Annual
Information Form of Platinum Group Metals Ltd.


For
year ended: August 31, 2008








Annual
Information Form – December 1, 2008








Documents
Incorporated by Reference




Incorporated
by reference into this Annual Information Form (“AIF”) are the Consolidated
Financial Statements of Platinum Group Metals Ltd. for the year ended August 31,
2008 as filed on December 1, 2008.





All
financial information in this Annual Information Form is prepared in accordance
with generally accepted accounting principles in Canada.







Date
of Information




All
information in this Annual Information Form is as of August 31, 2008 unless
otherwise indicated.







Currency
and Exchange Rates




All
dollar amounts in this Annual Information Form are expressed in Canadian dollars
unless otherwise indicated. Platinum Group Metals Ltd. accounts are maintained
in Canadian dollars. All references to “U.S. dollars” or to “US$” are to U.S.
dollars. All references to “ZAR” or to “R” or to “Rand” are to South African
Rand.





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








Canadian
      Dollars to
              U.S.
      Dollars
            Year
      Ended August 312008
            2007
            2006Rate
      at end of period
            US$0.9411
            US$0.9466
            US$0.9037Average
      rate for period
            US$0.9961
            US$0.8921
            US$0.8711High
      for period
            US$1.0905
            US$0.9641
            US$0.9099Low
      for period
            US$0.9365
            US$0.8437
            US$0.8361








The noon
rate of exchange on November 28, 2008 as reported by the Bank of Canada for the
conversion of Canadian dollars into United States dollars was Canadian $1.00
equals US$0.81.





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








South
      African Rand to Canadian Dollars
            Year
      Ended August 312008
            2007
            2006Rate
      at end of period
            $0.1380
            $
      0.1474
            $
      0.1537Average
      rate for period
            $0.1367
            $
      0.1546
            $
      0.1755High
      for period
            $0.1222
            $
      0.1422
            $
      0.1512Low
      for period
            $0.1514
            $
      0.1692
            $
      0.1945





The noon
rate of exchange on November 28, 2008 as reported by the Bank of Canada for the
conversion of South African Rand into Canadian dollars was one South African
Rand equals Canadian $0.1225.







Metric
Equivalents




For ease
of reference, the following factors for converting Imperial measurements into
metric equivalents are provided:





To
      convert from Imperial
            To
      metric
            Multiply
      byAcres
            Hectares
            0.404686Feet
            Metres
            0.30480Miles
            Kilometres
            1.609344Tons
            Tonnes
            0.907185Ounces
      (troy)/ton
            Grams/Tonne
            34.2857








Terms
used and not defined in this Annual Information Form that are defined in
National Instrument 51-102 Continuous Disclosure Obligations shall bear that
definition. Other definitions are set out in National Instrument 14-101
Definitions, as amended.







Forward
Looking Statements




The
information contained within this AIF is based on a review of the Company’s
operations, financial position and plans for the future based on facts and
circumstances as of the fiscal year ended August 31, 2008, unless stated
otherwise. Except for statements of historical fact, the information contained
herein constitutes forward looking statements within the meaning of Canadian and
U.S. securities laws.  Forward-looking statements are frequently, but
not always, identified by words such as “expects,” “anticipates,” “believes,”
“intends,” “estimates,” “potential,” “possible” and similar expressions, or
statements that events, conditions or results “will,” “may,” “could” or “should”
occur or be achieved. Information concerning the interpretation of drill results
and mineral resource or reserve estimates also may be deemed to be
forward-looking statements, as such information constitutes a prediction of what
mineralization might be found to be present if and when a project is actually
developed.  Forward-looking statements are statements about the future
and are inherently uncertain, and actual achievements of the Company or other
future events or conditions may differ materially from those reflected in the
forward-looking statements due to a variety of risks, uncertainties and other
factors, including, without limitation, those described in this AIF under the
heading “Risk Factors.”





Forward
looking statements are based on the opinions, plans and estimates of management
at the date the statements are the Company undertakes no obligation to update
forward looking statements if circumstances or management’s estimates, plans or
opinions should change. The reader is cautioned not to place undue reliance on
forward looking statements.





Cautionary
Note to United States Readers – Differences Regarding the Definitions of
Resource and Reserve Estimates in the United States and Canada




Mineral
      Reserve
            The
      definitions of “mineral reserves”, “proven mineral reserves” and “probable
      mineral reserves,” as used in this report, are Canadian mining terms as
      defined in accordance with National Instrument 43-101 -
      Standards of Disclosure for Mineral Projects under the guidelines
      set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the
      “CIM”) Standards on Mineral Resources and Mineral Reserves Definitions and
      guidelines adopted by the CIM Council on August 20, 2000. CIM standards
      differ from the standards in the United States.
              
              Under
      United States standards, a “mineral reserve” is defined as a part of a
      mineral deposit which could be economically and legally extracted or
      produced at the time the mineral reserve determination is made,
      where:
              
              “reserve”
      means that part of a mineral deposit which can be economically and legally
      extracted or produced at the time of the reserve
      determination;
              
              “economically”
      implies that profitable extraction or production has been established or
      analytically demonstrated to be viable and justifiable under reasonable
      investment and market assumptions; and
              
              while
      “legally” does not imply that all permits needed for mining and processing
      have been obtained or that other legal issues have been completely
      resolved, for a reserve to exist, there should be a reasonable certainty
      based on applicable laws and regulations that issuance of permits or
      resolution of legal issues can be accomplished in a timely
      manner.
              
              Mineral
      reserves are categorized as follows on the basis of the degree of
      confidence in the estimate of the quantity and grade of the
      deposit.
              
              Under
      United States standards, proven or measured reserves are defined as
      reserves for which (a) quantity is computed from dimensions revealed in
      outcrops, trenches, workings or drill holes, grade and/or quality are
      computed from the results of detailed sampling and (b) the sites for
      inspection, sampling and measurement are spaced so closely and the
      geographic character is so well defined that size, shape, depth and
      mineral content of reserves are well established.
              
              Under
      United States standards, probable reserves are defined as reserves for
      which quantity and grade and/or quality are computed from information
      similar to that of proven reserves (under United States standards), but
      the sites for inspection, sampling, and measurement are further apart or
      are otherwise less adequately spaced. The degree of assurance, although
      lower than that for proven mineral reserves, is high enough to assume
      continuity between points of observation.Mineral
      Resource
            While
      the terms “mineral resource,” “measured mineral resource,” “indicated
      mineral resource,” and “inferred mineral resource” are recognized and
      required by Canadian regulations, they are not defined terms under
      standards in the United States. As such, information contained in this
      report concerning descriptions of mineralization and resources under
      Canadian standards may not be comparable to similar information made
      public by U.S. companies subject to the reporting and disclosure
      requirements of the United States Securities and Exchange Commission
      (“SEC”). “Indicated mineral resource” and “inferred mineral resource” have
      a great amount of uncertainty as to their existence and a great
      uncertainty as to their economic and legal feasibility. It can not be
      assumed that all or any part of an “indicated mineral resource” or
      “inferred mineral resource” will ever be upgraded to a higher category.
      Investors are cautioned not to assume that any part or all of mineral
      deposits in these categories will ever be converted into
      reserves.









Corporate
Structure




Platinum
Group Metals Ltd. head office is located at:





328 – 550
Burrard Street


Vancouver,
British Columbia


Canada,
V6C 2B5





The
Company’s registered office is located at:





Gowling Lafleur Henderson
LLP


2300 -
550 Burrard Street


Vancouver,
British Columbia


Canada,
V6C 2B5





Platinum
Group Metals Ltd. (“Platinum Group” or the “Company”) is a British Columbia
corporation incorporated on February 18, 2002 by an order of the Supreme Court
of British Columbia approving an amalgamation between Platinum Group Metals Ltd.
and New Millennium Metals Corporation. The Company was later transitioned on
February 22, 2005 under the Business Corporations Act
(British Columbia). On February 22, 2005, the Company’s shareholders passed a
special resolution to amend the authorized share capital from 1,000,000,000
common shares without par value to an unlimited number of common shares without
par value, to remove the Pre-existing Company Provisions and to adopt new
articles.





The
Company has two wholly-owned subsidiaries which are incorporated under the
company laws of The Republic of South Africa.  The Company conducts
all of its South African exploration and development work though its
wholly-owned direct subsidiary, Platinum Group Metals (RSA) (Pty) Limited
(“PTM”) .  PTM holds 100% of the shares of a newly formed property
holding company named Wesplats Holding (Pty) Ltd. (“Wesplats”).  The
registered and records office of PTM and Wesplats are located at 4th Floor,
Aloe Grove, 196 Louis Botha Avenue, Houghton Estate, Johannesburg, 2000, Gauteng
Province, Republic of South Africa.  The principal business address of
the Company is Suite 328, 550 Burrard Street, Vancouver, British Columbia,
Canada, V6C 2B5. The principal business address of PTM is Technology House,
Greenacres Office Park, Victory Park, Johannesburg 2193, Gauteng Province, South
Africa.




General
Development of the Business






Three
year history




On
October 26, 2004, the Company entered into the Western Bushveld Joint Venture
Agreement and announced the formation of the Western Bushveld Joint Venture
(“WBJV”) with Anglo Platinum Limited (“Anglo Platinum”) and Africa Wide Mineral
Prospecting and Exploration (Pty) Limited (“African Wide”) in relation to a
platinum exploration and development project on combined mineral rights covering
approximately 67 square kilometers on the Western Bushveld Complex of South
Africa.  The WBJV is divided into three distinct projects, namely
Projects 1, 2 and 3.  PTM is the operator of the joint
venture.





The WBJV
is currently owned 37% by PTM, 37% by Rustenburg Platinum Mines Ltd. (“RPM”), a
subsidiary of Anglo Platinum, and 26% by Wesizwe Platinum (Pty) Ltd.
(“Wesizwe”), which acquired Africa Wide in 2007.





On
January 10, 2007, the Company completed a positive pre-feasibility study for the
Project 1 area of the WBJV.  During 2007 the WBJV then commissioned a
Feasibility Study for the Project 1 area of the WBJV, which was completed and
delivered to the partners of the WBJV on June 30, 2008.





The
Feasibility Study and revised resource estimation for the Project 1 area of the
WBJV was dated July 7, 2008. A report titled “Technical Report (Feasibility
Study) Western Bushveld Joint Venture Project 1 (Elandsfontein and
Frischgewaagd)” was filed by the Company on www.sedar.com on
August 21, 2008. The Feasibility Study considers and outlines the details and
mitigation of several considered projects risks, assessed in full detail,
including metallurgical recoveries, smelting and refining costs, surface and
mining rights, permits, and involvement of communities in compliance with the
Minerals and Petroleum Resources Development Act (2002).





The
Feasibility Study’s findings were positive for a platinum mine in the Project 1
area of the WBJV.  The Feasibility Study outlines a scope for an
underground mine producing 160,000 ounces per annum platinum or 250,000 ounces
per annum platinum, palladium, rhodium and gold in concentrate.





Under the
terms of the original WBJV Agreement, once a bankable feasibility study has been
completed the respective deemed capital contribution of each party will be
credited based on their contribution of measured, indicated, and inferred
platinum group metal (“PGM”) ounces from the contributed properties comprising
the WBJV, determined in accordance with the South African SAMREC code. Under the
terms of the original WBJV Agreement, inferred ounces will be credited at
US$0.50 per ounce, indicated ounces will be credited at US$3.20 per ounce and
measured ounces will be credited at US$6.20 per ounce. The Company will also be
credited for its Rand 35 million initial expenditure. For the later contribution
of Portion 11 to the WBJV by RPM in April 2007 the original credit rates for
equalization as described above have been amended to US$0.62 per inferred ounce,
US$10.37 per indicated ounce and US$39.55 per measured ounce in order to adjust
for market conditions at the time. Each party will then have the opportunity to
make equalizing cash payment, or contribute capital going forward in order to
catch up any resulting shortfall in their contributed capital and thereby
maintain their respective working interest in the WBJV. Should a party not wish
to participate, the WBJV agreement provides a mechanism whereby the parties may
elect to become “non-contributory” to the WBJV and by doing so they would be
subject to dilution. Anglo Platinum may only be diluted to a minimum 15%
non-contributory interest in the WBJV. At the time of writing the estimated
equalization payment due to Anglo Platinum by the Company is approximately US$20
million.


On
September 2, 2008 the Company announced its agreement to a term sheet with Anglo
Platinum and Wesizwe to consolidate and rationalize the WBJV (the “Proposed
Transaction”).  Under the terms Platinum Group will control 74% of the
WBJV Projects 1 and 3 and Wesizwe will control 100% of Project 2 and 26% of
Projects 1 and 3.





The
Proposed Transaction contemplates that Anglo Platinum will vend its 37% interest
in the WBJV to Wesizwe for common shares representing a 26.5% interest in
Wesizwe. Platinum Group will concurrently acquire a 37% interest in Projects 1
and 3 from Wesizwe in consideration of Platinum Group’s interest in Project 2
and R408.6 million (approx. C $49 million at the time of writing) in cash. The
cash payment to Wesizwe is to be deferred until six months after closing the
Proposed Transaction and will be held in escrow to be applied towards its
capital contribution for the Projects 1 and 3.  Steps to the Proposed
Transaction are as follows:





1.
            Wesizwe
      will purchase Anglo Platinum’s 37% interest in the WBJV, comprised of 37%
      of Projects 1 and 3 and 18.5% of Project 2 (part of the Wesizwe
      Frischgewaagd-Ledig main project), for 211,850,125 Wesizwe common
      shares.





2.
            In
      a concurrent transaction Platinum Group will purchase the 37% interest in
      Projects 1 and 3 from Wesizwe for 785.5M Rand (approx. C $94 million at
      the time of writing), offset by the sale to Wesizwe of Platinum Group’s
      18.5 % of Project 2 for 376.9M Rand (approx. C $45 million at the time of
      writing).





3.
            The
      balance, due from Platinum Group, of 408.6M Rand is to be paid into an
      escrow account within 6 months of the formal closing of this transaction.
      The escrow account will then be drawn down to satisfy Wesizwe’s
      obligations for the capital account of Projects 1 and 3. If the payment
      for the balance due is not made by Platinum Group then Wesizwe shall be
      entitled to claw back up to 19% in the
Projects.





The basis
of valuation for the negotiations was the 10% discount rate NPVs of the Projects
with platinum at US$1,199 per ounce for all projects and a Rand-to-Dollar
exchange rate set at 8. The project models included the Feasibility Study
results for Projects 1 and 2 and preliminary engineering on Project
3.





The
settlement of equalization payments currently due to Anglo Platinum under the
terms of the original WBJV agreement are now to be settled by Wesizwe in common
shares and by Platinum Group in cash by the later of the closing date of the
proposed transaction or December 31, 2008. At present, under the terms of the
original WBJV agreement, equalization payments are due subsequent to a decision
to mine being taken by the WBJV and are approximately US$18 million payable by
Wesizwe and US$20 million payable by Platinum Group. Under the terms of the
Proposed Transaction, if Platinum Group does not pay Anglo Platinum by the due
date, Anglo Platinum can elect to provide a 6 month extension with interest. A
total make up of approximately US$2.0M is also payable by Platinum Group to
Wesizwe for past exploration costs incurred on Project 2.





The
parties have agreed to suspend the 90 day deadline for a Decision to Mine under
the terms of the original WBJV agreement until the Proposed Transaction is
completed or a condition precedent is not able to be fulfilled. Under the
Proposed Transaction, Anglo Platinum will hold a 60 day first right of refusal
on the sale of ore or concentrate over the original WBJV mineral
rights.





The
closing of the Proposed Transaction is pending the completion of definitive
agreements and certain conditions precedent, such as shareholder, regulatory and
governmental approvals.  The deadline to enter into the definitive
agreements has been extended by the parties to December 6,
2008.  At the time of writing the definitive agreements are nearing
completion and the fulfillment of all conditions precedent is expected to then
take several months beyond the execution of the agreements.





Having
completed its feasibility study for WBJV Project 1 on June 30, 2008, mining
authorization permit applications are in process and final permitting is
expected in 2009.  Should a formal decision to build a mine on Project
1 of the WBJV be taken by the Company it will need to obtain its 74% share of
project financing and expand its capabilities as project operator in order to
implement the project build decision.





The mine
design involves the construction of a platinum mine and concentrator to produce
235,000 to 271,000 ounces of combined platinum, palladium, rhodium and gold
(“4E”) in concentrate per year steady state for 9 years with a 22 year total
underground mine life.The
capital cost for the mine and concentrator complex were estimated at R4.055
billion (approximately $483 million at the time of writing) for peak funding and
R5.474 billion (approximately $652 million at the time of writing) for life of
mine funding. The capital costs estimate includes R506 million (approximately
$61 million at the time of writing) for the capital costs for self-generation of
the electrical requirements of the project to the end of 2012 at full production
levels. This includes the entire infrastructure for power including diesel
storage.





The
Feasibility Study recommends a series of three simultaneous declines accessing
the deposit with a mining rate of 140,000 tonnes per month, which provides 13
years of steady state tonnage production. First ore is reached by development 13
months from the commencement of underground work. Mining is only scheduled on
the reserves. There are a further 1.26 million ounces of Inferred Resources in
the Project 1 area which may represent some additional production potential. The
lower grade UG2 resources also provide some future opportunities. The mining and
development plan includes conventional hand held drilling utilizing electrical
drills and scraper winch cleaning.





