---

Platinum Group Metals Ltd.
(An Exploration and Development Stage Company)

Consolidated Financial
StatementsFor the year ended August 31, 2013



Filed: November 26, 2013

---

Managements Responsibility for the Financial Statements

The preparation and presentation of the accompanying
consolidated financial statements, Managements Discussion and Analysis
(MD&A) and all financial information in the Annual Report are the
responsibility of management and have been approved by the Board of Directors.

The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards as issued by the
IASB. Financial statements, by nature are not precise since they include certain
amounts based upon estimates and judgments. When alternative methods exist,
management has chosen those it deems to be the most appropriate in the
circumstances. The financial information presented elsewhere in the Annual
Report is consistent with that in the consolidated financial statements.

Management, under the supervision of and with the participation
of the Chief Executive Officer and the Chief Financial Officer, have a process
in place to evaluate disclosure controls and procedures and internal control
over financial reporting as required by Canadian and U.S. securities
regulations. We, as Chief Executive Officer and Chief Financial Officer, will
certify our annual filings with the CSA and SEC as required in Canada by
National Instrument 52-109 and in the United States as required by the
Sarbanes-Oxley Act of 2002.

The Board of Directors is responsible for ensuring that
management fulfills its responsibilities for financial reporting and is
ultimately responsible for reviewing and approving the consolidated financial
statements. The Board carries out this responsibility principally through its
Audit Committee which is independent from management.

The Audit Committee is appointed by the Board of Directors and
reviews the consolidated financial statements and MD&A; considers the report
of the independent auditors; assesses the adequacy of our internal controls,
including managements assessment described below; examines and approves the
fees and expenses for the audit services; and recommends the independent
auditors to the Board for the appointment by the shareholders. The independent
auditors have full and free access to the Audit Committee and meet with it to
discuss their audit work, our internal control over financial reporting and
financial reporting matters. The Audit Committee reports its findings to the
Board for consideration when approving the consolidated financial statements for
issuance to the shareholders and managements assessment of the internal control
over financial reporting.

Managements Report on Internal Control over Financial
Reporting

Management is responsible for establishing and maintaining
adequate internal control over financial reporting.

Management has used the Internal Control  Integrated
Framework (1992) published by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO) framework to evaluate the effectiveness of the
Companys internal control over financial reporting as at August 31, 2013. Based
on this evaluation, management has concluded that as at August 31, 2013, the
Companys internal control over financial reporting was effective.

Under the Jumpstart Our Business & Startups Act (JOBS
Act), emerging growth companies are exempt from Section 404(b) of the
Sarbanes-Oxley Act, which generally requires public companies to provide an
independent auditor attestation of managements assessment of the effectiveness
of their internal control over financial reporting. The Company qualifies as an
emerging growth company under the JOBS Act and therefore has not included an
independent auditor attestation of managements assessment of the effectiveness
of its internal control over financial reporting in these audited annual
consolidated financial statements for the year ended August 31, 2013.



| |                         | 
| | ----------------------- | 
| | Frank Hallam           
| | Chief Financial Officer

---

Independent Auditors Report

To the Shareholders of Platinum Group Metals Ltd.

We have audited the accompanying consolidated financial
statements of Platinum Group Metals Ltd., which comprise the consolidated
statements of financial position as at August 31, 2013 and August 31, 2012 and
the consolidated statements of loss and comprehensive loss, changes in equity
and cash flows for the years ended August 31, 2013 and August 31, 2012, and the
related notes and other explanatory information.

Managements responsibility for the consolidated financial
statementsManagement is responsible for the preparation and fair
presentation of these consolidated financial statements in accordance with
International Financial Reporting Standards as issued by the International
Accounting Standards Board, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or
error.

Auditors responsibilityOur responsibility is to
express an opinion on these consolidated financial statements based on our
audits. We conducted our audits in accordance with Canadian generally accepted
auditing standards. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free from material
misstatement.

An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on the auditors judgment, including
the assessment of the risks of material misstatement of the consolidated
financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entitys
preparation and fair presentation of the consolidated financial statements in
order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
entitys internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made
by management, as well as evaluating the overall presentation of the
consolidated financial statements.

We believe that the audit evidence we have obtained in our
audits is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the consolidated financial
statements present fairly, in all material respects, the financial position of
Platinum Group Metals Ltd. as at August 31, 2013 and August 31, 2012 and its
financial performance and cash flows for the years ended August 31, 2013 and
August 31, 2012 in accordance with International Financial Reporting Standards
as issued by the International Accounting Standards Board.

(signed) PricewaterhouseCoopers LLP

Chartered AccountantsVancouver, British Columbia,
Canada November 26, 2013

---

|PLATINUM GROUP METALS LTD.                    
|----------------------------------------------
|(An exploration and development stage company)
|Consolidated Statements of Financial Position 
|(in thousands
      of Canadian dollars)      

|                                                            |   | August 31, 2013 |   |   | August 31, 2012 |  
|----------------------------------------------------------- | - | --------------- | - | - | --------------- | -
|                                                            |   |                 |   |   |                 |  
|ASSETS                                                      |   |                 |   |   |                 |  
|Current                                                     |   |                 |   |   |                 |  
|Cash and
      cash equivalents                             | $ | 111,784         |   | $ | 17,665          |  
|Amounts receivable (Note
      3)                           |   | 6,931           |   |   | 4,700           |  
|Prepaid expenses and other assets                           |   | 490             |   |   | 302             |  
|Total current assets                                        |   | 119,205         |   |   | 22,667          |  
|Restricted cash (Note 4 (a
      (i)))                      |   | 10,155          |   |   | 30,512          |  
|Other assets                                                |   | 123             |   |   | 141             |  
|Performance bonds (Note 4 (a
      (ii)))                   |   | 3,433           |   |   | 8,698           |  
|Exploration and evaluation assets (Note 5)                  |   | 22,447          |   |   | 14,809          |  
|Property, plant and equipment (Note 4)                      |   | 234,617         |   |   | 166,907         |  
|Total assets                                                | $ | 389,980         |   | $ | 243,734         |  
|                                                            |   |                 |   |   |                 |  
|LIABILITIES                                                 |   |                 |   |   |                 |  
|Current                                                     |   |                 |   |   |                 |  
|Accounts payable and accrued liabilities                    | $ | 25,057          |   | $ | 7,778           |  
|Total current liabilities                                   |   | 25,057          |   |   | 7,778           |  
|                                                            |   |                 |   |   |                 |  
|Deferred income taxes (Note
      15)                       |   | 11,908          |   |   | 13,426          |  
|Asset retirement obligation (Note 6)                        |   | 1,407           |   |   | 1,440           |  
|Total liabilities                                           |   | 38,372          |   |   | 22,644          |  
|                                                            |   |                 |   |   |                 |  
|EQUITY                                                      |   |                 |   |   |                 |  
|                                                            |   |                 |   |   |                 |  
|Share capital (Note 7)                                      |   | 425,435         |   |   | 256,312         |  
|Contributed surplus                                         |   | 18,593          |   |   | 16,934          |  
|Accumulated other
      comprehensive income                |   | (61,481         | ) |   | (36,521         | )
|Deficit                                                     |   | (85,349         | ) |   | (55,318         | )
|Equity attributable to
      shareholders of Platinum Group |   |                 |   |   |                 |  
|Metals Ltd.                                                 |   | 297,198         |   |   | 181,407         |  
|Non-controlling interest
      (Note 4(a (i)))              |   | 54,410          |   |   | 39,683          |  
|Total equity                                                |   | 351,608         |   |   | 221,090         |  
|Total equity and liabilities                                | $ | 389,980         |   | $ | 243,734         |  
|                                                            |   |                 |   |   |                 |  
|CONTINGENCIES AND COMMITMENTS
      (NOTE 12)               |  
|SUBSEQUENT EVENTS (NOTE 16)                                 |  

Approved by the Board of Directors and authorized for issue on
November 26, 2013

|"Iain
      McLean"    | 
|---------------------- | 
|Iain McLean, Director  | 
|                       | 
|"Eric
      Carlson"   | 
|Eric Carlson, Director | 

See accompanying notes to the consolidated financial statements.

