---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

FORM 20-F

|[  ] | REGISTRATION STATEMENT PURSUANT TO SECTION
      12(b) OR (g) OF THESECURITIESEXCHANGE ACT OF
      1934
|---- | --------------------------------------------------------------------------------------------------------

OR

[X]
    ANNUAL REPORT PURSUANT TO SECTION 13 OR
      15(d) OF THE SECURITIESEXCHANGEACTOF 1934**For the fiscal year ended August 31,
      2017**


OR

|[  ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR
      15(d) OF THE SECURITIESEXCHANGE ACT OF 1934
|---- | ---------------------------------------------------------------------------------------------
|     | **For the transition period
      from ______________________ to ______________________**    
|     | **OR**                                                                                       



|[  ] | SHELL COMPANY REPORT PURSUANT TO SECTION 13
      OR 15(d) OF THESECURITIESEXCHANGE
  ACT OF 1934
|---- | -------------------------------------------------------------------------------------------------

Commission file number: 001-33562

Platinum Group Metals Ltd.(Exact name of Registrant as specified in its charter)

British Columbia(Jurisdiction of
incorporation or organization)

Bentall Tower 5Suite 788  550 Burrard StreetVancouver, British ColumbiaCanada V6C 2B5(Address of principal executive offices)

Frank R. HallamTelephone: (604) 899-5450Facsimile: (604) 484-4710Platinum Group Metals Ltd.Bentall Tower 5Suite 788  550 Burrard StreetVancouver, British ColumbiaCanada V6C 2B5(Name, Telephone, E-Mail and/or Facsimile number and Address of
Company Contact Person)

Securities registered or to be registered pursuant to Section
12(b) of the Act:

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ii

|Title of
      each class   |  | Name of each exchange on which registered
|--------------------------- |  | -----------------------------------------
|                            |  |                                          
|Common Shares, no par value |  | NYSE American                            

Securities registered or to be registered pursuant to Section
12(g) of the Act: None

Securities for which there is a reporting obligation pursuant
to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the
issuers classes of capital or common stock as of the close of the period
covered by the annual report: 148,469,377 common shares.

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ 
]     No [X]

If this report is an annual or transition report, indicate by
check mark if the registrant is not required to file reports pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934. Yes [ 
]     No [X]

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. 
Yes [X]     No [  ]

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).
Yes [  ]     No [  ]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging
growth company. See the definition of large accelerated filer, accelerated
filer, and emerging growth company in Rule 12b-2 of the Exchange Act.

Large accelerated
    Accelerated filer [X]
    Non-accelerated filer [  ]
    Emerging growthfiler [  ]
    
    
    company
[X]


If an emerging growth company that prepares its financial
statements in accordance with U.S. GAAP, indicate by check mark if the
registrant has elected not to use the extended transition period for complying
with any new or revised financial accounng standards provided pursuant to
Section 13(a) of the Exchange Act. [  ]

The term new or revised financial accounting standard refers
to any update issued by the Financial Accounng Standards Board to its
Accounting Standards Codification after April 5, 2012.

Indicate by check mark which basis of accounting the registrant
has used to prepare the financial statements included in this filing:

|U.S. GAAP [  ] | International Financial Reporting Standards
      as issued | Other [  ]
|-------------- | ----------------------------------------------------------- | ----------
|               | by the International Accounting
      Standards Board [X]   |           

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iii

If Other has been checked in response to previous question,
indicate by check mark which financial statement item the registrant has elected
to follow. Item 17 [  ]     Item 18 [  ]

If this is an annual report, indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [  ]     No [X]

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TABLE OF CONTENTS

|INTRODUCTION                      | 4                                                                      
|--------------------------------- | -----------------------------------------------------------------------
|GLOSSARY                          | 11                                                                     
|GLOSSARY
      OF TECHNICAL TERMS | 13                                                                     
|PART
      I                      |                                                                        
|ITEM
      1.                     | IDENTITY
      OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS            
|ITEM
      2.                     | OFFER
      STATISTICS AND EXPECTED TIMETABLE                          
|ITEM
      3.                     | KEY
      INFORMATION                                                  
|                                  | A.                                                                     
|                                  | B.                                                                     
|                                  | C.                                                                     
|ITEM
      4.                     | INFORMATION
      ON THE COMPANY                                       
|                                  | A.                                                                     
|                                  | Corporatization
      of Waterberg Project                             
|                                  | Three-Year
      History                                               
|                                  | B.                                                                     
|                                  | C.                                                                     
|                                  | D.                                                                     
|ITEM
      4A.                    | UNRESOLVED
      STAFF COMMENTS                                        
|ITEM
      5.                     | OPERATING
      AND FINANCIAL REVIEW AND PROSPECTS                     
|                                  | A.                                                                     
|                                  | Year
      Ended August 31, 2017 Compared to Year Ended August 31, 2016
|                                  | Year
      Ended August 31, 2016 Compared to Year Ended August 31, 2015
|                                  | B.                                                                     
|                                  | C.                                                                     
|                                  | D.                                                                     
|                                  | E.                                                                     
|                                  | F.                                                                     
|ITEM
      6.                     | DIRECTORS,
      SENIOR MANAGEMENT AND EMPLOYEES                       
|                                  | A.                                                                     
|                                  | B.                                                                     
|                                  | C.                                                                     
|                                  | D.                                                                     
|                                  | E.                                                                     

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2

|ITEM 7.         | MAJOR
      SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                            | 175                                                    
|--------------- | ---------------------------------------------------------------------------------- | -------------------------------------------------------
|                | A.                                                                                 | Major
      Shareholders                               
|                | B.                                                                                 | Related Party Transactions                             
|                | C.                                                                                 | Interests
      of Experts and Counsel                 
|ITEM
      8.   | FINANCIAL
      INFORMATION                                                        | 177                                                    
|                | A.                                                                                 | Consolidated Statements and Other Financial Information
|                | B.                                                                                 | Significant Changes                                    
|ITEM 9.         | THE OFFER AND LISTING                                                              | 178                                                    
|                | B.                                                                                 | Plan of Distribution                                   
|                | C.                                                                                 | Markets                                                
|                | D.                                                                                 | Selling Shareholders                                   
|                | E.                                                                                 | Dilution                                               
|                | F.                                                                                 | Expenses of the Issue                                  
|ITEM 10.        | ADDITIONAL INFORMATION                                                             | 180                                                    
|                | A.                                                                                 | Share Capital                                          
|                | B.                                                                                 | Memorandum
      and Articles of Association           
|                | C.                                                                                 | Material Contracts                                     
|                | D.                                                                                 | Exchange
      Controls                                
|                | F.                                                                                 | Dividends and Paying Agents                            
|                | G.                                                                                 | Statement
      by Experts                             
|                | H.                                                                                 | Documents on Display                                   
|                | I.                                                                                 | Subsidiary
      Information                           
|ITEM
      11.  | QUANTITATIVE AND
      QUALITATIVE DISCLOSURES ABOUT MARKET RISK                   | 198                                                    
|ITEM 12.        | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                             | 199                                                    
|PART II         |                                                                                    |                                                        
|ITEM 13.        | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                                    | 200                                                    
|ITEM 14.        | MATERIAL
      MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | 200                                                    
|ITEM 15.        | CONTROLS AND PROCEDURES                                                            | 200                                                    
|ITEM
      15T. | CONTROLS AND
      PROCEDURES                                                      | 201                                                    
|ITEM 16A.       | AUDIT COMMITTEE FINANCIAL EXPERT                                                   | 201                                                    
|ITEM
      16B. | CODE OF ETHICS                                                                     | 201                                                    
|ITEM 16C.       | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                             | 201                                                    
|ITEM
      16D. | EXEMPTIONS FROM
      THE LISTING STANDARDS FOR AUDIT COMMITTEES                   | 202                                                    
|ITEM 16E.       | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND
      AFFILIATED PURCHASERS       | 202                                                    

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3

|ITEM
      16F.     | CHANGE
      IN REGISTRANTS CERTIFYING ACCOUNTANT | 202
|------------------- | -------------------------------------------------- | ---
|ITEM
      16G.     | CORPORATE
      GOVERNANCE                         | 202
|ITEM
      16H.     | MINE
      SAFETY DISCLOSURE                       | 203
|PART
      III      |                                                    | 204
|ITEM
      17.      | FINANCIAL
      STATEMENTS                         | 204
|ITEM
      18.      | FINANCIAL
      STATEMENTS                         | 204
|ITEM
      19.      | EXHIBITS                                           | 239
|EXHIBIT
      INDEX |                                                    | 241

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4

INTRODUCTION

The information contained in this annual report on Form 20-F
for the year ended August 31, 2017 (the Annual Report) is current as of
December 29, 2017, except where a different date is specified.

Financial information is presented in accordance with the
Handbook of the Canadian Institute of Charted Accountants, in accordance with
International Financial Reporting Standards (IFRS), as issued by
International Accounting Standards Board (IASB), applicable to the
preparation of consolidated financial statements and in accordance with
accounting policies based on IFRS standards and International Financial
Reporting Interpretations Committee (IFRIC) interpretations.

For further information please refer to Note 2 to the
accompanying consolidated financial statements.

Currency and Foreign Exchange Rates

All monetary amounts set forth in this Annual Report are
expressed in United States Dollars (USD), except where otherwise
indicated. The following tables set forth, for 1 USD expressed in Canadian
Dollars (CDN or $C or CAD) and for 1 USD expressed in
South African Rand (Rand or R or ZAR)), (i) the
average rate of exchange for each of the five most recent financial years,
calculated by using the average of the exchange rates on the last day of each
month during the period; and (ii) the high and low exchange rates for each month
during the previous six months.

The exchange rate for USD expressed in CDN is based on the noon
rate of exchange for dates through April 28, 2017, and based on the average
daily rate of exchange for dates after April 28, 2017, as reported by the Bank
of Canada. The exchange rate for USD expressed in Rand is based on the noon
buying rate in New York City for cable transfer in Rand as certified for customs
purposes by the Federal Reserve Bank of New York.

Year Ended August 31
    USD to CDN
    USD to Rand2017
    C$1.3212
    ZAR 13.40232016
    C$1.3265
    ZAR 14.77482015
    C$1.2102
    ZAR 11.87652014
    C$1.0787
    ZAR 10.51582013
    C$1.0159
    ZAR 9.2165


Month
    USD to
      CDN
    USD to
    RandHigh
    Low
    High
    LowJune 2017
    C$1.3504
    C$1.2977
    ZAR 13.0925
    ZAR 12.5925July 2017
    C$1.2982
    C$1.2447
    ZAR 13.5950
    ZAR 12.9050August 2017
    C$1.2755
    C$1.2482
    ZAR 13.4700
    ZAR 12.9450September 2017
    C$1.2480
    C$1.2128
    ZAR 13.5375
    ZAR 12.7625October 2017
    C$1.2893
    C$1.2472
    ZAR 14.1725
    ZAR 13.2600November 2017
    C$1.2888
    C$1.2683
    ZAR 14.4925
ZAR 13.5950


The daily average exchange rate on December 28, 2017 as
reported by the Bank of Canada for the conversion of USD into CDN was $1.00
equals C$1.2588.

The noon buying rate of exchange on December 22, 2017 as
reported by the Federal Reserve Bank of New York for the conversion of USD into
Rand was $1.00 equals Rand 12.605.

---

5

Share Consolidation

On January 28, 2016 the Companys common shares were
consolidated on the basis of one new share for ten old shares (1:10). All
information in this Annual Report 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.

Units of Conversion

The following table sets forth certain standard conversions
from the International System of Units (metric units) to the Standard Imperial
Units:

Conversion
      TableMetric
    
    Imperial1.0 millimetre (mm)
    =
    0.039 inches (in)1.0 metre (m)
    =
    3.28 feet (ft)1.0 kilometre (km)
    =
    0.621 miles (mi)1.0 hectare (ha)
    =
    2.471 acres (ac)1.0 gram (g)
    =
    0.032 troy ounces (oz)1.0 metric tonne (t)
    =
    1.102 short tons (ton)1.0 g/t
    =
    0.029 oz/ton


Forward-Looking Statements

This Annual Report 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 Annual Report include,
without limitation, statements with respect to:

| | the repayment, and compliance with the terms of,
      indebtedness;                                                          
|- | ------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                               
| | further amendments to the Project 1 Working Capital
      Facilities (defined below);                                         
|  |                                                                                                                               
| | the satisfaction of closing conditions and closing of the
      Maseve Sale Transaction (defined below);                      
|  |                                                                                                                               
| | the completion of the DFS (defined below) for, and other
      developments related to, the Waterberg Project (defined below);
|  |                                                                                                                               
| | the adequacy of capital, financing needs and the
      availability of and potential for obtaining further capital;           
|  |                                                                                                                               
| | revenue, cash flow and cost estimates and assumptions;                                                                        
|  |                                                                                                                               
| | future events or future performance;                                                                                          

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6

| | governmental and securities exchange laws, rules,
      regulations, orders, consents, decrees, provisions, charters, frameworks,
      schemes and regimes, including interpretations of and compliance with the
      same;
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                              
| | anticipated exploration, development, construction,
      production, permitting and other activities on the Companys properties;                                                                                           
|  |                                                                                                                                                                                                                              
| | 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.                                                                                                                                               

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 report referred to in this Annual Report 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 report 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:

| | delays in, or inability to complete, the planned sale of
      the Maseve platinum and palladium mine (Maseve Mine), also
      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), the LMM Facility (defined below) and the Companys
      convertible notes, and to comply with the terms of such indebtedness, 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, which
      potentially could result in the loss of the Companys interest in PTM RSA,
      the Waterberg Project and the Maseve Mine 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;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | completion of a Definitive Feasibility Study
      (DFS) for the Waterberg Project, which is subject to resource
      upgrade and economic analysis requirements;                                                                                                                                                                                                                                                                                                                                                                                                              
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | uncertainty of estimated production, development plans
      and cost estimates for the Waterberg Project;                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

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7

| | 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;                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | the failure of the Company or its joint venture partners
      to fund their pro rata share of funding obligations for the Waterberg
      Project;                                                                                                                                                                                                                                                                                                                 
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | any disputes or disagreements with the Companys joint
      venture partners;                                                                                                                                                                                                                                                                                                                                                                                      
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 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;                                                                                                                                                                                                                                                                                                                
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 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 Annual Report.                                                                                                                                                                                                                                                                                                                                                                             

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8

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 Annual Report 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.

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 Canadas National Instrument 43-101  Standards of Disclosure for
Mineral Projects (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 Annual Report 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. The Company has not disclosed
or determined any mineral reserves under SEC Industry Guide 7 standards in
respect of any of its properties.

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9

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 NI 43-101. Inferred mineral resource estimates are
excluded from estimates forming the basis of a feasibility study.

NI 43-101 requires mining companies to disclose reserves and
resources using the subcategories of proven reserves, probable reserves,
measured resources, indicated resources and inferred resources. Mineral
resources that are not mineral reserves do not have demonstrated economic
viability.

A 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, infrastructure, economic, marketing, legal,
environmental, social, governmental 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 which may occur
when the material is mined or extracted. A proven mineral reserve is the
economically mineable part of a measured mineral resource for which quantity,
grade or quality, densities, shape and physical characteristics are estimated
with confidence sufficient to allow the appropriate application of technical and
economic parameters to support detailed mine planning and final evaluation of
the economic viability of the deposit. A probable mineral reserve is the
economically mineable part of an indicated, and in some circumstances, a
measured mineral resource for which quantity, grade or quality, densities, shape
and physical characteristics are estimated with sufficient confidence to allow
the appropriate application of technical and economic parameters in sufficient
detail to support mine planning and evaluation of the economic viability of the
deposit.

A mineral resource is a concentration or occurrence of solid
material in or on the Earths crust in such form, grade or quality and quantity
that there are reasonable prospects for eventual economic extraction. The
location, quantity, grade or quality, continuity and other geological
characteristics of a mineral resource are known, estimated or interpreted from
specific geological evidence and knowledge, including sampling. A measured
mineral resource is that part of a mineral resource for which quantity, grade
or quality, densities, shape, and physical characteristics are estimated with
confidence sufficient to allow the appropriate application of technical and
economic parameters to support detailed mine planning and final evaluation of
the economic viability of the deposit. Geological evidence is derived from
detailed and reliable exploration, sampling and testing and is sufficient to
confirm geological and grade or quality continuity between points of
observation. An indicated mineral resource is that part of a mineral resource
for which quantity, grade or quality, densities, shape and physical
characteristics are estimated with sufficient confidence to allow the
application of technical and economic parameters in sufficient detail to support
mine planning and evaluation of the economic viability of the deposit.
Geological evidence is derived from adequately detailed and reliable
exploration, sampling and testing and is sufficient to assume geological and
grade continuity between points of observation. Mineral resources that are not
mineral reserves do not have demonstrated economic viability. An inferred
mineral resource is that part of a mineral resource for which quantity and
grade or quality are estimated on the basis of limited geological evidence and
sampling. Geological evidence is sufficient to imply but not verify geological
and grade or quality continuity. An inferred mineral resource is based on
limited information and sampling gathered through appropriate sampling
techniques from locations such as outcrops, trenches, pits, workings and drill
holes.

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10

A feasibility study is a comprehensive technical and economic
study of the selected development option for a mineral project that includes
appropriately detailed assessments of applicable mining, processing,
metallurgical, infrastructure, economic, marketing, legal, environmental,
social, governmental and other relevant operational factors and detailed
financial analysis that are necessary to demonstrate, at the time of reporting,
that extraction is reasonably justified (economically mineable). The results of
the study may serve as the basis for a final decision by a proponent or financial
institution to proceed with, or finance, the development of the project. A
preliminary feasibility study or pre-feasibility study is a comprehensive
study of a range of options for the technical and economic viability of a
mineral project that has advanced to a stage where a preferred mining method, in
the case of underground mining, or the pit configuration, in the case of an open
pit, is established and an effective method of mineral processing is determined.
It includes a financial analysis based on reasonable assumptions on the
applicable mining, processing, metallurgical, infrastructure, economic,
marketing, legal, environmental, social, governmental and other relevant
operational factors and the evaluation of any other relevant factors which are
sufficient for a qualified person, acting reasonably, to determine if all or
part of the mineral resource may be converted to a mineral reserve at the time
of reporting. Cut-off grade means (a) in respect of mineral resources, the
lowest grade below which the mineralized rock currently cannot reasonably be
expected to be economically extracted, and (b) in respect of mineral reserves,
the lowest grade below which the mineralized rock currently cannot be
economically extracted as demonstrated by either a preliminary feasibility study
or a feasibility study. Cut-off grades vary between deposits depending upon the
amenability of ore to mineral extraction and upon costs of production and metal
prices.

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11

GLOSSARY

Except as otherwise identified, the following terms, when used
herein, shall have the following meanings:

ANC refers to the African National Congress.

BCBCA refers to the Business Corporations Act
(British Columbia).

BEE Actrefers to the Broad-Based Black Economic
Empowerment Act, 2003.

BEE Amendment Actrefers to the Broad-Based Black
Economic Empowerment Amendment Act, No. 46 of 2013.

BMO refers to BMO Nesbitt Burns Inc.

Common Stock refers to the common shares in the
capital of PTM.

Company Actrefers to the Company Act (British
Columbia). On March 30, 2004, the Company Act (British Columbia) was
replaced by the Business Corporations Act (British Columbia).

ESKOM refers to ESKOM Holdings Limited, South Africas
state-owned electricity utility.

HDSAsrefers to historically disadvantaged South
Africans.

Implatsrefers to Impala Platinum Holdings
Limited.

Land Claims Act refers to the Restitution of Land
Rights Act, No. 22 of 1994, as amended.

LMMrefers to Liberty Metals & Mining Holdings,
LLC.

LMM Facility refers to the November 2, 2015 $40
million credit facility agreement with LMM, as amended, or amended and restated,
as applicable on May 3, 2016, September 19, 2016, January 13, 2017, April 13,
2017, June 13, 2017, June 23, 2017 and October 30, 2017.

Macquarie refers to Macquarie Capital Markets Canada
Ltd.

Maseve Minerefers tothe Maseve platinum and
palladium mine located on the Western Limb of the Bushveld Complex near
Rustenburg, South Africa.

MPRDA refers to the Mineral and Petroleum Resources
Development Act of 2002.

New Draft Charter refers to the Reviewed Broad Based
Black-Economic Empowerment Charter for the South African Mining and Minerals
Industry published on April 15, 2016.

NYSE Americanrefers to the NYSE American Stock
Exchange.

OECDrefers to the Organisation for Economic
Cooperation and Development.

PAJArefers tothe Promotion of Administrative
Justice Act, No. 3 of 2000.

Project 1 refers to the Maseve Mine.

Project 1 Working Capital Facilitiesrefers to the
Sprott Facility together with the LMM Facility.

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12

Project 3 refers to what was formerly the Western
Bushveld Joint Venture.

PTM,Platinum Group, Company or we refers
to Platinum Group Metals Ltd.

PTM RSA refers to our wholly owned subsidiary
incorporated under the laws of the Republic of South Africa under the name
Platinum Group Metals (RSA) (Proprietary) Limited.

RBPlat refers to Royal Bafokeng Platinum Limited.

Restitution Amendment Act refers to the
Restitution of Land Rights Amendment Act, No. 15 of 2014.

Royalty Act refers to The Mineral and Petroleum
Resources Royalty Act, No. 28 of 2008 which effectively came into operation on
May 1, 2009.

RSA is an abbreviation for Republic of South Africa.

SIMS Report refers to the State Intervention in the
Minerals Sector report.

Sprott refers to Sprott Resource Lending Partnership.

Sprott Facility refers to the original $40.0 million
credit facility agreement with the Sprott Lenders dated February 13, 2015, as
amended, or amended and restated, as applicable, on November 19, 2015, May 3,
2016, September 19, 2016, October 11, 2016, January 13, 2017, April 13, 2017,
June 13, 2017 and September 25, 2017.

Sprott Lenders refers to the secured lenders to
Platinum Group, including Sprott, among other lenders.

TSX refers to the Toronto Stock Exchange.

TSX-V refers to the TSX Venture Exchange.

U.S. Securities Act refers to the United States
Securities Act of 1933, as amended.

WBJV refers to the former Western Bushveld Joint
Venture.

WKMrefers to West Kirkland Mining Inc.

ZAR is an abbreviation for South African Rand.

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13

GLOSSARY OF TECHNICAL TERMS

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.

anorthosite is a rock comprised of largely feldspar
minerals and minor mafic iron-magnesium minerals.

assay is an analysis to determine the quantity of one
or more elemental components.

Au refers to gold.

BIC is an abbreviation for the Bushveld Igneous
Complex in South Africa, the source of most of the worlds platinum and is a
significant producer of palladium and other platinum group metals (PGMs) as
well as chrome.

cmis an abbreviation for centimetres.

Cu refers to copper.

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 or break in a rock across which
there has been displacement.

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 (ie, Cu, Zu, 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.

his an abbreviation for hectare.

hectare is an area totaling 10,000 square metres or
100 metres by 100 metres.

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.

km is an abbreviation for kilometre.

m is an abbreviation for metres.

mafic is a rock type consisting of predominantly iron
and magnesium silicate minerals with little quartz or feldspar minerals.

mineralization refers to minerals of value occurring
in rocks.

Mtis an abbreviation for million tonnes.

Ni is an abbreviation for nickel.

outcroprefers to an exposure of rock at the earths
surface.

overburden is any material covering or obscuring rocks
from view.

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14

Pd refers to palladium.

PGE refers to mineralization containing platinum group
elements, i.e. platinum, palladium, rhodium and gold.

PGM refers to platinum group metals, i.e. platinum and
palladium.

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.

quartzis a common rock-forming mineral
(SiO2)

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.

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 color and have relatively
high specific gravities.

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15

PART I

|ITEM 1. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND
      ADVISERS
|------- | -----------------------------------------------------------

Not applicable.

|ITEM 2. | OFFER STATISTICS AND EXPECTED TIMETABLE
|------- | ---------------------------------------

Not applicable.

|ITEM 3. | KEY INFORMATION
|------- | ---------------

|A. | Selected Financial Data
|-- | -----------------------

Our selected financial data as at August 31, 2017 and 2016 for
the fiscal years ended August 31, 2017, 2016 and 2015 are derived from our
consolidated financial statements which have been audited by
PricewaterhouseCoopers LLP as indicated in their independent auditors report
which is included elsewhere in this Annual Report. Our selected financial data
as at August 31, 2015 and 2014 are derived from audited consolidated financial
statements, which are not included in this Annual Report.

The selected financial data should be read in conjunction with
the financial statements and notes thereto as well as the information appearing
under Item 5  Operating and Financial Review and Prospects.

Summary of Financial Data

Our financial statements and the table set forth below have
been prepared in accordance with IFRS, as issued by the IASB. All figures
presented are in USD. On September 1, 2015, the first day of the 2016 fiscal
year the Company changed its presentation currency from CDN to USD. As a result,
the August 2014 balance sheet and the August 2015 fiscal year were restated in
USD. The Company has omitted the presentation of selected financial data for its
2013 balance sheet and 2013 and 2014 fiscal years because such financial data
cannot be restated in USD without unreasonable effort or expense.

|SELECTED
      FINANCIAL DATA                                | 
|------------------------------------------------------------ | 
|(in thousands
      of USD, except share and per share data) | 
|                                                             | 
|                                                             | 
|                                                             | 
|Other Income                                                 | 
|Net Loss                                                     | 
|Loss Per Share                                               | 
|Dividends per Share                                          | 
|                                                             | 
|                                                             | 
|Working Capital                                              | 
|Total Assets                                                 | 
|Long Term Liabilities                                        | 
|Mineral Properties                                           | 
|Property Plant and Equipment                                 | 
|Shareholders Equity                                         | 
|Capital Stock                                                | 
|Number of Shares                                             | 

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16

|B. | Capitalization and
Indebtedness
|-- | -------------------------------

Not applicable.

|C. | Reasons for the Offer and Use of
  Proceeds
|-- | -------------------------------------------

Not applicable.

|D. | 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 be unable to generate sufficient cash to
service its debt or otherwise comply with the terms of 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 its
indebtedness will depend on its ability to successfully close the Maseve Sale
Transaction and raise additional funding by way of debt or equity offerings, 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. The Sprott Facility matures on January 31, 2018. If the Company cannot
timely close and use the proceeds from the Plant Sale Transaction portion of the
Maseve Sale Transaction to repay the Sprott Facility, the Company will seek an
extension from the Sprott Lenders until the closing of such transaction. The
receipt of any such extension is not guaranteed. If the Companys cash flows and
capital resources are insufficient to fund its debt service obligations,
including if the Maseve Sale Transaction does not close on a timely basis or if
any necessary extensions or waivers from our lenders are not available, 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 affect 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 Companys debt
instruments could result in an event of default under the applicable
indebtedness and such default could result in secured creditors realization of
collateral. 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 certain
of the Companys indebtedness, including 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.

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17

The Companys debt instruments include 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. The
indenture governing the Notes also includes restrictive covenants. As a result
of these and other 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;                                                                                                                                                                             
|  |                                                                                                                                                                                                                                                                                                    
| | placing the Company at a disadvantage compared to other,
      less leveraged competitors; and                                                                                                                                                                                                     
|  |                                                                                                                                                                                                                                                                                                    
| | increasing the Companys cost of borrowing.                                                                                                                                                                                                                                                        

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

The Company is 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 care and
maintenance and shut down costs related to the Maseve Mine and the continued
exploration on the Waterberg Project, as well as for general working capital
purposes. Pursuant to the terms of the LMM Credit Agreement, as amended, the
Company is required to raise $20.0 million in subordinated debt and/or equity
within 30 days of the Sprott Facility being repaid (expected to be repaid in
January or February, 2018) and raise a further $10.0 million in subordinated
debt and/or equity before June 30, 2018. Proceeds in each instance are to repay
and discharge amounts due firstly to the Sprott Lenders, if any, and secondly to
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 the Waterberg Project, result in the Company being forced to sell
additional assets on an untimely or unfavorable basis or result in a default
under outstanding indebtedness of the Company. 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 outstanding indebtedness of the Company 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.

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18

The Company may be unable to complete the Maseve Sale
Transaction on the terms and timeframe anticipated, or at all, or such
transaction may result in litigation.

The Maseve Sale Transaction is subject to normal commercial
risk that said transaction may not be completed on the terms negotiated or at
all. The completion of the Maseve Sale Transaction may not take place due to the
failure to obtain requisite governmental approvals, lender approvals or satisfy
or waive other conditions precedent to the Maseve Sale Transaction by January
31, 2018, or for other reasons. Additionally, the Maseve Sale Transaction may in
the future be the subject to litigation by one or more shareholders of the
Company who may disagree with the Companys disposition of the Maseve Mine and
may seek to vary or unwind the Maseve Sale Transaction.The impact of
such litigation or the possible effect of a settlement of such litigation upon
the Company cannot be predicted with any degree of certainty at this time. If
the conditions to the Plant Sale Transaction portion of the Maseve Sale
Transaction have not been satisfied by January 31, 2018, we would anticipate
seeking RBPlats agreement to close at a later date; however, the receipt of
such agreement cannot be guaranteed. The failure to complete the Maseve Sale
Transaction, or any such litigation, would adversely affect the Companys
financial condition and may result in a default under the Companys indebtedness
and the Companys insolvency.

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.

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, and PTM
RSA has pledged its shares of Waterberg JV Co. 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, 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 and
pledged the shares it holds in Waterberg JV Co. in favour of 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.

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19

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
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 effective January 30, 2018 the Company
maintain consolidated cash and cash equivalents of at least $2.0 million and
working capital in excess of $1.0 million. No assurance can be provided that the
Company will be able to comply with these conditions. 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 50% of the proceeds from any equity or debt financings in
excess of $500,000 (excluding intercompany financings and the financings
required under the Project 1 Working Capital Facilities) 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 the
Sprott Lenders and LMM. 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.

The Companys properties may not be brought into a state
of 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 will
require obtaining land use consents, permits and the construction and operation
of mines, processing plants and related infrastructure. 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;

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20

| | 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, will be
brought into a state of commercial production.

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 Annual Report 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:

---

21

| | 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. 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.
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.

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. Downgrades, and potential further
downgrades, to South Africas sovereign currency ratings by international
ratings agencies 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 macro-economic 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;                                          

---

22

| |  | 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,
2017 and August 31, 2016. See the Companys financial statements included in
this Annual Report.

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.

Except in the case of JOGMECs $20 million funding commitment,
which has now been fully funded, and the potential for the receipt of funding if
Implats exercises its Purchase and Development Option, the exercise of which is
not guaranteed and is not expected to occur prior to the completion of the DFS,
funding of Waterberg Project costs is generally required to be provided by
Waterberg JV Co. shareholders on a pro rata basis. Even if Implats exercises and
funds its Purchase and Development Option, additional development costs are
likely to be incurred. The ability of the Company, and the ability and
willingness of its joint venture partners, to satisfy required funding
obligations is uncertain.

The Company has agreed in the Mnombo shareholders agreement to
fund Mnombos pro rata share of costs through the completion of the DFS. The
ability of Mnombo to repay the Company for advances as at August 31, 2017 of
approximately Rand 25.43 million (approximately $1.9 million as at August 31,
2017) or to fund future investment in the Waterberg Project following the
expiration of the Companys contractual obligation 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. At the Maseve Mine, the Company was adversely affected by the
failure of its joint venture partner, Africa Wide, to satisfy its pro rata share
of funding. 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.

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. Until the closing of the Maseve Sale
Transaction, PTM RSA will be 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 Project Shareholders
Agreement. PTM RSA is also a 49.9% shareholder of Mnombo and the relationship
among the shareholders of Mnombo is governed by the Mnombo 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, which could materially and adversely affect the Companys business and
results of operations.

---

23

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

Completion of a DFS 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; and Frank R. Hallam, Chief Financial Officer and
Corporate Secretary and a director 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.

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 HDSAs, as
defined respectively by the MPRDA and 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. 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 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 PPA.

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.

---

24

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 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.

The Company may become subject to the requirements of the
Investment Company Act of 1940, as amended (the Investment Company Act), which
would limit or alter the Companys business operations and may require the
Company to spend significant resources, or dissolve, to comply with such
act.

The Investment Company Act generally defines an investment
company to include, subject to certain exceptions, an issuer that is engaged or
proposes to engage in the business of investing, reinvesting, owning, holding or
trading in securities, and owns or proposes to acquire investment securities
having a value exceeding 40 percent of the issuer's unconsolidated assets,
excluding cash items and securities issued by the U.S. federal government. The Company believes that it is not an
investment company and is not subject to the Investment Company Act. However,
recent and future transactions that affect the Companys assets, operations and
sources of income and loss, including any exercise of the Purchase and
Development Option, may raise the risk that the Company could be deemed an
investment company.

---

25

The Company has obtained no formal determination from the SEC
as to its status under the Investment Company Act but the Company may in the
future determine that it is necessary or desirable to seek an exemptive order
from the SEC that it is not deemed to be an investment company. There can be no
assurance that the SEC would agree with the Company that it is not an investment
company and the SEC may make a contrary determination with respect to the
Companys status as an investment company. If an SEC exemptive order were
unavailable, the Company may be required to liquidate or dispose of certain
assets, including its interests in Waterberg JV Co., or otherwise alter its
business plans or activities.

If the Company is deemed to be an investment company, the
Company would be required to register as an investment company under the
Investment Company Act, pursuant to which the Company would incur significant
registration and compliance costs, which is unlikely to be feasible for the
Company. In addition, a non-U.S. company such as the Company is not permitted to
register under the Investment Company Act absent an order from the SEC, which
may not be available. If the Company were deemed to be an investment company and
it failed to register under the Investment Company Act, it would be subject to
significant legal restrictions, including being prohibited from engaging in the
following activities, except where incidental to the Companys dissolution:
offering or selling any security or any interest in a security; purchasing,
redeeming, retiring or otherwise acquiring any security or any interest in a
security; controlling an investment company that engages in any of these
activities; engaging in any business in interstate commerce; or controlling any
company that is engaged in any business in interstate commerce. In addition,
certain of the Companys contracts might not be enforceable and civil and
criminal actions could be brought against the Company and related persons. As a
result of this risk, the Company may be required to significantly limit or alter
its business plans or activities.

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. 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.

---

26

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.

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.

---

27

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. 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.

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 Item 4.B. 
South African Regulatory Framework.

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.

---

28

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.

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. 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 the Companys projects.

Risks of Doing Business in South Africa

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.

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29

A wide range of factors and principles must be taken into
account by 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 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 Waterberg Social and Labour Plan,
for instance, will contain 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.

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 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.

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.

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30

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 Mnombo in respect to the
Waterberg Project and for the prospecting rights.

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 Project and
the prospecting rights and applications over the Waterberg 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.

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 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. 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.

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
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.

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31

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, while
certain industries have their own transformation charters administered by the
relevant government department (in this case, the DMR). 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.
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. The Trumping Provision
expired on October 31, 2016 and no new application for exemption was made,
although Mining Charter 3 was promulgated. Mining Charter 3 has been suspended
in its operation pending the outcome of litigation between the DMR and the
Chamber of Mines. Generally speaking, the amended Generic BEE Codes will make
BEE-compliance more onerous to achieve. See Item 4.B.  South African Regulatory
Framework - Black Economic Empowerment in the South African Mining Industry, and
 Mining Charter.

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.
Downgrades, and potential further downgrades, to South Africas sovereign
currency ratings by international ratings agencies would likely adversely affect
the value of the Rand relative to the Canadian or U.S. Dollar. 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. 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 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.

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32

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.

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, 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.

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.

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, 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, led to a period of electricity shortages. ESKOM
has now established sufficient capacity to meet South Africa's current
requirements. Since 2008, ESKOM has invested heavily in new base load power
generation capacity. Its principal project, a power station known as Medupi, has been
subject to delays, with the last unit scheduled for commissioning in 2019. 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.

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33

The Company is dependent on the availability of water in its
areas of operations. Shifting rainfall patterns and increasing demands on the
existing water supply have caused water shortages in the Companys areas of
operations.

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.

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
unknown when the final legislation will come into operation.

The ANC held a policy conference in June 2012 at which 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.

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34

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.

South African foreign exchange controls may limit
repatriation of profits.

The Company will 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$888.7 million as at August 31,
2017 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.

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 Land Claims Act and the 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 (subject
to the promulgation of further legislation) 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.

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35

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.

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. In
addition, the Companys ability to declare and pay dividends may be affected by
the South African governments exchange controls. See Item 4.B.  South African
Regulatory Framework  Exchange Control.

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. There can
be no assurance that continual fluctuations in price will not occur.

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.

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36

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 may be unable to maintain compliance with
NYSE American and TSX continued listing standards and the Companys common
shares may be delisted from the NYSE American and TSX equities markets, which
would likely cause the liquidity and market price of the common shares to
decline.

The Companys common shares are currently listed on the NYSE
American and the TSX. The Company is subject to the continued listing criteria
of the NYSE American and the TSX and such exchanges will consider suspending
dealings in, or delisting, securities of an issuer that does not meet its
continued listing standards. In order to maintain the listings, the Company must
maintain certain objective standards, such as share prices, shareholders
equity, market capitalization and, share distribution targets. In addition to
objective standards, the NYSE American may delist the securities of any issuer,
among other reasons, if the issuer sells or disposes of principal operating
assets, ceases to be an operating company or has discontinued a substantial
portion of its operations or business for any reason or the NYSE American
otherwise determines that the securities are unsuitable for continued trading.
The Company may not be able to satisfy these standards.

Delisting of the common shares may result in a breach or
default under certain of the Companys agreements. Without limiting the
foregoing, a TSX delisting would result in a default (unless any required
waivers could be obtained) under certain or all of the Companys outstanding
indebtedness, which would have a material adverse impact on the Company. See
Risks Relating to the Company.A delisting of the Companys
common shares could also adversely affect the Companys reputation, the
Companys ability to raise funds through the sale of equity or securities
convertible into equity and the terms of any such fundraising, the liquidity and
market price of the Companys common shares and the ability of broker-dealers to
purchase the common shares.

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. 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.

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37

Future sales, conversion of senior subordinated notes 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.

On June 30, 2017 the Company issued $20 million aggregate
principal amount of convertible senior subordinated notes due 2022. The Notes
will bear interest at a rate of 6 7/8% per annum, payable semi-annually on
January 1 and July 1 of each year, beginning on January 1, 2018, in cash or at
the election of the Company, in common shares of the Company or a combination of
cash and common shares, and will mature on July 1, 2022, unless earlier
repurchased, redeemed or converted. The Notes will be convertible at any time at
the option of the holder, and may be settled, at the Company's election, in
cash, common shares, or a combination of cash and common shares. If any Notes
are converted on or prior to the three and one-half year anniversary of the
issuance date, the holder of the Notes will also be entitled to receive an
amount equal to the remaining interest payments on the converted Notes to the
three and one-half year anniversary of the issuance date, discounted by 2%,
payable in Common Shares.

The Company cannot predict the timing or amount of conversions
of Notes or the size or terms of future issuances of equity securities or
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. In addition, the conversion price of the Notes is
subject to adjustment in certain circumstances. 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 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.

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38

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.

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, 2018,
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.

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39

|ITEM 4. | INFORMATION ON THE COMPANY
|------- | --------------------------

|A. | History and Development of Platinum
  Group
|-- | -------------------------------------------

The Company was amalgamated on February 18, 2002 under the
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 Suite 788  550 Burrard
Street, Vancouver, British Columbia, Canada, V6C 2B5. The Companys registered
office is located at Gowling WLG (Canada) LLP, Suite 2300 - 550 Burrard Street,
Vancouver, British Columbia, Canada, V6C 2B5.

Information regarding the Companys organizational structure is
provided under Item 4.C.  Organizational Structure.

Since its formation, the Company has been engaged in the
acquisition, exploration and development of platinum and palladium properties.
PTM 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 currently conducted primarily in South Africa.

At present the Company considers the Waterberg Project to be
its sole material mineral property. A pre-feasibility study for the Waterberg
Project was published on October 19, 2016. A planned 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.

The Company is also in the process of selling all of its rights
and interests in the Maseve Mine to RBPlat in a transaction valued at
approximately $74.0 million, payable as $62.0 million in cash and $12.0 million
in RBPlat common shares. The proceeds of sale will be used to pay down existing
secured debt.

In addition to the information provided below regarding the
Companys principal capital expenditures and divestitures during the last three
financial years, see Item 5.B.  Liquidity and Capital Resources  Equity
Financings for information on use of proceeds from equity financings.

Recent Developments

Maseve Sale Transaction

On September 6, 2017 the Company entered into a term sheet to
sell its rights and interests in Maseve to RBPlat in a transaction valued at
approximately $74.0 million, payable as $62.0 million in cash and $12.0 million
in RBPlat common shares. Definitive legal agreements for the Maseve Sale
Transaction (defined below) were executed on November 23, 2017. A deposit in
escrow was paid by RBPlat in the amount of Rand 41,367,300 ($3.0 million
equivalent) on October 9, 2017. The Maseve Sale Transaction is to occur in two
stages:

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40

| |  | RBPlat is to pay Maseve $58 million in cash to acquire
      the concentrator plant and certain surface assets of the Maseve Mine,
      including an appropriate allocation for power and water (the Plant
      Sale Transaction). Maseve will retain ownership of the mining
      right, power and water rights as well as certain surface rights and
      improvements. The payment to be received by Maseve will be remitted to the
      Companys South African subsidiary, PTM RSA, in partial settlement of
      loans due to PTM RSA. This first payment due from RBPlat is conditional
      upon the satisfaction or waiver of certain conditions precedent, including
      but not limited to the negotiation and execution of definitive agreements,
      the approval, or confirmed obligation, of the holder of the remaining
      17.1% equity interest in Maseve, Africa Wide Mineral Prospecting and
      Exploration Proprietary Limited, the approval of PTMs secured lenders,
      the approval of the South African Competition Commission (Competition
      Approval), expected in two to three months, and completion of due
  diligence which may result in additional conditions.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |  | RBPlat is to pay PTM RSA $7.0 million in common shares of
      RBPlat plus approximately $4.0 million in cash to acquire PTM RSAs
      remaining loans due from Maseve, and is to pay PTM RSA and Africa Wide, in
      proportion to their respective equity interests in Maseve, a further $5.0
      million by way of issuance of common shares of RBPlat to acquire 100% of
      the equity in Maseve (the Share Transaction and collectively with
      the Plant Sale Transaction, the Maseve Sale Transaction). The
      second stage of the transaction is conditional upon implementation of the
      Plant Sale Transaction and, among other conditions, obtaining all
      requisite regulatory approvals including but not limited to the Minister
      of Mineral Resources granting consent to the transfer of the Maseve mining
      right to RBPlat in terms of section 11 of the Mineral and Petroleum
      Resources Development Act (Ministerial Consent) within three
      years after the Competition Approval.                                                                                                                                                                    

The RBPlat common shares to be issued pursuant to the Share
Transaction will be priced at their 30-day volume weighted average price of the
RBPlat common shares on the Johannesburg Stock Exchange calculated on market
close on the day preceding this announcement.

RBPlat will be granted a management contract for the Maseve
Mine and for carrying out care and maintenance services during the period
between the date of grant of the Competition Approval and the date of
Ministerial Consent. The Company will be responsible for 50% of care and
maintenance costs after Competition Approval until the earlier of the date of
Ministerial Consent and the date upon which RBPlat utilizes the surface
infrastructure of the Maseve Mine for its own purposes. It is estimated that the
Company will require approximately $10.0 million in additional working capital
to provide for its share of Maseve Mine costs until the Plant Sale Transaction
is closed. The Company is working with its strategic advisors on debt, equity
and other strategic transactions for this financing.

PTMs proceeds from the sale of Maseve and the Maseve Mine are
to be repaid to secured lenders who were collectively owed approximately $89
million in principal and accrued interest at August 31, 2017. Sprott and LMM
have agreed to terms and conditions, upon completion of which, they will provide
their consent to the Maseve Sale Transaction. The Company and RBPlat are in
process to complete required regulatory filings, legal agreements, procedures,
etc. which are required for closing and which will also satisfy Sprott and LMMs
requirements. RBPlat paid a deposit of Rand 41.37 million ($3.0 million) into
escrow on October 9, 2017.

Corporatization of Waterberg Project

On September 21, 2017 the Company completed the planned
corporatization of the Waterberg Project by the transfer of all Waterberg
Project prospecting permits held in trust by PTM RSA into Waterberg JV Co.
Effective September 21, 2017 Waterberg JV Co. owned 100% of the prospecting
rights comprising the entire Waterberg Project area and Waterberg JV Co. was
owned 45.65% by PTM RSA, 28.35% by JOGMEC and 26% by Mnombo.

Implats Transaction

On October 16, 2017 the Company announced the execution of
definitive agreements whereby Implats:

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41

|(a) | purchased Waterberg JV Co. shares representing a 15.0%
      interest in the Waterberg Project from PTM RSA (8.6%) and JOGMEC (6.4%)
      for $30.0 million (of which PTM RSAs pro rata share was $17.2 million)
      (the Initial Transaction); and                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                  
|(b) | acquired an option to increase its stake in Waterberg JV
      Co. to 50.01% through additional share purchases and earn-in arrangements
      and acquired a right of first refusal to smelt and refine Waterberg
      concentrate (collectively, the Implats
  Transaction).

The Initial Transaction closed on November 6, 2017.

Implats will have an option after the completion by Waterberg
JV Co. and approval by Waterberg JV Co. or Implats of the planned DFS (DFS
Approval), the preparation of which is currently underway and which is
expected to be completed in late 2018 or early 2019, to elect to exercise an
option to increase its interest in Waterberg JV Co. up to 50.01% (the
Purchase and Development Option) by purchasing an additional 12.195%
equity interest from JOGMEC for $34.8 million, and earning into the remaining
interest by making a firm commitment to an expenditure of $130.0 million in
development work. In the event of certain breaches of agreement, insolvency
events or events that would entitle a Waterberg JV Co. shareholder to acquire or
dispose of any Waterberg JV Co. shares (other than transfers to certain
permitted transferees) prior to the DFS Approval, Implats may by notice to the
other Waterberg JV Co. shareholders of such event cause the Purchase and
Development Option to instead become exercisable from the date of such notice.
Subject to certain exceptions, the Purchase and Development Option will
generally be exercisable for a period of at least 90 business days. Upon
exercise of the Purchase and Development Option, Implats will have the right to
appoint the manager of Waterberg JV Co.

The issuance and transfer of Waterberg JV Co. shares to Implats
following the exercise of the Purchase and Development Option is subject to the
satisfaction or waiver of certain conditions precedent, including but not
limited to: the receipt of required regulatory approvals, including under the
South African Competition Act, 89 of 1998, and the MPRDA; and within 180
business days after its exercise of the Purchase and Development Option, Implats
confirming the salient terms of a development and mining financing for the
Waterberg Project (the Development and Mining Financing), and providing
a signed financing term sheet, subject only to final credit approval and
documentation. If Implats exercises the Purchase and Development Option and such
transactions are consummated, Implats will have primary control of Waterberg JV
Co., including the power to approve matters submitted to the board of directors.
Certain matters would continue to require the approval of Waterberg JV Co.
shareholders by a 75% vote, including the approval of JOGMEC in certain
circumstances.

Should Implats complete the Purchase and Development Option and
increase its interest in Waterberg JV Co. to 50.01%, Mnombos 26% interest would
be maintained by Waterberg JV Co. issuing additional shares to Mnombo at a
nominal price, Platinum Group would retain a direct 18.99% interest, and JOGMEC
would hold a 5% interest. Platinum Groups direct and indirect (through its
shareholding of Mnombo) interests in Waterberg JV Co. would total 31.96% .
Following Implats exercise of the Purchase and Development Option and the
completion of its earn-in spending, all project partners would be required to
participate and fund the development of the Waterberg Project on a pro-rata
basis.

The Implats Transaction agreements provide for the transfer of
equity and the issuance of additional equity to one or more broad based black
empowerment partners, at fair value. If, prior to the consummation of the
Purchase and Development Option, a BEE dilution event has occurred (i.e., an
event resulting in the issuance of additional equity to a BEE shareholder,
thereby reducing the interests of non-BEE shareholders), the amount of equity to
be purchased by Implats and the purchase price for such equity upon the exercise
of the Purchase and Development Option will be adjusted pursuant to formulas set
forth in the Purchase and Development Option.

