**Platinum
        Group Metals Ltd.**
 *(Exploration
        Stage Company)*
  Supplimentary
        Information and MD&A
 For
        the
        year ended August 31, 2007
 Filed:
        November 29, 2007


A
      copy of this report will be provided to any
      shareholder who requests it.








**Management
      Discussion and Analysis**




**1.        DESCRIPTION
      OF BUSINESS**




The
      Company is a British Columbia corporation incorporated on February 18, 2002
      by
      an order of the Supreme Court of British Columbia approving an amalgamation
      between Platinum Group Metals Ltd. (“Old Platinum”) and New Millennium Metals
      Corporation (“New Millennium”). The Company is an exploration and development
      company conducting work primarily on mineral properties it has staked or
      acquired by way of option agreement in Ontario, Canada and the Republic of
      South
      Africa. The Company has not yet determined whether its mineral properties
      contain ore reserves that are economically recoverable. 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 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.








**2.        DISCUSSION
      OF OPERATIONS AND FINANCIAL CONDITIONS**




**a)
      Results of Operations**




The
      Company has been very active on projects in South Africa during the year. The
      Company’s Canadian projects were also active during the year, with a 1,090 metre
      drill program conducted on the Company’s Lac Des Iles projects. During the year
      the Company incurred a net loss of $6,758,123 (2006 - $3,853,273). Before a
      non-cash charge for stock based compensation of $1,487,661 (2006 - $110,176)
      and
      mineral property costs written off of $1,323,222 (2006 - $1,174,325), general
      and administrative expenses totaled $4,586,077 (2006 - $2,808,715). Interest,
      other income and recoveries amounted to $640,359 (2006 - $235,236). Total global
      exploration expenditures for the Company’s account, including the Company’s
      share of WBJV expenditures during the period totaled $4,531,533 (2006 -
      $5,474,479), of this $3,775,890 was for the WBJV (2006 - $4,998,447) and
      $755,643 for other exploration (2006 - $476,032). After meeting its earn in
      requirements in April 2006, Platinum Group Metals Ltd. is currently only
      responsible for its 37% pro-rata share of expenditures for the Western Bushveld
      Joint Venture (“WBJV”). Total WBJV expenditures (see below) during the year by
      all Joint Venture partners totaled $10,497,472 (2006: $7,705,592).





On
      October 27, 2004, the Company announced the formation of the WBJV with Anglo
      Platinum Limited and Africa Wide Mineral Prospecting and Exploration (Pty)
      Limited. Work commenced immediately thereafter on the project and the rate
      of
      work has accelerated since then. Activities consist of research and data review,
      prospecting, mapping, engineering and drilling of the project area. At the
      time
      of writing there are 4 high speed diamond drills turning on WBJV properties.
      On
      January 10, 2007, the Company completed a positive pre-feasibility study for
      the
      Project 1 area of the WBJV. During 2007 the WBJV commissioned a bankable
      feasibility study for the Project 1 area of the WBJV. This work is currently
      underway. On September 7, 2007 the Company published its most recent resource
      calculation for the WBJV. (See Item 2d. “Exploration Programs and Expenditures”
below)





The
      Company has increased its general level of activity in the past three years
      in
      South Africa. Activities in Canada have been reduced, as the more advanced
      nature of the WBJV project has caused it to become an investment focus for
      the
      Company. The Company still actively reviews many potential property acquisitions
      in the normal course of business. The Company also makes efforts to raise its
      profile and liquidity in the capital markets.





The
      following tables set forth selected financial data from the Company’s Audited
      Consolidated Financial Statements and should be read in conjunction with these
      financial statements.





**Year
                ended**
              **Aug.
                31, 2007**
            **Year
                ended**
              **Aug.
                31, 2006**
            **Year
                ended**
              **Aug.
                31, 2005**Interest
                & other income
            $640,359
            $235,236
            $218,373Net
                Loss
            ($6,758,123)
            ($3,853,273)
            ($3,795,648)Net
                Loss Per Common Share
            ($0.12)
            ($0.08)
            ($0.10)Total
                Assets
            $36,764,203
            $26,427,933
            $15,705,187Long
                Term Debt
            Nil
            Nil
            NilDividends
            Nil
            Nil
            Nil





The
      following table sets forth selected quarterly financial information for each
      of
      the last eight (8) quarters.





**Quarter
                Ending**
            **Interest
                & other income**
            **Net
                Loss**
            **Net
                Loss per share**August
                31, 2007
            $203,489
            ($1,392,894)
            ($0.03)May
                31, 2007
            $165,873
            ($1,830,268)
            ($0.03)February
                28, 2007
            $138,384
            ($1,355,649)
            ($0.02)November
                30, 2006
            $132,613
            ($2,179,312)
            ($0.04)August
                31, 2006
            $100,991
            ($1,200,351)
            ($0.02)May
                31, 2006
            $55,062
            ($515,092)
            ($0.01)February
                28, 2006
            $53,234
            ($1,447,883)
            ($0.03)November
                30, 2005
            $25,949
            ($689,947)
            ($0.02)





The
      Company has not declared nor paid dividends on its common shares. The Company
      has no present intention of paying dividends on its common shares, as it
      anticipates that all available funds will be invested to finance the growth
      of
      its business.





**b)
      Trend Information**




Other
      than the financial obligations as set out in the table provided at item 6 below,
      there are no identifiable trends, demands, commitments, events or uncertainties
      that will result in, or that are reasonably likely to result in, the Company’s
      liquidity either increasing or decreasing at present or in the foreseeable
      future. The Company will require sufficient capital in the future to meet its
      acquisition payments and other obligations under mineral property option
      agreements for those properties it considers worthwhile to incur continued
      holding and exploration costs upon. The Company intends to utilize its cash
      on
      hand in order to meet its obligations under mineral property option agreements.
      It is unlikely that the Company will generate sufficient operating cash flow
      to
      meet all of these ongoing obligations in the foreseeable future. Accordingly,
      the Company will likely need to raise additional capital by issuance of equity
      within the next year. The Company has no immediate plan or intention to issue
      any debt in order to raise capital for future requirements; however, the Company
      is working to complete a bankable feasibility study for the Project 1 area
      of
      the WBJV. If a production decision is taken by the WBJV upon completion of
      that
      study, the Company will most likely pursue debt financing for a portion of
      its
      share of the capital requirements for that project.





