---

|Platinum Group Metals Ltd.                    
|----------------------------------------------
|(An Exploration and Development Stage Company)
|                                              
|Consolidated Financial Statements             
|For the year ended August 31, 2015            
|                                              
|                                              
|                                              
|Filed: November 24, 2015                      

---

Independent Auditors Report

To the Shareholders of Platinum Group Metals Ltd.

We have audited the accompanying consolidated financial
statements of Platinum Group Metals Ltd., which comprise the consolidated
statements of financial position as at August 31, 2015 and August 31, 2014 and
the consolidated statements of loss and comprehensive loss, changes in equity
and cash flows for the years then ended, and the related notes, which comprise a
summary of significant accounting policies and other explanatory information.

Managements responsibility for the consolidated financial
statements

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

Auditors responsibility

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

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

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

Opinion

In our opinion, the consolidated financial statements present
fairly, in all material respects, the financial position of Platinum Group
Metals Ltd. as at August 31, 2015 and August 31, 2014 and its financial
performance and cash flows for the years then ended in accordance with
International Financial Reporting Standards.

|signed PricewaterhouseCoopers LLP
|-----------------------------------
|                                   
|Chartered Professional Accountants 
|Vancouver, British Columbia        
|                                   
|November 24, 2015                  

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

---

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

|                                                                                            |   | August 31, 2015 |   |   | August 31, 2014 |  
|------------------------------------------------------------------------------------------- | - | --------------- | - | - | --------------- | -
|ASSETS                                                                                      |   |                 |   |   |                 |  
|Current                                                                                     |   |                 |   |   |                 |  
|Cash and cash equivalents                                                                   | $ | 51,417          |   | $ | 108,150         |  
|Amounts
      receivable (Note 4)                                                           |   | 13,230          |   |   | 13,848          |  
|Prepaid expenses                                                                            |   | 455             |   |   | 714             |  
|Total current assets                                                                        |   | 65,102          |   |   | 122,712         |  
|                                                                                            |   |                 |   |   |                 |  
|Deferred financing fees (Note 3)                                                            |   | 3,504           |   |   | 4,206           |  
|Performance bonds (Note 5)                                                                  |   | 5,774           |   |   | 5,101           |  
|Exploration and evaluation assets (Note 7)                                                  |   | 32,402          |   |   | 30,612          |  
|Property, plant and equipment (Note 6)                                                      |   | 548,845         |   |   | 387,608         |  
|Total assets                                                                                | $ | 655,627         |   | $ | 550,239         |  
|                                                                                            |   |                 |   |   |                 |  
|                                                                                            |   |                 |   |   |                 |  
|LIABILITIES                                                                                 |   |                 |   |   |                 |  
|Current                                                                                     |   |                 |   |   |                 |  
|Accounts payable and
      accrued liabilities                                              | $ | 21,537          |   | $ | 28,576          |  
|Total current liabilities                                                                   |   | 21,537          |   |   | 28,576          |  
|                                                                                            |   |                 |   |   |                 |  
|Deferred income taxes                                                                       |   | 8,311           |   |   | 11,585          |  
|Asset retirement obligation (Note 13)                                                       |   | 3,038           |   |   | 1,636           |  
|Total liabilities                                                                           |   | 32,886          |   |   | 41,797          |  
|                                                                                            |   |                 |   |   |                 |  
|SHAREHOLDERS EQUITY                                                                        |   |                 |   |   |                 |  
|Share capital (Note 8)                                                                      |   | 716,148         |   |   | 590,774         |  
|Contributed surplus                                                                         |   | 25,038          |   |   | 22,374          |  
|Accumulated other
      comprehensive loss                                                  |   | (75,473         | ) |   | (63,980         | )
|Deficit                                                                                     |   | (114,167        | ) |   | (120,484        | )
|Total shareholders equity attributable to
      shareholders of Platinum Group Metals Ltd. |   | 551,546         |   |   | 428,684         |  
|                                                                                            |   |                 |   |   |                 |  
|Non-controlling interest (Note 9)                                                           |   | 71,195          |   |   | 79,758          |  
|Total shareholders equity                                                                  |   | 622,741         |   |   | 508,442         |  
|Total liabilities and shareholders equity                                                  | $ | 655,627         |   | $ | 550,239         |  

CONTINGENCIES AND COMMITMENTS (NOTE 14) SUBSEQUENT EVENTS
(NOTE 19)

Approved by the Board of Directors and authorized for issue on
November 24, 2015

Iain
      McLeanIain McLean, Director


Eric
      CarlsonEric Carlson, Director


|See accompanying notes to the consolidated financial
      statements | 2
|--------------------------------------------------------------------- | -

---

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

|                                                               |   | Year ended  |   |   | Year ended  |  
|-------------------------------------------------------------- | - | ----------- | - | - | ----------- | -
|                                                               |   | August 31,  |   |   | August 31,  |  
|                                                               |   | 2015        |   |   | 2014        |  
|                                                               |   |             |   |   |             |  
|                                                               |   |             |   |   |             |  
|EXPENSES                                                       |   |             |   |   |             |  
|General and
      administrative (Note 17)                     | $ | 8,328       |   | $ | 7,932       |  
|Foreign
      exchange gain (Note 17)                          |   | (10,738     | ) |   | (955        | )
|Stock compensation
      expense                               |   | 1,398       |   |   | 2,222       |  
|Termination and finance fees (Note 3)                          |   | 1,988       |   |   | -           |  
|Write-down of deferred
      financing fees (Note 3)           |   | 4,206       |   |   | -           |  
|Write-down of exploration and
      evaluation assets (Note 7) |   | 2,879       |   |   | 5,355       |  
|                                                               |   | (8,061      | ) |   | (14,554     | )
|                                                               |   |             |   |   |             |  
|Finance income                                                 |   | 4,574       |   |   | 3,886       |  
|Loss for the year before
      income taxes                    |   | (3,487      | ) |   | (10,668     | )
|Income tax (expense) recovery (Note 18)                        |   | (1,316      | ) |   | 209         |  
|Loss for the year                                              |   | (4,803      | ) |   | (10,459     | )
|                                                               |   |             |   |   |             |  
|Items that may be
      subsequently reclassified to net loss  |   |             |   |   |             |  
|Exchange differences in translating foreign
      operations   |   | (8,936      | ) |   | (1,827      | )
|                                                               |   |             |   |   |             |  
|Comprehensive loss for the year                                | $ | (13,739     | ) | $ | (12,286     | )
|                                                               |   |             |   |   |             |  
|Loss attributable to:                                          |   |             |   |   |             |  
|Shareholders of Platinum Group Metals Ltd.                     |   | (3,798      | ) |   | (10,438     | )
|Non-controlling interests                                      |   | (1,005      | ) |   | (21         | )
|                                                               | $ | (4,803      | ) | $ | (10,459     | )
|                                                               |   |             |   |   |             |  
|Comprehensive (loss) income
      attributable to:             |   |             |   |   |             |  
|Shareholders of Platinum
      Group Metals Ltd.               |   | (13,983     | ) |   | (11,550     | )
|Non-controlling interests                                      |   | 244         |   |   | (736        | )
|                                                               | $ | (13,739     | ) | $ | (12,286     | )
|                                                               |   |             |   |   |             |  
|Basic and diluted loss per common share                        | $ | (0.01       | ) | $ | (0.02       | )
|                                                               |   |             |   |   |             |  
|Weighted average number of common shares
      outstanding:    |   |             |   |   |             |  
|Basic and diluted                                              |   | 695,836,450 |   |   | 501,642,562 |  

|See accompanying notes to the consolidated financial
      statements | 3
|--------------------------------------------------------------------- | -

---

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

# of
    
    
    Share
    
    
    Contributed
    
    
    Accumulated
    
    
    Deficit
    
    
    Attributable to
    
    
    Non-
    
    
    TotalCommon
    
    
    Capital
    
    
    Surplus
    
    
    Other
    
    
    
    
    
    Shareholders
    
    
    ControllingShares
    
    
    
    
    
    
    
    
    Comprehensive
    
    
    
    
    
    of the Parent
    
    
    InterestIncome (loss)
    
    
    
    
    
    CompanyBalance, August 31,
      2013
    
    402,759,542
    
    $
    425,435
    
    $
    18,593
    
    $
    (61,481
    )
    $
    (85,349
    )
    $
    297,198
    
    $
    54,410
    
    $
    351,608Stock based
      compensation
    
    -
    
    
    -
    
    
    3,803
    
    
    -
    
    
    -
    
    
    3,803
    
    
    -
    
    
    3,803Share issuance costs
    
    -
    
    
    (9,968
    )
    
    -
    
    
    -
    
    
    -
    
    
    (9,968
    )
    
    -
    
    
    (9,968
    )Share
      issuance  financing
    
    148,500,000
    
    
    175,230
    
    
    -
    
    
    -
    
    
    -
    
    
    175,230
    
    
    -
    
    
    175,230Issued upon the exercise of options
    
    53,300
    
    
    77
    
    
    (22
    )
    
    -
    
    
    -
    
    
    55
    
    
    -
    
    
    55Funding of
      non-controlling interest
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (5,029
    )
    
    (5,029
    )
    
    5,029
    
    
    -Transactions with non-controlling interest
    
    -
    
    
    -
    
    
    -
    
    
    (1,387
    )
    
    (19,668
    )
    
    (21,055
    )
    
    21,055
    
    
    -Foreign
      currency translation
    
    -
    
    
    -
    
    
    -
    
    
    (1,112
    )
    
    -
    
    
    (1,112
    )
    
    (715
    )
    
    (1,827
    )Net (loss) income for
      the year
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (10,438
    )
    
    (10,438
    )
    
    (21
    )
    
    (10,459
    )Balance, August 31, 2014
    
    551,312,842
    
    $
    590,774
    
    $
    22,374
    
    $
    (63,980
    )
    $
    (120,484
    )
    $
    428,684
    
    $
    79,758
    
    $
    508,442Stock based compensation
    
    -
    
    
    -
    
    
    2,664
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    2,664Share
      issuance  financing
    
    214,800,000
    
    
    132,071
    
    
    -
    
    
    -
    
    
    -
    
    
    132,071
    
    
    -
    
    
    132,071Share issuance costs
    
    -
    
    
    (8,566
    )
    
    -
    
    
    -
    
    
    -
    
    
    (8,566
    )
    
    -
    
    
    (8,566
    )Shares
      issued for loan facility
    
    2,830,188
    
    
    1,869
    
    
    -
    
    
    -
    
    
    -
    
    
    1,869
    
    
    -
    
    
    1,869Transactions with non-controlling interest
    
    -
    
    
    -
    
    
    -
    
    
    (1,308
    )
    
    10,115
    
    
    8,807
    
    
    (8,807
    )
    
    -Foreign
      currency translation adjustment
    
    -
    
    
    -
    
    
    -
    
    
    (10,185
    )
    
