                                                    |  |           |       | 2,910,980               |      
|Loss from associate                                                                                |  |           |       |                        |      
|Net unrealized loss on held-for-trading financial
      instruments                                |  |           |       | (2,214,776              | )    
|Loss before income taxes                                                                           |  |           |       | (53,977,980             | )    
|Future income tax recovery                                                                         |  | 19        |       | 5,532,353               |      
|Loss for the
      year                                                                            |  |           | **$** | **(48,445,627**         | **)**
|                                                                                                   |  |           |       |                         |      
|Other comprehensive loss                                                                           |  |           |       |                         |      
|Unrealized gain (loss) on
      available-for-sale financial instruments                           |  | 11 (a)    |       | 3,025,751               |      
|Unrealized (loss) gain on foreign exchange
      translation of self-sustaining foreign operations |  |           |       | (27,779,605             | )    
|Other
      comprehensive loss                                                                     |  |           | **$** | **(24,753,854**         | **)**
|                                                                                                   |  |           |       |                         |      
|Total
      comprehensive loss for the year                                                        |  |           | **$** | **(73,199,481**         | **)**
|                                                                                                   |  |           |       |                         |      
|                                                                                                   |  |           |       |                         |      
|Basic and diluted loss per share                                                                   |  |           | $     | (0.16                   | )    
|                                                                                                   |  |           |       |                         |      
|Weighted average number of common shares outstanding                                               |  |           |       | 310,068,448             |      

See accompanying notes to consolidated financial
statements.

6

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

|                                                                            |  |                  |  | Year ended        |   |   | Year ended        |  
|--------------------------------------------------------------------------- |  | ---------------- |  | ----------------- | - | - | ----------------- | -
|                                                                            |  | Note             |  | December 31, 2009 |   |   | December 31, 2008 |  
|                                                                            |  |                  |  |                   |   |   |                   |  
|                                                                            |  |                  |  | Number of         |   |   |                   |  
|Common shares                                                               |  |                  |  | shares            |   |   |                   |  
|Balance at beginning of the year                                            |  |                  |  | 215,166,542       |   | $ | 428,656,646       |  
|Equity line: shares issued for cash, net of share
      issue costs         |  | 21 (e)           |  | 2,846,800         |   |   | 3,910,984         |  
|Public offering: shares issued for
      cash, net of share issue costs     |  | 21 (g)           |  | 115,000,000       |   |   | 132,699,566       |  
|Share purchase options exercised                                            |  | 21 (b)           |  | 1,124,675         |   |   | 2,293,644         |  
|Shares issued for mineral properties                                        |  | 21 (f)           |  | 20,000            |   |   | 35,200            |  
|Shares issued for Rusaf Gold Limited, April 2008                            |  | 15 (c)           |  |                  |   |   |                  |  
|Shares issued for Rusaf Gold Limited,
      July 2008                       |  | 15 (c)           |  |                  |   |   |                  |  
|Shares issued for Puma Gold (Pty) Ltd, July 2008                            |  | 15 (b)           |  |                  |   |   |                  |  
|Rusaf share purchase warrants
      exercised, October 2008                 |  | 21 (d)(i)        |  |                  |   |   |                  |  
|Share
      purchase warrants exercised                                     |  | 21
      (c)(iv) |  |                  |   |   |                  |  
|Balance at end of the year                                                  |  |                  |  | 334,158,017       |   | $ | 567,596,040       |  
|                                                                            |  |                  |  |                   |   |   |                   |  
|                                                                            |  |                  |  | Number of         |   |   |                   |  
|Share purchase warrants                                                     |  |                  |  | warrants          |   |   |                   |  
|Balance at beginning of the year                                            |  |                  |  | 49,180,312        |   | $ | 24,005,896        |  
|Warrants issued pursuant to Senior Secured Notes                            |  | 21 (c)(iii)      |  | 8,248,240         |   |   |                  |  
|Warrants issued pursuant to public
      offering, net of share issue costs |  | 21 (g)           |  | 57,500,000        |   |   | 5,307,983         |  
|Exercised                                                                   |  | 21 (c)(iv)       |  |                  |   |   |                  |  
|Expired                                                                     |  | 21 (c)(i)        |  | (28,750,000       | ) |   | (16,210,226       | )
|Balance at end
      of the year                                            |  |                  |  | 86,178,552        |   | $ | 13,103,653        |  
|                                                                            |  |                  |  |                   |   |   |                   |  
|Contributed surplus                                                         |  |                  |  |                   |   |   |                   |  
|Balance at beginning of the year                                            |  |                  |  |                   |   | $ | 21,599,521        |  
|Stock-based compensation                                                    |  | 21 (b)           |  |                   |   |   | 12,104,310        |  
|Share purchase options exercised,
      credited to share capital           |  | 21 (d)           |  |                   |   |   | (809,167          | )
|Rusaf share purchase options exercised, credited to
      share capital     |  | 21 (d)(i)        |  |                   |   |   |                  |  
|Fair value of share purchase warrants
      expired                         |  | 21 (c)(i)        |  |                   |   |   | 16,210,226        |  
|Future income tax on expired share purchase warrants                        |  | 19               |  |                   |   |   | (1,293,750        | )
|Convertible bond equity component                                           |  | 18 (d)           |  |                   |   |   | 35,455,306        |  
|Options and
      warrants issued on acquisition of Rusaf Gold Limited      |  | 21
      (d)(i)  |  |                   |   |   |                  |  
|Balance at end of the year                                                  |  |                  |  |                   |   | $ | 83,266,446        |  
|                                                                            |  |                  |  |                   |   |   |                   |  
|Deficit                                                                     |  |                  |  |                   |   |   |                   |  
|Balance at beginning of the year                                            |  |                  |  |                   |   | $ | (217,267,111      | )
|Net loss for the year                                                       |  |                  |  |                   |   |   | (48,445,627       | )
|Balance at end
      of the year                                            |  |                  |  |                   |   | $ | (265,712,738      | )
|                                                                            |  |                  |  |                   |   |   |                   |  
|Accumulated other comprehensive (loss) income                               |  |                  |  |                   |   |   |                   |  
|Balance at beginning of the year                                            |  |                  |  |                   |   | $ | 213,003           |  
|Unrealized gain (loss) on available-for-sale
      financial instruments    |  | 11 (a)           |  |                   |   |   | 3,025,751         |  
|Accumulated unrealized (loss) gain on
      foreign exchange translation of |  |                  |  |                   |   |   | (27,779,605       | )
|self-sustaining foreign operations                                          |  |                  |  |                   |   |   |                   |  
|Balance at end of the year                                                  |  |                  |  |                   |   | $ | (24,540,851       | )
|                                                                            |  |                  |  |                   |   |   |                   |  
|TOTAL SHAREHOLDERS' EQUITY                                                  |  |                  |  |                   |   | $ | 373,712,550       |  

See accompanying notes to consolidated financial
statements.

7

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

|                                                                     |   | Years ended December 31 |  
|-------------------------------------------------------------------- | - | ----------------------- | -
|                                                                     |   | 2009                    |  
|Operating activities                                                 |   |                         |  
|Loss for the period                                                  | $ | (48,445,627             | )
|Items not involving cash                                             |   |                         |  
|Depreciation                                                         |   | 3,190,944               |  
|Future income tax recovery                                           |   | (5,540,379              | )
|Loss (gain) on sale of assets                                        |   | 14,520                  |  
|Unrealized loss on held-for-trading financial
      instruments      |   | 2,214,776               |  
|Loss from associate                                                  |   |                        |  
|Mineral properties written off                                       |   | 154,065                 |  
|Non-cash stock-based
      compensation expense                      |   | 9,343,055               |  
|Provision for site reclamation cost                                  |   |                        |  
|Unrealized foreign exchange
      (gain) loss                        |   | (4,046,663              | )
|Accretion reclamation obligation                                     |   | 80,165                  |  
|Amortization                                                         |   | 54,152                  |  
|Depletion                                                            |   | 3,178,627               |  
|Interest expense accrual                                             |   | 120,342                 |  
|Interest income accrual                                              |   | (518,807                | )
|Changes in non-cash operating working
      capital                  |   |                         |  
|Amounts receivable                                                   |   | (880,932                | )
|Prepaid expenses                                                     |   | 26,523                  |  
|Inventory                                                            |   | (14,846,236             | )
|Accounts payable and accrued liabilities                             |   | 651,410                 |  
|Cash used in
      operating activities                              |   | (55,250,065             | )
|                                                                     |   |                         |  
|Investing activities                                                 |   |                         |  
|Mineral property acquisition costs                                   |   | (61,204                 | )
|Acquisition of shares in Rand Mutual Assurance                       |   |                        |  
|Proceeds on sale of assets                                           |   | 64,271                  |  
|Additions to property, plant and equipment                           |   | (118,187,441            | )
|Transfer to other assets                                             |   |                        |  
|Purchase of shares in Kryso Resources Plc                            |   |                        |  
|Reclamation deposits                                                 |   | (1,795,074              | )
|Cash used in
      investing activities                              |   | (119,979,448            | )
|                                                                     |   |                         |  
|Financing activities                                                 |   |                         |  
|Common shares and warrants issued for cash,
      net of issue costs |   | 143,403,010             |  
|Advances received from long-term borrowings                          |   | 119,905,933             |  
|Repayment of long term borrowings                                    |   | (33,883,980             | )
|Advances to other parties                                            |   |                        |  
|Advances (to) from related parties                                   |   | (229,680                | )
|Cash generated
      from financing activities                       |   | 229,195,283             |  
|                                                                     |   |                         |  
|Increase (decrease) in cash and cash equivalents                     |   | 53,965,770              |  
|Cash and cash equivalents, beginning of
      year                   |   | 33,549,118              |  
|Foreign exchange movement on cash and cash equivalents               |   | 1,949,474               |  
|Cash acquired through the acquisition of
      Puma Gold (Pty) Ltd   |   |                        |  
|Cash acquired
      through the acquisition of Rusaf Gold Limited    |   |                        |  
|Cash and cash equivalents, end of year                               | $ | 89,464,362              |  

Refer to note 22 of the Notes to the Consolidated Financial
Statements for supplementary information to the cash flow statement.

8

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|1. | Nature of operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Great Basin Gold Ltd. (Great Basin or the Company) is
      incorporated under the laws of the Province of British Columbia and is a
      pre-production mining company engaged in the acquisition, exploration,
      development and trial mining of precious metal deposits. The Company
      currently has two material projects both of which are at the trial mining
      stage, namely (a) the Hollister gold project, acquired in 1997, and which
      is located on the Carlin Trend goldfield in Nevada, USA (the Hollister
      Property) and (b) the Burnstone gold project, acquired in 2002, and which
      is located in the Witwatersrand Goldfields in South Africa (the Burnstone
      Property).
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The Company is also conducting early stage exploration on
      a number of other prospects, primarily in Tanzania and
  Mozambique.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The Esmeralda property was acquired in December 2008, for
      US$2 million and the assumption of the existing environmental bond,
      primarily for its ore processing facility which the Company
      refurbished.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|2. | Basis of preparation and principles of
      consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | These consolidated financial statements (financial
      statements) have been prepared in accordance with Canadian Generally
      Accepted Accounting Principles (Canadian GAAP), which, as described in
      note 26, differ in certain respects from accounting principles generally
    accepted in the United States of America.                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The principal accounting policies applied in the
      preparation of these financial statements are set out below. These
      policies have been consistently applied in all years presented, unless
    otherwise stated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | These financial statements include the accounts of the
      Company and its wholly-owned subsidiaries. All significant intercompany
    balances and transactions have been eliminated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Subsidiaries: are those entities in which the Company has an interest of
      more than one half of the voting rights or otherwise has power to govern
      the financial and operating policies. Subsidiaries are consolidated from
      the date on which control is acquired and are no longer consolidated when
    control ceases.                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The purchase method of accounting is
      used to account for the acquisition of subsidiaries. The cost of an
      acquisition is measured as the fair value of the assets given up, shares
      issued or liabilities undertaken at the date of acquisition plus costs
    directly attributable to the acquisition.                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Identifiable assets acquired and
      liabilities and contingent liabilities assumed in a business combination
      are measured initially at their fair values at acquisition date.
      Non-controlling interests are recorded at a proportion of the net
    identifiable assets acquired.                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The excess of the cost of acquisition
      over the fair value of the Companys share of the identifiable net assets
    acquired is recorded as goodwill.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

9

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

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

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

On January 1, 2008 the Company held 37%
of Rusaf Gold Limited, and on April 1, 2008 the Company acquired the remaining
63% of the fully diluted equity shares of Rusaf (refer note 15(c)).

The Company ceased exploration
activities relating to the Ganes Creek Property and issued the Articles of
Dissolution of Ganes Creek Ventures Corp., of which it held a 100% shareholding,
on August 20, 2009 (refer note 15(f)(i)).

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

Investments in  associates are accounted for using the equity method of accounting and are  initially recognized at cost. The Company’s share of its associates’  post-acquisition profits or losses is recognized in the Statement of Operations  and Comprehensive Loss.

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

10

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|3. | New accounting pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Canadian Institute of Chartered Accountants (CICA)
      has issued the following amendments to standards which affect the
      financial disclosures and results of operations of the Company for interim
      and annual periods beginning January 1, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | CICA 1582  Business Combinations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | This Section replaces Section 1581 and effectively
      harmonizes the business combinations standard under Canadian GAAP with
      International Financial Reporting Standards (IFRS). The new standard
      revises guidance on the determination of the carrying amount of the assets
      acquired and liabilities assumed, goodwill and accounting for
      non-controlling interests at the time of a business combination.
      Prospective application of the standard is effective January 1, 2011, with
      early adoption permitted. The impact of CICA 1582 cannot be determined
      until such time as the Company completes a business combination.             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | CICA 1601 and 1602  Consolidated Financial Statements
      and Non-Controlling Interests                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Concurrent with the issuance of CICA 1582, the CICA
      issued Section 1601 and 1602, which replace Section 1600 Consolidated
      Financial Statements. Section 1601 provides revised guidance on the
      preparation of consolidated financial statements and Section 1602
      addresses accounting for non-controlling interests in consolidated
      financial statements subsequent to a business combination. These standards
      are effective January 1, 2011, unless they are early adopted at the same
      time as Section 1582. The Company is currently in the process of
      evaluating the impact this will have on the Companys financial
      statements.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|4. | Significant accounting
policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

| | (a) Cash and cash equivalents
| | -----------------------------

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

(b) Amounts receivable

Amounts receivable
are recognized initially at fair value and subsequently measured at amortised
cost using the effective interest method, less provision for impairment. A
provision for impairment of receivables is established when there is objective
evidence that the Company will not be able to collect all amounts due, according
to the original terms of receivables.

11

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|4. | Significant accounting policies
      (continued)
|-- | -------------------------------------------------

(b) Amounts receivable
(continued)

The amount of the
provision is the difference between the assets carrying amount and the present
value of estimated future cash flows, discounted at the effective interest rate.
The amount of the provision is recognized in the income statement.

(c) Inventory

Inventories, which include work in
progress, unprocessed ore, stores and materials, are measured at the lower of
cost and net realizable value. Net realizable value is the estimated selling
price in the ordinary course of business less the estimated cost of completion
and the estimated cost necessary to perform the sale. Work in progress consists
of precious metals in production and unrefined precious metals, which are valued
at the 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 lower of weighted average cost or net realizable value,
less allowance for redundant items.

(d) Property, plant and
equipment

Property, plant and equipment are
stated at cost less accumulated amortization.

Capitalized mine development costs
include expenditure incurred to develop new orebodies, following the receipt of
all necessary permits and licenses to permit commercial mining activities. Mine
development costs are capitalized to the extent they provide access to gold
bearing deposits and have future economic benefit.

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

Amortization of equipment used directly
on exploration projects is included in exploration expenses.

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 years   
| | ---------------------------------------------------- | -----------
| | Site equipment                                       | 3  7 years
| | Leased assets                                        | 3  7 years
| | Vehicles                                             | 3  7 years
| | Computers                                            | 3 years    
| | Office furniture and fixtures                        | 5 years    

Land and assets under construction are
not depreciated.

Borrowing costs are allocated to the
construction of any qualifying asset and are capitalized during the period of
time that is required to complete and prepare the asset for its intended use.

12

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|4. | Significant accounting policies
      (continued)
|-- | -------------------------------------------------

(e) Mineral property
interests

The Company capitalizes mineral
property acquisition costs on a property-by-property basis. Mineral property
acquisition costs are subject to impairment tests for long lived assets.

Exploration expenditures and option payments incurred prior to the determination
  of the feasibility of mining operations and the decision to commence development
  are charged to operations as incurred.

Pre-development costs incurred prior to
a development decision and the receipt of all necessary permits and licenses for
commercial mining operations are charged to operations as incurred.

Development
  expenditures incurred subsequent to the commencement of commercial production to
  increase productive capacity or to extend the life of existing production are
  capitalized under mine development costs.

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

Administrative expenditures are
expensed as incurred.

(f) Impairment of non-financial
assets

Long-lived assets are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. The recoverable amount is determined on
the basis of estimated undiscounted future cash flows to be derived from the
asset group.

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.

If the recoverable amount is less than
the carrying value of the asset group, the fair value of the asset group is
estimated. An impairment loss is recognized as the amount by which the assets
carrying amount exceeds its estimated fair value.

For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows.

(g) Income taxes

The Company uses the asset and
liability method of accounting for income taxes. Under this method, future
income tax assets and liabilities are computed based on differences between the
carrying amount of existing assets and liabilities on the balance sheet and
their corresponding tax values, using the substantively enacted income tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled.

Future tax assets are recognized to the
extent that they are considered more likely than not to be realized. The
carrying value of future income tax assets is adjusted, if necessary, by the use
of a valuation allowance to reflect the estimated realizable amount.

13

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|4. | Significant accounting policies
      (continued)
|-- | -------------------------------------------------

(h) 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 is
expensed under exploration expenses against an increase in the rehabilitation
provision for those projects for which a decision to develop has not been taken.
Change in estimates for projects in the development phase is capitalized and
amortised over the life of mine on the units-of-production method.
Rehabilitation costs incurred that are included in the estimates are charged to
the provision. The cost of ongoing current programmes to prevent and control
pollution is charged against income as incurred.

(i) Share capital

The Company records proceeds from share
issuances net of issue costs. Shares issued for consideration other than cash or
in a business combination are valued at the quoted market price on the date
issued.

(j) Loss per common share

Basic loss per common share is
calculated by dividing the loss available to common shareholders by the weighted
average number of common shares outstanding during the year. For all years
presented, loss available to common shareholders equals the reported loss.

Diluted loss per common share is
calculated using the treasury stock method. Under the treasury stock method, the
weighted average number of common shares outstanding used for the calculation of
diluted loss per share assumes that the proceeds to be received on the exercise
of dilutive share options and warrants are used to repurchase common shares at
the average market price during the year.

In years when the Company records a net
loss, the effect of the stock options and warrants would be anti-dilutive and
accordingly basic and diluted loss per share are the same.

(k) Use of estimates

The preparation of financial statements
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period.

14

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|4. | Significant accounting policies
      (continued)
|-- | -------------------------------------------------

(k) Use of estimates
(continued)

Significant areas requiring the use of
management estimates relate to impairment of mineral property interests,
valuation of inventories, allocation of purchase price consideration to the fair
value of identifiable assets and liabilities acquired, the determination of
amortization, depletion and accretion, determination of reclamation obligations,
the determination of the fair values of financial instruments, assumptions used
in determining the fair value of non-cash stock-based compensation and warrants,
determination of valuation allowances for future income tax liabilities and
estimated market related interest rate used to calculate the equity component of
compound financial instruments. Actual results could differ from these
estimates.

(l) Segment disclosure

The primary reporting format of the
Company is by business segment. As there is only one business segment, being the
exploration and development of mineral properties, relevant disclosures are
given in the financial statements.

The secondary reporting format is by
geographical analysis by origin (refer note 23). The accounting policies of the
segments are the same as those described in the accounting policy notes to the
Companys financial statements.

(m) Stock-based compensation

The Company has an equity-settled,
stock-based compensation plan, where the Company grants stock options to certain
employees and non-employees. Non-employees are those individuals over whom the
Company does not exercise, nor have the right to exercise, sufficient control to
establish an employer-employee relationship as determined by law.

For employees, equity stock-based
payments are measured at the fair value of the equity instruments at the date of
grant. The deferred stock-based compensation is expensed over the vesting period
using the graded method, based on the Companys estimate of the shares that are
expected to eventually vest. For non-employees equity stock-based payments are
measured at fair value of the equity instruments over the vesting periods, the
expense of which is being recognized on each vesting date.

The Company used the Black Scholes
option pricing model in determining the fair value of the options granted. At
each balance sheet date, the Company revises its estimates of the number of
options that are expected to become exercisable. It recognizes the impact of the
revision of original estimates, if any, in the income statement, with a
corresponding adjustment to equity. Consideration received on the exercise of
stock options is recorded as share capital and the related contributed surplus
is transferred to share capital. When unvested options are forfeited the Company
reverses previously recognized charges to the income statement. The value of
vested options remains in contributed surplus.