At
      the
      time of writing there is a favourable macro-trend with regard to the market
      for
      metal commodities and related products, however, it is the opinion of the
      Company that its own liquidity will be most affected by the results of its
      own
      acquisition, exploration and development activities. The acquisition or
      discovery of an economic mineral deposit on one of its mineral properties may
      have a favourable effect on the Company’s liquidity, and conversely, the failure
      to acquire or find one may have a negative effect.





**c)
      Risk Factors**




The
      Company’s securities should be considered a highly speculative investment and
      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. For a discussion of risk factors applicable to the Company, see
      the
      section entitled “Risk Factors” in the Company’s most recent annual information
      form filed with Canadian provincial securities regulators, which was also filed
      as part of the Company’s most recent annual report on Form 40-F with the S.E.C.
      Without limiting the foregoing, the following risk factors should be given
      special consideration when evaluating an investment in the Company’s
      securities.





***General***




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
      and quality to return a profit from production.





***The
      Company’s business is subject to exploration and development
      risks***




All
      of
      the Company’s properties are in the exploration stage and no known reserves have
      been discovered on such properties. At this stage, favorable drilling results,
      estimates and studies are subject to a number of risks, including:




·
            the
                limited amount of drilling and testing completed to
                date;




·
            the
                preliminary nature of any operating and capital cost
                estimates;




·
            the
                difficulties inherent in scaling up operations and achieving expected
                metallurgical recoveries; and




·
            the
                likelihood of cost estimates increasing in the
                future.







There
      is
      no certainty that the expenditures to be made by us or by our joint venture
      partners in the exploration of the properties described herein will result
      in
      discoveries of precious metals in commercial quantities or that any of our
      properties will be developed. Most exploration projects do not result in the
      discovery of precious metals and no assurance can be given that any particular
      level of recovery of precious metals will in fact be realized or that any
      identified resource will ever qualify as a commercially mineable (or viable)
      resource which can be legally and economically exploited. Estimates of reserves,
      mineral deposits and production costs can also be affected by such factors
      as
      environmental permit regulations and requirements, weather, environmental
      factors, unforeseen technical difficulties, unusual or unexpected geological
      formations and work interruptions. In addition, the grade of precious metals
      ultimately discovered 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 on-site conditions or in production
      scale.





***Political
      and economic instability may affect the Company’s
      business***




South
      Africa has undergone significant change in its government and laws since the
      free elections in 1994. At present, Mining Legislation in South Africa is
      continuing to undergo change. The new Mineral and Petroleum Resources
      Development Act became law on May 1, 2004. The regulation and operation of
      this
      new law is still being implemented. In association with the new Act, the Mining
      Charter sets out a target of 26% ownership and participation in the mineral
      industry by “Historically Disadvantaged Persons” within ten years, but the
      mechanisms to fully affect this objective are still evolving. Accordingly,
      the
      South African legal regime may be considered relatively new, resulting in risks
      related to the possible misinterpretation of new laws, unilateral modification
      of mining or exploration rights, operating restrictions, increased taxes,
      environmental regulation, mine safety and other risks arising out of new
      sovereignty over mining, any or all of which could have an adverse affect on
      the
      Company. There is no certainty that the Company will be able to convert its
      existing exploration rights into mining rights. The Company’s operations in
      general may also be affected in varying degrees by political and economic
      instability, terrorism, crime, fluctuations in currency exchange rates and
      inflation.





***The
      Company is subject to the risk of fluctuations in the relative values of the
      Canadian Dollar as compared to the South African Rand and the United States
      Dollar***




The
      Company may be adversely affected by foreign currency fluctuations. The Company
      is primarily funded through equity investments into the Company denominated
      in
      Canadian Dollars. Several of the Company’s options to acquire properties in the
      Republic of South Africa may result in option payments by the Company
      denominated in South African Rand or in U.S. Dollars over the next three years.
      Exploration and development programs to be conducted by the Company in South
      Africa will also be funded in South African Rand. Fluctuations in the exchange
      rate between the Canadian Dollar and the South African Rand or U.S. Dollar
      may
      have an adverse affect on the Company.





***The
      Company’s properties are subject to title risks***




The
      Company’s properties may be subject to prior unregistered agreements or
      transfers and title may be affected by undetected defects. These defects could
      adversely affect the Company’s title to such properties or delay or increase the
      cost of the development of such properties. In addition, the Company’s
      properties may be subject to aboriginal or other historical rights that may
      be
      claimed on Crown properties or other types of tenure with respect to which
      mineral rights have been conferred. The Company is not aware of any aboriginal
      land claims having been asserted or any legal actions relating to native issues
      having been instituted with respect to any of the mineral properties in which
      the Company has an interest. The Company is aware of the mutual benefits
      afforded by co-operative relationships with indigenous people in conducting
      exploration activity and is supportive of measures established to achieve such
      co-operation.





***Environmental
      risk***




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 for companies and their officers, directors and
      employees. There is no assurance that future changes to environmental
      legislation in Canada or South Africa will not adversely affect the Company’s
      operations. Environmental risks may exist on properties in which the Company
      holds interests which are unknown at present and which have been caused by
      previous or existing owners or operators. 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
      restrictive.





***The
      mineral exploration industry is extremely competitive***




The
      resource industry is intensely competitive in all of its phases, and the Company
      competes with many companies that possess greater financial resources and
      technical facilities. 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.





***Metal
      prices affect the success of the Company’s business***




Metal
      prices have historically been subject to significant price fluctuation. 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. Significant reductions or volatility in metal prices may have an
      adverse effect on the Company’s business, including the economic attractiveness
      of the Company’s projects, the Company’s ability to obtain financing and, if the
      Company’s projects enter the production phase, the amount of the Company’s
      revenue or profit or loss.








**d)
      Exploration Programs and Expenditures**




***General***




The
      Company continues to be active in the Republic of South Africa (“RSA”). In 2003
      the Company acquired a 100% South African subsidiary named Platinum Group Metals
      RSA (Pty.) Ltd. (“PTM RSA”) for the purposes of holding mineral rights and
      conducting operations on behalf of the Company. The Company conducts all of
      its
      South African exploration and development work through PTM RSA.





