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 and six months ended February 28, 2017

Filed: April 17, 2017

PLATINUM GROUP METALS LTD.
(An exploration and development stage company)
Condensed Consolidated Interim Statements of Financial Position
(in thousands of United States Dollars)

		February 28,			August 31,
		2017			2016
ASSETS

Current
Cash and cash equivalents	$	25,005		$	16,450
Amounts receivable (Note 3)		5,331			6,087
Prepaid expenses		701			367
Total current assets		31,037			22,904

Performance bonds		5,792			4,912
Exploration and evaluation assets (Note 5)		25,047			22,346
Property, plant and equipment (Note 4)		525,450			469,696
Total assets	$	587,326		$	519,858

LIABILITIES

Current
Accounts payable and other liabilities	$	15,230		$	16,920
Loan payable (Note 6)		9,124			26,667
Total current liabilities		24,354			43,587

Loans payable (Note 6)		74,444			54,586
Other non-current liabilities		3,229			-
Asset retirement obligation		2,608			2,237
Total liabilities		104,635			100,410

SHAREHOLDERS’ EQUITY
Share capital (Note 7)		782,564			714,190
Contributed surplus		25,754			24,003
Accumulated other comprehensive loss		(182,719	)		(232,179	)
Deficit		(174,076	)		(125,245	)
Total shareholders’ equity attributable to shareholders of Platinum Group Metals Ltd.		451,523			380,769

Non-controlling interest		31,168			38,679
Total shareholders’ equity		482,691			419,448
Total liabilities and shareholders’ equity	$	587,326		$	519,858

SUBSEQUENT EVENTS (NOTE 12)

Approved by the Board of Directors and authorized for issue on April 17, 2017

*“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 Loss (Income) and Comprehensive Loss (Income)
(in thousands of United States Dollars except share and per share data)

		Three months ended						Six months ended
		February			February			February			February
		28, 2017			29, 2016			28, 2017			29, 2016


EXPENSES
General and administrative	$	1,394		$	1,635		$	2,561		$	3,029
Foreign exchange (gain) loss		(1,023	)		327			520			(72	)
Stock compensation expense (Note 7)		1,074			88			1,114			88
Impairment Charge (Note 4)		55,192			-			55,192			-
		56,637			2,050			59,387			3,045

Net finance income		(349	)		(240	)		(649	)		(523	)
Loss for the period		56,288			1,810			58,738			2,522

Items that may be subsequently reclassified to net loss:
Currency translation adjustment		(34,231	)		38,383			(51,856	)		79,294

Comprehensive loss for the period		22,057			40,193			6,882			81,816

Loss (Income) attributable to:
Shareholders of Platinum Group Metals Ltd.		46,417			1,895			48,874			2,529
Non-controlling interests		9,871			(85	)		9,864			(7	)
	$	56,288		$	1,810		$	58,738		$	2,522

Comprehensive loss (income) attributable to:
Shareholders of Platinum Group Metals Ltd.		13,715			37,082			(586	)		75,625
Non-controlling interests		8,342			3,111			7,468			6,191
	$	22,057		$	40,193		$	6,882		$	81,816

Basic and diluted loss per common share	$	0.39		$	0.02		$	0.45		$	0.03

Weighted average number of common shares outstanding:
Basic and diluted		119,177,051			77,591,471			108,056,515			77,281,193

See accompanying notes to the condensed consolidated interim financial statements

PLATINUM GROUP METALS LTD.
(An exploration and development stage company)
Condensed Consolidated Interim Statements of Changes in Equity
(in thousands ofShares ) United States Dollars, except # of Common