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42

If Implats does not elect to exercise the Purchase and
Development Option and arrange the Development and Mining Financing, Implats
will retain a 15.0% interest and Platinum Group will retain a 50.02% direct and
indirect interest in the Waterberg Project.

Implats has also acquired a right of first refusal to enter
into an offtake agreement, on commercial arms-length terms, for the smelting and
refining of mineral products from the Waterberg Project. JOGMEC will retain a
right to receive platinum, palladium, rhodium, gold, ruthenium, iridium, copper
and nickel in refined mineral products at the volume produced from the Waterberg
Project.

Implats, JOGMEC, Mnombo and Platinum Group (as operator of the
Waterberg Project) have agreed to the detailed scope of work for the DFS. The
DFS will investigate two options - a 600,000 tonne per month mine (744,000
ounces PGEs per year) as outlined in the PFS, and a second lower capital option
at 250,000 to 350,000 tonnes per month. The selection of the DFS team was also
agreed and a tender process managed by a third party specialist for engineering
groups has been completed. Following the closing of the Initial Transaction,
which occurred on November 6, 2017, DRA Projects SA (Proprietary) Limited
(DRA) was appointed for metallurgy, plant design, infrastructure and
cost estimation. Stantec Consulting International LLC (Stantec) was
appointed for underground mining engineering and design and reserve estimation.

The secured lenders to Platinum Group, including the Sprott
Lenders and LMM, have provided their consent to the Implats Transaction, which
consents are conditional on the satisfaction of certain conditions by the
Company.

Additional Matters

The Company has agreed with the Sprott Lenders and LMM to a
specific use of the Companys $17.2 million in proceeds from the Initial
Transaction, including: (i) repayment of any principal or fees related to a $5.0
million bridge loan provided by the Sprott Lenders to the Company in September
and October 2017 to provide working capital until closing of the Initial
Transaction (the Bridge Loan), (ii) payment of certain outstanding
payables and general administrative expenses (including certain transaction fees
related to the Implats Transaction), (iii) care and maintenance costs of the
Maseve Mine during the sale closing period, and (iv) $5.0 million of the
Companys anticipated DFS costs. The Company is to place approximately $7.0
million in reserve and escrow accounts for dedication to the costs described at
items (ii) and (iii) above. Proceeds from the Maseve Sale Transaction are to be
used first to repay the Sprott Lenders ($40.0 million) and second to partially
repay LMM (approximately $33.0 million).

In consideration for LMMs consent to the Implats Transaction,
the Company has, among other things:

|(1) | Delivered an amended and restated LMM Credit Agreement
      (defined below) which, among other things: (a) amends the term of the LMM
      Facility to mature the later of September 30, 2018 and four months after
      the closing of the Plant Sale Transaction (closing expected before
      December 31, 2017); provided, that if the Plant Sale Transaction does not
      close by December 31, 2018, the maturity date shall be December 31, 2018
      (the New LMM Maturity Date); (b) requires that 50% of net
      proceeds raised by the Company in an equity financing of over $500,000 be
      used for repayment of outstanding loan facilities; and (c) adds additional
      events of default for failing to be listed on the Toronto Stock Exchange
      (TSX), breaches under material agreements, a decrease in its
      equity ownership in Waterberg JV Co. beyond the decrease to occur as a
      result of the Implats Transaction and failing to close the Maseve Sale
      Transaction prior to December 31, 2018.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(2) | Agreed to raise $20.0 million in subordinated debt and/or
      equity within 30 days of the Sprott Facility due to the Sprott Lenders
      being repaid (expected to be repaid in late December, 2017 or in January,
      2018) and raise a further $10.0 million in subordinated debt and/or equity
      before June 30, 2018. Proceeds in each instance are to repay and discharge
      amounts due firstly to the Sprott Lenders (if any) and secondly to
    LMM.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

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43

|(3) | Delivered a termination agreement to the production
      payment agreement (PPA) between LMM and the Company pursuant to
      which the Company must either pay LMM $15.0 million before March 31, 2018
      or $25.0 million between March 31, 2018 and the New LMM Maturity
    Date.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In consideration for the Sprott Lenders providing the Bridge
Loan and the Sprott Lenders consent to the Implats Transaction, the Company has
delivered an amendment to the Sprott Credit Agreement which: (a) amends the term
of the loan to mature on the earlier of (i) January 31, 2018 and (ii) ten days
after the closing of the Plant Sale Transaction; (b) requires that 50% of net
proceeds raised by the Company in an equity financing of over $500,000 be used
for repayment of outstanding loan facilities; (c) adds events of default for
failing to be listed on the TSX, material breaches under material agreements, a
decrease in equity ownership in Waterberg JV Co. beyond the decrease to occur as
a result of the Implats Transaction and failing to close the Maseve Sale
Transaction prior to December 31, 2018; and (d) requires the Company to pay the
Sprott Lenders a cash bonus of $250,000, which was paid on September 26,
2017.

In October 2017, the Company agreed to pay to BMO and Macquarie
an aggregate of $1.0 million within 15 business days of the closing of the
Initial Transaction for services previously provided. In October 2017, the
Company also agreed with BMO and Macquarie to pay BMO and Macquarie an aggregate
of approximately $2.9 million following the repayment of the Sprott Facility and
the LMM Facility for services previously provided.

On November 17, 2017, the Company repaid the Bridge Loan.

On December 22, 2017 the Sprott Lenders advanced the Company
$2.75 million pursuant to a new bridge loan (the New Bridge Loan)
whereby the Sprott Lenders will provide up to $5.0 million before January 31,
2018. The proceeds of the New Bridge Loan are to fund direct expenditures
relating to the closure and ongoing care and maintenance of the Maseve Mine,
reasonable corporate overhead expenditures and outstanding amounts due and owing
to the Lenders. The New Bridge Loan is subject to the same security provisions,
interest rate, and covenants as the existing Sprott Facility, as amended. The
outstanding principal amount of the New Bridge Loan, together with any accrued
but unpaid interest, will be immediately due and payable in full on the earlier
of i.) the date which is 10 business days after the closing of the Plant Sale
Transaction; ii.) the closing of any equity or debt financing by the Company;
and iii.) January 31, 2018. In consideration for the New Bridge Loan the Sprott
Lenders were paid a bonus fee of $250,000 on December 22, 2017.

Three-Year History

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

|FISCAL YEAR 2015
|----------------
|                
|November 2014   
|                
|                
|                
|December 2014   
|                
|                
|                
|                

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44

|         | ***$113.8 Million Public Offering***                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|         | On December 31, 2014, the Company announced the closing
      of a previously announced public offering of common shares (the
      December 2014 Offering). The Company issued 214.8 million common
      shares at a price of $0.53 per share, for aggregate gross proceeds of
      $113.844 million. The common shares issued included 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.
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|May 2015 | Waterberg Unitization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|         | On May 26, 2015, the Company announced that JOGMEC had
      committed to fund the next $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 were as
      follows:                                                                                                                                                                                                                                                                                                                                                                                                                           

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

| | (1) | As of August 31, 2017, Platinum Group indirectly owned 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.
      See Recent Developments  Implats Transaction with respect to the
      subsequent sale of interests in the Waterberg Project to
  Implats.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|July 2015 | 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.
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|          | 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.                                                                                                                                                                                                                                                                                                                                                 

---

45

|FISCAL YEAR 2016
|----------------
|                
|November 2015   
|                
|                
|                
|                
|                
|                
|                
|                
|                
|                
|                
|                
|                
|                
|                
|February 2016   
|                
|                

---

46

|April 2016 | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|---------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|May 2016   | LMM Facility and Sprott Facility Amended                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|           | On May 5, 2016 the Company announced that the $40 million
      LMM Facility and the $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.                                                                                                                        
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|           | $33.0 Million Public Offering                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|           | On May 26, 2016 the Company announced the closing of a
      previously announced public offering of common shares (the May 2016
      Offering). The Company issued 11,000,000 shares at a price of $3.00
      per share, for aggregate gross proceeds of $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.

|FISCAL YEAR 2017
|----------------
|                
|September 2016  
|                
|                
|                
|October 2016    
|                
|                

---

47

|              | 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 $2.5 million of the Second Advance from the proceeds of
      the November 2016 Offering, which the Company has repaid. The remaining
      $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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|              | Waterberg Pre-Feasibility Study                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|              | 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 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 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 $248 per 4E ounce
      including by-product credits and exclusive of smelter discounts, (v)
      after-tax net present value (NPV) of $320 million, at an 8%
      discount rate, using three-year trailing average metal prices, (vi)
      after-tax NPV of $507 million, at an 8% discount rate, using investment
      bank consensus average metal prices, (vii) estimated capital to full
      production of approximately $1.06 billion including $67 million in
      contingencies. Peak project funding estimated at $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 cut-off.
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|November 2016 | $40 Million Public Offering                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|              | On November 1, 2016 the Company announced closing of a
      public offering of common shares (the November 2016 Offering)
      pursuant to which the Company issued 22,230,000 common shares at a price
      of $1.80 per share, for aggregate gross proceeds of approximately $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 $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
      (Base Shelf) 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 was filed on October
      25, 2016 with the SEC and with the securities regulatory authority in each
      of the provinces of Canada, except Quebec.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

---

48

|January 2017 | $28.75 Million Public Offering                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|             | On January 31, 2017 the Company announced the closing of
      a public offering (the January 2017 Offering) pursuant to
      which the Company issued 19,693,750 common shares at a price of $1.46 per
      share, for aggregate gross proceeds of $28,752,875, including the full
      exercise of an over-allotment option granted to the underwriters in
      connection with the offering. The net proceeds of the January 2017
      Offering were used for (i) underground development and production ramp-up
      of the Maseve Mine, (ii) working capital during start-up, and (iii)
      general corporate purposes.
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|April 2017   | $20 Million Public Offering                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|             | On April 26, 2017 the Company announced the closing of a
      public offering (the April 2017 Offering) pursuant to
      which the Company issued 15,390,000 common shares at a price of $1.30 per
      Share, for aggregate gross proceeds of $20,007,000. The net proceeds of
      the April 2017 Offering were used for (i) underground development and
      production ramp up of the Maseve Mine; (ii) working capital; (iii)
      repayment of a $2.5 million outstanding amount of a prior second advance
      under the Sprott Facility; and (iv) general corporate purposes.                                        
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|June 2017    | Waterberg DFS Engineering Work Update                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|             | On June 15, 2017 the Company reported that DFS
      engineering work on the Waterberg Project was underway, including infill
      drilling, resource modelling, mine plan optimization and infrastructure
      engineering. Detailed drilling targeting higher grade, thicker portions of
      the deposit was in progress, the objective of the drilling being to move
      portions of the deposit into the measured resource category and to
      investigate the best grade portions for inclusion in early mine planning.
      License and permitting application work was also underway.                                 
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|             | The Company also reported that several holes drilled in
      late 2016 returned assays including the following intercepts:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

| |  | North Super F Zone Borehole WE097D3 returning 45.1
      meters of 4.64 g/t 3PGE, including 16.6 meters of 7.28 g/t
      3PGE; 
| | - | --------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                 
| |  | North Super F Zone Borehole WE096D0 returning 25.81
      meters of 3.62 g/t 3PGE, including 6.15 meters of 4.89 3PGE;
      and
| |   |                                                                                                                                 
| |  | T Zone Borehole WB211D2 returning 6.55 meters of 5.81
      g/t 3PGE.                                                           

The true width of the shallow dipping
(30° to 35°) mineralized zones that were sampled are approximately 82% to 87% of
the reported interval from the vertical intercept. For the efficient application
of bulk mining methods and for mine planning, the Company believes that vertical
intercepts of 3 meters or more are desirable. Increased grade thickness zones
associated with minor footwall troughs or bays along the 13 km long layered
complex were identified. Infill drilling is confirming and adding definition to
these zones, which will allow them to be prioritized in an updated mine plan for
the DFS.

Important detailed infrastructure
planning has commenced for the Waterberg Project, including power line
environmental and servitude work by Eskom and detailed hydrogeological work to
source ground water. Eskom has progressed electrical power connection planning
for a 65 km, 140MW line to the project. Hydrological work identified several
large-scale water basins that are likely able to provide potable and mine
process water for the Waterberg Project and local communities.

---

49

|          | $20 Million 6 7/8% Convertible Senior Subordinated
      Notes Due 2022                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|          | On June 30, 2017 the Company issued and sold to certain
      institutional investors $20 million aggregate principal amount of
      convertible senior subordinated notes due 2022 (the Notes)
      pursuant to applicable U.S. and Canadian private placement exemptions. The
      Notes bear interest at a rate of 6 7/8% per annum, payable semi-annually
      on January 1 and July 1 of each year, beginning on January 1, 2018, in
      cash or at the election of the Company, in common shares of the Company,
      or a combination of cash and common shares, and will mature on July 1,
      2022, unless earlier repurchased, redeemed or converted. Subject to
      certain exceptions including beneficial ownership and issuance caps, the
      Notes are convertible at any time at the option of the holder, and may be
      settled, at the Companys election, in cash, common shares, or a
      combination of cash and common shares. If any Notes are converted on or
      prior to the three and one-half year anniversary of the issuance date, the
      holder of the Notes will also be entitled to receive an amount equal to
      the remaining interest payments on the converted Notes to the three and
      one-half year anniversary of the issuance date, discounted by 2%, payable
      in common shares. The initial conversion rate of the Notes is 1,001.1112
      common shares per $1,000 principal amount of Notes, which is equivalent to
      an initial conversion price of approximately $0.9989 per common share,
      representing a conversion premium of approximately 15% above the NYSE
      American closing sale price for the Companys common shares of $0.8686 per
      share on June 27, 2017. The conversion rate will be subject to adjustment
      upon the occurrence of certain events. The Notes are unsecured senior
      subordinated obligations and are subordinated in right of payment to the
      prior payment in full of all of the Companys existing and future senior
      indebtedness pursuant to the indenture governing the Notes. The Company
      used the net proceeds from the sale of the Notes for working capital at
      the Maseve Mine; for work on the DFS on the Waterberg Project; for general
      and administrative expenses; and for general working capital purposes. The
      Notes were offered and sold to certain institutional investors in a
      transaction that is exempt from the registration requirements of the U.S.
      Securities Act.
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|July 2017 | Restructuring of Maseve Mine                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|          | On July 7, 2017 the Company announced it was taking steps
      to restructure its mining operations at the Maseve Mine in South Africa
      due to the slower than planned production ramp up. The restructuring was
      to involve a change in primary mining method and cost reductions to create
      a sustainable future for the mine. The changes were operationally driven
      to align costs with a more gradual ramp-up of production using more
      selective mining methods. The restructuring aimed to reduce ongoing costs
      and achieve positive, sustainable cash flows utilizing already-established
      infrastructure. Restructuring work at the Maseve Mine was suspended in
      early September 2017 prior to the Maseve Sale Transaction.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

|B. | Business Overview
|-- | -----------------

General

The Company is a platinum and palladium 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.

---

50

Currently, the Company considers the Waterberg Project to be
its sole material mineral property. The Company is in the process of selling all
of its rights and interests in the Maseve Mine, which is currently on care and
maintenance, and the Company also holds interests in various early-stage
exploration projects located in Canada and in South Africa. The Company
continues to evaluate exploration opportunities both on currently owned
properties and on new prospects.

Principal Products

Our principal product from the Waterberg Project, in accordance
with the PFS, is planned to 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. Pursuant to the Implats Transaction, Implats has acquired a right of
first refusal to enter into an offtake agreement, on commercial arms-length
terms, for the smelting and refining of mineral products from the Waterberg
Project.

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.

Pursuant to the Implats Transaction, Implats will be an active
participant in the completion of a DFS for the Waterberg Project. Should Implats
exercise the Purchase and Development Option, Implats will become the majority
owner and will have the right to appoint the manager of the Waterberg Project.
Implats is one of the worlds foremost fully integrated producers of platinum
and associated PGEs. The group produces approximately a quarter of the worlds
supply of primary platinum. Implats produced 1.44 million ounces of platinum and
2.91 million ounces of PGEs in FY2016. Implats operations are located on the
Bushveld Complex in South Africa and the Great Dyke in Zimbabwe, two of the most
significant PGE-bearing ore bodies in the world. In Southern Africa Implats is
structured around five main operations namely Impala, Zimplats, Marula, Mimosa
and Two Rivers with headquarters based in Johannesburg, South Africa.

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.

Social and Labour Plans

The Waterberg Social and Labour Plan (the Waterberg Social
and Labour Plan) is currently being developed pursuant to South African
Department of Mineral Resources (DMR) guidelines for social and labour
plans and will be submitted in accordance with section 46 of the MPRDA (defined
below) once an application for a mining right for the Waterberg Project is
lodged with the DMR. 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.

---

51

These requirements include promoting employment and avoiding
retrenchments, 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 Waterberg Project. Contractors will be required to comply with the
Waterberg 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 policies relating
to recruitment, training, health and safety, etc. In terms of human resources
training, the Waterberg Social and Labour Plan will establish 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 Waterberg Social and
Labour Plan will also plan to establish 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.

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 operations in South Africa and the retrenchment processes at the Maseve Mine
were peaceful and orderly. 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 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 and palladium 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. There is not a material seasonal effect or influence on the PGM market or business. Since late 2015 the price of
palladium has approximately doubled due to rising automotive sector demand. 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. If the Company moves towards
production on the Waterberg Project, it will become exposed to many of the risks
of competition described herein. See Risk Factors.

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52

Employees and Contractors

The Companys current complement of managers, staff and
consultants in Canada consists of approximately 6 individuals. The Companys
complement of managers, staff, consultants, security and casual workers in South
Africa consists of approximately 105 individuals, inclusive of approximately 17
individuals active at the Waterberg Project conducting exploration and
engineering activities related to the planned completion of a DFS by the end of
calendar 2018 or early 2019. The Waterberg Project is operated by the Company
utilizing its own staff and personnel. Contract drilling, geotechnical,
engineering and support services are utilized as required. Operations at the
Waterberg Project are funded by Waterberg JV Co and its shareholders.

The Maseve Mine is currently on care and maintenance, pending
the completion of the Maseve Sale Transaction. As at November 30, 2017, the
labour force at the Maseve Mine totalled approximately 78 people, of whom 20 are
employees of Maseve and 58, inclusive of 43 security personnel, are employed by
third party contractors or consultants.

RBPlat will be granted a sub-contractor arrangement for the
Maseve Mine and for carrying out care and maintenance services during the period
between the date of grant of the Competition Approval and the date of
Ministerial Consent. The Company will be responsible for 50% of care and
maintenance costs at Maseve after Competition Approval until the earlier of the
date of Ministerial Consent and the date upon which RBPlat utilizes the surface
infrastructure of the Maseve Mine for its own purposes. The Company expects that
its required complement of employees and contractors at Maseve will decrease
subsequent to the grant of Competition Approval.

Foreign Operations

The Company conducts its business in South Africa. South Africa
has a large and well-developed mining industry. This, among other factors, means
the infrastructure in many areas 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 under construction. Additional water infrastructure will also be
required. See Risk Factors.

There is also access to materials and skilled labour in South
Africa due to the existence of many platinum, chrome, gold and coal mines.
Smelter complexes and refining facilities are also located in South Africa.
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.

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.

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53

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.

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
      and purchased by Sibanye Gold Limited in October,
2016.

For a further discussion of the Companys material and
non-material mineral properties, see Item 4.D.  Property, Plant and Equipment.

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54

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 has 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 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).

---

55

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 enterprise and
supplier development. The elements of ownership, skills development and
enterprise and supplier 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 was amended by The BEE Amendment Act,
which came into operation on October 24, 2014.

The provisions of 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 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. There has not been a further extension of this exemption.

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, 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.

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56

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.

The DMR and industry bodies are aware of the implications of
the Trumping Provision. Notwithstanding that there has been no further extension
of the exemption in respect of the Trumping Provision, to date, the DMR
continues to apply the provisions of the Mining Charter and not the Generic BEE
Codes. The draft Mining Charter issued in 2017, and discussed in more detail
below, purports to align the Mining Charter with the BEE Act and Generic BEE
Codes.

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.

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57

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:

| | 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:                                                                                                                                                                                                         

| | o | a minimum procurement of 40% of capital goods,
      70% of services and 50% of consumer goods from BEE entities; and                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                  
| | o | 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:                                                                                                                                                          

| | o | implementation of approved EMP measured annually against
      the approved plans;                                         
| | - | ---------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                            
| | o | implementation of action plans on health and safety
      measured annually against the approved plans; and                
| |   |                                                                                                                            
| | o | 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.

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58

On April 15, 2017, the Minister of Mineral Resources announced
the implementation of the Revised Broad Based Black-Economic Empowerment Charter
for the South African Mining and Minerals Industry, 2016 ("Mining Charter
3") which set out new and revised targets to be achieved by mining
companies, the most pertinent of these being the revised BEE ownership
shareholding requirements for both prospecting and mining rights holders. The
Mining Charter 3 provides revised ownership structures for mining rights
holders, and new prospecting rights holders respectively. Under the Mining
Charter 3, new prospecting rights holders will be required to apportion a
minimum of 50% + 1 Black Persons shareholding which shareholding shall include
voting rights, per prospecting right or in the company which holds the right.
New mining rights holders will be required tohave a minimum 30% Black
Person shareholding (a 4% increase from the required 26%) which shall include
economic interest plus a corresponding percentage of voting rights, per right or
in the mining company which holds the right.

The 30% Black Person shareholding for holders of mining rights
will be required to be apportioned in the following manner whereby a minimum of
(i) 8% of the total issued shares of the holder shall be issued to ESOPs (or any
similar employee scheme structure); (ii) 8% of the total issued shares of the
Holder shall be issued to Mine Communities (or in the form of a community
trust); and (iii) 14% of the total issued shares of the holder shall be issued
to BEE Entrepreneurs. Holders who have already attained 30% BEE shareholding are
not required to apportion their existing BEE shareholding in accordance with the
prescripts of the Mining Charter 3. Furthermore, holders who have attained 26%
BEE shareholding are required to increase to 30% BEE shareholding within the
transitional period of 12 months, but will not be required to further
restructure and apportion their BEE shareholding.

Following the announcement of the Mining Charter 3, the Chamber
of Mines applied to have the High Court of Gauteng, Pretoria ("High Court")
review the document on the basis of constitutional, procedural and
administrative irregularities. The implementation of Mining Charter 3 has since
been suspended. This comes after the Minister of Mineral Resources gave a
written undertaking that it would not be implemented until the review
application was heard before the full bench of the High Court, now to be heard
in a three day hearing set to commence on February 19, 2018. As a result of the
impending judicial review of the Mining Charter 3, the effect of the revised
targets and provisions contained therein are suspended until the High Court
makes a final ruling.

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.

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.

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59

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 publicly 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 and 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, NEMWA and 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 the potential
liability of shareholders and lenders have 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 directives and
compliance 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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60

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. 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 authorization (EA) was required for certain
activities that are incidental to mining, listed in a series of 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 EA 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 EA 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 National
Environmental Laws Amendment bill B14-2017 ("NEMABill") also has a
provision that EMPs approved under the MPRDA will be deemed to be EAs issued
under NEMA. The Amendment Bill and NEMA Bill have 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 strictly speaking
applicants for mineral rights are now required to submit an application for an
EA, despite an application for EMP approval being previously submitted. In
practice however, the DMR views EMPs submitted under the MPRDA to be EAs.

NEMA requires an EA 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. A water
use license (WUL) 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 WULs 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 WUL. A water
use without the required WUL is considered unlawful.

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61

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 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 offences
are 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 WUL 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 therefore also be required before 2020 to
comply with the 2020 air emission standards, for which significant capital
expenditures (CAPEX) may be required. 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.

NEMWA regulates the storage, treatment, recycling and disposal
of waste, among other things, including waste generated by the mining sector.
Its provisions are also relevant generally to the Companys operations. Waste
management licenses (WMLs) are required for certain waste management
activities, dependent on certain thresholds in relation to the waste. Although
WMLs are not required for waste storage, 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 NEMWA. This was changed by amendments under
theNEMLAA and WMLs were required from the Minister for residue
stockpiles and deposits since September 2, 2014, if they constitute waste and
if they fall above the thresholds for which a WML 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 EA 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.

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62

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. Two sets of proposed amendments were published to the Financial
Provision Regulations, one set very shortly after the institution of this High
Court application and the other set recently which, if enacted into law, may
resolve some of the gaps and contradictions. Existing holders of mineral rights
were initially required to align their financial provision approved under the
MPRDA with the Financial Provision Regulations by mid-2017, which was 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.

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 was 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 then made further annual deposits of approximately Rand
12 million per annum. Interest on deposits accrues to Maseve and Maseve has paid
annual fees of approximately Rand 600,000 to the insurer. At October 31, 2017
the balance on deposit for the Maseve environmental rehabilitation guarantee
totalled approximately Rand 57.8 million. Pursuant to the Maseve Sale
Transaction, loans from PTM RSA to Maseve utilized by Maseve for deposit to the
environmental rehabilitation guarantee are to be reimbursed to PTM RSA by
RBPlat, after Ministerial Consent is obtained and once RBPlat has posted its own
environmental rehabilitation guarantee.

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 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 authorises 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 -
compliance notice.

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63

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 rights 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.

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 ("DTC") 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 July 1, 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.

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64

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

The DTC released its second and final report on hard-rock
mining in December 2016.

Amongst the various proposals, the DTC recommended that the
upfront CAPEX write-off regime should be discontinued and replaced with an
accelerated CAPEX depreciation regime. The accelerated CAPEX depreciation regime
will provide for write-off periods in line with that of manufacturing, namely on
a 40/20/20/20. The removal of the upfront CAPEX tax allowance regime paves the
way for the removal of ring fences aimed at preventing the set-off of future
CAPEX expenditure against the tax base of other mining operations and against
non-mining income.

The second and final report also indicated that comprehensive
review of carbon taxes has been undertaken by a separate stream within the DTC
and therefore the report contains no comments on carbon taxes.

The Minister of Finance might adopt these recommendations which
in turn might impact of the net present value and internal rate of return of the
project.

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.

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.

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65

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 of 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%. 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 not clear when the final legislation will
come into operation.

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.

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.

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66

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

The Spatial Planning and Land Use Management Act 16 of 2013
("SPLUMA") prescribes principles for the regulation of land use in South
Africa on a national, provincial and municipal level. However, land use planning
is mainly regulated on a municipal level since municipalities are
constitutionally empowered to regulate the effective administration of land use
planning within their respective jurisdictions. Municipal land use planning is
regulated through municipal planning by-laws, spatial development frameworks and
land use or zoning schemes. Land-use or zoning schemes reflect all permissible
land use rights in respect of land situated within the municipality's area of
jurisdiction. Deviations from the land-use or zoning scheme are only permissible
upon application for the necessary departure, land use consent or re-zoning
application, as regulated by the applicable scheme and the relevant municipal
planning by-law read with SPLUMA.

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 Townand 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.

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67

In addition to statutory controls, certain private law rights,
such as the real rights created by way of registered restrictive conditions of
title or servitudes, may also impact on land use planning in general. Land use
or zoning schemes are subject to the real rights created by restrictive
conditions of title. The implication is that if a land-use or 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
(municipal planning by-laws read with SPLUMA). 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 may have to obtain a power of attorney from the land
owner to procure amendments to land use or zoning schemes in municipalities in
which the Company intends to prospect or mine and has obtained rezoning
permission where required.

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 Restitution of Land Rights Act 22 of 1994
("Restitution 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. In terms of
the Restitution Act, persons entitled to institute a land claim were required to
lodge their claims by December 31, 1998.

The Restitution Act also entitles the South African Minister of
Rural Development and Land Reform ("Minister") to acquire ownership of
land or rights in land by way of expropriation and to transfer the expropriated
land or rights in land to successful claimants. Notably, the Minister may elect
not to expropriate land and may provide alternative relief to the claimant, as
directed by section 25(7) of the Constitution. Expropriation would be subject to
provisions of the Expropriation Act 63 of 1975 and section 25(2) of the
Constitution, which provide, in general, for just and equitable compensation.

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68

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 came into effect on July 1, 2014.
The Restitution Amendment Act introduced significant amendments to the
Restitution 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. However, in Land Access
Movement of South Africa and Others v Chairperson of the National Council of
Provinces and Others, the Constitutional Court found that the Restitution
Amendment Act was invalid as parliament failed to satisfy its obligation to
facilitate public involvement in accordance with section 72(1)(a) of the
Constitution. As a result, the Constitutional Court interdicted the Commission
of Restitution of Land Rights from processing claims lodged from July 1, 2014
until all claims submitted prior to December 31, 1998 in terms of section
6(1)(a) of the Restitution Act have been finalised. Parliament has since this
judgment circulated a bill, which will repeal the Amendment Act, once
promulgated. In terms of this bill, the new period for the lodging of claims
will still be until June 30, 2019.

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 Restitution 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 Restitution 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 Restitution 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.

---

69

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.

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.

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70

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.

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.

---

71

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

The EmploymentEquity Act, No. 55 of 1998 ("EEA") places
an obligation on employers to promote equal opportunity in the workplace by,
amongst other things, eliminating any forms of unfair discrimination in the
workplace.

Section 6 of the EEA prohibits any employment practice or
policy which discriminates, directly or indirectly, against any employee on any
'arbitrary ground' or one or more of the grounds specifically listed in
the section 

| | 'race, gender, sex, pregnancy, marital status, family
      responsibility, ethnic or social origin, colour, sexual
      orientation, age, disability, religion, HIV status, conscience, belief,
      political opinion, culture, language and birth'. | 
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 

Where discrimination is alleged on one of the specified
grounds, it is presumed to be unfair; if the discrimination is based on some
other arbitrary ground, the complainant must establish unfairness.

Pursuant to recent amendments, the EEA now provides that a
difference in the terms and conditions of employment between employees of the
same employer, which are performing the same or substantially the same work or
work of equal value, amounts to unfair discrimination. It is important to note
that the relevant provision refers to 'a difference in the terms and conditions'
of employment and is not only limited to a difference in remuneration.
Nevertheless, to prove such discrimination, the employee will need to
demonstrate that the reason for the difference in treatment is based on one of
the listed grounds or any other arbitrary ground.

Any party may refer a dispute for unfair discrimination to the
CCMA which, in turn, must attempt to resolve the dispute through conciliation.
Should the conciliation be unsuccessful, either party may refer the dispute to
the Labour Court for adjudication.

Alternatively, an employee may refer the dispute directly to
the CCMA for arbitration if that specific employee earns below the earnings
threshold as prescribed by the Minister of Labour. The current earnings
threshold is R205 433.30 per annum. Irrespective of the foregoing, the employee
may also directly approach the CCMA to resolve the dispute through arbitration
where the employee's claim for unfair discrimination is based on alleged sexual
harassment. Then again, the parties can also agree to refer the matter to the
CCMA for arbitration.

|C. | Organizational Structure
|-- | ------------------------

The Companys material subsidiaries as at August 31, 2017 were
comprised of 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.

---

72



In addition, as at August 31, 2017 the Company held the initial
share of Waterberg JV Resources (Pty) Limited (Waterberg JV Co.), a
South African company, in anticipation of the corporatization of the Waterberg
Project (defined below) that was completed on September 21, 2017.

The Companys subsidiaries as at December 29, 2017 were
comprised of one wholly-owned company, one majority-owned company, a 49.9%
holding in a third company and a direct and indirect 50.02% holding in a fourth
company, all of which are incorporated under the company laws of the Republic of
South Africa. The following chart represents the Companys corporate
organization as at December 29, 2017:



As at December 29, 2017, the Companys primary and only
material mineral property is the Waterberg Joint Venture Project (the
Waterberg Project), which is comprised of two adjacent project areas
formerly known as the Waterberg joint venture project (the Waterberg JV
Project) and the Waterberg extension project (the Waterberg Extension
Project). The Waterberg Project is held by Waterberg JV Co., in which the
Company is the largest owner, with a 50.02% beneficial interest, of which 37.05%
is held directly by PTM RSA and 12.974% is held indirectly through PTM RSAs
49.9% interest in Mnombo Wethu Consultants (Pty) Ltd. (Mnombo), a
Broad-Based Socio-Economic Empowerment (BEE) company which holds 26.0%
of Waterberg JV Co. The remaining interests in Waterberg JV Co. are held by a
nominee of Japan, Oil, Gas and Metals National Corporation (JOGMEC)
(21.95%) and by Implats (15.0%) . PTM RSA is the manager of Waterberg JV Co.
Waterberg JV Co. and its shares are governed by a shareholders agreement (the
Waterberg Shareholders Agreement) and memorandum of incorporation. To
cause the board of directors of Waterberg JV Co. to take action, PTM RSA must
generally obtain the approval of the board representatives of at least one other
shareholder, which may be Mnombo, in which the Company has a
49.9% interest. In addition, certain matters must be approved by a majority, 80%
or 90% vote of the Waterberg JV Co. shareholders, depending on the matter, or,
in certain cases, by specific shareholders. The Waterberg Shareholders Agreement
confirms the principles of BEE compliance and contemplates the potential
transfer of equity and the issuance of additional equity to one or more broad
based black empowerment partners, at fair value in certain circumstances,
including a change in law or imposition of a requirement upon Waterberg JV Co.
In certain circumstances, Mnombo may be diluted with equity transferred or
issued to different black empowerment shareholders.

---

73

Implats has been granted a call option exercisable in certain
circumstances to purchase and earn into a 50.01% interest in Waterberg JV
Co.

PTM RSA also 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). Wesizwe Platinum Ltd.
(Wesizwe), through its subsidiary Africa Wide Mineral Prospecting and
Exploration Proprietary Limited (Africa Wide) has a 17.1% ownership
interest in Maseve.

On September 6, 2017 the Company announced the planned sale of
all rights and interests in the Maseve Mine to RBPlat in a transaction valued at
approximately $74.0 million, payable as $62.0 million in cash and $12.0 million
in RBPlat common shares.

Events Affecting Principal Subsidiaries

On September 6, 2017 the Company announced the planned sale of
all its rights and interests in the Maseve Mine to RBPlat in a transaction
valued at approximately $74 million, payable as $62 million in cash and $12
million in RBPlat common shares.

On September 21, 2017 the Company completed the planned
corporatization of the Waterberg Project by the transfer of all Waterberg
Project prospecting permits held in trust by PTM RSA into new operating company
Waterberg JV Co. Effective September 21, 2017 Waterberg JV Co. owned 100% of the
prospecting rights comprising the entire Waterberg Project area and Waterberg JV
Co. was owned 45.65% by PTM RSA, 28.35% by the JOGMEC and 26% by Mnombo.

On October 16, 2017 Implats entered into definitive agreements
with the Company, JOGMEC, Mnombo and Waterberg JV Co., whereby Implats purchased
shares representing a 15.0% interest in the Waterberg Project from PTM RSA
(8.6%) and JOGMEC (6.4%) for $30.0 million.

The Company previously held 100% of the shares of Platinum
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.

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74

|D. | Property, Plants and
Equipment
|-- | ------------------------------

Material Mineral Property Interests

Waterberg Project

The Waterberg Project is comprised of the original 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 following is a list
of the material prospecting rights comprising the Waterberg Project:

| | Prospecting Right 11013 (1265PR)- the prospecting
      right granted to PTM RSA under and in terms of section 17 of the MPRDA,
      situated in the Magisterial / Administrative District of Polokwane,
      Limpopo Province, measuring 13,714.6450 hectares in extent. On 22 May
      2013, the farm Goedetrouw 366 LR, measuring 1,607.6406 hectares in extent,
      was added to Prospecting Right 1265 in terms of section 102 of the MPRDA
      under notarial amendment of prospecting right, protocol no 3 of 2013, with
      the prospecting right now measuring 15,256.96 hectares in total extent, as
      renewed under notarial deed of renewal 11013 (PR) expiring September 29,
      2018;
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | Prospecting Right 10667 - the prospecting right
      granted to PTM RSA under and in terms of section 17 of the MPRDA, situated
      in the Magisterial / Administrative District of Blouberg, Limpopo
      Province, measuring 6,254.80 hectares in extent expiring October 1, 2018;                                                                                                                                                                                                                                                                                                                                                                                                                          
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | Prospecting Right 10668 - the prospecting right
      granted to PTM RSA under and in terms of section 17 of the MPRDA, situated
      in the Magisterial / Administrative District of Mogalakwena, Limpopo
      Province, measuring 3,953.05 hectares in extent expiring October 1, 2018;                                                                                                                                                                                                                                                                                                                                                                                                                       
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | Prospecting Right 10804 - the prospecting right
      granted to PTM RSA under and in terms of section 17 of the MPRDA, situated
      in the Magisterial / Administrative District of Mogalakwena, Limpopo
      Province, measuring 26,961.59 hectares in extent expiring October 1, 2018;                                                                                                                                                                                                                                                                                                                                                                                                                      
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | Prospecting Right 10805 - the prospecting right
      granted to PTM RSA under and in terms of section 17 of the MPRDA, situated
      in the Magisterial / Administrative District of Blouberg, Limpopo
      Province, measuring 17,734.80 hectares in extent expiring October 1, 2018;                                                                                                                                                                                                                                                                                                                                                                                                                         
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | Prospecting Right 10806 - the prospecting right
      granted to PTM RSA under and in terms of section 17 of the MPRDA, situated
      in the Magisterial District of Blouberg, Limpopo Province, measuring
      13,143.53 hectares in extent expiring September 29, 2020;                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | Prospecting Right 10809 - the prospecting right
      granted to PTM RSA under and in terms of section 17 of the MPRDA, situated
      in the Magisterial / Administrative District of Blouberg, Limpopo
      Province, measuring 3,676.59 hectares in extent expiring August 29, 2022;                                                                                                                                                                                                                                                                                                                                                                                                                          
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | Prospecting Right 10810 - the prospecting right
      granted to PTM RSA under and in terms of section 17 of the MPRDA, situated
      in the Magisterial / Administrative District of Blouberg, Limpopo
      Province, measuring 4,189.86 hectares in extent expiring October 22, 2018;
      and                                                                                                                                                                                                                                                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | Prospecting Right 11286 - the prospecting right
      granted to PTM RSA under and in terms of section 17 of the MPRDA, situated
      in the Blouberg Magisterial area, Limpopo Province, measuring 19, 912.44
      hectares in extent expiring November 22, 2021.                                                                                                                                                                                                                                                                                                                                                                                                                                              

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. Waterberg JV Co. plans to file a mining right
application during 2018, prior to September 29, 2018, based substantially on the
results of the October 2016 Waterberg Report.

---

75

On September 21, 2017, the Company completed the planned
corporatization of the Waterberg Project by the transfer of all Waterberg
Project prospecting rights held by PTM RSA on behalf of the joint venture
participants into Waterberg JV Co.

Effective September 21, 2017 Waterberg JV Co. owned 100% of the
prospecting rights comprising the entire Waterberg Project area and Waterberg JV
Co. was owned 45.65% by PTM RSA, 28.35% by JOGMEC and 26% by Mnombo, giving the
Company total direct and indirect ownership of 58.62% at that time.

On October 16, 2017 Implats entered into definitive agreements
with the Company, JOGMEC, Mnombo and Waterberg JV Co., whereby Implats purchased
shares of Waterberg JV Co. representing a 15.0% interest in the Waterberg
Project from PTM RSA (8.6%) and JOGMEC (6.4%) for $30.0 million, giving the
Company total direct and indirect ownership of 50.02% .

The Waterberg Project is located on a newly-discovered
extension of the Northern Limb of the Bushveld Complex. Anglo American Platinum
Limiteds (Amplats) Mogalakwena mine is a Platreef asset also located
on the Northern Limb. The pre-feasibility study for the Waterberg Project has
been completed. The detailed scope of work for the DFS has been agreed. The DFS
will investigate two options - a 600,000 tonne per month mine (744,000 ounces
PGEs per year) as outlined in the pre-feasibility study, and a second lower
capital option at 250,000 to 350,000 tonnes per month. The selection of the DFS
team has also been agreed and tenders for engineering groups have been completed
and Stantec and DRA have been selected as the lead independent project
engineers. A substantial portion of the Waterberg Project prospecting area
remains 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 is currently planned for development according to
the objective of achieving a best outcome scenario for shareholders and
stakeholders.

Technical Report - Waterberg

Technical information in this Annual Report 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. The
use of $ in the October 2016 Waterberg Report denotes USD.

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76

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 TSX 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
and 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. The reader is also cautioned
that all estimates of mineral resources and mineral reserves have been prepared
in accordance with NI 43-101 and the Company has not disclosed or determined any
mineral reserves under SEC Industry Guide 7 standards.

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 ($1,060 million), including ZAR999 million
      ($67 million) in contingencies;                              
|  |                                                                                                                                                                                                         
| | Peak funding ZAR13,694 million ($914 million);                                                                                                                                                          
|  |                                                                                                                                                                                                         
| | After-tax NPV of ZAR4,805 million ($320 million), at an
      8% discount rate (three year trailing average price desk 31 July 2016
      $1,212/oz Pt, $710/oz Pd, $984/oz Rh, $1,229/oz Au, $/ZAR 15);
|  |                                                                                                                                                                                                         
| | After-tax NPV of ZAR7,610 million ($507 million), at an
      8% discount rate (Investment Bank Consensus Price $1,213/oz Pt, $800/oz
      Pd, $1,000/oz Rh, $1,300/oz Au, $/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).                                                                                                               

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77



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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78



Figure 1-3: Annual Cashflow after Tax

Ownership

The ownership structure consists of:

| |  | Platinum Group Metals (RSA) (Pty) Ltd, abbreviated to
      PTM;
| | - | ----------------------------------------------------------------
| |   |                                                                 
| |  | JOGMEC; and                                                     
| |   |                                                                 
| |  | BEE partner Mnombo Wethu Consultants.                           

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 hectares. 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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79



Figure 1-4: Location of Waterberg Project within the
Bushveld Complex in the Republic of South Africa

Geological Setting, Deposit Type and
Mineralisation

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.

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80

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.



Figure 1-5: Regional Geology

Exploration Status

The Waterberg Project is an advanced project that has undergone
preliminary 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.

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81

Analysis

For the present database, field samples have been analyzed by
three different 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 minutes 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
(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.

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 298,538 m 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 has 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:

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82

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

T-Zone 2.5g/t
      Cut-offResource
      Category
    **Cut-off**
    Tonnage
    **Grade**
    **Metal**4E
    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 1-2: F-Zone Mineral Resource at 2.5g/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


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;
$1,212/oz Pt, $710/oz Pd, $1229/oz Au, Rh, $984/oz, $6.10/lb Ni, $2.56/lb Cu,
$/ZAR15.

The combined Mineral Resource Statement is summarized below:

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83

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

Waterberg Total 2.5g/t
      Cut-offResource
      Category
    **Cut-off**
    Tonnage
    **Grade**
    
    **Metal**4E
    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 1,250m, 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, labour 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.

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84

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 Labour Plan.

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.

Figure 1-6 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 (of the
October 2016 Waterberg report).

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.

---

85

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.



Consideration of mining, metallurgical, economic, marketing,
legal, environmental, social and governmental factors (The
modifying factors)

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

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.

---

86

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
    Grade**Zone**
    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


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
    (Mlb)T-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) inaccordance with SEC guidance was used for the assessment of
Resources and Reserves; $1,212/oz Pt, $710/oz Pd, $1229/oz Au, $984/oz Rh,
$6.10/lb Ni, $2.56/lb Cu, $/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, labour costs, electricity
supply issues or many other factors. See Risk Factors in 43-101 report on
www.sedar.com and the Companys Annual Information Form. The reserves are
estimated under SAMREC with no material difference to the CIM 2014 definitions
in this case.

---

87

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%.

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.

---

88

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.

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.

---

89

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 mine 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.

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.

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90

Mine Design Access

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

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 6.0m
(H), while the main conveyor declines have dimensions of 5.5m (W) x 5.5m (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.

---

91

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 20 m 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 4 m. The remaining benches are 6 m high. The catch berms have a
      width of 3 m 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 35 m 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 5 m. The remaining benches are 6 m 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 100 m 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.

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.

Figure 1.7 gives an overview of the portal positions and extent
of strike and dip of the orebody.

---

92



Figure 1-7: Portal andUndergroundLayouts

---

93

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.

---

94

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.

---

95

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



Figure 1-8: MiningMethodTotal MineProduction

---

96

Ventilation

The ventilation and cooling systems consider safety and health
requirements in accordance with the Mine Health and Safety Act 29 of 1996 (the
MHSA).

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 700m below surface 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 a 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 is 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.

---

97

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.

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 are 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 Figure 1-9 for an illustration of the above.

---

98



Figure 1-9:WaterbergConcentratorBlock FlowDiagram

---

99

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 (Mtpa). 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 (Section 18 of the October 2016 Waterberg Report).

---

100



Figure 1-10:GeneralSite Layout

---

101

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. From 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 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 Trichardt / 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/day 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.

---

102

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 9.4Ml/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.

From information available at this stage local groundwater
around the mine could yield up to 0.5Ml/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).

---

103



Figure 1-11: Proposed Overhead Line Route

---

104

Process Plant

Further to the equipment described in Section 1.16 (of the
October 2016 Waterberg Report), 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.

---

105

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             
|  |                                 
| | 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 option
      unfeasible 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:

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

---

106

| | o | Lined toe paddocks to collect contaminated
      run-off water from the RDF side slopes; and
| | - | --------------------------------------------------------------------------------------------
| |   |                                                                                             
| | o | A slurry spigot pipeline along the crest of the
      RDF.                                  



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.

---

107



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

---

108



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

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.

---

109

Metal Prices

The Waterberg Project level financial model begins on July 1,
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.

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

Parameter
    Unit
    Financial
      Analysis Assumptions3 Year Trailing Average Price (Date: 31 July
      2016)Platinum Palladium
      Gold Rhodium Nickel
      Copper
    $/oz. $/oz. $/oz.
      $/oz. $/lb $/lb
    1 212 710 1 229 984 6.10 2.56Base 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
    $/oz. $/oz. $/oz.
      $/oz. $/lb $/lb
    1 213 800 1 300
      1 000 7.50 2.9


Investment Bank Consensus September 2016 PGMs for base metals.

---

110

Environmental and Impact Assessment Studies

Preliminary environmental baseline studies have 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.           
|  |                 
| | 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.

---

111

The communities that are located within a 5km 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.

The communities that are located within a 5km 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
      11,468M and are expended in operating years from Jan 2023 to Jul 2038.
|  |                                                                                                                                                                                                                                                                                                                                                                                
| | The peak funding required for the project is estimated at
      ZAR13,694M ($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.

---

112

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.

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.

---

113



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,                                                                                                                                                       
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                   
| | 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
labour, 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.

---

114

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
    $ 18.13
    $ 1 861Engineering & Infrastructure
    R 107.49
    R 11 036
    $ 7.17
    $ 736General & Admin
    R 40.71
    R 4 180
    $ 2.71
    $ 279Process
    R 154.52
    R 15 864
    $ 10.30
    $ 1 058Total OPEX Cost
    R 574.62
    R 58 994
    $ 38.31
    $ 3 933


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.

---

115



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

From the figure, it is evident that mining comprises 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.

---

116

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.



Figure 1-18: Operating Cost per Zone over LoM relative to
Ore Tonnes

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. labour).
For more operating cost detail and results, refer to Section 21.3 (of the
October 2016 Waterberg Report).

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.

