Great Basin Gold provides operational update

VANCOUVER, Aug. 4, 2011 /CNW/ --
REPORTS 100% INCREASE IN REVENUE

VANCOUVER, Aug. 4, 2011 /CNW/ - Great Basin Gold Ltd. ('Great Basin
Gold' or the 'Company'), (TSX: GBG; NYSE Amex: GBG; JSE: GBG) reports
an operational update for the 3 months ended June 30, 2011. The Company
will file its interim financial statements for Q2 2011 on August 15,
2011 and will hold an earnings call on August 16, 2011 at 9 am (EST).

Great Basin Gold returned a much improved quarter in respect of Au and
Ag ounces sold which combined with an expected improvement in cash
costs should allow the Company to report adjusted earnings per share
for the quarter (Q1 2011: adjusted loss per share of $0.01).

Hollister


The Nevada operations recorded $49 million in revenue during the quarter
on record sales of 34,522 Au eqv(1) oz, an increase of 100% quarter on quarter. During the continuing
construction and installation of the acid wash and carbon regeneration
system at the Esmeralda Mill, loaded carbon is sent to the refiner as
opposed to dore. Improved refining terms resulted in a decrease of
approximately 5,000 Au eqv oz in inventory held at the refiner from Q1
2011. The Esmeralda Mill treated 22,237 tonnes during the quarter (Q1
2011:21,634) with a marked improvement in Au and Ag recoveries of 95%
and 75%. Cash production costs for the quarter is expected to improve a
further 8% quarter on quarter to approximately $611 per Au eqv oz  in
Q2 2011.

Underground exploration and stope delineation drilling continued during
the quarter, with a record footage of 45,000 feet or 13,636 meters
completed from 84 boreholes. The focus has been on completing phases of
drilling on the Blanket Zone and south east Gwenivere targets,
providing further data for incorporation in the upcoming mineral
resource update (anticipated release date September 2011). The stope
delineation drilling has continued to tighten up controls for short
interval trial stope planning. Surface exploration has continued
collating geological and geophysical data as well as reviewing surface
expressions of interpretations with structural and geological
observations.

Burnstone


Operational efficiencies at Burnstone improved significantly with
mechanized ore development increasing by 33% quarter on quarter to
1,550 meters in addition to 1,872 meters of waste development completed
during the quarter. The increase in ore development allowed for an
increase of 36% in the square meters stoped quarter on quarter. Despite
the relatively close drill spacing in the current mining area, the
exact position and orientation of geological faults could not be
identified earlier as most of these are of a graben nature. Additional
infill and delineation drilling as well as extensive mapping and
interpretation of the structural information from the over 10
kilometers of underground development, now provides management with
more detailed data to incorporate these faulting into the mine plan. An
additional 66% waste development was completed during the 6 months
ended June 30, 2011 in response to the geological faulting encountered
compared with the original planned meters.

Excellent progress has been made with long hole stoping as the mining
method, with the efficiency of the teams improving on a monthly basis.
The improved hanging and footwall conditions experienced in the C block
allowed for a significant improvement in decreasing the stoping width
which was measured as low as 67 cm in some stopes. This also had a
positive impact on the mining grade of stope material which improved
60% from Q1 2011.

The Metallurgical Plant is performing in line with expectation with
approximately 202,660 tonnes processed during the quarter (Q1
2011:199,878 tonnes).Tonnes processed however remain predominantly from
development ore which includes more dilution than stoped material and
negatively impacts on the mill head grade. Recoveries for the quarter
improved to 85% (Q1 2011:83%) although still impacted by the low head
grade ore delivered to the mill.

Recoveries are expected to improve to the planned 95% as the head grade
increases. The impact of the lower head grade is reflected in the 5,619
Au ounces sold (Q1 2011:2,794 Au eqv oz) as well as the cash production
cost per ounce of approximately $1,450 (ZAR 10,130) expected for the
quarter. During the build-up phase a more accurate measurement is cost
per tonne which improved 12% to approximately $60 (ZAR420) (Q1
2011:$68) per tonne for the quarter.