	# 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, 2015	76,894,302	$	681,762		$	23,646	$	(185,872	)	$	(104,570	)	$	414,966		$	58,380		$	473,346
Share based compensation	-		-			207		-			-			207			-			207
Shares issued for loan facilities (Note 6)	697,169		1,584			-		-			-			1,584			-			1,584
Transactions with non-controlling interest (Note 4)	-		-			-		3			-			3			(3	)		-
Foreign currency translation adjustment	-		-			-		(73,096	)		-			(73,096	)		(6,198	)		(79,294	)
Net (loss) income for the period	-		-			-		-			(2,529	)		(2,529	)		7			(2,522	)
Balance, February 29, 2016	77,591,471	$	683,346		$	23,853	$	(258,965	)	$	(107,099	)	$	341,135		$	52,186		$	393,321
Stock based compensation	-		-			150		-			-			150			-			150
Share issuance – financing	11,000,000		33,000			-		-			-			33,000			-			33,000
Share issuance costs	-		(2,959	)		-		-			-			(2,959	)		-			(2,959	)
Shares issued for loan facilities (Note 6)	263,307		800			-		-			-			800			-			800
Shares issued upon the exercise of options	2,250		3			-		-			-			3			-			3
Foreign currency translation adjustment	-		-			-		26,786			-			26,786			2,476			29,262
Net loss for the period	-		-			-		-			(18,146	)		(18,146	)		(15,983	)		(34,129	)
Balance, August 31, 2016	88,857,028	$	714,190		$	24,003	$	(232,179	)	$	(125,245	)	$	380,769		$	38,679		$	419,448
Stock based compensation	-		-			1,751		-			-			1,751			-			1,751
Share issuance – financing	41,923,750		68,767			-		-			-			68,767			-			68,767
Share issuance costs	-		(5,521	)		-		-			-			(5,521	)		-			(5,521	)
Shares issued for loan facilities (Note 6)	2,285,409		5,128			-		-			-			5,128			-			5,128
Transactions with non-controlling interest (Note 4)	-		-			-		-			43			43			(43	)		-
Foreign currency translation adjustment	-		-			-		49,460			-			49,460			2,396			51,856
Net loss for the period	-		-			-		-			(48,874	)		(48,874	)		(9,864	)		(58,738	)
Balance February 28, 2017	133,066,187	$	782,564		$	25,754	$	(182,719	)	$	(174,076	)	$	451,523		$	31,168		$	482,691

See accompanying notes to the condensed consolidated interim financial statements

PLATINUM GROUP METALS LTD.
(An exploration and development stage company)
Condensed Consolidated Interim Statements of Cash Flows
(in thousands of United States Dollars)

		Six months ended
		February 28,			February 29,
		2017			2016


OPERATING ACTIVITIES
Loss for the period	$	(58,738	)	$	(2,522	)

Add items not affecting cash:
Depreciation		198			246
Unrealized foreign exchange gain		260			505
Stock compensation expense		1,114			88
Impairment Charge		55,192			-
Net change in non-cash working capital (Note 10)		399			749
		(1,575	)		(934	)

FINANCING ACTIVITIES
Share issuance	$	68,767		$	-
Share issuance costs		(5,521	)		-
Interest paid on debt (Note 6)		(2,178	)		(1,069	)
Cash proceeds from debt (Note 6)		5,000			80,000
Debt principal repayment		(2,500	)		-
Costs associated with the debt (Note 6)		(127	)		(1,144	)
		63,441			77,787

INVESTING ACTIVITIES
Acquisition of property, plant and equipment	$	(63,854	)	$	(60,747	)
Proceeds from the sale of concentrate		7,647			-
Net Movement in South African VAT Receivable		(666	)		4,025
Performance bonds		(297	)		(661	)
		(57,170	)		(57,383	)

Net (decrease) increase in cash and cash equivalents		4,696			19,470
Effect of foreign exchange on cash and cash equivalents		3,859			(10,304	)
Cash and cash equivalents, beginning of period		16,450			39,082

Cash and cash equivalents, end of period	$	25,005		$	48,248

See accompanying notes to the condensed consolidated interim 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, 2017
(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 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. The Company is currently developing and operating the Maseve platinum and palladium mine (the “Maseve Mine”), formerly Project 1 of Western Bushveld Joint Venture (“WBJV”), located on the Western Limb of the Bushveld Complex in South Africa. The Maseve Mine is owned through the operating company Maseve Investments 11 (Pty.) Ltd. (“Maseve”), in which the Company held an 82.9% working interest as of February 28, 2017 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 the Maseve Mine on April 4, 2012 by the Government of South Africa (the “Mining Right”).

The Maseve Mine surface infrastructure is fully constructed and the mill was commissioned in February and March of 2016. Maseve is now in the ramp up phase of production. First concentrate was produced in February 2016 with commercial production levels expected in the first half of calendar 2017. Any revenues from concentrate sales realized before the asset is ready for its intended use are expected to be treated as a reduction in project capital cost.

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 combined. See details at Note 5 below. The Company published a pre-feasibility study for the combined Waterberg Project in October 2016.

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

Place of

Proportion of ownership interest

incorporation

and voting power held

and

February 28,

August 31,

Name of subsidiary

Principal activity

operation

2017

2016

Platinum Group Metals (RSA) (Pty) Ltd.¹

Exploration

South Africa

100%

Maseve Investments 11 (Pty) Ltd²

Mining

South Africa

82.9%

Mnombo Wethu Consultants (Pty) Limited.³

Exploration

South Africa

49.9%

¹Holds the Waterberg Project until approval to transfer rights to Waterberg JV Co. is received (see Note 5 below)
²See Note 4 “Ownership of Maseve Mine”.
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”) 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.