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


---

117

Figure 1-19: Annual Cashflow after TaxTable 1-13:
Investment Bank Consensus Price Item
    Discount Rate
    Before
      Taxation (ZAR)
    After
      Taxation (ZAR)
    Before
      Taxation (USD)
    After Taxation
      (USD)Net Present Value
    Undiscounted 4.0% 6.0% 8.0%
      10.0% 12.0% 14.0%
    45,781 24,180 17,426 12,402
      8,641 5,812 3,676
    31,946 16,184 11,263 7,610
      4,884 2,842 1,311
    3,052 1,612 1,162 827 576
      387 245
    2,130 1,079 750 507 325
      189 87Internal Rate of Return
      Project Payback Period (Years)
    19,8% 9
    16.3% 9
    19,8% 9
    16.3% 9
 MineralTenure, 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.   118 It should be noted that PTM has 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. 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
    119 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. 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 2016Platinum
    $/oz.
    1 212
    964
    1 213Palladium
    $/oz.
    710
    668
    800Gold
    $/oz.
    1 229
    1 255
    1 300Rhodium
    $/oz.
    984
    675
    1000Basket (4E)
    $/oz.
    899
    798
    960Nickel
    $/lb
    6.10
    4.52
    7.50Copper
    $/lb
    2.56
    2.17
    2.90Base 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.    120 Table 1-18: WPFS Production results. Item
    Unit
    Total LOM
    LOM Annual
      AvgOre ProductionMineral Reserve
    Mt
    103
    7.2Ore Milled
    Mt
    103
    7.2T-Zone
    g/t
    3.94
    3.94F South
    g/t
    3.78
    3.78F Central
    g/t
    3.59
    3.59F Boundary
    g/t
    3.75
    3.75F North
    g/t
    3.78
    3.784E
    g/t
    3.73
    3.73Copper
    %
    0.08
    0.08Nickel
    %
    0.15
    0.15RecoveriesPlatinum
    %
    82.5
    82.5Palladium
    %
    83.2
    83.2Gold
    %
    75.3
    75.3Rhodium
    %
    59.4
    59.44E
    %
    82.1
    82.1Copper
    %
    87.9
    87.9Nickel
    %
    48.8
    48.8Recovered MetalPlatinum
    koz
    3,029
    222Palladium
    koz
    6,297
    482Gold
    koz
    715
    45Rhodium
    koz
    73
    64E
    koz
    10,114
    744Copper
    Mlb
    168
    11Nickel
    Mlb
    163
    12    121 Waterberg Key financial metrics are depicted in the table
below: Table 1-19: WPFS Results Item
    Units
    TotalKey Financial Results (3 Year Trailing
      Price Deck  $/ZAR 15) - 31 July 2016Life of Mine
    years
    19Capital to Full Production
    $M
    1 060Mine Site Cash Cost
    $/oz 4E
    389Total Mine Cash Costs After Credits
    $/oz 4E
    248Total Cash Costs After Credits
    $/oz 4E
    481All in Costs After Credits
    $/oz 4E
    661Site Operating Costs
    $/t Milled
    38After Tax NPV @ 8%
    $M
    320After Tax IRR
    %
    13.5Project Payback Period (Start First Capital)
    years
    10Investment Bank Consensus Price Deck- 16
      September 2016After Tax NPV8
    $M
    507After 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 labour 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.   122 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. 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.   123 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. 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 labour 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:  o
    A suitable site for the RDF has been
      identified;o
    conventional/thickened tailings is the safest
      option and well understood in the platinum industry and has been regarded
      as the preferred option for Waterberg;o
    a conventional/thickened RDF has been shown to
      be the most cost-effective option for Waterberg in terms of water costs;
      ando
    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 in Section
19-3 (of the October 2016 Waterberg Report). 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.   124 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. 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
Labour 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.   125 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 Labour 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. 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.    126 Mining It is recommended that the opportunities mentioned in Section
16.12.2 (of the October 2016 Waterberg Report) 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. Metallurgy It is recommended that the opportunities mentioned in Section17
(of the October 2016 Waterberg Report) 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.   127 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. 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   128 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. * * * * * * Additional Information The DFS is now being advanced under the direction of the
Technical Committee appointed by Waterberg JV Co., which is comprised of members
representing the Company and all other Waterberg Project Partners  Implats,
JOGMEC and Mnombo. As of December 2017, seventeen drill rigs are on site and
have commenced drilling with the objectives of defining the shallowest areas of
the current 102 million tonne reserve for increased confidence and detailed mine
planning and to upgrade a portion of the indicated resources to measured
resources for reserve consideration in the DFS. Immediate areas for infill
drilling include the Northern and Boundary Super F zones. The scope of work and plans for the DFS during 2017 and 2018
have been agreed in detail by the Technical Committee. Further, Stantec and DRA
have been selected as the lead independent project engineers based on a
detailed, professionally supervised tendering process. Stantec will focus on
underground mining engineering and design and reserve
estimation. DRA will focus on metallurgy, plant design, infrastructure and cost
estimation.   129 Non-Material Mineral Property Interests The non-material mineral property interests of the Company
include prospecting rights located in South Africa, various mineral property
interests in Canada and the Maseve Mine. The Maseve Mine is in process of being
sold pursuant to the Maseve Sale Transaction and is no longer considered a
material property of the Company. 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, 2017. Maseve Mine On September 6, 2017 the Company entered into a term sheet to
sell all rights and interests in Maseve to RBPlat in a transaction valued at
approximately $74.0 million, payable as $62.0 million in cash and $12.0 million
in RBPlat common shares, allocated as to $58.0 for plant facilities, tailings
impoundment facilities and surface rights, $11.0 million for purchase of loans
due from Maseve to PTM RSA and $5.0 million for purchase of 100% of the issued
common shares of Maseve, thereby acquiring Maseve and its underlying assets,
rights and permits, including the Maseve mining right. A deposit in escrow was paid by RBPlat in the amount of Rand
41,367,300 ($3.0 Million equivalent) on October 9, 2017. Definitive legal
agreements for Maseve Sale Transaction were executed on November 23, 2017. The
Maseve sale transaction is to occur in two stages: 
    Pursuant to the terms of the Plant Sale Transaction,
      RBPlat is to pay Maseve $58 million in cash to acquire the concentrator
      plant and certain surface assets of the Maseve Mine, including an
      appropriate allocation for power and water. Maseve will retain ownership
      of the mining right, power and water rights as well as certain surface
      rights and improvements. The payment to be received by Maseve will be
      remitted to the Companys South African subsidiary, PTM RSA, in partial
      settlement of loans due to PTM RSA. This first payment due from RBPlat is
      conditional upon the satisfaction or waiver by January 31, 2018 of certain
      conditions precedent, including but not limited to the approval, or
      confirmed obligation, of the holder of the remaining 17.1% equity interest
      in Maseve, Africa Wide; the approval of the Sprott Lenders, LMM and other
      major lenders of the Company; and Competition Approval, which is expected
      to be received in January, 2018. Due diligence procedures required by
      RBPlat have been completed.
    Pursuant to the terms of the Share Transaction, RBPlat is
      to pay PTM RSA $7.0 million in common shares of RBPlat plus approximately
      $4.0 million in cash to acquire PTM RSAs remaining loans due from Maseve,
      and is to pay PTM RSA and Africa Wide, in proportion to their respective
      equity interests in Maseve, a further $5.0 million by way of issuance of
      common shares of RBPlat to acquire 100% of the equity in Maseve. The
      second stage of the transaction is conditional upon implementation of the
      Plant Sale Transaction and, among other conditions, obtaining all
      requisite regulatory approvals including Ministerial Consent within three
      years after the Competition Approval. The RBPlat common shares to be issued pursuant to the Share
Transaction will be priced at Rand 31.7366 per RBPlat common share, representing
the 30-day volume weighted average price of the RBPlat common shares on the
Johannesburg Stock Exchange calculated on market close on the day preceding the announcement of the Maseve Sale Transaction,
converted into U.S. dollars by applying the Rand/U.S. dollar exchange rate as
advised by Merrill Lynch South Africa at 5:00 p.m. on the business day preceding
the announcement of the Maseve Sale Transaction. Because this price is fixed,
PTM RSA will receive the benefit, or bear the loss, of any change in the market
value of RBPlat common shares that occurs prior to the closing of the Share
Transaction. PTM RSA has agreed that any sale by it of the RBPlat shares will
occur in an orderly fashion which does not distort the market, and that for 120
days after the issuance of the RBPlat shares to PTM RSA, PTM RSA will not sell,
in any 30 day period, more than 33.33% of its original allocation of RBPlat
shares unless the sale is placed by a licensed broker-dealer on an orderly sale
basis to qualified institutional investors.   130 RBPlat will be granted a sub-contractor arrangement for the
  Maseve Mine and for carrying out care and maintenance services during the period
  between the date of grant of the Competition Approval and the date of
  Ministerial Consent. The Company will be responsible for 50% of care and
  maintenance costs after Competition Approval until the earlier of the date of
  Ministerial Consent and the date upon which RBPlat utilizes the surface
infrastructure of the Maseve Mine for its own purposes. All of PTMs proceeds from the Maseve Sale Transaction are to
be used to repay the Sprott Lenders and partially repay LMM, who were
collectively owed approximately $89 million in principal and accrued interest at
August 31, 2017. The Sprott Lenders and LMM have agreed to terms and conditions
upon completion of which they will provide their consent to the Maseve Sale
Transaction. The Company and RBPlat are in process to complete required
regulatory filings, legal agreements, procedures, etc. which are required for
closing and which will also satisfy the Sprott Lenders and LMMs requirements.
Should the Maseve Sale Transaction not proceed as planned, the Company would
seek to otherwise dispose of Maseve promptly to other interested third parties,
on terms which may or may not be similar to the terms of the Maseve Sale
Transaction, failing which the Company would be in default of covenants and
undertakings pursuant to the Sprott Facility and LMM Facility. Maseve Mine - History On October 26, 2004, the Company entered into a joint venture
agreement (the WBJV Agreement) forming the WBJV among the Company (37%
interest held through PTM RSA), Amplats (37% interest held through its wholly
owned subsidiary, Rustenburg Platinum Mines Ltd., and Africa Wide (26% interest
held directly) in relation to a platinum exploration and development project on
combined mineral rights covering approximately 67 km2 on the Western
Bushveld Complex of South Africa. Africa Wide was subsequently 100% acquired by
Wesizwe in September 2007. On December 8, 2008, the Company entered into certain
agreements to consolidate and rationalize the ownership of the WBJV (the
Consolidation Transaction). On April 22, 2010, the Company paid an
equalization amount due under the WBJV Agreement to Amplats of Rand 186.28
million (approximately $24.83 million at the time). On April 22, 2010, the
Consolidation Transaction was also completed and the WBJV dissolved. Following the Consolidation Transaction, the Company held a
54.75% interest in Maseve and Wesizwe held a 45.25% initial interest in Maseve.
Under the terms of the Consolidation Transaction, the Company subscribed for a
further 19.25% interest in Maseve, from treasury, in exchange for Rand 408.81
million (approximately $59 million at the time), thereby increasing its
effective shareholding in Maseve to 74%. The subscription funds were placed in
escrow for application towards Africa Wides 26% share of expenditures for Projects 1 and 3. By mid-November
2013, the Africa Wide escrowed funds were fully depleted.   131 Phase 1 establishment of underground development at the north
  mine declines and preparation on surface for mill and concentrator construction
  commenced in late 2010 and finished in late 2012. In April 2011, Maseve applied
  for a mining right in respect of the prospecting rights for Projects 1 and 3 and
  was issued a letter of grant in respect of the Mining Right on April 4, 2012.
  Phase 1 site construction and underground development transitioned into Phase 2
  in late 2012 and early 2013, consisting of an additional twin decline access
  into the southern portion of the deposit, ground preparations and foundations
  for milling, concentrating facilities and continued underground development at
  the north declines. Ground work for the tailings storage facility commenced in
late 2013 on surface rights owned by Maseve. In October 2013, Africa Wide elected not to fund its
approximate $21.8 million share of a unanimously approved project budget and
cash call for Project 1. In March, 2014, Africa Wide elected not to fund its
$21.52 million share of a second unanimously approved cash call. As a result,
the Company entered into arbitration proceedings with Africa Wide in accordance
with the terms of the Maseve shareholders agreement (the Maseve Shareholders
Agreement) to determine Africa Wides diluted interest in Maseve, and
therefore Project 1 and Project 3. On August 20, 2014, an arbitrator ruled in
the Companys favour on all matters and Africa Wides shareholding in Maseve was
diluted to approximately 17.1% and the Companys ownership was increased to
approximately 82.9% . All funding provided by PTM RSA to Maseve for development and
construction at Project 1 since the second cash call missed by Africa Wide was
provided by way of intercompany loans. At August 31, 2017 Maseve owed PTM RSA
approximately $387 million. Cold commissioning at Maseve was carried out in December 2015
and January 2016. The Maseve Mine milling facility was commissioned in February
and March of 2016. First concentrate was produced in February 2016. Subsequent
to February 2016, production ramp up at Maseve fell below plan. Underperforming
contractors, labour skills and productivity, machinery maintenance and
availability, dilution, ground conditions and failure to meet development
targets at the Maseve Mine were all contributory factors. During the Second
Quarter of fiscal 2017, the Company made certain changes. Underperforming
contractors were terminated or given a reduced scope of work, while at the same
time, Redpath Mining South Africas scope of work regarding mine production
tonnage was increased. The Company also replaced several senior managers.
Improvements in operations during the Third Quarter ended May 31, 2017 did
occur, but were not sufficient to meet plans. In addition to the production challenges discussed above,
during the Third Quarter of fiscal 2017 Company engineers determined that in
some areas of Block 11 the bord and pillar mechanized mining method was not
achieving required efficiencies. Although produced tonnes from Block 11 had been
increasing, grade control was not being achieved. Based on extensive sampling,
the face grades in Block 11 were determined to have generally met estimates, but
the fully mechanized bord and pillar mining method resulted in excess dilution,
and therefore lower than planned grades delivered to the plant. As a result of the above, in July 2017, the Company undertook a
restructuring of mine operations. The restructuring aimed to reduce ongoing
costs and achieve positive, sustainable cash flows as soon as possible. The main
mining method was planned to transition from higher volume bord and pillar
mining to a hybrid mining method, consisting of mechanized access drives and
conventional hand-held methods for stoping. Active mining was suspended while restructuring
was planned and assessed while at the same time the labour force was
significantly reduced.   132 Subsequent to the cessation of mining activities at Maseve in
  July 2017, it was determined that Lender and investor support for further
  investment at Maseve in restructuring to a more conventional mining format was
  not available and preparations began to place Maseve on care and maintenance.
  Later, after an extended period of discussions, on September 6, 2017 the Company
entered into the Maseve Sale Transaction. At third quarter end May 31, 2017, Management believed that
indicators of impairment existed for the Maseve Mine, consisting of lower
platinum and palladium prices compared to previous years, delays in production
ramp-up and the low market capitalization of the Company. During the nine month
period, the Company recorded a $280 million impairment of the Maseve Mine (of
which $225 million was recognized in the three months ended May 31, 2017), which
was taken primarily to recognize the effect of missed production targets. At
year end August 31, 2017 the Company recognized a further impairment in the
amount of $291 million based on the valuation implied by the Maseve Sale
Transaction. ITEM 4A.
    UNRESOLVED STAFF COMMENTS Not applicable. ITEM 5.
    OPERATING AND FINANCIAL REVIEW AND
      PROSPECTS The following discussion of our financial condition, changes in
financial conditions and results of operations for each of the three years ended
August 31, 2017 should be read in conjunction with our consolidated financial
statements and related notes included therein included in this annual report at
Item 18. Our consolidated financial statements have been prepared in accordance
with IFRS as issued by the IASB. The following discussion contains forward-looking statements
that involve inherent risks and uncertainties. Actual results may differ
materially from those contained in such forward-looking statements. See
cautionary statements in Forward-Looking Statements at the beginning of this
document. Unless otherwise stated, all financial variations in this item
are given on a reported basis. A.
    Operating Results Financial Overview Year Ended August 31, 2017 Compared to Year Ended August
31, 2016 For the year ended August 31, 2017, the Company had a net loss
of $590 million (August 31, 2016  net loss of $36.6 million). This difference
is predominantly due to an impairment of the Maseve Mine of $589 million during
the year. Other items include a foreign exchange gain of $4.6 million (August
31, 2016 - $1.7 million gain) due to the US Dollar decreasing in value relative
to the Companys functional currency of the Canadian Dollar. Also, stock
compensation expense of $1.1 million was recognized in the current period
(August 31, 2016  $0.1 million) with the difference due to more rapid vesting
of share based compensation issued in the current year. General
and administrative costs rose from $5.4 to $5.7 million due to increase
professional fees. The currency translation adjustment recognized in the period
is a gain of $59 million (August 31, 2017 - $50 million loss) due to an 9%
increase in value of the Rand against the US Dollar in the current year as
compared to an 11% decrease in the value of the Rand in the previous year.   133 Year Ended August 31, 2016 Compared to Year Ended August
31, 2015 For the year ended August 31, 2016 the Company had net loss of
$36.7 million (August 31, 2015  net loss of $4.0 million). This difference is
largely due to the writedown of the Maseve mine during the current year. Also,
in the previous year the Company recognized an $8.9 million foreign exchange
gain as opposed to a $1.7 million foreign exchange gain in the current year.
Also in the previous year termination and finance fees recognized of $5.2
million and a write down of deferred finance fees of $2.4 million were also
recognized. Comprehensive loss for the period was $86.7 million (August 31, 2015
 $104 million) with the difference being due to a larger decrease in the value
of the Rand against the USD in the previous year as compared to the current year
which effects the translation of the Companys South African Rand denominated
subsidiaries. Finance income earned in the year ended August 31, 2016 totaled
$1.1 million as compared to $3.8 million in the comparative period in the prior
year due to the Company netting interest earned on debt proceeds against
interest expenses from the Sprott and Liberty debt holdings. Annual Financial Information (In thousands of dollars, except for share data) Year ended
    
    
    Year ended
    
    
    Year endedAug 31, 2017
    
    
    Aug 31, 2016
    
    
    Aug 31, 2015Interest income
    $
    1,062
    (1)
    $
    1,133
    (1)
    $
    3,781
    (1)Net
      loss
    
    590,317
    (2)
    $
    36,651
    (2)
    $
    3,972Basic loss per share
    $
    4.30
    (3)
    $
    0.26
    (3)
    $
    0.05
    (3)Diluted loss per share
    $
    4.30
    (3)
    $
    0.26
    (3)
    $
    0.05
    (3)Total assets
    $
    100,528
    

    $
    519,858
    
    $
    498,342Long
      term debt
    $
    43,821
    
    $
    54,586
    
    
    NilConvertible Debt
    $
    17,225
    
    
    Nil
    
    
    NilDividends
    
    Nil
    
    
    Nil
    
    
    Nil Notes: (1)
    The
      Companys only significant source of income during the years ending
      August 31, 2015 to 2017 wasinterest income from interest
      bearing accounts held by the Company.(2)
    Net loss is affected in 2016 and 2017 by an impairment
      recognized on the Maseve Mine and the impairment of the Maseve Mine when
      it was held as an asset held for sale.(3)
    Basic loss per share is calculated using the weighted
      average number of common shares outstanding. The Company uses the treasury
      stock method for the calculation of diluted earnings per share. Diluted
      per share amounts reflect the potential dilution that could occur if
      securities or other contracts to issue common shares were exercised or
      converted to common shares. In periods when a loss is incurred, the effect
      of potential issuances of shares under options and share purchase warrants
      would be anti-dilutive, and accordingly basic and diluted loss per share
      are the same. 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 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.    134 Foreign currency fluctuations have not materially impacted the
  Companys results of operations in recent years. Inflation in South Africa has
  been experienced in labour costs over recent years, with average wage inflation
  being at approximately 6% in 2016 and 2017. The Company can provide no assurance
  that foreign currency fluctuations and inflation will not materially impact the
  Company in the future. See Risk Factors. The Company has not entered into any
  agreements or purchased any instruments to hedge possible currency risks at this
time. Events subsequent to the year ended August 31, 2017 On November 6, 2017, the Company, along with JOGMEC and Mnombo
closed a transaction to dispose of 15% of the Waterberg Project for $30 million
to Implats. Implats was also granted an option to increase its stake to 50.01%
through additional share purchases from JOGMEC for an amount of $34.8 million
and earn-in arrangements for $130 million paid to Waterberg JV Co. (defined
below) to fund development work on the Waterberg Project, as well as a right of
first refusal to smelt and refine Waterberg concentrate (the Implats
Transaction). The Company received $17.2 million for its sale of an 8.6%
project interest. See details below. On November 23, 2017, the Company entered into definitive
agreements to sell its rights and interests in Maseve to RBPlat in a transaction
valued at approximately $74.0 million, payable as $62.0 million in cash and
$12.0 million in RBPlat common shares. The Maseve Sale Transaction is to occur
in two stages. RBPlat is to first pay Maseve $58 million in cash to acquire the
concentrator plant and certain surface assets of the Maseve Mine (the Plant
Sale Transaction). RBPlat is to then pay PTM RSA $7.0 million in common
shares of RBPlat plus approximately $4.0 million in cash to acquire PTM RSAs
remaining loans due from Maseve, and is to pay PTM RSA and Africa Wide, in
proportion to their respective equity interests in Maseve, a further $5.0
million by way of issuance of common shares of RBPlat to acquire 100% of the
equity in Maseve (the Share Transaction and collectively with the Plant
Sale Transaction, the Maseve Sale Transaction). See details below. 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 evaluates the carrying value of its property
interests on a regular basis. Management is required to make significant
judgements to identify potential impairment indicators. Any properties
management deems to be impaired are written down to their estimated net
recoverable amount. At August 31, 2017, the Company had an active plan in place to
sell the Maseve Mine and the Company entered into a term sheet to dispose of the
mine on September 6, 2017. This was followed by definitive agreements being
signed on November 23, 2017. As a result, at year end the Company held the
Maseve Mine as an asset held for sale, recorded at the lower of the carrying
value and fair value less costs to sell.   135 South African Properties The Company conducts its South African exploration and
development work through its wholly-owned direct subsidiary PTM RSA. The
Companys material mineral property is the Waterberg Project. After a planned
corporatization of the Waterberg joint venture completed on September 21, 2017,
the Waterberg Project is held by Waterberg JV Co. After giving effect to the
Initial Purchase (defined below), the Company holds a 50.02% beneficial interest
in Waterberg JV Co., of which 37.05% is held directly by PTM RSA and 12.974% is
held indirectly through PTM RSAs 49.9% interest in Mnombo, which holds 26.0% of
Waterberg JV Co. The remaining interests in Waterberg JV Co. are held by a
nominee of JOGMEC (21.95%) and by Implats (15.0%) . PTM RSA is the manager of
Waterberg JV Co. The Maseve Mine is held through Maseve, a company which is held
82.9% by PTM RSA and 17.1% by Africa Wide, which is in turn owned 100% by
Johannesburg Stock Exchange listed, Wesizwe. See Maseve Mine  Africa Wide
Dilution below for details regarding the dilution of Africa Wides shareholding
in Maseve. On September 6, 2017, the Company announced that Maseve had entered
into a term sheet with RBPlat to initially sell the concentrator and surface
rights to RBPlat, then subsequently 100% of the equity in Maseve. Further
details on this transaction can be found below. South African Legislation and Mining Charter The Mineral and Petroleum Resources Development Act, 28 of 2002
(the MPRDA) and related regulations in South Africa require that a BEE
entity own a 26% equity interest in mining projects that qualify for the grant
of a Mining Right. The DMR had obtained an exemption from applying the generic
BEE Codes of Good Practice (the Generic BEE Codes) under the BEE Act
until October 31, 2016 and had applied for a further extension until December
31, 2016. During such extension, when evaluating the issuance and maintenance of
licenses and other authorizations, the DMR would rely upon the Amended
Broad-Based Socio-Economic Empowerment Charter for the South African Mining
Industry (the Mining Charter), rather than the more onerous provisions
of the Generic BEE Codes. While this exemption was extended to December 31,
2016, no further exemption was obtained thereafter, and, as a matter of law, the
Generic BEE Codes now apply to the issuance and maintenance of licenses and
other authorizations. As a matter of practice, the DMR has continued to apply
the provisions of the Mining Charter rather than the Generic BEE Codes. The Reviewed Broad-Based Black Economic Empowerment Charter for
the South African Mining Industry, commonly styled Mining Charter III, was
published and became into effect on June 15, 2017. Within hours of its
publication, the Chamber of Mines rejected Mining Charter III as being
unilaterally imposed upon the mining industry and that the process of developing
the charter was seriously flawed. The Chamber of Mines has applied for an urgent
interdict to suspend the operation of Mining Charter III, pending a review
thereof by the courts. On July 14, 2017 the Chamber of Mines (the
Chamber) advised that the Minister of Mineral Resources had given a
written undertaking that the Minister and the DMR, will not implement or apply
the provisions of the 2017 Reviewed Mining Charter in any way, pending judgment
in the urgent interdict application brought by the Chamber of Mines, now to be
heard in a three day hearing set to commence on February 19, 2018. The most concerning aspects of Mining Charter III, from an
ownership perspective, are the requirement to have 30% BEE shareholding for all
new mining rights, to have 50% plus 1 BEE shareholding for all new prospecting
rights, that holders of rights who are at less than 30% currently, have 12
months in which to increase their BEE shareholding and that the funding of such
additional shareholding must come from dividends which accrue to BEE shareholders. If the dividends
are insufficient, whatever balance remains due and owing in respect of the BEE
shareholding must be written off. In addition, on new mining rights, a
distribution of 1% of turnover must be paid to BEE shareholders before dividends
are declared and paid. This is subject only to the solvency and liquidity test
of the South African Companies Act, 2008. In addition, for new rights or for
companies who are not yet at 26% BEE, the BEE shareholding has to be allocated
as to 14% to black entrepreneurs and 8% to each of the employee and local
community stakeholders. Very high targets are set for the procurement of local,
and particularly BEE, goods and services. On the employment equity front, 50% of
the board of a right holder and its executive management must be black persons,
25% of which must be female. At senior management level, 60% must be black
persons, of which 30% must be female. These percentages increase until, at
junior management level, 88% must be black persons of which 44% must be female.
The Company is unable to assess the impact that Mining Charter III, if
implemented, will have on its business, as even the Deputy President, Mr Cyril
Ramaphosa, has called for the DMR and the Chamber to get around the table to
negotiate a way forward in regard to this charter.   136 Material Mineral Property Interests  Waterberg
Project Waterberg Project  Activities subsequent to the year
ended August 31, 2017 On November 6, 2017, the Company closed the Implats
Transaction, originally announced on October 16, 2017, whereby Implats: 
    Purchased an aggregate 15.0% equity interest in Waterberg
      JV Co. (the Initial Purchase) for $30 million. The Company sold an 8.6%
      interest for $17.2 million and JOGMEC sold a 6.4% interest for $12.8
      million. From its $17.2 million in proceeds, the Company will commit $5.0
      million towards its pro rata share of remaining DFS costs. Implats will
      also contribute an estimated $1.5 million for its 15.0% pro rata share of
      DFS costs.
    Acquired an option (the Purchase and Development
      Option) whereby upon completion by Waterberg JV Co. and approval by
      Waterberg JV Co. or Implats of the DFS, and in certain other
      circumstances, Implats will have a right, generally exercisable for at
      least 90 days, to exercise an option to increase its interest to up to
      50.01% in Waterberg JV Co.If Implats exercises the
      Purchase and Development Option, Implats would commit to purchase an
      additional 12.195% equity interest in Waterberg JV Co. from JOGMEC for
      $34.8 million, and earning into the remaining interest by committing to an
      expenditure of $130.0 million in development work.The closing of the exercise of the Purchase and
      Development Option is subject to certain conditions precedent, including
      the receipt of required regulatory approvals and Implats confirming within
      180 business days the salient terms of a development and mining financing
      for the Waterberg Project, and providing a signed financing term sheet,
      subject only to final credit approval and documentation. If Implats
      exercises the Purchase and Development Option and such transactions are
      consummated, Implats will have primary control of Waterberg JV Co.Should Implats complete the increase of its interest in
      Waterberg JV Co. to 50.01% pursuant to the Purchase and Development Option
      and complete its earn in spending, Platinum Group would retain a 31.96%
      direct and indirect interest in Waterberg JV Co. and all of the project
      partners would be required to participate pro-rata. If, prior to the
      consummation of the Purchase and Development Option, a BEE dilution event
      has occurred, the amount of equity to be purchased by Implats and the
      purchase price for such equity upon the exercise of the Purchase and
      Development Option will be adjusted pursuant to formulas set forth in the
      call option. The transaction agreements also provide
for the transfer of equity and the issuance of additional
equity to one or more broad based black empowerment partners, at fair value.    137  If Implats does not elect to complete the Purchase and
  Development Option and the Development and Mining Financing, Implats will retain
  a 15.0% project interest and Platinum Group will retain a 50.02% direct and
indirect interest in the project.
    Acquired a right of first refusal to enter into an
      offtake agreement, on commercial arms-length terms, for the smelting and
      refining of mineral products from the Waterberg Project. JOGMEC will
      retain a right to receive platinum, palladium, rhodium, gold, ruthenium,
      iridium, copper and nickel in refined mineral products at the volume
      produced from the Waterberg Project. Waterberg Project  Activities in the year ended August
31, 2017 During the year ended August 31, 2017, approximately $5.6
million was spent at the Waterberg Project for engineering and exploration
activities. At August 31, 2017, the Company carried total net deferred
acquisition and exploration and other costs related to the Waterberg Projects of
$22.8 million (August 31, 2016 - $20.2 million). Since March 31, 2015, the
budget for work at the Waterberg Project has been fully funded by joint venture
partner JOGMEC in accordance with the 2nd Amendment to the JOGMEC
Agreement (both as defined below). From inception to date the Company has funded
both the Companys and Mnombos share of expenditures on the Waterberg Project.
At August 31, 2017, Mnombo owed the Company approximately $1.9 million for
funding provided. On April 19, 2016, the Company reported an updated independent
4E resource estimate for the Waterberg Project. Later, on October 19, 2016, the
Company reported positive results from an Independent Pre-Feasibility Study
(PFS) on the Waterberg Project and a further updated independent 4E
resource estimate for the Waterberg Project. See Waterberg Project 
Pre-Feasibility Study and Mineral Resource and Reserve Details below. The known deposit area on the Waterberg Project is 13 km long
so far, open along strike and begins from 140 meters deep. The deposit is known
to continue down dip below the arbitrary 1,250 meter cut off depth applied to
the deposit for resource estimation purposes. Minimum mineralized thickness is 3
meters and the maximum is 70 meters. Drilling will continue at the Waterberg
Project and the deposit is still open for expansion. Based on a reinterpretation of airborne gravity surveys and
taking the latest drill hole results into consideration, additional drilling
northward along strike is planned. Platinum Group is currently working to advance the project to
completion of a DFS and a construction decision. Some drilling to increase the
confidence in certain areas of the known mineral resource to the measured
category was completed during 2017, with drilling activity being ramped up again
in November, 2017 after completion of the Initial Purchase of the Implats
Transaction. To August 31, 2017 approximately 12,883 meters had been drilled for
this programme. The true width of the shallow dipping (30° to 35°) mineralized
zones at the Waterberg Project are approximately 82% to 87% of the reported
interval from the vertical intercepts drilled. For the efficient application of
bulk mining methods and for mine planning, vertical intercepts of 3 meters or
more are desirable. Increased grade thickness zones associated with minor
footwall troughs or bays along the 13 km long layered complex have recently been
identified. Infill drilling is confirming and adding definition to these zones,
which will allow them to be prioritized in an updated mine plan for the DFS.   138 As a result of its shallow depth, good grade and a fully
mechanized mining approach, the Waterberg Project has the opportunity to be a
safe mine within the lowest quartile of the Southern Africa PGE industry cost
curve. The project resources consist of 60% palladium (refer to the October 2016
Waterberg Report (defined below)). Important detailed infrastructure planning has commenced for
the Waterberg Project, including power line environmental and servitude work by
Eskom and detailed hydrogeological work to source ground water. Eskom has
progressed electrical power connection planning for a 65 km, 140MW line to the
project. Detailed hydrological work is now underway to study the
possible utilization of known sources for significant volumes of ground water.
Another instance where groundwater sources currently supply a large-scale mine
in the Limpopo region has stimulated this research. Several boreholes proximal
to the Waterberg Project have already identified large volumes of ground water
that because of mineral content, is not potable or suitable for agriculture.
Hydrological and mill process specialists are investigating the use of this
water as mine process water. Hydrological work so far has also identified
several large-scale water basins that are likely able to provide mine process
and potable water for the Waterberg Project and local communities. Test drilling
of these water basins has commenced. The Waterberg Project team is examining the
possibility of assisting with regional infrastructure to source potable water
for municipal use while also sourcing and providing mine process water. Meetings
with local municipalities have been positive and co-operative in tone and are
encouraging for future development. Planned DFS engineering work on the Waterberg Project includes
resource modelling, metallurgical work, optimization of the metallurgical flow
sheet using South African and Japanese expertise, bulk services design and
mechanized mine planning. Optimization of the mine plan and working on reducing
underground sustaining development capital will be part of the upcoming DFS.
Waterberg JV Co. also plans to file a mining right application during 2018,
based substantially on the results of the PFS. Waterberg Project  Activities in the year ended August
31, 2016 During the year ended August 31, 2016, approximately $4.6
million was spent conducting drilling at the Waterberg Project. At times, up to
twelve drill rigs were active on site. In addition to drilling approximately
$2.6 million was spent during the period for prefeasibility engineering,
resource modelling, metallurgy, infrastructure design, etc. At August 31, 2016,
the Company carried total net deferred acquisition and exploration and other
costs related to the Waterberg Projects of $20.2 million (August 31, 2015 -
$22.3 million). Since March 31, 2015 all Waterberg Project funding was covered
by JOGMEC in accordance with the 2ndAmendment to the JOGMEC
Agreement. At period end $20.2 million in net costs were capitalized to
the project. The apparent drop from the USD capitalized balance at the previous
year end was due entirely to the devaluation of the Rand and the translation of
Rand denominated balances at year end. The budget for work at Waterberg was
fully funded by joint venture partner JOGMEC. To March 31, 2015, the Company
funded the Companys and Mnombos combined 63% share of the work on the
Waterberg Project with the remaining 37% funded by JOGMEC. To March 31, 2015,
the Company funded the Companys and Mnombos combined 100% share of the work on
the Waterberg Extension Project. Exploration work on the Waterberg Extension
Project began in a material way in late 2013.   139 On April 19, 2016, the Company reported an updated independent
4E resource estimate for the Waterberg Project. Later, on October 19, 2016 the
Company reported the positive results from the PFS on the Waterberg Project and
a further updated independent 4E resource estimate for the Waterberg Project.
Mineral resources in the T and F zones (100% project basis) increased to an
estimated 24.886 million ounces 4E in the indicated category plus 10.802 million
ounces 4E in the inferred category: 
    Indicated 218.265 million tonnes grading 3.55 g/t 4E
      (1.06 g/t Pt, 2.18 g/t Pd, 0.26 g/t Au, 0.04 g/t Rh, 2.5 g/t cut-off),
      plus 0.08% Cu and 0.15% Ni.
    Inferred 97.212 million tonnes grading 3.46 g/t 4E (1.03
      g/t Pt, 2.10 g/t Pd, 0.30 g/t Au, 0.03 g/t Rh, 2.5 g/t cut-off), plus
      0.06% Cu and 0.11% Ni. The PFS also estimated probable mineral reserves in the T and
F zones (100% project basis) estimated at 12.32 million ounces 4E plus 191.18
million pounds of copper and 333.04 million pounds of nickel: 
    102.7 million tonnes grading 3.73 g/t 4E (1.11 g/t Pt,
      2.29 g/t Pd, 0.29 g/t Au, 0.04 g/t Rh, 2.5 g/t cut- off), plus 0.08% Cu
      and 0.15% Ni. 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 PFS. The reader is cautioned to note that the mineral
reserves are included within the indicated mineral resources, and are not in
addition to them. As compared to earlier resource estimates, the increased F
zone grade in the latest updated resource estimate combined with improved
deposit definition allowed for the targeting of best grade thickness in early
mine scheduling for the PFS. At period end, the Waterberg deposit is 13 km long, open along
strike and begins from 140 meters deep. The deposit is known to continue down
dip below the arbitrary 1,250 meter cut off depth applied to the deposit for
resource estimation purposes. Minimum mineralized thickness is 3 meters and the
maximum is 70 meters. Drilling will continue at Waterberg and the deposit is
still open for expansion. Based on a reinterpretation of airborne gravity surveys and
taking the latest drill hole results into consideration, additional drilling
northward along strike is planned for the future. Platinum Group plans to advance the project to completion of a
feasibility study and a construction decision. Drilling to increase the
confidence in certain areas of the known mineral resource to the measured
category is underway. Engagement with utilities for the delivery of bulk
services is in process. Engineering work on the Waterberg Project includes
resource modelling, metallurgical work, optimization of the metallurgical flow
sheet using South African and Japanese expertise, bulk services design and
mechanized mine planning. Optimization of the mine plan and working on reducing
underground sustaining development capital will be part of the upcoming
feasibility study. Waterberg Project  Activities in the year ended August
31, 2015 During the year ended August 31, 2015 the Company incurred $3.6
million (August 31, 2014 - $12 million) in exploration and engineering costs on
the Waterberg Project, net of $6.5 million (August 31, 2014 - $2.5 million) in
funding provided by JOGMEC. At August 31, 2015, the Company carried total net
deferred acquisition and exploration and other costs related to
the Waterberg Projects of $22.2 million (August 31, 2014 - $22.9 million).   140 Subsequent to the boreholes drilled up until April 2014 for the
  June 12, 2014 mineral resource estimate, an additional 85,364 meters in 80
  exploration boreholes and 151 deflections was drilled on the Waterberg JV
  Project and the Waterberg Extension Project for inclusion in the updated
  resource estimate dated effective July 20, 2015, as further described below. The
  primary objective of this drilling was to convert resource ounces from the
inferred to the indicated confidence category. On July 22, 2015 the Company reported an updated independent
platinum, palladium and gold (collectively referred to as 3E) resource
estimate for the Waterberg Projects effective as of July 20, 2015. The
independent Qualified Person responsible for the July 20, 2015 mineral resource
estimate is Charles J. Muller (B. Sc. (Hons) Geology) Pri. Sci. Nat., of CJM
Consulting (Pty) Ltd. Mr. Muller authored the NI 43-101 technical report
entitled An Independent Technical Report on the Waterberg Project located in
the Bushveld Igneous Complex, South Africa dated effective July 20, 2015 (the
July 2015 Waterberg Report). Mineral resources at Waterberg on a 100% project basis
increased to an estimated 25.64 million ounces 3E in the inferred category plus
12.61 million ounces 3E in the indicated category, from 29 million ounces of 4E
inferred in June 2014. At period end, since the drilling completed for the July 20,
2015 resource estimate, a further 31,928 meters in 44 exploration boreholes and
71 deflections was completed on the Waterberg Projects. As at November 8, 2015 a
total of approximately 280,676 meters had been drilled on the Waterberg Projects
in 275 diamond drill boreholes with 444 deflections. Drilling conducted in 2015
to period end was targeting near surface areas of thicker Super F
mineralization with the objective of delineating new resources while also
upgrading both T Zone and F Zone resources into the indicated category. Engineering work on the Waterberg Projects consisted of
resource modelling, metallurgical work, bulk services design, mine planning and
engineering for a prefeasibility study planned for completion in 2016.
Additional drilling continued on the project. Based on a reinterpretation of
airborne gravity surveys and taking the latest drill hole results into
consideration, additional drilling northward along strike was planned for the
future. The next updated resource estimate for Waterberg, to be included in the
prefeasibility study, was expected after the then-current drilling program was
completed. At period end, to March 31, 2015, the Company had funded the
Companys and Mnombos combined 63% share of the work on the Waterberg JV
Project with the remaining 37% funded by JOGMEC. To March 31, 2015, the Company
had funded the Companys and Mnombos combined 100% share of the work on the
Waterberg Extension Project. Exploration work on the Waterberg Extension Project
began in a material way in late 2013. Waterberg Project  Pre-Feasibility Study and Mineral
Resource and Reserve Details On October 19, 2016, the Company announced positive results
from a PFS on the Waterberg Project completed by international and South African
engineering firm WorleyParsons RSA (Pty) Ltd. trading as Advisian. Technical
information in this Annual Report regarding the Waterberg Project is derived
from the NI 43-101 technical report filed 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 reserves and resources (the October 2016Waterberg 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.   141 The October 2016 Waterberg Report estimated that mineral
  resources in the T and F zones (100% project basis) increased to an
  estimated 24.886 million ounces 4E in the indicated category plus 10.802 million
ounces 4E in the inferred category: 
    Indicated 218.265 million tonnes grading 3.55
      g/t 4E (1.06 g/t Pt, 2.18 g/t Pd, 0.26 g/t Au, 0.04 g/t Rh, 2.5 g/t
      cut-off), plus 0.08% Cu and 0.15% Ni.
    Inferred 97.212 million tonnes grading 3.46 g/t
      4E (1.03 g/t Pt, 2.10 g/t Pd, 0.30 g/t Au, 0.03 g/t Rh, 2.5 g/t cut-off),
      plus 0.06% Cu and 0.11% Ni. The October 2016 Waterberg Report also estimated probable
mineral reserves in the T and F zones (100% project basis) estimated at
12.32 million ounces 4E plus 191.18 million pounds of copper and 333.04 million
pounds of nickel: 
    102.7 million tonnes grading 3.73 g/t 4E (1.11
      g/t Pt, 2.29 g/t Pd, 0.29 g/t Au, 0.04 g/t Rh, 2.5 g/t cut- off), plus
      0.08% Cu and 0.15% Ni. 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 PFS. The reader is cautioned to note that the mineral
reserves are included within the indicated mineral resources, and are not in
addition to them. As compared to earlier resource estimates, the increased F
zone grade in the latest updated resource estimate combined with improved
deposit definition allowed for the targeting of best grade thickness in early
mine scheduling for the PFS. Highlights of the PFS 
    Validation of the 2014 Waterberg PEA results for a large
      scale, shallow, decline accessible, mechanized platinum, palladium,
      rhodium and gold mine.
    Annual steady state production rate of 744,000 4E ounces
      in concentrate.
    A 3.5-year construction period.
    Onsite life-of-mine average cash cost of $248 per 4E
      ounce including by-product credits and exclusive of smelter discounts.
    After-tax Net Present Value (NPV) of $320
      million, at an 8% discount rate, using three-year trailing average metal
      prices.
    After-tax NPV of $507 million, at an 8% discount rate,
      using investment bank consensus average metal prices.
    Estimated capital to full production of approximately
      $1.06 billion including $67 million in contingencies. Peak project funding
      estimated at $914 million. Capital costs to full production and peak
      funding of the project are estimated in Rand 2016 terms at 15R/1USD with a
      flat exchange rate.
      Escalation of costs in Rand terms are estimated to be mostly
  offset over time by future Rand devaluation.    142 
    After-tax Internal Rate of Return
      (IRR) of 13.5% using three-year trailing average price deck.
    After-tax IRR of 16.3% at investment bank
      consensus average metal prices.
    Probable reserves of 12.3 million 4E ounces
      (2.5 g/t 4E cut-off).
    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 cut-off. As a result of the shallow depth, good grades and a fully
mechanized mining approach, the Waterberg Project has the opportunity to be a
safe mine within the lowest quartile of the Southern Africa 4E industry cost
curve. The project resources consist of 60% palladium and the PFS estimates that
Waterberg will produce approximately 744,000 4E ounces per year at full
production, of which 472,000 ounces would be palladium annually. It is estimated that Waterberg will create approximately 3,361
new primary highly trained jobs with transferable skills. The increased safety,
improved working conditions, low costs and decline access for rapid development
all provide attractive features compared to traditional platinum and palladium
mines in South Africa. The project is in an area prioritized for economic
development. Relations with the small rural community in the area have been
business like and positive. The estimates for the scope of work, within the given battery
limits, and subject to the qualifications, assumptions and exclusions contained
in the PFS, are considered to be within the accuracy range required for a PFS of
+25%. Monte Carlo simulation was used to provide a 12% contingency that
was used in the estimates. A minimum mining width has been set at three meters
so that all mining can be fully mechanized, safe and efficient Waterberg Projects  History of Acquisition The Waterberg JV Project is comprised of a contiguous granted
prospecting right area of approximately 255 km2 located on the
Northern Limb of the Bushveld Complex, approximately 70 km north of the town of
Mokopane (formerly Potgietersrus). The adjacent Waterberg Extension property
includes contiguous granted and applied-for prospecting rights with a combined
area of approximately 864 km2. 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. On September 28, 2009, PTM RSA, JOGMEC and Mnombo entered into
a joint venture agreement, as later amended on May 20, 2013 (the JOGMEC
Agreement) whereby JOGMEC could earn up to a 37% participating interest in
the Waterberg JV Project for an optional work commitment of $3.2 million over
four years, while at the same time Mnombo could earn a 26% participating
interest in exchange for matching JOGMECs expenditures on a 26/74 basis ($1.12
million). On November 7, 2011, the Company entered into an agreement with
Mnombo whereby the Company acquired 49.9% of the issued and outstanding shares
of Mnombo in exchange for cash payments totaling R1.2 million and an agreement
that the Company would pay for Mnombo's 26% share of costs on the Waterberg JV Project until the completion of a DFS.   143 On May 26, 2015, the Company announced a second amendment to
  the JOGMEC Agreement (the 2ndAmendment)
  whereby the Waterberg JV Project and the Waterberg Extension Project were to be
  consolidated and contributed into operating company, Waterberg JV Co. At August
  31, 2017, the Company held 45.65% of the Waterberg Project while JOGMEC held
  28.35% and Mnombo held 26%. Through its 49.9% share of Mnombo, the Company held
  an effective 58.62% of the Waterberg Project, at August 31, 2017. The transfer
  of Waterberg prospecting rights into Waterberg JV Co pursuant to the
  2nd Amendment was given section 11 approval by the DMR in August,
  2017 and the transfer was completed on September 21, 2017. Under the
  2nd Amendment, JOGMEC committed to fund $20 million in expenditures
  over a three-year period ending March 31, 2018, all of which had been funded by
  JOGMEC as of August 31, 2017 with $3.1 million still left to be spent. The
Company remained the Project operator under the 2nd Amendment. On November 6, 2017, the Company (along with JOGMEC and Mnombo)
closed the Initial Purchase with Implats and Implats acquired the Purchase and
Development Option. Further details on this transaction can be found above. Non-Material Mineral Property Interests  Maseve
Mine As described above, the Company is in process to complete the
Maseve Sale Transaction. The Maseve Mine is on care and maintenance and the
Company does not plan any further investment at Maseve. In the event that the
Maseve Sale Transaction did not complete for any reason, the Company would
pursue other expressions of interest to purchase the mine. Based on the
Companys intended sale of the Maseve Mine and the above facts, the Company has
determined that the Maseve Mine is no longer a material property of the Company
in the context of NI 43-101. The other non-material mineral property interests of the
Company include the War Springs and Tweespalk projects located in South Africa
and various Canadian mineral property interests. These non-material property
interests are not, individually or collectively, material to the Company. All
non-material properties other than the Maseve Mine have been written off. Maseve  Sale to Royal Bafokeng Platinum On September 6, 2017, the Company entered into a term sheet to
sell all rights and interests in Maseve to RBPlat in a transaction valued at
approximately $74.0 million, payable as $62.0 million in cash and $12.0 million
in RBPlat common shares, allocated as to $58.0 for plant facilities, tailings
impoundment facilities and surface rights, $11.0 million for purchase of loans
due from Maseve to PTM RSA and $5.0 million for purchase of 100% of the issued
common shares of Maseve, thereby acquiring Maseve and its underlying assets,
rights and permits, including the Maseve mining right. Definitive legal agreements for the Maseve Sale Transaction
were executed on November 23, 2017. A deposit in escrow was paid by RBPlat in
the amount of Rand 4,871,335 ($3.0 million equivalent) on October 9, 2017. The
Maseve Sale Transaction is to occur in two stages: 
    Pursuant to the terms of the Plant Sale Transaction,
      RBPlat is to pay Maseve $58 million in cash to acquire the concentrator
      plant and certain surface assets of the Maseve Mine, including an
      appropriate allocation for power and water. Maseve will retain ownership
      of the mining right, power and water rights as well as certain surface
      rights and improvements. The payment to be received by
Maseve will be remitted to the Companys South African
subsidiary, PTM RSA, in partial settlement of loans due to PTM RSA. This first
payment due from RBPlat is conditional upon the satisfaction or waiver of
certain conditions precedent by January 31, 2018, including but not limited to
the approval, or confirmed obligation, of the holder of the remaining 17.1%
equity interest in Maseve, Africa Wide; the approval of the Sprott Lenders
(defined below), LMM (defined below) and the other major lenders of the Company;
and the approval of the South African Competition Commission (Competition
Approval), which is expected to be received in late December, 2017 or in
January, 2018. Due diligence procedures required by RBPlat have been completed.    144 
    Pursuant to the terms of the Share Transaction, RBPlat is
      to pay PTM RSA $7.0 million in common shares of RBPlat plus approximately
      $4.0 million in cash to acquire PTM RSAs remaining loans due from Maseve,
      and is to pay PTM RSA and Africa Wide, in proportion to their respective
      equity interests in Maseve, a further $5.0 million by way of issuance of
      common shares of RBPlat to acquire 100% of the equity in Maseve. The
      second stage of the transaction is conditional upon implementation of the
      Plant Sale Transaction and, among other conditions, obtaining all
      requisite regulatory approvals including Ministerial Consent within three
      years after the Competition Approval. The RBPlat common shares to be
      issued pursuant to the Share Transaction will be priced at their 30- day
      volume weighted average price of the RBPlat common shares on the
      Johannesburg Stock Exchange calculated on market close on the day
      preceding the announcement of the Maseve Sale Transaction on September 6,
      2017. RBPlat is to be granted a sub-contractor arrangement for the
Maseve Mine and for carrying out care and maintenance services during the period
between the date of grant of the Competition Approval and the date of
Ministerial Consent. The Company will be responsible for 50% of care and
maintenance costs after Competition Approval until the earlier of the date of
Ministerial Consent and the date upon which RBPlat utilizes the surface
infrastructure of the Maseve Mine for its own purposes. PTMs proceeds from the Maseve Sale Transaction are to be used
to repay the Sprott Lenders and partially repay LMM, who were collectively owed
approximately $89 million in principal and accrued interest at August 31, 2017.
The Sprott Lenders and LMM have agreed to terms and conditions, upon completion
of which, they will provide their consent to the Maseve Sale Transaction. The
Company and RBPlat are in process to complete required regulatory filings, legal
agreements, procedures, etc. which are required for closing and which will also
satisfy the Sprott Lenders and LMMs requirements. RBPlat paid a deposit of
Rand 41.37 million ($3.0 million) into escrow on October 9, 2017. Should the
Maseve Sale Transaction not proceed as planned, the Company would seek to
otherwise dispose of Maseve promptly to other interested third parties, on terms
which may or may not be similar to the terms of the Maseve Sale Transaction,
failing which the Company would be in default of covenants and undertakings
pursuant to the Sprott Facility and the LMM Facility. Maseve  Operations Maseve Phase 1 underground development at the north mine
declines (the North Declines) and surface preparation for mill and
concentrator construction commenced in late 2010 and finished in late 2012.
Phase 1 site construction and underground development transitioned into Phase 2
in late 2012 and early 2013, consisting of an additional twin decline access and
development into the south mine portion of the deposit (the South
Declines), milling and concentrating facilities, a tailings storage
facility (TSF) and continued underground development at the north
mine. Phase 2 construction at the Maseve Mine was substantially
complete in late 2015 in terms of surface plant and equipment and the cost budget estimate scope of work.
Cold commissioning was carried out in December 2015 and January 2016. Hot
commissioning and first production occurred in February and March of 2016.
Several minor, occasional mechanical breakdowns have occurred at the mill, as
per normal operating expectations, since March of 2016. Mill recoveries since
commissioning have been consistent with design criteria.   145 Commissioning feed to the plant in February and March 2016 was
  primarily sourced from the low-grade development stockpiles. During April and
  May 2016, tonnes from underground development and mined tonnes from stoping were
  introduced along with the feed from the low-grade development stockpile. From
  May to November 2016, mill feed was primarily development material, being mostly
  muck from primary access headings developed on reef. During the second and third
fiscal quarters, access into planned mining stopes increased. Although mined tonnes increased from month to month since
December 2016, the tonnes mined and delivered were less than planned,
substantially due to low availability levels for trackless mobile machinery
(TMM), such as dump trucks (DTs) and load haul dump machines
(LHDs). Lower than required TMM availability restricted the ability to
remove waste and ore from the mine. Underperforming contractors and labour as well as poor
equipment maintenance skills were impediments to meeting development and
production targets at the Maseve Mine. During the second and third fiscal
quarters, the Company made certain changes. Underperforming contractors were
terminated or given a reduced scope of work, while at the same time, new
contractors were engaged. The Company also replaced several senior managers.
Improvements in operations did occur, but were not sufficient to meet plans. In addition to the production challenges discussed above,
during the third fiscal quarter Company engineers determined that in some areas
of Block 11 the bord and pillar mechanized mining method was not achieving
required efficiencies. Although produced tonnes from Block 11 had been
increasing, grade control was not being achieved. Based on extensive sampling,
face grades in Block 11 were determined to have generally met estimates, but the
fully mechanized bord and pillar mining method has resulted in excess dilution,
and therefore lower than planned grades delivered to the plant. As previously
reported, MR mine blocks exhibited rolling features where the critical zone of
the Bushveld Igneous Complex is near the Transvaal Sediment floor rocks. This
condition also exacerbates grade control issues when mechanized bord and pillar
mining is undertaken. On July 7, 2017 the Company announced it was taking steps to
restructure its mining operations at the Maseve Mine in South Africa due to the
slower than planned production ramp up. The restructuring was to involve a
change in primary mining method and cost reductions to create a sustainable
future for the mine. The changes were operationally driven to align costs with a
more gradual ramp-up of production using more selective mining methods. The
restructuring aimed to reduce ongoing costs and achieve positive, sustainable
cash flows utilizing already-established infrastructure. Restructuring work at
Maseve was suspended in early September 2017 prior to the Maseve Sale
Transaction. Maseve Mine  Financial Overview During the twelve month period ended August 31, 2017, the
Company incurred and capitalized $136 million (August 31, 2016 - $143 million)
in operating, development, construction, equipment and other costs for the
Maseve Mine. Revenue from produced concentrate sales during this twelve month
period amounted to $15.2 million (August 31, 2016 - $13.4 million), which was
treated as a reduction in capital costs.   146 During the year ended August 31, 2016 the Company incurred $143
  million (August 31, 2015 - $135 million) in development, construction, equipment
  and other costs for the Maseve Mine. As at August 31, 2016, the Company carried
  total deferred acquisition, development, construction, equipment and other costs
  related to the Maseve Mine of $470 million and another $2.0 million related to
  Project 3. An impairment charge of $41.4 million was recognized on the Maseve
  Mine. All revenue generated from the sale of concentrate is treated as a
  reduction in capital costs until such time as commercial production at Maseve is
  declared. Africa Wides non-controlling interest in Maseve as at August 31, 2016
was recorded at $34.1 million. A summary of monthly production since commissioning follows: Month
    Dry Tonnes
      Milled
    Average
      Grade in gms/tonne
    Recovery %
    4E Ounces
      in Concentrate
    Cumulative
      gradeCommissioning
    138,889
    0.69
    65.2
    2,013
    0.69April, 2016
    83,866
    0.86
    72.7
    1,682
    0.75May, 2016
    97,542
    0.77
    67.0
    1,612
    0.76June, 2016
    55,945
    1.11
    74.6
    1,488
    0.81July, 2016
    54,420
    1.01
    76.8
    1,362
    0.84August, 2016
    50,306
    1.48
    79.1
    1,893
    0.90September, 2016
    55,897
    1.29
    78.4
    1,823
    0.94October, 2016
    22,316
    1.59
    79.3
    907
    0.97November, 2016
    29,945
    1.58
    81.4
    1,237
    1.00December, 2016
    39,297
    1.51
    79.2
    1,509
    1.03January, 2017
    34,661
    1.53
    79.2
    1,351
    1.06February, 2017(1)
    36,848
    1.64
    82.3
    1,602
    1.09March, 2017(1)
    43,961
    1.88
    82.3
    2,189
    1.14April, 2017
    41,853
    2.00
    83.8
    2,256
    1.18May, 2017
    50,484
    1.81
    83.4
    2,480
    1.22June, 2017
    45,727
    1.82
    83.4
    2,225
    1.25July, 2017
    7,069
    2.18
    87.5
    434
    1.26August, 2017
    -
    -
    -
    -
    1.26September, 2017
    7,420
    2.37
    82.1
    463
    1.27October, 2017 (2)
    -
    -
    -
    -
    1.27Total
    896,446
    1.27
    78.1
    28,526
 Notes: (1)
    Approximately 7,825 dry tonnes of ore mined in February
      2017 were milled in March 2017 due to severe weather events. This table
      reflects final calculations by technical personnel and adjusts the results
      of milling these 7,825 dry tonnes from March 2017 back into February 2017
      results.(2)
    There were no tonnes milled in October 2017, although
      some concentrate deliveries took place in October as carry over from
      September milling. September milling was undertaken to fully utilize ore
      stockpiles on surface. At year end, an impairment charge was recognized for the Maseve
Mine in the amount of $589 million, reducing the current carrying value of the
Maseve Mine to approximately its net value pursuant to the Maseve Sale Transaction.   147 Maseve Mine-Africa Wide
Dilution In October 2013, Africa Wide elected not to fund its
approximate $21.8 million share of a unanimously approved project budget and
cash call for Project 1. In March 2014, Africa Wide elected not to fund its
$21.52 million share of a second unanimously approved cash call. As a result,
the Company entered into arbitration proceedings with Africa Wide in accordance
with the terms of the Maseve shareholders agreement (the Maseve Shareholders
Agreement) to determine Africa Wides diluted interest in Maseve, and
therefore Project 1 and Project 3. On August 20, 2014, an arbitrator ruled in
the Companys favour on all matters and Africa Wides shareholding in Maseve was
diluted to approximately 17.1% and the Companys ownership was increased to
approximately 82.9% . All funding provided by PTM RSA to Maseve for development and
construction at Project 1 since the second cash call missed by Africa Wide was
provided by way of intercompany loans. At August 31, 2017, Maseve owed PTM RSA
approximately $387 million. B.
    Liquidity and Capital
Resources Our working capital is a direct result of the excess of funds
raised from debt, the sale of equity shares and the receipt of payments for sale
of PGE concentrate over expenditures for operating costs, engineering costs,
exploration costs as well as administrative expenses. The working capital
balance at the end of the following periods were: August 31, 2017: $13 million;
August 31, 2016: ($21 million); August 31, 2015: $33 million. Cash and cash equivalents at August 31, 2017 totaled $3.4
million compared to $16.4 million at August 31, 2016 and $39.1 million at August
31, 2015. The cash and cash equivalents are attributable primarily to the issue
of debt or share capital. Aside from cash and cash equivalents, we had no
material unused sources of liquid assets at August 31, 2017, 2016 or 2015. As described elsewhere in this Annual Report, various legal,
contractual or economic restrictions may affect the ability of the Companys
subsidiaries to transfer funds to the Company as needed to satisfy the Companys
obligations. For information on the Companys borrowings as of August 31,
2017, see Item 18  Financial Statements, Note 8. Except in the case of JOGMECs $20 million funding commitment,
which has now been fully funded, and the potential for the receipt of funding if
Implats exercises its Purchase and Development Option, the exercise of which is
not guaranteed and is not expected to occur prior to the completion of the DFS,
funding of Waterberg Project costs is generally required to be provided by
Waterberg JV Co. shareholders on a pro rata basis. See Item 4.A.  Recent
Developments  Implats Transaction. For anticipated Waterberg Project capital
expenditures, see Item 4.B.  Material Mineral Property Interests  Waterberg
Project Summary (Excerpted from the October 2016 Waterberg Report).   148 Going Concern The Company currently has limited financial resources and
subsequent to year-end has announced the sale of the Maseve Mine for gross
proceeds of $74 million and in addition Implats has completed the strategic acquisition of an 8.6% interest in the Waterberg
Project from the Company for $17.2 million, which was paid to the Company on
November 6, 2017. As a result of these two transactions the debt repayment
schedules with Sprott and LMM have been crystalized. The Company has no sources
of operating income at present. The Companys ability to continue operations in
the normal course of business will therefore depend upon its ability to secure
additional funding by methods which could include debt refinancing, equity
financing, sale of assets and strategic partnerships. Management believes the
Company will be able to secure further funding as required. Nonetheless, there
exist material uncertainties resulting in substantial doubt as to the ability of
the Company to continue to meet its obligations as they come due.   149 Equity Financings On December 31, 2014, the Company announced the closing of the
December 2014 Offering for 214,800,000 common shares at a price of $0.53 per
share resulting in gross proceeds of $113.8 million. Net proceeds to the Company
after fees, commissions and costs were approximately $106 million. On May 26, 2016, the Company announced the closing of the May
2016 Offering for 11,000,000 common shares at a price of $3.00 per share
resulting in gross proceeds of $33 million. Net proceeds to the Company after
fees, commissions and costs were approximately $30 million. On November 1, 2016, the Company announced the closing of the
November 2016 Offering for 22,230,000 common shares at a price of $1.80 per
share resulting in gross proceeds of $40 million. Net proceeds to the Company
after fees, commissions and costs were approximately $37 million. On January 31, 2017, the Company announced the closing of the
January 2017 Offering for 19,693,750 common shares at a price of $1.46 per share
resulting in gross proceeds of $29 million. Net proceeds to the Company after
fees, commissions and costs were approximately $26 million. On April 26, 2017, the Company announced the closing of the
April 2017 Offering for 15,390,000 common shares at a price of $1.30 per share,
for aggregate gross proceeds of $20 million. Net proceeds to the Company after
fees, commissions and costs were approximately $18.4 million. The following is a reconciliation for the use of proceeds from
the December 2014 Offering, May 2016 Offering, November 2016 Offering, January
2017 Offering and April 2017 Offering: Use of Proceeds(In millions of dollars)
    