---

|PLATINUM GROUP
      METALS LTD.                               
|---------------------------------------------------------------
|(An exploration and development stage company)                 
|Consolidated Statements of Loss and Comprehensive
      Loss   
|(in thousands
      of Canadian dollars, except for share data)

|                                                                               |   | Year            |   |   | Year            |  
|------------------------------------------------------------------------------ | - | --------------- | - | - | --------------- | -
|                                                                               |   | Ended           |   |   | Ended           |  
|                                                                               |   | August 31, 2013 |   |   | August 31, 2012 |  
|                                                                               |   |                 |   |   |                 |  
|EXPENSES                                                                       |   |                 |   |   |                 |  
|General and administrative (Note 11)                                           | $ | 6,937           |   | $ | 5,373           |  
|Foreign exchange loss                                                          |   | 8,245           |   |   | 3,588           |  
|Stock compensation expense (Note 7)                                            |   | 1,166           |   |   | 2,006           |  
|Write-down of property, plant
      and equipment                              |   | -               |   |   | 442             |  
|Write-down of exploration and evaluation assets                                |   | 548             |   |   | 413             |  
|                                                                               |   | (16,896         | ) |   | (11,822         | )
|Finance income                                                                 |   | 5,002           |   |   | 3,943           |  
|Loss for the year before income tax                                            |   | (11,894         | ) |   | (7,879          | )
|Income tax expense
      (Note 15)                                             |   | (172            | ) |   | (2,321          | )
|Loss for the year                                                              |   | (12,066         | ) |   | (10,200         | )
|Other comprehensive loss                                                       |   |                 |   |   |                 |  
|Foreign currency translation adjustment                                        |   | (28,198         | ) |   | (33,076         | )
|Comprehensive
      loss for the year                                          | $ | (40,264         | ) | $ | (43,276         | )
|                                                                               |   |                 |   |   |                 |  
|Loss attributable to:                                                          |   |                 |   |   |                 |  
|Shareholders of Platinum Group Metals Ltd.                                     |   | (12,369         | ) |   | (10,588         | )
|Non-controlling
      interests                                                |   | 303             |   |   | 388             |  
|                                                                               |   | (12,066         | ) |   | (10,200         | )
|                                                                               |   |                 |   |   |                 |  
|Comprehensive loss attributable to:                                            |   |                 |   |   |                 |  
|Shareholders of Platinum Group Metals Ltd.                                     |   | (37,329         | ) |   | (41,008         | )
|Non-controlling interests                                                      |   | (2,935          | ) |   | (2,268          | )
|                                                                               |   | (40,264         | ) |   | (43,276         | )
|                                                                               |   |                 |   |   |                 |  
|Basic and diluted
      loss per common share                                  | $ | (0.04           | ) | $ | (0.06           | )
|Weighted-average number of common shares outstanding -
      Basic and diluted |   | 324,990,597     |   |   | 177,584,542     |  

See accompanying notes to the consolidated financial statements.

---

|PLATINUM GROUP
      METALS LTD.                            
|------------------------------------------------------------
|(An exploration and development stage company)              
|Condensed Consolidated Statements of Changes in
      Equity
|(in thousands of Canadian dollars, except share data)       

Common shareswithout par value
    
    
    
    
    
    
    
    
    
    
    
    Attributable toContributed
    
    
    Accumulated other
    
    
    
    
    
    Shareholders of
    
    
    Non-controllingShares
    
    
    Amount
    
    
    surplus
    
    
    comprehensive loss
    
    
    Deficit
    
    
    Parent Company
    
    
    interest
    
    
    TotalBalance, August 31,
      2011
    
    177,584,542
    
    
    256,312
    
    
    13,816
    
    
    (6,101
    )
    
    (34,347
    )
    
    229,680
    
    
    31,568
    
    
    261,248Stock based compensation
    
    -
    
    
    -
    
    
    3,118
    
    
    -
    
    
    -
    
    
    3,118
    
    
    -
    
    
    3,118Funding of non-controlling
      interest
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (10,383
    )
    
    (10,383
    )
    
    10,383
    
    
    -Foreign currency translation adjustment
    
    -
    
    
    -
    
    
    -
    
    
    (30,420
    )
    
    -
    
    
    (30,420
    )
    
    (2,656
    )
    
    (33,076
    )Net loss for the year
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (10,588
    )
    
    (10,588
    )
    
    388
    
    
    (10,200
    )Balance, August 31, 2012
    
    177,584,542
    
    
    256,312
    
    
    16,934
    
    
    (36,521
    )
    
    (55,318
    )
    
    181,407
    
    
    39,683
    
    
    221,090Stock based compensation
    
    -
    
    
    -
    
    
    1,734
    
    
    -
    
    
    -
    
    
    1,734
    
    
    -
    
    
    1,734Share issuance - financing
    
    225,000,000
    
    
    180,000
    
    
    -
    
    
    -
    
    
    -
    
    
    180,000
    
    
    -
    
    
    180,000Share issuance costs
    
    -
    
    
    (11,143
    )
    
    -
    
    
    -
    
    
    -
    
    
    (11,143
    )
    
    -
    
    
    (11,143
    )Issued upon the exercise of options
    
    175,000
    
    
    266
    
    
    (75
    )
    
    -
    
    
    -
    
    
    191
    
    
    -
    
    
    191Funding of non-controlling
      interest
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (17,662
    )
    
    (17,662
    )
    
    17,662
    
    
    -Foreign currency translation adjustment
    
    -
    
    
    -
    
    
    -
    
    
    (24,960
    )
    
    -
    
    
    (24,960
    )
    
    (3,238
    )
    
    (28,198
    )Net loss for the year
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (12,369
    )
    
    (12,369
    )
    
    303
    
    
    (12,066
    )Balance, August 31, 2013
    
    402,759,542
    
    $
    425,435
    
    $
    18,593
    
    $
    (61,481
    )
    $
    (85,349
    )
    $
    297,198
    
    $
    54,410
    
    $
    351,608


See accompanying notes to the consolidated financial statements.

---

|PLATINUM GROUP
      METALS LTD.              
|----------------------------------------------
|(An exploration and development stage company)
|Consolidated Statements of Cash Flows         
|(in thousands
      of Canadian dollars)      

|                                                              |   | Year            |   |   | Year            |  
|------------------------------------------------------------- | - | --------------- | - | - | --------------- | -
|                                                              |   | Ended           |   |   | Ended           |  
|                                                              |   | August 31, 2013 |   |   | August 31, 2012 |  
|OPERATING ACTIVITIES                                          |   |                 |   |   |                 |  
|Loss for the year                                             | $ | (12,066         | ) | $ | (10,200         | )
|Add items not affecting
      cash:                           |   |                 |   |   |                 |  
|Depreciation                                                  |   | 386             |   |   | 387             |  
|Foreign
      exchange loss                                   |   | 7,310           |   |   | 1,659           |  
|Deferred income tax
      expense                             |   | 172             |   |   | 2,752           |  
|Write-down of property, plant and equipment                   |   | -               |   |   | 442             |  
|Write-down of exploration
      and evaluation assets         |   | 548             |   |   | 413             |  
|Stock
      compensation expense                              |   | 1,166           |   |   | 2,006           |  
|Net change in non-cash working capital (Note 13)              |   | 2,195           |   |   | 34              |  
|                                                              |   | (289            | ) |   | (2,507          | )
|                                                              |   |                 |   |   |                 |  
|FINANCING ACTIVITIES                                          |   |                 |   |   |                 |  
|Share issuance                                                |   | 180,000         |   |   | -               |  
|Share issuance Costs                                          |   | (11,143         | ) |   | -               |  
|Share issuance - stock options                                |   | 184             |   |   | -               |  
|                                                              |   | 169,041         |   |   | -               |  
|                                                              |   |                 |   |   |                 |  
|INVESTING ACTIVITIES                                          |   |                 |   |   |                 |  
|Acquisition of property, plant and
      equipment            |   | (73,071         | ) |   | (36,940         | )
|Exploration
      expenditures, net of recoveries             |   | (9,561          | ) |   | (5,910          | )
|South African VAT                                             |   | (4,471          | ) |   | (50             | )
|Performance bonds                                             |   | 4,178           |   |   | (6,878          | )
|Restricted cash                                               |   | 16,336          |   |   | 8,013           |  
|                                                              |   | (66,589         | ) |   | (41,765         | )
|Net (decrease) increase in cash and cash equivalents          |   | 102,163         |   |   | (44,272         | )
|Effect of foreign exchange on cash and cash
      equivalents |   | (8,044          | ) |   | (2,181          | )
|Cash and cash
      equivalents, beginning of year            |   | 17,665          |   |   | 64,118          |  
|Cash and cash equivalents, end of year                        | $ | 111,784         |   | $ | 17,665          |  

See accompanying notes to the consolidated financial statements.

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial statements
For the year ended August 31, 2013 (in thousands of Canadian dollars
unless otherwise noted)

1.         
NATURE OF OPERATIONS AND LIQUIDITY

Platinum Group Metals Ltd. (the Company) is a British
Columbia company amalgamated on February 18, 2002. The Companys shares are
publicly listed on the Toronto Stock Exchange in Canada and the NYSE MKT LLC in
the United States. The Companys address is Suite 788-550 Burrard Street,
Vancouver, British Columbia, V6C 2B5.

The Company is an exploration and development company
conducting work on mineral properties it has staked or acquired by way of option
agreements in Canada and the Republic of South Africa. The Company is currently
developing the Project 1 platinum mine in South Africa, in which it held a 74%
working interest as of August 31, 2013 and currently holds a right to acquire a
77.55% working interest. This working interest may, subject to the arbitration
discussed below, increase further to 78.98% . A formal Mining Right was granted
for the project on April 4, 2012 by the Government of South Africa.

These financial statements include the accounts of the Company
and its subsidiaries. The Companys subsidiaries are as follows at August 31,
2013:

Platinum Group Metals (RSA) (Pty) Ltd. - Johannesburg, RSA
(100% ownership) 
Maseve Investments 11 (Pty) Ltd. - Johannesburg, RSA (74%
ownership) 
Wesplats Holdings (Pty) Limited - Johannesburg, RSA (100% ownership)

Platinum Group Metals (Barbados) Ltd., Barbados (100% ownership) 
Mnombo Wethu
Consultants (Pty) Limited.  Johannesburg, RSA (49.9% ownership)

Prior to October 18, 2013 the Company was working with a
syndicate of international financial institutions (the Lenders) to complete a
USD $260 million senior loan facility for the Project 1 platinum mine.
Negotiations had advanced through detailed technical, financial and legal due
diligence. Credit committee approval by the Lenders was announced on December 6,
2012. Closing and draw down of the loan facility would have been subject to the
negotiation and execution of definitive documentation and satisfaction of
conditions precedent. The Company would have been required to fund its 74% share
of Project 1 funding over and above that which would have been provided by the
senior loan facility.