Mineral
      property acquisition costs deferred during the year totaled $365,514 (2006
      -
      $300,928). Of this amount Platinum Group Metals Ltd’s 37% pro-rata share of WBJV
      acquisition costs totaled $23,075 (2006 - $93,367). The Company also issued
      50,000 shares at a value of $230,000 for property acquisition costs related
      to
      the Company’s obligation to acquire certain portions of the farm Onderstepoort.
      The balance of $112,439 was spent on other mineral property acquisition costs
      in
      Canada. Exploration costs incurred globally in the year for the Company’s
      interests totaled $4,531,533 (2006 - $5,474,479). Of that amount $172,171 (2006
      - $27,422) was incurred on the Company’s Canadian properties and $4,359,362
      (2006 - $5,447,057) was incurred on the Company’s South African properties. Of
      the South African amount, $3,775,890 was for the Company’s 37% share of WBJV
      expenditures (2006 - $4,998,447). The South African expenditures for the year
      are lower than in the previous year as the Company met its earn in requirements
      for the WBJV in May 2006, meaning that the partners have been required to share
      costs since that time pro-rata to their Joint Venture interest. The total amount
      (100%) of exploration expenditures by all Joint Venture partners for the year
      for the WBJV came to $10,205,108 which was higher than the 100% amount spent
      in
      the same period last year (2006 - $7,612,225).





During
      the year $1,323,222 (2006 - $1,174,325) in deferred costs relating to Ontario
      projects were written off, while no write offs (2006 - $209,478) were taken
      on
      South African properties. For more information on mineral properties see Note
      5
      and 6 of the Company’s August 31, 2007 Audited Consolidated Financial
      Statements.





***Western
      Bushveld Joint Venture***




On
      October 26, 2004 the Company (37%) entered into a Joint Venture with Anglo
      Platinum Limited (“Anglo Platinum”) (37%) and Africa Wide Mineral Prospecting
      and Exploration (Pty) Limited ( “Africa Wide” ) (26%) to pursue platinum
      exploration and development on combined mineral rights covering approximately
      67
      square kilometres on the Western Bushveld Complex of South Africa. The Company
      contributed all of its interests in portions of the farms Onderstepoort 98
      JQ
      and Elandsfontein 102 JQ. For more details of the properties contributed by
      the
      Company see Note 5 of the Company’s audited consolidated year end financial
      statements. Anglo Platinum contributed its interests in portions of the farms
      Koedoesfontein 94 JQ, Elandsfontein 102 JQ and Frischgewaagd 96 JQ.





The
      Company is the operator of the WBJV. From October 2004 to April 2006 the Company
      funded a required exploration program in the amount of Rand 35 million (at
      August 31, 2005 approx. C$6.44 million). Since then the partners of the WBJV
      have been required to fund their portion of further expenditures pro-rata based
      upon their working interest in the Joint Venture. From April 2006 to March
      2007
      the partners to the WBJV approved budgets in the amount of Rand 76,393,208
      (approximately C$11.7 million at September 2006). In July 2007 the WBJV
      participants approved a new cash budget for the WBJV totaling Rand 102,976,176
      (approximately C$15.5 million in July 2007). At August 31, 2007 Anglo Platinum
      had an unspent contribution balance to the WBJV of Rand 24,517,766 (C$3,613,919)
      which will be used to fund their pro-rata share of further expenditures on
      the
      WBJV. At August 31, 2007 Africa Wide was due to contribute approximately Rand
      20,296,777 (C$2,991,745). This amount was recorded as a receivable by the
      Company at August 31, 2007.





To
      August
      31, 2007, all receipts, disbursements and net assets, excluding mineral
      properties contributed by other venturers to the WBJV are recorded in the books
      and records of the Company on behalf of the Joint Venture. Of the $2,288,934
      in
      the Company’s accounts payable at August 31, 2007, an amount of $1,724,000
      (approximately Rand 11.7 million) was incurred on behalf of the
      WBJV.





In
      April
      2007 Africa Wide accepted an offer for the purchase of 100% their company from
      Wesizwe Platinum Ltd. (WEZ:JSE). The transaction closed in September 2007 and
      Wesizwe paid consideration of 57.4 million new shares of Wesizwe at a deemed
      price of Rand 10.48 per share for total consideration of Rand 601.5 million
      (approximately C$90 million). Since September 2007 Wesizwe has become
      responsible for all of the rights and obligations of Africa Wide.





On
      April
      9, 2007 the Company announced the formal contribution to the WBJV of a 50%
      interest in the mineral rights to the 494 hectare Portion 11 of the Farm
      Frischgewaagd 96 JQ (“Portion 11”) by Rustenburg Platinum Mines Ltd., a
      subsidiary of Anglo Platinum. Portion 11 now forms part of the Project 2 area
      of
      the WBJV. This expanded Project 2 area is adjacent to the WBJV “Project 1” area.
      Anglo Platinum’s 50% interest in Portion 11 relates to New Order mineral rights
      that were converted from Old Order rights in 2007. All of the parties to the
      shared mineral rights on Portion 11 and RE 4 are working toward a detailed
      co-operation agreement. Current drilling, being conducted under initial
      co-operation agreements, is expected to continue.





Once
      a
      bankable feasibility study has been completed the respective deemed capital
      contribution of each party will be credited based on their contribution of
      measured, indicated, and inferred PGM ounces from the contributed properties
      comprising the WBJV, determined in accordance with the South African SAMREC
      code. Under the terms of the original WBJV Agreement, inferred ounces will
      be
      credited at US$0.50 per ounce, indicated ounces will be credited at US$3.20
      per
      ounce and measured ounces will be credited at US$6.20 per ounce. The Company
      will also be credited for its Rand 35 million expenditure as described above.
      Each party will then have the opportunity to make equalizing cash payment,
      or
      contribute capital going forward in order to catch up any resulting shortfall
      in
      their contributed capital and thereby maintain their respective working interest
      in the JV. Should a party not wish to participate, the JV agreement provides
      a
      mechanism whereby the parties may elect to become “non-contributory” to the JV
      and by doing so they would be subject to dilution.





Portion
      11 was contributed to the WBJV in 2007 as originally planned under the existing
      terms of the October 2004 WBJV Agreement. For this later contribution of Portion
      11 the original credit rates for equalization as described above have been
      amended to US$0.62 per inferred ounce, US$10.37 per indicated ounce and US$39.55
      per measured ounce in order to adjust for current market
      conditions.





In
      January 2007 the Company published a Pre-Feasibility Report and an updated
      Independent Resource Estimate which shows Measured, Indicated and Inferred
“4E”
(platinum, palladium, rhodium and gold) resources for the Project 1 area of
      the
      WBJV. On February 7, 2007 the Company published an initial Independent Resource
      Estimate for the Project 2 area of the WBJV. Later, on September 7, 2007 the
      Company published its most recent resource calculation for the
      WBJV.