(n) Revenue recognition

Revenue is recognized at the fair value
of the consideration received or receivable to the extent that it is probable
that economic benefits will flow to the Company and revenue can be reliably
measured.

15

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|4. | Significant accounting policies
      (continued)
|-- | -------------------------------------------------

(n) Revenue recognition
(continued)

The sale of gold and other precious
metals, including metal bearing ore, is recognized when the significant risks
and rewards of ownership of the products are transferred to the buyer.

(o) Long-term borrowings

Borrowings are initially recognized at
fair value net of transaction cost incurred and subsequently measured at
amortized cost, and are amortized to the repayment amount over the expected term
to repayment using the effective interest method.

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
fair value of the liability portion of a convertible bond is determined using a
market interest rate for an equivalent nonconvertible bond. This amount is
recorded as a liability on an amortized cost basis until extinguished on
conversion or maturity of the bonds. The remainder of the proceeds is allocated
to the conversion option and is recognized under contributed surplus.

Borrowings are classified as current liabilities unless the
  Company has an unconditional right to defer settlement of the liability for at
  least 12 months after the balance sheet date.

(p) Leased assets

Assets subject to finance leases are
capitalized at the lower of fair value or present value of minimum lease
payments measured at inception of the lease with the related lease obligation
recognized at the same amount. Capitalized lease assets are depreciated over
their estimated useful lives. Finance lease payments are allocated using the
rate implicit in the lease, which is included in finance costs, and the capital
repayment, which reduces the liability to the lessor.

Operating lease rentals
  are charged against operating profits on a straight line basis related to the
  period the assets concerned will be used.

(q) Foreign currency
translation

Items included in the financial
statements of each of the Companys subsidiaries are measured using the currency
of the primary economic environment in which the entity operates (the
functional currency).

The Companys integrated foreign
operations translate monetary assets and liabilities denominated in a foreign
currency into Canadian dollars at exchange rates in effect at the balance sheet
date. Non-monetary assets and liabilities are translated at historical exchange
rates. Revenues and expenses, except amortization, are translated at the average
exchange rates for the period. Amortization is translated at the same exchange
rate as the assets to which it relates. Gains or losses on translation are
recorded in the Statement of Operations and Comprehensive Loss.

Translation differences on non-monetary
items, such as equities held at fair value through profit or loss, are reported
as part of their fair value gain or loss. Translation differences on
non-monetary items, such as equities classified as available-for-sale financial
assets, are included in other comprehensive income in equity.

16

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|4. | Significant accounting policies
      (continued)
|-- | -------------------------------------------------

(q) Foreign currency translation
(continued)

The results and financial position of
all self sustaining entities (none of which has the currency of a
hyperinflationary economy) that have a functional currency different from the
presentation currency are translated into the presentation currency as follows:

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

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

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

(r) Financial instruments

Financial instruments are initially
measured at fair value when the Company becomes a party to their contractual
arrangements. Transaction costs are included in the initial measurement of
financial instruments, except financial instruments classified as at fair value
through profit and loss. The subsequent measurement of financial instruments is
dealt with below.

A financial liability is derecognized
when the obligation under the liability 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
income or loss.

Cash and cash equivalents are
non-derivative financial assets which consist of cash and highly liquid
investments and are readily convertible to known amounts of cash.

These held-for-trading financial assets
are recognized at fair value and are included in current assets.

17

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|4. | Significant accounting policies
      (continued)
|-- | -------------------------------------------------

(r) Financial instruments
(continued)

Loans and receivables are
non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. They arise when the Company provides money, goods or
services directly to a debtor with no intention of trading the receivable. They
are initially recognized at fair value and subsequently measured at amortized
cost. They are included in current assets, except for maturities greater than 12
months after the balance sheet date. These are classified as non-current assets.

Available-for-sale financial assets are
non-derivatives that are either designated in this category or not classified in
any of the other categories. They are included in non-current assets unless
management intends to dispose of the investment within 12 months of the balance
sheet date. Purchases and sales of investments are recognized on trade-date, the
date on which the Company commits to purchase or sell the asset.

Investments are initially recognized at
cost plus transaction costs for all financial assets. Investments are
derecognized when sold. Available-for-sale financial assets are subsequently
carried at fair value. Unrealized gains and losses arising from changes in the
fair value of investments classified as available-for-sale are recognized in
equity. When securities classified as available-for-sale are sold or impaired,
the accumulated fair value adjustments are included in the income statement. The
fair values of quoted investments are based on current bid prices.

These include the use of recent arms
length transactions, reference to other instruments that are substantially the
same, discounted cash flow analysis, and option pricing models refined to
reflect the issuers specific circumstances. The Company assesses at each
balance sheet date whether there is objective evidence that a financial asset or
a group of financial assets is impaired. In the case of equity securities
classified as available-for-sale, a significant or prolonged decline in the fair
value of the security below its cost is considered in determining whether the
securities are impaired. If, in the opinion of the directors, an other than
temporary decline in value exists for available-for-sale financial assets, the
cumulative loss  measured as the difference between the acquisition cost and
the current fair value, less any impairment loss on that financial asset
previously recognized in profit or loss  is removed from equity and recognized
in the income statement.

Financial assets at fair value through
profit or loss have been categorized as 'financial assets held-for-trading'. A
financial asset is classified in this category if acquired principally for the
purpose of selling in the short term or if so designated by management.
Derivatives are also categorized as 'held-for-trading' unless they are
designated as hedges. Assets in this category are classified as current assets
if they are either held for trading or are expected to be realized within 12
months of the balance sheet date.

|5. | Adoption of new accounting policies
|-- | -----------------------------------

Effective January 1, 2009, the Company
adopted the following accounting standards updates issued by the Canadian
Institute of Chartered Accountants (CICA). These new standards have been
adopted on a prospective basis with no restatement to prior period financial
statements.

18

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

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

(a) Goodwill and intangible assets
(Section 3064 and 1000)

Section 3064 replaces CICA 3062 and
provides guidance on the recognition, measurement, presentation and disclosure
of goodwill and intangible assets, other than the initial recognition of
goodwill or intangible assets acquired in a business combination. The adoption
of the Section had no impact on the Companys financial statements.

(b) Financial instruments (Section
3855)

Section 3855 was amended to change the
categories into which a  debt instrument is required or permitted to be   classified. The impairment model for held-to-maturity financial assets has also   been changed to the incurred  credit loss model of CICA 3025. The amendment also
requires, under specified circumstances, the reversal of previously recognized
impairment losses on available-for-sale financial assets. These amendments apply
to annual financial statements for years beginning on/after November 1, 2008

The
  Section was also amended to provide guidance concerning the assessment of
  embedded derivatives upon reclassification of a financial asset out of the
  held-for-trading category and to clarify the application of the effective
  interest method after a debt instrument has been impaired. The adoption of the
  Section had no impact on the Companys financial statements.

(c) Financial instrument disclosure
(Section 3862)

In June 2009, the CICA amended Handbook
Section 3862, Financial Instruments  Disclosures, to enhance disclosures about
fair value measurements and the liquidity risk of financial instruments. These
amendments are intended to provide further detail on the relative reliability of
the data or inputs used to measure the fair value of the entities financial
instruments. Specifically, financial instruments recognized at fair value on the
Consolidated Balance Sheet must be classified in one of three fair value
hierarchy levels.

The Company incorporated this amendment
into its financial statements (refer note 7).

(d) Credit risk and the fair value
of financial assets and financial liabilities (EIC 173)

This Abstract confirms that an entitys
own credit risk and the credit risk of the counterparty should be taken into
account in determining the fair value of financial assets and financial
liabilities, including derivative instruments, for presentation and disclosure
purposes. The adoption of this Abstract had no significant impact on the
Companys financial statements.

(e) Mining Exploration costs (EIC
174)

This Abstract considers when
exploration costs related to mining properties may be capitalized, and if
exploration costs are initially capitalized, when mining properties should be
assessed for impairment to determine whether a write-down is required, and what
conditions indicate impairment. The Abstract is effective for financial
statements issued after March 27, 2009. The adoption of this Abstract had no
significant impact on the Companys financial statements.

19

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|6. | Capital disclosures                                                                                                                                                                                                                                                                                                                                                        
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                            
|   | The Companys objectives when managing capital
  are:                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                            
|   | The Company considers the items included in the
      consolidated statement of shareholders equity as well as 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, enter into new
      debt arrangements, sell assets to reduce debt or return capital to
      shareholders. The Company is not subject to externally imposed capital
      requirements.                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                            
|7. | Financial instruments                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                            
|   | Fair Value Hierarchy                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                            
|   | Financial instruments recognized at fair value on the
      Consolidated Balance Sheets 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, held-for-trading, loans and receivables or
      other as defined by CICA 3855, Financial Instruments  Recognition and
      Measurement. No items were classified as held-to-maturity during the
      year.
|   |                                                                                                                                                                                                                                                                                                                                                                            
|   | The carrying amounts, fair values and levels per the fair
      value hierarchy of financial assets as of December 31, 2009, are as
      follows:                                                                                                                                                                                                                         

| |                                          |  |                     |  |  | Fair
      value |  |   | Estimated fair |  |   |                | 
| | ---------------------------------------- |  | ------------------- |  |  | ---------------- |  | - | -------------- |  | - | -------------- | 
| |                                          |  | Designation         |  |  | hierarchy level  |  |   | value          |  |   | Carrying value | 
| | Cash and cash equivalents                |  | Held-for-trading    |  |  | 2                |  | $ | 89,464,362     |  | $ | 89,464,362     | 
| | Amounts receivable                       |  | Loans & receivables |  |  |                  |  |   | 5,053,346      |  |   | 5,053,346      | 
| | Held-for-trading financial instruments   |  | Held-for-trading    |  |  | 1                |  |   | 207,452        |  |   | 207,452        | 
| | Reclamation deposits                     |  | Other               |  |  |                  |  |   | 4,590,267      |  |   | 4,590,267      | 
| | Available-for-sale financial instruments |  | Available-for-sale  |  |  | 1                |  |   | 4,960,683      |  |   | 4,960,683      | 
| |                                          |  |                     |  |  |                  |  |   |                |  |   |                | 
| | Total financial assets                   |  |                     |  |  |                  |  | $ | 104,276,110    |  | $ | 104,276,110    | 

20

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|7. | Financial instruments (continued)
|-- | ---------------------------------

Financial assets (continued)

The carrying amounts, fair values and
levels per the fair value hierarchy of financial assets as of December 31, 2008
were as follows:

| |                                                |  |                     |  |  | Fair
      value |  |   | Estimated fair |  |   |                | 
| | ---------------------------------------------- |  | ------------------- |  |  | ---------------- |  | - | -------------- |  | - | -------------- | 
| |                                                |  | Designation         |  |  | hierarchy level  |  |   | value          |  |   | Carrying value | 
| | Cash and cash equivalents                      |  | Held-for-trading    |  |  | 2                |  | $ | 33,549,118     |  | $ | 33,549,118     | 
| | Amounts receivable                             |  | Loans & receivables |  |  |                  |  |   | 4,940,950      |  |   | 4,940,950      | 
| | Due from related parties                       |  | Loans & receivables |  |  |                  |  |   | 23,174         |  |   | 23,174         | 
| | Held-for-trading financial instruments         |  | Held-for-trading    |  |  | 1                |  |   | 79,960         |  |   | 79,960         | 
| | Reclamation deposits                           |  | Other               |  |  |                  |  |   | 2,886,539      |  |   | 2,886,539      | 
| | Available-for-sale
      financial instruments |  | Available-for-sale  |  |  | 1                |  |   | 899,624        |  |   | 899,624        | 
| |                                                |  |                     |  |  |                  |  |   |                |  |   |                | 
| | Total financial
      assets                   |  |                     |  |  |                  |  | $ | 42,379,365     |  | $ | 42,379,365     | 

Movements in available-for-sale and
held-for-trading financial assets were as follows:

| |                                          |   | Available-for-sale |   |   | Held-for-trading |   |   | Total       |  
| | ---------------------------------------- | - | ------------------ | - | - | ---------------- | - | - | ----------- | -
| | At January 1, 2008                       | $ | 3,326,084          |   | $ | 79,195,954       |   | $ | 82,522,038  |  
| | Acquired during the year                 |   | 274,803            |   |   | 15,820           |   |   | 290,623     |  
| | Cash movements during the year           |   | -                  |   |   | (44,813,836      | ) |   | (44,813,836 | )
| | Movements in fair
      value            |   | (2,701,263         | ) |   | (768,860         | ) |   | (3,470,123  | )
| |                                          |   |                    |   |   |                  |   |   |             |  
| | Balance, December 31, 2008               | $ | 899,624            |   | $ | 33,629,078       |   | $ | 34,528,702  |  
| | Cash movements during the year           |   | -                  |   |   | 55,915,244       |   |   | 55,915,244  |  
| | Conversion of convertible loan to shares |   | 1,035,308          |   |   | -                |   |   | 1,035,308   |  
| | Movements in fair value                  |   | 3,025,751          |   |   | 127,492          |   |   | 3,153,243   |  
| | Balance, December
      31, 2009         | $ | 4,960,683          |   | $ | 89,671,814       |   | $ | 94,632,497  |  

Financial Liabilities

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

| | December 31, 2009                              |   |                |  |   |                | 
| | ---------------------------------------------- | - | -------------- |  | - | -------------- | 
| |                                                |   | Estimated fair |  |   | Carrying value | 
| |                                                |   | value          |  |   |                | 
| | Accounts payable and accrued
      liabilities | $ | 29,206,015     |  | $ | 29,206,015     | 
| | Borrowings                                     |   | 131,495,770    |  |   | 130,715,831    | 
| | Total financial liabilities                    | $ | 160,701,785    |  | $ | 159,921,846    | 

21

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|7. | Financial instruments (continued)
|-- | ---------------------------------

Financial Liabilities
(continued)

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

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 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.

Amounts receivable and other receivables consist mainly of
  GST/VAT and trade receivables. The Companys GST/VAT receivables consist of
  general sales tax due from the Government of Canada and South Africa
  respectively.

The Companys investments in
held-for-trading and available-for-sale instruments are detailed in notes 8, 11
and 12.

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.

To mitigate this risk the Company monitors its
  spending plans, repayment obligations and cash resources and takes actions with
  the objective of ensuring that there is sufficient capital in order to meet
  short term business requirements, after taking into account cash flows from
  operations and the Companys holdings of cash and cash equivalents.

22

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|7. | 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, 2009, are as follows:

| |                                          |   | Total       |  |   | Less
      than 1 year |  |   | 1  5
      years |  |   | More
      than 5 | 
| | ---------------------------------------- | - | ----------- |  | - | ---------------------- |  | - | ----------------- |  | - | ----------------- | 
| |                                          |   |             |  |   |                        |  |   |                   |  |   | years             | 
| | Accounts payable and accrued liabilities | $ | 29,206,015  |  | $ | 29,206,015             |  | $ | -                 |  | $ | -                 | 
| | Operating leases                         |   | 675,353     |  |   | 214,534                |  |   | 460,819           |  |   | -                 | 
| | Asset retirement obligations             |   | 3,990,230   |  |   | -                      |  |   | -                 |  |   | 3,990,230         | 
| | Convertible debentures                   |   | 177,100,000 |  |   | 10,541,667             |  |   | 166,558,333       |  |   | -                 | 
| | Senior secured notes                     |   | 64,951,800  |  |   | 64,951,800             |  |   | -                 |  |   | -                 | 
| | Finance lease
      liability            |   | 1,450,259   |  |   | 791,050                |  |   | 659,209           |  |   | -                 | 
| | Total                                    | $ | 277,373,657 |  | $ | 105,705,066            |  | $ | 167,678,361       |  | $ | 3,990,230         | 

The Senior Secured Notes (note 18(b))
(the "Notes") are due on December 12, 2011, however they are repayable at the
election of the Note holders on 30 days notice after November 12, 2010. The
Notes have therefore been classified as a current liability. Cash flow
projections indicate that the Company will not generate adequate cash flow from
operating activities to repay the Notes by December 2010 if called upon by the
holders. The public offering that closed in March 2009 included 57.5 million
warrants with a strike price of $1.60 per share that expire on October 15, 2010.
The warrant structure was designed at the time to provide additional funding to
settle the Notes if called upon. Although the Companys share price has been
trading above the strike price of the warrants and management remains positive
that the warrants will be exercised, it cannot be guaranteed. The Company is
therefore seeking an alternative debt structure that will provide sufficient
funds to repay the Notes during the coming year. The ability to obtain this
financing depends on a number of factors, some of which are beyond the control
of the Company. These include global economic, credit and capital market
conditions and the expected future price of gold. This debt restructuring
process is in an advanced stage of completion and management expects to conclude
this during the second quarter of 2010, well in advance of the potential
repayment date of the Notes. If management is unable to restructure the debt,
and the Note holders are unwilling to postpone their repayment election to a
later date, it may adversely impact the Company's ability to settle its
obligations as they come due and may have a material adverse effect on the
Company's operations and on the market price of the Company's equity.

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 United
States dollars (US$). However, the Companys operating expenses are primarily
incurred in US$ and South African Rand (ZAR). The results of the Companys
operations are subject to currency transaction risk and currency translation
risk.

23

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|7. | Financial instruments (continued)
|-- | ---------------------------------

Financial Instrument Risk Exposure
and Risk Management (continued)

Foreign exchange risk
(continued)

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.

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

| | December 31, 2009                              |   |           |  |   |           |  |   |            |  |   |            |  |   |             | 
| | ---------------------------------------------- | - | --------- |  | - | --------- |  | - | ---------- |  | - | ---------- |  | - | ----------- | 
| |                                                |   | GBP       |  |   | US$       |  |   | ZAR        |  |   | CAD        |  |   | Total       | 
| | Cash and cash equivalents                      | $ | -         |  | $ | 3,345,447 |  | $ | 20,145,656 |  | $ | 65,973,259 |  | $ | 89,464,362  | 
| | Amounts receivable                             |   | -         |  |   | 773,840   |  |   | 3,952,501  |  |   | 327,005    |  |   | 5,053,346   | 
| | Held-for-trading financial instruments         |   | 207,452   |  |   | -         |  |   | -          |  |   | -          |  |   | 207,452     | 
| | Reclamation deposits                           |   | -         |  |   | 2,636,686 |  |   | 1,103,581  |  |   | 850,000    |  |   | 4,590,267   | 
| | Available-for-sale financial
      instruments |   | 4,960,635 |  |   | -         |  |   | 48         |  |   | -          |  |   | 4,960,683   | 
| | Total
      financial assets                   | $ | 5,168,087 |  | $ | 6,755,973 |  | $ | 25,201,786 |  | $ | 67,150,264 |  | $ | 104,276,110 | 

| | December 31, 2008                        |   |         |  |   |            |  |   |            |  |   |           |  |   |            | 
| | ---------------------------------------- | - | ------- |  | - | ---------- |  | - | ---------- |  | - | --------- |  | - | ---------- | 
| |                                          |   | GBP     |  |   | US$        |  |   | ZAR        |  |   | CAD       |  |   | Total      | 
| | Cash and cash equivalents                | $ | -       |  | $ | 17,133,275 |  | $ | 16,025,198 |  | $ | 390,645   |  | $ | 33,549,118 | 
| | Amounts receivable                       |   | -       |  |   | 3,776,320  |  |   | 861,369    |  |   | 303,261   |  |   | 4,940,950  | 
| | Due from related parties                 |   | -       |  |   | -          |  |   | 23,174     |  |   | -         |  |   | 23,174     | 
| | Held-for-trading financial instruments   |   | 79,960  |  |   | -          |  |   | -          |  |   | -         |  |   | 79,960     | 
| | Reclamation deposits                     |   | -       |  |   | 61,874     |  |   | 604,065    |  |   | 2,220,600 |  |   | 2,886,539  | 
| | Available-for-sale financial instruments |   | 899,566 |  |   | -          |  |   | 58         |  |   | -         |  |   | 899,624    | 
| | Total financial assets                   | $ | 979,526 |  | $ | 20,971,469 |  | $ | 17,513,864 |  | $ | 2,914,506 |  | $ | 42,379,365 | 

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

| | December 31, 2009                        |   |            |  |   |            |  |   |            |  |   |             | 
| | ---------------------------------------- | - | ---------- |  | - | ---------- |  | - | ---------- |  | - | ----------- | 
| |                                          |   | US$        |  |   | ZAR        |  |   | CAD        |  |   | Total       | 
| | Accounts payable and accrued liabilities | $ | 11,405,283 |  | $ | 17,418,731 |  | $ | 382,001    |  | $ | 29,206,015  | 
| | Borrowings                               |   | 44,412,064 |  |   | -          |  |   | 86,303,767 |  |   | 130,715,831 | 
| | Total financial liabilities              | $ | 55,817,347 |  | $ | 17,418,731 |  | $ | 86,685,768 |  | $ | 159,921,846 | 

24

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|7. | Financial instruments (continued)
|-- | ---------------------------------

Financial Instrument Risk Exposure
and Risk Management (continued)

Foreign exchange risk
(continued)

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

At December 31, 2009, the Company is
exposed to currency risk through the following foreign currency denominated
assets and liabilities:

| |                             |   | GBP       |  |   | US$         |   |   | ZAR         |   |   | CAD         |   |   | Total        |  
| | --------------------------- | - | --------- |  | - | ----------- | - | - | ----------- | - | - | ----------- | - | - | ------------ | -
| | Financial assets            | $ | 5,168,087 |  | $ | 6,755,973   |   | $ | 25,201,786  |   | $ | 67,150,264  |   | $ | 104,276,110  |  
| | Financial
      liabilities |   | -         |  |   | (55,817,347 | ) |   | (17,418,731 | ) |   | (86,685,768 | ) |   | (159,921,846 | )
| | Net exposure                | $ | 5,168,087 |  | $ | (49,061,374 | ) | $ | 7,783,055   |   | $ | (19,535,504 | ) | $ | (55,645,736  | )

Based on the aforementioned net
exposure as at December 31, 2009, and assuming that all other variables remain
constant, a 10% depreciation or appreciation of the Canadian dollar against the
respective currencies would result in a variance as set out below in the
Companys net earnings.

| |              |   | GBP     |  |   | US$       |  |   | ZAR     | 
| | ------------ | - | ------- |  | - | --------- |  | - | ------- | 
| | Net exposure | $ | 516,809 |  | $ | 4,906,137 |  | $ | 778,306 | 

Interest rate risk

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

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

The exposure of the Companys financial
assets to interest rate risk as at December 31, 2009 was limited to its
investment in cash and cash equivalents of $89.5 million (2008: $33.5 million)
as well as reclamation deposits which are invested at floating rates.

