---











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

Consolidated Financial Statements
(Audited) For the year ended August 31, 2012



Filed: November 23, 2012

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November 23, 2012

Independent Auditors Report

To the Shareholders of Platinum Group Metals Ltd.

We have audited the accompanying consolidated financial
statements of Platinum Group Metals Ltd., which comprise the consolidated
statements of financial position as at August 31, 2012, August 31, 2011 and
September 1, 2010 and the consolidated statements of comprehensive loss, changes
in equity and cash flows for the years ended August 31, 2012 and August 31,
2011, and the related notes.

Managements responsibility for the consolidated financial
statements

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

Auditors responsibility

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

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

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

Opinion

In our opinion, the consolidated financial statements
present fairly, in all material respects, the financial position of Platinum
Group Metals Ltd. as at August 31, 2012, August 31, 2011 and September 1, 2010
and its financial performance and cash flows for the years ended August 31, 2012
and August 31, 2011 in accordance with International Financial Reporting
Standards as issued by the IASB.

signed PricewaterhouseCoopers LLP

Chartered Accountants

|PricewaterhouseCoopers LLP                                                                                 
|-----------------------------------------------------------------------------------------------------------
|PricewaterhouseCoopers Place, 250 Howe Street, Suite
      700, Vancouver, British Columbia, Canada V6C 3S7
|T: +1 604 806 7000, F: +1 604 806 7806                                                                     
|                                                                                                           
|PwC refers to PricewaterhouseCoopers LLP, an Ontario
      limited liability partnership.                

---

Managements responsibility for the Financial Statements

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

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

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

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

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

Managements Report on Internal Control over Financial
Reporting

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

Management has used the Committee of Sponsoring Organizations
of the Treadway Commission (COSO) framework to evaluate the effectiveness of the
Companys internal control over financial reporting as at August 31, 2012. Based
on this evaluation, management has concluded that as at August 31, 2012, the
Companys internal control over financial reporting was effective.

|/s/ R. Michael Jones
    R. Michael Jones
    Chief Executive Officer | /s/ Frank
      HallamFrank
      Hallam Chief Financial Officer
|--------------------------------------------------------------------- | ----------------------------------------------------------------

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

|                                                                                                  |   | August 31, 2012 |   |   | August 31, 2011 |   |   | September 1, 2010 |  
|------------------------------------------------------------------------------------------------- | - | --------------- | - | - | --------------- | - | - | ----------------- | -
|                                                                                                  |   |                 |   |   | (Note 17)       |   |   | (Note 17)         |  
|ASSETS                                                                                            |   |                 |   |   |                 |   |   |                   |  
|                                                                                                  |   |                 |   |   |                 |   |   |                   |  
|Current                                                                                           |   |                 |   |   |                 |   |   |                   |  
|Cash and cash equivalents                                                                         | $ | 17,665          |   | $ | 64,118          |   | $ | 2,366             |  
|Amounts
      receivable (Note 4 (a))                                                             |   | 4,700           |   |   | 1,845           |   |   | 1,271             |  
|Prepaid expenses and other assets (Note 4 (b))                                                    |   | 302             |   |   | 110             |   |   | 69                |  
|Total current assets                                                                              |   | 22,667          |   |   | 66,073          |   |   | 3,706             |  
|Restricted cash (Note 5 (a (i)))                                                                  |   | 30,512          |   |   | 47,720          |   |   | 160               |  
|Other assets (Note 4 (b))                                                                         |   | 141             |   |   | 2,598           |   |   | -                 |  
|Assets held for sale                                                                              |   | -               |   |   | 974             |   |   | 1,005             |  
|Performance bonds (Note 5 (a (ii)))                                                               |   | 8,698           |   |   | 2,162           |   |   | -                 |  
|Exploration and evaluation assets (Note 6)                                                        |   | 14,809          |   |   | 10,728          |   |   | 9,568             |  
|Property, plant and equipment (Note 5)                                                            |   | 166,907         |   |   | 150,533         |   |   | 111,955           |  
|Total
      assets                                                                                | $ | 243,734         |   | $ | 280,788         |   | $ | 126,394           |  
|                                                                                                  |   |                 |   |   |                 |   |   |                   |  
|LIABILITIES                                                                                       |   |                 |   |   |                 |   |   |                   |  
|                                                                                                  |   |                 |   |   |                 |   |   |                   |  
|Current                                                                                           |   |                 |   |   |                 |   |   |                   |  
|Accounts payable and accrued liabilities                                                          | $ | 7,778           |   | $ | 5,984           |   | $ | 2,270             |  
|Total current
      liabilities                                                                   |   | 7,778           |   |   | 5,984           |   |   | 2,270             |  
|                                                                                                  |   |                 |   |   |                 |   |   |                   |  
|Deferred income taxes (Note 16)                                                                   |   | 13,426          |   |   | 12,911          |   |   | 15,486            |  
|Asset retirement obligation (Note 7)                                                              |   | 1,440           |   |   | 645             |   |   | -                 |  
|Total
      liabilities                                                                           |   | 22,644          |   |   | 19,540          |   |   | 17,756            |  
|                                                                                                  |   |                 |   |   |                 |   |   |                   |  
|SHAREHOLDERS' EQUITY                                                                              |   |                 |   |   |                 |   |   |                   |  
|                                                                                                  |   |                 |   |   |                 |   |   |                   |  
|Share capital (Note 8)                                                                            |   | 256,312         |   |   | 256,312         |   |   | 91,794            |  
|Contributed surplus                                                                               |   | 16,934          |   |   | 13,816          |   |   | 10,929            |  
|Accumulated other comprehensive income                                                            |   | (36,521         | ) |   | (6,101          | ) |   | -                 |  
|Deficit                                                                                           |   | (55,318         | ) |   | (34,347         | ) |   | (5,234            | )
|Total
      shareholders' equity attributable to shareholders of Platinum Group
      Metals Ltd. |   | 181,407         |   |   | 229,680         |   |   | 97,489            |  
|Non-controlling interest (Note 5(a (i)))                                                          |   | 39,683          |   |   | 31,568          |   |   | 11,149            |  
|Total
      Shareholders' equity                                                                  |   | 221,090         |   |   | 261,248         |   |   | 108,638           |  
|Total liabilities and shareholders' equity                                                        | $ | 243,734         |   | $ | 280,788         |   | $ | 126,394           |  
|                                                                                                  |   |                 |   |   |                 |   |   |                   |  
|CONTINGENCIES AND COMMITMENTS (NOTE 13)                                                           |   |                 |   |   |                 |   |   |                   |  
|SUBSEQUENT EVENTS (NOTE 18)                                                                       |   |                 |   |   |                 |   |   |                   |  

Approved by the Board of Directors and authorized for issue on
November 23, 2012

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

See accompanying notes to the consolidated financial statements.

---

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

|                                                                               |   | Year            |   |   | Year            |  
|------------------------------------------------------------------------------ | - | --------------- | - | - | --------------- | -
|                                                                               |   | Ended           |   |   | Ended           |  
|                                                                               |   | August 31, 2012 |   |   | August 31, 2011 |  
|                                                                               |   |                 |   |   | (Note 17        | )
|EXPENSES                                                                       |   |                 |   |   |                 |  
|General and administrative (Note 12)                                           | $ | 5,373           |   | $ | 6,790           |  
|Foreign exchange loss                                                          |   | 3,588           |   |   | 12              |  
|Stock compensation expense                                                     |   | 2,006           |   |   | 6,910           |  
|Write-down of property, plant
      and equipment                              |   | 442             |   |   | -               |  
|Write-down of exploration and evaluation asset                                 |   | 413             |   |   | -               |  
|                                                                               |   | (11,822         | ) |   | (13,712         | )
|Finance income                                                                 |   | 3,943           |   |   | 3,785           |  
|Loss for the year before income tax                                            |   | (7,879          | ) |   | (9,927          | )
|Income tax
      (expense) recovery                                            |   | (2,321          | ) |   | 1,581           |  
|Loss for the year after income tax                                             |   | (10,200         | ) |   | (8,346          | )
|Income
      attributable to non-controlling interest                          |   | 388             |   |   | 546             |  
|Loss attributable to the shareholders of Platinum Group
      Metals Ltd.      | $ | (10,588         | ) | $ | (8,892          | )
|                                                                               |   |                 |   |   |                 |  
|Other comprehensive loss                                                       |   |                 |   |   |                 |  
|Foreign currency translation adjustment                                        |   | (30,420         | ) |   | (6,101          | )
|Comprehensive loss
      for the year                                          | $ | (41,008         | ) | $ | (14,993         | )
|                                                                               |   |                 |   |   |                 |  
|Basic and diluted
      loss per common share                                  | $ | (0.06           | ) | $ | (0.05           | )
|Weighted-average number of common shares outstanding - Basic
      and diluted |   | 177,584,542     |   |   | 173,948,058     |  

See accompanying notes to the consolidated financial statements.

