---



CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED 
  DECEMBER 31, 2005, 2004 and 2003



(Expressed in Canadian Dollars, unless otherwise
stated)

---

| | KPMG LLP                         | Telephone (604) 691-3000
| | -------------------------------- | ------------------------
| | Chartered Accountants            | Fax (604) 691-3031      
| | PO Box 10426 777 Dunsmuir Street | Internet www.kpmg.ca    
| | Vancouver BC V7Y 1K3             |                         
| | Canada                           |                         

AUDITORS REPORT TO THE SHAREHOLDERS

We have audited the consolidated balance sheets of Great Basin
  Gold Ltd. as at December 31, 2005 and 2004 and the consolidated statements of
  operations, deficit and cash flows for each of the years in the three-year period
  ended December 31, 2005. These financial statements are the responsibility of
  the Companys management. Our responsibility is to express an opinion on
  these financial statements based on our audits.

We conducted our audits in accordance with Canadian generally
  accepted auditing standards. Those standards require that we plan and perform
  an audit to obtain reasonable assurance whether the financial statements are
  free of material misstatement. An audit includes examining, on a test basis,
  evidence supporting the amounts and disclosures in the financial statements.
  An audit also includes assessing the accounting principles used and significant
  estimates made by management, as well as evaluating the overall financial statement
  presentation.

In our opinion, these consolidated financial statements present
  fairly, in all material respects, the financial position of the Company as at
  December 31, 2005 and 2004 and the results of its operations and its cash flows
  for each of the years in the three-year period ended December 31, 2005 in accordance
  with Canadian generally accepted accounting principles.

KPMG LLP (signed)

Chartered Accountants

Vancouver, Canada 
  February 24, 2006

---

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

|                                               |   | December 31 |   |   | December 31         |  
|---------------------------------------------- | - | ----------- | - | - | ------------------- | -
|                                               |   | 2005        |   |   | 2004                |  
|                                               |   |             |   |   | (restated  note 8) |  
|Assets                                         |   |             |   |   |                     |  
|                                               |   |             |   |   |                     |  
|Current assets                                 |   |             |   |   |                     |  
|Cash and equivalents                           | $ | 17,516,909  |   | $ | 17,199,548          |  
|Amounts receivable                             |   | 208,762     |   |   | 241,572             |  
|Due from related parties (note 7)              |   |            |   |   | 926                 |  
|Investments (note 5(c))                        |   | 179,000     |   |   | 271,000             |  
|Prepaid expenses                               |   | 85,164      |   |   | 126,175             |  
|                                               |   | 17,989,835  |   |   | 17,839,221          |  
|                                               |   |             |   |   |                     |  
|Equipment(note 4)                              |   | 6,080       |   |   |                    |  
|Reclamation deposits(note 5(a))                |   | 63,580      |   |   | 64,668              |  
|Mineral property interests(note 5)             |   | 98,630,000  |   |   | 98,630,000          |  
|                                               |   |             |   |   |                     |  
|                                               | $ | 116,689,495 |   | $ | 116,533,889         |  
|                                               |   |             |   |   |                     |  
|Liabilities and
      Shareholders' Equity     |   |             |   |   |                     |  
|                                               |   |             |   |   |                     |  
|Current liabilities                            |   |             |   |   |                     |  
|Accounts payable and accrued
      liabilities | $ | 644,245     |   | $ | 752,166             |  
|Due to related parties (note 7)                |   | 55,960      |   |   |                    |  
|                                               |   | 700,205     |   |   | 752,166             |  
|                                               |   |             |   |   |                     |  
|Future income taxes(note 8)                    |   | 19,364,000  |   |   | 24,596,000          |  
|                                               |   |             |   |   |                     |  
|Shareholders' equity                           |   |             |   |   |                     |  
|Share capital (note 6)                         |   | 161,228,635 |   |   | 143,341,453         |  
|Warrants (note 6(d))                           |   |            |   |   | 11,360,000          |  
|Contributed surplus
      (note 6(e))          |   | 5,007,211   |   |   | 4,531,055           |  
|Deficit                                        |   | (69,610,556 | ) |   | (68,046,785         | )
|                                               |   | 96,625,290  |   |   | 91,185,723          |  
|Nature of operations (note 1)                  |   |             |   |   |                     |  
|Subsequent events (note 11)                    |   |             |   |   |                     |  
|Commitments (note 5)                           |   |             |   |   |                     |  
|Contingencies (note 5(a))                      |   |             |   |   |                     |  
|                                               | $ | 116,689,495 |   | $ | 116,533,889         |  

See accompanying notes to consolidated financial
statements.

Approved by the Board of Directors

|*/s/ Ferdi Dippenaar* | /s/ Jeffrey R. Mason
|--------------------- | --------------------
|                      |                     
|Ferdi Dippenaar       | Jeffrey R. Mason    
|Director              | Director            

---

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

|                                                                       |   | Years ended December 31 |  
|---------------------------------------------------------------------- | - | ----------------------- | -
|                                                                       |   | 2005                    |  
|                                                                       |   |                         |  
|                                                                       |   |                         |  
|Expenses                                                               |   |                         |  
|Conference and travel                                                  | $ | 336,402                 |  
|Exploration
      (schedule)                                           |   | 3,884,972               |  
|Financial advisory and finders'
      fees                             |   |                        |  
|Foreign exchange
      loss (gain)                                     |   | (3,114,429              | )
|Interest and other expense
      (income)                              |   | (479,911                | )
|Legal, accounting,
      and audit                                     |   | 502,872                 |  
|Office and administration                                              |   | 1,222,037               |  
|Recovery of
      accounts receivable previously written off           |   |                        |  
|Shareholder communications                                             |   | 283,838                 |  
|Stock-based
      compensation - exploration (note 6(c))               |   | 18,783                  |  
|Stock-based compensation - office
      and administration (note 6(c)) |   | 457,373                 |  
|Trust and filing                                                       |   | 85,684                  |  
|Loss before the undernoted and income taxes                            |   | 3,197,621               |  
|Loss (gain) on
      sale of investments                               |   | 193,150                 |  
|Mark-to-market adjustment on
      investments (note 5(c))             |   | 166,000                 |  
|Loss before income taxes                                               |   | 3,556,771               |  
|Future income tax recovery (note 8)                                    |   | (1,993,000              | )
|                                                                       |   |                         |  
|Loss for the
      year                                                | $ | 1,563,771               |  
|                                                                       |   |                         |  
|Basic and diluted
      loss per share (note 3(i))                     | $ | (0.02                   | )
|                                                                       |   |                         |  
|Weighted average
      number of common shares outstanding             |   | 91,908,700              |  

See accompanying notes to consolidated financial
statements.



Consolidated Statements of Deficit(Expressed in
Canadian Dollars)

|                                                                               |   | Years ended December 31 | 
|------------------------------------------------------------------------------ | - | ----------------------- | 
|                                                                               |   | 2005                    | 
|                                                                               |   |                         | 
|Deficit, beginning of year, as previously
      reported                       | $ | 62,447,785              | 
|Adjustment
      for future income taxes and related foreign exchange (note 8) |   | 5,599,000               | 
|Deficit, as restated                                                           |   | 68,046,785              | 
|Loss for the year                                                              |   | 1,563,771               | 
|                                                                               |   |                         | 
|Deficit, end of
      the year                                                 | $ | 69,610,556              | 

See accompanying notes to consolidated financial
statements.

---

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

|                                                                          |   | Years ended December 31 |  
|------------------------------------------------------------------------- | - | ----------------------- | -
|                                                                          |   | 2005                    |  
|                                                                          |   |                         |  
|                                                                          |   |                         |  
|Operating activities                                                      |   |                         |  
|Loss for the period                                                       | $ | (1,563,771              | )
|Items not involving cash                                                  |   |                         |  
|Amortization
      included in exploration expenses                       |   | 1,242                   |  
|Future income tax recovery                                                |   | (1,993,000              | )
|Loss on sale of
      investments                                         |   | 193,150                 |  
|Non-cash stock-based compensation expense                                 |   | 476,156                 |  
|Unrealized foreign
      exchange                                         |   | (3,239,000              | )
|Warrants received for property option agreement (note 5(c))               |   | (345,000                | )
|Mark-to-market
      adjustment on investments (note 5(c))                |   | (166,000                | )
|Changes in non-cash operating
      working capital                       |   |                         |  
|Amounts receivable                                                        |   | 32,810                  |  
|Prepaid expenses                                                          |   | 41,011                  |  
|Accounts payable and accrued
      liabilities                            |   | (107,921                | )
|Cash used in operating activities                                         |   | (6,338,323              | )
|                                                                          |   |                         |  
|Investing activities                                                      |   |                         |  
|Mineral property acquisition costs                                        |   |                        |  
|Proceeds on sale of
      investments                                     |   | 77,850                  |  
|Purchase of equipment                                                     |   | (7,322                  | )
|Reclamation deposits                                                      |   | 1,088                   |  
|Cash from (used in)
      investing activities                            |   | 71,616                  |  
|                                                                          |   |                         |  
|Financing activities                                                      |   |                         |  
|Common shares issued for
      cash, net of issue costs                   |   | 6,527,182               |  
|Advances from related parties (note 7)                                    |   | 56,886                  |  
|Cash from financing activities                                            |   | 6,584,068               |  
|                                                                          |   |                         |  
|Increase (decrease) in
      cash and equivalents                         |   | 317,361                 |  
|Cash
      and equivalents, beginning of period                           |   | 17,199,548              |  
|                                                                          |   |                         |  
|Cash and equivalents, end of period                                       | $ | 17,516,909              |  
|                                                                          |   |                         |  
|Supplementary information                                                 |   |                         |  
|Taxes paid                                                                | $ |                        |  
|Interest paid                                                             | $ |                        |  
|Interest received                                                         | $ | 479,911                 |  
|                                                                          |   |                         |  
|Non-cash financing and investing activities                               |   |                         |  
|Shares issued for property option agreement
      (note 5(b))             | $ |                        |  
|Warrants issued for property
      option agreement (note 5(b))           | $ |                        |  
|Warrants received for mineral property option
      agreement             | $ | 345,000                 |  
|Fair value of stock options
      transferred to share capital on options |   |                         |  
|exercised from
      contributed surplus                                  | $ |                        |  
|Increase in mineral property
      for future income taxes                | $ |                        |  

See accompanying notes to consolidated financial
statements.