The
      Pre-Feasibility Study and revised resource estimation for the Project 1 area
      of
      the WBJV was dated January 15, 2007. A report titled “Technical Report Western
      Bushveld Joint Venture Project 1 (Elandsfontein and Frischgewaagd)” was filed by
      the Company on www.sedar.com January 30, 2007. The Pre-Feasibility Study
      considers and outlines the details and possible mitigation of several considered
      projects risks, not yet assessed in full detail, including metallurgical
      recoveries, smelting and refining costs, surface and mining rights, permits,
      and
      involvement of communities in compliance with the Minerals and Petroleum
      Resources Development Act (2002).





The
      Pre-Feasibility Study’s findings were positive for a platinum mine in the
      Project 1 area of the Western Bushveld Joint Venture (“WBJV”) in South Africa.
      The partners of the WBJV gave their approval to advance towards a bankable
      feasibility study for an underground mine producing 155,000 ounces per annum
      platinum or 250,000 ounces per annum platinum, palladium, rhodium and gold
      in
      concentrate.





Resources
      in the Measured and Indicated categories can be included in a bankable
      feasibility financial model under SAMREC and NI-43101 guidelines. Further
      drilling is now investigating additional areas with reef potential along strike
      on Project areas 2 and 3 within the Joint Venture area. At the time of writing
      the Company has four diamond drilling rigs deployed on the WBJV. The WBJV
      property includes the untested projected surface trace of the Merensky and UG2
      reefs which have been intercepted in a number of drill holes outside of areas
      where resources have been defined to date. To the time of writing the WBJV
      has
      completed more than 100,000 metres of drilling in approximately 200
      boreholes.





Summary
      resource details from published reports for Project 1, Project 1a and Project
      2
      follow in the table below. Platinum Group Metals Ltd. holds a 37% interest
      in
      the 4E ounces attributable to the WBJV. The prill splits and 4E estimates for
      Project 2 have been calculated by arithmetic mean. The prill splits and 4E
      estimates for Project 1 and 1a have been tested for reasonableness by kriging
      on
      the individual elements. Copper and nickel as well as the minor platinum group
      elements have also been estimated with a statistical process of Simple Kriging
      for Project 1 and 1a. Absent values for copper, nickel and the minor platinum
      group elements have been derived from regressed values.








**Resource**
            
            **WBJV**
            **Tonnes**
            **Grade**
            **Width**
            **Prill
                Split (4E)**
            **WBJV
                Ozs****Project**
            **Reef**
            **Category**
            **Cut-Off**
            **Interest**
            **In
                Millions**
            **4E**
            **Metres**
            **Pt**
            **Pd**
            **Rh**
            **Au**
            **In
                Millions****Project
                1**MR
            Measured
            300
                cm g/t
            100%
            6.305
            7.03
            1.18
            64%
            27%
            4%
            5%
            1.425UG2
            Measured
            300
                cm g/t
            100%
            7.165
            3.75
            1.56
            63%
            26%
            10%
            1%
            0.864MR
            Indicated
            300
                cm g/t
            100%
            12.181
            6.78
            1.22
            64%
            27%
            4%
            5%
            2.655UG2
            Indicated
            300
                cm g/t
            100%
            18.579
            3.96
            1.44
            63%
            26%
            10%
            1%
            2.365MR
            Inferred
            300
                cm g/t
            100%
            0.289
            6.47
            1.03
            64%
            27%
            4%
            5%
            0.060UG2
            Inferred
            300
                cm g/t
            100%
            2.387
            4.40
            1.49
            63%
            26%
            10%
            1%
            0.338**Project
                1a**MR
            Inferred
            300
                cm g/t
            100%
            1.871
            6.48
            1.15
            64%
            27%
            4%
            5%
            0.390UG2
            Inferred
            300
                cm g/t
            100%
            2.973
            5.00
            1.57
            63%
            26%
            10%
            1%
            0.478**Project
                2****RE
                4**
            MR
            Inferred
            100
                cm g/t
            50%
            6.54
            5.84
            1.42
            68%
            24%
            5%
            3%
            0.614UG2
            Inferred
            100
                cm g/t
            50%
            11.95
            4.63
            1.57
            59%
            29%
            11%
            1%
            0.890**Ptn
                11**
            MR
            Indicated
            1.18
                - 1.24 m
            50%
            0.220
            7.38
            1.21
            62%
            28%
            5%
            5%
            0.025UG2
            Indicated
            1.27
                m
            50%
            0.050
            4.32
            1.27
            59%
            29%
            11%
            1%
            0.004MR
            Inferred
            1.11
                - 1.55 m
            50%
            16.100
            6.00
            1.46
            62%
            28%
            5%
            5%
            1.550UG2
            Inferred
            1.23
                m
            50%
            16.240
            4.62
            1.23
            59%
            29%
            11%
            1%
            1.200Total
                Measured 4E Ounces
            
            
            
            
            
            
            
            2.289Total
                Indicated 4E Ounce
            
            
            
            
            
            
            
            5.049Total
                Inferred 4E Ounces
            
            
            
            
            
            
            
            5.520





***MR
      = Merensky
      Reef              UG2
      = Upper Group 2 Reef***




***Cautionary
      Note to U.S. Investors:** The U.S. Securities and Exchange Commission
      permits U.S. mining companies, in their filings with the SEC, to disclose only
      those mineral deposits that a company can economically and legally extract
      or
      produce. We use certain terms in this document, such as “measured,” “indicated,”
and “inferred,” “reserves,” “resources,” that the SEC guidelines strictly
      prohibit U.S. registered companies from including in their filings with the
      SEC.
“Resources” are not “Reserves” and so do not have demonstrated economic
      viability. U.S. investors are urged to consider closely the disclosure in our
      U.S. regulatory filings, File No. 0-033562, which may be secured from us, or
      from the SEC’s website
      at:  http://sec.gov/edgar.shtml.*





**Project
      1 and Project 1a:**A 39% and 41% total geological loss for the Merensky
      Reef and UG2 Reef respectively was applied to the resource area to accommodate
      for areas of potentially un-mineable structural and geological conditions.
      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. The Merensky mineral resource estimate is based on 158 boreholes with
      178 intercepts and the UG2 is based on 192 intercepts within the 1,087 hectare
      area. The prill split has been calculated by weighted averages as a proportion
      of the total 4E and the grades have been estimated with a more rigorous
      statistical process of Simple Kriging. The cut-off was determined on a practical
      mining width and the known costs and mining methods regionally. Platinum Group’s
      independent consulting Qualified Person has provided the resource estimate
      according to the SAMREC code. The reconciliation to the CIM codes is that the
      categories are the same. The resources are located on New Order prospecting
      permits that provide for the right to be converted to mining rights. Charles
      Muller of Minxcon is the Qualified Person (“QP”) for this report. He is
      registered with the SACNASP (South African Council for Natural Scientific
      Professions) (Registration No. 400201/04). Mr. Muller is an independent
      consultant with 18 years experience as a geologist, and resource evaluator.
      Samples were analyzed under Platinum Group’s and Anglo Platinum’s protocols
      including insertion of blanks, duplicates and certified reference materials
      in
      the assay stream once in every 24 or fewer samples. This is in addition to
      internal quality control measures undertaken by the contracted analytical
      facilities. Mr. Muller has visited the property on numerous occasions and has
      completed sufficient testing procedure to be satisfied that he has reasonably
      verified the data.





