GREAT BASIN GOLD PROVIDES OPERATIONAL UPDATE (cnw)

Including initial Production and Revenue from the Burnstone Mine

VANCOUVER, May 3 /CNW/ - Great Basin Gold Ltd. ("Great Basin Gold" or the "Company"), (TSX: GBG) (NYSE: GBG) (Amex: GBG) (JSE: GBG) reports an operational update for the quarter ended March 31, 2011 (Q1 2011). The Company will file its interim financial statements for Q1 2011 on May 16, 2011 and will hold an earnings call on May 17, 2011 at 9 am (EST).

Burnstone

The Metallurgical Plant, as well as all other major capital projects was successfully commissioned by the end of January 2011. During the quarter, Burnstone recovered 5,511 gold ounces (Au oz) and sold 2,794 oz to record its maiden revenue of $3.8 million. The cash production cost per tonne for the period is estimated at US$70 (ZAR490), which is in-line with the planned cost during production build-up. Ounces recovered were predominantly from development ore processed, which at a lower head grade of 0.03 Au oz/t (1.03 g/t) grade resulted in a gold recovery of 83%. Gold recoveries are expected to improve as the grade of the mill feed increases. The impact of the lower head grade resulted in a cash production cost of approximately US$1,365 (ZAR 9,555) per oz.

The Metallurgical Plant processed approximately 200,000 tonnes during the quarter, in-line with the production build-up plan. Underground tonnes are being augmented with the stockpile material to allow the mill to operate at an average of 90,000 tonnes per month until such time as production from underground is sufficient to increase to the planned processing rate of 125,000 tonnes per month.

Mechanized development continued with 3,288 meters being developed during the quarter against a plan of 3,600 meters, bringing the total development for the project to date to 12,402 meters of which 6,855 are on reef. Long Hole Stoping continued with a total of 6,000 square meters stoped to date. Good progress was made with the second phase of the shaft infrastructure on 40 and 41 Level, with the tramming loop and second access to the shaft tip being completed. This will alleviate the congestion at the tips and allow for the further ramp-up of tonnes though the shaft system. Over and above the area stoped to date, 16 panels were also drilled and available for blasting at the end of March, 2011.

Hollister

During the quarter, 21,828 tonnes were extracted through trial mining at Hollister, an average grade of 1.03 gold equivalent oz (Au eqv oz)1. Hollister maintained its production momentum from Q4 2010 by recovering 28,500 Au eqv oz, of which only 17,500 Au eqv oz were recognized in revenue as an additional 11,000 Au eqv oz were delivered but not sold to the refiner by quarter end. Until such time as the installation of the acid regeneration system has been completed at the Esmeralda Mill, the Company will continue to ship-loaded carbon to the refinery as opposed to doré, there will be a timing delay on when the revenue from these ounces can be recognized.

Since the introduction of clean carbon in February 2011, Au recoveries have exceeded 90%, with the Au recovery for the quarter being 88%, and Ag recoveries increasing to 68%. The Esmeralda Mill treated 21,634 tonnes during the quarter with an average head grade of approximately 1 Au eqv oz/t (32.15 g/t). Cash costs for the quarter are estimated at US$680 per Au eqv ounce. Although the overall average in-situ grades in the Blanket Zone are lower than what was encountered in the super high grade area, an additional 1,025 tons were mined during the quarter, at an average grade in excess of 3 Au eqv oz/t.

The delay in recognizing revenue from the Nevada operations had a negative impact on the earnings for the quarter. The net loss for the quarter is also impacted by the fair value charges attributable to the mark-to-market of the zero-cost collar hedge programs, as well as the settlement loss recognized on repayment of the Senior Secured Notes in March 2011. The adjusted loss per share for the quarter is estimated at $0.01 with the loss per share $0.05. The Company had $68 million in cash reserves on March 31, 2011.

Ferdi Dippenaar, Great Basin Gold President and CEO, commented: "Although experiencing the usual challenges with bringing a new mine into production, Burnstone is settling into a production rhythm and the progress made by the team on a monthly basis is reassuring. Production is expected to increase to 18,000 ounces in Q2 2011. The Nevada operations showed improvements in a number of areas during the quarter, notably on ounces recovered through trial mining as well as the improved recoveries at our Esmeralda Mill. The latter improvement especially pleasing with the impact already evident in both the resulting cash costs and the ounces delivered to the refinery. Not being able to recognize all ounces at the refiners has impacted our operating margins as well as earnings. Our short to medium term focus at both of these operations is to increase production and manage costs, and unlock the intrinsic value of these quality projects."