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 – all amounts in thousands of United States Dollars unless otherwise noted)

For the three months ended November 30, 2015

Filed: January 14, 2016

PLATINUM GROUP METALS LTD.

(An exploration and development stage company)

Condensed Consolidated Interim Statements of Financial Position

(Unaudited – in thousands of United States Dollars)

					Restated (see Note 2)
		November 30,			August 31,			August 31,
		2015			2015			2014

ASSETS
Current
Cash and cash equivalents	$	80,784		$	39,082		$	99,465
Amounts receivable (Note 3)		5,994			10,056			12,736
Prepaid expenses		263			346			657
Total current assets		87,041			49,484			112,858

Deferred financing fees (Note 6)		-			2,663			3,868
Performance bonds		4,575			4,389			4,692
Exploration and evaluation assets (Note 5)		22,424			24,629			28,154
Property, plant and equipment (Note 4)		411,824			417,177			356,483
Total assets	$	525,864		$	498,342		$	506,055


LIABILITIES
Current
Accounts payable and other liabilities	$	10,118		$	16,370		$	26,279
Loan Payable (Note 6)		3,837			-			-
Total current liabilities		13,955			16,370			26,279

Loans Payable (Note 6)		70,806			-			-
Deferred income taxes		5,655			6,317			10,654
Asset retirement obligation		2,141			2,309			1,505
Total liabilities		92,557			24,996			38,438

SHAREHOLDERS’ EQUITY
Share capital (Note 7)		683,346			681,762			573,800
Contributed surplus		23,646			23,646			21,506
Accumulated other comprehensive loss		(223,781	)		(185,872	)		(93,055	)
Deficit		(105,124	)		(104,570	)		(109,791	)
Total shareholders’ equity attributable to shareholders of Platinum Group Metals Ltd.		378,087			414,966			392,460

Non-controlling interest (Notes 4 & 5)		55,220			58,380			75,157
Total shareholders’ equity		433,307			473,346			467,617
Total liabilities and shareholders’ equity	$	525,864		$	498,342		$	506,055

CONTINGENCIES AND COMMITMENTS (NOTE 9)

Approved by the Board of Directors and authorized for issue on January 14, 2016

*“Iain McLean”*		*“Eric Carlson”*
Iain McLean, Director		Eric Carlson, Director

The accompanying notes are an integral part of the condensed consolidated interim 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 United States Dollars)

		Three months ended
					Restated See
					Note 2
		November 30,			November 30,
		2015			2014


EXPENSES
General and administrative	$	1,394		$	1,620
Foreign exchange gain		(399	)		(847	)
Stock compensation expense		-			9
Termination and finance fees		-			1,766
Write-down of deferred financing fees		-			3,576
		(995	)		(6,124	)

Finance income		283			1,088
Loss for the period		(712	)		(5,036	)

Items that may be subsequently reclassified to net loss:
Currency translation adjustment		(40,911	)		(20,519	)

Comprehensive loss for the period		(41,623	)		(25,555	)

Income (Loss) attributable to:
Shareholders of Platinum Group Metals Ltd.		(634	)		(5,106	)
Non-controlling interests		(78	)		70
	$	(712	)	$	(5,036	)

Comprehensive income (loss) attributable to:
Shareholders of Platinum Group Metals Ltd.		(38,543	)		(24,013	)
Non-controlling interests		(3,080	)		(1,542	)
	$	(41,623	)	$	(25,555	)

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

Weighted average number of common shares outstanding:
Basic and diluted		769,709,148			551,312,842

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 United States Dollars)