These interim condensed consolidated financial statements follow the same accounting principles as those outlined in the notes to the annual audited consolidated financial statements for the year ended August 31, 2016. These interim condensed consolidated financial statements are unaudited and condensed and do not include all the information and note disclosures required by IFRS for annual financial statements and should be read in conjunction with the Company’s audited consolidated financial statements for the year ended August 31, 2016. The interim condensed consolidated financial statements are presented in United States Dollars and the Company has used United States Dollars as its presentation currency since September 1, 2015.

Platinum Group Metals Ltd.
(An exploration and development stage company)
Notes to the consolidated financial statements
For the period ended February 28, 2017
(In thousands of United States Dollars unless otherwise noted)

Liquidity

The Company reported a net loss of $58.7 million for the six months ended February 28, 2017 with $55.2 million of that loss attributed to an impairment of the Maseve Mine. At February 28, 2017 the Company had working capital of $6.7 million with $6.7 million in short term liabilities not due until calendar 2018. At February 28, 2017, the Company was indebted for a principal amount of $82.5 million plus accrued interest of $6 million pursuant to the Amended and Restated Sprott Facility and the LMM Facility (both as defined below) to fund the development, construction and start-up working capital needs of the Maseve Mine. During the six-month period ending February 28, 2017 the Company closed equity financings totaling gross $69 million.

The Company currently has limited financial resources. 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 the Maseve Mine. The Company has experienced delays in the rate of underground development and stoping into key mining areas at the Maseve Mine due to delayed infrastructure and poor contractor performance. The Company’s engineers and mining personnel are working to mitigate and correct these issues. Under performing contractors are being replaced. Focus is being applied to achieve planned production and reduce costs. In addition, current global market prices for the metals to be produced at the Maseve Mine have been highly volatile. 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 the Maseve Mine required to maintain positive working capital and meet its amended production covenants under the Amended and Restated Sprott Facility and the LMM Facility (both as defined below). The Maseve Mine is behind on its planned ounce ramp-up profile at this time.

There is uncertainty related to the Company’s ability to secure additional funding. The Company’s ability to continue operations in the normal course of business may 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. However, management believes the Company will be able to secure further financing if deemed necessary.

Recently Issued Accounting Pronouncements

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 interim condensed 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

IFRS 9, Financial Instruments, replaces the guidance in IAS 39 that relates to the classification and measurement of financial instruments. IFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets: amortized cost, fair value through other comprehensive income, and fair value through profit or loss. The standard introduces a new expected credit losses model that replaces the incurred loss impairment model used in IAS 39. For financial liabilities, there were no changes to classification and measurement except for the recognition of changes in own credit risk in other comprehensive income, for liabilities designated at fair value through profit or loss. The standard is effective for accounting periods beginning on or after January 1, 2018. Early application is permitted. The Company is assessing IFRS 9’s impact on its financial statements.

(iii)

IFRS 16, Leases

The IASB has replaced IAS 17, Leases in its entirety with IFRS 16, Leases (“IFRS 16”), which will require lessees to recognize nearly all leases on the balance sheet to reflect their right to use an asset for a period of time and the associated liability to pay rentals. IFRS 16 is effective for annual periods commencing on or after January 1, 2019. The Company is in the process of evaluating the impact the standard is expected to have on our consolidated financial statements.

Exchange Rates

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

Rand/USD
Period-end rate	13.1365 (February 2016: 15.7732)
August 31, 2016	14.6958
6-month period average rate	13.7564 (February 2016: 14.6628)

CAD/USD
Period-end rate	1.3281 (February 2016: 1.3531)
August 31, 2016	1.3116
6-month period average rate	1.3240 (February 2016: 1.3203)

3.	AMOUNTS RECEIVABLE

		February 28, 2017		August 31, 2016
Receivable from concentrate sales	$	2,227	$	2,854
South African value added tax		2,570		1,776
Due from JOGMEC¹		294		15
Tax receivable		106		981
Other receivables		88		412
Due from related parties (Note 8)		46		49
	$	5,331	$	6,087

¹An amount of $294 is owed from JOGMEC against expenditures 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 and six months ended February 28, 2017
noted ) (In thousands of United States Dollars unless otherwise