On October 18, 2013 the Companys Black Economic Empowerment
(BEE) partner, Africa Wide Mineral Prospecting and Exploration (Pty) Ltd.
(Africa Wide), a subsidiary of Wesizwe Platinum Ltd. which held a 26% interest
in Project 1 through the operating company Maseve Investments 11 (PTY.) Ltd.
(Maseve), informed the Company that it would not be funding its approximately
USD $21.8 million share of a six month budget and cash call unanimously approved
by the board of directors of Maseve. Africa Wide was also to be a guarantor and
obligor under the above mentioned senior loan facility.

Subsequent to October 18, 2013 the Company began working with
the Lenders to restructure a loan facility for Project 1 wherein the Company
will be required to guarantee the obligations of Maseve by a pledge of its
interests in the capital of Maseve and its interests in the Waterberg joint
venture and Waterberg Extension (defined herein). On November 8, 2013 the
Company entered into a new mandate letter with three of the four Lenders for a
new USD $195 million senior loan facility for the Project 1 platinum mine. The
new mandate will build on the work and due diligence towards a senior loan
facility agreement that was achieved up to Africa Wides announcement on October
18, 2013.

The closing and draw down of the new senior loan facility
remains subject to finalization of a facility agreement and a number of
conditions in the new mandate letter, including financial and continued
technical due diligence of the Company and the receipt of necessary regulatory
approvals for the sale of Africa Wides diluted interest in Maseve to a
qualified BEE entity. The new senior loan facility under the terms and
conditions of the new mandate letter will replace the previously proposed senior
loan facility and will not rely on Africa Wide to provide any covenants,
guarantees or consents. Although Africa Wide has the right to participate in
future cash calls relative to their percentage holding in Maseve, the Company
anticipates that Africa Wide will not participate in future cash calls and that
the Company and any new BEE partner will be responsible for all required
additional equity to fund the construction of Project 1 as well as a cost
overrun account under a new senior loan facility.

1

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial statements
For the year ended August 31, 2013 (in thousands of Canadian dollars
unless otherwise noted)

There is no certainty that the Company will be able to
successfully complete the new senior loan facility described above. Failure by
the Company to complete a senior loan facility or alternative financing for
Project 1, or to provide its share of required funding, may result in the delay
or indefinite postponement of exploration, development, or production on any or
all of the Companys properties, or even a loss of property interests. Estimated
break fees in the event of cancellation are $35,617 (Note 12).

2.         
SIGNIFICANT ACCOUNTING POLICIES

Statement of Compliance

These consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS) and
International Financial Reporting Interpretations Committee (IFRIC)
interpretations as issued by the International Accounting Standards Board
(IASB). The consolidated financial statements have been prepared under the
historical cost convention.

The consolidated financial statements were approved by the
Companys Board of Directors.

The consolidated financial statements are presented in Canadian
dollars.

The principal accounting policies applied in the preparation of
these consolidated financial statements are set out below.

Consolidation

These consolidated financial statements incorporate the
financial statements of the Company and entities controlled by the Company
(subsidiaries). Control is achieved where the Company has the power to govern
the financial and operating policies of an entity so as to obtain benefits from
its activities.

Subsidiaries are fully consolidated from the date on which
control is transferred to the group. They are de-consolidated from the date that
control ceases.

Intercompany transactions, balances, revenues and expenses are
eliminated.

Non-controlling interest in the net assets of consolidated
subsidiaries are identified separately from the Companys equity.
Non-controlling interest consists of the non-controlling interest at the date of
the original business combination plus the non-controlling interests share of
changes in equity since the date of acquisition.

Cash and cash equivalents

Cash and cash equivalents consist of cash and short-term
deposits, which are readily convertible to cash and have original maturities of
90 days or less.

Exploration and Evaluation Assets

Exploration and evaluation activity involves the search for
mineral resources, the determination of technical feasibility and the assessment
of commercial viability of an identified resource.

Exploration and evaluation activity includes:

2

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2013 (in thousands of Canadian
dollars unless otherwise noted)

- acquiring the rights to explore;
- researching and analyzing historical exploration data; - gathering
exploration data through topographical, geochemical and geophysical studies;
- exploratory drilling, trenching and sampling; - determining and
examining the volume and grade of the resource; - surveying transportation
and infrastructure requirements; and - compiling pre-feasibility and
feasibility studies.

Exploration and evaluation expenditures on identifiable
properties are capitalized. Exploration and evaluation assets are shown
separately until a build decision is made at which point the relevant asset is
transferred to development assets under property, plant and equipment.
Capitalized costs are all considered to be tangible assets as they form part of
the underlying mineral property. No amortization is charged during the
exploration and evaluation phase as the asset is not available for use.

Capitalized exploration and evaluation assets are reviewed for
impairment when facts or circumstances suggest an assets carrying amount may
exceed its recoverable amount. If impairment is considered to exist, the related
asset is written down to the greater of its value in use and its fair value less
costs to sell.

Undivided interests in mineral properties acquired as a result
of a joint exploration arrangement are recorded as exploration and evaluation
assets.

Property, plant and equipment

Property, plant and equipment are stated at cost less
accumulated depreciation and accumulated impairment losses. The cost of an item
of property, plant and equipment includes the purchase price or construction
cost, any costs directly attributable to bringing the asset to the location and
condition necessary for its intended use, an initial estimate of the costs of
dismantling and removing the item and restoring the site on which it is located,
and for qualifying assets, the associated borrowing costs.

Where an item of property, plant and equipment is comprised of
major components with different useful lives, the components are accounted for
as separate items of property, plant and equipment.

Costs incurred for new construction, mine development, and
major overhauls of existing equipment are capitalized as property, plant and
equipment and are subject to depreciation once they are put into use. The costs
of routine maintenance and repairs are expensed as incurred.

Once a mining project has been established as commercially
viable, expenditure other than on land, buildings, plant and equipment is
capitalised as part of development assets together with any related amount
transferred from exploration and evaluation assets.

Property, plant and equipment are recorded at cost and are
amortized on a straight line basis over the following periods:

Building
    20 yearsMining equipment
    2  22 yearsVehicles
    3  5 yearsComputer equipment and software
    3  5 yearsFurniture and fixtures
    5 years


Development costs are depreciated on a unit of production
basis.

Impairment of long-lived assets

Long-lived assets are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount may not be recoverable.

3

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2013 (in thousands of Canadian
dollars unless otherwise noted)

The Company conducts internal reviews of asset values which are
used to assess for any indications of impairment. External factors such as
changes in expected future prices, costs and other market factors including
market capitalization are also monitored to assess for indications of
impairment.

If any such indication exists an estimate of the recoverable
amount is undertaken, being the higher of an assets fair value less costs to
sell and its value in use. If the assets carrying amount exceeds its
recoverable amount then an impairment loss is recognized.

Fair value is determined as the amount that would be obtained
from the sale of the asset in an arms length transaction between knowledgeable
and willing parties. Fair value of mineral assets is generally determined as the
present value of the estimated future cash flows expected to arise from the
continued use of the asset, including any expansion prospects.

Value in use is determined as the present value of the
estimated future cash flows expected to arise from the continued use of the
asset in its present form and from its ultimate disposal.

Impairment is normally assessed at the level of cash-generating
units (CGUs), which are identified as the smallest identifiable group of
assets that generates cash inflows that are largely independent of the cash
inflows from other assets.

Long lived assets that have suffered impairment are tested for
possible reversal of the impairment whenever events or changes in circumstances
indicate that the impairment may have reversed. When a reversal of a previous
impairment is recorded, the reversal amount is adjusted for depreciation that
would have been recorded had the impairment not taken place.

Asset retirement obligations

Provisions for asset retirement obligations are made in respect
of the estimated future costs of closure and restoration and for environmental
rehabilitation costs (which include the dismantling and demolition of
infrastructure, removal of residual materials and remediation of disturbed
areas) in the accounting period when the related disturbance occurs. The
provision is discounted using a risk-free pre-tax rate, and the unwinding of the
discount is included in finance costs. At the time of establishing the
provision, a corresponding asset is capitalized and is depreciated over the
future life of the asset to which it relates. The provision is adjusted on an
annual basis for changes in cost estimates, discount rates and inflation.

Income taxes

Deferred tax is recognized on temporary differences between the
carrying value of assets and liabilities in the statement of financial position
and the corresponding tax bases used in the computation of taxable profit.
Deferred tax is determined using tax rates and tax laws that are enacted or
substantively enacted at the date of the statement of financial position and
that are expected to apply when the related deferred tax asset is realized or
the deferred tax liability is settled.

Deferred tax assets and liabilities are not recognized if the
temporary difference arises in a transaction other than a business combination
that at the time of the transaction affects neither the taxable nor the
accounting profit or loss.

Deferred tax assets are recognized for all deductible temporary
differences to the extent that it is probable that taxable profits will be
available against which those deductible temporary differences can be utilized.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off the current tax assets against the current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the Company intends to settle its current tax assets and
liabilities on a net basis.

4

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2013 (in thousands of Canadian
dollars unless otherwise noted)

The Company records foreign exchange gains and losses
representing the impacts of movements in foreign exchange rates on the tax bases
of non-monetary assets and liabilities which are denominated in foreign
currencies. Foreign exchange gains and losses relating to deferred income taxes
are included in deferred income tax expense or recovery.