	# 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, 2014	551,312,842	$	573,800		$	21,506	$	(93,055	)	$	(109,791	)	$	392,460		$	75,157		$	467,617
Stock based compensation	-		-			9		-			-			9			-			9
Share issuance costs	-		(868	)		-		-			-			(868	)		-			(868	)
Transactions with non-controlling interest	-		-			-		(2,604	)		6,002			3,398			(3,398	)		-
Foreign currency translation	-		-			-		(18,907	)		-			(18,907	)		(1,612	)		(20,519	)
Net (loss) income for the period	-		-			-		-			(5,106	)		(5,106	)		70			(5,036	)
Balance, November 30, 2014	551,312,842	$	572,932		$	21,515	$	(114,566	)	$	(108,895	)	$	370,986		$	70,217		$	441,203
Stock based compensation	-		-			2,131		-			-			2,131			-			2,131
Share issuance – financing	214,800,000		113,844			-		-			-			113,844			-			113,844
Share issuance costs	-		(6,516	)		-		-			-			(6,516	)		-			(6,516	)
Shares issued for loan facility (Note 6)	2,830,188		1,502			-		-			-			1,502			-			1,502
Transactions with non-controlling interest (Note 4)	-		-			-		525			2,358			2,883			(2,883	)		-
Foreign currency translation adjustment	-		-			-		(71,831	)		-			(71,831	)		(8,051	)		(79,882	)
Net loss for the period	-		-			-		-			1,967			1,967			(903	)		1,064
Balance, August 31, 2015	768,943,030	$	681,762		$	23,646	$	(185,872	)	$	(104,570	)	$	414,966		$	58,380		$	473,346
Shares issued for loan facility (Note 6)	6,971,678		1,584			-		-			-			1,584			-			1,584
Transactions with non-controlling interest (Note 4)	-		-			-		-			80			80			(80	)		-
Foreign currency translation adjustment	-		-			-		(37,909	)		-			(37,909	)		(3,002	)		(40,911	)
Net loss for the period	-		-			-		-			(634	)		(634	)		(78	)		(712	)
Balance, November 30, 2015	775,914,708	$	683,346		$	23,646	$	(223,781	)	$	(105,124	)	$	378,087		$	55,220		$	433,307

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 United States Dollars)

		For the three months ended
					Restated See
					Note 2
		November 30,			November 30,
		2015			2014

OPERATING ACTIVITIES
Loss for the period	$	(712	)	$	(5,036	)

Add items not affecting cash:
Depreciation		135			104
Unrealized Foreign exchange gain		723			(264	)
Write-down of deferred finance fees		-			3,682
Stock compensation expense		-			9
Net change in non-cash working capital (Note 10)		2,439			(613	)
		2,585			(2,118	)

FINANCING ACTIVITIES
Proceeds from long term debt (Note 6)		80,000			-
Costs associated with the debt (Note 6)		(1,110	)		-
		78,890			-

INVESTING ACTIVITIES
Acquisition of property, plant and equipment		(38,030	)		(37,322	)
Exploration expenditures, net of recoveries		-			(4,648	)
South African VAT		1,900			5,227
Performance bonds		(584	)		(176	)
		(36,714	)		(36,919	)

Net (decrease) increase in cash and cash equivalents		44,761			(39,037	)
Effect of foreign exchange on cash and cash equivalents		(3,059	)		(3,429	)
Cash and cash equivalents, beginning of period		39,082			99,465

Cash and cash equivalents, end of period	$	80,784		$	56,999

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 months ended November 30, 2015
(In thousands of United States 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 an 82.9% working interest as of November 30, 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 property and Waterberg Extension property, both located on the Northern Limb of the Bushveld Complex in South Africa, are to be consolidated. See details at Note 5 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	November 30,	August 31,
Name of subsidiary	Principal activity	and operation	2015	2015

Platinum Group Metals (RSA) (Pty) Ltd.¹	Exploration	South Africa	100%	100%
Maseve Investments 11 (Pty) Ltd²	Mining	South Africa	82.9%	82.9%
Platinum Group Metals (Barbados) Ltd.	Holding company	Barbados	100%	100%
Mnombo Wethu Consultants (Pty) Limited.	Exploration	South Africa	49.9%	49.9%³

¹Waterberg Project held here until approval to transfer rights to JV Company is received (see Note 5 below)
²See Note 4 “Ownership of Project 1”.
³The Company controls Mnombo Wethu Consultants (Pty) Limited (“Mnombo”) for accounting purposes.

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 and have been prepared under the historical cost basis except for the revaluation of certain financial instruments, which are stated at their fair value.

