Platinum Group Metals Ltd. - Exhibit 99.1 - Filed by newsfilecorp.com

EX-99.1 2 exhibit99-1.htm EXHIBIT 99.1 Platinum Group Metals Ltd. - Exhibit 99.1 - Filed by newsfilecorp.com

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

Condensed Consolidated Interim Financial Statements (unaudited)
For the three and six months ended February 28, 2015

Filed: April 10, 2015

PLATINUM GROUP METALS LTD.
(An exploration and development stage company)
Condensed Consolidated Interim Statements of Financial Position
(Unaudited – in thousands of Canadian dollars)

		February 28, 2015			August 31, 2014
ASSETS
Current
Cash and cash equivalents	$	145,102		$	108,150
Amounts receivable (Note 4)		5,786			13,848
Prepaid expenses		971			714
Total current assets		151,859			122,712

Deferred financing fees (Note 3)		2,482			4,206
Performance bonds (Note 5 (ii))		5,774			5,101
Exploration and evaluation assets (Note 6)		37,246			30,612
Property, plant and equipment (Note 5)		488,333			387,608
Total assets	$	685,694		$	550,239


LIABILITIES
Current
Accounts payable and accrued liabilities	$	9,518		$	28,576
Total current liabilities		9,518			28,576

Deferred income taxes		12,078			11,585
Asset retirement obligation		2,999			1,636
Total liabilities		24,595			41,797

SHAREHOLDERS’ EQUITY
Share capital (Note 7)		716,205			590,774
Contributed surplus		25,038			22,374
Accumulated other comprehensive loss		(42,507	)		(63,980	)
Deficit		(110,538	)		(120,484	)
Total shareholders’ equity attributable to
shareholders of Platinum Group Metals Ltd.		588,198			428,684

Non-controlling interest (Note 5 (i) & Note 6)		72,901			79,758
Total shareholders’ equity		661,099			508,442
Total liabilities and shareholders’ equity	$	685,694		$	550,239

CONTINGENCIES AND COMMITMENTS (NOTE 9)

Approved by the Board of Directors and authorized for issue on April 10, 2015

*“Iain McLean”*
Iain McLean, Director

*“Eric Carlson”*
Eric Carlson, Director

See accompanying notes to the consolidated financial statements

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

		Three months ended						Six months ended
		February 28,			February 28,			February 28,			February 28,
		2015			2014			2015			2014

EXPENSES
General and administrative	$	3,004		$	3,113		$	4,807		$	4,512
Foreign exchange (gain) loss		(7,905	)		134			(8,852	)		(753	)
Stock compensation expense		1,387			2,222			1,398			2,222
Termination and finance fees (Note 3)		228			-			1,994			-
Write-down of deferred financing fees (Note 3)		-			-			4,206			-
		3,286			(5,469	)		(3,553	)		(5,981	)

Finance income		1,038			1,730			2,255			2,706
Income (Loss) for the period		4,324			(3,739	)		(1,298	)		(3,275	)

Items that may be subsequently reclassified to net loss
Exchange differences in translating foreign operations		22,949			(842	)		25,860			2,045

Comprehensive income (loss) for the period		27,273			(4,581	)		24,562			(1,230	)

Income (Loss) attributable to:
Shareholders of Platinum Group Metals Ltd.		5,395			(3,816	)		(313	)		(3,369	)
Non-controlling interests		(1,071	)		77			(985	)		94
	$	4,324		$	(3,739	)	$	(1,298	)	$	(3,275	)

Comprehensive income (loss) attributable to:
Shareholders of Platinum Group Metals Ltd.		26,382			(4,502	)		22,480			(1,294	)
Non-controlling interests		891			(79	)		2,082			64
	$	27,273		$	(4,581	)	$	24,562		$	(1,230	)

Basic and diluted income (loss) per common share	$	0.01		$	(0.01	)	$	(0.00	)	$	(0.01	)

Weighted average number of common shares outstanding:
Basic and diluted		692,503,534			500,121,409			621,518,158			451,171,520