---

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

|Mineral Property Interests (Note 5)                           |   | Burnstone  |  |   | Ivanhoe    |  |   | Other    |   |   | Total      |  
|------------------------------------------------------------- | - | ---------- |  | - | ---------- |  | - | -------- | - | - | ---------- | -
|                                                              |   |            |  |   |            |  |   |          |   |   |            |  
|Exploration expenses during 2005                              |   |            |  |   |            |  |   |          |   |   |            |  
|Assays and analysis                                           | $ | 83,601     |  | $ | 2,881      |  | $ | 96,606   |   | $ | 183,088    |  
|Amortization                                                  |   | 85         |  |   |           |  |   | 1,157    |   |   | 1,242      |  
|Drilling                                                      |   | 472,917    |  |   |           |  |   | 298,871  |   |   | 771,788    |  
|Engineering                                                   |   | 1,216,433  |  |   | 66,935     |  |   | 20,755   |   |   | 1,304,123  |  
|Environmental, socio-economic and
      land                  |   | 376,843    |  |   | 8,490      |  |   | 2,064    |   |   | 387,397    |  
|Equipment rental                                              |   |           |  |   |           |  |   | 18,276   |   |   | 18,276     |  
|Freight                                                       |   |           |  |   |           |  |   | 21       |   |   | 21         |  
|Geological                                                    |   | 439,310    |  |   | 109,781    |  |   | 312,802  |   |   | 861,893    |  
|Graphics                                                      |   | 8,552      |  |   | 18,994     |  |   | 7,997    |   |   | 35,543     |  
|Property fees and
      exploration option payments           |   | 155,688    |  |   | 153,856    |  |   | 4,254    |   |   | 313,798    |  
|Site activities                                               |   | 221,127    |  |   | 23,165     |  |   | 71,329   |   |   | 315,621    |  
|Transportation                                                |   | 16,532     |  |   | 5,883      |  |   | 14,767   |   |   | 37,182     |  
|Proceeds on option agreements (note
      5(c))               |   |           |  |   |           |  |   | (345,000 | ) |   | (345,000   | )
|                                                              |   | 2,991,088  |  |   | 389,985    |  |   | 503,899  |   |   | 3,884,972  |  
|Stock-based compensation (note 6(c))                          |   | 13,228     |  |   | 1,787      |  |   | 3,768    |   |   | 18,783     |  
|Incurred during 2005                                          |   | 3,004,316  |  |   | 391,772    |  |   | 507,667  |   |   | 3,903,755  |  
|Cumulative
      exploration expenditures, December 31, 2004  |   | 18,519,661 |  |   | 22,908,651 |  |   | (173,446 | ) |   | 41,254,866 |  
|Cumulative exploration expenditures, September
      30, 2005 | $ | 21,523,977 |  | $ | 23,300,423 |  | $ | 334,221  |   | $ | 45,158,621 |  
|                                                              |   |            |  |   |            |  |   |          |   |   |            |  
|Cumulative exploration expenditures,
      consist of :       |   |            |  |   |            |  |   |          |   |   |            |  
|Cumulative cash expenditures                                  | $ | 20,033,769 |  | $ | 23,111,796 |  | $ | 319,226  |   | $ | 43,464,791 |  
|Cumulative stock-based
      compensation - exploration       |   | 1,490,208  |  |   | 188,627    |  |   | 14,995   |   |   | 1,693,830  |  
|                                                              | $ | 21,523,977 |  | $ | 23,300,423 |  | $ | 334,221  |   | $ | 45,158,621 |  
|                                                              |   |            |  |   |            |  |   |          |   |   |            |  
|                                                              |   |            |  |   |            |  |   |          |   |   |            |  
|Exploration expenses during 2004                              |   |            |  |   |            |  |   |          |   |   |            |  
|Assays and analysis                                           | $ | 199,979    |  | $ | 22,046     |  | $ | 3,414    |   | $ | 225,439    |  
|Drilling                                                      |   | 4,368,621  |  |   | 133,946    |  |   |         |   |   | 4,502,567  |  
|Engineering                                                   |   | 625,221    |  |   | 76,174     |  |   |         |   |   | 701,395    |  
|Environmental,
      socio-economic and land                  |   | 84,237     |  |   | 39,210     |  |   |         |   |   | 123,447    |  
|Geological                                                    |   | 1,208,134  |  |   | 83,253     |  |   | 34,998   |   |   | 1,326,385  |  
|Graphics                                                      |   | 43,483     |  |   | 11,024     |  |   | 5,919    |   |   | 60,426     |  
|Property fees and exploration
      option payments           |   | 85,839     |  |   | 258,716    |  |   | 54,758   |   |   | 399,313    |  
|Site activities                                               |   | 286,888    |  |   | 62,950     |  |   | 3,995    |   |   | 353,833    |  
|Transportation                                                |   | 206,527    |  |   | 51,727     |  |   | 11,337   |   |   | 269,591    |  
|Proceeds on option agreements                                 |   |           |  |   |           |  |   | (271,000 | ) |   | (271,000   | )
|                                                              |   | 7,108,929  |  |   | 739,046    |  |   | (156,579 | ) |   | 7,691,396  |  
|Stock-based compensation (note
      6(c))                    |   | 671,776    |  |   | 71,257     |  |   | 11,033   |   |   | 754,066    |  
|Incurred during 2004                                          |   | 7,780,705  |  |   | 810,303    |  |   | (145,546 | ) |   | 8,445,462  |  
|Cumulative exploration expenditures, December 31, 2003        |   | 10,738,956 |  |   | 22,098,348 |  |   | (27,900  | ) |   | 32,809,404 |  
|Cumulative
      exploration expenditures, December 31, 2004  | $ | 18,519,661 |  | $ | 22,908,651 |  | $ | (173,446 | ) | $ | 41,254,866 |  
|                                                              |   |            |  |   |            |  |   |          |   |   |            |  
|                                                              |   |            |  |   |            |  |   |          |   |   |            |  
|Exploration expenses during 2003                              |   |            |  |   |            |  |   |          |   |   |            |  
|Assays and analysis                                           | $ | 183,350    |  | $ | 2,746      |  | $ |         |   | $ | 186,096    |  
|Drilling                                                      |   | 4,920,811  |  |   | 5,317      |  |   |         |   |   | 4,926,128  |  
|Engineering                                                   |   | 463,576    |  |   | 27,413     |  |   |         |   |   | 490,989    |  
|Environmental,
      socio-economic and land                  |   | 17,235     |  |   | 86,836     |  |   |         |   |   | 104,071    |  
|Geological                                                    |   | 1,308,197  |  |   | 63,159     |  |   |         |   |   | 1,371,356  |  
|Graphics                                                      |   | 36,944     |  |   | 3,435      |  |   |         |   |   | 40,379     |  
|Property fees and exploration
      option payments           |   | 19,374     |  |   | 263,292    |  |   | 1,454    |   |   | 284,120    |  
|Site activities                                               |   | 269,496    |  |   | 39,696     |  |   | 495      |   |   | 309,687    |  
|Transportation                                                |   | 193,958    |  |   | 20,834     |  |   |         |   |   | 214,792    |  
|                                                              |   | 7,412,941  |  |   | 512,728    |  |   | 1,949    |   |   | 7,927,618  |  
|Stock-based compensation (note 6(c))                          |   | 735,189    |  |   | 50,851     |  |   | 193      |   |   | 786,233    |  
|Incurred during 2003                                          |   | 8,148,130  |  |   | 563,579    |  |   | 2,142    |   |   | 8,713,851  |  
|Cumulative
      exploration expenditures, December 31, 2002  |   | 2,590,826  |  |   | 21,534,769 |  |   | (30,042  | ) |   | 24,095,553 |  
|Cumulative exploration expenditures, December
      31, 2003  | $ | 10,738,956 |  | $ | 22,098,348 |  | $ | (27,900  | ) | $ | 32,809,404 |  

See accompanying notes to consolidated financial
statements.

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2005, 2004 and 2003         
|(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 its principal business
        activity is the exploration and development of mineral property interests.
        The Company’s principal mineral property interests are the Ivanhoe
        Gold Property located in Nevada, United States of America (“USA”),
        and the Burnstone Gold Property located in the Republic of South Africa
        (“South Africa”) (note 5).                                                                                                                                                                       
|
|
|
|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | The Company is in the
        process of exploring its mineral property interests and has not yet determined
        whether its mineral property interests contain economically recoverable
        mineral reserves. The underlying value and the recoverability of the amounts
        shown for mineral property interests are entirely dependent upon the existence
        of economically recoverable mineral reserves, the ability of the Company
        to obtain the necessary financing to complete the exploration and development
        of the mineral property interests, and future profitable production or
        proceeds from the disposition of the mineral property interests.
|
|
|
|
|
|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|2.  | Basis of presentation and
        principles of consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | These financial statements
        have been prepared in accordance with Canadian generally accepted accounting
        principles. A reconciliation of material measurement differences between
        these principles and accounting principles generally accepted in the United
        States is shown in note 10. These consolidated financial statements include
        the accounts of the Company and its wholly-owned subsidiaries.                                                                                                                                                                                                                                                        
|
|
|
|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | All material intercompany balances
        and transactions have been eliminated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|3.  | Significant accounting policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(a) | Cash and equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | Cash and equivalents
        consist of cash and highly liquid investments, having maturity dates of
        three months or less from the date of acquisition, that are readily convertible
        to known amounts of cash.                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(b) | Short-term investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | Short-term investments
        include highly liquid investments with terms to maturity of three to twelve
        months when purchased. Short-term investments are carried at the lower
        of cost plus accrued interest and quoted fair market value.                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(c) | Reclamation deposits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | Reclamation deposits are recorded
        at cost.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2005, 2004 and 2003         
|(Expressed in Canadian
      Dollars unless otherwise stated)

|(d) | Investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Investments capable of reasonably prompt liquidation
        are carried at the lower of cost and quoted fair market value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | The Companys investment in warrants is recorded
        at estimated fair value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Investments where the Company has the ability to exercise
        significant influence are accounted for on the equity basis where the
        investment is initially recorded at cost and subsequently adjusted for
        the Companys share of the income or loss and capital transactions
        of the investee, less provision, if any, for permanent impairment in value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|(e) | Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Equipment is stated at cost less accumulated amortization.
        Amortization is provided on a straight-line basis over three to five years,
        which represents the estimated useful lives of the related equipment.
        Amortization on equipment used directly on exploration projects is included
        in exploration expenses until the related property is placed into production.                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|(f) | Mineral property interests                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | The Company capitalizes mineral property acquisition
        costs on a property-by-property basis. Exploration expenditures and option
        payments incurred prior to the determination of the feasibility of mining
        operations are charged to operations as incurred. Development expenditures
        incurred subsequent to such determination, to increase production, or
        to extend the life of existing production are capitalized, except as noted
        below. Such acquisition costs and deferred development expenditures are
        amortized over the estimated life of the property, or written off to operations
        if the property is abandoned, allowed to lapse, or if there is little
        prospect of further work being carried out by the Company or its option
        or joint venture partners.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Mineral property acquisition costs include the cash
        consideration and the fair market value of common shares, based on the
        trading price of the shares at the agreement and announcement date, issued
        for mineral property interests, pursuant to the terms of the relevant
        agreement. 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.                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Costs related to the determination of the feasibility
        of a project are expensed as incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Administrative expenditures are expensed as incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | The amount presented for mineral property interests
        represents costs incurred to date and accumulated acquisition costs, less
        write-downs, and does not necessarily reflect present or future values.
        The company does not accrue for asset retirement obligations which are
        the responsibility of an earn-in partner or a party to whom the property
        has been optioned.                                                                                                                                                                                                                                                                                                                                                                                                                                      