The
results of the Feasibility Study show a 20.08% Internal Rate of Return “IRR”
(pre-tax) Base Case, using 3 year trailing metal prices to June 2008, calculated
on the monthly averages including US$1,295 per ounce for
platinum.  The Feasibility Study model does not include escalation due
to inflation of costs or metal prices.  At November 4, 2008 the three
year trailing metal prices were above those used in the study, but the spot
prices of all metals included in the basket price calculation were below the
three year trailing metal prices as at June 2008.  Platinum was quoted
at US$843 on November 4, 2008.  Based on the three year trailing
average metals prices, current exchange rates and probable lowering of input
costs at the current time no change has been made to the Feasibility Study
information and reserves and resources.





Total
global exploration expenditures for the Company’s account in fiscal 2008,
including the Company’s share of WBJV expenditures during, totaled $6,733,094
(2007 - $4,531,533), and of this $6,132,281 was for the WBJV (2007 - $3,775,890)
and $600,813 was for other exploration (2007 - $755,643). After meeting its earn
in requirements in April 2006, Platinum Group was only responsible for its 37%
pro-rata share of expenditures for the WBJV in 2008. Total WBJV expenditures
during fiscal 2008 by all Joint Venture partners totaled $10,205,108 (2007:
$10,205,108).





The
Company was also active with an exploration program on its War Springs and
Tweespalk projects in South Africa on the North Limb of the Bushveld Complex
during the period 2005 through 2008, consisting of diamond drilling, geophysical
surveys and ground prospecting.





The
Company also conducted work on its Canadian projects during the period. A 1,125
metre drill program was completed on the Company’s Lac Des Iles projects in the
first quarter. A further small drilling program is planned for late
2008.  The Company maintains a large mineral rights position in the
Lac des Iles area north of Thunder Bay as a strategic holding against increasing
prices for palladium and platinum. Encouraging exploration results for
palladium, platinum, nickel and copper continue to be returned and the Company
plans to invest further in this area in the future.





During
the period the Company conducted a new business generative
program.  Research and implementation, including the staking of
several new license areas on or near to the Bushveld Complex, has cost
approximately $576,552. The Company has received the grant of several new
prospecting permits as a result of this work and several more are expected in
the months ahead.  The Company has subsequently entered into an
exploration joint venture with Sable Platinum (Pty) Ltd. (“Sable”) with respect
to new prospecting permits located at the eastern end of the Western Bushveld
Complex which encompass 82.9 square kilometers; a further 27.72 square
kilometers have also been applied for and are pending review and
approval.  Sable has the right to earn a 51% interest in the joint
venture by spending 51 million Rand in exploration costs over 5
years.  A private empowerment group will hold 26% and the Company will
operate the exploration program and retain a 23% interest when the earn-in is
complete.





The
Company has increased its general level of activity in the past four years in
South Africa. Activities in Canada have been reduced as the more advanced nature
of the WBJV has caused it to become an investment focus for the Company. The
Company still actively reviews many potential property acquisitions in the
normal course of business.







Significant
Acquisitions




No
significant acquisitions were completed by the Company during its most recently
completed financial year.  Subsequent to year end, on September 2,
2008, the Company announced in a news release its agreement to a term sheet with
Anglo Platinum and Wesizwe to consolidate and rationalize the ownership of the
WBJV.  Under the terms of the proposed transaction the Company may
increase its interests in the Project 1 and 3 areas of the WBJV to
74%.  See details above at “General Development of the Business -
Three year history”.




Description
of the Company’s Business




The
Company is a British Columbia corporation incorporated on February 18, 2002 by
an order of the Supreme Court of British Columbia approving an amalgamation
between Platinum Group Metals Ltd. and New Millennium Metals Corporation. The
Company is a platinum focused exploration and development company conducting
work primarily on mineral properties it has staked or acquired by way of option
agreement in the Republic of South Africa and in Ontario, Canada.





Platinum
Group Metals Ltd. is headquartered in Vancouver, British Columbia. The Company
and its consolidated subsidiary, Platinum Group Metals RSA (Pty.) Ltd., employ
approximately 50 people in Canada and South Africa, with the majority of
employees living and working in South Africa.







General




The
Company’s key project is its interest in the WBJV, a platinum exploration and
development project on combined mineral rights covering approximately 72 square
kilometres on the Western Bushveld Complex of South Africa.  The
majority of the Company’s exploration and development activities to date have
been focused on the WBJV and the completion of a definitive feasibility
study.





In 2008
the Company determined that Project 1 of the WBJV contains ore reserves that are
economically recoverable. The Company defers all acquisition, exploration and
development costs related to mineral properties. The recoverability of these
amounts is dependent upon the existence of economically recoverable reserves,
the ability of the Company to obtain the necessary financing to complete the
development of the property, and any future profitable production; or
alternatively upon the Company’s ability to dispose of its interests on an
advantageous basis.





The
Company also holds interests in various other early stage exploration projects
located in Canada and in South Africa. The Company continues to evaluate
exploration opportunities both on currently owned properties and on new
prospects. Details of these other projects may be found in Note 6 of the
Company’s August 31, 2008 audited financial statements.





To
conduct its exploration and planning, the Company is dependent on
sub-contractors for certain engineering, geological services, drilling equipment
and supplies. These are generally available but vary in price and immediacy of
availability subject to demand.







Risk
Factors




The
Company’s securities should be considered a highly speculative investment and
investors should carefully consider all of the information disclosed in the
Company’s Canadian and U.S. regulatory filings prior to making an investment in
the Company.





The
following risk factors, as well as risks not currently known to the Company,
could materially adversely affect the Company’s future business, operations and
financial condition and could cause them to differ materially from the estimates
described in the forward-looking statements relating to the
Company.




General




Resource
exploration and development is a speculative business, characterized by a number
of significant risks including, among other things, unprofitable efforts
resulting not only from the failure to discover mineral deposits but also from
finding mineral deposits, which, though present, are insufficient in quantity or
quality to return a profit from production.





The
Company will need additional financing





Although
the Company’s cash position is sufficient to fund general operating costs
through fiscal 2009, the Company will require additional capital in the
future to meet its WBJV related expenditures in the event the Proposed
Transaction closes.  It is unlikely that the Company will generate
sufficient operating cash flow to meet all of these expenditures in the
foreseeable future.  Accordingly, the Company will need to raise
additional capital by issuance of securities or by a sale or partnering of
project interests in order to meet the payment requirements of the proposed
transaction announced September 2, 2008.  The Company has completed a
Feasibility Study for the Project 1 area of the WBJV.  If a
production decision is taken, the Company will likely pursue both equity and
debt financings for its share of the capital requirements for that
project.  There can be no assurance that the Company will be
successful in obtaining any required financing now or in the
future.  Failure to obtain additional financing on a timely basis
could result in delay or indefinite postponement of further exploration and
development of the Company’s mineral properties, with the possible reduction of
interest or loss of such properties, or the inability to acquire any additional
properties.





Metal
prices affect the success of the Company’s business




Metal
prices have historically been subject to significant price fluctuations. No
assurance may be given that metal prices will remain stable. Significant price
fluctuations over short periods of time may be generated by numerous factors
beyond the control of the Company, including domestic and international economic
and political trends, expectations of inflation, currency exchange fluctuations,
interest rates, global or regional consumption patterns, speculative activities
and increases or decreases in production due to improved mining and production
methods.  The current spot metals prices are significantly below the
three year trading average prices used to assess the Company’s Project 1
Feasibility in July 2008.  Long term and short term prices are
currently volatile.  Significant or continued reductions or volatility
in metal prices may have an adverse effect on the Company’s business, including
the amount of the Company’s reserves, the Company’s economic attractiveness of
the Company’s projects, the Company’s ability to obtain financing and develop
the Company’s projects and, if the Company’s projects enter the production
phase, the amount of the Company’s revenues or profit or loss.





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




All of
the Company’s properties are in the exploration stage and no known reserves have
been discovered on such properties, the exception being Project 1 of the
WBJV. At this stage, favorable drilling results, estimates and studies are
subject to a number of risks, including:




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




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




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




·
            the
      likelihood of cost estimates increasing in the future;
  and




·
            the
      possibility of difficulties procuring needed supplies of electrical power
      and water.




There is
no certainty that the expenditures to be made by the Company or by its joint
venture partners in the exploration of the properties described herein will
result in discoveries of precious metals in commercial quantities or that any of
the Company’s  properties will be developed. Most exploration projects
do not result in the discovery of precious metals and no assurance can be given
that any particular level of recovery of precious metals will in fact be
realized or that any identified resource will ever qualify as a commercially
mineable (or viable) resource which can be legally and economically
exploited.  The resource and reserve estimates contained in this
Annual Information Form have been determined and valued based on assumed future
prices, cut-off grades and operating costs that may prove to be
inaccurate.  Estimates of reserves, mineral deposits and production
costs can also be affected by such factors as environmental permit regulations
and requirements, weather, environmental factors, unforeseen technical
difficulties, unusual or unexpected geological formations and work
interruptions. In addition, the grade and/or quantity of precious metals
ultimately recovered may differ from that indicated by drilling
results.  There can be no assurance that precious metals recovered in
small-scale tests will be duplicated in large-scale tests under on-site
conditions or in production scale.  Extended declines in market prices
for platinum, palladium, rhodium and gold may render portions of the Company’s
mineralization uneconomic and result in reduced reported mineralization. Any
material reductions in estimates of mineralization, or of the Company’s ability
to extract this mineralization, could have a material adverse effect on the
Company’s results of operations or financial condition.





Economic
and political instability may affect the Company’s business




Since mid
calendar 2008 there has been a negative trend with regard to the market for
metal commodities and related products as a result of global economic
uncertainty, reduced confidence in financial markets, bank failures and credit
availability concerns.  These macro-economic events have negatively
affected the mining and minerals sectors in general.  The Company’s
market capitalization has been significantly reduced.  Although these
circumstances will likely improve over the longer term, the short term impact
upon the Company’s liquidity and its ability to raise the capital required to
execute its business plans going forward will be negative.  As a
result the Company will consider its plans and options carefully going forward
into 2009.  The Company intends to preserve its cash balances to the
greatest extent possible curtailing capital and operational expenditures where
possible.





The
Company has assessed the carrying values of its mineral properties as a result
of the market downturn.  Based on current and expected metals prices
and cost structures, management has determined that the values of the Company’s
mineral properties have not been impaired at this time. However, should current
market conditions and commodity prices worsen and/or persist for a prolonged
period of time, an impairment of mineral properties may be
required.




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





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




The
Company’s current and anticipated future operations, including further
exploration, development activities and commencement of production on the
Company’s properties, require permits from various South African federal, state,
provincial, territorial and local governmental authorities.  In
particular, the Company must obtain a mining license for the WBJV Project 1
and an Environmental Impact Assessment must be completed.  There can
be no assurance that all licenses and permits which the Company requires for the
construction of mining facilities and the conduct of mining operations will be
obtainable on reasonable terms, or at all. Delays or a failure to obtain such
licenses and permits, or a failure to comply with the terms of any such licenses
and permits that the Company has obtained, could have a material adverse impact
on the Company.




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




The
Company may be adversely affected by foreign currency fluctuations. The Company
is primarily funded through equity investments into the Company denominated in
Canadian Dollars.  In the normal course of business the Company enters
into transactions for the purchase of supplies and services denominated in South
African Rand.  The Company also has cash and certain liabilities
denominated in South African Rand.  Several of the Company’s options
to acquire properties or surface rights in the Republic of South Africa may
result in payments by the Company denominated in South African Rand or in U.S.
Dollars. Exploration, development and administrative costs to be funded by the
Company in South Africa will also be denominated in South African
Rand.  Fluctuations in the exchange rates between the Canadian Dollar
and the South African Rand or U.S. Dollar may have an adverse or positive affect
on the Company.  In the past year to November 10, 2008 the South
African Rand has devalued by approximately 16% to the Canadian dollar and the
Canadian dollar has devalued by approximately 19% to the U.S.
Dollar.





Not
all of the Surface Rights for the WBJV Project 1 have been
purchased.





Not all
of the surface rights over the proposed infrastructure design in the Feasibility
Study have been purchased.  An allowance for the cost of this has been
made and the Mineral Petroleum
Development Act (South Africa) may provide some assistance in ensuring
that access to the minerals can be achieved at a reasonable cost; however there
is no certainty that this process will be successful or timely. Platinum Group
has purchased approximately 575 hectares of land over part of the deposit or
adjacent to an area of the mine that may be useable for mine access and
infrastructure.  Platinum Group also holds a further 365 hectares
adjacent to the south west of the deposit area. The purchased areas have not
been tested for suitability and amendments to the mine plan, capital and
operating cost estimates that would be required to relocate the mine
infrastructure have not yet been completed.  The failure to purchase
the necessary surface rights will likely increase the costs of developing
Project 1 and it may prevent or delay the development of
Project 1.





The
Company’s properties are subject to title risks




The
Company’s properties may be subject to prior unregistered agreements or
transfers and title may be affected by undetected defects. These defects could
adversely affect the Company’s title to such properties or delay or increase the
cost of the development of such properties. In addition, the Company’s
properties may be subject to aboriginal or other historical rights that may be
claimed on Crown properties or other types of tenure with respect to which
mineral rights have been conferred.





The
mineral exploration industry is extremely competitive




The
resource industry is intensely competitive in all of its phases, and the Company
competes with many companies that possess greater financial resources and
technical facilities. Competition could adversely affect the Company’s ability
to acquire suitable new producing properties or prospects for exploration in the
future. Competition could also affect the Company’s ability to raise financing
to fund the exploration and development of its properties or to hire qualified
personnel.





South
African foreign exchange controls may limit repatriation of
profits.




Loan
capital or equity capital may be introduced into South Africa through a formal
system of Exchange Control. Proceeds from the sale of assets in South Africa
owned by a non-resident are remittable to the non-resident. Approved loan
capital is generally remittable to a non-resident company from business profits.
Dividends declared by a non-listed South African company are remittable to
non-resident shareholders. However, there can be no assurance that restrictions
on repatriation of earnings from the Republic of South Africa will not be
imposed in the future.





Judgments
based upon the civil liability provisions of the United States federal
securities laws may be difficult to enforce.




The
ability of investors to enforce judgments of United States courts based upon the
civil liability provisions of the United States federal securities laws against
our company and our directors and officers may be limited due to the fact that a
majority of these persons reside outside of the United States and, in respect of
our directors and officers, their assets are located outside the United States.
There is uncertainty as to whether Canadian courts would: (i) enforce judgments
of United States courts obtained against our company or our directors and
officers predicated upon the civil liability provisions of the United States
federal securities laws, or (ii) entertain original actions brought in Canadian
courts against our company or such persons predicated upon the federal
securities laws of the United States, as such laws may conflict with Canadian
laws. In Canada, civil rights are within the legislative jurisdiction of the
Provinces and Territories. The Province of British Columbia, in which our
company and all of our directors and officers are resident, does not have laws
for the reciprocal enforcement of judgments of United States
courts.





The
Company is a Passive Foreign Investment Company for United State Federal Income
Tax Purposes which may have consequences for U.S. investors.




The
Company is a passive foreign investment company (“PFIC”) for United States
Federal income tax purposes because it earns 75% or more of its gross income
from passive sources. As a result, a United States holder of the Company’s
common shares could be subject to increased tax liability, possibly including an
interest charge, upon the sale or other disposition of the United States
holders’ common shares or upon receipt of “excess distributions,” unless such
holder of common shares elect to be taxed currently on his or her pro rata
portion of our income, whether or not the income was distributed in the form of
dividends or otherwise. The election requires certain conditions be met such as
filing on or before the due date, as extended, for filing the shareholder’s
income tax return for the first taxable year to which the election will apply.
Otherwise, the election may only partially apply. Further, the elections will
increase the administrative and regulatory burden on the Company.





The Company is subject to
significant governmental regulation.





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





•      environmental
protection;


•      management
and use of toxic substances and explosives;


•      management
of natural resources;


•      exploration,
development of mines, production and post-closure reclamation;


•      exports;


•      price
controls;


•      taxation;


•      regulations
concerning business dealings with native groups;


•      labor
standards and occupational health and safety, including mine safety;
and


•      historic
and cultural preservation.





Failure
to comply with applicable laws and regulations may result in civil or criminal
fines or penalties or enforcement actions, including orders issued by regulatory
or judicial authorities enjoining or curtailing operations or requiring
corrective measures, installation of additional equipment or remedial actions,
any of which could result in the Company incurring significant expenditures. The
Company may also be required to compensate private parties suffering loss or
damage by reason of a breach of such laws, regulations or permitting
requirements. It is also possible that future laws and regulations, or a more
stringent enforcement of current laws and regulations by governmental
authorities, could cause additional expense, capital expenditures, restrictions
on or suspensions of the Company’s operations and delays in the development of
the Company’s properties.





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




Environmental
legislation on a global basis is evolving in a manner that will ensure stricter
standards and enforcement, increased fines and penalties for non-compliance,
more stringent environmental assessment of proposed development and a higher
level of responsibility for companies and their officers, directors and
employees. There can be no assurance that future changes to environmental
legislation in Canada or South Africa will not adversely affect the Company’s
operations. Environmental hazards may exist on the Company’s properties which
are unknown at present and which have been caused by previous or existing owners
or operators. Furthermore, future compliance with environmental reclamation,
closure and other requirements may involve significant costs and other
liabilities. In particular, the Company’s operations and exploration activities
are subject to Canadian and South African national and provincial laws and
regulations governing protection of the environment. Such laws are continually
changing and, in general, are becoming more restrictive.





Amendments
to current laws, regulations and permits governing operations and activities of
mining companies, or more stringent implementation thereof, could have a
material adverse impact on the Company and cause increases in capital
expenditures or production costs or reduction in levels of production at
producing properties or require abandonment or delays in development of new
mining properties.