4.	PROPERTY, PLANT AND EQUIPMENT

		Development
		Assets			Land			Buildings			Office Equipment			Mining Equipment			Total
COST
Balance, August 31, 2015	$	368,660		$	9,527		$	10,652		$	2,135		$	39,605		$	430,579
Additions		131,893¹			-			943			418			9,701			142,955
Impairment Charge		(41,371	)		-			-			-			-			(41,371	)
Foreign exchange movement		(36,524	)		(980	)		(1,095	)		(142	)		(4,072	)		(42,813	)
Balance, August 31, 2016	$	422,658		$	8,547		$	10,500		$	2,411		$	45,234		$	489,350
Additions		56,710²			-			122			450			4,088			61,370
Impairment Charge		(55,192	)		-			-			-			-			(55,192	)
Foreign exchange movement		49,311			1,015			1,246			186			5,368			57,126
Balance, February 28, 2017	$	473,489		$	9,562		$	11,867		$	3,046		$	54,690		$	552,654

ACCUMULATED DEPRECIATION
Balance, August 31, 2015	$	-		$	-		$	789		$	1,065		$	11,548		$	13,402
Additions		-			-			879			397			6,299			7,575
Foreign exchange movement		-			-			(81	)		(55	)		(1,187	)		(1,323	)
Balance, August 31, 2016		-			-			1,587			1,407			16,660			19,654
Additions		-			-			374			202			4,718			5,294
Foreign exchange movement		-			-			188			92			1,976			2,256
Balance, February 28, 2017	$	-		$	-		$	2,148		$	1,701		$	23,355		$	27,204

Net book value, August 31, 2016	$	422,658		$	8,547		$	8,913		$	1,003		$	28,574		$	469,696

Net book value, February 28, 2017	$	473,489		$	9,562		$	9,719		$	1,345		$	31,335		$	525,450

¹Includes pre-production revenue credited of $9.3 million and $8.7 million of interest expense capitalized.
²Includes pre-production revenue credited of $6.9 (see below) and $7.2 million of interest expense (see Note 6)

Maseve Mine

The Maseve Mine is located in the Western Bushveld region of South Africa. Costs for the Maseve Mine are capitalized and classified as development assets in Property, Plant and Equipment. The local name for what was formerly the Project 1 of the WBJV is the Maseve Mine based on the holding company named Maseve Investments 11 (Pty) Ltd. that holds the legal right to the mine.

The Maseve Mine is in the production ramp up phase with first concentrate having been produced in February 2016. Initial proceeds from concentrate sales before commercial production are treated as a reduction in project capital cost with $6.9 million being recognized to development costs in the six months ended February 28, 2017. Underground infrastructure completion scheduled during the third fiscal quarter is expected to bring the mine sufficiently to planned capacity such that commercial production may be declared in the first half of calendar 2017.

Ownership of the Maseve Mine

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 $26,613 at February 28, 2017 ($34,124 – August 31, 2016), 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.

Legislation and regulations in South Africa specify a 26% equity interest by a BEE entity as a prerequisite to the grant of a Mining Right. A past sale by Platinum Group Metals (RSA) (Pty) Ltd. (“PTM RSA”) of an 18.5% interest in the project that has become Wesizwe’s platinum mine is a component of the Company’s BEE profile. Because Africa Wide is the Company’s BEE partner for the Maseve Mine, 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.

In June 2016, the DMR requested an update regarding the Company’s efforts to increase the BEE equity ownership percentage in Maseve following the dilution of Africa Wide’s interest in Maseve. The Company met with the DMR in early June 2016 and the DMR requested a further update by August 7, 2016. The Company made several attempts to schedule a meeting with the DMR as requested. The Company has been advised by the DMR that the matter will be discussed at a later date. The DMR has not issued a notice of non-compliance.

All funding provided by PTM RSA to Maseve for development and construction of the Maseve Mine since the March 3, 2014 second cash call has been, and is planned to be, provided by way of an intercompany loan. At February 28, 2017 Maseve owed PTM RSA approximately R4.3billion ($326 million). All amounts due to PTM RSA are planned to be repaid by Maseve before any distribution of dividends to shareholders.

ii.

Valuation

Management is required to make significant judgements concerning the identification of potential impairment indicators. In considering whether any potential impairment indicators occurred in respect of the Company's long lived assets management takes into account a number of factors such as changes in the pricing of platinum, palladium, rhodium and gold prices (the four elements being produced together as a basket “4E Ounce”), foreign exchange rates, capital expenditures, operating costs, increased costs of capital, market capitalization and required ownership by historically disadvantaged South Africans and other factors that may indicate impairment. The decline in platinum prices and the decrease in the Company’s market capitalization in fiscal 2016 were considered to be indicators of potential impairment.