---

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

|                                                |  | Common shares     |  |   |         |  |   |             |   |   |                    |   |   |         |   |   |                 |  
|----------------------------------------------- |  | ----------------- |  | - | ------- |  | - | ----------- | - | - | ------------------ | - | - | ------- | - | - | --------------- | -
|                                                |  | without par value |  |   |         |  |   |             |   |   |                    |   |   |         |   |   |                 |  
|                                                |  |                   |  |   |         |  |   | Contributed |   |   | Accumulated other  |   |   |         |   |   | Non-controlling |  
|                                                |  | Shares            |  |   | Amount  |  |   | surplus     |   |   | comprehensive loss |   |   | Deficit |   |   | interest        |  
|Balance, September 1, 2010 (Note 17)            |  | 93,964,792        |  | $ | 91,794  |  | $ | 10,929      |   | $ | -                  |   | $ | (5,234  | ) | $ | 11,149          |  
|Issuance of common shares for cash              |  | 70,150,000        |  |   | 135,366 |  |   | -           |   |   | -                  |   |   | -       |   |   | -               |  
|Issued on exercise of stock options             |  | 936,500           |  |   | 1,932   |  |   | (468        | ) |   | -                  |   |   | -       |   |   | -               |  
|Issued on exercise of w arrants                 |  | 12,533,250        |  |   | 27,220  |  |   | (5,287      | ) |   | -                  |   |   | -       |   |   | -               |  
|Stock based compensation                        |  | -                 |  |   | -       |  |   | 8,642       |   |   | -                  |   |   | -       |   |   | -               |  
|Funding of non-controlling interest             |  | -                 |  |   | -       |  |   | -           |   |   | -                  |   |   | (20,221 | ) |   | 20,221          |  
|Income attributable to non-controlling interest |  | -                 |  |   | -       |  |   | -           |   |   | -                  |   |   | -       |   |   | 546             |  
|Foreign currency translation adjustment         |  | -                 |  |   | -       |  |   | -           |   |   | (6,101             | ) |   | -       |   |   | (348            | )
|Net loss                                        |  | -                 |  |   | -       |  |   | -           |   |   | -                  |   |   | (8,892  | ) |   | -               |  
|Balance, August 31, 2011 (Note 17)              |  | 177,584,542       |  |   | 256,312 |  |   | 13,816      |   |   | (6,101             | ) |   | (34,347 | ) |   | 31,568          |  
|Stock based compensation                        |  | -                 |  |   | -       |  |   | 3,118       |   |   | -                  |   |   | -       |   |   | -               |  
|Funding of non-controlling interest             |  | -                 |  |   | -       |  |   | -           |   |   | -                  |   |   | (10,383 | ) |   | 10,383          |  
|Income attributable to non-controlling interest |  | -                 |  |   | -       |  |   | -           |   |   | -                  |   |   | -       |   |   | 388             |  
|Foreign currency translation adjustment         |  | -                 |  |   | -       |  |   | -           |   |   | (30,420            | ) |   | -       |   |   | (2,656          | )
|Net loss                                        |  | -                 |  |   | -       |  |   | -           |   |   | -                  |   |   | (10,588 | ) |   | -               |  
|Balance, August 31, 2012                        |  | 177,584,542       |  | $ | 256,312 |  | $ | 16,934      |   | $ | (36,521            | ) | $ | (55,318 | ) | $ | 39,683          |  

See accompanying notes to the consolidated financial statements.

---

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

|                                                           |   | Year            |   |   | Year            |  
|---------------------------------------------------------- | - | --------------- | - | - | --------------- | -
|                                                           |   | Ended           |   |   | Ended           |  
|                                                           |   | August 31, 2012 |   |   | August 31, 2011 |  
|OPERATING ACTIVITIES                                       |   |                 |   |   | (Note 17        | )
|Loss for the year                                          | $ | (10,588         | ) | $ | (8,892          | )
|Add items not affecting cash:                              |   |                 |   |   |                 |  
|Depreciation                                               |   | 387             |   |   | 262             |  
|Foreign exchange loss                                      |   | 1,659           |   |   | 12              |  
|Deferred income
      tax expense (recovery)               |   | 2,752           |   |   | (2,068          | )
|Write-down of property, plant
      and equipment          |   | 442             |   |   | -               |  
|Write-down of
      exploration and evaluation asset       |   | 413             |   |   | -               |  
|Stock compensation expense                                 |   | 2,006           |   |   | 6,910           |  
|Net change in non-cash working
      capital (Note 14)     |   | 422             |   |   | 354             |  
|                                                           |   | (2,507          | ) |   | (3,422          | )
|                                                           |   |                 |   |   |                 |  
|FINANCING ACTIVITIES                                       |   |                 |   |   |                 |  
|Issuance of common shares                                  |   | -               |   |   | 158,763         |  
|                                                           |   | -               |   |   | 158,763         |  
|                                                           |   |                 |   |   |                 |  
|INVESTING ACTIVITIES                                       |   |                 |   |   |                 |  
|Acquisition of property, plant
      and equipment         |   | (36,940         | ) |   | (38,726         | )
|Exploration expenditures, net of recoveries                |   | (5,910          | ) |   | (1,248          | )
|South African VAT                                          |   | (50             | ) |   | (726            | )
|Performance bonds                                          |   | (6,878          | ) |   | (2,001          | )
|Restricted cash                                            |   | 8,013           |   |   | (49,559         | )
|                                                           |   | (41,765         | ) |   | (92,260         | )
|Net (decrease) increase in cash and cash
      equivalents |   | (44,272         | ) |   | 63,081          |  
|Effect of foreign exchange on cash and cash equivalents    |   | (2,181          | ) |   | (1,329          | )
|Cash and cash equivalents, beginning of year               |   | 64,118          |   |   | 2,366           |  
|Cash and cash
      equivalents, end of year               | $ | 17,665          |   | $ | 64,118          |  

See accompanying notes to the consolidated financial statements.

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial statements
For the year ended August 31, 2012 
  (in thousands of Canadian dollars)

|1. | NATURE OF OPERATIONS AND LIQUIDITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Platinum Group Metals Ltd. (the Company) is a British
      Columbia corporation incorporated on February 18, 2002. The Companys
      shares are publicly listed on the Toronto Stock Exchange in Canada and the
      NYSE MKT LLC in the United States. The Companys address is Suite 328-550
      Burrard Street, Vancouver, British Columbia, V6C 2B5.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company is an exploration and development company
      conducting work on mineral properties it has staked or acquired by way of
      option agreements in Canada and the Republic of South Africa. The Company
      is currently developing the Project 1 Platinum Mine in South Africa, in
      which it holds a 74% working interest. A formal Mining Right was granted
      for the project on April 4, 2012 by the Government of South Africa. The
      Company is currently working with a syndicate of international banks (the
      Lenders) to complete a $260 million senior loan facility for the
      project. The negotiations have advanced through detailed technical,
      financial and legal due diligence. Closing and draw down of the loan
      facility is subject to receipt of commitment, final credit approval, the
      negotiation and execution of definitive documentation and certain
      conditions precedent. The Company will also be responsible for its 74%
      share of a cost overrun facility and working capital as needed to satisfy
      the Lenders requirements. In order to follow its business plan, the
      Company will need to raise additional capital in 2012 by way of equity
      issuance, additional debt or sale of assets. There is no assurance that
      such funding will be available to the Company, or that it will be obtained
      on terms favourable to the Company. Failure to obtain sufficient financing
      may result in delaying or indefinite postponement of exploration,
      development, or production on any or all of the Companys properties, or
      even a loss of property interests.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | These financial statements include the accounts of the
      Company and its subsidiaries. The Companys subsidiaries and significant
      investments are as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Platinum Group Metals (RSA) (Pty) Ltd. - Johannesburg,
      RSA (100% ownership) Maseve Investments 11 (Pty) Ltd. - Johannesburg,
      RSA (74% ownership) Wesplats Holdings (Pty) Limited - Johannesburg,
      RSA (100% ownership) Platinum Group Metals (Barbados) Ltd., Barbados
      (100% ownership) Mnombo Wethu Consultants (Pty) Limited. (49.9%
      ownership)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|2. | BASIS OF PRESENTATION AND ADOPTION OF INTERNATIONAL
      FINANCIAL REPORTING STANDARDS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company prepares its financial statements in
      accordance with Canadian generally accepted accounting principles
      (Canadian GAAP) as set out in the Handbook of the Canadian Institute of
      Chartered Accountants (CICA Handbook). In 2010, the CICA Handbook was
      revised to incorporate International Financial Reporting Standards
      (IFRS), and require publicly accountable enterprises to apply such
      standards effective for fiscal years beginning on or after January 1,
      2011. Accordingly, the Company commenced reporting on this basis in these
      consolidated financial statements. In these financial statements, the term
      Canadian GAAP refers to Canadian GAAP before the adoption of IFRS.
      Accordingly, these are the Companys first annual consolidated financial
      statements prepared in accordance with IFRS as issued by the
  IASB.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | These consolidated financial statements have been
      prepared in accordance with IFRS applicable to the preparation of
      consolidated financial statements, including IFRS 1, First-time adoption
      of International Financial Reporting Standards and subject to certain
      transition elections and certain optional exemptions as disclosed in Note
      17. The Company has consistently applied the same accounting policies in
      its opening IFRS statement of financial position at September 1, 2010 and
      throughout all periods presented, as if these policies had always been in
      effect. Note 17 discloses the impact of the transition to IFRS on the
      Companys financial position, financial performance and cash flows,
      including the nature and effect of significant changes in accounting
      policies from those used in the Companys consolidated financial
      statements for the year ended September 1, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

1

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2012 
  (in thousands of Canadian dollars)

|   | The financial statements were approved by the Companys
      Board of Directors.                                                                                                                                                                                                 
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                   
|   | The consolidated financial statements are presented in
      Canadian dollars.                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                   
|3. | SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                   
|   | The principal accounting policies applied in the
      preparation of these consolidated financial statements are set out
      below.                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                   
|   | Consolidation                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                   
|   | The financial statements of the Company consolidate the
      accounts of Platinum Group Metals Ltd. and its subsidiaries. All
      intercompany transactions, balances and any unrealized gains and losses
      from intercompany transactions are eliminated on consolidation.
|   |                                                                                                                                                                                                                                                                                   
|   | Cash and cash equivalents                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                   
|   | Cash and cash equivalents consist of cash and short-term
      deposits, which are readily convertible to cash and have original
      maturities of 90 days or less.                                                                                                             
|   |                                                                                                                                                                                                                                                                                   
|   | Exploration and Evaluation Assets                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                   
|   | Exploration and evaluation activity involves the search
      for mineral resources, the determination of technical feasibility and the
      assessment of commercial viability of an identified resource.                                                                       
|   |                                                                                                                                                                                                                                                                                   
|   | Exploration and evaluation activity
  includes:                                                                                                                                                                                                                                   

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

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

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

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

Property, plant and equipment

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

2

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2012 
  (in thousands of Canadian dollars)

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

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

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

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

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


Development costs are depreciated on a
unit of production basis.

