Waterberg

The progress made at the Waterberg projects during 2014 has been significant. Not only have we grown the deposits in terms of sheer ounces, but have also advanced the engineering with a positive Preliminary Economic Assessment (“PEA”) completed for the Waterberg Joint Venture in February 2014. As a result of the June 2014 increase in estimated resource ounces for the Waterberg deposit, the PEA is no longer current or valid. A pre-feasibility study is underway for the project with an expected delivery date in Q2 of calendar 2015. We believe that the Waterberg Joint Venture and Waterberg Extension projects now rank as one of the most prospective PGM discoveries globally.

Looking North at the Waterberg Extension Project

The scale and thickness of the Waterberg deposit makes it stand out. Traditional Merensky Reef and UG2 Reef platinum mines in South Africa average approximately 1.0 to 1.4 meters thick. The mineralized zones at Waterberg are 3.0 to 60 meters thick.  The most recent inferred resource estimate for the Waterberg deposit as a whole totals 287 million tonnes over 9 km of strike length. The deposit still remains open for expansion.

Many older, vertical shaft platinum mines are struggling with narrow mining widths and great depths, as well as ventilation, working condition and safety issues. Waterberg is shallow and is modelled as a decline accessible, fully mechanized mine with improved safety and efficiency as compared to deep, conventional mines. The capital cost for a decline accessible mine is generally much less when compared to deeper mines requiring large, twin vertical shafts. Being thick and shallow, within 200 meters from surface, Waterberg has a very competitive configuration.

Even though Waterberg was discovered in November 2011 we are still asked “How could this happen? It can’t be true or it would have been found already”. Our primary scientific work drove us to look for something different under surface cover rocks in a location that others had ignored. After initial geochemical and geophysical work, the third exploration drill hole hit the “T” reef discovery. A short time later we discovered the “F” layer below it.

Waterberg Joint Venture Project

The Company is the operator of the Waterberg Joint Venture Project. A technical committee comprised of the Company, the Japan Oil, Gas, and Minerals National Corporation (“JOGMEC”) and BEE partner Mnombo Wethu Consultants (Pty) Ltd. (“Mnombo”) oversees the project. The Waterberg Joint Venture Project is comprised of a contiguous granted prospecting right area of approximately 255 km2 located on the Northern Limb of the Bushveld Complex, approximately 70 km north of the town of Mokopane.

On February 14, 2014, the Company announced the completion of a positive PEA on the Waterberg Joint Venture Project recommending the project advance to a pre-feasibility study. In July 2014, the Company awarded the Independent Qualified Person role for the pre-feasibility study to DRA. The pre-feasibility study is anticipated to be completed in mid-2015.

On June 12, 2014, the Company announced an increase in the estimated inferred mineral resource at the Waterberg Projects from 17 to 29 million PGM ounces overall (see following table). The increased resource estimate and resulting updated technical report formally superseded and invalidated the earlier PEA according to National Instrument 43-101 on the basis there can only be one report per project.

The first 5 km of strike length heading from South to North on the Waterberg deposit comprises the Waterberg Joint Venture property, also known as Waterberg I. The next 4 km immediately adjacent to the north of Waterberg I is located on the Waterberg Extension property and has been named Waterberg II. Northward along strike beyond Waterberg II is Waterberg III. It is on the Waterberg III block where initial T and F zone intersections were announced on October 21, 2014 and December 5, 2014 indicating the northward extension of the Waterberg deposit.

During the first ten months of 2014, we had a total of 24 drill rigs in operation on the Waterberg Joint Venture Project and Waterberg Extension Project. Including drilling contractors under the Company’s supervision, approximately 220 people were at times involved in the drilling and sampling activities. Since commencing drilling in November 2011, approximately 182 diamond drill boreholes with 308 deflections have been completed on the Waterberg Joint Venture Project.

To date Platinum Group Metals has funded the Company’s (37%) and Mnombo’s (26%) combined 63% share of work on the Waterberg Joint Venture Project, with the remaining 37% funded by JOGMEC. A budget to April 30, 2015 of US$9.57 million was approved effective May 2014 to provide for sufficient engineering work and drilling work to allow completion of a pre-feasibility study of the Waterberg Joint Venture Project. The majority of this work is now complete.

Continued Japanese Government Company Investment

For many years JOGMEC has been a supportive, active and reliable funding participant in the Waterberg Joint Venture Project. JOGMEC was a part of the targeting and discovery work at Waterberg. JOGMEC holds a 37% interest in the Waterberg Joint Venture, but does not currently hold any interest in the Waterberg Extension Project. Following detailed joint venture discussions in South Africa, Japan and Vancouver, the Waterberg Joint Venture Project pre-feasibility scope of work was expanded to consider additional metallurgical studies and down-stream smelting and refining options. Regional synergies for the sale and processing of concentrate in the North Limb of the Bushveld Complex are also being considered. The large scale of the Waterberg deposit, the potential for expansion of the deposit onto the Waterberg Extension and the regional opportunities for large mechanized mining operations provide additional possibilities for overall processing considerations.

