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


Mathys Johannes Botha ("Thys") was born on November 13, 1973, in Carletonville, a South African gold mining town located just southwest of Johannesburg.  He was raised with three siblings and attended Wonderfontein High School where he enjoyed rugby, cricket, and athletics.  After high school Thys earned a Geology Diploma at Tshwane University of Technology. 

Thys joined Platinum Group Metals Ltd. in 2006 and  began exploring several projects owned by the Company in South Africa, rising to the position of Managing Geologist.  In 2007 and 2008, Thys was instrumental in conceptualizing and acquiring prospecting rights over the Waterberg Project area in Limpopo Province.  Thys also executed the exploration programs during 2009 to 2011 that lead to the discovery of the large, world class Waterberg platinum group metals deposit, including his namesake "Thys Zone", now known as the "T Zone".

Throughout his career, Thys managed some very large exploration drilling programs.  The Waterberg drilling campaign alone totalled about 375,000 metres of drilling and 180,000 assays.  No matter the pressure, amount of work, or challenge he faced, Thys always maintained his dedication, composure, and loyalty to his team.  Thys highly valued honesty and quality of work.  His coworkers respected his work ethic and principled, careful approach to his job. 

Thys was compassionate and caring.  He sought to improve the quality of life for his fellow South Africans.  In 2010, Thys participated in the "Ride for Smiles", a 7,500 km charity motorcycle road trip across southern Africa to raise money for children needing corrective dental and palate surgery.  Thys was an effective fund raiser and he made sure everyone at Platinum Group chipped in.  He was very satisfied when the 12-day round trip finished in Nelspruit.  We all enjoyed seeing the pictures from this road trip proudly displayed behind his desk. 

In September 2012, Thys and his wife Tanya were married, bringing together their children to form a new family.  Their daughter Kayleigh was born a few years later.  Thys was a dedicated family man.  He was a loving husband and father.  He worked hard to ensure his family was well taken care of.

Thys and his family recently moved to a farm near Dendron.  With the open spaces at the farm, he was able to pursue his passion for old cars and machinery and spend time hunting.  He wasted no time in working to develop and improve the land, which he did eagerly until he passed away on August 26, 2023.

It is hard to sum up the quality of a man and his life in just a few paragraphs.  There is so much more one could write about Thys.  Thys was exceptional and we at Platinum Group and his friends and family miss him dearly.


PLATINUM GROUP METALS LTD.

TABLE OF CONTENTS

ITEM  1 DEFINITIONS 3
1.1 GENERAL 3
1.2 ABBREVIATIONS AND GLOSSARY OF MINING TERMS 11
ITEM  2 PRELIMINARY NOTES 14
2.1 DATE OF INFORMATION 14
2.2 FINANCIAL INFORMATION 14
2.3 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS 14
2.4 RESERVE AND MINERAL RESOURCE DISCLOSURE 18
2.5 CAUTIONARY NOTE TO U.S. INVESTORS 18
2.6 CURRENCY PRESENTATION AND EXCHANGE RATE INFORMATION 19
2.7 NOTICE REGARDING NON-IFRS MEASURES 20
ITEM  3 CORPORATE STRUCTURE 20
3.1 NAME, ADDRESS AND INCORPORATION 20
3.2 PLATINUM GROUP METALS LTD. AND ITS SUBSIDIARIES 21
ITEM  4 GENERAL DEVELOPMENT OF THE BUSINESS 22
4.1 THREE-YEAR HISTORY 22
Fiscal 2021 Developments 22
Fiscal 2022 Developments 24
Fiscal 2023 Developments 26
Subsequent to Fiscal 2023 Developments 28
4.2 SIGNIFICANT ACQUISITIONS 28
ITEM  5 DESCRIPTION OF THE COMPANY'S BUSINESS 28
5.1 OVERVIEW 28
Principal Product 29
Implats Transaction 29
Specialized Skill and Knowledge 30
Competitive Conditions 30
Employees and Contractors 31
Foreign Operations 31
5.2 SOCIAL AND ENVIRONMENTAL POLICIES 32
Environmental, Social and Governance 32
Waterberg Social and Labour Plan 37
Labour in South Africa 38
Environmental Compliance 39
5.3 MINERAL PROPERTY INTERESTS 39
Material Mineral Property Interest - Waterberg Project 40
Non-Material Mineral Property Interests 72
5.4 SOUTH AFRICAN REGULATORY FRAMEWORK 72
Black Economic Empowerment in the South African Mining Industry 72
The Mining Charter 75
New Order Mining and Prospecting Rights Under the MPRDA 78
Resource Nationalism 79
Environment 79
Mine Safety 84
Royalty Payments 85
Mining Taxation Review 85
Exchange Control 86
Carbon Tax/Climate Change Policies 87


PLATINUM GROUP METALS LTD.


Climate Change Bill 90
Electricity Market Reform 90
South African Companies Act 91
Land Use 92
Dealing in Precious Metals 93
Land Claims 93
Beneficiation 95
Labour Relations Act 95
Employment Equity Act 96
5.5 RISK FACTORS 97
Risks Relating to the Company 97
Risks Related to the Mining Industry 107
Risks of Doing Business in South Africa 110
Risks Relating to the Company's Common Shares 118
ITEM  6 DIVIDENDS AND DISTRIBUTIONS 122
ITEM  7 DESCRIPTION OF CAPITAL STRUCTURE 122
ITEM  8 MARKET FOR SECURITIES 123
8.1 TRADING PRICE AND VOLUME 123
8.2 PRIOR SALES 125
ITEM  9 ESCROWED SECURITIES AND SECURITIES SUBJECT TO CONTRACTUAL RESTRICTION ON TRANSFER 125
ITEM  10 DIRECTORS AND OFFICERS 125
10.1 NAME, OCCUPATION AND SECURITY HOLDING 125
10.2 CORPORATE CEASE TRADE ORDERS, BANKRUPTCIES, PENALTIES OR SANCTIONS 127
10.3 CONFLICTS OF INTEREST 128
ITEM  11 PROMOTERS 129
ITEM  12 LEGAL PROCEEDINGS AND REGULATORY ACTIONS 129
12.1 LEGAL PROCEEDINGS 129
Africa Wide Litigation 129
12.2 REGULATORY ACTIONS 130
ITEM  13 INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS 130
ITEM  14 TRANSFER AGENTS AND REGISTRARS 130
ITEM  15 MATERIAL CONTRACTS 131
ITEM  16 INTERESTS OF EXPERTS 131
16.1 NAMES OF EXPERTS 131
16.2 INTERESTS OF EXPERTS 131
16.3 INDEPENDENT AUDITOR 132
ITEM  17 AUDIT COMMITTEES 132
17.1 AUDIT COMMITTEE CHARTER 132
17.2 AUDIT COMMITTEE COMPOSITION AND BACKGROUND 132
17.3 RELIANCE ON CERTAIN EXEMPTIONS 133
17.4 AUDIT COMMITTEE OVERSIGHT 133
17.5 PRE-APPROVAL POLICIES AND PROCEDURES 133
17.6 EXTERNAL AUDITOR SERVICE FEES (BY CATEGORY) 134
ITEM  18 ADDITIONAL INFORMATION 134
SCHEDULE "A"  AUDIT COMMITTEE CHARTER A1


PLATINUM GROUP METALS LTD.

ITEM  1 DEFINITIONS

In this Annual Information Form all units are presented in accordance with the International System of Units (i.e., metric) unless otherwise noted.  Capitalized terms and abbreviations used in the AIF but not otherwise defined have the meanings set out below unless the context otherwise indicates:

1.1 GENERAL

"2015 FP Regulations" refers to the Financial Provision Regulations in regard to rehabilitation published under the Constitution and National Environmental Management Act, No. 107 of 1998 on November 20, 2015, South Africa.

"2019 Registration Statement" refers to the Registration Statement on Form F-3 filed under the Securities Act of 1933 on June 5, 2019. 

"2020 ATM" refers to the at-the-market equity program to sell from time to time common shares of the Company for up to $12.0 million in aggregate sales proceeds pursuant to an Equity Distribution Agreement entered into with BMO U.S. on September 4, 2020. 

"2020 Work Program" refers to R 24.7 million of project work aimed at increasing confidence in specific areas of the Waterberg DFS which was funded by Implats in 2020 in consideration for the Waterberg JV Co. entering into the Amended Call Option Agreement. 

"2021 ATM" refers to the at-the-market equity program to sell from time to time common shares of the Company for up to $5.0 million in aggregate sales proceeds pursuant to an Equity Distribution Agreement entered into with BMO U.S. on February 5, 2021. 

"2022 ATM" refers to the at-the-market equity program to sell from time to time common shares of the Company for up to $50.0 million in aggregate sales proceeds pursuant to an Equity Distribution Agreement entered with the Agents.

"2023 Draft EIA Regulations" means the draft regulations to further amend the 2014 EIA Regulations, that were published for public comment by the DFFE in August 2023.

"Accounting Concerns" means, under the Whistleblower Policy, compliance with applicable government laws, rules and regulations, corporate reporting and disclosure, accounting practices, accounting controls, auditing practices and other matter relating to fraud against shareholders which the Company must comply with that may be the subject of a submission by a Covered Person.

"AEL" means atmospheric emission license. 

"Africa Wide" refers to Africa Wide Mineral Exploration and Prospecting (Pty) Ltd.

"Agents" refer to BMO Canada and BMO U.S.

"AIF" means this Annual Information Form dated November 21, 2023. 

"Amended Call Option Agreement" means the amended and restated Purchase and Development Option with Impala dated March 31, 2020. 

"Amplats" refers to Anglo American Platinum Limited.

"AMR" refers to Alta Mesa Resources, Inc.

"ANC" refers to the African National Congress of South Africa.

"Anti-Bribery Conduct Policy" means the Company's Commitment to anti-bribery conduct adopted in December 2021 to complement and expand on the existing Code of Business Conduct and Ethics.

"AQA" refers to the National Environmental Management Air Quality Act, No. 39 of 2004 of South Africa.


PLATINUM GROUP METALS LTD.

"AQA Listed Activities" refers to the list of activities, including certain mining related and processing activities, that are prohibited to undertake under the AQA. 

"ASC" refers to the Alberta Securities Commission.

"BCSC" refers to the British Columbia Securities Commission.

"BEE" refers to Broad-Based Black Economic Empowerment. 

"BEE Act" means the Broad-Based Black Economic Empowerment Act, No. 53 of 2003, South Africa. 

"BEE Amendment Act" means the Broad-Based Black Economic Empowerment Amendment Act, No. 46 of 2013 which came into operation on October 24, 2014.

"BIC" refers to The Battery Innovation Center.

"BMO Canada" refers to BMO Nesbit Burns Inc.

"BMO U.S." means BMO Capital Markets Corp.

"Board" refers to the board of directors of Platinum Group.

"Bushveld Complex" means the Bushveld Igneous Complex located in South Africa and contains the world's largest reserves of PGMs or PGEs.

"CAPEX" means capital expenditures. 

"Carbon Bill" means the South African Second Draft Carbon Tax Bill 2017 published in December 2017.

"Carbon Tax Act" means the South African Carbon Tax Act, No. 15 of 2019. 

"CCIAs" means climate change impact assessments.

"CCMA" refers to the Commission for Conciliation, Mediation and Arbitration, South Africa.

"CDM" means the clean development mechanism projects issued under national registries to be eligible for listing as eligible South African carbon offsets.

"CIPC" means the Companies and Intellectual Property Commission, an agency of the Department of Trade, Industry and Competition in South Africa.

"Clawback Policy" means  the policy adopted by the Company, as revised with an effective date of October 2, 2023, for the cancelation or recovery of excess payment of performance-based compensation issued or paid to an executive officer of the Company in the event of a restatement of the financial results of the Company and the performance-based compensation issued or paid would have been less had it been calculated based on such restated results.

"Climate Bill" means the Proposed Climate Change Bill first published for comment in June 2018.

"CMA" means the Common Monetary Area of South Africa, Namibia, Lesotho and Eswatini (formerly Swaziland). 

"Code" means the U.S. Internal Revenue Code of 1986, as amended.

"Code of Conduct" refers to the Company's Code of Business Conduct and Ethics. 

"Common Shares" means the common shares of the Company listed for trading on the TSX under the symbol "PTM" and on the NYSE American under the symbol "PLG".

"Company" or "Platinum Group" refers to Platinum Group Metals Ltd., a corporation organized under the laws of British Columbia, Canada, formed by way of an amalgamation on February 18, 2002 under the Company Act (British Columbia) and transitioned under the Business Corporations Act (British Columbia) on January 25, 2005.

"Companies Act" refers to the South African Companies Act, No. 71 of 2008 which came into force on May 1, 2011.


PLATINUM GROUP METALS LTD.

"Constitution" means the Constitution of the Republic of South Africa, 1996.

"Convertible Notes" means the $19.99 million 6 7/8% Convertible Senior Subordinated Notes repaid and cancelled by the Company on January 20, 2022. 

"Covered Persons" means directors, officers, employees, consultants and, as appropriate, certain third parties of the Company who make submissions under the Whistleblower Policy regarding Accounting Concerns. 

"COVID-19 Pandemic" means the global outbreak of coronavirus, an infectious disease caused by the severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) virus, as declared by the World Health Organization on March 11, 2020.

"CTOs" means Cease Trade Orders. 

"Deepkloof" means Deepkloof Limited, a wholly owned subsidiary of HCI.

"Defendants" means the defendants Platinum Group Metals (RSA) Proprietary Limited, Royal Bafokeng Platinum Limited, Royal Bafokeng Resources (Proprietary) Limited and Maseve Investments 11 (Proprietary) Limited in relation to the Maseve Sale Transaction.

"Deferred Share Unit Plan" means the Company's deferred share unit plan that permits directors who are not salaried officers or employees of the Company or a related corporation to convert into deferred share units the fees that would otherwise be payable by the Company to them relating to future services for their participation on the Board and on committees of the Board.

"DFFE" means the South African Department of Forestry, Fisheries and the Environment. 

"Digbee" means Digbee Ltd., provider of the Digbee ESG.

"Digbee ESG" means the free-to-access online ESG disclosure and ratings tool and communications platform designed specifically for the mining sector.

"DMRE" means the South African Department of Mineral Resources and Energy. 

"Draft Guideline" means the South African Draft National Guideline for Consideration of Climate Change Implications. 

"Draft NWA Regulations" means the draft regulations published by the DWS for comment in May 2023.

"DTC" means the Davis Tax Committee, consisting of the members of the South Africa Tax Review Committee as well as the Committee's Terms of Reference. 

"DWS" means the South African Department of Water and Sanitation.

"EA" means Environmental Authorization.

"EBIT" means a royalty rate in respect of refined minerals calculated by dividing earnings before interest and taxes by the product of 12.5 times gross revenue, calculated as a percentage, plus an additional 0.5%.

"EEA" means the South African Employment Equity Act, No. 55 of 1998.

"EHSSR Policies" refers to the Company's Environmental, Health, Safety, and Social Responsibility Policies.

"EHST Committee" means the Company's Environmental, Health, Safety and Technical Advisory Committee. 

"EIA" means Environmental Impact Assessment.

"EMP" means Environmental Management Plan.

"EMPs" means the EMP and Environmental Management Programs.

"Environmental Minister" means the Minister of the DFFE.

"ESG" means Environmental, Social and Governance.


PLATINUM GROUP METALS LTD.

"ESKOM" refers to ESKOM Holdings SOC Limited, South Africa's state electricity utility company.

"Explanatory Memorandum" means the Carbon Bill, together with an Explanatory Memorandum in respect of the Carbon Bill. 

"Financial Statements" refers to the Consolidated audited financial statements of Platinum Group. for the year ended August 31, 2023. 

"FinSurv" refers to the South African Reserve Bank, more specifically the Financial Surveillance Department.

"FIU" refers to Florida International University.

"Forward-Looking Statements" means the "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and the "forward-looking information" within the meaning of applicable Canadian securities legislation. 

"Future Rehabilitation" means the remediation of latent or residual environmental impacts which may become known in the future including the pumping and treatment of polluted or extraneous water. 

"Generic BEE Codes" means the Broad-Based Black Economic Empowerment Codes of Good Practice published under the BEE Act, as amended from time to time. 

"GHG emissions" means greenhouse gas emissions. 

"Good Practice Code" means the South Africa Code of Good Practice on the Prevention and Elimination of Harassment in the Workplace published in March 2022.

"Hanwa" refers to Hanwa Co. Ltd.

"HCI" refers to Hosken Consolidated Investments Limited, a black empowerment investment holding company which is listed in the financial sector on the JSE Securities Exchange South Africa.

"HCI Agreement" means the amended and restated subscription agreement dated May 10, 2018 between the Company and HCI.

"HDPs" means historically disadvantaged South Africans. 

"High Court Ruling" refers to the High Court of South Africa ruling dated June 14, 2022, dismissing the challenge brought by Africa Wide to set aside the Maseve Sale Transaction. 

"HJM" refers to HJ Platinum Metals Company Ltd., a special purpose company established in June 2023, and owned by JOGMEC and Hanwa, to hold an aggregate 21.95% interest in Waterberg JV Co. and fund their future equity investments in the Waterberg Project on a 75% / 25% funding basis. 

"Human Rights Policy" refers to the Company's human rights policy. 

"IFRS" means International Financial Reporting Standards as issued by the International Accounting Standards Board.

"Implats" refers to Impala Platinum Holdings Ltd.

"Implats Transaction" refers to the transaction dated November 6, 2017, whereby the Company sold Implats an 8.6% interest in Waterberg JV Co. for $17.2 million, JOGMEC sold Implats a 6.4% interest for $12.8 million, Implats acquired an option to acquire a controlling interest in the Waterberg Project, which was later terminated in June 2020, and Implats acquired the Offtake ROFR.

"Initial Budget" refers to the Waterberg Project initial budget of approx. $2.49 million that had to be spent by March 31, 2023, as approved by the directors of Waterberg JV Resources Proprietary Limited on September 1, 2022. 

"Investment Company Act" means the U.S. Investment Company Act of 1940, as amended. 

"IT" means information technology.


PLATINUM GROUP METALS LTD.

"JOGMEC" refers to Japan Organization for Metals and Energy Security (formerly Japan, Oil, Gas and Metals National Corporation).

"Labour Court" refers to the court that adjudicates labour law cases in South Africa.

"Land Claims Commissioner" means the Regional Land Claims Commissioner of South Africa. 

"Land Reform Minister" means the Minister of Agriculture, Land Reform and Rural Development of South Africa.

"LED" means Local Economic Development. 

"LEDS" means South Africa's first Low Emission Development Strategy 2050.

"Limpopo Provincial Government" refers the Limpopo Province of South Africa's provincial government, established in accordance with the Constitution and responsible for social services; economic functions; and provincial governance and administration.

"Lion Battery" means Lion Battery Technologies Inc., a company founded by Platinum Group in partnership with Amplats to research the use of palladium and platinum in lithium battery applications.

"Listed Activities" refers to certain activities that are incidental to mining, listed in a series of EIA Regulations published under the Constitution and National Environmental Management Act, No. 107 of 1998, South Africa. 

"LRA" means the Labour Relations Act, No. 66 of 1995, South Africa.

"Mark-to-Market Election" refers to the mark-to-market election for marketable stock under Section 1296 of the Code.

"Maseve" refers to Maseve Investments 11 (Proprietary) Limited.

"Maseve Sale Transaction" refers to the closing transaction for the sale of the Maseve Mine. 

"MEC" means Member of the Executive Committee for the Limpopo Department of Economic Development, Environment and Tourism.

"MHSA" means the Mine Health and Safety Act, No. 29 of 1996, South Africa.

"MHSA Bill" means the Mine Health and Safety Amendment Bill which was published for comment in June 2022.

"Minerals Council Judgement" means the judgement handed down by the High Court of South Africa on September 21, 2021, in the matter between Minerals Council of South Africa vs Minister of Mineral Resources and Energy and thirteen others [Case No.20341/19], in relation to the challenge to the Mining Charter, 2018.

"Mining Charter" refers to the Broad-Based Socio-Economic Empowerment Charter for the South African Mining and Minerals Industry.

"Mining Charter 2018" refers to the Amended Broad Based Socio Economic Empowerment Charter for the South African Mining Industry, 2018. 

"Mining Codes" refers to the Codes of Good Practice for the South African Minerals Industry, 2009

"Minister" means the Minister of the Department of Mineral Resources and Energy of South Africa.

"Minister of Finance" means the Minister of Finance of South Africa. 

"Mnombo" refers to Mnombo Wethu Consultants Proprietary Limited, a South African BEE company.

"MPRDA" means the Mineral and Petroleum Resources Development Act of 2002 of South Africa.