As at December 31, 2009, the Companys
financial liabilities have fixed interest rates and are therefore not exposed to
floating interest rates. The Convertible Debentures issued in November 2009, the
Senior Secured Notes issued in December 2008 and finance lease facilities have
fixed interest rates of 8%, 14% and 6.5% respectively (refer note 18(d), (b)and
(c)). The interest rate on the project financing was variable with the
Johannesburg inter banking borrowing rate (JIBAR) with an average premium of
2.25% above JIBAR. The amount owed on the project financing facility was settled
in November 2009 (refer note 18(a)). The remainder of the Companys financial
liabilities is not exposed to interest rate risk as it is of a non-interest
bearing nature.

25

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|7. | Financial instruments (continued)                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Financial Instrument Risk Exposure and Risk Management
      (continued)                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Commodity price risk                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The value of the Companys mineral resource properties is
      related to the price of gold and the outlook for this mineral. The Company
      does not have any hedging or other commodity based risks in respect of its
      operations.                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Gold prices historically fluctuated widely and are
      affected by numerous factors outside of the Companys control, including,
      but not limited to, industrial and retail demand, central bank lending,
      forward sales by producers and speculators, levels of worldwide
      production, short-term changes in supply and demand because of speculative
      hedging activities, and certain other factors related specifically to
      gold.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|8. | Cash and cash
equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                      

| |                  |   | December 31 |  |   | December 31 | 
| | ---------------- | - | ----------- |  | - | ----------- | 
| |                  |   | 2009        |  |   | 2008        | 
| | Cash             | $ | 1,297,884   |  | $ | 709,598     | 
| | Cash equivalents |   | 88,166,478  |  |   | 32,839,520  | 
| |                  | $ | 89,464,362  |  | $ | 33,549,118  | 

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

|9. | Amounts receivable
|-- | ------------------

| |                     |   | December 31 |  |   | December 31 | 
| | ------------------- | - | ----------- |  | - | ----------- | 
| |                     |   | 2009        |  |   | 2008        | 
| | GST/VAT receivable  | $ | 3,388,337   |  | $ | 1,415,918   | 
| | Deposit (note 9(a)) |   | -           |  |   | 1,523,256   | 
| | Trade receivables   |   | 385,135     |  |   | 1,812,550   | 
| | Other receivables   |   | 1,279,874   |  |   | 189,226     | 
| |                     | $ | 5,053,346   |  | $ | 4,940,950   | 

(a) Deposit

In connection with the February 20,
2007 share purchase agreement an amount of $1.5 million (US$1.3 million) was
retained by Hecla Limited in respect of the successful establishment of the
Hollister Ventures Corp. 401(k) and related pension plans. This condition was
met by October 1, 2008 and the amount was refunded to the Company on April 1,
2009.

26

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|10. | Inventory
|--- | ---------

| |                            |   | December 31 |  |   | December 31 | 
| | -------------------------- | - | ----------- |  | - | ----------- | 
| |                            |   | 2009        |  |   | 2008        | 
| | Stores and materials       | $ | 735,451     |  | $ | 501,505     | 
| | Unprocessed ore            |   | 19,480,760  |  |   | 7,744,588   | 
| | Precious metals in process |   | 6,095,861   |  |   | -           | 
| |                            | $ | 26,312,072  |  | $ | 8,246,093   | 

Production costs recognized in the
Statement of Operations and Comprehensive Loss consists of direct and indirect
mining costs, other overhead costs, depreciation of mining equipment and
depletion of mineral properties. During the year ended December 31, 2009,
unprocessed ore of $7.2 million has been included under production cost and
depletion.

|11. | Available-for-sale financial instruments
|--- | ----------------------------------------

| |                                    |   | December 31 |  |   | December 31 |  
| | ---------------------------------- | - | ----------- |  | - | ----------- | -
| |                                    |   | 2009        |  |   | 2008        |  
| | Balance, beginning of the year     | $ | 899,624     |  | $ | 3,326,084   |  
| | Kryso shares (note 11(a))          |   |             |  |   |             |  
| | Addition                           |   | 1,035,308   |  |   | 274,798     |  
| | Unrealized gain (loss)             |   | 3,025,751   |  |   | (2,701,263  | )
| | Rand Mutual Assurance (note 11(b)) |   |             |  |   |             |  
| | Addition                           |   | -           |  |   | 5           |  
| | Balance, end of year               | $ | 4,960,683   |  | $ | 899,624     |  

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

| |                                     |   | Kryso         |  |   | Rand Mutual | 
| | ----------------------------------- | - | ------------- |  | - | ----------- | 
| |                                     |   | Resources Plc |  |   | Assurance   | 
| | Total shares, beginning of the year |   | 13,401,335    |  |   | 22          | 
| | Acquired                            |   | 10,828,560    |  |   | -           | 
| | Total shares, end of year           |   | 24,229,895    |  |   | 22          | 
| |                                     |   |               |  |   |             | 
| | Fair value, December 31, 2009       | $ | 4,960,635     |  | $ | 48          | 
| | Fair value,
      December 31, 2008 | $ | 899,559       |  | $ | 65          | 

(a) Kryso Resources Plc -
Shares

Kryso Resources Plc (Kryso), a
mineral resources and exploration company exploring gold and precious metal
deposits in Central Asia, is a publicly traded company on the AIM market of the
London Stock Exchange. The shares were acquired over a period of 3 years at an
original cost of $3 million and were subsequently revalued to their fair value
of $0.9 million on December 31, 2008, which was calculated based on the closing
price of 3.75 pence per share and an exchange rate of $1.79:1GBP.

During April 2008 the Company granted a
convertible unsecured interest free loan facility to Kryso to the value of
GBP0.5 million ($1 million), due on October 31, 2008. The loan remained
outstanding on the repayment date and accrued default interest from this date at
12%.

27

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|11. | Available-for-sale financial instruments
      (continued)
|--- | ----------------------------------------------------------

(a) Kryso Resources Plc  Shares
(continued)

On June 30, 2009 the Company agreed to
the conversion of the loan and received 1 share for each 5 pence owed to the
Company.

An unrealized gain of $3 million for
the year ended December 31, 2009 is reported in the Statement of Operations and
Comprehensive Loss under other comprehensive income and was calculated based on
the closing price of GBP 12.10 pence per share and an exchange rate of
$1.69:1GBP.

(b) The Rand Mutual Assurance
Company Limited - Shares

The Rand Mutual Assurance Company
Limited is a mutual which caters for the compensation of occupational injuries
specifically to the South African mining industry. No dividends were received
during 2009 (2008 - $17,640).

|12. | Held-for-trading financial instruments
|--- | --------------------------------------

| | Kryso Resources Plc.               |  | Number of |  |   | December 31 |  |  | Number of |  |   | December 31 |  
| | ---------------------------------- |  | --------- |  | - | ----------- |  |  | --------- |  | - | ----------- | -
| |                                    |  | warrants  |  |   | 2009        |  |  | warrants  |  |   | 2008        |  
| | Balance, beginning of the year     |  | 6,086,956 |  | $ | 79,960      |  |  | 5,000,000 |  | $ | 833,000     |  
| | Addition  Kryso warrants received |  | -         |  |   | -           |  |  | 1,086,956 |  |   | 15,820      |  
| | Unrealized fair value gain (loss)  |  | -         |  |   | 127,492     |  |  | -         |  |   | (768,860    | )
| | Balance, end of
      year         |  | 6,086,956 |  | $ | 207,452     |  |  | 6,086,956 |  | $ | 79,960      |  

The warrants are exercisable at GBP 15
pence per share, with 5,000,000 warrants expiring on July 11, 2012 and 1,086,956
warrants expiring on October 31, 2010. Warrants are carried at fair value.

|13. | Property, plant and equipment
|--- | -----------------------------

| | December 31, 2009                             |   |             |  |   |              |  |   |             | 
| | --------------------------------------------- | - | ----------- |  | - | ------------ |  | - | ----------- | 
| |                                               |   |             |  |   | Accumulated  |  |   | Net book    | 
| |                                               |   | Cost        |  |   | amortization |  |   | value       | 
| | Land and buildings                            | $ | 5,934,637   |  | $ | 171,706      |  | $ | 5,762,931   | 
| | Mine infrastructure                           |   | 16,656,969  |  |   | 192,212      |  |   | 16,464,757  | 
| | Mine development and plant under construction |   | 139,793,294 |  |   | -            |  |   | 139,793,294 | 
| | Site equipment                                |   | 33,911,157  |  |   | 8,606,610    |  |   | 25,304,547  | 
| | Leased assets                                 |   | 2,545,170   |  |   | 392,313      |  |   | 2,152,857   | 
| | Vehicles                                      |   | 1,812,028   |  |   | 894,199      |  |   | 917,829     | 
| | Computers                                     |   | 1,352,049   |  |   | 712,049      |  |   | 640,000     | 
| | Office furniture and fixtures                 |   | 938,376     |  |   | 500,229      |  |   | 438,147     | 
| |                                               | $ | 202,943,680 |  | $ | 11,469,318   |  | $ | 191,474,362 | 

28

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|13. | Property, plant and equipment
      (continued)
|--- | -----------------------------------------------

| | December 31, 2008                             |   |            |  |   |              |  |   |            | 
| | --------------------------------------------- | - | ---------- |  | - | ------------ |  | - | ---------- | 
| |                                               |   |            |  |   | Accumulated  |  |   | Net book   | 
| |                                               |   | Cost       |  |   | amortization |  |   | Value      | 
| | Land and buildings                            | $ | 3,458,030  |  | $ | 119,774      |  | $ | 3,338,256  | 
| | Mine development and plant under construction |   | 21,955,085 |  |   | -            |  |   | 21,955,085 | 
| | Site equipment                                |   | 22,421,886 |  |   | 3,958,820    |  |   | 18,463,066 | 
| | Leased assets                                 |   | 2,769,566  |  |   | 32,971       |  |   | 2,736,595  | 
| | Vehicles                                      |   | 1,910,334  |  |   | 492,478      |  |   | 1,417,856  | 
| | Computers                                     |   | 946,391    |  |   | 389,818      |  |   | 556,573    | 
| | Office furniture
      and fixtures           |   | 770,741    |  |   | 388,987      |  |   | 381,754    | 
| |                                               | $ | 54,232,033 |  | $ | 5,382,848    |  | $ | 48,849,185 | 

As at December 31, 2009, $139.8 million
(December 31, 2008, $22 million), comprising of capitalized Burnstone mine
development cost and plant and equipment under construction, is not being
amortized.

Leased assets are pledged as security
for the related finance leases (refer note 18(c)).

|14. | Reclamation deposits
|--- | --------------------

The continuity of reclamation deposits
on the consolidated balance sheets is as follows:

| |                                             |   | December 31 |   |   | December 31 |  
| | ------------------------------------------- | - | ----------- | - | - | ----------- | -
| |                                             |   | 2009        |   |   | 2008        |  
| | Balance, beginning of the year              | $ | 2,886,539   |   | $ | 1,720,456   |  
| | Guarantee  Burnstone Property              |   | 188,673     |   |   | 144,210     |  
| | Investments  Burnstone
      Property      |   | 243,761     |   |   | 185,221     |  
| | Reclamation Bond  Esmeralda Property       |   | 1,362,640   |   |   | -           |  
| | Reclamation Bond  Hollister
      Property |   | -           |   |   | 850,000     |  
| | Guarantee  Puma Gold                       |   | -           |   |   | 1,967       |  
| | Exchange loss                               |   | (91,346     | ) |   | (15,315     | )
| | Balance, end of
      year                  | $ | 4,590,267   |   | $ | 2,886,539   |  

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

| |                            |   | Hollister    |   |   | Burnstone    |  |   | Esmeralda    |   |   |           |  
| | -------------------------- | - | ------------ | - | - | ------------ |  | - | ------------ | - | - | --------- | -
| |                            |   | Property     |   |   | Property     |  |   | Property     |   |   |           |  
| |                            |   | (note 14(a)) |   |   | (note 14(b)) |  |   | (note 14(c)) |   |   | Total     |  
| | Balance, December 31, 2008 | $ | 2,282,473    |   | $ | 604,066      |  | $ | -            |   | $ | 2,886,539 |  
| | Guarantee and investments  |   | -            |   |   | 432,434      |  |   | -            |   |   | 432,434   |  
| | Reclamation bond           |   | -            |   |   | -            |  |   | 1,362,640    |   |   | 1,362,640 |  
| | Exchange (loss) gain       |   | (50,396      | ) |   | 67,082       |  |   | (108,032     | ) |   | (91,346   | )
| | Balance, December 31, 2009 | $ | 2,232,077    |   | $ | 1,103,582    |  | $ | 1,254,608    |   | $ | 4,590,267 |  

(a) Hollister Property

As at December 31, 2009 and 2008, the
Company had posted $2.2 million (US$2.1 million) and $2.3 million (US$1.8
million) respectively in reclamation deposits with the United States Bureau of
Land Management ("BLM") in respect of exploration drilling and trial mining on
certain areas of the Hollister Property.

29

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|14. | Reclamation deposits (continued)
|--- | --------------------------------

(b) Burnstone Property

As at December 31, 2009 and 2008, the
Company placed investments and deposits for guarantees of $1.1 million (ZAR7.8
million) and $0.6 million (ZAR4.6 million) in favor of the South African
Department of Mineral Resources for the reclamation of the Burnstone
Property.

(c) Esmeralda Property

As at December 31, 2009 the Company had
posted cash surety and bonding of $1.3 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.

|15. | Mineral property interests
|--- | --------------------------

| |                                               |   | December 31 |  |   | December 31 | 
| | --------------------------------------------- | - | ----------- |  | - | ----------- | 
| | Mineral Property
      Acquisition Costs, net |   | 2009        |  |   | 2008        | 
| | Hollister Property (note 15(a))               | $ | 75,917,806  |  | $ | 88,623,915  | 
| | Burnstone Property (note 15(b))               |   | 107,158,228 |  |   | 130,783,565 | 
| | Rusaf Property (note 15(c))                   |   | 36,466,782  |  |   | 36,466,782  | 
| | Esmeralda Property (note 15(d))               |   | 3,217,816   |  |   | 3,762,713   | 
| | Kirkland Lake Property (note 15(e))           |   | 1           |  |   | 1           | 
| | Other (note 15(f))                            |   | 158,055     |  |   | 221,680     | 
| |                                               | $ | 222,918,688 |  | $ | 259,858,656 | 

(a) Hollister Property, Elko County,
Nevada, United States of America

| |                                |   | December 31 |   |   | December 31 |  
| | ------------------------------ | - | ----------- | - | - | ----------- | -
| |                                |   | 2009        |   |   | 2008        |  
| | Balance, beginning of the year | $ | 88,623,915  |   | $ | 95,156,279  |  
| | Depletion charge               |   | (6,011,962  | ) |   | (6,344,218  | )
| | Foreign exchange               |   | (6,694,147  | ) |   | (188,146    | )
| | Balance, end of
      year     | $ | 75,917,806  |   | $ | 88,623,915  |  

Depletion of $2.8 million relating to
stockpiled ounces was capitalized to the value of the unprocessed ore (refer
note 10).

(b) Burnstone Property, Republic of
South Africa

| |                                                      |   | December 31 |   |   | December 31 |  
| | ---------------------------------------------------- | - | ----------- | - | - | ----------- | -
| |                                                      |   | 2009        |   |   | 2008        |  
| | Balance, beginning of the year                       | $ | 130,783,565 |   | $ | 123,257,650 |  
| | Acquisition of Puma prospecting and option contracts |   | -           |   |   | 9,223,272   |  
| | Foreign exchange                                     |   | (23,625,337 | ) |   | (1,697,357  | )
| | Balance, end of
      year                           | $ | 107,158,228 |   | $ | 130,783,565 |  

30

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|15. | Mineral property interests (continued)
|--- | --------------------------------------

(b) Burnstone Property, Republic of
South Africa (continued)

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

On July 31, 2008 the Company issued
1,862,354 Great Basin common shares as consideration for a 100% interest in the
assets of Puma. The shares were valued at the closing price of $3.57 on July 31,
2008 for a total consideration price of $6.6 million.

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

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

(c) Rusaf Properties, Russia and
Republic of Tanzania

| |                                               |   | December 31 |  |   | December 31 | 
| | --------------------------------------------- | - | ----------- |  | - | ----------- | 
| |                                               |   | 2009        |  |   | 2008        | 
| | Balance, beginning of the year                | $ | 36,466,782  |  | $ | -           | 
| | Acquisition of interest held by third parties |   | -           |  |   | 36,466,782  | 
| | Balance, end of year                          | $ | 36,466,782  |  | $ | 36,466,782  | 

On April 1, 2008 the Company concluded
the asset acquisition of Rusaf. The transaction was structured in three tranches
of which the first tranche closed on June 28, 2007 with the payment of $2
million for 3,333,333 common shares at $0.60 per share.

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

On April 1, 2008, the Company acquired
the remaining 63% of Rusaf for a consideration of $22.9 million, payable in
6,613,636 Great Basin common shares. The exchange ratio was one Great Basin
share for every 4.5 Rusaf shares.

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

The Rusaf Plan of Arrangement (Rusaf
agreement) also provides for additional Great Basin shares to be issued in the
first three years from closing, contingent upon gold discoveries above a
threshold of 500,000 ounces in size on certain mineral prospects  held
by Rusaf. In the event of such discoveries, the Company will issue shares valued
at the higher of closing price on date of acquisition ($3.30) or then-prevailing
market price to the former Rusaf shareholders on the basis of valuing these gold
ounces at US$15/oz for inferred resources and US$40/oz for measured and
indicated resources (subject to a minimum average cut-off grade of 1.5 grams per
tonne or 0.04 oz per ton).

31

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|15. | Mineral property interests (continued)
|--- | --------------------------------------

(c) Rusaf Properties, Russia and
Republic of Tanzania (continued)

The contingent payment amounts are
considered a financial liability and are recorded at their fair value at the
acquisition date, which was estimated to be nominal at the time due to the
significant uncertainty inherent in mineral exploration. The liability is
accounted for at amortized cost, and changes in the estimated liability are
accounted for prospectively, with a corresponding adjustment to the accumulated
amortization. Adjustments to the amortization are accounted for as interest cost
and capitalized to the mineral property.

Technical reports on the first phase of
exploration were collated during November 2009, which confirmed resources within
the parameters of the Rusaf agreement set-out above and the Company accordingly
issued an additional 3,073,773 shares to the former Rusaf shareholders on
January 27, 2010. These shares are valued at the closing price of $1.82 on
January 27, 2010, for a total value of $5.6 million and will be recorded as
mineral properties (refer note 25(a)). Additional shares to be issued pursuant
to the Rusaf agreement can only be determined once exploration results are
confirmed by supporting technical reports as stipulated under the terms of the
Rusaf agreement.

The Company also agreed to spend a
minimum of $15 million and up to a maximum of $27 million to explore the
acquired properties during the first three years from closing of the transaction
on April 1, 2008. The increased expenditure is contingent upon gold discoveries
above a threshold of 500,000 ounces in size on certain mineral prospects
held by Rusaf.

| | The aggregate
      purchase price was $31.7 million, calculated as follows: |   |            |  
| | ---------------------------------------------------------------------------- | - | ---------- | -
| | Cash payment                                                                 | $ | 8,000,000  |  
| | Equity loss recognized to date of acquisition                                |   | (1,147,473 | )
| | Issuance of 6,613,636 Great Basin
      common shares                        |   | 22,883,180 |  
| | Additional 22,041 shares issued to Rusaf shareholders                        |   | 76,923     |  
| | Fair value of share options and
      warrants                               |   | 1,763,476  |  
| | Transaction
      costs                                                      |   | 86,836     |  
| |                                                                              | $ | 31,662,942 |  

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

The 1,062,033 future GBG shares to be
issued was recorded at an estimated fair value of $1.8 million (refer note
21(d)(i)).