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2005, 2004 and 2003         
|(Expressed in Canadian
      Dollars unless otherwise stated)

|(g) | Share capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | The Company records proceeds from share issuances
        net of issue costs. Shares issued for consideration other than cash are
        valued at the quoted market price on the date the agreement to issue the
        shares was reached.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(h) | Foreign currency translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | All of the Companys foreign operations are considered
        integrated with those of the Companys domestic operations and use
        the Canadian dollar as their functional currency.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Monetary assets and liabilities denominated in a foreign
        currency are translated into Canadian dollars at exchange rates in effect
        at the balance sheet date. Non-monetary assets and liabilities are translated
        at historical exchange rates unless such items are carried at market,
        in which case they are translated at the exchange rates in effect on the
        balance sheet date. Revenues and expenses, except 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.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(i) | Loss per common share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Basic loss per common share is calculated by dividing
        the loss available to common shareholders by the weighted average number
        of common shares outstanding during the 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 the Companys case, basic and diluted loss
        per share are the same as the effect of the outstanding warrants (note
        6(d)) and stock options (note 6(c)) would be anti-dilutive.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(j) | Fair value of financial instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | The carrying amounts of cash and equivalents, amounts
        receivable, reclamation deposits, and accounts payable and accrued liabilities
        approximate their fair values due to their short term nature. The fair
        value of amounts due to and from related parties is not determinable due
        to the related party nature and the lack of a market for such balances.                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | The fair value of investments at December 31, 2005
        is estimated to be $179,000 (2004  $226,000).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Fair value estimates are made at the date of issuance,
        and at the balance sheet date, based on relevant market information and
        information about the financial instruments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2005, 2004 and 2003         
|(Expressed in Canadian
      Dollars unless otherwise stated)

|(k) | Use of estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | The preparation of financial statements requires management
        to make estimates and assumptions that affect the reported amounts of
        assets and liabilities and disclosure of contingent assets and liabilities
        at the date of the financial statements and the reported amounts of revenues
        and expenses during the reporting period. Significant areas requiring
        the use of management estimates relate to impairment of mineral property
        interests, determination of reclamation obligations, assumptions used
        in determining the fair value of non-cash stock-based compensation and
        warrants and determination of valuation allowances for future income tax
        assets and future income tax liabilities. Actual results could differ
        from these estimates.                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(l) | Segment disclosure                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | The Company operates in a single segment, being the
        exploration and development of mineral properties within the geographic
        areas disclosed in note 9. Other than exploration expenses and mineral
        property acquisition costs, which are disclosed in the schedule of exploration
        expenses and in note 5 respectively, substantially all of the Companys
        net expenses are incurred in Canada.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(m) | Stock-based compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | The Company has a share option plan which is described
        in note 6(c). The Company records all stock-based payments using the fair
        value method.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | Under the fair value method, stock-based payments
        are measured at the fair value of the consideration received or the fair
        value of the equity instruments issued or liabilities incurred, whichever
        is more reliably measurable, and are charged to operations over the vesting
        period. The offset is credited to contributed surplus.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | Consideration received on the exercise of stock options
        is recorded as share capital and the related contributed surplus is transferred
        to share capital.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(n) | 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 income tax
        assets also result from unused loss carry forwards and other deductions.
        Future tax assets are recognized to the extent that they are considered
        more likely than not to be realized. The carrying value of future income
        tax assets is adjusted, if necessary, by the use of a valuation allowance
        to reflect the estimated realizable amount.

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2005, 2004 and 2003         
|(Expressed in Canadian
      Dollars unless otherwise stated)

|(o) | Asset retirement obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | The Company recognizes statutory, contractual or other
        legal obligations related to the retirement of tangible long-lived assets
        when such obligations are incurred, if a reasonable estimate of fair value
        can be made. These obligations are measured initially at fair value and
        the resulting costs capitalized to the carrying value of the related asset.
        In subsequent periods, the liability is adjusted for any changes in the
        amount or timing and for the discounting of the underlying future cash
        flows. The capitalized asset retirement cost is amortized to operations
        over the life of the asset.                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|(p) | Adoption of new accounting standard for variable
        interest entities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Effective January 1, 2005, the Company adopted the Canadian
        Institute of Chartered Accountants (CICA) Accounting Guideline
        15, "Consolidation of Variable Interest Entities" ("AcG15") on a prospective
        basis. AcG15 prescribes the application of consolidation principles for
        entities that meet the definition of a variable interest entity (VIE).
        An enterprise holding other than a voting interest in a VIE could, subject
        to certain conditions, be required to consolidate the VIE if it is considered
        its primary beneficiary whereby it would absorb the majority of the VIEs
        expected losses, receive the majority of its expected residual returns,
        or both. The adoption of this new standard had no effect on the consolidated
        financial statements as management has determined the Company does not
        have any variable interest entities.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|(q) | Comparative figures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Certain of the prior years comparative figures
        have been restated to conform with the presentation adopted for the current
        year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

|4. | Equipment
|-- | ---------

December
        31, 2005
      
      
      December 31, 2004NetAccumulated
      
      
      
      
      
      
      
      
      Accumulated
      
      
      bookCost
      
      
      amortization
      
      
      Net book value
      
      
      Cost
      
      
      amortization
      
      
      valueComputer
      $
      133,388
      
      $
      128,835
      
      $
      4,553
      
      $
      127,795
      
      $
      127,795
      
      $
      Field
      
      351,360
      
      
      349,833
      
      
      1,527
      
      
      349,631
      
      
      349,631
      
      
      Office
      
      300,678
      
      
      300,678
      
      
      
      
      
      300,678
      
      
      300,678
      
      
      $
      785,426
      
      $
      779,346
      
      $
      6,080
      
      $
      778,104
      
      $
      778,104
      
      $
      


---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2005, 2004 and 2003         
|(Expressed in Canadian
      Dollars unless otherwise stated)

|5. | Mineral property interests
|-- | --------------------------

| | Mineral Property Acquisition Costs, net  |   | December 31 |  |   | December 31 | 
| | ---------------------------------------- | - | ----------- |  | - | ----------- | 
| |                                          |   | 2005        |  |   | 2004        | 
| |                                          |   |             |  |   |             | 
| | Ivanhoe Gold Property (note 5(a))        | $ | 3,945,348   |  | $ | 3,945,348   | 
| | Burnstone Gold Property (note 5(b))      |   | 94,684,650  |  |   | 94,684,650  | 
| | Casino Property (note 5(c))              |   | 1           |  |   | 1           | 
| | Kirkland Lake Property
      (note 5(d)) |   | 1           |  |   | 1           | 
| |                                          |   |             |  |   |             | 
| |                                          | $ | 98,630,000  |  | $ | 98,630,000  | 

|(a) | Ivanhoe Gold Property, Elko County, Nevada, United
        States of America
|--- | ----------------------------------------------------------------------------

| |                                        |   | December 31 |  |   | December 31 | 
| | -------------------------------------- | - | ----------- |  | - | ----------- | 
| |                                        |   | 2005        |  |   | 2004        | 
| | Balance, beginning and end of the year | $ | 3,945,348   |  | $ | 3,945,348   | 

From 1997 to 1999, the Company acquired
  a 100% working interest in the Ivanhoe Property on the Carlin Trend in Nevada
  from Newmont Exploration Limited ("Newmont").

As part of the acquisition agreement,
  Newmont agreed to manage and complete an approved mine closure plan for the
  1.1 square mile area of former mining operations and to fund up to US$4.5 million
  in closure costs. The agreement provided that overruns beyond the US$4.5 million
  would be funded 25% by Newmont and 75% by the Company up to a total overrun
  of US$1.5 million, and thereafter 75% by Newmont and 25% by the Company. The
  Company paid US$77,725 over the period 2000 to 2004 as its share of the overruns.
  No amounts were required to be paid in respect of 2005.

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

In August 2002, the Company entered into
  Earn-In and Joint Operating Agreements (the Earn-In Agreement) with
  Hecla Ventures Corp. ("Hecla"), an affiliate of Hecla Mining Company. These
  agreements provided that Hecla would vest in a 50% working interest in the Hollister
  Development Block (HDB), which is a portion of the Ivanhoe Property,
  subject to a purchase royalty in favor of Great Basin, provided that Hecla funded
  a US$21.8 million two-stage advanced exploration and development program, or
  otherwise achieved commercial production from the HDB, which subsequently, has
  been amended in February 2006 to be a condition of earning a 50% working interest
  (see below), and issued 4 million Hecla Mining Company share purchase warrants
  (the "Hecla Warrants") to Great Basin. In 2002, 2 million share purchase warrants
  exercisable at US$3.73 per share were issued by Hecla to the Company.

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2005, 2004 and 2003         
|(Expressed in Canadian
      Dollars unless otherwise stated)

One million Hecla Warrants are required
  to be issued to the Company upon Hecla proceeding to Stage 2 activities, and
  the remaining 1 million Hecla Warrants are issuable upon the completion of Stage
  2 and completion of the earn-in.

During 2003, the 2 million Hecla Warrants
  issued in 2002 were exercised for shares which were subsequently sold by the
  Company. The net proceeds of $6,312,426 received resulted in a gain of $4,379,426
  which was reflected in the results of operations during 2003.