The
Company has not made any material expenditure for environmental compliance to
date. However, there can be no assurance that environmental laws will not give
rise to significant financial obligations in the future and such obligations
could have a material adverse affect on the Company’s financial
performance.





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




In the
course of exploration, development and production of mineral properties, certain
risks, and in particular, unexpected or unusual geological operating conditions
including rock bursts, cave-ins, fire, flooding and earthquakes may occur. It is
not always possible to fully insure against such risks as a result of high
premiums or other reasons. Should such liabilities arise, they could reduce or
eliminate any future profitability and result in increasing costs and a decline
in the value of the Company’s securities.





The
Company has limited experience with development-stage mining
operations.




Although
there are personnel within the Company who have experience with
development-stage mining operations, the Company’s ability to place projects
into production will be dependent upon using the services of both mining
contractors and additional appropriately experienced personnel or entering into
agreements with other major resource companies that can provide such
expertise.  There can be no assurance that the Company will have
available the necessary expertise when and if the Company places its mineral
properties into production.





The
Company has a history of losses and it anticipates continuing to incur losses
for the foreseeable future.




The
Company has a history of losses including net losses of $5,086,589 in 2008;
$6,758,123 in the year ended August 31, 2007; and $3,853,273 in the year ended
August 31, 2006. At August 31, 2008 the Company had an accumulated deficit of
$27,255,516.  At August 31, 2007, the Company had an accumulated
deficit of $22,168,927 and at August 31, 2006 $15,410,804.  The
Company anticipates continuing to incur losses for the foreseeable future until
it can successfully place one or more of its properties into commercial
production on a profitable basis.





The
Company has a lack of cash flow, which may affect its ability to continue as a
going concern.  It is an exploration and development company with a
history of losses and no history of revenues from its
operations.  None of the Company’s properties are currently in
production, and although a Feasibility Study indicates a positive economic model
for Project 1 of the WBJV, there is no certainty that the Company will succeed
in placing that project into production in the near future, if at all. During
the year ended August 31, 2008 the Company had a loss of
$5,086,589.  During the year ended August 31, 2007, the Company had a
loss of $6,758,123 and for 2006 a loss of $3,853,273.  The Company
used $4,547,428 in cash for operating activities in 2008 and used $3,682,561 for
that purpose in 2007 and $2,356,261 in 2006.  The Company used
$8,574,127 for investing activities in 2008, $5,771,234 in 2007 and $6,522,431
in 2006. Historically, the only source of funds available to the Company has
been through the sale of its equity securities.





The
Company’s continuing operations and the recoverability of the amounts
capitalized for mineral properties in its consolidated financial statements,
prepared in accordance with Canadian GAAP, is dependent upon its ability in the
future to achieve profitable operations and, in the meantime, to obtain the
necessary financing to meet its obligations and repay our liabilities arising
from normal business operations when they become due. External financing,
predominately by the issuance of equity to the public, will be sought to finance
our operations; however, there is no assurance that sufficient funds will be
raised.





The
Company is required to contribute its share of exploration and other costs to
maintain its interests in certain properties.




The
Company may, in the future, be unable to meet its share of costs incurred under
agreements to which it is a party and it may as a result be subject to loss or
dilution of its rights to acquire interests in the properties subject to such
agreements.





On
September 2, 2008 the Company announced in a news release its agreement to a
term sheet with Anglo Platinum and Wesizwe to consolidate and rationalize the
WBJV.  Under the terms of the proposed transaction the Company will be
responsible for material cash payments.  See “General Development of
the Business - Three year history” above for details.  The proposed
transaction is subject to the completion of definitive agreements and regulatory
and other approvals.  For more details of the Company’s financial
commitments see the Company’s August 31, 2008 audited year end financial
statements and Management Discussion and Analysis, both available on SEDAR at
www.sedar.com.





Most
of the Company’s properties contain no known reserves.




Project 1
of the WBJV contains mineral reserves.  The remaining properties are
in the exploration stage meaning that the Company has not determined whether
such properties contain mineral reserves that are economically recoverable.
Failure to discover economically recoverable reserves on a mineral property will
require it to write-off the costs capitalized for that property in its Canadian
GAAP financial statements.  At August 31, 2008 deferred acquisition,
exploration and development costs related to all of the Company’s mineral
property interests totaled $7,798,664 (2007 - $4,897,047 and 2006 -
$5,775,407).





The
Company depends on its key management employees.




The
Company’s development to date has depended, and in the future will continue to
depend, on the efforts of its key management figures:  R. Michael
Jones, the Company’s Chairman, President, CEO and director; Frank R. Hallam, the
Company’s Chief Financial Officer and director; and Peter Busse, the Company’s
Chief Operating Officer. The loss of any of the Company’s key management figures
could have a material adverse effect on it.  The Company has entered
into contracts with the named directors, officers and employees.  It
does not maintain key man insurance on any of its management.





The
Company’s directors may be associated with other mineral resource
companies.




Certain
of the Company’s officers and directors may become associated with other natural
resource companies that acquire interests in mineral properties. R. Michael
Jones, the Company’s Chairman, President, Chief Executive Officer and director
is also a director of Jerico Explorations Inc., a public company with a mineral
exploration property in Arizona, a director of West Timmins Mining Inc., a
public company with mineral exploration properties in Canada and Mexico, and a
director of MAG Silver Corp., a public company with silver properties in Mexico.
Frank Hallam, the Company’s Chief Financial Officer and director, is also a
senior officer of MAG Silver Corp., a director of Jerico Explorations Inc., and
a director and senior officer of West Timmins Mining Inc. Eric Carlson, a
director of the Company, is also a director of MAG Silver Corp. and a director
of West Timmins Mining Inc. Any conflicts, which may arise, will be dealt with
as disclosed below. Barry Smee, a director of the Company, is also a director of
Almaden Resources Ltd., a company with projects in Mexico, the USA, and
Canada.





Such
associations may give rise to conflicts of interest from time to
time.  The Company’s directors are required by law to act honestly and
in good faith with a view to the best interests of the Company and to disclose
any interest, which they may have in any project or opportunity of the
Company.  If a subject involving a conflict of interest arises at a
meeting of the board of directors, any director in a conflict will disclose his
interest and abstain from voting on such matter. In determining whether or not
the Company will participate in any project or opportunity, the directors will
primarily consider the degree of risk to which the Company may be exposed and
our financial position at that time.





The
Company has outstanding stock options which, if exercised, could cause dilution
to existing shareholders.




At
November 1, 2008, the Company had 5,564,875 stock options issued and outstanding
with a weighted average exercise price of $2.26 per share. Stock options are
likely to be exercised when the market price of the Company’s common shares
exceeds the exercise price of such stock options.  The exercise of
such stock options and the subsequent resale of such common shares in the public
market could adversely affect the prevailing market price and the Company’s
ability to raise equity capital in the future at a time and price which it deems
appropriate. The Company may also enter into commitments in the future which
would require the issuance of additional common shares and the Company may grant
additional share purchase warrants and stock options.  Any share
issuances from the Company’s treasury will result in immediate dilution to
existing shareholders.





The
Company’s share price has been volatile in recent years.




In recent
years, the securities markets in the United States and Canada have experienced a
high level of price and volume volatility, and the market price of many
companies, particularly those considered exploration or development stage
companies, have experienced wide fluctuations in price which have not
necessarily been related to the operating performance, underlying asset values
or prospects of such companies. In particular, the per share price of the
Company’s common shares on the TSX fluctuated from a high of $4.20 to a low of
$0.71 and on the NYSE Alternext US LLC (formerly the American Stock Exchange)
(“NYSE Alternext”) from a high of US$4.43 to a low of US$0.60 within the twelve
month period preceding the date of this Annual Information Form. There can be no
assurance that continual fluctuations in price will not occur.





We
do not expect to pay dividends.




We have
not paid any dividends since incorporation and we have no plans to pay dividends
for some time. Our directors will determine if and when dividends should be
declared and paid in the future based on our financial position at the relevant
time. All of the shares of Common Stock are entitled to an equal share of any
dividends declared and paid.







Companies
with Asset-back Securities Outstanding




The
Company holds no asset-backed securities or commercial paper.







Western
Bushveld Joint Venture




Readers
are encouraged to read the following technical reports, from which the
disclosure in this section has been derived:





1.
            Filed
      on SEDAR August 21, 2008: Technical Report (Feasibility Study) Western
      Bushveld Joint Venture Project 1 (Elandsfontein and Frischgewaagd) – (n/r
      July 7, 2008); and





2.
            Filed
      on SEDAR June 11, 2008: Competent Persons Report on Project 3 of the
      Western Bushveld Joint Venture (WBJV) Located on the Western Limb of the
      Bushveld Igneous Complex, South Africa (n/r of June 09,
    2008).







Introduction




On
October 26, 2004 the Company (37%) entered into a Joint Venture with Anglo
Platinum (37%) and Africa Wide (later acquired by Wesizwe) (26%) to pursue
platinum exploration and development on combined mineral rights covering 67
square kilometres on the Western Bushveld Complex of South Africa.





The
Company contributed all of its interests in portions of the farms Onderstepoort
98 JQ, Mimosa 81 JQ and Elandsfontein 102 JQ. The Company was also required to
complete Rand 35 million (at August 31, 2005 approx. C$6.44 million) in
expenditures as part of its earn-in, which expenditure the Company completed in
April 2006. Certain portions of Elandsfontein 102 JQ, Onderstepoort 98 JQ,
Frischgewaagd 96 JQ, Mimosa 81 JQ and Koedoesfontein 94 JQ were contributed by
Rustenburg Platinum Mines Ltd.





On April
9, 2007 the Company announced the formal contribution to the WBJV of a 50%
interest in the mineral rights to the 494 hectare Portion 11 of the Farm
Frischgewaagd 96 JQ (“Portion 11”) by RPM, a subsidiary of Anglo Platinum. With
this addition the geographic area of the WBJV increased to approximately 72
square kilometres of territory.





On
September 2, 2008 the Company announced in a news release its agreement to a
term sheet with Anglo Platinum and Wesizwe to consolidate and rationalize the
WBJV. Under the terms of the Proposed Transaction, the Company will control 74%
of the WBJV Projects 1 and 3 and Wesizwe will control 100% of Project 2 and 26%
of Projects 1 and 3.  See “General Development of the Business - Three
year history” above for details.  The proposed transaction is subject
to the completion of definitive agreements and regulatory and other
approvals.  On September 7, 2007 the Company also published a revised
statement of reserves and resources based on the terms of the proposed
transaction.





For more
details of the WBJV Agreement and the properties contributed by the Company, see
Note 5. of the Company’s August 31, 2008 audited year end financial statements
available on SEDAR at www.sedar.com.







Project
Description and Location





The WBJV
is currently owned 37% by PTM, a wholly-owned subsidiary of the Company; 37% by
RPM, a subsidiary of Anglo Platinum; and 26% by Wesizwe. The joint venture is a
notarial contract and managed by a committee representing all partners. The WBJV
is divided into three distinct project areas, namely Projects 1, 2 and 3. PTM is
the operator of the joint venture.





The WBJV
property is located on the south-western limb of the Bushveld Igneous Complex
(“BIC”), 110km west-northwest of Pretoria and 120km from Johannesburg. The BIC
is unique and well known for its layering and continuity of economic horizons
mined for platinum, palladium and other platinum-group elements (“PGEs”), chrome
and vanadium.









The total
joint venture area includes portions of the Company’s properties, namely
Elandsfontein 102JQ, Mimosa 81JQ and Onderstepoort 98JQ, and also certain
portions of Elandsfontein 102JQ, Onderstepoort 98JQ, Frischgewaagd 96JQ, Mimosa
81JQ and Koedoesfontein 94JQ contributed by RPM.  These properties are
centred on Longitude 27o 00’ 00’’
(E) and Latitude 25o20’ 00’’
(S) and the mineral rights cover approximately 67km2 or
6,700ha.





Project
Area 1 and 1A covers an area of 10.87km2 or
1,087ha in extent. Specifically, Project Area 1 and 1A consist of a section of
Portion (“Ptn”) 18, the Remaining Extent (“Re”), Ptn 13, Ptn 8, Re of Ptn 2, Ptn
7, Ptn 15 and Ptn 16 of the farm Frischgewaagd 96JQ, sections of Ptn 2, Ptn 9
and Ptn 12 of the farm Elandsfontein 102JQ and a small section of the Re of the
farm Mimosa 81JQ.  Project Area 3 covers an area of 224.28ha in extent
and is located on a section of the farm Koedoesfontein 94JQ.







The
resources of the WBJV Project Area 1 and 1A are located approximately 11km along
strike from the active Merensky Reef (sometimes referred to as “MR”) mining face
at the operating Bafokeng Rasimone Platinum Mine (“BRPM”). BRPM completed
opencast mining on the Upper Group 2 (“UG2”) Reef within 100m of the WBJV
property boundary.
 
 The
potential economic horizons in the WBJV Project Area 1 and 1A are the Merensky
Reef and UG2 Chromitite seam situated in the Critical Zone (“CZ”) of the
Rustenburg Layered Suite (“RLS”) of the BIC; these horizons are known for their
continuity. The Merensky Reef and UG2 Chromitite seam are mined at the BRPM
adjoining the WBJV property as well as on other contiguous platinum-mine
properties. In general, the 33 layered package dips at less than 20 degrees and
local variations in the reef attitude have been modelled. The Merensky Reef and
UG2 Chromitite seam, in the Project Area, dip between 4 and 42 degrees, with an
average dip of 14 degrees.
 
 Drilling,
in the form of diamond drilling, has been carried out over the Project Area and
to-date 181 boreholes have been drilled for the purposes of understanding the
geology, structure and metallurgy of the orebody in the Project
Area.  PTM has established a site office to the south of the Project
Area, and all core is stored in the core yard on site. All logging and sampling
of the core is undertaken at the site office core yard and the samples have been
sent to Genanalysis (Perth), ALS Chemex (South Africa) and currently samples are
sent to Set Point Laboratories (South Africa). A total of 29,303 samples have
been assayed and utilised in the estimation of the Mineral Resources over the
Project Area.
 
 Measured
Mineral Resource total 2.224 million ounces (“Moz”), Indicated Mineral Resources
total 5.010Moz and Inferred Mineral Resources total 1.256 Moz of 4E (platinum,
palladium, rhodium and gold) for Project Area 1 and 1A
 
  Licences
 
 The WBJV
has been subdivided into several smaller portions as each area has its own
stand-alone licence and Environmental Management Programme (“EMP”). Within the
WBJV property, there are nine separate licences and they are specifically listed
below for cross-referencing to the licence specifications. The licences over the
WBJV area are as follows:
 
 1.         Elandsfontein
(PTM)
 2.         Elandsfontein
(RPM)
 3.         Onderstepoort
(PTM) 4, 5 and 6
 4.         Onderstepoort
(PTM) 3 and 8
 5.         Onderstepoort
(PTM) 14 and 15
 6.         Onderstepoort
(RPM)
 7.         Frischgewaagd
(PTM)
 8.         Frischgewaagd
(RPM)
 9.         Koedoesfontein
(RPM)
 
 Applications
have been made in a timely fashion for conversion to the new Mineral and
Petroleum Resources Development Act, 2002 (“MPRDA”). Prospecting is continuing
while the conversions are in progress. The Prospecting Rights (“PR”) are all
held in the North West Province Region of the Department of Mineral and Energy
(“DME”) and are held for Platinum-group metals (“PGMs”), Nickel, Chrome and
Gold. The following table details the aspects of the PR’s:
 
 Legal
Aspects and Tenure of the WBJV Area
 
 
    
 Rights
to surface, minerals and agreements
  PTM
acquired its interest in Elandsfontein pursuant to a purchase agreement settled
by way of an Agreement of Settlement, which was signed on 26 April 2005. The
Agreement of Settlement has entitled PTM to the rights to the minerals as well
as the freehold. PTM has purchased the surface rights to the property. The
surface rights to Portions Re 1, 12 and Re 14 measure 364.6357 Ha. Option
agreements in respect of Onderstepoort have been signed with the owners of the
mineral rights on Portions Onderstepoort 4, 5 and 6; Onderstepoort 3 and 8; and
Onderstepoort 14 and 15. The option agreement was bought out by way of a
settlement agreement and a new order prospecting right covers this area. The
remainder of the WBJV property is covered by Anglo Platinum prospecting rights
contributed to the Joint Venture.
 
  Mineralized
zones
  The BIC
in general is well known for containing a large share of the world's platinum
and palladium resources. There are two very prominent economic deposits within
the BIC. Firstly, the Merensky Reef and the UG2 chromitite, which together can
be traced on surface for 300km in two separate areas. Secondly, the Northern
Limb (“Platreef”), which extends for over 120km in the area north of
Mokopane.
 
 In the
past the Bushveld’s platinum- and palladium-bearing reefs have been estimated at
about 770 and 480 million ounces respectively (down to a depth of 2,000 metres).
These estimates do not distinguish between the categories of Proven and Probable
Reserves and Inferred Resource. Recent calculations suggest about 204 and 116
million ounces of Proven and Probable Reserves of platinum and palladium
respectively, and 939 and 711 million ounces of Inferred Resources. Mining is
already taking place at 2km depth in the BIC. Inferred and ultimately mineable
ore resources can almost certainly be regarded as far greater than the
calculations suggest. These figures represent about 75% and 50% of the world's
platinum and palladium resources respectively. Reserve figures for the Proven
and Probable categories alone in the BIC appear to be sufficient for mining
during the next 40 years at the current rate of production. However, estimated
world resources are such as to permit extraction at a rate increasing by 6% per
annum over the next 50 years. Expected extraction efficiency is less for
palladium. Thereafter, down-dip extensions of existing BIC mines, as well as
lower-grade areas of the Platreef and the Middle Group chromitite layers
(sometimes referred to as “CL”), may become payable. Demand, and hence price,
will be the determining factor in such mining activities rather than
availability of ore.
 
