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|                                                           
|ANNUAL INFORMATION FORM OF PLATINUM GROUP METALS
      LTD.
|FOR YEAR ENDED: AUGUST 31, 2016                            
|                                                           
|                                                           
|                                                           
|                                                           
|Annual Information Form  November 29, 2016                

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TABLE OF CONTENTS

|             |                                                                                         |                                          | Page
|------------ | --------------------------------------------------------------------------------------- | ---------------------------------------- | ----
|             |                                                                                         |                                          |     
|ITEM 1       | COVER PAGE                                                                              |                                         
|             |                                                                                         |                                         
|ITEM 2       | PRELIMINARY NOTES                                                                       | 1                                       
|             |                                                                                         |                                         
|ITEM 3       | CORPORATE STRUCTURE                                                                     | 6                                       
|             |                                                                                         |                                         
|ITEM 4       | GENERAL DEVELOPMENT OF THE BUSINESS                                                     | 7                                       
|             |                                                                                         |                                         
|ITEM 5       | DESCRIPTION OF THE COMPANYS BUSINESS                                                   | 12                                      
|             |                                                                                         |                                         
|             | 5.1                                                                                     | MINERAL
      PROPERTY INTERESTS         | 16  
|             |                                                                                         |                                          |     
|             | 5.2                                                                                     | SOUTH
      AFRICAN REGULATORY FRAMEWORK | 90  
|             |                                                                                         |                                          |     
|             | 5.3                                                                                     | RISK
      FACTORS                       | 105 
|             |                                                                                         |                                          |     
|ITEM 6       | DIVIDENDS AND DISTRIBUTIONS                                                             | 128                                     
|             |                                                                                         |                                         
|ITEM 7       | DESCRIPTION OF CAPITAL STRUCTURE                                                        | 129                                     
|             |                                                                                         |                                         
|ITEM 8       | MARKET FOR SECURITIES                                                                   | 130                                     
|             |                                                                                         |                                         
|ITEM 9       | ESCROWED SECURITIES AND SECURITIES SUBJECT TO CONTRACTUAL
      RESTRICTION ON TRANSFER | 131                                     
|             |                                                                                         |                                         
|ITEM 10      | DIRECTORS AND OFFICERS                                                                  | 131                                     
|             |                                                                                         |                                         
|ITEM 11      | PROMOTERS                                                                               | 134                                     
|             |                                                                                         |                                         
|ITEM 12      | LEGAL PROCEEDINGS AND REGULATORY ACTIONS                                                | 134                                     
|             |                                                                                         |                                         
|ITEM 13      | INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL
      TRANSACTIONS                        | 134                                     
|             |                                                                                         |                                         
|ITEM 14      | TRANSFER AGENTS AND REGISTRARS                                                          | 134                                     
|             |                                                                                         |                                         
|ITEM 15      | MATERIAL CONTRACTS                                                                      | 134                                     
|             |                                                                                         |                                         
|ITEM 16      | INTERESTS OF EXPERTS                                                                    | 135                                     
|             |                                                                                         |                                         
|ITEM 17      | ADDITIONAL INFORMATION                                                                  | 136                                     
|             |                                                                                         |                                         
|SCHEDULE A | List of Abbreviations and
      Glossary of Mining Terms                                |                                         
|             |                                                                                         |                                         
|SCHEDULE B | Audit Committee Charter                                                                 |                                         

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Platinum Group Metals Ltd. 2016 Annual Information Form

|ITEM 2 | PRELIMINARY NOTES
|------ | -----------------

Date of Information

All information in this Annual Information Form (AIF)
of Platinum Group Metals Ltd. (Platinum Group or the Company)
is as of August 31, 2016 unless otherwise indicated.

List of Abbreviations and Glossary of Mining Terms

Schedule A attached hereto is a list of abbreviations and
glossary of mining terms used in this AIF.

Financial Information

Reference is made in this AIF to the consolidated audited
financial statements of the Company for the year ended August 31, 2016 (the
Financial Statements), a copy of which may be obtained online at
www.sedar.com.

All financial information in this AIF is prepared in accordance
with International Financial Reporting Standards (IFRS) as issued by
the International Accounting Standards Board.

Cautionary Note Regarding Forward-Looking Statements

This AIF and the documents incorporated by reference herein
contain forward-looking statements within the meaning of the United States
Private Securities Litigation Reform Act of 1995 and forward-looking
information within the meaning of applicable Canadian securities legislation
(collectively, Forward-Looking Statements). All statements, other than
statements of historical fact, that address activities, events or developments
that the Company believes, expects or anticipates will, may, could or might
occur in the future are Forward-Looking Statements. The words expect,
anticipate, estimate, may, could, might, will, would, should,
intend, believe, target, budget, plan, strategy, goals,
objectives, projection or the negative of any of these words and similar
expressions are intended to identify Forward-Looking Statements, although these
words may not be present in all Forward-Looking Statements. Forward-Looking
Statements included or incorporated by reference in this AIF include, without
limitation, statements with respect to:

| | production estimates and assumptions, including
      production rate, grade per tonne and smelter recovery;                            
|- | ----------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                         
| | production timing;                                                                                                                      
|  |                                                                                                                                         
| | capital raising activities, compliance with
      terms of indebtedness and the adequacy of capital;                                    
|  |                                                                                                                                         
| | revenue, cash flow and cost estimates and
      assumptions;                                                                            
|  |                                                                                                                                         
| | statements with respect to future events or
      future performance;                                                                   
|  |                                                                                                                                         
| | anticipated exploration, development,
      construction, production, permitting and other activities on the Companys
      properties;
|  |                                                                                                                                         
| | the adequacy of capital, financing needs and
      the availability of and potential for receiving further commitments;                 
|  |                                                                                                                                         
| | project economics;                                                                                                                      
|  |                                                                                                                                         
| | future metal prices and exchange rates;                                                                                                 
|  |                                                                                                                                         
| | mineral reserve and mineral resource estimates;
      and                                                                               
|  |                                                                                                                                         
| | potential changes in the ownership structures
      of the Companys projects.                                                          

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- 2 

Platinum Group Metals Ltd. 2016 Annual Information Form

Forward-Looking Statements reflect the current expectations or
beliefs of the Company based on information currently available to the Company.
Forward-Looking Statements in respect of capital costs, operating costs,
production rate, grade per tonne and concentrator and smelter recovery are based
upon the estimates in the technical reports referred to in this AIF and in the
documents incorporated by reference herein and ongoing cost estimation work, and
the Forward-Looking Statements in respect of metal prices and exchange rates are
based upon the three year trailing average prices and the assumptions contained
in such technical reports and ongoing estimates.

Forward-Looking Statements are subject to a number of risks and
uncertainties that may cause the actual events or results to differ materially
from those discussed in the Forward-Looking Statements, and even if events or
results discussed in the Forward-Looking Statements are realized or
substantially realized, there can be no assurance that they will have the
expected consequences to, or effects on, the Company. Factors that could cause
actual results or events to differ materially from current expectations include,
among other things:

| | uncertainty of production, development plans and cost
      estimates for the Maseve platinum and palladium mine (Maseve
      Mine), formerly known as Project 1 (Project 1), and Project
      3 (Project 3) of what was formerly the Western Bushveld Joint
      Venture (the WBJV);                                                                                                                                                                                                                                                                                                                                                                
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | additional financing requirements;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | the Companys history of losses;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | the inability of the Company to generate sufficient cash
      flow to make payment on its indebtedness under the Sprott Facility
      (defined below) and the LMM Facility (defined below) and the restrictions
      imposed by such indebtedness;                                                                                                                                                                                                                                                                                                                                                                                                           
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | the Sprott Facility and the LMM Facility are secured and
      the Company has pledged its shares of Platinum Group Metals (RSA)
      Proprietary Limited (PTM RSA) to the Sprott Lenders (defined
      below) and LMM (defined below, and together with the Sprott Lenders, the
      Lenders) under the Project 1 Working Capital Facilities (defined
      below), which potentially could result in the loss of the Companys
      interest in Project 1 (defined below), Project 3 (defined below), the
      Waterberg Project (defined below) and in PTM RSA in the event of a default
      under either the Sprott Facility or the LMM Facility;
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | the Companys negative cash flow;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | the Companys ability to continue as a going concern;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | delays in the production ramp-up of Project 1, which
      could result in a default under the LMM Facility or the Sprott Facility;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | there can be no assurance that underground development
      and production ramp-up at Project 1 will meet its production ramp-up
      timeline or that production at Project 1 will meet the Companys
      expectations;                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | delays in, or inability to achieve, planned commercial
      production;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | completion of a Definitive Feasibility Study
      (DFS) for the Waterberg Project, which is subject to resource
      upgrade and economic analysis requirements;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | discrepancies between actual and estimated mineral
      reserves and mineral resources, between actual and estimated development
      and operating costs, between actual and estimated metallurgical recoveries
      and between estimated and actual production;                                                                                                                                                                                                                                                                                                                                                                                           
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | fluctuations in the relative values of the U.S. Dollar,
      the Rand and the Canadian Dollar;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | volatility in metals prices;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

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Platinum Group Metals Ltd. 2016 Annual Information Form

| | the failure of the Company or its joint venture partners
      to fund their pro rata share of funding obligations for Project 1 or the
      Waterberg Project;                                                                                                                                                                                                                                                                                                    
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | the inability of the Company to find an additional and
      suitable joint venture partner for Project 1 and Project 3 within such
      time frame as may be determined by the South African Department of Mineral
      Resources (DMR);                                                                                                                                                                                                                       
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | any disputes or disagreements with the Companys joint
      venture partners;                                                                                                                                                                                                                                                                                                                                                                                      
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | other than at Project 1 and the Waterberg Project, the
      lack of known mineral reserves on the Companys properties;                                                                                                                                                                                                                                                                                                                                            
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | the ability of the Company to retain its key management
      employees and skilled and experienced personnel;                                                                                                                                                                                                                                                                                                                                                      
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | contractor performance and delivery of services, changes
      in contractors or their scope of work or any disputes with contractors;                                                                                                                                                                                                                                                                                                                              
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | conflicts of interest;                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | any designation of the Company as a passive foreign
      investment company and potential adverse U.S. federal income tax
      consequences for U.S. shareholders;                                                                                                                                                                                                                                                                                              
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | litigation or other legal or administrative proceedings
      brought against the Company;                                                                                                                                                                                                                                                                                                                                                                          
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | actual or alleged breaches of governance processes or
      instances of fraud, bribery or corruption;                                                                                                                                                                                                                                                                                                                                                              
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | exploration, development and mining risks and the
      inherently dangerous nature of the mining industry, including
      environmental hazards, industrial accidents, unusual or unexpected
      formations, safety stoppages (whether voluntary or regulatory), pressures,
      mine collapses, cave ins or flooding and the risk of inadequate insurance
      or inability to obtain insurance to cover these risks and other risks and
      uncertainties;
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | property and mineral title risks including defective
      title to mineral claims or property;                                                                                                                                                                                                                                                                                                                                                                     
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | changes in national and local government legislation,
      taxation, controls, regulations and political or economic developments in
      Canada, South Africa or other countries in which the Company does or may
      carry out business in the future;                                                                                                                                                                                                        
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | equipment shortages and the ability of the Company to
      acquire the necessary access rights and infrastructure for its mineral
      properties;                                                                                                                                                                                                                                                                                                                
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | environmental regulations and the ability to obtain and
      maintain necessary permits, including environmental authorizations and
      water use licences;                                                                                                                                                                                                                                                                                                      
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | extreme competition in the mineral exploration industry;                                                                                                                                                                                                                                                                                                                                                                                                            
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | delays in obtaining, or a failure to obtain, permits
      necessary for current or future operations or failures to comply with the
      terms of such permits;                                                                                                                                                                                                                                                                                                   
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | the failure to maintain or increase equity participation
      by historically disadvantaged South Africans in the Companys prospecting
      and mining operations and to otherwise comply with the Amended Broad Based
      Socio Economic Empowerment Charter for the South African Mining Industry
      (the "Mining Charter");                                                                                                                              
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | certain potential adverse Canadian tax consequences for
      foreign-controlled Canadian companies that acquire common shares of the
      Company;                                                                                                                                                                                                                                                                                                                

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Platinum Group Metals Ltd. 2016 Annual Information Form

| | risks of doing business in South Africa, including but
      not limited to, labour, economic and political instability and potential
      changes to and failures to comply with legislation; and
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                    
| | the other risks disclosed under the heading
      Risk Factors in this AIF.                                                                                                                      

These factors should be considered carefully, and investors
should not place undue reliance on the Companys Forward-Looking Statements. In
addition, although the Company has attempted to identify important factors that
could cause actual actions or results to differ materially from those described
in Forward-Looking Statements, there may be other factors that cause actions or
results not to be as anticipated, estimated or intended.

The mineral resource and mineral reserve figures referred to in
this AIF and the documents incorporated herein by reference are estimates and no
assurances can be given that the indicated levels of platinum ("Pt"),
palladium ("Pd"), rhodium ("Rh") and gold ("Au") will be
produced. Such estimates are expressions of judgment based on knowledge, mining
experience, analysis of drilling results and industry practices. Valid estimates
made at a given time may significantly change when new information becomes
available. By their nature, mineral resource and mineral reserve estimates are
imprecise and depend, to a certain extent, upon statistical inferences which may
ultimately prove unreliable. Any inaccuracy or future reduction in such
estimates could have a material adverse impact on the Company.

Any Forward-Looking Statement speaks only as of the date on
which it is made and, except as may be required by applicable securities laws,
the Company disclaims any intent or obligation to update any Forward-Looking
Statement, whether as a result of new information, future events or results or
otherwise.

Reserve and Mineral Resource Disclosure

Due to the uncertainty that may be attached to inferred mineral
resource estimates, it cannot be assumed that all or any part of an inferred
mineral resource estimate will be upgraded to an indicated or measured mineral
resource estimate as a result of continued exploration. Confidence in an
inferred mineral resource estimate is insufficient to allow meaningful
application of the technical and economic parameters to enable an evaluation of
economic viability sufficient for public disclosure, except in certain limited
circumstances set out in National Instrument 43-101  Standards of Disclosure
for Mineral Projects (NI 43-101). Inferred mineral resource
estimates are excluded from estimates forming the basis of a feasibility study.

Mineral resources that are not mineral reserves do not have
demonstrated economic viability.

Cautionary Note to U.S. Investors

Estimates of mineralization and other technical information
included or incorporated by reference herein have been prepared in accordance
with NI 43-101. The definitions of proven and probable reserves used in NI
43-101 differ from the definitions in SEC Industry Guide 7 of the U.S.
Securities and Exchange Commission (the SEC). Under SEC Industry Guide
7 standards, a final or bankable feasibility study is required to report
reserves, the three-year historical average price is used in any reserve or cash
flow analysis to designate reserves and the primary environmental analysis or
report must be filed with the appropriate governmental authority. As a result,
the reserves reported by the Company in accordance with NI 43-101 may not
qualify as reserves under SEC standards. In addition, the terms mineral
resource, measured mineral resource, indicated mineral resource and
inferred mineral resource are defined in and required to be disclosed by NI
43-101; however, these terms are not defined terms under SEC Industry Guide 7
and normally are not permitted to be used in reports and registration statements
filed with the SEC. Mineral resources that are not mineral reserves do not have
demonstrated economic viability. Investors are cautioned not to assume that any
part or all of the mineral deposits in these categories will ever be converted
into reserves. Inferred mineral resources have a great amount of uncertainty
as to their existence, and great uncertainty as to their economic and legal
feasibility. It cannot be assumed that all or any part of an inferred mineral
resource will ever be upgraded to a higher category. Under Canadian securities
laws, estimates of inferred mineral resources may not form the basis of
feasibility or prefeasibility studies, except in rare cases. See Reserve and
Mineral Resource Disclosure. Additionally, disclosure of contained ounces in
a resource is permitted disclosure under Canadian securities laws; however, the
SEC normally only permits issuers to report mineralization that does not
constitute reserves by SEC standards as in place tonnage and grade without
reference to unit measurements. Accordingly, information contained in this AIF
and the documents incorporated by reference herein containing descriptions of the Companys mineral deposits may not be
comparable to similar information made public by U.S. companies subject to the
reporting and disclosure requirements of United States federal securities laws
and the rules and regulations thereunder.

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Platinum Group Metals Ltd. 2016 Annual Information Form

Currency Presentation and Exchange Rate Information

On September 1, 2015, the Company changed its presentation
  currency from the Canadian Dollar to the U.S. Dollar. The change in presentation
  currency is to better reflect the Companys business activities and to improve
  investors ability to compare the Companys financials results with other
  publicly traded businesses in the mining industry. In making this change to the
  U.S. Dollar presentation currency, the Company followed the guidance in IAS 21
  The Effects of Changes in Foreign Exchange Rates and has applied the change
  retrospectively as if the new presentation currency had always been the
  Companys presentation currency. Unless stated otherwise or the context
  otherwise requires, all references to dollar amounts in this AIF are references
  to U.S. Dollars. All references to U.S. Dollars or to US$ are to United
  States Dollars. All references to R or to Rand are to South African Rand.
All references to CDN$ are to Canadian Dollars.

The following table sets forth the rate of exchange for the
U.S. Dollar expressed in Canadian Dollars in effect at the end of each of the
indicated periods, the average of the exchange rates in effect on the last day
of each month during each of the periods indicated, and the high and low
exchange rates during each of the periods indicated based on the noon rate of
exchange as reported by the Bank of Canada for the conversion of U.S. Dollars
into Canadian Dollars.

U.S. Dollar
      to Canadian Dollars
    Year Ended
      August 312016
    2015
    2014Rate at end of period
    CDN$1.3124
    CDN$1.3223
    CDN$1.0858Average rate for period
    CDN$1.3265
    CDN$1.2102
    CDN$1.0776High for period
    CDN$1.4589
    CDN$1.3303
    CDN$1.1251Low for period
    CDN$1.2544
    CDN$1.0863
    CDN$1.0237


The noon rate of exchange on November 29, 2016 as reported by
the Bank of Canada for the conversion of U.S. Dollars into Canadian Dollars was
$1.00 equals CDN$1.3435.

The following table sets forth the rate of exchange for the
South African Rand expressed in Canadian Dollars in effect at the end of each of
the indicated periods, the average of the exchange rates in effect on the last
day of each month during each of the periods indicated, and the high and low
exchange rates during each of the periods indicated based on the noon rate of
exchange as reported by the Bank of Canada for the conversion of South African
Rand into Canadian Dollars.

South
      African Rand to Canadian Dollars
    Year Ended
      August 312016
    2015
    2014Rate at end of period
    CDN$0.0893
    CDN$0.0998
    CDN$0.1019Average rate for period
    CDN$0.0902
    CDN$0.1026
    CDN$0.1026High for period
    CDN$0.0993
    CDN$0.1102
    CDN$0.1067Low for period
    CDN$0.0821
    CDN$0.0986
    CDN$0.0984


The noon rate of exchange on November 29, 2016 as reported by
the Bank of Canada for the conversion of South African Rand into Canadian
Dollars was R1 equals CDN$0.09670.

Terms used and not defined in this AIF that are defined in
National Instrument 51-102 - Continuous Disclosure Obligations (NI
51-102) shall bear that definition. Other definitions are set out in
National Instrument 14-101 - Definitions.

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- 6 

Platinum Group Metals Ltd. 2016 Annual Information Form

Notice Regarding Non-GAAP Measures

This AIF may include certain terms or performance measures
commonly used in the mining industry that are not defined under IFRS as issued
by the International Accounting Standards Board, which is incorporated in the
Handbook of the Canadian Institute of Chartered Accountants. We believe that, in
addition to conventional measures prepared in accordance with IFRS, certain
investors use this information to evaluate our performance. The data presented
is intended to provide additional information and should not be considered in
isolation or as a substitute for measures of performance prepared in accordance
with IFRS. These non-GAAP measures should be read in conjunction with our
financial statements.

Share Consolidation

On January 26, 2016, the Company announced that effective
January 28, 2016 its common shares would be consolidated on the basis of one new
share for ten old shares (1:10). All information in this AIF regarding the
issued and outstanding common shares, options and weighted average number and
per share information has been retrospectively restated to reflect the ten to
one consolidation.

|ITEM 3 | CORPORATE STRUCTURE
|------ | -------------------

The Company was amalgamated on February 18, 2002 under the
Business Corporations Act (British Columbia) (BCBCA) pursuant to
an order of the Supreme Court of British Columbia approving an amalgamation
between Platinum Group Metals Ltd. and New Millennium Metals Corporation. On
January 25, 2005, the Company was transitioned under the BCBCA.

On February 22, 2005, the Companys shareholders passed a
special resolution to: (a) amend the authorized share capital from 1,000,000,000
common shares without par value to an unlimited number of common shares without
par value; (b) remove the Pre-existing Company Provisions; and (c) adopt new
articles. On February 27, 2014, the shareholders passed an ordinary resolution
approving the advance notice policy of the Company and an alteration to the
Companys Articles to include provisions requiring advance notice of director
nominees from shareholders, as described in the Companys information circular
for its annual meeting of shareholders held on February 27, 2014.

The Companys head office is located at:

788  550 Burrard Street
Vancouver, British Columbia Canada, V6C 2B5

The Companys registered office is located at:

Gowling WLG (Canada) LLP 2300 -
550 Burrard Street Vancouver, British Columbia Canada, V6C 2B5

The Company is a platinum-focused exploration and development
company conducting work primarily on mineral properties it has staked or
acquired by way of option agreements or applications in the Republic of South
Africa and in Canada.

Platinum Group Metals Ltd. and its Principal Subsidiaries

The Companys material subsidiaries are one wholly-owned
company, one majority-owned company and a 49.9% holding in a third company, all
of which are incorporated under the company laws of the Republic of South
Africa.

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Platinum Group Metals Ltd. 2016 Annual Information Form



The Company conducts its South African exploration and
development work through its wholly-owned direct subsidiary, PTM RSA. PTM RSA
holds the Companys interests in the Project 1 (also known as the Maseve Mine)
and Project 3 platinum mines of what was formerly the Western Bushveld Joint
Venture through its 82.9% holdings in Maseve Investments 11 Proprietary Limited
(Maseve). We esizwe Platinum Ltd. (Wesizwe), through its
subsidiary Africa Wide Mineral Prospecting and Exploration Proprietary Limited
(Africa Wide) has a 17.1% ownership interest in Maseve. See Mineral
Property Interests  Projects 1 and 3 of the Western Bushveld Complex below.

On August 20, 2014, an arbitrator ruled that Africa Wides
shareholding in Maseve would be reduced to 21.2766% as a result of a failure to
fund its US$21.8 million share of a unanimously approved Maseve cash call by the
Maseve board of directors. This was the first cash call ever presented to Africa
Wide for their share of Maseve development costs. On March 3, 2014, Africa Wide
informed the Company that it would not be funding its US$21.52 million share of
a second unanimously approved cash call. As a result, Africa Wides ownership of
Maseve has been further diluted to approximately 17.1% based on the dilution
formula in the Maseve Shareholders Agreement among PTM RSA, Africa Wide e and
Maseve (the Maseve Shareholders Agreement), as confirmed by the
arbitrator. Likewise, the Companys ownership in Maseve has increased to
approximately 82.9% . See Africa Wide Dilution below for more information.

The Company also owns 49.9% of Mnombo Wethu Consultantts (Pty)
Limited (Mnombo), a black economic empowerment (BEE) company,
which holds a 26% participating interest in both the Waterberg joint venture
project (the Waterberg JV Project) and the Waterberg extension project (the
Waterberg Extension Project and together with the Waterberg JV Project, the
Waterberg Project).

The Company previously held 100% of the shares of Platinu um
Group Metals (Barbados) Ltd., a company incorporated under the laws of Barbados
originally set up to hold and manage potential PGM opportunities. Platinum Group
Metals (Barbados) Ltd. was voluntarily wound up and officially deregistered in
accordance with the provisions of the Companies Act of Barbados effective July
15, 2016.

PTM RSA previously held 100% of the shares of Wesplats Holding
(Proprietary) Limited, a holding company incorporated under the laws of South
Africa and originally set up to acquire surface rights. Wesplats Holding
(Proprietary) Limited was voluntarily wound up and officially deregistered by
the Companies and Intellectual Property Commission (CIPC) of South
Africa on September 16, 2015.

The Company previously held a 37% interest in Wildebeest
Platinum (Pty) Limited, a company set up to hold prospecting rights. Wildebeest
was voluntarily wound up and officially deregistered by the CIPC on June 30,
2015.

|ITEM 4 | GENERAL DEVELOPMENT OF THE BUSINESS
|------ | -----------------------------------

Since its formation in 2002, the Company has been engaged in
the acquisition, exploration and development of platinum and palladium
properties. The Company currently holds interests in platinum properties in the
Western and Northern Limbs of the Bushveld Complex in South Africa and in
Canada. The Companys business is conducted primarily in South Africa, and to a
lesser extent, in Ontario, the Northwest Territories and Newfoundland and
Labrador in Canada.

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- 8 

Platinum Group Metals Ltd. 2016 Annual Information Form

At present the Company is focused on the ramp-up of production
at Project 1.

The Company is also advancing the exploration and assessment of
the Waterberg Project. A pre-feasibility study for the Waterberg Project was
published on October 19, 2016. Work in preparation for a planned Definitive
Feasibility Study (DFS) is now underway, targeting a large, thick PGM
resource with the objective to model a large-scale, fully-mechanized mine. A
substantial portion of the Waterberg Projects prospecting area remains
unexplored.

Recent Developments

On November 1, 2016the Company announced the closing of
a public offering of common shares (the November 2016 Offering).
Pursuant to the November 2016 Offering, the Company issued 22,230,000 common
shares at a price of US$1.80 per share, for aggregate gross proceeds of
approximately US$40 million. BMO Capital Markets and RBC Dominion Securities
Inc. acted as the underwriters and agreed to buy the shares on a bought deal
basis. The net proceeds of the November 2016 Offering will be used for (i)
underground development and production ramp-up of the Project 1 Maseve Platinum
Mine, (ii) working capital during start-up, (iii) repayment of all or a portion
of the US$5.0 million Second Advance (defined below) received by the Company
under the Amended and Restated Sprott Facility (defined below), and (iv) general
corporate purposes. The November 2016 Offering was made pursuant to an effective
shelf registration statement previously filed on October 14, 2016 with the SEC
and a corresponding Canadian base shelf prospectus filed with the securities
regulatory authority in each of the provinces of Canada, except Quebec. In
relation to the offering, a prospectus supplement to the base shelf prospectus
was filed on October 25, 2016 with the SEC and with the securities regulatory
authority in each of the provinces of Canada, except Quebec.

On October 19, 2016 the Company announced positive
results from an independent pre-feasibility study on the Waterberg Project
(WPFS) contained in a technical report dated October 19, 2016 and filed
on SEDAR titled Independent Technical Report on the Waterberg Project Including
Mineral Resource Update and Pre-Feasibility Study (the WPFS Technical
Report). Platinum Group is to hold a 58.62% effective interest in the
Waterberg Project (including through its minority interest in Mnombo) with the
Japan, Oil, Gas and Metals National Corporation (JOGMEC) holding a
28.35% interest. Empowerment partner Mnombo holds the balance of the joint
venture. Highlights of the WPFS include (i) validation of the 2014 Waterberg
Preliminary Economic Assessment (PEA) results for a large scale,
shallow, decline accessible, mechanized platinum, palladium, rhodium and gold
(4E) mine, (ii) annual steady state production rate of 744,000 4E
ounces in concentrate, (iii) a 3.5 year construction period, (iv) on site
life-of-mine average cash cost of US$248 per 4E ounce including byproduct
credits and exclusive of smelter discounts, (v) after-tax net present value
(NPV) of US$320 million, at an 8% discount rate, using three-year
trailing average metal prices, (vi) after-tax NPV of US$507 million, at an 8%
discount rate, using investment bank consensus average metal prices, (vii)
estimated capital to full production of approximately US$1.06 billion including
US$67 million in contingencies. Peak project funding estimated at US$914
million, (viii) After-tax Internal Rate of Return (IRR) of 13.5% using
three-year trailing average price deck, (ix) after-tax IRR of 16.3% at
investment bank consensus average metal prices, (x) probable reserves of 12.3
million 4E ounces (2.5 g/t 4E cut-off), (xi) indicated resources updated to 24.9
million 4E ounces (2.5 g/t 4E cut-off) and deposit remains open on strike to the
north and below a 1,250 meter arbitrary depth cutoff. See details at Summary of
Mineral Reserves and Mineral Resource Estimates below. The Company plans to
continue drilling the deposit and to advance the project to completion of
feasibility study and a construction decision. The Company also plans to file a
mining right application, with joint venture approval, based substantially on
the results of the WPFS.

On October 12, 2016 the Company announced that Sprott
Resource Lending Partnership (Sprott), among other lenders (the lenders
from time to time, the Sprott Lenders) had provided a US $5.0 million
second advance (the Second Advance) to the Company. The original
US$40.0 million credit facility agreement with the Sprott Lenders dated February
13, 2015, as subsequently amended on November 19, 2015, May 3, 2016 and
September 19, 2016 (the "Sprott Facility"), pursuant to which US$40
million was advanced to the Company on November 20, 2015, was amended and
restated effective October 11, 2016 to reflect the Second Advance and an
increase to US$45.0 million (the Amended and Restated Sprott Facility).
Interest will accrue and become payable to Sprott monthly on any outstanding
principal related to the Second Advance at a rate of LIBOR plus 8.5%, the same
rate as for the original Sprott Facility. Other terms, conditions and covenants
related to the Amended and Restated Sprott Facility are substantially the same
as for the original Sprott Facility. See more below in this section.

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- 9 

Platinum Group Metals Ltd. 2016 Annual Information Form

Under the terms of the Amended and Restated Sprott Facility,
Sprott had a right to elect for earlier repayment of the Second Advance the from
the proceeds of an equity or debt financing by the Company prior to December 31,
2017. On November 2, 2016 Sprott elected for early repayment of US$2.5 million
of the Second Advance from the proceeds of the November 2016 Offering, which the
Company has repaid. The remaining US$2.5 million principal balance of the Second
Advance is to be repaid in six equal, monthly installments commencing on July
31, 2017; provided, that if the Company or any of its subsidiaries closes one or
more equity or debt financing (excluding intercompany financings) on or before
December 31, 2017, Sprott may elect to require the proceeds of such financing,
net of reasonable financing costs, be paid to the Sprott Lenders in repayment of
the remaining outstanding amount of the Second Advance. In consideration of the
Second Advance, as a fee, the Company issued 113,963 common shares of the
Company at a price of CDN$3.2428 per share, less a ten percent discount.

On September 19, 2016 the Company announced that Sprott
and Liberty Metals and Mining Holdings, LLC, a subsidiary of Boston-based
Liberty Mutual Insurance ("LMM"), had agreed to amend certain terms to
the Sprott Facility and the November 2, 2015 US$40 million credit facility
agreement with LMM (the "LMM Facility", and together with the Amended and
Restated Sprott Facility, the Project 1 Working Capital Facilities).
Sprott agreed to defer 12 planned monthly repayments of the original US$40
million Sprott Facility from commencing on January 31, 2017 to commencing on
January 31, 2018. LMM agreed to defer 9 planned quarterly repayments of its
original US$40 million LMM Facility plus capitalized interest from commencing
December 31, 2018 until June 30, 2019. LMM also agreed to defer the quarterly
payment of interest due to LMM from commencing December 31, 2016 until December
31, 2017. During the additional twelve-month period interest will continue to be
accrued monthly and capitalized to principal. Sprott and LMM both agreed to
reset agreed monthly production covenants so that month one of production will
be October, 2016. In consideration of the amendments, the Company issued 801,314
common shares of the Company as directed by the Sprott Lenders and 801,314 in
common shares of the Company to LMM. The shares were priced at CDN$3.66 per
share, less a ten percent discount.

On September 19, 2016 the Company also reported that
primary development at the Maseve Mine had accessed mining Block 11, hosting
some of the best grade thickness ore at the Maseve Mine. Block 11 is an
important part of the next several years of scheduled mining. Block 11 is a
large, well-drilled and stable mining block estimated to host more than 545,000
4E Merensky Reef ounces (3,066,512 tonnes at 5.53 grams per tonne 4E Indicated).
Production at the Maseve Mine is behind schedule due to challenges related to
the ramp up of stoping tonnes. Difficulties and delays were caused in part by
poor contractor performance and incomplete underground infrastructure, causing
bottlenecks in the movement of waste and ore out of the mine. Completion of the
first underground silo top, the addition of a belt loader at this silo and
future top and bottom completions at silos two and three are expected to improve
production into 2017. Feed to the plant since commissioning has been
substantially comprised of low grade development stockpiles and a combination of
mined stoping tonnes and development tonnes from primary headings where Merensky
Reef is present. Looking forward, Merensky tonnes mined are scheduled to
increase as key mining blocks are accessed, developed and stoped. A conveyor
from underground has been commissioned that feeds directly to the overland
conveyor and into the primary crusher and mill. A final conveyor leg directly to
Block 11 is being engineered and planned for construction, which is expected to
improve the future ability to move good grade tonnes out of the mine and
directly into the mill.

Three-Year History

The following is a summary of the Companys noteworthy
developments over the last three fiscal years.

Fiscal 2014 Developments

Third Independent Mineral Resource Estimate for WaterbergOn September 3, 2013, the Company announced an updated independent
inferred mineral resource estimate for the Waterberg JV Project.

Africa Wide Dilution - On October 18, 2013, Africa Wide
informed the Company that it would not be funding its approximate US$21.8
million share of a project budget and cash call for Project 1 that had been
unanimously approved by the Maseve board of directors. As a result of Africa
Wides failure to fund its share of the initial cash call, the Company entered
into arbitration proceedings with Africa Wide to determine the extent of the
dilution of Africa Wides ownership in Maseve (the Africa Wide
Dilution), and therefore Project 1 and Project 3, in accordance with the terms of the Maseve
Shareholders Agreement. The Company also delayed certain expenditures on Project
1 from October 2013 to January 2014 so that the Company could raise additional
equity financing. On August 20, 2014, an arbitrator determined that Africa
Wides shareholding in Maseve would be reduced to 21.2766% . As a result of
Africa Wides decision not to fund its US$21.52 million share of a second cash
call delivered in February 2014, Africa Wides ownership in Maseve was further
diluted to approximately 17.1% based on the dilution formula in the Maseve
Shareholders Agreement, as confirmed by the arbitration. Likewise, the Companys
ownership in Maseve has therefore increased to approximately 82.9% . The Company
expects that it will be required to fund 100% of Maseves cash requirements and
since 2014 has loaned Maseve such required amounts.

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- 10 

Platinum Group Metals Ltd. 2016 Annual Information Form

Project 1 New Lender Mandate  On November 11, 2013, the
Company entered into a new mandate letter with three commercial banking groups
to arrange for up to a US$195 million project finance loan to develop the Maseve
Mine. The new mandate was to build on work and due diligence conducted up until
October 18, 2013 under an earlier mandate. The proposed revised facility
agreement would not rely on Wesizwe or Africa Wide to provide any covenants,
guarantees or consents. See "Termination of Project 1 New Lender Mandate in
Fiscal 2015 Developments below.

CDN$175 Million Public Offering  On December 31, 2013,
  the Company closed a previously announced public offering of common shares. The
  Company issued 148.5 million common shares at a price of CDN$1.18 per share, for
  aggregate gross proceeds of CDN$175.23 million. BMO Capital Markets and GMP
  Securities L.P. led a team of underwriters which included CIBC World Markets
  Inc., RBC Dominion Securities Inc., Barclays Capital Canada Inc., PI Financial
  Corp., Raymond James Ltd. and Dundee Securities Ltd. which had agreed to buy the
  shares on a bought deal basis. The Company intended to use the net proceeds of
  the offering to partially fund Phase 2 development at the Maseve Mine, to fund
  the Companys portion of ongoing exploration and engineering work on the
  Waterberg JV Project, to fund the Companys portion of ongoing exploration work
  on the Waterberg Extension Project and for general working capital purposes. The
  common shares were offered by way of a short form prospectus filed in all
  provinces of Canada, except for Quebec, and in the United States by way of a
registration statement filed with the SEC.

Waterberg PEAOn February 14, 2014, the
Companyannounced positive results from an independent Preliminary
Economic Assessment on the Waterberg JV Project. The project was advanced to the
pre-feasibility stage. As disclosed in the Companys press release dated October
21, 2014, the Preliminary Economic Assessment is outdated and no longer valid.
Accordingly, the Preliminary Economic Assessment should not be relied upon.

Fourth Independent Mineral Resource Estimate for Waterberg On June 11, 2014, the Company announced an increase in the estimated
inferred mineral resource at the Waterberg JV Project and adjacent Waterberg
Extension Project.

Fiscal 2015 Developments

Termination of Project 1 New Lender Mandate - On
November 3, 2014, the Company announced the termination of the mandate for a
US$195 million term loan facility previously entered into with a syndicate of
lenders and announced on November 11, 2013.

Sprott US$40 Million Senior Secured Loan Facility - On
December 9, 2014, the Company announced that the Company had entered into a term
sheet with Sprott for the Sprott Facility in the amount of US$40 million at an
interest rate of LIBOR plus 8.50%, compounded and payable monthly. Later, on
February 16, 2015, the Company entered into a credit facility agreement (the
Sprott Credit Agreement) regarding the Sprott Facility. The Company
used the proceeds of the Sprott Facility for the development and operation of
the Maseve Mine and for general working capital purposes.

The Company made or will be obligated to make certain payments
to Sprott, including (a) a bonus payment made concurrently with execution and
delivery of the Sprott Credit Agreement in the amount of US$1,500,000, being
3.75% of the principal amount of the Sprott Facility, payable in 2,830,188
common shares of the Company issued on February 16, 2015 at a deemed price per
share equal to US$0.53 per common share of the Company; (b) a draw down payment
to Sprott of US$800,000, being equal to 2% of the amount being drawn down under
the Sprott Facility, payable in 3,485,839 common shares issued on November 20,
2015 at a deemed price equal to US$0.23 per common share of the Company; (c) a structuring
fee comprised of a cash payment in the amount of US$100,000, paid concurrently
with the execution and delivery of the term sheet for the Sprott Facility; and
(d) a standby fee payable monthly until December 31, 2015 in cash equal to 4%
per annum of the un-advanced principal amount of the Facility.

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Platinum Group Metals Ltd. 2016 Annual Information Form

US$113.8 Million Public Offering  On December 31, 2014,
the Company announced the closing of a previously announced public offering of
common shares. The Company issued 214.8 million common shares at a price of
US$0.53 per share, for aggregate gross proceeds of US$113.844 million. The
common shares issued include 7.2 million common shares issued pursuant to the
exercise of an over-allotment option. BMO Capital Markets and GMP Securities
L.P. acted as the underwriters and agreed to buy the offered shares on a bought
deal basis. The net proceeds of the offering were intended to fund Phase 2
development at the Maseve Mine. The shares were offered by way of a short form
prospectus filed in all provinces of Canada, except for Quebec, and were offered
in the United States pursuant to a registration statement filed under the
Canada/U.S. multi-jurisdictional disclosure system.

Waterberg Unitization On May 26, 2015, the Company
  announced that JOGMEC had committed to fund the next US$20 million of joint
  venture funding at Waterberg. In conjunction with JOGMECs firm funding
  commitment, the Company, JOGMEC and empowerment partner Mnombo agreed to
  consolidate the Waterberg JV Project and the Waterberg Extension Project into
  one unitized project area, which is referred to as the Waterberg Project. The
  resulting new ownership interests in the Waterberg Project on unitization be as
follows:


    Platinum Group:
    45.65%(1)
    JOGMEC:
    28.35%
    Mnombo:
    26.00%


| | (1) | Platinum Group indirectly owns an additional 12.97%
      interest in the Waterberg Project through its 49.9% interest in Mnombo,
      for a total 58.62% interest in the Waterberg
Project.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Platinum Group will increase its direct and indirect effective
interest in the old Waterberg JV Project area from 49.98% currently to 58.62% .
Platinum Group will decrease its effective interest in the old Waterberg
Extension Project from 87% to 58.62% . JOGMEC will decrease its interest in the
old Waterberg Joint Venture from 37% to 28.35% and increase its interest in the
old Waterberg Extension Project from zero to 28.35% . See further details below.

Project 1 Mineral Resources and Reserves Update  On
July 15, 2015, the Company announced that mineral resources and mineral reserves
for Project 1 had been updated to account for the planned increased use of
mechanized mining methods where the deposit is estimated to be thicker and
accessible from nearby completed underground development. The updated mineral
reserves were calculated using current three-year trailing metal prices and
current cost estimates to July 2015, updated detailed surface and underground
drilling results and a revised mine plan. See details at Summary of Mineral
Reserves and Mineral Resource Estimates below.

Fifth Independent Mineral Resource Estimate for Waterberg On July 22, 2015 the Company reported an updated independent platinum,
palladium and gold (collectively referred to as 3E) resource estimate
for the Waterberg Project, effective July 20, 2015.

Fiscal 2016 Developments

US$40 Million Sprott Facility  On November 20, 2015,
the Company drew down US$40 million working capital facility pursuant to the
Sprott Credit Agreement. The Company issued 348,584 common shares to Sprott in
connection with its draw down of the Sprott Facility at a deemed price of
CDN$3.045 per share. The Sprott facility bears interest at 8.5% over US Libor.
Sprott, in first lien position, agreed to amend its original terms and enter
into an inter-creditor agreement to allow for the second lien position for the
LMM Facility.

The Sprott Facility was later amended and restated in May and
October, 2016. See details above under Recent Developments and below under
Fiscal 2016 Developments.

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- 12 

Platinum Group Metals Ltd. 2016 Annual Information Form

US$40 Million LMM Facility  On November 20, 2015, the
Company also drew down US$40 million from the LMM Facility pursuant to a credit
agreement (the LMM Credit Agreement) entered into on November 2, 2015
with its largest shareholder, LMM. Pursuant to the terms of the LMM Credit
Agreement, the Company issued 348,584 common shares to LMM with its draw down of
the LMM Facility at a deemed price of CDN$3.045 per share. The LMM facility
bears interest at 9.5% over US Libor. Pursuant to the LMM Credit Agreement the
Company entered into a life of mine Production Payment Agreement (PPA)
with LMM. Under the PPA, the Company agreed to pay to LMM a production payment
of 1.5% of net proceeds received on concentrate sales or other minerals from the
Maseve Mine (the Production Payment).

Events of default under the Sprott Facility are also treated as
events of default under the LMM Facility, and vice versa. Under the LMM
Facility, the Company has provided a subordinated pledge of 100% of the shares
of PTM RSA. The LMM Facility is subordinated to the Sprott Facility and
scheduled to be repaid after Sprott. An event of default under the PPA triggers
the payment of a termination fee based on a net present value of the Production
Payments to be made under the PPA at a 5% discount rate. An event of default
under the Sprott Facility or the LMM Facility is also treated as an event of
default under the PPA. The Company holds the right to terminate the PPA upon
payment of the termination fee.

The PPA is secured with the second lien position of the LMM
Facility until it is repaid. The PPA will be acknowledged in any subsequent debt
arrangement of the Company. The Company has a right to refinance the Sprott
Facility or the LMM Facility, subject to certain rights granted to LMM under the
PPA.

The LMM Facility was later amended and restated in May, 2016.
See details below under Fiscal 2016 Developments.

Maseve Mine Commissioning- On February 9, 2016 the
Company reported that operations at the Maseve Mine had successfully completed a
72-hour run test during hot commissioning of its concentrator facility. The mine
produced its first concentrate for delivery to the Anglo Platinum Waterval
smelter 40 km to the south of the mine. Since commissioning, operations have
continued with further underground development and production ramp-up.

Sixth Independent Mineral Resource Estimate for Waterberg On April 19, 2016 the Company reported an updated independent 3E resource
estimate for the Waterberg Project, effective April 18, 2016. LMM Facility
and Sprott Facility Amended  On May 5, 2016 the Company announced that the
US$40 million LMM Facility and the US$40 million Sprott Facility were each
amended effective May 3, 2016. Under the amendments, the provision whereby
Maseve must reach and maintain on a three-month rolling average at least 60% of
planned production for a three-month period was extended and the provision
whereby Maseve must reach and maintain on a three-month rolling average at least
70% of planned production was also extended. In consideration of the amendments
the Company issued 131,654 common shares of the Company to Sprott and 131,654
common shares of the Company to LMM priced at CDN$4.18 per share, , less a seven
and one-half percent discount.

US$33.0 Million Public Offering  On May 26, 2016 the
Company announced the closing of a previously announced public offering of
common shares. The Company issued 11,000,000 shares at a price of US$3.00 per
share, for aggregate gross proceeds of US$33,000,000. BMO Capital Markets, RBC
Dominion Securities Inc. and Macquarie Capital Markets Canada Ltd. acted as the
underwriters and agreed to buy the offered shares on a bought deal basis. The
net proceeds of the offering were used for underground development and the
ramp-up of production at the Maseve Mine. The shares were offered by way of a
short form prospectus filed in all provinces of Canada, except for Quebec, and
were offered in the United States pursuant to a registration statement filed
under the Canada/U.S. multi-jurisdictional disclosure system.

Significant Acquisitions

The Company has not made any significant acquisitions during
its most recently completed financial year for which disclosure is required
under Part 8 of NI 51-102.

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- 13 

Platinum Group Metals Ltd. 2016 Annual Information Form

|ITEM 5 | DESCRIPTION OF THE COMPANYS BUSINESS
|------ | -------------------------------------

General

The Company is a platinum-focused exploration, development and
operating company conducting work primarily on mineral properties it has staked
or acquired by way of option agreements or applications in the Republic of South
Africa and in Canada.

Currently, the Company considers the Maseve Mine and the
Waterberg Project to be material mineral properties. The Company also holds
interests in various early-stage exploration projects located in Canada and in
South Africa, including Project 3, which is located adjacent to and to the north
of the Maseve Mine. The Company continues to evaluate exploration opportunities
both on currently owned properties and on new prospects.

Principal Products

Our principal product once production commences at the Maseve
Mine will be a PGM bearing concentrate. The concentrate will contain certain
amounts of eight elements payable to the Companys account comprised of
platinum, palladium, rhodium, gold, ruthenium, iridium, copper and nickel. All
of the PGM bearing concentrate produced at the Maseve Mine is to be delivered
and sold to Anglo American Platinum Limited (Amplats) in accordance
with the terms of a life-of-mine off-take agreement for the Maseve Mine with
Rustenburg Platinum Mines Limited ("RPM"). The off-take agreement
followed a competitive tender process and the exercise of a right of first
refusal by RPM. The concentrate from the Maseve Mine is planned for delivery to
the RPM Waterval smelter, approximately 40 km away by truck.

Specialized Skill and Knowledge

Various aspects of our business require specialized skills and
knowledge, including the areas of geology, engineering, operations, drilling,
metallurgy, permitting, logistical planning and implementation of exploration
programs as well as legal compliance, finance and accounting. We face
competition for qualified personnel with these specialized skills and knowledge,
which may increase our costs of operations or result in delays.

Due to the requirement for specialized skills and knowledge,
the Company has contracted the services of an experienced and professional human
resources company, to provide site and office human resources, organization
design and planning services to Maseve. The contracted human resources company
specializes in the mining industry, and their team of professional engineers,
psychologists and human resources practitioners has an intimate understanding of
organization design & development, including knowledge of the applied
legislation, mining techniques and associated labour practices. They have also
assisted the Company in completing a Local Skills Assessment in six
communities to help identify candidates for leadership and staff positions as
per Maseves Social and Labour Plan (the Maseve Social and Labour Plan)
andhuman resources development obligations. Community members have been
hired and more are currently undergoing medical examinations, training and
induction.

Social or Environmental Policies

Corporate Social Responsibility

Being a responsible corporate citizen means protecting the
natural environment associated with our business activities, providing a safe
workplace for our employees and contractors, and investing in infrastructure,
economic development, and health and education in the communities where we
operate so that we can enhance the lives of those who work and live there beyond
the life of such operations. We take a long-term view of our corporate
responsibility, which is reflected in the policies that guide our business
decisions, and in our corporate culture that fosters safe and ethical behaviour
across all levels of Platinum Group. Our goal is to ensure that our engagement
with our stakeholders, including our workforce, industry partners, and the
communities where we operate, is continued, mutually beneficial and transparent.
By building such relationships and conducting ourselves in this manner, we can
address specific concerns of our stakeholders and work cooperatively and
effectively towards achieving this goal.