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, 2015. The consolidated financial statements are presented in United States Dollars. This represents a change in accounting policy and is the first period the Company has used United States Dollars as a presentation currency and details on the change in accounting policy are below.

These interim financial statements follow the same accounting principles as those outlined in the notes to the annual financial statements for the year ended August 31, 2015 except for the change of the presentation currency from the Canadian Dollar to the United States Dollar as explained in the section below.

Liquidity
The Company reported a net loss of $0.71 million for the three months ended November 30, 2015 (three months ended November 30, 2014 – net loss of $5.0 million) and as at November 30, 2015 had working capital of $73.1 million (August 31, 2015 - $33.1) . At November 30, 2015 the Company was indebted for a principal amount of $80 million pursuant to the Sprott Facility and the LMM Facility (both as defined below) to fund the development, construction and start-up working capital needs of its Project 1 mine .

The Company currently has limited financial resources and no operating revenues. The Company’s ability to continue operations in the normal course of business in the foreseeable future is dependent upon, among other things, the Company establishing positive cash flow from production at Project 1. The Company has experienced delays in the rate of underground development and stoping into key mining areas at Project 1, which the Company’s engineers and mining personnel are working to mitigate. In addition, current global market prices for the metals to be produced at Project 1 have recently been highly volatile and trending downward. Unexpected costs, problems, lower metal prices or further delays could severely impact the Company’s production revenue and its ability to produce the tonnage at Project 1 required to maintain positive working capital and meet its covenants under the Sprott Facility and the LMM Facility (both as defined below).

The Company’s ability to continue operations in the normal course of business may also depend upon its ability to secure additional funding by methods which could include, debt refinancing, equity financing, forward sale agreements, sale of assets and strategic partnerships. In addition, the recoverability of the amount shown for property, plant and equipment and for exploration and evaluation assets may become dependent upon the disposition of the Company’s interests on a profitable basis, which is uncertain.

Change in Presentation Currency
Effective September 1, 2015 the Company changed its presentation currency from the Canadian Dollar (“CAD”) to the United States Dollar (“USD”). The change in presentation currency is to better reflect the Company’s business activities and to improve investors’ ability to compare the Company’s financial results with other publicly traded businesses in the mining industry. The USD is also the currency used for quoting prices in the Company’s products. There has been no change to PTM Canada’s functional currency (CAD) or its subsidiaries functional currencies (Rand). In making this change to the USD presentation currency, the Company followed the guidance in IAS 21 The Effects of Changes in Foreign Exchange Rates and have applied the change retrospectively as if the new presentation currency had always been the Company’s presentation currency. In accordance with IAS 21, the financial statements for all years and periods presented have been translated to the new USD presentation currency as follows:

	•	All assets and liabilities have been translated from their functional currency into the new USD presentation currency using the closing current exchange rate at the date of each balance sheet;
	•	Income and expenses for each statement of comprehensive loss presented have been retranslated at average exchange rates prevailing during each reporting period;
	•	Equity balances have been retrospectively translated at historical rates prevailing during the period incurred; and
	•	All resulting exchange differences have been recognized in other comprehensive income and accumulated as a separate component of equity (cumulative translation adjustment).

In additions to the comparative financial statements, the Company has presented a third statement of financial position as at August 31, 2014 as required by IFRS.

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:

(i)IFRS 15 Revenue 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.

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.

In addition to the accounting principles disclosed in the annual financial statements for August 31, 2015, the following accounting policies and principals are applicable for the first time:

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset. Other borrowing costs not directly attributable to a qualifying asset are expensed in the period incurred.

The accounting for the production payment liability relating to the LMM Facility which is an area of judgement or estimate. (See note 6 for further details).

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

Rand/USD
Period-end rate	14.4984 (November 2014: 11.0382)
3 month period average rate	13.7414 (November 2014: 11.0385)

CAD/USD
Period-end rate	1.3353 (November 2014: 1.1410)
3 month period average rate	1.3203 (November 2014: 1.1178)

3.	AMOUNTS RECEIVABLE

		November 30, 2015			August 31, 2015
South African VAT	$	4,862		$	6,218
Tax Receivable¹		1,137			1,154
Other receivables		-			1,633
Canadian sales tax		83			31
Due from JOGMEC²		(338	)		816
Interest		40			15
Due from related parties (Note 8)		210			189
	$	5,994		$	10,056

¹$177 (August 31, 2015 - $180) due from Canada Revenue Agency, $960 ($974 August 31, 2015) due from the South African Revenue Service.
²An amount of $0.34 million is owed to JOGMEC from cash calls received by the Company against expenditures to be made on the Waterberg Projects post March 31, 2015. See Note 5.