As a result the Company assessed the recoverable amount of the Maseve Mine Cash Generating Unit (“CGU”) at August 31, 2016. The Company has continued to capitalize costs against the Maseve Mine during fiscal 2017. At period end the Company assessed the recoverable amount of the Maseve Mine CGU at February 28, 2017 and recognized an impairment charge of $55 million.

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

The assumptions used by the Company in the DCFs are subject to risk and uncertainty relating to among other factors, metal prices and exchange rates.

The key financial assumptions used in the February 28, 2017 recoverable amount calculations are:

•	The future price per 4E ounce was a market consensus based on price projections of international banks and brokerages. A long-term price of US$1,200 per 4E ounce was used in the valuation model.
•	A long-term Rand/$USD exchange rate of 14.58:1 was used
•	A long-term discount rate of 10.70% for the project was used.

The recoverable amount was derived from the Company’s financial model which is categorised as a level 3 valuation of the fair value hierarchy. The recoverable amount for Maseve is most sensitive to exchange rates, metal prices, discount rates and to a lesser extent operating costs. Sensitivity analysis has been conducted for Maseve for metal prices, exchange rates and discount rates. Lower metal prices and/or lower head grades both negatively affect the recoverable amount for Maseve. Maseve is not significantly sensitive to capital cost increases as the majority of life of mine capital has been expended as at the date of these financial statements. If the US Dollar strengthens by 5% against the Rand the recoverable amount for Maseve increases by $58 million. If there is a 5% reduction in the life of mine 4E Ounce basket price the estimated recoverable amount for Maseve is reduced by $54 million. If an 11.7% discount rate is used the estimated recoverable amount for Maseve is reduced by $27 million.

5.	EXPLORATION AND EVALUATION ASSETS

Since mid-2015 the Company’s only active exploration project has been 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, 2015	$	24,629
Additions		7,630
Recoveries		(7,321	)
Foreign exchange movement		(2,592	)
Balance, August 31, 2016	$	22,346
Additions		2,686
Recoveries		(2,630	)
Foreign exchange movement		2,645

Balance, February 28, 2017	$	25,047

			February 28, 2017			August 31, 2016
Project 3 – see Note 4		$	2,361		$	2,111

Waterberg JV	Acquisition costs		21			19
	Exploration and evaluation costs		35,741			29,462
	Recoveries		(25,580	)		(20,518	)
			10,182			8,963
Waterberg Extension	Acquisition costs		18			17
	Exploration and evaluation costs		12,554			11,221
			12,572			11,238
Other	Acquisition costs		25			23
	Exploration and evaluation costs		668			691
	Recoveries		(761	)		(680	)
			(68	)		34

Total		$	25,047			22,346

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’s Waterberg properties. 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 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.

The Company consolidates Mnombo. The portion of Mnombo not owned by the Company, calculated at $4,555 at February 29, 2017 ($4,555 – August 31, 2016), 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 combined 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 was funded by JOGMEC to March 31, 2016, which is being followed by two $6 million tranches to be spent in each of the following two 12 month periods ending March 31, 2018. 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 to March 2015 (when the 2^nd Amendment became effective) $39.9 million was spent on the combined Waterberg JV and Waterberg Extension properties. JOGMEC contributed $11.4 million while the Company contributed the remaining $28.5 million which included Mnombo’s share of expenditures on the Waterberg Extension ($2.4 million) which are still owed to the Company.

Post March 2015, $14.59 million has been spent through to February 28, 2017 on the Waterberg JV and Waterberg Extension properties all of which has been funded by JOGMEC per the 2^nd Amendment agreement outlined above. In the first six months of fiscal 2017 $2.65 million was spent on the combined Waterberg JV and Waterberg Extension.

6.	LOANS PAYABLE

On February 16, 2015 the Company announced it had entered a credit agreement with a syndicate of lenders (the “Sprott 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 a $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 a significant shareholder, Liberty Metals & Mining Holdings, LLC (“LMM”), a subsidiary of Liberty Mutual Insurance. Pursuant to the LMM Credit Agreement the Company also entered into a life of mine Production Payment Agreement (“PPA”) with LMM.

The Company announced that effective May 3, 2016 that both the Sprott Facility and the LMM Facility had been amended. Under the amendments, the provision whereby Maseve must reach and maintain a three-month rolling average of at least 60% of planned production for a three-month period was extended from commencing three months post construction completion to commencing six months post construction completion.