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- 14 

Platinum Group Metals Ltd. 2016 Annual Information Form

Social and Labour Plans

The Maseve Social and Labour Plan was compiled pursuant to DMR
guidelines for social and labour plans and submitted in accordance with section
46 of the MPRDA (defined below). The objective of a social and labour plan is to
align the Companys social and labour principles with the related requirements
established under the Mining Charter. These requirements for Maseve include
promoting employment, advancement of the social and economic welfare of all
South Africans, contributing toward the transformation of the mining industry
and contributing towards the socio-economic development of the communities
proximal to the Maseve Mine. Contractors are required to comply with the Maseve
Social and Labour Plan and policies, including commitment to employment equity
and BEE, proof of competence in terms of regulations, commitment to undertake
training programs, compliance with all Maseve policies relating to recruitment,
training, health and safety, etc. In terms of human resources training, the
Maseve Social and Labour Plan establishes objectives for adult-based education
training, learnerships and development of skills required by mining industry,
portable skills training for transition into industries other than mining,
education bursaries and internships. The Maseve Social and Labour Plan also
establishes local economic development objectives for projects such as community
centre refurbishment, high school refurbishment, water and reticulation
projects, housing development, establishment of recreational parks and various
other localized programmes for small scale industry, agriculture,
entrepreneurship and health and education.

The Company is in process to develop a social and labour plan
for the Waterberg Project (the Waterberg Social and Labour plan).

Labour in South Africa

The gold and platinum mining industries in South Africa
witnessed significant labour unrest in recent years and demands for higher wages
by certain labour groups. Both legal and illegal or unprotected strikes have
occurred at several mines since the beginning of August 2012. In June 2014, the
Association of Mineworkers and Construction Union accepted a negotiated wage
settlement to end a five month long strike affecting a significant proportion of
the platinum industry. To date, the Company has seen no adverse labour action on
its site at the Maseve Mine.

The primary union at the Maseve Mine representing the workers
of Maseves primary underground mining contractor, JIC Mining Services
(JIC), is the National Union of Mineworkers (NUM). The Company
maintains an active dialogue with JIC, NUM and its own employees. JIC recently
agreed to terms with NUM for a labour contract at the Maseve Mine for a two-year
period ending September 2017. In the future, should higher salaries and wages
occur across the industry, the Company will likely be required to comply with
higher pay bands, and the resulting increase in the cost of labour. See Risk
Factors.

Environmental Compliance

The Companys current and future exploration and development
activities, as well as future mining and processing operations, if warranted,
are subject to various federal, state, provincial and local laws and regulations
in the countries in which the Company conducts its activities. These laws and
regulations govern the protection of the environment, prospecting, development,
production, taxes, labour standards, occupational health, mine safety, hazardous
substances and other matters. Company management expects to be able to comply
with those laws and does not believe that compliance will have a material
adverse effect on the Companys competitive position. The Company intends to
obtain and maintain all licences and permits required by all applicable
regulatory agencies in connection with its mining operations and exploration
activities. The Company intends to maintain standards of compliance consistent
with contemporary industry practice.

Competitive Conditions

The global PGM mining industry has historically been
characterised by long-term rising demand from global automotive and fabrication
sectors on the one hand and constrained supply sources on the other. South
Africas PGM mining sector has been the largest and fastest growing sector in
the South African mining industry until recently, representing approximately 80%
of global supply. Since mid-2012 global economic uncertainty, recycling and slow
growth have created a weak market for PGMs. Lower market prices for PGMs
combined with labour unrest has caused stoppages and closures of some higher
cost platinum mines and shafts in South Africa. Almost all of the South African platinum supply comes
from the geographic constraints of the Western, Northern and Eastern Limbs of
the Bushveld Complex, resulting in a high degree of competition for mineral
rights and projects. South Africas PGM mining sector remains beholden to
economic developments in the global automotive industry, which currently
accounts for approximately 41% of the total global demand for platinum. A
prolonged downturn in global automobile and light truck sales, resulting in
depressed platinum prices, often results in declining production as unprofitable
mines are shut down. Alternatively, strong automobile and light truck sales
combined with strong fabrication demand for platinum, most often results in a
more robust industry, creating competition for resources, including funding,
labour, technical experts, power, water, materials and equipment. The South
African industry is dominated by three or four producers, who also control
smelting and refining facilities. As a result, there is general competition for
access to these facilities on a contract basis. As the Company moves towards
production on the Maseve Mine, it will become exposed to many of the risks of
competition described herein. See Risk Factors.

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- 15 

Platinum Group Metals Ltd. 2016 Annual Information Form

Employees and Contractors

The Companys current complement of managers, staff and
  consultants in Canada consists of approximately 9 individuals and the Companys
  complement of managers, staff, consultants, security and casual workers in South
  Africa consists of approximately 311 individuals, inclusive of approximately 18
individuals active at the Waterberg Project.

The Waterberg Project is operated by the Company utilizing its
own staff and personnel as described above. Contract drilling, geotechnical and
support services are utilized as required.

Maseve is operated by the Company on an owner
managed-contractor basis. The Company has hired full time local mining
specialists in South Africa as part of an operational readiness plan while the
Company drives to ramp up production at the Maseve Mine. The Companys
management team has taken over many duties and responsibilities previously
assigned to contractors, resulting in improved planning and execution
capabilities at Maseve. The safety record at the Maseve Mine has been maintained
at levels better than industry average levels through a focus on safety. The
Maseve management team has frequent interaction and dialogue with the
inspectorate branch of the DMR and follows their guidance carefully.

As at October 31, 2016, the total labour force at the Maseve
Mine totalled approximately 2,145 people. The Company had 116 permanent and
temporary employees and directly managed 1,012 contractor employees assigned to
engineering (343 employees), security (101 employees), mining sub-contractors
(427 employees) and support services (141 employees). Underground mining
contractor JIC had approximately 834 people, including mining sub-contractors,
assigned to working on both the north and south mine areas at the Maseve Mine.
As the Maseve Mine ramps up production, Company management is working to
streamline and refine contractor engagement for underground mining and
development at the Maseve Mine to improve operational efficiencies and rates of
production.

In December 2012, DRA Mineral Projects (Pty) Ltd.
(DRA) was formally engaged as the EPCM contractor for commencement of
surface infrastructure, including mill and flotation circuit construction. At
October 31, 2016 DRA and all its subcontractors had demobilised from site post
the completion of the EPCM works.

During December 2015, Tailing Technology (Pty) Limited
(TTL) was engaged to provide concentrator management, operating and
maintenance services for the Maseve mill. TTL personnel were inducted to site
and completed training and the establishment of operating procedures and
protocols in December 2015 and January 2016. During February 2016 TTL
commissioned the Maseve Mine mill with assistance of the DRA commissioning team.
At October 31, 2016 TTL had approximately 114 employees on site plus
approximately 69 sub-contractor personnel.

The Company has worked closely for several years with local
communities and a human resource specialist company to create a database of
local persons interested in work at Maseve, including their skill and experience
details. The Company has set a target of 30% local employment for the mine,
including persons under the employ of contractors. As at October 31, 2016,
approximately 13% of the onsite Maseve workforce was comprised of local persons
from surrounding communities. Management will, as production build up and
increased labour requirement allow, address the shortfall in this target.

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- 16 

Platinum Group Metals Ltd. 2016 Annual Information Form

Foreign Operations

The Company conducts the majority of its business in South
Africa. South Africa has a large and well-developed mining industry,
particularly in the area where the Maseve Mine is located. This, among other
factors, means the infrastructure in the area is well-established, with
well-maintained roads and highways as well as electricity distribution networks,
water supply and telephone and communication systems. Electrical generating
capacity has been strained by demand in recent years in South Africa, but
additional capacity is currently underway. Additional water infrastructure will
also be required. See Risk Factors.

There is also access to materials and skilled labour in the
region due to the existence of many platinum and chrome mines in the immediate
vicinity. Smelter complexes and refining facilities are also located in the
area. South Africa has an established government, police force and judiciary as
well as financial, health care and social institutions, although such
institutions underwent significant change following the fall of apartheid and
free elections in 1994, and are continuing to be developed. The system of
mineral tenure was overhauled by new legislation in 2002, which came into force
in 2004. Since 1994, South Africa has been considered an emerging democracy. See
Risk Factors.

5.1 - Mineral Property Interests

Under IFRS, the Company defers all acquisition, exploration and
development costs related to mineral properties. The recoverability of these
amounts is dependent upon the existence of economically recoverable mineral
reserves, the ability of the Company to obtain the necessary financing to
complete the development of the property, and any future profitable production;
or alternatively upon the Companys ability to dispose of its interests on an
advantageous basis.

The Companys key development project and exploration targets
are located in the Bushveld Complex in South Africa. The Bushveld Complex is
comprised of a series of distinct layers or reefs, three of which contain the
majority of the economic concentrations of platinum group metals (together,
PGMs, and the subset of 4E PGMs consisting of platinum, palladium,
rhodium and gold, or the subset of 3E PGMs consisting of platinum, palladium and
gold) within the Bushveld Complex: (i) the Merensky Reef (Merensky or
MR), which occurs around the Western Limb of the Bushveld Complex, (ii)
the Upper Group 2 Layer or Reef (UG2), which occurs around the Eastern
Limb of the Bushveld Complex and (iii) the Platreef (Platreef), found
within the Northern Limb. These reefs exhibit extensive geological continuity
and predictability and have an established history of economic PGM production.
The Merensky, UG2 and Platreef have been producing PGMs since the 1920s, 1970s
and 1990s, respectively.

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- 17 

Platinum Group Metals Ltd. 2016 Annual Information Form

Overview of the Bushveld Complex (Map not drawn to scale)



Notes:

| | 1 | Anglo American Platinum Limited owns a 33%
  stake.            
| | - | ---------------------------------------------------------------
| | 2 | Comprised of Bathopele, Siphumelele and Thembelani
      mines.

Projects 1 and 3 of the Western Bushveld Complex

The Maseve Mine and Project 3 are located adjacent to each
other on the Western Limb of the Bushveld Complex, 110 km west northwest of
Pretoria and 120 km from Johannesburg. The approximately 47 km2 of
mining rights comprising the Maseve Mine and Project 3 are owned by project
operating company Maseve, of which the Company owns an 82.9% interest and
Wesizwe, through its subsidiary Africa Wide, owns 17.1% .

To date, the majority of the Companys exploration and
development activities have been focused on the Maseve Mine in order to advance
it into production. On July 7, 2008, the Company announced the results of a
feasibility study on the Maseve Mine. On November 25, 2009, the Company
published an updated feasibility study for the Maseve Mine. On April 4, 2012,
Maseve was issued a letter of grant for the Mining Right by the DMR. The Mining
Right was notarially executed on the commencement date of May 15, 2012 and
registered on August 3, 2012.

During 2012 and into early 2013, the Company completed Phase 1
development at the Maseve Mine. Phase 1 included surface infrastructure, lay
down areas, electrical and water connections, twin decline development and some
lateral development.

Phase 2 development at the Maseve Mine commenced in early
January 2013. Phase 2 included the completion of an additional twin decline
access into the deposit, a milling, concentrating and tailings facility and
extensive underground development. Plant and facility construction was
substantially complete by February, 2016 and commissioning occurred in
February/March 2016. First production occurred during February, 2016. Full commercial production is estimated to occur after a two-year
ramp-up period after commissioning of the plant. To date, production ramp up is
behind plan, as described above.

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- 18 

Platinum Group Metals Ltd. 2016 Annual Information Form

Technical Reports  Maseve Mine

Readers are encouraged to read the following technical reports,
  from which certain of the disclosure regarding the Maseve Mine and Project 3 in
this AIF has been derived:

|1. | Technical Report on Project 3 Resource Cut Estimation of
      the Western Bushveld Joint Venture (WBJV) Located on the Western Limb of
      the Bushveld Igneous Complex, South Africa, dated August 31, 2010 (the
      Project 3 Report), prepared by Charles J. Muller; and                                                                                                                                                                                                                                                                                                                                 
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2. | An Independent Technical Report on the Maseve Project
      (WBJV Project areas 1 and 1A) located on the Western Limb of the Bushveld
      Igneous Complex, South Africa (the Project 1 Report) dated
      August 28, 2015 with an effective date of July 15, 2015 for the estimate
      of mineral resources and reserves, prepared by Charles J. Muller (B. Sc.
      (Hons) Geology) Pri. Sci. Nat., of CJM Consulting (Pty) Ltd.; Gert Roets
      (B. Eng. Mining), Pr. Eng. (ECSA), of DRA Projects; and Gordon Cunningham,
      B. Eng. (Chemical), Pr. Eng. (ECSA) of Turnberry Projects (Pty)
  Ltd.

(collectively, the WBC Reports).

Although adjacent and on strike to the north of the Maseve
Mine, Project 3 is not material to the Company at this time and the discussion
below details only the Maseve Mine.

The following summary is qualified in its entirety with
reference to the full text of the Project 1 Report, which is incorporated by
reference herein.

The Project 1 Report complies with disclosure and reporting
requirements set forth in the Toronto Stock Exchange Manual, NI 43-101 Standards
of Disclosure for Mineral Projects, Companion Policy 43-101CP to NI 43-101, and
Form 43-101F1 of NI 43-101. The report reviews the geology, exploration and
development activities at the Maseve Mine and states the most recent mineral
reserve and resource estimates with an effective date of July 15, 2015.

The WBC Reports are subject to certain assumptions,
qualifications and procedures described therein. Readers are encouraged to
review the full text of the WBC Reports, available for review under the
Companys profile on SEDAR at www.sedar.com and on the SECs EDGAR
website at www.sec.gov, for additional information.

Project 1 Summary (Excerpted from the Project 1 Report)

Introduction

Since the update on the Feasibility Study in 2009, changes to
the mining methodology and method of access, on and off reef development have
been reviewed. In the 2009 Updated Feasibility Study, access development was to
be via 3 decline systems with trackless development and ore transport, with
raise development, ledging, equipping and stoping being conventional hand held
mining methodology.

Reason for Updated NI 43-101 Report

The Mineral Resources and Mineral Reserves for the Maseve Mine
have been updated to account for the planned increased use of mechanized mining
methods where the deposit is estimated to be thicker and accessible from nearby
completed underground development. The updated Mineral Reserves have been
calculated using current three year trailing metal prices and current cost
estimates, updated detailed surface and underground drilling results and a
revised mine plan.

Exclusive of smelter discount, on site costs are estimated to
be US$526 (12R/US$) per 4E ounce for the life of mine on the Merensky Reef
including copper, nickel and other minor elements as a credit and US$774 per 4E
ounce on the UG2 (12R/US$). The planned increased use of mechanized mining
methods in areas near current development, and a slightly weaker Rand has resulted in similar
cost guidance to earlier estimates despite increased labour and other cost
escalation in Rand terms.

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- 19 

Platinum Group Metals Ltd. 2016 Annual Information Form

Ownership

The Maseve Mine property is located in the western limb of the
  Bushveld Igneous Complex (BIC), 110 km West-NorthWest of Pretoria and
  120 km from Johannesburg. The WBJV is owned by Maseve Investments 11 (Pty.) Ltd.
  82.9% owned by Platinum Group Metals (RSA) (Pty) Ltd a wholly-owned subsidiary
  of Platinum Group Metals Ltd Canada, the issuer. The resources of the Maseve
  Mine and Project 1A are located approximately 1 km from the active MR mining
  face at the operating Bafokeng Rasimone Platinum Mine (BRPM) along
  strike. BRPM completed opencast mining on the UG2 Reef within 100m of the WBJV
property boundary.

The government of South Africa has custodianship of all of the
country's mineral and petroleum resources under the Mineral and Petroleum
Resources Development Act, No. 28 of 2002 (MPRDA). Maseve holds a
mining right issued by the State under the MPRDA.

Geology

The WBJV property is partly situated in a layered igneous
complex known as the BIC and its surrounding sedimentary footwall rocks. The BIC
is unique and well known for its layering and continuity of economic horizons
mined for platinum, palladium and other platinum group elements (PGEs), chrome
and vanadium.

The area is structurally complex with numerous phases of
faulting as well as soft-crystalline deformation within the MR and UG2 layers.

Major structures, which occur within the WBJV area, include the
Caldera and Elands Faults, Chaneng dyke and a major North-South trending
feature, which can be observed across the entire Pilanesberg Complex. These
East-West trending structures dip steeply (between 80° and 90°). The magnetics
indicate that the Chaneng Dyke dips steeply to the North. This is consistent
with similar structures intersected underground on the neighbouring BRPM, which
all dip steeply Northward.

Mineralisation

The potential economic horizons in the WBJV Maseve Project area
are the MR and UG2 situated in the Critical Zone of the Rustenburg Layered Suite
(RLS) of the BIC. These horizons are known for their continuity. The MR
and UG2 are mined at the BRPM adjoining the WBJV property as well as on other
contiguous platinum mine properties. In general, the layered package dips at
less than 20° and local variations in the reef attitude have been modelled. The
MR and UG2, in the Project Area, generally dip between 4° and 42°, averaging
22°.

The precious metals occur in a variety of forms. One or more of
the metals may be present in combination with sulphur, arsenic, selenium or
tellurium metallic particles of PGEs or of PGEs alloyed with base metals are
also found. Additional PGEs are found in solid solution in base metal sulphide
particles.

Project Status

The database for the Maseve Project available for mineral
resource estimation comprises a total of 669 drill holes (comprising of original
parent holes only, excluding deflections). The MR Mineral Resource estimate is
based on 366 intercepts and the UG2 mineral resource estimate is based on 415
intercepts. An additional 213 drillholes were included in the resource estimate
Update which comprise new holes drilled by PTM in the time elapsed since the
previous resource estimate of 2009.

At the stage of this resource estimate, the Project was in
construction and mine building with reconnaissance underground development
continuing and plant development in progress.

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- 20 

Platinum Group Metals Ltd. 2016 Annual Information Form

Resources

Mineral resource estimation was conducted using Datamine
Studio and Minesofts geostatistical package RES adopting an ordinary kriging
method of resource estimation. In keeping with industry best practice in mineral
resource estimation, allowance is made for known and expected geological losses.
From drill data and other known information areas with no reef have been
delineated and excluded from mineral resource estimation. These areas comprise
35% of the project area. Within expected reef areas, further geological losses
of up to 14% for the MR and 13% for the UG2 were applied to the area to
accommodate for areas of potentially un-mineable structural and geological
conditions, and this was considered in the Mineral Resource estimate. This
geological loss considers losses for faults, dykes, potholes and areas of iron
replacement pegmatite. Structural loss estimates are based on drilling, field
mapping and remote sense data, which include a high resolution aeromagnetic
survey.

Total measured and Indicated mineral resources amount to 6.63
million ounces (Moz) of 4E (platinum, palladium, rhodium and gold) for
Maseve Project area. The mineral resource estimate for the Maseve Project area
is shown in the following tables.

Table 1-1: Mineral Resource Estimate for the Maseve Project

Merensky - Mining Cut
      100% Project BasisResource
      Category
    Cut-off
    Tonnage
    Grade
    Metal
    Reef
      Width4E
    
    Pt
    Pd
    Rh
    Au
    4E
    
    4Ecmg/t
    Mt
    g/t
    g/t
    g/t
    g/t
    g/t
    kg
    Moz
    cmMeasured
    300
    9.266
    3.35
    1.41
    0.21
    0.26
    5.23
    48,461
    1.558
    152Indicated
    300
    12.552
    3.65
    1.54
    0.23
    0.29
    5.71
    71,672
    2.304
    141Total
    300
    21.818
    3.53
    1.49
    0.21
    0.28
    5.51
    120,133
    3.862
    146Inferred
    300
    0.196
    2.32
    0.98
    0.14
    0.18
    3.62
    710
    0.023
    118


UG2 - Mining Cut 100%
      Project BasisResource
      Category
    Cut-off
    Tonnage
    Grade
    Metal
    Reef
      Width4E
    
    Pt
    Pd
    Rh
    Au
    4E
    
    4Ecmg/t
    Mt
    g/t
    g/t
    g/t
    g/t
    g/t
    kg
    Moz
    cmMeasured
    300
    8.496
    2.29
    0.94
    0.36
    0.04
    3.63
    30,841
    0.992
    140Indicated
    300
    14.183
    2.46
    1.01
    0.39
    0.04
    3.90
    55,314
    1.778
    136Total
    300
    22.679
    2.39
    0.99
    0.38
    0.04
    3.80
    86,155
    2.770
    137Inferred
    300
    0
    0
    0
    0
    0
    0
    0
    0
    0


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- 21 

Platinum Group Metals Ltd. 2016 Annual Information Form

Mineral Reserves

The mineral reserves are fully included within the measured and
indicated mineral resources, and are not in addition to them.

The mineral reserve statement for the WBJV project 1 and 1A
(Maseve) is based on the South African Code for the Reporting of Exploration
Results, Mineral resource and Mineral reserves (SAMREC code). There is no
material difference between the SAMREC and CIM code for mineral reserve
estimation in this case.

The SAMREC code definition of a Mineral Reserve is:

A Mineral Reserve is the economically mineable
      material derived from a Measured or Indicated Mineral Resource or both. It
      includes diluting and contaminating materials and allows for losses that
      are expected to occur when the material is mined. Appropriate assessments
      to a minimum of a Pre-Feasibility Study for a project and a Life of Mine
      Plan for an operation must have been completed, including consideration
      of, and modification by, realistically assumed mining, metallurgical,
      economic, marketing, legal, environmental, social and governmental factors
      (the modifying factors). Such modifying factors must be disclosed.


Mineral reserves are reported as inclusive of diluting and
contaminating uneconomic and waste material delivered for treatment or
dispatched from the mine without treatment.

The CIM code definition for a Mineral Reserve:

A Mineral Reserve is the economically mineable part of a
      Measured and/or Indicated Mineral Resource. It includes diluting materials
      and allowances for losses, which may occur when the material is mined or
      extracted and is defined by studies at Pre-Feasibility or Feasibility
      level as appropriate that include application of Modifying Factors. Such
      studies demonstrate that, at the time of reporting, extraction could
      reasonably be justified.The reference point at which mineral reserves are
      defined, usually the point where the ore is delivered to the processing
      plant, must be stated. It is important that, in all situations where the
      reference point is different, such as for a saleable product, a clarifying
      statement is included to ensure that the reader is fully informed as to
      what is being reported.


For this technical report, the CIM mineral reserves for the
WBJV project 1 and 1A has been stated under the SAMREC Code. The point of
reference is ore delivery to the Run of Mine (RoM) silo at the
processing plant.

Mineral reserves are sub-divided in order of increasing
confidence into probable mineral reserves and proven mineral reserves. A
probable mineral reserve has a lower level of confidence than a proven mineral
reserve.

A probable reserve is the economically mineable part of an
indicated resource, and in some circumstances a measured resource. This is
demonstrated by at least a pre-feasibility study including adequate information
on mining, processing, metallurgical, economic and other factors that
demonstrate, at the time of reporting, the economic extraction can be
justified.

A proven reserve is the economically mineable part of a
measured resource demonstrated by the same level and factors as above. A proven
mineral reserve implies that there is a high degree of confidence. All mining
and permit approvals need not be in place for the declaration of reserves.

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- 22 

Platinum Group Metals Ltd. 2016 Annual Information Form



The conversion to mineral reserves was undertaken at 2.5g/t
stope cut-off grade for both MR and UG2 reefs. From the mineral resource as
estimated in this report, each stope has been fully diluted, comprising of a
planned dilution and additional dilution for all aspects of the mining process.
There are no inferred mineral resources included in the Reserves. The Qualified
Person for the Statement of Reserves is Mr. G. Roets, DRA.

The conversion of the 2015 Updated Mineral Resource Estimate to
Reserves differs from the 2009 Updated Feasibility Study Reserve calculation in
the following aspects:

| | ➢ | A lower planning face cut-off grade of 2.5g/t
      (vs 3.5g/t from 2009 Updated Feasibility Study (FS)) was used,                
| | - | ------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                     
| | ➢ | The software used for reserve valuation is
      Datamine. Studio5 was used for mine design and EPS for production
      scheduling.

The Mineral Reserve statement has been calculated based on the
outcome of the updated reserve calculation and economic evaluation and is
detailed in Table 1-2.

Table 1-2: Mineral Reserve 4E Statement

Estimated Total Reserve
      100% Project BasisReserve
      tonnes - Mt
    Pt
      g/t
    Pd
      g/t
    Rh
      g/t
    Auu
      g/t
    Reserve
      4E Grade - g/t
    Reserve
      4E Content  t
    Reserve
      4E Content  MozMR Proven and Probable
    17.525
    2.94
    1.24
    0.18
    0.23
    4.59
    80.401
    2.585


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- 23 

Platinum Group Metals Ltd. 2016 Annual Information Form

Estimated Total Reserve
      100% Project BasisReserve
      tonnes - Mt
    Pt
      g/t
    Pd
      g/t
    Rh
      g/t
    Au
      g/t
    Reserve
      4E Grade - g/t
    Reserve
      4E Content  t
    Reserve
      4E Content  MozUG2 Proven and Probable
    14.914
    2.01
    0.83
    0.32
    0.03
    3.19
    47.649
    1.532Total
    32.439
    2.51
    1.05
    0.25
    0.14
    3.95
    128.050
    4.117


Prill splits are calculated using the individual metal grades
reported as a percentage of the total 4E grade.

Table 1-3: MR and UG2 Prill Split

Merensky
  ReserveReserve
      tonnes - Mt
    Pt
      g/t
    Pd
      g/t
    Rh
      g/t
    Au
      g/t
    Reserve
      4E Grade - g/t
    Reserve
      4E Content - t
    Reserve
      4E Content - MozProven
    7.082
    2.89
    1.22
    0.18
    0.22
    4.51
    31.905
    1.025Probable
    10.443
    2.98
    1.26
    0.18
    0.23
    4.65
    48.496
    1.560Total
    17.525
    2.94
    1.24
    0.18
    0.23
    4.59
    80.401
    2.585


UG2 ReserveReserve
      tonnes - Mt
    Pt
      g/t
    Pd
      g/t
    Rh
      g/t
    Au
      g/t
    Reserve
      4E Grade - g/t
    Reserve
      4E Content - t
    Reserve
      4E Content - MozProven
    5.452
    1.95
    0.80
    0.31
    0.03
    3.09
    16.821
    0.540Probable
    9.462
    2.05
    0.85
    0.33
    0.03
    3.26
    30.828
    0.992Total
    14.914
    2.01
    0.83
    0.32
    0.03
    3.19
    47.649
    1.532


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- 24 

Platinum Group Metals Ltd. 2016 Annual Information Form



Graph 1-1: MR Prill Split



Graph 1-2: UG2 Prill Split

Mining Operations

GeotechnicalFactors

The main findings in the geological and rock engineering
investigations that influenced on-reef mine design are discussed below:

| | ➢ | The MR hasan average dip of 15.31°and an average stoping width of 142cm at a cut-offgrade of 2.5g/t,
| | - | ----------------------------------------------------------------------------------------------------

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- 25 

Platinum Group Metals Ltd. 2016 Annual Information Form

| | ➢ | The UG2 reef has an average dip of 16° and an average
      stoping width of the mine is 129cm at a cut-off grade of 2.5g/t,                                                                                                                                                                                                                                                               
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                            
| | ➢ | Certain mining blocks have the potential for increased
      mechanization, while other blocks have a greater potential for mining
      methods more suitable to narrow, steep dipping ore bodies. Currently
      predicted dip, structure and width can further be confirmed by additional
      drilling, either from surface or from underground with stope definition
      drilling,
| |   |                                                                                                                                                                                                                                                                                                                                                                                            
| | ➢ | A complex geological structure with faults and dykes
      intersecting the ore body subdivides the deposit into a number of discrete
      mining blocks, each of which requires access development on different
      mining elevations. The resultant blocks of ground left un-mined add to the
      regional stability of the mine.                                                   

After application of appropriate pay limits, the MR reserve
contains 40% more recoverable metal than the UG2 and is therefore the primary
target. The parting between the MR and the UG2 reserve varies in thickness from
contact in the West to 70m in the East and deeper part of the deposit. Mining of
both reefs generally only occurs when the parting is greater than 20m as
prescribed by the rock engineer.

Mining Methods Selected

The geological and structural models, in conjunction with
geotechnical considerations, formed the basis of the mining methods that were
selected to provide the best practical outcome under the given conditions. The
selected methods had to be versatile and easily interchangeable with the lowest
impact on production during transition between mining methods. The mining
methods would also have to be able to integrate with the trackless environment
that would supply access and service all of the mining areas.

Final Chosen Mining Methods:

| | ➢ | Bord and Pillar
| | - | ---------------

| |  | Bord and pillar mining was considered in flatter dipping
      areas with a maximum dip of 15o and where the actual seam height of the
      reef was conducive to the increased mining heights required for the bord
      and pillar equipment.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ➢ | Conventional Mining
| | - | -------------------

| |  | The conventional mining method was considered in the
      steepest dipping areas. Raises can be developed at a maximum dip (or
      apparent dip) of 34o, thus giving the best and most practical outcome
      under high variability conditions with the lowest replacement rates.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ➢ | Hybrid Mining
| | - | -------------

| |  | The hybrid mining method was considered in the moderate
      to steeper dipping areas where the bord and pillar method is not eligible.
      This method took precedence over the conventional method where applicable,
      due to the on-reef access which allows a quicker reef access and a faster
      production build-up. The method also requires a more favourable
      development replacement rate.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Mine Design

The updated Life of Mine (LoM) design, as illustrated
in Figure 1-2 and Figure 1-3, makes use of the twin decline system to access the
underground workings. Initially during the development phase, men, material and
rock will be transported by trackless mobile machinery. At steady state
production, men and rock will be transported by chairlift and conveyor systems
respectively (Refer to Section 18 of this report).

Mining methods have been adapted from the Updated Feasibility
Study to include geological, geotechnical, engineering and timing modifications.
Maseve will be operated as a trackless development (access development is
off-reef and production development is on-reef) and a partially conventional,
hybrid, and bord and pillar mechanised mine using diesel mobile mining
equipment. The overall on-reef / hand held methods applied in the conventional and hybrid mining methods have not
changed significantly from the conventional methods described in the previous
study. The thicker reef (partially due to the lower cut-off grade and additional
drilling information) and a deliberate drive towards a higher degree of
mechanization, allows for a bord and pillar mining method to be applied in the
deeper, shallower dipping areas of the mine.

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Platinum Group Metals Ltd. 2016 Annual Information Form



The mine design is focused on reducing waste footwall
development by replacing most of the previously footwall located off-reef
production development in the earlier design with on-reef production
development. This accommodates the trackless mining method approach and delivers
a faster RoM production build-up. The approach also allows for a reduced overall
mining cost but it does however result in a moderately higher dilution
percentage.

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Platinum Group Metals Ltd. 2016 Annual Information Form



This report documents the modifying factors including updated
geological model, optimized mining plan and updated financial and economic
models in support of the updated mineral reserves. The cost analysis and
accuracy estimates have been updated to reflect changes in capital and operating
costs associated with adjustments in the mine plan and current prices.

This document provides details of the mine plan modifications
and associated layouts related to the updated mineral reserves. These changes
include:

| | ➢ | Two decline systems at North Shaft and South Shaft to
      access the ore body (the 2009 Updated Feasibility Study included a three
      decline system),
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                            
| | ➢ | Mining blocks have changed in geometry,
      position and strike,                                                                                         
| |   |                                                                                                                                                            
| | ➢ | Dimensions and cross sectional areas of ends
      for the material decline, material ramp decline and strike drives.                                      

Realised development rates have been higher than estimated in
the 2009 Updated Feasibility Study. Updated rates have a positive effect on the
LoM scheduling. Realised development rates average:

| | ➢ | Material decline 100m per month,                                               
| | - | -------------------------------------------------------------------------------
| |   |                                                                                
| | ➢ | Material ramp decline 80m per month,                                           
| |   |                                                                                
| | ➢ | Strike ramps 60m per month,                                                    
| |   |                                                                                
| | ➢ | Increase size of diesel equipment fleet from
      52kW/ktpm to over 65kW/ktpm.

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Platinum Group Metals Ltd. 2016 Annual Information Form

Ventilation requirements for the modified layout consider:

| | ➢ | Intake airway capacity with two declines is
      less than with three declines,
| | - | --------------------------------------------------------------------------------
| |   |                                                                                 
| | ➢ | Raise Bore Hole (RBH) size and
      location,                                
| |   |                                                                                 
| | ➢ | Main fan(s) operating point, location and
      phase-in.                       

Ventilation

Subsequent to the updated mine designs completed in March 2012,
changes were made to mine design to improve the viability of the Maseve Project.
Some of the proposed changes have impacted on the original ventilation designs
and specifications. The ventilation section assesses the impact of the
significant changes on ventilation designs and associated costs.

The ventilation strategy considers safety and health in
accordance with the Mine Health and Safety Act (MHSA, Act 29 of 1996)
and complies with Maseve health and safety requirements. The primary ventilation
quantity for Maseve is 1 100m3/s; dictated by the need to dilute diesel
emissions, remove heat and dilute blasting fumes (during re-entry period). The
primary ventilation quantity satisfies the mine heat load without the need for
refrigeration. It must be noted however that, wet-bulb temperatures will exceed
27.5°C and approach 29.0°C and heat tolerance screening of the underground work
force will be required. Interactive computer simulation of heat and air flow was
used to determine ventilation requirements over the LoM for maximum depth and
strike.

The mining plan is based on steady state production of 160 000
reef tonnes per month. During the first phase of the project, the primary ore
body will be MR and accordingly discussion in this report focusses on access of
the MR. Later UG2 will provide replacement tonnes and will be ventilated
utilising the existing MR infrastructure by extending established intake and
returns to UG2 as required (e.g. step raise bore holes (RBHs), drop raises,
horizontal intake and return airways). The strategy will mine UG2 within a
specific mining block only after the overlying MR block has mined out, i.e.,
the two reefs will not be mined simultaneously from the same area.

In general, each mining block will be ventilated as a separate
district while at the same time utilising as much common infrastructure as
practically achievable. Fresh air will be introduced to mining blocks through a
combination of the main North and South access decline systems and strategically
located fresh air RBHs. Air returns through return RBHs equipped with fans.
Generally returns will serve more than one block, but in some cases a blocks
will require a dedicated return to surface. It should be noted that RBHs were
phased in to meet the production requirements as provided.

Metallurgical Testwork and Recovery

Three sets of testwork have been conducted on the WBJV
Elandsfontein deposit by SGS Lakefield for a pre-feasibility study and Mintek
for the 2009 Updated Feasibility Study. SGS Lakefield completed metallurgical
testwork on UG2 and MR (December 2006 and January 2007 respectively) reefs to
characterise the ores and evaluate metallurgical performance. From comminution
testwork, the UG2 ore was classified as being of medium to hard hardness. The
ore could be treated using a standard MF2 circuit and the predicted recoveries
were 82% (4E) with a grade of 150g/t. The predicted PGM recovery and grade for
MR were 94% and 179g/t (4E) respectively. Copper and Nickel recoveries achieved
were 89% and 59.5% respectively at grades of 2.4% and 3.6% . The testwork was
conducted at a fine grind of 90% passing 75μm. The testwork was conducted with
limited samples (four cores samples).

The Mintek 2009 Updated Feasibility Study metallurgical
testwork was conducted on MR and UG2 samples collected across the target mining
area. The mineralogy, grade and ore occurrence exhibited marked variability. The
MR grade varied from 1.9g/t to 8.5g/t (4E) with an average of 5.3g/t. The
testwork was conducted with a location composite with a grade of 2.5g/t. Both
MF1 and MF2 circuit configurations were tested. The overall MR MF1 recovery and
grade were 86% (4E) and 61g/t respectively. It was also demonstrated during the
rougher rate tests that for MF1, recovery increased with grinds being 88.9%,
90.1% and 94% for grinds of 40%, 60% and 90% passing 75μm respectively. The
overall copper and nickel recoveries were 86% and 57%. Respective grades for
copper and nickel were 1.6% and 2.1% . For MF2 overall 4E recovery and grade
were 91% and 85g/t respectively. Overall copper and nickel recoveries were 84%
and 58% respectively at grades of 2% and 2.8% .

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Platinum Group Metals Ltd. 2016 Annual Information Form

The UG2 testwork gave overall recovery of 86% at a grade of
102g/t with chromite grade less than 4%.

Mintek conducted confirmatory testwork in 2012 from nine MR
drill core samples collected across the mining area. The testwork demonstrated
that the ore was not significantly different to the other ores tested
previously. The samples also demonstrated marked variability with 4E grade
varying between 1.6g/t and 6.6g/t. Copper and nickel grades were 0.14% and 0.17%
.. Comminution testwork classified the ore as being hard. Rougher rates for MF2
and MF1 were 94% and 91% respectively. The cleaner efficiency was 95%, giving
predicted recoveries of 89.3% and 86.5% for MF2 and MF1 respectively. The
testwork also demonstrated an increase in recovery for the MF1 configuration for
increase in fineness from 40%, 60% and 80% passing 75μm, with the extended time
recoveries for the 60% and 80% being close to each other. From the MF2 locked
cycle testwork overall 4E recovery and grade were 87.1% and 135g/t respectively
at a mass pull of 3.3% . Copper and nickel recoveries were 88% and 64% at grades
of 1.9% and 3.5% respectively.

Tailings thickening tests conducted yielded a flux of 0.7m2/hr
tonne.

Feasibility study metallurgical testwork for UG2 was conducted,
with seven drill core samples at an overall grind of 80% passing 75μm applying
an MF2 configuration. Metallurgical characterisation confirmed that the response
was variable but similar to ores tested previously. Overall 4E recovery and
grade were 79% and 109g/t respectively. The chromite grade in concentrate was
3.7% .

Process Plant Design

The process plant design utilises a standard
mill-float-mill-float (MF2) circuit configuration that is applied to treat PGM
ores of the BIC. The plant has been designed to treat ore at a rate of 165
000tpm. The design offers flexibility to treat a blend of MR and UG2 at a
predetermined ratio. The MR is the target of initial mining. The mining ramp-up
to steady state production of 165 000tpm is over a three-year period.
Construction of the concentrator is in two phases, initially with an MF1 circuit
during the ramp-up period. The completion of the MF2 circuit will only be
decided after reviewing the mining production ramp-up in 2017.

The MF1 circuit offers lower start-up costs, early revenue and
good ore stockpile management. Only equipment required for the MF1 circuit will
be installed with all services (power, water and air) completed during this
phase. Main equipment installed in phase 1 includes the primary mill, secondary
flotation bank (redeployed to primary rougher flotation in this phase), tailings
thickener and disposal system and concentrate thickener and filter. The
concentrate filter was sized for the full plant capacity (60m2), but
only enough plates (48m2) to handle the phase 1 throughput were
installed. Sufficient civil work will be completed in phase 1 to minimise
interrupting production and allow for safe construction during completion of the
MF2 plant.

The MF1 circuit will treat between 80 000 and 115 000tpm at a
grind of just over 60% passing 75μm. The MF1 testwork shows that for this grind
MF1 recoveries are between 1% and 3% lower than MF2 for extended residence time.
The secondary rougher installed in the initial phase offers long residence time.
The MF1 recovery has been discounted by 1.5% for the initial phase.

Any confirmatory testwork required for the UG2 ore will be
determined at a later stage.

Infrastructure

The PTM Maseve site is divided into four secure areas, the
operational site is primarily focussed East of the R565 Provincial road namely
North Shaft, Plant and South Shaft. The training and induction centre functions
are primarily focused West of the R565 at the Training Centre. Each shaft and
the plant is equipped with its own offices, change house, control room,
maintenance, storage and general management facilities. Senior management
offices are located near the concentrator, central to all operational areas.

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Platinum Group Metals Ltd. 2016 Annual Information Form



The main Eskom supply is located close to North Shaft and the
generator station, bulk fuel storage and Power Factor Correction (PFC)
equipment is strategically located close to the main consumer substation. The
mine is not completely self-sufficient on generator power, however, is able to
supply 13% of it planned maximum demand with the two generators currently on
site.

All critical infrastructure from electrical to bulk materials
handling has been designed to accommodate full production out of a single shaft,
which provides for any variation in production scheduling that might occur
between North Shaft and South Shaft over the LoM.

Other important facilities to note on site are:

| | ➢ | Medical clinic facilities,                                
| | - | ----------------------------------------------------------
| |   |                                                           
| | ➢ | Potable water and waste water management
      facilities,
| |   |                                                           
| | ➢ | Sewerage treatment works,                                 
| |   |                                                           
| | ➢ | Tailing Storage Facility (TSF),                         
| |   |                                                           
| | ➢ | Security buildings,                                       
| |   |                                                           
| | ➢ | Visitors centre,                                          
| |   |                                                           
| | ➢ | Shaft head explosive delivery facilities,                 
| |   |                                                           
| | ➢ | Fire water pump stations.                                 

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Platinum Group Metals Ltd. 2016 Annual Information Form

Environmental Studies, Permitting and Social or Community
Impact

Baseline studies have been undertaken within the Maseve Mine
area in support of an Environmental Impact Assessment (EIA) and
Environmental Management Plan (EMP), which is part of the mining right
application. These studies were conducted to comply with local legislation as
well as international requirements and consisted of the following:

| | ➢ | Soils, land use and land capability study,
| | - | ------------------------------------------
| |   |                                           
| | ➢ | Fauna and flora Report,                   
| |   |                                           
| | ➢ | Hydrological study,                       
| |   |                                           
| | ➢ | Groundwater specialist report,            
| |   |                                           
| | ➢ | Air quality impact assessment,            
| |   |                                           
| | ➢ | Ground vibration and air blast,           
| |   |                                           
| | ➢ | Visual impact,                            
| |   |                                           
| | ➢ | Archaeological assessment,                
| |   |                                           
| | ➢ | Traffic assessment.                       

The EIA summarises relevant results of the environmental and
social baseline of the the Maseve Mine area.

Maseve holds the following governmental authorizations:

| | ➢ | The Environmental Impact Assessment and Environmental
      Management Plan (EIA and EMP) was approved by the Department of Mineral
      Resources in terms of the MPRDA on the 15 May 2012.                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                             
| | ➢ | The Department of Economic Development, Environmental,
      Conservation and Tourism (DEDECT) granted to Maseve an
      environmental authorisation in terms of the NEMA to commence with the
      construction of infrastructure and facilities on 13 September 2013, ref:
      30/5/1/2/3/2/1/528EM.
| |   |                                                                                                                                                                                                                                                                                                             
| | ➢ | Environmental authorization NWP/EIA/135/2010 issued by
      the Rural, Environmental and Agricultural Department of the North West
      Provincial Government and correction thereto dated 4 March 2015;                                                                                                  
| |   |                                                                                                                                                                                                                                                                                                             
| | ➢ | Waste management license 12/9/11/L628/7 (WML) issued by
      the Department of Environmental Affairs in terms of the National
      Environmental Management: Waste Act No. 59 of 2008 (NEMWA) for a treatment
      plant to be utilized during Phase 2 of the Maseve Mine.                               
| |   |                                                                                                                                                                                                                                                                                                             
| | ➢ | Water Use License 03/A22F/ABCGIJ/2596 (WUL) issued by the
      Department of Water and Sanitation in terms of Chapter 4 of the National
      Water Act, 1998 (Act No. 36 of 1998) for various water uses on the Mining
      Right Area on 16 July 2015.                                                  

Maseve has a programme of work in place to comply with the
necessary environmental, social and community requirements. Key work includes:

| | ➢ | EIA / EMP in accordance with the MPRDA, the National
      Environmental Management Act (NEMA) as well as the Equator
      Principles (EP).
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                 
| | ➢ | Stakeholder Engagement Process in accordance
      with the NEMA principles.                                                                    
| |   |                                                                                                                                                 
| | ➢ | Specialist investigations in support of the EIA
      / EMP.                                                                                    
| |   |                                                                                                                                                 
| | ➢ | Integrated Water Use License Application
      (IWULA) in compliance with the National Water Act (NWA).                                     

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Platinum Group Metals Ltd. 2016 Annual Information Form

| | ➢ | Integrated Waste Management License in
      compliance with the National Environmental Management Waste Act
      (NEMWA).
| | - | -----------------------------------------------------------------------------------------------------------------------------

Maseve posted an environmental rehabilitation guarantee of R
58.5 million as a requirement of the mining right application.

There are several communities within the proposed project area
who are affected by the Maseve Mine.

Production Schedule

The Maseve LoM for both the MR as well as the UG2 is just over
21 years (21.03), of which MR is 11.62 years and UG2 10.94 years. See Graph 1-3
below.



The production profile follows a phased approach to the planned
160 000tpm at steady state. In the initial phase to October 2017, the MR
production builds up to 115 000tpm. Production then builds up to 160 000tpm and
reaches steady state in September 2018 where it remains for the LoM.

The tail of the production schedule for the MR starts in
January 2025 and final reef tonnes for the MR is scheduled for May 2026. In
order to keep the mill fed at 160 000tpm, the UG2 reef starts production in
November 2024, where it builds up steadily to the required 160 000 tonnes of
reef in May 2026, supplementing the tail of MR. Steady state of the UG2 reef
lasts up to May 2032 from where the tail of the UG2 reef decreases to final reef
tonnes schedule in July 2035.

The production for each of the individual mining methods
selected for the Maseve Mine is as shown in Graph 1-4 below.

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Platinum Group Metals Ltd. 2016 Annual Information Form



The average mining height (on both reef horizons) for
conventional mining is 142cm, 146cm for Hybrid mining and 190cm for bord and
pillar.

Operating Costs

Table 1-4 below sets out key operating cost details of the
technical report.

Table 1-4: Key Operating Cost Details

ZAR:USD = 12.00

ZAR per tonne
      milled
    USD per tonne
      milledOn Mine Operating Cost
    896
    75By- & Co-Product Credits
    (106)
    (9)Total Net Mine Site Cash Cost
    791
    66


ZAR per 4E oz in
      concentrate
    USD per 4E oz in
      concentrateOn Mine Operating Cost
    8 392
    699By- & Co-Product Credits
    (989)
    (82)Total Net Mine Site Cash Cost
    7 403
    617


| | ➢ | On-mine operating costs include all mining
      costs, milling costs, support services and on-mine overheads,
| | - | --------------------------------------------------------------------------------------------------------------

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Platinum Group Metals Ltd. 2016 Annual Information Form

| | ➢ | By-& co-product credits
      consist of therevenue derrived from Ru, Ir, Ni and Cu.
| | - | ------------------------------------------------------------------------------------



Capital Costs

The project capital cost is anticipated to be ZAR5 070m to the
e start of production. An approximate additional ZAR708m will be spent on
capital to achieve peak production of 165 000tpm by mid-2018. LoM Capital
expenditure including sustaining capex is estimated at ZAR6 4188m.

Table 1-5: Capital Cost Summary

ZAR millionSunk to July 2015
    4,505Capital Expenditure to Production
    265Capitalised Operating Cost to Production
    300Total Capital Expenditure to Production
    5,070Remaining LoM Capital Excl. Sustaining Capital
    860Sustaining Capital LoM
    487Total LoM Capital Expenditure
    6418


Figure 1-5: Capital Expenditure Profile

Project peak funding is estimated at R5 625 million.

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Platinum Group Metals Ltd. 2016 Annual Information Form

Economic Analysis

The production schedule is as shown above in Graph 1-3 and
Graph 1-4. This schedule has been based on the mining plan as developed by the
project team and metallurgical results as determined by test work. The capital
and operating costs as determined by the project team are included. The toll
refining contract has been ratified and the numbers have been incorporated into
the financial model.

The following prices, based on a 3-year trailing average in
accordance with SEC guidance, was used for the assessment of resources and
reserves.

Table 1-6: Average 3 year Trailing Metal Prices used in
Financial Model

Metal
    Price
    UnitPlatinum
    1408
    USD/ozPalladium
    744
    USD/ozRhodium
    1126
    USD/ozGold
    1374
    USD/ozCopper
    3.18
    USD/lbNickel
    7.11
    USD/lbIridium
    731
    USD/ozRuthenium
    73
    USD/oz


The exchange rate between the ZAR and the USD is fixed at
ZAR12.00:USD1.00 in the financial model throughout the LoM. The pricing and
exchange rates above results in the estimated basket prices shown in Table 1-7
below.

Table 1-7: Basket Prices

Basket Prices per 4E
    ZAR/4E Oz
    ZAR/4E kg
    USD/4E Oz
    USD/4E KgMerensky Reef
    14 590
    469 093
    1216
    39 091UG Reef
    14 487
    465 776
    1207
    38 815Combined in LoM
    14 553
    467 902
    1213
    38 992


The economic evaluation is summarised in Table 1-8 below.