"MPRDA Amendment Act, 2008 means the Mineral and Petroleum Resources Development Amendment Act, No. 49 of 2008, sections of which became effective in 2013.


PLATINUM GROUP METALS LTD.

"MTBPS" means Medium-Term Budget Policy Statement. 

"MTRA" means the Mining Titles Registration Act, No. 16 of 1967, South Africa.

"NCOP" means the National Council of Provinces, the upper house of the Parliament of South Africa under the (post-apartheid) Constitution which came into full effect in 1997.

"NEMA" means the Constitution and National Environmental Management Act, No. 107 of 1998 of South Africa.

"NEMA Bill" means the National Environmental Laws Amendment Bill B14D-2017. 

"NEMLA Act" means the National Environmental Management Laws Amendment Act, No. 2 of 2022 published on June 24, 2022.

"NEMLAA" means the National Environmental Management Laws Amendment Act, No. 25 of 2014. 

"NEMWA" means the National Environmental Management: Waste Act, No. 59 of 2008 of South Africa.

"Nextraction" refers to Nextraction Energy Corp.

"NI 43-101" refers to National Instrument 43-101 - Standards of Disclosure for Mineral Projects, effective as of June 9, 2023, as adopted by the Canadian Securities Administrators.

"NI 51-102" refers to National Instrument 51-102 - Continuous Disclosure Obligations, effective as of June 9, 2023 as adopted by the Canadian Securities Administrators. 

"NI 52-110" refers to National Instrument 52-110 - Audit Committees, effective as of November 17, 2015 as adopted by the Canadian Securities Administrators.

"NWA" means the National Water Act, No. 36 of 1998 of South Africa.

"NYSE American" refers to the NYSE American, LLC., an American stock exchange located in New York City, where the Common Shares are traded under the symbol "PLG". 

"OECD" refers to the Organisation for Economic Cooperation and Development. 

"Offtake ROFR" means Implats' Right of First Refusal to enter into an offtake agreement, matching third party commercial arms-length terms offered to Waterberg JV Co., for the smelting and refining of mineral products from the Waterberg Project.

"Options" means the options to purchase Common Shares of the Company granted to certain eligible persons under the Share Compensation Plan.

"PAJA" refers to the Promotion of Administrative Justice Act, No. 3 of 2000, South Africa.

"Paris Agreement" means the legally binding international treaty on climate change adopted by 196 Parties at the United Nations Climate Change Conference (COP21) in Paris, France on December 12, 2015 and entered into force on November 4, 2016.

"PCC" refers to the Presidential Climate Commission of South Africa. 

"Plans" means the Share Compensation Plan and the Deferred Share Unit Plan.

"Precious Metals Act" means the Precious Metals Act, No. 37 of 2005 of South Africa.

"Pre-MPRDA Amendment Act Environmental Provisions" means the majority of the MPRDA's environmental regulation provisions which were deleted from the environmental mining legislation as a result of the transition of the primary environmental regulation of mining from the MPRDA to NEMA. 

"PTM RSA" refers to Platinum Group Metals (RSA) Proprietary Limited, a wholly owned South African subsidiary of Platinum Group.


PLATINUM GROUP METALS LTD.

"QEF Election" refers to a qualified electing fund election that may be done by a U.S. taxpayer to mitigate certain tax consequences under the Internal Revenue Code of 1986, as amended.

"RBPlat" refers to Royal Bafokeng Platinum Limited.

"Registration Statement" means the Company's registration statement on Form F-10 filed on June 21, 2022, with the Securities and Exchange Commission under the Multijurisdictional Disclosure System established between Canada and the United States.

"Rehabilitation and Closure Liability" means the MPRDA provision pursuant to which a mineral right holder remains liable for any environmental liability, pollution, ecological degradation, the pumping and treatment of extraneous water, compliance to the conditions of the EA and the management and sustainable closure of a mine, until the Minister has issued a closure certificate. 

"Restitution Act" means the Restitution of Land Rights Act, No. 22 of 1994, South Africa.

"Restitution Amendment Act" refers to the Restitution of Land Rights Amendment Act 15 of 2014, South Africa.

"Restoration" means the return of dispossessed land in South Africa that may be granted to a successful claimant pursuant to the Restitution Act.

"Royalty Act" collectively means the Mineral and Petroleum Resources Royalty Act, No. 28 of 2008 and Mineral and Petroleum Resources Royalty (Administration) Act, No. 29 of 2008 of South Africa.

"RSUs" means Restricted Share Units, rights awarded to certain eligible persons to receive Common Shares that become vested in accordance with the Share Compensation Plan. 

"SARB" refers to the South African Reserve Bank. 

"SEC" refers to the Securities and Exchange Commission, a U.S. government oversight agency responsible for regulating the securities markets and protecting investors. 

"SEC Modernization Rules" means the requirements of the SEC under subpart 1300 of Regulation S-K.

"Share Compensation Plan" means the Company's Share Compensation Plan (as amended) to provide for the award of RSUs and grant of Options to the directors, executive officers, key employees and consultants of the Company and its subsidiaries. 

"Shelf Prospectus" means the Company's final short form base shelf prospectus dated June 21, 2022, filed with the securities regulatory authorities in each of the provinces and territories of Canada. 

"SLP" refers to Social and Labour Plan, a document which South Africa's DMRE requires and approves when a company wishes to apply for and maintain a right to mine in any given area within South Africa.

"SPLUMA" refers to the Spatial Planning and Land Use Management Act, No. 16 of 2013, South Africa. 

"Sprott Facility" means the $20 million senior secured credit facility dated August 15, 2019, with Sprott Private Resource Lending II (Collector), LP and other lenders party thereto which was to mature on August 14, 2022, but was fully repaid in February 2022. 

"SRA" refers to the Sponsored Research Agreement between Lion Battery and the FIU Board of Trustees dated July 12, 2019 (as amended).

"Stage Three Budget" refers to the stage three budget of approximately $1.62 million for continued work on the Waterberg Project,  which is in process of being approved by the directors and shareholders of Waterberg JV Co.

"Stage Two Budget" means the stage two budget of $3.6 million for continued work on the Waterberg Project as approved by the directors, and shareholders of Waterberg JV Co. on March 24, 2023.


PLATINUM GROUP METALS LTD.

"Stipulated Distribution" means, for purposes of the Mining Charter 2018:

(i) a minimum of 5% non-transferable carried interest to qualifying employees from the effective date of a mining right. The definition of qualifying employees excludes employees who already own shares in the Company as a condition of their employment, except where such is a "Mining Charter" requirement;

(ii) a minimum of 5% non-transferable carried interest from the effective date of a mining right, or a minimum 5% equity equivalent benefit; and

(iii) a minimum of 20% shareholding to a BEE entrepreneur, of which 5% must preferably be for women.

"Tax Act" refers to the Income Tax Act (Canada)

"Trumping Provision" means the provisions in section 3(2) set out in the BEE Amendment Act. 

"TSX" refers to the Toronto Stock Exchange, a Canadian stock exchange located in Toronto, Ontario, where the Common Shares are traded under the symbol "PTM". 

"Updated NDC" means Updated Nationally Determined Contributions. 

"Waterberg DFS" means the NI 43-101 technical report entitled "Independent Technical Report, Waterberg Project Definitive Feasibility Study and Mineral Resource Update, Bushveld Complex, South Africa" dated October 4, 2019, with an effective date of resources and reserves of September 4, 2019. 

"Waterberg DFS Update" means a formal update to the Waterberg DFS, which was still in process as of the date of this AIF, the results of which are expected to be published within approximately by the end of calendar year 2023 or early in 2024.

"Waterberg JV Co." refers to Waterberg JV Resources Proprietary Limited, a subsidiary of PTM RSA. 

"Waterberg Mining Right" refers to the mining right for the Waterberg Project granted by the DMRE on January 28, 2021.

"Waterberg Project" refers to the deposit area discovered by the Company on the Waterberg property located on the Northern Limb of the Bushveld Complex, approximately 85 km north of the town of Mokopane, South Africa.

"Waterberg Shareholders Agreement" refers to the Shareholder Agreement in respect to Waterberg JV Co.  concluded on or about October 16 2017, between Implats, Platinum Group, PTM RSA, Mnombo, JOGMEC, Tiger Gate Platinum (RF) Proprietary Limited and acceded to by Hanwa on December 19, 2018, and by HJM on July 7, 2023.

"Waterberg SLP" refers to the Waterberg Social and Labour Plan granted on January 28, 2021, and registered on July 6, 2021.

"Whistleblower Policy" means the policy which outlines procedures for the confidential, anonymous submissions by Covered Persons regarding Accounting Concerns, without fear of retaliation of any kind. 

"WML" means waste management licence. 

"Work Program" refers to the in principle pre-construction work program approved for the Waterberg Project by the directors and shareholders of Waterberg JV Co. on October 18, 2022, and amounting to approximately $21.0 million over a 23 month period ending on August 31, 2024. 

"WUL" means water use licence. 

"WVM" refers to West Vault Mining Inc.


PLATINUM GROUP METALS LTD.

1.2 ABBREVIATIONS AND GLOSSARY OF MINING TERMS

The following is a list of abbreviations and a glossary of certain mining terms used in this AIF:

"3E" refers to platinum, palladium and gold, collectively.

"4E" refers platinum, palladium, rhodium and gold, collectively.

"anorthosite" is an intrusive igneous rock characterized by a predominance of plagioclase feldspar (90-100%), and a minimal mafic component (0-10%).  Pyroxene, ilmenite, magnetite, and olivine are the mafic minerals most commonly present.

"assay" is an analysis to determine the quantity of one or more elemental components.

"Au" refers to gold.

"cm" is an abbreviation for centimetres.

"CO2-eq" is an abbreviation for carbon dioxide equivalent.

"Cu" refers to copper.

"deposit" is a mineralized body, which has been physically delineated by sufficient drilling, trenching, and/or underground work, and found to contain a sufficient average grade of metal or metals to warrant further exploration and/or development expenditures.  Such a deposit does not qualify as a commercially mineable ore body or as containing ore reserves, until final legal, technical, and economic factors have been resolved.

"diamond drill" is a type of rotary drill in which the cutting is done by abrasion rather than percussion.  The cutting bit is set with diamonds and is attached to the end of the long hollow rods through which water is pumped to the cutting face.  The drill cuts a core of rock that is covered in long cylindrical sections, an inch or more in diameter.

"fault" is a fracture in a rock across which there has been displacement.

"felsites" refers to an igneous rock that contains a group of light-colored silicate minerals, including feldspar, feldspathoid, quartz, and muscovite.

"fracture" is a break in a rock, usually along flat surfaces.

"g/t" refers to grams per tonne.

"gabbro" is an intrusive rock comprised of a mixture of mafic minerals and feldspars.

"grade" is the concentration of an ore metal in a rock sample, given either as weight percent for base metals (i.e., Cu, Zn, Pb) or in grams per tonne (g/t) or ounces per short ton (oz/t) for precious or platinum group metals.

"ha" is an abbreviation for hectare.

"harzburgite" is a variety of peridotite consisting mostly of the two minerals, olivine and low-calcium (Ca) pyroxene (enstatite).  It commonly contains a few percent chromium-rich spinel as an accessory mineral.

"hectare" is an area totaling 10,000 square metres or 100 metres by 100 metres.

"intrusive" is a rock mass formed below earth's surface from molten magma, which was intruded into a pre-existing rock mass and cooled to solid.

"km" refers to kilometres.


PLATINUM GROUP METALS LTD.

"kriging" is the numerical modeling by applying statistics to resource calculations (or other earth sciences problems).  The method recognizes that samples are not independent and that spatial continuity between samples exists.

"m" refers to metres.

"mafic" is a rock type consisting of predominantly iron and magnesium silicate minerals with little quartz or feldspar minerals.

"magmatic" means pertaining to magma, a naturally occurring silicate melt, which may contain suspended silicate crystals, dissolved gases, or both; magmatic processes are at work under the earth's crust.

"Merensky" means the Merensky Reef, a distinct layer or reef comprising the Bushveld Complex which occurs around the Western Limb of the Bushveld Complex.

"mineralization" refers to minerals of value occurring in rocks.

"ML/day" refers to megalitre/day.

"MVA" refers to megavolt ampere.

"Ni" is an abbreviation for nickel.

"olivine" is a mineral silicate of iron and magnesium, principally (Mg, Fe)2SiO4, found in igneous and metamorphic rocks and used as a structural material in refractories and in cements.

"ounce" or "oz" refers to a troy ounce having a weight of 31.103 grams.

"outcrop" refers to an exposure of rock at the earth's surface.

"Pd" refers to palladium.

"pegmatoid" is an igneous rock that has the coarse-grained texture of a pegmatite but that lacks graphic intergrowths or typically granitic composition.

"PGE" refers to mineralization containing platinum group elements, i.e., platinum, palladium, rhodium and gold.

"PGM" refers to platinum group metals, i.e., platinum, palladium, rhodium and gold.

"plagioclase" is a form of feldspar consisting of aluminosilicates of sodium and/or calcium, common in igneous rocks and typically white.

"Platreef" means the Platreef, a distinct layer or reef comprising the Bushveld Complex found within the Northern Limb of the Bushveld Complex.

"Pt" refers to platinum.

"pyroxenite" refers to a relatively uncommon dark-coloured rock consisting chiefly of pyroxene; pyroxene is a type of rock containing sodium, calcium, magnesium, iron, titanium and aluminum combined with oxygen.

"Qualified Person" or "QP" as used in this AIF means a Qualified Person as that term is defined in NI 43-101.

"quartz" is a common rock-forming mineral (SiO2).

"quartzite" is an extremely compact, hard, granular rock consisting essentially of quartz.  It often occurs as silicified sandstone, as in sarsen stones.

"Rh" refers to rhodium.

"stope" is an underground excavation from which ore has been extracted.


PLATINUM GROUP METALS LTD.

"tailings" is the material that remains after all metals considered economic have been removed from ore during milling.

"tonne" refers to a metric tonne having a weight of 1,000 kilograms or 2,205 pounds.

"troctolite" is a gabbro made up mainly of olivine and calcic plagioclase, often having a spotted appearance likened to a trout's back.

"UG2" refers to Upper Group 2 Chromitite Layer or Reef, a distinct layer or reef comprising the Bushveld Complex which occurs around the Eastern Limb of the Bushveld Complex.

"ultramafic" refers to types of rock containing relatively high proportions of the heavier elements such as magnesium, iron, calcium and sodium; these rocks are usually dark in colour and have relatively high specific gravities.


PLATINUM GROUP METALS LTD.

ITEM  2 PRELIMINARY NOTES

2.1 DATE OF INFORMATION

All information in this AIF is as of August 31, 2023, unless otherwise indicated.

2.2 FINANCIAL INFORMATION

All financial information in this AIF is derived from the Financial Statements which have been prepared in accordance with IFRS as issued by the International Accounting Standards Board.  A copy of the Financial Statements may be obtained online at www.sedarplus.ca

2.3 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This AIF and the documents incorporated by reference herein contain Forward-Looking Statements.  All statements, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will, may, could or might occur in the future are Forward-Looking Statements.  The words "expect", "anticipate", "estimate", "forecast", "may", "could", "might", "will", "would", "should", "intend", "believe", "target", "budget", "plan", "strategy", "goals", "objectives", "projection" or the negative of any of these words and similar expressions are intended to identify Forward-Looking Statements, although these words may not be present in all Forward-Looking Statements.  Forward-Looking Statements included or incorporated by reference in this AIF include, without limitation, statements with respect to:

 the timely completion of additional required financings and potential terms thereof;

 the completion of appropriate contractual smelting and/or refining arrangements with Implats or another third party smelter/refiner;

 the completion of the Waterberg DFS Update;

 the projections set forth or incorporated into, or derived from, the Waterberg DFS, including, without limitation, estimates of mineral resources and mineral reserves, and projections relating to future prices of metals, commodities and supplies, currency rates, capital and operating expenses, production rate, grade, recovery and return, and other technical, operational and financial forecasts;

 the approval of a WUL and environmental permits for, and other developments related to, a deposit area discovered by the Company on the Waterberg Project;

 the Company's expectations with respect to the outcome of a review application in the High Court to set aside a decision by the Minister of the DFFE to refuse condonation for the late filing of the appeal by individuals from a community group against the grant of an EA for the Waterberg Project;

 the negotiation and execution of long term access agreements, on reasonable terms, with communities recognized as titled landowners of three farms where surface and underground mine infrastructure is planned, and rezoning for mining use;

 the development of performance indicators to measure and monitor key environmental, social sustainability and governance activities at the Waterberg Project;

 the ability of state electricity utility ESKOM to supply sufficient power to the Waterberg Project;

 risks related to geopolitical events and other uncertainties, such as Russia's invasion in Ukraine and conflict in the Middle East;

 the adequacy of capital, financing needs and the availability of and potential for obtaining further capital;

 revenue, cash flow and cost estimates and assumptions;

 future events or future performance;


PLATINUM GROUP METALS LTD.

 development of next generation battery technology by Lion Battery, the Company's battery technology joint venture (described below);

 potential benefits of Lion Battery engaging BIC;

 governmental and securities exchange laws, rules, regulations, orders, consents, decrees, provisions, charters, frameworks, schemes and regimes, including interpretations of and compliance with the same;

 developments in South African politics and laws relating to the mining industry;

 anticipated exploration, development, construction, production, permitting and other activities on the Company's properties;

 project economics;

 future metal prices and currency exchange rates;

 the identification of several large-scale water basins that could provide mine process and potable water for the Waterberg Project and local communities;

 the Company's expectations with respect to the outcomes of litigation;

 mineral reserve and mineral resource estimates;

 potential changes in the ownership structures of the Company's projects;

 the Company's ability to license certain intellectual property;

 the potential use of alternative renewable energy sources for the Waterberg Project; and

 future assistance from the MEC for the Limpopo Department of Economic Development, Environment and Tourism in regard to the Company's engagements with local communities.

Forward-Looking Statements reflect the current expectations or beliefs of the Company based on information currently available to the Company.  Forward-Looking Statements in respect of capital costs, operating costs, production rate, grade per tonne and concentrator and smelter recovery are based upon the estimates in the technical report referred to in this AIF and in the documents incorporated by reference herein and ongoing cost estimation work, and the Forward-Looking Statements in respect of metal prices and exchange rates are based upon the three year trailing average prices and the assumptions contained in such technical report and ongoing estimates.