Translation of foreign currencies

Functional and presentation currency

Items included in the financial statements of the Company and
each of the Companys subsidiaries are measured using the currency of the
primary economic environment in which the entity operates (the functional
currency) as follows:

|Platinum Group Metals Limited          | Canadian dollars     
|-------------------------------------- | ---------------------
|Platinum Group Metals (RSA) (Pty) Ltd. | South African Rand   
|Maseve Investments 11 (Pty) Ltd.       | South African Rand   
|Wesplats Holdings (Pty) Limited        | South African Rand   
|Mnombo Wethu Consultants (Pty) Limited | South African Rand   
|Platinum Group Metals (Barbados) Ltd.  | United States dollars

The Companys presentation currency is the Canadian dollar
($).

Transactions and balances

Foreign currency transactions are translated into the relevant
entitys functional currency using the exchange rates prevailing at the date of
the transaction. Foreign currency gains and losses resulting from the settlement
of such transactions and from the translation at period-end exchange rates of
monetary assets and liabilities denominated in foreign currencies are recognized
in the income statement.

Subsidiaries

The results and financial position of subsidiaries that have a
functional currency different from the presentation currency are translated into
the presentation currency as follows:

- Assets and liabilities are translated at the closing rate at the reporting
  date;
- Income and expenses are translated at average exchange rates for the
  period; and
- All resulting exchange differences are recognized in other comprehensive
  income as cumulative translation adjustments.

When a foreign operation is sold, such exchange differences are
recognized in the income statement to the extent of the portion sold as part of
the gain or loss on sale.

Stock-based compensation

The fair values for all stock-based awards are estimated using
the Black-Scholes model and recorded over the period of vesting. The
compensation cost related to stock options granted is expensed or capitalized to
mineral properties, as applicable.

Cash received on exercise of stock options is credited to share
capital and the related amount previously recognized in contributed surplus is
reclassified to share capital.

5

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2013 (in thousands of Canadian
dollars unless otherwise noted)

Loss per common share

Basic loss per common share is calculated using the weighted
average number of common shares outstanding.

The Company uses the treasury stock method for the calculation
of diluted earnings per share. Diluted per share amounts reflect the potential
dilution that could occur if securities or other contracts to issue common
shares were exercised or converted to common shares. In periods when a loss in
incurred, the effect of the potential issuances of shares is anti-dilutive, and
accordingly basic and diluted loss per share are the same.

Financial instruments

(i) Financial assets and liabilities

Loans and receivables  Loans
and receivables comprise cash and cash equivalents, amounts receivable,
restricted cash and performance bonds. Loans and receivables are non-derivative
financial assets with fixed or determinable payments that are not quoted in an
active market. They are classified as current assets or non-current assets based
on their maturity date. Loans and receivables are initially recognized at fair
value and subsequently carried at amortized cost less any impairment.

Other financial liabilities -
Other financial liabilities comprise accounts payable and accrued liabilities
and are recognized initially at fair value, net of transaction costs incurred
and are subsequently stated at amortized cost. Any difference between the
initial cost and the redemption value is recognized in the income statement over
the period to maturity using the effective interest method.

(ii) Fair value of financial instruments

The fair values of quoted investments
are based on current bid prices. If the market for a financial asset is not
active, the Company establishes fair value by using valuation techniques. These
include the use of recent arms length transactions, reference to other
instruments that are substantially the same, discounted cash flow analysis, and
option pricing models refined to reflect the issuers specific circumstances.

(iii) Impairment of financial assets

The Company assesses at each reporting
date whether there is objective evidence that a financial asset or a group of
financial assets is impaired. Impairment losses on financial assets carried at
amortized cost are reversed in subsequent periods if the amount of the loss
decreases and the decrease can be related objectively to an event occurring
after the impairment was recognized.

Future accounting changes

The following new accounting standards, amendments and
interpretations, that have not been early adopted in these consolidated
financial statements, will or may have an effect on the Companys future results
and financial position:

(i) IFRS 9 Financial Instruments

IFRS 9, addresses the classification,
measurement and recognition of financial assets and financial liabilities. IFRS
9 was issued in November 2009 and October 2010. It replaces the parts of IAS 39 that relate to the
classification and measurement of financial instruments. IFRS 9 requires
financial assets to be classified into two measurement categories: those
measured at fair value and those measured at amortized cost. The determination
is made at initial recognition. The classification depends on the entitys
business model for managing its financial instruments and the contractual cash
flow characteristics of the instrument. For financial liabilities, the standard
retains most of the IAS 39 requirements. The main change is that, in cases where
the fair value option is taken for financial liabilities, the part of a fair
value change due to an entitys own credit risk is recorded in other
comprehensive income rather than the income statement, unless this creates an
accounting mismatch. In July 2013, the IASB tentatively decided to defer the
mandatory effective date of IFRS 9. The IASB agreed that the mandatory effective
date should no longer be annual periods beginning on or after January 1, 2015
but rather be left open pending the finalization of the impairment and
classification and measurement requirements.

6

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2013 (in thousands of Canadian
dollars unless otherwise noted)

(ii) IFRS 10 Consolidated Financial Statements

IFRS 10, consolidation requires an
entity to consolidate an investee when it is exposed, or has rights, to variable
returns from its involvement with the investee and has the ability to affect
those returns through its power over the investee. Under existing IFRS,
consolidation is required when an entity has the power to govern the financial
and operating policies of an entity so as to obtain benefits from its
activities. IFRS 10 replaces SIC-12 Consolidation  Special Purpose Entities and
parts of IAS 27 Consolidated and Separate Financial Statements. The Company does
not anticipate the adoption of IFRS 10 will have a significant impact on its
consolidated financial statements and will adopt the standard as of September 1,
2013.

(iii) IFRS 11 Joint Arrangements

IFRS 11, Joint Arrangements, requires a
venturer to classify its interest in a joint arrangement as a joint venture or
joint operation. Joint ventures will be accounted for using the equity method of
accounting whereas for a joint operation the venturer will recognize its share
of the assets, liabilities, revenue and expenses of the joint operation. Under
existing IFRS, entities have the choice to proportionately consolidate or equity
account for interests in joint ventures. IFRS 11 supersedes IAS 31, Interests in
Joint Ventures, and SIC-13, Jointly Controlled EntitiesNon-monetary
Contributions by Venturers. The standard is effective for annual periods
beginning on or after January 1, 2013. The Company does not anticipate the
adoption of IFRS 11 will have a significant impact on its consolidated financial
statements and intends to adopt the standard as of September 1, 2013.

(iv) IFRS 12, Disclosure of Interests in Other
Entities

IFRS 12, Disclosures of Interests in
Other Entities establishes disclosure requirements for interests in other
entities, such as subsidiaries, joint arrangements and associates. The standard
carries forward existing disclosures and also introduces significant additional
disclosure that address the nature of, and risks associated with, an entitys
interests in other entities. The Company does not anticipate the adoption of
IFRS 12 will have a significant impact on its consolidated financial statements
and intends to adopt the standard as of September 1, 2013.

(v) IFRS 13, Fair Value Measurement

IFRS 13, Fair Value Measurement, is a
comprehensive standard for fair value measurement and disclosure for use across
all IFRS standards. The new standard clarifies that fair value is the price that
would be received to sell an asset, or paid to transfer a liability in an
orderly transaction between market participants, at the measurement date. Under
existing IFRS, guidance on measuring and disclosing fair value is dispersed
among the specific standards requiring fair value measurements and does not
always reflect a clear measurement basis or consistent disclosures. The Company
does not anticipate the adoption of IFRS 13 will have a significant impact on its consolidated
financial statements and intends to adopt the standard as of September 1, 2013.

7

---

Platinum Group Metals Ltd.(An
exploration and development stage company) Notes to the consolidated
financial statementsFor the year ended August 31, 2013 (in thousands of
Canadian dollars unless otherwise noted)

Significant accounting judgments and
estimates

The preparation of the financial statements in conformity
with IFRS requires the use of judgments and estimates that affect the amount
reported and disclosed in the consolidated financial statements and related
notes. These judgments and estimates are based on managements best knowledge of
the relevant facts and circumstances, having regard to previous experience, but
actual results may differ materially from the amounts included in the financial
statements. Information about such judgments and estimation is contained in the
accounting policies and notes to the financial statements, and the key areas are
summarized below.

Areas of judgment and key sources of estimation uncertainty
that have the most significant effect on the amounts recognized in these
consolidated financial statements are:

- Review of asset carrying values and impairment assessment; and
- Deferred tax assets and liabilities.

Each of these judgments and estimates is considered in more
detail below.

Review of asset carrying values and impairment assessment

Management is required to make significant judgements
concerning the identification of potential impairment indicators. In considering
whether any impairment indicators occurred in respect of the Company's long
lived assets as at August 31, 2013, management took into account a number of
factors such as changes in 4E basket prices, foreign exchange rates, capital
expenditures, operating costs, increased costs of capital, and required
ownership by historically disadvantaged South Africans and other factors that
may indicate impairment. Management has concluded, based on this analysis, that
it was not necessary to do a detailed assessment of whether any significant
assets were impaired.

The judgements, estimates and assumptions used by management in
assessing impairment indicators are based on current and forecast market
conditions. Changes in the economic and operating conditions impacting these
assumptions could result in the recognition of impairment charges in future
periods.

Deferred tax assets and liabilities and resource taxes

The determination of our future tax liabilities and assets
involves significant management estimation and judgment involving a number of
assumptions. In determining these amounts the Company interprets tax legislation
in a variety of jurisdictions and make estimates of the expected timing of the
reversal of future tax assets and liabilities. We also make estimates of our
future earnings which affect the extent to which potential future tax benefits
may be used. We are subject to assessment by various taxation authorities, which
may interpret tax legislation in a manner different from our view. These
differences may affect the final amount or the timing of the payment of taxes.
When such differences arise we make provision for such items based on our best
estimate of the final outcome of these matters.