Impairment of long-lived assets

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

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 are also monitored to assess for indications of impairment.

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

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

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

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

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

3

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2012 
  (in thousands of Canadian dollars)

Asset retirement obligations

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

Income taxes

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

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

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

Translation of foreign
currencies

Functional and presentation currency

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

Platinum Group Metals Limited
    Canadian dollarsPlatinum Group Metals (RSA) (Pty) Ltd.
    South African RandMaseve Investments 11 (Pty) Ltd.
    South African RandWesplats Holdings (Pty) Limited
    South African RandMnombo Wethu Consultants (Pty) Limited
    South African RandPlatinum Group Metals (Barbados) Ltd.
    United States dollars


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.

4

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2012 
  (in thousands of Canadian dollars)

Subsidiaries

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

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

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

Stock-based compensation

The fair values for all stock-based
awards are estimated using the Black-Scholes model and recorded over the period
of vesting. The compensation cost related to stock options granted is recorded
in operations 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.

Earnings (loss) per common share

Basic earnings (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 is incurred, the effect of the potential issuances of
shares is anti-dilutive, and accordingly basic and diluted loss per share are
the same.

Financial instruments

(i) Financial assets and liabilities

The classification depends on the
purpose for which the financial assets or liabilities were obtained. Management
determines the classification of financial assets and liabilities at initial
recognition.

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

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

5

---

Platinum Group Metals Ltd.(An
exploration and development stage company) Notes to the consolidated
financial statementsFor the year ended August 31, 2012 
  (in thousands of Canadian dollars)

(ii) Fair value of financial
instruments

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

(iii) Impairment of financial assets

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

Future accounting changes

Unless otherwise noted, the following
new or revised standards and amendments are effective for annual periods
beginning on or after January 1, 2013 with earlier application permitted. The
company has not yet assessed the impact of these standards and amendments or
determined whether it will early adopt them.

IFRS 9, Financial instruments,
addresses the classification, measurement and recognition of financial assets
and financial liabilities. IFRS 9 was issued in November 2009 and October 2010.
It replaces the parts of IAS 39 that relate to the classification and
measurement of financial instruments. IFRS 9 requires financial assets to be
classified into two measurement categories: those measured as at fair value and
those measured at amortized cost. The determination is made at initial
recognition. The classification depends on the entitys business model for
managing its financial instruments and the contractual cash flow characteristics
of the instrument. For financial liabilities, the standard retains most of the
IAS 39 requirements. The main change is that, in cases where the fair value
option is taken for financial liabilities, the part of a fair value change due
to an entitys own credit risk is recorded in other comprehensive income rather
than the income statement, unless this creates an accounting mismatch.

In May 2011, the IASB issued the
following standards which have not yet been adopted by the Company: IFRS 10,
Consolidated Financial Statements (IFRS 10), IFRS 11, Joint Arrangements (IFRS
11), IFRS 12, Disclosure of Interests in Other Entities (IFRS 12), IAS 27,
Separate Financial Statements (IAS 27), IFRS 13, Fair Value measurement (IFRS
13) and amended IAS 28, Investments in Associates and Joint Ventures (IAS
28).

IFRS 10, consolidation requires an
entity to consolidate an investee when it is exposed, or has rights, to variable
returns from its involvement with the investee and has the ability to affect
those returns through its power over the investee. Under existing IFRS,
consolidation is required when an entity has the power to govern the financial
and operating policies of an entity so as to obtain benefits from its
activities. IFRS 10 replaces SIC-12 Consolidation  Special Purpose Entities and
parts of IAS 27 Consolidated and Separate Financial Statements.

IFRS 11, Joint Arrangements, requires a
venturer to classify its interest in a joint arrangement as a joint venture or
joint operation. Joint ventures will be accounted for using the equity method of
accounting whereas for a joint operation the venturer will recognize its share
of the assets, liabilities, revenue and expenses of the joint operation. Under
existing IFRS, entities have the choice to proportionately consolidate or equity
account for interests in joint ventures. IFRS 11 supersedes IAS 31, Interests in
Joint Ventures, and SIC-13, Jointly Controlled EntitiesNon-monetary
Contributions by Venturers.

IFRS 12, Disclosure of Interests in
Other Entities, establishes disclosure requirements for interests in other
entities, such as subsidiaries, joint arrangements and associates. The standard carries forward existing disclosures
and also introduces significant additional disclosure that address the nature
of, and risks associated with, an entitys interests in other entities.

6

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2012 
  (in thousands of Canadian dollars)

IFRS 13, Fair Value Measurement, is a
comprehensive standard for fair value measurement and disclosure for use across
all IFRS standards. The new standard clarifies that fair value is the price that
would be received to sell an asset, or paid to transfer a liability in an
orderly transaction between market participants, at the measurement date. Under
existing IFRS, guidance on measuring and disclosing fair value is
dispersed among the specific standards requiring fair value measurements and
does not always reflect a clear measurement basis or consistent disclosures.

There have been amendments to existing
standards, including IAS 27, Separate Financial Statements (IAS 27), and IAS 28,
Investments in Associates and Joint Ventures (IAS 28). IAS 27 addresses
accounting for subsidiaries, jointly controlled entities and associates in
non-consolidated financial statements. IAS 28 has been amended to include joint
ventures in its scope and to address the changes in IFRS 10  13.

IAS 1, Presentation of Financial
Statements, has been amended to require entities to separate items presented in
other comprehensive income (OCI) into two groups, based on whether or not
items may be recycled in the future. Entities that choose to present OCI items
before tax will be required to show the amount of tax related to the two groups
separately. The amendment is effective for annual periods beginning on or after
July 1, 2012 with earlier application permitted.

Significant accounting judgments
and estimates

The preparation of the financial
statements in conformity of 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 that have the most
significant effect on the amounts recognized in these consolidated financial
statements are:

- Review of asset carrying values
      and impairment assessment;
- Determination of the fair values
      of share-based compensation.
- Determination of useful lives of
      property, plant and equipment;
- Asset retirement obligations; and
- Deferred tax assets and
      liabilities.

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;
- Asset retirement obligations; and
- Deferred tax assets and
      liabilities and resource taxes.

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

Review of asset carrying values and
impairment assessment

Property, plant and equipment and
mineral properties are considered for impairment when events or changes in
circumstances indicate that the carrying amount may not be recoverable. If any
such indication exists, a formal estimate of recoverable amount is performed and
an impairment loss is recognized to the extent that the carrying amount exceeds
the recoverable amount. For the purpose of measuring recoverable
amounts, assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash-generating units or CGUs). The recoverable
amount is the higher of an assets fair value less costs to sell and value in
use (being the present value of the expected future cash flows of the relevant
asset or CGU). An impairment loss is recognized for the amount by which the
assets carrying amount exceeds its recoverable amount.

7

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2012 
  (in thousands of Canadian dollars)

The determination of fair value less
costs to sell and value in use requires management to make estimates and
assumptions about expected production, commodity prices, mineral reserves and
resources, operating costs, closure and rehabilitation costs and future capital
expenditures. These estimates and assumptions are subject to risk and
uncertainty; hence there is the possibility that changes in circumstances will
alter these projections, which may impact the recoverable amount of the assets.
In such circumstances some or all of the carrying value of the assets may be
further impaired or the impairment charge reduced with the impact recorded in
the income statement.

Asset Retirement Obligations

The amounts recorded for asset
retirement costs are based on estimates included in closure and remediation
plans. These estimates are based on engineering studies of the work that is
required by environmental laws. These estimates include an assumption of the
rate at which costs may inflate in future periods. Actual costs and the timing
of expenditures could differ from these estimates.

Determination of the fair value of
share-based compensation

The Company provides compensation
benefits to our employees, directors, officers and consultants through a share
option plan. In order to compute this fair value the Company uses option pricing
models that require management to make various estimates and assumptions in
relation to the expected life of awards, volatility, risk-free interest rates,
and forfeiture rates. Expected volatility is based on historical volatility of
the Companys share price. The risk-free interest rate for the expected term of
the option is based on the Government of Canada yield curve in effect at the
time of the grant.

Deferred tax assets and liabilities
and resource taxes

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

Determination of useful lives of
property, plant and equipment

The Company uses the straight line
method to depreciate property, plant and equipment, whereby depreciation is
calculated using the expected life of the asset. Development assets will be
depreciated using the units of production method. Estimated lives of property,
plant and equipment are based on historical experience and actual asset lives
may vary from this experience. Lives are reassessed on at least an annual basis.