Platinum Group Metals Ltd.
(An exploration and development stage company)
Notes to the condensed consolidated interim financial statements
For the three months ended November 30, 2015
noted ) (In thousands of United States Dollars unless otherwise

4.	PROPERTY, PLANT AND EQUIPMENT

		Development			Construction									Office			Mining
		assets			work-in-progress			Land			Buildings			Equipment			Equipment			Total
COST
Balance, August 31, 2014	$	231,692		$	79,796		$	11,771		$	4,621		$	1,866		$	35,686		$	365,432
Additions		77,179			39,278			-			6,912			530			10,667			134,566
Foreign exchange movement		(44,071	)		(15,213	)		(2,244	)		(881	)		(261	)		(6,749	)		(69,419	)
Balance, August 31, 2015		264,800			103,861			9,527			10,652			2,135			39,604			430,579
Additions		19,063			12,304			-			-			19			2,293			33,679
Foreign exchange movement		(23,571	)		(9,417	)		(863	)		(966	)		(138	)		(3,590	)		(38,545	)
Balance, November 30, 2015	$	260,292		$	106,748		$	8,664		$	9,686		$	2,016		$	38,307		$	425,713

ACCUMULATED DEPRECIATION
Balance, August 31, 2014	$	-		$	-		$	-		$	555		$	973		$	7,421		$	8,949
Additions		-			-			-			340			268			5,542			6,150
Foreign exchange movement		-			-			-			(106	)		(176	)		(1,415	)		(1,697	)
Balance, August 31, 2015		-			-			-			789			1,065			11,548			13,402
Additions		-			-			-			213			121			1,329			1,663
Foreign exchange movement		-			-			-			(71	)		(58	)		(1,047	)		(1,176	)
Balance, November 30, 2015	$	-		$	-		$	-		$	930		$	1,127		$	11,832		$	13,889

Net book value, August 31, 2015	$	264,800		$	103,861		$	9,527		$	9,863		$	1,070		$	28,056		$	417,177

Net book value, November 30, 2015	$	260,292		$	106,748		$	8,664		$	8,756		$	889		$	26,475		$	411,824

Project 1 (Maseve Platinum Mine)

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. The local name for Project 1 is Maseve based on the holding company named Maseve Investment 11 Pty Ltd that holds the legal right to the mine. As the mine goes into production the accepted local name of the Maseve Mine will be adopted post this report.

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.

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 $51,065 at November 30, 2015 ($53,825 – August 31, 2015), is accounted for as a non-controlling interest.

On October 18, 2013, Africa Wide elected not to fund its $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 $21.52 million share of a second cash call. As a result of the missed cash calls, Africa Wide’s interest in Maseve was diluted to 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 November 30, 2015 Maseve owed PTM RSA approximately R2.148 billion ($156 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 an approved cash call and the associated dilution implications. No notice of compliance or non-compliance has been received by the Company as at the date of these financial statements.

ii.

Valuation

Management is required to make significant judgements concerning the identification of potential impairment indicators. Any properties management deems to be impaired are written down to their estimated net recoverable amount or written off. Due to lower platinum and palladium prices and the reduced market capitalization of the Company a formal impairment analysis was performed as of August 31, 2015 and should be read in conjunction with these financial statements which included the significant assumptions and inputs used in the impairment models. These indicators of impairment continued to exist at period end. However since August 31, 2015 lower USD prices for platinum and palladium have been mitigated by a concurrent weakening of the Rand against the USD. No impairment to any of the Company’s core South African properties was deemed necessary at August 31, 2015 or November 30, 2015.