8

---

Platinum Group Metals Ltd.(An
exploration and development stage company) Notes to the consolidated
financial statementsFor the year ended August 31, 2013 (in thousands of
Canadian dollars unless otherwise noted)

3.         
AMOUNTS RECEIVABLE

August 31, 2013
    
    
    August 31, 2012South African VAT
    $
    5,713
    
    $
    1,242Other receivables
    
    458
    
    
    31Interest
    
    287
    
    
    -Expenditure advances
    
    142
    
    
    3,208Canadian sales tax
    
    73
    
    
    131Due from related parties (Note 10)
    
    258
    
    
    88Total amounts receivable
    $
    6,931
    
    $
    4,700


9

---

PlatinumGroupMetalsLtd.(An exploration and development stage company) Notes to the
consolidated financial statements For the year ended August 31, 2013 (in
thousands of Canadian dollars unless otherwise noted)

4.PROPERTY,PLANTANDEQUIPMENT

|                                |   |             |   |   | Construction |   |   |        |   |   |           |   |   |           |   |   |           |   |   |         |  
|------------------------------- | - | ----------- | - | - | ------------ | - | - | ------ | - | - | --------- | - | - | --------- | - | - | --------- | - | - | ------- | -
|                                |   | Development |   |   | work- in-    |   |   |        |   |   |           |   |   | Office    |   |   | Mining    |   |   |         |  
|                                |   | assets      |   |   | progress     |   |   | Land   |   |   | Buildings |   |   | Equipment |   |   | Equipment |   |   | Total   |  
|Cost                            |   |             |   |   |              |   |   |        |   |   |           |   |   |           |   |   |           |   |   |         |  
|Balance as at August 31, 2011   | $ | 125,777     |   | $ | 3,432        |   | $ | 15,037 |   | $ | 4,338     |   | $ | 886       |   | $ | 1,811     |   | $ | 151,281 |  
|Additions                       |   | 31,164      |   |   | 805          |   |   | 2,112  |   |   | 282       |   |   | 131       |   |   | 5,803     |   |   | 40,297  |  
|Disposals                       |   | -           |   |   | -            |   |   | -      |   |   | -         |   |   | (1        | ) |   | (1        | ) |   | (2      | )
|Foreign exchange movement       |   | (19,348     | ) |   | (543         | ) |   | (2,379 | ) |   | (686      | ) |   | (68       | ) |   | (286      | ) |   | (23,310 | )
|Balance August 31, 2012         | $ | 137,593     |   | $ | 3,694        |   | $ | 14,770 |   | $ | 3,934     |   | $ | 948       |   | $ | 7,327     |   | $ | 168,266 |  
|Additions                       |   | 42,041      |   |   | 26,168       |   |   | -      |   |   | -         |   |   | 823       |   |   | 21,332    |   |   | 90,364  |  
|Foreign exchange movement       |   | (16,635     | ) |   | (462         | ) |   | (1,846 | ) |   | (492      | ) |   | (58       | ) |   | (915      | ) |   | (20,408 | )
|Balance August 31, 2 013        | $ | 162,999     |   | $ | 29,400       |   | $ | 12,924 |   | $ | 3,442     |   | $ | 1,713     |   | $ | 27,744    |   | $ | 238,222 |  
|                                |   |             |   |   |              |   |   |        |   |   |           |   |   |           |   |   |           |   |   |         |  
|Accumulated Depreciation        |   |             |   |   |              |   |   |        |   |   |           |   |   |           |   |   |           |   |   |         |  
|Balance as at August 31, 2011   |   | -           |   |   | -            |   |   | -      |   | $ | 32        |   | $ | 620       |   | $ | 96        |   | $ | 748     |  
|Additions                       |   | -           |   |   | -            |   |   | -      |   |   | 195       |   |   | 144       |   |   | 347       |   |   | 686     |  
|Disposals                       |   | -           |   |   | -            |   |   | -      |   |   | -         |   |   | (2        | ) |   | (1        | ) |   | (3      | )
|Foreign exchange movement       |   | -           |   |   | -            |   |   | -      |   |   | (4        | ) |   | (54       | ) |   | (14       | ) |   | (72     | )
|Balance August 31, 2012         | $ | -           |   | $ | -            |   | $ | -      |   | $ | 223       |   | $ | 708       |   | $ | 428       |   | $ | 1,359   |  
|Additions                       |   | -           |   |   | -            |   |   | -      |   |   | 179       |   |   | 157       |   |   | 2,034     |   |   | 2,370   |  
|Foreign exchange movement       |   | -           |   |   | -            |   |   | -      |   |   | (28       | ) |   | (43       | ) |   | (53       | ) |   | (124    | )
|Balance August 31, 2 013        | $ | -           |   | $ | -            |   | $ | -      |   | $ | 374       |   | $ | 822       |   | $ | 2,409     |   | $ | 3,605   |  
|                                |   |             |   |   |              |   |   |        |   |   |           |   |   |           |   |   |           |   |   |         |  
|Net book value, August 31, 2012 | $ | 137,593     |   | $ | 3,694        |   | $ | 14,770 |   | $ | 3,711     |   | $ | 240       |   | $ | 6,899     |   | $ | 166,907 |  
|Net book value, August 31, 2013 | $ | 162,999     |   | $ | 29,400       |   | $ | 12,924 |   | $ | 3,068     |   | $ | 891       |   | $ | 25,335    |   | $ | 234,617 |  

10

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial statements
For the year ended August 31, 2013 (in thousands of Canadian dollars
unless otherwise noted)

a)          Project
1

Project 1, is located in the Western Bushveld region of South
Africa and is currently in development. Project 1 is classified as development
assets and construction in progress in Property, Plant and Equipment.

| | i.  | Ownership of Project 1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     | Under the terms of a reorganization executed on April 22,
      2010 the Company acquired a 74% interest in Projects 1 and 3 of the former
      Western Bushveld Joint Venture through its holdings in Maseve, while the
      remaining 26% was acquired by Africa Wide (a 100% owned subsidiary of
      Wesizwe Platinum Ltd.). In consideration for the Company increasing its
      holdings to 74%, the Company paid subscription funds into Maseve, creating
      an escrow fund for application towards Africa Wides 26% share of capital
      requirements. These funds are classified as restricted cash. As of August
      31, 2013, the balance of restricted cash is $10,155 ($30,512  August 31,
      2012). For every $74 spent by the Company on project requirements, a
      further $26 can be removed from the restricted cash to cover Africa Wides
      share of such costs. No work was carried out on Project 3 during the
      year.                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     | The Company consolidated the financial statements of
      Maseve from the effective date of the reorganization. The portion of
      Maseve not owned by the Company, calculated at $51,386 at August 31, 2013
      ($39,683  August 31, 2012), is accounted for as a non-controlling
      interest. See Note 16. Subsequent Events for details regarding changes
      to the ownership structure of Maseve after August 31, 2013.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ii. | Other financial information - Project 1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     | At August 31, 2013 the Company had $3,433 posted in cash
      for environmental performance guarantees in South Africa, of which
      approximately $3,363 relates to Project 1 ($8,698  August 31, 2012). By
      agreement in October 2012 a third party insurer posted a bond in the
      amount of $6,008 (R58.5 million) to the credit of the Department of
      Mineral Resources (DMR) in satisfaction of the Companys environmental
      guarantee specific to its Project 1 Mining Right. Subsequent to the
      posting of the bond the DMR released $6,008 (R58.5 million) to the Company
      from funds previously deposited. The Company then deposited $1,232 (R12
      million) with The Standard Bank of South Africa against its environmental
      guarantee obligation and will make further annual deposits of
      approximately $1,232 (R12 million) per annum until the full amount of the
      Project 1 environmental guarantee is again on deposit and the third party
      bond arrangement will be wound up, or renewed at the Companys election.
      Interest on deposits will accrue to the Company. The Company will pay an
      annual fee of approximately $62 (R600,000) to the insurer as
      compensation.

5.         
EXPLORATION AND EVALUATION ASSETS

The Company has exploration projects in Canada and South
Africa. The total capitalized exploration and evaluation expenditures are as
follows:

|                          |   | South Africa |   |   | Canada |   |   | Total  |  
|------------------------- | - | ------------ | - | - | ------ | - | - | ------ | -
|Balance August 31, 2012   | $ | 9,208        |   | $ | 5,601  |   | $ | 14,809 |  
|Additions                 |   | 14,261       |   |   | 200    |   |   | 14,461 |  
|Writedowns                |   | -            |   |   | (548   | ) |   | (548   | )
|Recoveries                |   | (5,124       | ) |   | -      |   |   | (5,124 | )
|Foreign Exchange Movement |   | (1,151       | ) |   | -      |   |   | (1,151 | )
|Balance August 31, 2013   | $ | 17,194       |   | $ | 5,253  |   | $ | 22,447 |  

11

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2013 (in thousands of Canadian
dollars unless otherwise noted)

REPUBLIC OF SOUTH AFRICA

|SOUTH AFRICA                  
|------------------------------
|                              
|                              
|Project 3 - see note 4 (a)    
|Waterberg                     
|                              
|                              
|Total Waterberg               
|Waterburg
      Extension     
|Sable                         
|                              
|                              
|Total Sable                   
|Warsprings                    
|                              
|                              
|Total
      Warsprings        
|Tweespalk                     
|                              
|                              
|Total
      Tweespalk         
|Other                         
|Total South Africa Exploration

Waterberg JV

The Waterberg joint venture (Waterberg JV) property is
located due north of the town of Mokopane (formerly Potgietersrus). The property
consists of a registered new order prospecting right granted by the Government
of South Africa in 2009 and which expired on September 1, 2012. An application
for a three year renewal together with the required supporting documentation was
filed with the DMR on time and duly acknowledged by the Regional Manager for
Limpopo. The holder of a prospecting right may file an application for
conversion of a current prospecting right into a mining right.