Forward-Looking Statements are subject to a number of risks and uncertainties that may cause the actual events or results to differ materially from those discussed in the Forward-Looking Statements, and even if events or results discussed in the Forward-Looking Statements are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, the Company.  Factors that could cause actual results or events to differ materially from current expectations include, among other things:

 the Company's additional financing requirements;

 the effect of future debt financing on the Company and its financial condition;

 the Company's history of losses and expectations that will continue to incur losses until the Company's Waterberg Project reaches commercial production on a profitable basis, which may never occur;

 the Company's negative operating cash flow;

 uncertainty of estimated mineral reserve and mineral resource estimates, production, development plans and cost estimates for the Waterberg Project;

 the Company's ability to bring properties into a state of commercial production;


PLATINUM GROUP METALS LTD.

 the potential impact of international conflict and geopolitical tensions and events on the Company;

 discrepancies between actual and estimated mineral reserves and mineral resources, between actual and estimated development and operating costs, between actual and estimated metallurgical recoveries and between estimated and actual production;

 fluctuations in the relative values of the U.S. Dollar, the Rand and the Canadian Dollar;

 volatility in metals prices;

 the possibility that the Company may become subject to the Investment Company Act;

 Implats or another third party may not enter into appropriate contractual smelting and/or refining arrangements with Waterberg JV Co.;

 the ability of the Company to acquire the necessary surface access rights on commercially acceptable terms or at all;

 the ability of state electricity utility ESKOM to supply sufficient power to the Waterberg Project;

 the failure of the Company or the other shareholders of Waterberg JV Co. to fund their pro rata share of funding obligations for the Waterberg Project;

 any disputes or disagreements with the Company's other shareholders of Waterberg JV Co. or Mnombo;

 the Company is subject to assessment by various taxation authorities, who may interpret tax legislation in a manner different from the Company, which may negatively affect the final amount or the timing of the payment or refund of taxes;

 the Company's ability to attract and retain its key management employees;

 contractor performance and delivery of services, changes in contractors or their scope of work or any disputes with contractors;

 conflicts of interest among the Company's officers and directors;

 any designation of the Company as a "passive foreign investment company" for its current and future tax years and potential adverse U.S. federal income tax consequences for U.S. shareholders;

 litigation or other legal or administrative proceedings brought against or relating to the Company, including the review application to set aside a decision by the Minister of the DFFE to refuse condonation for the late filing of the appeal by individuals from a community group against the grant of an EA for the Waterberg Project;

 information systems and cyber security risks;

 actual or alleged breaches of governance processes or instances of fraud, bribery or corruption;

 exploration, development and mining risks and the inherently dangerous nature of the mining industry, including environmental hazards, industrial accidents, unusual or unexpected formations, safety stoppages (whether voluntary or regulatory), pressures, mine collapses, cave ins or flooding and the risk of inadequate insurance or inability to obtain insurance to cover these risks and other risks and uncertainties;

 property zoning and mineral title risks including defective title to mineral claims or property;

 changes in national and local government legislation, taxation, controls, regulations and political or economic developments in Canada, South Africa or other countries in which the Company does or may carry out business in the future;

 equipment shortages and the ability of the Company to acquire the necessary infrastructure for its mineral properties;


PLATINUM GROUP METALS LTD.

 environmental regulations and the ability to obtain and maintain necessary permits, including EAs and WULs;

 extreme competition in the mineral exploration industry;

 delays in obtaining, or a failure to obtain, permits necessary for current or future operations or failures to comply with the terms of such permits;

 any adverse decision in respect of the Company's mineral rights and projects in South Africa under the MPRDA;

 risks of doing business in South Africa, including but not limited to, labour, economic and political instability and potential changes to and failures to comply with legislation;

 the failure to maintain or increase equity participation by historically disadvantaged South Africans in the Company's prospecting and mining operations and to otherwise comply with the Mining Charter 2018;

 certain potential adverse Canadian tax consequences for foreign-controlled Canadian companies that acquire Common Shares of the Company;

 socio economic instability in South Africa or regionally, including risks of resource nationalism;

 labour disruptions and increased labour costs;

 interruptions, shortages or cuts in the supply of electricity or water;

 characteristics of and changes in the tax and royalties systems in South Africa;

 a change in community relations;

 South African foreign exchange controls impacting repatriation of profits;

 restriction on dividend payments;

 the risk that the Common Shares may be delisted;

 volatility in the price of the Common Shares;

 the exercise or settlement of Options, RSUs or warrants resulting in dilution to the holders of Common Shares;

 future sales of equity securities decreasing the value of the Common Shares, diluting investors' voting power, and reducing our earnings per share;

 enforcing judgements based on the civil liability provisions of United States federal securities laws;

 pandemics and other public health crises;

 global financial conditions;

 government imposed shutdowns or expense increases;

 land restitution claims or land expropriation;

 water license risks; and

 other risks disclosed under Item 5.5 Risk Factors in this AIF.

These factors should be considered carefully, and investors should not place undue reliance on the Company's Forward-Looking Statements.  In addition, although the Company has attempted to identify important factors that could cause actual actions or results to differ materially from those described in Forward-Looking Statements, there may be other factors that cause actions or results not to be as anticipated, estimated or intended.


PLATINUM GROUP METALS LTD.

The mineral resource and mineral reserve figures referred to in this AIF and the documents incorporated herein by reference are estimates and no assurances can be given that the indicated levels of Pt, Pd, Rh and Au will be produced.  Such estimates are expressions of judgment based on knowledge, mining experience, analysis of drilling results and industry practices.  Valid estimates made at a given time may significantly change when new information becomes available.  By their nature, mineral resource and mineral reserve estimates are imprecise and depend, to a certain extent, upon statistical inferences which may ultimately prove unreliable.  Any inaccuracy or future reduction in such estimates could have a material adverse impact on the Company.

Any Forward-Looking Statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any Forward-Looking Statement, whether as a result of new information, future events or results or otherwise.

2.4 RESERVE AND MINERAL RESOURCE DISCLOSURE

Mineral resources that are not mineral reserves do not have demonstrated economic viability. Confidence in an inferred mineral resource estimate is insufficient to allow meaningful application of the technical and economic parameters to enable an evaluation of economic viability sufficient for public disclosure, except in certain limited circumstances set out in NI 43-101.  The mineral resource and mineral reserve figures referred to in this AIF and the documents incorporated herein by reference are estimates and no assurances can be given that the indicated levels of platinum, palladium, rhodium and gold will be produced. Such estimates are expressions of judgment based on knowledge, mining experience, analysis of drilling results and industry practices.  Valid estimates made at a given time may significantly change when new information becomes available.  By their nature, mineral resource and mineral reserve estimates are imprecise and depend, to a certain extent, upon statistical inferences which may ultimately prove unreliable.  Any inaccuracy or future reduction in such estimates could have a material adverse impact on the Company.

Units of Conversion

The following table sets forth certain standard conversions from the International System of Units (metric units) to the Standard Imperial Units:

Conversion Table

Metric

 

Imperial

1.0 millimetre (mm)

=

0.039 inches (in)

1.0 metre (m)

=

3.28 feet (ft)

1.0 kilometre (km)

=

0.621 miles (mi)

1.0 hectare (ha)

=

2.471 acres (ac)

1.0 gram (g)

=

0.032 troy ounces (oz)

1.0 metric tonne (t)

=

1.102 short tons (ton)

1.0 g/t

=

0.029 oz/ton

2.5 CAUTIONARY NOTE TO U.S. INVESTORS

All mineral resource and reserve estimates included in this AIF and the documents incorporated by reference herein and therein, have been or will be prepared in accordance with NI 43-101, which is a rule developed by the Canadian Securities Administrators that establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects.  These standards differ significantly from the mineral reserve disclosure requirements of the SEC.  Consequently, mineral reserve and mineral resource information included and incorporated by reference in this AIF is not comparable to similar information that would generally be disclosed by U.S. companies in accordance with the rules of the SEC.


PLATINUM GROUP METALS LTD.

Estimates of mineralization and other technical information included or incorporated by reference herein have been prepared in accordance with NI 43-101, which differs significantly from the requirements of the SEC Modernization Rules.  The Company is not currently subject to the SEC Modernization Rules.  Accordingly, the Company's disclosure of mineralization and other technical information herein may differ significantly from the information that would be disclosed had the Company prepared the resource estimates under the standards adopted under the SEC Modernization Rules. 

2.6 CURRENCY PRESENTATION AND EXCHANGE RATE INFORMATION

All monetary amounts set forth in this AIF are expressed in United States Dollars ("U.S. Dollars", "USD", "$" or "US$"), except where otherwise indicated.  The Company's functional currency is the Canadian Dollar ("Canadian Dollars", "CAD" or "C$") and is reported in a USD presentation currency.  The Company's South African subsidiaries use the South African Rand ("Rand", "R" or "ZAR") as a functional currency.

The daily rate of exchange on August 31, 2023, as reported by the Federal Reserve Bank of New York for the conversion of South African Rand into one U.S. Dollar was 18.9061.

The following table sets forth the rate of exchange for the U.S. Dollars expressed in Canadian Dollars in effect at the end of each of the indicated periods, the average of the exchange rates in effect on the last day of each month during each of the periods indicated, and the high and low exchange rates during each of the periods indicated based on the average daily rate of exchange reported by the Bank of Canada for the conversion of U.S. Dollars into Canadian Dollars.

U.S. Dollars to Canadian Dollars

Year Ended August 31,

 

2023

2022

2021

Rate at end of period

C$1.3531

C$1.3111

C$1.2617

Average rate for period

C$1.3469

C$1.2720

C$1.2688

High for period

C$1.3856

C$1.3138

C$1.3396

Low for period

C$1.2980

C$1.2329

C$1.2040

The daily average rate of exchange on November 20, 2023, as reported by the Bank of Canada for the conversion of U.S. Dollars into Canadian Dollars was $1.00 equals C$1.3726.

The following table sets forth the rate of exchange for the South African Rand expressed in Canadian Dollars in effect at the end of each of the indicated periods, the average of the exchange rates in effect on the last day of each month during each of the periods indicated, and the high and low exchange rates during each of the periods indicated based on the average daily rate of exchange as reported by the Bank of Canada for the conversion of South African Rand into Canadian Dollars.

South African Rand to Canadian Dollars

Year Ended August 31

2023

2022

2021

Rate at end of period

R13.9315

R13.0242

R11.5115

Average rate for period

R13.4160

R12.2470

R11.8256

High for period

R14.5751

R13.2837

R12.8816

Low for period

R12.4533

R11.1857

R11.1532



PLATINUM GROUP METALS LTD.

The daily average rate of exchange on November 20, 2023, as reported by the Bank of Canada for the conversion of South African Rand into Canadian Dollars was C$1.00 equals R13.3905.

The following table sets forth the rate of exchange for the U.S. Dollars expressed in South African Rand in effect at the end of each of the indicated periods, the average of the exchange rates in effect on the last day of each month during each of the periods indicated, and the high and low exchange rates during each of the periods indicated based on the average daily rate of exchange as reported by the Federal Reserve Bank  of New York for the conversion of U.S. Dollars into Rand.

U.S. Dollars to South African Rand

 

Year Ended August 31

2023

2022

2021

Rate at end of period

R18.9061

R17.0350

R14.5075

Average rate for period

R18.065

R15.5742

R15.0013

High for period

R19.7787

R17.1450

R17.1875

Low for period

R16.8200

R14.1300

R13.4500

The daily average rate of exchange on November 17, 2023, as reported by the Federal Reserve Bank of New York for the conversion of U.S. Dollars into South African Rand $1.00 equals R18.3771.

Terms used and not defined in this AIF that are defined in NI 51-102 shall bear that definition.  Other definitions are set out in National Instrument 14-101 - Definitions.

2.7 NOTICE REGARDING NON-IFRS MEASURES

This AIF may include certain terms or performance measures that are not defined by IFRS, such as cash costs and all-in sustaining costs.  The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the Company's performance.  The data presented is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.  These non-IFRS measures should be read in conjunction with the Financial Statements.

ITEM  3 CORPORATE STRUCTURE

3.1 NAME, ADDRESS AND INCORPORATION

The Company is a corporation organized under the laws of British Columbia, Canada.  The Company was formed by way of an amalgamation on February 18, 2002, under the Company Act (British Columbia) pursuant to an order of the Supreme Court of British Columbia approving an amalgamation between Platinum Group Metals Ltd. and New Millennium Metals Corporation.  On January 25, 2005, the Company was transitioned under the Business Corporations Act (British Columbia).  The Company's British Columbia incorporation number is BC0642278.

The Company's head office is located at Suite 838 - 1100 Melville Street, Vancouver, British Columbia, Canada, V6E 4A6.  The Company's registered office is located at Gowling WLG (Canada) LLP, Suite 2300 - 550 Burrard Street, Vancouver, British Columbia, Canada, V6C 2B5.

Since its formation, the Company has been engaged in the acquisition, exploration and development of platinum and palladium properties.  The Company currently holds interests in platinum properties in the Northern Limb of the Bushveld Complex in South Africa.  The Company's business is currently conducted primarily in South Africa.


PLATINUM GROUP METALS LTD.

At present, the Company's sole material mineral property is the Waterberg Project.  Results of the Waterberg DFS targeting a large, thick PGM resource with the objective to model a large-scale, fully-mechanized mine was announced by the Company on September 24, 2019. 

In 2019, the Company founded Lion Battery in partnership with Amplats to research the use of palladium and platinum in lithium battery applications.

3.2 PLATINUM GROUP METALS LTD. AND ITS SUBSIDIARIES

The Company's material subsidiaries are comprised of one wholly-owned company, a 49.9% holding in a second company and a direct and indirect 50.02% holding in a third company, all of which are incorporated under the company laws of the Republic of South Africa and a 53.7% holding in a fourth company incorporated in British Columbia.  The following chart represents the Company's corporate organization as at the date of this AIF:

Notes

1. Remaining 46.3% interest owned by Amplats.

2. Remaining interest owned as to 21.95% by HJM and 15.0% by Implats.

3. Remaining 50.1% interest owned by Mlibo Gladly Mgudlwa and Luyanda Mgudlwa. Qualified BEE company.

As at the date of filing of this AIF, the Company's only material mineral property is the Waterberg Project, which is comprised of two adjacent project areas formerly known as the Waterberg Joint Venture Project and the Waterberg Extension Project.  The Waterberg Project is held by Waterberg JV Co. in which the Company is the largest owner, with a 50.02% beneficial interest, of which 37.05% is held directly by the Company's wholly owned South African subsidiary, PTM RSA and 12.974% is held indirectly through PTM RSA's 49.9% interest in Mnombo, a BEE company which holds 26.0% of Waterberg JV Co.  The remaining interests in Waterberg JV Co. are held as to 15.0% by Implats, and 21.95% by HJM, being an aggregate of 12.195% from JOGMEC and 9.755% from Hanwa.  JOGMEC and Hanwa established HJM, a special purpose corporation, in June 2023 to hold and fund their future equity interests in the Waterberg Project.  JOGMEC is expected to fund 75% of future equity investments into HJM and Hanwa the remaining 25%, with their relative interests in HJM being adjusted accordingly as such funding occurs.  On May 15, 2023, the Waterberg JV Co. shareholders concluded a Shareholder Variation and Consent Letter Agreement to record the restructuring of the respective Japanese shareholder interests in Waterberg JV Co.  On July 7, 2023, HJM signed a Deed of Adherence, agreeing to be bound by the Waterberg Shareholders' Agreement and Memorandum of Incorporation. 


PLATINUM GROUP METALS LTD.

PTM RSA is the manager of Waterberg JV Co.  Waterberg JV Co. and its shares are governed by the Waterberg Shareholders Agreement and Memorandum of Incorporation.  As of the publication date of this AIF the shareholders of Waterberg JV Co. are in process of updating the Waterberg Shareholders' Agreement and Memorandum of Incorporation.  To cause the board of directors of Waterberg JV Co. to take action, PTM RSA must generally obtain the approval of the board representatives of at least one other shareholder, which may be Mnombo.  In addition, certain matters must be approved by a majority, 80% or 90% vote of the Waterberg JV Co. shareholders, depending on the matter, or, in certain cases, by specific shareholders.  The Waterberg Shareholders Agreement confirms the principles of BEE compliance and contemplates the potential transfer of equity and the issuance of additional equity to one or more BEE partners, at fair value in certain circumstances, including a change in law or imposition of a requirement upon Waterberg JV Co.  In certain circumstances, Mnombo may be diluted with equity transferred or issued to different BEE shareholders.

ITEM  4 GENERAL DEVELOPMENT OF THE BUSINESS

4.1 THREE-YEAR HISTORY

The following is a summary of the Company's noteworthy developments over the last three fiscal years ending August 31.

Fiscal 2021 Developments

September 2020

At-The-Market Offering Sales Agreement

   

 

On September 4, 2020, the Company entered into the 2020 ATM pursuant to an Equity Distribution Agreement with BMO U.S. to sell Common Shares from time to time for up to $12.0 million in aggregate sales proceeds in "at-the-market" transactions. 

   

 

Lion Battery Granted U.S. Patent

   

 

On September 14, 2020, the Company reported that the U.S. Patent and Trademark Office issued Patent No. 10,734,636 B2 entitled "Battery Cathodes for Improved Stability" to FIU.  Under an SRA, Lion Battery has exclusive rights to all technology being developed by FIU including the patents granted.  The patent includes the use of platinum group metals and carbon nanotubes and other innovations in a lithium battery.

   

October 2020

Non-Brokered Private Placement

   

 

On October 15, 2020, the Company reported the closing of a non-brokered private placement of 1,146,790 Common Shares with major shareholder HCI, through its subsidiary Deepkloof, at a price of $2.18 each resulting in gross proceeds to the Company of $2.5 million and allowing HCI to maintain its interest in the Company at over 31%.

   

November 2020

At-The-Market Offering Completed

   

 

On November 30, 2020, the Company announced the completion of the 2020 ATM with the sale of 5,440,186 Common Shares at an average price of $2.21 for gross proceeds of $12.0 million.  The final sales settled on December 2, 2020.  No offers or sales of Common Shares were made in Canada, on or through the facilities of the TSX or other trading markets in Canada, or to anyone known by BMO U.S. to be a resident of Canada.



PLATINUM GROUP METALS LTD.


December 2020

Non-Brokered Private Placement

   

 

On December 8, 2020, the Company closed a non-brokered private placement of 1,121,076 Common Shares at a price of $2.23 per share with HCI through its subsidiary Deepkloof, resulting in gross proceeds to the Company of $2.5 million and allowing HCI to maintain approximately a 31% interest in the Company as they held prior to the 2020 ATM completed by the Company on November 30, 2020, as described above.

   

 

Lion Battery Granted Second U.S. Patent

   

 

On December 8, 2020, the U.S. Patent and Trademark Office issued Patent No. 10,682,103 B2 entitled "Battery Cathodes for Improved Stability" to FIU.  Under the SRA, the patent is licensed to Lion Battery and covers a preparation method using PGM catalysts in carbon materials for use as cathodes in lithium batteries, including lithium-ion, lithium-air, and lithium-sulfur batteries.  The new patent broadens protection for US patent 10,734,636 B2. 

   

January 2021

Waterberg Mining Right Granted

   

 

On January 28, 2021, the DMRE granted Waterberg JV Co. the Waterberg Mining Right.

   

February 2021

At-The-Market Offering Sales Agreement

   

 

On February 5, 2021, the Company entered into the 2021 ATM pursuant to an Equity Distribution Agreement with BMO U.S. to sell its Common Shares from time to time for up to $50.0 million in aggregate sales proceeds in "at-the-market" transactions. 

   

March 2021

Waterberg Mining Right Appeals

   

 

On and following March 5, 2021, three notices of appeal were filed by individual appellants against the January 28, 2021, granting of the Waterberg Mining Right.  Waterberg JV Co. filed formal rebuttals to each action and on October 13, 2022, the Minister ruled to dismiss all such appeals (see below).

   

April 2021

Waterberg Mining Right Notarially Executed

   

 

On April 13, 2021, representatives of the DMRE and Waterberg JV Co. completed a notarial execution of the Waterberg Mining Right. 

   

May 2021

Appeal to Grant of EA

   

 

On May 7, 2021, an opposition group filed an application for an order in the High Court of South Africa to review and set aside the decision by the Minister of the DFFE to refuse condonation for the late filing of that group's appeal against the grant of an EA for the Waterberg Mine in November 2020.  The attorneys acting for Waterberg JV Co. filed a notice to oppose the application and required the group's legal counsel to file proof of the mandate to represent the appellant group.  Since filing their review application, the appellants have done nothing to progress their action and their legal counsel has not filed a proof of mandate.

   

June 2021

Sprott Facility Maturity Date Extended

   

 

On June 14, 2021, the Company elected to extend the maturity date for $10 million of principal from the $20 million secured Sprott Facility, by one year in exchange for a payment in cash of $300,000.  The Sprott Facility was originally scheduled to mature on August 14, 2021.



PLATINUM GROUP METALS LTD.


 

Lion Battery Granted Third Patent

   

 

On June 15, 2021, the U.S. Patent and Trademark Office issued Patent No. 11,038,160 B2 entitled "Battery Cathodes for Improved Stability" to FIU.  The patent covers a preparation method using PGM catalysts in carbon materials for use as cathodes with increased emphasis on lithium sulphur batteries and broadens protection for US patent 10,734,636 B2 covering the composition of carbon cathodes containing PGMs.

   

July 2021

Waterberg Mining Right Registered

   

 

On July 6, 2021, Waterberg JV Co. completed the registration of the Waterberg Mining Right at the Mineral and Petroleum Titles Registration Office.

   

 

Lion Battery Agreements Amended

   

 

On July 6, 2021, the Company and Amplats agreed to increase the planned funding to Lion Battery by a further $2.73 million, to a total of up to $6.73 million, in order to allow the acceleration of certain research and commercialization activities.  On the same date, Lion Battery agreed to increase the planned amount of research funding to FIU by a further amount of $1.0 million, for a total of up to $4.0 million.  If the Company should fail to contribute its share of a required subscription to Lion Battery, it would be in breach of its agreement with Lion Battery and its interest in Lion Battery may be subject to dilution.

   

 

Waterberg Mining Right Interdict

   

 

On July 30, 2021, a group located near the planned surface infrastructure filed an urgent interdict application.  Waterberg JV Co. promptly filed an answering affidavit denying urgency and arguing that the application was without merit.  The applicants did not respond and were obliged to remove their application from the urgent court roll.  Host community Ketting applied to join as an interested party to the application and another host community submitted a confirmatory affidavit, both communities being in support of the Waterberg Mine.  In July 2022, Waterberg JV Co. filed a Notice of Set Down with the High Court in Limpopo and a hearing to rule on the interdict application occurred on May 22, 2023, at which hearing the court dismissed the urgent interdict application and ordered the applicants to pay costs to Waterberg JV Co. and the Ketting community.

