VANCOUVER, Feb. 2 /CNW/ - Great Basin Gold Ltd. ("Great Basin Gold" or
the "Company"), (TSX: GBG; NYSE Amex: GBG; JSE: GBG) announces
increases for both its Hollister Project and Burnstone Mine Mineral
Reserve and life-of mine ("LOM") estimates. The Company has also
received credit committee approval for a US$60 million Term Loan
financing from Credit Suisse AG, the proceeds of which will be used to
repay the high cost Senior Secured Notes issued during the 2008 credit
crisis.

Hollister Project, Carlin Trend, Nevada

Ongoing technical work at Hollister has resulted in a 13% increase, on a
directly comparable basis, in the Mineral Reserves from those published
in January 2009. (Capitalized terms not otherwise defined herein have
the meanings set out in Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects) The Hollister project is still in the trial mining stage, however,
based on production techniques tested to date, the Company has
estimated applicable call factors for mining of approximately 85% and
metallurgical recoveries of approximately 92% for Au and 85% for Ag.
Since the 2009 Mineral Reserve estimate, a total of 165,772 tons have
been extracted at an average grade of 1.06 Au(eqv) oz/ton (36.4 g/t),
delivering 176,387 Au(eqv) contained ounces. At a cut-off grade of 0.25
oz/ton (8.57 g/t) Au, the combined Proven and Probable Mineral Reserves
contain an estimated net 907,000 Au(eqv) ounces, grading 0.79 oz/ton
(27.02 g/t) Au and 4.75 oz/ton (163 g/t) silver (Ag) after application
of the noted call factors for mining and metallurgical recoveries.

Results of Hollister's January 2011 Mineral Reserve Estimate are shown
below:

Note: *The equivalent gold ounces reported herein were calculated using a
gold price of US$1,000/oz, a silver price of US$15/oz. A call factor of
85% and metallurgical recovery factors of 92% for Au and 85% for Ag
were applied.

The table below shows the reconciliation between the depleted January
2009 and January 2011 Mineral Reserve estimates, using a cut-off of
0.25 oz/t Au and applying similar call factors and metallurgical
recoveries:

A minimum stoping width of 0.91 meters (36 inches) was assumed for
purposes of Mineral Reserve estimation, along with dilution defined as
waste tonnes (or tons) carrying zero grade and 100 percent in-stope
extraction. An analysis by the Company's technical staff confirms that
no systematic, in-stope pillars will be required because of the
cut-and-fill trial mining method now being utilized. Based on the
results of trial stoping and grade reconciliation studies, where vein
widths of 0.76 meters (30 inches) or greater were considered, a total
of 0.15 meters (six inches) of hanging wall dilution and 0.15 meters
(six inches) of footwall dilution was applied. Where appropriate,
other average dilution rates were applied. The in-situ wireframe model
generated with the Mineral Resource update announced September 9, 2010,
were used as basis for this mineral reserve update.

Using the updated Mineral Reserve estimate, an average production
profile of 110,000 Au(eqv) oz over 8 years was projected with the
estimated cash cost, inclusive of royalties, amounting to US$527 per
Au(eqv) oz recovered over the LOM. Cash costs for 2011 are forecast to
be in the range of US$550 - US$600 per Au eqv oz. The estimated Net
Present Value ("NPV") of the Hollister Project (using metal prices of
US$1,000/oz for Au and US$15/oz for Ag) at a 5% discount rate is
calculated at US$236 million.

Burnstone Mine, Witwatersrand Basin, South Africa

At Burnstone, Mineral reserves increased by 55% with the majority of the
increase attributable to the improved geological information obtained
from underground development and drilling conducted since the January
2009 reserve update as well as additional reserves included from Area
2. Detailed planning has shown that production at Area 2 of the
Burnstone property can be increased and be extracted through separate
infrastructure. Since the January 2009 reserve update, Great Basin Gold
has completed over 6,000 meters (19,685 feet) of on-reef development
and over 3,851 meters2 (41,452 feet2) of long hole stoping ("LHS"). The January 2011 Mineral reserve update
and LOM planning is based on LHS as the preferred mining method, and
the decrease in dilution from this mining method also positively
impacted on the updated reserve estimate.

At a cut-off gold content of 350 centimeter-grams per tonne (cmg/t) the
combined Proven and Probable Mineral reserves contain 6.4 million Au
oz grading 4.47 g/t (0.13 oz/ton) Au after application of a 95% call
factor for mining and a 95% metallurgical recovery. Currently, 53% of
the Measured and indicated Mineral resources have been converted into
Proven and Probable Reserves.