Concurrent with the issuance of the Hecla
  Warrants, the Company was required to issue 2 million share purchase warrants
  (the "Great Basin Warrants") to Hecla. In 2002, 1 million share purchase warrants
  were issued by the Company to Hecla (note 6(d)). The remaining 1 million Great
  Basin Warrants are required to be issued in two tranches of 500,000 warrants
  per tranche concurrent with the issuance of the remaining 2 million Hecla Warrants.

Beginning in 2002, Hecla conducted engineering
  and permitting work in furtherance of an underground development program and
  obtained the necessary permits to complete the Stage 1 underground development,
  drilling, and pre-feasibility work. Prior to the Earn-In Agreement Amendment
  (“EIA Amendment”) (see below), the program budget for Stage 1 was
  agreed in the 2002 Earn-In Agreement to cost US$10.3 million, with work to be
  completed in the approximately 12 month period after the required work permits
  were issued. Such permits were issued in May 2004. Hecla commenced physical
  work on the site in October 2004. To vest its 50% working interest, Hecla was
  required, upon completion of Stage 1, to elect to proceed to Stage 2 within
  60 days. Following such an election, the Stage 2 program of US$11.5 million
  was required to be completed by August 2, 2006, to consist of underground production
  development and procurement of production equipment and surface facilities,
  with an overall goal to develop the HDB to the point of commercial production.
  The EIA Amendment has modified the above such that the requirement is now for
  Hecla to complete and fully fund, with no cap, Stage 1 activities by March 2007
  and that both Hecla and Great Basin are to share the costs of Stage 2 activities.

Under the 2002 Earn-In Agreement, Hecla
  is the operator of the Stage 1 and Stage 2 work programs, and would continue
  as the operator under production.

Subsequent to December 31, 2005, in February
  2006, the Company and Hecla signed an Earn-In Agreement Amendment which resulted
  in modifications to the 2002 Earn-In Agreement. The main modifications are as
  follows:

| | (i)   | Hecla commits to complete and fund 100% of the remaining
        Stage 1 earn-in activities by March 31, 2007.                                                                                                                                                                                                                                                                                                   
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (ii)  | Hecla is to fund Great Basin’s share of any Stage
        2 activities until such time that a feasibility study has been delivered
        to Great Basin. Upon such time, Great Basin will reimburse its share of
        Stage 2 costs to Hecla. Stage 2 activities are those which consist primarily
        of the development of the HDB into a mining operation, and lead to commercial
        production.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (iii) | If the decision is made to develop and operate a mine,
        Hecla must achieve commercial production by August 2, 2009, as a condition
        of earning a 50% working interest in the project.                                                                                                                                                                                                              
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (iv)  | Hecla is entitled to the proceeds of the first 50,000
        ounces of gold (or equivalent) up to the actual costs of Stage I activities,
        not to exceed $25.07 million, from pre-production Stage 1 activities.
        Thereafter any pre-production revenues will be equally shared.                                                                                                                  

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2005, 2004 and 2003         
|(Expressed in Canadian
      Dollars unless otherwise stated)

| | (v) | Hecla and Great Basin agree to terminate the current
        litigation between themselves and execute mutual releases from any action
        or claim arising to February 28, 2006 in connection with the 2002 Earn-in
        Agreement. The litigation was initiated in April 2005 when Hecla applied
        for a declaratory judgment in connection with the 2002 Earn-In Agreement
        and which application Great Basin was opposing.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

As at December 31, 2005 and 2004, the
  Company had posted $59,080 and $60,249 respectively in reclamation deposits
  with the Bureau of Land Management ("BLM") in respect of exploration drilling
  on certain areas of the Ivanhoe Property. These deposits will be released by
  the BLM upon the conclusion of the exploration and related reclamation programs
  on these areas.

In 2003, the Company entered into an
  agreement with Atna Resources Ltd. ("Atna") whereby the Company could acquire
  a 70% interest in Atnas Golden Cloud Property, located in Elko County,
  Nevada, by spending US$2.5 million on exploration and development over five
  years, making certain cash payments to Atna, and by assuming underlying option
  and property maintenance payments. During the year ended December 31, 2004,
  the Company chose not to continue further exploration work at the Golden Cloud
  Property and terminated the option.

|(b) | Burnstone Gold Property, Republic of South Africa
|--- | -------------------------------------------------

| |                                                       |   | December 31 |  |   | December 31 | 
| | ----------------------------------------------------- | - | ----------- |  | - | ----------- | 
| |                                                       |   | 2005        |  |   | 2004        | 
| |                                                       |   |             |  |   |             | 
| | Balance, beginning of the year                        | $ | 94,684,650  |  | $ | 26,722,743  | 
| |                                                       |   |             |  |   |             | 
| | Tranche Two:                                          |   |             |  |   |             | 
| | Issuance of 11 million common shares at $2.98         |   |            |  |   | 32,780,000  | 
| | Issuance of 5.5 million share
      purchase warrants |   |            |  |   | 11,360,000  | 
| | Finder's fees                                         |   |            |  |   | 125,040     | 
| | Future income tax provision                           |   |            |  |   | 23,696,867  | 
| |                                                       |   |             |  |   |             | 
| | Balance, end of the year                              | $ | 94,684,650  |  | $ | 94,684,650  | 

In November 2002, the Company entered
  into an option agreement (the "Option to Purchase Agreement") with Southgold
  Exploration (Proprietary) Limited (Southgold) and the then shareholders
  of Southgold (the Former Southgold Shareholders) to purchase on
  a staged basis, up to 100% of Southgold. Southgold is a private South African
  company that at the time held rights to acquire a 100% interest in a part of
  the Burnstone Gold Property covering approximately 265 square kilometers of
  the Witwatersrand goldfield in the Republic of South Africa, subject to a statutory
  requirement that a percentage of its equity or of the property be owned by Historically

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2005, 2004 and 2003         
|(Expressed in Canadian
      Dollars unless otherwise stated)

Disadvantaged South Africans (HDSA).
  Under South African mineral legislation, Southgold must achieve an HDSA ownership
  target of 15% by April 2009 and 26% by April 2014.

Upon signing the Option to Purchase Agreement
  the Company paid US$1.25 million ($2,007,561) to the Former Southgold Shareholders
  and also agreed to conduct a US$1.5 million work program prior to April 30,
  2003, which was completed. The Company exercised its option to purchase the
  shares of the Former Southgold Shareholders and completed the purchase of Southgold
  by making payments of cash and Great Basin common shares and share purchase
  warrants to the Former Southgold Shareholders in two staged tranches, as described
  below.

The Great Basin shares issued to the
  Former Southgold Shareholders pursuant to the two tranches are subject to a
  voting trust agreement, pursuant to which the holders have undertaken to vote
  with Great Basin management until the earlier of (i) April 30, 2008, or (ii)
  the time they dispose of such shares in accordance with the Option to Purchase
  Agreement. Additional Great Basin shares may become issuable by Great Basin
  to the Former Southgold Shareholders depending on certain outcomes with respect
  to the Bankable Feasibility Study (as defined in the Option to Purchase Agreement)
  on the Burnstone Project (as described below). The Former Southgold Shareholders
  are entitled to nominate two members to the Board of Directors of the Company,
  of which one has been nominated and elected.

In accordance with the Option to Purchase
  Agreement the Company also undertook:

| | (a) | to pay to the Former Southgold Shareholders
        in cash an amount equal to the consideration paid to Southgold by Tranter
        Investments (Proprietary) Limited (Tranter), a black economic
        empowerment (BEE) company, (or any other BEE entity selected
        by the parties to the Option to Purchase Agreement) for the right to participate
        in the Burnstone Project. This amount would be 20% of the net present
        value of the Burnstone Project (determined by applying a discount rate
        of 9%), but in any case would be a minimum of South African Rand (ZAR)
        15 million and a maximum of ZAR 22.5 million;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (b) | to pay the following additional consideration
        to the Former Southgold Shareholders with respect to the Bankable Feasibility
        Study:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2005, 2004 and 2003         
|(Expressed in Canadian
      Dollars unless otherwise stated)

or equal to US$150, the Company will
  issue to the Southgold Shareholders a further 500,000 common shares of the Company.

The Company's mineral rights, other than
  those acquired from GFL and Randex (see (iii) below), are held under option
  with "old order" mineral right holders, the State, or Municipalities. The Company
  is in the process of converting the "old order" rights to "new order" rights.
  In the event that all mineral right options are exercised and the options are
  exercised at the very end of each contract, the maximum cost to the Company
  would be approximately ZAR 93 million (approximately $17 million). The Company
  may elect to exercise certain of the options before the end of each contract
  (when they are less expensive to exercise), or not at all, depending on future
  exploration program results.

| | (i)  | Tranche One of the Southgold Option to Purchase Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |      | On April 30, 2003, the Company exercised tranche one
        of the Option to Purchase Agreement and acquired the right to 49% of the
        outstanding common shares of Southgold for payments totalling US$2 million
        ($2,768,990) cash and the issuance of 10 million Great Basin common shares
        and 5 million Great Basin share purchase warrants. The shares were valued
        at their quoted market value and the warrants were valued at their estimated
        fair value. A finders fee, to a maximum of US$1 million, was payable
        as the Company acquired Southgold and made expenditures on the Burnstone
        Gold Property. This finder's fee totalling US$1 million ($1,258,154) was
        paid in 2003 and was included in acquisition costs.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (ii) | Tranche Two of the Southgold Option to Purchase Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |      | On January 31, 2004, the Company exercised tranche two
        of the Option to Purchase Agreement and issued 11 million Great Basin
        common shares and 5.5 million Great Basin share purchase warrants to acquire
        the remaining 51% of the shares of Southgold. The shares were valued at
        their quoted market value and the warrants were valued at their estimated
        fair value.                                                                                                                                                                                                                                                                                                                                                                               
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |      | The warrants were exercisable at US$0.75 for one year
        from the date of issuance and were subject to an accelerated expiry provision
        under certain circumstances. In January 2005, the 5.5 million share purchase
        warrants issued pursuant to this tranche were exercised by the warrant
        holders, for proceeds to the Company of US$4,125,000 ($5,018,062).                                                                                                                                                                                                                                                                                                                                                                                                    

As Southgold had no material assets or
  liabilities other than its interest in the Burnstone Gold Property, the consideration
  given for the shares of Southgold, including the future income tax effects,
  was allocated to mineral property acquisition costs.