**Project
      2 – Remaining Extent of Ptn 4 of the farm Frischgewaagd 96 JQ:** An iron
      replacement area that was delineated by drilling and detailed aeromagnetics
      was
      subtracted. In addition to that, a further 18% geological loss was applied.
      Charles Muller is the Qualified Person (“QP”) for the resource assessment
      report. He is registered with the SACNASP (South African Council for Natural
      Scientific Professions) (Registration No. 400201/04). Mr. Muller is an
      independent consultant with 18 years experience as a geologist, and resource
      evaluator. Samples were analyzed under Platinum Group’s and Anglo Platinum’s
      protocols previously published for the project including insertion of blanks,
      duplicates and certified reference materials in the assay stream once in every
      24 or fewer samples. This is in addition to internal quality control measures
      undertaken by the contracted analytical facilities.





**Project
      2 – Ptn 11 of the farm Frischgewaagd 96 JQ:** A 20%-30% total geological
      loss was applied to the area to accommodate for areas of potentially un-mineable
      structural and geological conditions. This geological loss considers losses
      for
      faults, dykes, potholes and an area of iron replacement pegmatite. Structural
      loss estimates are based on drilling, field mapping and remote sense data which
      include a high resolution aeromagnetic survey. The Merensky mineral resource
      estimate is based on 15 boreholes with 39 intercepts within the 494 ha area
      and
      13 boreholes with 35 intercepts for the UG2 mineral resource estimate. The
      cut-off was determined on a practical mining width and the known costs and
      mining methods regionally. There are several other qualified person estimates
      in
      the public domain with other degrees of confidence on the same area. Once due
      diligence on further drilling and evaluation has been completed by the Company’s
      QP, the resource classification for a 43-101 compliant report will be updated.
      The Company’s independent consulting Qualified Person has provided this initial
      resource according to the SAMREC code. The reconciliation to the CIM codes
      is
      that the categories are the same. Mr. David Gray, of Snowden, is the independent
      QP for the resource assessment report of Frischgewaagd 96 JQ, Portion 11. He
      is
      registered with the SACNASP, the South African Council for Natural Scientific
      Professions, Registration No 400018/04. Mr. Gray has more than 17 years of
      relevant experience in platinum group metal resource assessments. Sampling
      was
      conducted using Anglo Platinum’s protocols, as previously published for the
      project. This includes the insertion of blanks, duplicates and certified
      reference materials in the assay stream, which is followed by routine quality
      analysis. These quality controls are in addition to the internal quality control
      measures undertaken by the contracted analytical facilities. Assays have been
      completed largely at Anglo Platinum’s laboratories in Johannesburg by standard
      fire assay procedures. Data has been verified by the QP to the extent that
      he
      has personal experience with the compilation of the data at the time it was
      collected and the protocols employed at Anglo Platinum during the data
      collection.





***Northern
      Limb, Bushveld - War Springs and Tweespalk Properties***




On
      June
      3, 2002, the Company entered an option agreement whereby it may earn a 100%
      interest in the 2,396 hectare War Springs property and the 2,177 hectare
      Tweespalk property both located in the Northern Limb or Platreef area of the
      Bushveld Complex north of Johannesburg. Acquisition and exploration costs on
      these properties to August 31, 2007 total $3,394,062 (August 31, 2006 -
      $3,037,933).





By
      prior
      agreement with the holders of the Old Order mineral rights the Company had
      an
      option to purchase 100% of these mineral rights for US$690 per hectare. The
      Company also agreed to pay prospecting fees to the vendors of US$3.25 per
      hectare. The vendors retain a 1% NSR Royalty on the property, subject to the
      Company’s right to purchase the NSR at any time for US$1.4 million. A 5%
      finders’ fee applies to vendor payments.





Under
      the
      new Mineral and Petroleum Resources Development Act (2002), which became
      effective in May 2004, Old Order permits were to be converted into New Order
      permits during a transition period. This process is now complete for the War
      Springs and Tweespalk properties. The June 3, 2002 option agreement provides
      for
      amendments as may be needed to maintain the parties in the same commercial
      position as they were in under the preceding mineral legislation and such
      amendments are yet to be completed.





Black
      Economic Empowerment groups Africa Wide and Taung Minerals (Pty) Ltd. have
      each
      acquired a 15% interest in the War Springs project carried to bankable
      feasibility. The Company’s retains a net 70% project interest.





Africa
      Wide also has a 30% participating interest in the Tweespalk property. The
      Company has not recorded a receivable for Africa Wide’s share of costs to date,
      which at August 31, 2007 are calculated to be $334,727 (August 31, 2006 -
      $253,783). The Company expects that Africa Wide will be able to fund their
      share
      of costs in the future and amounts recovered from Africa Wide will be treated
      as
      a reduction of costs relating to the Tweespalk property.





***Lakemount,
      Ontario***




On
      November 6, 2003 the Company acquired an option to earn up to a 62% interest
      in
      the 3,017 hectare Lakemount property located near Wawa, Ontario. Exploration
      results on the project to date have been of interest, but in light of certain
      title deficiencies and a complex title chain, the Company has abandoned the
      project. Deferred acquisition and exploration costs relating to the project
      in
      the amount of $1,323,222 have been written off.





***Lac
      Des Iles Area Properties, Ontario***




On
      May 5,
      2000, New Millennium entered into an option agreement to acquire a 50% interest
      in the Lac des Iles River property located near Thunder Bay, Ontario in exchange
      for cash payments ($43,500 paid in total) and the completion of exploration
      expenditures. On October 6, 2006, the Company and the property vendors entered
      into a termination and sale agreement whereby the option agreement was cancelled
      and the Company purchased an undivided 100% interest in the property subject
      only to an underlying 2.0% Net Smelter Return Royalty. In settlement the Company
      made a one-time payment to the vendors of $50,000 in lieu of past and future
      exploration expenditure commitments not incurred.