    -
    
    
    (10,147
    )
    
    1,249
    
    
    (8,936
    )Net loss for the year
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (3,798
    )
    
    (3,798
    )
    
    (1,005
    )
    
    (4,803
    )Balance, August 31, 2015
    
    768,943,030
    
    
    716,148
    
    
    25,038
    
    
    (75,473
    )
    
    (114,167
    )
    
    551,546
    
    
    71,195
    
    
    622,741


|See accompanying notes to the consolidated financial
      statements | 4
|--------------------------------------------------------------------- | -

---

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

|                                                              |   | Year ended |   |   | Year ended |  
|------------------------------------------------------------- | - | ---------- | - | - | ---------- | -
|                                                              |   | August 31, |   |   | August 31, |  
|                                                              |   | 2015       |   |   | 2014       |  
|                                                              |   |            |   |   |            |  
|OPERATING ACTIVITIES                                          |   |            |   |   |            |  
|Loss
      for the year                                       | $ | (4,803     | ) | $ | (10,459    | )
|                                                              |   |            |   |   |            |  
|Add
      items not affecting cash:                           |   |            |   |   |            |  
|Depreciation                                                  |   | 627        |   |   | 474        |  
|Unrealized foreign exchange gain                              |   | (3,209     | ) |   | 48         |  
|Deferred income tax expense (recovery)                        |   | 1,083      |   |   | (209       | )
|Write-down of deferred finance fees (Note 3)                  |   | 4,206      |   |   | -          |  
|Write-down of exploration properties                          |   | 2,879      |   |   | 5,355      |  
|Stock compensation expense                                    |   | 1,398      |   |   | 2,222      |  
|Net
      change in non-cash working capital (Note 15)        |   | (2,373     | ) |   | (3,546     | )
|                                                              |   | (192       | ) |   | (6,115     | )
|                                                              |   |            |   |   |            |  
|FINANCING ACTIVITIES                                          |   |            |   |   |            |  
|Share issuance                                                |   | 132,071    |   |   | 175,230    |  
|Share issuance costs                                          |   | (8,566     | ) |   | (9,968     | )
|Share issuance  stock options                                |   | -          |   |   | 55         |  
|Interest Paid (Note 3)                                        |   | (1,634     | ) |   | -          |  
|                                                              |   | 121,871    |   |   | 165,317    |  
|                                                              |   |            |   |   |            |  
|INVESTING ACTIVITIES                                          |   |            |   |   |            |  
|Acquisition of property, plant and equipment                  |   | (173,037   | ) |   | (154,815   | )
|Exploration expenditures, net of recoveries                   |   | (9,659     | ) |   | (9,955     | )
|South African VAT                                             |   | 3,639      |   |   | (6,107     | )
|Performance bonds                                             |   | (778       | ) |   | (1,702     | )
|Restricted cash                                               |   | -          |   |   | 10,056     |  
|                                                              |   | (179,835   | ) |   | (162,523   | )
|                                                              |   |            |   |   |            |  
|Net (decrease) increase in
      cash and cash equivalents    |   | (58,156    | ) |   | (3,321     | )
|Effect of foreign exchange on cash and cash
      equivalents |   | 1,423      |   |   | (313       | )
|Cash and cash equivalents, beginning of year                  |   | 108,150    |   |   | 111,784    |  
|                                                              |   |            |   |   |            |  
|Cash and cash equivalents, end of year                        | $ | 51,417     |   | $ | 108,150    |  

|See accompanying notes to the consolidated financial
      statements | 5
|--------------------------------------------------------------------- | -

---

|Platinum Group Metals Ltd.                               
|---------------------------------------------------------
|(An exploration and development stage company)           
|Notes to the consolidated financial statements           
|For the year ended August 31, 2015                       
|(in thousands of Canadian dollars unless otherwise noted)

|1. | NATURE OF OPERATIONS
|-- | --------------------

Platinum Group Metals Ltd. (the Company) is a British
Columbia, Canada, company formed by amalgamation on February 18, 2002. The
Companys shares are publicly listed on the Toronto Stock Exchange
(TSX) in Canada and the NYSE MKT LLC in the United States. The
Companys address is Suite 788-550 Burrard Street, Vancouver, British Columbia,
V6C 2B5.

The Company is an exploration and development company
conducting work on mineral properties it has staked or acquired by way of option
agreements in the Republic of South Africa and Canada. The Company is currently
developing the WBJV (Maseve) Project 1 platinum and palladium mine located on
the Western Limb of the Bushveld Complex in South Africa (Project 1).
Project 1 is owned through the operating company Maseve Investments 11 (Pty.)
Ltd. (Maseve), in which the Company held a 82.9% working interest as of
August 31, 2015 and the Companys Black Economic Empowerment (BEE)
partner, Africa Wide Mineral Prospecting and Exploration (Pty) Ltd. (Africa
Wide), a wholly owned subsidiary of Wesizwe Platinum Ltd., owned 17.1% . A
formal mining right was granted for Project 1 on April 4, 2012 by the Government
of South Africa (the Mining Right).

On May 26, 2015, the Company announced an agreement whereby the
Waterberg JV Project and Waterberg Extension Project, both located on the
Northern Limb of the Bushveld Complex in South Africa, are to be consolidated.
See details in note 7 below. The Company is advancing the consolidated Waterberg
Project, with drilling and engineering work presently underway as part of a
pre-feasibility study.

These financial statements include the accounts of the Company
and its subsidiaries. The Companys subsidiaries are as follows:

|                                              |  |                    |  |  |               |  |  | Proportion of ownership interest | 
|--------------------------------------------- |  | ------------------ |  |  | ------------- |  |  | -------------------------------- | 
|                                              |  |                    |  |  | Place of      |  |  | and voting
      power held      | 
|                                              |  |                    |  |  | incorporation |  |  | August 31,                       | 
|Name of subsidiary                            |  | Principal activity |  |  | and operation |  |  | 2015                             | 
|                                              |  |                    |  |  |               |  |  |                                  | 
|Platinum Group Metals (RSA)
      (Pty) Ltd.1 |  | Exploration        |  |  | South Africa  |  |  | 100%                             | 
|Maseve Investments 11 (Pty) Ltd               |  | Mining             |  |  | South Africa  |  |  | 82.9%1                           | 
|Wesplats Holdings (Pty)
      Limited3        |  | Dormant            |  |  | South Africa  |  |  | 100%                             | 
|Platinum Group Metals (Barbados) Ltd.         |  | Holding company    |  |  | Barbados      |  |  | 100%                             | 
|Mnombo Wethu Consultants (Pty) Limited.       |  | Exploration        |  |  | South Africa  |  |  | 49.9%                            | 

1Waterberg Projects held here until formal JV
Company approval received (see Note 7 below)2See Note 6(i)
Ownership of Project 1. 3In process of being wound up and
de-registered. 4The Company controls Mnombo Wethu Consultants
(Pty) Limited (Mnombo) for accounting purposes.

|2. | BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING
      POLICIES
|-- | ---------------------------------------------------------------

Basis of Presentation

These consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS) and
International Financial Reporting Interpretations Committee (IFRIC)
interpretations as issued by the International Accounting Standards Board
(IASB). The consolidated financial statements have been prepared under
the historical cost convention except for the asset retirement obligation.

The principal accounting policies applied in the preparation of
these consolidated financial statements are set out below.

Consolidation

The consolidated financial statements include those of Platinum
Group Metals, its subsidiaries, associates, joint ventures and structured entities, using
uniform accounting policies. Control exists when the Company has (i) power over
the investee, (ii) exposure, or rights, to variable returns from its involvement
with the investee, and (iii) the ability to use its power to affect its returns.

6

---

|Platinum Group Metals Ltd.                               
|---------------------------------------------------------
|(An exploration and development stage company)           
|Notes to the consolidated financial statements           
|For the year ended August 31, 2015                       
|(in thousands of Canadian dollars unless otherwise noted)

Non-controlling interest in the net assets of consolidated
subsidiaries are identified separately from the Companys equity.

Subsidiaries are all entities (including structured entities)
over which the Company has control. Subsidiaries are fully consolidated from the
date on which control is transferred to the group. They are de-consolidated from
the date that control ceases.

A joint arrangement is an arrangement of which two or more
parties have joint control. Investments in joint arrangements are classified as
either joint operations or joint ventures depending on the contractual rights
and obligations of each of the investors.

Inter-company transactions, balances and unrealized gains on
transactions between Group companies are eliminated on consolidation. Unrealized
losses are also eliminated unless the transaction provides evidence of an
impairment of the asset transferred.

Both Waterberg exploration properties are fully consolidated
with third party contributions treated as recoveries.

Cash and cash equivalents

Cash and cash equivalents consist of cash and short-term
deposits, which are readily convertible to cash and have original maturities of
90 days or less.

Exploration and evaluation assets

Exploration and evaluation activity involves the search for
mineral resources, the determination of technical feasibility and the assessment
of commercial viability of an identified resource.

Exploration and evaluation activity includes:

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

Exploration and evaluation expenditures on identifiable
properties are capitalized. Exploration and evaluation assets are shown
separately until technical feasibility and commercial viability is achieved at
which point the relevant asset is transferred to development assets under
property, plant and equipment. Capitalized costs are all considered to be
tangible assets as they form part of the underlying mineral property.

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

Property, plant and equipment

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

7

---

|Platinum Group Metals Ltd.                               
|---------------------------------------------------------
|(An exploration and development stage company)           
|Notes to the consolidated financial statements           
|For the year ended August 31, 2015                       
|(in thousands of Canadian dollars unless otherwise noted)

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

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

Once a mining project has been established as technically
feasible and commercially viable, expenditure other than on land, buildings,
plant and equipment is capitalised as part of development assets together with
any related amount transferred from exploration and evaluation assets.
Capitalization of costs incurred and revenue received during commissioning
ceases when the property is capable of operating at levels intended by
management.

The present value of the decommissioning cost, which is the
dismantling and removal of the asset included in the environmental
rehabilitation obligation, is included in the cost of the related preproduction
assets. These assets are depreciated over their useful lives.

Subsequent costs are included in the assets carrying amount
only when it is probable that future economic benefits associated with the item
will flow to the Company and the cost of the item can be reliably measured. All
repairs and maintenance are expensed to profit or loss during the financial
period in which they are incurred.

An item of property, plant and equipment is derecognized upon
disposal or when no future economic benefits are expected to arise from the
continued use of the asset. Any gain or loss arising on the disposal, retirement
or scrapping of an item of property, plant and equipment is determined as the
difference between the sales proceeds and the carrying amount of the asset and
is recognized in profit or loss.

Where an item of property, plant and equipment is comprised of
major components with different useful lives, the components are accounted for
as separate items of property, plant and equipment. Property, plant and
equipment are recorded at cost and are depreciated on a straight line basis over
the following periods:

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


Development costs are depreciated on a unit of production
basis.