The fair values of the share purchase
  warrants were estimated on the date of the exercise of each tranche using a
  Black-Scholes option pricing model with the following assumptions:

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2005, 2004 and 2003         
|(Expressed in Canadian
      Dollars unless otherwise stated)

Tranche two
      Tranche oneJanuary 31, 2004
      April 30, 2003Risk free interest rate
      3%
      3%Expected life
      1.0 years
      1.0 yearsExpected volatility
      78%
      85%Expected dividends
      nil
      nilExercise price
      US$0.75
      US$0.75Market price
      C$2.98
      C$1.38


(iii) Acquisition costs of mineral
  rights from GFL and Randex

On October 10, 2003, pursuant to a prospecting
  agreement (the Prospecting Agreement) dated October 17, 2000 between
  GFL Mining Services Limited (GFL), Randex Limited (Randex),
  and Southgold, Southgold elected to purchase certain mineral rights held by
  GFL and Randex totaling 11,563 hectares within the Burnstone Property which
  were not covered under Southgold's then-existing rights, for ZAR 35 million
  ($6,695,598) subject to a net smelter return royalty ranging from 1% to 2% (tiered
  to the gold price), and payable to GFL. The Company funded Southgold's purchase
  of these rights. Current South African legislation abolishes private ownership
  of mineral rights (and, possibly, royalties which are bound with those rights)
  and replaces them with a system which vests mineral tenure in the State. Under
  the terms of the Prospecting Agreement, in the event of a change in the mineral
  rights regime in South Africa, the parties agreed to negotiate amendments to
  the Prospecting Agreement, if possible without causing undue hardship to each
  of the parties.

(iv) Heads-Of Agreement

Prior to the Company entering into the
  Option to Purchase Agreement, Southgold entered into a joint venture agreement
  (the Previous Tranter Agreement) with Tranter, whereby Tranter was
  granted an option, exercisable on completion of a Bankable Feasibility Study,
  to acquire a 20% participating interest in the Burnstone Project. One of the
  objectives of the Previous Tranter Agreement was to ensure fulfillment by the
  Company of the BEE ownership requirements in relation to the Burnstone Project
  under South Africas new mineral tenure legislation, which require participation
  by BEE entities (such as Tranter) in mineral projects as a condition of ongoing
  security of mineral tenure. The Previous Tranter Agreement was subject to the
  satisfaction by Tranter of certain conditions by March 31, 2003, certain of
  which were not met and, consequently the Previous Tranter Agreement expired.

In April 2005, Tranter, Southgold and
  the Company signed an agreement (the Heads of Agreement), which
  created a new framework for the Company to fulfill the BEE ownership requirements
  in relation to the Burnstone Project. The Heads of Agreement set out the terms
  whereby Tranter may, subject to certain conditions, acquire an interest in Southgold.
  Such interest shall be acquired at a consideration yet to be determined. Completion
  of the transaction is subject to a number of conditions, including the negotiation
  of definitive agreements.

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2005, 2004 and 2003         
|(Expressed in Canadian
      Dollars unless otherwise stated)

(v) Puma Option

Puma Gold (Proprietary) Limited ("Puma")
  is a private South African company which holds prospecting and option contracts
  over four portions of the farm Doornhoek 577 IR located on the eastern edge
  of the Burnstone Property, of which one portion was dropped by the Company in
  October 2004. These options give Puma the right to explore and acquire certain
  mineral rights on this farm. Pursuant to the Option to Purchase Agreement, the
  Company agreed to fund 1,500 meters of exploration drilling and related assaying
  work and other direct exploration costs totaling US$100,000 ($120,000) on this
  property. To December 31, 2005, the exploration spending and drilling commitments
  had been met.

The Company may acquire 100% of the
  shares of Puma by paying US$2 per proven, probable, and indicated ounce of gold
  (adjusted for mining and geological dilution) determined in a bankable feasibility
  study, to a maximum of US$500,000.

|(c) | Casino Property, Whitehorse Mining District, Yukon,
        Canada                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | The Company owns a group of 161 mineral claims, some
        of which are subject to a 5% net profits from production royalty. During
        May 2000, the Company granted an option whereby Wildrose Resources Ltd.,
        the optionee, could earn the right to purchase 55 claims for $1 on the
        20th anniversary of the option agreement. As consideration, the optionee
        agreed to incur all annual filing fees and assessment work on the 55 claims
        under option and 83 other claims. Alternatively, the optionee may purchase
        the 55 claims for a one time payment of $200,000 without further obligation
        in respect of the Companys 83 claims. Should the optionee acquire
        the 55 claims, the optionee would be subject to a further 5% net profits
        interest, payable to the Company.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | On July 15, 2002, the Company agreed to option the Casino
        Property to Lumina Copper Corp. ("Lumina") (formerly CRS Copper Resources
        Ltd.), subject to existing net profits royalty agreements and the Wildrose
        option agreement on a portion of the Casino property. Under the terms
        of the agreement, Great Basin granted Lumina an option (the "Option")
        to purchase 100% of Great Basins interest in the claims and interests
        comprising the property for $1,000,000 (plus applicable taxes), payable
        at the option of Lumina in cash or Lumina common shares, provided that
        Lumina shares are listed on a recognized stock exchange and have certain
        minimum trading volumes.                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | The Option may be exercised at any time to July 15,
        2007, subject to written notice and confirmation that the terms of the
        Option have been met. Lumina was required to make interim option payments
        to Great Basin at the time that Lumina is listed on a stock exchange,
        of warrants to purchase 100,000 shares for a period of two years at an
        exercise price which reflects the maximum discount for the prevailing
        Lumina market price permitted by the policies of the relevant stock exchange.
        Lumina would issue further warrants on each anniversary date thereafter
        to a maximum of warrants to purchase 300,000 Lumina shares.                                                                                                                                              

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2005, 2004 and 2003         
|(Expressed in Canadian
      Dollars unless otherwise stated)

In June 2003, Lumina listed on the TSX
  Venture Exchange and accordingly, the Company received a first tranche of warrants
  to purchase 100,000 shares at an exercise price of $1.80 until May 23, 2005.
  These warrants were exercised by the Company in October 2003 and the related
  shares were then sold. In May 2004, the Company received a second tranche of
  warrants to purchase 100,000 shares at an exercise price of $5.80 until May
  21, 2006. These warrants were recorded as investments with an estimated fair
  value of $271,000 (using an expected volatility of 85%, risk free interest rate
  of 3%, dividends of nil, and a life of 2 years). In February 2005, these warrants
  were exercised by the Company and the related shares were sold.

In March 2005, the Company received from
  Lumina a third tranche of warrants to purchase 100,000 shares at an exercise
  price of $9.22 until March 14, 2007. These warrants were recorded as investments
  with an estimated fair value of $345,000 (using an expected volatility of 77%,
  risk free interest rate of 3%, dividends of nil and a life of approximately
  2 years).

In May 2005, Lumina completed a statutory
  plan of arrangement to reorganize into four separate companies (Regalito Copper
  Corp., Northern Peru Copper Corp., Lumina Resources Corp., and Global Copper
  Corp.), of which all except Global Copper Corp. are listed on the TSX. Pursuant
  to the terms of the Lumina plan of arrangement, upon exercise of each warrant
  the Company will receive one common share of each of the four companies. The
  exercise price remained unchanged. On February 14, 2006 the Company and Regalito
  Copper Corp. (Regalito), the successor company to Lumina, agreed
  to cancel these warrants and replace them with the following, which each may
  be exercised until March 14, 2007:

- 100,000 warrants of Northern Peru Copper Corp. exercisable at a price of
    $0.06 per share
- 100,000 warrants of Lumina Resources Corp. exercisable at a price of $0.07
    per share
- 100,000 warrants of Global Copper Corp. exercisable at a price of $0.31
    per share

Also pursuant to the February 14, 2006
  agreement, the Company and Regalito agreed that in the event, at any time prior
  to March 14, 2007, the shares of Regalito are purchased by a third party pursuant
  to a takeover bid or a similar acquisition for an amount greater than $8.78
  per share, Regalito will pay to the Company, the difference between such price
  and $8.78 multiplied by 100,000.

At December 31, 2005, the estimated fair
  value of the block of Lumina warrants was estimated at $179,000 (using expected
  volatilities averaging 85%, risk free interest rate of 3%, dividends of nil
  and remaining life of approximately 1.2 years). Consequently, a mark-to-market
  adjustment of $166,000 was charged to operations during the year ended December
  31, 2005.

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2005, 2004 and 2003         
|(Expressed in Canadian
      Dollars unless otherwise stated)

Lumina warrants:
      
      Number of
      
      
      Carryingwarrants
      
      
      valueReceived, May 2004
      
      100,000
      
      $
      271,000Balance at December 31, 2004
      
      100,000
      
      
      271,000Exercised, February 2005
      
      (100,000
      )
      
      (271,000
      )Received, March 2005
      
      100,000
      
      
      345,000Mark-to-market adjustments, 2005
      
      
      