32

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|15. | Mineral property interests (continued)
|--- | --------------------------------------

(c) Rusaf Properties, Russia and
Republic of Tanzania (continued)

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

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

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

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

| |                                       |   | December 31 |   |   | December 31 | 
| | ------------------------------------- | - | ----------- | - | - | ----------- | 
| |                                       |   | 2009        |   |   | 2008        | 
| | Balance, beginning of the year        | $ | 3,762,713   |   | $ | -           | 
| | Acquisition of mine and mill property |   | -           |   |   | 2,403,600   | 
| | Transfer tax and filing fees          |   | 5,491       |   |   | 7,875       | 
| | Reclamation asset                     |   | (34,483     | ) |   | 1,318,763   | 
| | Foreign exchange                      |   | (515,905    | ) |   | 32,475      | 
| | Balance, end of
      year            | $ | 3,217,816   |   | $ | 3,762,713   | 

The Company purchased the Esmeralda
property on November 30, 2008 from Metallic Ventures (U.S.), Inc. for an
aggregate consideration of $2.4 million (US$2 million). The Esmeralda Mine and
Mill Property consist of patented and unpatented mining claims, free lands,
water rights and a mill.

Estimated reclamation liabilities of
$1.3 million (US$1 million) have been capitalized to the Esmeralda property. The
2009 change in the reclamation obligations estimate was therefore capitalized
to the property (refer note 20(c)).

(e) Kirkland Lake Property, Ontario,
Canada

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

The Company continues to maintain the
property in good standing.

33

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|15. | Mineral property interests (continued)
|--- | --------------------------------------

(f) Other Properties

| |                                      |   | December 31 |   |   | December 31 | 
| | ------------------------------------ | - | ----------- | - | - | ----------- | 
| |                                      |   | 2009        |   |   | 2008        | 
| | Balance, beginning of the year       | $ | 221,680     |   | $ | -           | 
| | Ganes Creek Property (note 15(f)(i)) |   |             |   |   |             | 
| | - Issue
      of shares              |   | 35,200      |   |   | 29,700      | 
| | -
      Cash payments                |   | -           |   |   | 89,165      | 
| | -
      Mineral property written off |   | (154,065    | ) |   | -           | 
| | Tsetsera Property (note 15(f)(ii))   |   | 55,240      |   |   | 102,815     | 
| | Balance, end of year                 | $ | 158,055     |   | $ | 221,680     | 

(i) Ganes Creek Property, Alaska,
USA

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

Pursuant to the agreement, the Company
issued 20,000 shares on February 10, 2009 to CWM. The shares were valued at the
prevailing quoted price of $1.76 per share and the resulting interest in Ganes
Creek was recorded as mineral properties (refer note 21(f)).

The Company decided
  to terminate the agreement and to cease all exploration activities relating to
  the Ganes Creek Property, based on the evaluation of the 2008 seasons results
  and the strategic objective of the Company. The Company proceeded with the
  rehabilitation of the disturbance caused by the exploration program and the fair
  value of property was written off to the Statement of Operations and
  Comprehensive Loss.

(ii) Tsetsera Property, Mozambique,
Africa

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

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

Pursuant to the agreement, the Company
remitted a cash payment of US$50,000 (2008 -two cash payments of US$50,000
each), which were recorded as mineral properties.

34

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|16. | Accounts payable and accrued liabilities
|--- | ----------------------------------------

| |                     |   | December 31 |  |   | December 31 | 
| | ------------------- | - | ----------- |  | - | ----------- | 
| |                     |   | 2009        |  |   | 2008        | 
| | Trade payables      | $ | 7,316,689   |  | $ | 12,250,484  | 
| | Accrued liabilities |   | 17,497,525  |  |   | 10,339,911  | 
| | Royalty accrual     |   | 1,769,563   |  |   | 1,139,881   | 
| | Leave liability     |   | 811,664     |  |   | 681,540     | 
| | Bonus provision     |   | 1,810,574   |  |   | 1,864,746   | 
| |                     | $ | 29,206,015  |  | $ | 26,276,562  | 

|17. | Related party balances and transactions
|--- | ---------------------------------------

| | Due from related parties                        |   | December 31 |  |   | December 31 | 
| | ----------------------------------------------- | - | ----------- |  | - | ----------- | 
| |                                                 |   | 2009        |  |   | 2008        | 
| | Tranter Gold (Proprietary) Limited (note 17(a)) | $ | -           |  | $ | 23,174      | 

| | Due to related parties                                |   | December 31 |  |   | December 31 | 
| | ----------------------------------------------------- | - | ----------- |  | - | ----------- | 
| |                                                       |   | 2009        |  |   | 2008        | 
| | Tranter Gold (Proprietary) Limited (note
      17(a)) | $ | -           |  |   | 214,840     | 
| | Hunter Dickinson
      Services Inc. (note 17(b))     |   | -           |  |   | 38,014      | 
| |                                                       | $ | -           |  | $ | 252,854     | 

| | Reimbursement for related party expenses and
      services |   |             |   |   |             |  
| | ----------------------------------------------------------- | - | ----------- | - | - | ----------- | -
| | rendered                                                    |   | December 31 |   |   | December 31 |  
| |                                                             |   | 2009        |   |   | 2008        |  
| | Tranter Gold (Proprietary) Limited (note
      17(a))       | $ | (17,978     | ) | $ | (25,700     | )
| | Hunter Dickinson Services Inc. (note 17(b))                 | $ | -           |   | $ | 559,904     |  

Related party transactions are recorded
at the exchange amount which is the amount of consideration paid or received as
negotiated by the parties at arms length. Related party balances receivable
(payable) are non-interest bearing and are included under current assets and
liabilities on the consolidated balance sheets.

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

Tranter Gold is a wholly-owned
subsidiary of Tranter Burnstone (Proprietary) Limited (Tranter Burnstone) and
has a director in common with the Company. The Company used to provide Tranter
Gold with certain accounting and administrative services on rates negotiated
while the officer was dealing at arms length with the Company.

During the year ended December 31, 2008
Tranter Gold provided Southgold with geological services in the amount of $0.2
million (ZAR1.6 million), negotiated at arms length. No services were provided
during the 2009 year.

(b) Hunter Dickinson Services
Inc.

Hunter Dickinson Services Inc. (HDI)
is a private company which has a director in common with the Company. HDI used
to provide corporate development, administrative and management services to, and
incurred third party costs on behalf of the Company and its subsidiaries on a
full cost recovery basis pursuant to an agreement dated September 25, 2007.

Effective January 1, 2009, the Company
ceased to recognize HDI as a related party.

35

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|18. | Long term borrowings
|--- | --------------------

| | Non-current portion of long term borrowings |   | December 31 |  |   | December 31 | 
| | ------------------------------------------- | - | ----------- |  | - | ----------- | 
| |                                             |   | 2009        |  |   | 2008        | 
| | Project finance facility (note
      18(a)) | $ | -           |  | $ | 26,773,936  | 
| | Senior secured notes (note 18(b))           |   | -           |  |   | 33,766,950  | 
| | Finance lease liability (note
      18(c))  |   | 643,907     |  |   | 1,519,708   | 
| | Convertible debentures (note 18(d))         |   | 86,303,767  |  |   | -           | 
| |                                             | $ | 86,947,674  |  | $ | 62,060,594  | 

| | Current portion of long term borrowings |   | December 31 |  |   | December 31 | 
| | --------------------------------------- | - | ----------- |  | - | ----------- | 
| |                                         |   | 2009        |  |   | 2008        | 
| | Senior secured notes (note
      18(b)) | $ | 43,044,413  |  | $ | -           | 
| | Finance lease liability (note 18(c))    |   | 723,744     |  |   | 916,745     | 
| |                                         | $ | 43,768,157  |  | $ | 916,745     | 

Aggregate future payments, inclusive
of interest

| |                                   |   | Less than 1 |  |   | 1  5 years |  |   | More than 5 | 
| | --------------------------------- | - | ----------- |  | - | ----------- |  | - | ----------- | 
| |                                   |   | year        |  |   |             |  |   | years       | 
| | Senior secured notes              | $ | 64,951,800  |  | $ | -           |  | $ | -           | 
| | Finance lease liability           |   | 791,050     |  |   | 659,209     |  |   | -           | 
| | Convertible debentures            |   | 10,541,667  |  |   | 166,558,333 |  |   | -           | 
| | Total financial
      liabilities | $ | 76,284,517  |  | $ | 167,217,542 |  | $ | -           | 

(a) Project finance facility

| |                                           |   | December 31 |   |   | December 31 |  
| | ----------------------------------------- | - | ----------- | - | - | ----------- | -
| |                                           |   | 2009        |   |   | 2008        |  
| | Balance, beginning of the year            | $ | 26,773,936  |   | $ | -           |  
| | Principal amount                          |   | -           |   |   | 26,040,000  |  
| | Accrued interest                          |   | 2,940,887   |   |   | 1,113,710   |  
| | Facility arrangement fees                 |   | (160,900    | ) |   | (596,468    | )
| | Amortized facility arrangement
      fees |   | 780,745     |   |   | 18,768      |  
| | Foreign exchange                          |   | 2,469,835   |   |   | 197,926     |  
| | Payment                                   |   | (32,804,503 | ) |   | -           |  
| | Balance, end of
      year                | $ | -           |   | $ | 26,773,936  |  

During 2008, the Company utilized a
ZAR200 million ($26 million) project finance facility, which was collateralized
by a first mortgage bond over the Burnstone project.

The facility accrued interest at JIBAR
with an average premium of 2.25% above JIBAR.

The Company repaid the principal
amount, inclusive of interest accrued to date, on November 30, 2009.

36

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|18. | Long term borrowings (continued)
|--- | --------------------------------

(b) Senior secured notes

| |                                |   | December 31 |   |   | December 31 |  
| | ------------------------------ | - | ----------- | - | - | ----------- | -
| |                                |   | 2009        |   |   | 2008        |  
| | Balance, beginning of the year | $ | 33,766,950  |   | $ | -           |  
| | Principal amount               |   | -           |   |   | 57,819,944  |  
| | Pre-paid interest              |   | -           |   |   | (18,042,304 | )
| | Transaction cost               |   | -           |   |   | (5,816,203  | )
| | Amortized interest expense     |   | 15,104,781  |   |   | 706,432     |  
| | Foreign exchange               |   | (5,827,318  | ) |   | (900,919    | )
| | Balance, end of year           | $ | 43,044,413  |   | $ | 33,766,950  |  

| |             |   | December 31 |  |   | December 31 | 
| | ----------- | - | ----------- |  | - | ----------- | 
| |             |   | 2009        |  |   | 2008        | 
| | Non-current | $ | -           |  | $ | 33,766,950  | 
| | Current     |   | 43,044,413  |  |   | -           | 
| |             | $ | 43,044,413  |  | $ | 33,766,950  | 

On December 12, 2008, the Company
closed a senior secured note financing (the Note Financing), issuing a total
of 51,500 units and raising gross proceeds of US$51.5 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 and 350 common share
purchase warrants (the Note Financing Warrants). Each Note Financing Warrant
entitles the holder to purchase one common share in the capital of the Company
at a price of $1.80 per share on or before December 12, 2011.

These warrants are subject to
anti-dilution rights, including certain anti-dilution rights triggered by the
issuance of common shares at a price less than the exercise price, but have a
minimum exercise price of $1.11 per common share. The Equity offering that
closed on March 13, 2009 (refer note 21(g)) triggered the anti-dilution
protection on the warrants issued in respect of the Senior Secured Notes.

The Notes mature at 120% of principal
on the earlier of December 12, 2011 and certain stated events, including a
change of control and are repayable at the election of the holder on 30 days
notice after November 12, 2010.

The Notes bear interest of 14% per
annum and are guaranteed on a joint and several basis by all of the Companys
Nevada subsidiaries and collateralized by their assets, being the Hollister
Property and all other Nevada assets (refer note 15(a) and 15(d)).

The fair value of the senior secured
notes and associated warrants was apportioned using the relative fair value
method with the fair value assigned to the warrants being recorded in equity
(refer note 21(c)(iii)).

37

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|18. | Long term borrowings (continued)
|--- | --------------------------------

(c) Finance lease liability

| |                                |   | December 31 |   |   | December 31 |  
| | ------------------------------ | - | ----------- | - | - | ----------- | -
| |                                |   | 2009        |   |   | 2008        |  
| | Balance, beginning of the year | $ | 2,436,453   |   | $ | -           |  
| | Principal debt amount          |   | -           |   |   | 2,505,706   |  
| | Interest expense               |   | 120,342     |   |   | 17,732      |  
| | Payments                       |   | (918,350    | ) |   | (66,931     | )
| | Foreign exchange               |   | (270,794    | ) |   | (20,054     | )
| | Balance, end of
      year     | $ | 1,367,651   |   | $ | 2,436,453   |  

| |             |   | December 31 |  |   | December 31 | 
| | ----------- | - | ----------- |  | - | ----------- | 
| |             |   | 2009        |  |   | 2008        | 
| | Non-current | $ | 643,907     |  | $ | 1,519,708   | 
| | Current     |   | 723,744     |  |   | 916,745     | 
| |             | $ | 1,367,651   |  | $ | 2,436,453   | 

On November 15, 2008 the Company
financed site equipment through a finance lease agreement with Sandvik Customer
Finance LLC. The principal debt amount will be repaid in 36 equal installments.
Interest is charged at 6.5% on outstanding capital and is being calculated on
the 15thof each month.

The finance lease is collateralized by
the leased assets which had a carrying value of $2.2 million at December 31,
2009 (refer note 13).

(d) Convertible debentures

| |                                                  |   | December 31 |   |   | December 31 | 
| | ------------------------------------------------ | - | ----------- | - | - | ----------- | 
| |                                                  |   | 2009        |   |   | 2008        | 
| | Balance, beginning of the year                   | $ | -           |   | $ | -           | 
| | Principal amount                                 |   | 126,500,000 |   |   | -           | 
| | Transaction cost                                 |   | (6,594,067  | ) |   | -           | 
| | Equity component                                 |   | (35,455,306 | ) |   | -           | 
| | Liability component on initial
      recognition |   | 84,450,627  |   |   | -           | 
| | Amortized interest expense                       |   | 1,853,140   |   |   | -           | 
| | Balance, end of year                             | $ | 86,303,767  |   | $ | -           | 

| |             |   | December 31 |  |   | December 31 | 
| | ----------- | - | ----------- |  | - | ----------- | 
| |             |   | 2009        |  |   | 2008        | 
| | Non-current | $ | 86,303,767  |  | $ | -           | 
| | Current     |   | -           |  |   | -           | 
| |             | $ | 86,303,767  |  | $ | -           | 

An aggregate of $126.5 million
principal amount of 8.0% 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, commencing on May 30, 2010. The Debentures are direct senior
unsecured obligations of the Company and are guaranteed by certain of the
Companys subsidiaries.

38

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|18. | Long term borrowings (continued)
|--- | --------------------------------

(d) Convertible debentures
(continued)

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.

The fair value of the liability
component and the equity component were determined 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 21(d)). In
subsequent periods, 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 determined on the issue of the debentures
and is not changed in subsequent periods.

|19. | Future income taxes
|--- | -------------------

The estimated tax effect of the
significant components within the Companys future tax liability was as
follows:

| |                                       |   | December 31 |   |   | December 31 |  
| | ------------------------------------- | - | ----------- | - | - | ----------- | -
| |                                       |   | 2009        |   |   | 2008        |  
| | Future income tax assets              |   |             |   |   |             |  
| | Loss carry forwards                   | $ | 62,720,651  |   | $ | 48,432,765  |  
| | Equipment                             |   | 26,190,410  |   |   | 18,146,538  |  
| | Other                                 |   | 16,784,689  |   |   | 9,213,242   |  
| | Subtotal                              |   | 105,695,750 |   |   | 75,792,545  |  
| | Valuation allowance                   |   | (51,067,808 | ) |   | (33,464,849 | )
| | Future income tax asset               |   | 54,627,942  |   |   | 42,327,697  |  
| |                                       |   |             |   |   |             |  
| | Future income tax liability           |   |             |   |   |             |  
| | Mineral property interests            |   | (63,843,082 | ) |   | (54,903,967 | )
| | Senior secured debt                   |   | (1,444,100  | ) |   | (2,171,121  | )
| | Future income tax
      liability     |   | (65,287,182 | ) |   | (57,075,089 | )
| |                                       |   |             |   |   |             |  
| | Net future income
      tax liability | $ | 10,659,240  |   | $ | 14,747,392  |  

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

39

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|19. | Future income taxes (continued)
|--- | -------------------------------

These differences result from the
following items:

| |                                                                      |   | December 31 |   |   | December 31 |  
| | -------------------------------------------------------------------- | - | ----------- | - | - | ----------- | -
| |                                                                      |   | 2009        |   |   | 2008        |  
| | Combined Canadian federal and provincial
      statutory rate        |   | 30.0%       |   |   | 31.0%       |  
| |                                                                      |   |             |   |   |             |  
| | Income tax recovery at statutory rates                               | $ | (16,195,802 | ) | $ | (36,213,226 | )
| | Difference in foreign tax rates                                      |   | (1,312,999  | ) |   | 377,774     |  
| | Increase in valuation allowance                                      |   | 16,376,473  |   |   | 4,500,522   |  
| | Other non-deductible items                                           |   | 3,734,519   |   |   | 4,532,798   |  
| | Change due to foreign exchange                                       |   | 3,989,496   |   |   | (4,243,626  | )
| | Change in tax rate                                                   |   | (602,770    | ) |   | (218,366    | )
| | Unrealized foreign exchange gain (loss) not
      included in income |   | 3,087,307   |   |   | (758,387    | )
| | Amounts reported through equity                                      |   | (1,293,750  | ) |   | -           |  
| | Tax deductible items capitalized for
      accounting                |   | (13,614,079 | ) |   | -           |  
| | Other                                                                |   | 291,226     |   |   | 77,732      |  
| | Future income tax recovery                                           |   | (5,540,379  | ) |   | (31,944,779 | )
| | Income taxes paid                                                    |   | 8,026       |   |   | -           |  
| |                                                                      |   | (5,532,353  | ) |   | (31,944,779 | )

At December 31, 2009, the Company had
available losses for income tax purposes in Canada totaling approximately $30.4
million (2008  $9.2 million), expiring in various years from 2010 to 2029. The
Company has available resource tax pools in Canada of approximately $4.9 million
(2007  $4.8 million), which may be carried forward and utilized to reduce
resource income. Included in these resource tax pools is $3.1 million (2008 
$3.1 million) which is successored, and consequently can only be utilized
against taxable income from specific mineral properties.

At December 31, 2009,
  the Company had a net operating loss carry forward for United States income tax
  purposes of approximately $135.4 million (US$128.8 million) (2008  $116.8
  million (US$95.9 million)) which, if not utilized to reduce United States
  taxable income in future periods, expire through the year 2029. These available
  tax losses may only be applied to offset future taxable income from the
  Company's current United States subsidiaries.

Approximately $9.5 million (US$9
million) of the above United States losses are subject to limitation under
Section 382. Accordingly, the Company's ability to utilize these losses each
year may be limited. Furthermore, additional ownership changes under Section 382
may have occurred, which may further limit the availability of net operating
losses.

At December 31, 2009, the Company had
available losses for income tax purposes in South Africa totaling approximately
$11 million (ZAR78 million) (2008 - $7 million (ZAR52 million)) as well as
available unredeemed capital of approximately $228 million (ZAR1,605 million)
(2008 - $101 million (ZAR770 million)), which may be carried forward and
utilized to reduce future resource income.

The Companys future income tax
liability mainly reflects the temporary differences related to the accounting
and tax values of the Groups mineral properties. These balances decreased
mainly due to movement in recognized timing differences and foreign exchange.
During 2008 the Company also recognized future income tax liabilities of $10.7
million and $2.6 million from the acquisition of Rusaf and Puma respectively,
which reflects temporary differences related to the accounting and tax values of
the respective entities identifiable assets and liabilities.

40

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|20. | Site reclamation obligations
|--- | ----------------------------

The provision for site closure and
reclamation costs related to the Companys mineral properties is as follows:

| |                                                      |   | December 31 |   |   | December 31 | 
| | ---------------------------------------------------- | - | ----------- | - | - | ----------- | 
| |                                                      |   | 2009        |   |   | 2008        | 
| | Balance, beginning of the year                       | $ | 3,738,380   |   | $ | 1,416,964   | 
| | Accretion                                            |   | 154,215     |   |   | 38,086      | 
| | Recognition of obligation
      acquired - Esmeralda |   | -           |   |   | 1,318,763   | 
| | Change in estimate                                   |   | 454,600     |   |   | 728,224     | 
| | Foreign exchange                                     |   | (356,965    | ) |   | 236,343     | 
| | Balance, end of
      year                           | $ | 3,990,230   |   | $ | 3,738,380   | 

The components of the site reclamation
obligation are as follows:

| |                                 |   | December 31 |  |   | December 31 | 
| | ------------------------------- | - | ----------- |  | - | ----------- | 
| |                                 |   | 2009        |  |   | 2008        | 
| | Burnstone property (note 20(a)) | $ | 1,368,369   |  | $ | 706,363     | 
| | Hollister property (note 20(b)) |   | 1,425,682   |  |   | 1,648,967   | 
| | Esmeralda property (note 20(c)) |   | 1,140,706   |  |   | 1,318,763   | 
| | Other properties                |   | 55,473      |  |   | 64,287      | 
| |                                 | $ | 3,990,230   |  | $ | 3,738,380   | 

(a) Burnstone Property

The estimated amount of the reclamation
costs to remove infrastructure, capping and backfilling of the decline, vertical
shaft and metallurgical plant and subsequent property rehabilitation including
re-vegetation and fertilization, adjusted for estimated inflation at 8.4% per
year, is $1.6 million (ZAR11 million) and is expected to be spent over a period
of approximately three years beginning in 2025. The credit-adjusted risk free
rate at which the estimated future cash flows have been discounted is 9.2%, to
arrive at a net present value of $1.4 million (ZAR9.6 million).