Impairment

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

The Company conducts internal reviews of asset values which are
used to assess for any indications of impairment. External factors such as
changes in expected future prices, costs and other market factors including
market capitalization are also monitored to assess for indications of
impairment.

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

8

---

|Platinum Group Metals Ltd.                               
|---------------------------------------------------------
|(An exploration and development stage company)           
|Notes to the consolidated financial statements           
|For the year ended August 31, 2015                       
|(in thousands of Canadian dollars unless otherwise noted)

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

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

Impairment is assessed at the level of cash-generating units
(CGUs), which are identified as the smallest identifiable group of
assets that generates cash inflows that are largely independent of the cash
inflows from other assets. The Companys CGUs are based on geographic location
and the two CGUs the Company currently has are the WBJV Project 1 Mine and the
Waterberg Project.

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

Trade payables

Trade payables are obligations to pay for goods or services
that have been acquired in the ordinary course of business from suppliers.
Accounts payable are classified as current liabilities if payment is due within
one year or less. If not, they are presented as non-current liabilities.

Trade payables are recognised initially at fair value and
subsequently measured at amortized cost using the effective interest method.

Asset retirement obligations

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

Share Capital

Common shares are classified as equity. Incremental costs
directly attributable to the issue of common shares and share options are
recognized as a deduction from equity, net of any tax effect.

Income taxes

Income tax expense represents the sum of the tax currently
payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the
year. Taxable profit differs from 'profit before tax' as reported in the
consolidated statement of loss and other comprehensive loss because of items of
income or expense that are taxable or deductible in other years and items that
are never taxable or deductible. The Group's current tax is calculated using tax
rates that have been enacted or substantively enacted by the end of the
reporting period.

9

---

|Platinum Group Metals Ltd.                               
|---------------------------------------------------------
|(An exploration and development stage company)           
|Notes to the consolidated financial statements           
|For the year ended August 31, 2015                       
|(in thousands of Canadian dollars unless otherwise noted)

Deferred tax

Deferred tax is recognised on temporary differences between the
carrying amounts of assets and liabilities in the consolidated financial
statements and the corresponding tax bases used in the computation of taxable
profit. Deferred tax liabilities are generally recognised for all taxable
temporary differences. Deferred tax assets are generally recognised for all
deductible temporary differences to the extent that it is probable that taxable
profits will be available against which those deductible temporary differences
can be utilised. Such deferred tax assets and liabilities are not recognised if
the temporary difference arises from the initial recognition (other than in a
business combination) of assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at the
end of each reporting period and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part
of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax
rates that are expected to apply in the period in which the liability is settled
or the asset realised, based on tax rates (and tax laws) that have been enacted
or substantively enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets reflects
the tax consequences that would follow from the manner in which the Group
expects, at the end of the reporting period, to recover or settle the carrying
amount of its assets and liabilities.

Translation of foreign currencies

Functional and presentation currency

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

|Platinum Group Metals Limited          | Canadian Dollars     
|-------------------------------------- | ---------------------
|Platinum Group Metals (RSA) (Pty) Ltd. | South African Rand   
|Maseve Investments 11 (Pty) Ltd.       | South African Rand   
|Wesplats Holdings (Pty) Limited        | South African Rand   
|Mnombo Wethu Consultants (Pty) Limited | South African Rand   
|Platinum Group Metals (Barbados) Ltd.  | United States Dollars

The Companys presentation currency is the Canadian dollar
($).

The following exchange rates were used when preparing these
consolidated financial statements:

Rand/CADYear-end rate:
    R10.021 (2014 R9.8135)Year average rate:
    R9.7487 (2014 R9.7390)US/CADYear-end rate:
    US0.7601 (2014 US0.9197)Year average rate:
    US0.8266 (2014 US0.9281)


Transactions and balances

Foreign currency transactions are translated into the relevant
entitys functional currency using the exchange rates prevailing at the date of
the transaction. Foreign currency gains and losses resulting from the settlement
of such transactions and from the translation at period-end exchange rates of
monetary assets and liabilities denominated in foreign currencies are recognized
in the income statement.

10

---

|Platinum Group Metals Ltd.                               
|---------------------------------------------------------
|(An exploration and development stage company)           
|Notes to the consolidated financial statements           
|For the year ended August 31, 2015                       
|(in thousands of Canadian dollars unless otherwise noted)

Subsidiaries

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

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

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

Stock-based compensation

The fair values for stock-based awards have been estimated
using the Black-Scholes model and recorded over the period of vesting. The
compensation cost related to stock options granted is expensed or capitalized to
mineral properties, as applicable. Cash received on exercise of stock options is
credited to share capital and the related amount previously recognized in
contributed surplus is reclassified to share capital.

Loss per common share

Basic loss per common share is calculated using the weighted
average number of common shares outstanding. The Company uses the treasury stock
method for the calculation of diluted earnings per share. Diluted per share
amounts reflect the potential dilution that could occur if securities or other
contracts to issue common shares were exercised or converted to common shares.
In periods when a loss in incurred, the effect of the potential issuances of
shares is anti-dilutive, and accordingly basic and diluted loss per share are
the same.

Financial instruments

IFRS establishes a fair value hierarchy that categorizes the
inputs to valuation techniques used to measure fair value into three levels:


    Level 1  Quoted prices in active markets for
      the same instrument.
    Level 2  Valuation techniques for which
      significant inputs are based on observable market data.
    Level 3  Valuation techniques for which any
      significant input is not based on observable market data.


(i) Financial assets and liabilities

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

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

(ii) Impairment of financial assets

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

11

---

|Platinum Group Metals Ltd.                               
|---------------------------------------------------------
|(An exploration and development stage company)           
|Notes to the consolidated financial statements           
|For the year ended August 31, 2015                       
|(in thousands of Canadian dollars unless otherwise noted)

Accounting standards adopted in the current period

The principal accounting policies used by the Company and its
subsidiaries are consistent with those of the previous year, except for changes
from new or revised IFRSs. The following new accounting standards, amendments
and interpretations were adopted by the Company as of September 1, 2014. The
Company has adopted these new and amended standards without any significant
effect on the financial statements.

(i) IAS 36, Impairment of Assets

The IASB published amendments to the
disclosures required by IAS 36, when the recoverable amount is determined based
on the fair value less costs of disposal. The amendments are effective for
annual periods beginning on or after January 1, 2014 and are to be applied
retroactively.

(ii) IFRS 8 Operating Segments

IFRS 8, Operating Segments,
require an entity to disclose the judgements made by management in applying
aggregation criteria to operating segments and to provide clarity that a
reconciliation of a reportable segments total assets and the entitys assets
should only be provided if the segment asset details are regularly provided to
the chief operating decision maker.

Future accounting changes

The following new accounting standards, amendments and
interpretations, that have not been early adopted in these consolidated
financial statements, will or may have an effect on the Companys future results
and financial position:

(i) IFRS 15Revenue from Contracts with Customers

IFRS 15, Revenue from Contracts with
Customers, which will replace IAS 18, Revenue, is effective for
fiscal years ending on or after December 31, 2018 and is available for early
adoption. The standard contains a single model that applies to contracts with
customers. Revenue is recognized as control is passed to the customer, either at
a point in time or over time. New estimates and judgmental thresholds have been
introduced, which may affect the amount and/or timing of revenue recognized. The
Company is still in the process of assessing the impact, if any, on the
financial statements of this new standard.

(ii) IFRS 9, Financial Instruments

In July 2014, the IASB issued IFRS 9,
Financial Instruments, which addresses classification and measurement of
financial assets and replaces the multiple category and measurement models for
debt instruments in IAS 39, Financial Instruments: Recognition and
Measurement. Debt instruments will be measured with a new mixed measurement
model having only two categories: amortized cost and fair value through profit
and loss. The new standard also addresses financial liabilities which largely
carries forward existing requirements in IAS 39, with the exception of fair
value changes to credit risk for liabilities designated at fair value through
profit and loss which are generally to be recorded in other comprehensive
income. In addition, the new standard introduces a new hedge accounting model
more closely aligned with risk management activities undertaken by entities. The
new standard is effective for annual periods beginning on or after January 1,
2018, with an early adoption permitted. The Company is still in the process of assessing the impact, if any, on the financial
statements of the new standard.

12

---

|Platinum Group Metals Ltd.                               
|---------------------------------------------------------
|(An exploration and development stage company)           
|Notes to the consolidated financial statements           
|For the year ended August 31, 2015                       
|(in thousands of Canadian dollars unless otherwise noted)

The Company is currently considering the possible effect of the
new and revised standards which will be effective to the Companys consolidated
financial statements in the future.

Significant accounting judgments and
estimates

The preparation of the financial statements in conformity with
IFRS requires the use of judgments and estimates that affect the amount reported
and disclosed in the consolidated financial statements and related notes. These
judgments and estimates are based on managements best knowledge of the relevant
facts and circumstances, having regard to previous experience, but actual
results may differ materially from the amounts included in the financial
statements. Information about such judgments and estimation is contained in the
accounting policies and notes to the financial statements, and the key areas are
summarized below.

Areas of judgment and key sources of estimation uncertainty
that have the most significant effect on the amounts recognized in these
consolidated financial statements are:

| |  | Review of asset carrying values and impairment
      assessment (see Note 6)
| | - | ----------------------------------------------------------------------------
| |  | Asset retirement obligations (see Note 13)                                  
| |  | Determination of ore reserves and mineral
      resource estimates          
| |  | Deferred tax assets and liabilities and
      resource taxes; and           
| |  | Achievement of commercial production                                        

Each of these judgments and estimates is considered in their
respective notes or in more detail below.

Determination of ore reserve and mineral resource estimates

The Company estimates its ore reserves and mineral resources
based on information compiled by Qualified Persons as defined by NI 43-101.
Reserves determined in this way are used in the calculation of depreciation,
amortization and impairment charges, and for forecasting the timing of the
payment of close down and restoration costs. In assessing the life of a mine for
accounting purposes, mineral resources are only taken into account where there
is a high degree of confidence of economic extraction. There are numerous
uncertainties inherent in estimating ore reserves, and assumptions that are
valid at the time of estimation and they may change significantly when new
information becomes available. Changes in the forecast prices of commodities,
exchange rates, production costs or recovery rates may change the economic
status of reserves and may, ultimately, result in reserves being restated. Such
changes in reserves could impact depreciation and amortization rates, asset
carrying values and provisions for close down and restoration costs.

Deferred tax assets and liabilities and resource taxes

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

Achievement of commercial production

Once a mine reaches the operating levels intended by
management, depreciation of capitalized costs begins. Significant judgement is
required to determine when certain of the Companys assets reach this level;
management must consider several factors including: completion of a reasonable
period of commissioning; consistent operating results are being achieved
at a pre-determined level of design capacity and indications exist that this
level will continue; mineral recoveries are at or near expected production
level; and the transfer of operations from development personnel to operational
personnel has been completed.

