GREAT BASIN GOLD LIMITED - Great Basin Gold suspends operations at its Burnstone Mine

Great Basin Gold suspends operations at its Burnstone Mine

GREAT BASIN GOLD LIMITED
(Incorporated in Canada and registered as an External Company in
South Africa)
(Registration No. 2006/021304/10)
Share Code: GBG      ISIN Number: CA3901241057
("Great Basin Gold" or "the Company")

GREAT BASIN GOLD SUSPENDS OPERATIONS AT ITS BURNSTONE MINE

September 11, 2012, Vancouver, BC - Great Basin Gold Ltd.
(“Great Basin Gold” or the “Company”), (TSX: GBG; NYSE MKT: GBG;
JSE: GBG) announces that it has suspended operations at the
Company’s Burnstone mine located in the Witwatersrand Basin of
South Africa as at September 11, 2012. The suspension of all
development and production activities follows a recommendation
from the Company’s strategic review special committee, the
formation of which was announced on August 15, 2012. The
recommendation is based on the Company’s inability to continue
funding the working capital required by Burnstone to achieve
cash flow breakeven, which would have taken until May 2013 at
current ramp-up rates. The Company is seeking financing for the
immediate costs associated with the shut-down which are
estimated in the range of $30 - $40 million dollars (inclusive
of currently overdue accounts payable) together with ongoing
monthly costs in the $1.2 million range for a care and
maintenance program once it is developed and implemented. There
is currently no certainty that such financing will be made
available to the Company.

The Company also wishes to announce the resignation of Philip
Kotze as a director of the Company on September 6, 2012. Mr.
Kotze’s contribution as a director was valuable and we thank him
for it.

Lou van Vuuren, interim CEO, commented on the suspension: “While
it is disappointing that operations at Burnstone had to be
suspended, especially given the recently improved progress
there, the Board had to take this step pending the completion of
the strategic review process and potential financial
restructuring. Burnstone remains a very valuable project with                                                           
over 6 million ounces of gold in proven and probable reserves
and a forecast life of mine in excess of 25 years. The Board
thanks the many dedicated and hard-working employees and
contractors who contributed to bringing this project from
discovery to early stage production. We believe that following
the injection of sufficient new capital, this asset will
demonstrate its long-term value to investors and employees.”

Lou van Vuuren
CEO (interim)

For additional details on Great Basin Gold Ltd. and its gold
properties, please visit the Company’s website at
www.grtbasin.com or contact Investor Services Michael Curlook,
Head of Investor Services at 1-888-633-9332.


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 related to the Company’s liquidity challenges
and need for near term financing
- uncertainties related to project realization values
- 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 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;

As per January 2011 Mineral Reserve Statement less depletion up to June 30, 2012.
                                                                                       
- 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
- 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.
- There is currently no certainty that the financing required
to shut down Burnstone will be made available to the
Company.


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.gov and home
jurisdiction filings that are available at www.sedar.com.

12 September 2012

Sponsor
Sasfin Capital
(A division of Sasfin Bank Limited)

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