 Exploration
drilling to date on the WBJV area has shown that both economic reefs (Merensky
and UG2) are present and economically exploitable on the WBJV properties. The
separation between these reefs tends to increase from the subcrop environment
(less than five metres apart) to depths exceeding 650 metres (up to 50 metres
apart) towards the northeast. The subcrops of both reefs generally strike
southeast to northwest and dipon average 14 degrees to the northeast. The reefs
locally exhibit dips from 4 to 42 degrees (average 14 degrees) as observed from
borehole information.
 
 The most
pronounced PGM mineralisation along the western limb of the BIC occurs within
the Merensky Reef and is generally associated with a 0.1–1.2m-thick pegmatoidal
feldspathic pyroxenite unit. The second important mineralized unit is the UG2
CL, which is on average 0.6–2.0m thick.
 
  Environmental
liabilities and Prospecting permits
  There are
no known environmental issues relating to the PTM or WBJV
properties.
 
 Mining
and exploration companies in South Africa operate with respect to environmental
management regulations in Section 39 of the Minerals Act (1991) as amended. Each
prospecting area or mining site is subject to conditions such as
that:
 
 •      environmental
management shall conform to the EMP as approved by the DME;
 
 •
              prospecting
      activities shall conform to all relevant legislations, especially the
      National Water Act (1998) and such other conditions as may be imposed by
      the director of Minerals
Development;
 
 •
              surfaces
      disturbed by prospecting activities will be rehabilitated according to the
      standard laid down in the approved
EMPs;
 
 •
              financial
      provision will be made in the form of a rehabilitation trust and/or
      financial guarantee;
 
 •
              a
      performance assessment, monitoring and evaluation report will be submitted
      annually.
 
 Prospecting
permits are issued subject to the approval of the EMP, which in turn is subject
to provision of a financial guarantee.
 
 On Elandsfontein (PTM) the
operator conducted exploration under an EMP approved for a prospecting permit
granted to Royal Mineral Services on 14 November 2002 (now expired). A new
application for a prospecting permit and an EMP has been lodged with the DME in
the name of PTM and has been approved. A follow-up EMP was requested by the DME
and was compiled by an independent consultant and filed on 23 August 2004. The
updated EMP was accepted by the DME on 20 October 2004. The EMP financial
guarantee with respect to this application is held by Standard Bank of South
Africa (guarantee no. M410986) in the amount of R10,000. In terms of the
notarial prospecting agreement (Clause 10) the Minister or authorised person has
the right to inspect the performance of the company with regard to environmental
matters.
 
 With
regard to the Onderstepoort
(PTM) area that was contributed to the WBJV by PTM, all EMPs were lodged
with the DME and approved on 30 April 2004 and 24 April 2004 for Onderstepoort 4,5 and 6 and
Onderstepoort 3 and 8
respectively. Financial provision of R10,000 for each of the optioned areas have
been lodged with Standard Bank (guarantee no. TRN M421362 for Onderstepoort 4, 5 and 6;
guarantee no. TRN M421363 for Onderstepoort 3 and 8; and
M421364 for Onderstepoort 14
and 15).
 
 Regarding
Onderstepoort 14 and
15, a follow-up EMP was requested by the DME and was compiled by an
independent consultant and filed on 23 August 2004. The updated EMP was accepted
by the DME on 20 October 2004. The financial guarantee of R10,000 in respect of
this application is held by Standard Bank of South Africa (guarantee no.
M410986). In terms of the notarial prospecting agreement (Clause 10) the
Minister or authorised person has the right to inspect the performance of the
company with respect to environmental matters.
 
 In the
areas of the WBJV that were originally owned by RPM, PTM will take
responsibility for the EMPs that originated from RPM in respect of
Elandsfontein, Onderstepoort, Frischgewaagd and Koedoesfontein. PTM as operator
of the joint venture will be the custodian and will be responsible for all
aspects of the Environmental Management Programmes and for all specifics as set
out in all the various allocated and approved EMPs for properties that form part
of the WBJV.
 
 With
respect to Elandsfontein
(RPM) (Portions 8 and 9 of Elandsfontein 102JQ) there is an EMP dated 26
February 2004. There is also an EMP dated 11 March 2004 for portions of Mineral
Area 2 (a portion of Mineral Area 1) of the farm Elandsfontein
102JQ.
 
 Regarding
Frischgewaagd (RPM) –
Remaining Extent of Portion 4, Portion 3 (a portion of Portion 1), Portions 15,
16, 18, 2 and 17 (a portion of Portion 10) – an EMP dated 22 September 2002
exists.
 
 The EMP
for Onderstepoort (RPM)
was submitted together with the prospecting permit application.
 
 The EMP
for Koedoesfontein
(RPM) was received by the DME on 22 September 2002.
  Accessibility,
Climate, Local Resources, Infrastructure and Physiography
  South
Africa has a large and well-developed mining industry in the area where the WBJV
Project is located.  This, among other factors, means that the
infrastructure in the area is well established, with well-maintained roads and
highways as well as electricity distribution networks and telephone
systems.
 
 The
project area is located on the southwestern limb of the BIC, some 35km northwest
of the North West Province town of Rustenburg. The town of Boshoek is situated
10km to the south along the tar road that links Rustenburg with Sun City and
crosses the project area. The WBJV adjoins the Anglo Platinum-managed BRPM to
the southeast. A railway line linking BRPM to the national network passes the
project area immediately to the east with a railway siding at Boshoek. The WBJV
properties are readily accessible from Johannesburg by traveling 120km northwest
on Regional Road 24 to the town of Rustenburg and then a further
35km.  Both BRPM to the south of the project area and Styldrift, a
joint venture between the Royal Bafokeng Nation and Anglo Platinum, which lies
directly to the east of the property, have modern access roads and services.
Numerous gravel roads crossing the WBJV properties provide easy access to all
portions.
 
 The major
population centre is the town of Rustenburg, about 35km to the southeast of the
project.  Pretoria lies approximately 100km to the east and
Johannesburg about 120km to the southeast. A popular and unusually large hotel
and entertainment centre, Sun City, lies about 10km to the north of the project
area. The Sundown Ranch Hotel lies in close proximity to the project area and
offers rooms and chalets as accommodation. The WBJV properties fall under the
jurisdiction of the Moses Kotane Municipality. A paved provincial road crosses
the property. Access across most of the property can be achieved by truck
without the need for significant road building.
 
 With low
rainfall (the area is considered semi arid with an annual rainfall of 520mm) and
high summer temperatures, the area is typical of the Highveld Climatic Zone. The
climate of the area does not hinder the operating season and exploration can
continue all year long.
 
 All
project areas are close to major towns and informal settlements as a potential
source of labour with paved roads being the norm. Power lines (400kv) cross both
project areas and water is, as a rule, drawn from boreholes. As several platinum
mines are located adjacent to and within 50km of the property, there is
excellent access to materials and skilled labour. One of the smelter complexes
of Anglo Platinum is located within 60km of the property.
 
 Surface
rights to 365 ha on the Farm Elandsfontein have been purchased by the Company on
behalf of the WBJV and this property may be of some use for potential
operations. A further 575 ha of surface rights were purchased or in process of
being purchased at August 31, 2008 by the Company alone.  These
surface rights are intended for purposes of tailings placements and surface
infrastructure.  Additional surface rights within the footprint of the
mineral rights area are also required for location of shaft infrastructure, mill
facilities and concentrator facilities and waste sites.
 
 Topograhically,
the WBJV area is located on a central plateau characterized by extensive
savannah with vegetation consisting of grasses and shrubs with a few trees. The
total elevation relief is greater as prominent hills occur in the northern most
portions, but variations in topographical relief are minor and limited to low,
gently sloped hills.  On Project Area 1, elevations range from
1,080 metres above mean sea level (“AMSL”) towards the Elands River in the north
to 1,156m AMSL towards the farm Onderstepoort in the southwest, with an average
of 1,100 AMSL. The section of the Koedoesfontein property covered by the
Project 3 Area gently dips in a north-easterly direction toward a tributary
of the Elands River.  On Project 3 Area, elevations range from 1,060m
AMSL towards the Sandspruit River in the north to 1100m AMSL towards the south
eastern corner of the property.
  History
  Elandsfontein (PTM), Onderstepoort (Portions 4, 5 and
6), Onderstepoort
(Portions 3 and 8) and Onderstepoort (Portions 14 and
15) were all privately owned. Previous work done on these properties has
not been fully researched and is largely unpublished. Such academic work as has
been done by the Council for Geoscience (government agency) is generally not of
an economic nature.
 
 Elandsfontein (RPM), Frischgewaagd, Onderstepoort
(RPM) and Koedoesfonteinhave generally
been in the hands of major mining groups resident in the Republic of South
Africa. Portions of Frischgewaagd previously held by Impala Platinum Mines
Limited were acquired by Johannesburg Consolidated Investment Company Limited,
which in turn has since been acquired by Anglo Platinum through
RPM.
 
 Previous
geological exploration and resource estimation assessments were done by Anglo
Platinum as the original owner of some of the mineral rights. Anglo Platinum
managed the exploration drilling programme for the Elandsfontein and
Frischgewaagd borehole series in the area of interest on Project Area 1,
and for the Koedoesfontein borehole series in the area of interest on Project
Area 3. Geological and sampling logs and an assay database are
available.
 
  Project
Area 1
 
 Prior to
the establishment of the WBJV and commencement of drilling for the
Pre-feasibility study, PTM had drilled 36 boreholes on the Elandsfontein
property, of which the geological and sampling logs and assay databases are
available.
 
 Existing
gravity and ground magnetic survey data were helpful in the interpretation of
the regional and local geological setting of the reefs. A distinct increase in
gravity values occurs from the southwest to the northwest, most probably
reflecting the thickening of the Bushveld sequence in that direction. Low
gravity trends in a southeastern to northwestern direction. The magnetic survey
reflects the magnetite-rich Main Zone and some fault displacements and
late-stage intrusives in the area.
 
  Project
Area 3
 
 The
drilling program consisted of three boreholes (KD1, KD2 and KD3). Boreholes KD1
and KD3 were drilled beyond the Merensky Reef and UG2 CL subcrop, and terminated
in sediments of the Transvaal Supergroup. Drilling of borehole KD2 was stopped
short of the Merensky Reef subcrop.
 
 There has
been no previous production from any of the WBJV properties.
 
 Geological
Setting
  Regional
Geology of the BIC
  The
stable Kaapvaal and Zimbabwe Cratons in southern Africa are characterised by the
presence of large mafic-ultramafic layered complexes. These include the Great
Dyke of Zimbabwe, the Molopo Farms Complex in Botswana and the well-known
BIC.
 
 The BIC
was intruded about 2,060 million years ago into rocks of the Transvaal
Supergroup along an unconformity between the Magaliesberg quartzites (Pretoria
Group) and the overlying Rooiberg felsites (a dominantly felsic volcanic
precursor). The BIC is by far the most economically important of these deposits
as well as the largest in terms of preserved lateral extent, covering an area of
over 66,000km2. It has
a maximum thickness of 8km, and is matched in size only by the Windimurra
intrusion in Western Australia and the Stillwater intrusion in the USA
(Cawthorn, 1996). The mafic component of the Complex hosts layers rich in PGEs,
nickel, copper, chromium and vanadium. The BIC is reported to contain about 75%
and 50% of the world’s platinum and palladium resources respectively (Vermaak,
1995). The mafic component of the BIC is subdivided into several generally
arcuate segments/limbs, each associated with a pronounced gravity anomaly. These
include the western, eastern, northern/Potgietersrus, far western/Nietverdient
and southeastern/Bethal limbs.
 
  Local
Geology
  The WBJV
is underlain by the lower portion of the RLS, the Critical Zone and the lower
portion of the Main Zone. The ultramafic Lower Critical Zone and the Mafic Upper
Critical Zone and the Main Zone weather to dark, black clays with very little
topography. The underlying Transvaal Supergroup comprises shale and quartzite of
the Magaliesberg Formation, which creates a more undulating topography. Gravity,
magnetic, LANDSAT, aerial photography and geochemistry have been used to map out
lithological units.
 
 In parts
of the WBJV the MR outcrops, as does the UG2 Reef, beneath a relatively thick
(2-5m) overburden of red Hutton to darker Swartland soil forms. The sequence
strikes northwest to southeast and dips between 4° and 42° with an average of
14° in the Project 1 and 1A areas, and with an average dip of ~10° in the Project 3
area. The top 32m of rock formation below the soil column is characterized by a
highly weathered rock profile (regolith) consisting mostly of gabbro within the
Main Zone. Thicknesses of this profile increase near intrusive dykes traversing
the area.
 
  Stratigraphy
 
 The RLS
intruded into the rocks of the Transvaal Supergroup, largely along an
unconformity between the Magaliesberg quartzite of the Pretoria Group and the
overlying Rooiberg felsites, which is a dominantly felsic volcanic
formation.  The mafic rocks of the RLS are subdivided into the
following five zones:
 
 ·
              Marginal Zone
      comprising finer-grained gabbroic rocks with abundant country-rock
      fragments.
  ·
              Lower Zone– the overlying
      Lower Zone is dominated by darker, more iron and magnesium bearing rocks
      (orthopyroxenite with associated olivine-rich cumulates (harzburgite,
      dunite)).
  ·
              Critical Zone– its commencement
      is marked by first appearance of well-defined cumulus chromitite layers.
      Seven Lower Group chromitite layers have been identified within the lower
      Critical Zone. Two further chromitite layers – Middle Group (“MG”) – mark
      the top of the lower Critical Zone. From this stratigraphic position
      upwards, plagioclase becomes the dominant cumulus phase and lighter
      coloured (noritic) rocks predominate. The MG3 and MG4 chromitite layers
      occur at the base of the upper Critical Zone, which is characterised from
      here upwards by a number of cyclical units. The cycles commence in general
      with narrow, darker (pyroxenitic) horizons (with or without olivine and
      chromitite layers); these invariably pass up into norites, which in turn
      pass into near white layers (leuconorites and anorthosites). The UG1 –
      first of the two Upper Group chromitite layers – is a cyclical unit
      consisting of chromitite layers with overlying footwall units that are
      supported by an underlying anorthosite. The overlying UG2 chromitite layer
      is of considerable importance because of its economic concentrations of
      PGEs. The two uppermost cycles of the Critical Zone include the Merensky
      and Bastard cycles. The Merensky Reef is found at the base of the Merensky
      cycle, which consists of a pyroxenite and pegmatoidal feldspathic
      pyroxenite assemblage with associated thin chromitite layers that rarely
      exceed one metre in thickness. The top contact of the Critical Zone is
      defined by a giant mottled anorthosite that forms the top of the Bastard
      cyclic unit.
  ·
              Main Zone – consists of
      norites grading upwards into gabbronorites. It includes several
      distinctive mottled anorthosite units towards the base and a distinctive
      pyroxenite, the Pyroxenite Marker, two thirds of the way up. This
      marker-unit does not occur in the project area, but is evident in the
      adjacent BRPM. The middle to upper part of the Main Zone is very resistant
      to erosion and gives rise to distinctive hills, which are currently being
      mined for dimension stone (black
granite).
  ·
              Upper Zone – the base
      is defined by the appearance of cumulus magnetite above the Pyroxenite
      Marker. The Upper Zone is divided into Subzone A at the base; Subzone B,
      where cumulus iron-rich olivine appears; and Subzone C, where apatite
      appears as an additional cumulus
phase.
 
  Local
Geological Setting –Western Bushveld Limb
  Exposures
of the BIC located on the western limb include the stratigraphic units of the
RLS. The local geology includes the classic layered sequence of the RLS and the
footwall rocks of the Transvaal Supergroup. The Merensky Reef is believed to be
present within much of this lobe. The position of the Merensky Reef is fairly
closely defined by seismic reflectors associated with the cyclic units of the
upper Critical Zone.
 
 The
sequence of the BIC within the WBJV area is confined to the lower part of the
Main Zone (Porphyritic Gabbro Marker) and the Critical Zone (HW5–1 and Bastard
Reef to UG1 footwall sequence). The rock sequence thins towards the southwest
(subcrop) including the marker horizons with concomitant middling of the
economic reefs or total elimination thereof. The UG2 Reef and, more often, the
UG1 Reef are not developed in some areas owing to the irregular and elevated
palaeo-floor of the Transvaal sediments.
 
  Reefs
  The MR is
a well developed seam along the central part and towards the north eastern
boundary of the Project 1 area. Islands of thin reef and relatively
low-level mineralization are present. The better-developed reef package, in
which the intensity of chromitite is generally combined with pegmatoidal
feldspathic pyroxenite development, occurs as larger island domains along a wide
central strip in a north south orientation from subcrop to deeper
portions.  The Merensky Reef structure at the Project 3 Area has
not been interpreted to date.
 
 The UG2
reef is well developed towards the northeast of the project area, but
deteriorates towards the southwest. Within the latter area, the reef is present
as a thin discontinuous or disrupted chromitite/pyroxenite layer. It also
appears to be disrupted by the shear zone along the footwall alteration zone.
Towards the northwest on Frischgewaagd, the reef is generally well developed and
occurs as a single prominent chromitite layer varying in thickness from a few
centimetres to ~2m.
 
 The
thickness of the sequences between the UG2 and MR in the Project 1 and 1A areas
increases from ~10m to 80m in a southwest-northeast direction. A similar
situation exists in the north of the project area but with the thickness between
the reefs ranging from 6m to 25m at depths of 200m below surface. In general,
the thickness between the reefs appears to increase in a northeasterly
direction, sub-parallel to the strike of the BIC layered
lithologies.
 