In
      April
      2000, and later as amended in January 2005, the Company acquired an option
      to
      earn a 50% interest in the South Legris property located near Thunder Bay,
      Ontario in exchange for cash payments ($105,000 paid in total) and the
      completion of certain exploration expenditures. The Company wrote off $587,369
      in deferred acquisition and exploration costs related to the property at August
      31, 2004. On October 13, 2006, the Company and the property vendors entered
      into
      a termination and sale agreement whereby the option agreement was cancelled
      and
      the Company purchased an undivided 100% interest in the property subject only
      to
      underlying 2.0% Net Smelter Return Royalties. In settlement the Company made
      a
      one-time payment of $50,000 in lieu of past and future exploration expenditure
      commitments not incurred.





On
      June
      28, 2000, New Millennium entered into an option agreement to earn up to 60%
      interest in the Shelby Lake property, located near Thunder Bay, Ontario in
      exchange for cash payments of $15,000 (paid), the issue of 30,303 shares
      (issued) and the completion of exploration expenditures. On October 18, 2006,
      the Company and the property vendor entered into a termination and sale
      agreement whereby the option agreement was cancelled and the Company purchased
      an undivided 100% interest in the property for a one-time payment of $5,000
      subject only to an underlying 2.0% Net Smelter Return Royalty.





In
      late
      2006 a 1,090 metre drill program was conducted on the Company’s Lac Des Iles
      area projects. Further drilling is planned for the fall and winter of 2007
–
2008. For more details of the Company’s Lac Des Iles properties see Note 5 of
      the Company’s audited year end financial statements.





***Seagull,
      Ontario***




On
      September 24, 2004 the Company acquired an option to earn up to a 70% interest
      in the Seagull property located in the Nipigon region of Ontario by completing
      certain exploration expenditures, by making cash payments and by completing
      a
      bankable feasibility study and providing or arranging production financing.
      The
      Company terminated the Seagull option as of February 28, 2006 resulting in
      a
      write-off of $785,288.





***Agnew
      Lake, Ontario***




The
      Company’s Agnew Lake property was not active during the period. The Company has
      directly performed $512,265 worth of exploration work and caused further work
      of
      approximately $3,140,805 to be performed through the joint venture arrangement
      with PFN and Kaymin to August 31, 2005. Occurrences of PGMs have been located
      on
      the property, but no resource has been delineated to date. At August 31, 2005
      the Company wrote off its remaining investment in the property of $276,852.
      In
      2007 Kaymin advised the Company that it would cease further funding of the
      project. Kaymin also notified the Company that they would vest as to a 26.17%
      interest in the property in accordance the terms of their option agreement.
      PFN
      has now terminated its option and retains no working interest.








**e)
      Administration Expenses**




Before
      a
      non-cash charge for stock based compensation of $1,487,661 (2006 - $110,176),
      and mineral property costs written off of $1,323,222 (2006 - $1,174,325), and
      not including interest, other income and recoveries in the year of $640,359
      (2006 - $235,236), general and administrative expenses totaled $4,586,077 (2006
      - $2,808,715). Since 2002 the Company has grown substantially through its
      amalgamation with New Millennium Metals Corporation and its expansion into
      the
      Republic of South Africa. This growth is reflected in the costs described
      herein. During 2004 the Company opened and staffed a permanent office in
      Johannesburg and commenced active exploration on the ground. The costs described
      above include management and consulting fees of $690,504 (2006 - $367,891);
      office and miscellaneous expenses of $230,829 (2006 - $156,795); professional
      fees of $416,945 (2006 - $266,223); salaries and benefits of $1,400,258 (2006
      -
      $904,385); shareholder relations expense of $216,597 (2006 - $153,220); travel
      expenses of $656,965 (2006 - $271,883); mail, news releases and printing expense
      of $83,999 (2006 - $92,281) and promotion expenses of $193,296 (2006 -
      $112,721). All of these costs have increased during the year from 2006 levels
      as
      a result of the Company’s growth and expanded efforts in South
      Africa.





**f)
      Related Party Transactions**




Management
      and consulting fees, salaries and Director’s sitting fees in the year of
      $500,821 (2006 - $354,710) were incurred with directors of the Company. Of
      this
      amount approximately $220,591 (2006 - $195,980) is related to fees for the
      Company’s President. At August 31, 2007 there were $21,869 in fees (2006 -
      $7,600) owed and included in accounts payable.





The
      Company received $138,210 (2006 - $135,340) during the period from MAG Silver
      Corp. (“MAG”), a company with two common directors and a common officer, under
      the terms of a 2003 service agreement for administrative services. Accounts
      receivable at the end of the end include an amount of $267 due from
      MAG.





During
      the year the Company accrued or received payments of $67,200 (2006 – $27,300)
      from West Timmins Mining Inc. (“WTM”) formerly Sydney Resource Corporation, a
      company with three common directors and a common officer, for administrative
      services. Accounts receivable at the end of the period include an amount of
      $16,895 due from WTM.





During
      the year ended August 31, 2005, the Company entered into an office lease
      agreement with Anthem Works Ltd. (“Anthem”), a company with a common director.
      During the year ended August 31, 2007 the Company accrued or paid Anthem $66,684
      under the office lease agreement (2006 - $62,333).





These
      transactions are in the normal course of business and are measured at the
      exchange


amount
      which is the consideration established and agreed to by the noted
      parties.





**g)
      Shareholder Relations’ Expenses**




Shareholder
      relations’ expense during the year totaled $216,597 (2006 - $153,220). The
      Company manages its shareholder relations as an internal function. The Company
      has been active in raising its profile with both retail and institutional
      investors. Since May 2005 Roth Investor Relations (“Roth”) has been contracted
      at a rate of US $5,000 per month to provide distribution of the Company’s
      information to US institutions and other international analysts and money
      managers. Prior to May 2005 Roth was contracted by the Company to provide
      services, on an invoice basis, as needed from time to time. Roth has offices
      in
      New Jersey, USA and affiliated offices in London and Johannesburg. Mr. Larry
      Roth is the Company’s primary contact with the firm. Since June 2005 Mr. Tony
      Mahalski of LM Associates in London, U.K., has been engaged for a fee of GBP
      1,000 per month for the purpose of general business development and the raising
      of the Company’s profile in Europe.