Fiscal 2022 Developments

October 2021

Waterberg Project Geotechnical Drilling Campaign

   

 

On October 14, 2021, the Company reported completion of a geotechnical drilling campaign at the Waterberg Project.  The campaign consisted of 46 boreholes drilled along the planned centerline of two sets of twin declines and box-cut positions.  A total of 5,966 metres of drill core were recovered and a total of 2,696 metres of core were geotechnically logged from within the zone of interest.  Downhole geophysical surveys were conducted.  Core samples of all the major geotechnical units encountered were collected and subjected to laboratory testing. Geotechnical qualified persons monitoring the drill campaign have stated that in general, the rock mass encountered along both decline routes is competent and can support the planned excavations with no major problem areas expected.

   

February 2022

Non-Brokered Private Placement

   

 

On February 11, 2022, the Company completed a non-brokered private placement of 3,539,823 Common Shares at a price of $1.695 per Common Share to HCI, through its subsidiary Deepkloof, resulting in proceeds to the Company of $6.0 million.  Pricing of the private placement was set to be consistent with the equity consideration paid by the Company to purchase and cancel its outstanding $19.99 million 6 7/8% Convertible Notes.  The private placement allowed HCI to return to a near 26% interest in the Company, as it held prior to the purchase and cancellation of the Convertible Notes.



PLATINUM GROUP METALS LTD.


 

Convertible Notes Cancelled

   

 

On February 11, 2022, the Company reported the privately negotiated purchase and cancellation of the Convertible Notes maturing on July 1, 2022.  The Company issued to the holders, on a private placement basis, an aggregate of 11,793,509 Common Shares of the Company at a price of $1.695 per share in consideration for the $19.99 million principal outstanding balance of the Convertible Notes.  The Company paid accrued and unpaid interest on the Convertible Notes in cash.

   

 

Sprott Facility Repaid

   

 

On February 11, 2022, the Company repaid the Sprott Facility remaining $3.0 million principal balance and outstanding interest.  With the debt formally settled, the Company's pledge of its South African assets as security against the Sprott Facility was fully released. 

   

June 2022

South African High Court Rules Against Africa Wide

   

 

On June 14, 2022, the High Court of South Africa delivered a judgment dismissing the challenge brought by Africa Wide to reverse the Maseve Sale Transaction.  In its judgment the High Court dismissed all of the claims for which Africa Wide contended and ordered Africa Wide to make payment of the Defendants' costs. 

   

 

Final Base Shelf Prospectus Filed and 2021 ATM Terminated

   

 

On June 21, 2022, the Company filed a Shelf Prospectus with the securities regulatory authorities in each of the provinces and territories of Canada and a corresponding Registration Statement on Form F-10 with the SEC under the Multijurisdictional Disclosure System established between Canada and the United States.

Pursuant to the Shelf Prospectus and the Registration Statement, the Company may offer and sell Common Shares, debt securities, warrants, subscription receipts, or a combination thereof up to an aggregate initial offering price of $250 million (or its equivalent in Canadian dollars) from time to time, separately or together, in amounts, at prices and on terms to be determined based on market conditions at the time of the offering and as set out in an accompanying prospectus supplement, during the 25-month period that the Shelf Prospectus and the Registration Statement remain effective. 

Unless otherwise specified in the prospectus supplement relating to a particular offering of securities, the net proceeds from any sale of any securities will be used to advance our business objectives and for general corporate purposes. The Company filed the Shelf Prospectus and the Registration Statement to replace the 2019 Registration Statement, and to enhance the Company's financial flexibility.

The 2021 ATM terminated in June 2022 upon the expiration of the 2019 Registration Statement.  In aggregate, the Company sold 10,426,632 Common Shares pursuant to the 2021 ATM at an average price of $2.94 for gross proceeds of $30.6 million.  No offers or sales of Common Shares were made in Canada, to anyone known to be a resident of Canada or on or through the facilities of the TSX or other trading markets in Canada.



PLATINUM GROUP METALS LTD.


July 2022

At-The-Market Equity Distribution Agreement

   

 

On July 27, 2022, the Company entered into the 2022 ATM pursuant to an Equity Distribution Agreement with BMO Canada and BMO U.S. for a new at-the-market equity program to distribute up to $50.0 million (or the equivalent in Canadian Dollars) of Common Shares.  The Common Shares will be issued by the Company to the public from time to time, through the Agents, at the Company's discretion.  The Common Shares sold under the 2022 ATM, if any, will be sold at the prevailing market price at the time of sale.  The net proceeds of any such sales under the 2022 ATM will be used for general working capital purposes, including Waterberg pre-construction site work, engineering and preparation.  No Common Shares were sold pursuant to the 2022 ATM prior to August 31, 2022.  For the period ended August 31, 2023, the Company sold 1,089,503 Common Shares at an average price of $1.81 pursuant to the 2022 ATM for net proceeds of $1.527 million after directly attributable fees and expenses of $0.448 million.  No Common Shares were sold pursuant to the 2022 ATM subsequent to August 31, 2023. 

   

August 2022

South African High Court Rules Against Africa Wide Appeal

   

 

On August 1, 2022, the High Court dismissed Africa Wide's application for leave to appeal the June 14, 2022 High Court Ruling dismissing their case seeking to reverse the Maseve Sale Transaction.  Africa Wide was ordered to pay costs.

   

 

Africa Wide Petitions South African Supreme Court of Appeal

   

 

On August 31, 2022, Africa Wide filed a petition to the South African Supreme Court of Appeal for leave to appeal to that court, alternatively a full bench of the High Court, the June 14, 2022 High Court Ruling dismissing their case seeking to reverse the Maseve Sale Transaction.  The Company and RBPlat filed answering affidavits opposing Africa Wide's petition.  The petition was dismissed on November 10, 2022 (see below).

Fiscal 2023 Developments

October 2022

Lion Battery Granted Fourth Patent

   

 

On October 4, 2022, the U.S. Patent and Trademark Office issued Patent No. 11,462,743 B2 entitled "Battery comprising a metal interlayer" to FIU.  The patent involves the use of palladium as interlayer in batteries to stabilize and enable lithium metal anodes in various existing and emerging lithium battery technologies.

   

 

DMRE Dismisses Appeals to the Grant of Waterberg Mining Right

   

 

On October 13, 2022, the Minister of the DMRE ruled to dismiss a series of appeals filed in 2021 against the grant of the Waterberg Mining Right.  In his ruling the Minister provided the regulatory reasons why each appeal was denied and also confirmed the DMRE's assessment that Waterberg JV Co. has complied with BEE requirements and Social and Labour Plan community consultation processes.

   

 

Waterberg JV Co. Approves Work Program and Budget

   

 

On October 18, 2022, the board of directors of Waterberg JV Co. unanimously approved the Work Program for the Waterberg Project amounting to approximately $21.0 million over a 23-month period ending August 31, 2024, and formally approved the Initial Budget consisting of approx. $2.49 million to be spent by March 31, 2023.  Specific work items under the Work Program included a 32-hole infill drill program, the Waterberg DFS Update, initial road access, water supply, essential site facilities, a first phase accommodation lodge, a site construction power supply from state utility ESKOM and advancement of the Waterberg SLP.



PLATINUM GROUP METALS LTD.


November 2022

South African Supreme Court of Appeal Dismisses Africa Wide's Application for Leave to Appeal

   

 

On November 10, 2022, the South African Supreme Court of Appeal dismissed Africa Wide's application with costs on the grounds that there was no reasonable prospect of success in an appeal and there was no other compelling reason why an appeal should be heard.  (See July 2023 below).

   

January 2023

Waterberg Project Infill Drill Program Update

   

 

On January 26, 2023, the Company reported results from the infill drill campaign at the Waterberg Project.  Assay results for sixteen planned T Zone boreholes and one of sixteen planned F Zone boreholes were sent for assay by Intertek Genalysis Minerals and disclosed. 

   

February 2023

Lion Battery Granted Fifth Patent

   

 

On February 21, 2023, the U.S. Patent and Trademark Office issued FIU a fifth patent, No. 11,588,144 B2, entitled "Battery Cathodes for Improved Stability".  The patent involves the fabrication of cathodes using palladium as a catalyst in carbon nanotubes.  The carbon structure provides a barrier between the catalyst and the electrolyte, thereby increasing the stability of the electrolyte during charging and discharging of a battery.  Further patents are currently applied for.  Under the SRA, Lion Battery has exclusive rights to all intellectual property being developed by FIU including the patents granted.

   

March 2023

Waterberg JV Co. Approves Stage Two Budget

   

 

On March 24, 2023, the directors, and shareholders of Waterberg JV Co. approved the Stage Two Budget consisting of $3.6 million for continued work on the Waterberg Project.  The Stage Two Budget, covering the period from April 1, 2023 to August 31, 2023, is a subcomponent of the $21 million Work Program approved in principle on October 18, 2022.

   

 

Waterberg Project Infill Drill Program Results

   

 

On March 30, 2023, the Company reported positive results from a completed infill drill campaign at the Waterberg Project.  Assay results for sixteen planned F Zone boreholes were disclosed.  Results will be incorporated into a definitive feasibility study update now underway and described more fully below.

   

May 2023

Waterberg Project Intercepts Update

   

 

On May 17, 2023, the Company reported that exploration borehole WE153 had intercepted platinum group metals mineralization consistent with both the T Zone and F Zone as found within the mineral resources and reserves of the Waterberg Project.  Borehole WE153 was collared on prospecting rights owned by Waterberg JV Co. located adjacent to the north of the Waterberg Mining Right. 

   

June 2023

JOGMEC and Hanwa Ownership Update

   

 

On June 9, 2023, the Company reported that JOGMEC and Hanwa had established special purpose company HJM, to hold and fund their future equity interests in the Waterberg Project, with JOGMEC to fund 75% of future equity investments into HJM and Hanwa the remaining 25%.



PLATINUM GROUP METALS LTD.


 

Engagement of BIC

   

 

On June 21, 2023, the Company reported the engagement of BIC by Lion Battery to help drive commercialization of its next generation platinum and palladium based battery chemistries.  Under an agreed scope of work, BIC is to conduct independent small scale and large scale trials to validate Lion Battery's proprietary platinum and palladium based electrode composition, slurry, and films in both lithium-sulfur and lithium-ion (NMC811) coin and pouch cells.  Collaboration with BIC will also include additional research and development focused on improving performance and scale-up with the goal of creating prototypes for commercialization consideration in 2024.

   

July 2023

Africa Wide Applies for Reconsideration

   

 

On July 10, 2023, the Company received notice that Africa Wide had applied to the President of the Supreme Court of Appeal seeking reconsideration of the November 10, 2022, ruling by the South Africa Supreme Court of Appeal dismissing Africa Wide's earlier application seeking leave to appeal the High Court Ruling.  The Company and RBPlat opposed the application.  (See September 2023 below).

Subsequent to Fiscal 2023 Developments

September 2023

Non-Brokered Private Placement Announced

   

 

On September 18, 2023, the Company closed a non-brokered private placement of 2,118,645 Common Shares at a price of $1.18 per Common Share with HCI, through its subsidiary Deepkloof, resulting in proceeds to the Company of approximately $2.5 million.  The private placement allowed HCI to return to a near 27% interest in the Company.

   

October 2023

Supreme Court of Appeal of South Africa dismisses Africa Wide's Application for Reconsideration

   

 

On October 6, 2023, the Supreme Court of Appeal of South Africa dismissed with costs the application by Africa Wide for the reconsideration of the November 10, 2022 ruling by the South Africa Supreme Court of Appeal dismissing Africa Wide's earlier application seeking leave to appeal the High Court Ruling.  The court found that no exceptional circumstances warranting reconsideration or variation of the decision refusing the application for leave to appeal had been established.

4.2 SIGNIFICANT ACQUISITIONS 

The Company has not made any significant acquisitions during its most recently completed financial year for which disclosure is required under Part 8 of NI 51-102.

ITEM  5 DESCRIPTION OF THE COMPANY'S BUSINESS

5.1 OVERVIEW

The Company is a platinum and palladium focused exploration, development and operating company conducting work primarily on mineral properties it has staked or acquired by way of option agreements or applications in the Republic of South Africa.


PLATINUM GROUP METALS LTD.

The Company's sole material mineral property is the Waterberg Project, which was the subject of the Waterberg DFS completed in late 2019 as described in this AIF.  The Waterberg DFS Update is currently in process and is expected to be completed and published by the end of calendar year 2023 or early in 2024.  The Company's key business objective is to advance the Waterberg Project to a development and construction decision.  The Company continues to evaluate exploration opportunities both on currently owned properties and on new prospects.

The Company currently conducts no product sales, does not currently distribute any product, and does not have any source of operating revenues at this time.  The Company will be required to source additional financing by way of private or public offerings of equity or debt or the sale of project or property interests in order to have sufficient working capital for continued exploration and development on the Waterberg Project, as well as for general working capital purposes.

Waterberg JV Co. is presently in process with pre-construction permitting, engineering work, including road upgrade and traffic studies, finalization of power and water infrastructure design and construction camp design.  Waterberg JV Co. continues to work with regional and local communities and their leadership on how the mine can be developed to provide optimal outcomes and best value to all stakeholders.  Before a construction decision can be undertaken for the Waterberg Project, arrangements will be required for project concentrate offtake or processing. 

Principal Product

Our principal product from the Waterberg Project, in accordance with the Waterberg DFS, is planned to be a PGM bearing concentrate.  The concentrate will contain certain amounts of eight elements, which may be payable to the Company's account, comprised of platinum, palladium, rhodium, gold, ruthenium, iridium, copper and nickel.  Pursuant to the Offtake ROFR, Implats has acquired a right of first refusal to enter into an offtake agreement, on commercial arms-length terms, for the smelting and refining of mineral products from the Waterberg Project.

Implats Transaction

On November 6, 2017, the Company, along with Waterberg JV Co., JOGMEC and Mnombo completed the first phase of the Implats Transaction whereby Implats purchased an aggregate 15.0% equity interest in Waterberg JV Co. for $30 million.  The Company received consideration of $17.2 million from Implats for the sale of an 8.6% interest in the Waterberg Project and JOGMEC received $12.8 million for the sale of a 6.4% interest in the Waterberg Project.

Pursuant to the Implats Transaction, Implats acquired a Purchase and Development Option to increase its stake in Waterberg JV Co. to 50.01% by purchasing an additional 12.195% equity interest from JOGMEC for $34.8 million and earning into the remaining interest by making a firm commitment to an expenditure of $130.0 million in development work.  Implats also acquired a right of first refusal to smelt and refine Waterberg concentrate.  The positive results of the Waterberg DFS were announced on September 24, 2019 and the Waterberg DFS was delivered to the Waterberg JV Co. shareholders on October 4, 2019 for review and approval.  The Waterberg DFS was approved on December 5, 2019, after which Implats had an option within 90 business days to elect to exercise the Purchase and Development Option. 

Pursuant to the Implats Transaction, Implats also acquired the Offtake ROFR to enter into an offtake agreement, matching third party commercial arms-length terms offered to Waterberg JV Co., for the smelting and refining of mineral products from the Waterberg Project.  JOGMEC retained a right to receive platinum, palladium, rhodium, gold, ruthenium, iridium, copper and nickel in refined mineral products at market price and at volumes produced from the Waterberg Project.  This right was later acquired by Hanwa in March 2019.


PLATINUM GROUP METALS LTD.

On March 31, 2020, the parties entered into the Amended Call Option Agreement, to extend the termination date of Implats' Purchase and Development Option from April 17, 2020 to 90 calendar days following receipt of an executed mining right for the Waterberg Project.

In consideration for the amendment, Implats agreed to fund the 2020 Work Program.  The 2020 Work Program was aimed at increasing confidence in specific areas of the Waterberg DFS while awaiting the grant of a mining right and EA.  Total cost of the 2020 Work Program actually completed by Implats amounted to approximately Rand 24.7 million.

On June 15, 2020, Implats delivered an Election Notice not to exercise the Purchase and Development Option.  Implats stated that notwithstanding the positive progress achieved on the 2020 Work Program, and the strategic alignment between the Waterberg asset and Implats stated portfolio objectives, the unprecedented events brought about by the COVID-19 Pandemic necessitated Implats to re-evaluate the impact of the increased economic uncertainty on Implats' strategy and risk appetite in the short, medium and long term.  Implats reiterated their support of both the Waterberg Project and the joint venture partners and it planned to remain an active 15% participant, including funding of their share of costs, subject to future considerations.

On August 11, 2020, Waterberg JV Co. delivered to Implats a Subscription Failure Notice to formalize the termination of the Purchase and Development Option.  Waterberg JV Co. also recorded the termination of the offtake negotiation period with Implats.  The Company continues to discuss and negotiate for offtake terms with Implats; however, the Company is also carrying on discussions with other potential concentrate offtake parties, subject to Implats' Offtake ROFR.

Specialized Skill and Knowledge

Various aspects of our business require specialized skills and knowledge, including the areas of geology, engineering, operations, drilling, metallurgy, permitting, logistical planning and implementation of exploration programs as well as legal compliance, finance and accounting.  We face competition for qualified personnel with these specialized skills and knowledge, which may increase our costs of operations or result in delays.  The Company has found that it has been able to locate and retain employees or engage consulting experts with the required skills as described above when needed.

Competitive Conditions

Almost all South African platinum and palladium supply comes from the geographic constraints of the Western, Northern and Eastern Limbs of the Bushveld Complex, resulting in a high degree of competition for mineral rights and projects. South Africa's PGM mining sector remains closely tied to economic developments in the global automotive industry, which in 2022 accounted for approximately 43% of the total global demand for platinum and 82% of the total global demand for palladium.  A prolonged downturn in global automobile and light truck sales, resulting in depressed PGM prices, often results in declining production as unprofitable mines are shut down.  Alternatively, strong automobile and light truck sales combined with strong fabrication demand for PGMs, most often results in a more robust industry, creating competition for resources, including funding, labour, technical experts, power, water, materials and equipment.

Historically, over the long-term, the global PGM mining industry has benefited from generally rising demand from the global automotive and fabrication sectors.  In 2022, South Africa's PGM mining industry represented approximately 72% of global platinum mine supply and 35% of global palladium mine supply.  From mid-2012 until early 2019, global economic uncertainty, increased supply from recycling and slower growth created a weaker market for automobiles, and as a result, for PGMs.  During this period lower market prices for PGMs combined with labour unrest caused stoppages and closures of some higher cost PGM mines and shafts in South Africa.


PLATINUM GROUP METALS LTD.

The market demand for PGMs, palladium and rhodium in particular, improved from 2018 to early 2020, resulting in a higher overall metal basket price.  Then, in early March 2020, the COVID-19 Pandemic and resulting economic uncertainty caused a pullback in economic activity, including demand for automobiles.  In 2021, the impact of a global shortage of semi-conductor chips also caused a reduction in global automotive production.  As the impact of these two factors subsided the demand for PGMs returned to more robust levels in late 2021 to early 2022.  Since then, a series of negative geo-political factors, including rising global interest rates, the conflict between Russia and Ukraine, economic uncertainty in China, and the projected growth in demand for battery electric vehicles, has resulted in lower demand estimates for PGMs and as a result PGM prices have fallen from their zeniths. 

Prices for platinum, palladium and rhodium have been volatile over the last five years, due in part to supply and demand factors as described above.  The price of platinum as of the date of this AIF is approximately $1,060 per ounce.  In the past five years the price of platinum per ounce has been as high as $1,296 and as low as $588.  The price of palladium as of the date of this AIF is approximately $920 per ounce.  In the past five years the price of palladium per once has been as high as $3,099 and as low as $1,050.

The South African platinum and palladium industry is dominated by three or four producers, who also control smelting and refining facilities.  As a result, there is general competition for access to these facilities on a contract basis.  If the Company moves towards production on the Waterberg Project, it will become exposed to many of the risks of competition described herein.  See "Item 5.5 Risk Factors".  

Employees and Contractors

The Waterberg Project is operated in South Africa by the Company utilizing its own staff and personnel.  Contract drilling, geotechnical, engineering and support services are utilized as required.  Operations at the Waterberg Project are funded by Waterberg JV Co. and its shareholders.  The Company's current complement of officers and employees in Canada consists of 5 individuals.  The Company's complement of managers, employees, contractors, consultants, security and casual workers in South Africa consists of approximately 96 individuals, inclusive of 28 contractors, 55 consultants and 8 employees in PTM RSA, including 2 employees active at the Waterberg Project conducting site administration, exploration and engineering activities related to the advancement of the project and the execution of recommendations of the Waterberg DFS. 

Foreign Operations

The Company conducts its business in South Africa which hosts a large and well-developed mining industry.  This, among other factors, means the infrastructure in many areas is well-established, with well-maintained roads and highways as well as electricity distribution networks, water supply and telephone and communication systems.  Electrical generating capacity has been strained by demand and aging infrastructure in recent years in South Africa, but additional capacity is currently under construction.  Additional water infrastructure will also be required.  See "Item 5.5 Risk Factors".