    Project 1undergrounddevelopment andproduction
      ramp-up**costs (100% basis) (1)**
    
    
    Workingcapitalduring start-up
    (2)
    
    
    Repaymentof SecondAdvance(3)
    
    
    Generalcorporatepurposes
    
    
    TotalAs Estimated in the December 19, 2014 Prospectus
    $
    106.00
    (4)
    $
    -
    
    $
    -
    
    $
    -
    
    $
    106.00As
      Estimated in the May 18, 2016 Prospectus
    $
    30.30
    
    $
    -
    
    $
    -
    
    $
    -
    
    $
    30.30As Estimated in the October 25, 2016 Prospectus Supplement
    $
    22.00
    
    $
    9.40
    
    $
    5.00
    
    $
    0.56
    
    $
    36.96As
      Estimated in the January 24, 2017 Prospectus Supplement
    $
    8.50
    
    $
    4.00
    
    $
    -
    
    $
    13.88
    (5)
    $
    26.38As Estimated in the April 19, 2017 Prospectus Supplement
    $
    11.70
    
    $
    3.50
    

    $
    2.50
    
    $
    0.66
    
    $
    18.36Aggregate Amount
    $
    178.50
    
    $
    16.90
    
    $
    7.50
    
    $
    15.10
    
    $
    218.00Actual to August 31, 2017(6)
    $
    200.00
    
    $
    13.00
    
    $
    5.00
    
    $
    -
    
    $
    218.00   150 Notes: (1)
    Assumed that Africa Wide would elect not to contribute to
      Maseve in order to match its pro rata share of Project 1 funding. Any
      funding from Africa Wide or a new joint venture partner would reduce the
      Companys funding requirements.(2)
    May be used for interest payable under the Sprott
      Facility, wages and salaries and other estimated general and
      administrative costs.(3)
    The proceeds from the Second Advance were used to fund
      underground development and production ramp- up at Project 1. The Sprott
      Lenders elected for earlier repayment of one half of the Second Advance
      from the proceeds of the November 1, 2016 offering. The balance of the
      Second Advance was repaid from the net proceeds of the April 26, 2017
      offering.(4)
    Includes $103 million estimated in the December 19, 2014
      Prospectus and the balance of net proceeds from the offering represented
      by the over-allotment option, which was exercised in part. Use of proceeds
      was dedicated to fund Phase 2 development at the Maseve Mine.(5)
    Includes $10.35 million estimated in the January 24, 2017
      Prospectus Supplement and the balance of net proceeds from the offering
      represented by the over-allotment option, which was exercised in
    full.(6)
    This row shows only the portion of the net proceeds of
      the November 1, 2016 and January 31, 2017 offerings that were spent during
      the period of November 1, 2016 to August 31, 2017. Convertible Senior Subordinated Notes On June 30, 2017, the Company issued and sold to certain
institutional investors $20 million aggregate principal amount of 6 7/8%
convertible senior subordinated notes due 2022 (the Notes). The Notes
will bear interest at a rate of 6 7/8% per annum, payable semi-annually on
January 1 and July 1 of each year, beginning on January 1, 2018, in cash or at
the election of the Company, in common shares of the Company or a combination of
cash and common shares, and will mature on July 1, 2022, unless earlier
repurchased, redeemed or converted. Subject to certain exceptions, the Notes will be convertible at
any time at the option of the holder, and may be settled, at the Company's
election, in cash, common shares, or a combination of cash and common shares. If
any Notes are converted on or prior to the three and one-half year anniversary
of the issuance date, the holder of the Notes will also be entitled to receive
an amount equal to the remaining interest payments on the converted Notes to the
three and one-half year anniversary of the issuance date, discounted by 2%,
payable in common shares. The initial conversion rate of the Notes is 1,001.1112
common shares per $1,000 principal amount of Notes, which is equivalent to an
initial conversion price of approximately $0.9989 per common share, representing
a conversion premium of approximately 15% above the NYSE American closing sale
price for the Companys common shares of $0.8686 per share on June 27, 2017. The
conversion rate will be subject to adjustment upon the occurrence of certain
events. If the Company pays interest in common shares, such shares will be
issued at a price equal to 92.5% of the simple average of the daily
volume-weighted average price of the common shares for the 10 consecutive
trading days ending on the second trading day immediately preceding the payment
date, on the NYSE American exchange or, if the common shares are not then listed
on the NYSE American exchange, on the principal U.S. national or other
securities exchange or market on which the common shares are then listed or
admitted for trading. Notwithstanding the foregoing, no holder will be entitled to
receive common shares upon conversion of Notes to the extent that such receipt
would cause the converting holder or persons acting as a group to become, directly or indirectly, a beneficial owner (as
defined in the indenture governing the Notes, dated June 30, 2017 between the
Company and The Bank of New York Mellon (the Indenture)) of more than
19.9% of the common shares outstanding at such time or, in the case of a certain
note holder, if it or its affiliates would become a beneficial owner of more
than 4.9% of the common shares outstanding at such time. In addition, the
Company will not issue an aggregate number of common shares pursuant to the
Notes that exceeds 19.9% of the total number of common shares outstanding on
June 30, 2017.   151 Prior to July 1, 2018, the Company may not redeem the Notes,
  except upon the occurrence of certain changes to the laws governing Canadian
  withholding taxes. On or after July 1, 2018 and before July 1, 2019, the Company
  shall have the right to redeem all or part of the Notes at a price, payable in
  cash, of 110.3125% of the principal amount of the Notes to be redeemed, plus
  accrued and unpaid interest, if any, to, but excluding, the redemption date; on
  or after July 1, 2019 and before July 1, 2020, the Company shall have the right
  to redeem all or part of the outstanding Notes at a price, payable in cash, of
  105.15625% of the principal amount of the Notes to be redeemed, plus accrued and
  unpaid interest, if any, to but excluding, the redemption date; and on or after
  July 1, 2010, until the maturity date, the Company shall have the right to
  redeem all or part of the outstanding Notes at a price, payable in cash, of 100%
  of the principal amount of the Notes to be redeemed, plus accrued and unpaid
interest, if any, to, but excluding, the redemption date. Upon the occurrence of a fundamental change as defined in the
Indenture, the Company must offer to purchase the outstanding Notes at a price,
payable in cash, equal to 100% of the principal amount of the Notes, plus
accrued and unpaid interest, if any. The Company agreed in the Indenture to cause a prospectus and a
registration statement to be filed with Canadian securities regulatory
authorities and with the U.S. Securities and Exchange Commission, as applicable,
and become usable and effective within six months after June 30, 2017, and to
remain usable and effective for certain periods. The Indenture provides that if
the Company does not do so, it shall pay additional interest on the Notes at a
rate of 0.25% per annum for the first 90 days and at a rate of 0.50% per annum
thereafter, until the Notes are freely tradable by holders other than affiliates
and certain other events have occurred. The Company does not anticipate filing
the prospectus and registration statement and, accordingly, anticipates paying
additional interest as provided for in the Indenture. The Notes will be unsecured senior subordinated obligations and
will be subordinated in right of payment to the prior payment in full of all of
the Companys existing and future senior indebtedness pursuant to the Indenture.
The Company may issue additional Notes in accordance with the terms and
conditions set forth in the Indenture. The Indenture contains certain additional
covenants, including covenants restricting asset dispositions, issuances of
capital stock by subsidiaries, incurrence of indebtedness, business combinations
and share exchanges. Sprott Facility On February 13, 2015, the Company entered into a secured credit
agreement with the Sprott Lenders, led by Sprott, for the Sprott Facility of up
to $40 million. On November 20, 2015, the Company drew down $40 million under
the Sprott Facility. The Sprott Facility was amended, or amended and restated,
as applicable, on November 19, 2015, May 3, 2016, September 19, 2016, October
11, 2016, January 13, 2017, April 13, 2017, June 13, 2017 and September 25,
2017.   152 On October 11, 2016, the Second Advance was advanced to the
Company, with half of this amount repaid at the request of Sprott in November
2016 and the remaining $2.5 million repaid in April 2017. A Bridge Loan was
later advanced to the Company by Sprott consisting of $3.5 million on September
26, 2017 and a further $1.5 million on October 18, 2017. The Company repaid the
Bridge Loan in full November 17, 2017. The maturity date of the Sprott Facility is the earlier of: (i)
January 31, 2018 and (ii) ten days after the closing of the Plant Sale
Transaction. Interest is compounded and payable monthly at an interest rate of
LIBOR plus 8.5% . The Sprott Lenders have a first priority lien on: (i) the
issued shares of PTM RSA held by the Company (and such other claims and rights
described in the applicable pledge agreement); (ii) all present and
after-acquired personal property of the Company; and (iii) the shares PTM RSA
holds in Waterberg JV Co. The Sprott Facility is also guaranteed by PTM RSA. The Company has made or agreed to make certain payments to the
Sprott Lenders in connection with the Sprott Facility, including: (a) the
issuance of 348,584 common shares in connection with the November 2015 draw down
of the Sprott Facility; (b) a structuring fee comprised of a cash payment in the
amount of $100,000, paid concurrently with the execution and delivery of the
term sheet for the Sprott Facility; (c) a bonus payment in the amount of
$1,500,000, payable in the form of 283,019 common shares issued concurrently
with the execution of the Sprott Facility, (d) a standby fee in cash equal to 4%
per annum of the daily unadvanced principal amount of the Sprott Facility
payable in monthly instalments until December 31, 2015; (e) the issuance of
131,654 common shares in connection with the May 2016 amendment; (f) the
issuance of 801,314 common shares in connection with the September 2016
amendment (g) the issuance of 113,963 common shares in connection with the
Second Advance; (h) the issuance of 275,202 shares in connection with the
January 2017 amendment; (i) a $250,000 cash bonus which was paid in connection
with the September 2017 amendment, and (j) the payment of a fee of $200,000 due
upon the maturity or repayment of the Sprott Facility in connection with the
June 2017 amendment. On December 22, 2017 the Sprott Lenders advanced the Company
$2.75 million pursuant to a new bridge loan (the New Bridge Loan)
whereby the Sprott Lenders will provide up to $5.0 million before January 31,
2018. For more details, see Amendments to the Sprott Facility and the LMM
Facility. LMM Facility On November 20, 2015, the Company also drew down $40 million
from the LMM Facility, pursuant to the LMM Credit Agreement entered into on
November 2, 2015, which was later amended, or amended and restated, as
applicable on May 3, 2016, September 19, 2016, January 13, 2017, April 13, 2017,
June 13, 2017, June 23, 2017 and October 30, 2017, with LMM. The interest rate on the LMM Facility is LIBOR plus 9.5% .
Interest payments on the LMM Facility are to be accrued monthly and capitalized
until March 31, 2018, and then paid to LMM quarterly thereafter. LMM has a second priority lien on: (i) the issued shares of PTM
RSA held by the Company (and such other claims and rights described in the
applicable pledge agreement); (ii) all present and after-acquired personal
property of the Company; and (iii) the shares held by PTM RSA in Waterberg JV
Co. The LMM Facility is also guaranteed by PTM RSA. LMM and Sprott entered into
an intercreditor agreement under which, among other things, LMM agreed to
subordinate certain rights and to be bound by certain restrictions in favor of
Sprott.   153 The Company has made or agreed to make certain payments to LMM
in connection with the LMM Facility, including: (a) the issuance of 348,584
common shares in connection with the November 2015 draw down of the LMM
Facility; (b) the issuance of 131,654 common shares in connection with the May
2016 amendments; (c) the issuance of 801,314 common shares in connection with
the September 2016 amendments; (d) the issuance of 293,616 common shares in
connection with the January 2017 amendments; and (e) the payment of a fee of
$400,000 due upon the maturity or repayment of the Sprott Facility in connection
with the June 2017 amendment. Amendments to the Sprott Facility and LMM
Facility Under the Sprott Facility and the LMM Facility the Company
agreed to customary and usual covenants for facilities and agreements of this
nature. Based on delays to the ramp-up of production (as described above), the
Sprott Facility and the LMM Facility were amended several times during fiscal
2017 to revise certain covenants and conditions, including production targets,
to waive cash sweep requirements, to waive working capital requirements and to
defer repayment requirements. In exchange for these amendments and waivers the
Company at times paid consideration to Sprott and LMM as follows: 
    In January 2017 the Company paid an amount equal to
      $425,000 to the Sprott Lenders and an amount equal to $453,440 to LMM, in
      each case representing 1% of the outstanding principal amount of the
      applicable facility, payable by the issuance of 275,202 Company common
      shares to the Sprott Lenders and 293,616 Company common shares to LMM. The
      common shares were issued at a deemed price of C$2.0277, equal to the
      volume weighted average trading price of the Companys common shares on
      the Toronto Stock Exchange for the 10 trading days immediately prior to
      the date of the amendments, less a 10% discount, converted into Canadian
      dollars using the Bank of Canada noon spot rate for the purchase of
      Canadian dollars on the first business day immediately preceding the date
      of the amendments.
    In June 2017 the Company agreed to pay a fee of $200,000
      to Sprott and $400,000 to LMM in consideration of amendments, both
      payments to be made at the same time upon the maturity or repayment of the
      Sprott Facility. The LMM Facility is in second secured position and is
      scheduled for repayment subsequent to the Sprott Facility. In October 2017, the Company agreed with Sprott and LMM to a
specific use of the Companys $17.2 million in proceeds from the Initial
Purchase consummated in connection with the Implats Transaction, including: (i)
repayment of any principal or fees related to the Bridge Loan; (ii) payment of
certain outstanding payables and general administrative expenses (including
certain transaction fees related to the Implats Transaction); (iii) care and
maintenance costs of the Maseve Mine during the sale closing period; and (iv)
the Companys $5.0 million share of planned DFS costs. The Company is to place
approximately $7.0 million in reserve and escrow accounts for dedication to the
costs described at items (ii) and (iii) above. Proceeds from the Maseve Sale
Transaction are to be used first to repay indebtedness under the Sprott Facility
($40.0 million) and second to partially repay indebtedness under the LMM
Facility (approximately $33.0 million). In consideration for LMMs consent to the Implats Transaction,
the Company has, among other things, done the following: 
    Delivered an amended and restated LMM Facility agreement
      which, among other things: (a) amended the term of the LMM Facility to
      mature the later of September 30, 2018 and four months after the closing
      of the Plant Sale Transaction, provided that if the Plant Sale Transaction
      does not close by December 31, 2018, the maturity date shall be December
31, 2018; (b) requires that 50% of net proceeds raised by the Company in an
equity financing of over $500,000 be used for repayment of outstanding loan
facilities; and (c) adds additional events of default for failing to be listed
on the TSX, breaches under material agreements, a decrease in its equity
ownership in Waterberg JV Co. beyond the decrease to occur as a result of the
Implats Transaction and failing to close the Maseve Sale Transaction prior to
December 31, 2018.    154 
    Agreed to raise $20.0 million in subordinated debt and/or
      equity within 30 days of the Sprott Facility being repaid and raise a
      further $10.0 million in subordinated debt and/or equity before June 30,
      2018. Proceeds in each instance are to repay and discharge amounts due
      firstly to Sprott and secondly to LMM.
    Delivered a termination agreement to the production
      payment agreement between LMM and the Company pursuant to which a
      termination fee for the Maseve Mine production payment obligation due to
      LMM must be settled either by payment of $15.0 million before March 31,
      2018 or by payment of $25.0 million between March 31, 2018 and the New LMM
      Maturity Date. This termination fee is secured by the same security
      securing the LMM Facility. In consideration for Sprott providing the Bridge Loan and
Sprotts consent to the Implats Transaction, the Company has delivered an
amendment to the Sprott Facility agreement which: (a) amends the term of the
loan to mature on earlier of (i) January 31, 2018 and (ii) ten days after the
closing of the Plant Sale Transaction; (b) requires that 50% of net proceeds
raised by the Company in an equity financing of over $500,000 be used for
repayment of outstanding indebtedness under the Sprott Facility; (c) adds events
of default for failing to be listed on the Toronto Stock Exchange (the TSX),
breaches under material agreements, a decrease in equity ownership in Waterberg
JV Co. beyond the decrease to occur as a result of the Implats Transaction and
failing to close the Maseve Sale Transaction prior to December 31, 2018; and (d)
requires the Company to pay the Sprott Lenders a cash bonus of $250,000, which
was paid on September 26, 2017. On December 22, 2017 the Sprott Lenders advanced the Company
$2.75 million pursuant to the New Bridge Loan whereby the Sprott Lenders will
provide up to $5.0 million before January 31, 2018. The proceeds of the New
Bridge Loan are to fund direct expenditures relating to the closure and ongoing
care and maintenance of the Maseve Mine, reasonable corporate overhead
expenditures and outstanding amounts due and owing to the Lenders. The new
Bridge Loan is subject to the same security provisions, interest rate, and
covenants as the existing Sprott Facility, as amended. The outstanding principal
amount of the New Bridge Loan, together with any accrued but unpaid interest,
will be immediately due and payable in full on the earlier of i.) the date which
is 10 business days after the closing of the Plant Sale Transaction; ii.) the
closing of any equity or debt financing by the Company; and iii.) January 31,
2018. In consideration for the New Bridge Loan the Sprott Lenders were paid a
bonus fee of $250,000 on December 22, 2017. In October 2017, the Company agreed to pay to BMO and Macquarie
an aggregate of $1.0 million within 15 business days of the closing of the
Initial Purchase for services previously provided (which payment has been made).
In October 2017, the Company also agreed with BMO and Macquarie to pay BMO and
Macquarie an aggregate of approximately $2.9 million following the repayment of
the Sprott Facility and the LMM Facility for services previously provided.   155 Accounts Receivable and Payable Accounts receivable at August 31, 2017, totaled $2.1 million
  (August 31, 2016 - $6.1 million) being comprised mainly of pre-production
  proceeds of $1.6 million in the current period ($2.8 million at August 31, 2016)
  and value added taxes refundable in South Africa of $2.6 million ($1.8 million
  at August 31, 2016). Accounts payable and accrued liabilities at August 31,
  2017, totaled $16.4 million (August 31, 2016 - $16.9 million). Accounts receivable at August 31, 2016 totaled $6.1 million
(August 31, 2015 - $10.1 million) being comprised mainly of pre-production
proceeds of $2.8 million in the current year and value added taxes refundable in
South Africa of $6.2 million in the previous year. Accounts payable and accrued
liabilities at August 31, 2016 totaled $16.9 million (August 31, 2015 - $16.4
million). C.
    Research and Development, Patents and Licences,
      etc. We do not engage in research and development activities. D.
    Trend Information The Companys key business objectives are to complete the
Maseve Sale Transaction and to advance the Waterberg Project. In the near term,
the Companys liquidity will be constrained until the Maseve Sale Transaction is
complete and financing has been obtained to repay and discharge remaining
amounts due firstly to the Sprott Lenders (if any) and secondly to LMM and for
working capital purposes. As described above, the Company must raise $20.0
million in debt and or equity within 30 days of the first lien Sprott Facility
being repaid and raise a further $10.0 million in debt and or equity by June 30,
2018. Amounts due to LMM include the termination fee for the Maseve Mine
production payment obligation due in the amount of $15.0 million, if paid by
March 31, 2018. The Company plans to advance the Waterberg Project to
completion of a DFS and a construction decision. Under the terms of the Implats
Transaction a DFS budget of $10.0 million has been established by Waterberg JV
Co. and the Company has set aside an amount of $5.0 million from its proceeds of
the Initial Purchase toward its share of DFS costs. Drilling to increase the
confidence in certain areas of the known mineral resource to the measured
category is underway. Engagement with utilities for the delivery of bulk
services is in process. Engineering work on the Waterberg Project includes
resource modelling, metallurgical work, optimization of the metallurgical flow
sheet using South African and Japanese expertise, bulk services design and
mechanized mine planning. Optimization of the mine plan and working on reducing
underground sustaining development capital will be part of the upcoming DFS.
Waterberg JV Co. plans to file a mining right application during 2018, based
substantially on the results of the October 2016 Waterberg Report. The Company has been actively engaged with shareholders to
explain the new focus on the Waterberg Project and the Companys immediate and
medium term plans. Market interest in palladium has recently been increasing.
The Company believes that the transaction with Implats provides an endorsement
of the Waterberg Project and a mine to market roadmap. Factors which may have a material effect on our net sales or
revenues, income from continuing operations, profitability, liquidity or capital
resources, or that would cause reported financial information not necessarily to
be indicative of future operating results or financial condition are set forth
in Item 3.D.- Risk Factors.   156 E.
    Off-Balance Sheet
Arrangements There are no off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that is material to
investors. F.
    Tabular Disclosure of Contractual
    Obligations The following table discloses our contractual obligations at at
August 31, 2017 for loan indebtedness, services, optional mineral property
acquisition payments, optional exploration work and committed lease obligations
for office rent and equipment. Contractual Obligations
    
    Payments due by period(in thousands
      of dollars)< 1 Year
    
    
    1  3 Years
    
    
    3  5 Years
    
    
    > 5 Years
    
    
    TotalLease obligations
    $
    564
    
    $
    1,159
    
    $
    -
    
    $
    -
    
    $
    1,723Eskom - Power
    
    3,626
    
    
    -
    
    
    -
    
    
    -
    
    
    3,626Mining Development
    
    6,853
    
    
    -
    
    
    -
    
    
    -
    
    
    6,853Mining Indirect and Other
    
    2,494
    
    
    -
    
    
    -
    
    
    -
    
    
    2,494Sprott Facility
    
    30,002
    
    
    13,821
    
    
    -
    
    
    -
    
    
    43,823LMM
      Facility
    
    19,233
    
    
    29,735
    
    
    21,515
    
    
    -
    
    
    70,483Totals
    $
    62,772
    
    $
    44,715
    
    $
    21,515
    
    $
    -
    
    **$**
    **129,002**  ITEM 6.
    DIRECTORS, SENIOR MANAGEMENT AND
      EMPLOYEES  A.
    Directors and Senior
Management The following table sets forth our current directors and
executive officers, with each position and office held by them. As of December
20, 2017, directors and executive officers of the Company, as a group,
beneficially own, control or direct, directly or indirectly, approximately
534,859 common shares representing approximately 0.36% 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. Name and
      Place of
    
    
  Date First Elected orResidence
    Position
    Age
  AppointedR. MICHAEL JONES
      British Columbia, Canada
    President, Chief Executive Officer and Director
    54
    February 18, 2002FRANK R.
      HALLAM British Columbia, Canada
    Chief
      Financial Officer, Corporate Secretary and Director
    57
    February 18, 2002BARRY SMEE
      (1)(2)(3)British Columbia, Canada
    Director
    71
    February 18, 2002    157 Name and
      Place of
    
    
  Date First Elected orResidence
    Position
    Age
  AppointedIAIN McLEAN
      (1)(2)(3)British Columbia, Canada
    Director (Chairman of the Board)
    62
    February 18, 2002ERIC CARLSON
      (1)British Columbia, Canada
    Director
    59
    February 18, 2002TIMOTHY D.
      MARLOW British Columbia, Canada
    Director
    73
    June
      15, 2011DIANA WALTERS
      (1)(2)(3)North Salem, New York, USA
    Director
    54
    July
      16, 2013 Notes: (1)
    Member of the Audit Committee(2)
    Member of the Compensation Committee(3)
    Member of the Governance and Nomination
  Committee R. Michael Jones Mr. Jones has over twenty five years of
experience as a professional geological engineer and has been involved with the
raising of over $1 billion for exploration, mining development and production.
In addition to co-founding Platinum Group Metals Ltd., Mr. Jones was a founder
of Glimmer Resources Inc. and was responsible for the discovery of the Glimmer
Gold mine, now Blackfox, in Ontario. During a six-year tenure as President of
Cathedral Gold Corp., Mr. Jones ran a producing gold mining company and was
involved in the review of a feasibility study and financing for the $1 billion
Diavik Mine project during two years as Vice President with Aber Resources. Mr.
Jones was a co-founder and director of West Timmins Mining that was purchased by
producing company Lake Shore Gold Corp. in 2009 and was a co-founder and former
director until 2012 of MAG Silver Corp. Mr. Jones is a Director, President and
Chief Executive Officer of West Kirkland Mining Inc. and a director of
Nextraction Energy Corp. Mr. Jones served on the Securities Policy Advisory
Committee of the British Columbia Securities Commission for six years and holds
a B.A.Sc. in geological engineering from the University of Toronto. Frank R. Hallam Mr. Hallam was the original founder of New
Millennium Metals Corp, a predecessor company to Platinum Group Metals Ltd. Mr.
Hallam has extensive operating and financial experience at the senior management
level with several TSX and NYSE listed resource companies and has over twenty
years of experience working in East and South Africa. In his role as CFO and
Director with Tan Range Exploration he set up and administered exploration
offices in Tanzania, Ethiopia and Eritrea, among others. Mr. Hallam has been
involved in raising over $1 billion for exploration, mining development and
production and has been involved in negotiating and managing property deals with
Anglo Platinum Ltd., Barrick Gold Corporation, Johannesburg Consolidated
Investments and Newmont Mining Corporation. Mr. Hallam was a co-founder and
director of West Timmins Mining that was purchased by producing company Lake
Shore Gold Corp. in 2009, where he served as a director until April 2016. Mr.
Hallam was a co-founder and former director until 2014 of MAG Silver Corp. Mr.
Hallam also serves as CFO, Corporate Secretary & Director of West Kirkland
Mining Inc. and is a director of Nextraction Energy Corp. Mr. Hallam previously
served as an auditor in the mining practice of Coopers and Lybrand. He is a
chartered accountant and has a degree in business administration from Simon
Fraser University.   158 Barry Smee Dr. Smee has over forty years of experience
in the mining industry as a geologist and geochemist. He is a founder of Smee
and Associates, an international geology and geochemistry consulting firm. He
has been an advocate of the use of geochemistry in exploration programs and has
provided guidance in the use of quality control methods for major mining firms
and Canadian stock exchanges and regulatory bodies. Dr. Smee holds a B.Sc. in
chemistry and geology from the University of Alberta and a Ph.D. in geochemistry
from the University of New Brunswick. He has been awarded the CIM J.C. Sproule
Memorial Plaque for outstanding contribution to geochemical knowledge in Canada.
Mr. Smee has indicated that he will not stand for re-election as a director of
the Company in 2018. Iain McLean Mr. McLean is experienced in mine
operations and senior management positions in technology companies. Mr. McLeans
past roles include Chief Operating Officer of MineSense Technologies from August
2014 to September 2015; and Vice President for Gemcom Software
International/Dassault Systemes GEOVIA from June 2010 to July 2014. Mr. McLean
holds a degree in mining engineering from the Royal School of Mines, a Degree in
Archaeology from the University of Leicester
and a Masters Degree in Egyptology from Cambridge
University. Mr. McLean
also holds an M.B.A. from Harvard Business School. Eric Carlson Mr. Carlson is a co-founder and CEO of
Anthem Works Ltd., a Vancouver based real estate investment, development and
management company. Through Anthem Works, Mr. Carlson is involved as a director,
co-founder or significant shareholder in a variety of technology, mining and
energy, and consumer products and services businesses. Of public issuers, Mr.
Carlson is a director of Nextraction Energy Corp. and a former director of Mag
Silver Corp. He is a Fellow of the BC Institute of Chartered Accountants and
holds a Bachelor of Commerce from the University of British Columbia. Mr.
Carlson has indicated that he will not stand for re-election as a director of
the Company in 2018. Timothy D. Marlow Mr. Marlow has over thirty years of mining
engineering and mine operating experience in North America, South America,
Africa and Asia. His mining and project experience spans the world and he has
specific African experience in Ghana and Zambia. Mr. Marlow is President of
Marlow & Associates since 1995 and was President of Philippine Gold
Consulting LLC from 1995  2014. Mr. Marlow is a graduate of
the Camborne School of Mines and is registered as a C.Eng, Registered Charter
Engineer in the UK. He is a member of the Institute of Mining and Metallurgy UK
and a Qualified Person as defined by NI-43-101 for mining. Diana Walters Ms. Walters has over twenty-seven years of
experience in the Natural Resources sector, both as an investment banker and in
operating roles. She is the former President and CEO of Liberty Metals &
Mining, LLC and was a Managing Partner of Eland Capital, LLC, a Natural
Resources advisory firm. Ms. Walters has extensive investment experience with
both debt and equity through leadership roles at Credit Suisse, HSBC and other
firms. Ms. Walters graduated with honors from the University of Texas at Austin
with a BA in Plan II Liberal Arts and an MA in Energy and Mineral Resources. There are no family relationship between
any of the persons named above. Furthermore, there are no arrangements or
understandings with major shareholders, customers, suppliers or others, pursuant
to which any of the persons named above were selected as a director or member of
senior management.   159 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 Annual Report 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): (i)
    is, as at the date of this Annual
      Report 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 Annual Report, 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:   160 (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. Promoters No individuals acted as promoters of the
Company within the two most recently completed financial years or during the
current financial year. B.
    Compensation The following table sets forth all compensation paid or accrued
by our company to our directors and members of our administrative, supervisory
or management bodies for the year ended August 31, 2017. Annual
    
    
    
    
    
    
    
    
    **Long Term
      Compensation (1)**Year
    
    
    Compensation
    
    
    
    
    
    
    
    
    **Awards
      (1)**
    
    
    PayoutsName and
    
    
    
    
    
    
    
    
    
    
    
    
    
    SecuritiesPrincipal
    
    
    
    
    
    
    
    
    
    
    
    
    
    UnderPosition
    
    
    
    
    
    
    
    
    
    
    
    
    
    Options/
    
    
    RestrictedSARs
    
    
    Shares /Other Annual
    
    
    Granted
    
    
    Units
    
    
    LTIP
    
    
    All OtherSalary
    
    
    Bonus
    
    
    Compensation
    
    
    **(1)**
    
    
    Awarded
    
    
    Payouts
    
    
    Compensation($)
    
    
    ($)
    
    
    ($)
    
    
    (#)
    
    
    ($)
    
    
    ($)
    
    
    ($)R. Michael Jones
      President, CEO and Director
    
    2017
    
    $
    397,366
    
    $
    -
    
    $
    -
    
    
    200,000
    
    $
    -
    
    $
    -
    
    $
    -Frank Hallam CFO, Corp. Secretary
      and Director
    
    2017
    
    $
    359,521
    
    $
    -
    
    $
    -
    
    
    175,000
    
    $
    -
    
    $
    -
    
    $
    -Iain McLean Chairman and Director
    
    2017
    
    $
    -
    
    $
    -
    
    $
    56,767
    
    
    125,000
    
    $
    -
    
    $
    -
    
    $
    -Barry Smee Director
    
    2017
    
    $
    -
    
    $
    -
    
    $
    45,413
    
    
    125,000
    
    $
    -
    
    $
    -
    
    $
    -Eric Carlson Director
    
    2017
    
    $
    -
    
    $
    -
    
    $
    56,767
    
    
    125,000
    
    $
    -
    
    $
    -
    
    $
    -Timothy D. Marlow Director
    
    2017
    
    $
    -
    
    $
    -
    
    $
    59,037
    
    
    125,000
    
    $
    -
    
    $
    -
    
    $
    21,193Diana Walters Director
      Note:
    