  Local
Structural Model
  Floor
rocks in the southwestern BIC display increasingly varied degrees of deformation
towards the contact with the RLS. Structure within the floor rocks is dominated
by the north-northwest trending post-Bushveld Rustenburg Fault. This normal
fault with down-throw to the east extends northwards towards the west of the
Pilanesberg Alkaline Complex. A second set of smaller faults and joints,
striking 70° and dipping very steeply south-southeast or north-northwest, are
related to the Rustenburg fault system. These structures were reactivated during
the intrusion of the Pilanesberg Alkaline Complex. Dykes associated with this
Complex intruded along these faults and joints.
 
 Major
structures, which occur within the WBJV area, include the Caldera and Elands
faults and Chaneng Dyke and a major north-south trending feature, which can be
observed across the entire Pilanesberg Complex. These east-west trending
structures dip steeply (between 80° and 90°). The magnetics indicate that the
Chaneng Dyke dips steeply to the north. This is consistent with similar
structures intersected underground on the neighbouring Bafokeng Rasimone
Platinum Mine, which all dip steeply northward.
 
 Two
stages of folding have been recognized within the area. The earliest folds are
mainly confined to the Magaliesberg Quartzite Formation. The fold axes are
parallel to the contact between the RLS and the Magaliesberg Formation.
Quartzite xenoliths present close to the contact with the RLS and the
sedimentary floor. Examples of folding within the floor rocks are the
Boekenhoutfontein, Rietvlei and Olifantsnek anticlines. The folding was
initiated by compressional stresses generated by isostatic subsidence of the
Transvaal Supergroup during sedimentation and the emplacement of the
pre-Bushveld sills. The presence of an undulating contact between the floor
rocks and the RLS, and in this instance the resultant formation of large-scale
folds, substantiates a second stage of deformation. The fold axes trend at
approximately orthogonal angles to the first folding event. Deformation during
emplacement of the BIC was largely ductile and led to the formation of basins by
sagging and folding of the floor rocks. This exerted a strong influence on the
subsequent evolution of the Lower and Critical Zones and associated chromitite
layers.
 
 The
structural events that influenced the floor rocks played a major role during
emplacement of the BIC. There is a distinct thinning of rocks from east to west
as the BIC onlaps onto the Transvaal floor rocks, even to the extent that some
of the normal stratigraphic units have been eliminated. The Merensky and UG2
isopach decreases from 60m to 2m at outcrop position.
 
 A
structural model was developed from data provided by the magnetic survey results
and geological logs of drilled cores. At least three generations of faults were
identified on the property.
 
 The
oldest event appears to be associated with dykes and sills trending at 305
degrees and is of post-BIC age. It appears to be the most prominent, with the
largest displacement component of more than 20m. The majority of the faults are
normal faults dipping in a westerly direction, decreasing in their dip downwards
and displaying typical listric fault system behaviour.
 
 A second
phase represented by younger fault features is trending in two directions at 345
degrees and 315 degrees northwards respectively and appears to have consistent
down-throws towards the west.
 
 A third
phase of deformation may be related to a regional east-west-striking dyke system
causing discontinuity on adjacent structures. Several dolerite intrusives,
mainly steep-dipping dykes and bedding-parallel sills, were intersected in
boreholes. These range in thickness from 0.5–30m and most appear to be of a
chilled nature; some are associated with faulted contacts. Evident on the
magnetic image is an east-west-trending dyke, which was intersected in borehole
WBJV005 and appears to be of Pilanesberg-intrusion age. This dyke has a buffer
effect on structural continuity as faulting and earlier stage intrusives are
difficult to correlate on either side; and more work is required to understand
the mechanics.































Exploration




PTM is
the operator of the WBJV and PTM personnel have conducted or supervised the work
described below. Third party contractors are used to conduct specific components
of the work, such as drilling contractors or geophysical contractors, for
example, but they remain under the direction of PTM.





Project
Area 1





Fieldwork
in the form of soil sampling and surface mapping was initially done on the farm
Onderstepoort, where various aspects of the lower Critical Zone, intrusive
ultramafic bodies and structural features were identified. Efforts were later
extended southwards to the farms Frischgewaagd and Elandsfontein.  The
above work contributed directly to the economic feasibility of the overall
project, directing the main focus in the project area towards delineation of the
subcrop position of the actual Merensky and UG2 economic reef
horizons.





Geophysical
information obtained from Anglo Platinum was very useful during the
identification and extrapolation of major structural features as well as the
lithological layering of the BIC.





Ground
gravity measurements of 120.2 km have been completed on 500 metre line spacing
perpendicular to the strike across the deposit, together with 65.5 km of ground
magnetic survey. The ground gravity data played a significant role in
determining the hinge line where the BIC rocks start thickening down-dip, and
this raised the possibility of more economic mineralization. At the same time,
the data shows where the Transvaal footwall causes the abutment or onlapping of
the BIC rocks. Ground magnetic data helped to highlight faults and dykes as well
as to delineate iron replacement ultramafic pegmatoids.





An
aeromagnetic survey was flown for Anglo Platinum by Fugro Airborne using a Midas
Heli-borne magnetic gradiometer system. A total of 25,324 line kilometres were
flown on lines with a direction of 55° (true north) and with a sensor at a
nominal elevation of 20 metres. The area covered by the survey was some four
times larger than the WBJV area, which was situated in the north western
quadrant of the surveyed area. The high resolution survey data was of a very
high quality. The aeromagnetic data alone made it possible to delineate magnetic
units in the Main Zone, to recognise the strata strike and to identify the dykes
and iron-replacements.





Project
Area 3





Exploration
to date for the Project 3 Area has included geophysical surveys (magnetic,
gravity, 3D seismics and aerial magnetic), drilling, assaying and structural
interpretation and analysis.  Drilling on the project area has ceased
at present, but is planned to be recommenced at a future time.  An
initial inferred resource was declared for Project 3 on April 25, 2008 (See
press release of same date and below).  Under the terms of a proposed
transaction announced September 2, 2008 and described above at “General
Development of the Business - Three year history” the Company is to control 74%
of Project 3.  The purpose of future exploration programs will be to
test for additional resource ounces and to upgrade known resources into higher
levels of confidence and to further assess geological structures in the areas of
known resources.







Project
Area 3 – Mineral Resource Statement










The
Qualified Person for the mineral resources reported above is Charles Muller of
Minxcon.






Mineralization




Exposures
of the BIC located on the western limb include the stratigraphic units of the
RLS. The sequence comprises mostly gabbros, norites, anorthosites and
pyroxenites. The potential economic horizons in the WBJV Project 1 and 3
Areas are the Merensky Reef and UG2 CL situated in the Critical Zone of the RLS
of the BIC; these horizons are known for their continuity. The Merensky Reef in
Project Area 1 is the main exploration target; the UG2 CL has lesser
economic potential and will be exploited after the Merensky Reef during a later
stage of the proposed mine life. The Merensky Reef is generally associated with
a 0.1-1.2m-thick pegmatoidal feldspathic pyroxenite unit and is also generally
associated with thin chromitite layers on either/both the top and bottom
contacts of the reef. The UG2 chromitite layer occurs sequentially below the
Merensky Reef and is on average 1.50m thick.





The
Merensky and UG2 Reefs are mined at the BRPM adjoining the WBJV property as well
as on other contiguous platinum-mine properties. In general, the layered package
dips at less than 20 degrees to the northeast and local variations in the
reef attitude have been modelled. The Merensky and UG2 reefs, in Project
Area 1, dip between 4 and 42 degrees, with an average dip of
14 degrees, and in the Project 3 Area, dip at approximately
10 degrees.







Drilling




The type
of drilling being conducted on the WBJV is a diamond-drilling core-recovery
technique involving a BQ-size solid core extraction. The drilling is placed on
an unbiased 500m x 500m grid and detailed when necessary to a 250m x 250m grid.
The grid has been extended for 4.5km along strike to include the whole of the
Project 1 and 1A area. To date, 213 boreholes have been drilled by the
company on Project Area 1 and 30 boreholes have been drilled on
Project 1A. A total of 7 holes have been drilled on RE 4 and
Portion 11 of the Farm Frischewaagd within Project 2 area by the WBJV.
Additional holes have also been drilled on RE 4 and Portion 11 by
project 2 operator Wesizwe, who reports that they have drilled a further
95 boreholes for a total of 74,138 metres on those farm
portions.





To date,
a total of 24 boreholes have been drilled by PTM on Project 3 Area. 3
deflections were drilled for boreholes which intersected the Merensky Reef or
UG2 CL, and all of these deflections were assayed.





The
results of the drilling and the general geological interpretation are digitally
captured in SABLE (a commercially available logging software) and in a GIS
software package named ARCVIEW. The exact borehole locations, together with the
results of the economic evaluation, are plotted on plan. From the geographic
location of the holes drilled, regularly spaced sections are drawn by hand and
digitised. This information was useful for interpreting the sequence of the
stratigraphy intersected as well as for verifying the borehole
information.





The
structural features identified from aeromagnetic data were interpreted in terms
of a regional structural model. Major dyke features were easily recognised and
these assisted in the compilation of a structural model for the WBJV project
area.  Exploration drilling later helped to identify a prominent
east-west-trending linear feature as a south dipping dyke. This dyke occurs
along the northern boundary of the project area.  A second dyke occurs
along the northeastern boundary of the Elandsfontein and Frischewaagd
areas.  Other major structural features include potential faults
oriented at 345 degrees north in the deep environment of the Frischewaagd
south area.





The
geometry of the deposit has been clearly defined in the sections drawn through
the property. With the exception of three inclined boreholes, all holes were
drilled vertically (minus 90 degrees) and the down hole surveys indicate
very little deviation. A three-dimensional surface – digital terrain model (DTM)
– was created and used in the calculation of the average dip of 14 degrees
(10 degrees for Project 3). This dip has been factored into the
calculations on which resource estimates are based.







Sampling
and Analysis




Drilled
core is cleaned, de-greased and packed into metal core boxes by the drilling
company. The core is collected from the drilling site on a daily basis by a
Company geologist and transported to the exploration office by Company
personnel. Before the core is taken off the drilling site, the depths are
checked and entered on a daily drilling report, which is then signed off by the
Company. The core yard manager is responsible for checking all drilled core
pieces and recording the following information:




·
            Drillers’
      depth markers (discrepancies are
recorded).




·
            Fitment
      and marking of core pieces.




·
            Core
      losses and core gains.




·
            Grinding
      of core.




·
            One-meter-interval
      markings on core for sample
referencing.




·
            Re-checking
      of depth markings for accuracy.




Core
logging is done by hand on a Company pro-forma sheet by qualified geologists
under supervision of the project geologist, who is responsible for timely
delivery of the samples to the relevant laboratory. The supervising and project
geologists ensure that samples are transported by Company
contractors.







Sample
Method, Location, Number, Type and Size of Sampling





The first
step in the sampling of the diamond-drilled core is to mark the core from the
distance below collar in 1m units and then for major stratigraphic units. Once
the stratigraphic units are identified, the economic units – Merensky Reef and
UG2 Chromitite seam – are marked. The top and bottom contacts of the reefs are
clearly marked on the core. Thereafter the core is rotated in such a manner that
all lineations pertaining to stratification are aligned to produce a
representative split. A centre cut line is then drawn lengthways for cutting.
After cutting, the material is replaced in the core trays. The sample intervals
are then marked as a line and a distance from collar.




The
sample intervals are typically 15–25cm in length. In areas where no economic
zones are expected, the sampling interval could be as much as a metre. The
sample intervals are allocated a sampling number, and this is written on the
core for reference purposes. The half-core is then removed and placed into
high-quality plastic bags together with a sampling tag containing the sampling
number, which is entered onto a sample sheet. The start and end depths are
marked on the core with a corresponding line. The duplicate tag stays as a
permanent record in the sample booklet, which is secured on site. The
responsible project geologist then seals the sampling bag. The sampling
information is recorded on a specially designed sampling sheet that facilitates
digital capture into the SABLE system. The sampling extends for about a metre
into the hanging wall and footwall of the economic reefs.





Up to the
date of the Feasibility Study, a total of 122,361m has been drilled by PTM on
the Project 1 and 1A area (up to WBJV 181), and altogether 29,303
filed samples have been submitted for assaying along with 2,250 standards and
2,193 blanks.  A total of 25,911m has been drilled by PTM across
Project 3 and altogether 6,062 samples have been submitted for assaying,
including 590 standards and 577 blanks.







Drilling
Recovery





All reef
intersections that are sampled required a 100% core recovery.  If less
than 100% is recovered, the drilling company will re-drill, using a wedge to
achieve the desired recovery.







Sample
Quality and Sample Bias





The
sampling methodology accords with the PTM protocol based on industry-accepted
best practice. The quality of the sampling is monitored and supervised by a
qualified geologist. The sampling is done in a manner that includes the entire
economic unit together with hanging wall and footwall sampling. Sampling
over-selection and sampling bias is eliminated by rotating the core so that the
stratification is vertical and by inserting a cutline down the centre of the
core and removing one side of the core only.







Width
of Mineralized Zones - Resource Cuts





The
methodology in determining the resource cuts is derived from the core
intersections. Generally, the economic reefs are about 60cm thick. For both the
Merensky Reef and UG2 Reef, the marker unit is the bottom reef contact, which is
a chromite contact of less than a centimetre. The cut is taken from that
chromite contact and extended vertically to accommodate most of the metal
content. If this should result in a resource cut less than 80cm up from the
bottom reef contact, it is extended further to 80cm. If the resource cut is
thicker than the proposed 80cm, the last significant reported sample value above
80cm is added to determine the top reef contact.





In the
case of the UG2 Reef, the triplets (if and where developed and within 30cm from
the top contact) are included in the resource cut.







Sample
Preparation, Laboratory Standards and Procedures




When
samples are prepared for shipment to the analytical facility the following steps
are followed:




·
            Samples
      are sequenced within the secure storage area and the sample sequences
      examined to determine if any samples are out of order or
      missing.




·
            The
      sample sequences and numbers shipped are recorded both on the
      chain-of-custody form and on the analytical request
  form.




·
            The
      samples are placed according to sequence into large plastic bags. (The
      numbers of the samples are enclosed on the outside of the bag with the
      shipment, waybill or order number and the number of bags included in the
      shipment).




·
            The
      chain-of-custody form and analytical request sheet are completed, signed
      and dated by the project geologist before the samples are removed from
      secured storage. The project geologist keeps copies of the analytical
      request form and the chain-of-custody form on
  site.




·
            Once
      the above is completed and the sample shipping bags are sealed, the
      samples may be removed from the secured area. The method by which the
      sample shipment bags have been secured must be recorded on the
      chain-of-custody document so that the recipient can inspect for tampering
      of the shipment.




The
laboratories that have been used to date are Anglo American Analytical
Laboratories, Genalysis (Perth, Western Australia), ALS Chemex (South Africa),
and (currently) Set Point Laboratories (South Africa). Dr. B. Smee, a
geochemist and a director of the Company, has accredited Set Point
Laboratories.





Samples
are received, sorted, verified and checked for moisture and dried if necessary.
Each sample is weighed and the results are recorded. Rocks, rock chips or lumps
are crushed using a jaw crusher to less than 10mm. The samples are then milled
for 5 minutes in a Labtech Essa LM2 mill to achieve a fineness of 90% less than
106μm, which is the minimum requirement to ensure the best accuracy and
precision during analysis.





Samples
are analyzed for Pt (ppb), Pd (ppb), Rh (ppb) and Au (ppb) by standard 25g lead
fire-assay using silver as requested by a co-collector to facilitate easier
handling of prills as well as to minimize losses during the cupellation process.
Although collection of three elements (Pt, Pd and Au) is enhanced by this
technique, the contrary is true for rhodium (Rh), which volatilizes in the
presence of silver during cupellation. Palladium is used as the co-collector for
Rh analysis. The resulting prills are dissolved with aqua regia for Inductively
Coupled Plasma (“ICP”) analysis.





After
pre-concentration by fire assay and microwave dissolution, the resulting
solutions are analyzed for Au and PGM’s by the technique of ICP-OES (inductively
coupled plasma–optical emission spectrometry).





Quality
Assurance and Quality Control (QA&QC) Procedures and Results





The
Company protocols for quality control are as follows:




1.
            The
      project geologist oversees the sampling
process.




2.
            The
      core yard manager oversees the core quality
  control.




3.
            The
      exploration geologists and the sample technicians are responsible for the
      actual sampling process.




4.
            The
      project geologist oversees the chain of
custody.




5.
            The
      internal QP verifies both processes and receives the laboratory
      data.




6.
            The
      internal resource geologist and the database manager merge the data and
      produce the SABLE sampling log with assay
  values.




7.
            Together
      with the project geologist, the resource geologist determines the initial
      mining cut.




8.
            The
      external auditor verifies the sampling process and signs off on the mining
      cut.




9.
            Thesecond
      external database auditor verifies the SABLE database and highlights
      QA&QC failures.




10.
            A
      Company technician runs the QA&QC graphs (standards, blanks and
      duplicates) and reports anomalies and failures to the internal
      QP.




11.
            The
      internal QP requests re-assay.




12.
            Check
      samples are sent to a second laboratory to verify the validity of data
      received from the first laboratory.







Standards




Analytical
standards are used to assess the accuracy and possible bias of assay values for
Platinum (Pt) and Palladium (Pd). Rhodium (Rh) and Gold (Au) were monitored
where data for the standards were available, but standards were not failed on Rh
and Au alone.