Results of Burnstone's January 2011 Mineral Reserve Estimate are
tabulated below:

Using the updated Mineral Reserve estimate, an average annual production
profile of 254,000 Au oz over 25 years was scheduled with the cash
cost, inclusive of royalties, amounting to US$450/oz of Au recovered
over the LOM. The estimated NPV for Burnstone (using a metal price of
US$1,000/oz for Au and an exchange rate of USD1: ZAR9) at a 5% discount
rate is US$1,530 million.

The potential for an increase in the production build-up in the medium
term using LHS as the preferred mining method is demonstrated by the
updated LOM plan. On-reef development remains the key to delivering the
planned production build-up and will therefore be the priority focus
for 2011. The production range of 110,000 to 140,000 Au oz is therefore
the result of the increased focus on on-reef development. Cash costs
for 2011 are forecast in the range of US$520 - US$620/oz and are
impacted by the diluted grade from the additional on-reef development.

The metallurgical plant has achieved its targeted rate for January 2011
of 90,000 tonnes milled. The current focus is to ramp up production and
achieve a milling rate of 125,000 tons per month.

The Burnstone Mineral Resources have been revised in-line with the
Mineral reserve update. The Mineral Resources announced August 23, 2010
were based on a "4 2 1 model", which uses a minimum of 4 informing
samples for a Measured Resource classification, 2 for an Indicated
classification and 1 for an Inferred classification. The current model
uses the same estimation parameters but more stringent classification
criteria, which is a minimum of 6 informing samples for Measured, 3 for
Indicated and 2 for Inferred.

A comparison of the Mineral Resources estimated under the two models at
a range of gold content cut-off values is tabulated below:

At a 350 cmg/t cut-off, the tighter classification parameters have
resulted in an 8% decrease in total Measured and Indicated Resources
tonnage, a 2% increase in grade from 6.30 to 6.44 g/t Au, and a
combined 6% adjustment downwards of contained gold in the Measured and
Indicated Resources categories to 12.1 million ounces. The 350 cmg/t
cut-off is lower than the 400 cmg/t used for previous estimates and
conversions to Mineral Reserves, reflecting increased confidence in
these estimates.

Term Loan Financing Finalized

Great Basin Gold has also obtained final credit approval from Credit
Suisse AG to enter into a Term Loan Financing for US$60 million which
is now primarily subject only to negotiation of customary definitive
loan documents. Key terms include:

• 
  Maximum term of 4 years from date of drawdown, with interest and capital
  repayment commencing 3 months after draw down.
• 
  Interest at a margin of 3.75% over the USD LIBOR rate (currently 0.3%).
• 
  Great Basin Gold will have the option to retire the loan 12 months after
  draw down at no additional cost.
• 
  Secured by the Hollister Project and Esmeralda property.
• 
  Hedging program typical for these facilities will be finalized and
  implemented in the following weeks. It is anticipated that a
  zero-cost-collar structure for a total of up to 105,000 Au oz over the
  next 4 years of gold production will form the basis for the program.

It is anticipated that this transaction will be closed before the end of
February 2011. The net proceeds from this financing will be used to
settle the 2008 Senior Secured Notes which currently bear interest at
14% per annum.

Ferdi Dippenaar, Great Basin Gold CEO, commented:

"Our ongoing evaluations of the two ore bodies, which encompass
delineation drilling and results from trial mining, continue to confirm
the value of the Hollister and Burnstone properties, as evidenced in
both increased reserves and increased confidence in our measurements.
The tighter geological controls used in determining these estimates are
also improving trial stope tonnage and grade estimates and, as a
consequence, our mine planning is benefiting from more accurate
information.

"At Hollister, exploration drilling from underground is successfully
tracking the lateral extensions of the Hollister veins northwestward to
the Gloria vein system and the Butte bounding fault structure, and
southeastward from the Gwenivere vein system to the Hatter Graben. As
the underground development continues, there will be further
opportunities to drill test the extensions of a number of high grade
zones that are emerging from this evaluation work.

"Production from trial mining at Hollister is expected to remain at the
level of 110,000 recovered-Au(eqv) oz/annum for the near future. We
have conservatively estimated production at the Burnstone mine, which
will experience its first full year of mining in 2011, and have focused
the management team on prioritizing on-reef development to ensure that
this plus 25-year life, world class project has a solid foundation to
deliver successful production in the future.

"With the commitment of the Credit Suisse facility, Great Basin Gold now
has the necessary funds to retire the US$52 million Senior Secured
Notes, a debt facility put in place in November 2008. This both
reduces our cost of capital and provides us better financial
coordination with a single corporate lender."