    2017
    
    $
    -
    
    $
    -
    
    $
    37,844
    
    
    125,000
    
    $
    -
    
    $
    -
    
    $
    -  (1)
    For additional details, see Item 6.E Share
    Ownership.    161 During the year ended August 31, 2017, no amounts were set
aside for the foregoing persons to provide pension, retirement or similar
benefits. C.
    Board Practices The board of directors has determined the number of directors
at seven and currently consists of seven directors. Each director was elected at
the annual general meeting of our stockholders held on February 23, 2017. Each director elected will hold office until the next annual
general meeting of the Company or until his or her successor is elected or
appointed, unless his or her office is earlier vacated in accordance with the
Articles of the Company or the provisions of the Business Corporations Act(British Columbia). See Directors and Senior Management for the dates on
which our current directors were first elected or appointed. On January 13, 2015, the Board adopted a majority voting policy
(the Policy), as amended on February 18, 2015. The Policy requires that
any nominee for director who receives a greater number of votes withheld than
votes for his or her election will be required to tender an offer to resign (a
Resignation Offer). The Policy applies only to uncontested elections,
which are elections of directors where the number of nominees for election as
director is equal to the number of directors to be elected at such meeting.
Following a tender of a Resignation Offer, the Governance and Nomination
Committee will consider the Resignation Offer and will recommend to the Board
whether or not to accept or reject the Resignation Offer or to propose
alternative actions. The Governance and Nomination Committee will be expected to
recommend accepting the Resignation Offer, except in situations where
extraordinary circumstances would warrant the applicable director to continue to
serve on the Board. Within 90 days following the applicable annual general
meeting, the Board will make a determination of the action to take with respect
to the Resignation Offer and will promptly disclose by news release its decision
to accept or reject the directors Resignation Offer or to propose alternative
actions as referenced in the Policy. If the Board has decided to reject the
Resignation Offer or to pursue any alternative action other than accepting the
Resignation Offer, then the Board will disclose in the news release its reasons
for doing so. The applicable director will not participate in either the
Governance and Nomination Committee or Board deliberations on his or her
Resignation Offer. We have not entered into contracts providing for benefits to
the directors upon termination of employment, other than as described below. Agreements with Executive Officers The Company has the following plans or arrangements in respect
of remuneration that may be received by the Companys executive officers that
are also directors of the Company in respect of compensating such officer in the
event of termination of employment (as a result of resignation, change of
control or change of responsibilities). Pursuant to the employment agreements, each of R. Michael Jones
and Frank R. Hallam (hereinafter referred to as Jones and
Hallam, respectively; each an Officer and together, the
Officers) may resign by giving 90 days written notice and thereafter
be entitled to his annual salary earned to the date of cessation, together with
any outstanding earned but untaken vacation pay, reimbursement of any final
expenses and all bonuses earned in respect of any period before the date of
cessation (collectively, the Final Wages).   162 If an Officer is terminated without cause or resigns for good
cause (as defined below), the Company will pay the Officer: (a)
    the Final Wages; and(b)
    an additional amount equal to 24 months (for Jones and
      Hallam) of the Officers annual salary (the Severance Period),
      and the Officers current benefits will continue until the earlier
of the end of the Severance Period and receipt of similar benefits through other
employment. In the case of either a termination or resignation for good
cause following a Change of Control (as defined below), the Company will pay
severance as follows (the COC Severance): (a)
    the Final Wages;(b)
    an additional amount equivalent to 24 months annual
      salary (the COC Severance Period);(c)
    an additional lump sum equal to the sum of the amounts
      paid as bonuses to the Officer in respect of the completed three bonus
      years preceding the date of termination divided by 36 (the Average
      Monthly Bonus) multiplied by the number of completed months in the
      current bonus year through to the termination date; and(d)
    an additional lump sum equal to the Average Monthly Bonus
      multiplied by the number of months in the COC Severance Period,
  and the Officers current benefits will continue until the earlier
of the end of the COC Severance Period and the Officers receipt of similar
benefits through other employment. In addition, each Officer shall have a special right to resign
on one months written notice, delivered within 60 days following a Change of
Control, in which case the Officer will be entitled to receive the COC
Severance. Upon a Change of Control, any non-vested options held by the
Officer will be deemed vested on a Change of Control. Where the Change of
Control is a transaction in which the shares of the Company are to be purchased
or otherwise exchanged or acquired, such vesting shall take place so as to
permit the Officer, at his election to participate in the transaction in respect
of any such non-vested option shares, provided that if, for any reason such
Change of Control transaction does not complete, the options shall revert to
their original terms, including as to vesting and all options the vesting of
which is accelerated pursuant to the foregoing shall remain open for exercise
until the earlier of their expiry date or one year from the Change of Control. Change of Control means: (a)
    the acquisition, beneficially, directly or indirectly, by
      any person or group of persons acting jointly or in concert, within the
      meaning of Multilateral Instrument 62-104  Takeover Bids and Issuer
      Bids(or any successor instrument thereto), of Common Shares of the
      Company which, when added to all other Common Shares of the Company at the
      time held beneficially, directly or indirectly by such person or persons
      acting jointly or in concert, totals for the first time more than 50% of
      the outstanding Common Shares of the Company;
or    163 (b)
    the removal, by extraordinary resolution of the
      shareholders of the Company, of more than 51% of the then incumbent
      directors of the Company, or the election of a majority of directors to
      the Companys Board who were not nominees of the Companys incumbent Board
      at the time immediately preceding such election; or(c)
    the consummation of a sale of all or substantially all of
      the assets of the Company, or the consummation of a reorganization, merger
      or other transaction which has substantially the same effect; or(d)
    a merger, consolidation, plan of arrangement or
      reorganization of the Company that results in the beneficial, direct or
      indirect transfer of more than 50% of the total voting power of the
      resulting entitys outstanding securities to a person, or group of persons
      acting jointly and in concert, who are different from the person that
      have, beneficially, directly or indirectly, more than 50% of the total
      voting power prior to such transaction. good cause means the occurrence of one of the
following events without the Officers written consent: (a)
    upon the material breach of any material term of the
      Employment Agreement by the Company if such breach or default has not been
      remedied to the reasonable satisfaction of the Officer within 30 days
      after written notice of the breach of default has been delivered by the
      Officer to the Company; or(b)
    a material reduction in the Officers responsibilities,
      title or reporting, except as a result of the Officers disability;
    or(c)
    any reduction by the Company in the Officers then
      current annual salary; or(d)
    relocation of the Officers principal office location by
      more than 25 kilometres Deferred Share Unit Plan The Deferred Share Unit Plan (the DSU Plan) permits
directors who are not salaried officers or employees of the Company or a related
corporation (referred to as Eligible Directors) to convert into DSUs
the fees that would otherwise be payable by the Company to them relating to
future services for their participation on the Board and on committees of the
Board, including all annual retainers and amounts that would be payable for
serving as the Chair of the Board and/or as a chair of a committee of the Board
(excluding any reimbursement of expenses) (the Board Fees). Only
Eligible Directors are permitted to participate in the DSU Plan. The DSU Plan is
administered by the Board or such other persons as may be designated by the
Board from time to time, through the recommendation of the Compensation
Committee (the DSUP Administrators). With respect to the conversion of Board Fees into DSUs, each
Eligible Director may, under the DSU Plan, elect to convert a minimum of 20% up
to a maximum of 100%, in 10% increments, of his or her future Board Fees for the
relevant period into DSUs in lieu of being paid such fees in cash. On the
date on which the relevant Board Fees are payable, the number of DSUs to be
credited to a participating Eligible Director (a DSU
Participant) will be determined by dividing an amount equal to the
designated percentage of the Board Fees that the DSU Participant has elected to
have credited in DSUs on that fee payment date, by the market value of a Common
Share on that fee payment date. Eligible Directors are entitled to make an
election under the DSU Plan in respect of the period from January 1 through
December 31 no later than December 31 of the prior year. Newly elected Eligible
Directors will have 30 days from the date of his/her appointment to make an election
in respect of the remainder of such calendar year. All such elections will be
irrevocable in respect of such period.   164 If a DSU Participant becomes a salaried officer or an employee
  of the Company or a related corporation, such DSU Participant shall thereupon be
  suspended from further participation in the DSU Plan in the manner set out in
the DSU Plan. The DSUP Administrators may also, in their sole discretion from
time to time, award DSUs to one or more Eligible Directors for the purposes of
providing additional equity related remuneration to such Eligible Directors in
respect of future services as an Eligible Director. With respect to the award of
such DSUs, the DSUP Administrators will determine when DSUs will be awarded, the
number of DSUs to be awarded, the vesting criteria for each award of DSUs, if
any, and all other terms and conditions of each award. Unless the DSUP
Administrators determine otherwise, such DSUs will be subject to a vesting
schedule whereby they will become vested in equal instalments over three years
with one-third vesting on the first anniversary of the award and one-third
vesting on each of the subsequent anniversaries of the award. The DSUP
Administrators may consider alternatives for vesting criteria related to the
Companys performance and have the flexibility under the DSU Plan to apply such
vesting criteria to particular awards of DSUs. The DSU Plan also provides that:
(a) where the Termination of Board Service (as defined below) of a DSU
Participant (or termination of service as a salaried officer or employee, if
applicable) occurs as a result of the DSU Participants death, all unvested DSUs
of that DSU Participant will vest effective on the date of death; and (b) if
there is a change of control (as such term is defined in the DSU Plan), all
unvested DSUs will vest immediately prior to such change of control. If cash dividends are paid by the Company on the Common Shares,
a DSU Participant will also be credited with dividend equivalents in the form of
additional DSUs based on the number of vested DSUs the DSU Participant holds on
the record date for the payment of such dividend. Canadian DSU Participants are not entitled to redeem any DSUs
(regardless of their vested status) until after the DSU Participant ceases to be
a member of the Board by way of retirement, non-re-election as a director,
resignation, incapacity or death (each, a Termination of Board
Service), or termination of service as a salaried officer or employee, if
applicable. Except with respect to U.S. Eligible Directors (defined below)
a DSU Participant (or the DSU Participants legal representative, as the case
may be) will be permitted to redeem his or her vested DSUs no earlier than
following Termination of Board Service (and termination of service as a salaried
officer or employee, if applicable) by giving written notice to the Company to
redeem on one or more dates specified by the DSU Participant (or the DSU
Participants legal representative, as the case may be), which dates shall not,
in any event, be earlier than the tenth day following the release of the
Companys quarterly or annual financial results immediately following such
termination, or later than December 1 of the first calendar year commencing
after the time of such termination. The DSUs of an Eligible Director who is a
citizen or resident of the United States, as defined in the United States
Internal Revenue Code of 1986, as amended (the Code), and any other
Eligible Director who is subject to tax under the Code with respect to DSUs
granted pursuant to the DSU Plan (each, a U.S. Eligible Director) will
be redeemed during the calendar year following the year in which the U.S.
Eligible Director experiences a separation from service (as defined in the
Code) on a date selected by the Company. Upon redemption of DSUs, the Company
will pay to the DSU Participant (or the DSU Participants legal representative,
as the case may be) a lump sum cash payment equal to the number of DSUs to be
redeemed multiplied by the market value of a Common Share on the redemption
date, net of any applicable deductions and withholdings. The DSU Plan does not
entitle any DSU Participant to acquire Common Shares in connection with the
redemption of vested DSUs under the DSU Plan.   165 The DSU Plan also contains provisions that apply to DSU
  Participants who are subject to tax in both the United States and Canada. For
  such DSU Participants, in limited circumstances specified in the DSU Plan where
  there is a conflict in the requirements of U.S. tax laws and Canadian tax laws,
the relevant DSUs will be forfeited. Audit Committee Composition and Experience 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  Mr. Smee is a
      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. 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 American 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. Responsibilities The Audit Committees responsibilities include but are not
limited to:   166 
    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 Companys counsel and
      engage outside independent counsel and other advisors whenever as deemed
      necessary by the Committee to carry out its duties.
    Review the Companys annual and quarterly financial
      statements, including Managements Discussion and Analysis with respect
      thereto.
    Review audit issues related to the Companys material
      associated and affiliated companies that may have a significant impact on
      the Companys equity investment.
    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 Companys shareholders.
    Review with the Company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 Company 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 Company.
    Ensure that adequate procedures are in place for the
      review of the Companys public disclosure of financial information
      extracted or derived from the Companys financial statements, other than
      the public disclosure contained in the Companys financial statements,
      Managements Discussion and Analysis and annual and interim earnings press
      releases; and must periodically assess the adequacy of those procedures.
    Establish a procedure for:  o
    the confidential, anonymous submission by employees of
      the Company of concerns regarding questionable accounting or auditing
      matters; ando
    the receipt, retention and treatment of complaints
      received by the Company regarding accounting, internal accounting
      controls, or auditing matters.  
    With regard to the Corporations internal
      control procedures, the Committee is responsible to:  o
    review the appropriateness and effectiveness of the
      Companys policies and business practices which impact on the financial
      integrity of the Company, including those related to internal auditing,
      insurance, accounting, information services and systems and financial
      controls, management reporting and risk management; ando
    review compliance under the Companys business conduct
      and ethics policies and to periodically review these policies and
      recommend to the Board changes which the Committee may deem appropriate;
      ando
    review any unresolved issues between management and the
      external auditors that could affect the financial reporting or internal
      controls of the Company; ando
    periodically review the Company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.    167 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, 2017 and August 31, 2016 have been pre-approved by
the Audit Committee. Compensation Committee Composition The Compensation Committee is comprised of Barry Smee
(Chairman), Iain McLean and Diana Walters. All three members of the Compensation
Committee are independent. Responsibilities The responsibilities of the Compensation Committee include but
are not limited to: 
    Review, approve and report to the Board annually on
      managements succession plans for all executive officers, other than the
      CEO, including specific development plans and career planning for
      potential successors;
    Review and recommend to the Board for approval the
      general compensation philosophy and guidelines for all directors and
      executive officers, including the CEO. This includes incentive plan design
      and other remuneration;    168 
    Review and recommend to the Board the
      compensation, including salary, incentives, benefits and other
      perquisites, of all directors and executive officers, except for the CEO;
      and
    Report on executive compensation as required in
      public disclosure documents.
    Review and approve corporate goals and
      objectives relevant to CEO compensation, evaluate the CEOs performance in
      light of those corporate goals and objectives, consider the Corporate
      Governance and Nomination Committees report respecting the CEOs
      performance and recommend to the Board the CEOs compensation level based
      on this evaluation, including salary, incentives, benefits and other
      perquisites.
    Establish compensation and recruitment policies
      and practices for the Companys executive officers, including establishing
      levels of salary, incentives, benefits and other perquisites provided to
      executives of the Corporation and its subsidiaries; provided, however,
      that the compensation of individual executive officers shall be subject to
      the Boards approval.
    Administration of the Companys stock option
      plans and stock incentive plans, and recommending to the Board awards
      under the plans.
    The Committee shall review all executive
      compensation disclosure before the Company publicly discloses this
      information.
    The Committee will annually review and
      re-assess the adequacy of this Charter and recommend updates to this
      Charter and will receive approval of all changes from the Board. Governance and Nomination Committee Composition The Governance and Nomination Committee is comprised of Iain
McLean (Chairman), Barry Smee and Diana Walters. All three members of the
Governance and Nomination Committee are independent. Responsibilities The responsibilities of the Governance and Nomination Committee
include but are not limited to: 
    review and make recommendations to the Board respecting
      corporate governance in general and regarding the Boards stewardship role
      in the management of the Company.
    review, approve and report to the Board on:  o
    the establishment of appropriate processes for the
      regular evaluation of the effectiveness of the Board and its members and
      its committees and their charters;o
    in conjunction with the Chair of the Board, the
      performance of individual directors, the Board as a whole, and committees
      of the Board;o
    the performance evaluation of the Chair of the Board and
      the Chair of each Board Committee;o
    regularly, the performance evaluation of the CEO,
      including performance against corporate objectives.  
    CEO succession planning;    169 
    oversee compliance with the Companys Code of Business
      Conduct and Ethics (the Code), monitor compliance with the Code,
      investigate any alleged breach or violation of the Code, authorize any
      waiver granted in connection with the Code
    oversee compliance with any rules, regulations or
      guidelines promulgated by regulatory authorities relating to corporate
      governance.  D.
    Employees As of August 31, 2017, the Companys complement of managers,
staff and consultants in Canada consisted of approximately 6 individuals. The
Companys complement of managers, staff, consultants, security and casual
workers in South Africa currently consisted of approximately 105 individuals,
inclusive of approximately 17 individuals active at the Waterberg Project
conducting exploration and engineering activities related to the planned
completion of a DFS by the end of calendar 2018. The Waterberg Project is
operated by the Company utilizing its own staff and personnel. Contract
drilling, geotechnical, engineering and support services are utilized as
required. The Maseve Mine is currently on care and maintenance, pending
the completion of the Maseve Sale Transaction. As at August 31, 2017, the labour
force at the Maseve Mine totalled approximately 628 people, of whom 83 were
employees of Maseve and 545 were employed by third party contractors or
consultants. As at November 30, 2017, the labour force at the Maseve Mine
totaled approximately 78 people, of whom 20 are employees of Maseve and 58 are
employed by third party contractors or consultants. RBPlat will be granted a
management contract for the Maseve Mine and for carrying out care and
maintenance services during the period between the date of grant of the
Competition Approval and the date of Ministerial Consent. The Company will be
responsible for 50% of care and maintenance costs at Maseve after Competition
Approval until the earlier of the date of Ministerial Consent and the date upon
which RBPlat utilizes the surface infrastructure of the Maseve Mine for its own
purposes. The Company expects that is required compliment of employees and
contractors at Maseve will decrease subsequent to the grant of Competition
Approval. E.
    Share Ownership  With
respect to the persons listed in Compensation, above, who are current
directors, officers or employees of our company, the following table discloses
the number of and percent of the common shares outstanding held by those
persons, as of December 29, 2017. The common shares possess identical voting
rights. Name and Title
    No. of Shares(1)(2)
    Percent of SharesOutstanding of the Class(3)R. Michael JonesChairman,
      President, CEO and Director
    272,920(4)
    *Frank R. Hallam
    
    *CFO and
      Director
    125,314Barry Smee
    
    *Secretary and
      Director
    21,010Iain McLeanDirector
    20,335
    *Eric CarlsonDirector
    88,280(5)
    *    170 Name and Title
    No. of Shares (1)(2)
    Percent of Shares
  Outstanding of the Class(3)Timothy MarlowDirector
    3,000
    *Diana WaltersDirector
    4,000
    * **Notes**: *
    Less than one percent(1)
    Includes beneficial, direct and indirect
      shareholdings.(2)
    Does not include stock options and other rights to
      purchase or acquire shares.(3)
    There are 148,469,377 shares of Common Stock issued and
      outstanding as of December 29, 2017.(4)
    Of these shares, 95,600 shares are held by 599143 B.C.
      Ltd., a company 50% owned by Mr. Jones and 50% owned by Mr. Jones
      wife.(5)
    Of these shares, 42,580 shares are held by Carmax
      Enterprises Corporation, a private company owned by Mr. Carlson and 25,500
      shares are held by Anthem Works Ltd. a company founded by Mr.
    Carlson. The following table discloses the stock options outstanding to
the aforementioned persons as of December 29, 2017: Date of Grant or
    
    
    # of Shares of
    
    
    ExerciseName and Title
    
    Issuance
    
    
    Common Stock
    
    
    Price Per
    
    
    Expiry DateSubject to
    
    
    ShareIssuanceR. Michael Jones
    
    Jan 14, 2014
    
    
    100,000
    
    $
    13.00
    
    
    Jan 14, 2019President, CEO and Director
    
    Feb 16, 2015
    
    
    120,000
    
    $
    6.50
    
    
    Feb 16, 2020Dec 22, 2015
    
    
    67,500
    
    $
    2.00
    
    
    Dec 22, 2020Dec 23, 2016
    
    
    200,000
    
    $
    2.00
    
    
    Dec 23, 2021Frank R. Hallam
    
    Jan 14, 2014
    
    
    87,500
    
    $
    13.00
    
    
    Jan 14, 2019CFO and Director
    

    Feb 16, 2015
    
    
    100,000
    
    $
    6.50
    
    
    Feb 16, 2020Dec 22, 2015
    
    
    60,000
    
    $
    2.00
    
    
    Dec 22, 2020Dec 23, 2016
    
    
    175,000
    
    $
    2.00
    
    
    Dec 23, 2021Barry Smee
    
    Jan 14, 2014
    
    
    25,000
    
    $
    13.00
    
    
    Jan 14, 2019Director
    
    Feb 16, 2015
    
    
    35,000
    
    $
    6.50
    
    
    Feb 16, 2020Dec 22, 2015
    
    
    33,750
    
    $
    2.00
    
    
    Dec 22, 2020Dec 23, 2016
    
    
    125,000
    
    $
    2.00
    
    
    Dec 23, 2021Iain McLean
    
    Jan 14, 2014
    
    
    25,000
    
    $
    13.00
    
    
    Jan 14, 2019Chairman and Director
    
    Feb 16, 2015
    
    
    35,000
    
    $
    6.50
    
    
    Feb 16, 2020Dec 22, 2015
    
    
    33,750
    
    $
    2.00
    
    
    Dec 22, 2020Dec 23, 2016
    
    
    125,000
    
    $
    2.00
    
    
    Dec 23, 2021Eric Carlson
    
    Jan 14, 2014
    
    
    25,000
    
    $
    13.00
    
    
    Jan 14, 2019Director
    
    Feb 16, 2015
    
    
    35,000
    
    $
    6.50
    
    
    Feb 16, 2020Dec 22, 2015
    
    
    33,750
    
    $
    2.00
    
    
    Dec 22, 2020Dec 23, 2016
    
    
    125,000
    
    $
    2.00
    
    
    Dec 23, 2021Timothy Marlow
    
    Jan 14, 2014
    
    
    25,000
    
    $
    13.00
    
    
    Jan 14, 2019Director
    
    Feb 16, 2015
    
    
    35,000
    
    $
    6.50
    
    
    Feb 16, 2020Dec 22, 2015
    
    
    33,750
    
    $
    2.00
    
    
    Dec 22, 2020Dec 23, 2016
    
    
    125,000
    
    $
    2.00
    
    
    Dec 23, 2021Diana Walters
    
    Jan 14, 2014
    
    
    25,000
    
    $
    13.00
    
    
    Jan 14, 2019    171 Date of Grant or
    
    
    # of Shares of
    
    
    ExerciseName and Title
    
    Issuance
    
    
    Common Stock
    
    
    Price Per
    
    
    Expiry DateSubject to
    
    
    ShareIssuanceDirector
    
    Feb 16, 2015
    
    
    35,000
    
    $
    6.50
    
    
    Feb 16, 2020Dec 22, 2015
    
    
    33,750
    
    $
    2.00
    
    
    Dec 22, 2020Dec
      23, 2016
    
    
    125,000
    
    $
    2.00
    
    
    Dec
      23, 2021 Stock Option Plan The Stock Option Plan exists only for the purpose of governing
the terms of all outstanding options that were issued under the Stock Option
Plan before the adoption of the Companys Share Compensation Plan on February
23, 2017. No new options may be granted under the Stock Option Plan and the
total number of outstanding options issued (but not exercised) under the Stock
Option Plan count towards the maximum number of Options and restricted share
units (RSUs) issuable under the Share Compensation Plan. Details of the
Share Compensation Plan are provided below. The Stock Option Plan was approved by the shareholders at the
annual general meeting held on January 10, 2006 and was amended at the Companys
annual general meeting held on January 10, 2007 and was ratified by the
shareholders at the annual general meetings held on January 12, 2010, January 8,
2013 and February 26, 2016. The Stock Option Plan is classified as a 10%
rolling plan pursuant to which the number of Common Shares which may be
issuable pursuant to options previously granted and those granted under the
Stock Option Plan is a maximum of 10% of the issued and outstanding Common
Shares at the time of the grant. Other information relating to the Stock Option Plan is as
follows: 
    The Stock Option Plan is administered by the Compensation
      Committee.
    Options may be granted to directors, senior officers,
      employees, non-employee directors, management company employees and
      consultants of the Company and its affiliates.
    As at December 29, 2017, an aggregate of up to 14,846,938
      options were issued or issuable under the Stock Option Plan, being a
      number of options equal to 10% of the Companys issued and outstanding
      Common Shares on such date.
    As at December 29, 2017, an aggregate of 3,627,200
      options were outstanding under the Stock Option Plan, being a number of
      options equal to 4.2% of the Companys issued and outstanding Common
      Shares on such date.
    The number of Common Shares reserved for issuance under
      options granted to Insiders (as defined in the Stock Option Plan),
      together with any shares issuable to Insiders pursuant to any other share
      compensation arrangements of the Company, may not exceed 10% of the issued
      and outstanding number of Common Shares unless approved by disinterested
      shareholders.
    The number of shares issued to Insiders, together with
      any shares issued to Insiders pursuant to any other share compensation
      arrangements of the Company, within a 12-month period may not exceed 10%
      of the issued and outstanding number of Common Shares unless approved by
      disinterested shareholders.    172 
    The number of Common Shares reserved for issuance to any
      one individual pursuant to options or any other share compensation
      arrangements of the Company in any 12-month period may not exceed 5% of
      the number of issued and outstanding Common Shares from time to time
      unless approved by securityholders who are not Insiders.
    The maximum aggregate number of Common Shares that may be
      reserved under the Stock Option Plan or other share compensation
      arrangements of the Company for issuance to any one consultant during any
      12-month period may not exceed 2% of the issued and outstanding Common
      Shares.
    The maximum aggregate number of Common Shares that may be
      reserved under the Stock Option Plan or other share compensation
      arrangements of the Company for issuance to persons employed in investor
      relations activities (as a group) may not exceed, in any 12 month period,
      2% of the issued and outstanding Common Shares.
    The exercise price for options granted under the Stock
      Option Plan is determined by the Compensation Committee, in its
      discretion, at the time the options are granted, but such price shall be
      fixed in compliance with the applicable provisions of the TSX Company
      Manual in force at the time of grant, and, in any event, may not be less
      than the closing price of the Common Shares on the TSX on the trading day
      immediately preceding the day on which the option is granted (provided
      that if there are no trades on such day then the last closing price within
      the preceding ten trading days will be used, and if there are no trades
      within such ten-day period, then the simple average of the bid and ask
      prices on the trading day immediately preceding the day of grant will be
      used).
    The Stock Option Plan does not contain provisions
      allowing for the transformation of a stock option into a stock
      appreciation right.
    Vesting of options is at the discretion of the
      Compensation Committee at the time of grant of options.
    Options may be exercisable for a period of time
      determined by the Compensation Committee with the maximum term of options
      granted under the Existing Plan being ten years from the date of grant.
    Options can only be exercised by the optionee as long as
      the optionee remains an eligible optionee pursuant to the Stock Option
      Plan. Options granted to any optionee who is a director, employee,
      consultant or management company employee must expire within 90 days after
      the optionee ceases to be in at least one of these categories. Options
      granted to any optionee who is engaged in investor relations activities
      must expire within 30 days after the optionee ceases to be employed to
      provide investor relations activities.
    In the event of death of the optionee, the outstanding
      options shall remain in full force and effect and exercisable by the heirs
      or administrators of the deceased optionee in accordance with the terms of
      the agreement for one year from the date of death or the balance of the
      option period, whichever is earlier.
    Options granted under the Stock Option Plan are not
      assignable or transferable other than pursuant to a will or by the laws of
      descent and distribution.
    Subject to the policies of the TSX, the Board may, at any
      time, without further action by the Companys shareholders, amend the
      Stock Option Plan or any option granted thereunder in such respects as it
      may consider advisable and, without limiting the generality of the
      foregoing, it may do so to:    173 (a)
    ensure that the options granted thereunder will comply
      with any provisions respecting stock options in the income tax and other
      laws in force in any country or jurisdiction of which a participant to
      whom an option has been granted may from time to time be resident or a
      citizen;(b)
    make amendments of an administrative nature;(c)
    change vesting provisions of an option or the Existing
      Plan;(d)
    change termination provisions of an option provided that
      the expiry date does not extend beyond the original expiry date;(e)
    reduce the exercise price of an option for an optionee
      who is not an Insider;(f)
    make any amendments required to comply with applicable
      laws or TSX requirements; and(g)
    make any other amendments which are approved by the
      TSX.  
    Other than as set forth above, any other amendments to
      the Stock Option Plan or options granted thereunder (or options otherwise
      governed thereby), including the reduction of the exercise price or the
      cancellation and reissuance of options or other entitlements, will be
      subject to the approval of the shareholders and TSX.
    The Stock Option Plan does not contain any provisions
      relating to the provision of financial assistance by the Company to
      optionees to facilitate the purchase of Common Shares upon the exercise of
      options.
    The Stock Option Plan contains adjustment provisions
      pursuant to which the exercise price of an option and/or the number of
      securities underlying an option may be adjusted in the event of certain
      capital changes of the Company including, without limitation, share
      consolidations, stock-splits, dividends and corporate reorganizations. The
      adjustment provisions are meant to ensure that the rights associated with
      the option are neither enhanced nor prejudiced as a result of the capital
      change. Share Compensation Plan The Share Compensation Plan was adopted by the Company after it
was approved by the shareholders at the annual general meeting held on February
23, 2017 (the Adoption Date). As of the Adoption Date, the Share
Compensation Plan govern all new grants of restricted share units (the
RSUs) and options to purchase Common Shares (the Options). The
Companys Stock Option Plan continue to exist but only for the purpose of
governing the terms of all outstanding options that were been issued under the
Stock Option Plan before the adoption of the Share Compensation Plan. No new
options may be granted under the Stock Option Plan and the total number of
outstanding options issued (but not exercised) under the Stock Option Plan count
towards the maximum number of Options and RSUs issuable under the Share
Compensation Plan. A description of the Stock Option Plan is provided above. The Share Compensation Plan is a 10% rolling plan pursuant to
which the number of Common Shares which may be issuable pursuant to RSUs and
Options granted under the Share Compensation Plan, options previously granted
under the Existing Plan, together with those Common Shares issuable pursuant to
any other security based compensation arrangements of the Company or its
subsidiaries, is a maximum of 10% of the issued and outstanding Common Shares at
the time of the grant.   174 The Share Compensation Plan provides participants (each, an
SCP Participant), who may include participants who are citizens or
residents of the United States (each, a US-SCP Participant), with the
opportunity, through RSUsand Options, to acquire an ownership interest
in the Company. The RSUs will rise and fall in value based on the value of the
Common Shares. Unlike the Options, the RSUs will not require the payment of any
monetary consideration to the Company. Instead, each RSU represents a right to
receive one Common Share following the attainment of vesting criteria determined
at the time of the award. See Restricted Share Units  Vesting Provisions
below. The Options, on the other hand, are rights to acquire Common Shares upon
payment of monetary consideration (i.e., the exercise price), subject
also to vesting criteria determined at the time of the grant. See Options 
Vesting Provisions below. The Companys Stock Option Plan will continue to govern the
terms of all outstanding options issued under the Stock Option Plan and the
total number of outstanding options issued (but not exercised) under the Stock
Option Plan will count towards the maximum number of Options and RSUs issuable
under the Share Compensation Plan. Purpose of the Share Compensation Plan The stated purpose of the Share Compensation Plan is to advance
the interests of the Company, its subsidiaries and its shareholders by: (a)
ensuring that the interests of SCP Participants are aligned with the success of
the Company and its subsidiaries; (b) encouraging stock ownership by such
persons; and (c) providing compensation opportunities to attract, retain and
motivate such persons. The following people will be eligible to participate in the
Share Compensation Plan: any officer or employee of the Company or any officer
or employee of any subsidiary of the Company and, solely for purposes of the
grant of Options, any non-employee director of the Company or any non-employee
director of any subsidiary of the Company, and any consultant (defined under the
Share Compensation Plan as a consultant that (x) is an individual that provides
bona fide services to the Company pursuant to a written contract for
services with the Company and such services are not in connection with the offer
or sale of securities in a capital-raising transaction and do not directly or
indirectly promote or maintain a market for the Companys securities, or (y)
otherwise satisfies the requirements to participate in an employee benefit
plan as defined in Rule 405 under the U.S. Securities Act registered by the
Company on Form S-8). Non-employee directors of the Company will not be eligible
to participate in the Share Compensation Plan in respect of RSUs. Under the
Share Compensation Plan, non-employee directors of the Company will continue to
be eligible to participate in respect of Options, however, only on a limited
basis. See Restrictions on the Award of RSUs and Grant of Options below. Under
the Existing Plan, directors of the Company have been technically eligible to
participate on a discretionary basis without any limits on participation. Administration of the Share Compensation Plan The Share Compensation Plan is administered by the Board or
such other persons as may be designated by the Board (the SCP
Administrators) based on the recommendation of the compensation
committee of the Board (the Compensation Committee). The SCP
Administrators determine the eligibility of persons to participate in the Share
Compensation Plan, when RSUs and Options will be awarded or granted, the number
of RSUs and Options to be awarded or granted, the vesting criteria for each
award of RSUs and grant of Options and all other terms and conditions of each
award and grant, in each case in accordance with applicable securities laws and
stock exchange requirements.   175 Number of Common Shares Available for Issuance under the
Share Compensation Plan The number of Common Shares that available for issuance upon
the vesting of RSUs awarded and Options granted under the Share Compensation
Plan will be limited to 10% of the issued and outstanding Common Shares at the
time of any grant, as reduced by the number of Common Shares that may be
issuable pursuant to options outstanding under the Stock Option Plan. As of the date of this Annual Report, the Company has
148,469,377 Common Shares issued and outstanding and the aggregate number of
Common Shares that may be issuable pursuant to options outstanding under the
Stock Option Plan is 3,627,200 Common Shares (being approximately 2.44% of the
issued and outstanding Common Shares and approximately 24.43% of the total
Common Shares that may be issuable under the Stock Option Plan). The Common
Shares that may be issuable pursuant to options outstanding under the Stock
Option Plan will be included in the calculation of, and therefore will reduce,
the total number of Common Shares that will be issuable pursuant to RSUs or
Options under the Share Compensation Plan. ITEM 7.
    MAJOR SHAREHOLDERS AND RELATED PARTY
      TRANSACTIONS  A.
    Major Shareholders The Company is not directly or indirectly owned or controlled
by another corporation(s), by any foreign government or by any other natural or
legal person(s), severally or jointly. There are no arrangements known to the Company the operation of
which may at a subsequent date result in a change in control of the Company. The following table discloses the holders of the Companys
common shares who are known or believed by the Company to be the beneficial
owners of 5% or more of the Companys common shares (the Major
Shareholders). The percentages in the table below are based on 148,469,377
common shares outstanding as of December 20, 2017. Amount and Nature of
  Percent ofIdentity
      of Person or Group
    Beneficial Ownership
  ClassFranklin
      Resources, Inc./Franklin Advisors, Inc. (1)
    29,959,534
    19.90Liberty Mutual
      Group Asset Management Inc. (2)
    16,160,609
    10.88BlackRock, Inc.
      (3)
    14,324,479
    9.65Donald Smith &
      Co., Inc. (4)
    13,942,809
    9.39 Notes: (1)
    Based on information provided to the Company as of
      December 20, 2017 by Franklin Resources, Inc./Franklin Advisors, Inc., it
      had sole voting and dispositive power with respect to 27,878,488 common
      shares that were currently issued and outstanding, plus such number of
      additional common shares, issuable upon conversion of the Companys
      outstanding convertible notes, as would increase its beneficial ownership
      to approximately 19.9%.(2)
    Based on information provided to the Company as of
      December 19, 2017 by LMM, LMM had sole voting and dispositive power with
      respect to 16,160,609 common shares.(3)
    Based solely on BlackRock, Inc.s SEC Form 13F as of
      September 30, 2017, and assuming that BlackRock, Inc. had sole voting
      power and sole dispositive power over the Company common shares therein
      reported, and beneficially owned no other Company common shares, BlackRock,
Inc. had as of such date sole voting power and sole dispositive power with
respect to 14,324,479 common shares.(4)
    Based on Donald Smith & Co., Inc.s SEC Form 13F as
      of September 30, 2017 and information provided to the Company by Donald
      Smith & Co., Inc., as of September 30, 2017, Donald Smith & Co.,
      Inc. had shared voting power with respect to 13,003,479 common shares and
      shared dispositive power with respect to 13,942,809 common
shares.    176 Except as disclosed in the table above, we are not aware of any
other person or group who owns more than 5% of the issued and outstanding common
shares as at December 20, 2017. The Companys Major Shareholders have the same
voting rights in the Companys common shares as other holders of the Companys
common shares. We are aware of the following changes in our Major Shareholders
over the past three years: 
    Together, Donald Smith & Co. and Donald Smith LSEF
      first reported as beneficially owning greater than 5% of the Companys
      common shares as of January 24, 2017.
    As of December 31, 2015, Genesis Asset Managers, LLP
      (Genesis) reported as beneficially owning 7.91% of the Companys
      common shares. However, as of December 31, 2016, Genesis no longer
      reported as being a Major Shareholder of the Company.
    As of December 31, 2014, T. Rowe Price Associates, Inc.
      (T. Rowe Price) reported as beneficially owning 5.9% of the
      Companys common shares. However, as of December 31, 2015, T. Rowe Price
      no longer reported as being a Major Shareholder of the Company.
    As of December 31, 2014, JPMorgan Chase & Co.
      (JPMorgan) reported as beneficially owning 5.7% of the Companys
      common shares. However, as of October 13, 2015, JPMorgan no longer
      reported as being a Major Shareholder of the Company. Based on information available to the Company, as at December
19, 2017, approximately 62.59% of the Companys outstanding common shares were
beneficially owned in the United States, by approximately 13,150 holders with
U.S. addresses. B.
    Related Party
Transactions For purposes of this section, a Related Party means (a)
enterprises that directly or indirectly through one or more intermediaries,
control or are controlled by, or are under common control with, the company; (b)
associates; (c) individuals owning, directly or indirectly, an interest in the
voting power of the company that gives them significant influence over the
company, and close members of any such individuals family; (d) key management
personnel, that is, those persons having authority and responsibility for
planning, directing and controlling the activities of the company, including
directors and senior management of companies and close members of such
individuals families; and (e) enterprises in which a substantial interest in
the voting power is owned, directly or indirectly, by any person described in
(c) or (d) or over which such a person is able to exercise significant
influence. Neither the Company nor any of its subsidiaries has made any
loan or guarantee in favor of any Related Party, nor has any Related Party been
indebted to the Company or its subsidiaries, since September 1, 2016.   177 Neither the Company nor any of its subsidiaries is a party to
any transactions since September 1, 2016 or any presently proposed transactions
involving a Related Party, which transactions are material to the Company or the
Related Party or are unusual in their nature or conditions, except as
follows: (1)
    LMM, a Major Shareholder, is the lender to the Company
      pursuant to the LMM Facility, as amended and restated, and a party to the
      PPA. The transactions between the Company and LMM are more fully described
      elsewhere in this Annual Report.(2)
    Franklin Advisors, Inc., a Major Shareholder, subscribed
      on behalf of certain funds for $8 million of the convertible notes issued
      by the Company on June 30, 2017. The convertible note transaction is more