8

---

Platinum Group Metals Ltd.(An
exploration and development stage company) Notes to the consolidated
financial statementsFor the year ended August 31, 2012 
  (in thousands of Canadian dollars)

|4. | AMOUNTS RECEIVABLE AND
PREPAIDS
|-- | -------------------------------

| | a) | Amounts receivable
| | -- | ------------------

| |                                          |   | August 31, 2012 |  |   | August 31, 2011 |  |   | September 1, 2010 | 
| | ---------------------------------------- | - | --------------- |  | - | --------------- |  | - | ----------------- | 
| | South African VAT                        | $ | 1,242           |  | $ | 1,171           |  | $ | 445               | 
| | Other receivables                        |   | 31              |  |   | 203             |  |   | 2                 | 
| | Expenditure advances                     |   | 3,208           |  |   | 344             |  |   | 8                 | 
| | Canadian harmonized sales tax            |   | 131             |  |   | 80              |  |   | 127               | 
| | Due from related parties
      (Note 11) |   | 88              |  |   | 47              |  |   | 36                | 
| | Receivable from the sale of assets       |   | -               |  |   | -               |  |   | 653               | 
| | Total amounts receivable                 | $ | 4,700           |  | $ | 1,845           |  | $ | 1,271             | 

| | b) | Prepaid expenses and other
assets
| | -- | ---------------------------------

| |                                 |   | August 31, 2012 |  |   | August 31, 2011 |  |   | September 1, 2010 | 
| | ------------------------------- | - | --------------- |  | - | --------------- |  | - | ----------------- | 
| | Current                         |   |                 |  |   |                 |  |   |                   | 
| | Insurance premiums              | $ | 261             |  | $ | 87              |  | $ | 50                | 
| | Miscellaneous                   |   | 41              |  |   | 23              |  |   | 19                | 
| | Total current prepaids          | $ | 302             |  | $ | 110             |  | $ | 69                | 
| |                                 |   |                 |  |   |                 |  |   |                   | 
| | Non-current                     |   |                 |  |   |                 |  |   |                   | 
| | Miscellaneous                   | $ | 141             |  | $ | -               |  | $ | -                 | 
| | Project 1 - Contractor advances |   | -               |  |   | 2,598           |  |   | -                 | 
| | Total other assets              | $ | 141             |  | $ | 2,598           |  | $ | -                 | 

9

---

PlatinumGroupMetalsLtd.(An exploration and development stage company) Notes to the
consolidated financial statements For the year ended August 31, 2012 
  (in thousands of Canadian dollars)

|5. | PROPERTY, PLANT AND
EQUIPMENT
|-- | -----------------------------

ConstructionDevelopment
    
    
    work-in-
    
    
    
    
    
    
    
    
    Office
    
    
    Miningassets
    
    
    progress
    
    
    Land
    
    
    Buildings
    
    
    Equipment
    
    
    Equipment
    
    
    TotalCostBalance as at September 1, 2010
    $
    91,692
    
    $
    -
    
    $
    15
      ,532
    
    $
    4,487
    
    $
    712
    
    $
    166
    
    $
    112,589Additions
    
    37,012
    
    
    3,432
    
    
    -
    
    
    -
    
    
    459
    
    
    1,650
    
    
    42,553Disposal
    
    -
    
    
    -
    
    
    -
    
    
    (6
    )
    
    (272
    )
    
    -
    
    
    (278
    )Foreign exchange
      movement
    
    (2,927
    )
    
    -
    
    
    (495
    )
    
    (143
    )
    
    (13
    )
    
    (5
    )
    
    (3,583
    )Balance as at August 31, 2011
    $
    125,777
    
    $
    3,432
    
    $
    15,037
    
    $
    4,338
    
    $
    886
    
    $
    1,811
    
    $
    151,281Additions
    
    31,164
    
    
    805
    
    
    2,112
    
    
    282
    
    
    131
    
    
    5,803
    
    
    40,297Disposal
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (1
    )
    
    (1
    )
    
    (2
    )Foreign exchange
      movement
    
    (19,348
    )
    
    (543
    )
    
    (2,379
    )
    
    (686
    )
    
    (68
    )
    
    (286
    )
    
    (23,310
    )Balance August 31, 2012
    $
    137,593
    
    $
    3,694
    
    $
    14,770
    
    $
    3,934
    
    $
    948
    
    $
    7,327
    
    $
    168,266Accumulated DepreciationBalance as at September 1, 2010
    $
    -
    
    $
    -
    
    $
    -
    
    $
    16
    
    $
    567
    
    $
    51
    
    $
    634Additions
    
    -
    
    
    -
    
    
    -
    
    
    20
    
    
    193
    
    
    46
    
    
    259Disposals
    
    -
    
    
    -
    
    
    -
    
    
    (3
    )
    
    (128
    )
    
    -
    
    
    (131
    )Foreign exchange movement
    
    -
    
    
    -
    
    
    -
    
    
    (1
    )
    
    (12
    )
    
    (1
    )
    
    (14
    )Balance as at August 31, 2011
    $
    -
    
    $
    -
    
    $
    -
    
    $
    32
    
    $
    620
    
    $
    96
    
    $
    748Additions
    
    -
    
    
    -
    
    
    -
    
    
    195
    
    
    144
    
    
    347
    
    
    686Disposals
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (2
    )
    
    (1
    )
    
    (3
    )Foreign exchange movement
    
    -
    
    
    -
    
    
    -
    
    
    (4
    )
    
    (54
    )
    
    (14
    )
    
    (72
    )Balance August
      31, 2012
    $
    -
    
    $
    -
    
    $
    -
    
    $
    223
    
    $
    708
    
    $
    428
    
    $
    1,359Net book value,
      September 1, 2010
    $
    91,692
    
    $
    -
    
    $
    15,532
    
    $
    4,471
    
    $
    145
    
    $
    115
    
    $
    111,955Net book value, August 31, 2011
    $
    125,777
    
    $
    3,432
    
    $
    15,037
    
    $
    4,306
    
    $
    266
    
    $
    1,715
    
    $
    150,533Net book value,
      August 31, 2012
    $
    137,593
    
    $
    3,694
    
    $
    14,770
    
    $
    3,711
    
    $
    240
    
    $
    6,899
    
    $
    166,907


10

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial statements
For the year ended August 31, 2012 
  (in thousands of Canadian dollars)

| | a) | Projects 1
| | -- | ----------

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

| | i.  | Ownership of Project 1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | Under the terms of an agreement dated April 22, 2010, the
      Company owns a 74% interest in Project 1, while the remaining 26% is owned
      by Wesizwe Platinum Ltd. (Wesizwe). Under the terms of the agreement
      subscription funds paid by the Company are held in escrow for application
      towards Wesizwes capital requirements for Projects 1. These funds are
      classified as restricted cash. As of August 31, 2012, the balance of
      restricted cash is $32,158. For every $74 spent by the Company on project
      requirements in Maseve, a further $26 can be removed from the restricted
      cash to cover Wesizwes share of such costs.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | The Company consolidated the financial statements of
      Maseve from the effective date of the reorganization. The portion of
      Maseve not owned by the Company, calculated at $39,683 at August 31, 2012
      ($31,568  August 31, 2011), is accounted for as a non-controlling
      interest.                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ii. | Other financial information - Project 1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | At August 31, 2012, the Company recorded an asset
      retirement obligation of $1,440 (August 31, 2011 - $645) based on the
      degree of surface disturbance on the Project 1 site. As of August 31,
      2012, the Company has posted a total of $8,698 (August 31, 2011 - $2,162)
      as performance bonds in South Africa against reclamation work,
      approximately $8,600 (August 31, 2011 - $2,070) of which is posted against
      work on Project 1.                                                                                                                                                                                                         

|6. | EXPLORATION AND EVALUATION
ASSETS
|-- | ---------------------------------

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

|                  |   | August 31, 2012 |  |   | August 31, 2011 |  |   | September 1, 2010 | 
|----------------- | - | --------------- |  | - | --------------- |  | - | ----------------- | 
|Canada            | $ | 5,601           |  | $ | 3,710           |  | $ | 2,324             | 
|South Africa      |   | 9,208           |  |   | 7,018           |  |   | 7,244             | 
|Total exploration | $ | 14,809          |  | $ | 10,728          |  | $ | 9,568             | 

11

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2012 
  (in thousands of Canadian dollars)

REPUBLIC OF SOUTH AFRICA

SOUTH
        AFRICAAugust 31,
      
      
      August 31,
      
      
      September 1,2012
      
      
      2011
      
      
      2010Project 3 - see
        note 5 (a)
      $
      3,648
      
      $
      4,333
      
      $
      4,476Waterberg
      
      Acquisition costs
      $
      10
      
      $
      12
      
      $
      12Exploration and evaluation costs
      
      7,562
      
      
      886
      
      
      577Recoveries
      
      (4,250
      )
      
      (886
      )
      
      (577
      )Total Waterberg
      
      
      $
      3,322
      
      $
      12
      
      $
      12Sable
      
      Acquisition costs
      $
      9
      
      $
      11
      
      $
      3Exploration and evaluation costs
      
      1,147
      
      
      797
      
      
      87Recoveries
      
      (1,156
      )
      
      (760
      )
      
      (43
      )Total Sable
      
      
      $
      -
      
      $
      48
      
      $
      47Warsprings
      
      Acquisition costs
      $
      137
      
      $
      154
      
      $
      158Exploration and evaluation costs
      
      3,870
      
      
      4,588
      
      
      4,105Recoveries
      
      (2,414
      )
      
      (2,862
      )
      
      (2,318
      )Total Warsprings
      
      
      $
      1,593
      
      $
      1,880
      
      $
      1,945Tweespalk
      
      Acquisition costs
      $
      74
      
      $
      80
      
      $
      82Exploration and evaluation costs
      
      742
      
      
      870
      
      
      895Recoveries
      
      (182
      )
      
      (216
      )
      
      (224
      )Total Tweespalk
      
      
      $
      634
      
      $
      734
      
      $
      753Other
      
      
      $
      11
      
      $
      11
      
      $
      11Total
        South Africa Exploration
      $
      9,208
      
      $
      7,018
      
      $
      7,244


Waterberg

The Waterberg Project consists of a
registered new order prospecting right granted by the Government of South
Africa. The current prospecting right expired on the September 1, 2012 and an
application together with the required supporting documentation for the renewal
of the current prospecting right for a further period of three years commencing
on the September 2, 2012 was filed and duly acknowledged by the Regional
Manager, Limpopo Region, Department of Mineral Resources (DMR). A further
application to extend the license period to September 1, 2017 is in process. PTM
RSAs prospecting right at Waterberg will allow it to file an application for
conversion of the current prospecting right into a mining right.