On September 19, 2016, the Company announced that Sprott and LMM had agreed to amend certain terms to their existing loan facilities with the Company. Sprott agreed to defer 12 planned monthly repayments of the original $40 million Sprott Facility from commencing on January 31, 2017 to commencing on January 31, 2018. LMM agreed to defer 9 planned quarterly repayments of the original $40 million LMM Facility plus capitalized interest from commencing December 31, 2018 until June 30, 2019. LMM agreed to defer the quarterly payment of interest due to LMM from commencing December 31, 2016 until December 31, 2017. Sprott and LMM both agreed to reset agreed monthly production requirements so that the production period would commence October 31, 2016. Pursuant to the LMM Credit Agreement the Company entered a life of mine PPA with LMM whereby LMM was granted a Production Payment (as defined below) right to 1.5% of net proceeds received on concentrate sales from the Maseve Mine. LMM and the Company agreed to extinguish the Company’s right to buy back 1% of LMM’s 1.5% Production Payment right for $17.5 million until January 1, 2019 or for $20 million until December 31, 2021. In consideration of the amendments, the Company issued 801,314 common shares to Sprott and 801,314 common shares to LMM. The consideration was based on the value of five percent of the initial principal balance of the LMM loan facility and the Sprott facility, in each case, such amount being $2.0 million. The shares were priced at the five-day volume weighted average price on the TSX of $3.66 per share, less a ten percent discount, converted to US dollars using the Bank of Canada noon spot rate.

On October 12, 2016, the Company announced that Sprott had provided a $5.0 million second advance (the “Second Advance”) to the Company. The original $40.0 million Sprott Facility was amended and restated effective October 11, 2016 to reflect the Second Advance (the “Amended and Restated Sprott Facility”). Interest is payable to Sprott monthly on any outstanding principal related to the Second Advance at a rate of LIBOR plus 8.5%, the same rate as for the original Sprott Facility. Other terms, conditions and covenants related to the Amended and Restated Sprott Facility are substantially the same as for the original Sprott Facility. On November 2, 2016 Sprott elected for early repayment of $2.5 million of the Second Advance from the proceeds of an equity offering completed on November 1, 2016 (see Equity section for further details of the offering). Under the Amended and Restated Sprott Facility, as at February 28, 2017, the remaining $2.5 million principal balance of the Second Advance is to be repaid in six equal, monthly instalments commencing on July 31, 2017. In consideration of the Second Advance, as a fee, the Company issued 113,963 common shares of the Company at a price of $3.2428 per share, less a ten percent discount.

On January 13, 2017 the Company announced that Sprott and LMM had agreed to amend certain terms to their existing loan facilities with the Company. Sprott and LMM both agreed to reset agreed monthly production requirements whereby Maseve must reach and maintain a three-month rolling average of at least 60% of planned production to begin January 31, 2017 and an amendment to reach and maintain a three-month rolling average of at least 70% of planned production to begin April 30, 2017. Also, both LMM and Sprott agreed to waive the covenant until February 15, 2017 where working capital must be kept in excess of $5 million and to postpone from January 31, 2017 to March 31, 2017 the commencement of the requirement to pay Sprott 50% of the proceeds of further debt and equity financings. In consideration of the amendments, the Company issued 275,202 common shares to Sprott and 293,616 common shares to LMM. The consideration was based on the value of one percent of the outstanding principal balance of the LMM loan facility and the Amended and Restated Sprott facility. The shares were priced at the ten-day volume weighted average price on the TSX of C$2.253 per share, less a ten percent discount. At period end the Company was in compliance with all covenants.

In total the Company borrowed $82.5 million by way of the Amended and Restated Sprott Facility and the LMM facility, which are reconciled to the February 28, 2017 balance sheet as follows:

Net Sprott Facility drawn down	$	42,500
Value of shares issued at drawdowns		(1,050	)
Standby, Structuring, Legal and other fees		(3,356	)
Value of shares issued for amendments		(2,825	)
Interest paid on loan balance		(5,200	)
Interest finance cost at effective interest rate		8,470
Carrying value - Sprott Facility	$	38,539

LMM Facility drawn down	$	40,000
Value of shares issued at drawdown		(800	)
Legal and Other Fees		(607	)
Value of shares issued for amendment		(2,853	)
Interest finance cost at effective interest rate		8,503
Adjustment to amortized cost of LMM Production Payment Payable		523
LMM Production Payment Payable		263
Carrying value - LMM Facility	$	45,029

LMM Production Payment Liability	$	11,795
LMM Production Payment Payable		263
LMM Loan Facility		32,971
Total LMM Facility	$	45,029


Carrying value - Loans Payable	$	83,568
Current portion of loan payable	$	9,124
Non-current portion loans payable		74,444
Carrying value - Loans Payable	$	83,568

At February 28, 2017, the principal payable in the next twelve months on the Amended and Restated Sprott Facility of $9,124 has been classified as a current liability.