13

---

|Platinum Group Metals Ltd.                               
|---------------------------------------------------------
|(An exploration and development stage company)           
|Notes to the consolidated financial statements           
|For the year ended August 31, 2015                       
|(in thousands of Canadian dollars unless otherwise noted)

|3. | DEFERRED FINANCING FEES
|-- | -----------------------

On February 16, 2015 the Company announced it had entered into
a credit agreement with a syndicate of lenders (the Lenders) led by
Sprott Resource Lending Partnership (Sprott) for a Senior Secured Loan
Facility (the Sprott Facility) of up to US$40 million. Interest will be
compounded and payable monthly at an interest rate of LIBOR plus 8.50% . The
Company has made the following additional payments to the Lenders, including (a)
a bonus payment made concurrently with execution and delivery of the credit
agreement in the amount of US$1.5 million, being 3.75% of the principal amount
of the Facility, paid by issuance of 2,830,188 common shares of the Company in
the period; (b) a draw down payment to the Lenders equal to 2% of the amount
being drawn down under the Facility, payable in common shares of the Company
issued at a deemed price equal to the volume weighted average trading price (the
"VWAP") of the common shares on the TSX for the ten trading days
immediately prior to the draw down request or such other VWAP as required by the
TSX; (c) a structuring fee comprised of a cash payment in the amount of US$0.10
million, paid concurrently with the execution and delivery of the term sheet for
the Facility; and (d) a standby fee payable in cash equal to 4% per annum of the
un-advanced principal amount of the Facility paid in monthly instalments until
the facility was drawn down. The Facility matures on December 31, 2017 with the
repayment of principal due in monthly instalments during calendar 2017.

The advance of funds under the Facility by the Lenders was
subject to certain terms and conditions set out in the credit agreement. These
terms and conditions were satisfied and funds were drawn on November 20, 2015.
Please see subsequent events (Note 19) for further details.

Fees paid to the Lenders, (including 2,830,188 common shares
issued) and certain legal and regulatory fees incurred for the establishment of
the Sprott Facility (see subsequent events for further details) amounting to
$3,504 have been recognized as transaction costs at year end and deferred until
draw down occurs. When the Facility is drawn, the deferred fees will be netted
against the gross proceeds of the financing and recognized over the term of the
Facility on an effective interest rate basis.

Deferred finance costs amounting to $4,206, related to a
previously proposed loan facility with a syndicate of banks and to a unit
offering which did not complete, were written off during the year. Additional
termination and finance fees totaling $1,988 related to the previous loan
facility and the unit offering were also incurred and expensed during the year.

|4. | AMOUNTS RECEIVABLE
|-- | ------------------

|                                   |   | August 31, 2015 |  |   | August 31, 2014 | 
|---------------------------------- | - | --------------- |  | - | --------------- | 
|South African VAT                  | $ | 8,182           |  | $ | 11,820          | 
|Tax Receivable1                    |   | 1,518           |  |   | 744             | 
|Other receivables                  |   | 2,148           |  |   | 393             | 
|Canadian sales tax                 |   | 41              |  |   | 84              | 
|Due from JOGMEC (Note 7)           |   | 1,074           |  |   | 479             | 
|Interest                           |   | 19              |  |   | 93              | 
|Due from related parties (Note 12) |   | 248             |  |   | 235             | 
|                                   | $ | 13,230          |  | $ | 13,848          | 

1$236 due from CRA, $1,282 due from the South Africa
tax administration (SARS)

14

---

|Platinum Group Metals Ltd.                               
|---------------------------------------------------------
|(An exploration and development stage company)           
|Notes to the consolidated financial statements           
|For the year ended August 31, 2015                       
|(in thousands of Canadian dollars unless otherwise noted)

|5. | PREFORMANCE BOND
|-- | ----------------

At August 31, 2015 the Company had $5,774 posted in cash for
environmental performance and other

guarantees in South Africa, of which approximately $5,672
relates to Project 1 ($5,036  August 31, 2014). In October 2012 a third party
insurer posted a bond in the amount of R58.5 million ($5.84 million) to the
credit of the DMR in satisfaction of the Companys environmental guarantee
specific to its Project 1 Mining Right after which the DMR released R58.5
million to the Company from funds previously deposited. The Company then
deposited $1,284 (R12 million) with The Standard Bank of South Africa against
its environmental guarantee obligation and will make further annual deposits of
approximately $1,284 (R12 million) per annum until the full amount of the
Project 1 environmental guarantee is again on deposit and the third party bond
arrangement will be wound up, or renewed at the Companys election. Interest on
deposits will accrue to the Company. The Company pays an annual fee of
approximately $64 (R600,000) to the insurer as compensation.

15

---

|Platinum Group Metals Ltd.                               
|---------------------------------------------------------
|(An exploration and development stage company)           
|Notes to the consolidated financial statements           
|For the year ended August 31, 2015                       
|(in thousands of Canadian dollars unless otherwise noted)

|6. | PROPERTY, PLANT AND
EQUIPMENT
|-- | -----------------------------

Development
    
    
    Construction
    
    
    
    
    
    
    
    
    Office
    
    
    Miningassets
    
    
    work-in-progress
    
    
    Land
    
    
    Buildings
    
    
    Equipment
    
    
    Equipment
    
    
    TotalCOSTBalance, August 31, 2013
    $
    161,097
    
    $
    29,400
    
    $
    12,924
    
    $
    3,442
    
    $
    1,713
    
    $
    27,746
    
    $
    236,322Additions
    
    92,341
    
    
    57,649
    
    
    -
    
    
    1,616
    
    
    323
    
    
    11,326
    
    
    163,255Foreign exchange movement
    
    (1,518
    )
    
    (286
    )
    
    (125
    )
    
    (33
    )
    
    (7
    )
    
    (270
    )
    
    (2,239
    )Balance, August 31, 2014
    
    251,920
    
    
    86,763
    
    
    12,799
    
    
    5,025
    
    
    2,029
    
    
    38,802
    
    
    397,338Additions
    
    101,538
    
    
    51,675
    
    
    -
    
    
    9,093
    
    
    802
    
    
    14,106
    
    
    177,214Foreign exchange
      movement
    
    (5,083
    )
    
    (1,797
    )
    
    (265
    )
    
    (104
    )
    
    (23
    )
    
    (803
    )
    
    (8,075
    )Balance, August 31, 2015
    $
    348,375
    
    $
    136,641
    
    $
    12,534
    
    $
    14,014
    
    $
    2,808
    
    $
    52,105
    
    $
    566,477ACCUMULATED DEPRECIATIONBalance, August 31, 2013
    $
    -
    
    $
    -
    
    $
    -
    
    $
    374
    
    $
    822
    
    $
    2,409
    
    $
    3,605Additions
    
    -
    
    
    -
    
    
    -
    
    
    233
    
    
    240
    
    
    5,683
    
    
    6,156Foreign exchange
      movement
    
    -
    
    
    -
    
    
    -
    
    
    (4
    )
    
    (4
    )
    
    (23
    )
    
    (31
    )Balance, August 31, 2014
    
    -
    
    
    -
    
    
    -
    
    
    603
    
    
    1,058
    
    
    8,069
    
    
    9,730Additions
    
    -
    
    
    -
    
    
    -
    
    
    447
    
    
    352
    
    
    7,292
    
    
    8,091Foreign exchange movement
    
    -
    
    
    -
    
    
    -
    
    
    (12
    )
    
    (10
    )
    
    (167
    )
    
    (189
    )Balance, August 31, 2015
    $
    -
    
    $
    -
    
    $
    -
    
    $
    1,038
    
    $
    1,400
    
    $
    15,194
    
    $
    17,632Net book value, August 31, 2014
    $
    251,920
    
    $
    86,763
    
    $
    12,799
    
    $
    4,422
    
    $
    971
    
    $
    30,733
    
    $
    387,608Net book value, August 31, 2015
    $
    348,375
    
    $
    136,641
    
    $
    12,534
    
    $
    12,976
    
    $
    1,408
    
    $
    36,911
    
    $
    548,845


16

---

|Platinum Group Metals Ltd.                               
|---------------------------------------------------------
|(An exploration and development stage company)           
|Notes to the consolidated financial statements           
|For the year ended August 31, 2015                       
|(in thousands of Canadian dollars unless otherwise noted)

Project 1

Project 1 is located in the Western Bushveld region of South
Africa and is currently in development. Project 1 costs are classified as
development assets and construction in progress in Property, Plant and
Equipment.

| | i. | Ownership of Project 1
| | -- | ----------------------

Under the terms of a consolidation
transaction completed on April 22, 2010, the Company acquired a 74% interest in
Projects 1 and 3 of the former Western Bushveld Joint Venture through its
holdings in Maseve, while the remaining 26% was acquired by Africa Wide. In
consideration for the Company increasing its holdings to 74%, the Company paid
subscription funds into Maseve, creating an escrow fund for application towards
Africa Wides 26% share of capital requirements. These funds were classified as
restricted cash and were fully depleted in fiscal 2014.

The Company has consolidated the
results of Maseve from the effective date of the reorganization. The portion of
Maseve not owned by the Company is calculated at $65,019 at August 31, 2015
($75,741  August 31, 2014) and is accounted for as a non-controlling interest
(see note 9 for further details).

On October 18, 2013, Africa Wide
elected not to fund its US$21.8 million share of a project budget and cash call
unanimously approved by the board of directors of Maseve. On March 3, 2014,
Africa Wide elected not to fund its US$21.52 million share of a second cash
call. As a result of the missed cash calls, Africa Wides interest in Maseve has
diluted in the current period to approximately a 17.1% holding.

All funding provided by Platinum Group
Metals (RSA) (Pty) Ltd. (PTM RSA) to Maseve for development and
construction at Project 1 since the March 3, 2014 second cash call has been, and
is planned to be, provided by way of an intercompany loan. At August 31, 2015
Maseve owed PTM RSA approximately R1,765 million ($176.2 million). All amounts
due to PTM RSA are planned to be repaid by Maseve before any distribution of
dividends to shareholders.