In October 2009, PTM RSA entered into
an agreement with the Japanese Oil, Gas and Metals National Corporation (JOGMEC)
and Mnombo Wethu Consultants (Pty) Limited (Mnombo) whereby JOGMEC could earn
up to a 37% interest in the project for an optional work commitment of USD $3.2
million over 4 years, while at the same time Mnombo, is required to match
JOGMEC's expenditures on a 26/74 basis (USD $1.12 million).

The Company originally held a 37% share
in the Waterberg Project with Mnombo, a Black Economic Empowerment (BEE)
partner, holding the remaining 26% share. However, On November 7, 2011 the
Company entered into an agreement with Mnombo whereby the Company acquired 49.9%
of the issued and outstanding shares of Mnombo in exchange for cash payments
totalling R 1.2 million and paying for Mnombo's 26% share of project costs to
the completion of a feasibility study. When combined with the Company's 37%
direct interest in the Waterberg Project (after JOGMEC earn-in), the 12.974%
indirect interest to be acquired through Mnombo will bring the Company's
effective project interest to 49.974% .

12

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2012 
  (in thousands of Canadian dollars)

As of approximately April 2012 JOGMEC
had completed its USD $3.2 million earn in requirement as described above. Since
that time the Company has spent approximately a further USD $4.44 million on
exploration expenditures to August 31, 2012. Of this amount USD $1.12 million
will be applied to Mnombos initial earn in requirement and the balance of
approximately USD $3.32 million will be applied to the Companys and Mnombos
ongoing 63% combined pro rata share of costs.

War Springs and Tweespalk

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

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

On March 5, 2009 the Company announced
an agreement with JOGMEC whereby JOGMEC could earn up to a 35% interest in the
Companys rights to the War Springs project for an optional work commitment of
US$10 million over 5 years. After incurring total expenditures of approximately
R 20.5 million to August 31, 2011 (approximately $2,900 at that time), JOGMEC
notified the Company in early fiscal 2012 that it would not fund additional work
on the project. JOGMEC retains no interest in the project. The Company is
considering future exploration programs or a possible sale of the project.

Sable

During 2009, the Company acquired by
application prospecting permits in South Africa which became the Sable Joint
Venture project area on the Western Limb of the Bushveld Complex, west of
Pretoria. Sable Platinum Mining (Pty) Limited (Sable Platinum) is earning a
51% interest in exchange for funding approximately $6,000 (R 42.0 million) in
work on the project, while a private Black Economic Empowerment group will hold
26%. The Company was the operator of the project until mid-March 2012, after
which time operatorship was transitioned to Sable Platinum. Total expenditures
incurred by Sable Platinum to August 31, 2012 amounted to approximately $1,160
($760 - August 31, 2011).

CANADA

CANADAProperties
      
      August 31, 2012
      
      
      Aug 31, 2011
      
      
      Sept 1, 2010OntarioAcquisition costs
      $
      1,224
      
      $
      1,265
      
      $
      1,004Exploration and evaluation costs
      
      2,659
      
      
      2,358
      
      
      1,320Total Ontario
      $
      3,883
      
      $
      3,623
      
      $
      2,324ProvidenceAcquisition costs
      $
      78
      
      $
      78
      
      $
      -Exploration and evaluation costs
      
      1,640
      
      
      9
      
      
      -Total Providence
      $
      1,718
      
      $
      87
      
      $
      -Total Canada Exploration
      $
      5,601
      
      $
      3,710
      
      $
      2,324


13

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2012 
  (in thousands of Canadian dollars)

Thunder Bay, Ontario

The Company maintains a large mineral
rights position in the Lac des Iles area north of Thunder Bay, Ontario. These
holdings include 100% interests in the Lac Des Iles River and Shelby Lake
properties and are all subject to a 2.0% NSR royalty. In most cases, the Company
may buy back one half of the NSR. In 2012, the Company reviewed the results of
its exploration work in the Thunder Bay region and made the decision not to
proceed with further work on its Dog River and Bullseye claims. As a result, for
the year ending August 31, 2012, the Company wrote off $88 in acquisition and
exploration costs incurred to date on these properties

Bark Lake, Ontario

On February 10, 2011 the Company
acquired a right to earn up to a 75% interest in Benton Resources Corps Bark
Lake, Ontario platinum-palladium project, comprised of 19 mineral claims
totaling 3,884 hectares located approximately 120 km west of Thunder Bay,
Ontario. To earn a 70% interest the Company would be required to make staged
option payments of $145 in cash ($35 paid) plus 215,000 shares (nil issued) and
complete $1,625 in exploration over a 7 year period. In 2012, the Company
reviewed the results of its exploration work on the project and made the
decision not to proceed with further work. For the year ending August 31, 2012,
the Company wrote off $325 in acquisition and exploration costs incurred to date
on the property.

Providence

In September 2011, the Company
purchased the Providence Nickel, Copper, Cobalt and Platinum Group Metals
property located in the Northwest Territories from Arctic Star Exploration for a
payment of $50 and a 1.0% NSR royalty. The claims that comprise the Providence
property are expected to be brought to lease once a crown survey has been
completed in 2012 at an estimated cost of $100. An extension has been granted by
the Northwest Territories Mining Recorder for the completion of the survey of
the claims to lease until September 28, 2012. To date the first year lease
payment and application fees have been paid. Total acquisition costs were $78.
As of August 31, 2012, the Company has spent $1,640 toward exploration on the
property.

Camp facilities and an associated Land
Use Permit have also been purchased for an additional $20. The Company has
re-activated its corporate registration in the Northwest Territories and the
land use permit associated with the camp and exploration work has been
transferred into the Companys name. As part of the transfer, a security deposit
of $27 was issued to the Aboriginal Affairs and Northern Development Canada.

Title to mineral properties

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

14

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2012 
  (in thousands of Canadian dollars)

|7. | ASSET RETIREMENT
OBLIGATION
|-- | ---------------------------

There was an increase in the net present value of the asset
retirement obligation (ARO) during the year ended August 31, 2012, due mainly
to ongoing construction work on Project 1. At August 31, 2012, the ARO is
estimated based on a total future liability of approximately R 19.0 million
(August 31, 2011  R 8.0 million). A discount rate of 7.96% and an inflation
rate of 5.3%, which represents South Africas expected inflation rate, were used
to calculate the ARO.

Balance, September 1, 2010
    $
    -Increased estimate future obligation
    
    645Balance, August 31, 2011
    $
    645Increased estimate future obligation
    
    821Accretion expense
    
    82Foreign exchange gain
    
    (108
    )Balance, August 31, 2012
    $
    1,440


|8. | SHARE CAPITAL
|-- | -------------
|   |              
|   | (a)          
|   |              
|   |              
|   |              
|   | (b)          
|   |              
|   |              
|   |              
|   |              
|   |              
|   | (c)          
|   |              
|   |              
|   |              
|   |              

Number
    
    
    Averageof
      Shares
    
    
    Exercise PriceOptions outstanding at August 31, 2010
    
    5,000,500
    
    $
    2.28Granted
    
    7,691,500
    
    
    2.04Exercised
    
    (936,500
    )
    
    1.56Forfeited
    
    (505,000
    )
    
    2.71Options outstanding at August 31, 2011
    
    11,250,500
    
    
    2.19Granted
    
    4,354,000
    
    
    1.22Expired/Forfeited
    
    (1,845,000
    )
    
    2.29Options
      outstanding at August 31, 2012
    
    13,759,500
    
    $
    1.91


15

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2012 
  (in thousands of Canadian dollars)

WeightedNumber
    Average
    NumberOutstanding at
    Remaining
    Exercisable atExercise
    August 31,
    Contractual
    August 31,price
    2012
    Life
      (Years)
    20121.00
    25,000
    5.00
    25,0001.20
    100,000
    4.50
    25,0001.38
    75,000
    4.50
    75,0001.30
    3,904,000
    4.25
    3,904,0001.40
    957,000
    1.70
    957,0001.60
    1,017,000
    1.00
    1,017,0002.05
    3,934,000
    3.71
    3,884,0002.10
    2,497,500
    3.24
    2,497,5002.57
    50,000
    2.60
    50,0002.36
    250,000
    1.36
    100,0002.41
    100,000
    1.50
    100,0002.20
    50,000
    2.60
    50,0004.15
    150,000
    0.15
    150,0004.40
    650,000
    0.15
    650,00013,759,500
    3.18
    13,484,500


The stock options outstanding have an
intrinsic value of nil.