During 2012 the Company made application to the DMR to acquire
three additional prospecting rights adjacent to the West (1 farm for
39km2), North (1 farm for 63km2) and East (1 farm for
16km2) of the existing Waterberg JV property. In January 2013 the
area under the new application to the east was added into the existing
prospecting right by way of a Section 102 legal amendment. The prospecting
rights to the farms to the west and north were officially granted by the DMR
subsequent to August 31, 2013.

In October 2009, PTM RSA entered into an agreement with Japan
Oil, Gas and Metals National Corporation (JOGMEC) and Mnombo Wethu Consultants
(Pty) Limited (Mnombo) whereby JOGMEC could earn up to a 37% interest in the
Waterberg JV for an optional work commitment of USD $3.2 million over 4 years,
while at the same time Mnombo was required to match JOGMEC's expenditures on a
26/74 basis (USD $1.12 million). Under the terms of the October 2009 agreement
the Company would retain a 37% share in the newly created Waterberg JV while Mnombo, a
Black Economic Empowerment (BEE) partner, would earn the remaining 26%
share.

13

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2013 (in thousands of Canadian
dollars unless otherwise noted)

On November 7, 2011 the Company entered into an agreement with
Mnombo whereby the Company acquired 49.9% of the issued and outstanding shares
of Mnombo in exchange for cash payments totalling R1.2 million and an agreement
that the Company would pay for Mnombo's 26% share of joint venture costs until
the completion of a feasibility study. When combined with the Company's 37%
direct interest in the Waterberg JV (after the JOGMEC earn-in), the 12.974%
indirect interest acquired through Mnombo brings the Company's effective project
interest to 49.974% .

In April 2012, JOGMEC completed its USD $3.2 million earn in
requirement as described above. Following JOGMECs earn in the Company funded
Mnombos USD $1.12 million share of costs and the earn-in phase of the joint
venture ended in May 2012. Since then and up to August 31, 2013 an additional
USD $18.58 million has been spent on the joint venture. The Company has funded
the Companys and Mnombos 63% share of this work for a cost of USD $11.7
million with the remaining USD $6.88 million funded by JOGMEC. As of August 31,
2013 an amount of USD $0.5 million is due and receivable from JOGMEC against its
37% share of approved joint venture work.

Waterberg Extension

During 2012 the Company also applied to the DMR for further
prospecting rights adjacent to the North and East of the existing Waterberg JV
property (the Waterberg Extension). These extension area applications are not
included in the existing Waterberg JV property. Upon grant by the DMR of the new
prospecting license the Company would hold a direct 74% interest and Mnombo
would hold a 26% interest, leaving the Company with an 86.974% effective
interest. Prospecting licenses covering 489km2 of the applied for
Waterberg Extension area were officially granted by the DMR subsequent to August
31, 2013 and exploration drilling on these rights commenced in October 2013 and
continues at the time of publication of these financial statements. Permission
to explore on several additional farms within the extension area is pending
final approval by the DMR.

Sable

During 2009, the Company acquired by application prospecting
permits in South Africa which became the Sable Joint Venture project area on the
Western Limb of the Bushveld Complex, west of Pretoria. Sable Platinum Mining
(Pty) Limited (Sable Platinum) is earning a 51% interest in exchange for
funding approximately R42.0 million (approximately $6,000 in 2009) in work on
the project, while a private Black Economic Empowerment group will hold 26%. The
Company was the operator of the project until mid-March 2012, after which time
operatorship was transitioned to Sable Platinum.

War Springs and Tweespalk

On June 3, 2002, the Company acquired an option to earn a 100%
interest in the 2,396 hectare War Springs property and the 2,177 hectare
Tweespalk property both located in the Northern Limb or Platreef area of the
Bushveld Complex, north of Johannesburg. The Company can settle the vendors
residual interests in these mineral rights at any time for USD $690 per hectare.
The Company pays annual prospecting fees to the vendors of USD $3.25 per
hectare. The vendors retain a 1% Net Smelter Return Royalty (NSR) on the
property, subject to the Companys right to purchase the NSR at any time for USD
$1,400.

BEE groups Africa Wide and Taung Minerals (Pty) Ltd., a
subsidiary of Platmin Limited, have each acquired a 15% interest in the
Companys rights to the War Springs project carried to bankable feasibility. The
Company retains a net 70% project interest. Africa Wide also has a 30%
participating interest in the Tweespalk property.

No work was carried out on the War Springs or Tweespalk
properties during the period. The Company is considering future exploration
programs or a possible sale of the project.

14

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2013 (in thousands of Canadian
dollars unless otherwise noted)

CANADA

Properties
    
    Aug 31, 2013
    
    
    Aug 31, 2012OntarioAcquisition costs
    $
    1,108
    
    $
    1,224Exploration and evaluation costs
    
    2,281
    
    
    2,659Total Ontario
    $
    3,389
    
    $
    3,883ProvidenceAcquisition costs
    $
    106
    
    $
    78Exploration and evaluation costs
    
    1,686
    
    
    1,640Total Providence
    $
    1,792
    
    $
    1,718Total Newfoundland and
      Labrador
    $
    72
    
    $
    -Total Canada Exploration
    $
    5,253
    
    $
    5,601


Thunder Bay, Ontario

The Company maintains a mineral rights position in the Lac Des
Iles area north of Thunder Bay, Ontario. At the beginning of fiscal 2013, the
Company held a 100% interest in a total of 360km2 in the Thunder Bay
region; however during 2013 and in 2012 a number of peripheral claims and low
priority properties were dropped and their associated deferred costs were
written off. During fiscal 2013 the Company wrote off $548 in deferred
acquisition and exploration costs for such properties and for the year ending
August 31, 2012 the Company wrote off a further $88 in deferred acquisition and
exploration costs for the same area. The core long term holdings in the Lac Des
Iles area consist of the 8 claim Shelby Lake and South Legris properties and
these have been maintained. These 8 claims are subject to 1.0% and 2.0% NSR,
which the Company may buy back. Land holdings by the Company within the Thunder
Bay Mining District at August 31, 2013 and to date total 276km2 .

Providence, Northwest Territories

In September 2011, the Company purchased the Providence Nickel,
Copper, Cobalt and Platinum Group Metals property located in the Northwest
Territories from Arctic Star Exploration for a payment of $50 and a 1.0% NSR
royalty. The claims that comprise the Providence property have been brought to
lease. The application for lease was submitted in 2011 with the final lease
grant approved in June 2013. To date the first second and third year lease
payments and application fees have been paid. Total acquisition costs were $106.
As of August 31, 2013, the Company has spent $1,686 (August 31, 2012 - $1,640)
toward exploration on the property.

Newfoundland and Labrador

On August 9, 2013, the Company entered into an option agreement
with Benton Resources Corp. on the Mealy Lake Property in southwestern Labrador.
The deal consists of a one-time cash payment made by the Company of $51 on
signing and $2,400 in exploration expenditures to be made over four years to
earn a 71% interest in the property.

In addition to the Mealy Lake Project, the Company also staked
theAtikonak Property in southwestern Labrador to a total acquisition
cost of $11.

15

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2013 (in thousands of Canadian
dollars unless otherwise noted)

Title to mineral properties

Although the Company has taken steps to verify title to mineral
properties in which it has an interest, these procedures do not guarantee the
Companys title. Property title may be subject to unregistered prior agreements
and non-compliance with regulatory requirements.

6.          
ASSET RETIREMENT OBLIGATION

There was an increase in the net present value of the asset
retirement obligation (ARO) during the year ended August 31, 2013, due mainly
to ongoing construction work on Project 1. At August 31, 2013, the ARO is
estimated based on a total future liability of approximately R 21.4 million
(August 31, 2012  R 19.0 million). A discount rate of 8.50% and an inflation
rate of 6.4%, which represents South Africas expected inflation rate, were used
to calculate the ARO.

Balance August 31, 2011
    $
    645Increased estimate
      future obligation
    
    821Accreition expense
    
    82Foreign exchange gain
    
    (108
    )Balance August 31, 2012
    $
    1,440Increased estimated
      future obligation
    
    39Accretion expense
    
    108Foreign exchange gain
    
    (180
    )Balance August 31, 2013
    $
    1,407


|7. | SHARE CAPITAL
|-- | -------------
|   |              
|   | (a)          
|   |              
|   |              
|   |              
|   | (b)          
|   |              
|   |              
|   |              
|   |              
|   |              
|   | (c)          
|   |              
|   |              

16

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2013 (in thousands of Canadian
dollars unless otherwise noted)

The following tables summarize the
Companys outstanding stock options:

Number
    
    
    Averageof
      Shares
    
    
    Exercise PriceOptions outstanding at August
      31, 2011
    
    11,250,500
    
    
    2.19Granted
    
    4,354,000
    
    
    1.22Expired
    
    (875,000
    )
    
    2.49Cancelled
    
    (970,000
    )
    
    2.06Options outstanding at August 31, 2012
    
    13,759,500
    
    $
    1.91Granted
    
    3,809,000
    
    
    0.93Exercised
    
    (175,000
    )
    
    1.05Expired
    
    (800,000
    )
    
    4.35Cancelled
    
    (785,000
    )
    
    1.53Options outstanding at August 31, 2013
    
    15,808,500
    
    $
    1.58


AverageNumber Outstanding
    
    Remainingand Exercisable at
    Exercise
    ContractualAugust 31, 2013
    price
    Life
      (Years)3,324,000
    0.96
    4.0225,000
    1.00
    3.8235,000
    1.03
    4.15100,000
    1.05
    4.75100,000
    1.20
    3.353,559,000
    1.30
    3.2175,000
    1.38
    3.47992,000
    1.40
    1.001,017,000
    1.60
    0.123,739,000
    2.05
    2.682,392,500
    2.10
    2.2450,000
    2.20
    2.27100,000
    2.41
    0.46250,000
    2.36
    0.3550,000
    2.57
    2.3515,808,500
    
    2.72


The stock options outstanding have an
intrinsic value of $719 at August 31, 2013.