See accompanying notes to the consolidated financial statements

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

	# of		Share			Contributed			Accumulated			Deficit			Attributable to			Non-			Total
	Common		Capital			Surplus			Other						Shareholders			Controlling
	Shares								Comprehensive						of the Parent			Interest
									Income (loss)						Company
Balance, August 31, 2013	402,759,542	$	425,435		$	18,593		$	(61,481	)	$	(85,349	)	$	297,198		$	54,410		$	351,608
Stock based compensation	-		-			3,367			-			-			3,367			-			3,367
Share issuance costs	-		(9,968	)		-			-			-			(9,968	)		-			(9,968	)
Share issuance – financing	148,500,000		175,230			-			-			-			175,230			-			175,230
Issued upon the exercise of options	12,000		18			(5	)		-			-			13			-			13
Funding of non-controlling interest	-		-			-			-			(5,029	)		(5,029	)		5,029			-
Transactions with non-controlling interest	-		-			-			(1,052	)		(7,184	)		(8,236	)		8,236			-
Foreign currency translation	-		-			-			2,075			-			2,075			(30	)		2,045
Net income for the period	-		-			-			-			(3,369	)		(3,369	)		94			(3,275	)
Balance, February 28, 2014	551,271,542	$	590,715		$	21,955		$	(60,458	)	$	(100,931	)	$	451,281		$	67,739		$	519,020
Stock based compensation	-		-			436			-			-			436			-			436
Issued upon the exercise of options	41,300		59			(17	)		-			-			42			-			42
Transactions with non-controlling interest (Note 5)	-		-			-			(335	)		(12,484	)		(12,819	)		12,819			-
Foreign currency translation adjustment	-		-			-			(3,187	)		-			(3,187	)		(685	)		(3,872	)
Net loss for the period	-		-			-			-			(7,069	)		(7,069	)		(115	)		(7,184	)
Balance, August 31, 2014	551,312,842		590,774			22,374			(63,980	)		(120,484	)		428,684			79,758			508,442
Stock based compensation	-		-			2,664			-			-			2,664			-			2,664
Share issuance - financing	214,800,000		132,071			-			-			-			132,071			-			132,071
Share issuance costs	-		(8,509	)		-			-			-			(8,509	)		-			(8,509	)
Shares issued for loan facility	2,830,188		1,869			-			-			-			1,869			-			1,869
Transactions with non-controlling interest (Note 5)	-		-			-			(1,320	)		10,259			8,939			(8,939	)		-
Foreign currency translation adjustment	-		-			-			22,793			-			22,793			3,067			25,860
Net loss for the period	-		-			-			-			(313	)		(313	)		(985	)		(1,298	)
Balance, February 28, 2015	768,943,030	$	716,205		$	25,038		$	(42,507	)	$	(110,538	)	$	588,198		$	72,901		$	661,099

See accompanying notes to the consolidated financial statements

PLATINUM GROUP METALS LTD.
(An exploration and development stage company)
Condensed Consolidated Interim Statements of Cash Flows
(Unaudited – in thousands of Canadian dollars)

		Six months ended
		February 28,			February 28,
		2015			2014

OPERATING ACTIVITIES
Loss for the period	$	(1,298	)	$	(3,275	)

Add items not affecting cash:
Depreciation		254			235
Foreign exchange gain		(5,302	)		(123	)
Write-down of deferred finance fees (Note 3)		4,206			-
Stock compensation expense		1,398			2,222
Net change in non-cash working capital (Note 10)		(369	)		(1,162	)
		(1,111	)		(2,103	)

FINANCING ACTIVITIES
Share issuance		132,071			175,230
Share issuance costs		(8,509	)		(9,968	)
Share issuance – stock options		-			13
Finance Fees (Note 3)		(472	)		-
		123,090			165,275

INVESTING ACTIVITIES
Acquisition of property, plant and equipment		(90,419	)		(77,236	)
Exploration expenditures, net of recoveries		(9,004	)		(4,178	)
South African VAT		7,393			319
Performance bonds		(417	)		(1,317	)
Restricted cash		-			10,185
		(92,447	)		(72,227	)

Net increase in cash and cash equivalents		29,532			90,945
Effect of foreign exchange on cash and cash equivalents		7,420			470
Cash and cash equivalents, beginning of period		108,150			111,784

Cash and cash equivalents, end of period	$	145,102		$	203,199

See accompanying notes to the consolidated financial statements

Platinum Group Metals Ltd.
(An exploration and development stage company)
Notes to the condensed consolidated interim financial statements
For the three and six months ended February 28, 2015
(in thousands of Canadian dollars unless otherwise noted)

1. NATURE OF OPERATIONS AND LIQUIDITY

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 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 mine located on the Bushveld Complex in the Republic of 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 February 28, 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”).