5.	EXPLORATION AND EVALUATION ASSETS

Since mid-2015 the Company’s only active exploration project is the Waterberg Project located on the North Limb of the Western Bushveld Complex. The Company continues to hold other immaterial mineral or prospecting rights in South Africa and Canada. Total capitalized exploration and evaluation expenditures for all exploration properties held by the Company are as follows:


Balance, August 31, 2014	$	28,154
Additions		10,245
Recoveries		(6,123	)
Write-downs¹		(2,381	)
Foreign exchange movement		(5,266	)
Balance, August 31, 2015	$	24,629
Additions		1,303
Recoveries		(1,303	)
Foreign exchange movement		(2,205	)

Balance, November 30, 2015	$	22,424

¹The Company wrote off its Canadian exploration properties in 2015

			November 30, 2015			August 31, 2015
Project 3 – see Note 4		$	2,139		$	2,353

Waterberg JV	Acquisition costs		19			21
	Exploration and evaluation costs		25,670			27,659
	Recoveries		(14,692	)		(14,725	)
			10,997			12,955
Waterberg Extension	Acquisition costs		18			19
	Exploration and evaluation costs		9,236			9,297
			9,254			9,316
Other	Acquisition costs		23			25
	Exploration and evaluation costs		691			720
	Recoveries		(680	)		(740	)
			34			5

Total		$	22,424			24,629

Waterberg Project

The Waterberg Project is comprised of the Waterberg JV property, a contiguous granted prospecting right area of approximately 255 km², and the Waterberg Extension property, 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 property 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 Project with Mnombo identified as the Company’s 26% BEE partner for all. The Company holds the Waterberg Project prospecting permits in trust for the joint venture and subject to the ownership terms and conditions of the JOGMEC Agreement and the 2^nd Amendment thereto, as defined below.

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 Project (the “JOGMEC Agreement”). Under the terms of the JOGMEC Agreement, in April 2012, JOGMEC completed a $3.2 million work requirement to earn a 37% interest in the Waterberg JV property, 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 $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 property 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 $4,154 at November 30, 2015 ($4,554 – August 31, 2015), is accounted for as a non-controlling interest.

On May 26, 2015, the Company announced a second amendment (the “2^nd Amendment”) to the existing JOGMEC Agreement. Under the terms of the 2^nd Amendment the Waterberg JV and Waterberg Extension properties, 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 2^nd Amendment, JOGMEC has committed to fund $20 million in expenditures over a three year period ending March 31, 2018. An amount of $8 million will be funded by JOGMEC to March 31, 2016, followed by the first $6 million to be spent in each of the following two 12 month periods. Any amount in excess of $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 properties until closing. If Section 11 approval for the transfer is not obtained the parties will default to the pre 2^nd amendment JV arrangement, with any advances received from JOGMEC to be used to offset its spending commitments on the Waterberg JV property.

Since the JOGMEC earn-in period ended in May 2012, up until November 30, 2015, an additional $34.05 million has been spent on the Waterberg JV property. The Company and Mnombo’s combined 63% share of this work totaled $19.4 million up until March 31, 2015, at which time the above mentioned 2^ndAmendment came into effect, with the remaining $14.65 million funded by JOGMEC.

To November 30, 2015 approximately $10.1 million has been spent on the Waterberg Extension property. Mnombo’s combined 26% share of this work totalled $2.5 million up until March 31, 2015, at which time the above mentioned 2^nd Amendment came into effect. All of this work, including Mnombos’ share, was funded by the Company until March 31, 2015 and approximately $0.60 was funded by JOGMEC post March 31, 2015.

Post March 31, 2015 to November 30, 2015 approximately $5.95 million in work has been spent on the consolidated Waterberg Project, all of which was funded by JOGMEC. Of this amount approximately $1.4 million was completed during the three months ended November 30, 2015.

6.	LOANS PAYABLE

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 $40 million. The Sprott Facility was drawn on November 20, 2015.

On November 20, 2015, the Company also drew down $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 LMM Credit Agreement the Company entered into a life of mine Production Payment Agreement (“PPA”) with LMM.