The Mineral Reserve estimates and other technical information herein
were completed under the supervision of Johan Oelofse, Pr.Eng., FSAIMM,
Great Basin Gold's Chief Operating Officer. Mr Oelofse is a Qualified
Person as defined by Canadian Securities Regulations in National
Instrument 43-101, who has also reviewed and approved the information
in this news release.

The Mineral Resource estimate for Burnstone was completed by Freddie de
Bruin, Pr.Sci.Nat., of Deswik Mining and Resource Consultants, under
the supervision of Phil Bentley, Pr.Sci.Nat., Great Basin Gold's Vice
President: Geology & Exploration. Mr Bentley is a Qualified Person as
defined by Canadian Securities Regulations in National Instrument
43-101, who has also reviewed and approved the information in this news
release.

Details of these estimates will be included in NI 43-101 compliant
technical reports filed on www.sedar.com.

Ferdi Dippenaar
President and CEO

Samples collected from the Hollister Development Block Project are
delivered to Inspectorate America Corporation (Inspectorate) in Sparks,
Nevada. The primary analytical facility for the Burnstone Project from
2003-2005 has been SGS Lakefield Research Africa (Pty) Limited and
subsequently (2006-2010), ALS Chemex has been the primary laboratory.
Both facilities are located in Johannesburg, South Africa.

This document contains "forward-looking statements" that were based on
Great Basin Gold's expectations, estimates and projections as of the
dates as of which those statements were made. Generally, these
forward-looking statements can be identified by the use of
forward-looking terminology such as "outlook", "anticipate", "project",
"target", "believe", "estimate", "expect", "intend", "should" and
similar expressions. Forward-looking statements are subject to known
and unknown risks, uncertainties and other factors that may cause the
Company's actual results, level of activity, performance or
achievements to be materially different from those expressed or implied
by such forward-looking statements. These include but are not limited
to:

• 
  uncertainties and costs related to the Company's exploration and
  development activities, such as those associated with determining the
  extent of mineral resources or reserves which exist on a property;
• 
  uncertainties related to feasibility studies that provide estimates of
  expected or anticipated costs, expenditures and economic returns from a
  mining project; uncertainties related to expected production rates,
  timing of production and the cash and total costs of production and
  milling;
• 
  uncertainties related to the ability to obtain necessary licenses,
  permits, electricity, surface rights and title for development
  projects;
• 
  operating and technical difficulties in connection with mining
  development activities;
• 
  uncertainties related to the accuracy of our mineral reserve and mineral
  resource estimates and our estimates of future production and future
  cash and total costs of production, and the geotechnical or
  hydrogeological nature of ore deposits, and diminishing quantities or
  grades of mineral reserves;
• 
  uncertainties related to unexpected political, judicial or regulatory
  proceedings;
• 
  changes in, and the effects of, the laws, regulations and government
  policies affecting our mining operations, particularly laws,
  regulations and policies relating to
  
  • 
    mine expansions, environmental protection and associated compliance
    costs arising from exploration, mine development, mine operations and
    mine closures;
  • 
    expected effective future tax rates in jurisdictions in which our
    operations are located;
  • 
    the protection of the health and safety of mine workers; and
  • 
    mineral rights ownership in countries where our mineral deposits are
    located, including the effect of the Mineral and Petroleum Resources
    Development Act (South Africa);
• 
  changes in general economic conditions, the financial markets and in the
  demand and market price for gold, silver and other minerals and
  commodities, such as diesel fuel, coal, petroleum coke, steel,
  concrete, electricity and other forms of energy, mining equipment, and
  fluctuations in exchange rates, particularly with respect to the value
  of the U.S. dollar, Canadian dollar and South African rand;
• 
  unusual or unexpected formation, cave-ins, flooding, pressures, and
  precious metals losses (and the risk of inadequate insurance or
  inability to obtain insurance to cover these risks);
• 
  changes in accounting policies and methods we use to report our
  financial condition, including uncertainties associated with critical
  accounting assumptions and estimates;
• 
  environmental issues and liabilities associated with mining including
  processing and stock piling ore;
• 
  geopolitical uncertainty and political and economic instability in
  countries which we operate; and
• 
  labour strikes, work stoppages, or other interruptions to, or
  difficulties in, the employment of labour in markets in which we
  operate mines, or environmental hazards, industrial accidents or other
  events or occurrences, including third party interference that
  interrupt the production of minerals in our mines.

Cash costs per ounce are numbers commonly used in the mining industry to
assess performance. They are not terms recognized under generally
accepted accounting principles. Investors will wish to review the NI
43-101 technical reports which support these estimates in order to
understand the cost elements which make up the cash cost estimate.

Information Concerning Estimates of Measured, Indicated and Inferred
Resources