The Company is also advancing the Waterberg Joint Venture Project and Waterberg Extension Project with a pre-feasibility study scheduled for completion mid-2015.

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

			Proportion of ownership
		Place of	interest and voting power held
		incorporation	February 28,	August 31,
Name of subsidiary	Principal activity	and operation	2015	2014

Platinum Group Metals (RSA) (Pty) Ltd.	Exploration	South Africa	100%	100%
Maseve Investments 11 (Pty) Ltd	Mining	South Africa	82.9%¹	78.7%¹
Wesplats Holdings (Pty) Limited	Holding company	South Africa	100%	100%
Platinum Group Metals (Barbados) Ltd.	Holding company	Barbados	100%	100%
Mnombo Wethu Consultants (Pty) Limited.	Exploration	South Africa	49.9%²	49.9%²

¹See Note 5(i) “Ownership of Project 1”
²The Company controls Mnombo for accounting purposes as the Company is Mnombo’s only source of funding at the current time.

2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

These unaudited condensed consolidated interim 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”) applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting. The consolidated financial statements have been prepared under the historical cost convention.

These unaudited condensed consolidated interim financial statements do not include all the information and note disclosures required by IFRS for annual financial statements and therefore should be read in conjunction with the Company’s audited consolidated financial statements for the year ended August 31, 2014. The consolidated financial statements are presented in Canadian dollars.

These interim financial statements follow the same significant accounting principles as those outlined in the notes to the annual financial statements for the year ended August 31, 2014 with the following standards adopted in the current fiscal period:

Amendment to IAS 36, Impairment of Assets is to address the disclosure of information about the recoverable amount of impaired assets, if that amount is based on fair value less cost of disposal.

Platinum Group Metals Ltd.
(An exploration and development stage company)
Notes to the condensed consolidated interim financial statements
For the six months ended February 28, 2015
(in thousands of Canadian dollars unless otherwise noted)

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.

These new standards adopted have not resulted in any material change to the results and financial position of the Company.

A number of new standards, amendments to standards and interpretations applicable to the Company are not yet effective for the current accounting period and have not been applied in preparing these consolidated financial statements. These include:

IFRS 15 Revenue from Contracts with Customers, will be effective for annual periods beginning on or after January 1, 2017, with early adoption permitted. The Company is still in the process of assessing the impact, if any, on the financial statements of this new standard.
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.

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.

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 “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 or will be obligated to make certain 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 to be paid in monthly instalments until December 31, 2015. The Facility matures on December 31, 2017 with the repayment of principal due in monthly instalments during calendar 2017.

The Facility is planned to be available at the delivery and sale of first commercial concentrate from the WBJV Project 1 targeted for fourth quarter 2015. The advance of funds under the Facility by the Lenders is subject to certain terms and conditions set out in the credit agreement, including satisfactory due diligence and the receipt of all applicable approvals.

Fees paid to the Lenders, (including 2,830,188 common shares issued) and certain legal and regulatory fees incurred for the establishment of the Facility amounting to $2,482 have been recognized as transaction costs 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. Should the project financing not be drawn from the Facility, the deferred finance fees will be expensed.

Deferred finance costs amounting to $4.2 million, related to a previously proposed loan facility with a syndicate of banks and to a unit offering which did not complete, were written off in the current six month period. Additional termination and finance fees totaling $2.0 million related to the previous loan facility and the unit offering were also incurred and expensed in the current six month period.