      fully described elsewhere in this Annual Report.(3)
    Compensatory matters relating to the Companys directors
      and executive officers are described in Item 6 of this Annual
    Report.  C.
    Interests of Experts and
Counsel Not applicable. ITEM 8.
    FINANCIAL INFORMATION  A.
    Consolidated Statements and Other Financial
      Information See the audited consolidated financial statements listed in
Item 18 hereof and filed as part of this Annual Report. These financial
statements include our consolidated balance sheets as at August 31, 2017 and
2016 and our statements of operations and cash flows for the three years ended
August 31, 2017. These consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS) as
issued by the International Accounting Standards Board (IASB). The
consolidated financial statements have been prepared under the historical cost
convention. Dividend Policy We have not declared any dividends since incorporation and do
not anticipate doing so in the foreseeable future. The following restrictions
could prevent the Company from paying dividends or distributions: 
    The exchange controls of the Government of South Africa.
      See Item 4.B.  South African Regulatory Framework;
    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 Waterberg JV Co 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; and
    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 the Sprott
Lenders and/or LMM, as applicable.   178 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. B.
    Significant Changes On September 6, 2017 the Company announced the planned sale of
all its rights and interests in the Maseve Mine to RBPlat in a transaction
valued at approximately $74.0 million, payable as $62.0 million in cash and
$12.0 million in RBPlat common shares. The completion of due diligence and
execution of binding legal agreements with RBPlats was announced on November 23,
2017. On September 21, 2017 the Company completed the planned
corporatization of the Waterberg Project by the transfer of all Waterberg
Project prospecting permits held in trust by PTM RSA into new operating company
Waterberg JV Co. Effective September 21, 2017 Waterberg JV Co. owned 100% of the
prospecting rights comprising the entire Waterberg Project area and Waterberg JV
Co. was owned 45.65% by PTM RSA, 28.35% by the JOGMEC and 26% by Mnombo. On October 16, 2017 Implats entered into definitive agreements
with the Company, JOGMEC, Mnombo and Waterberg JV Co., whereby Implats purchased
shares representing a 15.0% interest in the Waterberg Project from PTM RSA
(8.6%) and JOGMEC (6.4%) for $30.0 million. ITEM 9.
    THE OFFER AND LISTING  A.
    Offer and Listing Details There is no offer associated with this Annual Report. Trading History The following table sets forth the high and low market prices
for the Companys common shares on the TSX and on the NYSE American (previously
the NYSE MKT) for each full quarterly period within the two most recent fiscal
years ended August 31, 2017 and any subsequent period: TSX
    TSX
    NYSE AMERICAN
  NYSE AMERICANPERIOD
    HIGH CDN $
    LOW CDN $
    HIGH USD $
  LOW USD $2018First Quarter
    0.89
    0.40
    0.72
    0.322017Fourth Quarter
    1.66
    0.64
    1.23
    0.51Third Quarter
    2.41
    1.42
    1.81
    1.03Second Quarter
    3.19
    1.89
    2.45
    1.40First Quarter
    3.97
    1.89
    3.08
    1.402016Fourth Quarter
    4.95
    3.51
    3.98
    2.73Third Quarter
    5.25
    2.51
    4.04
    1.86Second Quarter(1)
    3.00
    1.35
    2.30
    1.00First Quarter
    4.30
    2.80
    3.40
    2.00   179 Notes: (1)
    Effective January 28, 2016 the Companys common shares
      were consolidated on the basis of one new share for ten old shares (1:10).
      All information 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. The following table sets forth the high and low market prices
of the Companys common shares for the five most recent fiscal years ended
August 31, 2017: YEARS
      ENDING
    TSX
    TSX
    NYSE AMERICAN
  NYSE AMERICANAUG.
      31
    HIGH CDN $
    LOW CDN $
    HIGH USD $
  LOW USD $2017
    3.97
    0.64
    3.08
    0.512016(1)
    5.25
    1.35
    4.04
    1.002015
    1.19
    0.32
    1.08
    0.242014
    1.49
    0.97
    1.37
    0.992013
    1.51
    0.75
    1.52
    0.77 Notes: (1)
    Effective January 28, 2016 the Companys common shares
      were consolidated on the basis of one new share for ten old shares (1:10).
      All information 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. The following table sets forth the high and low market prices
for the most recent six months: TSX
    TSX
    NYSE AMERICAN
  NYSE AMERICANMONTH
    HIGH CDN $
    LOW CDN $
    HIGH USD $
  LOW USD $November 2017
    0.57
    0.40
    0.44
    0.32October 2017
    0.67
    0.49
    0.54
    0.39September 2017
    0.89
    0.43
    0.72
    0.35August 2017
    0.90
    0.64
    0.75
    0.51July 2017
    1.15
    0.90
    0.86
    0.71June 2017
    1.66
    1.00
    1.23
    0.75 The closing price of our common shares on December 28, 2017 was
C$0.375on the TSX and $0.2999 on the NYSE American. There have been no trading suspensions in the prior three
years.   180 B.
    Plan of Distribution Not applicable. C.
    Markets The common shares are listed on the TSX under the symbol PTM
and on the NYSE American under the symbol PLG. D.
    Selling Shareholders Not applicable. E.
    Dilution Not applicable. F.
    Expenses of the Issue Not applicable. ITEM 10.
    ADDITIONAL INFORMATION  A.
    Share Capital Not applicable. B.
    Memorandum and Articles of
  Association Incorporation The Company was formed by way of an amalgamation of Platinum
Group Metals Ltd. and New Millennium Metals Corporation on February 18, 2002
under the BCBCA pursuant to an order of the Supreme Court of British Columbia.
The Companys British Columbia incorporation number is BC0642278. Objects and Purposes Neither our Notice of Articles or Articles contains a
limitation on our objects and purposes. Directors Part 17 of our Articles deals with the directors involvement
in transactions in which they have an interest. Article 17.2 provides that a
director who holds a disclosable interest in a contract or transaction into
which we have entered or propose to enter is not entitled to vote on any
directors' resolution to approve that contract or transaction, unless all the
directors have a disclosable interest in that contract or transaction, in which
case any or all of those directors may vote on such resolution.   181 Pursuant to the BCBCA, a director does not have a disclosable
interest in a contract or transaction merely because the contract or transaction
relates to the remuneration of the director in that person's capacity as a
director of our company. Part 8 of our Articles deals with borrowing powers. Our
company, if authorized by the directors, may: (i) borrow money in the manner and
amount, on the security, from the sources and on the terms and conditions that
they consider appropriate; (ii) issue bonds, debentures and other debt
obligations either outright or as security for any liability or obligation of
our company or any other person and at such discounts or premiums and on such
other terms as they consider appropriate; (iii) guarantee the repayment of money
by any other person or the performance of any obligation of any other person;
and (iv) mortgage, charge (whether by way of specific or floating charge), grant
a security interest in, or give other security on, the whole or any part of the
present and future assets and undertaking of our company. Qualifications of Directors Our Articles do not specify a retirement age for directors. Directors are not required to own any common shares of the
Company. Section 124 of the BCBCAprovides that an individual is
not qualified to become or act as a director of a company if that individual is: (a)
    under the age of 18 years;(b)
    found by a court, in Canada or elsewhere, to be incapable
      of managing the individual's own affairs;(c)
    an undischarged bankrupt; or(d)
    convicted in or out of British Columbia of an offence in
      connection with the promotion, formation or management of a corporation or
      unincorporated business, or of an offence involving fraud,
  unless:  (i)
    the court orders otherwise;(ii)
    5 years have elapsed since the last to occur
  of:  (A)
    the expiration of the period set for suspension of the
      passing of sentence without a sentence having been passed;(B)
    the imposition of a fine;(C)
    the conclusion of the term of any imprisonment;
  and(D)
    the conclusion of the term of any probation imposed;
      or  (iii)
    a pardon was granted or issued, or a record suspension
      ordered, under the Criminal Records Act(Canada) and the pardon or
      record suspension, as the case may be, has not been revoked or ceased to
      have effect. A director who ceases to be qualified to act as a director of a
company must promptly resign. Section 120 of the BCBCA provides that every company must have
at least one director, and a public company must have at least three directors.   182 Rights, Preference and Restrictions All of the authorized shares of Common Stock are of the same
class and, once issued, rank equally as to dividends, voting powers, and
participation in assets and in all other respects, on liquidation, dissolution
or winding up of our company, whether voluntary or involuntary, or any other
distribution of our assets among our stockholders for the purpose of winding up
our affairs after we have paid out our liabilities. The issued shares of Common
Stock are not subject to call or assessment rights or any pre-emptive or
conversion rights. The stockholders are entitled to one vote for each share on
all matters to be voted on by the stockholders. There are no provisions for
redemption, purchase for cancellation, surrender or sinking funds, and there are
no provisions discriminating against any existing or prospective holder of
common shares as a result of such shareholder owning a substantial number of
common shares. The rights of stockholders may be altered only with the
approval of the holders of 2/3 or more of the Common Stock voted at a meeting of
our stockholders called and held in accordance with our Articles and applicable
law. Shareholder Meetings The BCBCA provides that: (i) meetings of shareholders must be
held in British Columbia, unless otherwise provided in a company's Articles;
(ii) directors must call an annual general of shareholders not later than 15
months after the last preceding annual general and once in every calendar year;
(iii) for the purpose of determining shareholders entitled to receive notice of
or vote at meetings of shareholders, the directors may fix in advance a date as
the record date for that determination, provided that such date shall not
precede by more than 2 months (or, in the case of a general meeting
requisitioned by shareholders under the BCBCA, by more than 4 months) or less
than 21 days the date on which the meeting is to be held; (iv) a quorum of
shareholders for a shareholder meeting may be set by the Articles and the
Companys Articles provide that the quorum for the transaction of business at a
meeting of our shareholders is two persons who are, or who represent by proxy,
shareholders who, in the aggregate, hold at least 5% of the issued shares
entitled to be voted at the meeting; (v) the holders of not less than five
percent of the issued shares entitled to vote at a meeting may requisition the
directors to call a meeting of shareholders for the purposes stated in the
requisition; and (vi) upon the application of a director or shareholder entitled
to vote at the meeting, the Supreme Court of British Columbia may order a
meeting to be called, held and conducted in a manner that the Court directs. Limitations on Ownership of Securities Except as provided in the Investment Canada Act, there
are no limitations specific to the rights of non-Canadians to hold or vote our
common shares under the laws of Canada or British Columbia or in our charter
documents. See Exchange Controls below in this Annual Report for a discussion
of the principal features of the Investment Canada Act for non-Canadian
residents proposing to acquire our common shares. Change in Control There are no provisions in our Articles or charter documents
that would have the effect of delaying, deferring or preventing a change in the
control of our company, or that would operate with respect to any proposed
merger, acquisition or corporate restructuring involving our company or any of
our subsidiaries.   183 Ownership Threshold There are no provisions in our Articles requiring share
ownership to be disclosed. Securities legislation in Canada requires that
stockholder ownership must be disclosed once a person beneficially owns or has
control or direction over 10% or more of the issued Common Stock. This threshold
is higher than the 5% threshold under U.S. securities legislation at which
stockholders must report their share ownership. Changes to Capital There are no conditions imposed by our Articles governing
changes in the capital where such conditions are more stringent than is required
by the law of British Columbia. Description of Capital Structure The rights of our common shares are also affected by the
Shareholder Rights Plan, as defined and described below. The Shareholder Rights
Plan is governed by the Shareholder Rights Plan Agreement between the Company
and Computershare Investor Services Inc. dated January 9, 2012. The Companys authorized share structure consists of an
unlimited number of common shares without par value, of which 148,469,377 common
shares were issued and outstanding as at November 29, 2017. All of the issued
common shares are fully paid. The Company does not own any of its common shares. 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 Annual General
Meeting 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.   184 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. C.
    Material Contracts Neither the Company nor its subsidiaries has been a party
within the two years immediately preceding the publication of this Annual Report
to a contract that is material to the Company, except for (i) contracts entered
into in the ordinary course of business, and (ii) contracts discussed elsewhere
in this Annual Report. D.
    Exchange Controls Canada has no system of exchange controls. There are no
Canadian governmental laws, decrees, or regulations relating to restrictions on
the repatriation of capital or earnings of our Company to nonresident investors.
There are no laws in Canada or exchange control restrictions affecting the
remittance of dividends, profits, interest, royalties and other payments by our
Company to non-resident holders of our Common Stock, except as discussed below
under "Item 10.E. Taxation." There are no limitations under the laws of Canada or in the
organizing documents of the Company on the right of foreigners to hold or vote
securities of the Company, except that the Investment Canada Actmay
require that a non-Canadian not acquire control of the Company without prior
review and approval by the Minister of Innovation, Science and Economic
Development. The acquisition of one-third or more of the voting shares of the
Company would give rise a rebutable presumption of the acquisition of control,
and the acquisition of more than fifty percent of the voting shares of the
Company would be deemed to be an acquisition of control. In addition, the
Investment Canada Actprovides the Canadian government with broad
discretionary powers in relation to national security to review and potentially
prohibit, condition or require the divestiture of, any investment in the Company
by a non-Canadian, including non-control level investments. "Non-Canadian"
generally means an individual who is neither a Canadian citizen nor a permanent
resident of Canada within the meaning of the Immigration and Refugee
Protection Act (Canada) who has been ordinarily resident in Canada for not
more than one year after the time at which he or she first became eligible to
apply for Canadian citizenship, or a corporation, partnership, trust or joint
venture that is ultimately controlled by non-Canadians.   185 E.
    Taxation Canadian Federal Income Tax Consequences The following is, as of the date hereof, a summary of the
  principal Canadian federal income tax considerations under Income Tax Act
  (Canada) (the Tax Act) and the regulations thereunder (the
  Regulations) generally applicable to a beneficial holder of Common
  Stock who, at all relevant times, for the purposes of the Tax Act, deals at
  arms length with the Company, is not affiliated with the Company, holds such
  Common Stock as capital property, is neither resident nor deemed to be resident
  in Canada, does not use or hold, and will not be deemed to use or hold, Common
  Stock in a business carried on in Canada, is a resident of the United States for
  purposes of the Canada-United States Income Tax Convention (1980) (the
  Canada-U.S. Tax Convention), and is a qualifying person within the
  meaning of the Canada-U.S. Tax Convention (each, a US Resident Holder).
  In some circumstances, persons deriving amounts through fiscally transparent
  entities (including limited liability companies) may be entitled to benefits
  under the Canada-U.S. Tax Convention. US Resident Holders are urged to consult
  their own tax advisors to determine their entitlement to benefits under the
  Canada-U.S. Tax Convention based on their particular circumstances. Common Stock will generally be considered to be capital
property to a US Resident Holder unless the US Resident Holder holds or uses the
Common Stock or is deemed to hold or use the Common Stock in the course of
carrying on a business of trading or dealing in securities or has acquired them
or deemed to have acquired them in a transaction or transactions considered to
be an adventure in the nature of trade. This summary does not apply to a US Resident Holder (a) that is
a financial institution for purposes of the mark to market rules contained in
the Tax Act; (b) an interest in which is or would constitute a tax shelter
investment as defined in the Tax Act; (c) that is a specified financial
institution as defined in the Tax Act; (d) that is a corporation that does not
deal at arms length for purposes of the Tax Act with a corporation resident in
Canada and that is or becomes as part of a transaction or event or series of
transactions or events that includes the acquisition of the Common Stock,
controlled by a non-resident corporation for the purposes of the foreign
affiliate dumping rules in Section 212.3 of the Tax Act; (e) that reports its
Canadian tax results in a currency other than Canadian currency, all as
defined in the Tax Act; (f) that is exempt from tax under the Tax Act; or (g)
that has entered into, or will enter into, a synthetic disposition arrangement
or a derivative forward agreement with respect to the Common Stock, as those
terms are defined in the Tax Act. Such US Resident Holders should consult their
own tax advisors with respect to their holding of Common Stock. Special considerations, which are not discussed in this
summary, may apply to a US Resident Holder that is an insurer that carries on an
insurance business in Canada and elsewhere or an authorized foreign bank (as
defined in the Tax Act). Such US Resident Holders should consult their own
advisors. This summary does not address the deductibility of interest by
a US Resident Holder who has borrowed money or otherwise incurred debt in
connection with the acquisition of Common Stock. This summary is based upon the current provisions of the Tax
Act and the Regulations in force as of the date hereof, specific proposals to
amend the Tax Act and the Regulations (the Tax Proposals) which have
been announced by or on behalf the Minister of Finance (Canada) prior to the
date hereof, the current provisions of the Canada-U.S. Tax Convention, and
counsels understanding of the current published administrative policies and
assessing practices of the Canada Revenue Agency (the CRA). This
summary assumes that the Tax Proposals will be enacted in the form proposed and
does not take into account or anticipate any other changes in law, whether by
way of judicial, legislative or governmental decision or action, nor does it
take into account provincial, territorial or foreign income tax legislation or considerations, which may differ from the
Canadian federal income tax considerations discussed herein. No assurances can
be given that the Tax Proposals will be enacted as proposed or at all, or that
legislative, judicial or administrative changes will not modify or change the
statements expressed herein.   186 This summary is not exhaustive of all possible Canadian federal
  income tax considerations applicable to the holding of Common Stock. This
  summary is of a general nature only and is not intended to be, nor should it be
  construed to be, legal or income tax advice to any particular US Resident
  Holder. US Resident Holders should consult their own income tax advisors with
  respect to the tax consequences applicable to them based on their own particular
circumstances. Amounts Determined in Canadian Dollars For purposes of the Tax Act, all amounts relating to the Common
Stock must be expressed in Canadian dollars, including cost, adjusted cost base,
proceeds of disposition, and dividends, and amounts denominated in U.S. dollars
must be converted to Canadian dollars using single daily exchange rate published
by the Bank of Canada on the particular date the particular amount arose, or
such other rate of exchange as may be accepted by the CRA. US Resident Holders
may therefore realize additional income or gain by virtue of changes in foreign
exchange rates, and are advised to consult with their own tax advisors in this
regard. Currency tax issues are not discussed further in this summary. Taxation of Dividends Subject to an applicable international tax treaty or
convention, dividends paid or credited, or deemed to be paid or credited, to a
non-resident of Canada on the Common Stock will be subject to Canadian
withholding tax under the Tax Act at the rate of 25% of the gross amount of the
dividend. Such rate is generally reduced under the Canada-U.S. Tax Convention to
15% if the beneficial owner of such dividend is a US Resident Holder. The rate
of withholding tax is further reduced to 5% if the beneficial owner of such
dividend is a US Resident Holder that is a company that owns, directly or
indirectly, at least 10% of the voting stock of the Company. In addition, under
the Canada-U.S. Tax Convention, dividends may be exempt from such Canadian
withholding tax if paid to certain US Resident Holders that are qualifying
religious, scientific, literary, educational, or charitable tax exempt
organizations or qualifying trusts, companies, organizations, or arrangements
operated exclusively to administer or provide pension, retirement, or employee
benefits or benefits for the self-employed under one or more funds or plans
established to provide pension or retirement benefits or other employee benefits
that are exempt from tax in the United States and that have complied with
specific administrative procedures. Disposition of Common Stock A US Resident Holder will not be subject to tax under the Tax
Act in respect of any capital gain realized by such US Resident Holder on a
disposition of Common Stock, unless the Common Stock constitute taxable
Canadian property (as defined in the Tax Act) of the US Resident Holder at the
time of the disposition and are not treaty-protected property (as defined in
the Tax Act) of the US Resident Holder at the time of the disposition. Generally, as long as the Common Stock is then listed on a
designated stock exchange (which currently includes the TSX and the NYSE
American), the Common Stock will not constitute taxable Canadian property of a
US Resident Holder, unless at any time during the 60 month period immediately
preceding the disposition the following two conditions are met concurrently: (a)
the US Resident Holder, persons with which the US Resident Holder does not deal at arms
length, partnerships whose members include, either directly or indirectly
through one or more partnerships, the US Resident Holder or persons which do not
deal at arms length with the US Resident Holder, or any combination of them,
owned 25% or more of the issued shares of any class or series of shares of the
capital stock of the Company, and (b) more than 50% of the fair market value of
the Common Stock was derived directly or indirectly, from one or any combination
of real or immovable property situated in Canada, Canadian resource
properties, timber resource properties (each as defined in the Tax Act), and
options in respect of or interests in, or for civil law rights in, any such
property (whether or not such property exists).   187 In the case of a US Holder, the Common Stock of such US Holder
  will generally constitute treaty-protected property for purposes of the Tax
  Act unless the value of the Common Stock is derived principally from real
  property situated in Canada. For this purpose, real property has the meaning
  that term has under the laws of Canada and includes any option or similar right
  in respect thereof and usufruct of real property, rights to explore for or to
  exploit mineral deposits, sources and other natural resources and rights to
  amounts computed by reference to the amount or value of production from such
resources. Taxation of Capital Gains and Losses If the Common Stock is taxable Canadian property of a US
Resident Holder and is not treaty-protected property of that US Resident Holder
at the time of its disposition, that US Resident Holder will realize a capital
gain (or incur a capital loss) equal to the amount by which the proceeds of
disposition in respect of the Common Stock exceed (or are exceeded by) the
aggregate of the adjusted cost base to the Resident Holder of such Common Stock
immediately before the disposition and any reasonable expenses incurred for the
purpose of making the disposition. Generally, one half of any capital gain (a taxable capital
gain) realized by a US Resident Holder must be included in the US Resident
Holders income for the taxation year in which the disposition occurs. Subject
to and in accordance with the provisions of the Tax Act, one half of any capital
loss incurred by a Resident Holder (an allowable capital loss) must generally
be deducted from taxable capital gains realized by the Resident Holder in the
taxation year in which the disposition occurs. Allowable capital losses in
excess of taxable capital gains for the taxation year of disposition generally
may be carried back and deducted in the three preceding taxation years or
carried forward and deducted in any subsequent year against taxable capital
gains realized in such years, in the circumstances and to the extent provided in
the Tax Act. US Resident Holders whose Common Stock are taxable Canadian
property should consult their own advisors. United States Federal Income Tax
Considerations The following is a general summary of certain material U.S.
federal income tax considerations applicable to a U.S. Holder (as defined
herein) arising from and relating to the ownership and disposition of shares of
Common Stock. This summary is for general information purposes only and does not
purport to be a complete analysis or listing of all potential U.S. federal
income tax considerations that may apply to a U.S. Holder arising from or
relating to the ownership and disposition of shares of Common Stock. In
addition, this summary does not take into account the individual facts and
circumstances of any particular U.S. Holder that may affect the U.S. federal
income tax consequences to such U.S. Holder, including specific tax consequences
to a U.S. Holder under an applicable tax treaty. Accordingly, this summary is not intended to be, and should not be construed as,
legal or U.S. federal income tax advice with respect to any U.S. Holder. This
summary does not address the U.S. federal alternative minimum, U.S. federal
estate and gift, U.S. state and local, and non-U.S. tax consequences to U.S.
Holders of the ownership and disposition of shares of Common Stock. In addition,
except as specifically set forth below, this summary does not discuss applicable
income tax reporting requirements. Each prospective U.S. Holder should consult
its own tax advisors regarding the U.S. federal, U.S. federal alternative
minimum, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax
consequences relating to the ownership and disposition of shares of Common
Stock.   188 No legal opinion from U.S. legal counsel or ruling from the
  Internal Revenue Service (the "IRS") has been requested, or will be
  obtained, regarding the U.S. federal income tax consequences of the ownership
  and disposition of shares of Common Stock. This summary is not binding on the
  IRS, and the IRS is not precluded from taking a position that is different from,
  or contrary to, the positions taken in this summary. In addition, because the
  authorities on which this summary is based are subject to various
  interpretations, the IRS and the U.S. courts could disagree with one or more of
the conclusions described in this summary. Scope of this Summary Authorities This summary is based on the U.S. Internal Revenue Code of
1986, as amended (the "Code"), Treasury Regulations (whether final,
temporary, or proposed), published rulings of the IRS, published administrative
positions of the IRS, the Canada-U.S. Tax Convention, and U.S. court decisions
that are available as of the date of this document. Any of the authorities on
which this summary is based could be changed in a material and adverse manner at
any time, and any such change could be applied on a retroactive or prospective
basis, which could affect the U.S. federal income tax considerations described
in this summary. Except as provided herein, this summary does not discuss the
potential effects of any proposed legislation. U.S. Holders For purposes of this summary, the term "U.S. Holder"
means a beneficial owner of shares of Common Stock that is for U.S. federal
income tax purposes: 
    a citizen or individual resident of the United
      States;
    a corporation (or other entity taxable as a
      corporation for U.S. federal income tax purposes) organized under the laws
      of the United States, any state thereof or the District of Columbia;
    an estate whose income is subject to U.S.
      federal income taxation regardless of its source; or
    a trust that (1) is subject to the primary
      supervision of a court within the U.S. and the control of one or more U.S.
      persons for all substantial decisions or (2) has a valid election in
      effect under applicable Treasury Regulations to be treated as a U.S.
      person. Non-U.S. Holders For purposes of this summary, a "non-U.S. Holder" is a
beneficial owner of shares of Common Stock that is not a U.S. Holder or a
partnership. This summary does not address the U.S. federal income tax consequences to non-U.S. Holders arising from or relating to
the ownership and disposition of shares of Common Stock. Accordingly, a non-U.S.
Holder should consult its own tax advisors regarding the U.S. federal, U.S.
federal alternative minimum, U.S. federal estate and gift, U.S. state and local,
and non-U.S. tax consequences (including the potential application of and
operation of any income tax treaties) relating to the ownership and disposition
of shares of Common Stock.   189 U.S. Holders Subject to Special U.S. Federal Income Tax
Rules Not Addressed This summary does not address the U.S. federal income tax
considerations applicable to U.S. Holders that are subject to special provisions
under the Code, including, but not limited to U.S. Holders that: (a) are
tax-exempt organizations, qualified retirement plans, individual retirement
accounts, or other tax-deferred accounts; (b) are financial institutions,
underwriters, insurance companies, real estate investment trusts, or regulated
investment companies; (c) are broker-dealers, dealers, or traders in securities
or currencies that elect to apply a mark-to-market accounting method; (d) have a
"functional currency" other than the U.S. dollar; (e) own shares of Common Stock
as part of a straddle, hedging transaction, conversion transaction, constructive
sale, or other arrangement involving more than one position; (f) acquired shares
of Common Stock in connection with the exercise of employee stock options or
otherwise as compensation for services; (g) hold shares of Common Stock other
than as a capital asset within the meaning of Section 1221 of the Code
(generally, property held for investment purposes); (h) are subject to the
alternative minimum tax; or (i) own or have owned or will own (directly,
indirectly, or by attribution) 10% or more of the total combined voting power of
the outstanding shares of the Company. This summary also does not address the
U.S. federal income tax considerations applicable to U.S. Holders who are: (a)
U.S. expatriates or former long-term residents of the U.S.; (b) persons that
have been, are, or will be a resident or deemed to be a resident in Canada for
purposes of the Tax Act; (c) persons that use or hold, will use or hold, or that
are or will be deemed to use or hold shares of Common Stock in connection with
carrying on a business in Canada; (d) persons whose shares of Common Stock
constitute "taxable Canadian property" under the Tax Act; or (e) persons that
have a permanent establishment in Canada for the purposes of the Canada-U.S. Tax
Convention. U.S. Holders that are subject to special provisions under the Code,
including, but not limited to, U.S. Holders described immediately above, should
consult their own tax advisors regarding the U.S. federal, U.S. federal
alternative minimum, U.S. federal estate and gift, U.S. state and local, and
non-U.S. tax consequences relating to the ownership and disposition of shares of
Common Stock. In particular, it is noted that the Company may be or may
become a "controlled foreign corporation" for U.S. federal income tax purposes,
and therefore, if a U.S. Holder is a U.S. shareholder owning 10% or more of the
Company's voting stock directly, indirectly and/or under the applicable
attribution rules, the U.S. federal income tax consequences to such U.S. Holder
of owning shares of Common Stock may be significantly different than those
described below in several respects. If a U.S. Holder owns 10% or more of the
Company's voting stock directly, indirectly and/or under the applicable
attribution rules, such holder should consult its own tax advisors regarding the
U.S. federal income tax rules applicable to an investment in a controlled
foreign corporation. If an entity or arrangement that is classified as a partnership
(or other "pass-through" entity) for U.S. federal income tax purposes holds
shares of Common Stock, the U.S. federal income tax consequences to such entity
and the partners (or other owners) of such entity generally will depend on the
activities of the entity and the status of such partners (or owners). This
summary does not address the tax consequences to any such entity or owner.
Partners (or other owners) of entities or arrangements that are classified as
partnerships or as "pass-through" entities for U.S. federal income tax purposes should consult their own tax advisors regarding the
U.S. federal income tax consequences arising from and relating to the ownership
and disposition of shares of Common Stock.   190 Passive Foreign Investment Company Rules PFIC Status of the Company If the Company were to constitute a passive foreign investment
company under the meaning of Section 1297 of the Code (a PFIC, as
defined below) for any year during a U.S. Holders holding period, then certain
potentially adverse rules may affect the U.S. federal income tax consequences to
a U.S. Holder as a result of the acquisition, ownership and disposition of
shares of Common Stock. Based on current business plans and financial
expectations, the Company believes that it may be a PFIC for its current tax
year ending August 31, 2018 and may be a PFIC in future tax years. No opinion of
legal counsel or ruling from the IRS concerning the status of the Company as a
PFIC has been obtained or is currently planned to be requested. The
determination of whether any corporation was, or will be, a PFIC for a tax year
depends, in part, on the application of complex U.S. federal income tax rules,
which are subject to differing interpretations. In addition, whether any
corporation will be a PFIC for any tax year depends on the assets and income of
such corporation over the course of each such tax year and, as a result, cannot
be predicted with certainty as of the date of this document. Accordingly, there
can be no assurance that the IRS will not challenge any determination made by
the Company (or any subsidiary of the Company) concerning its PFIC status. Each
U.S. Holder should consult its own tax advisors regarding the PFIC status of the
Company and each subsidiary of the Company. In any year in which the Company is classified as a PFIC, a
U.S. Holder will be required to file an annual report with the IRS containing
such information as Treasury Regulations and/or other IRS guidance may require.
In addition to penalties, a failure to satisfy such reporting requirements may
result in an extension of the time period during which the IRS can assess a tax.
U.S. Holders should consult their own tax advisors regarding the requirements of
filing such information returns under these rules, including the requirement to
file an IRS Form 8621 annually. The Company generally will be a PFIC if, for a tax year, (a)
75% or more of the gross income of the Company is passive income (the PFIC
income test) or (b) 50% or more of the value of the Companys assets either
produce passive income or are held for the production of passive income, based
on the quarterly average of the fair market value of such assets (the PFIC
asset test). Gross income generally includes all sales revenues less the
cost of goods sold, plus income from investments and from incidental or outside
operations or sources, and passive income generally includes, for example,
dividends, interest, certain rents and royalties, certain gains from the sale of
stock and securities, and certain gains from commodities transactions. Active
business gains arising from the sale of commodities generally are excluded from
passive income if substantially all of a foreign corporations commodities are
stock in trade or inventory, depreciable property used in a trade or business,
or supplies regularly used or consumed in the ordinary course of its trade or
business, and certain other requirements are satisfied. For purposes of the PFIC income test and PFIC asset test
described above, if the Company owns, directly or indirectly, 25% or more of the
total value of the outstanding shares of another corporation, the Company will
be treated as if it (a) held a proportionate share of the assets of such other
corporation and (b) received directly a proportionate share of the income of
such other corporation. In addition, for purposes of the PFIC income test and
PFIC asset test described above, and assuming certain other requirements are met, passive income does not include certain
interest, dividends, rents, or royalties that are received or accrued by the
Company from certain related persons (as defined in Section 954(d)(3) of the
Code) also organized in Canada, to the extent such items are properly allocable
to the income of such related person that is not passive income.   191 Under certain attribution rules, if the Company is a PFIC, U.S.
  Holders will generally be deemed to own their proportionate share of the
  Companys direct or indirect equity interest in any company that is also a PFIC
  (a Subsidiary PFIC), and will generally be subject to U.S. federal
  income tax on their proportionate share of (a) any excess distributions, as
  described below, on the stock of a Subsidiary PFIC and (b) a disposition or
  deemed disposition of the stock of a Subsidiary PFIC by the Company or another
  Subsidiary PFIC, both as if such U.S. Holders directly held the shares of such
  Subsidiary PFIC. In addition, U.S. Holders may be subject to U.S. federal income
  tax on any indirect gain realized on the stock of a Subsidiary PFIC on the sale
  or disposition of shares of Common Stock. Accordingly, U.S. Holders should be
  aware that they could be subject to tax under the PFIC rules even if no
  distributions are received and no redemptions or other dispositions of shares of
Common Stock are made. Default PFIC Rules Under Section 1291 of the
Code If the Company is a PFIC for any tax year during which a U.S.
Holder owns shares of Common Stock, the U.S. federal income tax consequences to
such U.S. Holder of the acquisition, ownership, and disposition of shares of
Common Stock will depend on whether and when such U.S. Holder makes an election
to treat the Company and each Subsidiary PFIC, if any, as a qualified electing
fund or QEF under Section 1295 of the Code (a QEF Election)
or makes a mark-to-market election under Section 1296 of the Code (a
Mark-to-Market Election). A U.S. Holder that does not make either a QEF
Election or a Mark-to-Market Election will be referred to in this summary as a
Non-Electing U.S. Holder. A Non-Electing U.S. Holder will be subject to the rules of
Section 1291 of the Code (described below) with respect to (a) any gain
recognized on the sale or other taxable disposition of shares of Common Stock
and (b) any excess distribution received on the shares of Common Stock. A
distribution generally will be an excess distribution to the extent that such
distribution (together with all other distributions received in the current tax
year) exceeds 125% of the average distributions received during the three
preceding tax years (or during a U.S. Holders holding period for the shares of
Common Stock, if shorter). Under Section 1291 of the Code, any gain recognized on the sale
or other taxable disposition of shares of Common Stock (including an indirect
disposition of the stock of any Subsidiary PFIC), and any excess distribution
received on shares of Common Stock or with respect to the stock of a Subsidiary
PFIC, must be ratably allocated to each day in a Non-Electing U.S. Holders
holding period for the respective shares of Common Stock. The amount of any such
gain or excess distribution allocated to the tax year of disposition or
distribution of the excess distribution and to years before the entity became a
PFIC, if any, would be taxed as ordinary income (and not eligible for certain
preferred rates). The amounts allocated to any other tax year would be subject
to U.S. federal income tax at the highest tax rate applicable to ordinary income
in each such year, and an interest charge would be imposed on the tax liability
for each such year, calculated as if such tax liability had been due in each
such year. A Non-Electing U.S. Holder that is not a corporation must treat any
such interest paid as personal interest, which is not deductible.   192 If the Company is a PFIC for any tax year during which a
Non-Electing U.S. Holder holds shares of Common Stock, the Company will continue
to be treated as a PFIC with respect to such Non-Electing U.S. Holder,
regardless of whether the Company ceases to be a PFIC in one or more subsequent
tax years. A Non-Electing U.S. Holder may terminate this deemed PFIC status by
electing to recognize gain (which will be taxed under the rules of Section 1291
of the Code discussed above), but not loss, as if such shares of Common Stock
were sold on the last day of the last tax year for which the Company was a PFIC. QEF Election A U.S. Holder that makes a timely and effective QEF Election
for the first tax year in which the holding period of its shares of Common Stock
begins generally will not be subject to the rules of Section 1291 of the Code
discussed above with respect to its shares of Common Stock. A U.S. Holder that
makes a timely and effective QEF Election will be subject to U.S. federal income
tax on such U.S. Holders pro rata share of (a) the net capital gain of the
Company, which will be taxed as long-term capital gain to such U.S. Holder, and
(b) the ordinary earnings of the Company, which will be taxed as ordinary income
to such U.S. Holder. Generally, net capital gain is the excess of (a) net
long-term capital gain over (b) net short-term capital loss, and ordinary
earnings are the excess of (a) earnings and profits over (b) net capital
gain. A U.S. Holder that makes a QEF Election will be subject to U.S. federal
income tax on such amounts for each tax year in which the Company is a PFIC,
regardless of whether such amounts are actually distributed to such U.S. Holder
by the Company. However, for any tax year in which the Company is a PFIC and has
no net income or gain, U.S. Holders that have made a QEF Election would not have
any income inclusions as a result of the QEF Election. If a U.S. Holder that
made a QEF Election has an income inclusion, such a U.S. Holder may, subject to
certain limitations, elect to defer payment of current U.S. federal income tax
on such amounts, subject to an interest charge. If such U.S. Holder is not a
corporation, any such interest paid will be treated as personal interest,
which is not deductible. A U.S. Holder that makes a timely and effective QEF Election
with respect to the Company generally (a) may receive a tax-free distribution
from the Company to the extent that such distribution represents earnings and
profits of the Company that were previously included in income by the U.S.
Holder because of such QEF Election and (b) will adjust such U.S. Holders tax
basis in the shares of Common Stock to reflect the amount included in income or
allowed as a tax-free distribution because of such QEF Election. In addition, a
U.S. Holder that makes a QEF Election generally will recognize capital gain or
loss on the sale or other taxable disposition of shares of Common Stock. The procedure for making a QEF Election, and the U.S. federal
income tax consequences of making a QEF Election, will depend on whether such
QEF Election is timely. A QEF Election will be treated as timely if such QEF
Election is made for the first year in the U.S. Holders holding period for the
shares of Common Stock in which the Company was a PFIC. A U.S. Holder may make a
timely QEF Election by filing the appropriate QEF Election documents at the time
such U.S. Holder files a U.S. federal income tax return for such year. If a U.S.
Holder does not make a timely and effective QEF Election for the first year in
the U.S. Holders holding period for the shares of Common Stock, the U.S. Holder
may still be able to make a timely and effective QEF Election in a subsequent
year if such U.S. Holder meets certain requirements and makes a purging
election to recognize gain (which will be taxed under the rules of Section 1291
of the Code discussed above) as if such shares of Common Stock were sold for
their fair market value on the day the QEF Election is effective. If a U.S.
Holder makes a QEF Election but does not make a purging election to recognize
gain as discussed in the preceding sentence, then such U.S. Holder shall be
subject to the QEF Election rules and shall continue to be subject to tax under
the rules of Section 1291 discussed above with respect to its shares of
Common Stock. If a U.S. Holder owns PFIC stock indirectly through another PFIC,
separate QEF Elections must be made for the PFIC in which the   193 A QEF Election will apply to the tax year for which such QEF
  Election is timely made and to all subsequent tax years, unless such QEF
  Election is invalidated or terminated or the IRS consents to revocation of such
  QEF Election. If a U.S. Holder makes a QEF Election and, in a subsequent tax
  year, the Company ceases to be a PFIC, the QEF Election will remain in effect
  (although it will not be applicable) during those tax years in which the Company
  is not a PFIC. Accordingly, if the Company becomes a PFIC in another subsequent
  tax year, the QEF Election will be effective and the U.S. Holder will be subject
  to the QEF rules described above during any subsequent tax year in which the
Company qualifies as a PFIC. U.S. Holders should be aware that there can be no assurances
that the Company will satisfy the record keeping requirements that apply to a
QEF, or that the Company will supply U.S. Holders with information that such
U.S. Holders are required to report under the QEF rules, in the event that the
Company is a PFIC. Thus, U.S. Holders may not be able to make a QEF Election
with respect to their shares of Common Stock. Each U.S. Holder should consult
its own tax advisors regarding the availability of, and procedure for making, a
QEF Election. A U.S. Holder makes a QEF Election by attaching a completed IRS
Form 8621, including a PFIC Annual Information Statement, to a timely filed
United States federal income tax return. However, if the Company does not
provide the required information with regard to the Company or any of its
Subsidiary PFICs, U.S. Holders will not be able to make a QEF Election for such
entity and will continue to be subject to the rules of Section 1291 of the Code
discussed above that apply to Non-Electing U.S. Holders with respect to the
taxation of gains and excess distributions. Mark-to-Market Election A U.S. Holder may make a Mark-to-Market Election only if the
shares of Common Stock are marketable stock. The shares of Common Stock
generally will be marketable stock if the shares of Common Stock are regularly
traded on (a) a national securities exchange that is registered with the
Securities and Exchange Commission, (b) the national market system established
pursuant to section 11A of the Securities and Exchange Act of 1934, or (c) a
foreign securities exchange that is regulated or supervised by a governmental
authority of the country in which the market is located, provided that (i) such
foreign exchange has trading volume, listing, financial disclosure, and
surveillance requirements, and meets other requirements and the laws of the
country in which such foreign exchange is located, together with the rules of
such foreign exchange, ensure that such requirements are actually enforced and
(ii) the rules of such foreign exchange effectively promote active trading of
listed stocks. If such stock is traded on such a qualified exchange or other
market, such stock generally will be regularly traded for any calendar year
during which such stock is traded, other than in de minimis quantities, on at
least 15 days during each calendar quarter. Each U.S. Holder should consult its
own tax advisor in this regard. A U.S. Holder that makes a Mark-to-Market Election with respect
to its shares of Common Stock generally will not be subject to the rules of
Section 1291 of the Code discussed above with respect to such shares of Common
Stock. However, if a U.S. Holder does not make a Mark-to-Market Election
beginning in the first tax year of such U.S. Holders holding period for the
shares of Common Stock for which the Company is a PFIC and such U.S. Holder has
not made a timely QEF Election, the rules of Section 1291 of the Code discussed
above will apply to certain dispositions of, and distributions on, the shares of
Common Stock.   194 A U.S. Holder that makes a Mark-to-Market Election will include
in ordinary income, for each tax year in which the Company is a PFIC, an amount
equal to the excess, if any, of (a) the fair market value of the shares of
Common Stock, as of the close of such tax year over (b) such U.S. Holders
adjusted tax basis in such shares of Common Stock. A U.S. Holder that makes a
Mark-to-Market Election will be allowed a deduction in an amount equal to the
excess, if any, of (a) such U.S. Holders adjusted tax basis in the shares of
Common Stock, over (b) the fair market value of such shares of Common Stock (but
only to the extent of the net amount of previously included income as a result
of the Mark-to-Market Election for prior tax years). A U.S. Holder that makes a Mark-to-Market Election generally
also will adjust such U.S. Holders tax basis in the shares of Common Stock to
reflect the amount included in gross income or allowed as a deduction because of
such Mark-to-Market Election. In addition, upon a sale or other taxable
disposition of shares of Common Stock, a U.S. Holder that makes a Mark-to-Market
Election will recognize ordinary income or ordinary loss (not to exceed the
excess, if any, of (a) the amount included in ordinary income because of such
Mark-to-Market Election for prior tax years over (b) the amount allowed as a
deduction because of such Mark-to-Market Election for prior tax years). Losses
that exceed this limitation are subject to the rules generally applicable to
losses provided in the Code and Treasury Regulations. A U.S. Holder makes a Mark-to-Market Election by attaching a
completed IRS Form 8621 to a timely filed United States federal income tax
return. A Mark-to-Market Election applies to the tax year in which such
Mark-to-Market Election is made and to each subsequent tax year, unless the
shares of Common Stock cease to be marketable stock or the IRS consents to
revocation of such election. Each U.S. Holder should consult its own tax
advisors regarding the availability of, and procedure for making, a
Mark-to-Market Election. Although a U.S. Holder may be eligible to make a Mark-to-Market
Election with respect to the shares of Common Stock, no such election may be
made with respect to the stock of any Subsidiary PFIC that a U.S. Holder is
treated as owning, because such stock is not marketable. Hence, the
Mark-to-Market Election will not be effective to avoid the application of the
default rules of Section 1291 of the Code described above with respect to deemed
dispositions of Subsidiary PFIC stock or excess distributions from a Subsidiary
PFIC to its shareholder. Other PFIC Rules Under Section 1291(f) of the Code, the IRS has issued proposed
Treasury Regulations that, subject to certain exceptions, would cause a U.S.
Holder that had not made a timely QEF Election to recognize gain (but not loss)
upon certain transfers of shares of Common Stock that would otherwise be
tax-deferred (e.g., gifts and exchanges pursuant to corporate reorganizations).
However, the specific U.S. federal income tax consequences to a U.S. Holder may
vary based on the manner in which shares of Common Stock are transferred. Certain additional adverse rules may apply with respect to a
U.S. Holder if the Company is a PFIC, regardless of whether such U.S. Holder
makes a QEF Election. For example, under Section 1298(b)(6) of the Code, a U.S.
Holder that uses shares of Common Stock as security for a loan will, except as
may be provided in Treasury Regulations, be treated as having made a
taxable disposition of such shares of Common Stock.   195 Special rules also apply to the amount of foreign tax credit
  that a U.S. Holder may claim on a distribution from a PFIC. Subject to such
  special rules, foreign taxes paid with respect to any distribution in respect of
  stock in a PFIC are generally eligible for the foreign tax credit. The rules
  relating to distributions by a PFIC and their eligibility for the foreign tax
  credit are complicated, and a U.S. Holder should consult with its own tax
  advisors regarding the availability of the foreign tax credit with respect to
distributions by a PFIC. The PFIC rules are complex, and each U.S. Holder should consult
its own tax advisors regarding the PFIC rules and how the PFIC rules may affect
the U.S. federal income tax consequences of the acquisition, ownership, and
disposition of shares of Common Stock. Ownership and Disposition of Shares of Common Stock to
the Extent that the Passive Foreign Investment Company Rules do not Apply The following discussion is subject, in its entirety, to the
rules described above under the heading "Passive Foreign Investment Company
Rules". Distributions on Shares of Common Stock A U.S. Holder that receives a distribution, including a
constructive distribution, with respect to an share of Common Stock will be
required to include the amount of such distribution in gross income as a
dividend (without reduction for any Canadian income tax withheld from such
distribution) to the extent of the current or accumulated "earnings and profits"
of the Company, as computed for U.S. federal income tax purposes. To the extent
that a distribution exceeds the current and accumulated "earnings and profits"
of the Company, such distribution will be treated first as a tax-free return of
capital to the extent of a U.S. Holder's tax basis in the shares of Common Stock
and thereafter as gain from the sale or exchange of such shares of Common Stock.
(See "Sale or Other Taxable Disposition of Shares of Common Stock" below).
However, the Company does not intend to maintain the calculations of its
earnings and profits in accordance with U.S. federal income tax principles, and
each U.S. Holder therefore should assume that any distribution by the Company
with respect to the shares of Common Stock will constitute ordinary dividend
income. Dividends received on shares of Common Stock will not be eligible for
the "dividends received deduction". Subject to applicable limitations and
provided the Company is eligible for the benefits of the Canada-U.S. Tax
Convention or the shares of Common Stock are readily tradable on a United States
securities market, dividends paid by the Company to non-corporate U.S. Holders,
including individuals, generally will be eligible for the preferential tax rates
applicable to long-term capital gains for dividends, provided certain holding
period and other conditions are satisfied, including that the Company not be
classified as a PFIC in the tax year of distribution or in the preceding tax
year. If the Company is a PFIC, a dividend generally will be taxed to a U.S.
Holder at ordinary income tax rates. The dividend rules are complex, and each
U.S. Holder should consult its own tax advisors regarding the application of
such rules. Sale or Other Taxable Disposition of Shares of Common Stock Upon the sale or other taxable disposition of shares of Common
Stock, a U.S. Holder generally will recognize capital gain or loss in an amount
equal to the difference between the U.S. dollar value of cash received plus the
fair market value of any property received and such U.S. Holder's tax basis in
such shares of Common Stock sold or otherwise disposed of. A U.S.
Holder's tax basis in shares of Common Stock generally will be such U.S.
Holder's U.S. dollar cost for such shares of Common Stock. Gain or loss
recognized on such sale or other disposition generally will be long-term capital
gain or loss if, at the time of the sale or other disposition, the shares of
Common Stock have been held for more than one year.   196 Preferential tax rates currently apply to long-term capital
  gain of a U.S. Holder that is an individual, estate, or trust. There are no
  preferential tax rates for long-term capital gain of a U.S. Holder that is a
  corporation. Deductions for capital losses are subject to significant
limitations under the Code. Additional Considerations Additional Tax on Passive Income Certain U.S. Holders that are individuals, estates or trusts
(other than trusts that are exempt from tax) will be subject to a 3.8% tax on
all or a portion of their "net investment income", which includes dividends on
the shares of Common Stock, and net gains from the disposition of the shares of
Common Stock. Special rules apply to PFICs. U.S. Holders that are individuals,
estates or trusts should consult their own tax advisors regarding the
applicability of this tax to any of their income or gains in respect of the
shares of Common Stock. Receipt of Foreign Currency The amount of any distribution paid to a U.S. Holder in foreign
currency, or on the sale, exchange or other taxable disposition of shares of
Common Stock, generally will be equal to the U.S. dollar value of such foreign
currency based on the exchange rate applicable on the date of receipt
(regardless of whether such foreign currency is converted into U.S. dollars at
that time). A U.S. Holder will have a tax basis in the foreign currency equal to
its U.S. dollar value on the date of receipt. Any U.S. Holder who converts or
otherwise disposes of the foreign currency after the date of receipt may have a
foreign currency exchange gain or loss that would be treated as ordinary income
or loss, and generally will be U.S. source income or loss for foreign tax credit
purposes. Different rules apply to U.S. Holders who use the accrual method of
tax accounting. Each U.S. Holder should consult its own U.S. tax advisors
regarding the U.S. federal income tax consequences of receiving, owning, and
disposing of foreign currency. Foreign Tax Credit Subject to the PFIC rules discussed above, a U.S. Holder that
pays (whether directly or through withholding) Canadian income tax with respect
to dividends paid on the shares of Common Stock generally will be entitled, at
the election of such U.S. Holder, to receive either a deduction or a credit for
such Canadian income tax. Generally, a credit will reduce a U.S. Holder's U.S.
federal income tax liability on a dollar-for-dollar basis, whereas a deduction
will reduce a U.S. Holder's income subject to U.S. federal income tax. This
election is made on a year-by-year basis and applies to all foreign taxes paid
(whether directly or through withholding) by a U.S. Holder during a year. Complex limitations apply to the foreign tax credit, including
the general limitation that the credit cannot exceed the proportionate share of
a U.S. Holder's U.S. federal income tax liability that such U.S. Holder's
"foreign source" taxable income bears to such U.S. Holder's worldwide taxable
income. In applying this limitation, a U.S. Holder's various items of income and
deduction must be classified, under complex rules, as either "foreign source" or
"U.S. source". Generally, dividends paid by a foreign corporation should be treated as foreign source for this
purpose. However, and subject to certain exceptions, a portion of the dividends
paid by a foreign corporation will be treated as U.S. source income for U.S.
foreign tax credit purposes, in proportion to its U.S. source earnings and
profits, if U.S. persons own, directly or indirectly, 50 percent or more of the
voting power or value of the foreign corporation's common shares. If a portion
of any dividends paid with respect to the shares of Common Stock are treated as
U.S. source income under these rules, it may limit the ability of a U.S. Holder
to claim a foreign tax credit for Canadian withholding taxes imposed in respect
of such dividend. In addition, the amount of a distribution with respect to the
shares of Common Stock that is treated as a "dividend" may be lower for U.S.
federal income tax purposes than it is for Canadian federal income tax purposes,
resulting in a reduced foreign tax credit allowance to a U.S. Holder. With
respect to gains recognized on the sale of stock of a foreign corporation by a
U.S. Holder, such gains are generally treated as U.S. source for purposes of the
foreign tax credit. These limitations are calculated separately with respect to
specific categories of income. The foreign tax credit rules are complex, and
each U.S. Holder should consult its own U.S. tax advisors regarding the foreign
tax credit rules.   197 Backup Withholding and Information Reporting Under U.S. federal income tax law and Treasury Regulations,
certain categories of U.S. Holders must file information returns with respect to
their investment in, or involvement in, a foreign corporation. For example, U.S.
return disclosure obligations (and related penalties) are imposed on individuals
who are U.S. Holders that hold certain specified foreign financial assets in
excess of certain threshold amounts. The definition of specified foreign
financial assets includes not only financial accounts maintained in foreign
financial institutions, but also, unless held in accounts maintained by a
financial institution, any stock or security issued by a non-U.S. person, any
financial instrument or contract held for investment that has an issuer or
counterparty other than a U.S. person and any interest in a non-U.S. entity.
U.S. Holders may be subject to these reporting requirements unless their shares
of Common Stock are held in an account at certain financial institutions.
Penalties for failure to file certain of these information returns are
substantial. U.S. Holders should consult their own tax advisors regarding the
requirements of filing information returns, including the requirement to file an
IRS Form 8938. Payments made within the U.S. or by a U.S. payor or U.S.
middleman, of dividends on, and proceeds arising from the sale or other taxable
disposition of, shares of Common Stock will generally be subject to information
reporting and backup withholding tax at the rate of 28% if a U.S. Holder (a)
fails to furnish such U.S. Holder's correct U.S. taxpayer identification number
(generally on IRS Form W-9), (b) furnishes an incorrect U.S. taxpayer
identification number, (c) is notified by the IRS that such U.S. Holder has
previously failed to properly report items subject to backup withholding tax, or
(d) fails to certify, under penalty of perjury, that such U.S. Holder has
furnished its correct U.S. taxpayer identification number and that the IRS has
not notified such U.S. Holder that it is subject to backup withholding tax.
However, certain exempt persons generally are excluded from these information
reporting and backup withholding rules. Backup withholding is not an additional
tax. Any amounts withheld under the U.S. backup withholding tax rules will be
allowed as a credit against a U.S. Holder's U.S. federal income tax liability,
if any, or will be refunded, if such U.S. Holder furnishes required information
to the IRS in a timely manner. The discussion of reporting requirements set forth above is not
intended to constitute an exhaustive description of all reporting requirements
that may apply to a U.S. Holder. A failure to satisfy certain reporting
requirements may result in an extension of the time period during which the IRS
can assess a tax, and under certain circumstances, such an extension may apply
to assessments of amounts unrelated to any unsatisfied reporting requirement. Each U.S.
Holder should consult its own tax advisor regarding the information reporting
and backup withholding rules.   198 F.
    Dividends and Paying
Agents Not applicable. G.
    Statement by Experts Not applicable. H.
    Documents on Display 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, 2017. 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. I.
    Subsidiary Information Not applicable. ITEM 11.
    QUANTITATIVE AND QUALITATIVE DISCLOSURES
      ABOUT MARKET RISK (a) Currency Risk While the Companys financial statements are presented in U.S.
dollars, the Companys functional currency is the Canadian dollar, the
functional currency of the Companys subsidiaries is the South African Rand, and
a significant portion of the Companys and its subsidiaries expenses are
incurred in Canadian dollars and South African Rand. Therefore, the Company is
subject to currency risk with respect to changes in exchange rates among the
U.S. dollar, Canadian dollar and South African Rand. The Company has not entered
into any agreements or purchased any instruments to hedge its currency risks. A
hypothetical 10% strengthening/weakening in the U.S. dollar versus the Canadian
dollar and Rand would have given rise to a decrease/increase in net loss for the
year ended August 31, 2017 of approximately $59 million. For further
information, see note 16 to the Companys financial statements.   199 (b) Interest Rate Risk Our primary exposure to interest rate risk is through our
  borrowings under the Sprott Facility and LMM Facility, which bear interest at
  floating rates plus a specified margin. At August 31, 2017, based on this
  exposure, a 1% change in the average interest rate (representing approximately a
  10% hypothetical change in our interest rates) would give rise to an
  increase/decrease of approximately $4 million on interest expense for the year
  ended August 31, 2017. (c) Commodity Risk As a natural resource company, we are exposed to commodity
price risks relating to the prices of any metals we produce, as well as certain
commodities required to operate our properties. During the year ended August 31,
2017, our primary commodity risk related to the price of 4E metals produced from
the Maseve Mine, which has since been placed on care and maintenance and is
expected to be sold in the Maseve Sale Transaction. A hypothetical 10% change in
the realized price of 4E metals would have had approximately a $1.68 million
effect on our cash flows for the year ended August 31, 2017. ITEM 12.
    DESCRIPTION OF SECURITIES OTHER THAN EQUITY
      SECURITIES Not applicable.   200 PART II ITEM 13.
    DEFAULTS, DIVIDEND ARREARAGES AND
      DELINQUENCIES Not applicable. ITEM 14.
    MATERIAL MODIFICATIONS TO THE RIGHTS OF
      SECURITY HOLDERS AND USE OF PROCEEDS Certain restrictions on the payment of dividends are described
under Item 8.A. ITEM 15.
    CONTROLS AND PROCEDURES 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 SEC and Canadian Securities Administrators
requirements are recorded, processed, summarized and reported in the manner
specified by the relevant securities laws applicable to the Company. Disclosure
controls and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed by an issuer in the
reports that it files or submits under the applicable securities legislation is
accumulated and communicated to the issuers management, including its principal
executive and principal financial officers, or persons performing similar
functions, as appropriate to allow timely decisions regarding required
disclosure. The Chief Executive Officer and the Chief Financial Officer have
evaluated the Companys disclosure controls and procedures as at August 31, 2017
through inquiry, review and testing, as well as by drawing upon their own
relevant experience. The Chief Executive Officer and the Chief Financial Officer
have concluded that the Companys disclosure controls and procedures were
effective as at August 31, 2017. 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 framework in Internal Control -
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO) to evaluate the effectiveness of the
Companys internal control over financial reporting as at August 31, 2017. Based
on this evaluation, management has concluded that the Companys internal
controls over financial reporting was effective as at August 31, 2017. Changes in Internal Controls over Financial
Reporting Management is responsible for establishing and maintaining
adequate internal controls over financial reporting. Any system of internal
control over financial reporting, no matter how well designed, has inherent
limitations. Therefore, even those systems determined to be effective can
provide only reasonable assurance with respect to financial statement
preparation and presentation. There has been no change in our internal control
over financial reporting during the year ended August 31, 2017 that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting. Exemption from Section 404(b) of the Sarbanes-Oxley
Act Under the Jumpstart Our Business & Startups Act (JOBS
Act) emerging growth companies are exempt from Section 404(b) of the
Sarbanes-Oxley Act, which generally requires public companies to provide an independent auditor attestation of managements assessment of
the effectiveness of their internal control over financial reporting. The
Company qualifies as an emerging growth company under the JOBS Act and therefore
has not included an independent auditor attestation of managements assessment
of the effectiveness of its internal control over financial reporting in this
MD&A or in its audited annual   201 **ITEM
      15T.**
    CONTROLS AND PROCEDURES Not applicable. **ITEM
      16A.**
    AUDIT COMMITTEE FINANCIAL EXPERT The board of directors has determined that there are two
financial experts on our Audit Committee: Iain McLean, director and Eric
Carlson, director. 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. Each of Mr.
McLean and Mr. Carlson is independent within the meaning of NYSE American
listing standards. **ITEM
      16B.**
    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. 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. A copy of the Code is posted on the
Companys website, at www.platinumgroupmetals.net. 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, 2017. **ITEM
      16C.**
    PRINCIPAL ACCOUNTANT FEES AND SERVICES 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,
2017 and 2016 are set forth below in $:   202 Year ended
    
    
    Year ended31-Aug-17
    
    
    31-Aug-16Audit Fees
    $
    263,242.00
    
    $
    219,516.00AuditRelated Fees(1)
    $
    55,041.00
    
    $
    52,032.00Tax Fees(2)
    $
    -
    
    $
    4,525.00All
      Other Fees(3)
    $
    97,121.00
    
    $
    55,388.00Total
    $
    415,404.00
    
    $
    331,461.00
 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.(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. Pre-Approval Policies The Audit Committees pre-approval policies are described under
Item 6.C. Board Practices. ITEM 16D.
    EXEMPTIONS FROM THE LISTING STANDARDS FOR
      AUDIT COMMITTEES Not applicable. ITEM 16E.
    PURCHASES OF EQUITY SECURITIES BY THE ISSUER
      AND AFFILIATED PURCHASERS There were no purchases of equity securities by us or by any
affiliated purchaser during the period covered by this Annual Report. **ITEM
      16F.**
    CHANGE IN REGISTRANTS CERTIFYING
      ACCOUNTANT None. **ITEM
      16G.**
    CORPORATE GOVERNANCE The Companys common shares are listed for trading on the NYSE
American. Section 110 of the NYSE American Company Guide permits the NYSE
American to consider the laws, customs and practices of foreign issuers in
relaxing certain NYSE American listing criteria, and to grant exemptions from
NYSE American 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 NYSE American standards is as follows: Shareholder Meeting Quorum Requirement: The NYSE
American minimum quorum requirement for a shareholder meeting is one-third of
the outstanding shares of common stock. In addition, a company listed on NYSE
American is required to state its quorum requirement in its bylaws. The
Companys quorum requirement is set forth in its articles. The Companys
articles provide that a quorum for the transaction of business at any
shareholders' meetings is two persons who are, or who represent by proxy,
shareholders who, in the aggregate, hold at least 5% of the issued shares
entitled to be voted thereat. However, if there is only one shareholder entitled
to vote at a meeting of shareholders, the quorum is one person who is, or who
represents by proxy, that shareholder. If within one-half hour from the time set
for the holding of a shareholders meeting, a quorum is not present, a meeting
convened by requisition of the shareholders shall be dissolved. In any other
case a meeting shall stand adjourned to the same day in the next week at the
same time and place; and, if a quorum is not present within one-half hour from
the time appointed for the adjourned meeting, the persons present and being, or
representing by proxy, one or more shareholders entitled to attend and vote at
such meeting shall constitute a quorum.   203 Proxy Delivery Requirement: NYSE American requires the
  solicitation of proxies and delivery of proxy statements for all shareholder
  meetings, and requires that these proxies be solicited pursuant to a proxy
  statement that conforms to the proxy rules of the U.S. Securities and Exchange
  Commission. The Company is a foreign private issuer as defined in Rule 3b-4
  under the U.S. Securities Exchange Act of 1934, as amended, and the equity
  securities of the Company are accordingly exempt from the proxy rules set forth
  in Sections 14(a), 14(b), 14(c) and 14(f) of such Act. The Company solicits
proxies in accordance with applicable rules and regulations in Canada. Shareholder Approval Requirements: NYSE American
requires a listed company to obtain the approval of its shareholders for certain
types of securities issuances, including private placements that may result in
the issuance of common shares (or securities convertible into common shares)
equal to 20% or more of presently outstanding shares for less than the greater
of book or market value of the shares. In general, there is no such requirement
under British Columbia law or under the policies of the Toronto Stock Exchange
unless the transaction: materially affects control of the listed issuer;
provides consideration to insiders in aggregate of 10% or greater of the market
capitalization of the listed issuer, during any six-month period, and has not
been negotiated at arms length; or the transaction is a private placement for
an aggregate number of listed securities issuable greater than 25% of the number
of securities of the listed issuer which are outstanding, on a non-diluted
basis, prior to the date of closing of the transaction where the price per
security is less than the market price (as such term is defined under Toronto
Stock Exchange policies) but within the discounts allowable under Toronto Stock
Exchange policies. The Company will seek a waiver from NYSE Americans
shareholder approval requirements in circumstances where the securities issuance
does not trigger such a requirement under British Columbia law or under the
policies of the Toronto Stock Exchange. The foregoing is consistent with the laws, customs and
practices in Canada. **ITEM
      16H.**
    MINE SAFETY DISCLOSURE The Company was not the operator, and did not have a subsidiary
that was an operator, of a coal or other mine, as defined in Section 3 of the
Federal Mine Safety and Health Act of 1977, in the United States during the year
ended August 31, 2017.   PART III ITEM 17.
    FINANCIAL STATEMENTS Not applicable ITEM 18.
    FINANCIAL STATEMENTS Following are the Companys Consolidated Financial Statements
for the year ended August 31, 2017.     Platinum Group Metals Ltd.
(An Exploration and Development Stage Company) Consolidated Financial
Statements(all amounts in thousands of United States Dollars unless
otherwise noted) For the year ended August 31, 2017 Filed: November 29, 2017     November 29, 2017 Report of Independent Registered
Public Accounting Firm To the Shareholders of Platinum
Group Metals Ltd. We have audited the accompanying
consolidated financial statements of Platinum Group Metals Ltd. and its
subsidiaries, which comprise the consolidated statements of financial position
as at August 31, 2017 and August 31, 2016 and the related consolidated statement
of loss and comprehensive loss, changes in equity and cash flows for each of the
years in the three-year period ended August 31, 2017. Management is responsible
for these consolidated financial statements. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. Our audits of the consolidated financial
statements included examining, on a test basis, evidence supporting the amounts
and disclosures in the consolidated financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall consolidated financial statement presentation. We were
not engaged to perform an audit of the companys internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the companys internal control over financial reporting.
Accordingly, we express no such opinion. Our audits also included performing
such other procedures as we considered necessary in the circumstances. We
believe that our audits provide a reasonable basis for our opinions. In our opinion, the consolidated
financial statements referred to above present fairly, in all material respects,
the financial position of Platinum Group Metals Ltd. and its subsidiaries as of
August 31, 2017 and August 31, 2016 and the results of their operations and
their cash flows for each of the years in the three-year period ended August 31,
2017 in conformity with International Financial Reporting Standards as issued by
the International Accounting Standards Board. Emphasis of matter The accompanying consolidated financial
statements have been prepared assuming the Company will continue as a going
concern. As discussed in Note 1 to the financial statements, the Company has
suffered recurring losses from operations and significant amounts of debt
payable without any current source of operating income. The Company also has a
net capital deficiency that raise substantial doubt about its ability to
continue as a going concern. Management's plans in regard to these matters are
also described in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty. (Signed) PricewaterhouseCoopers
LLP Chartered Professional
Accountants PricewaterhouseCoopers LLP
PricewaterhouseCoopers Place, 250 Howe Street, Suite 1400, Vancouver,
British Columbia, Canada V6C 3S7 T: +1 604 806 7000, F: +1 604 806
7806, www.pwc.com/ca PwC refers to PricewaterhouseCoopers
LLP, an Ontario limited liability partnership.]   PLATINUM GROUP METALS LTD.(An exploration and
development stage company)Consolidated Statements of Financial Position
(in thousands of United States Dollars) August 31,
    
    
    August 31,2017
    
    
    2016ASSETSCurrentCash and
      cash equivalents
    $
    3,414
    
    $
    16,450Amounts receivable (Note 4)
    
    2,058
    
    
    6,087Prepaid
      expenses
    
    645
    
    
    367Asset held for sale
      (Note 6)
    
    69,889
    
    
    -Total current assets
    
    76,006
    
    
    22,904Performance bonds
    
    79
    
    
    4,912Exploration and evaluation
      assets (Note 7)
    
    22,900
    
    
    22,346Property, plant and equipment (Note 5)
    
    1,543
    
    
    469,696Total assets
    $
    100,528
    
    $
    519,858LIABILITIESCurrentAccounts
      payable and other liabilities
    $
    16,443
    
    $
    16,920Loan payable (Note 8)
    
    46,305
    
    
    26,667Total current liabilities
    
    62,748
    
    
    43,587Loans payable (Note 8)
    
    43,821
    
    
    54,586Convertible notes (Note 9)
    
    17,225
    
    
    -Asset retirement obligation
    
    -
    
    
    2,237Total liabilities
    
    123,794
    
    
    100,410SHAREHOLDERS EQUITYShare capital (Note 10)
    
    800,894
    
    
    714,190Contributed surplus (Note 10)
    
    25,870
    
    
    24,003Accumulated other comprehensive loss
    
    (170,505
    )
    
    (232,179
    )Deficit
    
    (667,617
    )
    
    (125,245
    )Total shareholders equity attributable
      to shareholders of Platinum Group Metals Ltd.
    