Legislation and regulations in South
Africa require a 26% equity interest by a BEE entity as a prerequisite to the
grant of a Mining Right. Because Africa Wide is the Companys BEE partner for
Project 1, the Company advised the Department of Mineral Resources (the
DMR) on October 19, 2013 of Africa Wides decision to not fund the cash
call and the associated dilution implications. On October 24, 2013, the DMR
provided the Company with a letter stating that it will apply the provisions of
the Mineral and Petroleum Resources Development Act, 28 of 2002 (the
MPRDA) to any administrative processes or decisions to be conducted or
taken within a reasonable time and in accordance with the principles of
lawfulness, reasonableness and procedural fairness in giving the Company the
opportunity to remedy the effect of Africa Wides dilution. The Company is
considering alternatives to bring additional qualified BEE investment into
Maseve if and when instructed by the DMR. Under the terms of the Maseve
Shareholders Agreement, if Maseve is instructed by the DMR to increase its BEE
ownership, any agreed costs or dilution of interests shall be borne equally by
the Company and Africa Wide, notwithstanding that Africa Wide now holds only
approximately 17.1% of the equity in Maseve. The DMR officials have stated that
overall performance against the Mining Charter objectives in beneficiation will
be considered for overall compliance. No notice of compliance or non-compliance
with the Mining Charter has been received by the Company at the date of
authorization of the financial statements.

| | ii. | Valuation
| | --- | ---------

Management is required to make
significant judgements concerning the identification of potential impairment
indicators. In considering whether any potential impairment indicators occurred
in respect of the Company's long lived assets as at August 31, 2015, management
took into account a number of factors
such as changes in the pricing of platinum, palladium, rhodium and gold prices
(the four elements being produced together as a basket 4E Ounce), foreign
exchange rates, capital expenditures, operating costs, increased costs of
capital, market capitalization and required ownership by historically
disadvantaged South Africans and other factors that may indicate impairment. The
decline in platinum prices and the decrease in the Companys market
capitalization in fiscal 2015 were considered to be potential indicators of
impairment and the Company assessed the recoverable amount of the Project 1
which has been identified as a CGU.

17

---

|Platinum Group Metals Ltd.                               
|---------------------------------------------------------
|(An exploration and development stage company)           
|Notes to the consolidated financial statements           
|For the year ended August 31, 2015                       
|(in thousands of Canadian dollars unless otherwise noted)

Project 1 construction is nearly
complete at August 31, 2015 and Project 1will be considered a cash generating
unit (CGU). On a value in use basis, using the key assumptions below, the
recoverable amount of Project 1 exceeds the carrying value. Accordingly, no
impairment adjustment was necessary.

The recoverable amount of the Project
1 assets is based on estimates of future discounted cash flows (DCFs) of the
latest business forecasts regarding production volumes, costs of production,
capital expenditure, metal prices and market forecasts for foreign exchange
rates. The discount rate is a risk adjusted discount rate, taking into account
specific risks where the cash flows have not been adjusted for the risk.

These assumptions are subject to risk
and uncertainty relating to among other factors, metal prices and exchange
rates. It is therefore possible that changes such as those indicated in the
sensitivity analysis below can occur which may affect the recoverability of the
of the Project 1 assets hence leading to an impairment of the asset.

The key financial assumptions used in
the recoverable amount calculations are:

| | o | The future price per 4E Ounce was considered
      separately at both the three year trailing average and market consensus
      based on price projections of international banks and brokerages. A long
      term price of US$1,346 per 4E Ounce was used in the valuation model.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | o | The real $US/Rand exchange rate of 13:1 was
      used                                                                                                                                                                                                                              
| | o | Long-term real discount rate of 12.35% for the
      project.                                                                                                                                                                                                                       

The recoverable amount was derived
from the Companys financial model which is categorised as a level 3 valuation
of the fair value hierarchy. The recoverable amount for Project 1 is most
sensitive to metal prices, head grades and to a lesser extent operating costs.
Sensitivity has been conducted for Project 1 for metal price, head grade,
capital cost and exchange rates. Lower metal prices and/or lower head grades
both negatively affect the recoverable amount for Project 1. Higher operating
costs also negatively affect the recoverable amount for Project 1. Project 1 is
not significantly sensitive to capital cost increases as the majority of life of
mine capital is sunken as at the date of these financial statements. At a 12.35%
discount rate the estimated recoverable amount for Project 1 is reduced by $77
million for a 5% reduction in the life of mine 4E ounce basket price, by $88
million for a 5% decrease in delivered life of mine head grade or by $45 million
for a 5% increase in life of mine operating costs. At a 12.35% discount rate a
change in the $US/Rand exchange rate from 13:1 to 12:1 decreases the estimated
recoverable amount by $131 million assuming the $CAD:Rand exchange rate remains
unchanged.

|7. | EXPLORATION AND EVALUATION
ASSETS
|-- | ---------------------------------

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

|                               |   | South Africa |   |   | Canada |   |   | Total  |  
|------------------------------ | - | ------------ | - | - | ------ | - | - | ------ | -
|Balance, August 31,
      2013 | $ | 17,194       |   | $ | 5,253  |   | $ | 22,447 |  
|Additions                      |   | 15,885       |   |   | 602    |   |   | 16,487 |  
|Recoveries                     |   | (2,800       | ) |   | -      |   |   | (2,800 | )
|Write-downs                    |   | (1,967       | ) |   | (3,388 | ) |   | (5,355 | )

|Foreign exchange movement |   | (167   | ) |   | -      |   |   | (167   | )
|------------------------- | - | ------ | - | - | ------ | - | - | ------ | -
|Balance, August 31, 2014  | $ | 28,145 |   | $ | 2,467  |   | $ | 30,612 |  
|Additions                 |   | 13,066 |   |   | 413    |   |   | 13,479 |  
|Recoveries                |   | (8,056 | ) |   | -      |   |   | (8,056 | )
|Write-downs               |   | -      |   |   | (2,880 | ) |   | (2,880 | )
|Foreign exchange movement |   | (753   | ) |   | -      |   |   | (753   | )
|                          |   |        |   |   |        |   |   |        |  
|Balance, August 31, 2015  | $ | 32,402 |   | $ | -      |   | $ | 32,402 |  

18

---

|Platinum Group Metals Ltd.                               
|---------------------------------------------------------
|(An exploration and development stage company)           
|Notes to the consolidated financial statements           
|For the year ended August 31, 2015                       
|(in thousands of Canadian dollars unless otherwise noted)

(a) Republic of South Africa

|                          |                                        | August 31,
      2015 |            |   | August 31,
      2014 |        
|------------------------- | -------------------------------------- | --------------------- | ---------- | - | --------------------- | -------
|Project 3  see Note 6(i) | **$**                                  | **3,095**             |            | $ | 3,161                 |        
|                          |                                        |                       |            |   |                       |        
|Waterberg JV              | Acquisition costs                      |                       | 28         |   |                       | 21     
|                          | Exploration and
      evaluation costs |                       | 36,386     |   |                       | 27,811 
|                          | Recoveries                             |                       | (19,372    | ) |                       | (11,557
|                          |                                        |                       | 17,042     |   |                       | 16,275 
|Waterberg Extension       | Acquisition costs                      |                       | 26         |   |                       | 22     
|                          | Exploration and evaluation costs       |                       | 12,232     |   |                       | 8,653  
|                          |                                        |                       | 12,258     |   |                       | 8,675  
|War Springs               | Acquisition costs                      |                       | -          |   |                       | 128    
|                          | Exploration and
      evaluation costs |                       | -          |   |                       | 3,377  
|                          | Recoveries                             |                       | -          |   |                       | (2,104 
|                          | Write-down                             |                       | -          |   |                       | (1,401 
|                          |                                        |                       | -          |   |                       | -      
|Tweespalk                 | Acquisition costs                      |                       | -          |   |                       | 73     
|                          | Exploration and
      evaluation costs |                       | -          |   |                       | 634    
|                          | Recoveries                             |                       | -          |   |                       | (157   
|                          | Write-down                             |                       | -          |   |                       | (550   
|                          |                                        |                       | -          |   |                       | -      
|Other                     | Acquisition costs                      |                       | 33         |   |                       | 10     
|                          | Exploration and
      evaluation costs |                       | 949        |   |                       | 1,029  
|                          | Recoveries                             |                       | (975       | ) |                       | (1,005 
|                          |                                        |                       | 7          |   |                       | 34     
|                          |                                        |                       |            |   |                       |        
|Total South Africa        |                                        | **$**                 | **32,402** |   | $                     | 28,145 

Waterberg Projects

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

PTM RSA holds legal title to the prospecting rights underlying
the Waterberg Projects with Mnombo identified as the Companys 26% BEE partner
for all. The Company holds the Waterberg JV Project prospecting permits in trust
for the joint venture and subject to the ownership terms and conditions of the
JOGMEC Agreement and the 2nd Amendment thereto, as defined below.

The Company holds the Waterberg Extension Project prospecting
permits in trust for Mnombo and the Company, subject to the planned
consolidation according to the 2nd Amendment to the JOGMEC Agreement,
as defined below.

19

---

|Platinum Group Metals Ltd.                               
|---------------------------------------------------------
|(An exploration and development stage company)           
|Notes to the consolidated financial statements           
|For the year ended August 31, 2015                       
|(in thousands of Canadian dollars unless otherwise noted)

In October 2009, PTM RSA, the Japan Oil, Gas and Metals
National Corporation (JOGMEC) and Mnombo entered into a joint venture
agreement with regard to the Waterberg JV project (the JOGMEC
Agreement). Under the terms of the JOGMEC Agreement, in April 2012, JOGMEC
completed a US$3.2 million work requirement to earn a 37% interest in the
Waterberg JV Project, leaving the Company with a 37% interest and Mnombo with a
26% interest. Following JOGMECs earn-in, the Company funded Mnombos 26% share
of costs, totalling US$1.12 million, until the earn-in phase of the joint
venture ended in May 2012.

On November 7, 2011 the Company entered into an agreement with
Mnombo to acquire 49.9% of the issued and outstanding shares of Mnombo in
exchange for cash payments totalling R1.2 million and the Companys agreement to
pay for Mnombo's 26% share of costs on the Waterberg JV Project until the
completion of a feasibility study.

For accounting purposes, the Company fully consolidates Mnombo.
The portion of Mnombo not owned by the Company, calculated at $4,791 at August
31, 2015 ($4,017  August 31, 2014), is accounted for as a non-controlling
interest.

On May 26, 2015, the Company announced a second amendment (the
2ndAmendment) to the existing JOGMEC
Agreement. Under the terms of the 2nd Amendment the Waterberg JV and
Waterberg Extension projects, as described below, are to be consolidated and
contributed into a newly created operating company named Waterberg JV Resources
(Pty) Ltd. (Waterberg JV Co.). The Company is to hold 45.65% of
Waterberg JV Co. while JOGMEC is to own 28.35% . Mnombo will hold 26%. Through
its 49.9% share of Mnombo, the Company will hold an effective 58.62% of
Waterberg JV Co., post-closing. Under the 2nd Amendment, JOGMEC has
committed to fund US$20 million in expenditures over a three year period ending
March 31, 2018. An amount of US$8 million will be funded by JOGMEC to March 31,
2016, followed by the first US$6 million to be spent in each of the following
two 12 month periods. Any amounts in excess of US$6 million to be spent in
either of years two or three is to be funded by the JV partners pro-rata to
their holdings. Closing of this transaction is subject to Section 11 approval by
the DMR for the transfer of title to the Waterberg prospecting rights and other
project assets into the new Waterberg JV Co. The Company will continue its
current accounting treatment for the Waterberg JV and Waterberg Extension
projects until closing. If Section 11 approval for the transfer is not obtained
the parties will default to the pre 2nd amendment JV arrangement,
with any advances received from JOGMEC to be used to offset its spending
commitments on the Waterberg JV property.

| | i. | Waterberg JV Project
| | -- | --------------------

PTM RSA applied for the original 137
km2 prospecting right for the Waterberg JV Project area and in
September 2009 the DMR granted the prospecting right until September 1, 2012.
This prospecting right was later increased in size to 153 km2 by way
of section 102 application to the DMR. Renewal of this prospecting right for a
further three years ending September 29, 2018 was granted by the DMR in
September 2015. Under the MPRDA, a prospecting right remains valid during the
application period pending the grant of a renewal. Two further prospecting
rights totaling 102 km2 were granted to PTM RSA on October 2, 2013.
These two prospecting rights are valid until October 1, 2018 and may each be
renewed for a further period of three years thereafter.