**h)
      Travel and Promotion Expenses**




Travel
      expenses for the year amounted to $656,965 (2006 - $271,883). These activities
      relate to the supervision of ongoing operations in South Africa and Canada,
      new
      property investigations and meetings with potential and current institutional
      and sophisticated investors. Promotional expenses in the year amounted to
      $193,296 (2006 - $112,721) and these costs relate to design work, media
      relations, printed material, postage and trade show attendance.





**i)
      Property Acquisition Expenses**




Property
      acquisition expenditures during the year totaled $365,514 (2006 - $300,928)
      in
      cash and shares. This includes $105,000 for properties in Ontario, and $260,514
      to acquire or maintain option rights to the South African properties. Cash
      payments or accruals totaled $135,514 (2006 - $260,928) and share issuances
      for
      property acquisitions totaled $230,000 (2006 - $40,000).





The
      Company evaluates its property interests on an ongoing basis and intends to
      abandon properties that fail to remain prospective. The Company is confident
      that it will be able to meet its earn-in obligations on those properties which
      management considers to be of merit. At the time of writing the Company was
      incurring further property acquisition expenses through its activities in
      Ontario, Canada and the Republic of South Africa.





**j)
      Off-Balance Sheet Arrangements**




The
      Company has no off-balance sheet arrangements.








**3.        CRITICAL
      ACCOUNTING ESTIMATES**




In
      preparing financial statements, management has to make estimates and assumptions
      that affect the reported amounts of assets, liabilities, revenues and expenses.
      Based on historical experience, current conditions and expert advice, management
      makes assumptions that are believed to be reasonable under the circumstances.
      These estimates and assumptions form the basis for judgments about the carrying
      value of assets and liabilities and reported amounts for revenues and expenses.
      Different assumptions would result in different estimates, and actual results
      may differ from results based on these estimates. These estimates and
      assumptions are also affected by management’s application of accounting
      policies. Critical accounting estimates are those that affect the consolidated
      financial statements materially and involve a significant level of judgment
      by
      management. Management’s critical accounting estimates apply to the assessment
      for the impairment of mineral properties and the valuation of other assets
      and
      liabilities such as fixed assets, investments, reclamation costs, accounting
      for
      income and resource taxes, mineral resources and contingencies.








**4.        SIGNIFICANT
      ACCOUNTING POLICIES**




The
      Company’s accounting policies are set out in Note 2 of its Consolidated Audited
      Financial Statements for the year ended August 31, 2007. There are several
      policies that are significant to the financial results of the
      Company.





Under
      Canadian GAAP, the Company defers all costs relating to the acquisition and
      exploration of its mineral properties. Any revenues received from such
      properties are credited against the costs of the property. When commercial
      production commences on any of the Company’s properties, any previously
      capitalized costs would be charged to operations over the life of the property
      using a unit-of-production method. The Company regularly reviews deferred
      exploration costs to assess their recoverability and when the carrying value
      of
      a property exceeds the estimated net recoverable amount, provision is made for
      impairment in value.





The
      existence of uncertainties during the exploration stage and the lack of
      definitive empirical evidence with respect to the feasibility of successful
      commercial development of any exploration property do create measurement
      uncertainty concerning the calculation of the amount of impairment to the value
      of any mineral property. The Company relies on its own or independent estimates
      of further geological prospects of a particular property and also considers
      the
      likely proceeds from a sale or assignment of the rights before determining
      whether or not impairment in value has occurred.





Future
      income taxes are calculated based on the liability method. Future income taxes
      arise from the recognition of the tax consequences of temporary differences
      by
      applying enacted or substantively enacted tax rates applicable to future years
      to differences between the financial statement carrying amounts and the tax
      bases of certain assets and liabilities. The Company records a valuation
      allowance against any portion of those future income tax assets that it believes
      will, more likely than not, fail to be realized.








**5.        ADOPTION
      OF NEW ACCOUNTING STANDARDS**




In
      January 2005, the CICA issued a new Handbook Section 3855 *Financial
      Instruments – Recognition and Measurement*, effective for annual and interim
      periods beginning on or after October 1, 2006. CICA 3855 establishes standards
      for recognizing and measuring financial assets and liabilities and non-financial
      derivatives. All financial assets, except those classified as held to maturity,
      and derivative financial instruments, must be measured at fair value. All
      financial liabilities must be measured at fair value when they are classified
      as
      held for trading; otherwise, they are measured at amortized cost. Investments
      available-for-sale will be recorded at fair value with the unrealized gains
      or
      losses recorded through comprehensive income. For the interim period ending
      November 30, 2007, the Company expects a material impact on its financial
      statements similar to the impact on comprehensive income for U.S. GAAP purposes.
      See Note 15 of the financial statements.





In
      January 2005, the CICA issued new Handbook Section 1530, *Comprehensive
      Income* and Section 3251, *Equity*, effective for interim and annual
      period beginning on or after October 1, 2006. CICA 1530 establishes standards
      for reporting and presenting certain gains and losses normally not included
      in
      net earnings or losses, such as unrealized gains and losses related to
      available-for-sale securities, in a statement of comprehensive income. CICA
      3251
      establishes standards for the presentation of equity and changes in equity
      as a
      result of the new requirements in CICA 1530. The Company will include a
      statement of comprehensive income upon adoption of these sections on September
      1, 2007.








**6.        LIQUIDITY
      AND CAPITAL RESOURCES**




The
      Company issued a total of 7,297,569 (2006 – 10,532,547) common shares during the
      year. Of this 7,247,569 shares (2006 – 10,507,547) were issued for cash proceeds
      of $12,080,366 (2006 - $16,197,711). During the year 50,000 shares (2006 –
25,000) were issued for mineral properties for a fair value of $230,000 (2006
      -
      $40,000). Cash proceeds are net of share issuances to be spent on mineral
      property acquisitions, exploration and development as well as for general
      working capital purposes. See Subsequent Events for further equity issuances.
      The Company’s primary source of capital has been from the sale of equity. At
      August 31, 2007 the Company had cash and cash equivalents on hand of $12,669,067
      compared to cash and cash equivalents of $10,066,801 at August 31, 2006. The
      primary use of cash during the year was for acquisition of mineral properties,
      exploration expenditures, and investment in and advances to Joint Venture being
      approximately $3,513,464, which includes $2,645,382 for the WBJV project (2006
      -
      $6,423,839 which includes $5,780,246 for the WBJV project), management fees
      and
      expenses of $690,504 (2006 - $367,891) and other general and administrative
      expenses of $3,895,573 (2006 - $2,440,824).