(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% per year, is $1.6 million (US$1.5
million) and is expected to be spent from 2017. The credit-adjusted risk free
rate at which the estimated future cash flows have been discounted is 3.38%, to
arrive at a net present value of $1.4 million (US$1.4 million).

(c) Esmeralda Property

In terms of the Asset Purchase
Agreement (refer note 15(d)), the Company also acquired the future reclamation
liability over the Esmeralda property. The estimated amount of the reclamation
costs to remove infrastructure and subsequent property rehabilitation, adjusted
for estimated inflation at 2% per year, is $1.3 million (US$1.2 million) and
expected to be spent from 2017. The credit-adjusted risk free rate at which the
estimated future cash flows have been discounted is 3.38%, to arrive at a net
present value of $1.1 (US$1.1 million).

41

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|21. | Share capital
|--- | -------------

(a) Authorized share capital

The Companys authorized share capital
consists of an unlimited number of common shares without par value.

(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, then the options available to grant under the plan increase
  correspondingly. Options can have a maximum term of ten years and typically
  terminate 30 days following the termination of the optionees employment or
  engagement, except in the case of retirement or death.

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

The continuity of share purchase
options is as follows:

| |                                  |   |                  |  |  |                   |   |  | Contractual weighted   | 
| | -------------------------------- | - | ---------------- |  |  | ----------------- | - |  | ---------------------- | 
| |                                  |   | Weighted average |  |  | Number of options |   |  | average remaining life | 
| |                                  |   | exercise price   |  |  |                   |   |  | (years)                | 
| | Balance, December 31, 2007       | $ | 2.32             |  |  | 11,718,170        |   |  | 2.37                   | 
| | Granted                          | $ | 3.09             |  |  | 9,913,503         |   |  |                        | 
| | Exercised                        | $ | 2.07             |  |  | (2,250,386        | ) |  |                        | 
| | Expired                          | $ | 1.62             |  |  | (1,090,000        | ) |  |                        | 
| | Forfeited                        | $ | 2.62             |  |  | (1,048,891        | ) |  |                        | 
| | Balance, December 31, 2008       | $ | 2.82             |  |  | 17,242,396        |   |  | 2.30                   | 
| | Granted                          | $ | 1.57             |  |  | 10,381,124        |   |  |                        | 
| | Cancelled                        | $ | 2.97             |  |  | (6,617,081        | ) |  |                        | 
| | Exercised                        | $ | 1.32             |  |  | (1,124,675        | ) |  |                        | 
| | Expired                          | $ | 2.07             |  |  | (36,000           | ) |  |                        | 
| | Forfeited                        | $ | 1.95             |  |  | (2,911,000        | ) |  |                        | 
| | Balance, December
      31, 2009 | $ | 1.64             |  |  | 16,934,764        |   |  | 2.52                   | 

42

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|21. | Share capital (continued)
|--- | -------------------------

(b) Share option plan
(continued)

Options outstanding at December 31,
2009 are as follows:

| |                      |   |                |  |   | Number of options |  |   | Number of options | 
| | -------------------- | - | -------------- |  | - | ----------------- |  | - | ----------------- | 
| | Expiry date          |   | Exercise price |  |   | outstanding       |  |   | exercisable       | 
| | April 18, 2010       | $ | 2.68           |  |   | 16,667            |  |   | 16,667            | 
| | November 9, 2010     | $ | 3.12           |  |   | 130,000           |  |   | 130,000           | 
| | December 31, 2010    | $ | 1.14           |  |   | 400,000           |  |   | 400,000           | 
| | February 4, 2011     | $ | 3.00           |  |   | 276,668           |  |   | 206,667           | 
| | February 18, 2011    | $ | 2.95           |  |   | 50,000            |  |   | 33,333            | 
| | March 18, 2011       | $ | 3.57           |  |   | 90,000            |  |   | 60,000            | 
| | April 30, 2011       | $ | 2.45           |  |   | 450,000           |  |   | 450,000           | 
| | May 21, 2011         | $ | 3.47           |  |   | 150,000           |  |   | 100,000           | 
| | August 18, 2011      | $ | 2.78           |  |   | 470,000           |  |   | 313,333           | 
| | October 30, 2011     | $ | 1.50           |  |   | 1,011,800         |  |   | 630,133           | 
| | December 11, 2011    | $ | 1.25           |  |   | 4,423,063         |  |   | 2,849,666         | 
| | February 11, 2012    | $ | 1.75           |  |   | 3,776,766         |  |   | 1,355,032         | 
| | April 18, 2012       | $ | 2.68           |  |   | 90,000            |  |   | 90,000            | 
| | July 15, 2012        | $ | 1.49           |  |   | 750,000           |  |   | 250,000           | 
| | October 9, 2012      | $ | 1.65           |  |   | 490,000           |  |   | -                 | 
| | April 10, 2013       | $ | 3.60           |  |   | 110,000           |  |   | 73,333            | 
| | December 11, 2013    | $ | 1.25           |  |   | 254,800           |  |   | 169,867           | 
| | January 14, 2014     | $ | 1.35           |  |   | 825,000           |  |   | 274,998           | 
| | February 11, 2014    | $ | 1.75           |  |   | 690,000           |  |   | 230,000           | 
| | April 12, 2014       | $ | 1.49           |  |   | 2,380,000         |  |   | 793,333           | 
| | July 15, 2014        | $ | 1.49           |  |   | 100,000           |  |   | 33,333            | 
| | Total                |   |                |  |   | 16,934,764        |  |   | 8,459,695         | 
| | Average option price |   |                |  | $ | 1.64              |  | $ | 1.67              | 

Employees and certain consultants were
allowed to cancel certain unexercised employee and non-employee stock options
and received new options equal to 50% of the cancelled options at an exercise
price of $1.25 and vesting period of 24 months. The aforementioned cancellation
and replacement were subject to the option holders election to receive his/her
annual bonus and salary increase in stock options, as opposed to cash payments.
Replacement options were issued to the directors at an exercise price of $1.49
and vesting period of 24 months. The cancellation was concluded on January 12,
2009 and the replacement on April 12, 2009.

The cancelled options were accounted
for as cancellations in accordance with CICA 3870 where any carry forward cost
not yet recognized was recognized immediately in the Statement of Operations and
Comprehensive Loss.

The new options issued were accounted
for as modifications in accordance with CICA 3870, where the incremental value
was recorded as additional cost measured by the difference between the fair
value of the old options calculated on the modification date and the value of
the new options at the modification date. The amount is recognized over the
vesting period of the new option. Any remaining compensation cost for as yet
unvested old options is also recognized over the new vesting period.

Costs previously recognized on
forfeited options were, upon forfeiture, reversed through the Statement of
Operations and Comprehensive Loss.

43

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|21. | Share capital (continued)
|--- | -------------------------

(b) Share option plan
(continued)

| |                                       | Weighted |  |  |            |  |  |                            | 
| | ------------------------------------- | -------- |  |  | ---------- |  |  | -------------------------- | 
| |                                       | average  |  |  |            |  |  |                            | 
| | Range of Exercise Price  Outstanding | exercise |  |  | Number of  |  |  | Weighted average remaining | 
| | Options                               | price    |  |  | options    |  |  | contractual life (years)   | 
| | $ 1.00 - $ 1.24                       | $1.14    |  |  | 400,000    |  |  | 1.00                       | 
| | $ 1.25 - $ 1.49                       | $1.35    |  |  | 8,732,863  |  |  | 2.92                       | 
| | $ 1.50 - $ 1.74                       | $1.55    |  |  | 1,501,800  |  |  | 2.14                       | 
| | $ 1.75 - $ 1.99                       | $1.75    |  |  | 4,466,766  |  |  | 2.42                       | 
| | $ 2.25 - $ 2.49                       | $2.45    |  |  | 450,000    |  |  | 1.33                       | 
| | $ 2.50 - $ 2.99                       | $2.78    |  |  | 626,667    |  |  | 1.65                       | 
| | $ 3.00 - $ 3.49                       | $3.15    |  |  | 556,668    |  |  | 1.12                       | 
| | $ 3.50 - $ 3.99                       | $3.59    |  |  | 200,000    |  |  | 2.36                       | 
| | Total                                 | $1.64    |  |  | 16,934,764 |  |  | 2.52                       | 

| |                                       | Weighted       |  |  |                   | 
| | ------------------------------------- | -------------- |  |  | ----------------- | 
| | Range of Exercise Price  Exercisable | average        |  |  |                   | 
| | options                               | exercise price |  |  | Number of options | 
| | $ 1.00 - $ 1.24                       | $1.14          |  |  | 400,000           | 
| | $ 1.25 - $ 1.49                       | $1.32          |  |  | 4,371,197         | 
| | $ 1.50 - $ 1.74                       | $1.50          |  |  | 630,133           | 
| | $ 1.75 - $ 1.99                       | $1.75          |  |  | 1,585,032         | 
| | $ 2.25 - $ 2.49                       | $2.45          |  |  | 450,000           | 
| | $ 2.50 - $ 2.99                       | $2.77          |  |  | 453,333           | 
| | $ 3.00 - $ 3.49                       | $3.14          |  |  | 436,667           | 
| | $ 3.50 - $ 3.99                       | $3.59          |  |  | 133,333           | 
| | Total                                 | $1.67          |  |  | 8,459,695         | 

The exercise prices of all share
purchase options granted were at or above the market price at the grant date.
The options have been valued using the Black Scholes option pricing model with
the assumptions noted below, the estimated fair value of options granted for the
years ended December 31, 2009 and 2008, have been included in the Statements of
Operations and Comprehensive Loss, as follows:

| |                                                                                        |   | Years ended December 31 |  
| | -------------------------------------------------------------------------------------- | - | ----------------------- | -
| |                                                                                        |   | 2009                    |  
| | Total compensation cost recognized,
      credited to contributed surplus (note 21(d)) | $ | 12,104,310              |  
| | Allocated to exploration and pre-development expenses                                  |   | (1,059,108              | )
| | Compensation cost allocated to Hollister
      stockpile                               |   | (331,300                | )
| | Compensation cost capitalized on Burnstone mine development
      (refer note 22)      |   | (1,420,546              | )
| | Compensation cost allocated to bonus provision                                         |   | (1,009,409              | )
| |                                                                                        |   |                         |  
| | Stock based compensation expense                                                       | $ | 8,283,947               |  

44

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|21. | Share capital (continued)
|--- | -------------------------

(b) Share option plan
(continued)

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

| |                         |  | Years ended December 31 | 
| | ----------------------- |  | ----------------------- | 
| |                         |  | 2009                    | 
| | Risk free interest rate |  | 2.83%                   | 
| | Expected life           |  | 3.5 years               | 
| | Expected volatility     |  | 79%                     | 
| | Expected dividends      |  | Nil                     | 

(c) Share purchase warrants

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

| | December 31, 2009                         |   |          |  |  |              |  |  |             |   |  |            |  |  |            |  |  |             | 
| | ----------------------------------------- | - | -------- |  |  | ------------ |  |  | ----------- | - |  | ---------- |  |  | ---------- |  |  | ----------- | 
| |                                           |   |          |  |  | Outstanding  |  |  |             |   |  |            |  |  |            |  |  | Outstanding | 
| |                                           |   | Exercise |  |  | December 31, |  |  |             |   |  |            |  |  |            |  |  | December 31 | 
| | Expiry dates                              |   | price    |  |  | 2008         |  |  | Expired     |   |  | Adjustment |  |  | Issued     |  |  | 2009        | 
| | April 20, 2009 (note 21(c)(i))            | $ | 3.50     |  |  | 28,750,000   |  |  | (28,750,000 | ) |  | -          |  |  | -          |  |  | -           | 
| | September 30, 2010 (note 21(c)(ii))       |   | ZAR20.78 |  |  | 1,684,312    |  |  | -           |   |  | -          |  |  | -          |  |  | 1,684,312   | 
| | October 15, 2010 (note 21(g))             | $ | 1.60     |  |  | -            |  |  | -           |   |  | -          |  |  | 57,500,000 |  |  | 57,500,000  | 
| | December 12, 2011
      (note 21(c)(iii)) | $ | 1.25     |  |  | 18,746,000   |  |  | -           |   |  | 8,248,240  |  |  | -          |  |  | 26,994,240  | 
| |                                           |   |          |  |  | 49,180,312   |  |  | (28,750,000 | ) |  | 8,248,240  |  |  | 57,500,000 |  |  | 86,178,552  | 

| | December 31, 2008                         |   |          |  |  |                |  |  |            |  |  |           |   |  |         |  |  |                | 
| | ----------------------------------------- | - | -------- |  |  | -------------- |  |  | ---------- |  |  | --------- | - |  | ------- |  |  | -------------- | 
| |                                           |   |          |  |  | Outstanding    |  |  |            |  |  |           |   |  |         |  |  | Outstanding    | 
| |                                           |   | Exercise |  |  | December       |  |  |            |  |  |           |   |  |         |  |  | December       | 
| | Expiry dates                              |   | price    |  |  | 31,
      2007 |  |  | Issued     |  |  | Exercised |   |  | Expired |  |  | 31,
      2008 | 
| | July 18, 2008 (note 21(c)(iv))            |   | ZAR12.90 |  |  | 998,890        |  |  | -          |  |  | (998,890  | ) |  | -       |  |  | -              | 
| | April 20, 2009 (note 21(c)(i))            | $ | 3.50     |  |  | 28,750,000     |  |  | -          |  |  | -         |   |  | -       |  |  | 28,750,000     | 
| | September 30, 2010 (note 21(c)(ii))       |   | ZAR20.78 |  |  | 1,684,312      |  |  | -          |  |  | -         |   |  | -       |  |  | 1,684,312      | 
| | December 12, 2011
      (note 21(c)(iii)) | $ | 1.80     |  |  | -              |  |  | 18,746,000 |  |  | -         |   |  | -       |  |  | 18,746,000     | 
| |                                           |   |          |  |  | 31,433,202     |  |  | 18,746,000 |  |  | (998,890  | ) |  | -       |  |  | 49,180,312     | 

(i) April 2007 Public
offering

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

Each whole purchase warrant entitled
the holder thereof to purchase one common share of the Company at a price of
$3.50 per share for two years from the date of issuance.

45

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|21. | Share capital (continued)
|--- | -------------------------

(c) Share purchase warrants
(continued)

(i) April 2007 Public offering
(continued)

The 28,750,000 warrants expired
unexercised on April 20, 2009.

The estimated fair value of $16.2
million (using expected volatility of 56.9%, risk free interest rate of 4%,
dividends of nil, share price of $2.48 and remaining life of approximately 2
years) of the warrants was therefore transferred to the contributed surplus
reserve (refer note 21(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.
1,263,234 warrants were granted to Investec Bank (Investec), who provided a
portion of the financing for the investment by Tranter Gold in Southgold, and
Tranter Gold received 421,078 warrants. Each warrant is convertible into one
Great Basin common share at ZAR20.78 ($3) on or before October 1, 2010. The
warrants are subject to GBG having the right to require exercise of the warrants
if the market price equals or exceeds ZAR45.72 ($7).

On the date of the transaction, the
fair value of the warrants was estimated at $1.2 million (ZAR8 million). The
fair value was calculated using the Black Scholes option pricing model and based
upon the following assumptions: remaining life of 2 years; expected volatility
of 62.74%; risk free rate of 8.93% and dividends of nil.

(iii) 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. Each note also granted its holder
350 warrants. Each warrant entitles the holder thereof to subscribe to one
common share of the Company at a price of $1.80 per share over a 36 month term
and has no mandatory conversion by the holder.

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

The Company also granted 721,000 warrants, subject to the same terms as set out above, to the agent. The number of these warrants was calculated at 4% of the 18,025,000 warrants issued to the note holders. The fair value was calculated using the Black Scholes option pricing model and based upon the following assumptions: expected life of 3 years; volatility of 82.60%; risk free rate of 3.10% and dividends of nil.

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

46

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|21. | Share capital (continued)
|--- | -------------------------

(c) Share purchase warrants
(continued)

(iii) Senior secured notes warrants
(continued)

The Equity offering that closed on
March 13, 2009 (refer note 21(g)) triggered the anti-dilution protection on the
warrants issued in respect of the Senior Secured Notes.

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 common shares (including
agents warrants). No additional fair value was recorded with the increase of
the warrants.

(iv) Burnstone June 2006 Settlement
agreement

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

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

(d) Contributed surplus

The continuity of contributed surplus
components is:

| | December 31, 2009                                                                                                                  |   |             |  |   |            |   |   |             |  
| | ---------------------------------------------------------------------------------------------------------------------------------- | - | ----------- |  | - | ---------- | - | - | ----------- | -
| |                                                                                                                                    |   | December 31 |  |   |            |   |   | December 31 |  
| |                                                                                                                                    |   | 2008        |  |   | Movement   |   |   | 2009        |  
| | Fair value of warrants issued which expired
      unexercised (note 21(c)(i))                                                      | $ | 238,668     |  | $ | 16,210,226 |   | $ | 16,448,894  |  
| | Future income tax on expired warrants                                                                                              |   | -           |  |   | (1,293,750 | ) |   | (1,293,750  | )
| | Fair value of warrants and options
      available to Rusaf share holders (note 21(d)(i))                                          |   | 1,755,067   |  |   | -          |   |   | 1,755,067   |  
| | Accumulated stock-based compensation; net of       amount
      transferred to share capital upon exercise of options (note 21(b)) |   | 19,605,786  |  |   | 11,295,143 |   |   | 30,900,929  |  
| | Convertible bond equity component (note 18(d))                                                                                     |   | -           |  |   | 35,455,306 |   |   | 35,455,306  |  
| |                                                                                                                                    | $ | 21,599,521  |  | $ | 61,666,925 |   | $ | 83,266,446  |  

47

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|21. | Share capital (continued)
|--- | -------------------------

(d) Contributed surplus
(continued)

| | December 31, 2008                                                                                                                        |   |             |  |   |            |   |   |             |  
| | ---------------------------------------------------------------------------------------------------------------------------------------- | - | ----------- |  | - | ---------- | - | - | ----------- | -
| |                                                                                                                                          |   | December 31 |  |   |            |   |   | December 31 |  
| |                                                                                                                                          |   | 2007        |  |   | Movement   |   |   | 2008        |  
| | Fair value of warrants issued which expired
      unexercised                                                                            | $ | 238,668     |  | $ | -          |   | $ | 238,668     |  
| | Fair value of warrants and options available to Rusaf
      share holders (note 21(d)(i))                                                |   | -           |  |   | 1,763,476  |   |   | 1,763,476   |  
| | Fair value of Rusaf warrants exercised,
      credit to share capital (note 21(d)(i))                                                    |   | -           |  |   | (8,409     | ) |   | (8,409      | )
| | Accumulated
      stock-based compensation; net of       amount transferred to share capital
      upon exercise of options (note 21(b)) |   | 11,270,434  |  |   | 8,335,352  |   |   | 19,605,786  |  
| |                                                                                                                                          | $ | 11,509,102  |  | $ | 10,090,419 |   | $ | 21,599,521  |  

(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 was
calculated using the Black Scholes option pricing model based on a risk free
interest rate of 2.99%, expected life between 1 month and 4 years, 59%
volatility and nil dividends, and was recorded as contributed surplus.