Assay
testing refers to Round Robin programs that comprise collection and preparation
of material of varying matrices and grades to provide homogeneous material for
developing reference materials (standards) necessary for monitoring assaying.
Assay testing is also useful in ensuring that analytical methods are matched to
the mineralogical characteristics of the mineralization being explored. Samples
are sent to a sufficient number of international testing laboratories to provide
enough assay data to statistically determine a representative mean value and
standard deviation necessary for setting acceptance/rejection tolerance
limits.





Tolerance
limits are set at two and three standard deviations from the Round Robin mean
value of the reference material: a single analytical batch is rejected for
accuracy when reference material assays are beyond three standard deviations
from the certified mean, and any two consecutive standards within the same batch
are rejected on the basis of bias when both reference material assays are beyond
two standard deviations limit on the same side of the mean.







Blanks




The
insertion of blanks provides an important check on the laboratory practices,
especially potential contamination or sample sequence mis-ordering. Blanks
consist of a selection of Transvaal Quartzite pieces (devoid of platinum,
palladium, copper and nickel mineralization) of a mass similar to that of a
normal core sample. The blank being used is always noted to track its behaviour
and trace metal content. Typically the first blank is sample 5 in a given
sampling sequence.







Duplicates




The
purpose of having field duplicates is to provide a check on possible sample
over-selection. The field duplicate contains all levels of error – core or
reverse-circulation cutting splitting, sample size reduction in the prep lab,
sub-sampling at the pulp, and analytical error.





Field
duplicates were, however, not used on this project by very significant reason of
the assemblage of the core. Firstly, BQ core has an outer diameter of only
36.5mm. Secondly, it is friable and brittle due to the chrome content making it
extremely difficult to quarter the core.  It usually ends up in broken
pieces and not a solid piece of core.





Due to
this problem, the laboratory was asked to regularly assay split pulp samples as
a duplicate sample to monitor analytical precision.







Assay
Validation




Although
samples are assayed with reference materials, an assay validation program is
being conducted to ensure that assays are repeatable within statistical limits
for the styles of mineralization being investigated. It should be noted that
validation is different from verification; the latter implies 100%
repeatability. The validation program consists of the following:




·
            a
      re-assay program conducted on standards that “failed” the tolerance limits
      set at two and three standard deviations from the Round Robin mean value
      of the reference material;




·
            ongoing
      blind pulp duplicate assays at Set Point
  Laboratory;




·
            check
      assays conducted at an independent assaying facility
      (Genalysis).









Re-assay




This
procedure entailed the following: the failed standard (2) together with standard
(1) submitted before and standard (3) submitted after the particular failed
standard (2), as well as all submitted field samples (pulps) in between standard
(1) and standard (3) were resubmitted for re-assaying.







Sampling
Procedures




The
QA&QC practice of the Company is a process beginning with the actual
placement of the borehole position (on the grid) and continuing through to the
decision for the 3D economic intersection to be included in (passed into) the
database. The values are also confirmed, as well as the correctness of
correlation of reef/resource cut so that populations used in the geostatistical
modeling are not mixed; this makes for a high degree of reliability in estimates
of resources/reserves.





Quality
control measures and data verification





All
scientific information is manually captured and digitally recorded. The
information derived from the core logging is manually recorded on A4-size
logging sheets. After being captured manually, the data is electronically
captured in a digital logging program (SABLE). For this exercise, the program
has very specific requirements and standards. Should the entered data not be in
the set format the information is rejected. This is the first stage of the
verification process.





After the
information is transferred into SABLE, the same information is transferred into
a modelling package (DATAMINE). Modelling packages are rigorous in their
rejection of conflicting data, e.g. the input is aborted if there are any
overlaps in distances or inconsistencies in stratigraphic or economic horizon
nomenclature. This is the second stage of verification.





Once
these stages of digital data verification are complete, a third stage is
generated in the form of section construction and continuity through DATAMINE.
The lateral continuity and the packages of hanging wall and footwall
stratigraphic units must align or be in a format consistent with the general
geometry. If this is not the case, the information is again
aborted.





The final
stage of verification is of a geostatistical nature, where population
distributions, variance and spatial relationships are considered. Anomalies in
grade, thickness, and isopach or isocon trends are noted and questioned. Should
inconsistencies and varying trends be un-explainable, the base data is again
interrogated, and the process is repeated until a suitable explanation is
obtained.







Security
of Samples




Samples
are not removed from secured storage location without completion of a
chain-of-custody document; this forms part of a continuous tracking system for
the movement of the samples and persons responsible for their security. Ultimate
responsibility for the secure and timely delivery of the samples to the chosen
analytical facility rests with the project geologist and samples are not
transported in any manner without the project geologist’s
permission.





During
the process of transportation between the project site and analytical facility
the samples are inspected and signed for by each individual or company handling
the samples. It is the mandate of both the supervising and project geologist to
ensure secure transportation of the samples to the analytical facility. The
original chain-of-custody document always accompanies the samples to their final
destination.





The
supervising geologist ensures that the analytical facility is aware of the
Company standards and requirements. It is the responsibility of the analytical
facility to inspect for evidence of possible contamination of, or tampering
with, the shipment received from the Company. A photocopy of the
chain-of-custody document, signed and dated by an official of the analytical
facility, is faxed to the Company’s offices in Johannesburg upon receipt of the
samples by the analytical facility and the original signed letter is returned to
the Company along with the signed analytical certificate(s).





The
analytical facility’s instructions are that if they suspect the sample shipment
has been tampered with, they will immediately contact the supervising geologist,
who will arrange for someone in the employment of the Company to examine the
sample shipment and confirm its integrity prior to the start of the analytical
process.





If, upon
inspection, the supervising geologist has any concerns whatsoever that the
sample shipment may have been tampered with or otherwise compromised, the
responsible geologist will immediately notify the Company management in writing
and will decide, with the input of management, how to proceed. In most cases
analysis may still be completed although the data must be treated, until proven
otherwise, as suspect and unsuitable as a basis for a news release until
additional sampling, quality control checks and examination prove their
validity.





Should
there be evidence or suspicions of tampering or contamination of the sampling,
the Company will immediately undertake a security review of the entire operating
procedure. The investigation will be conducted by an independent third party,
whose report is to be delivered directly and solely to the directors of the
Company, for their consideration and drafting of an action plan. All in-country
exploration activities will be suspended until this review is complete and the
findings have been conveyed to the directors of the company and acted
upon.







WBJV
Project 1 – Mineral Resource and Mineral Reserve Estimates


























The
mineral resources reported as part of this Feasibility Study are updated from
previously reported resources and filed in a technical report on SEDAR on
October 30, 2007. The resource update was done to conform to a minimum 80cm
resource cut which is in line withy that used by Anglo Platinum. Sampling
practice, bore hole data, other factors and quality control and assurance are as
reported previously. The resources are estimated by kriging of approximately 180
boreholes plus deflections and are reported under SAMREC. The categories are the
same as CIM categories. The drill spacing on the Indicated Resource is
approximately 250m or in some instances as close as 125 metres. In keeping with
best practice in resource estimation, allowance is made for known and expected
geological losses. The losses are estimated at 14% for the Merensky Reef and 23%
for the UG2 Reef (this includes minor faults, dykes and potholes) (major faults,
dykes, weathered zone and iron replacement areas have already been excluded by
delineating areas with no reef) for the project resource area, and this has been
considered in the resource estimate. The resulting resource model has been
selected to be available for mining over a mineable cut.





The
Qualified Person for the mineral resources reported above is Charles Muller of
Minxcon.





The
conversion to Mineral Reserves was undertaken at 3.5g/t stope cut-off grade,
each stope has been fully diluted, comprising of a planned dilution and
additional dilution for all aspects of the mining process. The inferred
Resources are outside and in addition to the reserves. The Qualified Person for
the Statement of Reserves is Tim Spindler.





Reserves
– Converted from Measured and Indicated Resources








The prill
splits are the same percentages as for the Measured and Indicated Resources. The
effective date of the Reserve estimate is June 30, 2008. The reserves are stated
with certain risk factors including but not limited to normal and typical mining
projects risks.





The
Feasibility Study recommends a series of three simultaneous declines accessing
the deposit with a mining rate of 140,000 tonnes per month, which provides 13
years of steady state tonnage production. First ore is reached by development 13
months from the commencement of underground work. Mining is only scheduled on
the reserves. There are a further 1.26 million ounces of Inferred Resources in
the Project 1 area which may represent additional production potential. The
lower grade UG2 resources also provide some future opportunities. The mining and
development plan includes conventional hand held drilling utilizing electrical
drills and scraper winch cleaning similar to the successful conventional mining
at the adjacent producing Bafokeng Rasimone Platinum Mine. Declines and primary
access to the deposit is designed for development with mechanized equipment. Ore
is initially to be hauled out of the mine with mechanized equipment and assisted
then by conveyor from year 4 of mine life to end of mine life.





The
Merensky Reef will be mined at widths between 93cm and 176cm at an average of
115cm and the UG2 Reef will be mined at widths between 105cm and 205cm at an
average of 153cm.





At the
recommended mining rate and modifying factors the mine plan generates
approximately 235,000 – 271,000 4E in concentrate per year, of which
approximately 160,000 ounces are platinum at full steady state ounce production
for 9 years from Merensky Reeef horizon with a 22 year mine life.





The
Feasibility Study design for metallurgical extraction utilizes a standard plant
design similar to other nearby plants in the Bushveld Complex operating on the
same reefs. The plant is designed with circuits that can process Merensky Reef,
UG2 Reef or a blended feed. The Merensky Reef is the target of initial mining
because of its higher grade and low chrome content.





Metallurgical
testing and the published experience of the adjacent operating mine support a
recovery rate estimate of 87.5% of platinum, palladium, rhodium and gold on the
Merensky Reef and 82.5% on the UG2 Reef. Recoveries of 45% for nickel and 70%
for copper are also modeled for the Merensky Reef. Ruthenium and Iridium are
also included as minor contributors.





The mine
infrastructure in the estimates includes the entire required surface
infrastructure for a stand alone mine including water, power, underground access
and ventilation to establish full production.





The
Feasibility Study includes capital and operating estimates to produce
concentrate but no capital is included for smelting or refining of this
concentrate. The costs associated with smelting and refining of concentrate is
modeled as a deduction from revenue arising from the sale of concentrate to
others. While the terms of agreements governing the sale of such concentrates
within the South African PGM industry are all confidential the Qualified Person
believes deductions used in the Feasibility Study financial model are indicative
of deductions current in that industry. The party to who concentrate will be
sold and the terms of this potential sale are yet to be determined. Anglo
Platinum has the right of first refusal to purchase all of the ore or
concentrate produced by the WBJV on commercial terms. Estimated deductions in
the Feasibility Study include penalties and shipment charges and total
approximately 15.16% from gross concentrate sales revenue. Should Anglo Platinum
decide to purchase the concentrate produced by the Project 1 mine the structure
of such purchase would be governed by the pro-forma off-take agreement included
in the WBJV Agreement, however the commercial terms will be subject to
negotiation. Approaches will now be made to Anglo Platinum and other parties in
an attempt to secure an off-take agreement and the terms thereof based on the
Feasibility Study production profile.


Financial
Details





The
results of the Feasibility Study are a strong modeled return at a 20.08%
Internal Rate of Return “IRR” (pre-tax) Base Case, using 3 year trailing metal
prices, calculated on the monthly averages including US$1,295 per ounce platinum
for the 235,000 – 271,000 4E concentrate ounces per year. Using recent metal
prices, including US$2,035 per ounce platinum, the IRR for the project (pre-tax)
is 34%. Recent metals prices are taken as the average daily price for the month
of June 2008 to June 23, 2008 for the base metals and June 24, 2008 for the
platinum group metals. Net Present Value is calculated at September 2008 in June
2008 terms. The model does not include escalation due to inflation of costs or
metal prices.





Average
life-of-mine cash operating costs to produce concentrate is estimated at R451
per tonne (US$56.38) of ore or (R3,504) US$438 per 4E ounce on a life of mine
basis. The Merensky Reef layer represents the first 15 years of production and
the basket price per 4E ounce is modeled at US$1,168 (3 year trailing prices)
and US$1,854 (recent prices). The UG2 layer represents the balance of the
production. The model includes a subsequent average 15.16% discount from the
metal price to estimate the smelter pay discount. Operating margin life of mine
on three year trailing 4E metal prices is approximately US$739 per ounce or 63%
of revenue and on recent prices it is US$1,355 per ounce or 76%.





The
project has an estimated life of 22 years with 9 years at a steady state of
production of 235,000 to 271,000 ounces per year. The capital cost for the mine
and concentrator complex are R4.055 billion or US$507 million for peak funding
and R5.474 billion (US$684 million) for life of mine funding. The capital costs
estimate includes R506 million (US$63.3 million) for the capital costs for
self-generation of the electrical requirements of the project to the end of 2012
at full production levels. This includes the entire infrastructure for power
including diesel storage. Eskom has indicated that an allocation of 2MW should
be available for the construction phase of the project, and this has been
assumed in the Feasibility Study. A contingency of R467 million or US$58.4
million is included in the overall capital estimate.





A
sensitivity table is presented below. The payback period is approximately 4.5
years post peak funding using trailing metal prices and 2.5 years on recent
metals prices.





Based on
three year trailing average metals prices at mid November 2008, current exchange
rates and a probable decrease of general input costs since the publication of
the Company’s Feasibility Statement on July 7, 2008, no amendment has been made
to the Company’s statement of reserves and resources.  However, should
current market conditions and commodity prices worsen and/or persist for a
prolonged period of time, a reassessment of the Company’s stated reserves may be
required.




Metal
Prices
 
 
 
 Smelter
Discount
 
 
 
 Statutory
Declaration – Royalty & Taxes
 
 
 
 Summary
Capital Cost
 
 
  Summary
Working Costs
 
 
 
 Summary
IRR and NPV Results





Sensitivity
to 3-year trailing Metal Prices











Social
Development and Responsibilities





Feedback
from the public consultation processes for the environmental assessment and
social and labour plan development have been constructive and positive. The mine
capital development plan includes a significant investment in training through
the life of mine, allocated to a social and labour plan to ensure maximum value
from the project for all stakeholders including local residents. Based on
interaction with the community, a skills and needs assessment, and our training
plans the project is planning for 2,700 jobs with a target of at least 30% from
the local communities. The WBJV is committed to a strong community involvement
in the project particularly as Wesizwe Platinum is a 26% partner in the project
and their largest shareholder is one of the communities near the mine. The
mine’s financial estimates include an accumulated charge per tonne to create a
fund for eventual closure of the mine projected in 2031.




Exploration
and Development




Our
business is conducted primarily in South Africa, and to a lesser extent, in
Ontario, Canada. As at the date hereof, our WBJV Project in South Africa
constitutes our only material property which has an outlined mineral reserve
estimate.  Exploration programs and proposed development for projects
within the WBJV are described above.





Planned
exploration activities for fiscal 2009 on projects outside of the WBJV include
further additional soil sampling, geophysical surveys, mapping and drilling on
the War Springs Project on the North Limb of the Bushveld Complex in South
Africa. Exploration work on the War Springs project will be subject to funding
based on a partnering agreement currently under negotiation.  The
Company also has several new project areas being assembled or acquired on or
near the Bushveld Complex of South Africa as a result of generative work
conducted in 2008.  Exploration work on these areas will commence only
after title, permits and funding are established.  Limited drilling
programs are also being planned for the Company’s Lac Des Iles area projects in
Ontario, Canada.







Dividends




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







Description
of Capital Structure




Our
authorized capital consists of an unlimited number of common shares without par
value, of which 67,624,717 common shares were issued and outstanding as at
November 1, 2008. All of the issued common shares are fully paid. The Company
does not own any of its common shares.





Shareholders
are entitled to one vote for each share on all matters to be voted on by the
shareholders. Each common share is equal to every other common share and all
common shares participate equally on liquidation, dissolution or winding up of
our company, whether voluntary or involuntary, or any other distribution of our
assets among our shareholders for the purpose of winding up our affairs after we
have paid out our liabilities. The shareholders are entitled to vote for each
share held and are entitled to receive pro rata such dividends as
may be declared by the board of directors out of funds legally available
therefore and to receive pro
rata the remaining property of our company upon dissolution. No shares
have been issued subject to call or assessment. There are no pre-emptive or
conversion rights, and no provisions for redemption, purchase or cancellation,
surrender, sinking fund or purchase fund. Provisions as to the creation,
modification, amendment or variation of such rights or such provisions are
contained in the Business
Corporations Act(British Columbia)(the “BCA”).







Market
for Securities






Trading
Price and Volume




The
Company’s common shares are listed on the Toronto Stock Exchange under the
symbol “PTM” and on the NYSE Alternext under the symbol “PLG”.




The
following tables provide information as to the high, low trading prices of the
Company’s shares during the 12 months of the most recently completed financial
year as well as the volume of shares traded for each month:




Toronto
      Stock Exchange - PTMMonth
            High
            Low
            VolumeSeptember,
      2007
            $4.03
            $3.30
            1,755,469October,
      2007
            $4.46
            $3.45
            2,830,729November,
      2007
            $4.29
            $3.30
            2,944,727December,
      2007
            $4.15
            $3.25
            1,386,319January,
      2008
            $4.20
            $2.80
            1,142,868February,
      2008
            $3.90
            $3.30
            2,745,897March,
      2008
            $3.54
            $2.76
            863,677April,
      2008
            $3.15
            $2.19
            1,471,484May,
      2008
            $3.28
            $2.30
            1,119,522June,
      2008
            $3.25
            $2.60
            710,815July,
      2008
            $3.15
            $2.67
            3,042,859August,
      2008
            $3.04
            $1.76
            2,455,571





NYSE Alternext US LLC(formerly the
      American Stock Exchange)- PLGMonth
            High
            Low
            VolumeSeptember,
      2007
            $4.25
            $3.10
            356,300October,
      2007
            $5.00
            $3.25
            824,800November,
      2007
            $4.78
            $3.30
            563,725December,
      2007
            $4.25
            $3.20
            691,329January,
      2008
            $4.43
            $2.27
            861,190February,
      2008
            $4.01
            $3.38
            995,195March,
      2008
            $3.71
            $2.65
            1,178,628April,
      2008
            $3.101
            $2.15
            656,694May,
      2008
            $3.32
            $2.23
            580,731June,
      2008
            $3.31
            $2.59
            481,142July,
      2008
            $3.45
            $2.70
            590,021August,
      2008
            $2.949
            $1.77
            651,294







Prior
Sales




None




Escrowed
Securities




There are
no securities of the Company held in escrow.