4. AMOUNTS RECEIVABLE

		February 28, 2015		August 31, 2014
South African VAT	$	4,466	$	11,820
Foreign jurisdiction tax payable to be recovered		748		744
Other receivables		128		382
Canadian sales tax		86		84
Due from JOGMEC (Note 6)		50		479
Interest		32		93
Operating expense advances		28		11
Due from related parties (Note 8)		248		235
	$	5,786	$	13,848

Platinum Group Metals Ltd.
(An exploration and development stage company)
Notes to the condensed consolidated interim financial statements
For the three and six months ended February 28, 2015
(in thousands of Canadian dollars unless otherwise noted)

5. PROPERTY, PLANT AND EQUIPMENT

		Development			Construction									Office			Mining
		assets			work-in-progress			Land			Buildings			Equipment			Equipment			Total
COST
Balance, August 31, 2013	$	161,097		$	29,400		$	12,924		$	3,442		$	1,713		$	27,746		$	236,322
Additions		92,341			57,649			-			1,616			323			11,326			163,255
Foreign 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			397,338
Additions		46,274			37,465			-			-			622			1,457			85,818
Foreign exchange movement		12,285			4,342			641			251			56			1,941			19,516
Balance, February 28, 2015	$	310,479		$	128,570		$	13,440		$	5,276		$	2,707		$	42,200		$	502,672

ACCUMULATED DEPRECIATION
Balance, August 31, 2013	$	-		$	-		$	-		$	374		$	822		$	2,409		$	3,605
Additions		-			-			-			233			240			5,683			6,156
Foreign exchange movement		-			-			-			(4	)		(4	)		(23	)		(31	)
Balance, August 31, 2014		-			-			-			603			1,058			8,069			9,730
Additions		-			-			-			182			191			3,779			4,152
Foreign exchange movement		-			-			-			30			24			403			457
Balance, February 28, 2015	$	-		$	-		$	-		$	815		$	1,273		$	12,251		$	14,339

Net book value, August 31, 2014	$	251,920		$	86,763		$	12,799		$	4,422		$	971		$	30,733		$	387,608

Net book value, February 28, 2015	$	310,479		$	128,570		$	13,440		$	4,461		$	1,434		$	29,949		$	488,333

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. No work was carried out on Project 3 during the period.

		The Company has consolidated the results of Maseve from the effective date of the reorganization. The portion of Maseve not owned by the Company, calculated at $68,175 at February 28, 2015 ($75,741 – August 31, 2014), is accounted for as a non-controlling interest.

		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 Africa Wide’s October 18, 2013 decision not to fund, the Company and Africa Wide entered into arbitration proceedings to determine Africa Wide’s diluted interest in Maseve, and therefore Project 1 and Project 3, in accordance with the terms of the Maseve Shareholders Agreement. On August 20, 2014, an arbitrator ruled in the Company’s favour on all matters and determined that Africa Wide’s interest in Maseve would first be reduced to approximately 21.28%. As a result of the second missed cash call, Africa Wide’s interest in Maseve was further diluted in the current period to approximately a 17.1% holding. Accordingly the Company held 82.9% of Maseve at February 28, 2015. In both cases Africa Wide’s dilution in Maseve was affected after the Company’s portion of each cash was fully invested into Maseve in January and September 2014 respectively.

		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. On February 18, 2015 the board of directors of Maseve unanimously resolved that as of that date forward outstanding loan amounts due from Maseve to PTM RSA will accrue and pay interest at the Johannesburg Interbank Average Rate plus 3% (approximately 9.1% per annum as at February 28, 2015). At February 28, 2015 Maseve owed PTM RSA approximately R769 million ($82.4 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 in order to maintain the Mining Right in good standing. 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 currently working on alternatives to sell the diluted percentage interest in Maseve previously held by Africa Wide to an alternative, qualified BEE company, or to otherwise bring additional qualified BEE investment into Maseve if and when instructed by the DMR. The Company may also undertake a transaction unilaterally. The Company is presently considering Mnombo as the BEE entity for such a transaction if required. The Company currently owns 49.9% of the issued and outstanding shares of Mnombo. Mnombo acts as the Company’s BEE partner in respect of the Waterberg Projects. 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 time of writing.

	ii.	Other financial information – Project 1

		At February 28, 2015 the Company had $5,774 posted in cash for environmental performance and other guarantees in South Africa, of which approximately $5,664 relates to Project 1 ($5,036 – August 31, 2014). In October 2012 a third party insurer posted a bond in the amount of $6,002 (R58.5 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 $6,260 (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.