There is also access to materials and skilled labour in South Africa due to the existence of many PGM, chrome, gold and coal mines.  Smelter complexes and refining facilities are also located in South Africa.  South Africa has an established government, police force and judiciary as well as financial, health care and social institutions, although such institutions underwent significant change following the fall of apartheid and free elections in 1994 and are continuing to be developed.  The system of mineral tenure was overhauled by new legislation in 2002, which came into force in 2004.  Since 1994, South Africa has been considered an emerging democracy.  See "Item 5.5 Risk Factors".


PLATINUM GROUP METALS LTD.

5.2 SOCIAL AND ENVIRONMENTAL POLICIES

Being a responsible corporate citizen means protecting the natural environment associated with our business activities, providing a safe workplace for our employees and contractors, and investing in infrastructure, economic development, and health and education in the communities where we operate so that we can enhance the lives of those who work and live there beyond the life of such operations.  We take a long-term view of our corporate responsibility, which is reflected in the policies that guide our business decisions, and in our corporate culture that fosters safe and ethical behaviour across all levels of Platinum Group.  Our goal is to ensure that our engagement with our stakeholders, including our workforce, industry partners, and the communities where we operate, is continued, mutually beneficial and transparent.  By building such relationships and conducting ourselves in this manner, we can address specific concerns of our stakeholders and work cooperatively and effectively towards achieving this goal.

Environmental, Social and Governance

ESG Approach and Objectives

The Company and Waterberg JV Co. are committed to conducting business in a responsible and sustainable manner.  Our core ESG values are:

  • maximizing the positive effect of our projects and operations for all stakeholders;
  • caring for the environment in which we operate;
  • contributing to both the short-term and long-term development of our host communities;
  • ensuring safe and secure workplaces for our employees;
  • contributing to the welfare of our employees and local communities; and
  • promoting good corporate governance, through openness, transparency, and accountability.

We continue to work on enhancements to our community engagement processes for all our mining and environmental matters.  We consider all stakeholders and confirm our commitment to the health and safety of our employees and surrounding communities.  Our ESG objectives include:

  • reducing planned water consumption;
  • attaining full compliance with regulations and reporting of GHG emissions;
  • achieving minimum impact on vegetation and supporting and enabling local biodiversity;
  • reducing planned industrial waste;
  • resolving individual community member grievances;
  • continuing and improving stakeholder communication and engagement programs; and
  • achieving zero significant environmental incidents.

ESG Reporting and Assessment

The Company's ongoing ESG analysis continues to refine the set of performance indicators to measure and monitor key environmental, social sustainability and governance activities at the Waterberg Project.  We wish to achieve a high level of understanding and commitment from those who carry out our day-to-day activities.  Our social performance indicators aim to cover social risk management, grievance management, community investment and human rights.  Our environmental performance indicators aim to cover environmental impact mitigation, audits, water, energy, GHG emissions, and environmental remediation and rehabilitation.  Health and safety performance indicators are also to be recorded and monitored.

The Company has worked with Digbee since 2021 to independently assess its ESG development and disclosure at both the corporate and project level as it moves toward the construction phase of the Waterberg Project.  The Digbee ESG platform is aligned with over 25  global reporting standards to generate an appropriate ESG score for development stage mining companies and address real risk. 


PLATINUM GROUP METALS LTD.

As part of the Waterberg Mining Right application process the Company developed a wide ranging set of studies and plans in relation to potential ESG impacts.  These studies and plans were leveraged to form the basis of the Digbee ESG assessment and subsequent outcomes.

For 2023, an independent team of ESG experts evaluated the Company's ESG submission against a set of rigorous and standardized scoring criteria.  To ensure accuracy and credibility, these scores were finalized after being peer reviewed.  As of September 2023, Platinum Group achieved an overall score of BBB with a range of C to AAA based on the information provided.  This score is an improvement from the BB score achieved in 2022.

Awarded ESG Ratings (September 2023)

The total score shown above is the calculated average of the corporate and project scores which are displayed on the right.  While there is little that can be done to influence project context scores, they reflect the inherent risk of the environment in which we operate.  In contrast, project action scores reflect the steps we have taken to mitigate these risks.


PLATINUM GROUP METALS LTD.

Overarching Results

Positive Outcomes

Potential Risks and Opportunities

  • The Waterberg Project is finalizing the Waterberg DFS Update and has approved in principle the budget for infrastructure for roads, power and water.  ESG is taken into consideration in the Waterberg DFS Update, in particular a reduced TSF footprint.
  • The ESG component in the strategy was augmented in 2023 to include better understanding of ESG threats and opportunities than has been presented in previous years.
  • ESG key performance indicators were introduced in the 2023 fiscal year and expanded in 2023 for the 2024 fiscal year.
  • Understanding of the local surroundings has been improved, this includes updated detailed studies on the underground water environment and enhanced relations with the local community with a relevant picture of skills needs and requirements.
  • Diversity of the workforce (both employees and contractors) has improved; however, these are primarily only gender focused rather than inclusive of broader diversity such as ethnicity.
  • No formal risk management framework to identify and manage risks and opportunities is as yet in place, though it should be noted that publicly available documentation suggests that integrated risk management is taking place with the corporate. 
  • The plan for continuity of decision making from project to operational phase is yet to be drafted, in part due to the timeline anticipated; however, it might be expected that the current workforce plan would detail how this handover will take place in the future.

 

Environmental Matters

We have commissioned independent environmental site inspections and environmental management program compliance assessments at the Waterberg Project for our prospecting right areas and the Waterberg Mining Right area.  Annual environmental reports are filed with regulators.  To date, there have been no significant environmental incidents at our Waterberg operation since exploration began on the property in 2011.  As a requirement to the grant of the Waterberg Mining Right, an EIA and EMP were filed with governmental regulators after a comprehensive consultation process with communities, regulators, environmental institutions, and other stakeholders over the last ten years.  Several independent, third-party specialist consultants completed component studies as a part of the application process.  The EIA and EMP were subsequently approved by the relevant regulators. 

The Company has carried on advancing the Waterberg DFS Update in 2023.  The upcoming Waterberg DFS Update will take into consideration studies completed in 2020-2021 on the use of battery electric equipment for the Waterberg Project and the use of dry stacking solutions for tailings to reduce water use.

Since its initiation in 2023, environmental monitoring has advanced in the areas of climatic data, surface water chemistry, groundwater and air quality.  As the Waterberg Project develops, environmental monitoring will be expanded to include monitoring of noise pollution and biodiversity.  In line with this, environmental management and mitigation measures will be implemented accordingly.

Furthermore, the mineral resources targeted at the Waterberg Project are mineable platinum group metals, being mainly palladium, platinum, and rhodium.  These metals are important elements in terms of reducing harmful emissions from internal combustion engines.  Platinum is a critical element in fuel cells and the "hydrogen economy" in general, highlighting the mine's potential to contribute to a cleaner future.


PLATINUM GROUP METALS LTD.

Social Matters

To date, work at the Waterberg Project has been related to exploration and engineering activities.  Overall safety performance has been very good and strict safety protocols are followed.

We maintain an open communication policy with communities near the Waterberg Project.  We responded to concerns raised by individuals regarding water resources, roadways, heritage sites and planned infrastructure locations by thoroughly investigating each reported concern or claim.  Meetings were held with community leaders and site inspections occurred with local community members accompanied by independent consultants, NGOs, government agencies and regulators.  Although no material issues or events of regulatory non-compliance by the Company have been identified after these investigations, the Company remains committed to operating in a responsible manner and continues to work with local community leadership to ensure any identified issues are resolved in an appropriate and professional manner and in compliance with governing regulations.  The Company is in the process of developing a more formalized grievance mechanism that will be accessible to all community members.

In 2023 the Company has continued working with local communities to create community trusts.  To ensure communities are well represented, the Company is covering the costs of legal representation for the communities.  The Limpopo Provincial Government and the Regional DMRE Office in Limpopo are preparing to facilitate workshops with community leadership and other stakeholders to support and build their understanding of the mining legal framework and their rights and obligations in respect thereto.  The Company intends to benefit from these efforts.

The Company has further supported a local skills audit and the development of profiles of our local communities.  These reports will help the Company better understand and respond to the needs of our local community members.  The Company has also appointed two additional consultants to work with our local communities at the Waterberg Project.  These consultants are assisting with community engagement and the implementation of the Waterberg SLP.  This year the Company has also granted bursaries to local youth and provided portable skills training to local community members.

Based on community meetings and direct feedback, and in part due to the Company's efforts to engage and support local communities, we believe local community residents support the development of the Waterberg Project and understand the expected economic benefits. 

Governance Matters

In keeping with its dedication to maintaining the highest standards of governance, the Company has implemented the EHST Committee, the Governance and Nomination Committee and a number of policies to help create secure work environments that prioritize equality, integrity and respect for all. 

Environmental, Health, Safety and Technical Advisory (EHST) Committee

As part of its mandate to assist the Board in its oversight of capital projects and material transactions undertaken by the Company, its subsidiaries or its affiliates from an environmental, technical, financial and scheduling perspective and to be responsible for developing and monitoring standards for ensuring a safe and healthy work environment and to promote sustainable development.  The EHST Committee is also responsible for providing oversight of the EHSSR Policies, the Human Rights Policy, and for monitoring the Company's practices in these areas, including the monitoring of (a) risks, challenges and opportunities to the Company's business associated with environmental, health, safety and social responsibility matters; (b) the Company's sustainability conduct, including environmental, health, safety and social policies and programs and overseeing performance in such areas; (c) the Company's compliance and applicable legal and regulatory requirements associated with environmental, health, safety, and community conduct; and (d) the Company's external reporting in relation to health, safety, environmental and community conduct.  The EHST Committee is comprised of directors Stuart Harshaw (Chair), Diana Walters and Timothy Marlow.  The EHST Committee meets on a regular basis and reports to the Board after each meeting. 


PLATINUM GROUP METALS LTD.

Governance and Nomination Committee

The Governance and Nomination Committee of the Board also plays an important role in assisting the Board with its oversight of ESG matters.  The Governance and Nomination Committee is responsible for developing and implementing governance guidelines and principles, providing governance leadership to the Company and monitoring governance programs and policies, including without limitation, the Code of Conduct and the Commitment to Anti-Bribery Conduct.  The Governance and Nomination Committee reviews the Company's policies to ensure compliance with the applicable rules and regulations, and where necessary or desirable on account of governance trends that are appropriate for the Company, recommends changes, or the adoption of further policies, to the Board for approval.  The Governance and Nomination Committee is currently comprised of directors Timothy Marlow (Chair), Diana Walters and Mpho Makwana.  The Governance and Nomination Committee meets a minimum of one time per year and reports to the Board after each meeting. 

Environmental, Health, Safety, and Social Responsibility Policies

The EHSSR Policies supplement the requirements, guidelines, and standards of conduct specified in Platinum Group's other policies and affirm the Company's commitment to health and safety, social license and sustainable development, environmental stewardship, and human rights.  The EHSSR Policies are intended to be a component of the flexible governance framework within which the Board, assisted by its committees, directs the affairs of Platinum Group.  The EHSSR Policies outline the Company's ESG expectations for all employees, directors, contractors, and consultants performing services for or on behalf of the Company. 

Human Rights Policy

Along with integrating human rights into its risk assessment and due diligence processes, the Company is dedicated to fostering a culture of respect for human rights in the workplace.  It also actively seeks out positive interactions and collaborations with stakeholders who are impacted by its operations.  The EHST Committee assist the Board in the oversight of the Human Rights Policy including: reviewing the effectiveness and compliance of this policy on a regular basis, monitoring the Company's performance, challenges and commitments in the prevention or mitigation of any human rights issues, and reviewing the proposed public disclosure of any Company human rights matters. 

Code of Conduct and Business Ethics

The Company has adopted a Code of Conduct which applies to all of the Company's directors, officers and employees, including the Chief Executive Officer and Chief Financial Officer.  The Code of Conduct includes provisions covering conflicts of interest, ethical conduct, compliance with applicable government laws, rules and regulations, disclosure in reports and documents filed with, or submitted to, the SEC, reporting of violations of the Code of Conduct and accountability for adherence to the Code of Conduct.  The Company has not amended the Code of Conduct or granted any waiver, including any implicit waiver, from a provision of the Code of Conduct during the Company's most recently completed fiscal year ending August 31, 2023. 

Commitment to Anti-Bribery Conduct

The Company is committed to acting in line with applicable anti-bribery law, our values and principles.  Platinum Group's business activities are based on quality, and service, and we do not provide bribes or other improper incentives.  The Anti-Bribery Conduct Policy was adopted in December 2021 to complement and expand on the existing Code of Conduct and to ensure compliance with applicable anti-bribery law, including the Canadian Corruption of Foreign Public Officials Act, S.C. 1998, c.34, the U.S. Foreign Corrupt Practices Act, 1977, and the South African Prevention and Combating of Corrupt Activities Act, No. 12 of 2004.  All known or suspected violations of the Anti-Bribery Conduct Policy should be reported either directly to the Ethics Officer, Governance and Nomination Committee Chair or as otherwise permitted under the Company's internal reporting procedures.  As set out in the Code of Conduct Policy, the Company will not allow any harassment, retaliation or any type of discrimination against a director, officer, employee or contractor who acts in good faith in reporting any violation. 


PLATINUM GROUP METALS LTD.

Whistleblower Policy

The Audit Committee has established the Whistleblower Policy which outlines procedures for the confidential, anonymous submission by directors, officers, employees, consultants and, as appropriate, certain third parties of the Company, regarding the Company's compliance with all applicable government laws, rules and regulations, corporate reporting and disclosure, accounting practices, accounting controls, auditing practices and other matter relating to fraud against shareholders, without fear of retaliation of any kind.  If a Covered Person has any concerns about any of the Accounting Concerns which they consider to be questionable, incorrect, misleading or fraudulent, the Covered Person is urged to come forward with any such information, complaints or concerns, without regard to the position of the person or persons responsible for the subject matter of the relevant complaint or concern.

The Covered Person may report their concern in writing, by telephone or e-mail and forward it to the Chairman of the Audit Committee or to outside counsels of the Company.  All submissions will be treated on a confidential and anonymous basis, except when the Accounting Concerns refer to violation of any applicable law, rule or regulation that relates to the corporate reporting and disclosure, and to violation of the Code of Conduct, when the person making the submission must be identified for purposes of performing the investigation.  Further, the Company will not discharge, discipline, demote, suspend, threaten or in any manner discriminate against any person who submits in good faith an Accounting Concern.  Promptly following the receipt of any complaints submitted to it, the Audit Committee will investigate each complaint and take appropriate corrective actions.  No whistleblower complaints have been submitted since the inception of the Whistleblower Policy. 

Copies of the Company's Charters and relevant policies may be found on the Company's website at www.platinugroupmetals.net.

Waterberg Social and Labour Plan

The Waterberg SLP was developed pursuant to DMRE guidelines for social and labour plans and submitted in accordance with section 46 of the MPRDA together with the Waterberg Mining Right application, which right was granted on January 28, 2021, and registered on July 6, 2021.  The objective of the Waterberg SLP is to align the Company's social and labour principles with the related requirements established under the Mining Charter, as applicable from time to time.  These requirements include promoting employment and avoiding retrenchments, advancement of the social and economic welfare of all South Africans, contributing towards the transformation of the mining industry and contributing towards the socio-economic development of the communities proximal to the Waterberg Project.  Contractors will be required to comply with the Waterberg SLP and policies, including commitment to employment equity and BEE, proof of competence in terms of regulations, commitment to undertake training programs, compliance with all policies relating to recruitment, training, health and safety, etc.  In terms of human resources training, the Waterberg SLP establishes objectives for adult-based education training, learnerships and development of skills required by the mining industry, portable skills training for transition into industries other than mining, education bursaries and internships.  The Waterberg SLP also envisages a plan to establish local economic development objectives for projects such as infrastructure and educational support to local schools, the equipping and extension of a clinic/health facility, water and reticulation projects, housing development, and various other localized programs for small scale industry, agriculture, entrepreneurship and health and education.


PLATINUM GROUP METALS LTD.

To support the Waterberg SLP for affected communities near the Waterberg Project, Waterberg JV Co. has budgeted expenditures amounting to an aggregate R428.9 million (approx. $22.93 million at August 31, 2023) over a five-year period.  Expenditures are subject to the grant of all required permits and the commencement of development activities on site.  At the end of each five-year period a new SLP will be established, considering actual expenditures to date and changes to adjust for community feedback, needs and preferences.  Components making up the current Waterberg SLP budget provisions are:

  • Human Resource Development

Waterberg JV Co. is aware of the importance of human resources to accomplish its business objectives.  Skills development is the foundation for attaining competent and productive employees who can contribute to meeting the mine's business objectives and also contribute to the upliftment of their communities through their own personal economic success. The human resources development plan for the Waterberg Project budgets R13.3 million ($0.71 million at August 31, 2023) for the achievement of future career development opportunities within the mining industry and beyond the needs of the mine's operational requirements.  The skills development plan seeks to achieve portable skills through accredited qualification by certified training providers and programs.  Emphasis is to be applied to employment equity and to participation by historically disadvantaged South Africans and women.  Learnership, internship, bursary and youth training programs are planned.  Targets have been established for procurement and employment levels for women and for people from the local community.

  • Local Economic Development

The LED program will seek to enable local communities to become economically stronger by improving infrastructure, business skills, entrepreneurship, job creation and income.  An amount of R405.6 million ($21.69 million at August 31, 2023) has been budgeted for LED projects seeking to amplify opportunities as well as alleviate poverty within the surrounding communities of the mine. Programs are to include infrastructure and educational support to local schools, mine and community bulk water supply and reticulation, extension and equipping of existing clinic/health facilities, and road construction.

  • Management of Downscaling

A budget of R10.0 million ($0.53 million at August 31, 2023) has been established for training and skills development.  We conducted a social audit and needs and skills assessment of the communities near the Waterberg Project to learn about these communities and to help direct our efforts towards the matters of importance to them.  This work will guide our long-term training programs intended to increase skilled employment opportunities for local community members.  Investment in human resource development and facilitation of training during the lifetime of the Waterberg Project intends to sustain skills that will support employment for workers beyond the life of the mine.  The mine intends to comply with the Basic Conditions of Employment Act, No. 75 of 1997 and the Social and Labour Plan Guidelines with the goal of establishing skills that will be of value to employees at a future time of downscaling and retrenchment. 

Labour in South Africa

The gold and platinum mining industries in South Africa have witnessed labour unrest in past years, including demands for higher wages by certain labour groups.  In June 2014, the Association of Mineworkers and Construction Union accepted a negotiated wage settlement to end a five-month long strike affecting a significant proportion of the PGM industry.  In 2022, over 30,000 gold sector workers at one of the biggest mining houses downed tools for three months before a wage settlement was reached.  In 2022, several PGM mining companies negotiated and entered into five-year term wage settlement agreements.  To date, the Company has seen no adverse labour action on its operations in South Africa.  See "Item 5.5 Risk Factors".


PLATINUM GROUP METALS LTD.

Environmental Compliance

The Company's current and future exploration and development activities, as well as future mining and processing operations, if warranted, are subject to various state, provincial and local laws and regulations in the countries in which the Company conducts its activities.  These laws and regulations govern the protection of the environment, prospecting, development, mining, production, taxes, labour standards, occupational health, mine safety, hazardous substances and other matters.  Company management expects to be able to comply with those laws and does not believe that compliance will have a material adverse effect on the Company's competitive position.  The Company intends to obtain and maintain all licences and permits required by all applicable regulatory agencies in connection with its mining operations and exploration activities.  The Company intends to maintain standards of compliance consistent with contemporary industry practice.

5.3 MINERAL PROPERTY INTERESTS

Under IFRS, the Company capitalizes all acquisition, exploration and development costs related to mineral properties.  The recoverability of these amounts is dependent upon the existence of economically recoverable mineral reserves, the ability of the Company to obtain the necessary financing to complete the development of the property, and any future profitable production; or alternatively upon the Company's ability to dispose of its interests on an advantageous basis.

The Company's key development project is located in the Bushveld Complex.  The Bushveld Complex is comprised of a series of distinct layers or reefs, three of which contain the majority of the economic concentrations of PGMs, and the subset of 4E PGMs consisting of platinum, palladium, rhodium and gold, (or the subset of 3E PGMs consisting of platinum, palladium and gold) within the Bushveld Complex: (i)  Merensky, which occurs around the Western Limb of the Bushveld Complex, (ii) UG2, which occurs around the Eastern Limb of the Bushveld Complex and (iii)  Platreef, found within the Northern Limb of the Bushveld Complex. These reefs exhibit extensive geological continuity and predictability and have an established history of economic PGM production.  The Merensky, UG2 and Platreef have been producing PGMs since the 1920s, 1970s and 1990s, respectively.