Table 1-8: Economic Evaluation Summary

NPV @ 5%
    NPV @ 10%Economic Evaluation
      Summary
    ZAR
      million
    USD
      million
    ZAR
      million
    USD
      million
    IRRCash flow since start of project
    1 597
    133
    (368)
    (31)
    8.8%Cash flow from July 2015
    6 340
    528
    4 226
    352
    49.8%


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Platinum Group Metals Ltd. 2016 Annual Information Form

**NPV @
      5%**
    NPV @
10%Economic Evaluation
      Summary
    **ZAR** **million**
    USD
      million
    ZAR
      million
    USD
      million
    **IRR**(reporting date)


The IRR of the project is based on estimated cash flows from
July 2015 onwards is 49.8% .

Conclusion and Recommendations

The Project Area represents measured and Indicated mineral
resources. The definitions of the mineral resource classification are in
accordance with the definitions stated in the SAMREC Code and the CIM Mineral
Resource Classifications and comply with disclosure standards of NI 43-101.

The updated geological model has increased confidence in the
western areas where iron replacement bodies within the ore body have been
delineated out of the mineral resource more accurately, based on known and
interpreted localities of such bodies. Based on data spatial localities, the
mineral resource estimate was computed from relatively large blocks, i.e. 100m X
100m blocks.

Rolls in the mineralized reefs, mainly along the marginal zone
on the western portion of the deposit have been modelled to detail and the mine
plan adjusted accordingly to optimize underground layout and haulage.

The Maseve Mine and Project 1A areas are at development level
and thus have had sufficient exploration completed that any material exploration
activities and engineering studies have been concluded for these areas. The site
infrastructure and processing plant completed to date is appropriate for the
mine plan ahead. The project completed and the investment to date allows the
project to have an attractive profile, at 3-year average trailing metal prices
and reserves, in the current environment.

Waterberg Project

The Waterberg Project is comprised of the Waterberg JV Project,
a contiguous granted prospecting right area of approximately 255 km2
and the Waterberg Extension Project, an area of granted and applied-for
prospecting rights with a combined area of approximately 864 km2
located adjacent and to the north of the Waterberg JV Project, both located on
the Northern Limb of the Bushveld Complex, approximately 85 km north of the town
of Mokopane (formerly Potgietersrus).

The Waterberg Project is located on a newly-discovered
extension of the Northern Limb of the Bushveld Complex. Amplats' Mogalakwena
mine is a Platreef asset also located on the Northern Limb. The Waterberg
Project is the subject of an ongoing pre-feasibility study being completed by
mine building and engineering firm DRA. The pre-feasibility study for the
Waterberg Project will target a large, thick PGM resource. The objective of the
pre-feasibility study will be to model a large-scale, fully-mechanized mine. A
substantial portion of the Waterberg Project prospecting area remain unexplored.

The Waterberg Project is derived from a group of exploration
projects that came from a regional target initiative by the Company conceived in
2007 and 2008. The projects target a previously unknown extension to the
Northern Limb of the Bushveld Complex in South Africa. The Company selected this
target from a list of new ideas provided by a team of South African
geoscientists. Detailed geophysical and other work indicated potential for a
package of Bushveld Complex rocks under the sedimentary Waterberg formation
cover rocks. Previous mineral exploration activities in the area were limited
due to the extensive sedimentary cover. Exploration by the Company therefore
progressed through preliminary exploration activities to delineate initial drill
targets to primarily drilling focused work now that a deposit has been
discovered.

The Waterberg Project is managed and explored according to a
joint technical committee and are currently planned for development according
with the objective of achieving a best outcome scenario for shareholders and
stakeholders.

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Platinum Group Metals Ltd. 2016 Annual Information Form

Technical Report - Waterberg

Technical information in this AIF regarding the Waterberg
Project is derived from the NI 43-101 technical report entitled Independent
Technical Report on the Waterberg Project Including Mineral Resource Update and
Pre-Feasibility Study dated October 19, 2016 with an effective date of October
17, 2016 for the estimate of mineral resources and resources (the October
2016 Waterberg Report), prepared by (i) Independent Engineering Qualified
Person Mr. Robert L Goosen (B.Eng. (Mining Engineering)) Pr. Eng. (ECSA),
Advisian/WorleyParsons Group, (ii) Independent Geological Qualified Person Mr.
Charles J Muller (B.Sc. (Hons) Geology) Pri. Sci. Nat., CJM Consulting (Pty)
Ltd., and (iii) Independent Engineering Qualified Person Mr. Gordon I.
Cunningham, B. Eng. (Chemical), Pr. Eng. (ECSA), Professional association to
FSAIMM, Turnberry Projects (Pty) Ltd. The following summary is qualified in its
entirety with reference to the full text of the October 2016 Waterberg Report,
which is incorporated by reference herein. Readers are directed to review the
full text of the report, available for review under the Companys profile on
SEDAR at www.sedar.com and on the SECs EDGAR website at www.sec.gov, for
additional information.

The October 2016 Waterberg Report has been evaluated and
prepared in accordance with NI 43-101 to comply with the requirements for a
pre-feasibility study. The October 2016 Waterberg Report complies with
disclosure and reporting requirements set forth in the Toronto Stock Exchange
Manual, NI 43-101 Standards of Disclosure for Mineral Projects, Companion Policy
43-101CP to NI 43-101, and Form 43-101F1 of NI 43-101. The October 2016
Waterberg Report includes updated Inferred and Indicated Resources. Only
Indicated resources have been incorporated into the mine plan and financial
model. The mineable Reserve represents the portion of the Indicated resource
that can be economically mined as delivered to the mill, and as demonstrated in
the WPFS. The reader is cautioned to note that the mineral Reserves are included
within the Indicated Mineral Resources, and are not in addition to them.

Waterberg Project Summary (Excerpted from the October 2016
Waterberg Report)

Introduction

This report was prepared in compliance with National Instrument
43101, Standards of Disclosure for Mineral Projects (NI 43101), and documents
the results of ongoing exploration and project work.

The project is the development of large greenfield platinum
mine and concentrator plant north of the town of Mokopane in the Province of
Limpopo.

A Preliminary Economic Assessment (PEA) on the original
Waterberg JV was completed and announced in February 2014.

The resource estimate includes the T Zone, F South, F Central,
F Boundary and F North with the shallowest edge of the known deposit on the
T-Zone at approximately 140m below surface. The resource estimate has been cut
off at an arbitrary depth of 1,250m vertical. Drill intercepts well below 1,250m
vertical indicate the deposit continues and is open down dip from this depth.
The deposit is 13 km long and remains open along strike to the north.

The key features of the WPFS include:

| |  | Development of a large, mechanized, underground
      mine that is planned at a 7.2 Mtpa throughput scenario;                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                               
| |  | Planned steady state annual production rate of 744 koz of
      platinum, palladium, rhodium and gold (4E) in concentrate;                                                    
| |   |                                                                                                                                                                               
| |  | Estimated Capital to full production requirement of
      approximately ZAR15,906 billion (US$1,060 million), including ZAR999
      million (US$67 million) in contingencies;
| |   |                                                                                                                                                                               
| |  | Peak funding ZAR13,694 million (US$914
      million);                                                                                                                        

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Platinum Group Metals Ltd. 2016 Annual Information Form

| |  | After-tax NPV of ZAR4,805 million (US$320 million), at an
      8% discount rate (three year trailing average price desk 31 July 2016
      US$1,212/oz Pt, US$710/oz Pd, US$984/oz Rh, US$1,229/oz Au, US$/ZAR 15);
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                     
| |  | After-tax NPV of ZAR7,610 million (US$507 million), at an
      8% discount rate (Investment Bank Consensus Price US$1,213/oz Pt,
      US$800/oz Pd, US$1,000/oz Rh, US$1,300/oz Au, US$/ZAR 15;                   
| |   |                                                                                                                                                                                                                     
| |  | After-tax Internal Rate of Return (IRR) of
      13.5% (three year trailing average price deck); and                                                                                                                
| |   |                                                                                                                                                                                                                     
| |  | Internal Rate of Return (IRR) of 16.3%
      After-tax (Investment Bank Consensus Price).                                                                                                                           



Figure 1-1: Total Ounces Produced

Mine production is shown in Figure 1-2 and the after-tax cash
flow is shown in Figure 1-3.



Figure 1-2: Total Mine Production

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- 39 

Platinum Group Metals Ltd. 2016 Annual Information Form



Figure 1-3: Annual Cashflow after Tax

Ownership

The ownership structure consists of:

| |  | Platinum Group Metals (RSA) (Pty) Ltd,
      abbreviated to PTM (45.65% directly)
| | - | ---------------------------------------------------------------------------------
| |   |                                                                                  
| |  | JOGMEC (28.35%)                                                                  
| |   |                                                                                  
| |  | BEE partner Mnombo Wethu Consultants (26%).                                      

Because of PTMs 49.90% ownership in Mnombo, the Company has a
direct and indirect 58.62% overall interest in the project. Platinum Group
Metals is the operator.

The size and scale of the Waterberg Project represents a
significant alternative to narrow width, conventional, Merensky and UG2 mining
on the Western and Eastern Limbs of the Bushveld Complex.

The government of South Africa holds the mineral rights to the
project properties under the MPRDA. The mineral rights are held through a mining
right under the MPRDA.

Location and Access

The Waterberg Mineral Project is located approximately 85 km
north of the town of Mokopane in the Province of Limpopo, South Africa as shown
in Figure 1-4.

Platinum Group Metals has been granted prospecting rights
covering the Waterberg and Waterberg Extension Project of 111,882 ha. The
prospecting rights are approximately 40 km north south and 40 km east west
centered at 23°2201 south latitude and 28°4942 east longitude. The project
is accessible by paved and dirt roads by vehicle.

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Platinum Group Metals Ltd. 2016 Annual Information Form



Figure 1-4: Location of Waterberg Project within the Bushveld
Complex in the Republic of South Africa  Geological Setting, Deposit Type and Mineralisation

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Platinum Group Metals Ltd. 2016 Annual Information Form

The Bushveld and Molopo Complexes in the Kaapvaal Craton are
two of the most well-known mafic/ultramafic layered intrusions in the world. The
Bushveld complex was intruded about 2,060 million years ago into rocks of the
Transvaal Supergroup, largely along an unconformity between the Magaliesberg
quartzite of the Pretoria Group and the overlying Rooiberg felsites. It is
estimated to exceed 66,000km2 in extent, of which about 55% is
covered by younger formations. The Bushveld Complex hosts several layers rich in
Platinum Group Metals (PGM), chromium and vanadium, and constitutes the world's
largest known resource of these metals.

The Waterberg Project is situated off the northern end of the
  previously known Northern Limb, where the mafic rocks have a different sequence
to those of the Eastern and Western Limbs.

PGM mineralization within the Bushveld package underlying the
Waterberg Project is hosted in two main layers: the T-Zone and the F-Zone.

The T-Zone occurs within the Main Zone just beneath the contact
of the overlaying Upper Zone. Although the T-Zone consists of numerous
mineralized layers, three potential economical layers were identified, T1, T2HW
and T2 layers. They are composed mainly of anorthosite, pegmatoidal gabbros,
pyroxenite, troctolite, harzburgite, gabbronorite and norite.

The F-Zone is hosted in a cyclic unit of olivine rich
lithologies towards the base of the Main Zone towards the bottom of the Bushveld
Complex. This zone consists of alternating units of harzburgite, troctolite and
pyroxenites.

The F-Zone was divided into the FH and FP layers. The FH layer
has significantly higher volumes of olivine in contrast with the lower lying FP
layer, which is predominately pyroxenite. The FH layer is further subdivided
into six cyclic units chemically identified by their geochemical signature,
especially chrome. The base of these units can also be lithologically identified
by a pyroxenite layer.

Geology

The Waterberg Project is located along the strike extension of
the Northern Limb of the Bushveld Complex. The geology consists predominantly of
the Bushveld Main Zone gabbros, gabbronorites, norites, pyroxenites and
anorthositic rock types with more mafic rock material such as harzburgite and
troctolites that partially grade into dunites towards the base of the package.
In the southern part of the project area, Bushveld Upper Zone lithologies such
as magnetite gabbros and gabbronorites do occur as intersected in drill hole
WB001 and WB002. The Lower Magnetite Layer of the Upper Zone was intersected on
the south of the project property (Disseldorp) where drill hole WB001 was
drilled and intersected a 2.5m thick magnetite band.

On the property, the Bushveld package strikes south-west to
northeast with a general dip of34o-38o towards the west is observed from drill
hole core for the layered units intersected on Waterberg property within the
Bushveld Package (Figure 1-5). However, some structural blocks may be tilted at
different angles depending on structural and /or tectonic controls.

The Bushveld Upper Zone is overlain by a 120m to 760m thick
Waterberg Group, which is a sedimentary package predominantly, made up of
sandstones, and within the project area that sedimentary formations known as the
Setlaole and Makgabeng Formations constitute the Waterberg Group. The Waterberg
package is flat lying with dip angles ranging from to 2o to 5o. Figure 1-5 gives
an overview of interpreted geology for the Waterberg Project.

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- 42 

Platinum Group Metals Ltd. 2016 Annual Information Form



Figure 1-5: Regional Geology

Exploration Status

The Waterberg Project is at an advanced project that has
undergone prelim minary economic evaluations, which have warranted further work.
Drilling to date has given the confidence to classify Mineral Resources as
Inferred and Indicated.

Sample Preparation

The sampling methodology concurs with PTM protocol based on
industry best practice. The quality of the sampling is monitored and supervised
by a qualified geologist. The sampling is done in a manner that includes the
entire potentially economic unit, with sufficient shoulder sampling to ensure
the entire economic zones are assayed.

Analysis

For the present database, field samples have been analyzed d by
three diifferent laboratories. The primary laboratory is currently Set Point
laboratories (South Africa). Genalysis (Australia) is used for referee test work
to confirm the accuracy of the primary laboratory. Analysis was also completed
at Bureau Vertitas in Rustenberg.

Samples are received, sorted, verified and checked for moisture
and dried if necessary. Each sample is weighed and the results are recorded.
Rocks, rock chips or lumps are crushed using a jaw crusher to less than 10mm.
The samples are then milled for 5 min to achieve a fineness of 90% less than
106μm, which is the minimum requirement to ensure the best accuracy and
precision during analysis.

Samples are analyzed for Pt (ppm), Pd (ppm) Rh (ppm) and Au u
(ppm) by standard 25g lead fire-assay using a silver collector. Rh (ppm) is
assayed using the same method but with a palladium collector and only for
selected samples. After pre-concentration by fire assay, the resulting solutions
are analyzed using ICP-OES (Inductively Coupled PlasmaOptical Emission
Spectrometry).

The base metals (copper, nickel, cobalt and chromium) are
analyzed using ICP-OES (Inductively Coupled Plasma  Optical Emission
Spectrometry) after a multi-acid digestion.

This technique results in almost total digestion. The
drilling, sampling and analytical aspects of the project are considered to have
been undertaken to industry standards. The data is considered reliable and
suitable for mineral resource estimation.

---

- 43 

Platinum Group Metals Ltd. 2016 Annual Information Form

The company completes a Quality Control and Assurance review on
all of the laboratory samples including a review of the lab quality control
samples and the company inserted standards. Issues that are detected beyond
acceptable levels are requested for re-analysis.

Drilling

The data from which the structure of the mineralized horizons
was modelled and grade

Values estimated were derived from 298 538m of diamond
drilling. This report updates the mineral resource estimate using this dataset.
The initial database for this mineral resource estimate was received on July 7,
2016. The raw database consists of 303 drill holes with 483 deflections totaling
300,875 m.

The management of the drilling programmes, logging and sampling
has been undertaken from two facilities: one at the town of Marken in Limpopo
Province, South Africa and the other on the farm Goedetrouw 366LR within the
prospecting right area.

Drilled core is cleaned, de-greased and packed into metal core
boxes by the drilling company. The core is collected from the drilling site on a
daily basis by PTM personnel and transported to the core yard. Before the core
is taken off the drilling site, core recovery and the depths are checked. Core
logging is done by hand on a pro-forma sheet by qualified geologists under
supervision of the Project Geologist.

Quality Control and Quality Assurance

PTM have instituted a complete QA/QC programme including the
insertion of blanks and certified reference materials as well as referee
analyses. The programme is being followed and is considered to be to industry
standard. The data is as a result, considered reliable in the opinion of the
Qualified Person.

Mineral Resource Estimate

This report documents the mineral resource estimate - Effective
Date: 17 October 2016. The Mineral Resources are reported in the table below.
Infill drilling over portions of the project area and new estimation methodology
has made it possible to estimate a new mineral resource estimate and upgrade
portions of the mineral resource to the Indicated category. The Mineral Resource
Statement is summarized below:

Table 1-1: T-Zone Mineral Resource at 2.5g/t 4E Cut-off

T-Zone 2.5g/t
      Cut-offResource
      Category
    Cut-
      off
    Ton-
      nage
    Grade
    Metal4E
    Pt
    Pd
    Au
    Rh
    4E
    Cu
    Ni
    4Eg/t
    Mt
    g/t
    g/t
    g/t
    g/t
    g/t
    %
    %
    Kg
    MozIndicated
    2.5
    31.540
    1.13
    1.90
    0.81
    0.04
    3.88
    0.16
    0.08
    122,375
    3.934Inferred
    2.5
    19.917
    1.10
    1.86
    0.80
    0.03
    3.79
    0.16
    0.08
    75,485
    2.427


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- 44 

Platinum Group Metals Ltd. 2016 Annual Information Form

Table 1-2: F-Zone Mineral Resource at 2.5g/t 4E Cut-off

F-Zone 2.5g/t
      Cut-offResource
      Category
    Cut
      -off
    Ton-
      nage
    Grade
    Metal4E
    Pt
    Pd
    Au
    Rh
    4E
    Cu
    Ni
    4Eg/t
    Mt
    g/t
    g/t
    g/t
    g/t
    g/t
    %
    %
    Kg
    MozIndicated
    2.5
    186.725
    1.05
    2.23
    0.17
    0.04
    3.49
    0.07
    0.16
    651,670
    20.952Inferred
    2.5
    77.295
    1.01
    2.16
    0.17
    0.03
    3.37
    0.04
    0.12
    260,484
    8.375


4E = platinum Group Elements (Pd+Pt+Rh) and Au The cut-offs
for Mineral Resources have been established by a qualified person after a review
of potential operating costs and other factors. The Mineral Resources stated
above are shown on a 100% basis, that is, for the Waterberg Project as a whole
entity. Conversion Factor used  kg to oz = 32.15076. Numbers may not add due to
rounding. Resources do not have demonstrated economic viability. A 5% and 7%
geological loss have been applied to the indicated and inferred categories
respectively. Effective Date Oct 17, 2016. Metal prices used in the reserve
estimate are as follows based on a 3-year trailing average (as at July 31/2016)
in accordance with SEC guidance was used for the assessment of Resources;
US$1,212/oz Pt, US$710/oz Pd, US$1229/oz Au, Rh, US$984/oz, US$6.10/lb Ni,
US$2.56/lb Cu, US$/ZAR15.

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Platinum Group Metals Ltd. 2016 Annual Information Form

The combined Mineral Resource Statement is summarized below:

Table 1-3: Total Mineral Resource at 2.5g/t 4E Cut-off

Waterberg Total 2.5g/t
      Cut-offResource
      Category
    Cut-
      off
    Ton-
      nage
    Grade
    Metal4E
    Pt
    Pd
    Au
    Rh
    4E
    Cu
    Ni
    4Eg/t
    Mt
    g/t
    g/t
    g/t
    g/t
    g/t
    %
    %
    Kg
    MozIndicated
    2.5
    218.265
    1.06
    2.18
    0.26
    0.04
    3.55
    0.08
    0.15
    774 045
    24.886Inferred
    2.5
    97.212
    1.03
    2.10
    0.30
    0.03
    3.46
    0.06
    0.11
    335 969
    10.802


Mineral Resources at Waterberg on a 100% project basis have
decreased to an estimated 10.8 million ounces 4E in the Inferred category but
increased to 24.9 million ounces 4E in the Indicated category, from 23.9 million
ounces 4E Indicated in April 2016:

|1. | The Mineral Resources are classified in accordance with
      the SAMREC standards. There are certain differences with the "CIM
      Standards on Mineral Resources and Reserves"; however, in this case the QP
      believes the differences are not material and the standards may be
      considered the same. Mineral Resources that are not mineral reserves do
      not have demonstrated economic viability and Inferred resources have a
      high degree of uncertainty.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|2. | The Mineral Resources and are provided on a 100% project
      basis and Inferred and Indicated categories are separate and the estimates
      have an effective date of 17 October 2016.                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|3. | A cut-off grade of 2.5g/t 4E for both the T and the F
      Zones is applied to the selected base case Mineral Resources. Previously a
      2g/t 4E cut-off was applied to the resources.                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|4. | Cut off for the T and the F Zones considered costs,
      smelter discounts, concentrator recoveries from previous engineering work
      completed on the property by the Company. The Resource model was cut-off
      at an arbitrary depth of 1250m, although intercepts of the deposit do
      occur below this depth.                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|5. | Mineral Resources were completed by Charles Muller of CJM
      Consulting.                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|6. | Mineral Resources were estimated using Kriging methods
      for geological domains created in Datamine from 303 original holes and 483
      deflections. A process of geological modelling and creation of grade
      shells using indicating kriging was completed in the estimation
      process.                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|7. | The estimation of Mineral Resources has taken into
      account environmental, permitting and legal, title, and taxation,
      socio-economic, marketing and political factors.                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|8. | The Mineral Resources may be materially affected by
      metals prices, exchange rates, labor costs, electricity supply issues or
      many other factors detailed in the Company's Annual Information
    Form.                                                                                                                                                                                                                                                                    

The data that formed the basis of the estimate are the drill
holes drilled by PTM, which consist of geological logs, the drill hole collars,
the downhole surveys and the assay data. The area where each layer was present
was delineated after examination of the intersections in the various drill
holes.

There is no guarantee that all or any part of the Mineral
Resource not included in the current reserves will be upgraded and converted to
a Mineral Reserve.

Mineral Reserves Estimates

The effective date for the mineral Reserve estimate contained
in this report is 17 October 2016.

On review by the Qualified Person for Reserves, Robert L Goosen
(QP) has not identified any risk including legal, political, or environmental
that would materially affect potential Mineral Reserves. The final access to the
minerals will require permits from the DMR, acquisition of surface rights, water
use license, securing of power and a social license to operate as established in
a Social and Labor Plan.

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Platinum Group Metals Ltd. 2016 Annual Information Form

The QPs are not aware of unique characteristics related to this
Project that would prevent the granting of such permits and satisfied with
progress towards the timing of submission of these applications where
applicable. The mineral rights are held under Prospecting Permits with the
exclusive right to apply for a Mining Right.

The Mineral Reserve statement for the Waterberg project is
based on the South African Code for the Reporting of Exploration Results,
Mineral Resource and Mineral Reserves (SAMREC code). There is no material
difference between the SAMREC and CIM 2014 code for Mineral Reserve estimation
in this case.

Figure1-6 sets out the framework for classifying
tonnage and grade estimates to reflect different levels of geoscientific
confidence and the different degrees of technical and economic evaluation.
Mineral Resources can be estimated based on geoscientific information with input
from relevant disciplines.

Mineral Reserves, which are a modified sub-set of the Indicated
and Measured Mineral Resources in order of increasing confidence, are converted
into Probable Mineral Reserves and Proven Mineral Reserves (shown within the
dashed outline in Figure 1-6), require consideration of factors affecting
extraction, including mining, metallurgical, economic, marketing, legal,
environmental, social and governmental factors (modifying factors), and should
in most instances be estimated with input from a range of disciplines.

A Probable Mineral Reserve has a lower level of confidence than
a Proven Mineral Reserve, which is the economically mineable part of an
Indicated Resource, and in some circumstances a Measured Resource. This is
demonstrated by at least a pre-feasibility study including adequate information
on mining, processing, metallurgical, and economic and other factors that
demonstrate, at the time of reporting, the economic extraction can be
justified.

A Proven Reserve is the economically mineable part of a
Measured Resource demonstrated by the same factors as above. A Proven Mineral
Reserve implies that there is a high degree of confidence. Not all mining and
permit approvals need be in place for the declaration of Reserves.

Abridged definitions are given below in Section 2.5.

The SAMREC code definition of a Mineral Reserve is:

A Mineral Reserve is the economically mineable material
derived from a Measured, or Indicated Mineral, resource or both. It includes
diluting and contaminating materials and allows for losses that are expected to
occur when the material is mined. Appropriate assessments to a minimum of a
Pre-Feasibility Study for a project and a Life of Mine Plan for an operation
must have been completed, including consideration of, and modification by,
realistically assumed mining, metallurgical, economic, marketing, legal,
environmental, social and governmental factors (the modifying factors). Such
modifying factors must be disclosed.

Mineral Reserves are reported as inclusive of diluting and
contaminating uneconomic and waste material delivered for treatment or
dispatched from the mine without treatment.

The CIM 2014 code definition for a Mineral Reserve:

A Mineral Reserve is the economically mineable part of a
Measured and/or Indicated Mineral Resource. It includes diluting materials and
allowances for losses, which may occur when the material is mined or extracted
and is defined by studies at Pre-Feasibility or Feasibility level as appropriate
that include application of Modifying Factors. Such studies demonstrate that, at
the time of reporting, extraction could reasonably be justified.

The reference point at which Mineral Reserves are defined,
usually the point where the ore is delivered to the processing plant, must be
stated. It is important that, in all situations where the reference point is
different, such as for a saleable product, a clarifying statement is included to
ensure that the reader is fully informed as to what is being reported.

For this technical report, the Mineral Reserves for the
Waterberg project have been stated under the SAMREC Code with no material
difference to the CIM 2014 standards. The point of reference is ore delivery to
the RoM silo at the processing plant.

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- 47 

Platinum Group Metals Ltd. 2016 Annual Information Form



Figure  1-6:  Relationship between Mineral Resources  and
Mineral Reserves

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- 48 

Platinum Group Metals Ltd. 2016 Annual Information Form

The conversion to Mineral Reserves was undertaken initially at
3.0g/t and the 2.5 g/t 4E stope cut-off grade for both for the T and the
F-Zones, which considered costs, smelter discounts, concentrator recoveries from
the previous and ongoing engineering work completed on the property by the
Company and its independent engineers. Spot and three-year trailing average
prices and exchange rates are considered for the cut-off considerations. Initial
mine plans were developed based on a 3 g/t 4E cut-off. At the end of the mine
life material that was available at a 2.5 g/t 4E cut-off was considered in the
full life of mine.

From the Mineral Resource as estimated in this report, each
stope has been fully diluted, comprising of a planned dilution and additional
dilution for all aspects of the mining process. There are no inferred Mineral
Resources included in the Reserves.

The Qualified Person for the Statement of Reserves is Mr. RL
Goosen (WorleyParsons RSA (Pty) Ltd Trading as Advisian).

Table 1-4 shows the Prill splits which are calculated using the
individual metal grades reported as a percentage of the total 4E grade.

Table 1-4: Prill Splits

Prill Split
    GradeZone
    Pt
    Pd
    Au
    Rh
    Cu
    Ni%
    %
    %
    %
    %
    %T-Zone
    29
    49
    21
    1
    0.16
    0.08F-Zone
    30
    64
    5
    1
    0.07
    0.16


Table 1-5 and Table 1-6 show the total diluted and recovered
Probable Mineral Reserve for the Waterberg project.

Table 1-5: Probable Mineral Reserve at 2.5g/t 4E Cut-off 
Tonnage and Grades

Waterberg Probable
      Mineral Reserve  Tonnage and GradesZone
    Mt
    Cut-off
      grade (g/t)
    Pt
      (g/t)
    Pd
      (g/t)
    Au
      (g/t)
    Rh
      (g/t)
    4E
      (g/t)
    Cu (%)
    Ni (%)T-Zone
    16.5
    2.5
    1.14
    1.93
    0.83
    0.04
    3.94
    0.16
    0.08F-Zone
    86.2
    2.5
    1.11
    2.36
    0.18
    0.04
    3.69
    0.07
    0.16Total
    102.7
    2.5
    1.11
    2.29
    0.29
    0.04
    3.73
    0.08
    0.15


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Platinum Group Metals Ltd. 2016 Annual Information Form

Table 1-6: Probable Mineral Reserve at 2.5g/t 4E Cut-off 
Contained Metal

Waterberg Probable
      Mineral Reserve  Contained MetalZone
    Mt
    Pt
      (Moz)
    Pd
      (Moz)
    Au
      (Moz)
    Rh
      (Moz)
    4E
      (Moz)
    4E
      Content (kg)
    Cu
      (Mlb)
    Ni
      (MlbT-Zone
    16.5
    0.61
    1.03
    0.44
    0.02
    2.09
    65 097
    58.21
    29.10F-Zone
    86.2
    3.07
    6.54
    0.51
    0.10
    10.22
    318 007
    132.97
    303.94Total
    102.7
    3.67
    7.57
    0.95
    0.12
    12.32
    383 103
    191.18
    333.04


Reasonable prospects of economic extraction were determined
with the following assumptions: Metal prices used in the reserve estimate are as
follows based on a 3-year trailing average (as at July 31/2016) in accordance
with SEC guidance was used for the assessment of Resources and Reserves;
US$1,212/oz Pt, US$710/oz Pd, US$1229/oz Au, US$984/oz Rh, US$6.10/lb Ni,
US$2.56/lb Cu, US$/ZAR15. Smelter payability of 85% was estimated for 4E and 73%
for Cu and 68% for Ni. The effective date is October 17, 2016. A 2.5 g/t Cut-off
was used and checked against a pay-limit calculation. Independent Qualified
Person for the Statement of Reserves is Mr. RL Goosen (WorleyParsons RSA (Pty)
Ltd Trading as Advisian). The mineral reserves may be materially affected by
changes in metals prices, exchange rates, labor costs, electricity supply issues
or many other factors. See Risk Factors in 43-101 report onwww.sedar.comand the Companys Annual Information Form. The
reserves are estimated under SAMREC with no material difference to the CIM 2014
definitions in this case.

Geotechnical Investigations

Ground Conditions

The site is covered by five identified soil profiles (Kalahari
sand, ferruginised Kalahari sand, colluvium, alluvium and strongly cemented
calcrete) across the proposed site.

The DCP test results confirm that the transported material
layer found from 0.5m below ground level has an allowable bearing capacity of at
least 50kPa.

The permanent water table was not encountered during this
investigation.

The transported Aeolian material encountered on the site is
generally suitable for use in engineered layer work applications. Further
testing would be necessary if proposed for use.

Soft to medium hard rock sandstone and strongly cemented
calcrete pan can be expected at shallow depth below ground level. Some variation
can be expected over the site. Blasting may be required to maintain the lines
and levels of services and foundations depending on the design depths.

The sidewalls of the trial pits were relatively stable during
the investigations.

Foundations

According to the trial pits/rotary core drilling investigation
and the laboratory test results, the site is classified as a H1/S2/C2/R site
in the NHBRC Classification, with an expected range of total soil movements more
than 20mm. The assumed differential movement is 50%.

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Platinum Group Metals Ltd. 2016 Annual Information Form

Light Structures* (100  150kPa)

Remove the soil to a depth of 1.6m below surface or up to the
bedrock. The excavation must then be back filled with G6 materials in in 0.200m
thick layers; compacted to 93% mod ASHTO, wetted at -1 to +2% optimal moisture
content. Conventional pad foundations can then be placed at minimal depth (min
of 1m deep) with bearing pressures limited to 150kPa.

Medium Structures* (150  250kPa)

Remove the soil to a depth of 3m below surface or up to the
bedrock. The excavation must then be back filled with G6 materials in in 0.200m
thick layers; compacted to 93% mod ASHTO, wetted at -1 to +2% optimal moisture
content. Conventional pad foundations can then be placed at minimal depth (min
of 1m deep) with bearing pressures limited to 250kPa.

Heavy Structures* (250 - 500kPa)

Remove the soil to a depth of 4m below surface or up to the
bedrock. The excavation must then be backfilled with G5 materials in in 0.200m
thick layers; compacted to 93% mod ASHTO, wetted at -1 to +2% optimal moisture
content. Conventional pad foundations can then be placed at minimal depth (min
of 1m deep) with bearing pressures limited to 500kPa.

Notes*: Soil raft foundation with good site drainage is
recommended. Ninety-three percent compaction is a reasonable expectation.
Anything above that might not be achievable during construction. Soil mattresses
will have to be found on dense sand (>100kPa) as a minimum.

Primary and Secondary Surface Crushers

Spread foundations founded on the bedrock are considered
feasible. Allowable bearing capacity of at least 5MPa, which is generally
suitable for a crusher structure, was confirmed with the point load test
results. The recommended founding level was identified at 4.21m depth below
natural ground level in the borehole WB130. Good founding material (medium hard
rock sandstone) will have to be validated by a competent person during
construction.

Mine Plan

Geotechnical Factors

Prior to the commencement of the WPFS, additional geotechnical
data was obtained through core logging of recently drilled boreholes. The
revised geotechnical, database, which includes laboratory strength test results,
was used to determine rock properties and classify the rock mass. This
information was used together with available geological information to construct
a 3-dimensional geotechnical rock mass model. The geotechnical rock mass model
together with other pertinent information informed aspects of mine design. Input
parameters derived from this work were used in idealized numerical models to
evaluate various mining configurations and mine sequencing and to augment the
empirical evaluations that were conducted.

Some elementary geological interpretations were made to help
inform mine design.

The potential for surface displacement resulting from
underground mining was assessed with elementary numerical models and it was
found that the likelihood of surface subsidence is very low.

The potential for raisebore instability was assessed based on a
few boreholes not necessarily near any proposed ventilation raise bore location.
There could be challenges, however better informed assessments can only be made
based on dedicated geotechnical boreholes at each location.

The two mining methods proposed, BLR and SLOS were assessed and
are substantially feasible as long as control is exercised diligently.

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Platinum Group Metals Ltd. 2016 Annual Information Form

Critical hydraulic radii were calculated for open span designs
and pillar dimensions were determined based on empirical methods and numerical
modelling. In an attempt to optimize extraction, the designs for Waterberg are
in a transition zone between indefinite stability on the one hand and definite
caving on the other.

Based on the rock mass classification and using the Q-system,
guidelines for ground support in main access excavations, main and secondary on
reef roadways and on reef drifts have been developed.

All the work contributed to the development of a set of rock
mechanics parameters for mine design.

Current risks and opportunities to the project associated with
mine design have been identified and listed and a set of recommendations for the
way forward have been compiled.

Mining Methods selected

The wireframes resulting from the MSO runs were used to create
artificial footwall and hanging wall contact zones from which the mine design
could be digitized.

Three mining methods Blind Longitudinal Retreat, BLR
Transverse Sub-level open stoping TSLOS and Longitudinal Sub-level open
stoping LSLOS) were selected for the project as they satisfy the
following design criteria:

Minimize the schedule required to achieve full production with
stope sequencing;

Required production volumes;

Opex/Capex cost;

Optimize recovery and minimize dilution;

Maximize flexibility and adaptability based on size, shape, and
distribution of target mining areas; and

Prevent surface subsidence from underground mining.

The criteria for each of these methods are detailed below, but
can be resumed by the following table:

Table 1-7: Mining Method Criteria

Mining Method
    Dip
    Vertical ThicknessBLR
    ≤ 35°
    3 - 15mLSLOS
    > 35°
    3 - 15mTSLOS
    > 15m


The MSO wireframes provided the boundaries to which each mining
method is applied. These boundaries along with the artificial contact zones were
used in Studio 5D Planner to create the detailed mined design.

The design maximized the recovery of material identified from
MSO while keeping to geotechnical guidelines proposed by rock engineering, thus
all geotechnical losses were designed for and would not require additional
factors.

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Platinum Group Metals Ltd. 2016 Annual Information Form

To obtain initial tonnage and grades, the mine design was
evaluated against the block model and the results were exported to EPS for
scheduling and reporting.

From the Mineable Shape Optimizer model, ore bodies were
delineated by resource characteristics and potential mining methods were
selected and derived for each defined mining area through a process of option
identification and ranking, and adapted to the rock conditions, including:

Geometry of orebody;

Geological complexities;

Geotechnical properties of the country rock and orebody; and

Depth below surface of extraction.

The mine is designed to initially develop the high-grade zones
to minimize pre-production development capital and maximize early revenues.
Further optimization for grade is an opportunity with more detailed mine designs
in the DFS stage. Final resource to Reserve reconciliations checks was
completed. The QP is satisfied with the Reserve data and has verified the data
for the Reserve estimate.

Mine Design Access

The top of mining zones in the current Waterberg mine plan
occur at depths ranging from 170m to approximately 350m below surface.

The majority of development is done by mechanized equipment on
the ore horizon due to the orebody and various mining methods.

Access to the mine will be via three decline shafts, to service
the various zones namely:

|T-Zone :   | Portal Position - South;  
|---------- | --------------------------
|           |                           
|F Central: | Portal Position  Central;

|F Boundary and F North : | Portal Position  North.
|------------------------ | ------------------------

The design philosophy applied to the Waterberg project followed
an approach of proven designs and results of various trade-off studies and was
designed to accommodate a mine plan, which ramps up to 7.2 Mtpa.

Practical consideration of the real estate purchases and
protection of heritage resources were considered in the selection of surface
infrastructure.

The study has concluded that the dual decline option has lower
capital cost and lower long-term operating costs and provides a more flexible
and easily expandable solution for initial mine access and production ramp-up,
as well as an opportunity to achieve higher production rates in the event that
resource growth is confirmed.

Other key access design objectives met are:

To access the workings in a way this minimizes capital
development; and

To facilitate an aggressive production build up, targeting the
high-grade areas as quickly as possible.

Various ventilation holes from surface will also be required to
provide a ventilation egress point.

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Platinum Group Metals Ltd. 2016 Annual Information Form

Portal and Declines

Initial access into the mine would be via portals that service
the twin declines.

The dimensions of the main access declines are 6.0m (W) x 6.0 m
(H), while the main conveyor declines have dimensions of 5.5 m (W) x 5.5 m (H).
The declines will dip at -9°, generally in an easterly direction. Figure 1-7
shows the position of the portals in relation to the surface infrastructure. The
dimensions have been based on the conveyor design, ventilation intake
requirements and sizes of equipment.

Positioning the portal as shown, will facilitate quick access
to the shallower parts of the ore body, which will reduce the time to first
ore. In addition, the portal position allows quick access to the higher-grade
areas of the Waterberg mining area.

Portal designs were created based on professional experience in
similar ground environment and geotechnical information gathered from the
inspection of four boreholes drilled near the proposed portals location.

Laboratory tests were conducted to confirm the on-site
investigation and establish preliminary engineering parameters for the soils and
rocks.

The suggested preliminary portals designs will have to be
supported and approved with the finite element and limit equilibrium methods
during the DFS to reach an acceptable Factor of Safety (FoS) determined for the
project.

The proposed portals designs were conducted in a manner
consistent with the level of care and skill ordinarily exercised by members of
the geotechnical profession practicing under similar conditions in the locality
of the project.

| |  | Portals T-Zone and F Central                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |   | The box cut will consist of a bottom sidewall with an
      inclination of 51° into rock and a top sidewall of 37° inclination into
      soil material. The high wall is 20m high from the footwall position. The
      overall slope angles are 41° and 50° for the sidewalls and highwall
      respectively in the preliminary portal design. The top two benches have a
      height of 4m. The remaining benches are 6m high. The catch berms have a
      width of 3m across the highwall and sidewalls.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |  | Portal F North Zone                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |   | The box cut will consist of a bottom sidewall with an
      inclination of 51° into rock and a top sidewall of 36° inclination into
      soil material. The high wall is 35m high from the footwall position. The
      overall slope angles are 38° and 44° for the sidewalls and highwall
      respectively in the preliminary portal design. The first bench has a
      height of 5m. The remaining benches are 6m high. The catch berms have a
      width of 3m across the highwall and sidewalls.     
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |   | Each mining method requires a different underground
      infrastructure, such as access development to sub-levels, loading points,
      ventilation shafts and silos. Together, they form intricate network of
      openings, drifts, ramps, shafts and slot raises, each with its designated
      function.                                                                                                                                                                                               

Mining Rates

The PTM Waterberg Project requires significant underground
development in order to optimally access the ore body. Access to the high-grade
areas of the mine is required as soon as reasonably possible in order to attain
a maximized potential project value.

A mining cycle scheduling operation, derived from first
principles, for cleaning, supporting, drilling and blasting was completed for
various mining systems and face arrangements. This was done to test the
theoretical possibility of attaining the required 100m per month system advance,
which has been planned, whilst not conservative, is a consistently achievable target from both a
theoretical and actual benchmarked operations perspective.

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Platinum Group Metals Ltd. 2016 Annual Information Form

There is significant opportunity to increase the planned system
advance rate in areas should it be possible to achieve multi-blast conditions
during the course of the mine development. This would entail establishing an
independent ventilation district that solely ventilates the development and is
removed from stoping operations.

Figure1.7 gives an overview of the portal positions and
extent of strike and dip of the orebody.

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Platinum Group Metals Ltd. 2016 Annual Information Form



Figure  1-7: Portal and  Underground Layouts

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Platinum Group Metals Ltd. 2016 Annual Information Form

Production Summary and Schedule

The key average annual production results over the 18-year mine
life are shown in Table 1.8.

Table 1-8: Production Summary

Item
    Units
    TotalMined and Processed
    Mtpa
    7.20Platinum
    g/t
    1.11Palladium
    g/t
    2.29Gold
    g/t
    0.29Rhodium
    g/t
    0.044E
    g/t
    3.73Copper
    %
    0.08Nickel
    %
    0.15RecoveriesPlatinum
    %
    82.5%Palladium
    %
    83.2%Gold
    %
    75.3%Rhodium
    %
    59.4%4E
    %
    82.1%Copper
    %
    87.9%Nickel
    %
    48.8%Concentrate ProducedConcentrate
    ktpa
    285Platinum
    g/t
    24.2Palladium
    g/t
    51.5Gold
    g/t
    4.9Rhodium
    g/t
    0.64E
    g/t
    81Copper
    %
    1.9Nickel
    %
    1.8Recovered Metal in ConcentratePlatinum
    kozpa
    222Palladium
    kozpa
    472Gold
    kozpa
    45Rhodium
    kozpa
    64E
    kozpa
    744Copper
    Mlbpa
    11Nickel
    Mlbpa
    12


Year 4 bases the mine plan on a multiple ramp access
underground mining operation ramping up to 600ktpm where it remains for the
majority of the LoM until the lower grade end period.

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Platinum Group Metals Ltd. 2016 Annual Information Form

The current status of Life of Mine (LOM) throughput is based on
an initial 3g/t 4E cut-off; thereafter, 2.5 g/t 4E will be applied in the final
years of the mine life.

The tail of the production schedule for the Waterberg
production starts in 2035 and final reef tonnes are scheduled for 2038.

The recommended throughput option for the Waterberg process
plant is two modules of 300ktpm each. This configuration is sufficiently
flexible to cater for the portal development scenarios and further provides
flexibility to cater for both large and small mining operations if selected in
future.

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Platinum Group Metals Ltd. 2016 Annual Information Form

Total Mine production with the average grade is shown in Figure
1.8.



Figure  1-8:  Mining Method
Total Mine  Production

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Platinum Group Metals Ltd. 2016 Annual Information Form

Ventilation

The ventilation and cooling systems consider safety and health
requirements in accordance with the Mine Health and Safety Act [MHSA, Act 29 of
1996].

Ventilation and cooling system designs are based on the
production and development tonnage profiles and diesel fleet provided by the
mine design team. The mining plan is based on steady state production of 600 000
reef tons per month, ventilation and cooling requirements for each mining area
is phased-in accordingly over LoM.

Diesel equipment will be a significant heat source accounting
for almost 40% of mine heat, in comparison heat flow from rock will account for
less than 10% [maximum Virgin Rock Temperature VRT 46.0°C] . The balance will
come from auto-compression and other sources including electrical. In mechanized
mines, to a depth of approximately 700 mbs this heat can usually be removed by
ventilation used to dilute exhaust gasses. However, beyond this depth, heat
flowing into the mine from rock and other sources combined with heat from the
diesel equipment means that generally, air alone cannot adequately cool the mine
and additional mechanical cooling is required. It is confirmed that at depth
T-Zone, F1 South, F2 Central, F4 Boundary North and F5 North additional cooling
will be required

Metallurgical Test Work and Recovery

Various metallurgical test work campaigns have been conducted
throughout the course of 2013 to 2016 to determine the optimum flowsheet for
treatment of the various Waterberg ore lithologies. Metallurgical test work
focused on maximizing recovery of PGEs and base metals, mainly copper and
nickel, while producing an concentrate product of an acceptable grade for
further processing and/or sale to a third party.

In 2013, preliminary metallurgical test work was undertaken at
SGS (Booysens, South Africa) using two samples, F-Central and T-zone, taken from
the Waterberg deposit as part of the Preliminary Economic Assessment. The
results indicated that a potentially saleable concentrate could be produced. The
results from the PEA test work program is summarized in the previous PEA
technical report, filed in February 2014.

Further investigative test work was performed on an F-Central
composite sample, under the management of JOGMEC during the course of 2013 to
2014. The results indicated that a concentrate product in excess of 100 g/t 4E
could be produced at acceptable recoveries with the inclusion of Oxalic acid and
Thiourea in the reagent suite.

As part of the WPFS, extensive metallurgical test work was
conducted at MINTEK, which focused on characterizing the various Waterberg
lithologies in terms of mineralogical composition, comminution parameters, and
flotation response.

Comminution tests have classified the Waterberg ores as hard to
very hard and not suitable for Semi-Autogenous Grinding (SAG) milling.

Two flotation flowsheets were tested on each Waterberg
lithology, a MF1 circuit utilizing Oxalic acid and Thiourea as part of the
reagent suite and a MF2 circuit utilizing typical Southern African PGM reagents,
such as SIBX as a collector. Batch open circuit flotation test work as well as
locked cycle flotation test work was conducted. Encouraging results were
obtained from both flowsheets. Test work results have demonstrated that some of
the ore types respond better to a particular configuration. However, superior
recoveries were obtained for the mine blend samples using the MF2 configuration,
leading to the selection of the MF2 circuit for the process design.

It was noted that extensive scavenging and cleaning was
required in the MF2 circuit to maximize recoveries, while lower mass pulls in
the high grade and low grade circuits where essential to ensure acceptable
concentrate grades were achieved and the product grade specification were met.
Flotation work indicated that the optimum final grind for the F-zone ores are
80% passing 75μm; whilst there are evidence that the T-zone material could
achieve higher recoveries at finer grinds of 85-90% passing 75μm. Further test
work to investigate the optimization of the T-zone final grind is
recommended.

The flotation test work indicated that the Waterberg ores are
amenable to treatment by conventional flotation without the need for
re-grinding. A standard flotation concentrator can be used to produce a saleable
concentrate, at a 4E grade of no less than 80 g/t, with no
deleterious products. 4E recoveries in excess of 80% are expected at the
proposed mill feed grades.

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Platinum Group Metals Ltd. 2016 Annual Information Form

Process Plant Design

The process design for the Waterberg Concentrator Plant has
  been developed based on the extensive metallurgical test work results, as well
  as other desktop level studies completed by the project team. A trade off study
  was conducted to determine the optimal production ramp up and steady state
  production. Based on the outcome of the study the plant steady state capacity of
  7.2 Mtpa will be achieved by the construction of the plant in two phases. Each
phase consisting of a 3.6 Mtpa concentrator module,

The Phase 1 3.6 Mtpa concentrator module and associated
infrastructure, is planned to start production in month 36. Phase 2 includes the
construction of the second 3.6 Mtpa module to take the total production to 7.2
Mtpa in month 53. The second concentrator module is designed as a copy of the
first module, with minor exceptions with regards to shared infrastructure.

Each of these modules comprises a three-stage crushing circuit,
feeding crushed material to the primary milling circuits. Primary milling is
achieved in a ball mill with closed-circuit classification followed by a primary
rougher flotation bank. The primary rougher concentrate is further upgraded in
the primary cleaning/re-cleaning circuit to produce a high grade concentrate
product. The primary rougher tailings is further liberated in the secondary
milling circuit which consist of a ball mill with closed-circuit classification,
before reporting to the secondary rougher and scavenger flotation circuit. The
secondary rougher concentrate product reports to the secondary
cleaning/re-cleaning stages to produce a medium grade concentrate, whilst the
scavenger flotation concentrate is upgraded in the scavenger cleaning circuit to
produce a low grade concentrate product. Each of the concentrate products are
combined in the concentrate thickener for dewatering, followed by filtration.
The flotation tailings products are thickened prior to beings disposed to the
residue storage facility.