During the year ended August 31, 2012,
the Company granted 4,354,000 stock options (August 31, 2011  7,691,500). The
Company recorded $3,118 ($2,006 expensed and $1,112 capitalized to development
costs) of compensation expense relating to stock options granted in this period
(August 31, 2011 - ($6,910 expensed and $1,732 capitalized to mineral
properties).

The Company uses the Black-Scholes
model to determine the grant date fair value of stock options granted. The
following weighted average assumptions were used in valuing stock options
granted during the year ended August 31, 2012 and 2011:

2012
    2011Risk-free interest rate
    1.44%
    2.19%Expected life of options
    3.5
    3.5Annualized volatility
    83%
    84%Forfeiture rate
    0%
    0%Dividend rate
    0%
    0%


|9. | CAPITAL RISK MANAGEMENT
|-- | -----------------------

The Companys objectives in managing
its liquidity and capital are to safeguard the Companys ability to continue as
a going concern and provide financial capacity to meet its strategic objectives.
The capital structure of the Company consists of share capital, contributed
surplus, accumulated other comprehensive income and accumulated deficit.

The Company manages the capital
structure and makes adjustments to it in light of changes in economic conditions
and the risk characteristics of the underlying assets. To maintain or adjust the
capital structure, the Company may issue new shares, issue new debt, acquire or
dispose of assets.

In order to facilitate the management
of its capital requirements, the Company prepares annual expenditure budgets
that are updated as necessary based on various factors, including successful
capital deployment and general industry conditions. The annual and updated
budgets are approved by the Board of Directors. The Company does not currently
declare or pay out dividends.

As at August 31, 2012, the Company does
not have any long-term debt and is not subject to any externally imposed capital requirements. However, the
      Company is in the process of securing debt financing for its Project 1 in
      South Africa. If the debt financing is completed, the Company will become
      subject to externally imposed capital requirements.

16

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2012 
  (in thousands of Canadian dollars)

|10. | FINANCIAL INSTRUMENTS AND RISK
MANAGEMENT                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                              
|    | The Company examines the various financial risks to which
      it is exposed and assesses the impact and likelihood of occurrence. These
      risks may include credit risk, liquidity risk, currency risk, interest
      rate risk and other price risks.

| | (a) | Credit risk
| | --- | -----------

| | (i) | Amounts receivable
| | --- | ------------------

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

| | (ii) | Cash and cash equivalents and restricted cash
| | ---- | ---------------------------------------------

In order to manage credit and
liquidity risk the Company invests only in term deposits with Canadian Chartered
and South African banks that have maturities of three months or less. A South
African Bank Rand account held in the United Kingdom is used for holding Rand
denominations only, and is controlled entirely by the Company. Deposit limits
are also established based on the type of investment, the counterparty and the
credit rating.

| | (iii) | Performance Bonds
| | ----- | -----------------

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

| | (b) | Liquidity risk
| | --- | --------------

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

Future exploration, development,
mining, and processing of minerals from the Companys properties will require
additional financing. The Company has no credit facilities in place at this
time; however a debt financing of US $260 million for the next stage of the
Companys Project 1 WBJV project is currently being finalized with a lender
group of four major banks. The negotiations have advanced through detailed
technical, financial and legal due diligence. Closing and draw down of the loan
facility is subject to receipt of commitment, final credit approval, the
negotiation and execution of definitive documentation and certain conditions
precedent. Funding from equity sources for project capital and a cost overrun
facility will also be required. The issuance of additional equity capital, if
available, may result in substantial dilution to existing shareholders.

| | (c) | Currency risk
| | --- | -------------

The Companys functional currency is
the Canadian dollar, while its operations are in both Canada and South Africa;
therefore the Company's results are impacted by fluctuations in the value of
foreign currencies in relation to the Canadian dollar. The Company's significant
foreign currency exposures on financial instruments comprise cash and cash
equivalents, restricted cash, performance bonds, amounts receivable, and
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.

17

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2012 
  (in thousands of Canadian dollars)

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

August 31, 2012
    
    
    August 31, 2011Canadian dollar value
    
    
    Canadian dollar valueof South African Rand
    
    
    of South Africanbalances
    
    
    Rand balancesCash and cash equivalents
    $
    11,601
    
    $
    35,243Restricted cash
    
    30,512
    
    
    47,720Accounts receivable
    
    1,517
    
    
    1,518Prepaid
    
    190
    
    
    2,648Performance bonds
    
    8,698
    
    
    2,162Accounts payable and accrued liabilities
    
    (8,051
    )
    
    (4,520
    )$
    44,467
    
    $
    84,771


The Company's net loss and other
comprehensive loss are affected by changes in the exchange rate between its
operating currencies and the Canadian dollar. At August 31, 2012, based on this
exposure a 10% strengthening/weakening in the Canadian dollar versus Rand
foreign exchange rate would give rise to a decrease/increase in income for the
year presented of approximately $4,400. At August 31, 2012, the company held
approximately R 372.0 million cash (August 31, 2011  R594.0 million).

| | (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, 2012, based on this exposure a 1% change in the average
interest rate would give rise to an increase/decrease in the earnings for the
year of approximately $500.

At August 31, 2012, the carrying
amounts of cash and cash equivalents, amounts receivable, restricted cash,
performance bonds and accounts payable and accrued liabilities are considered to
be reasonable approximations of their fair values due to the short-term nature
of these instruments.

|11. | RELATED PARTY TRANSACTIONS                         
|--- | ---------------------------------------------------
|    |                                                    
|    | Transactions with related parties are as
  follows:
|    |                                                    
|    | (a)                                                
|    |                                                    
|    | (b)                                                
|    |                                                    
|    | (c)                                                
|    |                                                    
|    | (d)                                                

18

---

Platinum Group Metals Ltd.(An
exploration and development stage company) Notes to the consolidated
financial statementsFor the year ended August 31, 2012 
  (in thousands of Canadian dollars)

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

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

Key Management Compensation

The remuneration of directors and other
members of key management personnel during the years ended August 31, 2012 and
2011 is as follows:

| |                             |   | Year
      ended |  |   | Year
      ended | 
| | --------------------------- | - | ---------------- |  | - | ---------------- | 
| |                             |   | August 31, 2012  |  |   | August 31, 2011  | 
| | Fees and salaries           | $ | 1,496            |  | $ | 1,575            | 
| | Share-based
      payments1 |   | 1,543            |  |   | 5,005            | 
| | Total                       | $ | 3,039            |  | $ | 6,580            | 

1Share-based payments are
the fair value of options that have been granted to directors and key management
personnel.

|12. | GENERAL AND
ADMINISTRATIVE
|--- | --------------------------

Year
      ending
    
    
    Year
      endingAugust 31, 2012
    
    
    August 31, 2011Salaries and benefits
    $
    1,924
    
    $
    2,452Professional/consulting fees
    
    1,341
    
    
    2,597Travel
    
    823
    
    
    677Depreciation
    
    387
    
    
    263Insurance
    
    157
    
    
    114Rent
    
    121
    
    
    86Regulatory fees
    
    263
    
    
    297Other
    
    357
    
    
    304Total
    
    $5,373
    
    
    $6,790


|13. | CONTINGENCIES AND COMMITMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The Companys remaining minimum payments under its office
      and equipment lease agreements in Canada and South Africa total
      approximately $230 to August 31, 2015. The Company also has commitments
      for Project 1 related insurance coverage totaling approximately $200 over
      the next 3 years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The Companys project operating subsidiary, Maseve, is
      party to a long term electricity supply agreement with South African power
      utility, Eskom. Under the agreement the Company was provided with a 1.5MVA
      temporary power supply in July 2011 and is to be provided with a 10 MVA
      construction power supply which as of August 31, 2012 is in the process of
      being installed. and a total 40 MVA production power supply in late
      calendar 2013 in exchange for connection fees and guarantees totaling Rand
      142.22 million ($16,720 at August 31, 2012) to fiscal 2014. The Company
      has paid R 51.71 million ($6,080 at August 31, 2012), therefore R 90.51
      million ($10,980 at August 31, 2012) of the commitment remains
      outstanding. These fees are subject to possible change based on Eskoms
      cost to install.

19

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2012 
  (in thousands of Canadian dollars)

For the fiscal years ending on August
  31, the aggregate commitments are as follows:

August 31, 2013
    
    10,845August 31, 2014
    
    166August 31, 2015
    
    65August 31, 2016
    
    15$
    11,091


|14. | SUPPLEMENTARY CASH FLOW INFORMATION     
|--- | ----------------------------------------
|    |                                         
|    | Net change in non-cash working
  capital

Year ended
    
    
    Year endedAugust 31, 2012
    
    
    August 31, 2011Amounts receivable, prepaid expenses and
      other assets
    $
    (266
    )
    $
    97Accounts payable
    
    688
    
    
    257$
    422
    
    $
    354


|15. | SEGMENTED REPORTING                                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                        
|    | The Company operates in one operating segment, that being
      exploration and development of mineral properties. Segmented information
      presented on a geographic basis follows:
|    |                                                                                                                                                                                        
|    | Assets                                                                                                                                                                                 

August 31,
    
    
    August
      31,
    
    
    September 12012
    
    
    2011
    
    
    2010Canada
    $
    25,490
    
    $
    36,528
    
    $
    5,822South Africa
    
    218,244
    
    
    244,260
    
    
    120,572$
    243,734
    
    $
    280,788
    
    $
    126,394


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

(Loss) income attributable to the
shareholders of Platinum Group Metals Ltd.