PLATINUM GROUP METALS LTD.

Overview of the Bushveld Complex

(Map not drawn to scale)

Material Mineral Property Interest - Waterberg Project

The Waterberg Project is managed and explored according to a joint technical committee and is currently planned for development according to the objective of achieving a "best outcome" scenario for shareholders and stakeholders.

The Waterberg Project is located 85 km north of the town of Mokopane (formerly Potgietersrus) in the province of Limpopo, South Africa, approximately 330 km NNE from Johannesburg.  Elevation ranges from approximately 880 to 1365 metres above sea level. 

The project area is located approximately centred on UTM coordinates (Latitude 23°21′53" S, Longitude 28°48′ 23" E). 

In calendar year 2021, Waterberg JV Co. filed for the closure of several, uneconomic prospecting rights.  Afterwards, in early 2022, the Waterberg Project comprised an aggregate of approximately 65,903 hectares of active prospecting rights and rights under application, including 20,482 hectares covered by the Waterberg Mining Right.  During 2022, Waterberg JV Co. filed for closure on a further 50,951 gross hectares of prospecting rights, of which 14,209 hectares were held within the granted mining right, leaving a net 36,742 hectares of uneconomic prospecting rights to be terminated.  Once all the closure applications become effective, the project area will cover approximately 29,161 hectares, being comprised of the Waterberg Mining Right covering 20,482 hectares, 4,190 hectares in the active prospecting rights and 4,489 hectares of rights under application. 


PLATINUM GROUP METALS LTD.

The Waterberg Project was derived from a regional target initiative by the Company in 2007 and 2008.  The Waterberg prospect targeted a previously unproven extension to the Northern Limb of the Bushveld Complex that was overlain by a sequence of the Waterberg sedimentary formation.  Detailed geophysical and other work indicated potential for a package of Bushveld Igneous Complex rocks beneath the Waterberg formation.  Previous mineral exploration activities in the area were limited due to the extensive sedimentary cover. Exploration by the Company progressed through preliminary exploration activities, to delineation of initial drill targets in 2010, to primarily drilling in 2011 and later, and then to feasibility work in 2017 to 2019 once a deposit had been discovered.

On September 21, 2017, the Company completed the planned corporatization of the Waterberg Project by the transfer of all Waterberg Project prospecting rights held by PTM RSA on behalf of the joint venture participants into Waterberg JV Co.

Effective September 21, 2017, Waterberg JV Co. owned 100% of the prospecting rights comprising the entire Waterberg Project area and Waterberg JV Co. was owned 45.65% by PTM RSA, 28.35% by JOGMEC and 26% by Mnombo, giving the Company total direct and indirect ownership of 58.62% at that time.

On October 16, 2017, Implats entered into definitive agreements with the Company, JOGMEC, Mnombo and Waterberg JV Co., whereby Implats purchased shares of Waterberg JV Co. representing a 15.0% interest in the Waterberg Project from PTM RSA (8.6%) and JOGMEC (6.4%) for $30.0 million, giving the Company total direct and indirect ownership of 50.02%.

On November 6, 2017, the Company, JOGMEC and Mnombo closed the Initial Purchase with Implats and Implats acquired the Purchase and Development Option.

On March 8, 2018, JOGMEC signed a memorandum of understanding for the transfer of 9.755% of its 21.95% interest in Waterberg JV Co. to Hanwa, which was the result of Hanwa winning JOGMEC's public tender held on February 23, 2018.  In March 2019, JOGMEC completed a transfer of 9.755% of its 21.95% interest in Waterberg JV Co. to Hanwa.  Under the terms of the transaction, Hanwa also acquired the exclusive right to purchase some, or all of the metals produced from the Waterberg Project at market prices.

On May 10, 2022, JOGMEC confirmed a decision to maintain JOGMEC's interests in the Waterberg Project and to support funding contributions for project development to the extent possible. 

In June 2023, JOGMEC and Hanwa established HJM, a special purpose corporation, to hold and fund their equity interests in the Waterberg Project, being an aggregate of 12.195% from JOGMEC and 9.755% from Hanwa, with JOGMEC to fund 75% of future equity investments into HJM and Hanwa the remaining 25%.  Consequently, JOGMEC and Hanwa's current shareholding percentages will dilute going forward as the combined funding obligations attributable to their aggregated shareholdings of 21.95% will be funded by HJM, to which commensurate equity will be issued.

As of the date of filing of this AIF, Waterberg JV Co. owns 100% of the Waterberg Mining Right and prospecting rights comprising the entire Waterberg Project area.  Waterberg JV Co. is owned 37.05% by PTM RSA, 12.195% by JOGMEC, 21.95% by HJM, 26% by Mnombo and 15% by Implats, giving the Company total direct and indirect ownership of 50.02% of the Waterberg Project.

Technical Report - Waterberg DFS

Technical information in this AIF regarding the Waterberg Project is derived from the Waterberg DFS. In addition to the Waterberg DFS, a SAMREC 2016 compliant technical report has been prepared and signed-off by the Independent Qualified Persons. The Independent Qualified Persons for the Waterberg DFS and the companion SAMREC technical report are Charles J Muller, B. Sc. (Hons) Geology, Pri. Sci. Nat. of Protek Consulting (Pty) Ltd.; Gordon Ian Cunningham, B. Eng. (Chemical), Pr. Eng., FSAIMM of Turnberry Projects (Pty) Ltd.; and Michael Murphy, P. Eng. of Stantec Consulting Ltd.


PLATINUM GROUP METALS LTD.

The Waterberg DFS supersedes the Company's prior technical report, the October 2018 Waterberg Report, as well as the earlier 2016 pre-feasibility study, with respect to the Waterberg Project. Prior technical reports and studies relating to the Waterberg Project should no longer be relied upon.

The Waterberg DFS has been evaluated and prepared in accordance with NI 43-101 to comply with the requirements for a definitive feasibility study. The Waterberg DFS complies with disclosure and reporting requirements set forth in the TSX Company Manual, NI 43-101, Companion Policy 43-101CP to NI 43-101, and Form 43-101F1 of NI 43-101.  The Waterberg DFS includes measured, indicated and inferred mineral resources. Only measured and indicated resources have been incorporated into the Waterberg DFS mine plan and financial model. The reader is cautioned that all estimates of mineral resources have been prepared in accordance with NI 43-101 and the Company has not disclosed or determined any mineral reserves under SEC Industry Guide 7 standards.

The following summary is qualified in its entirety with reference to the full text of the Waterberg DFS, which is incorporated by reference herein. The use of "US$" in the Waterberg DFS denotes USD.

Readers are requested to note that the Waterberg DFS Update is currently in process and is expected to be completed by the end of calendar year 2023.  The Waterberg DFS Update will supersede the Waterberg DFS.  It is expected that the Waterberg DFS Update will indicate financial and economic results that vary from the Waterberg DFS.  Since the completion of the Waterberg DFS in September 2019 many economic factors have changed, including a weaker Rand to the U.S. Dollar, lower U.S. Dollar PGM prices, and higher costs for labour, steel, energy and equipment.  The Waterberg DFS assumed a long-term exchange rate for the Rand to the U.S. Dollar of 15 to 1.  The Waterberg DFS also assumed a project schedule with a start date of January 2020.  A construction decision has not yet occurred and although some pre-production work is underway on the project, a formal start date has not yet been declared as of the date of this AIF.

Waterberg Project Summary

(Excerpted from the Waterberg DFS)

1. Summary

1.1 Introduction

This report was compiled for Waterberg Joint Venture (JV) Resources (Pty) Ltd. (Waterberg JV Resources), a company owned by Platinum Group Metals Ltd. (PTM), Impala Platinum (Implats), Japan Oil, Gas and Metals National Corporation (JOGMEC), Hanwa Co. Ltd. (Hanwa) and Mnombo Wethu Consultants (Pty) Ltd. (Mnombo).  PTM is listed on the Toronto Stock Exchange under the symbol "PTM" and on the New York Stock Exchange under the symbol "PLG.A."

The purpose of this report is to provide an update to the Mineral Resource estimate, update to the Mineral Reserve, and publish the results of a definitive feasibility study (DFS) for the Waterberg Project.  The Waterberg Project is the development of a platinum group metals (PGM) mine and Concentrator Plant in the Province of Limpopo, South Africa.

This report was prepared in accordance with disclosure and reporting requirements set forth in National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101), Companion Policy 43-101CP to NI 43-101, and Form 43-101F1 of NI 43-101.


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The estimated Mineral Resources for the Waterberg Project at a 2.5 grams per tonne (g/t) platinum (Pt), palladium (Pd), rhodium (Rh), and gold (Au) (4E) cutoff grade include a combined 242.4 million tonnes at an average grade of 3.38 g/t 4E, 0.10% copper (Cu) and 0.18% nickel (Ni) in the measured and indicated (M&I) categories, and an additional 66.7 million tonnes at an average grade of 3.27 g/t 4E, 0.11% Cu, and 0.15% Ni in the inferred category.

The estimated Mineral Reserve for the Waterberg Project at a 2.5 g/t 4E cutoff grade includes a combined 187.5 million tonnes at an average grade of 3.24 g/t 4E, 0.09% Cu, and 0.18% Ni in the proven and probable categories.  The estimated Mineral Reserves contains a total of 19.5 million ounces of Pd, Pt, Rh, and Au.

The key outcome of the DFS is the development of one of the largest and lowest cash cost underground PGM mines globally.  The shallow, decline-accessed mine will be fully mechanized and produce approximately 4.8 million tonnes of ore and 420,000 combined ounces of Pd, Pt, Rh, and Au in concentrate per year at steady state.  The mine will produce for approximately 45 years.  Additional outcomes include:

 Estimated project capital of approximately Rand 13.1 billion United States dollar (US$874 million) plus Rand 3.5 billion in capitalized operating costs to achieve 70% of steady-state production.

 Peak funding of Rand 9.26 billion (US$617 million).

 Payback period of approximately 11.4 years at 3-year average prices and 8.4 years at spot prices.

 After tax net present value (NPV) of Rand 5.62 billion (US$333 million) at an 8% discount rate (three-year average price US$931 per oz Pt, US$1 055 per oz Pd, US$1 930 per oz Rh, US$1 318 per oz Au, US$2.87 per pound Cu and US$5.56 per pound Ni, US$/South African Rand (ZAR) 15.95).

 After tax NPV of Rand 14.7 billion (US$982 million) at an 8% discount rate (spot prices 04 September 2019 - US$980 per oz Pt, US$1 546 per oz Pd, US$5 036 per oz Rh, US$1 548 per oz Au, US$2.56 per pound Cu and US$8.10 per pound Ni, US$/ZAR 15.00).

 After tax internal rate of return (IRR) of 13.3% (three year trailing average price).

 After tax IRR of 20.7% (Spot Prices 04 September 2019).

1.2 Property Description and Location

1.2.1  Property and Title

The Waterberg Project is located 85 kilometres (km) north of the town of Mokopane in the province of Limpopo, South Africa, approximately 330 km NNE from Johannesburg.  The total project area, active prospecting rights (PRs), and mining right application area covers a total area of 99 244 hectare (ha).  Elevation ranges from approximately 880 to 1 365 metres (m) above sea level.

1.2.2 Holdings Structure

Platinum Group Metals (RSA) (Pty) Ltd (PTM RSA) is the operator of the Waterberg Project, with JV partners being Japanese Oil, Gas and Metals National Corporation (JOGMEC), Hanwa Co. (Hanwa), Impala Platinum Holdings Ltd (Implats) and Mnombo Wethu Consultants (Pty) Ltd. (Mnombo).  Figure 0-1 shows the holdings of the Waterberg Project.


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Figure 0-1:  Waterberg Project Holdings

1.3 Geological Setting and Mineralisation

The Bushveld and Molopo Complexes in the Kaapvaal Craton are two of the most well-known mafic / ultramafic layered intrusions in the world.  The Bushveld Complex was intruded about 2 060 million years ago into rocks of the Transvaal Supergroup, largely along an unconformity between the Magaliesberg quartzite of the Pretoria Group and the overlying Rooiberg felsites.  It is estimated to exceed 66 000 square kilometres (km2) in extent, of which about 55% is covered by younger formations.  The Bushveld Complex hosts several layers rich in PGM, chromium (Cr) and vanadium (V), and constitutes the world's largest known Mineral Resources of these metals.

Waterberg is situated off the northern end of the previously known Northern Limb of the Bushveld Complex, where the mafic rocks have a different sequence to those of the Eastern and Western Limbs of the Bushveld Complex.

PGM mineralisation within the Bushveld package underlying Waterberg is hosted in two main layers: T Zone and F Zone.

The T Zone occurs within the Main Zone just beneath the contact of the overlaying Upper Zone.  Although the T Zone consists of numerous mineralised layers, three potential economical layers were identified, TZ, T1, and T0 - Layers.  They are composed mainly of anorthosite, pegmatoidal gabbros, pyroxenite, troctolite, harzburgite, gabbronorite, and norite.

The F Zone is hosted in a cyclic unit of olivine rich lithologies towards the base of the Main Zone towards the bottom of the Bushveld Complex.  This zone consists of alternating units of harzburgite, troctolite, and pyroxenites.  The F Zone was divided into the FH (harzburgite) and FP (pyroxenite) layers.  The FH layer has significantly higher volumes of olivine in contrast with the lower lying FP layer, which is predominately pyroxenite.

1.4 Deposit Types

The mineralised layers of the Waterberg Project meet some the criteria for Platreef-type deposits, where the mineralisation is hosted by sulphides that are magmatic in origin.  The mineralised layers can be relatively thick, often greater than 10 m. 


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The other criteria relating to the Platreef have yet to be demonstrated.  Consequently, this mineralisation is deemed to be similar, i.e., Platreef-like, but its stratigraphic position, geochemical and lithological profiles suggest a type of mineralisation not previously recognised in the Bushveld Complex.

1.5 Exploration Data / Information

The Waterberg Project is an advanced project that has undergone preliminary economic evaluations, a prefeasibility study (PFS) and resulted in this DFS.  Drilling to date has given the confidence to classify Mineral Resources as inferred, indicated, and measured. 

1.6 Drilling

The data from which the structure of the mineralised horizons were modelled and grade values estimated were derived from a total of 362 293 m of diamond drilling.  This report updates the Mineral Resource Estimate using this dataset.  The drill hole dataset consists of 441 drill holes and 583 deflections at the date of drill data cutoff (01 December 2018).

The management of the drilling programs, logging, and sampling were undertaken from multiple facilities: one at the town of Marken in Limpopo Province, South Africa, and the other on the farm Goedetrouw 366LR within the PR area, or at an exploration camp on the adjacent farm Harriet's Wish.

1.7 Sample Preparation, Analyses, and Security

The sampling methodology concurs with Waterberg JV Resources' protocol based on industry best practice.  The quality of the sampling is monitored and supervised by a qualified geologist.  The sampling is done in a manner that includes the entire potentially economic unit with enough shoulder sampling to ensure the entire economic zones are assayed.

Waterberg JV Resources instituted a complete quality assurance / quality control (QA/QC) programme, including the insertion of blanks and certified reference materials as well as referee analyses.  The programme is being followed and is to industry standard.  The data is as a result, considered reliable in the opinion of the qualified person (QP).

1.8 Data Verification

Printed logs for 90% of the holes were checked with the drilled core.  The depths of mineralisation, sample numbers and widths, and lithologies were confirmed.  The full process from core logging to data capturing into the database were reviewed at the two exploration sites.  Collar positions of a few random selected drill holes were checked in the field and found to be correct.  The average specific gravity (SG) values were generated for each individual lithological type and missing SG values were inserted according to the lithological unit.  Assay certificates were checked on a test basis.  The data was reviewed for statistical anomalies. 

The individuals in Waterberg JV Resources' senior management and certain directors of the company, who completed the tests and designed the processes, are non-independent mining or geological experts.  The QP's opinion is that the data is adequate for use in Mineral Resource Estimation.

1.9 Mineral Processing and Metallurgical Testing

Metallurgical testing of the F Zone and T Zone on selected drill core samples was completed at accredited metallurgical laboratories in South Africa with all analyses being performed with appropriate QA/QC oversight.  The economic minerals will be recovered by flotation techniques into a flotation concentrate suitable as feed stock to a smelter and followed by further downstream processing at a precious metals refinery, typical of the PGM industry.


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The PFS programme selected the most appropriate metallurgical process for the optimized recovery of the 4E elements and the associate base metals and this was confirmed during the DFS variability and production blend evaluations.

The ore is hard and is not amenable to semi-autogenous milling; therefore, a three-stage crushing followed by two-stage ball milling circuit was selected for comminution.

The testwork programme was used to develop a grade-recovery relationship targeting 80 g/t 4E in the flotation concentrate as feed to a smelter.  The concentrate is expected to contain 2.5% Cu and 2.7% Ni in addition to the contained 4E elements (Pt, Pd, Rh, and Au).  The grade recovery relationship was developed for each of the six economic metals with 4Es at 81%, Cu at 82%, and Ni at 48% for the first 13 years of production with the corresponding life of mine recoveries being 79%, 83%, and 48%, respectively.

1.10 Mineral Resource Estimates

This report documents the Mineral Resource Estimate - effective date: 04 September 2019.  Infill drilling over portions of the Waterberg Project area and new estimation methodology made it possible to estimate a new Mineral Resource Estimate and upgrade portions of the Mineral Resource to the measured category.  All the JV partners were involved in the development of the latest Mineral Resource Model, appropriate cutoff grades, economic parameters, and Mineral Resource Model criteria.  It was determined in relation to basic working costs and in consideration of the overall resource envelope for the deposit, that at a 2.0 grams per tonne (g/t) cutoff grade, the deposit has a reasonable prospect of economic extraction.  The Mineral Resource Statement is summarised in Table 0-1.  For purposes of the DFS, sensitivity analysis and comparison to the 2016 PFS, which utilised a 2.5 g/t Pt, Pd, Rh, Au for the (4E) cutoff grade, a Mineral Resource Estimate at a 2.5 g/t cutoff grade is the preferred scenario as shown in Table 0-2.


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Table 0-1:  Summary of Mineral Resource Estimate Effective 04 September 2019 on a 100% Project Basis at 2.0 g/t Cutoff

Total T Zone at 2.0 g/t (4E) Cutoff

Mineral
Resource
Category

Cutoff

Tonnage

Grade

Metal

4E

Pt

Pd

Rh

Au

4E

Cu

Ni

4E

g/t

t

g/t

g/t

g/t

g/t

g/t

%

%

kg

Million

ounces
(Moz)

Measured

2.0

4 892 193

1.12

2.01

0.04

0.85

4.02

0.16

0.08

19 667

0.632

Indicated

2.0

21 479 925

1.23

2.09

0.03

0.78

4.13

0.19

0.09

88 712

2.852

M+I

2.0

26 372 118

1.21

2.08

0.03

0.79

4.11

0.18

0.09

108 379

3.484

Inferred

2.0

25 029 695

1.17

1.84

0.03

0.60

3.64

0.14

0.07

91 108

2.929

Mineral
Resource
Category

Prill Split

                       

Pt

Pd

Rh

Au

                       

%

%

%

%

                       

Measured

27.9

50.0

1.0

21.1

                       

Indicated

29.8

50.6

0.7

18.9

                       

M+I

29.5

50.6

0.7

19.2

                       

Inferred

32.1

50.5

0.8

16.6

                       

F Zone at 2.0 g/t (4E) Cutoff

Mineral
Resource
Category

Cutoff

Tonnage

Grade

Metal

4E

Pt

Pd

Rh

Au

4E

Cu

Ni

4E

g/t

t

g/t

g/t

g/t

g/t

g/t

%

%

kg

Moz

Measured

2.0

75 332 513

0.82

2.00

0.05

0.14

3.01

0.08

0.19

226 833

7.293

Indicated

2.0

273 272 480

0.80

1.85

0.04

0.14

2.83

0.07

0.18

772 103

24.824

M+I

2.0

348 604 993

0.80

1.88

0.04

0.14

2.87

0.08

0.18

998 936

32.117

Inferred

2.0

121 535 227

0.70

1.62

0.04

0.13

2.50

0.07

0.16

303 722

9.765

Mineral
Resource
Category

Prill Split

                       

Pt

Pd

Rh

Au

                       

%

%

%

%

                       

Measured

27.2

66.4

1.7

4.7

                       

Indicated

28.3

65.4

1.4

4.9

                       

M+I

28.0

65.7

1.4

4.9

                       

Inferred

28.1

65.1

1.6

5.2

                       
                                                     

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Waterberg Aggregate Total 2.0 g/t Cutoff

Mineral
Resource
Category

Cutoff

Tonnage

Grade

Metal

4E

Pt

Pd

Rh

Au

4E

Cu

Ni

4E

g/t

t

g/t

g/t

g/t

g/t

g/t

%

%

kg

Moz

Measured

2.0

80 224 706

0.84

2.00

0.05

0.18

3.07

0.08

0.18

246 500

7.925

Indicated

2.0

294 752 405

0.83

1.87

0.04

0.19

2.92

0.08

0.17

860 815

27.676

M+I

2.0

374 977 111

0.83

1.90

0.04

0.19

2.96

0.08

0.18

1 107 315

35.601

Inferred

2.0

146 564 922

0.78

1.66

0.04

0.21

2.69

0.08

0.15

394 830

12.694

Mineral
Resource
Category

Prill Split

             

Pt

Pd

Rh

Au

             

%

%

%

%

             

Measured

27.3

65.1

1.6

6.0

             

Indicated

28.4

63.9

1.3

6.4

             

M+I

28.1

64.3

1.3

6.3

             

Inferred

29.0

61.7

1.5

7.8

             

Notes:

  • 4E = Platinum Group Elements (PGE) (Pt + Pd + Rh) and Au. 
  • The cutoffs for Mineral Resources were established by a QP after a review of potential operating costs and other factors. 
  • The Mineral Resources stated above are shown on a 100% basis, that is, for the Waterberg Project entity. 
  • Conversion factor used - kg to oz = 32.15076. 
  • Numbers may not add due to rounding. 
  • A 5% and 7% geological loss were applied to the measured / indicated and inferred Mineral Resource categories, respectively.