    (11,358
    )
    
    380,769Non-controlling interest (Note 11)
    
    (11,908
    )
    
    38,679Total shareholders equity
    
    (23,266
    )
    
    419,448Total liabilities and shareholders equity
    $
    100,528
    
    $
    519,858Going
      Concern (Note 1)Contingencies
      and Commitments (Note 13)Subsequent
      Events (Note 20) Approved by the Board of Directors and authorized for issue on
November 29, 2017 Iain
      McLean
    
    Eric CarlsonIain McLean, Director
    
    Eric Carlson, Director  The accompanying notes are an integral part of the
      consolidated financial statements.
    FS.2    PLATINUM GROUP METALS LTD.(An exploration and
development stage company)Consolidated Statements of Loss (Income) and
Comprehensive Loss (Income) (in thousands of United States Dollars except
share and per share data) Year Ended
    
    
    Year Ended
    
    
    Year EndedAugust 31,
    
    
    August 31,
    
    
    August 31,2017
    
    
    2016
    
    
    2015ExpensesGeneral and
      administrative (Note 16)
    $
    5,749
    
    $
    5,421
    
    $
    6,888Interest (Note 9)
    
    367
    
    
    -
    
    
    -Foreign exchange
      gain
    
    (4,563
    )
    
    (1,664
    )
    
    (8,876
    )Stock compensation expense (Note 10)
    
    1,144
    
    
    150
    
    
    1,155Impairment Charge
      (Note 6)
    
    589,162
    
    
    41,371
    
    
    -Termination and finance fees
    
    -
    
    
    -
    
    
    1,653Write-down of
      deferred financing fees
    
    -
    
    
    -
    
    
    3,515Write-down of exploration and
      evaluation assets
    
    -
    
    
    -
    
    
    2,331591,859
    
    
    45,278
    
    
    6,666Other incomeGain of fair
      value of financial instruments (Note 9)
    
    (2,081
    )
    
    -
    
    
    -Net finance income
    
    (1,062
    )
    
    (1,133
    )
    
    (3,781
    )Loss for the year before
      income taxes
    
    588,716
    
    
    44,145
    
    
    2,885Deferred income tax expense (recovery) (Note 19)
    
    1,655
    
    
    (7,494
    )
    
    1,087Loss for the year
    $
    590,371
    
    $
    36,651
    
    $
    3,972Items that may be subsequently reclassified
      to net loss:Currency translation adjustment
    
    (59,086
    )
    
    50,030
    
    
    100,401Comprehensive loss (income) for the year
    $
    531,285
    
    $
    86,681
    
    $
    104,373Loss attributable to:Shareholders of Platinum Group Metals Ltd.
    
    542,415
    
    
    20,675
    
    
    3,139Non-controlling interests
    
    47,956
    
    
    15,976
    
    
    833$
    590,371
    
    $
    36,651
    
    $
    3,972Comprehensive loss
      attributable to:Shareholders of
      Platinum Group Metals Ltd.
    
    480,741
    
    
    66,984
    
    
    93,875Non-controlling interests
    
    50,544
    
    
    19,697
    
    
    10,496$
    531,285
    
    $
    86,681
    
    $
    104,371Basic and diluted loss per common share
    $
    4.30
    
    $
    0.26
    
    $
    0.05Weighted average number of common shares
      outstanding:Basic and diluted
    
    126,019,077
    
    
    80,438,434
    
    
    69,583,645  See accompanying notes to the consolidated financial
      statements
    FS.3    PLATINUMGROUPMETALSLTD.(Anexplorationanddevelopmentstagecompany)Consolidated Statements of Changes in
Equity (inthousandsof United States Shares)
Dollars,except # ofCommon # of Common
    
    
    Share Capital
    
    
    Contributed
    
    
    Accumulated
    
    
    Deficit
    
    
    Attributable to
    
    
    Non-
    
    
    TotalShares
    
    
    
    
    
    Surplus
    
    
    Other
    
    
    
    
    
    Shareholders of
    
    
    ControllingComprehensive
    
    
    
    
    
    the Parent
    
    
    InterestIncome (loss)
    
    
    
    
    
    CompanyBalance, August 31,
      2014
    
    55,131,283
    
    $
    573,800
    
    $
    21,506
    
    $
    (93,055
    )
    $
    (109,791
    )
    $
    392,460
    
    $
    75,157
    
    $
    467,617Share based compensation
    
    -
    
    
    -
    
    
    2,140
    
    
    -
    
    
    -
    
    
    2,140
    
    
    -
    
    
    2,140Share
      issuance  financing
    
    21,480,000
    
    
    113,844
    
    
    -
    
    
    -
    
    
    -
    
    
    113,844
    
    
    -
    
    
    113,844Share issuance costs
    
    -
    
    
    (7,384
    )
    
    -
    
    
    -
    
    
    -
    
    
    (7,384
    )
    
    -
    
    
    (7,384
    )Shares issued
      for loan facilities
    
    283,019
    
    
    1,502
    
    
    -
    
    
    
    
    
    -
    
    
    1,502
    
    
    -
    
    
    1,502Transactions with
      non-controlling interest
    
    -
    
    
    -
    
    
    -
    
    
    (2,079
    )
    
    8,360
    
    
    6,281
    
    
    (6,281
    )
    
    -Foreign
      currency translation adjustment
    
    -
    
    
    -
    
    
    -
    
    
    (90,738
    )
    
    -
    
    
    (90,738
    )
    
    (9,663
    )
    
    (100,401
    )Net loss for the year
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (3,139
    )
    
    (3,139
    )
    
    (833
    )
    
    (3,972
    )Balance, August 31,
      2015
    
    76,894,302
    
    $
    681,762
    
    $
    23,646
    
    $
    (185,872
    )
    $
    (104,570
    )
    $
    414,966
    
    $
    58,380
    
    $
    473,346Share based compensation
    
    -
    
    
    -
    
    
    357
    
    
    -
    
    
    -
    
    
    357
    
    
    -
    
    
    357Share
      issuance  financing
    
    11,000,000
    
    
    33,000
    
    
    -
    
    
    -
    
    
    -
    
    
    33,000
    
    
    -
    
    
    33,000Share issuance costs
    
    -
    
    
    (2,959
    )
    
    -
    
    
    -
    
    
    -
    
    
    (2,959
    )
    
    -
    
    
    (2,959
    )Shares issued
      for loan facilities (Note 8)
    
    960,476
    
    
    2,384
    
    
    -
    
    
    -
    
    
    -
    
    
    2,384
    
    
    -
    
    
    2,384Shares issued upon the
      exercise of options
    
    2,250
    
    
    3
    
    
    -
    
    
    -
    
    
    -
    
    
    3
    
    
    -
    
    
    3Foreign
      currency translation adjustment
    
    -
    
    
    -
    
    
    -
    
    
    (46,307
    )
    
    -
    
    
    (46,307
    )
    
    (3,725
    )
    
    (50,030
    )Net loss for the year
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (20,675
    )
    
    (20,675
    )
    
    (15,976
    )
    
    (36,651
    )Balance, August 31,
      2016
    
    88,857,028
    
    $
    714,190
    
    $
    24,003
    
    $
    (232,179
    )
    $
    (125,245
    )
    $
    380,769
    
    $
    38,679
    
    $
    419,448Stock based compensation
    
    -
    
    
    -
    
    
    1,867
    
    
    -
    
    
    -
    
    
    1,867
    
    
    -
    
    
    1,867Share
      issuance  financing
    
    57,313,750
    
    
    88,774
    
    
    -
    
    
    -
    
    
    -
    
    
    88,774
    
    
    -
    
    
    88,774Share issuance costs
    
    -
    
    
    (7,210
    )
    
    -
    
    
    -
    
    
    -
    
    
    (7,210
    )
    
    -
    
    
    (7,210
    )Shares issued
      on conversion of convertible note
    
    13,190
    
    
    12
    
    
    
    
    
    
    
    
    
    
    
    12
    
    
    
    
    
    12Shares issued for loan
      facilities (Note 8)
    
    2,285,409
    
    
    5,128
    
    
    -
    
    
    -
    
    
    -
    
    
    5,128
    
    
    -
    
    
    5,128Transactions
      with non-controlling interest
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    43
    
    
    43
    
    
    (43
    )
    
    -Foreign currency translation
      adjustment
    
    -
    
    
    -
    
    
    -
    
    
    61,674
    
    
    -
    
    
    61,674
    
    
    (2,588
    )
    
    59,086Net loss for the year
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (542,415
    )
    
    (542,415
    )
    
    (47,956
    )
    
    (590,371
    )Balance August 31, 2017
    
    148,469,377
    
    $
    800,894
    
    $
    25,870
    
    $
    (170,505
    )
    $
    (667,617
    )
    $
    (11,358
    )
    $
    (11,908
    )
    $
    (23,266
    )  See accompanying notes to the consolidated financial
      statements
    FS.4    PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) For the year endedAugust 31, 2017
    
    
    August 31, 2016
    
    
    August 31, 2015OPERATING ACTIVITIESLoss
      for the year
    $
    (590,371
    )
    $
    (36,651
    )
    $
    (3,972
    )Add
      items not affecting cash:Depreciation
    
    535
    
    
    446
    
    
    518Accretion of convertible notes (Note 9)
    
    367
    
    
    -
    
    
    -Unrealized foreign exchange gain
    
    (324
    )
    
    (46
    )
    
    (2,673
    )Stock compensation expense (Note 10)
    
    1,144
    
    
    150
    
    
    1,178Gain on fair value of financial instruments
      (Note 9)
    
    (2,081
    )
    
    -Deferred income tax expense (recovery) (Note 19)
    
    1,656
    
    
    (7,494
    )
    
    895Impairment charge (Note 6)
    
    589,162
    
    
    41,371
    
    
    -Write-down of deferred finance fees
    
    -
    
    
    -
    
    
    3,868Write-down exploration expenses
    
    -
    
    
    -
    
    
    2,380Net
      change in non-cash working capital (Note 14)
    
    3,375
    
    
    (574
    )
    
    (1,977
    )3,463
    
    
    (2,798
    )
    
    217FINANCING ACTIVITIESShare issuance
    $
    88,774
    
    $
    33,000
    
    $
    113,844Share issuance costs
    
    (7,210
    )
    
    (2,958
    )
    
    (7,384
    )Share issuance  stock options
    
    -
    
    
    3
    
    
    -Cash proceeds convertible note
    
    20,000
    
    
    -
    
    
    -Costs associated with convertible notes
    
    (249
    )
    
    -
    
    
    -Interest paid on debt (Note 8)
    
    (3,938
    )
    
    (3,049
    )
    
    (1,161
    )Interest capitalized on debt proceeds
    
    67
    
    
    927
    
    
    -Cash proceeds from debt (Note 8)
    
    5,000
    
    
    80,000
    
    
    -Debt
      principal repayment
    
    (5,000
    )
    
    -
    
    
    -Costs associated
      with the debt (Note 8)
    
    (224
    )
    
    (1,240
    )
    
    -97,220
    
    
    106,683
    
    
    105,299INVESTING ACTIVITIESAcquisition of property, plant and equipment
    $
    (134,488
    )
    $
    (133,350
    )
    $
    (143,793
    )Proceeds from the sale of concentrate
    
    16,609
    
    
    6,645
    
    
    -Exploration expenditures, net of recoveries
    
    -
    
    
    -
    
    
    (8,120
    )Net
      payment of South African VAT
    
    (842
    )
    
    4,443
    
    
    3,008Performance bonds
    
    (600
    )
    
    (974
    )
    
    (591
    )(119,321
    )
    
    (123,236
    )
    
    (149,496
    )Net decrease in cash and
      cash equivalents
    
    (18,638
    )
    
    (19,351
    )
    
    (43,979
    )Effect of foreign exchange on cash and cash
      equivalents
    
    5,602
    
    
    (3,281
    )
    
    (16,404
    )Cash and cash equivalents, beginning of year
    
    16,450
    
    
    39,082
    
    
    99,465Cash and cash equivalents, end of year
    $
    3,414
    
    $
    16,450
    
    $
    39,082 FS.5   PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) 1.
    NATURE OF OPERATIONS AND GOING
  CONCERN The Company is a British Columbia, Canada, company formed by
amalgamation on February 18, 2002. The Companys shares are publicly listed on
the Toronto Stock Exchange (TSX) in Canada and the NYSE American in the
United States (formerly the NYSE MKT LLC). The Companys address is Suite
788-550 Burrard Street, Vancouver, British Columbia, V6C 2B5. The Company is an exploration and development company
conducting work on mineral properties it has staked or acquired by way of option
agreements in the Republic of South Africa. The Company is currently in the
process of disposing of the Maseve Mine to RBPlat. See Subsequent Events (Note
20) for further details. The Maseve Mine is owned through the operating company
Maseve, in which the Company held an 82.9% working interest as of August 31,
2017 and the Companys Black Economic Empowerment (BEE) partner, Africa
Wide, a wholly owned subsidiary of Wesizwe Platinum Ltd., owned 17.1% . A formal
mining right was granted for the Maseve Mine on April 4, 2012 by the Government
of South Africa (the Mining Right). On May 26, 2015, the Company announced an agreement whereby the
Waterberg JV property and Waterberg Extension property, both located on the
Northern Limb of the Bushveld Complex in South Africa, were combined into the
Waterberg Project. See details at Note 7 below. The Company published a
pre-feasibility study for the combined Waterberg Project in October 2016.
Subsequent to year-end Implats entered into a definitive agreement to purchase
15% of the Waterberg Project, the Company selling an 8.6% interest and JOGMEC
selling a 6.4% interest, with a further purchase and development option to
increase its interest up to 50.01% of the Waterberg Project. Please see
Subsequent Events (Note 20) for further details. These financial statements include the accounts of the Company
and its subsidiaries. The Companys main subsidiaries (collectively with the
Company, the Group) are as follows: Proportion of ownership interestPlace of
    and voting power heldincorporation
    August 31,
    August 31,Name of
      subsidiary
    Principal activity
    and operation
    2017
    2016Platinum Group Metals (RSA) (Pty) Ltd.
    Exploration
    South Africa
    100%
    100%Maseve Investments 11 (Pty) Ltd1
    Mining
    South Africa
    82.9%
    82.9%Mnombo Wethu Consultants (Pty) Limited.2
    Exploration
    South Africa
    49.9%
    49.9%Waterberg JV
      Resources (Pty) Ltd.3
    Exploration
    South Africa
    45.65%
    - 1See Note 5 Ownership of Maseve Mine.
2The Company controls Mnombo for accounting purposes.
3At August 31, 2017 the Company owned the 1 common share issued
and outstanding in Waterberg JV Co. Subsequent to year end, on September 21,
2017, the Company transferred all of the prospecting rights comprising the
Waterberg Project into Waterberg JV Co. and issued shares to all Waterberg
partners pro rata to their joint venture interests, resulting in the Company
holding a 45.65% direct interest in Waterberg JV Co., JOGMEC holding a 28.35%
interest and Mnombo, as the Companys BEE partner, holding 26%. These audited consolidated financial statements have been
prepared in accordance with International Financial Reporting Standards
(IFRS) applicable to a going concern which contemplates that the
Company will be able to realize its assets and settle its liabilities in the
normal course as the come due for the foreseeable future. As at August 31, 2017
the Company reported a net loss of $590 million for the year ended August 31,
2017 with the majority of that loss attributed to an impairment of the Maseve
Mine. At August 31, 2017, including the current portion of loan balances due and
assets held for sale, the Company has a working capital balance of $13 million.
At August 31, 2017, the Company was indebted for a principal amount of $80
million plus accrued interest of $9.1 million pursuant to the Amended and
Restated Sprott Facility and the LMM Facility (both as defined below). During
the year ended August 31, 2017 the Company completed a gross amount of $89
million in equity offerings and closed a convertible note financing for a gross
amount of $20 million. The Company currently has limited financial resources but subsequent to year-end announced the
sale of the Maseve Mine for gross proceeds of $74 million (see subsequent events
Note 20 for further details). In addition, Implats completed the strategic
acquisition of an 8.6% interest in the Waterberg Project from the Company for
$17.2 million, which amount was paid to the Company on November 6, 2017. As a
result of these two transactions after year end a debt repayment schedule with
Sprott and LMM (both as defined below) has been crystalized, (see subsequent
events Note 20 for further details). The Company has no sources of operating
income at present. The Companys ability to continue operations in the normal
course of business will therefore depend upon its ability to secure additional
funding by methods which could include debt refinancing, equity financing, sale
of assets and strategic partnerships. Management believes the Company will be
able to secure further funding as required. Nonetheless, there exist material
uncertainties resulting in substantial doubt as to the ability of the Company to
continue to meet its obligations as they come due and, hence the ultimate
appropriateness of the use of accounting principals applicable to a going
concern. FS.6   PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) These consolidated financial statements do not include
  adjustments or disclosures that may result should the Company not be able to
  continue as a going concern. If the going concern assumption were not
  appropriate for these consolidated financial statements, then adjustments would
  be required to the carrying value of assets and liabilities, the expenses, the
  reported comprehensive loss and balance sheet classifications used that would be
  necessary if the Company were unable to realize its assets and settle its
  liabilities as a going concern in the normal course of operations. These
adjustments could be material. 2.
    BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING
      POLICIES These consolidated financial statements have been prepared in
accordance with the Handbook of the Canadian Institute of Charted Accountants,
in accordance with IFRS, as issued by International Accounting Standards Board
(IASB), applicable to the preparation of consolidated financial
statements and in accordance with accounting policies based on IFRS standards
and International Financial Reporting Interpretations Committee (IFRIC)
interpretations. The Company has consistently applied the accounting policies
used in the preparation of its IFRS financial statements throughout all periods
presented, as if these policies had always been in effect. Significant Accounting Policies The principal accounting policies applied in the preparation of
these consolidated financial statements are set out below. a.
    Consolidation The consolidated financial statements include those of the
Company, its subsidiaries, associates, joint ventures and structured entities
that it controls, using uniform accounting policies. Control exists when the
Company has (i) power over the investee, (ii) exposure, or rights, to variable
returns from its involvement with the investee, and (iii) the ability to use its
power to affect its returns. Non-controlling interests in the net assets of consolidated
subsidiaries are identified separately from the Companys equity. Subsidiaries are all entities (including structured entities)
over which the Company has control. Subsidiaries are fully consolidated from the
date on which control is transferred to the Group. They are de-consolidated from
the date that control ceases. Inter-company transactions, balances and unrealized gains on
transactions between Group companies are eliminated on consolidation. Unrealized
losses are also eliminated unless the transaction provides evidence of an
impairment of the asset transferred. FS.7   PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) The Waterberg Project is fully consolidated with third party
contributions treated as recoveries. b.
    Translation of foreign
  currencies Functional currency Items included in the financial statements of the Company and
each of the Companys subsidiaries are measured using the currency of the
primary economic environment in which the entity operates (the functional
currency) as follows: Platinum Group Metals Ltd.
    Canadian DollarsPlatinum Group Metals (RSA) (Pty) Ltd.
    South African RandMaseve Investments 11 (Pty) Ltd.
    South African RandMnombo Wethu Consultants (Pty) Limited
    South African RandWaterberg JV Resources (Pty) Ltd
    South African Rand Presentation Currency On September 1, 2015, the Company changed its presentation
currency from the Canadian Dollar (C$ or CAD) to the United
States Dollar ($ or USD). The change in presentation currency
is to better reflect the Companys business activities and to improve investors
ability to compare the Companys financial results with other publicly traded
businesses in the mining industry. In making this change to the United States
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. Foreign Exchange Rates Used The following exchange rates were used when preparing these
consolidated financial statements: Rand/USDYear-end rate:
    R13.0190 (2016 R14.6958)Year average rate:
    R13.4711 (2016 R14.6911)CAD/USDYear-end rate:
    C$1.2536 (2016 C$1.3116)Year average rate:
    C$1.3212 (2016 C$1.3261) Transactions and balances Foreign currency transactions are translated into the relevant
entitys functional currency using the exchange rates prevailing at the date of
the transaction. Foreign currency gains and losses resulting from the settlement
of such transactions and from the translation at period-end exchange rates of
monetary assets and liabilities denominated in foreign currencies are recognized
in the income statement. FS.8   PLATINUM GROUP METALS LTD.(An exploration
and development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) Subsidiaries The results and financial position of subsidiaries that have a
functional currency different from the presentation currency are translated into
the presentation currency as follows: 
    Assets and liabilities are translated at the
      closing rate at the reporting date;
    Income and expenses are translated at average
      exchange rates for the period; and
    All resulting exchange differences are
      recognized in other comprehensive income as cumulative translation
      adjustments.  c.
    Cash and cash
equivalents Cash and cash equivalents consist of cash and short-term
deposits, which are readily convertible to cash and have original maturities of
90 days or less. d.
    Exploration and evaluation
  assets Exploration and evaluation activity involves the search for
mineral resources, the determination of technical feasibility and the assessment
of commercial viability of an identified resource. Exploration and evaluation activity includes: -
    acquiring the rights to explore;-
    researching and analyzing historical exploration data;-
    gathering exploration data through topographical,
      geochemical and geophysical studies;-
    exploratory drilling, trenching and sampling;-
    determining and examining the volume and grade of the
      resource;-
    surveying transportation and infrastructure requirements;
      and-
    compiling pre-feasibility and feasibility studies. Exploration and evaluation expenditures on identifiable
properties are capitalized. Exploration and evaluation assets are shown
separately until technical feasibility and commercial viability is achieved at
which point the relevant asset is transferred to development assets under
property, plant and equipment. Capitalized costs are all considered to be
tangible assets as they form part of the underlying mineral property. Capitalized exploration and evaluation assets are reviewed for
impairment when facts or circumstances suggest an assets carrying amount may
exceed its recoverable amount. If impairment is considered to exist, the related
asset is written down to the greater of its value in use and its fair value less
costs to sell. e.
    Property, plant and
  equipment Property, plant and equipment are stated at cost less
accumulated depreciation and accumulated impairment losses. The cost of an item
of property, plant and equipment includes the purchase price or construction
cost, any costs directly attributable to bringing the asset to the location and
condition necessary for its intended use, an initial estimate of the costs of
dismantling and removing the item and restoring the site on which it is located,
and for qualifying assets, the associated borrowing costs. Where an item of property, plant and equipment is comprised of
major components with different useful lives, the components are accounted for
as separate items of property, plant and equipment. FS.9   PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) Costs incurred for new construction, mine development, and
major overhauls of existing equipment are capitalized as property, plant and
equipment and are subject to depreciation once they are put into use. The costs
of routine maintenance and repairs are expensed as incurred. Once a mining project has been established as technically
feasible and commercially viable, expenditure other than on land, buildings,
plant and equipment is capitalised as part of development assets together with
any related amount transferred from exploration and evaluation assets.
Capitalization of costs incurred and revenue received during commissioning
ceases when the property is capable of operating at levels intended by
management. The present value of the decommissioning cost, which is the
dismantling and removal of the asset included in the environmental
rehabilitation obligation, is included in the cost of the related preproduction
assets. These assets are depreciated over their useful lives. Subsequent costs are included in the assets carrying amount
only when it is probable that future economic benefits associated with the item
will flow to the Company and the cost of the item can be reliably measured. All
repairs and maintenance are expensed to profit or loss during the financial
period in which they are incurred. An item of property, plant and equipment is derecognized upon
disposal or when no future economic benefits are expected to arise from the
continued use of the asset. Any gain or loss arising on the disposal, retirement
or scrapping of an item of property, plant and equipment is determined as the
difference between the sales proceeds and the carrying amount of the asset and
is recognized in profit or loss. Where an item of property, plant and equipment is comprised of
major components with different useful lives, the components are accounted for
as separate items of property, plant and equipment. Property, plant and
equipment are recorded at cost and are depreciated on a straight-line basis over
the following periods: Buildings
    20 yearsMining equipment
    2  22 yearsVehicles
    3  5 yearsComputer equipment and software
    3  5 yearsFurniture and fixtures
    5 years  f.
    Asset Held for Sale Assets that are immediately available for sale and for which a
sale is highly probable are classified as assets held for sale. When several
assets are held for sale in a single transaction, they are accounted for as a
disposal group, which also includes any liabilities directly associated with
those assets. The net assets or disposal groups held for sale are measured at
the lower of carrying amount and fair value less costs to sell. Depreciation
ceases when assets are classified as held for sale. At each balance sheet date,
the value of the assets and liabilities held for sale is reviewed to determine
whether any provision adjustments should be recorded due to a change in their
fair value less costs to sell. g.
    Impairment Long-lived assets are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount may not be
recoverable. The Company conducts internal reviews of asset values which are
used to assess for any indications of impairment. External factors such as
changes in expected future prices, costs and other market factors including
market capitalization are also monitored to assess for indications of
impairment. FS.10   PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) If any such indication exists an estimate of the recoverable
amount is undertaken, being the higher of an assets fair value less costs to
sell and its value in use. If the assets carrying amount exceeds its
recoverable amount, then an impairment loss is recognized. Fair value is determined as the amount that would be obtained
from the sale of the asset in an arms length transaction between knowledgeable
and willing parties. Fair value of mineral assets is generally determined as the
present value of the estimated future cash flows expected to arise from the use
of the asset, including any expansion prospects. Value in use is determined as the present value of the
estimated future cash flows expected to arise from the continued use of the
asset in its present form and from its ultimate disposal. Impairment is assessed at the level of cash-generating units
(CGUs), which are identified as the smallest identifiable group of
assets that generates cash inflows that are largely independent of the cash
inflows from other assets. The Companys CGUs are based on geographic location.
The Companys two CGUs at present are the Maseve Mine and the Waterberg
Project. Long-lived assets that have been impaired are tested for
possible reversal of the impairment whenever events or changes in circumstances
indicate that the impairment may have reversed. When a reversal of a previous
impairment is recorded, the reversal amount is adjusted for depreciation that
would have been recorded had the impairment not taken place. h.
    Trade payables Trade payables are obligations to pay for goods or services
that have been acquired in the ordinary course of business from suppliers.
Accounts payable are classified as current liabilities if payment is due within
one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at fair value and
subsequently measured at amortized cost using the effective interest method. i.
    Asset retirement
  obligations Provisions for asset retirement obligations are made in respect
of the estimated future costs of closure and restoration and for environmental
rehabilitation costs (which include the dismantling and demolition of
infrastructure, removal of residual materials and remediation of disturbed
areas) in the accounting period when the related disturbance occurs. The
provision is discounted using a risk-free pre-tax rate, and the unwinding of the
discount is included in finance costs. At the time of establishing the
provision, a corresponding asset is recognized and is depreciated over the
future life of the asset to which it relates. The provision is adjusted on an
annual basis for changes in cost estimates, discount rates and inflation. j.
    Convertible Notes At inception the debt component of the convertible notes is
deemed to be the residual value of the net proceeds after the fair value of the
embedded derivatives are separated. The debt component is then measured at
amortized cost using the effective interest method. The embedded derivatives are
revalued at each reporting period with the change in fair value being recorded
in profit or loss in each reporting period. FS.11   PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) k.
    Share Capital Common shares are classified as equity. Incremental costs
directly attributable to the issue of common shares and share options are
recognized as a deduction from equity, net of any tax effect. l.
    Stock-based
compensation The fair values for stock-based awards have been estimated
using the Black-Scholes model and recorded as compensation cost over the period
of vesting. The compensation cost related to stock options granted is expensed
or capitalized to mineral properties, as applicable. Cash received on exercise
of stock options is credited to share capital and the related amount previously
recognized in contributed surplus is reclassified to share capital. l.
    Income taxes Income tax expense represents the sum of the tax currently
payable and deferred tax. Current tax Current tax expense is based on taxable profit for the year.
Taxable profit differs from 'profit before tax' as reported in the consolidated
statement of loss and other comprehensive loss because of items of income or
expense that are taxable or deductible in other years and items that are never
taxable or deductible. The Company's current tax is calculated using tax rates
that have been enacted or substantively enacted by the end of the reporting
period. Deferred tax Deferred tax is recognised on temporary differences between the
carrying amounts of assets and liabilities in the consolidated financial
statements and the corresponding tax bases used in the computation of taxable
profit. Deferred tax liabilities are generally recognised for all taxable
temporary differences. Deferred tax assets are generally recognised for all
deductible temporary differences to the extent that it is probable that taxable
profits will be available against which those deductible temporary differences
can be utilised. Such deferred tax assets and liabilities are not recognised if
the temporary difference arises from the initial recognition (other than in a
business combination) of assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit. The carrying amount of deferred tax assets is reviewed at the
end of each reporting period and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part
of the asset to be recovered. Deferred tax liabilities and assets are measured at the tax
rates that are expected to apply in the period in which the liability is settled
or the asset realised, based on tax rates (and tax laws) that have been enacted
or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects
the tax consequences that would follow from the manner in which the Group
expects, at the end of the reporting period, to recover or settle the carrying
amount of its assets and liabilities. m.
    Loss per common
share Basic loss per common share is calculated using the weighted
average number of common shares outstanding. The Company uses the treasury stock
method for the calculation of diluted earnings per share. Diluted per share
amounts reflect the potential dilution that could occur if securities or other
contracts to issue common shares were exercised or converted to common shares. In periods when a
loss in incurred, the effect of the potential issuances of shares is
anti-dilutive, and accordingly basic and diluted loss per share are the same. FS.12   PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) n.
    Financial
instruments IFRS establishes a fair value hierarchy that categorizes the
inputs to valuation techniques used to measure fair value into three levels: 
    Level 1  Quoted prices in active markets for
      the same instrument.
    Level 2  Valuation techniques for which
      significant inputs are based on observable market data.
    Level 3  Valuation techniques for which any
      significant input is not based on observable market data. (i) Financial assets and liabilities Loans and receivables  Loans
and receivables comprise cash and cash equivalents, amounts receivable and
performance bonds. Loans and receivables are non-derivative financial assets
with fixed or determinable payments that are not quoted in an active market.
They are classified as current assets or non-current assets based on their
maturity date. Loans and receivables are initially recognized at fair value and
subsequently carried at amortized cost less any impairment. Financial liabilities are classified as
either financial liabilities or at fair value through profit or loss. Financial liabilities - Other
financial liabilities are initially measured at fair value, net of transaction
costs and are subsequently measured at amortized cost using the effective
interest method, with interest expense recognized on an effective yield basis.
The Company has classified accounts payable, accrued liabilities and the debt
portion of the convertible notes as other financial liabilities. Fair value through profit or loss- The Company has classified the convertible note derivative as fair value
through profit or loss and adjusts the fair value each quarter. (ii) Impairment of financial assets The Company assesses at each reporting
date whether there is objective evidence that a financial asset or a group of
financial assets is impaired. Impairment losses on financial assets carried at
amortized cost are reversed in subsequent periods if the amount of the loss
decreases and the decrease can be related objectively to an event occurring
after the impairment was recognized. o.
    Future accounting
changes The following new accounting standards, amendments and
interpretations, that have not been early adopted in these consolidated
financial statements, will or may have an effect on the Companys future results
and financial position: (i) IFRS 15Revenue from Contracts with Customers IFRS 15, Revenue from Contracts with
Customers, which will replace IAS 18, Revenue, is effective for
fiscal years ending on or after January 1, 2018 (fiscal 2018 for the Company
given its August 31 year end) and is available for early adoption. The standard
contains a single model that applies to contracts with customers. Revenue is
recognized as control is passed to the customer, either at a point in time or
over time. New estimates and judgmental thresholds have been introduced, which
may affect the amount and/or timing of revenue recognized. The Company is still
in the process of assessing the impact, if any, on the financial statements of
this new standard. FS.13   PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) (ii) IFRS 9, Financial Instruments In July 2014, the IASB issued IFRS 9,
Financial Instruments, which addresses classification and measurement of
financial assets and replaces the multiple category and measurement models for
debt instruments in IAS 39, Financial Instruments: Recognition and
Measurement. Debt instruments will be measured with a new mixed measurement
model having only two categories: amortized cost and fair value through profit
and loss. The new standard also addresses financial liabilities which largely
carries forward existing requirements in IAS 39, with the exception of fair
value changes to credit risk for liabilities designated at fair value through
profit and loss which are generally to be recorded in other comprehensive
income. In addition, the new standard introduces a new hedge accounting model
more closely aligned with risk management activities undertaken by entities. The
new standard is effective for annual periods beginning on or after January 1,
2018 (fiscal 2019 for the Company given its August 31 year end), with an early
adoption permitted. The Company is still in the process of assessing the impact,
if any, on the financial statements of the new standard. (iii) IFRS 16, Leases The IASB has replaced IAS 17, Leases in
its entirety with IFRS 16, Leases (IFRS 16), which will require lessees
to recognize nearly all leases on the balance sheet to reflect their right to
use an asset for a period of time and the associated liability to pay rentals.
IFRS 16 is effective for annual periods commencing on or after January 1, 2019
(fiscal 2020 for the Company given its August 31 year end). The Company is in
the process of evaluating the impact the standard is expected to have on our
consolidated financial statements. 3.
    Significant accounting judgments and
    estimates The preparation of the financial statements in conformity with
IFRS requires the use of judgments and estimates that affect the amount reported
and disclosed in the consolidated financial statements and related notes. These
judgments and estimates are based on managements best knowledge of the relevant
facts and circumstances, having regard to previous experience, but actual
results may differ materially from the amounts included in the financial
statements. Information about such judgments and estimation is contained in the
accounting policies and notes to the financial statements, and the key areas are
summarized below. Areas of judgment and key sources of estimation uncertainty
that have the most significant effect on the amounts recognized in these
consolidated financial statements are: 
    Review of asset carrying values and impairment
      assessment (Note 6)
    Fair value of embedded derivatives
    Determination of ore reserves and mineral
      resource estimates
    Deferred tax assets and liabilities and
      resource taxes
    Classification of the Production Payment
      (defined below)
    Valuation of the Production Payment Each of these judgments and estimates is considered in their
respective notes or in more detail below. Carrying values and impairment assessments Management is required to make judgements concerning the
identification of potential impairment indicators in relation to the carrying
value of its assets. Potential indicators include the pricing of platinum,
palladium, rhodium and gold prices (the four elements being produced together as
a basket 4E Ounce), foreign exchange rates, capital expenditures,
operating costs, increased costs of capital, market capitalization, required
ownership by historically disadvantaged South Africans and other factors that
may indicate impairment. When indicators are present, management estimates the
net recoverable amount of the cash generating unit based on estimates of future
discounted cashflows or estimated fair value of the cash generating unit less
costs to sell. FS.14   PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) Fair value of embedded derivatives Where the fair value of financial liabilities recorded in the
financial statements cannot be derived from active markets, their fair value is
determined using valuation techniques including the partial differential
equation method. The inputs to this model are taken from observable markets
where possible, but where this is not feasible, a degree of judgment is required
in establishing fair values. The judgments include considerations of inputs such
as liquidity risk, credit risk and volatility. Changes in assumptions about
these factors could affect the reported fair value of financial instruments.
When measuring the fair value of an asset or liability, the Company uses
observable market data as far as possible. Determination of ore reserve and mineral resource estimates The Company estimates its ore reserves and mineral resources
based on information compiled by Qualified Persons as defined by NI 43-101.
Reserves determined in this way are used in the calculation of depreciation,
amortization and impairment charges, and for forecasting the timing of the
payment of close down and restoration costs. In assessing the life of a mine for
accounting purposes, mineral resources are only taken into account where there
is a high degree of confidence of economic extraction. There are numerous
uncertainties inherent in estimating ore reserves, and assumptions that are
valid at the time of estimation and they may change significantly when new
information becomes available. Changes in the forecast prices of commodities,
exchange rates, production costs or recovery rates may change the economic
status of reserves and may, ultimately, result in reserves being restated. Such
changes in reserves could impact depreciation and amortization rates, asset
carrying values and provisions for close down and restoration costs. Deferred tax assets and liabilities and resource taxes The determination of our future tax liabilities and assets
involves significant management estimation and judgment involving a number of
assumptions. In determining these amounts the Company interprets tax legislation
in a variety of jurisdictions and makes estimates of the expected timing of the
reversal of future tax assets and liabilities. We also make estimates of our
future earnings which affect the extent to which potential future tax benefits
may be used. We are subject to assessment by various taxation authorities, which
may interpret tax legislation in a manner different from our view. These
differences may affect the final amount or the timing of the payment of taxes.
When such differences arise, we make provision for such items based on our best
estimate of the final outcome of these matters. Classification of Production Payment Significant judgement is required in determining the
appropriate accounting for the Production Payment. Based on the specific facts
and circumstances, judgement is required to assess whether the arrangement is a
commodity agreement, a financial liability or a sale of a mineral interest.
Management previously determined that based on covenants that connect the
Production Payment to the Liberty Loan management has not transferred the risk
of ownership of the ounces to LMM and the Production Payment was treated as part
of the loan. A termination payment accrual has been estimated, upon the decision
to sell the Maseve Mine. Valuation of the Production Payment Management has assessed the fair value of the Production
Payment on day one and the subsequent carrying value as the net present value of
future Production Payments over the life of the Maseve Mine. The Company
continues to evaluate on an ongoing basis whether there are material changes to
the inputs in the valuation and adjust the future estimated cash flows as part
of the Production Payment accordingly. Under the applicable agreements, an
accrual for a termination payment is estimated in the event that production will
not occur or a transfer in ownership of the mine occurs. FS.15   PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) 4.
    AMOUNTS RECEIVABLE  August 31, 2017
    
    
    August 31, 2016Receivable from concentrate
      sales
    $
    1,570
    
    $
    2,854South African value added tax
    
    2,619
    
    
    1,776Due (to) from
      JOGMEC1
    
    (2,443
    )
    
    15Tax receivable
    
    98
    
    
    981Other receivables
    
    170
    
    
    412Due
      from related parties (Note 12)
    
    44
    
    
    49$
    2,058
    
    $
    6,087 1From advances paid to the Company by JOGMEC in
advance of work to be completed at the Waterberg Project, an amount of $2.4
million remained to be incurred at August 31, 2017. FS.16   PLATINUMGROUPMETALSLTD.(An exploration and development stage company) Notes to the
consolidated financial statementsFor the year ended August 31, 2017
(**In thousands of United States Dollars unless otherwise noted****)** 5.
    PROPERTY, PLANT AND
EQUIPMENT  DevelopmentAssets
    
    
    Land
    
    
    Buildings
    
    
    Office Equipment
    
    
    Mining Equipment
    
    
    TotalCOSTBalance, August 31, 2015
    $
    368,660
    
    $
    9,527
    
    $
    10,652
    
    $
    2,135
    
    $
    39,605
    
    $
    430,579Additions
    
    131,8931
    
    
    -
    
    
    943
    
    
    418
    
    
    9,701
    
    
    142,955Impairment Charge
    
    (41,371
    )
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (41,371
    )Foreign exchange movement
    
    (36,524
    )
    
    (980
    )
    
    (1,095
    )
    
    (142
    )
    
    (4,072
    )
    
    (42,813
    )Balance, August 31, 2016
    $
    422,658
    
    $
    8,547
    
    $
    10,500
    
    $
    2,411
    
    $
    45,234
    
    $
    489,350Additions
    
    130,8682
    
    
    -
    
    
    2,655
    
    
    529
    
    
    2,046
    
    
    136,098Impairment and transfer to Asset Held for Sale
    
    (604,974
    )
    
    (9,648
    )
    
    (14,506
    )
    
    (898
    )
    
    (52,157
    )
    
    (682,183
    )3Foreign exchange movement
    
    51,446
    
    
    1,101
    
    
    1,351
    
    
    247
    
    
    5,825
    
    
    59,970Balance, August 31, 2017
    $
    -
    
    $
    -
    
    $
    -
    
    $
    2,289
    
    $
    948
    
    $
    3,237ACCUMULATED
      DEPRECIATIONBalance, August 31, 2015
    $
    -
    
    $
    -
    
    $
    789
    
    $
    1,065
    
    $
    11,548
    
    $
    13,402Additions
    
    -
    
    
    -
    
    
    879
    
    
    397
    
    
    6,299
    
    
    7,575Foreign exchange movement
    
    -
    
    
    -
    
    
    (81
    )
    
    (55
    )
    
    (1,187
    )
    
    (1,323
    )Balance, August 31, 2016
    
    -
    
    
    -
    
    
    1,587
    
    
    1,407
    
    
    16,660
    
    
    19,654Additions
    
    -
    
    
    -
    
    
    962
    
    
    516
    
    
    7,750
    
    
    9,228Transfer to Asset Held for Sale
    
    -
    
    
    -
    
    
    (2,753
    )
    
    (599
    )
    
    (26,319
    )
    
    (29,671
    )3Foreign exchange movement
    
    -
    
    
    -
    
    
    204
    
    
    134
    
    
    2,145
    
    
    2,483Balance, August 31, 2017
    $
    -
    
    $
    -
    
    $
    -
    
    $
    1,458
    
    $
    236
    
    $
    1,694Net book value, August 31, 2016
    $
    422,658
    
    $
    8,547
    
    $
    8,913
    
    $
    1,004
    
    $
    28,574
    
    $
    469,696Net book value, August 31, 2017
    $
    -
    
    $
    -
    
    $
    -
    
    $
    831
    
    $
    712
    
    $
    1,543 1Includes pre-production
revenue credited of $9.3 million and $8.7 million of interest expense
capitalized. 2Includes pre-production revenue credited of $15.2
million (see below) and $13.4 million of interest expense (see Note 8)
3Total transfer to Assets Held for Sale of $646,038. Asset
Impairment of $280,357 recognized in interim periods is now included in Assets
Held for Sale (Note 6) FS.17   PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) Maseve Mine The Maseve Mine is located in the Western Bushveld region of
South Africa. Costs for the Maseve Mine had been capitalized and classified as
development assets in Property, Plant and Equipment until August 31, 2017. On
September 6, 2017 the Company announced it had entered into a term sheet with
RBPlat to sell the Maseve Mine (see Note 20 subsequent events for further
details) so as of August 31, 2017, all capitalized costs were reclassified as an
Asset Held for Sale (see Note 6 for further details) and the Asset Held for Sale
was written down to $69.9 million, being the estimated net proceeds from the
sale of the Maseve Mine. i.
    Ownership of the Maseve
Mine The Maseve Mine, known formerly as Project 1 of the WBJV, is
named after the operating company, Maseve, that holds the legal right to the
mine. Under the terms of a consolidation transaction completed on
April 22, 2010, the Company acquired a 74% interest in Projects 1 and 3 of the
former Western Bushveld Joint Venture through its holdings in Maseve, while the
remaining 26% was acquired by Africa Wide. The Company has consolidated the results of Maseve from the
effective date of the reorganization. The portion of Maseve not owned by the
Company, calculated at ($15,910) at August 31, 2017 ($34,124  August 31, 2016),
is accounted for as a non-controlling interest. On October 18, 2013, Africa Wide elected not to fund its $21.8
million share of a project budget and cash call unanimously approved by the
board of directors of Maseve. On March 3, 2014, Africa Wide elected not to fund
its $21.52 million share of a second cash call. As a result of the missed cash
calls, Africa Wides interest in Maseve was diluted to a 17.1% holding. All funding provided by the Company's South African subsidiary,
PTM RSA, to Maseve for development and construction of the Maseve Mine since the
March 3, 2014 second cash call has been provided by way of an intercompany
loan. 6.
    ASSET HELD FOR SALE At August 31, 2017 the Company had an active plan in place to
sell the Maseve Mine and on September 6, 2017 the Company announced it had
entered a term sheet with RBPlat to sell the Maseve Mine. Total consideration of
$74 million is being pledged for selected Maseve Mine assets then Maseve itself
in a two stage transaction. Please see Note 20 Subsequent events for further
details. Under IFRS, when an asset group is held for sale, the net
assets must be classified separately from other assets and measured at the lower
of carrying value and fair value less costs to sell. In Maseves case, the fair
value less costs directly attributable to the sale are lower than the carrying
value and the fair value less costs to sell are calculated on a consolidated
basis as follows: Purchase Price
    $
    74,000Less: fees directly attributable to sale
    