During the year ended August 31, 2013,
the Company granted 3,809,000 stock options (August 31, 2012  4,354,000). The
Company recorded $1,734 ($1,166 expensed and $568 capitalized to development
costs) of compensation expense in the year ended August 31, 2013 (year ended
August 31, 2012 - $3,118 ($2,006 expensed and $1,112 capitalized to mineral
properties)).

The Company uses the Black-Scholes
model to determine the grant date fair value of stock options granted. The
following weighted average assumptions were used in valuing stock options
granted during the year ended August 31, 2013 and 2012:

17

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2013 (in thousands of Canadian
dollars unless otherwise noted)

August 31, 2013
    August 31, 2012Risk-free interest rate
    1.34%
    1.44%Expected life of options
    3.5
    3.5Annualized volatility
    64%
    83%Forfeiture rate
    3%
    0%Dividend rate
    0.00%
    0.00%


|8. | CAPITAL RISK MANAGEMENT                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The Companys objectives in managing its liquidity and
      capital are to safeguard the Companys ability to continue as a going
      concern and provide financial capacity to meet its strategic objectives.
      The capital structure of the Company consists of share capital,
      contributed surplus, accumulated other comprehensive income and
      accumulated deficit.                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The Company manages the capital structure and makes
      adjustments to it in light of changes in economic conditions and the risk
      characteristics of the underlying assets. To maintain or adjust the
      capital structure, the Company may issue new shares, issue new debt,
      acquire or dispose of assets.                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | In order to facilitate the management of its capital
      requirements, the Company prepares annual expenditure budgets that are
      updated as necessary based on various factors, including successful
      capital deployment and general industry conditions. The annual and updated
      budgets are approved by the Board of Directors. The Company does not
      currently declare or pay out dividends.                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | As at August 31, 2013, the Company does not have any
      long-term debt and is not subject to any externally imposed capital
      requirements. However, the Company is currently working to arrange and
      secure debt financing for its Project 1 in South Africa. If the debt
      financing is completed, the Company will become subject to externally
      imposed capital requirements and restrictions on the use or disposition of
      its assets.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|9. | FINANCIAL INSTRUMENTS AND RISK
MANAGEMENT                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The Company examines the various financial risks to which
      it is exposed and assesses the impact and likelihood of occurrence. These
      risks may include credit risk, liquidity risk, currency risk, interest
      rate risk and other price risks.                                                                                                                                                                                                        

(a)          
Credit risk

(i)      
      Amounts receivable

Total credit risk is limited to the
carrying amount of amounts receivable.

(ii)     
      Cash and cash equivalents and restricted cash

In order to manage credit and
liquidity risk the Company invests only in term deposits with Canadian Chartered
and South African banks that have maturities of three months or less. A South
African Bank Rand account held in the United Kingdom is used for holding Rand
denominations only, and is not restricted. Deposit limits are also established
based on the type of investment, the counterparty and the credit rating.

(iii)         
 Performance Bonds

In order to explore and develop its
properties in South Africa, the Company was required to post performance bonds
as financial guarantees against future reclamation work. These funds are held
with Standard Bank of South Africa Limited with the Department of Mineral
Resources in South Africa as beneficiary in accordance with the Mineral and Petroleum Resources Development Act
(2002) and the Companys environmental management programme.

18

---

Platinum Group Metals Ltd.(An
exploration and development stage company) Notes to the consolidated
financial statementsFor the year ended August 31, 2013 (in thousands of
Canadian dollars unless otherwise noted)

(b)         
 Liquidity risk

The Company has in place a planning and
budgeting process to help determine the funds required to support the Company's
normal operating requirements and its exploration and development plans. The
annual budget is approved by the Board of Directors.

Future exploration, development,
mining, and processing of minerals from the Companys properties will require
additional financing. The Company has no credit facilities in place at this
time; however a debt financing for the next stage of the Companys Project 1
platinum mine is currently being sought by the Company.

Prior to October 18, 2013 the Company
was working with the Lenders to complete a USD $260 million senior loan facility
for the Project 1 platinum mine. Negotiations had advanced through detailed
technical, financial and legal due diligence. Credit committee approval by the
Lenders was announced on December 6, 2012. Closing and draw down of the loan
facility would have been subject to the negotiation and execution of definitive
documentation and satisfaction of conditions precedent. The Company would have
been required to fund its 74% share of Project 1 funding over and above that
which would have been provided by the senior loan facility.

On October 18, 2013 the Companys BEE
partner, Africa Wide, which held a 26% interest in Project 1 through the
operating company Maseve, informed the Company that it would not be funding its
approximately USD $21.8 million share of a six month budget and cash call
unanimously approved by the board of directors of Maseve. Africa Wide was also
to be a guarantor and obligor under the above mentioned senior loan facility.

Subsequent to October 18, 2013 the
Company began working with the Lenders to restructure a loan facility for
Project 1 wherein Africa Wide will not be a guarantor and obligor. On November
8, 2013 the Company entered into a new mandate letter with three of the four
Lenders for a revised USD $195 million senior loan facility for the Project 1
platinum mine. The new mandate will build on the work and due diligence towards
a senior loan facility agreement that was completed up until October 18, 2013.

The closing and draw down of the new
senior loan facility remains subject to finalization of a facility agreement and
a number of conditions in the new mandate letter, including financial and
continued technical due diligence of the Company and the receipt of necessary
regulatory approvals for the sale of Africa Wides diluted interest in Maseve to
a qualified BEE entity. The new senior loan facility under the terms and
conditions of the new mandate will replace the previously proposed senior loan
facility and will not rely on Africa Wide to provide any covenants, guarantees
or consents. Although Africa Wide has the right to participate in future cash
calls relative to their percentage holding in Maseve, the Company anticipates
that Africa Wide will not participate in future cash calls and that the Company
and any new BEE partner will be responsible for all required additional equity
to fund the construction of Project 1 as well as a cost overrun account under
the senior loan facility.

There is no certainty that the Company
will be able to successfully complete the revised senior loan facility described
above. Failure by the Company to complete a senior loan facility or alternative
financing for Project 1, or to provide its share of required funding, may result
in the delay or indefinite postponement of exploration, development, or
production on any or all of the Companys properties, or even a loss of property
interests. The issuance of additional equity capital, if available, to fund
project capital requirements and a cost overrun facility may result in
substantial dilution to existing shareholders.

(c)         
 Currency risk

The Companys functional currency is
the Canadian dollar, while its operations are in both Canada and South Africa;
therefore the Company's results are impacted by fluctuations in the value of foreign currencies in relation
to the Canadian dollar. The Company's significant foreign currency exposures on
financial instruments comprise cash and cash equivalents and accrued
liabilities. The Company has not entered into any agreements or purchased any
instruments to hedge possible currency risks at this time.

19

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2013 (in thousands of Canadian
dollars unless otherwise noted)

The Company is exposed to foreign
exchange risk through the following financial instruments denominated in a
currency other than Canadian dollars:

August 31, 2013
    
    
    August 31, 2012Canadian Dollar value
    
    
    Canadian Dollarof South African
    
    
    value of SouthRand and US Dollar
    
    
    African Rand and USbalances
    
    
    Dollar balancesCash and cash equivalents
    $
    90,341
    
    $
    9,351Accrued Liabilities
    
    (471
    )
    
    -$
    89,870
    
    $
    9,351


|    | The Company's net loss is affected by changes in the
      exchange rate between its operating currencies and the Canadian dollar. At
      August 31, 2013, based on this exposure a 10% strengthening/weakening in
      the Canadian dollar versus Rand foreign exchange rate and United States
      dollar would give rise to a decrease/increase in income for the year
      presented of approximately $8.99 million. At August 31, 2013, the company
      held approximately R 676.1 million in cash (August 31, 2012 
      R75.1million).
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | (d) Interest rate risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | The Companys interest income earned on cash and cash
      equivalents and on short term investments is exposed to interest rate
      risk. At August 31, 2013, based on this exposure a 1% change in the
      average interest rate would give rise to an increase/decrease in the
      earnings for the year of approximately $1,219.                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | At August 31, 2013, the carrying amounts of cash and cash
      equivalents, amounts receivable, restricted cash, performance bonds and
      accounts payable and accrued liabilities are considered to be reasonable
      approximations of their fair values due to the short-term nature of these
      instruments.                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|10. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Transactions with related parties are as
  follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

20

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2013 (in thousands of Canadian
dollars unless otherwise noted)

| | (d) | The Company had an office lease agreement with Anthem
      Works Ltd. (Anthem), a company with a director in common. During the
      year ended August 31, 2013 the Company paid Anthem $161 under the office
      lease agreement ($126  August 31, 2012).
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

All amounts in amounts receivable and
accounts payable owing to or from related parties are non-interest bearing with
no specific terms of repayment.