Since the earn-in period ended in May
2012 and up to August 31, 2015 an additional US$33.5 million has been spent on
the Waterberg JV Project. The Company and Mnombos combined 63% share of this
work totaled US$19.4 million up until March 31, 2015 (at which time the above
mentioned 2ndAmendment comes into effect) with the remaining US$14.1
million funded by JOGMEC. As of August 31, 2015 an amount of US$0.81 million is
due from JOGMEC against expenditures made on the Waterberg JV project since
March 31, 2015.

| | ii. | Waterberg Extension
Project
| | --- | ---------------------------

The Waterberg Extension Project
includes contiguous granted and applied-for prospecting rights with a combined
area of approximately 864 km2. Two of the prospecting rights were
executed on October 2, 2013 and each is valid for a period of five years,
expiring on October 1, 2018. The third prospecting right was executed on
October 23, 2013 and is valid for a period of five years, expiring on October
22, 2018. The Company has made an application under section 102 of the MPRDA to
the DMR to increase the size of one of the granted prospecting rights by 44
km2. The Company has the exclusive right to apply for renewals of the
prospecting rights for periods not exceeding three years each and the exclusive
right to apply for a mining right over these prospecting right areas.
Applications for a fourth and a fifth prospecting right covering 331
km2 were accepted for filing with the DMR on February 7, 2012 for a
period of five years. These applications, which are not directly on the trend of
the primary exploration target, are in process with the DMR. No work has been
completed to date on the areas covered by the fourth and fifth prospecting
rights pending their formal grant by the DMR.

20

---

|Platinum Group Metals Ltd.                               
|---------------------------------------------------------
|(An exploration and development stage company)           
|Notes to the consolidated financial statements           
|For the year ended August 31, 2015                       
|(in thousands of Canadian dollars unless otherwise noted)

Before closing of the 2nd
Amendment as described above, the Company holds a direct 74% interest and Mnombo
holds a 26% interest in the Waterberg Extension Project, leaving the Company
with an 86.974% effective interest by way of the Companys 49.9% shareholding in
Mnombo. The Company has carried Mnombos 26% share of ongoing costs on the
Waterberg Extension Project until March 31, 2015. Under the 2nd
Amendment JOGMEC will fund US$20 million in expenditures to March 31, 2018 on
the combined Waterberg Projects.

To March 31, 2015 US$9.5 million has
been spent on the Waterberg Extension Project. Mnombos combined 26% share of
this work totalled US$2.5 million up until March 31, 2015, at which time the
above mentioned 2nd Amendment comes into effect. Spent to date post
March 31, 2015 is US$2.1 and at August 31, 2015, an amount of US$0.1 million is
due from JOGMEC against expenditures made on the Waterberg Extension projects
since March 31, 2015.

War Springs and Tweespalk

On June 3, 2002, the Company acquired an option to earn a 100%
interest in the 2,396 hectare War Springs property and the 2,177 hectare
Tweespalk property, both located in the Northern Limb or Platreef area of the
Bushveld Complex. BEE groups Africa Wide and Taung Minerals (Pty) Ltd. have each
acquired a 15% interest in the Companys rights to the War Springs project
carried to bankable feasibility. The Company retains a net 70% project interest.
Africa Wide also has a 30% participating interest in the Tweespalk property. The
Company wrote off all deferred costs related to these properties in fiscal 2014
while continuing to hold the prospecting rights, which are subject to renewal by
the DMR.

(b) Canada

On August 9, 2013, the Company entered into an option agreement
with Benton Resources Inc. on the Mealy Lake Property in southwestern Labrador.
The Company does not plan to continue exploration on the project and $999 of
deferred acquisition and exploration costs were written off during the year
ended August 31, 2015.

In September 2011, the Company purchased the Providence
property located in the Northwest Territories from Arctic Star Exploration Corp.
During the period the Company wrote off all deferred acquisition and exploration
costs related to the project in the amount of $1,821. Subsequent to year end,
the Company sold its rights to the project to Benton Resources Inc., who
acquired the rights by making an approximate $28,000 lease payment to the NWT
government and granting Platinum Group a 0.75% NSR along with a 0.5% NSR to
Arctic Star Exploration Corp.

The Company maintains a mineral rights position in the Lac Des
Iles area north of Thunder Bay, Ontario. On April 23, 2014 the Company entered
into an option to purchase agreement with Lac des Iles Mines Ltd. (LDI)
(a 100% owned subsidiary of North American Palladium Ltd.) whereby LDI can earn
a 100% undivided interest in the Companys Shelby Lake property by completing
$400 in exploration expenditures over a three year period, with an initial cash
payment to the Company of $25. The Company will retain a 1% NSR if LDI completes
the earn-in. During the year ended August 31, 2014 all deferred acquisition and
exploration costs were written off for all Ontario properties.

21

---

|Platinum Group Metals Ltd.                               
|---------------------------------------------------------
|(An exploration and development stage company)           
|Notes to the consolidated financial statements           
|For the year ended August 31, 2015                       
|(in thousands of Canadian dollars unless otherwise noted)

|8. | SHARE CAPITAL
|-- | -------------

|(a) | Authorized
|--- | ----------

Unlimited common shares without par value.

|(b) | Issued and outstanding
|--- | ----------------------

At August 31, 2015, the Company had 768,943,030 shares
outstanding.

During the year ended August 31, 2015, the Company closed an
offering of 214.8 million shares at a price of US$0.53 ($0.61) per share
resulting in gross proceeds of US$114 million ($132 million). The offering
closed December 31, 2014 with net proceeds to the Company after fees,
commissions and costs of approximately US$106 million ($124 million).

During the year ended August 31, 2015 the Company issued
2,830,188 common shares at a deemed price of US$0.53 per share in connection
with the Senior Secured Loan Facility entered into on February 16, 2015 (Note
3). The total issue price of US$1.5 million represents 3.75% of the principal
amount of the Facility.

|(c) | Incentive stock options
|--- | -----------------------

The Company has entered into Incentive Stock Option Agreements
(Agreements) under the terms of its stock option plan with directors,
officers, consultants and employees. Under the terms of the Agreements, the
exercise price of each option is set, at a minimum, at the fair value of the
common shares at the date of grant. Stock options granted to certain employees,
directors and officers of the Company are subject to vesting provisions, while
others vest immediately.

The following tables summarize the Companys outstanding stock
options:

| |                                              |  |                  |   |   | Average        | 
| | -------------------------------------------- |  | ---------------- | - | - | -------------- | 
| |                                              |  | Number of Shares |   |   | Exercise Price | 
| | Options outstanding at August
      31, 2013 |  | 15,808,500       |   | $ | 1.58           | 
| | Granted                                      |  | 6,575,000        |   |   | 1.30           | 
| | Exercised                                    |  | (53,300          | ) |   | 1.00           | 
| | Cancelled                                    |  | (2,585,700       | ) |   | 1.63           | 
| | Options outstanding at August
      31, 2014 |  | 19,744,500       |   |   | 1.48           | 
| | Granted                                      |  | 9,430,000        |   |   | 0.65           | 
| | Cancelled                                    |  | (850,000         | ) |   | 1.33           | 
| | Options outstanding at August 31, 2015       |  | 28,324,500       |   | $ | 1.21           | 

NumberOutstanding and
    
    
    
    
    Average RemainingExercisable at
    
    
    
    
    Contractual LifeAugust 31, 2015
    
    Exercise Price
    
    
    (Years)9,295,000
    
    $                                         0.65
    
    
    4.473,124,000
    
    0.96
    
    
    2.02100,000
    
    1.05
    
    
    2.7525,000
    
    1.20
    
    
    1.359,814,000
    
    1.30
    
    
    3.4375,000
    
    1.38
    
    
    1.4735,000
    
    1.40
    
    
    2.553,554,000
    
    2.05
    
    
    0.682,252,500
    
    2.10
    
    
    0.2450,000
    
    2.20
    
    
    0.2728,324,500
    
    
    
    
    3.00


22

---

|Platinum Group Metals Ltd.                               
|---------------------------------------------------------
|(An exploration and development stage company)           
|Notes to the consolidated financial statements           
|For the year ended August 31, 2015                       
|(in thousands of Canadian dollars unless otherwise noted)

The stock options outstanding have an intrinsic value of $Nil
at August 31, 2015.

During the year ended August 31, 2015, the Company granted
9,430,000 stock options (August 31, 2014  6,575,000). The Company recorded
$2,664 ($1,398 expensed and $1,266 capitalized to properties) of compensation
expense for the year ended August 31, 2015 (August 31, 2014 - $3,803 ($2,222
expensed and $1,581 capitalized to properties)).

The Company uses the Black-Scholes model to determine the grant
date fair value of stock options. Assumptions used in valuing stock options
granted during the year ended August 31, 2015 and 2014 follow:

Period ended
    
    August 31, 2015
    
    
    August 31, 2014Risk-free interest rate
    
    0.60%
    
    
    1.47%Expected life of options
    
    3.8 years
    
    
    3.7 yearsAnnualized volatility
    
    60%
    
    
    60%Forfeiture rate
    
    0%
    
    
    0%Dividend rate
    
    0.00%
    
    
    0.00%


|9. | Non-controlling interest
|-- | ------------------------

The table below shows details of non-wholly owned subsidiaries
of the Group that have material non-controlling interests:

Company
    
    Proportion of
    
    
    Loss allocated to
    
    
    Accumulatedownership and
    
    
    non-controlling
    
    
    non-controllingvoting rights
      held
    
    
    interests
    
    
    interestsby
      non-controllinginterests2015
    
    
    2014
    
    
    2015
    
    
    2014
    
    
    2015
    
    
    2014Maseve Investments 11 (Pty) Ltd
    
    17.1%
    
    
    21.3%
    
    
    1,005
    
    
    55
    
    
    66,404
    
    
    75,741Mnombo Wethu Consultants (Pty) Limited
    
    50.1%
    
    
    50.1%
    
    
    -
    
    
    -
    
    
    4,791
    
    
    4,017Total
    
    
    71,195
    
    
    79,758


|10. | CAPITAL RISK MANAGEMENT
|--- | -----------------------

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

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

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

As at August 31, 2015, the Company did not have any long-term
debt and was not subject to any externally imposed capital requirements.
Subsequent to year end, the Company closed the Sprott Facility and the LMM
Facility (defined herein). See subsequent events (note 19) below for further
details.