Directors
and Officers
  Name
      & Position
              Principal
      Occupation or Employment
              Director
      sinceR.
      MICHAEL JONES
                President,
      CEO and Director
                British
      Columbia, Canada
              Professional
      Geological Engineer
                President
      and Chief Executive Officer of the Company and a predecessor company from
      2000 to present.
              February
      18, 2002FRANK
      R. HALLAM(3)
                CFO,
      Secretary and Director
                British
      Columbia, Canada
              Chartered
      Accountant
                Chief
      Financial Officer of the Company and the founder of a predecessor company
      from 1983 to present.
              February
      18, 2002BARRY
      SMEE (1)
      (2)(3)
                Director
                British
      Columbia,
                Canada
              Geologist
      and Geochemist
                President
      of Smee & Associates, a private consulting, geological and
      geochemistry company, since 1990.
              February
      18, 2002IAIN
      McLEAN (1)
      (2)(3)
                Director
      and Corp. Consultant to Co.
                British
      Columbia, Canada
              General
      Management Consultant. Former CEO of Municipal Software Corporation of
      Canada, a software development company based in Victoria BC. Former Vice
      President and General Manager of Total Care Technologies, a division of Ad
      Opt Technologies Inc, a medical software development
    company.
              February
      18, 2002ERIC
      CARLSON (1)
                Director
                British
      Columbia, Canada
              Chartered
      Accountant
                President
      and Chief Executive Officer of Anthem Properties Corp., an investment
      group specializing in the acquisition and management of residential and
      office properties in Canada and the United States, since July
      1994.
              February
      18, 2002PETER
      BUSSE
                COO
                British
      Columbia, Canada
              Professional
      Mining Engineer
                Chief
      Operating Officer of the Company since October 2007. Former GM Procon
      Group, a contract mining development company, 2006 to 2007. Former Mine
      Manager, Placer Dome, Campbell Mine, 2002 to 2006.
              N/A
 Notes:
 (1)      Member
of the Audit Committee
 (2)      Member
of Compensation Committee
 (3)      Member
of Governance and Nominating Committee
  
 As of
November 28, 2008, directors and officers of the Company own or control
approximately 2,325,925 common shares of the Company representing approximately
3.44% of its issued and outstanding shares.
 
 The term
of office for each director of the Company expires at the annual general meeting
of shareholders where they can be nominated for re-election.
 
  Cease
Trade Orders, Bankruptcies, Penalties or Sanctions
  No
director or executive officer of the Company is, or during the ten years
preceding the date of this Annual Information Form has been, a director, chief
executive officer or chief financial officer of any company that:
  (a)
              was
      subject to an order that was issued while the director or executive
      officer was acting in the capacity as director, chief executive officer or
      chief financial officer; or
  (b)
              was
      subject to an order that was issued after the director or executive
      officer ceased to be a director, chief executive officer or chief
      financial officer and which resulted from an event that occurred while
      that person was acting in the capacity as director, chief executive
      officer or chief financial officer.
  No
director or executive officer of the Company, or a shareholder holding a
sufficient number of securities of the Company to affect materially the control
of the Company:
 
 (a)
              is,
      or during the ten years preceding the date of this Annual Information Form
      has been, a director or executive officer of any company that, while that
      person was acting in that capacity, or within a year of that person
      ceasing to act in that capacity, became bankrupt, made a proposal under
      any legislation relating to bankruptcy or insolvency or was subject to or
      instituted any proceedings, arrangement, or compromise with creditors, or
      had a receiver, receiver manager, or trustee appointed to hold its assets;
      or
  (b)
              has,
      within the ten years before the date of this Annual Information Form,
      become bankrupt, made a proposal under any legislation relating to
      bankruptcy or insolvency, or been subject to or instituted any
      proceedings, arrangement or compromise with creditors, or had a receiver,
      receiver manager or trustee appointed to hold the assets of that
      person.
  No
director or executive officer of the Company, or a shareholder holding a
sufficient number of securities to affect materially control of the Company, has
been subject to any penalties or sanctions imposed by a court relating to
securities legislation or by a securities regulatory authority or has entered
into a settlement agreement with a securities regulatory authority or any other
penalties or sanctions imposed by a court or regulatory body that would be
likely to be considered important to a reasonable investor in making an
investment decision.
 
  Conflicts
of Interest
  The
Company’s directors and officers may serve as directors or officers of other
companies or have significant shareholdings in other resource companies and, to
the extent that such other companies may participate in ventures in which the
Company may participate, the directors of the Company may have a conflict of
interest in negotiating and concluding terms respecting the extent of such
participation. In the event that such a conflict of interest arises at a meeting
of the Company’s directors, a director who has such a conflict will abstain from
voting for or against the approval of such participation or such terms. From
time to time several companies may participate in the acquisition, exploration
and development of natural resource properties thereby allowing for their
participation in larger programs, permitting involvement in a greater number of
programs and reducing financial exposure in respect of any one program. It may
also occur that a particular company will assign all or a portion of its
interest in a particular program to another of these companies due to the
financial position of the company making the assignment. In accordance with the
laws of British Columbia the directors of the Company are required to act
honestly, in good faith and in the best interests of the Company. In determining
whether or not the Company will participate in a particular program and the
interest therein to be acquired by it, the directors will primarily consider the
degree of risk to which the Company may be exposed and its financial position at
that time.
 
 The
directors and officers of the Company are aware of the existence of laws
governing the accountability of directors and officers for corporate opportunity
and requiring disclosures by the directors of conflicts of interest and the
Company will rely upon such laws in respect of any directors’ and officers’
conflicts of interest or in respect of any breaches of duty by any of its
directors and officers. All such conflicts will be disclosed by such directors
or officers in accordance with the laws of British Columbia shall govern
themselves in respect thereof to the best of their ability in accordance with
the obligations imposed upon them by law. The directors and officers of the
Company are not aware of any such conflicts of interests.
 
  Code
of Ethics
  The
Company has adopted a Code of Business Conduct (the “Code”) that applies to all
of its directors, officers and employees, including the Chief Executive Officer
and Chief Financial Officer. The Code includes provisions covering conflicts of
interest, ethical conduct, compliance with applicable government laws, rules and
regulations, disclosure in reports and documents filed with, or submitted to,
the SEC, reporting of violations of the Code and accountability for adherence to
the Code. A copy of the Code is posted on the Company’s website, at www.platinumgroupmetals.net.
 
  Committees
of the Board of Directors
   Audit
Committee
  The Audit
Committee is responsible for reviewing the Company’s financial reporting
procedures, internal controls and the performance of the Company’s external
auditors.  See Audit Committee Charter attached herein as Schedule
“A”.
 
  Audit
Committee Composition and Background
  The Audit
Committee is comprised of Eric Carlson (Chairman), Iain McLean and Barry Smee.
All three members of the Audit Committee are independent and financially
literate, meaning they are able to read and understand the Company’s financial
statements and to understand the breadth and level of complexity of the issues
that can reasonably be expected to be raised by the Company’s financial
statements. In addition to each member’s general business experience, the
education and experience of each member of the Audit Committee that is relevant
to the performance of his responsibilities as a member of the Audit Committee
are set forth below:
  Eric H.
Carlson,B.Comm,
Chartered Accountant-Mr.
Carlson has over 19 years of real estate investment, development and management
experience and he has been the President of Anthem Properties Corp. since July
1994. Anthem is an investment group that specializes in the acquisition and
management of Class B retail, multi family residential and office properties in
high growth markets in Canada and the USA.
  Iain D.
C. McLean,B.Sc.Eng
(ARSM), M.B.A., MIMM. C. Eng. - Experience as senior executive in several public
companies managing operations, listings, capital raising, etc. Also has
experience in underground mining operations in the UK and South
Africa.
  Dr. Barry
W. Smee, Ph.D., P.Geo - Professional Geologist/Geochemist with 35 years in
mineral exploration as quality control and laboratory audit expert.
 
 The Board
of Directors has determined that each of Mr. McLean and Mr. Carlson is an audit
committee financial expert within the meaning of the regulations promulgated by
the SEC and is independent within the meaning of the American Stock Exchange
Company Guide. Mr. McLean has an M.B.A. from Harvard Business School and a B.Sc
(Eng.) in Mining from the Imperial College of Science and Technology (London,
England). In addition to his education, Mr. McLean has gained relevant
experience acting as the Chief Operating Officer of several private technology
companies since 1995 and as the Vice President of Operations at Ballard Power
Systems from 1993 to 1995.  Mr. Carlson is a Chartered Accountant and
holds a Bachelor of Commerce degree from the University of British
Columbia.
   Reliance
on Certain Exemptions
  At no
time since the commencement of the Company’s most recently completed financial
year has the Company relied on any of the exemptions set out in Sections 2.4,
3.2, 3.4 or 3.5 of National Instrument 52-110 Audit Committees(“NI
52-110”), or an exemption from NI 52-110, in whole or in part, granted under
Part 8 of NI 52-110. No non-audit services were approved pursuant to a de
minimis exemption to the pre-approval requirement.
 
  Audit
Committee Oversight
  At no
time since the commencement of the Company’s most recently completed financial
year was a recommendation of the Audit Committee to nominate or compensate an
external auditor not adopted by the Board of Directors.
 
  Pre-Approval
Policies and Procedures
  The
Company’s audit committee is authorized to review the performance of the
Company’s independent auditors and pre-approves all audit and non-audit services
to be provided to the Company by its independent auditor. Prior to granting any
pre-approval, the audit committee must be satisfied that the performance of the
services in question is not prohibited by applicable securities laws and will
not compromise the independence of the independent auditor. All non-audit
services performed by the Company’s auditor for the fiscal year ended August 31,
2008 and August 31, 2007 have been pre-approved by the audit
committee.
 
  Independent
Auditor’s Fees
  The
aggregate fees billed by the Company’s current independent auditor,
PricewaterhouseCoopers LLP.
 
 Year
      ended
                August
      31, 2008
              Year
      ended
                August
      31, 2007Audit
      Fees
              $213,000
              $200,000Audit-Related
      Fees(1)
              $45,000
              $15,160Tax
      Fees(2)
              $
      10,000
              $
      NilAll
      Other Fees(3)
              $
      38,000
              $
      NilTotal
              $
      306,000
              $
      215,160
 Notes:
 (1)
              The
      aggregate fees billed for assurance and related services that are
      reasonably related to the performance of the audit or review of our
      financial statements, which are not included under the heading “Audit
      Fees”.
 (2)      The
aggregate fees billed for professional services rendered for tax compliance, tax
advice and tax planning.
 (3)
              The
      aggregate fees billed for products and services other than as set out
      under the headings “Audit Fees”, “Audit Related Fees” and “Tax
      Fees”.
   Legal
Proceedings and Regulatory Actions
  There are
no pending or material proceedings to which our company is or is likely to be a
party or of which any of our properties is or is likely to be the
subject.
 
  Interest
of Management and Others in Material Transactions
  No
director, executive officer or principal shareholder of the Company, or any
associate or affiliate of the foregoing, has had any material interest, direct
or indirect, in any transaction within the three most recently completed
financial years or during the current financial year prior to the date of this
Annual Information Form that has materially affected or will materially affect
the Company.
 
 Transfer
Agents and Registrars
  The
Company’s transfer agent and registrar is:
 
 Computershare Investor Services
Inc.
 3rd floor –
510 Burrard Street
 Vancouver, British
Columbia
 Canada  V6C
3B9
 
  Material
Contracts
  There are
no contracts of the Company other than contracts entered into in the ordinary
course of business of the Company and the Western Bushveld Joint Venture
Agreement (See “General Development of the Company – Three Year History”), that
are material to the Company and that were entered into within the most recently
completed financial year of the Company or before the most recently completed
financial year of the Company and which are still in effect.
 
  Interests
of Experts
  
 Charles
J. Muller, Minxcon (Pty) Ltd., Gordon I. Cunningham, Timothy Spindler, Turnberry
Projects (Pty) Ltd., Byron Stewart, Wardrop Engineering Inc., David Gray,
Snowdon Mining Industry Consultants Inc., Adam Miethke, Ken Lomberg and Coffey
Mining (South Africa) (Pty) Ltd. have been named as having prepared reports
described or included in a filing, or referred to in a filing, made under
National Instrument 51-102 by the Company during, or relating to, the Company’s
most recently completed financial year.
 
 None of
the aforementioned firms or persons held any securities or property of the
Company or any associate or affiliate of the Company when they prepared the
reports referred to above or following the preparation of such reports nor did
they receive any direct or indirect interest in any securities or other property
of the Company or any associate or affiliate of the Company in connection with
the preparation of the reports (other than compensation in cash for their
services).
 
 None of
the aforementioned firms or persons, nor any directors, officers or employees of
such firms, are currently expected to be elected, appointed or employed as a
director, officer or employee of the Company or of any associate or affiliate of
the Company.
 
 PricewaterhouseCoopers
LLP is the independent auditor of the Company within the meaning of the Rules of
Professional Conduct of the Institute of the Chartered Accountants of British
Columbia.
 
  Additional
Information
  
 Additional
information relating to the Company may be found on SEDAR at
www.sedar.com.
 
 Additional
information, including details as to directors’ and officers’ remuneration,
principal holders of the Company’s shares, options to purchase Company shares
and certain other matters, is contained in the Company’s Management Information
Circular for the Annual General Meeting of shareholders to be held on January
13, 2009. The Circular will be made available on SEDAR concurrent with the
delivery of the document to the Company’s shareholders.
 
 Additional
financial information is provided in the Company’s 2008 Annual Report containing
the Management’s Discussion and Analysis and the Consolidated Financial
Statements for the year ended August 31, 2008.
 
 Copies of
the above may be obtained, when available, on the Company’s website www.platinumgroupmetals.net;
on the SEDAR website at www.sedar.com; or by
calling the Company’s investor relations personnel at
604-899-5450.
  
   Schedule
“A”
  
 PLATINUM
GROUP METALS LTD.
 (the
“Corporation”)
 