In
      the
      normal course of business the Company enters into transactions for the purchase
      of supplies and services denominated in South African Rand. The Company also
      has
      cash and certain liabilities denominated in South African Rand. As a result
      the
      Company is subject to foreign exchange risk from fluctuations in foreign
      exchange rates. In the past year to the time of writing this report, the South
      African Rand has fallen in value against the Canadian Dollar by approximately
      14%.





The
      following Table discloses the Company’s continual obligations for optional
      mineral property acquisition payments, and committed lease obligations for
      office rent and equipment. The Company has no long term debt or loan
      obligations. Under the terms of several of the Company’s mineral property option
      and purchase agreements, the Company is required to make certain scheduled
      acquisition payments and incur minimum annual exploration expenditures as
      summarized in the table below in order to preserve the Company’s interests in
      the related mineral properties. In the event the Company is unable or unwilling
      to make these payments, it is likely that the Company would forfeit our rights
      to acquire the related properties.








**Payments
                by period****Total**
            **<
                1****Year**
            **1
                – 3****Years**
            **3
                – 5****Years**
            **>
                5****Years**Optional
                Acquisition Payments
            $
                5,178,000
            $
                5,178,000
            $0
            $
                0
            $
                0Lease
                Obligations
            279,823
            103,019
            165,986
            10,818
            0**Totals**
            **$
                5,457,823**
            **$
                5,281,019**
            **$165,986**
            **$
                10,818**
            **$0**








**7.        OUTSTANDING
      SHARE DATA**




The
      Company has an unlimited number of common shares authorized for issuance without
      par value. At November 7, 2007 there were 61,451,747 shares outstanding,
      4,164,875 incentive stock options outstanding and 850,000 common share purchase
      warrants outstanding.







8.        DISCLOSURE CONTROLS AND
      INTERNAL CONTROL OVER FINANCIAL REPORTING




The
      Company maintains a set of disclosure controls and procedures designed to ensure
      that information required to be disclosed in filings made pursuant to both
      U.S.
      Securities and Exchange Commission and Canadian Securities Administration
      requirements are recorded, processed, summarized and reported in the manner
      specified by the relevant securities laws applicable to the Company. The Company
      operates in both Canada and the Republic of South Africa and work is ongoing
      to
      improve and modernize these controls and to ensure that they remain consistently
      applied in both jurisdictions. The Chief Executive Officer and the Chief
      Financial Officer have evaluated the Company’s disclosure control procedures as
      of August 31, 2007 through inquiry, review, and testing, as well as by drawing
      upon their own relevant experience. The Company retained an independent third
      party specialist in 2007 to assist in the assessment of its disclosure control
      procedures. The Chief Executive Officer and the Chief Financial Officer have
      concluded that, as at August 31, 2007, the Company’s disclosure control
      procedures were effective. Management is also developing and implementing a
      plan
      to address disclosure controls and procedures on a forward looking basis as
      the
      Company continues to grow.





The
      Company also maintains a system of internal controls over financial reporting
      designed under the supervision of the Company’s Chief Executive Officer and
      Chief Financial Officer to provide reasonable assurance regarding the
      reliability of financial reporting and the preparation of financial statements
      for external purposes in accordance with Canadian GAAP. The Company retained
      an
      independent third party specialist in 2007 to assist in the assessment of its
      internal control procedures. The Board of Directors approves the financial
      statements and ensures that management discharges its financial
      responsibilities. The Board’s review is accomplished principally through the
      audit committee, which is composed of independent non-executive
      directors.





The
      audit
      committee meets periodically with management and auditors to review financial
      reporting and control matters. The Board of Directors has also appointed a
      compensation committee composed of non-executive directors whose recommendations
      are followed with regard to executive compensation.





From
      time
      to time the board may also form special sub-committees, which must investigate
      and report to the Board on specific topics.





During
      the year ended August 31, 2007, the Company effected the changes in internal
      control over financial reporting that have materially affected, or may
      materially affect, the Company’s internal control over financial reporting. The
      Company has (i) taken steps to improve segregation of duties and the
      authorization process through the addition of accounting personnel; and (ii)
      reviewed and refined internal control processes; and (iii) adopted and published
      new corporate governance policies; and (iv) reviewed and improved general
      controls over information technology; and (v) enhanced financial control over
      period close processes.





The
      Company’s management, including the Chief Executive Officer and the Chief
      Financial Officer, is responsible for establishing and maintaining adequate
      internal control over financial reporting, and evaluating the effectiveness
      of
      the Company’s internal control over financial reporting as at each fiscal year
      end. Management has used the Committee of Sponsoring Organizations of the
      Treadway Commission (COSO) framework to evaluate the effectiveness of the
      Company’s internal control over financial reporting as at August 31, 2007. Based
      on this evaluation, management has concluded that as at August 31, 2007, the
      Company’s internal control over financial reporting was effective.





**9.        AMEX
      CORPORATE GOVERNANCE**




The
      Company’s common shares are listed on the American Stock Exchange (“AMEX”).
      Section 110 of the AMEX company guide permits AMEX to consider the laws, customs
      and practices of foreign issuers in relaxing certain AMEX listing criteria,
      and
      to grant exemptions from AMEX listing criteria based on these considerations.
      A
      company seeking relief under these provisions is required to provide written
      certification from independent local counsel that the non-complying practice
      is
      not prohibited by home country law. A description of the significant ways in
      which the Company’s governance practices differ from those followed by domestic
      companies pursuant to AMEX standards is posted on the Company’s website at
      www.platinumgroupmetals.net and a copy of such description is available by
      written request made to the Company.





**10.           SUBSEQUENT
      EVENTS**




Subsequent
      to August 31, 2007, 463,000 common shares were issued pursuant to the exercise
      of 463,000 stock options at prices between $0.50 per share and $2.57 per share
      for aggregate proceeds of $536,500. In October 2007, there were 150,000
      incentive stock options granted at a price of $4.15 per share and 1,097,500
      incentive stock options granted at a price of $4.40 per share.








**11.           LIST
      OF DIRECTORS AND OFFICERS**




***a)
      Directors:***




Eric
      Carlson


Frank
      R.
      Hallam


R.
      Michael
      Jones


Iain
      McLean


Barry
      W.
      Smee






***b)
      Officers:***




R.
      Michael
      Jones (President)


Frank
      R.
      Hallam (Chief Financial Officer, Secretary)


Peter
      C.
      Busse (Chief Operating Officer)