Refer to Figure1-9 for an illustration of the above.

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Platinum Group Metals Ltd. 2016 Annual Information Form



Figure  1-9:  Waterberg Concentrator  Block Flow  Diagram

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Platinum Group Metals Ltd. 2016 Annual Information Form

Infrastructure

The design philosophy applied to the Waterberg project followed
an approach of proven designs and results of various trade-off studies.

The infrastructure was designed to accommodate a mine plan,
which ramps up to 7.2 million tonnes per annum (Mpta). Locations and
sizing of infrastructures were significantly influenced by the geographical
area. Real estate associated with cost, social, and cultural heritage
considerations allowed little leeway for selection of locations. A site layout
plan covering site facilities is shown in Figure 1-10.

The key infrastructure includes regional infrastructure, local
infrastructure, central shared services, portal infrastructure as well as mine
ventilation and refrigeration surface infrastructure as described in the Mine
Operations section above.

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Platinum Group Metals Ltd. 2016 Annual Information Form



Figure  1-10:  General  Site
Layout

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Platinum Group Metals Ltd. 2016 Annual Information Form

Bulk Water Supply

South Africa is a country of relatively low rainfall and, in
particular, the Limpopo province will require significant additional water
capacity to meet the growing demand from the mining, agricultural, and domestic
sectors. The Government has committed to addressing this shortage in the
interest of developing the region. However, there are major planning,
infrastructural design, and funding challenges that need to be addressed in
order to ensure that sufficient bulk water supply is achieved.

The Olifants River Water Resource Development Project (ORWRDP)
has been designed to deliver water to the Eastern Limb and Northern Limb of the
Bushveld Igneous Complex (BIC) of South Africa. The ORWRDP consists of the new
De Hoop Dam, the raising of the wall of the Flag Boshielo Dam, and related
pipeline infrastructure, which will ultimately deliver water via Pruissen to
Sekuruwe, located some 30 km to the north of Mokopane and 60 km south of PTM
Waterberg Project. Fro om this point, PTM Waterberg will need to develop their
own pipeline project to take water to their site.

Implementation of the Flag Boshielo Pruizen pipeline has been
put on hold because of funding issues and withdrawal of commitments from some
mines due to low commodity prices. The PTM Waterberg project is located on the
northern extremity of the ORWRDP area, the delay in implementation will result
in PTM Waterberg not meeting their development schedule, and other options would
need to be considered.

During the Pre-Feasibility Study, other bulk water supply
options were considered. Other options considered were Glen Alpine Dam, transfer
of water from Lephalala River, groundwater and effluent from various Waste Water
Treatment Works (WWTW) including Louis Trichard dt / Makhado and Seshego. The
present water balance model simulations showed that the average bulk water
supply requirement over the life of the mine would be 10.6 Ml/d.

Of all the water supply options considered a combination of
sewage effluent and groundwater is considered the most viable and least risk
solution to meet the proposed mining schedule. Wellfields with mainly poor water
quality will be targeted so as not to compete with domestic water uses in the
area.

From existing borehole information and limited exploration,
drilling done to date about 0.5Ml/ day of potable water or more could be
developed around the mine site. Poor quality groundwater developed within 35 km
east of the mine towards Bochum (about 5,5Ml/day) and to the south of the mine,
some 4.3Ml/da y is thought to be available. Non-potable groundwater resources up
to 35 km from the mine could yield up to 9.9Ml/day.

Ground Water

The PTM Waterberg Project site and surrounding area is
underlain by the Waterberg Group, Bushveld Igneous Complex and the Archaean
Granite/Gneiss rocks. The Waterberg Group overlies the Bushveld Igneous Complex
and comprise predominantly of sandstones. The base of the Bushveld Main Zone is
characterized by the presence of a transitional zone that constitutes a mixed
zone of Bushveld and altered sediments/quartzites before intersecting the
Archaean granite basement. The Waterberg Sedimentary package has been
intersected by numerous crisscrossing dolerite or granodiorite sills or dykes
and act as preferential flow path for groundwater.

Groundwater abstraction in the area is mainly used for domestic
consumption at the villages. Water levels in the area vary between artesian and
52m below ground level (mbgl). The groundwater quality does not always comply
with the drinking water standards due mainly to the high salt content. Borehole
yields vary considerably over the area with yields of up to 10l/s found along
major structures in the Waterberg sediments and in the highly weathered and
fractured Gneisses. However, due to the low rainfall, recharge to the aquifers
is low with the average annual recharge estimated to be only about 12mm per
annum.

Inflow into the proposed mine workings has been estimated to be
between 3.6Ml/ day and 9.4 Ml/day depending on hydraulic conductivity of the
deeper fault zones and the number of faults intersected. A conservative figure
of 3.3Ml/day has been used in the water balance. These inflows will result in an
impact zone around the mining lease area of about 6 km. Production boreholes
serving communities within this zone could be affected.

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Platinum Group Metals Ltd. 2016 Annual Information Form

From information available at this stage local groundwater
around the mine could yield up to 0.5 Ml/day of potable water or more.
Non-potable groundwater resources up to 35 km from the mine could yield up to
9.9Ml/day.

Bulk Power Supply

The bulk electricity supply for the project is being planned to
cater for mining and plant production rates of up to 600ktpm, which correspond
to an electrical load of up to 160MVA. A temporary electrical supply is being
planned for the construction stage.

Existing 66kV and 132kV networks approach to within 25 km from
the project site, however, it has been determined that the capacities of these
networks are inadequate to supply the project load. The updated electricity
supply plan compiled by Eskom therefore provides for the establishment of new
132kV overhead lines from the Eskom Burotho 400/132kV main transmission
substation, which is located approximately 77 km south of the project site.
Eskom has confirmed in principle the availability of capacity from this system
to supply the mine.

The proposed bulk electricity supply infrastructure comprises
the following:

Two 77 km long 132kV overhead lines from Burotho transmission
substation;

Two 132kV line feeder bays for these new lines at Burotho
transmission substation; and

A 132kV switching substation and step-down substation located
on the project site.

The development of the abovementioned infrastructure is being
done in conjunction with Eskom on a Self-Build basis in terms of which Waterberg
JV Resources is responsible for most of the development work.

This work is already in an advanced stage; with line route
planning and environmental impact assessment work having progressed well (refer
Figure 1-11, which shows some of the 132kV overhead line route options).

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Platinum Group Metals Ltd. 2016 Annual Information Form



Figure 1-11: Proposed Overhead Line Route

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Platinum Group Metals Ltd. 2016 Annual Information Form

Process Plant

Further to the equipment described in Section 1.16, the
following permanent installations are also included to support the processing
plant:

| |  | Return water columns from the residue storage
      facility to the processing plant
| | - | ------------------------------------------------------------------------------------
| |   |                                                                                     
| |  | Plant services, i.e. compressed air and raw
      water                             
| |   |                                                                                     
| |  | Plant potable water storage and reticulation                                        
| |   |                                                                                     
| |  | Plant electrical supply and reticulation, from
      the plant consumer substation. 
| |   |                                                                                     
| |  | Plant offices                                                                       
| |   |                                                                                     
| |  | Plant store                                                                         
| |   |                                                                                     
| |  | Plant workshop                                                                      
| |   |                                                                                     
| |  | Plant weighbridge                                                                   

The plant infrastructure includes storm water berms and drains
to divert rainwater from the plant and to collection rainwater falling in the
plant in a pollution control dam, this water will be captured for use in the
process plant and not intended to be discharged to the environment.

Residue Storage Facility

A Pre-Feasibility Design (PFD) of the Residue Disposal Facility
(RDF) and its associated infrastructure was undertaken. The design of the RDF
comprising:

| | A Residue Storage Facility (RDF) that
      accommodates 140 000 000 dry tonnes over a 20 year Life of Mine (LoM);                                                                       
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                          
| | A Return Water Dam (RWD) and/or Storm Water Dam
      (SWD associated with the RDF;                                                                                                      
|  |                                                                                                                                                                                          
| | The associated infrastructure for the RDF (i.e. perimeter
      slurry deposition pipeline, storm water diversion trenches, perimeter
      access road, etc.);                          
|  |                                                                                                                                                                                          
| | Estimation of the capital costs to an accuracy of ±25%,
      operating costs associated with these facilities to an accuracy of ±25%
      and closure costs to an accuracy of ±35%; and
|  |                                                                                                                                                                                          
| | Estimation of the costs over the life of the
      facility.                                                                                                                             

Site Selection

A site selection study was undertaken to find the most
favorable site. The study found that Ketting farm was the most favorable.

Depositional Trade-off Study

A trade-off study was undertaken to determine a suitable
depositional methodology as well as to highlight the advantages and
disadvantages of each methodology. The following methodologies were
investigated:

| |  | Conventional/thickened tailings;
| | - | --------------------------------
| |   |                                 
| |  | Cycloned tailings;              
| |   |                                 
| |  | Paste tailings; and             

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Platinum Group Metals Ltd. 2016 Annual Information Form

| |  | Dry-filtered tailings.
| | - | ----------------------

The following conclusions were drawn from the study:

| |  | Paste disposal is untested in the platinum industry and
      would pose a significant risk and require an extensive testing regime to
      consider implementing;                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                               
| |  | Dry stacking is a possible option and the potential water
      recoveries could make this option feasible, however the high capital and
      operational costs associated with dry stacking could make this potion
      infeasible compared to a conventional tailings dam;
| |   |                                                                                                                                                                                                                                                                               
| |  | Cycloned tailings may provide a cost saving due to the
      higher rates of rise achievable, however test work is required prior to
      recommending this option;                                                                                                          
| |   |                                                                                                                                                                                                                                                                               
| |  | Conventional/thickened tailings are the safest option,
      well understood in the platinum industry, and have been regarded as the
      preferred option for Waterberg.                                                                                                    

Economic Depositional Methodology Trade-off Assessment

Further to this, an Economic Assessment of the various
depositional methodologies was undertaken to determine which methodology would
provide a cost effective solution given that the scarcity of water at the site.
The purpose of this assessment was to determine which option would result in the
most cost effective solution in terms of water cost; therefore, the costs were
only taken to a conceptual level. The results show that filtered tailings will
only be feasible if the water cost exceeds R60/m3.

Therefore, conventional/thickened tailings were taken forward
as the preferred option for Waterberg.

| |  | Key Design Features:
| | - | --------------------

The key design features of the RDF in
Figure 1-12 are as follows:

| | - | The RDF will be constructed as an upstream,
      spigotting facility;                                          
| | - | ----------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                 
| | - | A compacted earth fill starter wall at
      elevation 1000m.a.m.s.l.;                                          
| |   |                                                                                                                 
| | - | A penstock system will be used to decant water
      from the RDF;                                              
| |   |                                                                                                                 
| | - | A RWD with sufficient capacity for the 1 in 50
      year storm event (340 000m3);                              
| |   |                                                                                                                 
| | - | The RDF has a total footprint area of 297Ha, a
      maximum height of 55m and a final rate of rise of <3m/year;
| |   |                                                                                                                 
| | - | A concrete lined solution trench to convey
      seepage water to the RWD;                                      
| |   |                                                                                                                 
| | - | Lined toe paddocks to collect contaminated
      run-off water from the RDF side slopes; and                    
| |   |                                                                                                                 
| | - | A slurry spigot pipeline along the crest of the
      RDF.                                                      

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Platinum Group Metals Ltd. 2016 Annual Information Form



Figure 1-12: RDF Layout

Access Roads

The Waterberg Project is located some 85 km north of the town
of Mokopane (formerly Potgietersrus) in Seshego and Mokerong, districts of the
Limpopo Province. Although the bulk of the roads surrounding the site are
provincial roads under the jurisdiction of the Roads Agency Limpopo (RAL), some
of the minor roads are the responsibility of either the Capricorn District
Municipality or the three relevant Local Municipalities.

The Waterberg Project is situated some 56 km from the N11
national road that links Mokopane with the Groblers Bridge border post to
Botswana. Access to the project area from Mokopane in Figure 1-13 (112km), and
Polokwane in Figure 1.14 (94km) includes about 32 km of unpaved roads.

It has been assumed in this study that this portion of the
access route will remain unsurfaced but provision has been made for re-profiling
and adequate drainage run-off along the route and a maintenance contract to
maintain the road to an acceptable standard for the life of mine.

The balance of the route will have to be assessed to determine
additional costs that may be incurred to upgrade and repair. The transport of
the concentrate has been assumed to be done by contract haul and a rate per
tonne component has been included in the financial model.

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Platinum Group Metals Ltd. 2016 Annual Information Form



Figure 1-13: Access Route from Mokopane (112km)



Figure 1-14: Access Route from Polokwane (94km)

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Platinum Group Metals Ltd. 2016 Annual Information Form

Market Studies and Contracts

Either the Waterberg project will produce a flotation
concentrate from the processing plant, which is assumed to be sold, or toll
treated into the local South African market.

Production of up to 285 000 tonnes of concentrate per annum
will be available at peak production. The concentrate will contain approximately
80g/t 4Es plus copper at between 1% and 9.2% and nickel at between 1.1% and
5%.The concentrate does not contain any penalty elements such as chrome and is
rich in Sulphur, thus making it a desirable concentrate to blend with other high
chrome concentrates.

No formal marketing studies have been conducted for this study
nor have the local smelter and refinery operators been formally contacted to
understand the appetite in the local industry to treat the concentrate to be
produced from the project. Informal indications from smelters are that the
concentrate is attractive.

Based upon industry data, it is expected that the payability
for the concentrate sold to a local smelter operator will be up to 85% for the
PGEs, 73% for contained copper and 68% for contained nickel. It is expected
that the metal will be available from the refinery after 16 weeks. Opportunity
exists to have payment terms with pipeline finance facilities and these have
been included in the study for the life of the mine.

Metal Prices

The Waterberg Project level financial model begins on 1 July
2016. It is presented in 2016 constant dollars, cash flows are assumed to occur
evenly during each year and a mid-year discounting approach is taken.

The base case real discount factor applied to the analyses is
8%. No allowance for inflation has been made in the analyses.

The following prices, based on a 3-year trailing average in
accordance with SEC guidance, was used for the assessment of resources and
Reserves.

The exchange rate between the ZAR and the USD is fixed at
ZAR15.00:USD1.00 in the financial model throughout the LoM. The pricing and
exchange rates above results in the estimated basket prices shown in Table 1-9
below.

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Platinum Group Metals Ltd. 2016 Annual Information Form

Table 1-9: Average Three Year Trailing Metal Prices used in
Financial Model

|Parameter                                                                       | Unit                                                      | Financial Analysis
      Assumptions
|------------------------------------------------------------------------------- | --------------------------------------------------------- | ------------------------------------
|
|3 Year Trailing Average Price (Date: 31 July
    2016)                         
|Platinum Palladium
      Gold Rhodium Nickel Copper                             | US$/oz. US$/oz. US$/oz.
      US$/oz. US$/lb US$/lb       | 1 212 710 1 229 984
      6.10 2.56 
|
|
|
|
|
|Base Metals Refining Charge
      Copper Refining Charge Nickel Refining Charge | % Gross Sales pay % Gross Sales
    pay % Gross Sales pay | 85% 73% 68%                         
|
|
|Investment Bank Consensus Price (Date: 16
    September 2016)                  
|Platinum Palladium
      Gold Rhodium Nickel Copper                             | US$/oz. US$/oz. US$/oz.
      US$/oz. US$/lb US$/lb       | 1 213 800 1 300 1 000
      7.50 2.9
|
|
|
|
|

Investment Bank Consensus Sept, 2016 PGMs for base metals.

Environmental and Impact Assessment Studies

Preliminary environmental baseline studies has been completed
for the Waterberg Project and measures have been incorporated in the development
of the layouts, designs and operational practices to mitigate potential
environmental risks.

The baseline studies included the following:

| |  | Ground Water. 
| | - | --------------
| |   |               
| |  | Air Quality.  
| |   |               
| |  | Noise.        
| |   |               
| |  | Bio-Diversity.
| |   |               
| |  | Soil.         

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Platinum Group Metals Ltd. 2016 Annual Information Form

| |  | Visual Impact.  
| | - | ----------------
| |   |                 
| |  | Heritage Impact.
| |   |                 
| |  | Surface Water.  
| |   |                 
| |  | Traffic.        
| |   |                 
| |  | Blasting.       

Prior to construction and operation of an underground mine, the
following local legislative authorizations would be required:

| |  | In support of a Mining Right Application (MRA),
      authorization in terms of Section 22 of the MPRDA by the DMR is required.                                                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                
| |  | Environmental Authorization as per the National
      Environmental Management Act, 1998 (Act No. 107 of 1998) (NEMA) and the
      Environmental Impact Assessment (EIA) Regulations (GNR. 543, 544 and 545
      of 18 June 2010) from the Limpopo Department of Economic Development,
      Environment and Tourism (LEDET).
| |   |                                                                                                                                                                                                                                                                                                                                
| |  | A water use license in terms of Section 21 of the
      National Water Act, 1998 (Act No. 36 of 1998) from the Department of Water
      and Sanitation (DWS).                                                                                                                                                                 
| |   |                                                                                                                                                                                                                                                                                                                                
| |  | A Waste Management License for categorized waste
      activities in terms of the National Environmental Management Waste Act,
      2008 (Act No. 59 of 2008) (NEMWA) from the National Department of
      Environmental Affairs (DEA).                                                                                      

There have been discussions with the local communities and
stakeholders regarding the environmental protection measures proposed to be
undertaken.

The communities that are located within a 5 km radius from the
proposed project site are:

| |  | Ga-Ngwepe. 
| | - | -----------
| |   |            
| |  | Setlaole.  
| |   |            
| |  | Ga-Masekwa.
| |   |            
| |  | Ga-Raweshe.
| |   |            
| |  | Ketting.   

Consultations have also been held with the Regulatory
Departments on various aspects of the Project and detailed discussions will
continue throughout the permitting process and project execution.

A project risk assessment was carried out as part of the
Pre-Feasibility Study to identify environmental sensitivities. The key risks
potentially affecting the achievement of the project objectives were identified,
together with their root causes and potential consequences. Primary mitigating
strategies currently in place to address the risks were documented and where the
current risk rating was considered unacceptably high, additional action items
agreed to reduce it to an acceptable level.

Community Social Impact Assessment Studies

A social impact assessment is being conducted with the local
communities to establish the social understanding within the area of the
Waterberg mining operations. The project has maintained a positive open working
relationship with the small communities in the area of the project including
regular well documented meetings.

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Platinum Group Metals Ltd. 2016 Annual Information Form

The communities that are located within a 5 km radius from the
proposed prospecting site are Ga-Ngwepe, Setlaole, Ga-Masekwa, Ga-Raweshe, and
Ketting.

Capital and Operating Costs

Capital Costs

Project capital costs total ZAR 27,374M, consisting of the
following:

| |  | Initial Capital Costs  includes all costs to develop the
      property to a sustainable production of 600ktpm. Initial capital costs
      total ZAR 15,906M and are expended over a 72 month period from January
      2017 to Dec 2022 including the pre-production construction and
      commissioning period; and                                                        
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                 
| |  | Sustaining Capital Costs  includes all costs over the
      16-year mine life related to expansion of production from the initial
      300ktpm to 600ktpm and the acquisition, replacement, or major overhaul of
      assets required to sustain operations. Sustaining capital costs total ZAR
      11,468 M and are expended in operating years from Jan 2023 to Jul 2038.
| |   |                                                                                                                                                                                                                                                                                                                                                                                 
| |  | The peak funding required for the project is
      estimated at ZAR13,694M (US$914M) in year 2022.                                                                                                                                                                                                                                                                              

The costs are presented in ZAR 2016 and U.S. Dollars (USD)
market terms. It is presented in real money terms and no escalation was added.
The base date for the Capital Estimate shall be 31 July 2016 and will be used to
qualify the estimate in terms of governing laws, duties, taxes and tariffs.

The exchange rate between the ZAR and the USD will be fixed at
ZAR15.00:USD1.00 in the Financial Model throughout the LoM.

The expected order of accuracy of the final estimate is in the
range of ±25%

A 12% contingency allowance has been based on an assessment of
the risk around the accuracy of the design information, quantities and rates
applied using a Monte Carlo statistic process.

The estimate is presented in such a way that it is seamlessly
incorporated into the financial model as an input, expressed in monthly cash
flows for each WBS Level 1 facility code. Table 1-10 presents the PTM Waterberg
capital at Level 1 WBS facility code.

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Platinum Group Metals Ltd. 2016 Annual Information Form

Table 1-10: Total CAPEX

Facility
      Code
    Facility
      Description
    To Full
      Production ZAR (M)
    Sustaining Capital ZAR (M)
    To Full
      Production USD (M)
    Sustaining Capital USD (M)2000
    Underground Mining
    6,092
    9,766
    406
    6513000
    Concentrator
    2,850
    159
    190
    114000
    Shared Services & Infrastructure
    1,063
    43
    71
    35000
    Regional Infrastructure
    2,566
    -
    171
    -6000
    Site Support Services
    691
    67
    46
    47000
    Project Delivery Management
    1,399
    147
    93
    108000
    Other Capitalised Costs
    246
    83
    16
    69000
    Contingency
    999
    1,202
    67
    80Total Capital
    15,906
    11,468
    1,060
    765


The facility level summary of the capital as well as the
capital expenditure for LOM is depicted in Figure 1-15.



Figure 1-15: Total CAPEX Cashflow

Operating Costs

For the study, OPEX has been defined as:

| |  | All on-reef development as soon as first
      stoping tonnes are achieved,
| | - | ---------------------------------------------------------------------------

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Platinum Group Metals Ltd. 2016 Annual Information Form

| |  | Off-reef development associated with ongoing access and
      Reserve generation within, when first stoping tonnes are achieved. (These
      include sub-level off reef, lateral ventilation and other access
      development),
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                   
| |  | All ongoing production related activities after
      first stoping ore is mined,                                                                                                                                                 
| |   |                                                                                                                                                                                                                                   
| |  | Operating costs associated with the mobile
      mining equipment and fixed engineering equipment,                                                                                                                                
| |   |                                                                                                                                                                                                                                   
| |  | Maintenance of mobile mining equipment and
      fixed engineering equipment.                                                                                                                                                     

Initially the mine will be contractor operated and once first
stoping ore is mined for a particular mining zone, it will become owner
operated. This excludes some contracted services over LoM such as raise bore,
ventilation raises, silo and vertical dams, main access, primary conveyor
decline and material decline development. The RDF facility will also be
contracted out. The owner-mined operation per zone will coincide with when
operating costs starts being incurred. All costs not associated to a particular
mining zone will be reported under shared services and will include general,
administration, and processing cost.

The operating cost model was developed by following the typical
steps and processes prescribed by the Advisian RSA OPEX Estimation standards and
methodologies. Methodologies utilized includes first principle costing for the
labor, lifecycle costing for all equipment, infrastructure and fleet, zero-based
costing for mining consumables and fixed/variable costing for the remainder of
operating cost items.

The estimate methodology is aligned to preliminary engineering
designs and budgetary quotations for major equipment and consumable cost and
conforms to the +-25% accuracy level of a Pre-Feasibility Study. The operating
cost estimate is modelled annually in ZAR. Costs reported in USD were converted
from ZAR by using and exchange rate of R 15 per USD. A base date of July 2016
was used as costing basis. Costs are reported in real money terms with no
escalations or contingency modelled. Quotes and cost rates were sourced from
South African suppliers with foreign component cost not having an impact on the
operating costs estimate.

The average LoM operating cost for the Waterberg
Pre-Feasibility Study project is estimated at R 574.62 per ore tonnes broken
(USD 38.31 /t). As indicated in Table 1-11, the total LoM cost amounts to R
58,99 billion (USD 3,93 billion). Average LoM costs are also detailed on a high
level per area in ZAR and USD.

Table 1-11: Average LoM Operating Cost Rates and Totals per
Area in ZAR and USD

|                             | Average LOM (ZAR/t) | Total
      LOM (ZAR M) | Average LOM (USD/t) | Total
      LOM (USD)
|---------------------------- | ------------------- | ----------------------- | ------------------- | ---------------------
|
|
|
|
|Mining                       | R                   | 271.90                  | R                   | 27 915               
|Engineering & Infrastructure | R                   | 107.49                  | R                   | 11 036               
|General & Admin              | R                   | 40.71                   | R                   | 4 180                
|Process                      | R                   | 154.52                  | R                   | 15 864               
|Total OPEX Cost              | R                   | 574.62                  | R                   | 58
      994         

The information in the table above is visually represented in
Figure 1-16 to provide a better understanding of the breakdown per area of the
LoM operating cost.

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Platinum Group Metals Ltd. 2016 Annual Information Form



Figure 1-16: LoM Average R/t Operating Cost Breakd down per
Area

From the figure, it is evident that mining comprise the bulk of
the operating cost at 47%, followed by process at 27% and engineering and
infrastructure at 19%. General and administration cost contributes a small
portion (7%) of the total operating cost. The mining cost mostly driven by the
large materials and supplies cost which is associated to development and
production fleet maintenance (R 87/t) and consumables such as fuel (R 30/t). The
process cost can be mostly attributed to the high power cost at R 64/t and
consumable costs at R 60/t.

Figure 1-17 provides an overview of the operating cost per cost
category over LoM. From the graphical representation, it is evident that the
majority of costs remain constant. As expected, materials and supplies, cost
will vary, as it is the directly related to the production profile.



Figure 1-17: Operating Cost broken down per Cost Category
over LoM

Figure 1-18 presents the total operating costs over LoM
overlaid with the ore tonnage profile. The cost increase observed in 2022 is due
to the start of the second process plant in November 2022 (month 53) combined
with an increase in tonnage. Steady state is observed around 2024 when the
process plant will process 7.2 Mtpa. The process, general, administration,
engineering, and infrastructure operating cost remain constant throughout the
LoM, whilst the mining operating cost closely resembles the tonnage profile. The
two-phased ramp down starting in year 2035 is clearly visible towards the end of
LoM.

The dip in operating cost displayed in year 2036 is a result of
only one process plant being operational to process 200 ktpm for duration of
approximately 17 months, until ore tonnes are depleted.

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Platinum Group Metals Ltd. 2016 Annual Information Form

The operating cost model was developed to enable reporting per
zone(e.g. F South), per area (e.g. mining) and per cost category (e.g. labor).



The operating cost model was developed to enable reporting per
zone (e.g. F South), per area (e.g. mining) and per cost category (e.g. labor).
For more operating cost detail and results, refer to Section 21.3.

Summary of Economic Analysis

The results of the financial analysis show an After Tax NPV 8%
of ZAR4,805M. The case exhibits an after tax IRR of 13.5% and a payback period
of around eleven years. The estimates of cash flows have been prepared on a real
basis as at 1 July 2016 and a mid-year discounting is taken to calculate NPV. A
summary of the financial results is shown in Table 1-12.

The cumulative cash flow after tax is depicted in Figure
1-19.

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Platinum Group Metals Ltd.
2016
Annual Information Form

Table 1-12: Financial Results Base Case Three Year Trailing
Average

|Item                           | Discount
      Rate | ZAR
      Millions (Before Taxation) | ZAR
      Millions (After Taxation) | USD
      Millions (Before Taxation) | USD Millions
      (After Taxation)
|------------------------------ | ------------------- | ------------------------------------ | ----------------------------------- | ------------------------------------ | -----------------------------------
|                               | Undiscounted        | 36,096                               | 25,042                              | 2,406                                | 1,669                              
|                               | 4.0%                | 18,213                               | 11,883                              | 1,214                                | 792                                
|                               | 6.0%                | 12,666                               | 7,808                               | 844                                  | 520                                
|Net Present Value              | 8.0%                | 8,565                                | 4,805                               | 571                                  | 320                                
|                               | 10.0%               | 5,519                                | 2,584                               | 368                                  | 172                                
|                               | 12.0%               | 3,249                                | 939                                 | 217                                  | 62                                 
|                               | 14.0%               | 1,555                                | -278                                | 104                                  | -19                                
|Internal Rate of
      Return  |                     | 16.6%                                | 13.5%                               | 16.6%                                | 13.5%                              
|Project Payback Period (Years) | 10                  | 10                                   | 10                                  | 10                                  



Figure 1-19: Annual Cashflow after Tax

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Platinum Group Metals Ltd.
2016
Annual Information Form

Table 1-13: Investment Bank Consensus Price

|Item                           | Discount Rate | Before Taxation
      (ZAR) | After Taxation
      (ZAR) | Before Taxation
      (USD) | After Taxation (USD)
|------------------------------ | ------------- | --------------------------- | -------------------------- | --------------------------- | --------------------
|                               | Undiscounted  | 45,781                      | 31,946                     | 3,052                       | 2,130               
|                               | 4.0%          | 24,180                      | 16,184                     | 1,612                       | 1,079               
|                               | 6.0%          | 17,426                      | 11,263                     | 1,162                       | 750                 
|Net Present Value              | 8.0%          | 12,402                      | 7,610                      | 827                         | 507                 
|                               | 10.0%         | 8,641                       | 4,884                      | 576                         | 325                 
|                               | 12.0%         | 5,812                       | 2,842                      | 387                         | 189                 
|                               | 14.0%         | 3,676                       | 1,311                      | 245                         | 87                  
|Internal Rate of
      Return  |               | 19,8%                       | 16.3%                      | 19,8%                       | 16.3%               
|Project Payback Period (Years) | 9             | 9                           | 9                          | 9                          

Mineral Tenure, Surface Rights and Royalties

Currently there are no royalties, back-in rights, payments or
other encumbrances that could prevent PTM from carrying out its plans or the
trading of its rights to its license holdings at the Waterberg Project. JOGMEC
or its nominee has the exclusive right to direct the marketing of the mineral
products of the other participants for a 10-year period from first commercial
production on an equivalent to commercially competitive arms length basis and
has the first right of refusal to purchase at prevailing market prices any
mineral products taken by another participant as its share of joint venture
output.

A summary of the mineral exploration and mining rights regime
for South Africa is provided in Table 1-12. It should be noted that PTM have a
Prospecting Right which allows them should they meet the requirements in the
required time, to have the sole mandate to file an application for the
conversion of the registered Prospecting Right to a Mining Right.

Conclusions

Results of this WPFS demonstrate that the Waterberg Project
warrants development due to its positive, robust economics, large production
volume and opportunity relative to the PGM price deck.

It is the conclusion of the QPs that the WPFS summarized in
this technical report contains adequate detail and information to support a
Pre-Feasibility level analysis.

Infill drilling over portions of the project area and new
estimation methodology has made it possible to estimate a new mineral resource
estimate and upgrade portions of the mineral resource to the Indicated category.

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Platinum Group Metals Ltd.
2016
Annual Information Form

A Mineral Resource and Reserves may be declared for the PTM
Waterberg project and reported in the tables below:

Table 1-14: T Zone Mineral Resource at 2.5 g/t 4E Cut-off

T-Zone 2.5g/t
      Cut-offResource
      Category
    Cut-off
    Tonnage
    Grade
    Metal4E
    Pt
    Pd
    Au
    Rh
    4E
    Cu
    Ni
    4Eg/t
    Mt
    g/t
    g/t
    g/t
    g/t
    g/t
    %
    %
    Kg
    MozIndicated
    2.5
    31.540
    1.13
    1.90
    0.81
    0.04
    3.88
    0.16
    0.08
    122 375
    3.934Inferred
    2.5
    19.917
    1.10
    1.86
    0.80
    0.03
    3.79
    0.16
    0.08
    75 485
    2.427


Table 1-15: F Zone Mineral Resource at 2.5 g/t 4E Cut-off

F-Zone 2.5g/t
      Cut-offResource
      Category
    Cut-off
    Tonnage
    Grade
    Metal4E
    Pt
    Pd
    Au
    Rh
    4E
    Cu
    Ni
    4Eg/t
    Mt
    g/t
    g/t
    g/t
    g/t
    g/t
    %
    %
    Kg
    MozIndicated
    2.5
    186.725
    1.05
    2.23
    0.17
    0.04
    3.49
    0.07
    0.16
    651 670
    20.952Inferred
    2.5
    77.295
    1.01
    2.16
    0.17
    0.03
    3.37
    0.04
    0.12
    260 484
    8.375


Table 1-16: Probable Reserve at 2.5 g/t 4E Cut-off

Zone
    Mt
    Moz
    Pt (g/t)
    Pd (g/t)
    Au (g/t)
    Rh (g/t)
    4E (g/t)T Zone
    16.50
    2.09
    1.14
    1.93
    0.83
    0.04
    3.94F South
    10.32
    1.26
    1.14
    2.42
    0.19
    0.04
    3.78F Central
    36.75
    4.24
    1.08
    2.30
    0.18
    0.04
    3.59F Boundary
    16.08
    1.94
    1.12
    2.40
    0.19
    0.04
    3.75F North
    23.02
    2.79
    1.13
    2.42
    0.19
    0.04
    3.78Total
    102.67
    12.32
    1.11
    2.29
    0.29
    0.04
    3.73


The following prices, based on a 3-year trailing average in
accordance with SEC guidance, was used for the assessment of Resources and
Reserves.

The Investment Bank Consensus price and spot price were also
used for the Sensitivity analysis.

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Table 1-17: Key Economic assumptions

|Parameter                   | Unit          | 3 Yr Trailing Average
      31 Jul 2016 | Spot Price 6 Oct 2016 | Investment Bank Consensus
      Price Deck 16 Sep 2016
|--------------------------- | ------------- | --------------------------------------- | --------------------- | ------------------------------------------------------
|Platinum                    | US$/oz.       | 1.212                                   | 964                   | 1.213                                                 
|Palladium                   | US$/oz.       | 710                                     | 668                   | 800                                                   
|Gold                        | US$/oz.       | 1.229                                   | 1.255                 | 1.300                                                 
|Rhodium                     | US$/oz.       | 984                                     | 675                   | 1.000                                                 
|Basket (4E)                 | US$/oz.       | 899                                     | 798                   | 960                                                   
|Nickel                      | US$/lb        | 6.10                                    | 4.52                  | 7.50                                                  
|Copper                      | US$/lb        | 2.56                                    | 2.17                  | 2.90                                                  
|Base Metals Refining Charge | % Gross Sales | 85%                                     |                       |                                                       
|Copper Refining Charge      | % Gross Sales | 73%                                     |                       |                                                       
|Nickel Refinery Charge      | % Gross Sales | 68%                                     |                       |                                                       

The key features of the WPFS include:

| | Planned steady state total and annual production and
      recoveries for the Mining zones are depicted in the table below.
|- | ---------------------------------------------------------------------------------------------------------------------------

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Table 1-18: WPFS Production results.

|Item            | Unit | Total LOM | LOM Annual Avg
|--------------- | ---- | --------- | --------------
|Ore Production  |      |           |               
|Mineral Reserve | Mt   | 103       | 7.2           
|Ore Milled      | Mt   | 103       | 7.2           
|T-Zone          | g/t  | 3.94      | 3.94          
|F South         | g/t  | 3.78      | 3.78          
|F Central       | g/t  | 3.59      | 3.59          
|F Boundary      | g/t  | 3.75      | 3.75          
|F North         | g/t  | 3.78      | 3.78          
|4E              | g/t  | 3.73      | 3.73          
|Copper          | %    | 0.08      | 0.08          
|Nickel          | %    | 0.15      | 0.15          
|Recoveries      |      |           |               
|Platinum        | %    | 82.5      | 82.5          
|Palladium       | %    | 83.2      | 83.2          
|Gold            | %    | 75.3      | 75.3          
|Rhodium         | %    | 59.4      | 59.4          
|4E              | %    | 82.1      | 82.1          
|Copper          | %    | 87.9      | 87.9          
|Nickel          | %    | 48.8      | 48.8          
|Recovered Metal |      |           |               
|Platinum        | koz  | 3,029     | 222           
|Palladium       | koz  | 6,297     | 482           
|Gold            | koz  | 715       | 45            
|Rhodium         | koz  | 73        | 6             
|4E              | koz  | 10,114    | 744           
|Copper          | Mlb  | 168       | 11            
|Nickel          | Mlb  | 163       | 12            

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Waterberg Key financial metrics are depicted in the table
below:

Table 1-19: WPFS Results

|Item                                                                                 | Units        | Total
|------------------------------------------------------------------------------------ | ------------ | -----
|Key Financial Results (3 Year Trailing Price
      Deck  US$/ZAR 15) - 31 July 2016
|Life of Mine                                                                         | years        | 19   
|Capital to Full Production                                                           | US$M         | 1060 
|Mine Site Cash Cost                                                                  | US$/oz 4E    | 389  
|Total Mine Cash Costs After Credits                                                  | US$/oz 4E    | 248  
|Total Cash Costs After Credits                                                       | US$/oz 4E    | 481  
|All in Costs After Credits                                                           | US$/oz 4E    | 661  
|Site Operating Costs                                                                 | US$/t Milled | 38   
|After Tax NPV @ 8%                                                                   | US$M         | 320  
|After Tax IRR                                                                        | %            | 13.5 
|Project Payback Period (Start First Capital)                                         | years        | 10   
|Investment Bank Consensus Price Deck- 16
      September 2016                       
|After Tax NPV8                                                                       | US$M         | 507  
|After Tax IRR                                                                        | %            | 16.3 

Standard industry practices, equipment and design methods were
used in this WPFS. The report authors are unaware of any unusual or significant
risks, or uncertainties that would affect project reliability or confidence
based on the data and information made available. For these reasons, the path
going forward must continue to focus on drilling activities and obtaining the
necessary permitting approval, while concurrently advancing key activities in
the DFS that will reduce project execution time.

Risk is present in any mineral development project. Feasibility
engineering formulates design and engineering solutions to reduce that risk
common to every project such as resource uncertainty, mining recovery and
dilution control, metallurgical recoveries, political risks, schedule and cost
overruns, and labor sourcing. Opportunities include further optimization of the
mine plan and potential reduction of development sustaining capital. The company
indicates they will be focused on these aspects in the definitive feasibility
phase.

The project provides attractive returns when compared to
competitive projects in the Bushveld Complex in the Western or Northern Limb.
Based on the competitive returns the project is recommended to proceed to the
DFS Stage. Drilling for measured resources should continue and be designed and
budgeted along with the scoping process for the definitive feasibility
study.

Geology and Mineral Estimates

A Mineral Resource may be declared for the PTM Waterberg
project. This Resource comprises an Indicated Resource of 31 Million tonnes at
3.88g/t 4E for the T-zone; and 186 Million tonnes at 3.49 g/t 4E for the F-zone.
Additional Inferred Resources of 19 Million tonnes at 3.79g/t 4E for the T-zone
and 77 Million tonnes at 3.37g/t 4E for the F-zone. These Resources
are reported at a 4E grade cut-off of 2.5 g/t. Only Indicated resources are
included in the mine plan and financial analysis.

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Annual Information Form

Geotechnical and Rock Engineering

The main findings in the geological and rock engineering
investigations that influenced on reef mine design are discussed below:

The general geotechnical conditions are suitable for the
planned infrastructure and the soil and rock is capable of supporting the
planned structures.

The geotechnical database was adequate for this level of study.

The mining methods that have been identified as most suited are
Blind Longitudinal Retreat (BLR) and Sub-Level Open Stoping (SLOS). These mining
methods offer flexibility and with proper sequencing of mining cuts and
support strategies, regional stability can be improved.

Mining

The mine design and production schedules presented are deemed
as reasonable for a pre-feasibility study level of confidence. Although, the BLR
mining method is not widely utilized, it is the view of the project study team
that the layouts and schedule rates are not overly aggressive.

A number of potential optimization opportunities have been
identified and can be further quantified and expanded in the DFS.

Metallurgy

Sufficient test work to support the Waterberg Platinum
pre-feasibility study has been undertaken.

Extensive metallurgical test work has been conducted on two
different flowsheets, namely the MF1 and MF2 flowsheets, with encouraging
results obtained from both. Test results have demonstrated that some of the ore
types respond better to a particular configuration.

Bench scale test work conducted, on the Waterberg ores types
and blends, has demonstrated that a saleable final concentrate containing at
least 80 g/t 4E can be produced by applying a MF2 flowsheet and using standard
Southern African PGM reagents. No deleterious elements are expected in the final
concentrate, whilst 4E recoveries in excess of 80% are expected for the selected
process design.

Infrastructure

For the purposes of this WPFS, a range of options were
considered for the on-site and regional infrastructure.

The main infrastructure requirements for the Waterberg Project
are access roads, residue disposal, water management, power supply and process
plant to service and treat the targeted mine production.

The Waterberg Project is situated in a remote area and will
require approximately 32 km of existing unpaved roads to be surfaced.

A combination of sewage effluent together with groundwater is
considered the most viable solution to meet the bulk water requirements of the
proposed mining schedule. Wellfields with poor water quality will be targeted so
as not to compete with domestic water uses in the area.

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The bulk electricity supply for the project is being planned to
cater for mining and plant production rates of up to 600ktpm, which correspond
to an electrical load of up to 160MVA. A temporary electrical supply is being
planned for the construction stage. Eskom has been engaged in the design
process.

The availability of skilled labor resources, for both
construction and operational phases, is limited and the training and skills
development program will have to be closely monitored to ensure that the correct
skills are developed in time to support the construction and operational
requirements of the Waterberg Project. The company plans to use its accredited
training center.

Residue Storage Facility

The following conclusions were drawn from the study:

| |  | A pre-feasibility design of the Residue Disposal Facility
      (RDF) for the Waterberg Project has been undertaken, in which:
| | - | ------------------------------------------------------------------------------------------------------------------------------

| | - | A suitable site for the RDF has been identified;                                                                                                                          
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                           
| | - | conventional/thickened tailings is the safest option and
      well understood in the platinum industry and has been regarded as the
      preferred option for Waterberg;
| |   |                                                                                                                                                                           
| | - | a conventional/thickened RDF has been shown to be the
      most cost effective option for Waterberg in terms of water costs; and                                         
| |   |                                                                                                                                                                           
| | - | The total LoM cost associated with the Waterberg RDF over
      the duration of the project life (Feasibility Study to Post Closure) is
      estimated at R1,057 million.

Bulk Water Supply

Of all the options considered, a combination of sewage effluent
together with groundwater is considered the most viable solution to meet the
proposed mining schedule.

Consider the bulk water source options as described is Section
19-3. The option of wellfields in combination with an effluent water pipeline
from Bochum (Senwabarwama Ponds) is the most favorable with the least risk and
is considered the base case. This infrastructure would allow the collection of
water from various sources along the way, thereby ensuring a more sustainable
bulk water supply to the Waterberg site.

The wellfields in combination with Waste Water Treatment Works
(WWTW) pipeline from Bochum also creates the following opportunities:

| |  | Access to groundwater from various wellfield areas along
      the route to supplement supply. This water is considered unsuitable for
      human consumption and would therefore have little impact on community
      water requirements;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                             
| |  | collection of water from smaller WWTW at Mogwadi;                                                                                                                                                                                           
| |   |                                                                                                                                                                                                                                             
| |  | possible future expansion of the pipeline to collect
      effluent from Makhado WWTW                                                                                                                                                       

Bulk Power Supply

The updated electricity supply plan compiled by Eskom provides
for the establishment of new 132kV overhead lines from the Eskom Burotho
400/132kV main transmission substation,

The development of the abovementioned infrastructure will be
done in conjunction with Eskom on a Self-Build basis and this work is already in
an advanced stage.

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Market Studies and Contracts

No formal marketing studies have been conducted for this study
nor have the local smelter and refinery operators been formally contacted to
understand the appetite in the local industry to treat the concentrate to be
produced from the project. Informal contact by the Company is reported to
indicate capacity and interest by two smelters. This will need to be confirmed
in the DFS stage. Based on a comparison with the Merensky style of concentrate
the Waterberg concentrate is considered attractive.

Based upon industry data, it is expected that the payability
for the concentrate sold to a local smelter operator will be up to 85% for the
PGEs, 73% for contained copper and 68% for contained nickel. It is expected
that the payment terms will be full payment after 16 weeks for all metals, but
with financing arrangements, these terms can be improved, but with significant
interest charges for the up-front payment.

Environmental Impact Assessment Studies

The environmental permit, not yet approved, is of paramount
importance, and delays from the company plan will increase project execution
time. Without the permit advancement to a mining right with approval, the
Project cannot proceed and failure to secure the necessary permits could stop or
delay the Project. The project design considers the environment and local
communities.

Community Social Impact Assessment Studies

The Community Social Impact Assessment Study is underway. It is
focusing on all the three farms affected by the mining operations. This study is
important because it will assist in the compilation of the Waterberg Social and
Labor Plan. The Waterberg Social and Labour Plan will form part of the Mining
Right application process. Detailed consultation has been ongoing and is well
documented.

The process for completing a Mining Right Application is
underway. Discussions have been positive and business like. Both the community
and the company have arranged experienced mining lawyers to facilitate the
negotiations. The small community of approximately 100 homes will have to be
relocated to the farm next to Ketting, which is also owned by the same
community. This will require relocations costs. The MRPDA provides for a right
of access and fair compensation will be required.

Allowance for land purchase and relocation costs was provided
for the Waterberg Social and Labour Plan in the Financial Model.

Recommendations

The QPs recommend that the Waterberg project advance to the DFS
stage. The project financial model, including low capital cost per annual ounce
of production and low operating costs provides the basis for further investment
and refinement of the project design. The QPs recommend that based on the large
scale PGM production profile of the project at 740,000 4E ounces per year that
the project owners initiate discussions with smelters an investigate a
standalone smelting option. The QPs also recommend that the owners initiate work
towards an application for a Mining Right including the development of a Social
and Labor Plan and environmental permits.

Geology and Mineral Estimates

It is recommended that exploration drilling continue in order
to advance the geological confidence in the deposit through infill drilling.
This will provide more data for detailed logging and refined modelling. This is
expected to confirm the geological continuity and allow the declaration of
further Indicated Mineral Resources.

Given the results of the diamond drilling on the northern area
and the extent of target areas generated by geophysical surveys, the completion
of the planned exploration drilling is recommended north of the location of the
current exploration programme. The objective of the exploration drilling would
be to find the limit of the current deposit, confirm the understanding of
the F Zone and improve the confidence for a selected part of the deposit to the
measured category for the DFS.

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2016
Annual Information Form

Geotechnical and Rock Engineering

The following is a list of work that will be required for a
feasibility level of study. Although the list is comprehensive is by no means
exhaustive.

| |  | Additional trial pits should be excavated at the exact
      positions of the proposed structures during the DFS at the next stage. A
      diamond drilled triple tubes borehole should be undertaken at each surface
      crusher up to a depth of 45m or 10m into medium hard rock sandstone or
      stronger (>25MPa). Appropriate soil and rock laboratory testing should
      be part of the geotechnical investigation at this stage, including falling
      head permeability test of the in situ material for the clay/geosynthetic
      liner of the tailing dam.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | The T-Reef should be explored geotechnically in more
      detail.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | Sufficient data should be collected to allow for rigorous
      analyses of joints. This will include oriented core.                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | A representative number of boreholes should be logged at
      selected locations to derive a more complete rock mass model that will
      inform designs of excavations away from the orebody as well as the main
      on-reef declines.                                                                                                                                                                                                                                                                                                                                     
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | With improved understanding of the model input parameters
      and the mining configuration, the assessment of the stability of the BLR
      designs, SLOS stopes and SLOS pillars can be conducted with greater
      confidence.                                                                                                                                                                                                                                                                                                                                            

Mining

It is recommended that the opportunities mentioned in Section
16.12.2 be investigated further. This could be done prior to the next phase of
the study or at least during the next definitive feasibility study phase.

| |  | The mine design of underground access infrastructure,
      other underground excavations and production areas should be prepared to
      higher level of confidence for the definitive feasibility study.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                            
| |  | Scheduling rates for development and production should be
      revisited to ensure that the rates planned remain realistic and
      achievable.                                                          
| |   |                                                                                                                                                                                                            
| |  | Compile a detailed Bill of Quantities of the mine design
      and involve relevant mining contracting companies so that accurate cost
      estimates can be prepared.                                    
| |   |                                                                                                                                                                                                            
| |  | Conduct a simulation exercise that considers all
      underground logistics. It is recommended that this be done using an
      appropriate software package.                                             
| |   |                                                                                                                                                                                                            
| |  | Review the risks mentioned so that where possible
      adequate mitigating factors can be incorporated into the mine design and
      schedule.                                                           
| |   |                                                                                                                                                                                                            
| |  | Complete a value engineering exercise on development and
      mining designs to reduce dilution and increase head grades.                                                                                 
| |   |                                                                                                                                                                                                            
| |  | Waste development in sustaining capital should be studied
      for reduction with investigation and further detailing of the ventilation
      plan                                                       

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Platinum Group Metals Ltd.
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Metallurgy

It is recommended that the opportunities mentioned in Section17
be investigated further. This could be done prior to the next phase of the study
or at least during the next study phase.