 AUDIT COMMITTEE
CHARTER
 
 1.
              General
  The Board
of Directors of the Corporation (the “Board”) has established an Audit Committee
(the “Committee”) to assist the Board in fulfilling its oversight
responsibilities.  The Committee will review and oversee the financial
reporting and accounting process of the Corporation, the system of internal
control and management of financial risks, the external audit process, and the
Corporation’s process for monitoring compliance with laws and regulations and
its own code of business conduct.  In performing its duties, the
Committee will maintain effective working relationships with the Board,
management, and the external auditors and monitor the independence of those
auditors.  To perform his or her role effectively, each Committee
member will obtain an understanding of the responsibilities of Committee
membership as well as the Corporation’s business, operations and
risks.
  The
Corporation’s independent auditor is ultimately accountable to the Board and to
the Committee. The Board and Committee, as representatives of the Corporation’s
shareholders, have the ultimate authority and responsibility to evaluate the
independent auditor, to nominate annually the independent auditor to be proposed
for shareholder approval, to determine appropriate compensation for the
independent auditor, and where appropriate, to replace the outside
auditor.  In the course of fulfilling its specific responsibilities
hereunder, the Committee must maintain free and open communication between the
Corporation’s independent auditors, Board and Corporation
management.  The responsibilities of a member of the Committee are in
addition to such member’s duties as a member of the Board.
  2.
              Members
  The Board
will in each year appoint a minimum of three (3) directors as members of the
Committee.  All members of the Committee shall be non-management
directors and shall be independent within the meaning of all applicable U.S. and
Canadian securities laws and the rules of the Toronto Stock Exchange and the
American Stock Exchange, unless otherwise exempt from such
requirements.
  None of
the members of the Committee may have participated in the preparation of the
financial statements of the Corporation or any current subsidiary of the
Corporation at any time during the past three years.
  All
members of the Committee shall be able to read and understand fundamental
financial statements and must be financially literate within the meaning of all
applicable U.S. and Canadian securities laws or become financially literate
within a reasonable period of time following his or her
appointment.  Additionally, at least one member of the Committee shall
be financially sophisticated and shall have past employment experience in
finance or accounting, requisite professional certification in accounting, or
any other comparable experience or background which results in the individual’s
financial sophistication, which may include being or having been a chief
executive officer, chief financial officer, or other senior officer with
financial oversight responsibilities.
  3.
              Duties
  The
Committee will have the following duties:
  ·
              Gain
      an understanding of whether internal control recommendations made by
      external auditors have been implemented by
  management.
  ·
              Gain
      an understanding of the current areas of greatest financial risk and
      whether management is managing these
  effectively.
  ·
              Review
      significant accounting and reporting issues, including recent professional
      and regulatory pronouncements, and understand their impact on the
      financial statements.
  ·
              Review
      any legal matters which could significantly impact the financial
      statements as reported on by the Corporation’s counsel and engage outside
      independent counsel and other advisors whenever as deemed necessary by the
      Committee to carry out its duties.
  ·
              Review
      the Corporation’s annual and quarterly financial statements, including
      Management’s Discussion and Analysis with respect thereto, and all annual
      and interim earnings press releases, prior to public dissemination,
      including any certification, report, opinion or review rendered by the
      external auditors and determine whether they are complete and consistent
      with the information known to Committee members; determine that the
      auditors are satisfied that the financial statements have been prepared in
      accordance with generally accepted accounting
  principles.
  ·
              Pay
      particular attention to complex and/or unusual transactions such as those
      involving derivative instruments and consider the adequacy of disclosure
      thereof.
  ·
              Focus
      on judgmental areas, for example those involving valuation of assets and
      liabilities and other commitments and
  contingencies.
  ·
              Review
      audit issues related to the Corporation’s material associated and
      affiliated companies that may have a significant impact on the
      Corporation’s equity investment.
  ·
              Meet
      with management and the external auditors to review the annual financial
      statements and the results of the
audit.
  ·
              Evaluate
      the fairness of the interim financial statements and related disclosures
      including the associated Management’s Discussion and Analysis, and obtain
      explanations from management on
whether:
  o
              actual
      financial results for the interim period varied significantly from
      budgeted or projected results;
  o
              generally
      accepted accounting principles have been consistently
    applied;
  o
              there
      are any actual or proposed changes in accounting or financial reporting
      practices; or
  o
              there
      are any significant or unusual events or transactions which require
      disclosure and, if so, consider the adequacy of that
      disclosure.
  ·
              Review
      the external auditors’ proposed audit scope and approach and ensure no
      unjustifiable restriction or limitations have been placed on the
      scope.
  ·
              Recommend
      to the Board an external auditor to be nominated for appointment by the
      Corporation’s shareholders.  Subject to the appointment of the
      Corporation’s external auditor by the Corporation’s shareholders, the
      Committee will be directly responsible for the appointment, compensation,
      retention and oversight of the work of external auditor engaged for the
      purpose of preparing or issuing an auditor’s report or performing other
      audit, review or attest services for the Corporation, including the
      resolution of disagreements between management and the external auditor
      regarding financial reporting.  The Corporation’s external
      auditor shall report directly to the
Committee.
  ·
              Review
      with the Corporation’s management, on a regular basis, the performance of
      the external auditors, the terms of the external auditor’s engagement,
      accountability and experience.
  ·
              Pre-approve
      all non-audit services to be provided to the Corporation or its subsidiary
      entities by the external auditor.
  ·
              Consider
      at least annually the independence of the external auditors, including
      reviewing the range of services provided in the context of all consulting
      services obtained by the Corporation,
including:
   o
              insuring
      receipt from the independent auditor of a formal written statement
      delineating all relationships between the independent auditor and the
      Company, consistent with the Independence Standards Board Standard No. 1
      and related Canadian regulatory body
standards;
  o
              considering
      and discussing with the independent auditor any relationships or services,
      including non-audit services, that may impact the objectivity and
      independence of the independent auditor;
and
  o
              as
      necessary, taking, or recommending that the Board take, appropriate action
      to oversee the independence of the independent
  auditor.
  
 ·
              Ensure
      that adequate procedures are in place for the review of the Corporation’s
      public disclosure of financial information extracted or derived from the
      Corporation’s financial statements, other than the public disclosure
      contained in the Corporation’s financial statements, Management’s
      Discussion and Analysis and annual and interim earnings press releases;
      and must periodically assess the adequacy of those
    procedures.
  ·
              Review
      any significant disagreement among management and the external auditors in
      connection with the preparation of the financial
    statements.
  ·
              Review
      and approve the Corporation’s hiring policies regarding partners,
      employees and former partners and employees of the present and former
      external auditors of the
Corporation.
  ·
              Establish
      a procedure for:
  o
              the
      confidential, anonymous submission by employees of the Corporation of
      concerns regarding questionable accounting or auditing matters;
      and
  o
              the
      receipt, retention and treatment of complaints received by the Corporation
      regarding accounting, internal accounting controls, or auditing
      matters.
  ·
              Meet
      separately with the external auditors to discuss any matters that the
      committee or auditors believe should be discussed privately in the absence
      of management.
  ·
              Endeavour
      to cause the receipt and discussion on a timely basis of any significant
      findings and recommendations made by the external
  auditors.
  ·
              Ensure
      that the Board is aware of matters which may significantly impact the
      financial condition or affairs of the
business.
  ·
              Review
      and oversee all related party
transactions.
  ·
              Perform
      other functions as requested by the
Board.
  ·
              If
      necessary, institute special investigations and, if appropriate, hire
      special counsel or experts to assist, and set the compensation to be paid
      to such special counsel or other
experts.
  ·
              Review
      and re-assess annually the adequacy of this Charter and recommend updates
      to this charter; receive approval of changes from the
    Board.
  ·
              With
      regard to the Corporation’s internal control procedures, the Committee is
      responsible to:
  o
              review
      the appropriateness and effectiveness of the Corporation’s policies and
      business practices which impact on the financial integrity of the
      Corporation, including those related to internal auditing, insurance,
      accounting, information services and systems and financial controls,
      management reporting and risk management;
and
  o
              review
      compliance under the Corporation’s business conduct and ethics policies
      and to periodically review these policies and recommend to the Board
      changes which the Committee may deem appropriate;
  and
  o
              review
      any unresolved issues between management and the external auditors that
      could affect the financial reporting or internal controls of the
      Corporation; and
  ·
              periodically
      review the Corporation’s financial and auditing procedures and the extent
      to which recommendations made by the internal audit staff or by the
      external auditors have been
implemented.
  ·
              Comply
      with Rule 10A – 3(b)(2), (3), (4) and (5) under the Securities Exchange
      Act of 1934.
  4.
              Chair
  The
Committee will in each year appoint the Chair of the Committee from among the
members of the Committee.  In the Chair’s absence, or if the position
is vacant, the Committee may select another member as Chair. The Chair will not
have a casting vote.
  5.
              Meetings
  The
Committee will meet at least once every calendar quarter.  Special
meetings shall be convened as required.  Notices calling meetings
shall be sent to all members of the Committee, all Board members and the
external auditor.  The external auditor of the Corporation must be
given reasonable notice of, and has the right to appear before and to be heard
at, each meeting of the Committee.  At the request of the external
auditor, the Committee must convene a meeting of the Committee to consider any
matter that the external auditor believes should be brought to the attention of
the Board or shareholders of the Corporation.
  The
Committee may invite such other persons (e.g. without limitation, the President
or Chief Financial Officer) to its meetings, as it deems
appropriate.
  6.
              Quorum
  A
majority of members of the Committee, present in person, by teleconferencing, or
by videoconferencing, or by any combination of the foregoing, will constitute a
quorum.
  7.
              Removal and
      Vacancy
  A member
may resign from the Committee, and may also be removed and replaced at any time
by the Board, and will automatically cease to be a member as soon as the member
ceases to be a director of the Corporation.  The Board will fill
vacancies in the Committee by appointment from among the directors in accordance
with Section 2 of this Charter.  Subject to quorum requirements, if a
vacancy exists on the Committee, the remaining members will exercise all of the
Committee’s powers.
  8.
              Authority
  The
Committee may:
  ·
              engage
      independent counsel and other advisors as it determines necessary to carry
      out its duties.
  ·
              set
      and pay the compensation for any advisors employed by the Committee;
      and
  ·
              communicate
      directly with the internal and external
  auditors.
  The
Committee may also, within the scope of its responsibilities, seek any
information it requires from any employee and from external parties, to obtain
outside legal or professional advice, and to ensure the attendance of
Corporation officers at meetings as appropriate.
  9.
              Secretary and
      Minutes
  The Chair
of the Committee will appoint a member of the Committee or other person to act
as Secretary of the Committee for purposes of a meeting of the
Committee.  The minutes of the Committee meetings shall be in writing
and duly entered into the books of the Corporation, and will be circulated to
all members of the Board.
  10.
              Funding
  The
Corporation shall provide for appropriate funding, as determined by the
Committee, for payment of (a) compensation to any registered public accounting
firm engaged for the purposes of preparing or issuing an audit report or
performing other audit, review or attest services for the Corporation; (b)
compensation to any advisers employed by the Committee; and (c) ordinary
administrative expenses of the Committee that are necessary or appropriate in
carry out its duties.
   
   Schedule
“B”
  Glossary
of Mining Terms
  
 The
following is a glossary of certain mining terms used in this Annual Information
Form.
  “AEM” is an abbreviation for
airborne electromagnetic.
 
 "Ag" refers to
silver.
 
 “anomalous”refers to a sample
or location that either (i) the concentration of an element(s) or (ii)
geophysical measurement is significantly different from the average background
values in the area.
 
 “anomaly” refers to the
geographical area corresponding to anomalous geochemical or geophysical
values.
 
 “anorthosite” is a rock
comprised of largely feldspar minerals and minor mafic iron-magnesium
minerals.
 
 "As"refers to
arsenic.
 
 “assay” is an analysis to
determine the quantity of one or more elemental components.
 "Au" refers to
gold.
 
 “BIC” is an abbreviation for
the Bushveld Igneous Complex in South Africa, the source of most of the world’s
platinum and is a significant producer of palladium and other platinum group
metals (PGM’s) as well as chrome.
 
 “breccia” is a rock type with
angular fragments of one composition surrounded by rock of another composition
or texture.
 
 "bulk placer sampling" (in the
context of placer properties) refers to the process of obtaining individual
gravel samples in the order of 5 to 15 cubic yards using an excavating machine
and running the samples through a concentrating device to measure the placer
gold content per cubic yard.
 
 “chalcopyrite” is a copper
sulfide mineral.
 
 “channel sample”is a surface
sample which has been collected by continuous sampling across a measured
interval, and is considered to be representative of the area
sampled.
 
 “chargeability” is a measure
of electrical capacitance of a rock that may indicate the presence of
disseminated sulfide minerals but not all chargeability features are caused by
such sulfides.
 
 "cm"refers to
centimetres.
 
 “crosscut”is a mine working,
which is driven horizontally and at right angles to an adit, drift or
level.
 
 "Cu" refers to
copper.
 
 “deposit”is a mineralized
body, which has been physically delineated by sufficient drilling, trenching,
and/or underground work, and found to contain a sufficient average grade of
metal or metals to warrant further exploration and/or development expenditures.
Such a deposit does not qualify as a commercially mineable ore body or as
containing ore reserves, until final legal, technical, and economic factors have
been resolved.
 
 “diamond drill”is a type of
rotary drill in which the cutting is done by abrasion rather than percussion.
The cutting bit is set with diamonds and is attached to the end of the long
hollow rods through which water is pumped to the cutting face. The drill cuts a
core of rock that is covered in long cylindrical sections, an inch or more in
diameter.
 
 “early-stage exploration
property” refers to a property that has been subjected to a limited
amount of physical testing and systematic exploration work with no known
extensive zone of mineralization.
 
 “EM” is an abbreviation for
electromagnetic.
 
 “exploration stage” refers to
the stage where a company is engaged in the search for minerals deposits
(reserves), which are not in either the development or production
stage.
 
 “fault” is a fracture in a
rock across which there has been displacement.
 
 “fracture” is a break in a
rock, usually along flat surfaces.
 
 “gabbro” is an intrusive rock
comprised of a mixture of mafic minerals and feldspars.
 
 “gossanous” refers to a rock
outcrop that is strongly stained by iron oxides.
 
 “grab sample” is a sample of
selected rock chips collected from within a restricted area of
interest.
 
 “grade” is the concentration
of an ore metal in a rock sample, given either as weight percent for base metals
(i.e., Cu, Zn, Pb) or in grams per tonne (g/t) or ounces per short ton (oz/t)
for precious or platinum group metals.
 
 "g/t" refers to grams per
tonne.
 
 “highly anomalous” is an
anomaly, which is in approximately the 90th
percentile of the sample or measurement population.
 
 "ICP" refers to inductively
coupled plasma, a laboratory technique used for the quantitative analysis of
samples (soil, rock, etc.) taken during field exploration programs.
 
 “indicated mineral resource”is that part of a mineral resource for which quantity, grade or quality,
densities, shape and physical characteristics can be estimated with a level of
confidence sufficient to allow the appropriate application of technical and
economic parameters, to support mine planning and evaluation of the economic
viability of the deposit.  The estimate is based on detailed and
reliable exploration and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits, workings and drill
holes that are spaced closely enough for geological and grade continuity to be
reasonably assumed.
 
 “inferred mineral resource”is
that part of a mineral resource for which quantity and grade or quality can be
estimated on the basis of geological evidence and limited sampling and
reasonably assumed, but not verified, geological and grade
continuity.  The estimate is based on limited information and sampling
gathered through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes.
 
 “intrusive” is a rock mass
formed below earth’s surface from molten magma, which was intruded into a
pre-existing rock mass and cooled to solid.
 
 "IP survey" refers to induced
polarization survey, a geophysical method of exploring an area in which physical
properties relating to geology are used.
 
 “kriging”is the numerical
modelling by applying statistics to resource calculations (or other earth
sciences problems). The method recognizes that samples are not independent and
that spatial continuity between samples exists.
 
 "lode mining" refers to mining
in solid rock.
 
 “mafic” is a rock type
consisting of predominantly iron and magnesium silicate minerals with little
quartz or feldspar minerals.
 
 “magmatic” means pertaining to
magma, a naturally occurring silicate melt, which may contain suspended silicate
crystals, dissolved gases, or both; magmatic processes are at work under the
earth’s crust.
 
 “measured mineral resource”is
that part of a mineral resource for which quantity, grade or quality, densities,
shape, physical characteristics are so well established that they can be
estimated with confidence sufficient to allow the appropriate application of
technical and economic parameters, to support production planning and evaluation
of the economic viability of the deposit.  The estimate is based on
detailed and reliable exploration, sampling and testing information gathered
through appropriate techniques from locations such as outcrops, trenches, pits,
workings and drill holes that are spaced closely enough to confirm both
geological and grade continuity.
 
 “mid-stage exploration property”is one hosting a known zone of mineralization, which has been subjected
to a limited amount of physical testing and systematic exploration
work.
 “mineralization” refers to
minerals of value occurring in rocks.
 “mineral reserve”is the
economically mineable part of a measured or indicated mineral resource
demonstrated by at least a preliminary feasibility study.  This study
must include adequate information on mining, processing, metallurgical, economic
and other relevant factors that demonstrate, at the time of reporting, that
economic extraction can be justified.  A mineral reserve includes
diluting materials and allowances for losses that may occur when material is
mined.
 
 “mineral resource”is a
concentration or occurrence of natural, solid, inorganic or fossilized organic
material in or on the Earth’s crust in such form and quantity and of such a
grade or quality that it has reasonable prospects for economic
extraction.  The location, quantity, grade, geological characteristics
and continuity of a mineral resource are known, estimated or interpreted from
specific geological evidence and knowledge.
 
 "Mo" refers to molybdenum, a
hard, silver-white metal.
 
 “National Instrument 43-101”
NI 43-101 entitled “Standards if Disclosure for Mineral Projects” sets out
Canadian securities reporting guidelines for mining companies.
 “Ni” is an abbreviation for
nickel.
 
 “outcrop”refers to an
exposure of rock at the earth’s surface.
 
 “overburden” is any material
covering or obscuring rocks from view.
 
 "Pd" refers to
palladium.
 
 "PGM" refers to platinum group
metals, i.e. platinum, palladium, rhodium and gold.
 
 "PGE" refers to mineralization
containing platinum group elements, i.e. platinum, palladium, rhodium and
gold.
 
 "placer mining" is the mining
of unconsolidated material, which overlies solid rock (bedrock).
 
 “ppb” refers to parts per
billion.
 
 "ppm"refers to parts per
million.
 
 “probable mineral reserve”is
the economically mineable part of an indicated, and in some circumstances a
measured mineral resource demonstrated by at least a preliminary feasibility
study.  This study must include adequate information on mining,
processing, metallurgical, economic, and other relevant factors that
demonstrate, at the time of reporting, that economic extraction can be
justified.
 
 “proven mineral reserve”is
the economically mineable part of a measured mineral resource demonstrated by at
least a preliminary feasibility study.  This study must include
adequate information on mining, processing, metallurgical, economic and other
relevant factors that demonstrate, at the time of reporting, that economic
extraction is justified
 "Pt” refers to
platinum.
 
 “pyrite” is an iron sulfide
mineral.
 
 “pyroxenite” refers to a
relatively uncommon dark-coloured rock consisting chiefly of pyroxene; pyroxene
is a type of rock containing sodium, calcium, magnesium, iron, titanium and
aluminum combined with oxygen.
 
 “quartz”is a common
rock-forming mineral (SiO2).
 
 "Rh" refers to rhodium, a
platinum metal.  Rhodium shares some of the notable properties of
platinum, including its resistance to corrosion, its hardness and ductility.
Wherever there is platinum in the earth, there is rhodium as well. In fact, most
rhodium is extracted from a sludge that remains after platinum is removed from
the ore. A high percentage of rhodium is also found in certain nickel deposits
in Canada.
 
 “room and pillar mining”is a
method of mining flat-lying ore deposits in which the mined-out areas, or rooms,
are separated by pillars of approximately the same size.
 
 “stope”is an underground
excavation from which ore has been extracted.
 
 “tailings”is the material
that remains after all metals considered economic have been removed from ore
during milling.
 
 “ultramafic” refers to types
of rock containing relatively high proportions of the heavier elements such as
magnesium, iron, calcium and sodium; these rocks are usually dark in colour and
have relatively high specific gravities.
 
 “VLF” means very low
frequency.