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Great Basin Gold Updates Insolvency Proceedings And DIP Loan Status

JOHANNESBURG, SA, Oct. 4, 2012 /PRNewswire/ - Great Basin Gold Ltd. (" Great Basin Gold"), (TSX: GBG; NYSE MKT: GBG; JSE: GBG) announces that further to its news release of September 20, 2012, the $35 million debtor-in-possession loan from its current lenders (" Lender  DIP Loan") authorized by the Supreme Court of British Columbia on September 19, 2012 and reaffirmed on September 27 with amendments, closed on October 3, 2012. An initial utilisation of US$14,235,000 under the Lender DIP Loan has now been advanced of which approximately US$9,235,000 was used to pay down the emergency loan advanced by the lenders on September 20 as an amendment of the existing 2010 Burnstone $150 million secured credit facility ("the 2010 Burnstone Facility").

A British Columbia appellate court has today denied an application made by an ad hoc committee of holders of the Great Basin Gold's convertible debentures (" CD Committee") for leave to appeal the September 27 decision of the British Columbia Supreme Court.  The CD Committee's main objection to the Lender DIP Loan is the granting by Great Basin Gold Inc. ("GBGI"), parent of the Great Basin Gold  subsidiaries in Nevada which own the Hollister and Esmeralda assets, of a guarantee (the " Guarantee") of the obligations of the 2010 Burnstone Facility, which is a requirement under the Lender DIP Loan.  The British Columbia Supreme Court rejected this objection, and the British Columbia Court of Appeal today denied leave to appeal that decision. Yesterday, the CD Committee obtained from a Nevada State court a 7 day temporary restraining order (" TRO") restricting GBGI from entering into the Guarantee. The CD Committee is also seeking a receivership order against GBGI.  GBGI will vigorously defend itself in the Nevada litigation.

In other developments, TSX has determined to delist the Common Shares, Debentures and Warrants (Symbols: GBG, GBG.DB and GBG.WT) (collectively, the "Securities") of the Company at the close of market on October 25, 2012 for failure to meet the continued listing requirements of TSX. The Securities will remain suspended from trading.

Lou van Vuuren CEO (interim)

Cautionary and Forward Looking Statement Information

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