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

| |                    |   |          |  |   |               |  |  |                |   |  |                 |   |   | Outstanding | 
| | ------------------ | - | -------- |  | - | ------------- |  |  | -------------- | - |  | --------------- | - | - | ----------- | 
| |                    |   | Exercise |  |   | Outstanding   |  |  |                |   |  |                 |   |   | December 31 | 
| | Expiry dates       |   | price    |  |   | April 1, 2008 |  |  | Exercised      |   |  | Expired         |   |   | 2009        | 
| | April 11, 2008     | $ | 0.25     |  |   | 48,706        |  |  | (22,041        | ) |  | (26,665         | ) |   | -           | 
| | September 6, 2008  | $ | 0.75     |  |   | 27,037        |  |  | (13,333        | ) |  | (13,704         | ) |   | -           | 
| | September 15, 2008 | $ | 0.75     |  |   | 42,222        |  |  | -              |   |  | (42,222         | ) |   | -           | 
| | March 16, 2009     | $ | 0.75     |  |   | 93,333        |  |  | -              |   |  | (93,333         | ) |   | -           | 
| | May 17, 2009       | $ | 0.75     |  |   | 8,518         |  |  | -              |   |  | (8,518          | ) |   | -           | 
| |                    |   |          |  |   | 219,816       |  |  | (35,374        | ) |  | (184,442        | ) |   | -           | 
| | Fair value         |   |          |  | $ | 107,909       |  |  | ($
      8,409 | ) |  | ($
      99,500 | ) | $ | -           | 

| | The
      continuity of these options since acquisition is set out below: |   |          |  |   |                     |  | 
| | ------------------------------------------------------------------------- | - | -------- |  | - | ------------------- |  | 
| |                                                                           |   |          |  |   |                     |  | 
| |                                                                           |   | Exercise |  |   | Outstanding         |  | 
| | Expiry dates                                                              |   | price    |  |   | April
      1, 2008 |  | 
| | December 31, 2010                                                         | $ | 0.25     |  |   | 19,999              |  | 
| | December 31, 2010                                                         | $ | 0.40     |  |   | 144,443             |  | 
| | June 1, 2012                                                              | $ | 0.60     |  |   | 677,776             |  | 
| |                                                                           |   |          |  |   | 842,218             |  | 
| | Fair value                                                                |   |          |  | $ | 1,655,567           |  | 

48

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|21. | Share capital (continued)
|--- | -------------------------

(e) Share issuance, January;
February 2009 - Equity line

In December 2008, the Company entered
into an equity line agreement with an affiliate of Investec Ltd (Investec).
The agreement provided that the Company could sell to Investec over the term of
the agreement up to $4 million of common shares in tranches at a price which was
to be calculated at 95% of prevailing market price with a floor price of $1.12
per common share.

The agreement terminated on February 7, 2009 and the Company
  issued an aggregate of 2,846,800 common shares to Investec at an average price
  of $1.38. After share issue costs of $18,446, net proceeds of $3.9 million were
  recorded as share capital.

(f) Share issuance, February 2009

On February 10, 2009, the Company
issued 20,000 shares in connection with the earn-in agreement on the Ganes Creek
property (2008: 10,000 shares at $2.97) . The shares have been valued at their
quoted price of $1.76 per share on the date of issuance and the resulting
interest in the Ganes Creek Property was recorded as mineral properties (refer
note 15(f)(i)) .

(g) Share issuance, 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 (the Offering Price) thereby raising gross proceeds of
$149.5 million. 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 Great Basin.

Each Warrant entitles 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. The valuation was
performed by an independent valuation specialist, using the Black Scholes option
pricing model.

The Company paid the underwriters a
commission of $10 million and incurred other share issue costs of approximately
$1.5 million for net proceeds of $138 million of which $132.7 million has been
recorded as share capital and $5.3 million as fair value of the warrants (refer
note 21(c)).

49

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|22. | Additional cash flow information
|--- | --------------------------------

| | Supplementary information:                              |   | December 31 |  |   | December 31 | 
| | ------------------------------------------------------- | - | ----------- |  | - | ----------- | 
| |                                                         |   | 2009        |  |   | 2008        | 
| |                                                         |   |             |  |   |             | 
| | Interest paid                                           | $ | 23,923      |  | $ | 53,418      | 
| | Taxation paid                                           | $ | 8,026       |  | $ | -           | 
| |                                                         |   |             |  |   |             | 
| | Non-cash financing and investing activities:            |   |             |  |   |             | 
| |                                                         |   |             |  |   |             | 
| | Fair value of warrants issued with Senior Secured Notes | $ | -           |  | $ | 6,616,856   | 
| | Common shares issued for property
      settlement      | $ | 35,200      |  | $ | 29,648,274  | 
| | Increase in mineral property for future income taxes    | $ | -           |  | $ | 13,235,669  | 
| | Capitalized borrowing costs                             | $ | 19,898,808  |  | $ | 605,934     | 
| | Capitalized stock based compensation (refer note 21(b)) | $ | 1,420,546   |  | $ | -           | 
| | Capitalized facility arrangement fees                   | $ | 780,745     |  | $ | -           | 
| | Capitalized change in reclamation estimate              | $ | 432,316     |  | $ | -           | 
| | Changes in accounts payable                             | $ | 2,178,777   |  | $ | 1,403,895   | 

|23. | Segment disclosure
|--- | ------------------

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

| | Assets                                             |   | December 31 |  |   | December 31 | 
| | -------------------------------------------------- | - | ----------- |  | - | ----------- | 
| |                                                    |   | 2009        |  |   | 2008        | 
| | Canada                                             |   |             |  |   |             | 
| | Assets other than mineral property interests       | $ | 76,835,615  |  | $ | 22,610,226  | 
| | Mineral property interests                         |   | 1           |  |   | 1           | 
| | Tanzania                                           |   |             |  |   |             | 
| | Assets other than mineral
      property interests |   | 729,390     |  |   | 1,551,261   | 
| | Mineral property interests                         |   | 36,466,782  |  |   | 36,466,782  | 
| | United States                                      |   |             |  |   |             | 
| | Assets other than mineral property interests       |   | 28,343,641  |  |   | 10,844,303  | 
| | Mine development and equipment                     |   | 37,660,434  |  |   | 16,698,084  | 
| | Mineral property interests                         |   | 79,135,622  |  |   | 92,505,493  | 
| | South Africa                                       |   |             |  |   |             | 
| | Assets other than mineral property interests       |   | 28,475,637  |  |   | 22,281,236  | 
| | Mine development and equipment                     |   | 153,320,460 |  |   | 31,356,717  | 
| | Mineral property interests                         |   | 107,316,284 |  |   | 130,886,380 | 
| |                                                    | $ | 548,283,866 |  | $ | 365,200,482 | 

| | Revenue       |   | December 31 |  |   | December 31 | 
| | ------------- | - | ----------- |  | - | ----------- | 
| |               |   | 2009        |  |   | 2008        | 
| | United States |   |             |  |   |             | 
| | Ore sales     | $ | 33,737,518  |  | $ | 24,716,323  | 

During 2009 the Company generated
revenue of $33.7 million (US$28 million) (2008: $24.7 million (US$23 million))
from its Hollister operation. The ore was sold under the terms of various toll
milling and ore purchase agreements to Newmont Mining Corporation and Echo Bay
Minerals Company (Kinross) (2008: Newmont Mining Corporation).

50

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|24. | Contingencies and commitments
|--- | -----------------------------

On October 1, 2007, Tranter Burnstone
(a black empowerment enterprise) borrowed $28 million (ZAR200 million) from
Investec to settle a portion of the purchase consideration of $37 million
(ZAR260 million) for 812 Southgold shares. The Southgold shares were
subsequently exchanged for 19,938,650 shares of Great Basin. The security for
the loan comprised, amongst other items, a loan guarantee which requires N5C
Resources Inc., N6C Resources Inc. and/or Rodeo Creek Gold Inc., in the event of
default by Tranter Burnstone on any of its interest payments to Investec, at any
time for the first four years, to lend not more than $11 million (ZAR80 million)
to Tranter Burnstone in order to settle such interest payment obligations.

The loan agreement with Investec
requires Tranter Burnstone to deposit cash into a margin call account if the
underlying value of the shares held by Tranter in Great Basin is less than the
outstanding loan and accrued interest. The decrease in the share price of the
Company since September 2008 triggered the requirement for a cash deposit into
the margin account.

Tranter Burnstone defaulted on funding
the short fall in the margin call account and the Company has been advised that
Investec served Tranter Burnstone with a notice of default in December 2008.

A notice of foreclosure has not been
served on Tranter Burnstone and the probability of the guarantee being called
upon remains uncertain.

|25. | Subsequent events
|--- | -----------------

Subsequent to December 31, 2009

| | (a) | Shares issuance, January 27, 2010                                                                                                                                                                                                                                                                              
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                
| |     | Pursuant to the Rusaf agreement of April 1, 2008, the
      Company issued 3,073,773 shares, as additional consideration, valued at
      $5.6 million on January 27, 2010 upon gold discoveries above a threshold
      of 500,000 ounces in size, on mineral prospects  held by Rusaf
    (refer note 15(c)).
| |     |                                                                                                                                                                                                                                                                                                                
| | (b) | Share options granted, February 9, 2010                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                
| |     | The Company granted 950,000 options on February 9, 2010
      with an exercise price of $1.78 per common share and an expiry date of
      February 10, 2013.                                                                                                                                                  

51

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|26. | Reconciliation with United States Generally
      Accepted Accounting Principles
|--- | --------------------------------------------------------------------------------

The Company prepares its financial
statements in accordance with Canadian GAAP which principles differ in certain
respects from those applicable in the United States (US GAAP) and from
practices prescribed by the United States Securities and Exchange Commission
(SEC). Had the Company applied US GAAP, certain items on the statements of
operations, deficit and balance sheets would have been reported as follows:

| |                                                                                                                   |   | December 31   |   |   | December 31   |  
| | ----------------------------------------------------------------------------------------------------------------- | - | ------------- | - | - | ------------- | -
| | Consolidated
      Balance Sheets                                                                                 |   | 2009          |   |   | 2008          |  
| | Total assets under Canadian GAAP                                                                                  |   | 548,283,866   |   |   | 365,200,482   |  
| | Adjustments under US GAAP:                                                                                        |   |               |   |   |               |  
| | Adjustment for convertible debentures 
      transaction costs (note c)                                          |   | 6,005,928     |   |   | -             |  
| | Adjustment for
      senior secured notes  transaction costs (note c)                                            |   | 3,219,639     |   |   | -             |  
| | Total assets under US GAAP                                                                                        | $ | 557,509,433   |   | $ | 365,200,482   |  
| |                                                                                                                   |   |               |   |   |               |  
| | Total liabilities under Canadian GAAP                                                                             | $ | 174,571,316   |   | $ | 107,992,527   |  
| | Adjustments under US GAAP:                                                                                        |   |               |   |   |               |  
| | Recognize warrants issued for BEE
      transaction as a liability (note b)                                       |   | 1,178,815     |   |   | 1,178,815     |  
| | Mark to market adjustment on warrants  BEE (note b)                                                              |   | (874,709      | ) |   | (235,638      | )
| | Adjustment for convertible debentures 
      transaction costs and equity component (note c)                     |   | 41,461,234    |   |   | -             |  
| | Adjustment for
      senior secured notes  transaction costs (note c)                                            |   | 3,219,639     |   |   | -             |  
| | Total liabilities under US GAAP                                                                                   | $ | 219,556,295   |   | $ | 108,935,704   |  
| | Share capital, warrants, contributed surplus and
      accumulated other comprehensive income under Canadian GAAP |   | $ 639,425,288 |   |   | $ 474,475,066 |  
| | Adjustments under US GAAP:                                                                                        |   |               |   |   |               |  
| | Stock-based compensation (note a)                                                                                 |   | 2,658,000     |   |   | 2,658,000     |  
| | Recognize warrants issued for BEE
      transaction as a liability (note b)                                       |   | (1,178,815    | ) |   | (1,178,815    | )
| | Warrants exercised in prior periods                                                                               |   | (3,695,159    | ) |   | (3,695,159    | )
| | Adjustment for convertible debentures  equity component (note
      c)                                           |   | (35,455,306   | ) |   | -             |  
| | Share capital, warrants, contributed surplus and
      accumulated                                                |   |               |   |   |               |  
| | other comprehensive income under US GAAP                                                                          | $ | 601,754,008   |   | $ | 472,259,092   |  
| | Deficit under Canadian GAAP                                                                                       | $ | (265,712,738  | ) | $ | (217,267,111  | )
| | Adjustments under US GAAP:                                                                                        |   |               |   |   |               |  
| | Stock-based compensation (note a)                                                                                 |   | (2,658,000    | ) |   | (2,658,000    | )
| | Mark-to-market gain / loss realized on
      warrants exercised                                                   |   | 3,695,159     |   |   | 3,695,159     |  
| | Mark-to-market
      adjustment on warrants  BEE (note b)                                                        |   | 874,709       |   |   | 235,638       |  
| | Deficit under US GAAP                                                                                             | $ | (263,800,870  | ) | $ | (215,994,314  | )

52

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|26. | Reconciliation with United States Generally
      Accepted Accounting Principles (continued)
|--- | --------------------------------------------------------------------------------------------

| | Consolidated
      Statements of                                                    |   | December 31 |   |   | December 31 |  
| | ----------------------------------------------------------------------------------- | - | ----------- | - | - | ----------- | -
| | Operations                                                                          |   | 2009        |   |   | 2008        |  
| | Loss for the period under Canadian GAAP                                             | $ | (48,445,627 | ) | $ | (84,872,078 | )
| | Adjustments under US GAAP:                                                          |   |             |   |   |             |  
| | Mark-to-market adjustment on warrants (note b)                                      |   | 639,071     |   |   | 438,993     |  
| | Loss for the period under US GAAP                                                   | $ | (47,806,556 | ) | $ | (84,433,085 | )
| | Other comprehensive loss under Canadian GAAP and US GAAP                            |   | (24,753,854 | ) |   | (389,869    | )
| | Other
      comprehensive loss under US GAAP                                        | $ | (72,560,410 | ) | $ | (84,822,954 | )
| |                                                                                     |   |             |   |   |             |  
| | Basic and
      diluted loss per share for the year under US GAAP (note
      4(j)) |   | (0.15       | ) |   | (0.40       | )

Revenue and production costs disclosed
under Canadian GAAP relate to income generated from the sale of minerals and
related cost of sales during the development stage of the operation. US GAAP
considers income generated from the sale of minerals as well as incremental and
direct costs associated with the sale thereof incidental to the Companys
operations and accordingly these items would have been disclosed as other
income/expenses under US GAAP.

There are no material differences
between Canadian GAAP and US GAAP in the consolidated statements of cash flows
for the years ended December 31, 2009 and 2008.

The Company has evaluated all
subsequent events through to March 18, 2010.

(a) Stock based compensation

In the year ended December 31, 2003 the
Company adopted, for US GAAP, the fair value based method of accounting for
employee stock-based compensation. The Company adopted the fair value method on
a prospective basis from January 1, 2003. The prospective adoption of this new
US GAAP policy creates no differences with the Companys stock-based
compensation expense reported under Canadian GAAP.

Prior to 2003, no compensation expense
was recognized under US GAAP because the Company accounted for share options
using the intrinsic value and the exercise price of the Companys employee stock
options equalled the market price of the underlying stock on the date of the
grant. For the years ended December 31, 2009 and 2008, there were no differences
in stock-based compensation expense in respect of employee and non-employee
share options which would be required to be charged to operations under both
Canadian and US GAAP.

As the US GAAP requirements were
adopted on a prospective basis, there is $2,658,000 historical difference in
contributed surplus and deficit relating to the period prior to adoption. The
cumulative effect of initially applying this Statement, if any, is recognized as
of the required effective date. Under Canadian GAAP no provision was made for
the recognition of the cumulative effect upon adoption of CICA 3870.

53

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|26. | Reconciliation with United States Generally
      Accepted Accounting Principles (continued)
|--- | --------------------------------------------------------------------------------------------

(b) Fair value of financial
instruments

Under US GAAP, warrants issued by the
Company that are denominated in currencies other than Canadian dollars are
accounted for as a derivative liability, and recorded on the balance sheet as a
liability at fair value, with changes in fair value being charged to earnings
each period.

During 2007, the Company issued
1,684,312 of such warrants upon the conclusion of the BEE transaction and
assigned the issued warrants a value of $1,178,815. At December 31, 2008, the
fair value of these warrants was estimated at $943,177 resulting in a cumulative
mark-to-market gain of $235,638 recognized under US GAAP. At December 31, 2009
the fair value of these warrants was estimated at $304,106 resulting in a
cumulative mark-to-market adjustment of $874,709 recognised under US GAAP. Under
Canadian GAAP, the fair value of these warrants was recognized within equity
with no fair value adjustment required on the report dates.

(c) Convertible debentures and
senior secured notes

Under US GAAP, the convertible
debentures would be accounted for entirely as a debt instrument as the equity
conversion feature does not represent a cash conversion feature. Under Canadian
GAAP the convertible debenture was split into debt and equity components.

Under US GAAP, debt transaction costs
related to the convertible debenture and the debt component of the senior
secured notes are recognized as a deferred charge asset and amortized over the
term to maturity of the debt. Under Canadian GAAP, debt transaction costs are
recognized as a reduction of the related debt liability and related equity
components and the accretion of the debt to face value over the period to
maturity is adjusted accordingly.

Under US GAAP, the carrying value of
the convertible debt liability was adjusted to reclassify the Canadian GAAP
equity component of $35,455,306 plus related issue costs of $6,594,068 less the
adjustment of $588,140 for accretion of the liability charged under Canadian
GAAP.

Under US GAAP, the transaction costs
related to the debt component of the senior secured notes in the amount of
$3,219,639 would be recorded as deferred charges, and amortized over the term to
maturity.

Amortization of deferred charges is
capitalized in accordance with the Companys policy on interest capitalization;
accordingly, there is no impact on earnings from the adjustments above.

54

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|26. | Reconciliation with United States Generally
      Accepted Accounting Principles (continued)
|--- | --------------------------------------------------------------------------------------------

(d) Other

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

| |                     |   | December 31 |  |   | December 31 | 
| | ------------------- | - | ----------- |  | - | ----------- | 
| |                     |   | 2009        |  |   | 2008        | 
| | Amounts payable     | $ | 7,316,689   |  | $ | 12,250,484  | 
| | Accrued liabilities |   |             |  |   |             | 
| | Burnstone           |   | 13,237,811  |  |   | 7,099,680   | 
| | Hollister           |   | 6,296,771   |  |   | 4,277,431   | 
| | Other               |   | 544,170     |  |   | 784,221     | 
| | Annual bonuses      |   | 1,810,574   |  |   | 1,864,746   | 
| |                     |   |             |  |   |             | 
| |                     | $ | 29,206,015  |  | $ | 26,276,562  | 

(e) Accounting Standard Codification
(ASC) No. 740, Income Taxes (ASC 740)

In June 2006, the Financial Accounting
Standards Board (FASB) issued guidance to address diversity in practice
regarding the interpretation and application of the accounting model for
uncertain tax positions. ASC 740 clarifies the accounting for income taxes, by
prescribing a minimum recognition threshold a tax position is required to meet
before being recognized in the financial statements.

ASC 740 also provides guidance on
de-recognition, measurement, classification, interest and penalties, accounting
in interim periods, disclosure and transition and was effective for fiscal years
beginning after December 15, 2006.

The Company adopted the provisions of
uncertain tax positions in accordance with ASC 740 on January 1, 2007, which did
not have a material impact on the consolidated financial position or results of
operations, and reported no unrecognized tax benefits for the year ending
December 31, 2007 and 2008. For December 31, 2009, there were no increases or
decreases in unrecognized tax benefits as a result of tax positions taken in a
prior year.

There were also no increases or
decreases in unrecognized tax benefits from tax positions taken in the current
year. As a result, there are no unrecognized tax benefits at December 31, 2009.
As there were no unrecognized tax benefits at December 31, 2009, there are also
no unrecognized tax benefits that could affect the effective tax rate if
recognized.

There was no interest and penalties
recognized on the Statement of Operations and Comprehensive Loss or the
statement of financial position. The Companys policy is to recognize accrued
interest and penalties related to unrecognized tax benefits in operating
expenses.

The Company is subject to taxes in
Canada, United States, South Africa, Tanzania and Russia.

55

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|26. | Reconciliation with United States Generally
      Accepted Accounting Principles (continued)
|--- | --------------------------------------------------------------------------------------------

(e) Accounting Standard Codification
(ASC) No. 740, Income Taxes (ASC 740) (continued)

The following tax years remain subject
to examination as of December 31, 2009 by major tax jurisdiction:

| | Canada       | 2002 to present
| | ------------ | ---------------
| | United Sates | 1997 to present
| | South Africa | 2004 to present

(f) Additional disclosures

The Company meets the definition of a
development stage enterprise under both Canadian and US GAAP. Pursuant to the
rules and regulations of the SEC, a mining company in the exploration stage
should not refer to itself as a development stage company in its financial
statements, even though such Company should comply with the measurement and
disclosure requirements for development stage enterprises.

Under US GAAP, the Company is required
to provide additional disclosures from its date of inception, or the date the
Company was reactivated to undertake development stage activities. Consolidated
summarized statements of operations and deficit and cash flows since January 1,
1998, the date the Company was considered to be reactivated to undertake
development stage activities, to December 31, 2009 are presented as follows:

| |                                                                                                                                                                           |   | Period from January 1, 1998 to |  
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------------------------ | -
| | Consolidated
      statement of operations and deficit                                                                                                                    |   | December 31, 2009              |  
| | Mineral property exploration, development
      and reclamation                                                                                                           | $ | (213,421,413                   | )
| | General and administration, salaries, professional fees and
      other                                                                                                   |   | (90,755,313                    | )
| | Other income                                                                                                                                                              |   | 51,495,610                     |  
| | Net loss for the period from January 1, 1998 to December
      31, 2009, being the deficit accumulated during the exploration,
    pre-development and development stages |   | (252,681,116                   | )
| | Opening deficit accumulated during the development stage,
      January 1, 1998                                                                                           |   | (11,119,754                    | )
| |                                                                                                                                                                           |   |                                |  
| | Ending deficit accumulated during the development stage,
      December 31, 2009                                                                                          | $ | (263,800,870                   | )

56

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|26. | Reconciliation with United States Generally
      Accepted Accounting Principles (continued)
|--- | --------------------------------------------------------------------------------------------

(f) Additional disclosures
(continued)

| |                                                     |   | Period
      from January 1, 1998 to |  
| | --------------------------------------------------- | - | ------------------------------------ | -
| | Consolidated
      statements of cash flows         |   | December 31, 2009                    |  
| | Operating activities                                | $ | (243,671,755                         | )
| | Investing activities                                |   | (259,097,932                         | )
| | Financing activities                                |   | 585,828,219                          |  
| | Increase in cash and cash equivalents               | $ | 83,058,532                           |  
| | Cash and cash equivalents - January 1, 1998         |   | 1,922,206                            |  
| | Acquired through business acquisitions              |   | 4,512,119                            |  
| | Foreign exchange                                    |   | (28,495                              | )
| | Cash and cash
      equivalents  December 31, 2009 | $ | 89,464,362                           |  

Consolidated statements of change in
equity (Unaudited)

Common Shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accumulatedother
    
    
    TotalIssue
    
    
    Number of
    
    
    
    
    
    
    
    
    Contributed
    
    
    
    
    
    comprehensive
    
    
    shareholders'Price
    
    
    shares
    
    
    Amount
    
    
    Warrants
    
    
    surplus
    
    
    Retained deficit
    
    
    income
    
    
    equity$
    
    
    
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $Balance, January 1, 1998
    
    
    
    
    14,161,171
    
    
    22,790,760
    
    
    
    
    
    
    
    
    (11,119,754
    )
    
    
    
    
    11,671,006Escrow shares
    
    0.01
    
    
    750,000
    
    
    7,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,500Exercise of options
    
    1.28
    
    
    41,875
    
    
    53,600
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    53,600Private placement
    
    2.00
    
    
    1,704,600
    
    
    2,983,088
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,983,088For mineral property interests
    
    1.43
    
    
    162,500
    
    
    232,624
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    232,624Loan guarantee
    
    2.05
    
    
    98,125
    
    
    201,156
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    201,156Loss for the year
    
    -
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,819,118
    )
    
    
    
    
    (6,819,118
    )Stock based compensation
    
    -
    
    
    
    
    
    
    
    
    
    
    
    372,000
    
    
    
    
    
    
    
    
    372,000Balance, December 31, 1998
    
    
    
    
    16,918,271
    
    
    26,268,728
    
    
    
    
    
    372,000
    
    
    (17,938,872
    )
    
    
    
    
    8,701,856Exercise of warrants
    
    1.16
    
    
    1,834,600
    
    
    2,126,428
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,126,428Exercise of options
    
    1.17
    
    
    1,276,800
    
    
    1,488,069
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,488,069Private placement
    
    1.30
    
    
    4,864,335
    
    
    6,011,841
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,011,841For donations
    
    2.50
    
    
    4,000
    
    
    10,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,000For mineral property interests
    
    1.28
    
    
    2,825,000
    
    
    3,606,250
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,606,250Loss for the year
    
    -
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,313,029
    )
    
    
    
    
    (6,313,029
    )Stock based compensation
    
    -
    
    
    
    
    
    
    
    
    
    
    
    1,385,000
    
    
    
    
    
    
    
    
    1,385,000Balance, December 31, 1999
    
    
    
    
    27,723,006
    
    
    39,511,316
    
    
    
    
    
    1,757,000
    
    
    (24,251,901
    )
    
    
    
    
    17,016,415Exercise of warrants
    
    1.31
    
    
    5,312,331
    
    
    6,983,902
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,983,902Exercise of options
    
    1.30
    
    
    146,800
    
    
    190,297
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    190,297Private placement
    
    2.00
    
    
    5,000,000
    
    
    9,299,145
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,299,145Loss for the year
    
    -
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,346,645
    )
    
    
    
    
    (11,346,645
    )Stock based compensation
    
    -
    
    
    
    
    
    
    
    
    
    
    
    41,000
    
    
    
    
    
    
    
    
    41,000Balance, December 31, 2000
    
    
    
    
    38,182,137
    
    
    55,984,660
    
    
    
    
    
    1,798,000
    
    
    (35,598,546
    )
    
    
    
    
    22,184,114Share issuance costs
    
    -
    
    
    
    
    
    (31,245
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    (31,245
    )Loss for the year
    
    -
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,924,906
    )
    
    
    
    
    (9,924,906
    )Stock based compensation
    
    -
    
    
    
    
    
    
    
    
    
    
    
    860,000
    
    
    
    
    
    
    
    
    860,000Balance, December 31, 2001
    
    
    
    
    38,182,137
    
    
    55,953,415
    
    
    
    
    
    2,658,000
    
    
    (45,523,452
    )
    
    
    
    
    13,087,963


57

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|26. | Reconciliation with United States Generally
      Accepted Accounting Principles (continued)
|--- | --------------------------------------------------------------------------------------------

| | (f) | Additional disclosures (continued)                           
| | --- | -------------------------------------------------------------
| |     |                                                              
| |     | Consolidated statements of change in equity
      (Unaudited)

|                                            |  |       |  |  | Common Shares |  |  |             |  |  |          |   |  |             |   |  |                  |   |  | Accumulated   |  |  |               |  
|------------------------------------------- |  | ----- |  |  | ------------- |  |  | ----------- |  |  | -------- | - |  | ----------- | - |  | ---------------- | - |  | ------------- |  |  | ------------- | -
|                                            |  |       |  |  |               |  |  |             |  |  |          |   |  |             |   |  |                  |   |  | other         |  |  | Total         |  
|                                            |  | Issue |  |  | Number of     |  |  |             |  |  |          |   |  | Contributed |   |  |                  |   |  | comprehensive |  |  | shareholders' |  
|                                            |  | Price |  |  | shares        |  |  | Amount      |  |  | Warrants |   |  | surplus     |   |  | Retained deficit |   |  | income        |  |  | equity        |  
|                                            |  | $     |  |  |               |  |  | $           |  |  | $        |   |  | $           |   |  | $                |   |  | $             |  |  | $             |  
|                                            |  |       |  |  |               |  |  |             |  |  |          |   |  |             |   |  |                  |   |  |               |  |  |               |  
|Balance, December 31,
      2001            |  |       |  |  | 38,182,137    |  |  | 55,953,415  |  |  |         |   |  | 2,658,000   |   |  | (45,523,452      | ) |  |              |  |  | 13,087,963    |  
|                                            |  |       |  |  |               |  |  |             |  |  |          |   |  |             |   |  |                  |   |  |               |  |  |               |  
|Exercise of warrants                        |  | 1.00  |  |  | 2,257,000     |  |  | 2,257,000   |  |  |         |   |  |            |   |  |                 |   |  |              |  |  | 2,257,000     |  
|Exercise of options                         |  | 0.96  |  |  | 679,900       |  |  | 656,018     |  |  |         |   |  |            |   |  |                 |   |  |              |  |  | 656,018       |  
|Private placement                           |  | 1.50  |  |  | 5,742,327     |  |  | 7,891,385   |  |  |         |   |  |            |   |  |                 |   |  |              |  |  | 7,891,385     |  
|Warrants issued for mineral property        |  | -     |  |  |              |  |  |            |  |  | 295,000  |   |  |            |   |  |                 |   |  |              |  |  | 295,000       |  
|Stock based compensation                    |  | -     |  |  |              |  |  |            |  |  |         |   |  | 374,627     |   |  |                 |   |  |              |  |  | 374,627       |  
|Loss
      for the year                     |  | -     |  |  |              |  |  |            |  |  |         |   |  |            |   |  | (4,792,089       | ) |  |              |  |  | (4,792,089    | )
|                                            |  |       |  |  |               |  |  |             |  |  |          |   |  |             |   |  |                  |   |  |               |  |  |               |  
|Balance, December 31, 2002                  |  |       |  |  | 46,861,364    |  |  | 66,757,818  |  |  | 295,000  |   |  | 3,032,627   |   |  | (50,315,541      | ) |  |              |  |  | 19,769,904    |  
|                                            |  |       |  |  |               |  |  |             |  |  |          |   |  |             |   |  |                  |   |  |               |  |  |               |  
|Exercise of warrants                        |  | 1.51  |  |  | 6,541,943     |  |  | 7,683,994   |  |  |         |   |  |            |   |  |                 |   |  |              |  |  | 7,683,994     |  
|Exercise of options                         |  | 1.43  |  |  | 3,636,600     |  |  | 5,204,175   |  |  |         |   |  |            |   |  |                 |   |  |              |  |  | 5,204,175     |  
|Private placement                           |  | 1.80  |  |  | 5,600,000     |  |  | 9,416,731   |  |  |         |   |  |            |   |  |                 |   |  |              |  |  | 9,416,731     |  
|Shares issued for mineral
      property    |  | 1.38  |  |  | 10,000,000    |  |  | 13,800,000  |  |  |         |   |  |            |   |  |                 |   |  |              |  |  | 13,800,000    |  
|Fair value of stock options exercised       |  | -     |  |  |              |  |  | 430,000     |  |  |         |   |  | (430,000    | ) |  |                 |   |  |              |  |  |              |  
|Loss for the year                           |  | -     |  |  |              |  |  |            |  |  |         |   |  |            |   |  | (13,043,469      | ) |  |              |  |  | (13,043,469   | )
|Stock based compensation                    |  | -     |  |  |              |  |  |            |  |  |         |   |  | 2,131,739   |   |  |                 |   |  |              |  |  | 2,131,739     |  
|Exercise of warrants - fair value           |  | -     |  |  |              |  |  | 7,019,962   |  |  |         |   |  |            |   |  |                 |   |  |              |  |  | 7,019,962     |  
|                                            |  |       |  |  |               |  |  |             |  |  |          |   |  |             |   |  |                  |   |  |               |  |  |               |  
|Balance, December 31,
      2003            |  |       |  |  | 72,639,907    |  |  | 110,312,680 |  |  | 295,000  |   |  | 4,734,366   |   |  | (63,359,010      | ) |  |              |  |  | 51,983,036    |  
|                                            |  |       |  |  |               |  |  |             |  |  |          |   |  |             |   |  |                  |   |  |               |  |  |               |  
|Exercise of warrants                        |  | 1.81  |  |  | 2,137,772     |  |  | 3,785,490   |  |  |         |   |  |            |   |  |                 |   |  |              |  |  | 3,785,490     |  
|Exercise of options                         |  | 1.16  |  |  | 835,700       |  |  | 969,580     |  |  |         |   |  |            |   |  |                 |   |  |              |  |  | 969,580       |  
|Shares issued for mineral
      property    |  | 2.98  |  |  | 11,000,000    |  |  | 32,780,000  |  |  |         |   |  |            |   |  |                 |   |  |              |  |  | 32,780,000    |  
|Fair value of stock options exercised       |  | -     |  |  |              |  |  | 239,915     |  |  |         |   |  | (239,915    | ) |  |                 |   |  |              |  |  |              |  
|Loss for the year                           |  | -     |  |  |              |  |  |            |  |  |         |   |  |            |   |  | (3,695,616       | ) |  |              |  |  | (3,695,616    | )
|Warrants expired unexercised                |  | -     |  |  |              |  |  |            |  |  | (221,250 | ) |  | 221,250     |   |  |                 |   |  |              |  |  |              |  
|Exercise of warrants - fair
      value     |  | -     |  |  |              |  |  | 73,750      |  |  | (73,750  | ) |  |            |   |  |                 |   |  |              |  |  |              |  
|Stock based compensation                    |  | -     |  |  |              |  |  |            |  |  |         |   |  | 2,473,354   |   |  |                 |   |  |              |  |  | 2,473,354     |  
|                                            |  |       |  |  |               |  |  |             |  |  |          |   |  |             |   |  |                  |   |  |               |  |  |               |  
|Balance, December 31, 2004                  |  |       |  |  | 86,613,379    |  |  | 148,161,415 |  |  |         |   |  | 7,189,055   |   |  | (67,054,626      | ) |  |              |  |  | 88,295,844    |  
|                                            |  |       |  |  |               |  |  |             |  |  |          |   |  |             |   |  |                  |   |  |               |  |  |               |  
|Exercise of warrrants                       |  | 0.91  |  |  | 5,500,000     |  |  | 5,018,062   |  |  |         |   |  |            |   |  |                 |   |  |              |  |  | 5,018,062     |  
|Exercise of options                         |  | 0.96  |  |  | 1,572,000     |  |  | 1,509,120   |  |  |         |   |  |            |   |  |                 |   |  |              |  |  | 1,509,120     |  
|Exercise of warrants - fair value           |  | -     |  |  |              |  |  | 2,844,879   |  |  |         |   |  |            |   |  |                 |   |  |              |  |  | 2,844,879     |  
|Stock base compensation                     |  | -     |  |  |              |  |  |            |  |  |         |   |  | 476,156     |   |  |                 |   |  |              |  |  | 476,156       |  
|Loss
      for the year                     |  | -     |  |  |              |  |  |            |  |  |         |   |  |            |   |  | (1,518,771       | ) |  |              |  |  | (1,518,771    | )
|                                            |  |       |  |  |               |  |  |             |  |  |          |   |  |             |   |  |                  |   |  |               |  |  |               |  
|Balance, December 31, 2005                  |  |       |  |  | 93,685,379    |  |  | 157,533,476 |  |  |         |   |  | 7,665,211   |   |  | (68,573,397      | ) |  |              |  |  | 96,625,290    |  
|                                            |  |       |  |  |               |  |  |             |  |  |          |   |  |             |   |  |                  |   |  |               |  |  |               |  
|Exercise of options                         |  | 1.49  |  |  | 1,193,000     |  |  | 1,782,510   |  |  |         |   |  |            |   |  |                 |   |  |              |  |  | 1,782,510     |  
|                                            |  |       |  |  |               |  |  |             |  |  |          |   |  |             |   |  |                  |   |  |               |  |  |               |  
|Shares issued for cash net of issue costs   |  | 2.25  |  |  | 11,200,000    |  |  | 23,058,915  |  |  |         |   |  |            |   |  |                 |   |  |              |  |  | 23,058,915    |  
|Private placement net of
      issue costs  |  | 2.25  |  |  | 3,333,334     |  |  | 7,033,683   |  |  |         |   |  |            |   |  |                 |   |  |              |  |  | 7,033,683     |  
|Shares issued for mineral property          |  | 1.90  |  |  | 4,000,000     |  |  | 7,600,000   |  |  |         |   |  |            |   |  |                 |   |  |              |  |  | 7,600,000     |  
|Fair value of stock options
      exercised |  | -     |  |  |              |  |  | 753,849     |  |  |         |   |  | (753,849    | ) |  |                 |   |  |              |  |  |              |  
|Compensation warrants                       |  | -     |  |  |              |  |  |            |  |  | 159,000  |   |  |            |   |  |                 |   |  |              |  |  | 159,000       |  
|Stock based compensation                    |  | -     |  |  |              |  |  |            |  |  |         |   |  | 3,610,110   |   |  |                 |   |  |              |  |  | 3,610,110     |  
|Loss
      for the year                     |  | -     |  |  |              |  |  |            |  |  |         |   |  |            |   |  | (11,478,000      | ) |  |              |  |  | (11,478,000   | )
|                                            |  |       |  |  |               |  |  |             |  |  |          |   |  |             |   |  |                  |   |  |               |  |  |               |  
|Balance, December 31, 2006                  |  |       |  |  | 113,411,713   |  |  | 197,762,433 |  |  | 159,000  |   |  | 10,521,472  |   |  | (80,051,397      | ) |  |              |  |  | 128,391,508   |  

58

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|26. | Reconciliation with United States Generally
      Accepted Accounting Principles (continued)
|--- | --------------------------------------------------------------------------------------------

| | (f) | Additional disclosures (continued)                           
| | --- | -------------------------------------------------------------
| |     |                                                              
| |     | Consolidated statements of change in equity
      (Unaudited)