    (4,111
    )Maseve asset held for sale
    $
    69,889
 FS.18   PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) The carrying value of the Maseve net assets held for sale is
calculated as follows: Net assets attributable to
      Maseve (Note 5)
    $
    652,512Reclamation bonds
    
    6,994Project #3 (previously
      classified as exploration and evaluation)
    
    2,382Asset Retirement Obligation
    
    (2,837
    )Asset Impairment1
    
    (589,162
    )Maseve asset held for sale
    $
    69,889
 1Including impairment of
$280,357 that was recognized during interim reporting periods during the year
before the asset was considered held for sale. 7.
    EXPLORATION AND EVALUATION
ASSETS Since mid-2015 the Companys only active exploration project
has been the Waterberg Project located on the North Limb of the Western Bushveld
Complex. The Company continues to hold other immaterial mineral or prospecting
rights in South Africa and Canada. Total capitalized exploration and evaluation
expenditures for all exploration properties held by the Company are as follows: Balance, August 31,
      2014
    $
    28,154Additions
    
    10,245Recoveries
    
    (6,123
    )Write-downs
    
    (2,331
    )Foreign Exchange Movement
    
    (5,316
    )Balance, August 31, 2015
    $
    24,629Additions
    
    7,630Recoveries
    
    (7,321
    )Foreign exchange movement
    
    (2,592
    )Balance, August 31, 2016
    $
    22,346Additions
    
    5,701Disposal of Project #3 (Note 6)
    
    (2,383
    )Recoveries
    
    (5,635
    )Foreign exchange movement
    
    2,870Balance, August 31, 2017
    $
    22,900
 FS.19   PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) August 31, 2017
    
    
    August 31, 2016
    
    
    August 31, 2015Project 3 see Note 6
    
    $
    -
    
    $
    2,111
    
    $
    2,353Waterberg1
    
    Acquisition costs
    
    
    42
    
    
    36
    
    
    40Exploration and evaluation costs
    
    
    51,564
    
    
    40,683
    
    
    36,956Recoveries
    
    
    (28,797
    )
    
    (20,518
    )
    
    (14,725
    )22,809
    
    
    20,201
    
    
    22,271Other
    
    Acquisition costs
    
    
    26
    
    
    23
    
    
    25Exploration and evaluation costs
    
    
    832
    
    
    691
    
    
    720Recoveries
    
    
    (767
    )
    
    (680
    )
    
    (740
    )91
    
    
    34
    
    
    5Total
    
    
    
    $
    22,900
    
    
    22,346
    
    $
    24,629 1Previously presented as Waterberg JV and
Waterberg Extension Waterberg The Waterberg Project is comprised of the former Waterberg JV
Property and the Waterberg Extension Property, an area of adjacent, granted and
applied-for prospecting rights with a combined area of approximately 864
km2, located on the Northern Limb of the Bushveld Complex,
approximately 85 km north of the town of Mokopane (formerly Potgietersrus). On August 8, 2017 PTM RSA transferred legal title of all
Waterberg Project prospecting rights into a dedicated joint venture corporation
named Waterberg JV Co. upon receiving Section 11 approval of the 2ndAmendment (defined below). On September 21, 2017 Waterberg JV Co. issued
shares to all Waterberg partners pro rata to their joint venture interests,
resulting in the Company holding a 45.65% direct interest in Waterberg JV Co.,
JOGMEC holding a 28.35% interest and Mnombo, as the Companys BEE partner,
holding 26%. Subsequent to year-end the Company announced that Implats had
entered into definitive agreements to acquire a 15% interest in Waterberg JV Co.
for $30 million from the Company and JOGMEC, with an option to increase its
stake to 50.1% ownership in Waterberg JV Co. through additional purchases and
earn-in arrangements totaling $166 million. See subsequent events (Note 20) for
further details. Acquisition and Development of the Property In October 2009, PTM RSA, JOGMEC and Mnombo entered into the
JOGMEC Agreement. Under the terms of the JOGMEC Agreement, in April 2012, JOGMEC
completed a $3.2 million work requirement to earn a 37% interest in the
Waterberg JV property, leaving the Company with a 37% interest and Mnombo with a
26% interest. Following JOGMECs earn-in, the Company funded Mnombos 26% share
of costs, totalling $1.12 million, until the earn-in phase of the joint venture
ended in May 2012. On November 7, 2011, the Company entered an agreement with
Mnombo to acquire 49.9% of the issued and outstanding shares of Mnombo in
exchange for cash payments totalling R1.2 million and the Companys agreement to
pay for Mnombos 26% share of costs on the Waterberg JV property until the
completion of a feasibility study. The Company consolidates Mnombo. The portion
of Mnombo not owned by the Company, calculated at $4.6 million at August 31,
2017 ($4.6 million  August 31, 2016), is accounted for as a non-controlling
interest. FS.20   PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 On May 26, 2015, the Company announced a second amendment (the
2ndAmendment) to the existing JOGMEC
Agreement. Under the terms of the 2nd Amendment the Waterberg JV and
Waterberg Extension properties are to be combined and contributed into the newly
created operating company Waterberg JV Co. On August 4, 2017, the Company
received Section 11 transfer approval from the South African DMR and title to
all of the Waterberg prospecting rights held by the Company were transferred
into Waterberg JV Co. At year end, the Company holds the rights to 45.65% of
Waterberg JV Co., JOGMEC 28.35% and Mnombo 26%. Through its 49.9% share of
Mnombo, the Company held an effective 58.62% of Waterberg JV Co. at year
end. Under the 2nd Amendment, JOGMEC committed to fund
$20 million in expenditures over a three-year period ending March 31, 2018. An
amount of $8 million was funded by JOGMEC to March 31, 2016, which has been
followed by two $6 million tranches to be spent in each of the following two 12
month periods ending March 31, 2018. At year end the full $20 million has been
advanced by JOGMEC with $2.4 million left to spend on Waterberg. Any amount in
excess of $6 million to be spent in year three is to be funded by the JV
partners pro-rata to their holdings. Since the JOGMEC earn-in period ended in May 2012, up to March
2015 (when the 2nd Amendment became effective) $39.9 million was
spent on the combined Waterberg JV and Waterberg Extension properties. JOGMEC
contributed $11.4 million while the Company contributed the remaining $28.5
million which included Mnombos share of expenditures on the Waterberg Extension
($1.95 million) which are still owed to the Company. Post March 2015, $17.6 million has been spent through to August
31, 2017 on the Waterberg Project all of which has been funded by JOGMEC per the
2nd Amendment agreement outlined above. During the year, $5.6 million
was spent on the Waterberg Project. 8.
    LOANS PAYABLE On February 16, 2015, the Company announced it had entered a
credit agreement with the Sprott Lenders, led by Sprott, for the Sprott Facility
of $40 million. The Sprott Facility was drawn on November 20, 2015. On November 20, 2015, the Company also drew down the $40
million LMM Facility pursuant to the LMM Credit Agreement entered into on
November 2, 2015 with a significant shareholder, LMM, a subsidiary of Liberty
Mutual Insurance. Pursuant to the LMM Credit Agreement the Company also entered
into the PPA with LMM. On September 19, 2016, the Company announced that Sprott and
LMM had agreed to amend certain terms to their existing loan facilities with the
Company. Sprott agreed to defer 12 planned monthly repayments of the original
$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 the
original $40 million LMM Facility plus capitalized interest from commencing
December 31, 2018 until June 30, 2019. LMM agreed to defer the quarterly payment
of interest due to LMM from commencing December 31, 2016 until December 31,
2017. As consideration for the amendments, the Company issued 801,314 common
shares to Sprott and 801,314 common shares to LMM. The consideration was based
on the value of five percent of the initial principal balance of the LMM
Facility and the Sprott Facility, in each case, such amount being $2.0 million.
The shares were priced at the five-day volume weighted average price on the TSX
of $3.66 per share, less a ten percent discount, converted to US dollars using
the Bank of Canada noon spot rate. On October 12, 2016, the Company announced that Sprott had
provided the Second Advance to the Company. As consideration for the Second
Advance, the Company issued 113,963 common shares of the Company at a price of
$3.2428 per share, less a ten percent discount. Interest was payable on 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 were substantially the same as for the original Sprott Facility. On
November 2, 2016 and April 26, 2017 Sprott elected for early repayments of $2.5
million of the Second Advance from the proceeds of equity offerings completed on
November 1, 2016 and April 26, 2017. FS.21   PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) On January 13, 2017 and April 13, 2017 the Company announced
  that Sprott and LMM had agreed to amend certain terms of their existing loan
  facilities with the Company. Sprott and LMM both agreed to reset agreed monthly
  production requirements. As consideration for the amendments, the Company issued
  a total of 275,202 common shares to Sprott and 293,616 common shares to LMM. The
  consideration was based on the value of one percent of the outstanding principal
balance of the LMM Facility and the Amended and Restated Sprott Facility. On June 13, 2017, the Company announced that Sprott and LMM had
agreed to further amend certain terms of their existing loan facilities with the
Company. Sprott and LMM both agreed to amend existing loan facilities to the
Company and provide waivers, in each case, until October 31, 2017, with regard
to minimum cash and working capital requirements, achievement of productions
targets, certain events of default and the requirement to pay the lenders 50% of
the proceeds of equity and debt financings. Sprott and LMM are each to be paid a
fee of $200 and $400 respectively in consideration of the above amendments, both
at the same time upon the maturity or repayment of the Sprott Facility. In total the Company borrowed $85.0 million by way of the
Amended and Restated Sprott Facility and the LMM Facility, which are reconciled
to the August 31, 2017 balance sheet as follows: Gross Sprott Facility drawn down including Second Advance
    
    $
    45,000Second Advance repayment
    
    
    (5,000
    )Drawdown Standby and
      Amendment fees
    
    
    (7,243
    )Interest paid on loan balance
    
    
    (6,987
    )Interest and finance cost at effective interest rate
    
    
    11,965Carrying value  Sprott Facility
    
    $
    37,735LMM Facility drawn down
    
    $
    40,000Drawdown, Amendment, Legal
      and Other Fees
    
    
    (4,344
    )Interest and finance cost at effective
      interest rate
    
    
    12,602Adjustment to amortized cost
      of LMM Production Payment Payable
    
    
    (2,146
    )Additional Production Payment accrual
    
    
    5,874LMM Production Payment Payable
    
    
    405Carrying value  LMM Facility
    
    $
    52,391LMM Production Payment termination accrual
    
    $
    15,0001LMM Production Payment
      Payable
    
    
    405LMM
      Loan Facility
    
    
    36,986Total LMM Facility
    
    $
    52,391Carrying value  Loans Payable
    
    $
    90,126Current portion of loan
      payable
    
    $
    46,305Non-current portion loans payable
    
    
    43,821Carrying
      value  Loans Payable
    
    $
    90,126 FS.22   PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) 1This accrual is based on the expected termination
fee At August 31, 2017, the principal payable in the next twelve
months on the Amended and Restated Sprott Facility of $26,667 has been
classified as a current liability. Both loans are carried at amortized cost with the Amended and
Restated Sprott Facility having an effective interest rate of 20% and the LMM
Facility having an effective interest rate of 27%. The LMM Facility has a higher
effective interest rate due to the existence of the related Production Payment
liability and its subordination to the Amended and Restated Sprott Facility.
Since drawdown net interest expense of $17.5 million from both loans has been
capitalized to development assets in the Maseve Mine. Adjustments and accretion
to the Production Payment liability have also been capitalized to the
development assets in the Maseve Mine. Sprott Facility Upon drawdown of the Amended and Restated Sprott Facility, all
deferred fees of $4.0 million ($1.8 million in cash) were netted against gross
proceeds and will be recognized over the term of the agreement on an effective
interest rate basis. Total interest of $11,925 was recognized since inception
($6,861 in the current year) with $6,986 in cash interest paid since inception
($3,938 in the current year). At August 31, 2017 $352 in interest is due to
Sprott. The Amended and Restated Sprott Facility is in the first lien
position on (i) the shares of PTM RSA held by the Company (and such other claims
and rights described in the applicable pledge agreement); (ii) the shares of
Waterberg JV Co held by PTM RSA and (iii) all current and future assets of the
Company. Interest on the Amended and Restated Sprott Facility is compounded and
payable monthly at a stated interest rate of LIBOR plus 8.50% . LMM Facility Loan Pursuant to the terms of the LMM Credit Agreement, the Company
paid a draw down fee of $800 to LMM, being 2% of the amount being drawn down
under the LMM Facility, paid in 348,584 common shares of the Company. The stated interest rate on the LMM Facility is LIBOR plus 9.5%
.. At year end, interest payments on the LMM Facility have been accrued and added
to the loan balance until December 31, 2017 and then will paid to LMM quarterly
thereafter. Also, the first 20% of principal is to be repaid on June 30, 2019
and then in tranches of 10% of the principal at the end of each calendar quarter
beginning on September 30, 2019 and for each of the next 7 quarters of the LMM
Facility. Production Payment 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). The terms of the PPA
were amended during the period. See details above in this Note. The initial fair value of the Production Payment liability was
valued at $11.3 million using Level 3 valuation assumptions and bifurcated from
the LMM Facilitys loan payable and were to be amortized over the expected life
of mine as production payments are made. The carrying value of the production
payment is currently $9.1 million with difference from the original carrying
value having been recognized as interest expense and as adjustments to the fair value of the loan payable. The key valuation
assumptions for the Production Payment valuation are production profile,
discount rate and timing of cash flows. All accretion to the Production Payment
facility was treated as interest cost and capitalized to the project. Given the
Companys sale of the Maseve Mine subsequent to year-end (see Note 20 Subsequent
Events) the production payment liability has been reclassified to the loan
balance as of August 31, 2017. The Company has accrued an additional $5.9
million to increase the production payment liability to $15 million as a
termination fee accrual. Please see Note 20 (Subsequent Events) for further
details. FS.23   PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) LMM holds the second lien position on (i) the shares of PTM
  (RSA) held by the Company and (ii) all current and future assets of the Company.
  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 Amended and Restated Sprott
  Facility or the LMM Facility, subject to certain rights granted to LMM under the
  PPA. The Company will be required to comply with certain covenants once first
production commences (see above for details of the amended covenants). 9.
    CONVERTIBLE NOTES On June 30, 2017, the Company closed a private placement of $20
million aggregate principal amount of convertible senior subordinated notes
(Convertible Notes) due 2022. The Convertible Notes bear interest at a
rate of 6 7/8% per annum, payable semi-annually on January 1 and July 1 of each
year, beginning on January 1, 2018, in cash or at the election of the Company,
in common shares of the Company (Common Shares) or a combination of
cash and Common Shares, and will mature on July 1, 2022, unless earlier
repurchased, redeemed or converted. The Convertible Notes will be convertible at any time at the
option of the holder, and may be settled, at the Companys election, in cash,
Common Shares, or a combination of cash and Common Shares. If any Convertible
Notes are converted on or prior to the three and one half year anniversary of
the issuance date, the holder of the Convertible Notes will also be entitled to
receive an amount equal to the remaining interest payments on the converted
notes to the three and one half year anniversary of the issuance date,
discounted by 2%, payable in Common Shares. The initial conversion rate of the
Convertible Notes will be 1,001.1112 Common Shares per $1,000 principal amount
of Convertible Notes, which is equivalent to an initial conversion price of
approximately $0.9989 per Common Share, representing a conversion premium of
approximately 15% above the NYSE American closing sale price for the Companys
common shares of $0.8686 per share on June 27, 2017. The Convertible Notes have been deemed to contain multiple
embedded derivatives (the Convertible Note Derivatives) relating to the
conversion and redemption options. The Convertible Note Derivatives were valued
upon initial recognition at fair value using partial differential equation
methods at $5,381 (see below). At inception, the gross proceeds of the
Convertible Notes were reduced by the estimated fair value of the Convertible
Note Derivatives of $5,381 and transaction costs relating to the Convertible
Notes of $1,049 resulting in an opening balance of $13,570. The Convertible
Notes are measured at amortized cost and will be accreted to maturity over the
term using the effective interest method. On July 25, 2017 a holder of the Convertible Notes converted
$10 of the principal resulting the Company choosing to issue 13,190 common
shares to settle the principal and accrued interest. The components of the Convertible Notes are as follows: FS.24   PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) Face value convertible
      notes
    $
    20,000Transaction costs
    
    (1,049
    )Embedded Derivative fair value at inception
    
    (5,381
    )Value attributed to debt portion of
      convertible notes
    $
    13,570Accretion and interest
    
    365Redemption
    
    (10
    )Convertible Note balance
      August 31, 2017
    $
    13,925Embedded Derivatives balance August 31, 2017 (see below)
    $
    3,300Total
    $
    17,225
 Embedded Derivatives The Convertible Note Derivatives was valued upon initial
recognition at a fair value of $5,381 using partial differential equation
methods and is subsequently re-measured at fair value at each period-end through
the consolidated statement of net loss and comprehensive loss. The fair value of
the Convertible Note Derivatives was measured at $3,300 at August 31, 2017
resulting in a $2,081 gain recognized in the statement of loss and comprehensive
loss. The fair value of the Convertible Note Derivatives were
calculated using partial differential equation methods. The assumptions used in
the valuation model used at June 30, and August 31, 2017 include: Valuation Date
    
    August 31, 2017
    
    
    June 30, 2017Share Price
    $
    0.52
    
    $
    0.67Volatility
    
    56.17%
    
    
    56.15%Risk free rate
    
    1.68%
    
    
    1.89%Credit spread
    
    13.59%
    
    
    13.28%All-in rate
    
    15.27%
    
    
    15.17%Implied discount on share price
    
    20%
    
    
    20%
 The Convertible Note derivative is classified as a level 2
financial instrument in the fair value hierarchy. 10.
    SHARE CAPITAL  (a)
    Authorized Unlimited common shares without par value. (b)
    Issued and outstanding At August 31, 2017, the Company had 148,469,377 shares
outstanding. On September 19, 2016, both Sprott and LMM were each issued
801,314 shares with a fair value of $2.0 million each based on the five-day
volume weighted average price on the TSX of C$3.66 per share (less a ten percent
discount), converted to US dollars as consideration for the September 30, 2016
amendment to the outstanding working capital facilities. On October 12, 2016 upon drawdown of an additional $5 million
from the Amended and Restated Sprott Facility, Sprott was issued 113,963 shares
with a value of $250 as a drawdown fee. FS.25   PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) On November 1, 2016, the Company announced the closing of an
offering of 22,230,000 common shares at a price of $1.80 per share resulting in
gross proceeds of $40.0 million. Net proceeds to the Company after fees,
commissions and costs were approximately $36.9 million. On January 13, 2017 Sprott was issued 275,202 shares and
Liberty was issued 293,616 shares with a value of $878,440 based on the ten-day
volume weighted average price on the TSX of C$2.253 per share (less a ten
percent discount), as consideration for the January 13, 2017 amendment to the
outstanding working capital facilities. On January 31, 2017, the Company announced the closing of an
offering of 19,693,750 common shares at a price of $1.46 per share resulting in
gross proceeds of $28.8 million. Net proceeds to the Company after fees,
commissions and costs were approximately $26.3 million. On April 18, 2017, the Company announced the closing of an
offering of 15,390,000 common shares at a price of $1.30 per share resulting in
gross proceeds of $20.0 million. Net proceeds to the Company after fees,
commissions and costs were approximately $18.3 million. On July 25, 2017 the Company issued 13,190 shares upon the
conversion of $10 of the Convertible Notes. See Note 9 for further details. (c)
    Incentive stock options The Company has entered into Incentive Stock Option Agreements
(Agreements) under the terms of its stock option plan with directors,
officers, consultants and employees. Under the terms of the Agreements, the
exercise price of each option is set, at a minimum, at the fair value of the
common shares at the date of grant. Certain stock options of the Company are
subject to vesting provisions, while others vest immediately. All exercise
prices are denominated in Canadian Dollars. The following tables summarize the Companys outstanding stock
options: Average ExerciseNumber of Shares
    
    
    PriceOptions outstanding at August
      31, 2015
    
    2,832,450
    
    C$
    12.10Granted
    
    1,014,675
    
    
    2.00Exercised
    
    (2,250
    )
    
    2.00Cancelled
    
    (867,600
    )
    
    16.67Options outstanding at August
      31, 2016
    
    2,977,275
    
    
    7.31Granted
    
    2,305,000
    
    
    2.00Cancelled
    
    (900,000
    )
    
    6.46Options outstanding at August 31, 2017
    
    4,382,275
    
    C$
    4.65  Number Outstandingat August 31, 2017
    
    Number Exercisable
      at
    
    
    
    
    
    Average RemainingAugust 31, 2017
    
    
    Exercise Price
    
    
    Contractual Life (Years)2,789,575
    
    2,302,288
    
    C$
    2.00
    
    
    4.03751,000
    
    751,000
    
    
    6.50
    
    
    2.46292,200
    
    292,200
    
    
    9.60
    
    
    0.02 FS.26   PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) Number Outstandingat August 31, 2017
    
    Number Exercisable
      at
    
    
    
    
    
    Average RemainingAugust 31, 2017
    
    
    Exercise Price
    
    
    Contractual Life (Years)10,000
    
    10,000
    
    
    10.50
    
    
    0.75536,000
    
    536,000
    
    
    13.00
    
    
    1.403,500
    
    3,500
    
    
    14.00
    
    
    0.554,382,275
    
    3,894,988
    
    
    
    
    
    3.05 During the year ended August 31, 2017 the Company granted
2,305,000 stock options (1,014,675  August 31, 2016). The stock options granted
in the current year vested immediately. The Company recorded $1,867 ($723
capitalized to property plant and equipment and mineral properties and $1,144
expensed). In the year ended August 31, 2016 the Company recorded $356 ($150
expensed and $206 capitalized to property, plant and equipment and mineral
properties). The Company used the Black-Scholes model to determine the grant
date fair value of stock options granted. The following assumptions were used in
valuing stock options granted during the periods ending August 31, 2017 and
August 31, 2016: Year ended
    
    August 31, 2017
    
    
    August 31, 2016Risk-free interest rate
    
    1.10%
    
    
    0.65%Expected life of options
    
    4.0 years
    
    
    3.9 yearsAnnualized volatility
    
    68%
    
    
    64%Forfeiture rate
    
    0.00%
    
    
    2.1% per yearDividend rate
    
    0.00%
    
    
    0.00%  11.
    NON-CONTROLLING INTEREST The table below shows details of non-wholly owned subsidiaries
of the Group that have material non-controlling interests: Company
    
    Proportion of
      ownership and voting rights held by non- controlling
      interests
    
    
    Loss allocated to
      non-controlling interests
    
    
    Accumulated
      non-controlling interests2017
    
    
    2016
    
    
    2017
    
    
    2016
    
    
    2017
    
    
    2016Maseve Investments 11 (Pty)
      Ltd
    
    17.1%
    
    
    17.1%
    
    $
    47,956
    
    $
    15,976
    
    $
    (16,463
    )
    $
    34,124Mnombo Wethu Consultants (Pty) Limited
    
    50.1%
    
    
    50.1%
    
    
    -
    
    
    -
    
    
    4,555
    
    
    4,555Total
    
    $
    (11,908
    )
    $
    38,679 FS.27   PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) 12.
    RELATED PARTY TRANSACTIONS Transactions with related parties are as follows: (a)
    During the year ended August 31, 2017, $235 ($235 
      August 31, 2016) was paid to independent directors for directors fees and
      services.(b)
    During the year ended August 31, 2017, the Company
      accrued or received payments of $55 ($62  August 31, 2016) from West
      Kirkland Mining Inc. (West Kirkland), a company with two
      directors in common, for accounting and administrative services. Amounts
      receivable at the end of the year include an amount of $28 ($21  August
      31, 2016) due from West Kirkland. LMM was considered a related party in prior years. (Refer to
note 8 for details of LMM transactions). At August 31, 2017 LMM is no longer
considered to be a related party due to a decreased ownership percentage in the
Company. All amounts receivable and accounts payable owing to or from
related parties are non-interest bearing with no specific terms of repayment.
These transactions are in the normal course of business and are recorded at
consideration established and agreed to by the parties. Key Management Compensation The remuneration of directors, the CFO, CEO, COO and other key
management personnel during the years ended August 31, 2017 and 2016 is as
follows: Year ended
    
    August 31, 2017
    
    
    August 31, 2016
    
    
    August 31, 2015Salaries
    $
    1,093
    
    $
    1,510
    
    $
    2,060Share-based payments
    
    396
    
    
    133
    
    
    1,119Total
    $
    1,489
    
    $
    1,643
    
    $
    3,179  13.
    CONTINGENCIES AND
COMMITMENTS The Companys remaining minimum payments under its office and
equipment lease agreements in Canada and South Africa total approximately $1,915
to August 31, 2020. Maseve is party to a long term 40MVA electricity supply
agreement with South African power utility, Eskom. In consideration of the
upgrade to 40MVA Maseve is to pay connection fees and guarantees totaling R147
million ($11.3 million at August 31, 2017) of which R100 million ($7.7 million
at August 31, 2017), has been paid, leaving R47 million ($3.6 million at August
31, 2017) of the commitment outstanding. These fees are subject to possible
change based on Eskoms cost to install. Eskoms delivery schedule is also
subject to possible change and as of the time of writing the upgrade to 40MVA
had not occurred. From year end the Companys aggregate commitments are as
follows: FS.28   PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) < 1
    
    
    1  3
    
    
    4  5
    
    
    > 5
    
    
    TotalYear
    
    
    Year
    
    
    Year
    
    
    YearLease obligations
    $
    564
    
    $
    1,159
    
    
    -
    
    $
    -
    
    $
    1,723Eskom  power
    
    3,626
    
    
    -
    
    
    -
    
    
    -
    
    
    3,626Mining Development
    
    6,853
    
    
    -
    
    
    -
    
    
    -
    
    
    6,853Mining Indirect and Other
    
    2,494
    
    
    -
    
    
    -
    
    
    -
    
    
    2,494Sprott Facility1
    
    30,002
    
    
    13,821
    
    
    -
    
    
    -
    
    
    43,823LMM
      Facility1
    
    19,233
    
    
    29,735
    
    
    21,515
    
    
    -
    
    
    70,483Totals
    $
    62,772
    
    $
    44,715
    
    $
    21,515
    
    $
    -
    
    **$**
    **129,002** 1The Sprott and Liberty facilities are expected to
be settled within one year. See Note 20 (Subsequent Events) for further details. 14.
    SUPPLEMENTARY CASH FLOW
  INFORMATION Net change in non-cash working capital: Year ended
    
    August 31, 2017
    
    
    August 31, 2016Amounts receivable, prepaid expenses and
      other assets
    $
    4,445
    
    $
    2,124Accounts payable and accrued liabilities
    
    (1,070
    )
    
    (1,550
    )$
    3,375
    
    $
    574  15.
    SEGMENTED REPORTING Segmented information is provided on the basis of geographical
segments as the Company manages its business and exploration activities through
geographical regions  Canada, South Africa-Maseve, South Africa-Waterberg,
South Africa-Other. The Companys other South African divisions that do not meet
the quantitative thresholds of IFRS 8 Operating segments, are included in the
segmental analysis under South Africa-Other. The Chief Operating Decision Makers
(CODM) reviews information from the below segments separately so the
below segments are separated. This represents a change from prior years and
comparative information have been represented to reflect the way the CODM
currently reviews information The Company evaluates performance of its operating and
reportable segments as noted in the following table: Total ComprehensiveFor the year ended August 31, 2017
    
    Assets
    
    
    Liabilities
    
    
    Loss/(Income)Canada
    $
    4,087
    
    $
    109,379
    
    $
    7,689South Africa  Maseve
    
    71,816
    
    
    11,853
    
    
    536,019South Africa  Waterberg
    
    22,705
    
    
    -
    
    
    -South Africa  Other
    
    5,888
    
    
    2,562
    
    
    (12,423
    )$
    104,496
    
    $
    123,794
    
    $
    531,285 FS.29   PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) Total ComprehensiveFor the year ended August 31, 2016
    
    Assets
    
    
    Liabilities
    
    
    Loss/(Income)Canada
    $
    10,666
    
    $
    81,878
    
    $
    (2,541
    )South Africa  Maseve
    
    486,003
    
    
    17,875
    
    
    80,872South Africa  Waterberg
    
    20,201
    
    
    -
    
    
    -South Africa  Other
    
    2,988
    
    
    657
    
    
    8,350$
    519,858
    
    $
    100,410
    
    $
    86,681  16.
    GENERAL AND ADMINISTRATIVE
  EXPENSES  GENERAL AND ADMINISTRATIVE EXPENSESYear Ending
    
    
    **Year
      Ending**August 31, 2017
    
    
    August 31,2016Salaries and benefits
    $
    1,750
    
    $
    1,781Professional/consulting fees
    
    1,585
    
    
    1,238Depreciation
    
    508
    
    
    441Travel
    
    307
    
    
    399Regulatory Fees
    
    242
    
    
    325Rent
    
    247
    
    
    244Accretion
    
    159
    
    
    165Insurance
    
    273
    
    
    163Write-down of receivable from
      related party
    
    -
    
    
    141Other
    
    678
    
    
    524Total
    $
    5,749
    
    $
    5,421 FS.30   PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) 17.
    CAPITAL RISK MANAGEMENT The Companys objectives in managing its liquidity and capital
are to safeguard the Companys ability to continue as a going concern and
provide financial capacity to meet its strategic objectives. The capital
structure of the Company consists of share capital, contributed surplus,
accumulated other comprehensive loss and accumulated deficit. The Company manages the capital structure and makes adjustments
to it in light of changes in economic conditions and the risk characteristics of
the underlying assets. To maintain or adjust the capital structure, the Company
may issue new shares, issue new debt, acquire or dispose of assets. In order to facilitate the management of its capital
requirements, the Company regularly updates the Board of Directors with regard
to budgets, forecasts, results of capital deployment and general industry
conditions. The Company does not currently declare or pay out dividends. As at August 31, 2017, the Company is subject to externally
imposed capital requirements under the Sprott Facility and the LMM Facility.
Please see Note 8 for further details. 18.
    FINANCIAL INSTRUMENTS AND RISK
  MANAGEMENT The Company examines the various financial risks to which it is
exposed and assesses the impact and likelihood of occurrence. These risks may
include credit risk, liquidity risk, currency risk, interest rate risk and other
price risks. (a)
    Credit risk Credit risk arises from the risk that the financial asset
counterparty, may default or not meet its obligations timeously. The Company
minimizes credit risk by monitoring the reliability of counterparties to settle
assets. The maximum exposure to the credit risk is represented by the carrying
amount of all the financial assets. There is no material concentration of credit
risk in cash and cash equivalents, trade and other receivables and loans. (i)
    Amounts receivable Total credit risk is limited to the carrying amount of amounts
receivable. (ii)
    Cash and cash equivalents and restricted
    cash In order to manage credit and liquidity risk the Company
invests only in term deposits with Canadian Chartered and South African banks
that have maturities of three months or less. (iii)
    Performance Bonds In order to explore and develop its properties in South Africa,
the Company was required to post performance bonds as financial guarantees
against future reclamation work. These funds are held with Standard Bank of
South Africa Limited with the DMR as beneficiary in accordance with the MPRDA
and the Companys environmental management programme. FS.31   PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) (b)
    Liquidity risk The Company has in place a planning and budgeting process to
help determine the funds required to support the Companys normal operating
requirements and its exploration and development plans. The Company regularly
updates the Board of Directors with regard to budgets, forecasts, results of
capital deployment and general industry conditions. 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 cash to make debt repayments and
working capital for continued exploration on the Waterberg Projects, as well as
for general working capital purposes. Any failure by the Company to obtain additional required
financing on acceptable terms 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 unfavourable basis. Any such delay or sale could
have a material and adverse effect on the Companys financial condition, results
of operations and liquidity. Also refer to Note 1 for discussion of going
concern risk. (c)
    Currency risk The Companys functional currency is the Canadian dollar, while
the consolidated presentation currency is the United States Dollar. The
functional currency of all South African subsidiaries is the Rand. The Companys
operations are in both Canada and South Africa; therefore, the Company's results
are impacted by fluctuations in the value of foreign currencies in relation to
the Canadian and United States dollar. The Company also held material USD
denominated cash balances. The Company's significant foreign currency exposures
on financial instruments comprise cash and cash equivalents, loans payable,
convertible notes, accounts payable and accrued liabilities. The Company has not
entered into any agreements or purchased any instruments to hedge possible
currency risks at this time. The Company is exposed to foreign exchange risk through the
following financial instruments denominated in a currency other than Canadian
dollars: Year ended
    
    August 31, 2017
    
    
    August 31, 2016Cash (Rand)
    $
    1,402
    
    $
    6,334Cash (USD)
    
    1,964
    
    
    9,941Accounts payable (Rand)
    
    13,294
    
    
    16,297Loan Payable (USD)
    
    90,126
    
    
    81,253Convertible Note (USD)
    
    17,225
    
    
    -Accounts receivable (Rand)
    
    1,479
    
    
    2,995 The Company's comprehensive loss is affected by changes in the
exchange rate between its operating currencies and the United States dollar. At
August 31, 2017, based on this exposure a 10% strengthening/weakening in the
United States dollar versus Rand foreign exchange rate and Canadian dollar would
give rise to a decrease/increase in net loss for the year presented of
approximately $59 million. FS.32   PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) (d)
    Interest rate risk The Companys interest income earned on cash and cash
equivalents and on short term investments is exposed to interest rate risk. At
August 31, 2017, based on this exposure a 1% change in the average interest rate
would give rise to an increase/decrease in the net loss for the year of
approximately $4. At August 31, 2017, the carrying amounts of cash and cash
equivalents, amounts receivable, performance bonds and accounts payable and
accrued liabilities are considered to be reasonable approximations of their fair
values due to the short-term nature of these instruments. 19.
    INCOME TAXES The income taxes shown in the consolidated earnings differ from
the amounts obtained by applying statutory rates to the earnings before
provision for income taxes due to the following: 2017
    
    
    2016
    
    
    2015Loss before income taxes
    $
    588,716
    
    $
    44,145
    
    $
    2,885Income tax recovery at
      statutory rates
    
    (153,066
    )
    
    (11,478
    )
    
    (749
    )Difference of foreign tax rates
    
    (11,774
    )
    
    (766
    )
    
    (44
    )Non-deductible expenses and
      non-taxable portion of capital gains
    
    158,059
    
    
    44
    
    
    (472
    )Changes in unrecognized deferred tax assets and other
    
    8,436
    
    
    4,706
    
    
    4,421Income tax expense (recovery)
    
    1,655
    
    
    (7,494
    )
    
    3,156Income tax expense (recovery)
      consists of:Current income taxes
    $
    -
    
    $
    -
    
    $
    192Deferred income
      taxes
    
    1,655
    
    
    (7,494
    )
    
    895$
    1,655
    
    $
    (7,494
    )
    $
    1,087 The gross movement on the net deferred income tax account is as
follows: 2017
    
    
    2016
    
    
    2015Deferred tax liability at the
      beginning of the year
    $
    -
    
    $
    (6,317
    )
    $
    (10,654
    )Tax recovery relating to the loss (income)
      from
    
    (1,655
    )
    
    7,494
    
    
    895continuing operationsTax (expense) recovery relating to components
      of other
    
    1,655
    
    
    (1,177
    )
    
    3,442comprehensive incomeDeferred tax liability at the end of the year
    $
    -
    
    $
    -
    
    $
    (6,317
    ) The significant components of the Companys net deferred income
tax liabilities are as follows: **2017**
    
    
    2016
    
    
    2015Mineral properties
    $
    (4,635
    )
    $
    (19,692
    )
    
    (17,729
    )Loss
      carry forwards
    
    4,635
    
    
    19,692
    
    
    17,729$
    -
    
    $
    -
    
    $
    - FS.33   PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) Unrecognized deductible temporary differences, unused tax
losses and unused tax credits are attributed to the following: 2017
    
    
    2016
    
    
    2015Tax Losses:Operating loss carry forwards  Canada
    $
    85,898
    
    $
    60,950
    
    $
    58,335Operating loss carry forwards
       South Africa
    
    204,500
    
    
    77,069
    
    
    -Net
      capital loss carry forwards
    
    -
    
    
    1,559
    
    
    1,484$
    290,398
    
    $
    139,578
    
    $
    59,819Temporary
      Differences:Mineral properties
    $
    305,515
    
    $
    7,628
    
    $
    7,647Financing Costs
    
    16,481
    
    
    13,930
    
    
    11,955Property, plant and equipment
    
    692
    
    
    594
    
    
    531Other
    
    368
    
    
    329
    
    
    471$
    323,056
    
    $
    22,481
    
    $
    20,604Investment Tax Credits:
    $
    331
    
    $
    317
    
    $
    285 The Companys Canadian operating loss carry-forwards expire
between 2026 and 2037. The Companys South African operating loss carry-forwards
do not expire. The Companys Canadian unused investment tax credit
carry-forwards expire between 2029 and 2035. The Companys Canadian net capital
loss carry-forwards do not expire. On January 1, 2018 the British Columbia
provincial income tax rate will increase from 11% to 12%. The combined
federal/BC tax rate will increase from 26% to 27%. This change will not have a
significant impact on the income taxes as represented above. 20.
    SUBSEQUENT EVENTS  (a)
    On September 6, 2017 the Company announced that it had
      entered into a term sheet (the "Term Sheet") to sell Maseve to RBPlat in a
      transaction with a gross value of approximately $74 million, payable as to
      $62 million in cash and $12.0 million in RBPlat common shares. Definitive
      legal agreements for this sale were executed on November 23, 2017. The
      Maseve sale transaction is to occur in two
stages:  
    RBPlat is to pay Maseve $58.0 million in cash to acquire
      the concentrator plant and certain surface assets of the Maseve Mine,
      including an appropriate allocation for power and water (the "Plant Sale
      Transaction"). Maseve will retain ownership of the mining rights, power
      and water rights as well as certain surface rights and improvements. The
      payment to be received by Maseve will be remitted to PTM RSA, in partial
      settlement of loans due to PTM RSA. This first payment due from RBPlat is
      conditional upon the satisfaction or waiver of certain conditions
      precedent, including but not limited to the approval, or confirmed
      obligation, of the holder of the remaining 17.1% equity interest in
      Maseve, Africa Wide Mineral Prospecting and Exploration Proprietary
      Limited, the approval of the Companys lenders, and the approval of the
      South African Competition Commission ("Competition Approval").
    RBPlat is to pay PTM RSA $7 million in common shares of
      RBPlat plus approximately $4 million in cash to acquire PTM RSA's
      remaining loans due from Maseve, and is to pay PTM RSA and Africa Wide, in
      proportion to their respective equity interests in Maseve, a further $5
      million by way of issuance of common shares of RBPlat to acquire 100% of
      the equity in Maseve. The second stage of the transaction is conditional
      upon implementation of the Plant Sale Transaction and, among other
  conditions, obtaining consent of the Companys secured lenders
and all requisite regulatory approvals including but not limited to the DMR
granting consent to the transfer of the Maseve mining right to RBPlat in terms
of section 11 of the MPRDA. FS.34   PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) (b)
    On November 6, 2017 the Company closed a transaction,
      originally announced on October 16, 2017, whereby
  Implats:  
    Purchased an aggregate 15.0% equity interest in Waterberg
      JV Co (the Initial Purchase) for $30 million. The Company sold an 8.6%
      interest for $17.2 million and JOGMEC a 6.4% interest for $12.8 million.
      From its $17.2 million in proceeds, the Company will commit $5.0 million
      towards its pro rata share of remaining DFS costs. Implats will also
      contribute an estimated $1.5 million for its 15.0% pro rata share of DFS
      costs. Following the Initial Purchase, the Company will hold a direct
      37.05% equity interest, JOGMEC a 21.95% equity interest and Black Economic
      Empowerment partner Mnombo will maintain a 26.0% equity interest. The
      Company holds a 49.9% interest in Mnombo, bringing its overall direct and
      indirect ownership in Waterberg JV Co. to 50.02%.
    Acquired an option (the Purchase and Development
      Option) whereby upon completion of the DFS, Implats will have a right,
      within 90 days of the DFS completion, to exercise an option to increase
      its interest to up to 50.01% in Waterberg JV Co. If Implats exercises the
      Purchase and Development Option, Implats would commit to purchase an
      additional 12.195% equity interest in Waterberg JV Co. from JOGMEC for
      $34.8 million, and commit to an expenditure of $130.0 million in
      development work.Following an election to go to a 50.01% project interest
      as described above, Implats will have another 90 days to confirm the
      salient terms of a development and mining financing for the Waterberg
      Project, including a signed financing term sheet, subject only to final
      credit approval and documentation. After exercising the Purchase and
      Development Option, Implats will control Waterberg JV Co.Should Implats complete the increase of its interest in
      Waterberg JV Co. to 50.01% pursuant to the Purchase and Development
      Option, the Company would retain a 31.96% direct and indirect interest in
      Waterberg JV Co. and following completion of Implats earn-in spending all
      of the project partners would be required to participate pro-rata. The
      transaction agreements also provide for the transfer of equity and the
      issuance of additional equity to one or more broad based black empowerment
      partners, at fair value.If Implats does not elect to complete the Purchase and
      Development Option and the Development and Mining Financing, Implats will
      retain a 15.0% project interest and the Company will retain a 50.02%
      direct and indirect interest in the project.
    Acquired a right of first refusal to enter into an
      offtake agreement, on commercial arms-length terms, for the smelting and
      refining of mineral products from the Waterberg Project. JOGMEC will
      retain a right to receive platinum, palladium, rhodium, gold, ruthenium,
      iridium, copper and nickel in refined mineral products at the volume
      produced from the Waterberg Project. In consideration for Sprotts and LMMs consent to the Implats
Transaction, the Company has done or has agreed to do, among other things, the
following: 
    Delivered an amendment to the Sprott Facility
      and an amended and restated LMM Facility agreement which, among other things,: (a) amend the term of the
Sprott Facility to mature the earlier of January 31, 2018 and ten days after the
closing of the Plant Sale Transaction and amend the LMM Facility to mature the
later of September 30, 2018 and four months after the closing of the Plant Sale
Transaction, provided that if the Plant Sale Transaction does not close by
December 31, 2018, the maturity date of the LMM Facility shall be December 31,
2018; (b) requires that 50% of net proceeds raised by the Company in an equity
financing of over $500,000 be used for repayment of outstanding loan facilities
(first to Sprott and second to LMM); and (c) adds additional events of default
for failing to be listed on the TSX, breaches under material agreements, a
decrease in its equity ownership in Waterberg JV Co beyond the decrease to occur
as a result of the Implats Transaction and failing to close the Maseve sale
transaction prior to December 31, 2018. FS.35   PLATINUM GROUP METALS LTD.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2017 (In thousands of United
States Dollars unless otherwise noted) 
    Under the amendment to the LMM Facility, raise $20.0
      million in subordinated debt and/or equity within 30 days of the first
      lien facility due to Sprott being repaid and raise a further $10 million
      in subordinated debt and/or equity before June 30, 2018. Proceeds in each
      instance are to repay and discharge amounts due firstly to Sprott and
      secondly to LMM.
    Delivered a termination agreement terminating the
      production payment agreement between LMM and the Company pursuant to which
      a termination fee for the Maseve Mine production payment obligation due to
      LMM must be settled by payment of $15 million before March 31, 2018 or by
      payment of $25 million between March 31, 2018 and the New LMM Maturity
      Date. FS.36   239 ITEM 19.
    EXHIBITS See EXHIBIT INDEX, below.   240 SIGNATURES The registrant hereby certifies that it meets all of the
requirements for filing on Form 20-F and that it has duly caused and authorized
the undersigned to sign this annual report on its behalf. PLATINUM GROUP METALS LTD.(Registrant)Date: December 29, 2017
    By:
    /s/
      Frank R. HallamFrank R. HallamChief Financial Officer    241 ExhibitNumber
    
    Description1.1
    
    Articles of Incorporation, as amended and consolidated on
    February 27, 20142.1
    
    Shareholder Rights Plan Agreement (previously filed by
  the Company as Exhibit 2.1 to the Form 8-A filed on July 11, 2012)4.1
    
    Incentive Stock Option Plan, as amended4.2
    
    Share Compensation Plan (previously filed by the Company
    as Schedule B to Exhibit 99.1 to the Form 6-K filed on January 17, 2017)4.3
    
    Sprott Amended and Restated Credit Agreement dated
      October 11, 2016 (previously filed by the Company as Exhibit 99.1 to the
      Form 6-K filed on November 30, 2017)4.4
    
    Sprott First Amended and Restated Credit Agreement
      Modification Agreement dated January 13, 2017 (previously filed by the
  Company as Exhibit 99.2 to the Form 6-K filed on November 30, 2017)4.5
    
    Sprott Second Amended and Restated Credit Agreement
      Modification Agreement dated April 13, 2017 (previously filed by the
  Company as Exhibit 99.3 to the Form 6-K filed on November 30, 2017)4.6
    
    Sprott Third Amended and Restated Credit Agreement
      Modification Agreement dated June 13, 2017 (previously filed by the
  Company as Exhibit 99.4 to the Form 6-K filed on November 30, 2017)4.7
    
    Sprott Fourth Amended and Restated Credit Agreement
      Modification Agreement dated September 25, 2017 (previously filed by the
  Company as Exhibit 99.5 to the Form 6-K filed on November 30, 2017)4.8
    
    LMM Amended and Restated Credit Agreement dated October
      30, 2017 (previously filed by the Company as Exhibit 99.6 to the Form 6-K
      filed on November 30, 2017)4.9
    
    LMM Production Payment Agreement Termination Agreement
    dated October 30, 20174.10
    
    Convertible Notes Indenture dated June 30, 2017
      (previously filed by the Company as Exhibit 99.1 to the Form 6-K filed on
      July 5, 2017)4.11
    
    Impala Share Purchase Agreement
      dated October 16, 20174.12
    
    Maseve Sale of Business Agreement dated November 23, 2017
      (previously filed by the Company as Exhibit 99.1 to the Form 6-K filed on
      December 1, 2017)4.13
    
    Maseve Scheme Implementation Agreement dated November 23,
      2017 (previously filed by the Company as Exhibit 99.2 to the Form 6-K
      filed on December 1, 2017)8.1
    
    List of Subsidiaries (included under Item 4.C. of this
      Form 20-F)12.1
    
    Certification of Chief Executive Officer12.2
    
    Certification of Chief Financial Officer13.1
    
    Certification of Chief Executive Officer13.2
    
    Certification of Chief Financial Officer15.1
    
    Waterberg Technical Report (previously filed by the
  Company as Exhibit 99.3 to the Form 6-K filed on October 20, 2016)15.2
    
    Consent of PricewaterhouseCoopers LLP15.3
    
    Consent of Gordon I. Cunningham15.4
    
    Consent of Robert L. Goosen15.5
    
    Consent of R. Michael Jones15.6
    
    Consent of Charles J. Muller