The following is also recommended for the next study phase:

| |  | Flotation test work using water from the envisaged raw
      water sources to ensure the flotation performance is not negatively
      affected.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                 
| |  | Testing of the MF2 circuit using an Oxalic acid and
      Thiourea reagent scheme                                                               
| |   |                                                                                                                                                 
| |  | Comminution variability test work on the individual ore
      types                                                                             
| |   |                                                                                                                                                 
| |  | Comminution variability test work on various possible
      mine blends                                                                         
| |   |                                                                                                                                                 
| |  | Flotation open circuit batch variability test work on the
      individual ore types                                                            
| |   |                                                                                                                                                 
| |  | Flotation open circuit batch variability test work on
      various possible mine blends                                                        
| |   |                                                                                                                                                 
| |  | Concentrate thickening and filtration test work                                                                                                 

Geotechnical investigation of the plant site to accurately
determine founding conditions in the plant area and inform the design of the
civil engineering works is also recommended.

The DFS would be completed using the test work results to
optimize the process and infrastructure design and allow a more accurate
assessment of the capital cost, operating cost and risks.

Infrastructure

Progress in-depth further infrastructure studies associated
with access roads, supply and logistics, RDF design methodologies and any other
areas of the Project where studies and confidence levels are lacking and for
which information is required to support permitting and feasibility studies.

The Infrastructure component outlines a series of
recommendations for the Project including progression to the Feasibility Study
phase in order to assess the Waterberg development further including:

Residue Storage Facility

For the Residue Disposal Facility, in the DFS stage of the
project, it is recommended that the following be included:

| |  | A geotechnical investigation of the RDF site in order to
      confirm the type, extent and characteristics of the in-situ materials as
      well as available construction materials.                                                                                                            
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                    
| |  | A seepage analysis and slope stability study be
      undertaken to confirm the seepage regimes through the RDF as well as to
      confirm the RDF stability. The results of these analyses could affect
      greatly on the geometry of the RDF walls and ultimate height of the
      facility.
| |   |                                                                                                                                                                                                                                                                                                    
| |  | Confirmation of the physical characteristics of the
      tailings product based on laboratory testing of a representative sample.                                                                                                                                                                 
| |   |                                                                                                                                                                                                                                                                                                    
| |  | Possible further optimization of the RDF preparatory
      works in terms of layout, footprint extent, etc. including any changes to
      the mine plan.                                                                                                                                          
| |   |                                                                                                                                                                                                                                                                                                    
| |  | Review the construction rates with a contractor to price
      the facility with representative rates.                                                                                                                                                                                             
| |   |                                                                                                                                                                                                                                                                                                    
| |  | Compilation of a more detailed schedule of quantities
      describing the proposed preparatory works and the pricing of the schedules
      to a greater level of accuracy; and a hydrological study of potential
      flood lines near the RDF.                                                 

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Bulk Water Supply

Due to the scarcity of water in the area, it will be critical
to conduct more detailed hydrogeological investigations in order to identify in
detail the potential groundwater resources that can be developed for mine supply
and to predict the mine inflows and impact zone accurately. This will also be
important to determine external bulk water requirements and the timing thereof.
These hydrogeological investigations should include a numerical model, which
will also assist the mine with monitoring and water management during the life
of mine.

Bulk Power Supply

The electrical supply for the construction phase will involve
the strengthening of an existing 22kV rural overhead line until the permanent
supply infrastructure is in place. The 132kV overhead lines from the Eskom
Burotho 400/132kV main transmission substation and the associated infrastructure
would form part of the permanent supply infrastructure

Market Studies and Contracts

It is recommended that the local smelter operators be formally
approached to better understand the appetite to consume the significant
concentrate production once the mine is at steady state. A competitive process
could be developed with the Japanese partner JOGMEC.

In addition, during the DFS, it is recommended that a Scoping
Study be completed into the potential for the inclusion of a Waterberg Project
Smelter on site. The product from this smelter could be a furnace matte or a
convertor matte, which could be treated locally or exported for refining.

Environmental Impact Assessment Studies

The future development and delivery of the Waterberg Project
will be underpinned by a programme of work for the mitigation of social and
environmental impacts; creating value through good governance practices.

PTM has a programme of work in place to comply with the
necessary environmental, social and community requirements, which include:

| | ESIA in accordance with the MPRDA, the National
      Environmental Management Act (NEMA);                           
|- | ---------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                      
| | Public Participation Process (PPP) in accordance with the
      NEMA Guidelines;                                     
|  |                                                                                                                      
| | Specialist investigations in support of the ESIA;                                                                    
|  |                                                                                                                      
| | Integrated Water Use License Application (IWULA) in
      compliance with the NWA; and                               
|  |                                                                                                                      
| | Integrated Waste Management License in compliance with
      the National Environmental Management Waste Act (NEMWA).

Community Social Impact Assessment Studies

The community impact assessment studies are being conducted and
Platinum Group Metals and detailed documentation of the process is recommended
to continue with appropriate specialists and counsel.

Non-Material Mineral Property Interests

The non-material mineral property interests of the Company
include prospecting rights located in South Africa and various mineral property
interests in Canada. These non-material property interests are not, individually
or collectively, material to the Company and are also described in the Companys
Financial Statements and Managements Discussion and Analysis for the year ended
August 31, 2016, copies of which may be obtained online at www.sedar.com.

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Annual Information Form

5.2  South African Regulatory Framework

The Company is subject to South African government regulations
that affect all aspects of the Companys operations. Accordingly, the sections
below set out the primary laws and regulatory concepts to which the Company is
subject.

Black Economic Empowerment in the South African Mining
Industry

The transition from an apartheid regime to a democratic regime
brought with it a commitment by the South African state, as enshrined in the
Constitution, to take legislative and other measures to redress the results of
past racial discrimination against black South Africans, or as the Mining
Charter defines them, HDSAs. The MPRDA uses the term historically
disadvantaged person with reference to HDSAs. Under the MPRDA, the concept
includes any association, the majority of whose members are HDSAs as well as
juristic persons if HDSAs own and control the majority of the shares and control
the majority of the shareholders votes. The Mineral and Petroleum Resources
Development Amendment Bill, 2013 to the MPRDA (the Amendment Bill) was
approved by the Parliamentary Portfolio Committee on Mineral Resources and by
the National Council of Provinces during March 2014, as well as by the national
parliament during April 2014. The Amendment Bill was returned to Parliament by
the President due to concerns over the constitutionality of various provisions.
Minor amendments have been made to the Amendment Bill which as again been
approved by the National Assembly and is being further debated in the National
Council of Provinces. It is uncertain whether the Amendment Bill in its current
form will be assented to by the President. In the event the Amendment Bill is
passed in its current form, it will, among other things, amend the term HDSA to
refer to South African citizens, a category of persons or a community,
disadvantaged by unfair discrimination before the Constitution came into
operation which should be representative of the demographics of the country. In
addition, the Amendment Bill will amend the definition of the MPRDA to include
the Mining Charter, the Codes of Good Practice for the Minerals Industry (the
Mining Codes) and the Housing and Living Conditions Standards for
the Minerals Industry, 2009 (Standards), as discussed below. The
effect of the Amendment Bill will be to give the South African Minister of
Mineral Resources (the Minister) the authority to suspend or cancel
prospecting or mining rights in the event that the holder is in breach of the
Mining Charter, the Mining Codes or the Standards.

This concept and process to take legislative and other measures
to redress the results of past racial discrimination against black South
Africans is known in South Africa as broad-based black economic empowerment, or
BEE. The mining industry was one of many industries identified by the South
African government as requiring reform to bring about equitable benefit from
South Africas mineral industry to all South Africans and to promote local and
rural development and social upliftment of communities affected by mining.

The regulatory regime governing the South African mining
industry has therefore fundamentally changed over the past decade. Legislation
governing mining and BEE within the mining sector includes, among other laws,
the MPRDA, the Mining Codes and the Standards pursuant to the MPRDA, the Mining
Charter, the Mining Charter Scorecard and the Mining Titles Registration Act
No. 16 of 1967 (as amended). The aforementioned legislation, however, is
industry specific and the generic BEE regulatory framework in South Africa is
regulated in terms of the Broad-Based Black Economic Empowerment Act, 2003 (the
BEE Act), which sets outs the South African governments policy in respect of
the promotion of BEE. The BEE Act also permits the Minster of Trade and Industry
to publish generic BEE Codes of Good Practice (Generic BEE Codes),
being codes of good practice that address, among other things, the indicators to
measure BEE and the weightings to be attached to such indicators.

The Generic BEE Codes were originally published in 2007 and set
out seven indicators or elements in terms of which BEE compliance is measured.
Each element has a scorecard in terms of which various sub-elements are set out,
together with a target for compliance with each sub-element and a corresponding
number of weighting points. An entitys BEE compliance is measured in terms of
each of these scorecards and the aggregate score will then determine that
entitys BEE compliance level. Independent BEE verification agencies are
authorized to verify an entitys compliance and provide it with a verification
certificate which will set out its score and confirm its BEE compliance level.
The seven elements of BEE compliance set out in the original Generic BEE Codes
are ownership (which measures the extent to which black people own the measured
entity), management control (which measures the extent to which black people form part of the board of
directors and top management of the entity), employment equity (which measures
the extent to which black people are employed with the various management levels
of the entity), skills development (which measures the extent to which the
entity has undertaken skills training for the benefit of its black employees),
preferential procurement (which measures the extent to which the entity procures
goods and services from BEE compliant and black-owned companies), enterprise
development (which measures the extent to which the entity has contributed
towards the development of black-owned or BEE compliant companies), and
socio-economic development (which measures the extent to which the entity has
contributed towards the economic development of black people).

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The original Generic BEE Codes were amended on October 11, 2013
and such amendments became effective from May 1, 2015. Generally-speaking the
amended Generic BEE Codes seek to make BEE compliance more onerous to achieve.
The total number of points required to achieve certain levels of BEE compliance
have been increased. The elements of management control and employment equity
have been consolidated into a single element referred to only as management
control, and the elements of preferential procurement and enterprise development
have been consolidated into a single element referred to as supplier and
enterprise development. The elements of ownership, skills development and
supplier and enterprise development are classified as priority elements to which
minimum thresholds of compliance attach and subjects an entity to a penalty of a
reduction in its BEE compliance status by one level if the entity fails to
achieve any of such minimum thresholds.

In addition, the BEE Act has recently been amended by The
Broad-Based Black Economic Empowerment Amendment Act, No. 46 of 2013 (the
BEE Amendment Act), which came into operation on October 24, 2014.

The provisions of the new section 3(2) set out in the BEE
Amendment Act states that in the event of any conflict between this Act and
any other law in force immediately prior to the date of commencement of the
Broad-Based Black Economic Empowerment Act, 2013, this Act prevails if the
conflict specifically relates to a matter dealt with in this Act (the
Trumping Provision). The BEE Amendment Act provides that section 3(2)
will come into effect one year after the date on which the President proclaims
the BEE Amendment Act into law and therefore became operative on October 24,
2015. However, on October 30, 2015 the Minister of Trade and Industry exempted
the DMR from applying the BEE Trumping Provision until October 31, 2016 on the
basis that the alignment of the Mining Charter with the BEE Act and the BEE
Codes is still ongoing. The DMR has sought an extension of this exemption until
December 31, 2016.

The new section 10(1)(a) set out in the BEE Amendment Act
provides that every organ of state and public entity must apply any relevant
code of good practice issued in terms of this Act in determining qualification
criteria for the issuing of licences, concessions or other authorizations in
respect of economic activity in terms of any law. This will require all
governmental bodies to apply the Generic BEE Codes or other relevant codes of
good practice when procuring goods or services or issuing licenses or other
authorizations under any other laws, and to penalize fronting or
misrepresentation of BEE information.

The provisions of section 3(2) and 10(1)(a) indicate that the
DMR would be obliged to apply the provisions of the BEE Act and of any BEE code
of good practice gazetted in terms of the BEE Act when issuing rights,
permissions or permits in terms of the MPRDA in the future.

A code of good practice refers to the Generic BEE Codes or any
sector-specific code of good practice which has been developed and gazetted in
terms of the provisions of the BEE Act after consultation with the relevant
industry stakeholders and the Department of Trade and Industry. It does not
include the Mining Charter. The implications of the above provisions of the BEE
Amendment Act are that unless a mining sector code is developed and gazetted, or
unless a further exemption is granted by Ministers of Trade and Industry, prior
to 1 November 2016, the DMR would not be entitled to apply the Mining Charter
when issuing rights, permissions or permits (after commencement of the
abovementioned sections of the BEE Amendment Act) and would be required to apply
the Generic BEE Codes. While the target for ownership under the Generic BEE
Codes is the same as in the Mining Charter i.e. 26%, the remaining elements in
terms of which BEE compliance is measured are materially different from those
set out in the Mining Charter. In addition, the extent of BEE compliance is
determined under the Generic BEE Codes with reference to an entitys overall
score and corresponding BEE compliance level, and the Mining Charters scorecard
does not contain the same methodology. Thus, if the Generic BEE Codes were to
apply to the mining industry, it would place the industry at a
disadvantage and create uncertainty. The DMR and industry bodies are aware of
the implications of the Trumping Provision and are likely to address this in the
near future.

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The new section 10(2)(a) set out in the BEE Amendment Act
provides that the Minister may, after consultation with the relevant organ
of state or public entity, exempt the organ of state or public entity from a
requirement contained in subsection (1) or allow a deviation therefrom if
particular objectively verifiable facts or circumstances applicable to the organ
of state or public entity necessitate a deviation. Such an exemption or
deviation is required to be published in the government gazette. It seems
possible but it is not certain whether the DMR could apply for such an exemption
in respect of the mining industry.

It is important to bear in mind that none of the Mining
Charter, the Mining Charter Scorecard or the Mining Codes are drafted as
legislative documents. They are instruments of policy and as such are frequently
ambiguous, loosely worded and difficult to interpret with precision.

The MPRDA seeks to facilitate participation by HDSAs in mining
ventures. Complying with the HDSA regime is a prerequisite for being granted and
maintaining prospecting and mining rights. Every application for a mining right
under the MPRDA must demonstrate that the granting of such right will:

substantially and meaningfully expand opportunities for HDSAs,
including women, to enter the mineral and petroleum industry in order to benefit
from the exploitation of the nations mineral and petroleum resources; and promote employment and advance the social and economic welfare
of all South Africans.

The Mining Charter

The original mining charter was developed to give substance and
guidance to the empowerment provisions under the Mining Charter, which came into
effect on August 13, 2004. The Mining Charter set out a number of targets which
were to be achieved by mining companies by 2009 and 2014. Among other targets,
mining companies had to achieve a 15% HDSA ownership by 2009 and a 26% HDSA
ownership by 2014. Ownership relates to ownership of mining assets, whether
through the holding of equity, partnership, joint venture or direct holding. On
July 14, 2004, the (then) Department of Minerals and Energy released a
clarification document (Clarification Document) to provide policy
guidance on the interpretation and implementation of the MPRDA and the Mining
Charter. This document was intended to clarify the BEE requirements for unused
mining or prospecting licenses and pending prospecting right applications.
However, the Clarification Document concluded by stating that all other
applications for rights not mentioned in the Clarification Document and in the
custodianship of the state will be subject to a minimum of 26% BEE
participation. Consequently, and as a matter of policy, the DMR required and
continues to require a minimum 26% HDSA ownership for the grant of all new
mining right applications.

Notwithstanding the uncertainties in BEE legislation applicable
to mining companies with regard to the measurement of HDSA ownership, it is
accepted practice (as confirmed in section 2.1.2 of the Mining Codes) that the
so-called flow-through and modified flow-through principles are applicable to
the calculation of indirectly held HDSA interests (i.e. where there is partial
HDSA ownership in a corporate structure above the level of the company holding
the prospecting or mining right). In terms of the flow-through principle, the
level of indirect ownership, proportionally reduced to reflect partial HDSA
shareholding in intermediate companies, would be calculated to determine the
proportional indirect HDSA shareholding in the company holding the right. Under
the modified flow-through principle, a company with more than 50% HDSA ownership
(defined as a HDSA Company in the Mining Charter) may, at any one level in a
corporate structure, attribute 100% HDSA ownership to that company for the
purposes of applying the flow-through principle.

On September 13, 2010, the current Mining Charter came into
effect setting targets (some of which remain the same as those in the previous
mining charter) to be achieved by mining companies by December 31, 2014 (the
implementation of which needs to be reported to the DMR by mining companies in
2015), which targets include:

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Ownership: this entails 26% meaningful economic participation
by HDSAs and 26% full shareholder rights for HDSAs. The Mining Charter refers to
BEE entities as opposed to HDSA companies but retains the 26% ownership target.

Housing and living conditions: occupancy rate of employee
accommodations of one person per room and all conversion of employee hostels
must be fully achieved.

Procurement and enterprise development: a minimum procurement of 40% of capital goods, 70% of services
and 50% of consumer goods from BEE entities; and ensure that multinational suppliers of capital goods contribute
at least 0.5% of their annual income generated from local mining companies
towards a fund for the purposes of socio- economic development of local
communities.

Employment equity: 40% HDSA participation at Board level, at
executive committee level, in middle management, in junior management and 40%
HDSA participation within core skills.

Human resource development: 5% human resource development
expenditure focused on HDSAs as a percentage of total annual payroll.

Mine community development: implementation of approved
community projects.

Sustainable development and growth:

implementation of approved EMP measured annually against the
approved plans;

implementation of action plans on health and safety measured
annually against the approved plans; and

utilization of South African based research facilities for the
analysis of all South African sourced mineral samples.

Beneficiation: contribute a percentage of additional production
volume towards local beneficiation of mineral commodities in accordance with the
beneficiation strategy introduced pursuant to the terms of section 26 of the
MPRDA. No such strategy has yet been finalized.

Reporting: submission of annual reports to the DMR in respect
of compliance with the Mining Charter.

The Mining Charter includes targets, measures and weightings by
which mining right holders are assessed against the obligations according to the
Mining Charter Scorecard. Failure of a company to meet its obligations in
relation to the Mining Charter could lead to the suspension or cancellation of
its New Order Rights and could have a negative impact on applications for New
Order Rights.

New Order Mining and Prospecting Rights Under the MPRDA

All of the Companys prospecting and mining rights are
so-called new order rights (i.e. rights granted under the MPRDA) as opposed to
old order rights, being rights granted under pre-MPRDA legislation. Under the
MPRDA, mining companies operating in South Africa were required to apply for
conversion of old order rights into new order prospecting and mining rights
issued by the South African state in terms of the MPRDA. New order rights in
respect of mining are granted for a maximum period of 30 years, with renewals of
up to 30 years at a time. Prospecting rights are valid for a period of five
years, with one renewal of up to three years. Furthermore, the MPRDA provides
for a retention period after prospecting of up to three years with one renewal
of up to two years, subject to certain conditions. The holder of a prospecting
right granted under the MPRDA has the exclusive right to apply for and, subject
to compliance with the requirements of the MPRDA, to be granted, a mining right
in respect of the prospecting area in question.

The new order rights are transferable only with the approval of
the Minister and are subject to various terms and conditions, including
commencement of operations within specified periods, maintenance of continuing and active operations and compliance with work
programs, social and labour plans, EMPs and empowerment requirements.

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New order rights can be suspended or cancelled by the Minister
if a holder has breached its obligations under the terms of the rights and has
failed to remedy such breach after written notice of the breach from the
Minister and after being given an opportunity to respond. In addition, mining
rights could potentially be cancelled for non-compliance with the Mining
Charter.

Resource Nationalism

The concept of resource nationalism encompasses a range of
measures, such as expropriation or taxation, whereby governments increase their
economic interest in corporate entities exploiting natural resources, with or
without compensation. The current South African government has publically stated
that it does not intend to nationalize the mining industry.

At its 53rd national conference in December 2012, the ANC
debated its previously commissioned State Intervention in the Minerals Sector
report (SIMS Report), and wholesale nationalization was rejected. It was
resolved that state intervention in the economy would focus on beneficiation.
Strategic minerals, which include platinum group metals, coal and iron ore, will
be identified and special public policy measures may be put in place. Further
state interventions could include state ownership through the state mining
company, and mineral resource rents through the imposition of new taxes or a
super-profits tax.

Environment

South Africa has a comprehensive and constantly evolving
environmental regulatory framework, particularly relating to mining. The
Constitution entrenches the right to an environment that is not harmful to human
health or well-being and imposes a duty to protect the environment for the
benefit of present and future generations through reasonable legislative and
other measures. The Constitution and NEMA, as well as various other related
laws, grant legal standing to a wide range of people and interest groups to
bring legal proceedings to enforce their environmental rights, such that claims
can be made against private and public entities as well as the South African
government.

Environmental impacts of mineral resource operations (including
prospecting and mining of mineral resources and exploration and production of
petroleum) are, at present, primarily regulated by four pieces of legislation,
namely, the MPRDA, NEMA, the Waste Act and the NWA.

South African environmental law is largely permit-based and
requires businesses whose operations may have an environmental impact to obtain
licenses and authorizations from the DMR and the DWS for those operations. These
typically contain conditions that may be reviewed periodically to make the
environmental standards which the holder is required to meet more stringent.
Environmental legislation also stipulates general compliance requirements. It
incorporates a polluter pays principle and also imposes a duty on a group of
specified parties wider than the actual polluter to take reasonable measures to
assess and address pollution (even that which was authorized by law). This duty
is retrospective in its application. A failure to take such measures may result
in governmental authorities taking measures against, and recovering costs from,
a wider range of parties than the one on whom the duty primarily rests. This
latter group includes a successor in title to a person, a lender or a
shareholder of a company, who caused the pollution, although this potential
liability has not yet been considered by South African courts.

NEMA provides for the appointment of Environmental Management
Inspectors and Environmental Mineral Resource Inspectors at the Department of
Environmental Affairs and DMR respectively. These inspectors have wide-ranging
powers and can undertake both announced and unannounced inspections and
investigations. Criminal prosecutions have been initiated and enforcement
notices issued following a number of these inspections.

Under NEMA, it is a criminal offence for any person unlawfully
and intentionally or negligently to commit any act or omission which causes, has
caused or is likely to cause significant environmental pollution or degradation
or unlawfully and intentionally or negligently commit any act or omission which
detrimentally affects or is likely to affect the environment in a significant
manner. A maximum criminal fine of up to Rand 10 million and/or a prison term of
up to ten years may be imposed for such an offence.

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Directives or compliance notices can also be issued under NEMA,
the MPRDA or the NWA for the temporary or permanent shut down of facilities at a
mining operation or the entire mining operation. Directors and certain employees
can also be held criminally liable in their personal capacity under NEMA.

The environmental regulation of mining underwent a recent
transition. When the transition is complete, NEMA is now the primary
environmental legislation regulating mining and not the MPRDA. Due to this
transition, the majority of the MPRDA's environmental regulation provisions were
deleted (Pre MPRDA Amendment Act Environmental Provisions) and the
National Environmental Management Laws Amendment Act, No. 25 of 2014
(NEMLAA) introduced specific provisions regulating mining into NEMA.
The Minister of Mineral Resources has however retained the bulk of his
environmental regulation competencies under the NEMLAA's amendments, to be
undertaken in accordance with NEMA. This transition has created some gaps which
include that not all of the necessary amendments have yet commenced under the
MPRDA and the necessary regulations under NEMA are outstanding.

Under the Pre-MPRDA Amendment Act Environmental Provisions,
before 8 December 2014, environmental management plans and environmental
management programmes (EMPs) were required to be approved by the
relevant delegated authority at the DMR before a prospecting right or mining
right respectively became effective.

In addition to requiring that an EMP be approved under the
MPRDA, an environmental authorisation was required for certain activities that
are incidental to mining, listed in a series of Environmental Impact Assessment
(EIA) Regulations published under the NEMA. This includes vegetation
clearance; construction of roads, facilities in proximity to a watercourse and
facilities that may cause pollution; and storage of dangerous goods, where the
activities exceeded specified thresholds (Listed Activities). An
environmental authorization was not required for mining or prospecting
activities.

This position changed on 8 December 2014 when the 2015 EIA
Regulations commenced under NEMA, replacing the 2010 EIA Regulations. Mining and
prospecting activities that commenced after this date required an EA, as do
associated infrastructure, structures and earthworks directly related to the
prospecting and extraction of a mineral resource.

There are presently no provisions in force in the MPRDA or NEMA
deeming EMPs approved under the MPRDA to be EAs issued under the NEMA, which
creates gaps in relation to the obligations of mineral right holders with an
approved EMP. Certain 2013 amendments to the MPRDA (following the implementation
of the Mineral and Petroleum Resources Development Act No. 49 of 2008
(MPRDA Amendment Act, 2008)) introduced a deeming provision however it
has not yet commenced. This provision provides that an EMP approved under the
MPRDA before and at the time of the NEMA coming into force will be deemed to
have been approved and an environmental authorization issued in terms of NEMA.
The Amendment Bill proposes to amend the MPRDA Amendment Act, 2008's deeming
provision to correct the incorrect reference of the NEMA to the NEMLAA. The
Amendment Bill has however not yet been enacted into law. There are also no
transitional provisions deeming approvals to EMP applications that were
submitted before NEMLAA and approved after NEMLLA to be deemed to be EAs. This
has created the situation where applicants for mineral rights are now required
to submit an application for an environmental authorization, despite an
application for EMP approval being previously submitted.

NEMA requires an environmental authorization before Listed
Activities commence and it is a criminal offence to commence such Listed
Activity without the required EA. A person who has commenced a Listed Activity
without an EA may apply for rectification of this state of affairs but would be
required to pay a maximum administrative fine of R5 million, and may face
criminal penalties.

Under the NWA, water cannot be owned, but is instead held in
trust for the people of South Africa under the States custodianship.
authorization water use licence is required to undertake certain water uses
specified in the NWA. This includes water storage, abstraction, disposal of
waste water into the environment, dewatering a mine; and impacting on
watercourse's flow. Generally, large scale water users, such as mines, are
required to either apply for water use licenses or, in certain cases, only to
register water uses if small water volumes are abstracted or stored or the
impacts to watercourses are low. In certain instances an entity may continue
with a water use that was conducted lawfully prior to 1998 under the predecessor to the NWA, the Water Act, No. 54
of 1956, without the requirement for a water use license. A water use
without the required water use licence is considered unlawful.

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Regulations published under the NWA regulate water use in
relation to mining activities, providing for limitations on the location of
mining infrastructure and requirements for separation of dirty and clean water
systems. If a water use or water management is deemed unlawful, the DWS may
issue administrative directives to enforce the NWAs provisions or stop the
unlawful water use. Criminal proceedings can also be instituted. Penalties for
offenses include a maximum fine and/or imprisonment of Rand 200,000 and five
years, respectively. Upon a second conviction, the maximum fine and/or
imprisonment are Rand 400,000 and ten years, respectively. While significant
progress has been made by the DWS in processing pending water use license
applications, a backlog remains.

The National Environmental Management Air Quality Act No. 39
of 2004 (AQA) regulates air pollution in South Africa and prohibits
the undertaking of activities listed under AQA, including certain mining related
and processing activities, without an atmospheric emission license. Minimum
emission standards have been set for each listed activity. Facilities that were
operational before these regulations came into force were afforded a "grace
period" within which to comply with the more stringent air emission standards
contained in the Regulations until 2015. If a facility did not comply with the
2015 air emission standards, upgrading of the facilities was necessary. Such
facilities will need to comply with even more stringent air emission standards
from 2020. Additional upgrades may also be required before 2020 to comply with
the 2020 air emission standards. Alternatively an application to postpone the
time period for compliance with air emission standards may be possible but the
grant of any postponement cannot be guaranteed.

The Waste Act regulates the storage, treatment, recycling and
disposal of waste, among other things, including waste generated by the mining
sector. The provisions of the Waste Act are also relevant generally to the
Companys operations. Waste management licences are required for certain waste
management activities, dependent on certain thresholds in relation to the waste.
Under recent amendments to Regulations published under the Waste Act, waste
management licenses are no longer required for waste storage however such
activities must comply with certain norms and standards. Residue stockpiles and
deposits relating to prospecting, mining, exploration or production activities
regulated under the MPRDA were previously exempt from the Waste Act. This has
been changed by recent amendments under theNEMLAA and waste management
licenses will now be required from the Minister for residue stockpiles and
deposits from September 2, 2014, if they constitute waste and if they fall
above the thresholds for which a waste management license is required, unless an
entity lawfully conducted these activities prior to September 2, 2014.

Both the MPRDA and NEMA have provisions regulating
rehabilitation and closure, which are not entirely consistent. The MPRDA
provides that a mineral right holder remains liable for any environmental
liability, pollution, ecological degradation, the pumping and treatment of
extraneous water, compliance to the conditions of the environmental
authorisation and the management and sustainable closure of a mine, until the
Minister of Mineral Resources has issued a closure certificate
(Rehabilitation and Closure Liability). NEMA provides that a mineral
right holder remains responsible for Rehabilitation and Closure Liability
notwithstanding the issue of a closure certificate.

Under the MPRDA, when the Minister issues a closure
certificate, he may retain any portion of such financial provision for latent
and residual safety, health or environmental impact which may become known in
the future. The power of the Minister to retain a portion of financial provision
is discretionary under the MPRDA.

The Pre-MPRDA Amendment Act Environmental Provisions required
that financial provision for environment rehabilitation and closure costs must
be provided by an applicant for a mineral right prior to the approval of an EMP.
NEMA now requires that this financial provision must be made prior to the
issuing of an EA under NEMA.

New Financial Provision Regulations in regard to rehabilitation
were published under NEMA in December 2015, which have been highly contentious
due to gaps and contradictions with the Income Tax Act No. 58 of 1962;
MPRDA and NEMA. They will require a substantial increase in financial provision
required for rehabilitation, as they are far more onerous and now require
financial provision to be provided for annual rehabilitation and, more
significantly, the remediation of latent or residual environmental impacts which
may become known in the future including the pumping and treatment of polluted
or extraneous water (Future Rehabilitation). The Chamber of Mines has
stated that the Financial Provision Regulations could have a crippling effect on
the mining industry. The Financial Provision Regulations are the subject of a
recent High Court application for an order clarifying their legality and/or
meaning. Proposed amendments were published to the Financial Provision
Regulations very shortly after the institution of this High Court application
which, if enacted into law, may resolve some of the gaps and contradictions.
Existing holders of mineral rights were required to align their financial
provision approved under the MPRDA with the Financial Provision Regulations by
mid-2017. This has recently been extended until mid-2019. Applicants for new
mineral rights are however still required to provide financial provision in
terms of the Financial Provision Regulations. This includes that a trust fund
must be established for Future Rehabilitation and the contributions into the
trust fund must be ceded to the DMR on mine closure. This required cession is
contradictory to the Minister's discretion in the MPRDA to retain a portion of
the financial provision.

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A mining or prospecting right can be suspended or cancelled
under the MPRDA if there is non-compliance with environmental legislation.

In April 2012, Maseve posted an environmental rehabilitation
guarantee of Rand 58.5 million (approximately C$6.0 million at the time) as a
requirement of Maseves mining right application. In October 2012, Maseve
entered into an agreement with a third party insurer whereby a bond would be
posted to the credit of the DMR against the Companys Rand 58.5 million
environmental guarantee for its mining right and the Companys posted guarantee
would be released back to the Company. The process was completed in fiscal 2013
and the posted guarantee has been returned to the Company. As a term of the
agreement with the third party insurer, in October 2012, Maseve posted Rand 12
million on deposit with the Standard Bank of South Africa against its
environmental guarantee obligation and will make further annual deposits of
approximately Rand 12 million per annum until the full amount of the
environmental guarantee is returned and the third party arrangement will be
wound up or renewed at Maseves election. Interest on deposits will accrue to
Maseve and Maseve will pay an annual fee of approximately Rand 600,000 to the
insurer.

Mine Safety

Mine safety in South Africa is governed by the MHSA, which is
enforced by the Inspectorate of Mine Health and Safety, a part of the DMR. The
reporting provisions of the MHSA are aligned with the International Labour
Organizations Code of Practice on Recording and Notification of Occupational
Accidents and Diseases. Under the MHSA, the Company is obligated, among other
things, to ensure, as far as reasonably practicable, that the Companys mines
are designed, constructed and equipped to provide conditions for safe operation
and a healthy working environment and the mines are commissioned, operated,
maintained and decommissioned in such a way that employees can perform their
work without endangering their health and safety or that of any other person.
The Company is also obliged to ensure, as far as reasonably practicable, that
persons who are not employees, but who may be directly affected by the Companys
mining activities are not exposed to any hazards relating to their health and
safety. The MHSA also permits mine inspectors to issue safety compliance notices
to mines under section 55 of the MHSA and, should the inspectors feel that the
action is warranted, to temporarily close part or all of the operations under
powers conferred by section 54 of the MHSA, pending compliance with the
directives issued under the compliance notice.

An employer who has been instructed to temporarily close a mine
or any part thereof in a section 54 notice has the remedy of approaching the
Labour Court for urgent relief to suspend the operation of the section 54 notice
until a review application to set aside that notice is determined by the Labour
Court.

The Mine Health and Safety Amendment Act, No. 74 of
2008, which came into effect on May 30, 2009, criminalizes violations of the
MHSA, increases the maximum fines to Rand 1 million per occurrence and creates
the possibility that mining licenses could be revoked for continued safety
violations. A number of guidelines on the implementation of mandatory codes of
practice under sections 9(2) and 9(3) of the MHSA have been issued by the Chief
Inspector of Mines and govern the provision of personal protective equipment for
women in the SA Mining Industry; trackless mobile machines; cyanide management;
underground rail bound equipment; conveyor belt installation for transport of
mineral, material or personnel; and risk-based fatigue management.

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Royalty Payments

The Royalty Act, imposes a royalty on the first transfer of
refined or unrefined minerals, payable to the state, calculated on the actual or
deemed gross sales amount at the statutorily determined saleable condition (i.e.
whether the mineral is in a refined or unrefined condition as determined in
accordance with Schedule 1 and 2, respectively, of the Royalty Act).

The royalty rate in respect of refined minerals is calculated
by dividing earnings before interest and taxes, or EBIT (as defined for
purposes of the Royalty Act), by the product of 12.5 times gross revenue,
calculated as a percentage, plus an additional 0.5% . EBIT refers to the taxable
mining income of the holder of the right (with certain exceptions such as no
deduction for interest payable and foreign exchange losses) before assessed
losses but after capital expenditure. There is also an arms length adjustment,
where applicable. A maximum royalty rate of 5% of revenue applies to refined
minerals.

The royalty rate in respect of unrefined minerals is calculated
by dividing EBIT by the product of nine times gross revenue, calculated as a
percentage, plus an additional 0.5% . A maximum royalty rate of 7% applies to
unrefined minerals.

Mining Taxation Review

In the 2013 Budget Speech, the Minister of Finance announced
that the mineral and petroleum royalty regime has broadened the South African
tax base and allowed for increased revenue during periods of high commodity
prices, while providing relief to marginal mines when commodity prices and
profitability are low. The broader review of the South African tax system will
consider whether this approach is sufficiently robust and assess what the most
appropriate mining tax regime is to ensure that South Africa remains a
competitive investment destination.

To give effect to announcements made by the Minister of Finance
in his 2013 budget speech, the Davis Tax Committee was established to assess
South Africas tax policy framework and its role in supporting the objectives of
inclusive growth, employment, development and fiscal sustainability. The Terms
of Reference of the Davis Tax Committee includes a review of the current mining
tax regime. The Davis Tax Committee submitted its First Interim Report on Mining
on 1 July 2015 and made various recommendations, including that:

| |  | the mining corporate income tax regime be aligned with
      the tax system applicable to other taxpaying sectors generally, leaving
      the royalty system to respond to the non-renewable nature of mineral
      resources; and             
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                  
| |  | the upfront capital expenditure write-off regime be
      discontinued and replaced with an accelerated capital expenditure
      depreciation regime in parity with the write-off periods provided for in
      respect of manufacturing assets.

These recommendations are still under consideration by the
South African government.

Exchange Control

South African law provides for Exchange Control which, among
other things, regulates the flow of capital from the Common Monetary Area of
South Africa, Lesotho and Swaziland (CMA). The Currency and
Exchanges Act, No. 9 of 1933 empowers the President of South Africa to make
regulations in regard to any matter directly or indirectly relating to currency,
banking or exchanges. The Minister of Finance is responsible for all matters
regarding exchange control policy, and certain of these powers and functions
have been delegated to the South African Reserve Bank, more specifically the
Financial Surveillance Department.

The Exchange Control Regulations, which are administered by the
Financial Surveillance Department are applied throughout the CMA and regulate
transactions involving South African exchange control residents, including
companies. The basic purpose of the Exchange Control Regulations is to mitigate
the negative effects caused by a decline of foreign capital reserves in South
Africa, which may result in the devaluation of the Rand against other
currencies. It is the stated objective of the authorities to achieve equality of
treatment between residents and non-residents for exchange control purposes as
it relates to inflows and outflows of capital. While the South African
government has relaxed exchange controls in recent years, the Company expects current exchange
controls to remain in place for the foreseeable future.

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The Company is subject to various forms of such controls. The
Company is generally not permitted to export capital from South Africa, hold
foreign currency, incur indebtedness denominated in foreign currencies or
acquire an interest in a foreign venture without the approval of the relevant
South African exchange control authorities.

However, there are no exchange control restrictions between the
members of the CMA as they form a single exchange control territory. Lesotho,
Namibia and Swaziland have their own exchange control authorities as well as
their own acts or regulations and rulings but in terms of the Common Monetary
Area Agreement, their application must be at least as strict as that of South
Africa. Accordingly the Company will not require the approval of the Financial
Surveillance Department for investments and transfers of funds from South Africa
to other CMA countries.

Carbon Tax/Climate Change Policies

After having published a number of papers on the introduction
of a carbon tax, the South African government released the draft Carbon Tax Bill
in November 2015 for comment by interested parties. Greenhouse gas emissions
from the combustion of fossil fuels, fugitive emissions in respect of
commodities, fuel or technology, and greenhouse gas emissions from industrial
processes and product use will be subject to a carbon tax. During the first
phase of implementation (ending 2020), it is proposed that the emission of
greenhouse gasses be taxed at R120 per tonne of the carbon dioxide equivalent of
the greenhouse gas emitted, which rate is expected to increase by 10% per annum.
Emission factors will be used in order to calculate the carbon dioxide
equivalent of the greenhouse gasses emitted. Various allowances will be
available for taxpayers to reduce their final carbon tax liability by up to a
maximum of 95%. On June 20, 2016, the South African government also released the
draft regulations in respect of the carbon offset allowance. Taxpayers can
qualify for a carbon offset allowance un to a maximum of 10%. The carbon offset
allowance will not enable a taxpayer to reduce its final carbon tax liability
beyond the maximum of 95%. When the tax-free thresholds are taken into account,
the effective tax rate will be between R6 and R48 per tonne of carbon dioxide.
Schedule 2 to the draft Carbon Tax Bill lists the sectors and industries in
which taxpayers will be liable for carbon tax. Mining companies will generally
fall within these sectors. The Minister of Environmental Affairs will publish a
notice indicating which activities will render a person liable for the carbon
tax. The agricultural, forestry and waste sectors will initially be excluded. .
The draft Carbon Tax Bill is silent on the second phase post 2020, but it is
generally expected to result in a further gradual ramp-up of the carbon tax. The
rate and allowances will be reviewed for the second phase of implementation
(after 2020). It is expected that the final legislation will come into operation
some time during 2017, but further postponements are possible.

South African Companies Act

The Companys South African subsidiaries are subject to the
South African Companies Act, No. 71 of 2008 (Companies Act)
which came into force on May 1, 2011. The aim of the Companies Act is to
modernize company law in South Africa so that it is comparable with leading
jurisdictions around the world.

The Companies Act has introduced numerous new legal concepts
into South African company law, and there are therefore some areas of
uncertainty in the application and implementation of the Companies Act in these
early stages of its existence. Various compliance obligations have been brought
about for companies and their boards, including a requirement to ensure that a
companys constitutional documents are aligned with the Companies Act, and that
any shareholders agreements that are in place are aligned with the companys
memorandum of incorporation and the Companies Act. There was essentially a
two-year grace period for such alignment process to take place, in that,
subject to certain exceptions, for two years after the commencement date of the
Companies Act (May 1, 2011), a pre-existing companys shareholders agreement
and/or constitutional documents would have prevailed in the case of any
inconsistency with the Companies Act. The position currently, after the lapse of
the grace period, is that a companys memorandum of incorporation
prevails over the shareholders' agreement and the Companies Act in turn prevails
over both. Although not peremptory, the Company has registered new memoranda of
incorporation for the Companys South African subsidiaries.

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The Companies Act also requires that certain categories of
companies have in place certain committees, namely audit committees (for all
public and state owned companies) and social and ethics committees (for all
listed public companies and state owned companies as well as other companies
that reach a certain public interest score in terms of the Companies
Regulations, 2011). The public interest score takes into account the number of
shareholders and employees of the company, as well as the amount of the
companys debt and annual turnover.

Failure to comply with the Companies Act can lead to compliance
notices being issued by the CIPC, administrative fines and civil liability for
damages caused by non-compliance. The Companys South African subsidiaries may
also be liable under the Companies Act to any other person for any loss or
damage suffered by that person as a result of the Companys subsidiarys
non-compliance with the Companies Act.

The Companies Act extends shareholders rights and recourse
against companies and directors. Also, directors, prescribed officers and
committee members will now face more extensive and stricter grounds for personal
liability for their actions in carrying out their functions within the company
than was the case under the previous regime. The Companies Act introduces class
action suits against companies, directors and company officers by persons whose
rights are affected by the company. Companies will thus face a greater risk of
litigation and the costs thereof. Minority shareholders rights in the context
of mergers and other fundamental transactions have also been increased
substantially, such as the introduction of appraisal rights and the ability to
set aside and review special resolutions approving such transactions. This could
result in the hindrance of such transactions.

The Companies Act has also introduced fairly extensive
regulation of financial assistance given among related and inter related
companies, in that there must be shareholder approval, compliance with solvency
and liquidity tests, and fairness and reasonableness in relation to such
financial assistance. This for instance affects intra group loan and security
arrangements, as well transactions with third parties where guarantees or other
security within a group of companies is given. This affects financial assistance
given by South African companies, and would accordingly affect financial
assistance given by South African companies to non-South African related
entities.

The Companies Act prohibits companies from creating any further
par value shares. If a company wishes to increase its share capital, it will
have to convert all of its pre-existing par value shares into shares of no par
value. The revenue authorities have issued a ruling with respect to the tax
treatment of such conversions to the effect that such conversions shall not be
viewed as disposals. This may become relevant in respect of the Companys
South African subsidiaries should their share capital be required to be
increased at any stage for whatever reason.

An important innovation of the Companies Act is that of
business rescue, which is modelled to some extent on the United States Chapter
11 bankruptcy procedures. Business rescue is a largely non-judicial, commercial
process that aims to rescue a financially distressed company and maximize the
likelihood of the companys continued existence on a solvent basis.

Companies in South Africa can be deregistered if they fail to
timeously lodge their annual returns. This means that the company ceases to
exist as a separate juristic person, and that all of its rights and assets
devolve to the state by operation of law. A companys registration can be
reinstated by application either to the CIPC or the High Court. Currently, under
the Companies Act there is uncertainty in the case-law around the exact legal
consequences of such reinstatement and whether the rights and assets
automatically re-vest, with retrospective effect, in the company. The Company
ensures that at all times the requisite filings and returns of its South African
subsidiaries with CIPC are up-to-date and thereby ensures that such subsidiaries
are not deregistered.

Land Use

While national and provincial laws and policies exist and may
be developed for land use planning (including the Spatial Planning and Land
Use Management Act, No. 16 of 2013, which has been assented to but is not yet in force), municipalities are
constitutionally empowered to regulate the effective administration of land use
planning within their respective jurisdictions. Land use regulation is primarily
implemented through restrictive conditions of title registered against the title
deeds of properties, zoning schemes which determine and administer land use
rights and the restrictions on such rights. The zoning schemes reflect all
permissible land use rights on properties within the municipalitys area of
jurisdiction. Deviations from the zoning scheme are only permissible upon
application for the necessary departure, land use consent or re-zoning
application as regulated by the applicable scheme.

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While previously it was in dispute whether municipal planning
had the power to regulate mining activities, April 2012 Constitutional Court
judgments in the cases of Maccsand (Proprietary) Limited v City of Cape Town
and Others and Minister for Mineral Resources v Swartland Municipality and
others confirmed that town planning approvals and consents are required for
mining activities. A High Court decision has indicated that such consents will
likewise be required for prospecting activities. The effect of these judgments
is that all mining and prospecting operations need to be conducted on land which
is appropriately zoned for mining or prospecting. Mining companies run the risk
of being interdicted from continuing with their operations pending a re-zoning
if the land on which they are operating is not appropriately zoned. The
practical implications of complying with these judgments are numerous. These
include that there may be different land uses on one property, particularly
where only prospecting is taking place. These implications will need to be
considered further by the Companys operations. This is further complicated by
the fact that there are several provincial land use planning laws for different
provinces.

In addition to statutory controls, certain private law rights
may also impact on land use planning in general. Zoning schemes are subject to
the real rights created by restrictive conditions of title. The implication is
that if zoning schemes permit a land use which is prohibited by a restrictive
condition of title, such condition will first have to be removed in terms of the
relevant legislation (Removal of Restrictions Act, No. 84 of 1967).
Servitudes may also impact on land use planning, for instance servitudes
registered in respect of infrastructure. Contravention of these real rights may
result in a demolition order being granted in respect of unlawful development.

Another aspect which requires consideration is who should apply
for such re-zoning. Although land owners would typically be the applicant, the
Companys operations are not always conducted on land which the Company owns.
Accordingly, the Company has been required to request amendments to zoning
schemes in municipalities in which the Company intends to prospect or mine and
has obtained rezoning permission in regard to the Maseve Mine.

Dealing in precious metals

All operations which acquire, refine, beneficiate, possess or
dispose of gold, any metals of the platinum group, or any ores of such metals,
are required to obtain authorisations to do so under the Precious Metals Act No.
37 of 2007. These authorisations include metal beneficiation licences, refining
licences and precious metals export approvals. Applications for such
authorisations must be made to the South African Diamond and Precious Metals
Regulator. Refining licences can be issued for up to 30 years, whilst precious
metals beneficiation licences can be issued for periods of up to ten years. The
issue of certain licences under the Precious Metals Act requires that the
applicant be complaint with the BEE provisions of the Mining Charter.

Land Claims

Under the Land Claims Act, as amended, any person who was
dispossessed of rights in land in South Africa after June 19, 1913 as a result
of past racially discriminatory laws or practices without payment of just and
equitable compensation is granted certain remedies and is entitled to redress.
Under the Land Claims Act, persons entitled to institute a land claim were
required to lodge their claims by December 31, 1998.

The Land Claims Act also entitles the South African Minister of
Rural Development and Land Reform to acquire ownership of land by way of
expropriation either for claimants who are entitled to restitution of land, or,
in respect of land over which no claim has been lodged but the acquisition of
which is directly related to or affected by such claim, will promote restitution
of land to claimants or alternative relief.

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Expropriation would be subject to provisions of legislation and
the Constitution, which provide, in general, for just and equitable
compensation.

The South African Minister of Rural Development and Land Reform
may not, however, restore land to a claimant without a court order or an
agreement being reached between the affected parties for the purposes of
achieving restitution.

The Restitution Amendment Act took effect on July 1, 2014. The
Restitution Amendment Act introduced significant amendments to the Land Claims
Act, most notably allowing for land claims by persons previously disposed of
land under apartheid laws to again be submitted, despite the previous cut-of
date having expired approximately 15 years ago. The new period for lodging
claims will be until June 30, 2019, which may arguably create a possible
resurgence of new restitution claims.

In order to substantiate a claim for restitution, a person is
required to demonstrate that:

he/she is a person or it is a deceased estate dispossessed of a
right in land after June 19, 1913, as a result of past racially discriminatory
laws or practices;

he/she is the direct descendant of a person referred to above
who has died without lodging a claim and has no ascendant who: (i) is a direct
descendant of a person referred to above and (ii) has lodged a claim for the
restitution of a right in land; or

it is a community or part of a community dispossessed of a
right in land after June 19, 1913, as a result of past racially discriminatory
laws or practices.