6. EXPLORATION AND EVALUATION ASSETS

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

		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		6,755			330			7,085
Recoveries		(1,858	)		-			(1,858	)
Foreign Exchange Movement		1,407			-			1,407

Balance, February 28, 2015	$	34,449		$	2,797		$	37,246

REPUBLIC OF SOUTH AFRICA

		February 28, 2015			August 31, 2014

Project 3 – see Note 5(i)	$	3,319		$	3,161

Waterberg JV
Acquisition costs		30			21
Exploration and evaluation costs		34,710			27,811
Recoveries		(13,993	)		(11,557	)
		20,747			16,275

Waterberg Extension
Acquisition costs		28			22
Exploration and evaluation costs		10,262			8,653
		10,290			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		8			10
Exploration and evaluation costs		1,130			1,029
Recoveries		(1,045	)		(1,005	)
		93			34


Total South Africa Exploration	$	34,449		$	28,145

Waterberg JV Project

The Waterberg JV Project is comprised of a contiguous granted prospecting right area of approximately 255 km² located on the North Limb of the Bushveld Complex, approximately 70 kilometers north of the town of Mokopane (formerly Potgietersrus). Platinum Group Metals (RSA) (Pty) Ltd. (“PTM RSA”) applied for the original 137 km² prospecting right for the Waterberg JV Project area in 2009. In September 2009, the DMR granted PTM RSA the prospecting right until September 1, 2012. Application for the renewal of this prospecting right for a further three years has been made and acknowledged by the DMR. Under the MPRDA, the prospecting right remains valid pending the grant of the renewal. The original prospecting right was enlarged by a section 102 legal amendment in January 2013 and two further prospecting rights were granted to PTM RSA for the Waterberg JV Project on October 2, 2013. These prospecting rights are valid until October 1, 2018 and may each be renewed for a further period of three years thereafter.

In October 2009, PTM RSA, Japan Oil, Gas and Metals National Corporation (“JOGMEC”) and Mnombo entered into an agreement (as amended, the ‘‘JOGMEC Agreement’’) whereby JOGMEC could earn up to a 37% participating interest in the project for an optional work commitment of US$3.2 million over four years. At the same time, Mnombo could earn a 26% participating interest in exchange for matching JOGMEC’s expenditures on a 26/74 basis (US$1.12 million).

On November 7, 2011 the Company entered into an agreement with Mnombo whereby the Company acquired 49.9% of the issued and outstanding shares of Mnombo in exchange for cash payments totalling R1.2 million and an agreement that the Company would pay for Mnombo's 26% share of costs on the Waterberg Joint Venture until the completion of a feasibility study. When combined with the Company's 37% direct interest pursuant to the JOGMEC Agreement, the 12.974% indirect interest acquired through Mnombo brings the Company's effective interest in the Waterberg JV Project to 49.974%. For accounting purposes, the Company fully consolidates Mnombo. The portion of Mnombo not owned by the Company, calculated at $4,639 at February 28, 2015 ($4,017 – August 31, 2014), is accounted for as a non-controlling interest.

In April 2012, JOGMEC completed its US$3.2 million earn-in requirement to earn its 37% interest in the Waterberg JV Project. Following JOGMEC’s earn-in, the Company funded Mnombo’s US$1.12 million share of costs until the earn-in phase of the joint venture ended in May 2012. Since then and up to February 28, 2015 an additional US$29.9 million has been spent on the joint venture. The Company has funded the Company and Mnombo’s combined 63% share of this work for a cost of US$18.8 million with the remaining US$11.1 million funded by JOGMEC. As of February 28, 2015, an amount of US$0.40 million is due from JOGMEC against its 37% share of approved joint venture work completed in fiscal 2015.

Waterberg Extension Project

The Waterberg Extension Project comprises contiguous granted and applied-for prospecting rights with a combined area of approximately 864 km² adjacent and to the north of the Waterberg JV Project. 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.

PTM RSA holds the prospecting rights filed with the DMR for the Waterberg Extension Project, and Mnombo is identified as the Company’s BEE partner. 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 and Mnombo are negotiating a formal joint venture agreement to govern the participating rights in and obligations towards the Waterberg Extension Project. The Company is currently carrying Mnombo’s 26% share of ongoing costs on the Waterberg Extension Project.