      
      (166,000
      )Balance, December 31, 2005
      
      100,000
      
      $
      179,000


|    | Lumina has the right to conduct exploration work on,
        or in respect of, the Casino Property at its cost, or to make payments
        in lieu to keep the property in good standing during the period of the
        Option. If Lumina elects to terminate the agreement without exercising
        the Option or allows it to lapse, Lumina must pay to Great Basin a "break
        fee" of $25,000 (plus applicable taxes). If the Option is not exercised
        and is terminated, Lumina is required to pay property holding costs for
        a minimum period of two years from the effective date of termination.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | In the event the Option is exercised and a decision
        is made to put the Casino Property into commercial production, Lumina
        agreed to pay Great Basin $1 million (plus applicable taxes) within 30
        days of that decision.                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|(d) | Kirkland Lake Property, Ontario, Canada                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | In 1992, the future economic benefit of the Kirkland
        Lake property became uncertain, and while the property was not abandoned,
        there were no plans 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2005, 2004 and 2003         
|(Expressed in Canadian
      Dollars unless otherwise stated)

|6. | Share capital
|-- | -------------

|(a) | Authorized share capital                                                                                          
|--- | ------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                   
|    | The Companys authorized share capital consists
        of an unlimited number of common shares without par value.
|    |                                                                                                                   
|(b) | Issued and outstanding common shares                                                                              

| |                                                                          |  | Number of  |  |   |             | 
| | ------------------------------------------------------------------------ |  | ---------- |  | - | ----------- | 
| |                                                                          |  | Shares     |  |   | Amount      | 
| | Balance, December 31, 2002                                               |  | 46,861,364 |  | $ | 66,757,818  | 
| | Share purchase options exercised (note 6(c))                             |  | 3,636,600  |  |   | 5,204,175   | 
| | Fair value of stock options allocated
      to shares issued on exercise |  |           |  |   | 430,000     | 
| | Share purchase warrants exercised (note 6(d))                            |  | 6,541,943  |  |   | 9,883,994   | 
| | Private placement, January 2003,
      net of issue costs (note 6(f))    |  | 5,600,000  |  |   | 9,416,731   | 
| | Shares issued for Burnstone Gold Property, May
      2003                |  |            |  |   |             | 
| | (note 5(b))                                                              |  | 10,000,000 |  |   | 13,800,000  | 
| | Balance, December 31, 2003                                               |  | 72,639,907 |  |   | 105,492,718 | 
| | Fair value of stock options allocated
      to shares issued on exercise |  |           |  |   | 239,915     | 
| | Share purchase options exercised (note 6(c))                             |  | 835,700    |  |   | 969,580     | 
| | Share purchase warrants exercised
      (note 6(d))                      |  | 2,137,772  |  |   | 3,859,240   | 
| | Shares issued for Burnstone Gold Property, January
      2004            |  |            |  |   |             | 
| | (note 5(b))                                                              |  | 11,000,000 |  |   | 32,780,000  | 
| | Balance, December 31, 2004                                               |  | 86,613,379 |  |   | 143,341,453 | 
| | Share purchase options exercised
      (note 6(c))                       |  | 1,572,000  |  |   | 1,509,120   | 
| | Share purchase warrants exercised (note 6(d))                            |  | 5,500,000  |  |   | 5,018,062   | 
| | Warrants allocated to share capital on exercise                          |  |           |  |   | 11,360,000  | 
| | Balance, December
      31, 2005                                         |  | 93,685,379 |  | $ | 161,228,635 | 

|(c) | Share option plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The Company has a share option plan approved by the
        shareholders that allows it to grant options, subject to regulatory terms
        and approval, to its 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. 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.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | A new share option plan was approved by the Board and
        by the shareholders in 2005. The new share option plan (the "2005 Rolling
        Option Plan") is based on the 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. Pursuant to the 2005 Rolling Option
        Plan, if outstanding options are                                                                                                                                                                                                                                                                                                                                          

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2005, 2004 and 2003         
|(Expressed in Canadian
      Dollars unless otherwise stated)

exercised, or expire, and/or the number
  of issued and outstanding common shares of the Company increases, then the options
  available to grant under the plan increase proportionately.

The continuity of share purchase options
  is as follows:

Weighted
      
      Contractualaverage
      
      weighted averageexercise
      Number of
      remaining lifeprice
      options
      (years)Balance, December 31, 2002
      $1.24
      6,650,100
      2.38Granted
      $1.83
      2,667,500Exercised
      $1.43
      (3,636,600)Balance, December 31, 2003
      $1.39
      5,681,000
      2.20Granted
      $1.68
      2,960,000Exercised
      $1.16
      (835,700)Cancelled
      $2.61
      (70,000)Balance, December 31, 2004
      $1.52
      7,735,300
      2.07Granted
      $1.15
      1,480,000Exercised
      $0.96
      (1,572,000)Expired
      $1.88
      (2,091,300)Cancelled
      $1.88
      (310,000)Balance, December 31, 2005
      $1.41
      5,242,000
      2.60


Options outstanding at December 31, 2005
  are as follows:

Number of
      Number ofExercise
      options
      optionsExpiry date
      price
      outstanding
      exercisableNovember 30, 2006
      $1.59
      180,000
      180,000November 30, 2006
      $1.75
      410,000
      410,000November 30, 2006
      $1.62
      100,000
      100,000September 28, 2007
      $1.15
      685,000
      315,000December 20, 2007
      $1.17
      1,072,000
      1,072,000December 14, 2007
      $1.14
      15,000
      December 19, 2008
      $1.62
      2,100,000
      2,100,000December 31, 2010
      $1.14
      680,000
      226,700Total
      
      5,242,000
      4,403,700Average option price
      
      $1.41


---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2005, 2004 and 2003         
|(Expressed in Canadian
      Dollars unless otherwise stated)

The following table summarizes information
  about share purchase options outstanding at December 31, 2005:

Options outstanding
      
      Options exercisableNumber
      Weighted
      Weighted
      Number
      Weightedoutstanding at
      average
      average
      exercisable at
      averageRange of exercise
      December 31
      remaining
      exercise
      December 31
      exerciseprices
      2005
      contractual life
      price
      2005
      price$1.00 to $1.24
      2,452,000
      2.75 years
      $1.16
      1,613,700
      $1.16$1.50 to $1.74
      2,380,000
      2.73 years
      $1.62
      2,380,000
      $1.62$1.75 to $1.99
      410,000
      0.92 years
      $1.75
      410,000
      $1.755,242,000
      2.60
        years
      $1.41
      4,403,700
      $1.46


The exercise prices of all share purchase
  options granted during each year were at or above the market price at the grant
  date. Using an option pricing model with the assumptions noted below, the estimated
  fair value of all options granted for the years ended December 31, 2005, 2004
  and 2003, which have been reflected in the consolidated statements of operations,
  is as follows:

| |                                                   |   | Years ended December 31 |  
| | ------------------------------------------------- | - | ----------------------- | -
| |                                                   |   | 2005                    |  
| | Exploration                                       |   |                         |  
| | Engineering                                       | $ | (9,843                  | )
| | Environmental, socioeconomic and land             |   |                        |  
| | Geological                                        |   | 28,626                  |  
| | Exploration                                       |   | 18,783                  |  
| | Operations and administration                     |   | 457,373                 |  
| | Total compensation cost recognized in operations, |   |                         |  
| | credited to contributed surplus                   | $ | 476,156                 |  

The grant date fair value of options
  granted during the year ended December 31, 2005 was $0.61 (2004  $0.82;
  2003  $1.00) .

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

Years ended December 312005
      2004
      2003Risk free interest rate
      3%
      3%
      3%Expected life
      2.4 years
      2.6 years
      2.2 yearsExpected volatility
      55%
      64%
      85%Expected dividends
      nil
      nil
      nil


---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2005, 2004 and 2003         
|(Expressed in Canadian
      Dollars unless otherwise stated)

|(d) | Share purchase warrants                                            
|--- | -------------------------------------------------------------------
|    |                                                                    
|    | The continuity of the number of share purchase warrants
        is:

Financial statement notereference
      
      5(a)
      
      
      
      
      
      5(b)(i)
      
      
      5(b)(ii)Expiry date
      
      August 2
      
      
      January 30
      
      
      April 30
      
      
      January 312004
      
      
      2004
      
      
      2004
      
      
      2005Exercise price
      $
      1.55
      
      $
      1.80
      
      
      US$0.75
      
      
      US$0.75
      
      
      TOTALBalance, Dec. 31, 2002
      
      1,000,000
      
      
      
      
      
      
      
      
      
      
      
      6,742,327Issued
      
      
      
      
      3,304,000
      
      
      5,000,000
      
      
      
      
      
      8,304,000Exercised
      
      
      
      
      (1,416,228
      )
      
      (5,000,000
      )
      
      
      
      
      (6,541,943
      )Expired
      
      
      
      
      
      
      
      
      
      
      
      
      
      (5,616,612
      )Balance, Dec. 31, 2003
      
      1,000,000
      
      
      1,887,772
      
      
      
      
      
      
      
      
      2,887,772Issued
      
      
      
      
      
      
      
      
      
      
      5,500,000
      
      
      5,500,000Exercised
      
      (250,000
      )
      
      (1,887,772
      )
      
      
      
      
      
      
      
      (2,137,772
      )Expired
      
      (750,000
      )
      
      
      
      
      
      
      
      
      
      
      (750,000
      )Balance, Dec. 31, 2004
      
      
      
      
      
      
      
      
      
      
      5,500,000
      
      
      5,500,000Exercised
      
      
      
      
      
      
      
      
      
      
      (5,500,000
      )
      
      (5,500,000
      )Balance, Dec. 31, 2005
      
      
      
      
      
      
      
      
      
      
      
      
      
      


The continuity of the value of warrants
  on the consolidated balance sheets is as follows:

| | Balance, December 31, 2002                                        | $ | 295,000     |  
| | ----------------------------------------------------------------- | - | ----------- | -
| | Changes during 2003                                               |   |             |  
| | Warrants issued for Burnstone
      Gold Property (note 5(b)(i))  |   | 2,200,000   |  
| | Exercised
      during 2003, credited to share capital            |   | (2,200,000  | )
| | Balance, December 31, 2003                                        |   | 295,000     |  
| | Changes during 2004                                               |   |             |  
| | Exercised during 2004, credited
      to share capital            |   | (73,750     | )
| | Expired during 2004, credited to contributed surplus              |   | (221,250    | )
| | Warrants issued for Burnstone Gold Property
      (note 5(b)(ii)) |   | 11,360,000  |  
| | Balance, December 31, 2004                                        |   | 11,360,000  |  
| | Changes during 2005                                               |   |             |  
| | Exercised
      during 2005, credited to share capital            |   | (11,360,000 | )
| | Balance, December 31, 2005                                        | $ |            |  

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2005, 2004 and 2003         
|(Expressed in Canadian
      Dollars unless otherwise stated)

|(e) | Contributed surplus                                                                           
|--- | ----------------------------------------------------------------------------------------------
|    |                                                                                               
|    | The continuity of contributed surplus on the consolidated
        balance sheet is as follows:

| | Balance, December 31, 2002                                        | $ | 374,627   |  
| | ----------------------------------------------------------------- | - | --------- | -
| | Changes during 2003                                               |   |           |  
| | Non-cash stock-based compensation
      (note 6(c))               |   | 2,131,739 |  
| | Share
      purchase options exercised, credited to share capital |   | (430,000  | )
| | Balance, December 31, 2003                                        |   | 2,076,366 |  
| | Changes during 2004                                               |   |           |  
| | Warrants expired unexercised                                      |   | 221,250   |  
| | Non-cash stock-based compensation (note 6(c))                     |   | 2,473,354 |  
| | Share purchase options exercised, credited
      to share capital |   | (239,915  | )
| | Balance, December 31, 2004                                        |   | 4,531,055 |  
| | Changes during 2005                                               |   |           |  
| | Non-cash
      stock-based compensation (note 6(c))               |   | 476,156   |  
| | Balance, December 31, 2005                                        | $ | 5,007,211 |  

The components of contributed surplus
  are:

| |                                                               |   | December 31 |   |   | December 31 |  
| | ------------------------------------------------------------- | - | ----------- | - | - | ----------- | -
| |                                                               |   | 2005        |   |   | 2004        |  
| | Fair value of warrants issued which expired
      unexercised | $ | 221,250     |   | $ | 221,250     |  
| | Accumulated stock-based compensation                          |   | 5,455,876   |   |   | 4,979,720   |  
| | Share purchase options exercised, credited to share capital   |   | (669,915    | ) |   | (669,915    | )
| | Total contributed
      surplus                               | $ | 5,007,211   |   | $ | 4,531,055   |  

|(f) | Private placement financing, January 2003                                                                                                                                                                                                                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                
|    | On January 30, 2003, the Company completed a private
        placement financing of 5,600,000 units at a price of $1.80 per unit. Each
        unit was comprised of one common share and one half of a common share
        purchase warrant. Each common share purchase warrant was exercisable into
        one common share at $1.80 per common share until January 30, 2004.                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                
|    | In connection with the private placement, the Company
        granted to the agents an Option to purchase 336,000 units at $1.80 per
        unit until January 30, 2004. Upon exercise of the Option, the agents were
        issued a total of 336,000 common shares, and warrants to purchase an additional
        168,000 common shares. All of these warrants had been exercised by January
        2004.