Both loans are carried at amortized cost with the Amended and Restated Sprott Facility having an effective interest rate of 20% and the LMM Facility having an effective interest rate of 27%. The LMM Facility has a higher effective interest rate due to the existence of the related Production Payment liability and its subordination to the Amended and Restated Sprott Facility. Net interest expense of $16.0 million from both loans has been capitalized against development assets in the Maseve mine until the asset is ready for its intended use which is expected to be aligned with the date commercial production is achieved. Adjustments and accretion to the Production Payment liability are also capitalized against the development assets in the Maseve mine until the mine is considered ready for its intended use and commercial production is achieved.

Sprott Facility

Pursuant to the terms of the original Sprott facility and the Amended and Restated Sprott Facility, the Company has made certain payments to the Sprott 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 283,019 common shares of the Company; (b) a draw down payment to the Sprott Lenders equal to 2% of the amount being drawn down under the Sprott Facility, which was paid by issuance of 348,584 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 originally was to mature on December 31, 2017 with the repayment of principal due in monthly instalments during calendar 2017, however due to the amendments outlined above the principal is now due to be repaid by December 2018.

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. Total interest of $8.5 million was recognized since inception ($3,405 in the current six-month period) with $5.2 million in cash interest paid since inception ($2,151 in the current six-month period).

The Amended and Restated Sprott Facility is in the first lien position on (i) the shares of PTM RSA held by PTM (and such other claims and rights described in the applicable pledge agreement) and (ii) all current and future personal property of PTM. Interest on the Amended and Restated Sprott Facility is compounded and payable monthly at a stated interest rate of LIBOR plus 8.50% .

LMM Facility

Loan

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 348,584 common shares of the Company.

The stated interest rate on the LMM Facility is LIBOR plus 9.5% . At period end, interest payments on the LMM Facility have been accrued and added to the loan balance until March 31, 2018 and then paid to LMM quarterly thereafter. Also, the first 20% of principal was to be repaid on June 30, 2019 and then in tranches of 10% of the principal at the end of each calendar quarter beginning on September 30, 2019 and for each of the next 7 quarters of the LMM Facility.

Production Payment

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 Maseve Mine (the “Production Payment”). The terms of the PPA were amended during the period. See details above in this Note 6.

The initial fair value of the Production Payment liability was valued at $11.3 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. The carrying value of the production payment is currently $11.8 million with difference from the original carrying value having been recognized as interest expense. The key valuation assumptions for the Production Payment valuation are production profile, discount rate and timing of cash flows. Any accretion to the Production Payment facility is treated as interest cost and capitalized to the project until the project is determined ready for its intended use.

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 Amended and Restated 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 (see above for details of the amended covenants).

7.	SHARE CAPITAL

(a)

Authorized

Unlimited common shares without par value.

(b)

Issued and outstanding

At February 28, 2017, the Company had 133,066,187 shares outstanding.

On September 19, 2016, both Sprott and Liberty were each issued 801,314 shares for consideration of $2.0 million each based on the five-day volume weighted average price on the TSX of C$3.66 per share (less a ten percent discount), converted to US dollars in consideration for the amendment to the outstanding working capital facilities.

On October 12, 2016 upon drawdown of an additional $5 million from the Amended and Restated Sprott Facility, Sprott was issued 113,963 shares as a drawdown fee.

On November 1, 2016, the Company announced the closing of an offering of 22,230,000 common shares at a price of $1.80 per share resulting in gross proceeds of $40.0 million. Net proceeds to the Company after fees, commissions and costs were approximately $36.9 million.

On January 13, 2017 Sprott was issued 275,202 shares and Liberty was issued 293,616 shares for total consideration of $878,440 based on the ten-day volume weighted average price on the TSX of C$2.253 per share (less a ten percent discount), in consideration for the amendment to the outstanding working capital facilities.

On January 31, 2017, the Company announced the closing of an offering of 19,693,750 common shares at a price of $1.46 per share resulting in gross proceeds of $28.8 million. Net proceeds to the Company after fees, commissions and costs were approximately $26.3 million.

(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. Certain stock options of the Company are subject to vesting provisions, while others vest immediately. All exercise prices are denominated in Canadian Dollars (“C$”).