These transactions are in the normal
course of business and are measured at the estimated fair value, which is the
consideration established and agreed to by the noted parties.

Key Management Compensation

The remuneration of directors, the CFO,
CEO, COO and other key management personnel during the years ended August 31,
2013 and 2012 is as follows:

Year
      ending
    
    
    Year
      endingAugust 31, 2013
    
    
    August 31, 2012Salaries
    $
    1,923
    
    $
    1,496Share-based payments
    
    472
    
    
    1,543Total
    $
    2,395
    
    $
    3,039


|11. | GENERAL AND ADMINISTRATIVE
  EXPENSES
|--- | -------------------------------------

Year
      ending
    Year
      endingAugust 31,
    August 31,2013
    2012Salaries and benefits
    $2,540
    $1,924Professional/consulting fees
    1,476
    1,341Travel
    601
    823Depreciation
    386
    387Insurance
    178
    157Rent
    304
    121Regulatory fees
    498
    263Other
    954
    357Total
    $6,937
    $5,373


|12. | CONTINGENCIES AND COMMITMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | The Companys remaining minimum payments under its office
      and equipment lease agreements in Canada and South Africa total
      approximately $3,251 to August 31, 2020. The Company also has commitments
      for Project 1 related insurance coverage totaling approximately $61 over
      the next year.                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | The Companys project operating subsidiary, Maseve, is
      party to a long term 40MVA electricity supply agreement with South African
      power utility, Eskom. In consideration Maseve is to pay connection fees
      and guarantees totaling R142.22 million ($14,634 at August 31, 2013) to
      fiscal 2014. The Company has paid R51.71 million ($5,321 at August 31,
      2013), therefore R90.51 million ($9,313 at August 31, 2013) of the
      commitment remains outstanding. These fees are subject to possible change
      based on Eskoms cost to install. Eskoms schedule to deliver power is
      also subject to potential for change.

21

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2013 (in thousands of Canadian
dollars unless otherwise noted)

Tenders for the Primary Mill
components, mining development and equipment and other project expenditures have
been adjudicated and orders have now been placed resulting in a commitment of
R1.167 million ($120 million at August 31, 2013) over the next two years.

From period end the aggregate
commitments are as follows:

Payments by
      period in Canadian Dollars< 1
    1  3
    4  5
    > 5
    TotalYear
    Years
    Years
    YearsLease Obligations
    403
    861
    964
    1,023
    3,251EskomPower(1)
    9,313
    -
    -
    -
    9,313Magalies Water
    14,536
    -
    -
    -
    14,536Insurance contracts
    61
    -
    -
    -
    61Concentrator Plant &
      SurfaceInfrastructure
    28,236
    3,819
    -
    -
    32,055Mining Development
    47,866
    33,132
    -
    -
    80,998Mining Equipment
    6,975
    76
    -
    -
    7,051Totals
    $ 107,390
    $ 37,888
    $ 964
    $ 1,023
    $ 147,265


Explanatory Notes:

|(1) | The Companys project operating subsidiary Maseve has
      entered into a long term electricity supply agreement with ESKOM. Under
      the agreement the Company received connection and service for a 10MVA
      construction power supply in October 2013. A total 40 MVA production power
      supply is now planned for delivery in stages to 2017. Remaining connection
      fees and guarantees for the full service total Rand total 90.5 million
      ($9,313 at August 31, 2013).
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The above contracts are subject to the following estimated
break fees in the event of cancellation:

Concentrator Plant & Surface Infrastructure
    $
    14,097Mining Development
    
    10,012Mining Equipment
    
    6,382Other Property Expenditures
    
    5,126Total
    $
    35,617


Break fees are estimated by means of contractual notice
periods, work in progress costs and normal costs associated with the unwinding
and disestablishment of certain contractors.

13.       SUPPLEMENTARY CASH
FLOW INFORMATION

Net change in non-cash working
capital

22

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2013 (in thousands of Canadian
dollars unless otherwise noted)

Year
      ended
    
    
    Year
      endedAugust 31, 2013
    
    
    August 31, 2012Amounts receivable, prepaid expenses and
      other assets
    $
    2,218
    
    $
    (654
    )Accounts payable
      and accrued liabilities
    
    (23
    )
    
    688$
    2,195
    
    $
    34


|14. | SEGMENTED REPORTING                                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                        
|    | The Company operates in one operating segment, that being
      exploration and development of mineral properties. Segmented information
      presented on a geographic basis follows:
|    |                                                                                                                                                                                        
|    | Assets                                                                                                                                                                                 

August 31, 2013
    
    
    August 31, 2012Canada
    $
    115,328
    
    $
    25,490South Africa
    
    274,652
    
    
    218,244$
    389,980
    
    $
    243,734


Substantially all of the Companys
capital expenditures are made in the South African geographical segment; however
the Company also has exploration properties in Canada.

Loss attributable to the
shareholders of Platinum Group Metals Ltd.

August 31, 2013
    
    
    August 31, 2012Canada
    $
    (12,305
    )
    $
    (9,900
    )South Africa
    
    (64
    )
    
    (688
    )$
    (12,369
    )
    $
    (10,588
    )


|15. | INCOME TAXES                                                                                                                                                                                                               
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                            
|    | The income taxes shown in the consolidated statement of
      earnings differ from the amounts obtained by applying statutory rates to
      the earnings before the provision for income taxes due to the
      following:

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Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2013 (in thousands of Canadian
dollars unless otherwise noted)

2013
    
    
    2012Amount
    
    
    Amount$
    
    
    $Loss before income taxes
    
    11,894
    
    
    7,879Income tax recovery at statutory rates
    
    (3,023
    )
    
    (2,009
    )Difference in foreign tax rates
    
    22
    
    
    56Non-deductible expenses
    
    1,404
    
    
    1,616Changes in
      unrecognized deferred tax assets and other
    
    1,769
    
    
    2,658Income tax expense
    
    172
    
    
    2,321Income tax expense consists of:Current income taxes
    
    -
    
    
    (431
    )Deferred income
      taxes
    
    172
    
    
    2,752172
    
    
    2,321


The significant
      components of the Company's net deferred income tax liabilities are as
      follows:2013
    
    
    2012Mineral properties
    
    (29,269
    )
    
    (27,312
    )Loss carryforwards
      and other
    
    17,361
    
    
    13,886(11,908
    )
    
    (13,426
    )


Unrecognized deductible temporary
differences, unused tax and unused tax credits losses are attributed to the
following:

2013
    
    
    2012Unused tax losses
    
    45,084
    
    
    31,044Carrying value of tangible in excess of tax basis
    
    4,273
    
    
    3,633Share issuance costs
    
    12,291
    
    
    5,714Foreign loans and
      unrealized foreign exchange and other
    
    55,486
    
    
    27,774


The Company has operating loss carry-forwards that may be
available for tax purposes in Canada totaling $37,836 (August 31, 2012 -
$31,044) expiring between 2014 and 2033.

16.       SUBSEQUENT EVENTS

The following events occurred subsequent to year end. These
events and other non-material subsequent events may be mentioned elsewhere in
these financial statements:

- On October 18, 2013 the 26% partner in the Project 1 platinum mine, Africa
  Wide, informed the Company that they would not be funding their share of a
  budget and cash call unanimously approved by the board of directors of the
  Project 1 operating company Maseve. Africa Wide was also to provide their 26%
  share of a cost overrun facility and working capital, as well as be a
  guarantor and obligor, to a planned USD $260 senior loan
  facility.Subsequent to October 18, 2013 the Company began working with the
  Lenders to restructure a loan facility for Project 1 wherein the Company will
  be required to guarantee the obligations of Maseve by a pledge of its
  interests in the capital of Maseve and its interests in the Waterberg JV and
  the Waterberg Extension. On November 11, 2013 the Company announced that a new
  mandate with three of the four Lenders had been entered into for a new USD
  $195 million senior loan facility for the Project 1 platinum mine. The new
  mandate will build on the work and due diligence towards a senior loan
  facility agreement that was achieved up until October 18, 2013.The closing
  and draw down of the new senior loan facility remains subject to finalization
  of definitive documentation and a number of other conditions in the new
  mandate, including financial and continued technical due diligence of the
  Company and the receipt of necessary regulatory approvals for the sale of Africa
  Wides diluted interest in Maseve to a qualified BEE entity. The revised
  senior loan facility under the terms and conditions of the new mandate will
  replace the previously proposed senior loan facility and will not rely on
  Africa Wide to provide any covenants, guarantees or consents. Although Africa
  Wide has the right to participate in future cash calls relative to their
  percentage holding in Maseve, the Company anticipates that Africa Wide will
  not participate in future cash calls and that the Company and any new BEE
  partner will be responsible for all required additional equity to fund the
  construction of Project 1 as well as a cost overrun account under the senior
  loan facility, thereby further diluting Africa Wide.

24

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Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2013 (in thousands of Canadian
dollars unless otherwise noted)

- Subsequent to year end, in October 2013, the Company received the formal
  grant of prospecting rights applied for as additions to the Waterberg JV
  property and to a majority of the prospecting rights comprising the Waterberg
  Extension. Exploration activities commenced in October 2013. See Note 5.
  Exploration and Evaluation Assets above for more detail.

25

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