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2005, 2004 and 2003         
|(Expressed in Canadian
      Dollars unless otherwise stated)

|7. | Related party balances and transactions
|-- | ---------------------------------------

| | Related party balances receivable (payable) |   | December 31 |   |   | December 31 |  
| | ------------------------------------------- | - | ----------- | - | - | ----------- | -
| |                                             |   | 2005        |   |   | 2004        |  
| | Hunter Dickinson Inc. (a)                   | $ | (6,399      | ) | $ | 4,350       |  
| | Hunter Dickinson Group Inc. (b)             |   |            |   |   | (3,424      | )
| | CEC Engineering Ltd. (c)                    |   | (49,561     | ) |   |            |  
| |                                             | $ | (55,960     | ) | $ | 926         |  

| | Reimbursement for third party expenses and   |   |                         |  |   |           |  |   |           | 
| | -------------------------------------------- | - | ----------------------- |  | - | --------- |  | - | --------- | 
| | services rendered                            |   | Years ended December 31 | 
| |                                              |   | 2005                    |  |   | 2004      |  |   | 2003      | 
| | Hunter Dickinson Inc. (a)                    | $ | 1,104,875               |  | $ | 1,002,431 |  | $ | 1,411,849 | 
| | Hunter Dickinson Group Inc. (b)              | $ | 9,600                   |  | $ | 12,800    |  | $ | 22,320    | 
| | CEC Engineering Ltd. (c)                     | $ | 242,198                 |  | $ | 102,372   |  | $ | 118,987   | 
| | Pangea Exploration (Proprietary) Limited (d) | $ | 105,091                 |  | $ | 135,143   |  | $ |          | 

Related party balances receivable (payable),
  which are non-interest bearing and are due on demand, are included in amounts
  receivable (accounts payable and accrued liabilities) on the consolidated balance
  sheets. Related party balances receivable arise from advances by the Company
  for normal course in-progress and near-term planned exploration and other work
  on the mineral properties.

| | (a) | Hunter Dickinson Inc. ("HDI") is a private company owned
        equally by nine public companies, one of which is the Company. HDI has
        certain directors in common with the Company and provides geological,
        corporate development, administrative and management services to, and
        incurs third party costs on behalf of, the Company and its subsidiaries
        on a full cost recovery basis pursuant to an agreement dated December
        31, 1996.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (b) | Hunter Dickinson Group Inc. is a private company with
        certain directors in common that provides consulting services to the Company.                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (c) | CEC Engineering Ltd. is a private company owned by a
        director of the Company that provides engineering and project management
        services at market rates.                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (d) | Pangea Exploration (Proprietary) Limited (Pangea)
        is a private company of which a director of the Company, is an officer.
        Pangea provides certain accounting and administrative services to the
        Company on rates negotiated while the officer was dealing at arms
        length with the Company.                                                                                                                                                      

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2005, 2004 and 2003         
|(Expressed in Canadian
      Dollars unless otherwise stated)

|8. | Income taxes                                                                                                             
|-- | -------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                          
|   | The estimated tax effect of the significant components
        within the Companys future tax liability were as follows:

| |                                  |   | December 31 |   |   | December 31 |  
| | -------------------------------- | - | ----------- | - | - | ----------- | -
| |                                  |   | 2005        |   |   | 2004        |  
| |                                  |   |             |   |   | (restated)  |  
| | Future income tax assets         |   |             |   |   |             |  
| | Mineral properties               | $ | 2,831,000   |   | $ | 2,763,000   |  
| | Loss carry forwards              |   | 8,683,000   |   |   | 7,773,000   |  
| | Equipment                        |   | 78,000      |   |   | 81,000      |  
| | Other                            |   | 299,000     |   |   |            |  
| | Subtotal                         |   | 11,891,000  |   |   | 10,617,000  |  
| | Valuation allowance              |   | (11,416,000 | ) |   | (10,617,000 | )
| | Net future income tax asset      |   | 475,000     |   |   |            |  
| | Future income tax liability      |   |             |   |   |             |  
| | Mineral
      property interests |   | (19,839,000 | ) |   | (24,596,000 | )
| | Net future income tax liability  | $ | (19,364,000 | ) | $ | (24,596,000 | )

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

| |                                                                          | December 31   | December 31  
| | ------------------------------------------------------------------------ | ------------- | -------------
| |                                                                          | 2005          | 2004         
| |                                                                          |               | (restated)   
| | Combined Canadian federal and provincial statutory
      rate            | 34.87%        | 35.62%       
| |                                                                          |               |              
| | Income tax at statutory rates                                            | $ (1,234,000) | $ (4,992,000)
| | Difference in foreign tax rates                                          | 233,000       | 469,000      
| | Valuation allowance                                                      | 799,000       | 923,823      
| | Other non-deductible items, Canada                                       | 152,000       | 891,000      
| | Change due to foreign exchange                                           | (1,098,000)   | 858,310      
| | Change in tax rate                                                       | (820,000)     |             
| | Non-deductible items, South Africa                                       | 55,000        |             
| | Benefit of unrealized
      foreign exchange loss not included in income | (174,000)     |             
| | Other                                                                    | 94,000        |             
| |                                                                          | $ (1,993,000) | $ (1,849,867)

At December 31, 2005, the Company had
  available losses for income tax purposes in Canada totalling approximately $7.0
  million (2004 – $5.5 million), expiring in various years from 2006 to
  2015. The Company has available resource tax pools in Canada of approximately
  $7.6 million (2004 – $7.4 million), which may be carried forward and utilized
  to reduce resource income. Included in these resource tax pool is $2.9 million
  (2004 – $2.9 million) which is successored, and consequently can only
  be utilized against taxable income from specific mineral properties.

At December 31, 2005, the Company had
  a net operating loss carry forward for United States income tax purposes of
  approximately US$15.1 million (2004 – US$14.2 million) which, if not utilized
  to reduce United States taxable income in future periods, expire through the
  year 2025.

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2005, 2004 and 2003         
|(Expressed in Canadian
      Dollars unless otherwise stated)

These available tax losses may only be
  applied to offset future taxable income from the Company's current United States
  subsidiaries.

Future utilization of United States loss
  carryforwards is subject to certain limitations under provisions of the Internal
  Revenue Code including limitations subject to Section 382, which relates to
  a 50 percent change in control over a three-year period, and are further dependent
  upon the Company attaining profitable operations. An ownership change occurred
  on June 30, 1999 regarding the losses incurred by Touchstone Resources Company,
  a wholly-owned subsidiary of the Company incorporated in the United States.
  Therefore, approximately $1.6 million of the above losses are subject to limitation
  under Section 382. Accordingly, the Company's ability to utilize these losses
  may be limited to approximately US$100,000 per year. Furthermore, the Company
  potentially incurred an ownership change under Section 382 at some time after
  June 1999. If so, an additional US$2.1 million of the above losses will be subject
  to a similar annual limitation.

In addition, the Company has available
  resource tax pool in the United States of approximately US$3.8 million (2004
   US$3.6 million).

During the year ended December 31, 2005,
  the Company made certain retroactive adjustments to the estimates of its accounting
  and tax temporary differences. These adjustments resulted in revisions to its
  future income tax-related balances at December 31, 2004 and for the year then
  ended. The effect of these adjustments was to increase the future income tax
  liability, and deficit, at December 31, 2004 by $5,599,000, and to increase
  the loss from operations and loss per share for the year then ended by $5,599,000
  and $0.06, respectively, of which $5,524,000 has been allocated to foreign exchange
  loss and $75,000 has been allocated to future income tax recovery. There was
  no effect on the deficit at January 1, 2004 or on the statement of operations
  and cash flows for the year ended December 31, 2003.
  The future income tax liability arising from mineral properties is based substantially
  on South African rand-denominated assets and tax balances. The future income
  tax liability as at and for the year ended December 31, 2005 was reduced by
  $1,993,000 to reflect changes in tax rates and timing differences and $3,239,000
  to reflect changes in exchange rates, with the offset being charged to the statement
  of operations during this year.

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2005, 2004 and 2003         
|(Expressed in Canadian
      Dollars unless otherwise stated)

|9. | 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 | 
| | -------------------------------------------------- | - | ----------- |  | - | ----------- | 
| |                                                    |   | 2005        |  |   | 2004        | 
| |                                                    |   |             |  |   |             | 
| | Canada                                             |   |             |  |   |             | 
| | Assets other than mineral property
      interests | $ | 17,124,154  |  | $ | 16,918,017  | 
| | Mineral property
      interests                   |   | 2           |  |   | 2           | 
| |                                                    |   |             |  |   |             | 
| | United States                                      |   |             |  |   |             | 
| | Assets other than mineral property
      interests |   | 171,195     |  |   | 130,937     | 
| | Mineral property
      interests                   |   | 3,945,348   |  |   | 3,945,348   | 
| |                                                    |   |             |  |   |             | 
| | Republic of South Africa                           |   |             |  |   |             | 
| | Assets other than mineral property
      interests |   | 764,146     |  |   | 854,935     | 
| | Mineral property interests                         |   | 94,684,650  |  |   | 94,684,650  | 
| |                                                    |   |             |  |   |             | 
| | Total assets                                       | $ | 116,689,495 |  | $ | 116,533,889 | 

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2005, 2004 and 2003         
|(Expressed in Canadian
      Dollars unless otherwise stated)

|10. | Differences between Canadian and United States generally
        accepted accounting principles                                                                                                                                                                                                                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | The consolidated financial statements have been prepared
        in accordance with Canadian generally accepted accounting principles (Canadian
        GAAP), which differ in certain material respects from those principles
        that the Company would have followed had its consolidated financial statements
        been prepared in accordance with United States generally accepted accounting
        principles (US GAAP).
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | Had the Company followed US GAAP, for measurement differences,
        certain items on the statements of operations, deficit, and balance sheets
        would have been reported as follows:                                                                                                                                                                                                                                              

| |                                                                  |   | As at       |   |   | As at       |  
| | ---------------------------------------------------------------- | - | ----------- | - | - | ----------- | -
| |                                                                  |   | December 31 |   |   | December 31 |  
| |                                                                  |   | 2005        |   |   | 2004        |  
| | Consolidated Balance
      Sheets                                |   |             |   |   | (restated)  |  
| |                                                                  |   |             |   |   |             |  
| | Total assets                                                     |   |             |   |   |             |  
| | Total assets under Canadian GAAP                                 | $ | 116,689,495 |   | $ | 116,533,889 |  
| | Adjustments under US GAAP                                        |   |             |   |   |             |  
| | Mark-to-market
      adjustment on warrants (b)                  |   |            |   |   | (45,000     | )
| | Total assets under US GAAP                                       | $ | 116,689,495 |   | $ | 116,488,889 |  
| |                                                                  |   |             |   |   |             |  
| |                                                                  |   |             |   |   |             |  
| | Total liabilities
      under Canadian and US GAAP               | $ | 20,064,205  |   | $ | 25,348,166  |  
| |                                                                  |   |             |   |   |             |  
| |                                                                  |   |             |   |   |             |  
| | Share capital and contributed surplus under
      Canadian GAAP  | $ | 166,235,846 |   | $ | 159,232,508 |  
| | Adjustments under US GAAP:                                       |   |             |   |   |             |  
| | Stock-based compensation (a)                                     |   | 2,658,000   |   |   | 2,658,000   |  
| | Share capital
      and contributed surplus under US GAAP        | $ | 168,893,846 |   | $ | 161,890,508 |  
| |                                                                  |   |             |   |   |             |  
| |                                                                  |   |             |   |   |             |  
| | Deficit under Canadian GAAP                                      | $ | (69,610,556 | ) | $ | (68,046,785 | )
| | Adjustments under US GAAP:                                       |   |             |   |   |             |  
| | Stock-based compensation (a)                                     |   | (2,658,000  | ) |   | (2,658,000  | )
| | Mark-to-market adjustment on warrants (b)                        |   | 45,000      |   |   | (45,000     | )
| | Reduction of gain on sale of investments
      due to prior year |   |             |   |   |             |  
| | mark-to-market adjustment (b)                                    |   | (45,000     | ) |   |            |  
| | Deficit under US GAAP                                            | $ | (72,268,556 | ) | $ | (70,749,785 | )

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2005, 2004 and 2003         
|(Expressed in Canadian
      Dollars unless otherwise stated)

| |                                                                     |   | Year ended  |   |   | Year ended  |  |   | Year ended  | 
| | ------------------------------------------------------------------- | - | ----------- | - | - | ----------- |  | - | ----------- | 
| |                                                                     |   | December 31 |   |   | December 31 |  |   | December 31 | 
| |                                                                     |   | 2005        |   |   | 2004        |  |   | 2003        | 
| | Consolidated Statements of Operations                               |   |             |   |   | (restated)  |  |   |             | 
| | Loss for the year under Canadian GAAP                               | $ | 1,563,771   |   | $ | 12,165,737  |  | $ | 7,496,507   | 
| | Adjustments under US GAAP:                                          |   |             |   |   |             |  |   |             | 
| | Mark-to-market adjustment on warrants (b)                           |   |            |   |   | 45,000      |  |   |            | 
| | Reduction of gain (loss) on sale of investments due                 |   |             |   |   |             |  |   |             | 
| | to prior year mark-to-market adjustment (b)                         |   | (45,000     | ) |   |            |  |   | 727,000     | 
| | Loss for the year under US GAAP**, being comprehensive
      loss** | $ | 1,518,771   |   | $ | 12,210,737  |  | $ | 8,223,507   | 
| |                                                                     |   |             |   |   |             |  |   |             | 
| | Basic and diluted loss per share for the year                       |   |             |   |   |             |  |   |             | 
| | under US GAAP                                                       | $ | 0.02        |   | $ | 0.14        |  | $ | 0.14        | 

There are no material differences between
  Canadian GAAP and US GAAP in the consolidated statements of cash flows for the
  years ended December 31, 2005, 2004, and 2003.

| | (a) | In the year ended December 31, 2003 the Company
        adopted the fair value based method of accounting for employee stock-based
        compensation as prescribed by FASB Statement No. 123, Accounting for
        Stock-Based Compensation(SFAS 123). The Company adopted
        the fair value base method on a prospective basis from January 1, 2003
        as permitted by FASB Statement No. 148, Accounting for Stock-Based
        Compensation  Transition and Disclosure, and amendment of FASB
        Statement No. 123. The prospective adoption of this new US GAAP policy
        creates no differences with the Companys stock-based compensation
        expense reported under Canadian GAAP.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
|
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | Previously under US GAAP, the Company accounted for
        its employee stock option plan under the principles of Accounting Principles
        Board Opinion No. 25, Accounting for Stock Issued to Employees(APB
        25) and other Interpretations. No compensation expense was recognized
        under APB 25 because the exercise price of the Companys employee
        stock options equals the market price of the underlying stock on the date
        of the grant.                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | For the years ended December 31, 2005, 2004, and 2003,
        there were no differences in stock-based compensation expense in respect
        of non-employee share options which would be required to be charged to
        operations under both Canadian and US GAAP. As SFAS 123 was adopted on
        a prospective basis, there is $2,658,000 historical difference in contributed
        surplus and deficit relating to the period prior to adoption.                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (b) | US GAAP requires investments in available-for-sale securities
        to be recorded at fair value in accordance with SFAS 115, Accounting
        for Certain Investments in Debt and Equity Securities("SFAS 115").
        Unrealized gains and losses are recorded in a separate component of shareholders'
        equity with the year-over-year change recorded as other comprehensive
        income (loss), except for declines in fair value that are determined to
        be other than temporary. These declines in value are charged to the statement
        of operations, which is similar to Canadian GAAP.                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | US GAAP requires a company to present comprehensive
        income (loss) in accordance with SFAS 130, Reporting Comprehensive Income,
        which establishes standards for reporting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2005, 2004 and 2003         
|(Expressed in Canadian
      Dollars unless otherwise stated)

and display of comprehensive income
  (loss), its components and accumulated balances. Comprehensive income (loss)
  comprises net income (loss) and all changes to shareholders’ equity except
  those resulting from investments by owners and distributions to owners.
  Under US GAAP, the Hecla Warrants (note 5(a)) would be considered derivative
  financial instruments and would be accounted for under SFAS 133, Accounting
  for Derivative Instruments and Hedging Activities ("SFAS 133"), until
  they are exercised. Once exercised, the shares of Hecla Mining Company received
  would be considered an available-for-sale security and would be accounted for
  under SFAS 115. The Hecla warrants issued were exercised and sold in 2002. Accordingly,
  a mark-to-market loss of $727,000 recorded in 2002 under US GAAP would include
  the gain otherwise recognised in 2003. SFAS 133 requires that all derivative
  financial instruments be recognized in the financial statements and measured
  at fair value. Changes in the fair value of a derivative financial instrument
  are charged to operations if the instrument does not qualify as a hedge, or
  other comprehensive income, a separate component of shareholders' equity, if
  it does qualify as a hedge.
  Under US GAAP, the Lumina warrants (note 5(c)) would also be considered derivative
  financial instruments and would be accounted for under SFAS 133 until they were
  exercised. Once exercised, the shares of the Lumina companies received would
  be considered available-for-sale securities and would be accounted for under
  SFAS 115. At December 31, 2005, the fair value of the remaining Lumina warrants
  was estimated to be $179,000 (2004 – $226,000). Consequently, a mark-to-market
  loss of $45,000 would have been recorded in 2004 under US GAAP and would decrease
  the loss on sale of investments in 2005 by an equal and offsetting amount. For
  Canadian GAAP purposes, shares received on the exercise of the warrants are
  carried at cost, unless there is an other than temporary decline in value, in
  which case the shares are written down to market value as a charge to the statement
  of operations.

| | (c) | Pursuant to US GAAP, the Company would be
        considered an exploration stage company as the Company is devoting efforts
        to establishing commercially viable mineral properties. However, the identification
        of the Company as such for accounting purposes does not impact the measurement
        principles applied in these consolidated financial statements.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                       
| | (d) | Impact of recent United States accounting
        pronouncements:                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                       
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                       
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                  

---

|GREAT BASIN GOLD LTD.                                        
|-------------------------------------------------------------
|Notes to the Consolidated Financial Statements               
|For the years ended December 31, 2005, 2004 and 2003         
|(Expressed in Canadian
      Dollars unless otherwise stated)

to do so. This is a change from the
  existing practice that requires most accounting changes to be accounted for
  by including in net income in the period of the change the cumulative effect
  of changing to the new accounting principle. SFAS 154 will be effective for
  accounting changes and corrections of errors made in fiscal years beginning
  after December 15, 2005. The impact of SFAS 154 cannot be determined until such
  time as the Company makes a change in accounting policy.

|11. | Subsequent events               
|--- | --------------------------------
|    |                                 
|    | Subsequent to December 31, 2005,

| | (a) | the Company and Hecla signed an Earn-In Agreement Amendment
        in February 2006. This agreement modified the 2002 Earn-In Agreement and
        resulted in a termination of all litigation and the execution of mutual
        releases (note 5(a)).
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                           
| | (b) | the Company issued 287,000 common shares pursuant to
        the exercise of options at exercise prices between $1.15 to $1.62 per
        share (note 6 (c)).                                                                                            

---