War Springs and Tweespalk

On June 3, 2002, the Company acquired an option to earn a 100% interest in the 2,396 hectare War Springs property and the 2,177 hectare Tweespalk property both located in the Northern Limb or Platreef area of the Bushveld Complex, north of Johannesburg. The Company can settle the vendors’ residual interests in these mineral rights at any time for US$690 per hectare. The Company pays annual prospecting fees to the vendors of US$3.25 per hectare. The vendors retain a 1% Net Smelter Return Royalty (“NSR”) on the property, subject to the Company’s right to purchase the NSR at any time for US$1.4 million.

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

As no work was carried out on the War Springs or Tweespalk properties during the previous year the Company wrote off all deferred costs related to these properties while continuing to hold them.

CANADA

		February 28, 2015		August 31, 2014

Newfoundland and Labrador
Acquisition costs	$	193	$	173
Exploration and evaluation costs		784		474
		977		647

Providence, Northwest Territories
Acquisition costs		134		134
Exploration and evaluation costs		1,686		1,686
		1,820		1,820
Ontario
Acquisition costs		-		570
Exploration and evaluation costs		-		2,818
Write-down		-		(3,388	)
		-		-

Total Canada Exploration	$	2,797	$	2,467

Newfoundland and Labrador

On August 9, 2013, the Company entered into an option agreement with Benton Resources Corp. on the Mealy Lake Property in southwestern Labrador. The agreement consists of a one-time cash payment made by the Company of $51 on signing and $2,400 in exploration expenditures to be made over four years to earn a 71% interest in the property and Benton retaining a 1% NSR.

In addition to the optioned portions of the Mealy Lake Project, the Company also staked a number of claims in 2013 and 2014 of which they own 100%.

Providence, Northwest Territories

In September 2011, the Company purchased the Providence Nickel, Copper, Cobalt and Platinum Group Metals property located in the Northwest Territories from Arctic Star Exploration Corp. for a payment of $50 and a 1.0% NSR. The claims that comprise the Providence property have been brought to lease. The application for lease was submitted in 2011 with the final lease grant approved in June 2013. To date five annual lease payments and application fees have been paid. Total acquisition costs are $134.

Thunder Bay, Ontario

The Company maintains a mineral rights position in the Lac Des Iles area north of Thunder Bay, Ontario. The Shelby Lake Property consists of 20 claims totaling 38.56 km²that includes the Company’s core long term holdings in the Lac Des Iles area consisting of the 8 claim Shelby Lake and South Legris properties. 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 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 once LDI has completed the option earn in. During the year ended August 31, 2014 all deferred acquisition and exploration costs were written off for all Ontario properties.

7. SHARE CAPITAL

(a) Authorized

Unlimited common shares without par value.

(b) Issued and outstanding

At February 28, 2015, the Company had 768,943,030 shares outstanding.

During the six months ended February 28, 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$113.8 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 six months ended February 28, 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
Expired	(2,585,700	)		1.63
Options outstanding at August 31, 2014	19,744,500			1.48
Granted	9,430,000			0.65
Cancelled	(100,000	)		1.53
Options outstanding at February 28, 2015	29,074,500		$	1.21

Number
Outstanding and		Average Remaining
Exercisable at		Contractual Life
February 28, 2015	Exercise Price	(Years)
9,405,000	$ 0.65	4.97
3,254,000	0.96	2.53
100,000	1.05	3.25
125,000	1.20	1.85
9,994,000	1.30	3.94
75,000	1.38	1.97
35,000	1.40	3.05
3,659,000	2.05	1.19
2,327,500	2.10	0.74
50,000	2.20	0.77
50,000	2.57	0.85
29,074,500		3.48

The stock options outstanding have an intrinsic value of $Nil at February 28, 2015.

During the six months ended February 28, 2015, the Company granted 9,430,000 stock options (February 28, 2014 – 5,825,000). The Company recorded $2,664 ($1,398 expensed and $1,266 capitalized to mineral properties) of compensation expense for the period ended February 28, 2015 (February 28, 2014 - $3,368 ($2,222 expensed and $1,146 capitalized to mineral properties)).