Under the Land Claims Act a successful claimant may be granted
either return of the dispossessed land (referred to as restoration) or
equitable redress (which includes the granting of an appropriate right in
alternative state-owned land; or payment of compensation). If restoration is
claimed, the Land Claims Act requires, inter alia, the feasibility of
such restoration to be considered. Under recent case law, restoration of land
may only be given in circumstances where a claimant can use the land
productively, with the feasibility of restoration being dependent on the costs.

The procedure for lodging a land claim is that a claim must be
lodged with the Land Claims Commissioner. The land claim will then be
investigated by the Land Claims Commissioner, after which the claim will be
published in the Government Gazette and in the media circulating nationally and
in the relevant province. The Land Claims Act provides that, if at any stage
during the course of the investigation of a land claim, it becomes evident that:

there are two or more competing claims in respect of the same
land (whether by communities or otherwise); or

the land that is subject to the claim is not state-owned land,
and the owner or holder of rights in such land is opposed to the claim; or

there is any other issue which might usefully be resolved
through mediation and negotiation,

the Chief Land Claims Commissioner may direct the parties
concerned to attempt to settle their dispute through mediation or negotiation.
It further provides that if, upon completion of an investigation of a land
claim, it is agreed that it is not possible to settle the claim by mediation or
negotiation, the claim may be referred to the Land Claims Court for final
determination.

Beneficiation

The beneficiation of mineral resources in South Africa is
regulated by three main pieces of legislation, namely the MPRDA, through section
26 thereof, the Precious Metals Act, No. 37 of 2005 and the Diamonds
Act, No. 58 of 1986 (as amended).

In addition to the legislative framework aimed at promoting
local beneficiation of minerals, the DMR has developed and adopted a
beneficiation strategy which identifies value chains for the purpose of
beneficiation of certain minerals in South Africa (which is also in line with
the developmental goals set-out in the National Development Plan adopted by the South African
government). The Mining Charter (as discussed above) also includes an incentive
for mining companies to offset the value of the level of beneficiation achieved
by the company against a portion of its HDSA ownership requirement, not
exceeding 11%, in an effort to promote local beneficiation.

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The legislation at the center of the initiation or promotion of
beneficiation of mineral resources is the MPRDA. Section 26 of the MPRDA
regulates the Ministers power to initiate and promote beneficiation of minerals
in South Africa. The term beneficiation was not defined by the MPRDA. The
MPRDA Amendment Act, 2008 introduced a definition for beneficiation, which will
again be amended by the Amendment Bill. The Amendment Bill defines beneficiation
as, "the transformation, value addition or downstream beneficiation of a
mineral and petroleum resource (or a combination of minerals) to a higher value
product, over baselines to be determined by the Minister, which can either be
consumed locally or exported". As the section currently reads, the Minister
may prescribe levels of beneficiation of a particular mineral should he
establish, on advice from the Minerals and Mining Board and consulting with the
Minister of Trade and Industry, that a particular mineral can be beneficiated
economically in South Africa. Further, a person who intends to beneficiate any
minerals mined in South Africa, outside of the country may only do so with the
written consent of and in consultation with the Minister.

The Amendment Bill, if signed into law in its present form,
will radically amend the current provisions of section 26. The Amendment Bill
will oblige the Minister to initiate the downstream beneficiation of minerals or
mineral products in South Africa by designating certain minerals or mineral
products for local beneficiation. The Amendment Bill refers to both designated
minerals and strategic minerals, however only the definition of designated
minerals is used in the body of the Amendment Bill. The term designated
minerals is used in the context of the promotion of local beneficiation of
minerals or mineral products in South Africa at prescribed levels in terms of
section 26. It is not clear how the term strategic minerals differs from
designated minerals, or in what context the Minister will be able to declare a
mineral as a "designated mineral" or a strategic mineral.

The Amendment Bill provides that the Minister must, in
consultation with Ministers of other national government departments, designate
certain minerals or mineral products for local beneficiation. However before
declaring a mineral or mineral product as a designated mineral for local
beneficiation, the Minister must take into consideration the national
developmental imperatives (such as macro-economic stability, energy security,
industrialization, food security and infrastructure development) of South Africa
and the advice of the Ministerial Council as contemplated by the new section 56B
of the Amendment Bill. Once the Minister deems a mineral or mineral product to
constitute a designated mineral for local beneficiation after completing the
aforesaid process, the Minister must designate such mineral or mineral product
in the Government Gazette as a designated mineral and further indicate that:

the conditions required to ensure security of supply of the
mineral or mineral product;

the percentage of the mineral or mineral product which must be
offered to local beneficiators; and

the prescribed quality, quantity and timelines at duration
which the mineral must be made available.

It would appear from section 21 of the Amendment Bill that
there is an obligation on the producer or mining company to make a percentage
(to be determined by regulations) of the designated mineral or mineral product
available to local beneficiators at an agreed price or a mine gate price.
Mine-gate price is defined as the price, excluding value added tax, of the
mineral at the time that it leaves the mine and excludes charges such as
transport and delivery charges from the mine or processing area to the local
beneficiator. The producer may also require Ministerial consent to sell the
mineral or mineral product on the export market. This uncertainty will need to
be clarified by regulation or by conditions imposed by the Minister in respect
of a designated mineral. There is however a risk that delays caused by this
approval process could further deter investment in the Company as investors
might be cautious to investing in the development of a mineral which could
potentially be restricted from export.

Labour Relations Act

The Constitution gives every person the right to fair labour
practices. The Labour Relations Act, No. 66 of 1995 (LRA) is the
principal legislation that gives effect to the framework in which employees,
employers and industrial relations at an individual and collective level are
regulated. As a premise the LRA regulates the manner in which employees, employers, trade unions and
employers organizations interact and engage with one another in the work place.
This includes processes related to collective bargaining, wage determination,
determination of terms and conditions of employment, the formulation of
industrial policy and employee participation in the decision-making processes.

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The LRA framework holistically is geared at the protection of
employee and employer rights through various structures. Principally the LRA
allows for the creation of trade unions and employers organizations. The extent
of entitlement of the trade union is subject to the size of its membership base.
Depending on the number of employees who are members of the trade union, the
trade union will be allowed access to the workplace, representation at the
workplace, to have meetings at the workplace and to access to information
concerned with the employment of the employees. To be entitled to enter into
collective agreements with the employer, the trade union must have as its
members the majority of the employees at the workplace. The LRA endorses a
co-operative approach whereby two or more trade unions can aggregate their
membership for the purposes of achieving majority status in a collective
bargaining unit or forum.

Collective agreements entered into between the trade union and
the employer will bind all employees employed by the employer, regardless of
their trade union affiliations, for the whole period of the agreement. The LRA
does not provide for a statutory duty to bargain collectively or otherwise, and
therefore such conduct is purely a voluntary decision.

At a greater level the LRA allows for the creation of
bargaining and statutory councils. Such councils can be established both for
more than one registered trade union or employers organization. Such councils
will be established per sector or area. Councils in this regard will, amongst
others, be entitled to conclude collective agreements and to engage in the
resolution of disputes.

If a dispute between the employer and employee arises the LRA
clearly delineates the lawful context in which this may occur. As a premise the
LRA strictly stipulates and regulates the requirements for a lawful strike,
lockout or picketing. In this regard the LRA expressly identifies who is allowed
to engage in industrial action of this nature, which processes must be followed
and for which purposes employees and employers may engage in such industrial
action. Should the industrial action require the parties to engage in a process
of consultation and negotiation, the LRA also prescribes the procedures to be
followed.

If the conduct of the parties, for whatever reason, result in
the dismissal of employees the LRA establishes the Commission for Conciliation,
Mediation and Arbitration (CCMA) as a principal forum for the
resolution of disputes resulting from the dismissal. The LRA defines unlawful
dismissals as being either automatically or not automatically unfair. The type
of dismissal will depend on the nature thereof and the prevailing circumstances
at the time of dismissal, an example being dismissals arising from operational
requirements.

A process of mediation and conciliation is pre-emptory in this
regard. Should the dispute remain unresolved, parties will be required to enter
into a process of arbitration, and the award made by the Commissioner would be
final.

Employment Equity Act

Subject to recent amendments to the Employment Equity Act,
No. 55 of 1998 (EEA) it is imperative that regard must be had of
the necessity to remunerate employees equally based on the principle of equal
pay for work of equal value. Work will be identified as of equal value when the
work done by the employee is the same, substantially the same or of equal value
when compared to an appropriate comparator.

To determine whether differentiation between employees occurs,
the EEA identifies 22 listed grounds upon which an employer could potentially
differentiate between employees. Differentiation in this regard is presumed to
be unfair discrimination between employees. The EEA furthermore identifies an
arbitrary ground of differentiation as a ground upon which unfair
discrimination can take place.

Should an employer be guilty of not remunerating employees
equally based on the principle of equal pay for work of equal value,
discriminating against an employee on a listed ground, or of sexual harassment,
the EEA also identifies the CCMA as the forum of first instance to resolve the
dispute through a process of conciliation. Should the dispute remain unresolved after
conciliation, the matter may either be referred to the Labour Court for
adjudication, or remain with the CCMA for arbitration if the requirements
imposed by the EEA are met.

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5.3  Risk Factors

The Companys securities should be considered a highly
speculative investment due to the nature of the Companys business and present
stage of exploration and development of its mineral properties. Resource
exploration and development is a speculative business, characterized by a number
of significant risks including, among other things, unprofitable efforts
resulting not only from the failure to discover mineral deposits but also from
finding mineral deposits, which, though present, are insufficient in quantity or
quality to return a profit from production. Investors should carefully consider
all of the information disclosed in the Companys Canadian and U.S. regulatory
filings prior to making an investment in the Company. Without limiting the
foregoing, the following risk factors should be given special consideration when
evaluating an investment in the Companys securities. Additional risks not
currently known to the Company, or that the Company currently deems immaterial,
may also impair the Companys operations.

Risks Relating to the Company

The Company may require additional financing, which may
not be available on acceptable terms, if at all.

The Company may be required to source additional financing by
way of private or public offerings of equity or debt or the sale of project or
property interests in order to have sufficient working capital for the
development and operation of Project 1 and the continued exploration on the
Waterberg Project, as well as for general working capital purposes. Under the
terms of the Amended and Restated Sprott Facility, if the Company or any of its
subsidiaries closes one or more equity or debt financing (excluding intercompany
financings) on or before December 31, 2017, Sprott may elect to require the
proceeds of such financing, net of reasonable financing costs, be paid to the
Sprott Lenders in repayment of the remaining outstanding amount of the Second
Advance. In addition, under the terms of the Project 1 Working Capital
Facilities, 50% of the proceeds from any equity or debt financings (excluding
intercompany financings) with a value exceeding US$1 million that close after
January 31, 2017, in the case of the Amended and Restated Sprott Facility (not
including financings where the proceeds are used to repay the Second Advance, at
the election of the Sprott Lenders) and December 31, 2017, in the case of the
LMM Facility, are to be paid to the Lenders in partial repayment of the Project
1 Working Capital Facilities, subject to terms and conditions of an
Intercreditor Agreement between Sprott and LMM.

The success and the pricing of any such capital raising and/or
debt financing will be dependent upon the prevailing market conditions at that
time. There can be no assurance that financing will be available to the Company
or, if it is available, that it will be offered on acceptable terms. If
additional financing is raised through the issuance of the securities, this may
have a depressive effect on the price of the common shares of the Company and
the interests of shareholders in the net assets of the Company may be
diluted.

Any failure by the Company to obtain required financing on
acceptable terms or on a timely basis could cause the Company to delay
development of its material projects or could result in the Company being forced
to sell some of its assets on an untimely or unfavorable basis. Any such delay
or sale could have a material adverse effect on the Companys financial
condition, results of operations and liquidity. Any default under the Project 1
Working Capital Facilities could result in the loss of the Companys entire
interest in PTM RSA, and therefore its interests in Project 1, Project 3 and the
Waterberg Project.

The Company has a history of losses and it anticipates
continuing to incur losses.

The Company has a history of losses. The Company anticipates
continued losses until it can successfully place one or more of its properties
into commercial production on a profitable basis. It could be years before the
Company receives any profits from any production of metals, if ever. If the
Company is unable to generate significant revenues with respect to its
properties, the Company will not be able to earn profits or continue operations.

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The Company may be unable to generate sufficient cash to
service its debt, the terms of the agreements governing the Companys debt may
restrict its current or future operations and the indebtedness may adversely
affect the Companys financial condition and results of operations.

The Companys ability to make scheduled payments on the Project
1 Working Capital Facilities will depend on its ability to successfully ramp-up
production at Project 1, and on the Companys financial condition and operating
performance, which are subject to prevailing economic and competitive conditions
and to certain financial, business, legislative, regulatory and other factors
beyond its control. If the Companys cash flows and capital resources are
insufficient to fund its debt service obligations, the Company could face
substantial liquidity problems and could be forced to reduce or delay
investments and capital expenditures or to dispose of material assets or
operations, seek additional debt or equity capital or restructure or refinance
the Companys indebtedness, including indebtedness under the Project 1 Working
Capital Facilities. The Company may not be able to effect any such alternative
measures on commercially reasonable terms or at all and, even if successful,
those alternatives may not allow the Company to meet its scheduled debt service
obligations.

In addition, a breach of the covenants under the Project 1
Working Capital Facilities or the Companys other debt instruments from time to
time could result in an event of default under the applicable indebtedness. Such
a default may allow the creditors to accelerate the related debt, may result in
the imposition of default interest, and may result in the acceleration of any
other debt to which a cross acceleration or cross default provision applies. In
particular, a cross default provision applies to the Project 1 Working Capital
Facilities. In the event a Lender accelerates the repayment of the Companys
borrowings, the Company may not have sufficient assets to repay its
indebtedness.

The Project 1 Working Capital Facilities contain a number of
covenants that impose operating and financial restrictions on the Company and
may limit the Companys ability to engage in acts that may be in its long term
best interest. In particular, the Project 1 Working Capital Facilities restrict
the Companys ability to modify material contracts, to dispose of assets, to use
the proceeds from permitted dispositions, to incur additional indebtedness, to
enter into transactions with affiliates, and to grant security interests or
encumbrances and to use proceeds from future debt or equity financings. In
addition, the Company must obtain the consent of the agent under each Project 1
Working Capital Facility to consolidate and contribute the Waterberg JV Project
and the Waterberg Extension Project to Waterberg JV Co. Such consents may not be
unreasonably withheld by the agents. As a result of these restrictions, the
Company may be limited in how it conducts its business, may be unable to raise
additional debt or equity financing, may be unable to compete effectively or to
take advantage of new business opportunities or may become in breach of its
obligations to joint venture partners and others, each of which may affect the
Companys ability to grow in accordance with its strategy or may otherwise
adversely affect its business and financial condition.

Further, the Companys maintenance of substantial levels of
debt could adversely affect its financial condition and results of operations
and could adversely affect its flexibility to take advantage of corporate
opportunities. Substantial levels of indebtedness could have important
consequences to the Company, including:

| |  | limiting the Companys ability to obtain additional
      financing to fund future working capital, capital expenditures,
      acquisitions or other general corporate requirements, or requiring the
      Company to make non-strategic divestitures;                                           
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                    
| |  | requiring a substantial portion of the Companys cash
      flows to be dedicated to debt service payments instead of other purposes,
      thereby reducing the amount of cash flows available for working capital,
      capital expenditures, acquisitions and other general corporate purposes;
| |   |                                                                                                                                                                                                                                                                                                    
| |  | increasing the Companys vulnerability to general adverse
      economic and industry conditions;                                                                                                                                                                                                  
| |   |                                                                                                                                                                                                                                                                                                    
| |  | exposing the Company to the risk of increased interest
      rates for any borrowings at variable rates of interest;                                                                                                                                                                               
| |   |                                                                                                                                                                                                                                                                                                    
| |  | limiting the Companys flexibility in planning for and
      reacting to changes in the industry in which it competes;                                                                                                                                                                             

---

- 108 

Platinum Group Metals Ltd.
2016
Annual Information Form

| | placing the Company at a disadvantage compared
      to other, less leveraged competitors; and
|- | ----------------------------------------------------------------------------------------------
|  |                                                                                               
| | increasing the Companys cost of borrowing.                                                   

The Company has granted first and second ranking security
interests in favour of the Lenders over all of its personal property, subject to
certain exceptions, and the Company has pledged its shares of PTM RSA to the
Lenders under the Project 1 Working Capital Facilities, which may have a
material adverse effect on the Company.

To secure its obligations under the Project 1 Working Capital
Facilities (and in the case of the LMM Facility, the PPA between the Company,
PTM RSA and LMM, dated November 19, 2015, as amended, with respect to Project 1
and Project 3), the Company has entered into a general security agreement under
which the Company has granted first and second ranking security interests in
favour of the Lenders over all of its present and after-acquired personal
property, subject to certain exceptions, and a share pledge agreement pursuant
to which the Company has granted a first and second priority security interest
in favour of the Lenders over all of the issued shares in the capital of PTM
RSA. PTM RSA has also guaranteed the Companys obligations to the Lenders. These
security interests and guarantee may impact the Companys ability to obtain
project financing for the Waterberg Project or its ability to secure other types
of financing. The Project 1 Working Capital Facilities have various covenants
and provisions, including target production provisions, payment covenants and
financial tests that must be satisfied and complied with during the term of the
Project 1 Working Capital Facilities. There is no assurance that such covenants
will be satisfied. Any default under Project 1 Working Capital Facilities,
including any covenants thereunder, could result in the loss of the Companys
entire interest in PTM RSA, and therefore its interests in Project 1, Project 3
and the Waterberg Project.

The Company has a history of negative operating cash
flow, and may continue to experience negative operating cash flow.

The Company has had negative operating cash flow in recent
financial years. The Companys ability to achieve and sustain positive operating
cash flow will depend on a number of factors, including the Companys ability to
produce at Project 1 on a profitable basis and advance the Waterberg Project
into production. To the extent that the Company has negative cash flow in future
periods, the Company may need to deploy a portion of its cash reserves to fund
such negative cash flow. The Project 1 Working Capital Facilities require that
the Company maintain consolidated cash and cash equivalents of at least US$5.0
million and working capital in excess of US$5.0 million. The LMM Facility
requires that the Company maintain a debt service coverage ratio of at least
1.20 to 1. The Company may be required to raise additional funds through the
issuance of additional equity or debt securities to satisfy the minimum cash
balance requirements under the Project 1 Working Capital Facilities. The Project
1 Working Capital Facilities provide, however, that a portion of the proceeds
from any equity or debt financings (excluding intercompany financings) are
required to be paid to the Lenders in partial repayment of the Project 1 Working
Capital Facilities, subject to the terms and conditions of an Intercreditor
Agreement between Sprott and LMM. See Business of the Company  Project 1
Working Capital Facilities. There can be no assurance that additional debt or
equity financing or other types of financing will be available if needed or that
these financings will be on terms at least as favorable to the Company as those
obtained previously.

The Company may not be able to continue as a going
concern.

The Company has limited financial resources. The Companys
ability to continue as a going concern is dependent upon, among other things,
the Company establishing commercial quantities of mineral reserves and
successfully establishing profitable production of such minerals or,
alternatively, disposing of its interests on a profitable basis. Any unexpected
costs, problems or delays could severely impact the Companys ability to
continue exploration and development activities. Should the Company be unable to
continue as a going concern, realization of assets and settlement of liabilities
in other than the normal course of business may be at amounts materially
different than the Companys estimates. The amounts attributed to the Companys
exploration properties in its financial statements represent acquisition and
exploration costs and should not be taken to represent realizable value.

There may be further delays in the production ramp-up of
Project 1 which could result in a default under the Project 1 Working Capital
Facilities and could have a material adverse effect on the Companys financial
condition and prospects.

---

- 109 

Platinum Group Metals Ltd.
2016
Annual Information Form

The ramp-up of production at Project 1 has been slower than
anticipated and the Company may experience further delays. Timelines are based
on managements current expectations and may be affected by a number of factors,
including:

| | the availability of adequate funds to complete
      underground development, including the anticipated net proceeds of an
      offering, or funds obtained through alternative sources of financing;
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                       
| | consultants analyses and recommendations;                                                                                                                                                            
|  |                                                                                                                                                                                                       
| | the rate at which expenditures are incurred;                                                                                                                                                          
|  |                                                                                                                                                                                                       
| | delays in construction schedules;                                                                                                                                                                     
|  |                                                                                                                                                                                                       
| | contractor performance and delivery of services, changes
      in contractors or their scope of work or any disputes with contractors;                                                                
|  |                                                                                                                                                                                                       
| | availability of major equipment and personnel;                                                                                                                                                        
|  |                                                                                                                                                                                                       
| | the Companys ability to maintain requisite permits and
      licenses (including a water use license, and the environmental
      authorization held by Maseve);                                     
|  |                                                                                                                                                                                                       
| | other potentially required authorizations arising from
      recent legislative amendments; and                                                                                                       
|  |                                                                                                                                                                                                       
| | the rate of underground development in the north and
      south declines.                                                                                                                            

Some of the above factors are beyond the Companys control and
could cause managements timelines not to be realized. It is common for mining
projects to experience unexpected costs, problems and delays. The targeted start
date for first concentrate production at Project 1 in the fourth quarter of
calendar 2015 was delayed. Delays in production ramp-up at Project 1 have also
occurred. While there has been no material cost overrun with regard to capital
costs, the delay in ramp-up of production at Project 1 has caused a delay in the
Companys receipt of anticipated production revenue. The Company had planned to
use this revenue to cover a portion of the ongoing capital costs of Project 1.
As of September 30, 2016, the anticipated production revenue shortfall of
approximately US$42 million has been accommodated by amounts drawn down under
the Project 1 Working Capital Facilities. Further delays in the production
ramp-up of Project 1 could have a material adverse effect on the Companys
financial condition and prospects and may also result in a default under the
target production provisions of the Project 1 Working Capital Facilities, which
may accelerate amounts due thereunder and permit the Lenders to realize on any
applicable security thereunder. This could result in a complete loss of the
Companys assets, including its investment in PTM RSA, and therefore in Project
1, Project 3 and the Waterberg Project. There is no assurance that insurance for
any interruption in production at Project 1 will be available to the Company on
economic terms or in such amounts as would be adequate to cover all losses or at
all.

Interruptions in production may trigger events of default under
the Project 1 Working Capital Facilities. Under the Project 1 Working Capital
Facilities, the Company will be in default if it fails to meet rolling
three-month average production targets at Project 1, starting on October 31,
2016. If the Company fails to meet these production targets, there is no
guarantee that LMM or the Sprott Lenders will agree to further amendments to the
Project 1 Working Capital Facilities. Any default under the Project 1 Working
Capital Facilities could result in the loss of the Companys interest in PTM RSA
and therefore its interests in Project 1, Project 3 and the Waterberg Project.

There can be no assurance that underground development
and production ramp-up at Project 1 will meet its production ramp-up timeline or
be completed at all or that production at Project 1 will meet the Companys
expectations.

The Company is in the process of underground development and
production ramp-up at Project 1. While the Company expects commercial production
to be achieved in the first half of 2017, there can be no assurance that the
Company will meet this target. In addition, the Company has certain expectations
with respect to performance of Project 1, but there can be no assurance that
after the underground development and production ramp-up is complete that
Project 1 will perform to such expectations. Delays in the underground development and production ramp-up and
lower-than-expected performance could impact the Companys revenue and cash flow
or result in an event of default relating to the target production provisions
under the Project 1 Working Capital Facilities.

---

- 110 

Platinum Group Metals Ltd.
2016
Annual Information Form

Until such time that steady state commercial production is
achieved at Project 1, there is no guarantee that Project 1 will generate
projected revenue or cash flow.

The Companys properties, including Project 1, may not be
brought into a state of commercial production.

Although the Company has completed commissioning at Project 1,
underground development and production ramp-up continue and Project 1 has not
yet reached commercial production. Development of mineral properties involves a
high degree of risk and few properties that are explored are ultimately
developed into producing mines. The commercial viability of a mineral deposit is
dependent upon a number of factors which are beyond the Companys control,
including the attributes of the deposit, commodity prices, government policies
and regulation and environmental protection. Fluctuations in the market prices
of minerals may render reserves and deposits containing relatively lower grades
of mineralization uneconomic. The development of the Companys properties,
including Project 1, will require obtaining land use consents, permits and the
construction and operation of mines, processing plants and related
infrastructure. Although Project 1 has been granted the necessary permits and
land use zoning, the Company is subject to all of the risks associated with
establishing new mining operations, including:

| | the timing and cost, which can be considerable, of the
      construction of mining and processing facilities and related
      infrastructure;                                                                                                                                                                                              
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                                              
| | the availability and cost of skilled labour and mining
      equipment;                                                                                                                                                                                                                                                                      
|  |                                                                                                                                                                                                                                                                                                                                              
| | the availability and cost of appropriate smelting and/or
      refining arrangements;                                                                                                                                                                                                                                                        
|  |                                                                                                                                                                                                                                                                                                                                              
| | the need to obtain and maintain necessary environmental
      and other governmental approvals and permits, and the timing of those
      approvals and permits;                                                                                                                                                                             
|  |                                                                                                                                                                                                                                                                                                                                              
| | in the event that the required permits are not obtained
      in a timely manner, the risks of government environmental authorities
      issuing directives or commencing enforcement proceedings to cease
      operations or administrative, civil and criminal sanctions being imposed
      on the Company, its directors and employees;
|  |                                                                                                                                                                                                                                                                                                                                              
| | the availability of funds to finance construction and
      development activities;                                                                                                                                                                                                                                                          
|  |                                                                                                                                                                                                                                                                                                                                              
| | potential opposition from non-governmental organizations,
      environmental groups or local groups which may delay or prevent
      development activities; and                                                                                                                                                                            
|  |                                                                                                                                                                                                                                                                                                                                              
| | potential increases in construction and operating costs
      due to changes in the cost of fuel, power, materials and supplies and
      foreign exchange rates.                                                                                                                                                                            

The costs, timing and complexities of mine construction and
development are increased by the remote location of the Waterberg Project, with
additional challenges related thereto, including water and power supply and
other support infrastructure. For example, water resources are scarce at the
Waterberg Project. If the Company should decide to mine at the Waterberg
Project, it will have to establish sources of water and develop the
infrastructure required to transport water to the project area. Similarly, the
Company will need to secure a suitable location by purchase or long term lease
of surface or access rights at the Waterberg Project to establish the surface
rights necessary to mine and process.

It is common in new mining operations to experience unexpected
costs, problems and delays during development, construction and mine ramp-up.
Accordingly, there are no assurances that the Companys properties, including
Project 1, will be brought into a state of commercial production.

---

- 111 

Platinum Group Metals Ltd.
2016
Annual Information Form

Estimates of mineral reserves and mineral resources are
based on interpretation and assumptions and are inherently imprecise.

The mineral resource and mineral reserve estimates contained in
this AIF and the other documents incorporated by reference herein have been
determined and valued based on assumed future prices, cut off grades and
operating costs. However, until mineral deposits are actually mined and
processed, mineral reserves and mineral resources must be considered as
estimates only. Any such estimates are expressions of judgment based on
knowledge, mining experience, analysis of drilling results and industry
practices. Estimates of operating costs are based on assumptions including those
relating to inflation and currency exchange, which may prove incorrect.
Estimates of mineralization can be imprecise and depend upon geological
interpretation and statistical inferences drawn from drilling and sampling
analysis, which may prove to be unreliable. In addition, the grade and/or
quantity of precious metals ultimately recovered may differ from that indicated
by drilling results. There can be no assurance that precious metals recovered in
small scale tests will be duplicated in large scale tests under onsite
conditions or in production scale. Amendments to the mine plans and production
profiles may be required as the amount of resources changes or upon receipt of
further information during the implementation phase of the project. Extended
declines in market prices for platinum, palladium, rhodium and gold may render
portions of the Companys mineralization uneconomic and result in reduced
reported mineralization. Any material reductions in estimates of mineralization,
or of the Companys ability to develop its properties and extract and sell such
minerals, could have a material adverse effect on the Companys results of
operations or financial condition.

Actual capital costs, operating costs, production and
economic returns may differ significantly from those the Company has anticipated
and there are no assurances that any future development activities will result
in profitable mining operations.

The capital costs to take the Companys projects into
commercial production may be significantly higher than anticipated. None of the
Companys mineral properties has an operating history upon which the Company can
base estimates of future operating costs. Decisions about the development of the
Companys mineral properties will ultimately be based upon feasibility studies.
Feasibility studies derive estimates of cash operating costs based upon, among
other things:

| | anticipated tonnage, grades and metallurgical
      characteristics of the ore to be mined and processed;
|- | ---------------------------------------------------------------------------------------------------------
|  |                                                                                                          
| | anticipated recovery rates of metals from the ore;                                                       
|  |                                                                                                          
| | cash operating costs of comparable facilities and
      equipment; and                                   
|  |                                                                                                          
| | anticipated climatic conditions.                                                                         

Capital costs, operating costs, production and economic returns
and other estimates contained in studies or estimates prepared by or for the
Company may differ significantly from those anticipated by the Companys current
studies and estimates, and there can be no assurance that the Companys actual
capital and operating costs will not be higher than currently anticipated. To
date, cost escalation in Rand terms has been substantially offset by a weaker
Rand, but there is no guarantee that this outcome will continue. As a result of
higher capital and operating costs, production and economic returns may differ
significantly from those the Company has anticipated.

The Company is subject to the risk of fluctuations in the
relative values of the U.S. Dollar, the Rand and the Canadian Dollar.

The Company may be adversely affected by foreign currency
fluctuations. Effective September 1, 2015, the Company adopted U.S. Dollars as
the currency for the presentation of its financial statements. Historically, the
Company has primarily generated funds through equity investments into the
Company denominated in Canadian or U.S. Dollars. In the normal course of
business, the Company enters into transactions for the purchase of supplies and
services primarily denominated in Rand or Canadian Dollars. The Company also has
assets, cash and liabilities denominated in Rand, Canadian Dollars and U.S.
Dollars. Several of the Companys options to acquire properties or surface
rights in South Africa may result in payments by the Company denominated in Rand
or in U.S. Dollars. Exploration, development and administrative costs to be funded by the Company in South
Africa will also be denominated in Rand. Settlement of sales of minerals from
the Companys projects, once commercial production commences, will be in Rand,
and will be converted to U.S. Dollars to make payment of principal and interest
on the Project 1 Working Capital Facilities. Fluctuations in the exchange rates
between the U.S. Dollar and the Rand or Canadian Dollar may have a material
adverse effect on the Companys financial results.

---

- 112 

Platinum Group Metals Ltd.
2016
Annual Information Form

In addition, South Africa has in the past experienced double
digit rates of inflation. If South Africa experiences substantial inflation in
the future, the Companys costs in Rand terms will increase significantly,
subject to movements in applicable exchange rates. Inflationary pressures may
also curtail the Companys ability to access global financial markets in the
longer term and its ability to fund planned capital expenditures, and could
materially adversely affect the Companys business, financial condition and
results of operations. Potential downgrades to South Africas sovereign currency
ratings by international ratings agencies also would likely adversely affect the
value of the Rand relative to the Canadian or U.S. Dollar. The South African
governments response to inflation or other significant macroeconomic pressures
may include the introduction of policies or other measures that could increase
the Companys costs, reduce operating margins and materially adversely affect
its business, financial condition and results of operations.

Metal prices are subject to change, and low prices or a
substantial or extended decline or volatility in such prices could materially
and adversely affect the value of the Companys mineral properties and potential
future results of operations and cash flows.

Metal prices have historically been subject to significant
price fluctuations. No assurance may be given that metal prices will remain
stable. Significant price fluctuations over short periods of time may be
generated by numerous factors beyond the control of the Company, including:

| | domestic and international economic and political trends;                                
|- | -----------------------------------------------------------------------------------------
|  |                                                                                          
| | expectations of inflation;                                                               
|  |                                                                                          
| | currency exchange fluctuations;                                                          
|  |                                                                                          
| | interest rates;                                                                          
|  |                                                                                          
| | global or regional consumption patterns;                                                 
|  |                                                                                          
| | speculative activities; and                                                              
|  |                                                                                          
| | increases or decreases in production due to improved
      mining and production methods.

Low metal prices or significant or continued reductions or
volatility in metal prices may have an adverse effect on the Companys business,
including the amount of the Companys mineral reserves, the economic
attractiveness of the Companys projects, the Companys ability to obtain
financing and develop projects, the amount of the Companys revenues or profit
or loss and the value of the Companys assets. An impairment in the value of the
Companys assets would require such assets to be written down to their estimated
net recoverable amount. The Company wrote down certain assets as at August 31,
2016. See the Companys financial statements for the year ended August 31, 2016.

The failure of the Company or its joint venture partners
to fund their pro-rata share of funds under the respective joint ventures may
have a material adverse effect on the Companys business and results of
operations.

The Company, through its subsidiaries, participates in joint
ventures with various partners. In particular, PTM RSA, Africa Wide and Maseve
are parties to the Maseve Shareholders Agreement related to the exploration and
development of Project 1 and Project 3. On October 18, 2013, Africa Wide advised
the Company that it would not be funding its approximately US$21.8 million share
of a six-month budget and cash call unanimously approved by the board of
directors of Maseve. On March 3, 2014, Africa Wide advised the Company that it
would not be funding its approximately US$21.52 million share of a second cash
call. Africa Wides decision may result in significant adverse effects on the
Company and Maseve, including delays, increases in expenses, less advantageous
financing terms and, potentially, the halting of operations at Project 1. For example, as a result of Africa
Wides decision not to fund its cash calls, a procurement freeze was implemented
on Project 1 for approximately 12 weeks from late 2013 into 2014, which resulted
in delays to the acquisition and procurement of various goods and services,
delaying mill and surface infrastructure construction. Any failure by PTM RSA,
Africa Wide or any future shareholder under the Maseve Shareholders Agreement to
contribute its pro-rata share of a cash call would result in dilution of that
partys interest in proportion to the shortfall, and could have a material
adverse effect on the Company as discussed below.

---

- 113 

Platinum Group Metals Ltd.
2016
Annual Information Form

Pursuant to the terms of the JOGMEC 2nd Amendment, JOGMEC has
been funding all work on the Waterberg Project in accordance with a US$20
million commitment. If the corporatization of the Waterberg Project is completed
and the Waterberg Project becomes held by Waterberg JV Co., it is anticipated
that the procedures governing further funding for the Waterberg Project will be
set forth in a new shareholders agreement among PTM RSA, JOGMEC and Mnombo.
This agreement is in the process of being negotiated, based on provisions set
forth in the JOGMEC Agreement, as amended by the JOGMEC 2nd Amendment. If
closing of the JOGMEC 2nd Amendment does not occur, the JOGMEC 2nd Agreement
will terminate and the parties will default to the JOGMEC Agreement arrangement,
with such portion of the US$20 million in expenditures funding already paid by
JOGMEC being deemed to be an advance by JOGMEC towards its future spending
commitments on the Waterberg JV Project. The Company and Mnombo will be required
to make corresponding cash payments in respect of the Waterberg JV Project to
pro rata match the advance payments made by JOGMEC, within 120 days of the
termination of the JOGMEC 2nd Amendment, failing which they shall suffer equity
dilutions under the JOGMEC Agreement as if such equivalent pro rata amounts were
approved program funding in which they elected not to participate.

Prior to JOGMECs US$20 million commitment, the Company funded
Mnombos 26% share of the work on the Waterberg Project. The ability of Mnombo
to repay the Company for advances as at August 31, 2016 of approximately Rand
25.53 million (approximately US$1.74 million as at August 31, 2016) or to fund
future investment in the Waterberg Project may be uncertain. If the Company
fails to fund Mnombos future capital obligations for the Waterberg Project,
Mnombo may be required to obtain funding from alternative sources, which may not
be available on favorable terms, or at all. If Mnombo is unable to fund its
share of such work, this may delay project expenditures and may result in
dilution of Mnombos interest in the Waterberg Project and require the sale of
the diluted interests to another qualified BEE entity.

Because the development of the Companys joint venture projects
depends on the ability to finance further operations, any inability of the
Company or one or more of its joint venture partners to fund its respective
funding obligations and cash calls in the future could require the other
partners, including the Company, to increase their funding of the project, which
they may be unwilling or unable to do on a timely and commercially reasonable
basis, or at all. The occurrence of the foregoing, the failure of any partner,
including the Company, to increase their funding as required to cover any
shortfall, as well as any dilution of the Companys interests in its joint
ventures as a result of its own failure to satisfy a cash call, may have a
material adverse effect on the Companys business and results of operations.

The dilution of Africa Wide may have a material adverse
effect on the Companys business and results of operations.

Under the terms of the Maseve Shareholders Agreement, the board
of directors of Maseve may make cash calls on PTM RSA and Africa Wide. Africa
Wide declined to fund its share of cash calls in October 2013 and in March 2014.
As a result of the first missed cash call, the Company entered into arbitration
proceedings against Africa Wide to determine the extent of the dilution of
Africa Wides interest in Maseve, in accordance with the terms of the Maseve
Shareholders Agreement. On August 20, 2014, an arbitrator determined that Africa
Wides shareholding in Maseve would be reduced to 21.2766% . Based on the
arbitration award, Africa Wide has been further diluted to approximately 17.1%
as a result of Africa Wides failure to fund the second cash call and therefore
the Companys shareholding in Maseve has increased to approximately 82.9% . In
addition, as a result of the transactions explained under the risk factor
captioned The failure to maintain or increase equity participation by HDSAs in
the Companys prospecting and mining operations could adversely affect the
Companys ability to maintain its prospecting and mining rights, there is no
guarantee the DMR would recognize Africa Wide as a qualified BEE entity. To
comply with the Mining Charter, Maseve was required to have 26% ownership by a
qualified BEE entity by December 31, 2014 in order to maintain the Mining Right
in good standing. Subsequent to the end of the Companys third fiscal quarter of
2016, the DMR requested an update regarding the Companys efforts to increase the HDSA equity
ownership percentage in Maseve from 17.1% to 26%. The Company met with the DMR
in early June 2016 and the DMR requested a further update by August 7, 2016,
while reminding the Company of the risk of potential action under Sections 47
and 93 of the MPRDA if the Company were not to increase the HDSA ownership
percentage. The Company has made several attempts to schedule a meeting with the
DMR to further discuss this issue. To date, while the Company has been advised
by the DMR that the matter will be discussed at a later date, no such meeting
has taken place and the DMR has not issued a notice of non-compliance with the
MPRDA.

---

- 114 

Platinum Group Metals Ltd.
2016
Annual Information Form

In addition to unaffiliated BEE qualified companies, the
Company has considered Mnombo as the BEE company for such a transaction and
remains open to other possibilities. Should Mnombo acquire an interest in
Maseve, as with funding to date for the Waterberg Project, the Company would
expect to cover Mnombos share of any cash calls. If Mnombo was not deemed to be
a suitable BEE company or if the Company was unsuccessful in reaching an
agreement on the terms of Mnombos investment in Maseve, the Company would be
required to reach an agreement with another qualified BEE entity and, failing
that, the Company may face possible suspension or cancellation of the Mining
Right under a process governed by Section 47 of the MPRDA.

Any disputes or disagreements with the Companys joint
venture partners could materially and adversely affect the Companys business.

The Company participates in joint ventures and may enter into
other similar arrangements in the future. PTM RSA is a party to the Maseve
Shareholders Agreement related to the exploration and development of Project 1
and Project 3. In addition, PTM RSA is also a party to the Waterberg Extension
JV Agreement and the JOGMEC Agreement, as amended by the JOGMEC 2nd Amendment,
related to the exploration and development of the Waterberg Project. If the
corporatization of the Waterberg Project is completed, PTM RSA will become party
to a shareholders agreement governing Waterberg JV Co. PTM RSA is also a 49.9%
shareholder of Mnombo and the relationship among the shareholders of Mnombo is
governed by a formal shareholders agreement. Any dispute or disagreement with a
joint venture partner, any change in the identity, management or strategic
direction of a joint venture partner, or any disagreement among the Mnombo
shareholders, including with respect to Mnombos role in the Waterberg Project,
could materially adversely affect the Companys business and results of
operations. If a dispute arises between the Company and a joint venture partner
or the other Mnombo shareholders that cannot be resolved amicably, the Company
may be unable to move its projects forward and may be involved in lengthy and
costly proceedings to resolve the dispute, such as the dispute that recently led
to arbitration with Africa Wide, which could materially and adversely affect the
Companys business and results of operations.

Completion of a feasibility study for the Waterberg
Project is subject to economic analysis requirements.

Completion of a feasibility study for the Waterberg Project is
subject to completion of a positive economic analysis of the mineral deposit. No
assurance can be provided that such analysis will be positive.

If the Company is unable to retain key members of
management, the Companys business might be harmed.

The Companys development to date has depended, and in the
future will continue to depend, on the efforts of its senior management
including: R. Michael Jones, President and Chief Executive Officer and a
director of the Company; Frank R. Hallam, Chief Financial Officer and Corporate
Secretary and a director of the Company; and Peter Busse, Chief Operating
Officer of the Company. The Company currently does not, and does not intend to,
have key person insurance for these individuals. Departures by members of senior
management could have a negative impact on the Companys business, as the
Company may not be able to find suitable personnel to replace departing
management on a timely basis or at all. The loss of any member of the senior
management team could impair the Companys ability to execute its business plan
and could therefore have a material adverse effect on the Companys business,
results of operations and financial condition.

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- 115 

Platinum Group Metals Ltd.
2016
Annual Information Form

If the Company is unable to procure the services of
skilled and experienced personnel, the Companys business might be harmed.

There is currently a shortage of skilled and experienced
personnel in the mining industry in South Africa. The competition for skilled
and experienced employees is exacerbated by the fact that mining companies
operating in South Africa are legally obliged to recruit and retain historically
disadvantaged South Africans (HDSAs), as defined respectively by the
MPRDA and the Broad-Based Black Economic Empowerment Act, 2003 (the BEE
Act), and women with the relevant skills and experience at levels that meet
the transformation objectives set out in the MPRDA and the Mining Charter.
Skilled and experienced personnel are especially important at Project 1 since
the deposit does not lend itself to mechanized methods. If the Company is unable
to attract and retain sufficiently trained, skilled or experienced personnel,
its business may suffer and it may experience significantly higher staff or
contractor costs, which could have a material adverse effect on its business,
results of operations and financial condition.

Conflicts of interest may arise among the Companys
officers and directors as a result of their involvement with other mineral
resource companies.

Certain of the Companys officers and directors are, and others
may become, associated with other natural resource companies that acquire
interests in mineral properties. R. Michael Jones, President and Chief Executive
Officer and a director of the Company, is also the President and Chief Executive
Officer and a director of West Kirkland Mining Inc. (WKM), a public
company with mineral exploration properties in Ontario and Nevada, and a
director of Nextraction Energy Corp. (NE), a public company with oil
properties in Alberta, Kentucky and Wyoming. Frank Hallam, Chief Financial
Officer and Corporate Secretary and a director of the Company, is also a
director, Chief Financial Officer and Corporate Secretary of WKM, and a director
of NE. Eric Carlson, a director of the Company, is a director of NE. Diana
Walters, a director of the Company, was formerly an executive officer of LMM, a
significant shareholder of the Company, the lender under the LMM Facility, and
the holder of a production payment right under the Production Payment Agreement.

Such associations may give rise to conflicts of interest from
time to time. As a result of these potential conflicts of interests, the Company
may miss the opportunity to participate in certain transactions, which may have
a material adverse effect on the Companys financial position. The Companys
directors are required by law to act honestly and in good faith with a view to
the best interests of the Company and to disclose any interest that they may
have in any project or opportunity of the Company. If a subject involving a
conflict of interest arises at a meeting of the board of directors, any director
in a conflict must disclose his interest and abstain from voting on such matter.

The Company may become subject to litigation and other
legal proceedings that may adversely affect the Companys financial condition
and results of operations.

All companies are subject to legal claims, with and without
merit. The Companys operations are subject to the risk of legal claims by
employees, unions, contractors, lenders, suppliers, joint venture partners,
shareholders, governmental agencies or others through private actions, class
actions, administrative proceedings, regulatory actions or other litigation. The
outcome of litigation and other legal proceedings that the Company may be
involved in the future, particularly regulatory actions, is difficult to assess
or quantify. Plaintiffs may seek recovery of very large or indeterminate
amounts, and the magnitude of the potential loss relating to such lawsuits may
remain unknown for substantial periods of time. Defense and settlement costs can
be substantial, even with respect to claims that have no merit. Due to the
inherent uncertainty of the litigation process, the litigation process could
take away from the time and effort of the Companys management and could force
the Company to pay substantial legal fees. There can be no assurance that the
resolution of any particular legal proceeding will not have an adverse effect on
the Companys financial position and results of operations.

An actual or alleged breach or breaches in governance
processes or fraud, bribery and corruption may lead to public and private
censure, regulatory penalties, loss of licenses or permits and may damage the
Companys reputation.

The Company is subject to anti-corruption laws and regulations,
including the Canadian Corruption of Foreign Public Officials Act and certain
restrictions applicable to U.S. reporting companies imposed by the U.S. Foreign
Corrupt Practices Act of 1977, as amended, and similar anti-corruption and
anti-bribery laws in South Africa, which generally prohibit companies from
bribing or making other prohibited payments to foreign public officials in order
to obtain or retain an advantage in the course of business. The Companys Code
of Business Conduct and Ethics, among other governance and compliance processes,
may not prevent instances of fraudulent behavior and dishonesty nor guarantee
compliance with legal and regulatory requirements. The Company is particularly
exposed to the potential for corruption and bribery owing to the financial scale
of the mining business in South Africa. In March 2014, the Organisation for
Economic Cooperation and Development (OECD) released its Phase 3 Report
on Implementing the OECD Anti-bribery Convention in South Africa, criticizing
South Africa for failing to enforce the anti-bribery convention to which it has
been a signatory since 2007. The absence of enforcement of corporate liability
for foreign bribery coincides with recent growth in corporate activity in South
Africas economic environment. Allegations of bribery, improper personal
influence or officials holding simultaneous business interests have been linked
in recent years to the highest levels of the South African government. To the
extent that the Company suffers from any actual or alleged breach or breaches of
relevant laws, including South African anti-bribery and corruption legislation,
it may lead to regulatory and civil fines, litigation, public and private
censure and loss of operating licenses or permits and may damage the Companys
reputation. The occurrence of any of these events could have an adverse effect
on the Companys business, financial condition and results of operations.

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- 116 

Platinum Group Metals Ltd.
2016
Annual Information Form

Risks Related to the Mining Industry

Mining is inherently dangerous and is subject to
conditions or events beyond the Companys control, which could have a material
adverse effect on the Companys business.

Hazards such as fire, explosion, floods, structural collapses,
industrial accidents, unusual or unexpected geological conditions, ground
control problems, power outages, inclement weather, cave-ins and mechanical
equipment failure are inherent risks in the Companys mining operations. These
and other hazards may cause injuries or death to employees, contractors or other
persons at the Companys mineral properties, severe damage to and destruction of
the Companys property, plant and equipment and mineral properties, and
contamination of, or damage to, the environment, and may result in the
suspension of the Companys exploration and development activities and any
future production activities. Safety measures implemented by the Company may not
be successful in preventing or mitigating future accidents and the Company may
not be able to obtain insurance to cover these risks at economically feasible
premiums or at all. Insurance against certain environmental risks is not
generally available to the Company or to other companies within the mining
industry.

In addition, from time to time the Company may be subject to
governmental investigations and claims and litigation filed on behalf of persons
who are harmed while at its properties or otherwise in connection with the
Companys operations. To the extent that the Company is subject to personal
injury or other claims or lawsuits in the future, it may not be possible to
predict the ultimate outcome of these claims and lawsuits due to the nature of
personal injury litigation. Similarly, if the Company is subject to governmental
investigations or proceedings, the Company may incur significant penalties and
fines, and enforcement actions against it could result in the cessation of
certain of the Companys mining operations. During the period of February and
March 2013, operations at Project 1 halted for approximately one month due to a
notice under Section 54 of the Mine Health and Safety Act, No. 29 of 2006 issued
in relation to a surface worker fatality that occurred onsite. Since March 2013,
Maseve has received several notices under Section 54 that have resulted in
short-term halts to operations. If claims, lawsuits, governmental investigations
or proceedings, including Section 54 notices, are resolved against the Company,
the Companys financial performance, financial position and results of
operations could be materially adversely affected.

The Companys prospecting and mining rights are subject
to title risks.

The Companys prospecting and mining rights may be subject to
prior unregistered agreements, transfers, claims and title may be affected by
undetected defects. A successful challenge to the precise area and location of
these claims could result in the Company being unable to operate on its
properties as permitted or being unable to enforce its rights with respect to
its properties. This could result in the Company not being compensated for its
prior expenditures relating to the property. Title insurance is generally not
available for mineral properties and the Companys ability to ensure that it has
obtained secure claims to individual mineral properties or mining concessions
may be severely constrained. These or other defects could adversely affect the Companys title to
its properties or delay or increase the cost of the development of such
prospecting and mining rights.