In total the Company borrowed $80 million by way of the Sprott Facility and the LMM facility, which are reconciled to the November 30, 2015 balance sheet as follows:

Sprott Facility drawn down	$	40,000
Value of shares issued		(2,300	)
Costs Incurred to Issue Shares		84
Standby Fees		(1,244	)
Structuring Fee		(100	)
Legal and Other Fees		(492	)
Interest paid on loan balance		(115	)
Interest recognized		177
Foreign exchange gain		40
Carrying value - Sprott Facility	$	36,050

LMM Facility drawn down	$	40,000
Value of shares issued		(800	)
Legal and Other Fees		(574	)
Interest accrued on loan balance		(125	)
Interest recognized		62
Foreign exchange gain		30
Carrying value - LMM Facility	$	38,593

LMM Production Payment Liability¹	$	12,523
LMM Loan Facility		26,070
Total LMM Facility	$	38,593

Carrying value - Loans Payable	$	74,643

¹Production Payment to be amortized separately once production commences. See Liberty Facility below for further details.

Short term loans payable	$	3,837
Long term loans payable		70,806
Carrying value - Loans Payable	$	74,643

Note that interest payable on in the next twelve months on the Sprott Facility in the amount of $3,837 has been classified as a current loan payable.

Both loans are carried at amortized cost with the Sprott Facility having an effective interest rate of 13% while the Liberty Facility has an effective interest rate of 23%. The Liberty Facility has a higher effective interest rate due to the Production Payment being segregated and amortized separately, (see below description for further details).

Sprott Facility

Pursuant to the terms of the Sprott facility, the Company has made certain additional payments to the Lenders, including (a) a bonus payment made in February, 2015 concurrently with execution and delivery of the credit agreement in the amount of $1,500, being 3.75% of the principal amount of the Sprott Facility, paid by issuance of 2,830,188 common shares of the Company; (b) a draw down payment to the Lenders equal to 2% of the amount being drawn down under the Sprott Facility, or $800 which paid by issuance of 3,485,839 common shares of the Company on November 20, 2015; (c) a structuring fee comprised of a cash payment in the amount of $100, paid concurrently with the execution and delivery of the term sheet for the Sprott Facility; and (d) a standby fee paid in cash equal to 4% per annum of the un-advanced principal amount of the Sprott Facility paid in monthly instalments until draw down on November 20, 2015 totalling $1,244. The Sprott Facility matures on December 31, 2017 with the repayment of principal due in monthly instalments during calendar 2017.

Upon drawdown all deferred fees of $4.0 million ($1.8 million in cash) were netted against gross proceeds and will be recognized over the term of the agreement on an effective interest rate basis with $61 recognized in the current period along with $115 of actual interest. The Company classified $1,279 as the current portion representing interest payments due to Sprott over the next 12 months. The Company will be required to comply with certain covenants once first production commences.

The Sprott Facility is in the first lien position on (i) the shares of PTM (RSA) held by PTM and (ii) all current and future assets of PTM. Interest on the Sprott Facility is compounded and payable monthly at a nominal interest rate of LIBOR plus 8.50% .

Liberty Facility

Pursuant to the terms of the LMM Credit Agreement, the Company paid a draw down fee of $800 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 nominal 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.

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 $17.5 million until January 1, 2019 and then for $20 million until December 31, 2021. The initial fair value of the production payment liability has been valued at $12.5 million using Level 3 valuation assumptions and bifurcated from the LMM Facility’s loan payable and will be amortized over the expected life of mine as production payments are made.

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.

LMM holds the second lien position on (i) the shares of PTM (RSA) held by PTM and (ii) all current and future assets of PTM. 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. The Company will be required to comply with certain covenants once first production commences.

A reconciliation of the $40 million drawdown to the amount outstanding on the balance sheet is provided above.

7.	SHARE CAPITAL

(a)

Authorized

Unlimited common shares without par value.

(b)

Issued and outstanding

At November 30, 2015, the Company had 775,914,708 shares outstanding.

During the three months ended November 30, 2015, the Company issued 6,971,678 shares in connection with Sprott and Liberty Facilities (3,485,839 each).

(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. All exercise prices are denominated in Canadian Dollars.