The Company uses the Black-Scholes model to determine the grant date fair value of stock options granted. The following assumptions were used in valuing stock options granted during the period ended February 28, 2015 and 2014:

Period ended	February 28, 2015	February 28, 2014
Risk-free interest rate	0.60%	1.48%
Expected life of options	3.8 years	3.7 years
Annualized volatility	60%	60%
Forfeiture rate	0%	0%
Dividend rate	0.00%	0.00%

8. RELATED PARTY TRANSACTIONS

Transactions with related parties are as follows:

(a)	During the six months ended February 28, 2015, $138 ($219 – February 28, 2014) was paid to independent directors for directors’ fees and services.

(b)	During the six months ended February 28, 2015, the Company accrued or received payments of $51 ($51 – February 28, 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 $42 ($163 – February 28, 2014) due from West Kirkland.

(c)	During the six months ended February 28, 2015, the Company accrued or received payments of $Nil ($20 – February 28, 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 ($195 – February 28, 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.

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.

9. CONTINGENCIES AND COMMITMENTS

The Company’s remaining minimum payments under its office and equipment lease agreements in Canada and South Africa total approximately $2,952 to August 31, 2019.

The Company pays annual prospecting fees to the vendors of Tweespalk and Warsprings of US$3.25 per hectare. The Company has the option to settle the vendors’ residual interests in these mineral rights at any time for US$690 per hectare. The Company made a commitment of $56 for the annual fees to August 31, 2017 subject to the DMR approving filed extensions to the prospecting rights.

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 R142.22 million ($15.21 million at February 28, 2015) to fiscal 2016 of which R71.389million ($7.63 million at February 28, 2015), has been paid, leaving R70.831 million ($7.58 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, who is the main distributor of potable water for the area in which Maseve is located. 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 via cash calls from Magalies or via infrastructural builds jointly management by Maseve and Magalies. As at February 28, 2015, Maseve has contributed R51.4 million to the scheme, leaving R90.6 million ($9.69 million at February 28, 2015) of the commitment outstanding.

Tenders for the mining development and equipment and other project expenditures have been adjudicated and orders have now been placed resulting in a total commitment of $53.8 million over the next three years with $50.1 million due in less than a year.

From period end the aggregate commitments are as follows:

		< 1		1 – 3		4 – 5		> 5		Total
		Year		Years		Years		Years

Lease obligations	$	237	$	1,021	$	1,145	$	549	$	2,952
ESKOM – power		7,579		-		-		-		7,579
Magalies water		4,462		5,231		-		-		9,693
Concentrator plant & surface infrastructure		21,734		-		-		-		21,734
Mining development		3,501		-		-		-		3,501
Mining equipment		7,114		-		-		-		7,114
Loan Standby Fees (Note 3)		1,071		710		-		-		1,781
EPCM & Project 1 indirect		17,712		3,773		-		-		21,485
Totals	$	63,410	$	10,735	$	1,145	$	549	$	75,839

The above contracts are subject to the following estimated break fees in the event of cancellation at February 28, 2015:

Concentrator plant and surface infrastructure	$	21,594
Mining development		11,598
Magalies water		9,693
ESKOM		7,579
Mining equipment		6,698
Other		5,600
	$	62,762

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.

10. SUPPLEMENTARY CASH FLOW INFORMATION

Net change in non-cash working capital:

Six months ended		February 28, 2015			February 28, 2014

Amounts receivable, prepaid expenses and other assets	$	936		$	(602	)
Accounts payable and accrued liabilities		(1,305	)		(560	)

	$	(369	)	$	(1,162	)

11. SEGMENTED REPORTING

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

Assets

		February 28, 2015		August 31, 2014
Canada	$	108,790	$	118,174
South Africa		576,904		432,065
	$	685,694	$	550,239

Substantially all of the Company’s capital expenditures are made in South Africa; however the Company also has exploration properties in Canada.

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

Six months ended		February 28, 2015			February 28, 2014

Canada	$	4,332		$	(3,485	)
South Africa		(4,645	)		116
	$	(313	)	$	(3,369	)