_________________________


(1) Au eqv oz is calculated based on US$1,400Au and US$30Ag.

Corporate


The Company, with the assistance of RBC Capital markets, offered a $0.07
per warrant early exercise discount to holders of the $1.25 warrants
expiring November 2011. Ten million of the warrants were exercised
prior to June 30, 2011 with another 9.2 million warrants exercised
subsequently, leaving approximately 223,000 warrants to be exercised
prior to expiry on November 15, 2011.

The Company had approximately $38 million in cash reserves on June 30,
2011 and has also negotiated a US$40 million standby debt facility with
Credit Suisse AG. This facility will be available in the event that
additional working capital is required at Burnstone as a result of the
slower than planned production build-up. Legal documentation is nearing
completion with the targeted signature date being mid-August, 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
although the progress made by the team on a monthly basis is
reassuring, it is not yet at planned levels.   The need for additional
waste development to access the mining blocks impacted negatively on
ore development which in turn impacts on stopes available for mining.
Production for the remainder of the year will unfortunately be impacted
by this approximate 3 month delay in ore development and we expect to
recover between 50,000 to 60,000 Au oz for the second half of the year
and an estimated 60 000 to 70 000 ounces for the 12 month period. The
Nevada operations showed improvements in a number of areas during the
quarter, notably in ounces extracted through trial mining as well as
the improved recoveries at our Esmeralda Mill. The latter improvement
is especially pleasing with the impact already evident in the reduced
cash costs and the increased ounces delivered to the refinery. The
current performance from our Nevada operations and the standby debt
facility provides the Company with adequate cash resources to fund the
delayed production build-up at Burnstone. Our short to medium term
focus at both of these operations remains to increase production,
manage costs and unlock the intrinsic value of these quality projects.'

Johan Oelofse, Pr.Eng., FSAIMM, Chief Operating Officer of Great Basin
Gold, and Phil Bentley, Pr. Sci. Nat., Vice President: Geology &
Exploration, Qualified Persons as defined by regulatory policy, have
reviewed and assumed responsibility for the technical information
contained in this release.

No regulatory authority has approved or disapproved the information
contained in this news release.

Cautionary and Forward Looking Statement Information

This document contains 'forward-looking statements' that were based on
Great Basin'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 whether mineral resources or reserves exist on a
        property;
    --  uncertainties related to Technical Reports 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 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
  o mine expansions, environmental protection and associated compliance
    costs arising from exploration, mine development, mine operations
    and mine closures;
  o expected effective future tax rates in jurisdictions in which our
    operations are located;
  o the protection of the health and safety of mine workers; and
  o 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.

For further information on Great Basin Gold, investors should review the
Company's annual Form 40-F filing with the United States Securities and
Exchange Commission www.sec.com and home jurisdiction filings that are available at www.sedar.com.  The Company undertakes no obligation to update forward-looking
information if circumstances or management's estimates or opinions
should change except as required by law.

Cautionary Note regarding Non-GAAP Measurements

Cash production cost per ounce/tonne is a not a generally accepted
accounting principles ('GAAP') based figure but rather is intended to
serve as a performance measure providing some indication of the mining
and processing efficiency and effectiveness. It is determined by
dividing the relevant mining and processing costs including royalties
by the ounces produced/tonnes milled in the period. There may be some
variation in the method of computation of 'cash production cost per
ounce/tonne' as determined by the Company compared with other mining
companies. Cash production costs per ounce/tonne may vary from one
period to another due to operating efficiencies, waste to ore ratios,
grade of ore processed and gold recovery rates in the period. We
provide this measure to our investors to allow them to also monitor
operational efficiencies. As a Non-GAAP Financial Measure cash
production costs should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
GAAP. There is material limitations associated with the use of such
Non-GAAP measures.

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For additional details on Great Basin Gold and its gold properties as well as further particulars about the financial and operational update, please visit the Company's website at www.grtbasin.com or contact Investor Services: