Great Basin Gold Ltd. reports on the progress of exploration, development and production activities at its Hollister trial mining operation in Nevada, United States, and its Burnstone mine in South Africa.

Hollister gold project

The Nevada operations reported an increase in production related, mainly, to higher tonnages from trial mining and improved operational performance of the Esmeralda mill, resulting in approximately 31,000 gold equivalent ounces (Au eqv oz) being sold during Q4 2010. This is a substantial increase over the 11,000 Au eqv oz sold in Q3 2010. Cash costs were also lower at approximately US$680/oz, a 20% quarter-on-quarter improvement. Additionally, 3,500 ounces were delivered to the refinery; these will be recognized as revenue in Q1 2011.

At the Hollister Project, initial trial mining in the newly discovered Blanket Zone yielded 500 tons at a grade of 15 Au eqv oz/ton (510 g/t), containing an estimated 7,500 Au eqv oz. A short 15-foot section of the 180-foot length of the high grade stope has been trial mined for 50 feet vertically to establish the vertical extent of the Blanket Zone in this area. Activities are focused on opening up the stope to determine the southern and northern limits and to establish a platform to trial mine the total payable zone, including the high grade centre and the surrounding lower grade halo (est. 0.6-1 oz/ton). Delineation drilling of the zone immediately adjacent to the 3000 N 1 E stope has already commenced.

The Company continues to work with the Federal Mine Safety and Health Administration (MSHA) through their established process to ensure that Hollister will remain a safe and productive mine over the long term. The MSHA inspections have not adversely affected the productivity of the operation.

Burnstone Gold Mine

At the Burnstone Mine, the capital expenditure program has generally been completed with the vertical and ventilation shafts commissioned. The mine has commenced with production build-up. Development continues with 5,747 meters of on-reef development completed to the end of December 2010. The focus of current work is to increase the rate of stoping panel development and Long Hole Stoping; both are progressing well.

The metallurgical plant was successfully commissioned and commenced milling low grade development ore by mid-October 2010; 65,534 tonnes of low grade ore had been treated by end of December 2010. The Company was not in the position to declare commercial production prior to the Christmas break in December. During the first 17 days of January 2011, 51,653 tonnes of production material was treated, which is in line with the planned build up for the metallurgical plant. A total of 2,186 ounces of gold has been recovered, including 9 kg (289 oz) by gravity, 34 kg (1,093 oz) loaded onto carbon and 25 kg (804 oz) in residue. Due to the lower grade of the development ore being processed by the mill, an average recovery of 86% was achieved but is expected to increase to 95% when higher grade material is processed. It is expected that commercial production will be reached by end January 2011.

At January 17, 2011, there were 156,000 tonnes on the ore stockpile at Burnstone.

Exploration and Development Drilling

Exploration and evaluation drilling has continued at both the Burnstone and Hollister operations. At Burnstone, drilling is currently being conducted from surface and underground to provide infill evaluation and structural data on future mining blocks. Block evaluation is being advanced by detailed underground channel sampling of on-reef mine development exposures.

In Nevada, underground exploration and evaluation drilling is focusing on the high grade Blanket Zone, Velvet and Southeast Gwenivere targets. The Blanket Zones are characterized by disseminated gold mineralization that occurs in volcanic rocks that overlie the older metasedimentary rocks that host the main epithermal vein systems. Recent mine development has exposed a mineralized zones that extends 180 feet (60 meters) and with an in situ grade of 22 oz/ton Au, fully diluted over 3.5 feet (1.2 meters). Currently, a 33-hole, 16,000-foot (4,864- meter) drilling program is underway at the Blanket Zone. The second in a fan of drill holes was completed January 16, 2011. This objective of the program is to enable grade shell modelling2 and assessment of the vertical continuity of the mineralization associated with the Clementine #13-19 and Gwenivere #5-9 epithermal veins.

Two long, low angle boreholes are planned to test the targets in the Velvet area and the intervening ground located up to 3,000 feet north of the current mine infrastructure. To January 16, hole HDB 433 in this area had progressed to 2,500 feet. It has intersected a number of zones of clay and silica veining, and broader zones of silicification and brecciation. Initial assays are pending.

A number of intersections have been received for exploration boreholes testing the SE Gwenivere target. HDB-423 encountered three significant gold intercepts from the Southeastern Gwenivere Vein System. The first is 0.1 feet (0.03 m) quartz veinlet at 23.1-23.9 feet (7.0-7.3 m). This veinlet is a healed vein breccia with clasts of argillite and milky quartz clasts that rarely contain visible gold up to 5 mm thick. This veinlet had a grade of 15.90 opt (545.0 g/t) Au and 5.8 opt (200 g/t) Ag.

A second was intercepted from 28.6-35 feet (8.7-10.6 m) and included a 6.4 feet (1.9 m) zone of moderate quartz stockwork, with veinlets in this zone up to 0.07 feet (0.02 m) thick. This zone had a composite grade of 0.696 opt (23.86 g/t) Au and 0.3 opt (12.9 g/t) Ag.

The last significant intercept was a 13.0 feet (4.0 m) zone of weakly healed breccia encountered from 40-53 feet (12.2-16.2 m). This breccia cuts minor spiderweb quartz stockwork in moderately silicified argillite and quartzite and is weakly healed by white clay. This 13.0 feet (4.0 m) zone had a composite grade of 2.766 opt (94.82 g/t) Au and 1.3 opt (45 g/t) Ag.

There was only one notable gold intercept in HDB-424 at 24-28.2 feet (7.3-8.6 m). This 4.2 feet (1.3 m) intercept contained moderately silicified argillite with minor white clay along few fractures and graded 0.776 opt (26.61 g/t) Au and 0.5 opt (17.8 g/t) Ag.

Ferdi Dippenaar, President and CEO, commented: "After nearly four and a half years, the Burnstone mine is up and running. Our short term focus is on underground development which will provide for a progressive build up in production over the year. 2011 will be our first full year of production.

At our Hollister project, production from trial mining has increased in line with our plan from 275 tons per day to an average of 325 tons per day. The exciting new Blanket Zone and Southeast Gwenivere discoveries are currently under active exploration, and the information being gathered will assist in determining the extent and value of these new zones. Both zones are located near to existing infrastructure, which would facilitate rapid development."

Phil Bentley, Pr.Sci.Nat. (SACNAS) Vice President for Geology and Exploration for the Company and a qualified person, and Johan Oelofse, PrEng, FSAIMM, Chief Operating Officer for the Company and a qualified person, have reviewed this news release on behalf of Great Basin.

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