23

---

|Platinum Group Metals Ltd.                               
|---------------------------------------------------------
|(An exploration and development stage company)           
|Notes to the consolidated financial statements           
|For the year ended August 31, 2015                       
|(in thousands of Canadian dollars unless otherwise noted)

|11. | FINANCIAL INSTRUMENTS AND RISK
  MANAGEMENT
|--- | -------------------------------------------

The Company examines the various financial risks to which it is
exposed and assesses the impact and likelihood of occurrence. These risks may
include credit risk, liquidity risk, currency risk, interest rate risk and other
price risks.

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

Credit risk arises from the risk that the financial asset
counterparty, may default or not meet its obligations timeously. The Company
minimizes credit risk by monitoring the reliability of counterparties to settle
assets. The maximum exposure to the credit risk is represented by the carrying
amount of all the financial assets. There is no material concentration of credit
risk in cash and cash equivalents, trade and other receivables and loans.

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

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

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

In order to manage credit and liquidity
risk the Company invests only in term deposits with Canadian Chartered and South
African banks that have maturities of three months or less. A South African Bank
Rand account held in the United Kingdom is used for holding Rand denominations
only, and is not restricted. Deposit limits are also established based on the
type of investment, the counterparty and the credit rating.

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

In order to explore and develop its
properties in South Africa, the Company was required to post performance bonds
as financial guarantees against future reclamation work. These funds are held
with Standard Bank of South Africa Limited with the Department of Mineral
Resources in South Africa as beneficiary in accordance with the MPRDA and the
Companys environmental management programme.

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

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

Future exploration, development, mining, and processing of
minerals from the Companys properties will require additional financing.
Subsequent to year end the Company closed two debt financings which are expected
to fund the Project 1 platinum mine to production based on current projections.
See subsequent events for further details of the transactions.

Further, the Company may be required to source additional
financing by way of private or public offerings of equity or debt or the sale of
project or property interests in order to have sufficient working capital for
continued exploration on the Waterberg Projects, as well as for general working
capital purposes.

Any failure by the Company to obtain additional required
financing on acceptable terms could cause the Company to delay development of
its material projects or could result in the Company being forced to sell some
of its assets on an untimely or unfavourable basis. Any such delay or sale could
have a material and adverse effect on the Companys financial condition, results
of operations and liquidity.

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

PTM Canadas functional currency is the Canadian dollar, while
the functional currency of all South African subsidiaries is the Rand. The
Companys operations are in both Canada and South Africa; therefore the
Company's results are impacted by fluctuations in the value of foreign
currencies in relation to the Canadian dollar. The Company also held material
USD denominated cash balances. The Company's significant foreign currency
exposures on financial instruments comprise cash and cash equivalents, accounts
payable and accrued liabilities. The Company has not entered into any agreements
or purchased any instruments to hedge possible currency risks at this time.

24

---

|Platinum Group Metals Ltd.                               
|---------------------------------------------------------
|(An exploration and development stage company)           
|Notes to the consolidated financial statements           
|For the year ended August 31, 2015                       
|(in thousands of Canadian dollars unless otherwise noted)

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

Year ended
    
    August 31, 2015
    
    
    August 31, 2014Cash (Rand)
    $
    9,467
    
    $
    4,854Cash (USD)
    
    27,152
    
    
    23,985Accounts payable (Rand)
    
    21,024
    
    
    27,054Accounts receivable (Rand)
    
    11,611
    
    
    12,215


The Company's comprehensive loss is affected by changes in the
exchange rate between its operating currencies and the Canadian dollar. At
August 31, 2015, based on this exposure a 10% strengthening/weakening in the
Canadian dollar versus Rand foreign exchange rate and United States dollar would
give rise to a decrease/increase in net loss for the year presented of
approximately $3.66 million.

|(d) | Interest rate risk
|--- | ------------------

The Companys interest income earned on cash and cash
equivalents and on short term investments is exposed to interest rate risk. At
August 31, 2015, based on this exposure a 1% change in the average interest rate
would give rise to an increase/decrease in the net loss for the year of
approximately $1,170.

At August 31, 2015, the carrying amounts of cash and cash
equivalents, amounts receivable, performance bonds and accounts payable and
accrued liabilities are considered to be reasonable approximations of their fair
values due to the short-term nature of these instruments.

|12. | RELATED PARTY TRANSACTIONS
|--- | --------------------------

Transactions with related parties are as follows:

|(a) | During the year ended August 31, 2015, $297 ($311 
      August 31, 2014) was paid to independent directors for directors fees and
      services.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(b) | During the year ended August 31, 2015, the Company
      accrued or received payments of $102 ($102  August 31, 2014) from West
      Kirkland Mining Inc. (West Kirkland), a company with two
      directors in common, for administrative services. Amounts receivable at
      the end of the period include an amount of $26 ($24  August 31, 2014) due
      from West Kirkland.                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(c) | During the year ended August 31, 2015, the Company
      accrued or received payments of $Nil ($25  August 31, 2014) from
      Nextraction Energy Corp. (Nextraction), a company with three
      directors in common, for administrative services. Amounts receivable at
      the end of the period include an amount of $206 ($206  August 31, 2014)
      due from Nextraction. Nextraction is currently going through a credit
      restructuring and non-conflicted directors of the Company will decide on
      the form of settlement with Nextraction. Nextraction is not incurring
      further indebtedness to the Company for services at this
  time.

25

---

|Platinum Group Metals Ltd.                               
|---------------------------------------------------------
|(An exploration and development stage company)           
|Notes to the consolidated financial statements           
|For the year ended August 31, 2015                       
|(in thousands of Canadian dollars unless otherwise noted)

All amounts receivable and accounts payable owing to or from
related parties are non-interest bearing with no specific terms of repayment.
These transactions are in the normal course of business and are measured at the
estimated fair value, which is the consideration established and agreed to by
the parties.

Key Management Compensation

The remuneration of directors, the CFO, CEO, COO and other key
management personnel during the years ended August 31, 2015 and 2014 is as
follows:

Year ended
    
    August 31, 2015
    
    
    August 31, 2014Salaries
    
    2,493
    
    
    2,289Share-based payments
    
    1,354
    
    
    1,526Total
    
    3,847
    
    
    3,815


|13. | ASSET RETIREMENT
OBLIGATION
|--- | ---------------------------

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

There was an increase in the net present value of the asset
retirement obligation (ARO) during the year ended August 31, 2015, due
mainly to ongoing construction work on Project 1. At August 31, 2015, the ARO is
estimated based on a total future liability of approximately R 44.0 million
(August 31, 2014  R 22.3 million). A discount rate of 7.97% and an inflation
rate of 6.4%, which represents South Africas expected inflation rate, were used
to calculate the ARO.

Balance August 31, 2013
    $
    1,407Additional obligation incurred
    
    125Accretion expense
    
    118Foreign exchange gain
    
    (14
    )Balance August 31,
      2014
    $
    1,636Additional obligation incurred
    
    1,258Accretion expense
    
    179Foreign exchange gain
    
    (35
    )Balance August 31, 2015
    $
    3,038


|14. | CONTINGENCIES AND
COMMITMENTS
|--- | -----------------------------

The Companys remaining minimum payments under its office and
equipment lease agreements in Canada and South Africa total approximately $2,602
to August 31, 2020.

The Companys project operating subsidiary, Maseve, is party to
a long term 40MVA electricity supply agreement with South African power utility,
Eskom. In consideration Maseve is to pay connection fees and guarantees totaling
R147 million ($14.7 million at August 31, 2015) to fiscal 2016 of which R88.4
million ($8.8 million at August 31, 2015), has been paid, leaving R58.6 million
($5.9 million) of the commitment outstanding. These fees are subject to possible
change based on Eskoms cost to install. Eskoms schedule to deliver power is
also subject to potential for change.

In November 2012, Maseve entered into a water supply agreement
with Magalies Water. In terms of the agreement Maseve is required to contribute
to the Pilansberg Water Scheme to the amount of R142 million. Contributions to
the scheme can be in the form of cash contributions or via infrastructural
builds jointly managed by Maseve and Magalies. As at August 31, 2015, Maseve has
contributed R72.8 million ($7.3 million) to the scheme, leaving R69.42 million ($6.9
million at August 31, 2015) of the commitment outstanding.

26

---

|Platinum Group Metals Ltd.                               
|---------------------------------------------------------
|(An exploration and development stage company)           
|Notes to the consolidated financial statements           
|For the year ended August 31, 2015                       
|(in thousands of Canadian dollars unless otherwise noted)

From period end the aggregate commitments are as follows:

< 1
    
    
    1  3
    
    
    4  5
    
    
    > 5
    
    
    TotalYear
    
    
    Years
    
    
    Years
    
    
    YearsLease obligations
    $
    473
    
    $
    1,036
    
    $
    1,093
    
    $
    -
    
    $
    2,602ESKOM  power
    
    5,845
    
    
    -
    
    
    -
    
    
    -
    
    
    5,845Magalies water
    
    6,928
    
    
    -
    
    
    -
    
    
    -
    
    
    6,928Tailings & Surface Infrastructure
    
    23,882
    
    
    -
    
    
    -
    
    
    -
    
    
    23,882Mining development
    
    2,354
    
    
    -
    
    
    -
    
    
    -
    
    
    2,354Mining equipment
    
    11,875
    
    
    -
    
    
    -
    
    
    -
    
    
    11,875Sprott Standby Fees (Note 3)
    
    462
    
    
    -
    
    
    -
    
    
    -
    
    
    462Other property expenditures
    
    13,182
    
    
    -
    
    
    -
    
    
    -
    
    
    13,182Totals
    $
    65,001
    
    $
    1,036
    
    $
    1,093
    
    $
    -
    
    $
    67,130


The above contracts are subject to the following estimated
break fees in the event of cancellation at August 31, 2015:

|Concentrator plant and surface infrastructure | $ | 9,946  | 
|--------------------------------------------- | - | ------ | 
|Magalies water                                |   | 6,928  | 
|ESKOM                                         |   | 5,845  | 
|Mining equipment                              |   | 6,450  | 
|Other                                         |   | 7,786  | 
|                                              | $ | 36,955 | 

Break fees are estimated by means of contractual notice
periods, work in progress costs and normal costs associated with the unwinding
and disestablishment of certain contractors.