|                                                                                                                          |  |       |  |  | Common Shares |  |  |             |  |  |             |   |  |             |   |  |                  |   |  | Accumulated   |   |  |               |  
|------------------------------------------------------------------------------------------------------------------------- |  | ----- |  |  | ------------- |  |  | ----------- |  |  | ----------- | - |  | ----------- | - |  | ---------------- | - |  | ------------- | - |  | ------------- | -
|                                                                                                                          |  |       |  |  |               |  |  |             |  |  |             |   |  |             |   |  |                  |   |  | other         |   |  | Total         |  
|                                                                                                                          |  | Issue |  |  | Number of     |  |  |             |  |  |             |   |  | Contributed |   |  |                  |   |  | comprehensive |   |  | shareholders' |  
|                                                                                                                          |  | Price |  |  | shares        |  |  | Amount      |  |  | Warrants    |   |  | surplus     |   |  | Retained deficit |   |  | income        |   |  | equity        |  
|                                                                                                                          |  | $     |  |  |               |  |  | $           |  |  | $           |   |  | $           |   |  | $                |   |  | $             |   |  | $             |  
|                                                                                                                          |  |       |  |  |               |  |  |             |  |  |             |   |  |             |   |  |                  |   |  |               |   |  |               |  
|Balance, December 31,
            2006                                                                                    |  |       |  |  | 113,411,713   |  |  | 197,762,433 |  |  | 159,000     |   |  | 10,521,472  |   |  | (80,051,397      | ) |  |              |   |  | 128,391,508   |  
|Adoption of accounting policy                                                                                             |  | -     |  |  |              |  |  |            |  |  |            |   |  |            |   |  |                 |   |  | 64,811        |   |  | 64,811        |  
|Exercise of options                                                                                                       |  | 1.69  |  |  | 3,015,830     |  |  | 5,111,184   |  |  |            |   |  |            |   |  |                 |   |  |              |   |  | 5,111,184     |  
|Shares issued for cash net of issue costs                                                                                 |  | 2.11  |  |  | 57,500,000    |  |  | 121,427,869 |  |  |            |   |  |            |   |  |                 |   |  |              |   |  | 121,427,869   |  
|Shares issued for Hecla
            Ventures Corp.                                                                        |  | 2.48  |  |  | 7,930,214     |  |  | 19,666,931  |  |  |            |   |  |            |   |  |                 |   |  |              |   |  | 19,666,931    |  
|Shares issued for Tranter Burnstone Pty Ltd                                                                               |  | 1.82  |  |  | 19,938,650    |  |  | 36,323,195  |  |  |            |   |  |            |   |  |                 |   |  |              |   |  | 36,323,195    |  
|Share purchase warrants
            exercised                                                                             |  | 2.16  |  |  | 1,599,495     |  |  | 3,459,187   |  |  |            |   |  |            |   |  |                 |   |  |              |   |  | 3,459,187     |  
|Fair value of stock options exercised                                                                                     |  | -     |  |  |              |  |  | 2,005,064   |  |  |            |   |  | (2,005,064  | ) |  |                 |   |  |              |   |  |              |  
|Compensation warrants
            exercised                                                                               |  | -     |  |  |              |  |  | 141,582     |  |  | (141,582    | ) |  |            |   |  |                 |   |  |              |   |  |              |  
|Compensation warrants expired                                                                                             |  | -     |  |  |              |  |  |            |  |  | (17,418     | ) |  | 17,418      |   |  |                 |   |  |              |   |  |              |  
|Fair value of warrants
            exercised                                                                              |  | -     |  |  |              |  |  | 547,107     |  |  |            |   |  |            |   |  |                 |   |  |              |   |  | 547,107       |  
|Warrants issued persuant to share issuance                                                                                |  | -     |  |  |              |  |  |            |  |  | 16,210,226  |   |  |            |   |  |                 |   |  |              |   |  | 16,210,226    |  
|Stock based compensation                                                                                                  |  | -     |  |  |              |  |  |            |  |  |            |   |  | 5,633,276   |   |  |                 |   |  |              |   |  | 5,633,276     |  
|Loss for the year                                                                                                         |  | -     |  |  |              |  |  |            |  |  |            |   |  |            |   |  | (51,509,832      | ) |  |              |   |  | (51,509,832   | )
|Fair value adjustment -
            financial instruments                                                                 |  | -     |  |  |              |  |  |            |  |  |            |   |  |            |   |  |                 |   |  | 538,061       |   |  | 538,061       |  
|Mark-to-market fair value adjustment                                                                                      |  | -     |  |  |              |  |  |            |  |  |            |   |  |            |   |  |                 |   |  |               |   |  |              |  
|                                                                                                                          |  |       |  |  |               |  |  |             |  |  |             |   |  |             |   |  |                  |   |  |               |   |  |               |  
|Balance, December 31, 2007                                                                                                |  |       |  |  | 203,395,902   |  |  | 386,444,552 |  |  | 16,210,226  |   |  | 14,167,102  |   |  | (131,561,229     | ) |  | 602,872       |   |  | 285,863,523   |  
|Fair value of options
            exercised                                                                               |  |       |  |  | -             |  |  | 2,076,452   |  |  | -           |   |  | (2,076,452  | ) |  | -                |   |  | -             |   |  | -             |  
|Fair value of warrants exercised                                                                                          |  |       |  |  | -             |  |  | 545,894     |  |  |             |   |  | -           |   |  | -                |   |  | -             |   |  | 545,894       |  
|Share purchase options
            exercised                                                                              |  | 2.07  |  |  | 2,250,386     |  |  | 4,655,242   |  |  | -           |   |  | -           |   |  | -                |   |  | -             |   |  | 4,655,242     |  
|Shares issued to CW Properties LLC, February 2008                                                                         |  | 2.97  |  |  | 10,000        |  |  | 29,700      |  |  | -           |   |  | -           |   |  | -                |   |  | -             |   |  | 29,700        |  
|Shares issued for Rusaf Gold Limited, April 2008                                                                          |  | 3.45  |  |  | 6,613,636     |  |  | 22,787,802  |  |  | -           |   |  | -           |   |  | -                |   |  | -             |   |  | 22,787,802    |  
|Shares issued for Rusaf Gold Limited, July2008                                                                            |  | 3.49  |  |  | 22,041        |  |  | 76,923      |  |  | -           |   |  | -           |   |  | -                |   |  | -             |   |  | 76,923        |  
|Shares issued for Puma Gold (Pty) Ltd, July 2008                                                                          |  | 3.57  |  |  | 1,862,354     |  |  | 6,648,604   |  |  | -           |   |  | -           |   |  | -                |   |  | -             |   |  | 6,648,604     |  
|Rusaf share purchase warrants exercised, October 2008                                                                     |  | 1.38  |  |  | 13,333        |  |  | 18,409      |  |  | -           |   |  | -           |   |  | -                |   |  | -             |   |  | 18,409        |  
|Share purchase warrants exercised                                                                                         |  | 1.68  |  |  | 998,890       |  |  | 1,677,909   |  |  | -           |   |  | -           |   |  | -                |   |  | -             |   |  | 1,677,909     |  
|Warrants issued persuant to
            Senior Secured Notes                                                              |  |       |  |  |               |  |  |             |  |  | 6,616,856   |   |  | -           |   |  | -                |   |  | -             |   |  | 6,616,856     |  
|Stock based compensation                                                                                                  |  |       |  |  | -             |  |  | -           |  |  | -           |   |  | 10,411,804  |   |  | -                |   |  | -             |   |  | 10,411,804    |  
|Options and warrants issued on acquisition of Rusaf Gold Limited                                                          |  |       |  |  | -             |  |  | -           |  |  | -           |   |  | 1,755,067   |   |  | -                |   |  | -             |   |  | 1,755,067     |  
|Loss for the period                                                                                                       |  |       |  |  | -             |  |  | -           |  |  | -           |   |  |             |   |  | (84,433,085      | ) |  | -             |   |  | (84,433,085   | )
|Unrealized loss on
            available-for-sale financial instruments                                                   |  |       |  |  | -             |  |  | -           |  |  | -           |   |  | -           |   |  | -                |   |  | (2,701,256    | ) |  | (2,701,256    | )
|Accumulated unrealized gain
            on foreign exchange translation of self-sustaining
            foreign operations |  |       |  |  | -             |  |  | -           |  |  | -           |   |  | -           |   |  | -                |   |  | 2,311,387     |   |  | 2,311,387     |  
|                                                                                                                          |  |       |  |  |               |  |  |             |  |  |             |   |  |             |   |  |                  |   |  |               |   |  |               |  
|Balance, December 31,
            2008                                                                                    |  |       |  |  | 215,166,542   |  |  | 424,961,487 |  |  | 22,827,082  |   |  | 24,257,521  |   |  | (215,994,314     | ) |  | 213,003       |   |  | 256,264,779   |  
|Equity line: shares issued for cash, net of share issue costs                                                             |  | 1.37  |  |  | 2,846,800     |  |  | 3,910,984   |  |  | -           |   |  | -           |   |  | -                |   |  | -             |   |  | 3,910,984     |  
|Public offering: shares issued for cash, net
            of share issue costs                                             |  | 1.15  |  |  | 115,000,000   |  |  | 132,699,566 |  |  | 5,307,983   |   |  | -           |   |  | -                |   |  | -             |   |  | 138,007,549   |  
|Options exercised                                                                                                         |  | 2.04  |  |  | 1,124,675     |  |  | 2,293,644   |  |  | -           |   |  | (809,167    | ) |  | -                |   |  | -             |   |  | 1,484,477     |  
|Shares issued for mineral
            properties                                                                          |  | 1.76  |  |  | 20,000        |  |  | 35,200      |  |  | -           |   |  | -           |   |  | -                |   |  | -             |   |  | 35,200        |  
|Warrants expired                                                                                                          |  | -     |  |  | -             |  |  | -           |  |  | (16,210,226 | ) |  | 16,210,226  |   |  | -                |   |  | -             |   |  | -             |  
|Future income tax on expired
            share purchase warrants                                                          |  |       |  |  |               |  |  |             |  |  |             |   |  | (1,293,750  | ) |  |                  |   |  |               |   |  | (1,293,750    | )
|Stock-based compensation                                                                                                  |  | -     |  |  | -             |  |  | -           |  |  | -           |   |  | 12,104,310  |   |  | -                |   |  | -             |   |  | 12,104,310    |  
|Loss for the period                                                                                                       |  | -     |  |  | -             |  |  | -           |  |  | -           |   |  | -           |   |  | (47,806,556      | ) |  | -             |   |  | (47,806,556   | )
|Unrealized gain on
            available-for-sale financial instruments                                                   |  | -     |  |  | -             |  |  | -           |  |  | -           |   |  | -           |   |  | -                |   |  | 3,025,751     |   |  | 3,025,751     |  
|Accumulated unrealized loss
            on foreign exchange translation of self-sustaining operations                     |  | -     |  |  | -             |  |  | -           |  |  | -           |   |  | -           |   |  | -                |   |  | (27,779,605   | ) |  | (27,779,605   | )
|                                                                                                                          |  |       |  |  |               |  |  |             |  |  |             |   |  |             |   |  |                  |   |  |               |   |  |               |  
|Balance, December 31,
            2009                                                                                    |  |       |  |  | 334,158,017   |  |  | 563,900,881 |  |  | 11,924,839  |   |  | 50,469,140  |   |  | (263,800,870     | ) |  | (24,540,851   | ) |  | 337,953,139   |  

59

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|26. | Reconciliation with United States Generally
      Accepted Accounting Principles (continued)
|--- | --------------------------------------------------------------------------------------------

(g) New US GAAP pronouncements
adopted

(i) FASB Accounting Standard
Codification (ASC) No. 805, Business Combinations (ASC 805)

ASC 805, Business Combinations
establishes principles and requirements for how the acquirer recognizes and
measures the identifiable assets acquired, liabilities assumed, and any
noncontrolling interest in the acquiree; recognizes and measures the goodwill
acquired in the business combination or a gain from a bargain purchase and
determines what information to disclose to enable users of the financial
statements to evaluate the nature and financial effects of the business
combination. This Statement applies prospectively to business combinations for
which the acquisition date is on or after the beginning of the first annual
reporting period beginning on or after December 15, 2008. The adoption of ASC
805 had no impact on the Companys financial statements for the year ended
December 31, 2009 as the Company did not complete any business combinations
during the year.

(ii) FASB Accounting Standard
Codification (ASC) No. 855, Subsequent events (ASC 855)

The FASB issued ASC 855, Subsequent
events, which establishes general standards of accounting for, and
disclosure of, events that occur after the balance sheet date but before
financial statements are issued or are available to be issued. This Standard is
effective for interim or annual periods ending after June 15, 2009 and its
adoption had no impact on the Companys financial statements.

(iii) FSAB Accounting Standards
Codification (ASC) 825, Financial Instruments (ASC 825)

The FASB issued ASC 825, Financial
Instruments, which requires disclosures about fair value of financial
instruments in interim financial statements of public companies (rather than
just annually), and requires those disclosures in summarized financial
information at interim periods. ASC 825 is effective for periods ending after
June 15, 2009. The adoption of this Standard had no significant impact of the
Companys financial statements.

(iv) FSAB Accounting Standards
Codification (ASC) 820  Fair Value Measurements and Disclosures (ASC
820)

This Standard provides additional
guidance to highlight and expands on the factors that should be considered in
estimating fair value when there has been a significant decrease in market
activity for a financial asset. The Standard is effective for interim and annual
periods ending after June 15, 2009, with early adoption permitted for periods
ending after March 15, 2009. In the period of adoption, a reporting entity must
disclose any changes in valuation techniques and related inputs resulting from
the application of this Standard, and quantify the total effect of the change in
valuation techniques and related inputs, if practicable, by major category. The
adoption of this Standard had no impact on the Companys results of operations
and financial position.

60

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2009 and 2008               
|(Expressed in
      Canadian Dollars unless otherwise stated)

|26. | Reconciliation with United States Generally
      Accepted Accounting Principles (continued)
|--- | --------------------------------------------------------------------------------------------

(g) New US GAAP pronouncements
adopted (continued)

(v) FSAB Accounting Standards
Codification (ASC) 860  Transfers and Servicing (ASC 860)

ASC 860 eliminated the concept of a
qualifying special-purpose entity. Therefore, formerly qualifying
special-purpose entities should be evaluated for consolidation by reporting
entities on and after the effective date in accordance with the applicable
consolidation guidance. If the evaluation on the effective date results in
consolidation, the reporting entity should apply the transition guidance
provided in the pronouncement that requires consolidation. The Standard is
effective for interim and annual periods ending after November 15, 2009, with
early adoption prohibited. The adoption of this Standard had no impact on the
Companys results of operations and financial position.

(h) New US GAAP pronouncement issued
but not yet adopted

(i) FASB Accounting Standard
Codification (ASC) No. 810, Consolidations (ASC 810)

The FASB issued ASC 810,
Consolidations, eliminates the quantitative approach previously required
for determining the primary beneficiary of a variable interest entity, among
other changes. This Standard is effective as of the beginning of each reporting
entitys first annual reporting period that begins after November 15, 2009, for
interim periods within that first annual reporting period, and for interim and
annual reports beginning thereafter. Earlier application is prohibited. The
Company is currently evaluating the impact of the adoption of this standard on
the Companys results of operations and financial position.

61

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

|                                                                 |  |              |   | Year
      ended |  |   | Year
      ended | 
|---------------------------------------------------------------- |  | ------------ | - | ---------------- |  | - | ---------------- | 
|Mineral Property Interests                                       |  |              |   | December 31      |  |   | December 31      | 
|                                                                 |  | Note         |   | 2009             |  |   | 2008             | 
|Burnstone - Pre-development                                      |  |              |   |                  |  |   |                  | 
|Mine development                                                 |  |              |   |                  |  |   |                  | 
|Establishment work                                               |  |              | $ |                 |  | $ | 193,475          | 
|Equipment rental and services                                    |  |              |   |                 |  |   | 892,541          | 
|Surface infrastructure                                           |  |              |   |                 |  |   | 658,127          | 
|Portal construction                                              |  |              |   |                 |  |   | 1,292,687        | 
|Underground access and infrastructure                            |  |              |   |                 |  |   | 5,558,031        | 
|Depreciation                                                     |  |              |   |                 |  |   | 1,144,751        | 
|Other cost                                                       |  |              |   |                  |  |   |                  | 
|Access road                                                      |  |              |   |                 |  |   | 470,575          | 
|Operational cost                                                 |  |              |   |                 |  |   | 4,801,643        | 
|Long hole stoping pilot project                                  |  |              |   |                 |  |   | 192,504          | 
|Waste rock dump                                                  |  |              |   |                 |  |   | 27,063           | 
|Vertical shaft                                                   |  |              |   |                 |  |   | 7,778,719        | 
|Energy project                                                   |  |              |   |                 |  |   | 86,256           | 
|Permanent
      infrastructure - surface                         |  |              |   |                 |  |   | 582,674          | 
|Pre-development expenses before the
      following              |  |              |   |                 |  |   | 23,679,046       | 
|Office and
      administration                                  |  |              |   |                 |  |   | 414,214          | 
|Pre-development expenses incurred during
      the year          |  |              |   |                 |  |   | 24,093,260       | 
|Cumulative
      pre-development expenditures, beginning of year |  |              |   | 39,173,505       |  |   | 15,080,245       | 
|Cumulative pre-development expenditures, end of year             |  |              |   | 39,173,505       |  |   | 39,173,505       | 
|                                                                 |  |              |   |                  |  |   |                  | 
|Hollister - Pre-development                                      |  |              |   |                  |  |   |                  | 
|Depreciation                                                     |  |              |   | 1,731,776        |  |   | 1,673,964        | 
|Property evaluation                                              |  |              |   | 439,024          |  |   |                 | 
|Surface infrastructure                                           |  |              |   |                 |  |   | 1,880,509        | 
|Underground access and infrastructure
      development          |  |              |   | 20,151,560       |  |   | 25,274,165       | 
|Operational
      costs                                          |  |              |   | 2,487,259        |  |   | 9,013,695        | 
|Pre-development expenses before the
      following              |  |              |   | 24,809,619       |  |   | 37,842,333       | 
|Office and
      administration                                  |  |              |   | 1,059,108        |  |   | 661,970          | 
|Pre-development expenses incurred during
      the year          |  |              |   | 25,868,727       |  |   | 38,504,303       | 
|Cumulative
      pre-development expenditures, beginning of year |  |              |   | 56,854,588       |  |   | 18,350,285       | 
|Cumulative pre-development expenditures, end of year             |  |              |   | 82,723,315       |  |   | 56,854,588       | 
|                                                                 |  |              |   |                  |  |   |                  | 
|Total pre-development expenses before
      the following        |  |              |   | 24,809,619       |  |   | 61,521,379       | 
|Office and
      administration                                  |  | 21
      (b) |   | 1,059,108        |  |   | 1,076,184        | 
|Total pre-development expenses incurred
      during the year    |  |              |   | 25,868,727       |  |   | 62,597,563       | 
|Cumulative
      pre-development expenditures, beginning of year |  |              |   | 96,028,093       |  |   | 33,430,530       | 
|Cumulative pre-development expenditures, end of year             |  |              | $ | 121,896,820      |  | $ | 96,028,093       | 

See accompanying notes to consolidated financial
statements.

62

---

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

|                                                             |  |        |  |           | Year
      ended |  |           | Year
      ended |  
|------------------------------------------------------------ |  | ------ |  | --------- | ---------------- |  | --------- | ---------------- | -
|Mineral Property Interests                                   |  |        |  |           | December 31      |  |           | December 31      |  
|                                                             |  | Note   |  |           | 2009             |  |           | 2008             |  
|Burnstone - Exploration                                      |  |        |  |           |                  |  |           |                  |  
|Assays and analysis                                          |  |        |  | $         | 27,504           |  | $         | 40,817           |  
|Drilling                                                     |  |        |  |           | 201,635          |  |           | 2,342,178        |  
|Engineering                                                  |  |        |  |           |                 |  |           | 62,128           |  
|Equipment rental                                             |  |        |  |           | 3,470            |  |           | 19,461           |  
|Geological                                                   |  |        |  |           | 63,757           |  |           | 669,751          |  
|Graphics                                                     |  |        |  |           | 592              |  |           | 5,596            |  
|Property fees and exploration option payments                |  |        |  |           | 136              |  |           | 7,749            |  
|Site activities                                              |  |        |  |           | 270,232          |  |           | 104,787          |  
|Exploration expenses before the following                    |  |        |  |           | 567,326          |  |           | 3,252,467        |  
|Office and administration                                    |  |        |  |           |                 |  |           | 56,895           |  
|Exploration expenses incurred during the year                |  |        |  |           | 567,326          |  |           | 3,309,362        |  
|Cumulative exploration expenditures, beginning of year       |  |        |  |           | 31,042,717       |  |           | 27,733,355       |  
|Cumulative
      exploration expenditures, end of year       |  |        |  |           | 31,610,043       |  |           | 31,042,717       |  
|                                                             |  |        |  |           |                  |  |           |                  |  
|Hollister - Exploration                                      |  |        |  |           |                  |  |           |                  |  
|Assays and analysis                                          |  |        |  |           | 209,450          |  |           | 1,348,040        |  
|Drilling                                                     |  |        |  |           | 6,886,082        |  |           | 8,316,210        |  
|Engineering                                                  |  |        |  |           | 711,650          |  |           | 66,888           |  
|Environmental, socio-economic and land                       |  |        |  |           | 1,689,553        |  |           | 1,086,029        |  
|Freight                                                      |  |        |  |           | 190,305          |  |           |                 |  
|General office and administration                            |  |        |  |           | 853,381          |  |           |                 |  
|Geological                                                   |  |        |  |           | 150,370          |  |           | (19,146          | )
|Graphics                                                     |  |        |  |           |                 |  |           | 3,578            |  
|Property fees and exploration option
      payments          |  |        |  |           | 73,091           |  |           | 133,747          |  
|Site
      activities                                        |  |        |  |           | 2,953,620        |  |           | 281,851          |  
|Exploration expenses before the
      following              |  |        |  |           | 13,717,502       |  |           | 11,217,197       |  
|Office and
      administration                              |  |        |  |           |                 |  |           | 196,221          |  
|Exploration expenses incurred during the
      year          |  |        |  |           | 13,717,502       |  |           | 11,413,418       |  
|Cumulative
      exploration expenditures, beginning of year |  |        |  |           | 45,195,303       |  |           | 33,781,885       |  
|Cumulative exploration expenditures, end of year             |  |        |  |           | 58,912,805       |  |           | 45,195,303       |  
|                                                             |  |        |  |           |                  |  |           |                  |  
|Rusaf Gold - Exploration                                     |  |        |  |           |                  |  |           |                  |  
|Assays and analysis                                          |  |        |  |           | 330,944          |  |           | 938,192          |  
|Depreciation                                                 |  |        |  |           | 298,837          |  |           | 218,553          |  
|Drilling                                                     |  |        |  |           | 11,489           |  |           | 2,492,273        |  
|Engineering                                                  |  |        |  |           | 32,032           |  |           | 186,313          |  
|Equipment rental                                             |  |        |  |           |                 |  |           | 477,055          |  
|Freight                                                      |  |        |  |           | 86,452           |  |           | 450,618          |  
|Geological                                                   |  |        |  |           | 202,750          |  |           | 935,816          |  
|Graphics                                                     |  |        |  |           |                 |  |           | 16,494           |  
|Property fees and exploration option payments                |  |        |  |           | 445,495          |  |           | 329,373          |  
|Site activities                                              |  |        |  |           | 714,010          |  |           | 1,494,118        |  
|Exploration expenses incurred during the year                |  |        |  |           | 2,122,009        |  |           | 7,538,805        |  
|Cumulative exploration expenditures, beginning of year       |  |        |  |           | 7,538,805        |  |           |                 |  
|Cumulative
      exploration expenditures, end of year       |  | 15 (c) |  | 9,660,814 |                  |  | 7,538,805 |                 

63

---

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

|                                                       |  |        |  |   | Year
      ended |  |         | Year
      ended | 
|------------------------------------------------------ |  | ------ |  | - | ---------------- |  | ------- | ---------------- | 
|Mineral Property Interests                             |  |        |  |   | December 31      |  |         | December 31      | 
|                                                       |  | Note   |  |   | 2009             |  |         | 2008             | 
|Other - Exploration                                    |  |        |  |   |                  |  |         |                  | 
|Assays and analysis                                    |  |        |  | $ | 43               |  | $       | 284,553          | 
|Depreciation                                           |  |        |  |   | 13,817           |  |         | 14,459           | 
|Drilling                                               |  |        |  |   |                 |  |         | 6,605            | 
|Engineering                                            |  |        |  |   |                 |  |         | 62,721           | 
|Equipment rental                                       |  |        |  |   | 49,966           |  |         | 139,746          | 
|Freight                                                |  |        |  |   | 3,380            |  |         | 141,198          | 
|Geological                                             |  |        |  |   | 89,250           |  |         | 473,250          | 
|Property fees and exploration option
      payments    |  |        |  |   | 2,272            |  |         | 103,863          | 
|Site activities and closure                            |  |        |  |   | 26,487           |  |         | 384,967          | 
|Transportation                                         |  |        |  |   |                 |  |         | 29,790           | 
|Exploration expenses incurred during the year          |  |        |  |   | 185,215          |  |         | 1,641,152        | 
|Cumulative exploration expenditures, beginning of year |  |        |  |   | 4,169,243        |  |         | 2,528,091        | 
|Cumulative
      exploration expenditures, end of year |  |        |  |   | 4,354,458        |  |         | 4,169,243        | 
|                                                       |  |        |  |   |                  |  |         |                  | 
|Total exploration expenses before the following        |  |        |  |   | 16,592,052       |  |         | 23,649,621       | 
|Office and administration                              |  | 21 (b) |  |  |                  |  | 253,116 |                 
|Total exploration expenses incurred during the year    |  |        |  |   | 16,592,052       |  |         | 23,902,737       | 
|Cumulative exploration expenditures, beginning of year |  |        |  |   | 87,946,068       |  |         | 64,043,331       | 
|Cumulative
      exploration expenditures, end of year |  |        |  | $ | 104,538,120      |  | $       | 87,946,068       | 

See accompanying notes to consolidated financial
statements.

64

---