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

			Average
	Number of Shares		Exercise Price
Options outstanding at August 31, 2015	2,832,450		C$ 12.10
Granted	1,014,675		2.00
Exercised	(2,250	)	2.00
Cancelled	(867,600	)	16.67
Options outstanding at August 31, 2016	2,977,275		7.31
Granted	2,210,000		2.00
Cancelled	(460,400	)	10.23
Options outstanding at February 28, 2017	4,726,875		C$ 4.54

Number	Number		Average Remaining
Outstanding at	Exercisable at		Contractual Life
February 28, 2017	February 28, 2017	Exercise Price	(Years)
3,073,175	2,641,588	C$ 2.00	4.54
791,500	791,500	6.50	2.97
292,200	292,200	9.60	0.52
10,000	10,000	10.50	1.25
2,500	2,500	12.00	2.55
554,000	554,000	13.00	1.91
3,500	3,500	14.00	1.05
4,726,875	4,295,288		3.63

During the six months ended February 28, 2017 the Company granted 2,210,000 stock options (1,014,675 – February 28, 2016). The stock options granted vest immediately. The Company recorded $1,751 ($637 capitalized to PPE and mineral properties and $1,114 expensed).

The Company used 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 periods ending February 28, 2017 and February 29, 2016:

Period ended	February 28, 2017	February 29, 2016
Risk-free interest rate	1.10%	0.65%
Expected life of options	4.0 years	3.9 years
Annualized volatility	68%	64%
Forfeiture rate	0.00%	2.1% per year
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, 2017, $117 ($119 – February 29, 2016) was paid to independent directors for directors’ fees and services.

(b)	During the six months ended February 28, 2017, the Company accrued or received payments of $27 ($38 – February 29, 2016) 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 $28 ($15 – February 29, 2016) due from West Kirkland.

(c)	In fiscal 2016 the Company entered into a loan facility agreement with a significant shareholder LMM. The loan was negotiated and entered into at commercial terms. For full details on this transaction please refer to Note 6 above.

Except for amounts due to LMM, 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 recorded at 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 $1,847 to August 31, 2020.

Maseve is party to a long term 40MVA electricity supply agreement with South African power utility, Eskom. In consideration Maseve is to pay connection fees and guarantees totaling R147 million ($11.2 million at February 28, 2017) of which R100 million ($7.6 million at February 28, 2017), has been paid, leaving R47 million ($3.6 million at February 28, 2017) of the commitment outstanding. These fees are subject to possible change based on Eskom’s cost to install. Eskom’s delivery schedule is also subject to possible change.

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

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

	$	510	$	1,337		-
Lease obligations							$	-	$	1,847
ESKOM – power		3,593		-		-		-		3,593
Mining Development		9,420		-		-		-		9,420
Mining Indirect and Other		596		-		-		-		596
Sprott Loan Facility		13,446		34,925		-		-		48,371
Liberty Loan Facility		-		56,626		11,517		-		68,143
Totals	$	27,565	$	92,888	$	11,517	$	-	$	131,970

10.

SUPPLEMENTARY CASH FLOW INFORMATION

Net change in non-cash working capital:

Six months ended		February 28, 2017			February 29, 2016
Amounts receivable, prepaid expenses and other assets	$	1,829		$	(1,091	)
Accounts payable and accrued liabilities		(1,430	)		1,840
	$	399		$	749

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

		February 28, 2017		August 31, 2016
Canada	$	21,358	$	10,572
South Africa		565,968		509,286
	$	587,326	$	519,858

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

Loss attributable to the shareholders of Platinum Group Metals Ltd.

Six months ended		February 28, 2017		February 29, 2016

Canada	$	3,608	$	2,085
South Africa		45,266		444
	$	48,874	$	2,529

12.

SUBSEQUENT EVENTS

On April 17, 2017, the Company announced that Sprott and LMM had agreed to further amend certain terms to their existing loan facilities with the Company. Sprott and LMM both agreed to reset agreed monthly production requirements whereby Maseve must reach and maintain a three-month rolling average of at least 60% of planned production to begin March 31, 2017 and an amendment to reach and maintain a three-month rolling average of at least 70% of planned production to begin June 30, 2017. Both LMM and Sprott also agreed to waive until May 31, 2017 the covenant to maintain at all times a working capital in excess of $5 million and a minimum of $5 million in unrestricted cash and cash equivalents. In the case of the Amended and Restated Sprott Facility, the Sprott Lenders agreed to amendments that postpone from March 31 2017 to June 30, 2017 the commencement of the requirement to pay Sprott 50% of the proceeds of further debt and equity financings and that require repayment of the outstanding portion of the Second Sprott Advance in full using the net proceeds of any equity or debt financings (excluding intercompany financings) that close after April 13, 2017 (otherwise to be paid in six equal installments commencing July 31, 2017).