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- 117 

Platinum Group Metals Ltd.
2016
Annual Information Form

The Company is subject to significant governmental
regulation.

The Companys operations and exploration and development
activities in South Africa and Canada are subject to extensive federal, state,
provincial, territorial and local laws and regulation governing various matters,
including:

| | environmental protection;                                                                                      
|- | ---------------------------------------------------------------------------------------------------------------
|  |                                                                                                                
| | management and use of hazardous and toxic substances and
      explosives;                                     
|  |                                                                                                                
| | management of tailings and other waste generated by the
      Companys operations;                            
|  |                                                                                                                
| | management of natural resources;                                                                               
|  |                                                                                                                
| | exploration, development of mines, production and
      post-closure reclamation;                              
|  |                                                                                                                
| | exports and, in South Africa, potential local
      beneficiation quotas;                                      
|  |                                                                                                                
| | price controls;                                                                                                
|  |                                                                                                                
| | taxation;                                                                                                      
|  |                                                                                                                
| | regulations concerning business dealings with local
      communities;                                         
|  |                                                                                                                
| | labour standards, BEE laws and regulations and
      occupational health and safety, including mine safety; and
|  |                                                                                                                
| | historic and cultural preservation.                                                                            

Failure to comply with applicable laws and regulations may
result in civil or criminal fines or administrative penalties or enforcement
actions, including orders issued by regulatory or judicial authorities enjoining
or curtailing operations, requiring corrective measures, installation of
additional equipment, remedial actions or recovery of costs if the authorities
attend to remediation of any environmental pollution or degradation, any of
which could result in the Company incurring significant expenditures.
Environmental non-profit organizations have become particularly vigilant in
South Africa and focus on the mining sector. Several such organizations have
recently instituted actions against mining companies. The Company may also be
required to compensate private parties suffering loss or damage by reason of a
breach of such laws, regulations or permitting requirements. It is also possible
that future laws and regulations, or a more stringent enforcement of current
laws and regulations by governmental authorities, could cause additional
expense, capital expenditures, restrictions on or suspensions of the Companys
operations and delays in the development of the Companys properties.

The Company may face equipment shortages, access
restrictions and lack of infrastructure.

Natural resource exploration, development and mining activities
are dependent on the availability of mining, drilling and related equipment in
the particular areas where such activities are conducted. A limited supply of
such equipment or access restrictions may affect the availability of such
equipment to the Company and may delay exploration, development or extraction
activities. Certain equipment may not be immediately available, or may require
long lead time orders. A delay in obtaining necessary equipment for mineral
exploration, including drill rigs, could have a material adverse effect on the
Companys operations and financial results.

Mining, processing, development and exploration activities also
depend, to one degree or another, on the availability of adequate
infrastructure. Reliable roads, bridges, power sources, fuel and water supply
and the availability of skilled labour and other infrastructure are important
determinants that affect capital and operating costs. At the Waterberg Project,
additional infrastructure will be required prior to commencement of mining. At
Project 1, the Companys most advanced project, construction is substantially complete and production ramp-up is underway. The
establishment and maintenance of infrastructure, and services are subject to a
number of risks, including risks related to the availability of equipment and
materials, inflation, cost overruns and delays, political opposition and
reliance upon third parties, many of which are outside the Companys control.
The lack of availability on acceptable terms or the delay in the availability of
any one or more of these items could prevent or delay development or ongoing
operation of the Companys projects.

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- 118 

Platinum Group Metals Ltd.
2016
Annual Information Form

Exploration of mineral properties is less intrusive, and
generally requires fewer surface and access rights, than properties developed
for mining. The Company has not secured any surface rights at the Waterberg
Project other than those access rights legislated by the MPRDA. If a decision is
made to develop the Waterberg Project, or other projects in which the Company
has yet to secure adequate surface rights, the Company will need to secure such
rights. No assurances can be provided that the Company will be able to secure
required surface rights on favorable terms, or at all. Any failure by the
Company to secure surface rights could prevent or delay development of the
Companys projects.

The Companys operations are subject to environmental
laws and regulations that may increase the Companys costs of doing business and
restrict its operations.

Environmental legislation on a global basis is evolving in a
manner that will ensure stricter standards and enforcement, increased fines and
penalties for non-compliance, more stringent environmental assessment of
proposed development and a higher level of responsibility and potential
liability for companies and their officers, directors, employees and,
potentially, shareholders. Compliance with environmental laws and regulations
may require significant capital outlays on behalf of the Company and may cause
material changes or delays in the Companys intended activities. There can be no
assurance that future changes to environmental legislation in Canada or South
Africa will not adversely affect the Companys operations. Environmental hazards
may exist on the Companys properties which are unknown at present and which
have been caused by previous or existing owners or operators for which the
Company could be held liable. Furthermore, future compliance with environmental
reclamation, closure and other requirements may involve significant costs and
other liabilities. In particular, the Companys operations and exploration
activities are subject to Canadian and South African national and provincial
laws and regulations governing protection of the environment. Such laws are
continually changing and, in general, are becoming more onerous. See
South African Regulatory Framework  Environment above.

Amendments to current laws, regulations and permits governing
operations and activities of mining companies, or more stringent implementation
thereof, could have a material adverse impact on the Company and cause increases
in capital expenditures or production costs or a reduction in levels of
production at producing properties or require abandonment or delays in
development of new mining properties. Environmental hazards may exist on the
Companys properties that are unknown at the present time, and that may have
been caused by previous owners or operators or that may have occurred naturally.
These hazards, as well as any pollution caused by the Companys mining
activities, may give rise to significant financial obligations in the future and
such obligations could have a material adverse effect on the Companys financial
performance.

The mineral exploration industry is extremely
competitive.

The resource industry is intensely competitive in all of its
phases. Much of the Companys competition is from larger, established mining
companies with greater liquidity, greater access to credit and other financial
resources, and that may have newer or more efficient equipment, lower cost
structures, more effective risk management policies and procedures and/or
greater ability than the Company to withstand losses. The Companys competitors
may be able to respond more quickly to new laws or regulations or emerging
technologies, or devote greater resources to the expansion of their operations,
than the Company can. In addition, current and potential competitors may make
strategic acquisitions or establish cooperative relationships among themselves
or with third parties. Competition could adversely affect the Companys ability
to acquire suitable new producing properties or prospects for exploration in the
future. Competition could also affect the Companys ability to raise financing
to fund the exploration and development of its properties or to hire qualified
personnel. The Company may not be able to compete successfully against current
and future competitors, and any failure to do so could have a material adverse
effect on the Companys business, financial condition or results of operations.

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- 119 

Platinum Group Metals Ltd.
2016
Annual Information Form

The Company requires various permits in order to conduct
its current and anticipated future operations, and delays or a failure to obtain
such permits, or a failure to comply with the terms of any such permits that the
Company has obtained, could have a material adverse impact on the Company.

The Companys current and anticipated future operations,
including further exploration, development activities and commencement of
commercial production on the Companys properties, require permits from various
national, provincial, territorial and local governmental authorities in the
countries in which the Companys properties are located. Compliance with the
applicable environmental legislation, permits and land use consents is required
on an ongoing basis, and the requirements under such legislation, permits and
consents are evolving rapidly and imposing additional requirements for Project
1. The Waterberg Project prospecting rights issued by the DMR are also subject
to land use consents and compliance with applicable legislation on an ongoing
basis.

In addition, the duration and success of efforts to obtain,
amend and renew permits are contingent upon many variables not within the
Companys control. Shortage of qualified and experienced personnel in the
various levels of government could result in delays or inefficiencies. Backlog
within the permitting agencies could also affect the permitting timeline of the
Companys various projects. Other factors that could affect the permitting
timeline include the number of other large scale projects currently in a more
advanced stage of development, which could slow down the review process, and
significant public response regarding a specific project. As well, it can be
difficult to assess what specific permitting requirements will ultimately apply
to all of the Companys projects.

Risks of Doing Business in South Africa

Labour disruptions and increased labour costs could have
an adverse effect on the Companys results of operations and financial
condition.

Although the Companys employees are not unionized at this
time, contractors operating on the Project 1 mine site in South Africa have
employees that are unionized. As a result, trade unions could have a significant
impact on the Companys labour relations, as well as on social and political
reforms. There is a risk that strikes or other types of conflict with unions or
employees may occur at any of the Companys operations, particularly where the
labour force is unionized. Labour disruptions may be used to advocate labour,
political or social goals in the future. For example, labour disruptions may
occur in sympathy with strikes or labour unrest in other sectors of the economy.
South African employment law sets out minimum terms and conditions of employment
for employees, which form the benchmark for all employment contracts.
Disruptions in the Companys business due to strikes or further developments in
South African labour laws may increase the Companys costs or alter its
relationship with its employees and trade unions, which may have an adverse
effect on the Companys financial condition and operations. South Africa has
recently experienced widespread illegal strikes and violence.

Interruptions, shortages or cuts in the supply of
electricity or water could lead to disruptions in production and a reduction in
the Companys operating capacity.

The Company procures all of the electricity necessary for its
operations from ESKOM Holdings Limited (ESKOM), South Africas state
owned electricity utility, and no significant alternative sources of supply are
available to it. ESKOM has suffered from prolonged underinvestment in new
generating capacity which, combined with increased demand, has led to
electricity shortages in recent years. Since 2008, ESKOM has invested heavily in
new base load power generation capacity, but its principal project, a power
station known as Medupi, has been subject to delays, with the last unit
scheduled for commissioning in 2019. In addition, ESKOM is heavily dependent on
coal to fuel its electricity plants. Accordingly, if coal mining companies
experience labour unrest or disruptions to production (which have occurred
historically in South Africa, including a coal strike by approximately 30,000
National Union of Mineworkers members which lasted for approximately one week in
October 2015), or if heavy rains, particularly during the summer months in South
Africa, adversely impact coal production or coal supplies, ESKOM may have
difficulty supplying sufficient electricity supply to the Company.

The Company procures water from Magalies Water, the statutory,
state-owned water authority in the Companys area of operations. The Company is
dependent on the availability of water in its areas of operations and in
particular on the ability of Magalies Water to provide it with sufficient
allocation of water to enable it to conduct its business. Shifting rainfall
patterns and increasing demands on the existing water supply have caused water
shortages in the Companys areas of operations.

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- 120 

Platinum Group Metals Ltd.
2016
Annual Information Form

If electricity or water supplies are insufficient or
unreliable, the Company may be unable to operate as anticipated, which may
disrupt production and reduce revenues.

Any adverse decision in respect of the Companys mineral
rights and projects in South Africa under the MPRDA could materially affect the
Companys projects in South Africa.

With the enactment of the MPRDA, the South African state became
the sole regulator of all prospecting and mining operations in South Africa. All
prospecting and mining licenses and claims granted in terms of any prior
legislation became known as the old order rights. All prospecting and mining
rights granted in terms of the MPRDA are new order rights. The treatment of
new applications and pending applications is uncertain and any adverse decision
by the relevant regulatory authorities under the MPRDA may adversely affect
title to the Companys mineral rights in South Africa, which could stop,
materially delay or restrict the Company from proceeding with its exploration
and development activities or any future mining operations.

A wide range of factors and principles must be taken into
account by the South African Minister of Mineral Resources (the
Minister) when considering applications for new order rights. These
factors include the applicants access to financial resources and appropriate
technical ability to conduct the proposed prospecting or mining operations, the
environmental impact of the operation, whether the applicant holds an
environmental authorization and, in the case of prospecting rights,
considerations relating to fair competition. Other factors include
considerations relevant to promoting employment and the social and economic
welfare of all South Africans and showing compliance with the provisions
regarding the empowerment of HDSAs in the mining industry. All of the Companys
old order prospecting rights in respect of Project 1 and Project 3 were first
converted into new order prospecting rights and subsequently, in April 2012,
were superseded by the Mining Right. All of the Companys current prospecting
rights are new order rights.

The assessment of some of the provisions of the MPRDA or the
Mining Charter may be subjective and is dependent upon the views of the DMR as
to whether the Company is in compliance. The Maseve Social and Labour Plan, for
instance, contains both quantitative and qualitative goals, targets and
commitments relating to the Companys obligations to its employees and community
residents, the achievement of some of which are not exclusively within the
Companys control. Certain of the socio economic projects identified in the
Maseve Social and Labour Plan have proved inappropriate or unviable given
prevailing conditions and levels of training within the local communities in the
vicinity of Project 1. Such projects have been identified and the Company has
consulted with the DMR regarding a course of action. An application is being
made to the DMR to amend the Maseve Social and Labour Plan to target more
appropriate and viable projects. If Maseve is found to be in non-compliance with
the Maseve Social and Labour Plan, the Minister may institute the Section 47
process discussed below. At this time, the Company has not received a notice of
non-compliance from the DMR.

The Minister has the discretion to cancel or suspend mining
rights under Section 47(1) of the MPRDA as a consequence of the Companys
non-compliance with the MPRDA, environmental legislation, the Mining Charter,
the terms of its Mining Right and prospecting rights or if mining is not
progressing optimally. The

Section 47 process involves multiple, successive stages which
include granting the Company a reasonable opportunity to show why its rights
should not be cancelled or suspended. Pursuant to the terms of the provisions of
Section 6(2)(e)(iii) of the Promotion of Administrative Justice Act, No. 3 of
2000 (PAJA) read with Section 6 of the MPRDA, the Minister can direct
the Company to take remedial measures. If such remedial measures are not taken,
the Minister must again give the Company a reasonable opportunity to make
representations as to why such remedial measures were not taken. The Minister
must then properly consider the Companys further representations (which
considerations must also comply with PAJA) and only then is the Minister
entitled to cancel or suspend a mining right. Any such cancellation or
suspension will be subject to judicial review if it is not in compliance with
the MPRDA or PAJA, or it is not lawful, reasonable and procedurally fair under
Section 33(1) of the South African Constitution.

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- 121 

Platinum Group Metals Ltd.
2016
Annual Information Form

Failure by the Company to meet its obligations in relation to
its Mining Right or prospecting rights or the Mining Charter could lead to the
suspension or cancellation of such rights and the suspension of the Companys
other rights, which would have a material adverse effect on the Companys
business, financial condition and results of operations.

The failure to maintain or increase equity participation
by HDSAs in the Companys prospecting and mining operations could adversely
affect the Companys ability to maintain its prospecting and mining rights.

The Company is subject to a number of South African statutes
aimed at promoting the accelerated integration of HDSAs, including the MPRDA,
the BEE Act and the Mining Charter. To ensure that socioeconomic strategies are
implemented, the MPRDA provides for the Mining Codes which specify empowerment
targets consistent with the objectives of the Mining Charter. The Mining Charter
Scorecard requires the mining industrys commitment of applicants in respect of
ownership, management, employment equity, human resource development,
procurement and beneficiation. For ownership by BEE groups in mining
enterprises, the Mining Charter Scorecard sets a 26% target by December 31,
2014.

The South African government awards procurement contracts,
quotas, licenses, permits and prospecting and mining rights based on numerous
factors, including the degree of HDSA ownership. The MPRDA and Mining Charter
contain provisions relating to the economic empowerment of HDSAs. One of the
requirements which must be met before the DMR will issue a prospecting right or
mining right is that an applicant must facilitate equity participation by HDSAs
in the prospecting and mining operations which result from the granting of the
relevant rights. As a matter of stated policy, the DMR requires a minimum of 26%
HDSA ownership for the grant of applications for mining rights. The Mining
Charter required a minimum of 26% HDSA ownership by December 31, 2014.

The Company has sought to satisfy the foregoing requirements by
partnering, at the operating company level, with companies demonstrating 26%
HDSA ownership. The Company has partnered with Africa Wide with respect to
Maseve, which owns the Mining Right, and has partnered with Mnombo with respect
to the Waterberg JV Project and for the prospecting rights and applications over
the Waterberg Extension Project.

The Company believes that Africa Wide was majority owned by
HDSAs in 2002, when it first partnered with the Company. However, the Companys
contractual arrangements with Africa Wide do not currently require Africa Wide
to maintain any minimum level of HDSA ownership or to certify the level of such
ownership to the Company. In 2007, Wesizwe (which was then majority owned by
HDSAs) acquired 100% of the shares of Africa Wide. On an application of the
modified flow-through principles, Africa Wide remained an HDSA company. On
December 8, 2008, the Company entered into certain agreements to consolidate and
rationalize the ownership of the Western Bushveld Joint Venture (the
Consolidation Transaction). Under the terms of the Consolidation
Transaction, the Company transferred its 18.5% interest in Project 2 of what was
formerly the Western Bushveld Joint Venture to Wesizwe, therefore providing
attributable units of production and further enhancing the ownership of mining
assets by HDSA companies. Under the same transaction, Rustenburg Platinum Mines
Limited, a wholly owned subsidiary of Amplats acquired a then approximately
26.9% interest in Wesizwe. In 2011, Jinchuan Group Limited of China and China
Africa Development Fund, with the approval of the DMR and notwithstanding that
the transaction resulted in Wesizwe not being majority owned by HDSAs, acquired
a then approximately 45% interest in Wesizwe. Although Amplats interest is held
for preferential disposition to a qualified BEE purchaser, HDSAs do not
currently own a majority of the Wesizwe equity. In April 2012, Maseve was
granted the Mining Right by the DMR which, by stated policy, is an
acknowledgement of Maseves BEE compliance status as being acceptable to the
DMR. There can be no assurance when, or if, the transfer of Amplats interest in
Wesizwe to a qualified BEE purchaser will occur. Also, there can be no assurance
that the HDSA ownership may not be re -assessed or that the criteria for HDSA
ownership may not be interpreted differently in the future. If only the direct
shareholdings of Africa Wide and its parent are considered, and other factors
which were considered by the DMR at the time of grant are set aside, Maseve,
solely on flow-through principles, would have been, and remains, below the 26%
HDSA ownership level.

Further, on August 20, 2014, an award in the binding
arbitration with respect to the calculation of dilution to the ownership of
Africa Wide in Maseve was completed and delivered to the Company. The arbitrator
ruled in favor of the Company on all matters in contention. The favourable award
reduced Africa Wides shareholding in Maseve to 21.2766% . As a result of Africa
Wides decision on March 3, 2014 not to fund its US$21.52 million share of a
second cash call delivered in February 2014, Africa Wides ownership in Maseve
was further reduced to approximately 17.1% based on the dilution formula in the
Maseve Shareholders Agreement, as confirmed by the arbitration. Until the
Company sells the diluted percentage interest in Maseve previously held by
Africa Wide to an alternative, qualified BEE company, Maseve will have less than
26% HDSA ownership.

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- 122 

Platinum Group Metals Ltd.
2016
Annual Information Form

The Company is satisfied that Mnombo is majority-owned by
HDSAs. The contractual arrangements between Mnombo, the Company and the HDSAs
require the HDSAs to maintain a minimum level of HDSA ownership in Mnombo of
more than 50%. However, if at any time Mnombo becomes a company that is not
majority owned by HDSAs, the ownership structure of the Waterberg JV Project and
the prospecting rights and applications over the Waterberg Extension Project may
be deemed not to satisfy HDSA requirements.

As the Company has historically partnered with BEE groups or
companies that were HDSA-controlled at the time on all of its material projects
in South Africa at a level of 26% at an operating or project level it relies
upon the continuing consequences of such transactions (the so-called once
empowered, always empowered principle) for ownership compliance with the Mining
Charter in regard to Maseve.

There is currently no legal or regulatory certainty over
whether the principle of once empowered, always empowered (i.e., whether a
company that has reached its empowerment targets under the Mining Charter will
remain empowered if its HDSA participation subsequently falls below required
thresholds) would apply. The DMR and the Chamber of Mines of South Africa
(acting on behalf of the mining industry) are currently engaged in litigation
which may result in some clarity on the once empowered, always empowered
principle, but this is likely to be a lengthy process and no assurance can be
given regarding the ultimate outcome of such litigation or its impact on the
Company. In addition, an application has been filed in the High Court of South
Africa to have the Mining Charter itself set aside.

On April 15, 2016, the Reviewed Broad Based Black-Economic
Empowerment Charter for the South African Mining and Minerals Industry (the
New Draft Charter) was published for comment. Interested parties were
given a period of 30 days from date of publication to make submissions to the
DMR. The DMR continues to engage with the Chamber of Mines and with the industry
in regard to the New Draft Charter. The New Draft Charter requires mining
companies to maintain 26% BEE ownership throughout the life of the mine. If
adopted in its current form, the New Draft Charter will require Maseve to
conclude further BEE transactions to increase its BEE ownership level to 26%
once more. However, the New Draft Charter envisages that mining companies will
be given a period of three years within which to achieve compliance.

Subject to conditions contained in the Companys prospecting
and mining rights, the Company may be required to obtain approval from the DMR
prior to undergoing any change in its empowerment status under the Mining
Charter. In addition, if the Company or its BEE partners are found to be in
non-compliance with the requirements of the Mining Charter and other BEE
regulations, including failure to retain the requisite level of HDSA ownership,
the Company may face possible suspension or cancellation of its mining rights
under a process governed by Section 47 of the MPRDA.

In addition, there have been a number of proposals made at
governmental level in South Africa regarding amendments and clarifications to
the methodology for determining HDSA ownership and control of mining businesses,
including the Mineral and Petroleum Resources Development Amendment Bill, 2013,
which create greater uncertainty in measuring the Companys progress towards,
and compliance with, its commitments under the Mining Charter and other BEE
regulations. If implemented, any of these proposals could result in, among other
things, stricter criteria for qualification as an HDSA investor.

The Company is obliged to report on its compliance with the
Mining Charter, including its percentage of HDSA shareholding, to the DMR on an
annual basis. The Companys 2015 report was submitted on May 3, 2016. Although
no feedback has been received in regard to either the 2014 or the 2015 filing,
the Company received a request from the DMR subsequent to the end of its third
fiscal quarter in 2016 to provide an update as to its plan to achieve a 26% HDSA
equity ownership percentage for Maseve. The Company met with the DMR in early
June 2016 and the DMR requested a further update by August 7, 2016, while
reminding the Company of the risk of potential action under Sections 47 and 93
of the MPRDA if the Company were not to increase the HDSA ownership percentage.
The Company has made several attempts to schedule a meeting with the DMR to further
discuss this issue. To date, while the Company has been advised by the DMR that
the matter will be discussed at a later date, no such meeting has taken place
and the DMR has not issued a notice of non-compliance with the MPRDA.

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Platinum Group Metals Ltd.
2016
Annual Information Form

If the Company is required to increase the percentage of HDSA
ownership in any of its operating companies or projects, the Companys interests
may be diluted. In addition, it is possible that any such transactions or plans,
or the investment by a new BEE partner in Maseve to attain a 26% interest by
qualified BEE companies, may need to be executed at a discount to the proper
economic value of the Companys operating assets or it may also prove necessary
for the Company to provide vendor financing or other support in respect of some
or all of the consideration, which may be on non-commercial terms. Under the
terms of the Maseve Shareholders Agreement, if Maseve is instructed by the DMR
to increase its HDSA ownership, any agreed costs or dilution of interests shall
be borne equally by the Company and Africa Wide, notwithstanding that Africa
Wide holds 17.1% of the equity after the second missed cash call.

Currently, the South African Department of Trade and Industry
is responsible for leading government action on the implementation of BEE
initiatives under the auspices of the BEE Act and the generic BEE Codes of Good
Practice (the Generic BEE Codes), while certain industries have their
own transformation charters administered by the relevant government department
(in this case, the DMR). The Broad Based Black Economic Empowerment Amendment
Act, No. 16 of 2013 (the BEE Amendment Act) came into operation on
October 24, 2014. Among other matters, the BEE Amendment Act amends the BEE Act
to make the BEE Act the overriding legislation in South Africa with regard to
BEE requirements (the Trumping Provision) and will require all
governmental bodies to apply the Generic BEE Codes or other relevant code of
good practice when procuring goods and services or issuing licenses or other
authorizations under any other laws, and penalize fronting or misrepresentation
of BEE information. The Trumping Provision came into effect on October 24, 2015.
However, on October 30, 2015, the South African Minister of Trade and Industry
exempted the DMR from applying the Trumping Provision for a period of twelve
months on the basis that the alignment of the Mining Charter with the BEE Act
and the Generic BEE Codes was an ongoing process. The New Draft Charter purports
to align the Mining Charter with the Generic BEE Codes. It is unclear whether
the New Draft Charter will be finalized before the exemption period from
application of the Trumping Provision expires on October 31, 2016. This
exemption period may be further extended given that such alignment is still
ongoing. If the New Draft Charter is not finalized before the exemption period
expires and a further exemption period is not granted, the Generic BEE Codes
will apply. Generally speaking, the amended Generic BEE Codes will make
BEE-compliance more onerous to achieve. The Generic BEE Codes are substantially
different from the Mining Charter and, if they were to apply to the mining
industry, would place the industry at a disadvantage. See South African
Regulatory Framework - Black Economic Empowerment in the South African Mining
Industry above.

The Generic BEE Codes will require Mnombo to be 51% held and
controlled by HDSAs to qualify it as a black-controlled company and hence a
qualified BEE entity. Mnombo is presently 50.1% owned and controlled by
HDSAs.

If the Company is unable to achieve or maintain its empowered
status under the Mining Charter or comply with any other BEE regulations or
policies, it may not be able to maintain its existing prospecting and mining
rights and/or acquire any new rights and therefore would be obliged to suspend
or dispose of some or all of its operations in South Africa, which would likely
have a material adverse effect on the Companys business, financial condition
and results of operations.

Socio-economic instability in South Africa or regionally,
including the risk of resource nationalism, may have an adverse effect on the
Companys operations and profits.

The Company has ownership interests in significant projects in
South Africa. As a result, it is subject to political and economic risks
relating to South Africa, which could affect an investment in the Company. South
Africa was transformed into a democracy in 1994. The government policies aimed
at redressing the disadvantages suffered by the majority of citizens under
previous governments may impact the Companys South African business. In
addition to political issues, South Africa faces many challenges in overcoming
substantial differences in levels of economic development among its people.
Large parts of the South African population do not have access to adequate
education, health care, housing and other services, including water and
electricity.

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Platinum Group Metals Ltd.
2016
Annual Information Form

This issue was particularly acute in late 2012 when wild cat
strikes and violence occurred near Project 1 and generally at other platinum
mines. There can be no assurance that wild cat strikes and violence will not
occur at the Companys properties in the future. Wild cat strikes and violence
at Project 1 may have a material negative impact on the project and its start-up
mine operations. The Company also faces a number of risks from deliberate,
malicious or criminal acts relating to these inequalities, including theft,
fraud, bribery and corruption.

The Company is also subject to the risk of resource
nationalism, which encompasses a range of measures, such as expropriation or
taxation, whereby governments increase their economic interest in natural
resources, with or without compensation. Although wholesale nationalization was
rejected by the ruling party, the African National Congress (the ANC),
leading into the 2014 national elections, a resolution adopted by the ANC on
nationalization calls for state intervention in the economy, including state
ownership. A wide range of stakeholders have proposed ways in which the State
could extract greater economic value from the South African mining industry. A
call for resource nationalization has also been made by a new political party,
the Economic Freedom Fighters, under the leadership of Julius Malema.

The Company cannot predict the future political, social and
economic direction of South Africa or the manner in which government will
attempt to address the countrys inequalities. Actions taken by the South
African government, or by its people without the sanction of law, could have a
material adverse effect on the Companys business. Furthermore, there has been
regional, political and economic instability in countries north of South Africa,
which may affect South Africa. Such factors may have a negative impact on the
Companys ability to own, operate and manage its South African mining projects.

Changes in South African State royalties where many of
the Companys mineral reserves are located could have an adverse effect on the
Companys results of operations and its financial condition.

The Mineral and Petroleum Resources Royalty Act, No. 28 of 2008
(the Royalty Act) effectively came into operation on May 1, 2009. The
Royalty Act establishes a variable royalty rate regime, in which the prevailing
royalty rate for the year of assessment is assessed against the gross sales of
the extractor during the year. The royalty rate is calculated based on the
profitability of the mine (earnings before interest and taxes) and varies
depending on whether the mineral is transferred in refined or unrefined form.
For mineral resources transferred in unrefined form, the minimum royalty rate is
0.5% of gross sales and the maximum royalty rate is 7% of gross sales. For
mineral resources transferred in refined form, the maximum royalty rate is 5% of
gross sales. The royalty will be a tax deductible expense. The royalty becomes
payable when the mineral resource is transferred, which refers to the disposal
of a mineral resource, the export of a mineral resource or the consumption,
theft, destruction or loss of a mineral resource. The Royalty Act allows the
holder of a mining right to enter into an agreement with the tax authorities to
fix the percentage royalty that will be payable in respect of all mining
operations carried out in respect of that resource for as long as the extractor
holds the right. The holder of a mining right may withdraw from such agreement
at any time.

The feasibility studies covering the Companys South African
projects made certain assumptions related to the expected royalty rates under
the Royalty Act. If and when the Company begins earning revenue from its South
African mining projects, and if the royalties under the Royalty Act differ from
those assumed in the feasibility studies, this new royalty could have a material
and adverse impact on the economic viability of the Companys projects in South
Africa, as well as on the Companys prospects, financial condition and results
of operations.

Characteristics of and changes in the tax systems in
South Africa could materially adversely affect the Companys business, financial
condition and results of operations.

The Companys subsidiaries pay different types of governmental
taxes in South Africa, including corporation tax, payroll taxes, VAT, state
royalties, various forms of duties, dividend withholding tax and interest
withholding tax. The tax regime in South Africa is subject to change.

After having published a number of papers on the introduction
of a carbon tax, the South African government released the draft Carbon Tax Bill
in November 2015 for comment by interested parties. Greenhouse gas emissions
from the combustion of fossil fuels, fugitive emissions in respect of commodities, fuel or technology, and greenhouse gas emissions
from industrial processes and product use will be subject to a carbon tax.
During the first phase of implementation (ending 2020), it is proposed that the
emission of greenhouse gasses be taxed at R120 per tonne of the carbon dioxide
equivalent of the greenhouse gas emitted, which rate is expected to increase by
10% per annum. Emission factors will be used in order to calculate the carbon
dioxide equivalent of the greenhouse gasses emitted. Various allowances will be
available for taxpayers to reduce their final carbon tax liability by up to a
maximum of 95%. On June 20, 2016, the South African government also released the
draft regulations in respect of the carbon offset allowance. Taxpayers can
qualify for a carbon offset allowance up to a maximum of 10%. The carbon offset
allowance will not enable a taxpayer to reduce its final carbon tax liability
beyond the maximum of 95% stated above. When the tax free thresholds are taken
into account, the effective tax rate will range between R6 and R48 per ton of
carbon dioxide equivalent. Schedule 2 to the draft Carbon Tax Bill lists the
sectors and industries in which taxpayers will be liable for carbon tax. Mining
companies, depending on the nature of their activities, will generally fall
within these sectors. The Minister of Environmental Affairs will publish a
notice indicating which activities will render a person liable for the carbon
tax. The agricultural, forestry and waste sectors will initially be excluded.
The draft Carbon Tax Bill is silent on the second phase post 2020, but it is
generally expected to result in a gradual ramp-up of the carbon tax. The rate
and allowances will be reviewed for the second phase of implementation. It is
expected that the final legislation will come into operation some time in 2017.

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- 125 

Platinum Group Metals Ltd.
2016
Annual Information Form

The ANC held a policy conference in June 2012 at which the
State Intervention in the Minerals Sector report (the SIMS Report)
commissioned by the ANC was debated. The SIMS Report includes a proposal for a
super tax of 50% of all profits above a 15% return on investment, which would
apply in respect of all metals and minerals. If a super tax is implemented, the
Company may realize lower after-tax profits and cash flows from its current
mining operations and may decide not to pursue certain new projects, as such a
tax could render these opportunities uneconomic.

It is also possible that the Company could become subject to
taxation in South Africa that is not currently anticipated, which could have a
material adverse effect on its business, financial condition and results of
operations.

The Companys land in South Africa could be subject to
land restitution claims which could impose significant costs and burdens.

The Companys privately held land could be subject to land
restitution claims under the Restitution of Land Rights Act, No. 22 of 1994, as
amended (the Land Claims Act) and the Restitution of Land Rights
Amendment Act, No. 15 of 2014 (Restitution Amendment Act), which took
effect on July 1, 2014. Under the Land Claims Act and the Restitution Amendment
Act, any person who was dispossessed of rights in land in South Africa after
June 19, 1913 as a result of past racially discriminatory laws or practices
without payment of just and equitable compensation, and who lodges a claim on or
before June 30, 2019, is granted certain remedies. A successful claimant may be
granted either return of the dispossessed land (referred to as
restoration) or equitable redress (which includes the granting of an
appropriate right in alternative state-owned land, payment of compensation or
alternative relief). If restoration is claimed, the Land Claims Act
requires the feasibility of such restoration to be considered. Restoration of
land may only be given in circumstances where a claimant can use the land
productively with the feasibility of restoration dependent on the value of the
property.

The South African Minister of Rural Development and Land Reform
may not acquire ownership of land for restitution purposes without a court order
unless an agreement has been reached between the affected parties. The Land
Claims Act also entitles the South African Minister of Rural Development and
Land Reform to acquire ownership of land by way of expropriation either for
claimants who are entitled to restitution of land, or, in respect of land over
which no claim has been lodged but the acquisition of which is directly related
to or affected by such claim, will promote restitution of land to claimants or
alternative relief. Expropriation would be subject to provisions of legislation
and the South African Constitution which provide, in general, for just and
equitable compensation.

The Company has not been notified of any land claims to date
over the Companys properties. There is no guarantee, however, that any of the
Companys privately held land rights could not become subject to acquisition by
the state without the Companys agreement, or that the Company would be
adequately compensated for the loss of its land rights. Any such claims could
have a negative impact on the Companys South African projects and therefore an adverse
effect on its business, operating results and financial condition.

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- 126 

Platinum Group Metals Ltd.
2016
Annual Information Form

South African foreign exchange controls may limit
repatriation of profits.

The Company will most likely need to repatriate funds from its
foreign subsidiaries to fulfill its business plans and make payments on the
Project 1 Working Capital Facilities. Since commencing business in South Africa,
the Company has loaned or invested approximately CDN$782.36 million as at August
31, 2016 into PTM RSA in South Africa. The Company obtained approval from the
SARB in advance for its investments into South Africa. The Company anticipates
that it will loan the majority of the proceeds from an offering to PTM RSA with
the advance approval of the SARB. Although the Company is not aware of any law
or regulation that would prevent the repatriation of funds it has loaned or
invested into South Africa back to the Company in Canada, no assurance can be
given that the Company will be able to repatriate funds back to Canada in a
timely manner or without incurring tax payments or other costs when doing so,
due to legal restrictions or tax requirements at local subsidiary levels or at
the parent company level, which costs could be material.

South Africas exchange control regulations restrict the export
of capital from South Africa. Although the Company is not itself subject to
South African exchange control regulations, these regulations do restrict the
ability of the Companys South African subsidiaries to raise and deploy capital
outside the country, to borrow money in currencies other than the Rand and to
hold foreign currency. Exchange control regulations could make it difficult for
the Companys South African subsidiaries to: (a) export capital from South
Africa; (b) hold foreign currency or incur indebtedness denominated in foreign
currencies without approval of the relevant South African exchange control
authorities; (c) acquire an interest in a foreign venture without approval of
the relevant South African exchange control authorities and compliance with
certain investment criteria; and (d) repatriate to South Africa profits of
foreign operations. While the South African government has relaxed exchange
controls in recent years, it is difficult to predict whether or how it will
further relax or abolish exchange control measures in the foreseeable future.
There can be no assurance that restrictions on repatriation of earnings from
South Africa will not be imposed on the Company in the future.

Community relations may affect the Companys business.

Maintaining community support through a positive relationship
with the communities in which the Company operates is critical to continuing
successful exploration and development. As a business in the mining industry,
the Company may come under pressure in the jurisdictions in which it explores or
develops, to demonstrate that other stakeholders benefit and will continue to
benefit from the Companys commercial activities. The Company may face
opposition with respect to its current and future development and exploration
projects which could materially adversely affect its business, results of
operations, financial condition and common share price.

Risks Relating to the Companys Common Shares

The Company has never paid dividends and does not expect
to do so in the foreseeable future.

The Company has not paid any dividends since incorporation and
it has no plans to pay dividends in the foreseeable future. The Companys
directors will determine if and when dividends should be declared and paid in
the future based on the Companys financial position at the relevant time.
Further, the Project 1 Working Capital Facilities limit the Companys ability to
pay dividends, and make distributions or other payments based on share capital.
In addition, the Companys ability to declare and pay dividends may be affected
by the South African governments exchange controls. See South African
Regulatory Framework  Exchange Control above.

The Common Share price has been volatile in recent years.

In recent years, the securities markets in the United States
and Canada have experienced a high level of price and volume volatility, and the
market price of securities of many companies, particularly those considered
exploration or development-stage mining companies, have experienced wide
fluctuations in price which have not necessarily been related to the operating
performance, underlying asset values or prospects of such companies. In
particular, after giving effect to the consolidation of the common shares on the basis of one new Common Share for ten old common shares
effective January 26, 2016 (the Share Consolidation), the per share price of
the Companys common shares on the Toronto Stock Exchange (the TSX) fluctuated
from a high of CDN$5.25 to a low of CDN$1.35 and on the NYSE MKT from a high of
US$4.04 to a low of US$0.96during the twelve-month period ending November 29,
2016. There can be no assurance that continual fluctuations in price will not
occur.

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- 127 

Platinum Group Metals Ltd.
2016
Annual Information Form

The factors influencing such volatility include macroeconomic
developments in North America and globally, and market perceptions of the
attractiveness of particular industries. The price of the Companys common
shares is also likely to be significantly affected by short term changes in
precious metal prices or other mineral prices, currency exchange fluctuations
and the Companys financial condition or results of operations as reflected in
its earnings reports. Other factors unrelated to the performance of the Company
that may have an effect on the price of the Companys common shares and other
securities include the following:

 the extent of analyst coverage available to investors
concerning the business of the Company may be limited if investment banks with
research capabilities do not follow the Companys securities;

 lessening in trading volume and general market interest in
the Companys securities may affect an investors ability to trade significant
numbers of securities of the Company;

 changes to South African laws and regulations might have a
negative effect on the development prospects, timelines or relationships for the
Companys material properties;

 the size of the Companys public float may limit the ability
of some institutions to invest in the Companys securities; and

 a substantial decline in the price of the securities of the
Company that persists for a significant period of time could cause the Companys
securities to be delisted from an exchange, further reducing market liquidity.

Securities class action litigation often has been brought
against companies following periods of volatility in the market price of their
securities. The Company may in the future be the target of similar litigation.
Securities litigation could result in substantial costs and damages and divert
managements attention and resources.

The Companys growth, future profitability and ability to
obtain financing may be impacted by global financial conditions.

Global financial conditions continue to be characterized by
extreme volatility. In recent years, global markets have been adversely impacted
by the credit crisis that began in 2008, the European debt crisis and
significant fluctuations in fuel and energy costs and metals prices. Many
industries, including the mining industry, have been impacted by these market
conditions. Global financial conditions remain subject to sudden and rapid
destabilizations in response to future economic shocks, as government
authorities may have limited resources to respond to future crises. A continued
or worsened slowdown in the financial markets or other economic conditions,
including but not limited to consumer spending, employment rates, business
conditions, inflation, fuel and energy costs, consumer debt levels, lack of
available credit, the state of the financial markets, interest rates and tax
rates, may adversely affect the Companys growth and profitability. Future
economic shocks may be precipitated by a number of causes, including debt
crises, a continued rise in the price of oil and other commodities, the
volatility of metal prices, geopolitical instability, terrorism, the devaluation
and volatility of global stock markets, health crises and natural disasters. Any
sudden or rapid destabilization of global economic conditions could impact the
Companys ability to obtain equity or debt financing in the future on terms
favourable to the Company or at all. In such an event, the Companys operations
and financial condition could be adversely impacted.

The exercise of outstanding stock options or warrants
will result in dilution to the holders of common shares.

The issuance of common shares upon the exercise of the
Companys outstanding stock options will result in dilution to the interests of
shareholders, and may reduce the trading price of the common shares.

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- 128 

Platinum Group Metals Ltd.
2016
Annual Information Form

Additional stock options and warrants to purchase common shares
may be issued in the future. Exercises of these securities, or even the
potential of their exercise, may have an adverse effect on the trading price of
the Companys common shares. The holders of stock options or warrants are likely
to exercise them at times when the market price of the Companys common shares
exceeds the exercise price of the securities. Accordingly, the issuance of
common shares upon exercise of the stock options and warrants will likely result
in dilution of the equity represented by the then outstanding common shares held
by other shareholders. The holders of stock options or warrants can be expected
to exercise or convert them at a time when the Company would, in all likelihood,
be able to obtain any needed capital on terms which are more favorable to the
Company than the exercise terms provided by these stock options and warrants.

Future sales or issuances of equity securities could
decrease the value of the common shares, dilute investors voting power and
reduce the Companys earnings per share.

The Company may sell equity securities in offerings (including
through the sale of debt securities convertible into equity securities) and may
issue additional equity securities to finance operations, exploration,
development, acquisitions or other projects. The Company cannot predict the size
of future issuances of equity securities or the size and terms of future
issuances of debt securities or other securities convertible into equity
securities or the effect, if any, that future issuances and sales of the
securities will have on the market price of the Companys common shares. Any
transaction involving the issuance of previously authorized but unissued common
shares, or securities convertible into common shares, would result in dilution,
possibly substantial, to shareholders. Exercises of presently outstanding stock
options may also result in dilution to shareholders.

The board of directors of the Company has the authority to
authorize certain offers and sales of the securities without the vote of, or
prior notice to, shareholders. Based on the need for additional capital to fund
expected expenditures and growth, it is likely that the Company will issue the
securities to provide such capital. Such additional issuances may involve the
issuance of a significant number of common shares at prices less than the
current market price.

Sales of substantial amounts of the securities, or the
availability of the securities for sale, could adversely affect the prevailing
market prices for the securities and dilute investors earnings per share. A
decline in the market prices of the securities could impair the Companys
ability to raise additional capital through the sale of additional securities
should the Company desire to do so.

Judgments based upon the civil liability provisions of
the United States federal securities laws may be difficult to enforce.

The ability of investors to enforce judgments of United States
courts based upon the civil liability provisions of the United States federal
securities laws against the Company, its directors and officers, and the experts
named herein may be limited due to the fact that the Company is incorporated
outside of the United States, a majority of such directors, officers, and
experts reside outside of the United States and a substantial portion of the
assets of the Company and said persons are located outside the United States.
There is uncertainty as to whether foreign courts would: (a) enforce judgments
of United States courts obtained against the Company, its directors and officers
or the experts named herein predicated upon the civil liability provisions of
the United States federal securities laws; or (b) entertain original actions
brought in Canadian courts against the Company or such persons predicated upon
the federal securities laws of the United States, as such laws may conflict with
Canadian laws.

There may be adverse Canadian tax consequences for a foreign
controlled Canadian company that acquires the securities of the Company.

Certain adverse tax considerations may be applicable to a
shareholder that is a corporation resident in Canada and is, or becomes,
controlled by a non-resident corporation for the purposes of the foreign
affiliate dumping rules in the Income Tax Act (Canada) (the Tax
Act). Such shareholders should consult their tax advisors with respect to
the consequences of acquiring the securities.

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- 129 

Platinum Group Metals Ltd.
2016
Annual Information Form

The Company may be a passive foreign investment company
in its current and future tax years, which may have adverse U.S. federal income
tax consequences for U.S. investors.

Potential investors in the securities who are U.S. taxpayers
should be aware that the Company may be classified as a passive foreign
investment company or PFIC for its current tax year ending August 31, 2017,
and may be a PFIC in future tax years. If the Company is a PFIC for any tax year
during a U.S. taxpayers holding period of the securities, then such U.S.
taxpayer generally will be required to treat any gain realized upon a
disposition of the securities or any so-called excess distribution received on
the securities, as ordinary income, and to pay an interest charge on a portion
of such gain or excess distribution. In certain circumstances, the sum of the
tax and the interest charge may exceed the total amount of proceeds realized on
the disposition, or the amount of excess distribution received, by the U.S.
taxpayer. Subject to certain limitations, these tax consequences may be
mitigated if a U.S. taxpayer makes a timely and effective qualified electing
fund or QEF election (a QEF Election) under Section 1295 of the
Internal Revenue Code of 1986, as amended (the Code) or a
mark-to-market election (a Mark-to-Market Election) under Section 1296
of the Code. Subject to certain limitations, such elections may be made with
respect to the securities, provided, however, that a QEF Election may not be
made with respect to warrants and debt securities convertible into common shares
and that the Mark-to-Market Election may only apply to common shares. A U.S.
taxpayer who makes a timely and effective QEF Election generally must report on
a current basis its share of the Companys net capital gain and ordinary
earnings for any year in which the Company is a PFIC, whether or not the Company
distributes any amounts to its shareholders. A U.S. taxpayer who makes the
Mark-to-Market Election generally must include as ordinary income each year the
excess of the fair market value of common shares over the taxpayers basis
therein. Each potential investor who is a U.S. taxpayer should consult its own
tax advisor regarding the U.S. federal, U.S. state and local, and foreign tax
consequences of the PFIC rules.

The Company is an emerging growth company and the
Company cannot be certain whether the reduced disclosure requirements applicable
to emerging growth companies will make the securities less attractive to
investors.

The Company is an emerging growth company, as defined in the
U.S. Jumpstart Our Business Startups Act of 2012, and intends to take advantage
of exemptions from various requirements that are applicable to other public
companies that are emerging growth companies, including not being required to
comply with the auditor attestation requirements of Section 404 of the U.S.
Sarbanes-Oxley Act of 2002 for so long as the Company is an emerging growth
company. The Company cannot predict if investors will find the securities less
attractive because the Companys independent auditors will not have attested to
the effectiveness of the Companys internal controls. If some investors find the
securities less attractive as a result of the Companys independent auditors not
attesting to the effectiveness of the Companys internal controls or as a result
of other exemptions that the Company may take advantage of, there may be a less
active trading market for the securities and the value of the securities may be
adversely affected.

|ITEM 6 | DIVIDENDS AND DISTRIBUTIONS
|------ | ---------------------------

The Company has not declared nor paid dividends or
distributions on its common shares in any of its three most recently completed
financial years.

There following restrictions could prevent the Company from
paying dividends or distributions:

|(a) | the exchange controls of the Government of South Africa.
      See South African Regulatory Framework - Exchange Control
  above;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(b) | In 2012, the Government of South Africa replaced the
      longstanding secondary tax on corporations with a dividend tax levied on
      shareholders. Before the new dividend tax became law, secondary tax on
      corporations had been levied at a rate of 10% on all dividends declared by
      companies resident in South Africa. The current rate of dividends tax is
      15%. Under an existing tax treaty between Canada and South Africa, the
      effective rate under the new dividend tax in South Africa on dividends
      paid from Maseve and PTM RSA to the Company will be 5% of the gross amount
      of dividends, provided the Company continues to hold at least 10% of the
      capital of PTM RSA. Dividend taxes are to be withheld by corporations in
      South Africa on behalf of shareholders and remitted to the South African
      Revenue Service.

---

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Platinum Group Metals Ltd.
2016
Annual Information Form

|(c) | Both the Sprott Facility and the LMM Facility specify
      that the Company may not declare and pay dividends during the terms of
      those agreements, except with the prior written consent of Sprott and/or
      LMM, as applicable,
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Company has no current dividend or distribution policy and
has no present intention to change its dividend or distribution policy, as it
anticipates that all available funds will be invested to finance the growth of
its business. The Companys directors will determine if and when dividends
should be declared and paid in the future based on the Companys financial
position at the relevant time.

|ITEM 7 | DESCRIPTION OF CAPITAL STRUCTURE
|------ | --------------------------------

The Companys authorized share structure consists of an
unlimited number of common shares without par value, of which 112,803,619 common
shares were issued and outstanding as at November 29, 2016. All of the issued
common shares are fully paid. The Company does not own any of its common shares.