Inspecting Drill Core at the Waterberg Project

Waterberg Extension Project

The Waterberg Extension Project is a large area of prospecting rights covering 864 km2 which host the north end of the known Waterberg deposit. Early drilling in 2014 has found an initial resource of 68 million tonnes containing 6.8 million ounces platinum, palladium and gold on the Waterberg Extension. The deposit layers remain open northward and down dip and will be the target of future exploration drilling campaigns.

Regional exploration drilling on the Waterberg Extension has found the important Bushveld Complex rocks as much as 20 km north of the known Waterberg deposit, confirming significant further exploration potential.

In order to help put the Waterberg projects in perspective it is worth noting that the size of the Waterberg Extension resource alone is larger than the reserves at the WBJV Project 1 mine we are building. Although resources are not comparable to reserves, as they have different confidence levels, it is useful to compare the gross size of these two deposits in order to demonstrate the large scale nature of the deposit being established at Waterberg.

Platinum Group Metals ’ wholly owned South African subsidiary holds the prospecting rights filed with the South African Department of Mineral Resources (“DMR”) for the Waterberg Extension Project, and Mnombo is identified as the Company’s 26% BEE partner. The Company’s 49.9% shareholding in Mnombo, combined with its direct 74% project interest, gives the Company an effective 86.97% interest in the Waterberg Extension prospecting rights. The Company is currently funding Mnombo’s 26% share of ongoing costs for the Waterberg Extension Project. The Company is assisting Mnombo in negotiations with several interested investors. It is an objective of Mnombo to complete a financing, allowing Mnombo to repay the approximately $2.3 million owed to Platinum Group Metals as well as fund their ongoing share of project costs.

Drilling in 2014 has confirmed that the Waterberg deposit remains open northward and down dip. The deposit has shown excellent continuity of the mineralized layers for 9 km so far, and a new intercept of 6.03 g/t 3E (4.15 g/t palladium, 1.46 g/t platinum and 0.42 g/t gold) over 4.52 meters approximately 1.9 km north of the known deposit (announced December 5, 2014) confirms the limits of the deposit are not yet known. Since commencing drilling in September 2013, approximately 48 diamond drill boreholes with 70 deflections have been completed on the Waterberg Extension Project.

Waterberg Mineral Resources

The mineral resources reported for the Waterberg deposit are located within the Waterberg Joint Venture Project and in the southern portion of the Waterberg Extension Project (see table below).

The June 2014 Inferred Mineral Resource was estimated using 138 bore holes with a total of 363 pierce points including deflections. The resource estimate was undertaken by Coffey Mining (South Africa) (Pty) Limited (“Coffey”) and a number of iterations were performed to confirm the validity of the estimate. The resource estimation was completed using an Inverse Distance Weighted to the Power 2 methodology and examined at various cut-off grades. Additional step out and infill drilling conducted since June 2014 will be considered in an updated resource estimate expected in early 2015, which will be an input to a pre-feasibility study scheduled for completion in Q2 of calendar 2015.

(1) South African Code for the Reporting of Mineral Resources and Mineral Reserves (the “SAMREC Code”). The independent Qualified Persons responsible for the mineral resource estimate with an effective date of June 12, 2014 and summarized in this table are Kenneth Lomberg and Alan Goldschmidt of Coffey.  Please see technical details, risks, qualifications and cautions with regard to the inferred mineral resource estimate in the NI 43-101 technical report filed December 19, 2014 at www.sedar.com. There is no guarantee that all or any part of the Mineral Resource will be converted to a Mineral Reserve. The SAMREC and CIM classification in this case is the same.

(2) The T1-Zone cut-off of 2 g/t is reported as 2PGE+Au and the F – Zone cut-off of 2 g/t is reported as 3PGE+Au. A marginal cut-off of 0.01 g/t was used for the T2-Zone. Individual numbers may not add up due to rounding.

BUSHVELD COMPLEX NORTH LIMB

Waterberg is shallow and is modelled as a decline accessible, fully mechanized mine with improved safety and efficiency as compared to deep, conventional mines.

Waterberg Project: Logging Core at Waterberg Site Complex

The Company’s 49.9% shareholding in Mnombo, combined with its direct 74% project interest, gives the Company an effective 86.974% interest in the Waterberg Extension prospecting rights.

Waterberg Project: Unloading Fresh Drill Core