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

				Average
	Number of Shares			Exercise Price
Options outstanding at August 31, 2014	19,744,500		C$	1.48
Granted	9,430,000			0.65
Cancelled	(850,000	)		1.33
Options outstanding at August 31, 2015	28,324,500			1.21
Cancelled	(2,859,500	)		1.81
Options outstanding at November 30, 2015	25,465,000		C$	1.13

Number
Outstanding and			Average Remaining
Exercisable at			Contractual Life
November 30, 2015		Exercise Price	(Years)
9,055,000	C$	0.65	4.22
3,032,000		0.96	1.77
100,000		1.05	2.50
25,000		1.20	3.80
9,554,000		1.30	3.18
75,000		1.38	1.22
35,000		1.40	2.30
3,539,000		2.05	0.43
50,000		2.20	0.02
25,465,000			2.99

The stock options outstanding have an intrinsic value of $Nil at November 30, 2015.

During the three month period ended November 30, 2015, the Company did not grant stock options (November 30, 2014 – 25,000 options were granted).

8.	RELATED PARTY TRANSACTIONS

Transactions with related parties are as follows:

(a)	During the three months ended November 30, 2015, $61 ($58 – November 30, 2014) was paid to independent directors for directors’ fees and services.

(b)	During the three months ended November 30, 2015, the Company accrued or received payments of $19 ($23 – November 30, 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 $48 ($20 – November 30, 2014) due from West Kirkland.

(c)	During the year ended August 31, 2015, the Company accrued or received payments from Nextraction Energy Corp. (“Nextraction”), a company with three directors in common, for administrative services. Amounts receivable at November 30, 2015 include an amount of $156 ($157 – 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.

(d)	During the period the Company entered into a loan facility agreement with its largest shareholder LMM. The loan was negotiated and entered into on an “arm’s length” basis at commercial terms. For full details on this transaction please refer to Note 6 above.

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 $1,933 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 R142 million ($9.81 million at November 30, 2015) to fiscal 2016 of which R89 million ($6.13 million at November 30, 2015), has been paid, leaving R59 million ($4.04 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, a body corporate constituted in terms of the provisions of the Water Services Act, 1997 (Act 108 of 1997). In terms of the agreement Maseve is required to contribute to the Pilansberg Water Scheme to the amount of R142 million ($9.81 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 November 30, 2015, Maseve has contributed R73 million ($5.0 million) to the scheme, leaving R69 million ($4.79 million at November 30, 2015) of the commitment outstanding.

From period end the Company’s aggregate commitments are as follows:

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

Lease obligations	$	344	$	749	$	680	$	160	$	1,933
ESKOM – power		4,040		-		-		-		4,040
Magalies water		4,788		-		-		-		4,788
Tailings & Surface
Infrastructure		17,495		-		-		-		17,495
Mining development		10,860		-		-		-		10,860
Mining equipment		5,550		-		-		-		5,550
Sprott Loan Facility		3,659		42,359		-		-		46,018
Liberty Loan Facility		-		8,320		45,847		4,619		58,786
Other property expenditures		10,090		-		-		-		10,090
Totals	$	56,826	$	51,428	$	46,527	$	4,779	$	159,560

The above contracts are subject to the following estimated break fees in the event of cancellation at November 30, 2015:

Concentrator plant and surface infrastructure	$	6,164
Magalies water		4,788
ESKOM		4,040
Mining equipment		2,839
Other		6,015
	$	23,846

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:

Three months ended		November 30, 2015		November 30, 2014

Amounts receivable, prepaid expenses and other assets	$	1,346	$	(676	)
Accounts payable and accrued liabilities		1,093		63
	$	2,439	$	(613	)

11.

SEGMENTED REPORTING

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

Assets

		November 30, 2015		August 31, 2015
Canada	$	79,108	$	35,091
South Africa		446,756		463,251
	$	525,864	$	498,342

Substantially all of the Company’s capital expenditures are made in South Africa.

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

Three months ended		November 30, 2015			November 30, 2014

Canada	$	(525	)	$	(5,556	)
South Africa		(109	)		450
	$	(634	)	$	(5,106	)