Table 0-2:  Summary of Mineral Resource Estimate effective 04 September 2019 on a 100% Project Basis at 2.5 g/t (4E) Cutoff

T Zone at 2.5 g/t (4E) Cutoff

Mineral
Resource
Category

Cutoff

Tonnage

Grade

Metal

4E

Pt

Pd

Rh

Au

4E

Cu

Ni

4E

g/t

t

g/t

g/t

g/t

g/t

g/t

%

%

kg

Moz

Measured

2.5

4 443 483

1.17

2.12

0.05

0.87

4.20

0.15

0.08

18 663

0.600

Indicated

2.5

17 026 142

1.37

2.34

0.03

0.88

4.61

0.20

0.09

78 491

2.524

M+I

2.5

21 469 625

1.34

2.29

0.03

0.88

4.53

0.19

0.09

97 154

3.124

Inferred

2.5

21 829 698

1.15

1.92

0.03

0.76

3.86

0.20

0.10

84 263

2.709

Mineral
Resource
Category

Prill Split

             

Pt

Pd

Rh

Au

             

%

%

%

%

             

Measured

27.8

50.4

1.2

20.6

             

Indicated

29.7

50.7

0.6

19.0

             

M+I

29.5 50.4 0.7 19.4              
Inferred 29.8 49.7 0.8 19.7              


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F Zone at 2.5 g/t (4E) Cutoff

Mineral
Resource
Category

Cutoff

Tonnage

Grade

Metal

4E

Pt

Pd

Rh

Au

4E

Cu

Ni

4E

g/t

t

g/t

g/t

g/t

g/t

g/t

%

%

kg

Moz

Measured

2.5

54 072 600

0.95

2.20

0.05

0.16

3.36

0.09

0.20

181 704

5.842

Indicated

2.5

166 895 635

0.95

2.09

0.05

0.15

3.24

0.09

0.19

540 691

17.384

M+I

2.5

220 968 235

0.95

2.12

0.05

0.15

3.27

0.09

0.19

722 395

23.226

Inferred

2.5

44 836 851

0.87

1.92

0.05

0.14

2.98

0.06

0.17

133 705

4.299

Mineral
Resource
Category

Prill Split

             

Pt

Pd

Rh

Au

             

%

%

%

%

             

Measured

28.3

65.4

1.5

4.8

             

Indicated

29.3

64.4

1.6

4.7

             

M+I

29.1

64.8

1.5

4.6

             

Inferred

29.2

64.4

1.7

4.7

             

Waterberg Aggregate Total 2.5 g/t Cutoff

Mineral
Resource
Category

Cutoff

Tonnage

Grade

Metal

4E

Pt

Pd

Rh

Au

4E

Cu

Ni

4E

g/t

t

g/t

g/t

g/t

g/t

g/t

%

%

kg

Moz

Measured

2.5

58 516 083

0.97

2.19

0.05

0.21

3.42

0.09

0.19

200 367

6.442

Indicated

2.5

183 921 777

0.99

2.11

0.05

0.22

3.37

0.10

0.18

619 182

19.908

M+I

2.5

242 437 860

0.98

2.13

0.05

0.22

3.38

0.10

0.18

819 549

26.350

Inferred

2.5

66 666 549

0.96

1.92

0.04

0.34

3.27

0.11

0.15

217 968

7.008

Mineral
Resource
Category

Prill Split

             

Pt

Pd

Rh

Au

             

%

%

%

%

             

Measured

28.2

64.0

1.5

6.3

             

Indicated

29.4

62.6

1.5

6.5

             

M+I

29.1

63.0

1.5

6.4

             

Inferred

29.5

58.9

1.2

10.4

             
                               

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Notes:

 4E = PGE (Pt + Pd + Rh) and Au. 

 The cutoffs for Mineral Resources were established by a QP after a review of potential operating costs and other factors. 

 The Mineral Resources stated above are shown on a 100% basis, that is, for the Waterberg Project entity. 

 Conversion factor used - kg to oz = 32.15076. 

 Numbers may not add due to rounding. 

 A 5% and 7% geological loss were applied to the measured/indicated and inferred Mineral Resource categories, respectively.

Following are the parameters for the Mineral Resources.

 Mineral Resources are classified in accordance with the South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves (SAMREC) 2016 standards.  Certain differences exist with the "Canadian Institute of Mining (CIM) Standards on Mineral Resources and Mineral Reserves;" however, in this case the company and QP believe the differences are not material and the standards may be considered the same.  Inferred Mineral Resources have a high degree of uncertainty. 

 Mineral Resources are provided on a 100% project basis.  Inferred and indicated categories are separate.  The estimates have an effective date of 04 September 2019. 

 A cutoff grade of 2.0 g/t and 2.5 g/t 4E is applied to the selected Base Case Mineral Resources.

 Cutoff grade for the T Zone and the F Zone considered costs, smelter discounts, concentrator recoveries from the previous and ongoing engineering work completed on the property by the company, and its independent engineers.  Spot and three-year trailing average prices and exchange rates are considered for the cutoff considerations.  The upper and lower bound metal prices used in the determination of cutoff grade for resources estimated are as follows: US$983/oz-US$953/oz Pt, US$993/oz-US$750/oz Pd, US$1 325/oz-US$1 231/oz Au, US$1 923US/oz-US$972/oz Rh, US$6.08/lb-US$4.77/lb Ni, US$3.08/lb-US$2.54/lb Cu, and US$/ZAR15-US$/ZAR12.  These metal prices are based on the estimated 3-year trailing average prices and the spot prices at the time of commencement of the Mineral Resource Estimate modelling.  The lower cutoff was tested against the higher metal price in the range and the higher cutoff was tested against the lower price in the range.

The objective of the cutoff grade estimation was to establish a minimum grade for working break even.  Following the PFS, the following factors were used for the calculation of cutoff at 2.0 g/t 4E at higher potential prices and 2.5 g/t 4E at more conservative lower prices listed above.

 Working cost mining of US$25.00, R379 per tonne, life-of-mine (LOM) average total operating costs (OpEx) US$38.00, R574 per tonne average LOM.

 80 g/t concentrate, 82% recoveries of the PGM's, 88% of the Cu and 49% of the Ni.

 85% payability of the PGM's from a third-party smelter, 73% for Cu and 68% for Ni.

These costs recoveries and pay abilities were updated in the DFS for the consideration of Mineral Reserves.

 Charles Muller of CJM Consulting (South Africa) Pty Limited (CJM) completed the Mineral Resource Estimate.

 Mineral Resources were estimated using ordinary kriging (OK) and simple kriging (SK) methods in Datamine Studio3 from 441 mother holes and 583 deflections in mineralisation.  A process of geological modelling and creation of grade shells using indicating kriging (IK) was completed in the estimation process.


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 The estimation of Mineral Resources considered environmental, permitting, legal, title, taxation, socioeconomic, marketing, and political factors.  The Mineral Resources may be materially affected by metals prices, exchange rates, labour costs, electricity supply issues, or many other factors detailed in the company's annual information form.

 Estimated grades and quantities for byproducts are included in recoverable metals and estimates in the DFS.  Cu and Ni are the value byproducts recoverable by flotation and for M&I Mineral Resources are estimated at 0.18% Cu and 0.09% Ni in the T Zone and 0.08% Cu and 0.18% Ni in the F Zone. 

The data that formed the basis of the estimate are the drill holes drilled by Waterberg JV Resources, which consist of geological logs, the drill hole collars, the downhole surveys, and the assay data, all of which were validated by the QP.  The area where each layer was present was delineated after examination of the intersections in the various drill holes.

1.11 Mineral Reserve Estimates

The effective date for the Mineral Reserve estimate contained in this report is 04 September 2019.

The Waterberg Project Mineral Reserve Estimate was based on the M&I Mineral Resource material contained in the T Zone and Super F Zone (F Zone) resource block models.  The F Zone is comprised of the five sub-zones listed below.

 Super F-South Zone (F-South)

 Super F-Central Zone (F-Central)

 Super F-North Zone (F-North)

 Super F-Boundary North Zone (F-Boundary North)

 Super F-Boundary South Zone (F-Boundary South)

A 2.5 g/t 4E stope cutoff grade was used for mine planning for both the T Zone and F Zone. 

The mine design is based on using the sublevel longhole stoping mining method with paste backfill.  Sublevel intervals and stope dimensions were established from evaluating mineral resource geometry and continuity, geomechanical study design parameters, and optimizing production rate and resource extraction.  Individual stope mining shapes were created using mineable shape optimizer (MSO) software.  Stope sill development designs were prepared for all stopes and the Mineral Resources contained in development has been separated from the stopes.  The in situ Mineral Resource contained in the stope shapes and development designs were extracted from the resource models and include all planned dilution.  Modifying factors applied to the in situ Mineral Resource include geological losses, external overbreak dilution, and mining losses. 

The reference point for the estimated Mineral Reserves is delivery of run-of-mine (ROM) ore to the processing plant.

The estimated proven, probable, and total Waterberg Project Mineral Reserves at 2.5 g/t 4E cutoff effective as of 04 September 2019 are summarized in Table 0-3, Table 0-4 and Table 0-5.


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Table 0-3:  Proven Mineral Reserve Estimate at 2.5 g/t 4E Cutoff effective 04 September 2019

Zone

Tonnes

Pt

Pd

Rh

Au

4E

Cu

Ni

4E Metal

 

 

(g/t)

(g/t)

(g/t)

(g/t)

(g/t)

(%)

(%)

(kg)

(Moz)

T Zone

3 963 694

1.02

1.84

0.04

0.73

3.63

0.13

0.07

14 404

0.463

F-Central

17 411 606

0.94

2.18

0.05

0.14

3.31

0.07

0.18

57 738

1.856

F-South

0

0

0

0

0

0

0

0

0

0.000

F-North

16 637 670

0.85

2.03

0.05

0.16

3.09

0.10

0.20

51 378

1.652

F-Boundary North

4 975 853

0.97

2.00

0.05

0.16

3.18

0.10

0.22

15 847

0.509

F-Boundary South

5 294 116

1.04

2.32

0.05

0.18

3.59

0.08

0.19

19 020

0.611

F Zone Total

44 319 244

0.92

2.12

0.05

0.16

3.25

0.09

0.20

143 982

4.629

Waterberg Total

48 282 938

0.93

2.10

0.05

0.20

3.28

0.09

0.19

158 387

5.092

Table 0-4 No sequence specified.:  Probable Mineral Reserve Estimate at 2.5 g/t 4E Cutoff effective 04 September 2019

Zone

Tonnes

Pt

Pd

Rh

Au

4E

Cu

Ni

4E Metal

 

 

(g/t)

(g/t)

(g/t)

(g/t)

(g/t)

(%)

(%)

(kg)

(Moz)

T Zone

12 936 870

1.23

2.10

0.02

0.82

4.17

0.19

0.09

53 987

1.736

F-Central

52 719 731

0.86

1.97

0.05

0.14

3.02

0.07

0.18

158 611

5.099

F-South

15 653 961

1.06

2.03

0.05

0.15

3.29

0.04

0.13

51 411

1.653

F-North

36 984 230

0.90

2.12

0.05

0.16

3.23

0.09

0.20

119 450

3.840

F-Boundary North

13 312 581

0.98

1.91

0.05

0.17

3.11

0.10

0.23

41 369

1.330

F-Boundary South

7 616 744

0.92

1.89

0.04

0.13

2.98

0.06

0.18

22 737

0.731

F Zone Total

126 287 248

0.91

2.01

0.05

0.15

3.12

0.08

0.18

393 578

12.654

Waterberg Total

139 224 118

0.94

2.02

0.05

0.21

3.22

0.09

0.18

447 564

14.390

Table 0-5:  Total Estimated Proven and Probable Mineral Reserve at 2.5 g/t Cutoff effective as of 04 September 2019

Zone

Tonnes

Pt

Pd

Rh

Au

4E

Cu

Ni

4E Metal

 

 

(g/t)

(g/t)

(g/t)

(g/t)

(g/t)

(%)

(%)

(kg)

(Moz)

T Zone

16 900 564

1.18

2.04

0.03

0.80

4.05

0.18

0.09

68 391

2.199

F-Central

70 131 337

0.88

2.02

0.05

0.14

3.09

0.07

0.18

216 349

6.956

F-South

15 653 961

1.06

2.03

0.05

0.15

3.29

0.04

0.13

51 411

1.653

F-North

53 621 900

0.88

2.09

0.05

0.16

3.18

0.10

0.20

170 828

5.492

F-Boundary North

18 288 434

0.98

1.93

0.05

0.17

3.13

0.10

0.23

57 216

1.840

F-Boundary South

12 910 859

0.97

2.06

0.05

0.15

3.23

0.07

0.19

41 756

1.342

F Zone Total

170 606 492

0.91

2.04

0.05

0.15

3.15

0.08

0.19

537 560

17.283

Waterberg Total

187 507 056

0.94

2.04

0.05

0.21

3.24

0.09

0.18

605 951

19.482



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Notes:

  • A stope cutoff grade of 2.5 g/t 4E was used for mine planning for the mineral reserves estimate
  • Tonnage and grade estimates include planned dilution, geological losses, external overbreak dilution, and mining losses
  • Metal prices assumed for cutoff grade estimates were: Pt = $US 960/oz, Pd = $US 993/oz, Rh = $US 1 923/oz, Au = $US 1 325/oz, Cu = $US 6 795/tonne, Ni = $US 13 395/tonne and ZAR:$US 12.04
  • 4E = PGE (Pt + Pd + Rh) and Au.
  • Numbers may not add due to rounding.

1.12 Mining Methods

The Waterberg Project will be a 400 000 tonnes per month (tpm) [400 kilo tonnes per month (ktpm)] mechanized underground mining operation accessed via declines.  The mine design is based on using the Sublevel Longhole Stoping mining method (Longhole) and backfilling the mined voids with paste backfill.

The Waterberg Project was divided into the following three mining complexes.

 The South Complex that includes T Zone and F-South

 The Central Complex that includes F-Central

 The North Complex that includes F-North, F-Boundary North, and F-Boundary South

A plan view with the production areas projected to surface is shown in Figure 0-2 and a longitudinal view of the zones, looking approximately northwest (looking from the footwall), is shown in Figure 0-3.


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Figure 0-2:  Surface Plan View Showing Mineral Resource Extents

Source:  Background - Google Maps

Figure 0-3:  Longitudinal View of Waterberg Complexes (Looking Northwest)

There will be a box cut and portal at each complex, each with twin declines (service decline and conveyor decline) developed to access and service the complex for the LOM.


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1.12.1 Geomechanical

Geomechanics core logging and laboratory test data from the PFS and additional data collected as part of this DFS were combined in a database and used to develop a geomechanical model and for use in rock mass classifications systems to develop rock mechanics parameters for the mine design.  The analysis utilised several common empirical models and was validated with numerical modelling in several instances.

Support requirements for development headings were developed and are in line with both empirical calculation methods and common support types.  Generally, primary ground support will consist of patterned rock bolts and screen, with application of shotcrete in areas deeper in the mine.

A numerical modelling exercise was undertaken to evaluate the evolution of rock mass damage and paste backfill performance as mining progresses.  The principal findings of the modelling exercise are listed below.

 No requirement exists for substantial designed regional ore pillars.

 No major rock mass damage (stopes and rock pillars) was developed above around 300 m below surface.  Moderate to major rock mass damage developed in stope abutments and secondary stope cores towards end of the sequence, especially below 1 000 m.

 Paste backfill dilution in wider parts of the ore body is expected, principally affecting secondary transverse stopes.  In general, paste backfill dilution is anticipated to increase with depth and towards completion of the mining level and has been reflected in the dilution estimates

Backfill stability was assessed primarily using empirical-analytical methods with developed backfill strength requirements validated by benchmarking and limited three-dimensional (3D) finite element modelling.

1.12.2 Mine Development

All decline and lateral excavations will be developed using drill and blast methods and mechanized diesel-powered mobile equipment.  A summary of the development totals by complex is included in Table 0-6 and the development profile is shown in Figure 0-4.

Table 0-6:  Development Quantities by Complex

Item

Central
Complex

(m)

South
Complex
(m)

North
Complex
(m)

Waterberg
Total

(m)

Decline

22 316

37 197

33 398

92 911

Lateral Sublevel and Infrastructure

160 963

112 766

225 750

499 479

Total

183 279

149 963

259 148

    592 390




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Figure 0-4:  Lateral Development Profile

1.12.3 Production

Mining blocks will be established at 100 m vertical intervals and will consist of two sublevels spaced at 40 m (40 m stope height) and one sublevel spaced at 20 m (20 m uppers stope that will be mined beneath the backfilled stopes in the block above).  Individual stopes will be 20 m along strike and a combination of transverse and longitudinal approaches will be used to accommodate the varying ore body thickness.  Within each mining block, stopes have been sequenced and there will be multiple stopes in the active stope cycle.  To achieve the production profile, there will be multiple mining blocks in production simultaneously.

The production plan focuses on optimizing the ramp-up period and maximizing productivity.  Each complex was scheduled independently as a stand-alone operation.  The breakdown of tonnes and grade recovered by mining approach and zone is summarised in Table 0-7.

Initial production will come from the simultaneous operation of the Central and South Complexes, with the North Complex phased in once production in the Central and South Complexes begins to ramp down.  There will be approximately five years of ramp up from the start of the decline development in 2021 to achieve sustainable 70% of steady-state production in January 2026.  Steady-state production of 400 ktpm will be achieved in Q1 2027 with 300 ktpm from the Central Complex and 100 ktpm from the South Complex.  Later in the mine life, the North Complex will ramp up to maintain 400 ktpm production.  The ramp-up and steady-state production tonnage profiles are shown in Figure 0-5 and Figure 0-6

Table 0-7:  Life-of-Mine Production Summary

 

T Zone

F-Central

F-South

F-North

F-Boundary
North

F-Boundary
South

Ore Tonnes - Stope Total

15 610 201

65 326 918

14 482 019

50 274 701

16 888 572

11 922 776

  Ore Tonnes - Transverse

1 689 200

46 538 873

2 302 529

38 755 421

7 318 698

508 303

  Ore Tonnes - Longitudinal

13 921 001

18 788 045

12 179 491

11 519 279

9 569 874

11 414 473

Ore Tonnes - Development

1 290 363

4 804 419

1 171 942

3 347 199

1 399 862

988 084

Ore Tonnes - Total

16 900 564

70 131 337

15 653 961

53 621 900

18 288 434

12 910 859

Grade 4E (g/t)

4.05

3.09

3.29

3.18

3.13

3.23

  Grade Pt (g/t)

1.18

0.88

1.06

0.88

0.98

0.97

  Grade Pd (g/t)

2.04

2.02

2.03

2.09

1.93

2.06

  Grade Rh (g/t)

0.03

0.05

0.05

0.05

0.05

0.05

  Grade Au (g/t)

0.80

0.14

0.15

0.16

0.17

0.15

Grade Cu (%)

0.18

0.07

0.04

0.10

0.10

0.07

Grade Ni (%)

0.09

0.18

0.13

0.20

0.23

0.19

Notes:

  • 4E = PGE (Pt + Pd + Rh) and Au.
  • Totals may not add due to rounding.