Shareholders are entitled to one vote for each common share on
all matters to be voted on by the shareholders. Each common share is equal to
every other common share and all common shares participate equally on
liquidation, dissolution or winding-up of the Company, whether voluntary or
involuntary, or any other distribution of the Companys assets among the
shareholders for the purpose of winding-up its affairs after it has paid out its
liabilities. Shareholders are entitled to receive pro-rata such dividends as may
be declared by the board of directors out of funds legally available therefore
and to receive pro-rata the remaining property of the Company upon dissolution.
No common shares have been issued subject to call or assessment. There are no
pre-emptive or conversion rights, and no provisions for redemption, purchase or
cancellation, surrender, sinking fund or purchase fund. Provisions as to the
creation, modification, amendment or variation of such rights or such provisions
are contained in the BCBCA.

On July 10, 2012, the Company announced that its board of
directors had approved the adoption of a shareholder rights plan dated July 9,
2012 (the Shareholder Rights Plan) subject to shareholder approval,
which was received at the Companys annual general meeting held on January 8,
2013 and which shareholder approval was renewed at the Companys AGM held on
February 26, 2016. The Shareholders Rights Plan will continue in force up to the
end of the Companys third annual general meeting of shareholders following the
shareholder approval obtained on February 26, 2016, subject to earlier expiry in
the event of (i) the redemption of the shareholder rights; or (ii) the exchange
of the shareholder rights for debt or equity securities or assets (or a
combination thereof), all as more particularly set out in the Shareholder Rights
Plan.

The Companys management considers its current market valuation
to be in contrast to the advancement of the Company and its business. As a
result, the board of directors undertook a review to consider the need for a
shareholder rights plan. The Shareholder Rights Plan is not intended to prevent
or discourage a fair bid for the Company. The purpose of the Shareholder Rights
Plan is to provide shareholders and the Companys board of directors with
adequate time to consider and evaluate any unsolicited bid made for the Company,
to provide the board of directors with adequate time to identify, develop and
negotiate value-enhancing alternatives, if considered appropriate, to any such
unsolicited bid, to encourage the fair treatment of shareholders in connection
with any take-over bid for the Company and to ensure that any proposed
transaction is in the best interests of the Company's shareholders.

The rights issued under the Shareholder Rights Plan will become
exercisable only if a person, together with its affiliates, associates and joint
actors, acquires or announces its intention to acquire beneficial ownership of
shares which when aggregated with its current holdings, total 20% or more of the
Companys outstanding common shares (determined in the manner set out in the
Shareholder Rights Plan), other than by a Permitted Bid or Shareholder Endorsed
Insider Bid (in each case as described in the Shareholder Rights Plan).
Permitted Bids must be made by way of a take-over bid circular prepared in
compliance with applicable securities laws and, among other conditions, must
remain open for 60 days. A Shareholder Endorsed Insider Bid is a take-over bid
made by a bidder who together with its affiliates or associates and joint actors
has beneficial ownership of 10% or more of the voting securities of the Company,
by way of take-over bid circular to all shareholders, and in respect of which,
among other things, more than 50% of the common shares held by shareholders have
been tendered to the take-over bid at the time of first take-up under the
take-over bid and the date of such first take-up occurs not later than the
120th calendar day following the date on which the take-over bid is
commenced. A Shareholder Endorsed Insider Bid is not required to be open for a minimum
period of time beyond the 35 days required under applicable securities law.

---

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Platinum Group Metals Ltd.
2016
Annual Information Form

In the event that a take-over bid does not meet the Permitted
Bid or Shareholder Endorsed Insider Bid requirements of the Shareholder Rights
Plan, the rights will entitle shareholders, other than any shareholder or
shareholders making the take-over bid, to purchase additional common shares of
the Company at a substantial discount to the market price of the common shares
at that time.

A copy of the Shareholder Rights Plan was provided to the TSX
and the TSX accepted the notice for filing. The Company is not aware of
any specific take-over bid for the Company that has been made or is
contemplated.

|ITEM 8 | MARKET FOR SECURITIES
|------ | ---------------------

Trading Price and Volume

The common shares are listed on the TSX under the symbol PTM
and on the NYSE MKT under the symbol PLG.

The following tables provide information as to the high and low
trading prices of the common shares during the 12 months of the most recently
completed financial year as well as the volume of common shares traded for each
month:

Toronto Stock Exchange PTM(1)

Month
    High
      (CDN$/share)(2)
    Low (CDN$/share)(2)
    Volume (# of
      shares)September, 2015
    4.00
    2.90
    199,613October, 2015
    4.30
    3.00
    645,474November, 2015
    3.45
    2.80
    208,371December, 2015
    3.00
    1.75
    2,166,542January, 2016
    2.05
    1.35
    1,223,459February, 2016
    3.00
    1.41
    4,237,233March, 2016
    5.25
    2.51
    3,111,955April, 2016
    5.07
    3.16
    3,329,126May, 2016
    4.74
    3.42
    1,788,239June, 2016
    4.64
    3.51
    1,827,030July, 2016
    4.95
    3.79
    2,665,700August, 2016
    4.63
    3.59
    1,568,123


Notes:

|(1) | The price and volume have been adjusted to reflect the
      Share Consolidation.
|--- | ---------------------------------------------------------------------------------
|(2) | Based on intra-day highs and
lows.                                               

NYSE MKT  PLG(1)

Month
    High (US$/share)(2)
    Low (US$/share)(2)
    Volume (# of
      shares)September, 2015
    2.90
    2.17
    351,124October, 2015
    3.40
    2.26
    1,518,493November, 2015
    2.65
    2.03
    738,390December, 2015
    2.26
    1.25
    1,624,307January, 2016
    1.51
    0.96
    1,462,689February, 2016
    2.19
    1.01
    15,083,013March, 2016
    4.04
    1.86
    8,742,239April, 2016
    3.91
    2.46
    10,796,958May, 2016
    3.71
    2.65
    7,089,516June, 2016
    3.57
    2.73
    8,766,770July, 2016
    3.98
    2.87
    10,608,231


---

- 132 

Platinum Group Metals Ltd.
2016
Annual Information Form

Month
    High (US$/share)(2)
    Low (US$/share)(2)
    Volume (# of
      shares)August, 2016
    3.56
    2.75
    7,993,488


Notes:

|(1) | The price and volume have been adjusted to reflect the
      Share Consolidation.
|--- | ---------------------------------------------------------------------------------
|(2) | Based on intra-day highs and
lows.                                               

Prior Sales

During the most recently completed financial year, the Company
has issued the following stock options (Options) convertible into
common shares at the following exercise prices:

Date of Issuance
    Number of Options
      Issued(1)
    Exercise PricesDecember 22, 2015
    1,016,550
    CDN$2.00TOTAL
    1,016,550


Note:

|(1) | Each Option is exercisable into one common
  share.
|--- | ---------------------------------------------------

|ITEM 9 | ESCROWED SECURITIES AND
      SECURITIES SUBJECT TO CONTRACTUAL
      RESTRICTION ON TRANSFER
|------ | ---------------------------------------------------------------------------------------------

There are no securities of the Company held, to the Companys
knowledge, in escrow or that are subject to a contractual restriction on
transfer.

|ITEM 10 | DIRECTORS AND OFFICERS
|------- | ----------------------

Name, Occupation and Security Holding

Name, Province or
      State and Country of Residence, Positions and
      Offices
    Principal Occupation or Employment during
      the preceding five years
    Director since(6)R. MICHAEL JONES(4)British Columbia, Canada President, CEO and Director
    Professional Geological
      Engineer. President and Chief Executive Officer of the Company and a
      predecessor company from 2000 to the present.
    February 18, 2002FRANK R. HALLAM(4)British Columbia, Canada CFO, Corporate Secretary and Director
    Chartered Accountant. Chief
      Financial Officer of the Company and the founder of a predecessor company
      from 1983 to the present.
    February 18, 2002BARRY SMEE(1)(2)(3)British Columbia, Canada Director
    Geologist and Geochemist.
      President of Smee & Associates, a private consulting, geological and
      geochemistry company, from 1990 to the present.
    February 18, 2002IAIN McLEAN(1)(2)(3)British Columbia, Canada Chairman and Director
    General Management Consultant
      and Chartered Engineer. Chief Operating Officer, MineSense Technologies, a
      technology company based in Vancouver, B.C. from Aug 2014 to Sep 2015;
      Regional Vice President, Gemcom Software/Dassault Systemes GEOVIA from
      June 2010 to July 2014.
    February 18, 2002ERIC CARLSON(1)British Columbia, Canada Director
    Chartered Accountant. Chief
      Executive Officer of Anthem Works Ltd., a real estate investment,
      development and management company, from July 1994 to the present.
    February 18, 2002TIMOTHY D. MARLOW(3)(4)British Columbia, Canada Director
    Chartered Mining Engineer and
      Consultant. President of Philippine Gold Consulting LLC from 1995  2014;
      President of Marlow & Associates from 1995 to the present.
    June 15, 2011


---

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Platinum Group Metals Ltd.
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Annual Information Form

Name, Province or
      State and Country of Residence, Positions and
      Offices
    Principal Occupation or Employment during
      the preceding five years
    Director since(6)DIANA WALTERS(1)(2)North Salem, New
      York, USA Director
    Consulting specialist primarily in natural
      resources, principal investing, investment banking/finance and industry
      management. President and CEO of Liberty Metals and Mining Holdings, LLC
      from Jan 2010 to Oct 2014.
    July 16, 2013PETER BUSSE British Columbia,
      Canada COO
    Professional Mining Engineer.
      Chief Operating Officer of the Company from Oct 2007 to the present.
    N/A


Notes:

|(1) | Member of the Audit Committee                      
|--- | ---------------------------------------------------
|(2) | Member of the Compensation Committee               
|(3) | Member of the Governance and Nominating
  Committee
|(4) | Member of the Disclosure
Committee                 

As of November 29, 2016, directors and executive officers of
the Company, as a group, beneficially own, control or direct, directly or
indirectly, approximately 534,171 common shares representing approximately 0.47%
of the Companys issued and outstanding common shares.

The term of office for each director of the Company expires at
the annual general meeting of shareholders where they can be nominated for
re-election.

Corporate Cease Trade Orders, Bankruptcies, Penalties or
Sanctions

Except as disclosed below, no director or executive officer of
the Company (or any of their personal holding companies) is, or during the ten
years preceding the date of this AIF has been, a director, chief executive
officer or chief financial officer of any company, including the Company, that:

|(i)  | was subject to an order that was issued while the
      director or executive officer was acting in the capacity as director,
      chief executive officer or chief financial order; or                                                                                                                                                        
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(ii) | was subject to an order that was issued after the
      director or executive officer ceased to be a director, chief executive
      officer or chief financial officer and which resulted from an event that
      occurred while that person was acting in the capacity as director, chief
      executive officer or chief financial officer;

Mr. Jones and Mr. Hallam are directors of Nextraction Energy
Corp. (NE), which is currently the subject of a Cease Trade Order of
the BCSC issued on May 8, 2015 for failing to file a comparative financial
statement for its financial year ended December 31, 2014 and a Form 51-102F1
Management's Discussion and Analysis for the period ended December 31, 2014 (the
Required Records). NE is working on a financing and reorganization so
that it can complete the Required Records.

For the purposes hereof, order means:

| | (a) | a cease trade order;                                                                                 
| | --- | -----------------------------------------------------------------------------------------------------
| | (b) | an order similar to a cease trade order; or                                                          
| | (c) | an order that denied the relevant company access to any
      exemption under securities legislation,

that was in effect for a period of more than 30 consecutive
days.

No director or executive officer of the Company, or a
shareholder holding a sufficient number of securities of the Company to affect
materially the control of the Company, (or any of their personal holding
companies):

---

- 134 

Platinum Group Metals Ltd.
2016
Annual Information Form

|(i)  | is, as at the date of this AIF or during the ten years
      preceding the date of this AIF has been, a director or executive officer,
      of any company, including the Company, that while the director or
      executive officer was acting in that capacity or within a year of that
      person ceasing to act in that capacity, became bankrupt, made a proposal
      under any legislation relating to bankruptcy or insolvency or was subject
      to or instituted any proceedings, arrangement, or compromise with
      creditors, or had a receiver, receiver manager, or trustee appointed to
      hold its assets; or
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(ii) | has, within the ten years before the date of this AIF,
      become bankrupt, made a proposal under any legislation relating to
      bankruptcy or insolvency, or become subject to or instituted any
      proceedings, arrangement or compromise with creditors, or had a receiver,
      receiver manager or trustee appointed to hold the assets of that director
      or executive officer.                                                                                                                                                                                                                                        

No director or executive officer of the Company, or a
shareholder holding a sufficient number of securities of the Company to affect
materially the control of the Company, (or any of their personal holding
companies) has been subject to:

|(i)  | any penalties or sanctions imposed by a court relating to
      securities legislation or by a securities regulatory authority or has
      entered into a settlement agreement with a securities regulatory
      authority; or
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                 
|(ii) | any other penalties or sanctions imposed by a court or
      regulatory body which would likely be considered important to a reasonable
      investor in making an investment decision.                                        

Conflicts of Interest

Certain of the Companys directors and officers may serve as
directors or officers of other companies or have significant shareholdings in
other resource companies and, to the extent that such other companies may
participate in ventures in which the Company may participate, the directors of
the Company may have a conflict of interest in negotiating and concluding terms
respecting the extent of such participation. In the event that such a conflict
of interest arises at a meeting of the Companys directors, a director who has
such a conflict will abstain from voting for or against the approval of such
participation or such terms. Such companies may, from time to time, compete with
the Company for business opportunities. In addition, several companies may
participate in the acquisition, exploration and development of natural resource
properties thereby allowing for their participation in larger programs,
permitting involvement in a greater number of programs and reducing financial
exposure in respect of any one program. It may also occur that a particular
company will assign all or a portion of its interest in a particular program to
another of these companies due to the financial position of the company making
the assignment. In accordance with the laws of British Columbia the directors of
the Company are required to act honestly, in good faith and in the best
interests of the Company. In determining whether or not the Company will
participate in a particular program and the interest therein to be acquired by
it, the directors will primarily consider the degree of risk to which the
Company may be exposed and its financial position at that time.

The directors and officers of the Company are aware of the
existence of laws governing the accountability of directors and officers for
corporate opportunity and requiring disclosures by the directors of conflicts of
interest and the Company will rely upon such laws in respect of any directors
and officers conflicts of interest or in respect of any breaches of duty by any
of its directors and officers. All such conflicts will be disclosed by such
directors or officers in accordance with the laws of British Columbia shall
govern themselves in respect thereof to the best of their ability in accordance
with the obligations imposed upon them by law. The Company leases office space
from a company with a director in common, and provides administrative services
to several companies with directors or management in common. The directors and
officers of the Company are not aware of any conflicts of interests involving
the Companys mineral properties.

Code of Ethics

The Company has adopted a Code of Business Conduct and Ethics
(the Code) that applies to all of its directors, officers and
employees, including the Chief Executive Officer and Chief Financial Officer.
The Code includes provisions covering conflicts of interest, ethical conduct,
compliance with applicable government laws, rules and regulations, disclosure in
reports and documents filed with, or submitted to, the SEC, reporting of
violations of the Code and accountability for adherence to the Code. A copy of
the Code is posted on the Companys website, at
www.platinumgroupmetals.net.

---

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Platinum Group Metals Ltd.
2016
Annual Information Form

The Company has not granted any waiver, including any implicit
waiver, from a provision of the Code during the Companys most recently
completed fiscal year ending August 31, 2016. Subsequent to the 2016 fiscal year
end, the Company amended the Code in November 2016 to clarify certain rights
regarding communications with regulatory authorities, consistent with evolving
and accepted standards of corporate governance.

|ITEM 11 | PROMOTERS
|------- | ---------

No individuals acted as promoters of the Corporation within the
two most recently completed financial years or during the current financial
year.

|ITEM 12 | LEGAL PROCEEDINGS AND REGULATORY ACTIONS
|------- | ----------------------------------------

Legal Proceedings

During the most recently completed financial year, there were
no legal proceedings to which the Company is or was the subject of. The Company
knows of no legal proceedings to be contemplated.

Regulatory Actions

There are no penalties or sanctions imposed against the Company
by a court relating to securities legislation or by a securities regulatory
authority during the Companys financial year. There are no other penalties or
sanctions imposed by a court or regulatory body against the Company that would
likely be considered important to a reasonable investor in making an investment
decision. There are no settlement agreements entered into by the Company before
a court relating to securities legislation or with a securities regulatory
authority during the Companys financial year.

|ITEM 13 | INTEREST OF MANAGEMENT AND OTHERS IN
      MATERIAL TRANSACTIONS
|------- | ----------------------------------------------------------------

No director, executive officer or person or company that
beneficially owns, or controls or directs, directly or indirectly, more than ten
percent of the common shares of the Company, or any associate or affiliate of
the foregoing, has had any material interest, direct or indirect, in any
transaction within the three most recently completed financial years or during
the current financial year that has materially affected or is reasonable
expected to materially affect the Company.

|ITEM 14 | TRANSFER AGENTS AND REGISTRARS
|------- | ------------------------------

The Companys transfer agent and registrar is Computershare
Investor Services Inc. in Canada and Computershare Trust Company, N.A. in the
USA. The registers of transfers of the common shares of the Company are located
in Vancouver, British Columbia and Toronto, Ontario in Canada and in Golden,
Colorado in the USA.

|ITEM 15 | MATERIAL CONTRACTS
|------- | ------------------

Except for contracts entered into in the ordinary course of
business, the only material contracts that we have entered into in the financial
year ended August 31, 2016, or before the last financial year but still in
effect, are as follows:

|1. | Shareholders Rights Plan Agreement dated July 9, 2012
      between the Company and Computershare Investor Services Inc. as Rights
      Agent and approved by the Shareholders on January 8, 2013 and February 26,
      2016;
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | The Maseve Shareholders Agreement among PTM RSA, Africa
      Wide and Maseve dated April 24, 2008; and                                                                                                                        
|3. | The JOGMEC Agreement, as amended, dated October 12, 2009
      among the Company, JOGMEC and Mnombo governing the Waterberg Joint
      Venture.                                                                               

Other than the above, there are no contracts other than
contracts entered into in the ordinary course of business of the Company (See
Mineral Property Interests) that are material to the Company and that were entered into within the most recently completed financial
year of the Company or before the most recently completed financial year of the
Company and which are still in effect.

---

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Platinum Group Metals Ltd.
2016
Annual Information Form

|ITEM 16 | INTERESTS OF EXPERTS
|------- | --------------------

Names of Experts

The following persons or companies are named as having prepared
or certified a report, valuation, statement or opinion described in or included
in a filing, or referred to in a filing, made under NI 51-102 by the Company
during, or relating to the Companys most recently completed financial year,
whose profession or business gives authority to the report, valuation, statement
or opinion made by the person of company.

Name
    DescriptionCharles Muller (B. Sc. (Hons) Geology) Pri. Sci. Nat.,
      CJM Consulting (Pty) Ltd.
    Authored the Project 3 Report and co-authored
      the Project 1 Report and the October 2016 Waterberg Report, each of which
      is referred to herein.Gert Roets (B. Eng. Mining), Pr. Eng.
      (ECSA), of DRA Projects SA (Pty) Ltd.
    Co-authored the Project 1
      Report, which is referred to herein.Gordon Cunningham, B. Eng. (Chemical),
      Pr. Eng. (ECSA) of Turnberry Projects (Pty) Ltd.
    Co-authored the Project 1
      Report and the October 2016 Waterberg Report, each of which is referred to
      herein.Robert L Goosen, B. Eng. (Mining
      Engineering), Pr. Eng (ECSA) of Advisian/Worley Parsons Group
    Co-authored the October 2016
      Waterberg Report, which is referred to herein.R. Michael Jones, P. Eng. Platinum Group
    The President and Chief Executive Officer of
      the Company. The non-independent Qualified Person for the disclosure in
      the material change reports of the Company dated November 3, 2015,
      November 23, 2015, January 12, 2016, February 9, 2016, March 17, 2016,
      April 19, 2016, May 5, 2016, May 31, 2016 and July 14, 2016 and certain
      disclosure contained herein.


Interests of Experts

There were no registered or beneficial interests, direct or
indirect, in any securities or other property of the Company or of one of the
Companys associates or affiliates (a) held by the persons or companies named
above (experts), and if the expert is not an individual, by the designated
professionals of that expert, when that expert prepared the report, valuation,
statement or opinion referred to above; (b) received by an expert named above
and, if the expert is not an individual, by the designated professionals of that
expert, after the time that expert prepared the report, valuation, statement or
opinion referred to above; or (c) to be received by an expert named above and,
if the expert is not an individual, by the designated professionals of that
expert, except for R. Michael Jones or other than compensation in cash for their
services.

None of the aforementioned experts, nor any directors, officers
or employees of an expert referred to above, is currently expected to be
elected, appointed or employed as a director, officer or employee of the Company
or of any associate or affiliate of the Company.

Independent Auditor

PricewaterhouseCoopers LLP, Chartered Professional Accountants,
of Vancouver, British Columbia are the external auditor of the Company who have
issued an independent auditors report dated November 29, 2016 in respect of the
Companys consolidated statements of financial position as at August 31, 2016
and August 31, 2015 and the related consolidated statements of loss and
comprehensive loss, changes in equity and cash flows for the years ended August 31, 2016
and August 31, 2015. PricewaterhouseCoopers LLP has advised that they are
independent of the Company within the meaning of the Code of Professional
Conduct of the Chartered Professional Accountants of British Columbia and the
applicable rules and regulations of the SEC.

---

- 137 

Platinum Group Metals Ltd.
2016
Annual Information Form

|ITEM 17 | ADDITIONAL INFORMATION
|------- | ----------------------

Additional Information

Additional information relating to the Company may be found on
SEDAR at www.sedar.com and on EDGAR at www.sec.gov.

Additional information, including directors and officers
remuneration and indebtedness, principal holders of the Companys securities and
securities authorized for issuance under equity compensation plans, if
applicable, is contained in the Companys information circular for its most
recent annual meeting of shareholders.

Additional financial information is provided in the Companys
Financial Statements and Managements Discussion and Analysis for the year ended
August 31, 2016.

Copies of the above may be obtained, on the Companys website
www.platinumgroupmetals.net; on the SEDAR website at
www.sedar.com; on the SECs EDGAR website at www.sec.gov; or by
calling the Companys investor relations personnel at 604-899-5450.

Audit Committee

Pursuant to National Instrument 52 110  Audit
Committees (NI 52-110), companies that are required to file an AIF
are required to provide certain disclosure with respect to their audit
committee. The Companys audit committee (Audit Committee) is
responsible for reviewing the Companys financial reporting procedures, internal
controls and the performance .of the Companys external auditors.

Audit Committee Charter

The text of the Audit Committee Charter attached hereto as
Schedule B.

Audit Committee Composition and Background

The Audit Committee is comprised of Eric Carlson (Chairman),
Iain McLean, Barry Smee and Diana Walters. All four members of the Audit
Committee are independent and financially literate, meaning they are able to
read and understand the Companys financial statements and to understand the
breadth and level of complexity of the issues that can reasonably be expected to
be raised by the Companys financial statements.

In addition to each members general business experience, the
education and experience of each member of the Audit Committee that is relevant
to the performance of his or her responsibilities as a member of the Audit
Committee are set forth below:

Eric H. Carlson, B.Comm, Chartered
Accountant - Mr. Carlson has over 20 years of real estate investment,
development and management experience and he has been the President of Anthem
Works Ltd. (Anthem) since July 1994. Anthem is an investment group that
specializes in the acquisition, development and management of Class B retail,
multi-family residential and office properties in high growth markets in Canada
and the USA.

Iain D. C. McLean, B.Sc.Eng (ARSM),
M.B.A., MIMM. C. Eng.  Mr. McLean has experience as a senior executive in
several public companies managing operations, listings, capital raising, etc. He
also has experience in underground mining operations in the UK and South Africa.

Dr. Barry W. Smee, Ph.D., P.Geo -
Professional geologist/geochemist with 46 years in mineral exploration as a
quality control and laboratory audit expert.

Diana Walters  Ms. Walters has over 25 years in the financial
services sector and has served on the audit committee of other publicly-traded
companies.



---

- 138 

Platinum Group Metals Ltd.
2016
Annual Information Form

The board of directors has determined that each of Mr. McLean
and Mr. Carlson is an audit committee financial expert within the meaning of the
regulations promulgated by the SEC and is independent within the meaning of the
NYSE MKT LLC Company Guide. Mr. McLean has an M.B.A. from Harvard Business
School and a B.Sc (Eng.) in Mining from the Imperial College of Science and
Technology (London, England). In addition to his education, Mr. McLean has
gained relevant experience acting as the Chief Operating Officer of several
private technology companies since 1995 and as the Vice President of Operations
at Ballard Power Systems from 1993 to 1995. Mr. Carlson is a Chartered
Accountant and holds a Bachelor of Commerce degree from the University of
British Columbia.

Reliance on Certain Exemptions

At no time since the commencement of the Companys most
recently completed financial year has the Company relied on any of the
exemptions set out in Section 2.4 (De Minimis Non-audit Services),
Section 3.2 (Initial Public Offerings), Section 3.4 (Events Outside
Control of Member), Section 3.5 (Death, Disability or Resignation of
Audit Committee Member),Subsection 3.3(2)(Controlled Companies),3.6(Temporary Exemption for Limited and Exceptional Circumstances)
or Section 3.8 (Acquisition of Financial Literacy) of NI 52-110, or an
exemption from NI 52-110, in whole or in part, granted under Part 8 of NI
52-110.

Audit Committee Oversight

At no time since the commencement of the Companys most
recently completed financial year was a recommendation of the Audit Committee to
nominate or compensate an external auditor not adopted by the board of
directors.

Pre-Approval Policies and Procedures

The Companys Audit Committee is authorized to review the
performance of the Companys independent auditors and pre-approves all audit and
non-audit services to be provided to the Company by its independent auditor.
Prior to granting any pre-approval, the Audit Committee must be satisfied that
the performance of the services in question is not prohibited by applicable
securities laws and will not compromise the independence of the independent
auditor. All non-audit services performed by the Companys auditor for the
fiscal year ended August 31, 2016 and August 31, 2015 have been pre-approved by
the Audit Committee.

External Auditor Service Fees (By Category)

The aggregate fees billed by the Companys current independent
auditor, PricewaterhouseCoopers LLP, during the fiscal years ended August 31,
2016 and 2015 are set forth below in U.S. Dollars:

Year ended
      August 31, 2016
    Year ended
      August 31, 2015Audit Fees
    $219,516
    $226,502Audit-Related Fees(1)
    $52,032
    $54,558Tax Fees(2)
    $4,525
    $4,960All Other Fees(3)
    $55,388
    $2,480Total
    $331,461
    $288,500


Notes:

|(1) | The aggregate fees billed for assurance and related
      services that are reasonably related to the performance of the audit or
      review of our financial statements, which are not included under the
      heading Audit Fees.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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- 139 

Platinum Group Metals Ltd.
2016
Annual Information Form

|(2) | The aggregate fees billed for professional services
      rendered for tax compliance, tax advice and tax planning, including
      restructuring advice.  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | The aggregate fees billed for products and services other
      than as set out under the headings Audit Fees, Audit Related Fees and
      Tax Fees.

---

SCHEDULE A

LIST OF ABBREVIATIONS AND GLOSSARY OF MINING
TERMS

The following is a list of abbreviations and a glossary of
certain mining terms used in this AIF:

3E refers to platinum, palladium and gold,
collectively.

4E refers platinum, palladium, rhodium and gold,
collectively.

amsl refers to above mean sea level.

anomalous refers to a sample or location that either
(i) the concentration of an element(s) or (ii) geophysical measurement is
significantly different from the average background values in the area.

anomaly refers to the geographical area corresponding
to anomalous geochemical or geophysical values.

anorthosite is an intrusive igneous rock characterized
by a predominance of plagioclase feldspar (90-100%), and a minimal mafic
component (010%). Pyroxene, ilmenite, magnetite, and olivine are the mafic
minerals most commonly present.

anticlines is a ridge or ridge-shaped fold of
stratified rock in which the strata slope downward from the crest.

apatite is a widely occurring pale green to purple
mineral, consisting of calcium phosphate with some fluorine, chlorine, and other
elements.

assay is an analysis to determine the quantity of one
or more elemental components.

Au refers to gold.

basket price per 4E ounce refers to the aggregate
value for one combined ounce of platinum, palladium, rhodium and gold, based on
the prill split, or ratio of representative metals, for each of the four
elements contained in the combined 4E ounce, valued at a stated price per ounce
for those same elements.

blebs is a small particle.

chromitite is an igneous cumulate rock composed mostly
of the mineral chromite. It is found in layered intrusions.

cm refers to centimetres.

cmg/t refers to centimetre grams per tonne.

Cu refers to copper.

cupellation is a refining process for nonoxidizing
metals, such as silver and gold, in which a metallic mixture is oxidized at high
temperatures and base metals are separated by absorption into the walls of a
cupel.

deposit is a mineralized body, which has been
physically delineated by sufficient drilling, trenching, and/or underground
work, and found to contain a sufficient average grade of metal or metals to
warrant further exploration and/or development expenditures. Such a deposit does
not qualify as a commercially mineable ore body or as containing ore reserves,
until final legal, technical, and economic factors have been resolved.

diamond drill is a type of rotary drill in which the
cutting is done by abrasion rather than percussion. The cutting bit is set with
diamonds and is attached to the end of the long hollow rods through which water is pumped to the cutting face. The drill cuts a core of
rock that is covered in long cylindrical sections, an inch or more in diameter.

---

- 2 

dolerite is a dark basic intrusive igneous rock
consisting of plagioclase feldspar and a pyroxene.

dunite is a green to brownish coarse-grained igneous
rock consisting largely of olivine.

early-stage exploration project refers to a property
that has been subjected to a limited amount of physical testing and systematic
exploration work with no known extensive zone of mineralization.

exploration stage refers to the stage where a company
is engaged in the search for minerals deposits (reserves), which are not in
either the development or production stage.

fault is a fracture in a rock across which there has
been displacement.

felsic, felsites and feldspathic
refers to an igneous rock that contains a group of light-colored silicate
minerals, including feldspar, feldspathoid, quartz, and muscovite.

fracture is a break in a rock, usually along flat
surfaces.

gabbro is an intrusive rock comprised of a mixture of
mafic minerals and feldspars.

grade is the concentration of an ore metal in a rock
sample, given either as weight percent for base metals (i.e., Cu, Zn, Pb) or in
grams per tonne (g/t) or ounces per short ton (oz/t) for precious or platinum
group metals.

g/t refers to grams per tonne.

ha refers to hectares.

harzburgite is a variety of peridotite consisting
mostly of the two minerals, olivine and low-calcium (Ca) pyroxene (enstatite).
It commonly contains a few percent chromium-rich spinel as an accessory mineral.

ICP refers to inductively coupled plasma, a laboratory
technique used for the quantitative analysis of samples (soil, rock, etc.) taken
during field exploration programs.

indicated mineral resource is that part of a mineral
resource for which quantity, grade or quality, densities, shape and physical
characteristics can be estimated with a level of confidence sufficient to allow
the appropriate application of technical and economic parameters, to support
mine planning and evaluation of the economic viability of the deposit. The
estimate is based on detailed and reliable exploration and testing information
gathered through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes that are spaced closely enough for
geological and grade continuity to be reasonably assumed.

inferred mineral resource is that part of a mineral
resource for which quantity and grade or quality can be estimated on the basis
of geological evidence and limited sampling and reasonably assumed, but not
verified, geological and grade continuity. The estimate is based on limited
information and sampling gathered through appropriate techniques from locations
such as outcrops, trenches, pits, workings and drill holes.

intrusive is a rock mass formed below earths surface
from molten magma, which was intruded into a pre-existing rock mass and cooled
to solid.

isopach is a line on a map or diagram connecting
points beneath which a particular stratum or group of strata has the same
thickness.

km refers to kilometres.

kriging is the numerical modeling by applying
statistics to resource calculations (or other earth sciences problems). The
method recognizes that samples are not independent and that spatial continuity
between samples exists.

---

- 3 

m refers to metres.

ML/day refers to megalitre/day.

mafic is a rock type consisting of predominantly iron
and magnesium silicate minerals with little quartz or feldspar minerals.

magmatic means pertaining to magma, a naturally
occurring silicate melt, which may contain suspended silicate crystals,
dissolved gases, or both; magmatic processes are at work under the earths
crust.

measured mineral resource is that part of a mineral
resource for which quantity, grade or quality, densities, shape, physical
characteristics are so well established that they can be estimated with
confidence sufficient to allow the appropriate application of technical and
economic parameters, to support production planning and evaluation of the
economic viability of the deposit. The estimate is based on detailed and
reliable exploration, sampling and testing information gathered through
appropriate techniques from locations such as outcrops, trenches, pits, workings
and drill holes that are spaced closely enough to confirm both geological and
grade continuity.

mineralization refers to minerals of value occurring
in rocks.

mineral reserve is the economically mineable part of a
measured or indicated mineral resource demonstrated by at least a preliminary
feasibility study. This study must include adequate information on mining,
processing, metallurgical, economic and other relevant factors that demonstrate,
at the time of reporting, that economic extraction can be justified. A mineral
reserve includes diluting materials and allowances for losses that may occur
when material is mined.

mineral resource is a concentration or occurrence of
natural, solid, inorganic or fossilized organic material in or on the Earths
crust in such form and quantity and of such a grade or quality that it has
reasonable prospects for economic extraction. The location, quantity, grade,
geological characteristics and continuity of a mineral resource are known,
estimated or interpreted from specific geological evidence and knowledge.

MR refers to Merensky Reef.

MVA refers to megavolt ampere.

NI 43-101 refers to National Instrument 43-101 
Standards of Disclosure for Mineral Projects of the Canadian Securities
Administrators which sets out Canadian securities reporting guidelines for
mining companies.

Ni is an abbreviation for nickel.

noritic is a coarse-grained igneous rock, very similar
to gabbro but containing orthopyroxene instead of clinopyroxene.

olivine is a mineral silicate of iron and magnesium,
principally (Mg, Fe) 2SiO4, found in igneous and metamorphic rocks and used as a
structural material in refractories and in cements.

orthopyroxenite is a member of the pyroxene group of
minerals having an orthorhombic crystal structure, such as enstatite and
hypersthenes.

ounce or oz refers to a troy ounce having a
weight of 31.103 grams.

outcrop refers to an exposure of rock at the earths
surface.

overburden is any material covering or obscuring rocks
from view.

pegmatoid is an igneous rock that has the
coarse-grained texture of a pegmatite but that lacks graphic intergrowths or
typically granitic composition.

---

- 4 

Pd refers to palladium.

PGM refers to platinum group metals, i.e. platinum,
palladium, rhodium and gold.

PGE refers to mineralization containing platinum group
elements, i.e. platinum, palladium, rhodium and gold.

plagioclase is a form of feldspar consisting of
aluminosilicates of sodium and/or calcium, common in igneous rocks and typically
white.

ppb refers to parts per billion.

probable mineral reserve is the economically mineable
part of an indicated, and in some circumstances a measured mineral resource
demonstrated by at least a preliminary feasibility study. This study must
include adequate information on mining, processing, metallurgical, economic, and
other relevant factors that demonstrate, at the time of reporting, that economic
extraction can be justified.

proven mineral reserve is the economically mineable
part of a measured mineral resource demonstrated by at least a preliminary
feasibility study. This study must include adequate information on mining,
processing, metallurgical, economic and other relevant factors that demonstrate,
at the time of reporting, that economic extraction is justified

Pt refers to platinum.

pyroxenite refers to a relatively uncommon
dark-coloured rock consisting chiefly of pyroxene; pyroxene is a type of rock
containing sodium, calcium, magnesium, iron, titanium and aluminum combined with
oxygen.

Qualified Person as used in this AIF means a Qualified
Person as that term is defined in NI 43-101.

quartz is a common rock-forming mineral (SiO2).

quartzite is an extremely compact, hard, granular rock
consisting essentially of quartz. It often occurs as silicified sandstone, as in
sarsen stones.

Rh refers to rhodium, a platinum metal. Rhodium shares
some of the notable properties of platinum, including its resistance to
corrosion, its hardness and ductility. Wherever there is platinum in the earth,
there is rhodium as well. In fact, most rhodium is extracted from a sludge that
remains after platinum is removed from the ore. A high percentage of rhodium is
also found in certain nickel deposits in Canada.

stope is an underground excavation from which ore has
been extracted.

tailings is the material that remains after all metals
considered economic have been removed from ore during milling.

tonne refers to a metric tonne having a weight of
1,000 kilograms or 2,205 pounds.

troctolite is a gabbro made up mainly of olivine and
calcic plagioclase, often having a spotted appearance likened to a trouts back.

UG2 refers to Upper Group 2 Chromitite Layer or Reef.

ultramafic refers to types of rock containing
relatively high proportions of the heavier elements such as magnesium, iron,
calcium and sodium; these rocks are usually dark in colour and have relatively
high specific gravities.

xenolith is a rock fragment which becomes enveloped in
a larger rock during the latters development and hardening.

---

SCHEDULE B

PLATINUM GROUP METALS LTD. (the Corporation)

AUDIT COMMITTEE CHARTER

|1. | General
|-- | -------

The Board of Directors of the Corporation (the Board)
has established an Audit Committee (the Committee) to assist the Board
in fulfilling its oversight responsibilities. The Committee will review and
oversee the financial reporting and accounting process of the Corporation, the
system of internal control and management of financial risks, the external audit
process, and the Corporations process for monitoring compliance with laws and
regulations and its own code of business conduct. In performing its duties, the
Committee will maintain effective working relationships with the Board,
management, and the external auditors and monitor the independence of those
auditors. To perform his or her role effectively, each Committee member will
obtain an understanding of the responsibilities of Committee membership as well
as the Corporations business, operations and risks.

The Corporations independent auditor is ultimately accountable
to the Board and to the Committee. The Board and Committee, as representatives
of the Corporations shareholders, have the ultimate authority and
responsibility to evaluate the independent auditor, to nominate annually the
independent auditor to be proposed for shareholder approval, to determine
appropriate compensation for the independent auditor, and where appropriate, to
replace the outside auditor. In the course of fulfilling its specific
responsibilities hereunder, the Committee must maintain free and open
communication between the Corporations independent auditors, Board and
Corporation management. The responsibilities of a member of the Committee are in
addition to such members duties as a member of the Board.

|2. | Members
|-- | -------

The Board will in each year appoint a minimum of three (3)
directors as members of the Committee. All members of the Committee shall be
non-management directors and shall be independent within the meaning of all
applicable U.S. and Canadian securities laws and the rules of the Toronto Stock
Exchange and the NYSE MKT LLC (collectively, the Applicable
Regulations), unless otherwise exempt under the Applicable Regulations.

None of the members of the Committee may have participated in
the preparation of the financial statements of the Corporation or any current
subsidiary of the Corporation at any time during the past three years.

All members of the Committee shall be able to read and
understand fundamental financial statements and must be able to read and
understand fundamental financial standards and satisfy all applicable financial
literacy requirements of the Applicable Regulations. Additionally, at least one
member of the Committee shall: (a) be financially sophisticated, in that he or
she shall have past employment experience in finance or accounting, requisite
professional certification in accounting, or any other comparable experience or
background which results in the individuals financial sophistication, which may
include being or having been a chief executive officer, chief financial officer,
or other senior officer with financial oversight responsibilities; and (b) be an
audit committee financial expert within the meaning of U.S. federal securities
laws.

---

- 2 

|3. | Duties
|-- | ------

The Committee will have the following duties:

| |  | Gain an understanding of whether internal control
      recommendations made by external auditors have been implemented by
      management.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | Gain an understanding of the current areas of greatest
      financial risk and whether management is managing these effectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | Review significant accounting and reporting issues,
      including recent professional and regulatory pronouncements, and
      understand their impact on the financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | Review any legal matters which could significantly impact
      the financial statements as reported on by the Corporations counsel and
      engage outside independent counsel and other advisors whenever as deemed
      necessary by the Committee to carry out its duties.                                                                                                                                                                                                                                                                                                                                                   
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | Review the Corporations annual and quarterly financial
      statements, including Managements Discussion and Analysis with respect
      thereto, and all annual and interim earnings press releases, prior to
      public dissemination, including any certification, report, opinion or
      review rendered by the external auditors and determine whether they are
      complete and consistent with the information known to Committee members;
      determine that the auditors are satisfied that the financial statements
      have been prepared in accordance with generally accepted accounting
      principles.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | Pay particular attention to complex and/or unusual
      transactions such as those involving derivative instruments and consider
      the adequacy of disclosure thereof.                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | Focus on judgmental areas, for example those involving
      valuation of assets and liabilities and other commitments and
      contingencies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | Review audit issues related to the Corporations material
      associated and affiliated companies that may have a significant impact on
      the Corporations equity investment.                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | Meet with management and the external auditors to review
      the annual financial statements and the results of the audit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | Evaluate the fairness of the interim financial statements
      and related disclosures including the associated Managements Discussion
      and Analysis, and obtain explanations from management on whether:                                                                                                                                                                                                                                                                                                                                                                                                                    

| |  | actual financial results for the interim period varied
      significantly from budgeted or projected results;                                        
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                       
| |  | generally accepted accounting principles have been
      consistently applied;                                                                        
| |   |                                                                                                                                                       
| |  | there are any actual or proposed changes in accounting or
      financial reporting practices; or                                                     
| |   |                                                                                                                                                       
| |  | there are any significant or unusual events or
      transactions which require disclosure and, if so, consider the adequacy of
      that disclosure.

| |  | Review the external auditors proposed audit scope and
      approach and ensure no unjustifiable restriction or limitations have been
      placed on the scope.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  | Recommend to the Board an external auditor to be
      nominated for appointment by the Corporations shareholders. Subject to
      the appointment of the Corporations external auditor by the Corporations
      shareholders, the Committee will be directly responsible for the
      appointment, compensation, retention and oversight of the work of external
      auditor engaged for the purpose of preparing or issuing an auditors
      report or performing other audit, review or attest services for the
      Corporation, including the resolution of disagreements between management and the external auditor
      regarding financial reporting. The Corporations external auditor shall
  report directly to the Committee.

---

- 3 

| |  | Review with the Corporations management, on a regular
      basis, the performance of the external auditors, the terms of the external
      auditors engagement, accountability and experience.                          
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                             
| |  | Pre-approve all non-audit services and tax services to be
      provided to the Corporation or its subsidiary entities by the external
      auditor, or other registered accounting firm.                                  
| |   |                                                                                                                                                                                                                             
| |  | Consider at least annually the independence of the
      external auditors, including reviewing the range of services provided in
      the context of all consulting services obtained by the Corporation,
      including:

| |  | insuring receipt from the independent auditor of a formal
      written statement delineating all relationships between the independent
      auditor and the Company, consistent with the Independence Standards Board
      Standard No. 1 and related Canadian regulatory body standards;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                             
| |  | considering and discussing with the independent auditor
      any relationships or services, including non-audit services, that may
      impact the objectivity and independence of the independent auditor; and                                                                           
| |   |                                                                                                                                                                                                                                                                                             
| |  | as necessary, taking, or recommending that the Board
      take, appropriate action to oversee the independence of the independent
      auditor.                                                                                                                                           

| |  | Ensure that adequate procedures are in place for the
      review of the Corporations public disclosure of financial information
      extracted or derived from the Corporations financial statements, other
      than the public disclosure contained in the Corporations financial
      statements, Managements Discussion and Analysis and annual and interim
      earnings press releases; and must periodically assess the adequacy of
      those procedures.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  | Review any significant disagreement among management and
      the external auditors in connection with the preparation of the financial
      statements.                                                                                                                                                                                                                                                                                                                 
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  | Review and approve the Corporations hiring policies
      regarding partners, employees and former partners and employees of the
      present and former external auditors of the Corporation.                                                                                                                                                                                                                                                                           
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  | Establish a procedure for:                                                                                                                                                                                                                                                                                                                                                                                                                                                 

| |  | the confidential, anonymous submission by employees of
      the Corporation of concerns regarding questionable accounting or auditing
      matters; and          
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                    
| |  | the receipt, retention and treatment of complaints
      received by the Corporation regarding accounting, internal accounting
      controls, or auditing matters.

| |  | Meet separately with the external auditors to discuss any
      matters that the committee or auditors believe should be discussed
      privately in the absence of management.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                 
| |  | Endeavour to cause the receipt and discussion on a timely
      basis of any significant findings and recommendations made by the external
      auditors.                      
| |   |                                                                                                                                                                                 
| |  | Ensure that the Board is aware of matters which may
      significantly impact the financial condition or affairs of the business.                                              
| |   |                                                                                                                                                                                 
| |  | Review and oversee all related party transactions within
      the meaning of the Applicable Regulations.                                                                       
| |   |                                                                                                                                                                                 
| |  | Perform other functions as requested by the Board.                                                                                                                              

---

- 4 

| |  | If necessary, institute special investigations and, if
      appropriate, hire special counsel or experts to assist, and set the
      compensation to be paid to such special counsel or other experts.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                         
| |  | Review and re-assess annually the adequacy of this
      Charter and recommend updates to this charter; receive approval of changes
      from the Board.                                               
| |   |                                                                                                                                                                                                         
| |  | With regard to the Corporations internal control
      procedures, the Committee is responsible to:                                                                                                    

| |  | review the appropriateness and effectiveness of the
      Corporations policies and business practices which impact on the
      financial integrity of the Corporation, including those related to
      internal auditing, insurance, accounting, information services and systems
      and financial controls, management reporting and risk management; and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                  
| |  | review compliance under the Corporations business
      conduct and ethics policies and to periodically review these policies and
      recommend to the Board changes which the Committee may deem appropriate;
      and                                                                                                                                      
| |   |                                                                                                                                                                                                                                                                                                                                                                  
| |  | review any unresolved issues between management and the
      external auditors that could affect the financial reporting or internal
      controls of the Corporation; and                                                                                                                                                                                     
| |   |                                                                                                                                                                                                                                                                                                                                                                  
| |  | periodically review the Corporations financial and
      auditing procedures and the extent to which recommendations made by the
      internal audit staff or by the external auditors have been implemented.                                                                                                                                                  

|4. | Chair
|-- | -----

The Committee will in each year appoint the Chair of the
Committee from among the members of the Committee. In the Chairs absence, or if
the position is vacant, the Committee may select another member as Chair. The
Chair will not have a casting vote.

|5. | Meetings
|-- | --------

The Committee will meet at least once every calendar quarter.
Special meetings shall be convened as required. Notices calling meetings shall
be sent to all members of the Committee, all Board members and the external
auditor. The external auditor of the Corporation must be given reasonable notice
of, and has the right to appear before and to be heard at, each meeting of the
Committee. At the request of the external auditor, the Committee must convene a
meeting of the Committee to consider any matter that the external auditor
believes should be brought to the attention of the Board or shareholders of the
Corporation.

The Committee may invite such other persons (e.g. without
limitation, the President or Chief Financial Officer) to its meetings, as it
deems appropriate.

|6. | Quorum
|-- | ------

A majority of members of the Committee, present in person, by
teleconferencing, or by videoconferencing, or by any combination of the
foregoing, will constitute a quorum.

|7. | Removal and Vacancy
|-- | -------------------

A member may resign from the Committee, and may also be removed
and replaced at any time by the Board, and will automatically cease to be a
member as soon as the member ceases to be a director of the Corporation. The
Board will fill vacancies in the Committee by appointment from among the
directors in accordance with Section 2 of this Charter. Subject to quorum
requirements, if a vacancy exists on the Committee, the remaining members will
exercise all of the Committees powers.

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|8. | Authority
|-- | ---------

The Committee may:

| |  | engage independent counsel and other advisors as it
      determines necessary to carry out its duties.
| | - | -------------------------------------------------------------------------------------------------------
| |   |                                                                                                        
| |  | set and pay the compensation for any advisors employed by
      the Committee; and                     
| |   |                                                                                                        
| |  | communicate directly with the internal and external
      auditors.                                    

The Committee may also, within the scope of its
responsibilities, seek any information it requires from any employee and from
external parties, to obtain outside legal or professional advice, and to ensure
the attendance of Corporation officers at meetings as appropriate.

|9. | Secretary and
Minutes
|-- | ---------------------

The Chair of the Committee will appoint a member of the
Committee or other person to act as Secretary of the Committee for purposes of a
meeting of the Committee. The minutes of the Committee meetings shall be in
writing and duly entered into the books of the Corporation, and will be
circulated to all members of the Board.

|10. | Funding
|--- | -------

The Corporation shall provide for appropriate funding, as
determined by the Committee, for payment of (a) compensation to any registered
public accounting firm engaged for the purposes of preparing or issuing an audit
report or performing other audit, review or attest services for the Corporation;
(b) compensation to any advisers employed by the Committee; and (c) ordinary
administrative expenses of the Committee that are necessary or appropriate in
carry out its duties.

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