August 31, 2012
    
    
    August 31, 2011Canada
    $
    (9,900
    )
    $
    (10,848
    )South Africa
    
    (688
    )
    
    1,956$
    (10,588
    )
    $
    (8,892
    )


20

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2012 
  (in thousands of Canadian dollars)

|16. | INCOME TAXES
|--- | ------------

2012
    
    
    2011Amount
    
    
    Amount$
    
    
    $Loss before income taxes
    
    7,879
    
    
    9,927Income tax recovery at statutory rates
    
    (2,009
    )
    
    (2,697
    )Non-deductible expenses
    
    1,616
    
    
    1,903Changes in unrecognized deferred tax assets and other
    
    2,714
    
    
    (787
    )Income tax expense (recovery)
    
    2,321
    
    
    (1,581
    )Income tax expense (recovery) consists of:Current income taxes
    
    (431
    )
    
    487Deferred income taxes
    
    2,752
    
    
    (2,068
    )2,321
    
    
    (1,581
    )


The significant
      components of the Company's net deferred income tax liabilities are as
      follows:2012
    
    
    2011Mineral properties
    
    (27,312
    )
    
    (21,116
    )Loss carryforwards
    
    13,886
    
    
    8,205(13,426
    )
    
    (12,911
    )


Unrecognized deductible temporary
differences, unused tax and unused tax credits losses are attributed to the
following:2012
    
    
    2011Loss carryforwards
    
    33,011
    
    
    25,536Foreign loans
    
    27,671
    
    
    -Mineral properties
    
    3,249
    
    
    2,698Share issuance costs
    
    5,714
    
    
    8,051Other
    
    487
    
    
    304


The Company has operating loss
carry-forwards that may be available for tax purposes in Canada totaling $31,044
(August 31, 2011 - $25,536) expiring between 2014 and 2032.

21

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2012 
  (in thousands of Canadian dollars)

|17. | TRANSITION TO INTERNATIONAL FINANCIAL REPORTING
      STANDARDS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | As outlined in note 2, the Company adopted IFRS on
      September 1, 2011 with a transition date of September 1, 2010. Under IFRS
      1 First-time Adoption of International Financial Reporting Standards,
      the IFRS are applied retrospectively at the transition date with all
      adjustments to assets and liabilities as stated under Canadian GAAP taken
      to accumulated deficit unless certain exemptions are applied. IFRS
      provides for certain optional exemptions and certain mandatory exceptions
      for first time IFRS adopters.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Set forth below are the IFRS 1 applicable exemptions and
      exceptions applied in the conversion from Canadian GAAP to IFRS.                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | IFRS exemption options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Business combinations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | IFRS 1 permits the Company to apply IFRS 3, Business
      Combinations on a prospective basis only from the transition date.
      Accordingly, the Company has elected not to restate past business
      combinations to comply with IFRS 3, where control was obtained before the
      transition date.                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Currency translation differences                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Retrospective application of IFRS would require the
      Company to determine cumulative currency translation differences in
      accordance with IAS 21, The Effects of Changes in Foreign Exchange Rates,
      from the date each subsidiary was formed or acquired. IFRS 1 permits
      cumulative currency translation gains and losses to be reset to zero at
      the Transition Date. The Company elected to reset all cumulative currency
      translation gains and losses to zero in opening deficit at its transition
      date.                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Except for the above, the accounting policies set out in
      Note 3 have been applied retroactively for the year ended August 31, 2011,
      and in the preparation of the opening IFRS balance sheet at September 1,
      2010.                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Statement of Cash Flows                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The transition from Canadian GAAP to IFRS had no
      significant impact on cash flows generated by the
  Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                     

22

---

Platinum Group Metals Ltd.(An
exploration and development stage company) Notes to the consolidated
financial statementsFor the year ended August 31, 2012 
  (in thousands of Canadian dollars)

Reconciliations

The September 1, 2010 Canadian GAAP
consolidated balance sheet has been reconciled to IFRS as follows:

| |                                                                              |   |         |   |   | IFRS        |   |   |         |   |  |           | 
| | ---------------------------------------------------------------------------- | - | ------- | - | - | ----------- | - | - | ------- | - |  | --------- | 
| |                                                                              |   | CGAAP   |   |   | Adjustments |   |   | IFRS    |   |  | Notes     | 
| | Current Assets                                                               |   |         |   |   |             |   |   |         |   |  |           | 
| | Cash and cash equivalents                                                    | $ | 2,366   |   | $ | -           |   | $ | 2,366   |   |  |           | 
| | Amounts receivable                                                           |   | 1,271   |   |   | -           |   |   | 1,271   |   |  |           | 
| | Prepaid expenses and other assets                                            |   | 69      |   |   | -           |   |   | 69      |   |  |           | 
| |                                                                              |   | 3,706   |   |   | -           |   |   | 3,706   |   |  |           | 
| | Non-Current Assets                                                           |   |         |   |   |             |   |   |         |   |  |           | 
| | Performance bonds                                                            |   | 160     |   |   | -           |   |   | 160     |   |  |           | 
| | Assets held for sale                                                         |   | 952     |   |   | 53          |   |   | 1,005   |   |  | (a)       | 
| | Exploration and evaluation assets                                            |   | 116,027 |   |   | (106,459    | ) |   | 9,568   |   |  | (a, c, d) | 
| | Property, plant and equipment                                                |   | 6,146   |   |   | 105,809     |   |   | 111,955 |   |  | (a, b, d) | 
| |                                                                              |   | 123,285 |   |   | (597        | ) |   | 122,688 |   |  |           | 
| |                                                                              |   |         |   |   |             |   |   |         |   |  |           | 
| |                                                                              | $ | 126,991 |   | $ | (597        | ) | $ | 126,394 |   |  |           | 
| | Current Liabilities                                                          |   |         |   |   |             |   |   |         |   |  |           | 
| | Accounts payable and accruals                                                | $ | 2,270   |   | $ | -           |   | $ | 2,270   |   |  |           | 
| |                                                                              |   | 2,270   |   |   | -           |   |   | 2,270   |   |  |           | 
| | Non-Current Liabilities                                                      |   |         |   |   |             |   |   |         |   |  |           | 
| | Deferred income taxes                                                        |   | 21,824  |   |   | (6,338      | ) |   | 15,486  |   |  | (b)       | 
| |                                                                              |   |         |   |   |             |   |   |         |   |  |           | 
| | Total Liabilities                                                            |   | 24,094  |   |   | (6,338      | ) |   | 17,756  |   |  |           | 
| | Non- controlling interest                                                    |   | 11,149  |   |   | (11,149     | ) |   | -       |   |  | (f)       | 
| |                                                                              |   |         |   |   |             |   |   |         |   |  |           | 
| | Shareholders' Equity                                                         |   |         |   |   |             |   |   |         |   |  |           | 
| | Share capital                                                                |   | 91,794  |   |   | -           |   |   | 91,794  |   |  |           | 
| | Contributed surplus                                                          |   | 10,929  |   |   | -           |   |   | 10,929  |   |  |           | 
| | Accumulated other comprehensive income                                       |   | (3,416  | ) |   | 3,416       |   |   | -       |   |  | (e)       | 
| | Deficit                                                                      |   | (7,559  | ) |   | 2,325       |   |   | (5,234  | ) |  | (a, c, e) | 
| | Total shareholders' equity
      attributable to shareholders of the Company |   | 91,748  |   |   | 5,741       |   |   | 97,489  |   |  |           | 
| | Non- controlling interest                                                    |   | -       |   |   | 11,149      |   |   | 11,149  |   |  | (f)       | 
| | Total Shareholders' equity                                                   |   | 91,748  |   |   | 16,890      |   |   | 108,638 |   |  |           | 
| |                                                                              |   |         |   |   |             |   |   |         |   |  |           | 
| |                                                                              | $ | 126,991 |   | $ | 10,552      |   | $ | 126,394 |   |  |           | 

23

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2012 
  (in thousands of Canadian dollars)

The August 31, 2011 Canadian GAAP
consolidated balance sheet has been reconciled to IFRS as follows:

| |                                                                              |  |         |   |  | IFRS        |   |  |         |   |  |           | 
| | ---------------------------------------------------------------------------- |  | ------- | - |  | ----------- | - |  | ------- | - |  | --------- | 
| |                                                                              |  | CGAAP   |   |  | Adjustments |   |  | IFRS    |   |  | Notes     | 
| |                                                                              |  |         |   |  |             |   |  |         |   |  |           | 
| | Current Assets                                                               |  |         |   |  |             |   |  |         |   |  |           | 
| | Cash and cash equivalents                                                    |  | 64,118  |   |  | -           |   |  | 64,118  |   |  |           | 
| | Amounts receivable                                                           |  | 1,845   |   |  | -           |   |  | 1,845   |   |  |           | 
| | Other assets                                                                 |  | 110     |   |  | -           |   |  | 110     |   |  |           | 
| |                                                                              |  | 66,073  |   |  | -           |   |  | 66,073  |   |  |           | 
| | Non-Current Assets                                                           |  |         |   |  |             |   |  |         |   |  |           | 
| | Restricted cash                                                              |  | 47,720  |   |  | -           |   |  | 47,720  |   |  |           | 
| | Non- current prepaid expenses                                                |  | 2,598   |   |  | -           |   |  | 2,598   |   |  |           | 
| | Assets held for sale                                                         |  | 951     |   |  | 23          |   |  | 974     |   |  | (a)       | 
| | Performance bonds                                                            |  | 2,162   |   |  | -           |   |  | 2,162   |   |  |           | 
| | Exploration and evaluation assets                                            |  | 146,379 |   |  | (135,651    | ) |  | 10,728  |   |  | (a, c, d) | 
| | Property, plant and equipment                                                |  | 20,829  |   |  | 129,704     |   |  | 150,533 |   |  | (a, b, d) | 
| |                                                                              |  | 220,639 |   |  | (5,924      | ) |  | 214,715 |   |  |           | 
| |                                                                              |  |         |   |  |             |   |  |         |   |  |           | 
| |                                                                              |  | 286,712 |   |  | (5,924      | ) |  | 280,788 |   |  |           | 
| |                                                                              |  |         |   |  |             |   |  |         |   |  |           | 
| | Current Liabilities                                                          |  |         |   |  |             |   |  |         |   |  |           | 
| | Accounts payables and accruals                                               |  | 5,984   |   |  | -           |   |  | 5,984   |   |  |           | 
| |                                                                              |  | 5,984   |   |  | -           |   |  | 5,984   |   |  |           | 
| | Non-current Liabilities                                                      |  |         |   |  |             |   |  |         |   |  |           | 
| | Deferred income taxes                                                        |  | 21,452  |   |  | (8,541      | ) |  | 12,911  |   |  | (b)       | 
| | Asset retirement obligation                                                  |  | 645     |   |  | -           |   |  | 645     |   |  |           | 
| | Total Liabiliaties                                                           |  | 28,081  |   |  | (8,541      | ) |  | 19,540  |   |  |           | 
| | Non- Controlling Interest                                                    |  | 11,695  |   |  | (11,695     | ) |  | -       |   |  | (f)       | 
| |                                                                              |  |         |   |  |             |   |  |         |   |  |           | 
| | Shareholders' Equity                                                         |  |         |   |  |             |   |  |         |   |  |           | 
| | Share Capital                                                                |  | 256,312 |   |  | -           |   |  | 256,312 |   |  |           | 
| | Contributed surplus                                                          |  | 13,816  |   |  | -           |   |  | 13,816  |   |  |           | 
| | Accumulated other comprehensive income                                       |  | (3,416  | ) |  | (2,685      | ) |  | (6,101  | ) |  | (a, e)    | 
| | Deficit                                                                      |  | (19,776 | ) |  | (14,571     | ) |  | (34,347 | ) |  | (a, c, e) | 
| | Total shareholders' equity
      attributable to shareholders of the Company |  | 246,936 |   |  | (17,256     | ) |  | 229,680 |   |  |           | 
| | Non-Controlling Interest                                                     |  | -       |   |  | 31,568      |   |  | 31,568  |   |  | (f)       | 
| | Total shareholders' equity                                                   |  | 246,936 |   |  | 14,312      |   |  | 261,248 |   |  |           | 
| |                                                                              |  |         |   |  |             |   |  |         |   |  |           | 
| |                                                                              |  | 286,712 |   |  | (5,924      | ) |  | 280,788 |   |  |           | 

The Canadian GAAP statement of
comprehensive loss for the year ended August 31, 2011 has been reconciled to
IFRS as follows:

| |                                                                               |   |         |   |   | IFRS        |   |   |         |   |  |       | 
| | ----------------------------------------------------------------------------- | - | ------- | - | - | ----------- | - | - | ------- | - |  | ----- | 
| |                                                                               |   | CGAAP   |   |   | Adjustments |   |   | IFRS    |   |  | Notes | 
| | EXPENSES                                                                      |   |         |   |   |             |   |   |         |   |  |       | 
| | General and administrative                                                    | $ | 6,790   |   | $ | -           |   | $ | 6,790   |   |  |       | 
| | Foreign exchange (gain) loss                                                  |   | 3,337   |   |   | (3,325      | ) |   | 12      |   |  | (a)   | 
| | Stock compensation expense                                                    |   | 6,910   |   |   | -           |   |   | 6,910   |   |  |       | 
| |                                                                               |   | (17,037 | ) |   | 3,325       |   |   | (13,712 | ) |  |       | 
| | Less finance income                                                           |   | 3,785   |   |   | -           |   |   | 3,785   |   |  |       | 
| | Loss for the year
      before income taxes                                   |   | (13,252 | ) |   | 3,325       |   |   | (9,927  | ) |  |       | 
| |                                                                               |   |         |   |   |             |   |   |         |   |  |       | 
| | Income tax expense                                                            |   | (487    | ) |   | -           |   |   | (487    | ) |  |       | 
| | Future income tax recovery                                                    |   | 2,068   |   |   | -           |   |   | 2,068   |   |  |       | 
| | Loss for the year                                                             |   | (11,671 | ) |   | 3,325       |   |   | (8,346  | ) |  |       | 
| | Income attributable to non- controlling interest                              |   | 546     |   |   | -           |   |   | 546     |   |  |       | 
| | Net loss
      attributable to the stockholders of Platinum Group Metals Ltd. |   | (12,217 | ) |   | 3,325       |   |   | (8,892  | ) |  |       | 
| |                                                                               |   |         |   |   |             |   |   |         |   |  |       | 
| | Other comprehensive loss                                                      |   |         |   |   |             |   |   |         |   |  |       | 
| | Foreign currency translation reserve                                          |   | -       |   |   | (6,101      | ) |   | (6,101  | ) |  | (a)   | 
| | Comprehensive loss
      for the year                                         | $ | (12,217 | ) | $ | (2,776      | ) | $ | (14,993 | ) |  |       | 

24

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2012 
  (in thousands of Canadian dollars)

The following are explanations of the
key differences between Canadian GAAP and IFRS which gave rise to adjustments.

| | a) | Foreign currency translation
| | -- | ----------------------------

The Companys South African
subsidiaries have the South African Rand as their functional currency. Under
Canadian GAAP for integrated foreign operations, only monetary items were
translated to Canadian dollars at the end of each reporting period at the period
end exchange rate. However under IFRS, all assets and liabilities of a foreign
subsidiary with a functional currency different from the parents presentation
currency are converted to the parents presentation currency at the period end
rate with the resulting foreign exchange differences recorded in other
comprehensive income.

Under Canadian GAAP, the South African
subsidiaries were considered to be integrated operations, which effectively
meant the entities had Canadian functional currencies. Under IFRS, these South
African subsidiaries are considered to have the Rand as their functional
currency. As a result, the foreign exchange gain or loss on the intercompany
loan to the foreign subsidiaries which is considered to be part of the parent
companys net investment in a foreign operation is recognized initially in other
comprehensive income and will only be reclassified from equity to profit or loss
on disposal of the net investment. Under Canadian GAAP, the gain or loss was
recognized in the profit or loss.

| | b) | Deferred income taxes
| | -- | ---------------------

Under Canadian GAAP, deferred income
taxes were recognized following the acquisition of various assets. Under IFRS,
deferred income taxes are not recognized on temporary differences that arise
from transactions other than a business combination that at the time of the
transaction affected neither the taxable nor accounting profit or loss. As a
result of this difference a decrease to the deferred income tax liability and a
corresponding decrease to the carrying value of property plant and equipment for
56 million Rand ($7,823) has been made on transition and is applied to all
periods.

| | c) | Pre-exploration costs
| | -- | ---------------------

Under IFRS, expenditures that are
capitalized before the Company has the legal right to explore the specific
property must be expensed. Canadian GAAP does not have the same restriction;
therefore an adjustment is required on transition to expense pre-exploration
costs which were capitalized under Canadian GAAP. This accounting policy change
resulted in an increase to deficit and a corresponding decrease in the carrying
value of resource properties on transition.

| | d) | Reclassification of Project 1 deferred costs
| | -- | --------------------------------------------

Under Canadian GAAP, all capitalized
and deferred costs were classified as mineral properties. Under IFRS, the
Project 1 deferred costs have been reclassified under Property, Plant and
Equipment.

| | e) | Currency translation differences
| | -- | --------------------------------

This adjustment results from the
application of the IFRS 1 election which permits cumulative currency translation
gains and losses to be reset to zero at the transition date.

| | f) | Non-controlling interest
| | -- | ------------------------

At the date of transition, the
accounting requirement for non-controlling interests differed under IFRS. Under
IFRS changes in ownership interest where control is maintained are recorded
through equity.

25

---

Platinum Group Metals Ltd.(An exploration and
development stage company) Notes to the consolidated financial
statementsFor the year ended August 31, 2012 
  (in thousands of Canadian dollars)

|18. | SUBSEQUENT EVENTS
|--- | -----------------

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

- On September 7, 2012, the Company granted 3,524,000
      incentive stock options at a price of $0.96 per share to its employee and
      directors.
- On September 11, 2012, Rustenburg Platinum Mines Limited,
      a wholly owned subsidiary of Anglo American Platinum Limited, exercised
      its first right of refusal to purchase the off- take of concentrate from
      the Companys Western Bushveld Project 1 Platinum Mine.
- On September 25, 2012, the Company granted 100,000
      incentive stock options at a price of $1.11 per share to a consultant.
- On October 22, 2012, the Company granted 50,000 incentive
      stock options at a price of $1.03 per share to an employee.
- On October 23, 2012, 150,000 incentive stock options at a
      price of $4.15 per share expired without exercise.
- On October 26, 2012, 650,000 incentive stock options at a
      price of $4.40 per share expired without exercise.
- On October 31, 2012, the Company received US$2,000 from
      JOGMEC for contribution towards the 2012 Waterberg work program.

26

---