Subsequent to year end the Company drew down on the Sprott
Facility and entered into and drew down on the LMM Facility (defined herein).
Loan repayment details are also included below in the subsequent events (Note
19).

|15. | SUPPLEMENTARY CASH FLOW
  INFORMATION
|--- | -------------------------------------

Net change in non-cash working capital:

|Year ended                                                  |   | August 31, 2015 |   |   | August 31, 2014 |  
|----------------------------------------------------------- | - | --------------- | - | - | --------------- | -
|Amounts receivable, prepaid
      expenses and other assets | $ | (3,040          | ) | $ | (3,280          | )
|Accounts payable and accrued liabilities                    |   | 667             |   |   | (266            | )
|                                                            | $ | (2,373          | ) | $ | (3,546          | )

|16. | SEGMENTED REPORTING
|--- | -------------------

The Company operates in one operating segment, that being
exploration and development of mineral properties. Information presented on a geographic basis
follows:

27

---

|Platinum Group Metals Ltd.                               
|---------------------------------------------------------
|(An exploration and development stage company)           
|Notes to the consolidated financial statements           
|For the year ended August 31, 2015                       
|(in thousands of Canadian dollars unless otherwise noted)

Assets

|             |   | August 31, 2015 |  |   | August 31, 2014 | 
|------------ | - | --------------- |  | - | --------------- | 
|Canada       | $ | 46,166          |  | $ | 118,174         | 
|South Africa |   | 609,461         |  |   | 432,065         | 
|             | $ | 655,627         |  | $ | 550,239         | 

Substantially all of the Companys capital expenditures are
made in South Africa, although the Company also held exploration properties in
Canada which were written off during the year.

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

|Year ended   |   | August 31, 2015 |   |   | August 31, 2014 |  
|------------ | - | --------------- | - | - | --------------- | -
|             |   |                 |   |   |                 |  
|Canada       | $ | 1,170           |   | $ | (8,263          | )
|South Africa |   | (4,968          | ) |   | (2,175          | )
|             | $ | (3,798          | ) | $ | (10,438         | )

|17. | EXPENSES
|--- | --------

| | i) | General and
Administrative
| | -- | --------------------------

|GENERAL AND ADMINISTRATIVE   |   | Year Ending |  |   | Year Ending | 
|---------------------------- | - | ----------- |  | - | ----------- | 
|                             |   | August 31,  |  |   | August 31,  | 
|                             |   | 2015        |  |   | 2014        | 
|Salaries and benefits        | $ | 3,567       |  | $ | 3,391       | 
|Professional/consulting fees |   | 1,859       |  |   | 1,649       | 
|Depreciation                 |   | 627         |  |   | 474         | 
|Travel                       |   | 593         |  |   | 724         | 
|Regulatory Fees              |   | 409         |  |   | 538         | 
|Insurance                    |   | 361         |  |   | 451         | 
|Rent                         |   | 295         |  |   | 227         | 
|Accretion                    |   | 179         |  |   | 118         | 
|Other                        |   | 438         |  |   | 360         | 
|Total                        | $ | 8,328       |  | $ | 7,932       | 

| | ii) | Foreign Exchange Gain
| | --- | ---------------------

The foreign exchange gain of $10.7 million is due to the
Company holding US Dollars during the year while the US Dollar increased in
value relative to the Canadian dollar.

|18. | INCOME TAXES
|--- | ------------

The income taxes shown in the consolidated earnings differ from
the amounts obtained by applying statutory rates to the earnings before
provision for income taxes due to the following:

28

---

|Platinum Group Metals Ltd.                               
|---------------------------------------------------------
|(An exploration and development stage company)           
|Notes to the consolidated financial statements           
|For the year ended August 31, 2015                       
|(in thousands of Canadian dollars unless otherwise noted)

|                                                      |   | 2015  |   |   | 2014   |  
|----------------------------------------------------- | - | ----- | - | - | ------ | -
|                                                      |   |       |   |   |        |  
|Loss before income taxes                              | $ | 3,487 |   | $ | 10,668 |  
|                                                      |   |       |   |   |        |  
|Income tax recovery at
      statutory rates          |   | (906  | ) |   | (2,774 | )
|Difference of foreign tax rates                       |   | (53   | ) |   | (30    | )
|Non-deductible expenses                               |   | (570  | ) |   | 1,431  |  
|Changes in unrecognized deferred tax assets and other |   | 2,845 |   |   | 1,164  |  
|Income tax expense (recovery)                         |   | 1,316 |   |   | (209   | )
|                                                      |   |       |   |   |        |  
|Income tax expense (recovery)
      consists of:      |   |       |   |   |        |  
|Current
      income taxes                            | $ | 233   |   | $ | -      |  
|Deferred income
      taxes                           |   | 1,083 |   |   | (209   | )
|                                                      | $ | 1,316 |   | $ | (209   | )

The gross movement on the net deferred income tax account is as
follows:

|                                                                             |   | 2015    |   |   | 2014    |  
|---------------------------------------------------------------------------- | - | ------- | - | - | ------- | -
|Deferred tax liability at the
      beginning of the year                    | $ | (11,585 | ) | $ | (11,908 | )
|Tax (expense) recovery relating to the loss
      from continuing operations |   | (1,083  | ) |   | 209     |  
|Tax recovery relating to components of other comprehensive income            |   | 4,357   |   |   | 114     |  
|Deferred tax liability at the end of the year                                | $ | (8,311  | ) | $ | (11,585 | )

The significant components of the Companys net deferred income
tax liabilities are as follows:

|                          |   | 2015    |   |   | 2014    |  
|------------------------- | - | ------- | - | - | ------- | -
|Mineral properties        | $ | (23,326 | ) | $ | (31,257 | )
|Loss
      carry forwards |   | 15,015  |   |   | 19,672  |  
|                          | $ | (8,311  | ) | $ | (11,585 | )

Unrecognized deductible temporary differences, unused tax and
unused tax credit losses are attributed to the following:

|                                                                                |   | 2015   |  |   | 2014   | 
|------------------------------------------------------------------------------- | - | ------ |  | - | ------ | 
|Tax Losses:                                                                     |   |        |  |   |        | 
|Operating loss carry forwards                                                   | $ | 58,335 |  | $ | 46,892 | 
|Capital loss carry forwards                                                     |   | 1,484  |  |   | 12,841 | 
|                                                                                |   | 59,819 |  |   | 59,733 | 
|                                                                                |   |        |  |   |        | 
|Temporary Differences:                                                          |   |        |  |   |        | 
|Mineral properties                                                              |   | 10,061 |  |   | 7,181  | 
|Share issuance costs                                                            |   | 15,729 |  |   | 15,532 | 
|Property, plant and equipment                                                   |   | 699    |  |   | 603    | 
|Deductible temporary difference related to
      net investment in a subsidiary |   | -      |  |   | 50,614 | 
|Other                                                                           |   | 620    |  |   | 270    | 
|                                                                                | $ | 27,109 |  | $ | 74,200 | 
|                                                                                |   |        |  |   |        | 
|Investment Tax Credit:                                                          | $ | 375    |  | $ | 375    | 

29

---

|Platinum Group Metals Ltd.                               
|---------------------------------------------------------
|(An exploration and development stage company)           
|Notes to the consolidated financial statements           
|For the year ended August 31, 2015                       
|(in thousands of Canadian dollars unless otherwise noted)

The Company has operating loss carry-forwards that may be
available for tax purposes in Canada totaling $58,335 (August 31, 2014 -
$46,892). These losses expire between 2016 and 2035.

The Company has capital loss carry-forwards that may be
available for tax purposes in Canada totaling $1,484 (August 31, 2014 -
$12,841). These capital losses can be carried forward indefinitely.

The Company has unused investment tax credit carry-forwards
that may be available for tax purposes in Canada totaling $375 (August 31, 2014
- $375). These tax credits expire between 2029 and 2034.

|19. | SUBSEQUENT EVENTS
|--- | -----------------

The following significant events occurred subsequent to year
end. These events as well as other non-significant subsequent events may be
mentioned elsewhere in the financial statements.

On November 20, 2015, the Company drew down US$40 million
working capital facility pursuant to the Sprott Facility with Sprott and others
executed on February 16, 2015. Pursuant to the terms of the Sprott credit
agreement, the Company paid a draw down fee of US$800,000 (being 2% of the
amount being drawn down under the Facility) paid in 3,485,839 common shares of
the Company.

On November 20, 2015, the Company also drew down US$40 million
from a loan facility (the LMM Facility) pursuant to a credit agreement (the
LMM Credit Agreement) entered into on November 2, 2015 with its largest
shareholder, Liberty Metals & Mining Holdings, LLC (LMM), a subsidiary of
Boston based Liberty Mutual Insurance. Pursuant to the terms of the LMM Credit
Agreement, the Company paid a draw down fee of US$800,000 to LMM, being 2% of
the amount being drawn down under the LMM Facility, paid in 3,485,839 common
shares of the Company.

The interest rate on the LMM Facility is 9.5% over LIBOR.
Interest payments on the LMM Facility will be accrued and capitalized until
December 31, 2016, and then paid to LMM quarterly thereafter. The first 20% of
principal is to be repaid on December 31, 2018 and then in tranches of 10% of
the principal at the end of each calendar quarter beginning on March 31, 2019
and for each of the next 7 quarters of the LMM Facility.

Pursuant to the LMM Credit Agreement the Company entered into a
life of mine Production Payment Agreement (PPA) with LMM. Under the PPA, the
Company agreed to pay to LMM a production payment of 1.5% of net proceeds
received on concentrate sales or other minerals from the Project 1 platinum and
palladium mine (the Production Payment). The Company has the right, but not
the obligation, to buy back 1% of the 1.5% Production Payment for US$17.5
million until January 1, 2019 and then for US$20 million until December 31,
2021.

If the Company exercises its right to buy back a portion of the
production payment, then the LMM Facility payback will be deferred, with 10% of
the principal and capitalized interest to be repaid on each of September 30,
2019 and December 31, 2019, followed by 20% of principal and capitalized
interest to be repaid on each of March 31, 2020, June 30, 2020, September 30,
2020 and December 31, 2020.

Sprott, in first lien position, agreed to amend its original
terms and enter into an inter-creditor agreement to allow for the second lien
position for LMM. The Sprott Facility is to be repaid during 2017. Events of
default under the Sprott Facility are also treated as events of default under
the LMM Facility, and vice versa. Under the LMM Facility, the Company has
provided a subordinated pledge of 100% of the shares of PTM RSA. The LMM
Facility is subordinated to the Sprott Facility and scheduled to be repaid after
Sprott. An event of default under the PPA triggers the payment of a termination
fee based on a net present value of the Production Payments to be made under the
PPA at a 5% discount rate. An event of default under the Sprott Facility or the
LMM Facility is also treated as an event of default under the PPA. The Company
holds the right to terminate the PPA upon payment of the termination fee.

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

30

---