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Figure 0-5:  Production Tonnage by Month during Ramp-up


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Figure 0-6:  Annual Production Tonnage Profile

1.12.4 Ventilation and Mine Air Refrigeration

The underground mobile equipment will be diesel powered.  The required ventilation flow will be 1 124 cubic metres per second (m3/s), 688 m3/s, and 1 229 m3/s for the Central, South, and North Complexes, respectively.

Ventilation to each complex will be provided by surface fresh air and return air ventilation raises and the portals / declines.  The ventilation systems will be a "pull" system with large surface fans located at the exhaust raises.  Ventilation in the conveyor declines will have fresh air pulled from the portals and exhausted without being used to ventilate other mine workings.

The underground heat loads will be countered by a combination of refrigerated air and uncooled air.  The cooling requirement will be 20 megawatts refrigeration (MWR), 10 MWR, and 20 MWR for the Central, South, and North Complexes, respectively.  Mine air cooling will not be required until mining depths reach 700 m below surface in 2030.

1.13 Recovery Methods

The process design for the Waterberg Concentrator Plant was developed based on the extensive metallurgical test work results and previous studies.  The testwork programme developed during the PFS and the DFS identified that the mill-float-mill-float (MF2) configuration following three stage crushing is the most appropriate recovery technique for the PGE and the base metals for the F Zone and the T Zone ores.  The plant design makes provision for the controlled blending of the two ore types in the crushing circuit.  The blending of the ores does not require a conceptual change to the MF2 flowsheet, but the controlled blending is considered advantageous in providing a consistent feed composition to the process.  Further optimisation of the reagent addition during operation to achieve the optimal concentrate grade and recovery can be completed.

The flotation concentrator will produce a concentrate containing 80 g/t 4E with a mass pull of approximately 3.1%.  The concentrator was designed to process 4.8 Mtpa (400 ktpm) of ROM and will produce 155 kilo tonnes per annum (ktpa) of concentrate to be shipped by road to a smelter.  The concentrate will contain 12% moisture while the tailings will be directed to either the backfill plant for placing as cemented fill underground or to the surface tailings storage facility (TSF).


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The plant production rate is aligned with mine production and plant production will commence in January 2024 with ramp-up continuing until steady state is reached December 2026 as indicated in Figure 0-7.

Figure 0-7:  Annual Mill Feed Profile Summary

The concentrate production and contained 4E elements approaching 425 000 ounces per annum is indicated in Figure 0-8 along with anticipated the base metal content in tonnes per annum (tpa).

Figure 0-8:  Annual Metal Production Summary


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1.14 Project Infrastructure

The Waterberg Project is located in a rural area with limited existing infrastructure apart from gravel roads, drill hole water, and 22 kilovolts (kV) rural power distribution with limited capacity.  Upgrading is planned for all existing infrastructure, including the upgrading of 34km of the gravel roads to the N11 national road. 

In addition to three mining complexes and one processing facility, the Waterberg Project infrastructure required for a successful operation will include the construction of a new 132 kV electrical supply from the ESKOM Burotho 400/132 kV main transmission station 74 km south of the site.  The development and equipping of a local well field spread over 20 km to provide water.

At the site, a lined TSF, ore stockpile and waste rock storage facilities, backfill preparation and distribution system, and the necessary surface infrastructure to support mining and processing operations will be constructed. 

The project will require 90 mega volt amps (MVA) of electrical power and 6.2 ML/day of industrial water.

1.15 Market Studies and Contracts

One of the JV partners of the Waterberg Project is Implats; therefore, no formal marketing study was commissioned for the DFS.

Metal price movements for the economic metals associated with the project (Pt, Pd, Rh, Au, Ni, and Cu) were reviewed for the preceding three years and show that there was a significant change in the market for the major contributors to income generation.  The metal prices for the period to 04 September 2019 normalised to 01 July 2019 are detailed in Table 0-8.

Table 0-8:  Pricing for all Economic Metals

Period

Pd

Pt

Au

Ni

Cu

Rh

US$/oz

US$/oz

US$/oz

US$/tonne

US$/tonne

US$/oz

Three-year Trailing

$ 1 055

$ 931

$ 1 318

$ 12 248

$ 6 333

$ 1 930

Two-year Trailing

$ 1 174

$ 891

$ 1 322

$ 13 034

$ 6 530

$ 2 427

One-year Trailing

$ 1 338

$ 841

$ 1 318

$ 12 666

$ 6 146

$ 2 942

04 September 2019 Spot

$ 1 546

$ 980

$ 1 548

$ 17 855

$ 5 646

$ 5 036

Source - 'Johnson Matthey Metal Prices' BMO

Considering these metal prices and the production profile for the Waterberg Project, contributors to income are summarized in Table 0-9.  The first 13 years of the production profile is treating about 25% from the T Zone with a different prill spilt to the F Zone ore.


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Table 0-9:  Economic PGEs and Base Metals for first 13 Years and Life of Mine

Metal

Approximate Percent of Revenue
(3-year trailing price to September2019)

Approximate Percent of Revenue
(04 September 2019 Spot Price)

First 13 years

LOM

First 13 years

LOM

Pd

54.3%

55.8%

59.4%

60.6%

Pt

23.2%

22.1%

18.2%

17.2%

Au

8.3%

6.1%

7.3%

5.3%

Ni

8.7%

10.5%

9.5%

11.3%

Cu

4.1%

4.0%

2.7%

2.6%

Rh

1.5%

1.5%

2.9%

3.0%

No off-take agreement was negotiated for the concentrate, but Implats has right of first refusal to develop the Waterberg Project and further treat the concentrate produced.  It is anticipated that the payability for the contained metal in concentrate will be 85% for all 4E elements, 73% for Cu, and 68% for Ni.  These net-smelter-return factors are fully inclusive of all smelting and refining costs, apart from delivery to the smelter.

It is anticipated that the metal pipeline between delivery of concentrate and payment will be 12 weeks.  The Project finances are based on prefunding of the concentrate with an 85% value payment received in Month 1 and the 15% balance paid after the 3 months, incurring an interest charge (as defined in Section 21).

The concentrate from Waterberg Project will be very low in chromitite, which will make this material attractive for blending with other concentrates; however, the contained iron (Fe) and sulphur (S) with high base metals may require further optimization of the smelting and base metal refining protocols.  No penalties are expected to be placed upon the concentrate.

1.16 Environmental Studies, Permitting, and Social or Community Impact

In consultation with the community, the mine footprint was planned to exclude areas significant to the community, including prime grazing areas.

Table 0-10 shows key environmental and social licenses and permit applications are required for the Waterberg Project.

Table 0-10:  Status of Environmental Licenses and Permits Required for the Waterberg Project

License / Permit Application

Authority

Reference Number

Status

Mining Right (with Social and Labour Plan (SLP)

Department of Mineral Resources and Energy (DMRE)

LP 30/5/1/2/2 /2/10161MR

Submitted

Environmental Authorisation (EA) [includes Environmental Impact Assessment (EIA) and Environmental Management Programme (EMPr) and Closure Plan]

DMRE

LP 30/5/1/2/2 /2/10161EM

Granted

Waste Management Licence

DMRE

LP 30/5/1/2/2 /2/10161MR

Submitted

Water Use Licence

DHSWA

Imminent Application

Imminent Application

Heritage Resources Consent for Development

South African Heritage Resource Agency (SAHRA)

LP 30/5/1/2/2 /2/10161MR - 12878

Submitted



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From an environmental and social perspective, the greatest impacts from mining are anticipated in the eastern (plant footprint) and south-east-central areas of the proposed mining right area.  This area is where surface infrastructure is planned as this is the shallowest access for underground mining and is topographically relatively flat.  The findings of the Environmental Assessment Practitioner and specialists' assessments have shown that the Waterberg Project may result in both negative and positive impacts to the environment; however, adequate mitigation measures are included into the EMPr to reduce the significance of the identified negative impacts.

The Social and Labour Plan ("SLP") forms part of the mining right in South Africa.  It is a commitment to sustainable social development and was submitted, as required, with the mining right application.  Local landowners, land users, local authorities and communities were consulted and updated from the prospecting stage and are well aware of the project plans.  Land use agreements are currently being concluded with the Goedetrouw Community, the Ketting Community, and individual property owners on the farms traversed by the proposed water pipeline and powerlines.

Specific training needs were identified, and a detailed training programme is being developed with an internationally recognised organisation to provide the structure and services required for the initial and ongoing needs of the Waterberg Project.

1.17 Capital and Operating Costs

Capital costs to 70% of steady-state production are estimated predominantly in ZAR, with all cost estimates expressed in ZAR real July 2019 terms.  Modelled costs are converted to US$ at a long-term real exchange rate of 15.00 (ZAR/US$).  The real escalation of costs (in ZAR terms) is estimated to be offset, over time, by the future devaluation of the ZAR against the US$.  Estimated capital expenditure is R13 105 M for the Waterberg Project plus R3 453 M for capitalized operating costs to achieve the 70% of steady-state production as detailed in Table 0-11.

Table 0-11:  Waterberg Project Capital Cost

Cost Area

ZAR Total
(ZAR M)

USD Total
(US$ M)

Underground Mining

R6 097

$406

Concentrator

R2 580

$172

Shared Services and Infrastructure

R682

$45

Regional Infrastructure

R1 229

$82

Site Support Services

R234

$16

Project Delivery Management

R654

$44

Other Capitalised Costs

R331

$22

Contingency

R1 298

$87

Total Project Capital (excluding Capitalised OpEx)

R13 105

$874

Capitalised Operating Costs

R3 453

$230

Total Project Capital (including Capitalised OpEx)

R16 559

$1 104



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The SIB expenditure covers all expenditure of a capital nature following the achievement of 70% of the steady-state production.  This includes all ongoing underground waste development, construction of the North Complex, and the required infrastructure plus mobile equipment replacement and other items of a capital nature associated with the concentrator and general mine infrastructure.  The total stay-in-business (SIB) contingency is R21.6 billion spread over the more than 40 years of mine life.

The overall life of mine capital expenditure profile for the Project is shown in Figure 0-9.

Figure 0-9:  Capital Expenditure Profile for Life of Mine


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The LOM operating costs following achievement of 70% of steady-state production and excluding SIB expenditure is summarised in Table 0-12.

Table 0-12:  Waterberg Project Operating Cost

Cost Area

LOM Average
(ZAR/t milled)

LOM Average
(US$/t milled)

Mining

R345

$23.01

Milling and Processing

R132

$8.79

Engineering and Infrastructure

R116

$7.76

General and Administration

R19

$1.25

Total On-site Operating Costs

R612

$40.80

The cash cost per 4E ounce is estimated at US$640 (spot prices) and US$554 (three-year trailing prices), respectively.  The cash cost includes the smelter discount as a cost, as well as byproduct credits from Cu and Ni sales; therefore, the indicated cash costs are dependent on the prevailing metal price assumptions as detailed in Table 0-13.

Table 0-13:  Waterberg Project Cash and All-In-Cost

Metric

Spot Prices
(US$ / 4E oz)

Three-year
Trailing Prices

(US$ / 4E oz)

On-site Operating Costs

$487

$456

Smelting, Refining, and Transport Costs

$302

$227

Royalties and Production Taxes

$88

$54

Less Byproduct Base Metal Credits

$(236)

$(184)

Total Cash Cost

$640

$554

Sustaining Capital

$94

$88

Total All-in Sustaining Cost

$734

$642

Project Capital

$34

$32

Total All-in Cost

$767

$674

1.18 Economic Analysis

Key features of the Waterberg Project are listed below.

 The Waterberg Project capital expenditure (CapEx) (exclusive of sustaining capital) is estimated at R16 559 M (US$1 104 M).  The Waterberg Project CapEx includes capitalised operating costs of R3 453 M up to 70% of steady-state production. 


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 The LOM average OpEx unit cost (exclusive of capitalised OpEx) is estimated at R612 / t milled.

 The Waterberg Project produces a positive business case in both the spot and three-year trailing average metal price scenarios.  At spot prices, the Waterberg Project yields a post-tax NPV8.0% of R14 736 M (US$982 M), at an IRR of 20.7%, an undiscounted payback period of 8.4 years, and a peak funding requirement of R9 255 M (US$617 M).  At three-year trailing average metal prices, the project yields a post-tax NPV8.0% of R5 616 M (US$333 M), at an IRR of 13.3%, an undiscounted payback period of 11.2 years, and a peak funding requirement of R10 261 M (US$667 M).

 At the two pricing scenarios (spot and three-year trailing average) the project generates LOM average cash costs of US$640 / 4E oz and US$554 / 4E oz, respectively, which places Waterberg firmly within the lowest quartile of regional PGE producers.

1.19 Adjacent Properties

Numerous mineral deposits have been outlined along the Northern Limb of the Bushveld Complex.  The main projects in the area include Mogalakwena Mine, Aurora Project, Akanani Project, Boikgantsho Project, Hacra Project, and Platreef Project.

1.20 Project Implementation

The project schedule assumes a start date of January 2020 with the commencement of the detailed engineering and aims to achieve the following key milestones:

 Start of Project - January 2020

 Start of Construction of Central / South Mining Complex - June 2020

 Start of Decline Development - January 2021

 Completion of the 132 kV Bulk Electrical Supply - April 2022

 Start of Ore Processing in Concentrator- January 2024

 Achievement of 70% of Steady-state Capacity - September 2025

 Completion of Capital Period - December 2025

The project schedule is summarised graphically in Figure 0-10. 



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Figure 0-10:  High-level Implementation Schedule

Year

2020

2021

2022

2023

2024

2025

Quarter

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Central / South Mining Complex

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineering & Procurement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Underground Mine Development

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineering & Procurement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Box Cut Construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Decline Development

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ore to Surface

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

70% Steady-state Production

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bulk Electrical Supply

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineering & Procurement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Concentrator Plant

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineering & Procurement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Production Ramp up

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Backfill Plant & TSF

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineering & Procurement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



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1.21 Interpretations and Conclusions

The database used for the Mineral Resource estimate consisted of 441 drill holes and 583 deflections.  The Mineral Resource estimate was completed using geostatistics best practices and the M&I Mineral Resources are at an appropriate level of confidence to be considered in the DFS for mine planning.

The geometry and continuity of the mineral resource and the rock mass quality of the mineralized zones and surrounding rock mass make the Waterberg zones amenable to extraction using the Sublevel Longhole Stoping mining method using paste backfill.  The mine design includes all development and infrastructure required to access the Central, South, and North Complexes and mine the estimated Mineral Reserves.  A full 3D mine model was created for each complex and a LOM development and production schedule was prepared to determine the estimated tonnes, average grade, and metals profile mined and delivered to surface.  Individual stope and development mining shapes were created and include planned dilution and modifying factors to account for geological losses, external overbreak dilution, and mining losses.  The estimated Mineral Reserves are supported by a mine plan and economic analysis and demonstrate positive economics.

The development methods and mining methods are safe and highly mechanized and use common equipment and processes that are proven and used successfully in the global mining industry.  The successful execution of these methods to achieve planned underground mine development and production at the Waterberg Project will require the operation to establish a culture focused on worker health and safety, investment and emphasis on worker skills training geared toward the equipment and technology used, and structured mine planning.

The metallurgical process selected is proven technology and is appropriate for the ore to be treated and will produce a concentrate containing about 80 g/t 4E at a recovery approaching 80%.

The economics show that the Waterberg Project is financially robust with peak funding at R9 255 M and a payback of 8.4 years for spot prices and R10 261 M with a payback of 11.2 years for three-year trailing prices.  The cash cost estimate shows that the Waterberg Project will be in the lower quartile of PGM mining operations in the southern African region.

1.22 Recommendations

The key recommendations related to the Mineral Resource are summarized below.

 It is recommended that dedicated Mineral Resource definition drilling from both surface and underground be completed during the access period to upgrade some of the indicated Mineral Resources to measured Mineral Resources.

 Currently, only the larger geological structures have been modelled.  It is recommended that a detailed structural analysis is conducted and modelled.

The key recommendations related to the mine design and Mineral Reserves are summarised below.

 There is Mineral Resource below the stope cutoff that is not included in the mine plan but is adjacent to planned development and stoping areas.  A lower cutoff grade could potentially bring this material into the mine plan with incremental additional development and add to the Mineral Reserves.  It is recommended to evaluate the potential for reducing the stope cutoff grade.


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 There is Mineral Resource that is above cutoff that could not be included in a longhole stope shape due to local geometry.  This material could be amenable to mining using Cut and Fill or Board and Pillar methods.  It is recommended to determine the stoping cutoff for this material and evaluate the potential to include some of this material in the mine plan and add to the Mineral Reserves.

 It is recommended to monitor the progress and application of battery-powered mobile equipment technology and evaluate the opportunities this technology could present to the Waterberg Project.

 It is recommended that further geotechnical and geomechanical work be completed as part of project execution to validate mine design assumptions and support the detailed design for underground and surface infrastructure.

The following metallurgical test work is recommended during project execution.

 Further flotation testwork to confirm the effect of the available groundwater on flotation performance and to determine what adjustments to the raw water circuit would be required (if any)

 Concentrate thickening and filtration testwork.

 Further tailings thickening and filtration testwork for confirmation of backfill plant design criteria.

It is recommended Waterberg JV Resources continue their current permitting strategy to develop positive community support and streamline final project approval as outlined below.

 Maintain regular consultation activities with all appropriate national, provincial, and local regulatory agencies and officials.

 Maintain engagement with local communities. 

Waterberg JV Resources has a programme of work in place to comply with the necessary environmental, social, and community requirements.  Following is key work that should continue.

 Environmental, Social, and Health Impact Assessment (ESHIA) in accordance with the Mineral and Petroleum Resources Development Act (MPRDA), and the National Environmental Management Act (NEMA).

 Public Participation Process in accordance with the NEMA.

 Specialist investigations in support of the ESHIA.

 Integrated Water Use License (WUL) Application in compliance with the National Water Act.

 Integrated Waste Management License (WML) in compliance with the National Environmental Management Waste Act.

If the permits are received for construction and operation the project is recommended to move into the detailed design and planning for project implementation.

It is recommended that the concentrate off-take discussions be initiated with the JV partner (and others) to confirm the net smelter return payabilities for the economic metals in the concentrate to be sold by Waterberg, as this will have a material impact on the overall finances.

Based on the positive economics from the technical inputs and the financial analysis, it is recommended that the Waterberg Project be considered by the members of the Waterberg JV for an investment decision.


PLATINUM GROUP METALS LTD.

Additional Information

Waterberg JV Co. applied for the Waterberg Mining Right in August 2018 and an EA in July of 2019.  Detailed consultation with communities, local municipalities, the Limpopo Provincial Government and South African national authorities was completed.  The EA was granted on August 12, 2020, subject to a public notice period and finalization of issues raised by affected parties, which process was completed with the issue of the final EA on November 10, 2020.  The Waterberg Mining Right was granted by the DMRE on January 28, 2021, and its notarial execution was completed on April 13, 2021.

The Waterberg DFS was completed in September 2019 under the direction of the Technical Committee appointed by Waterberg JV Co. comprised of members representing the Company and all other Waterberg Project Partners - Implats, JOGMEC, Hanwa and Mnombo. 

As of the date of this AIF, Waterberg JV Co. is working with the engineering firms Stantec Consulting International Ltd. (which participated in the Waterberg DFS) and Fraser McGill Mining & Minerals Advisory to complete the Waterberg DFS Update.  The Waterberg DFS Update scope of work considers de-risking and value engineering opportunities identified by Implats in the 2020 Work Program and in subsequent engineering work and studies undertaken by the Company and Implats in 2021 and 2022.

During the twelve-month period ended August 31, 2023, a total of $4.9 million (year ended August 31, 2022 - $3.0 million) of exploration, engineering and development costs were incurred and capitalized for the Waterberg Project.  All joint venture partners participated on a pro-rata basis. 

At August 31, 2023, the Company had capitalized $41.6 million in accumulated net costs to the Waterberg Project. Total expenditures on the property since inception, and before cost reimbursements by other Waterberg Project Partners, are approximately $85.4 million. 

As a result of its shallow depth, good grade and a fully mechanized mining approach, the Waterberg DFS determined that the Waterberg Project has the opportunity to be a safe mine within the lowest quartile of the Southern Africa PGE industry cost curve. 

Infrastructure planning has commenced for the Waterberg Project.  Detailed hydrological work and test drilling for water has been completed to study the planned utilization of known sources for significant volumes of ground water. A co-operation agreement between Waterberg JV Co. and the local Capricorn Municipality for the cooperative development of water resources has resulted in the identification of water supplies and the preliminary design of distribution infrastructure.  Hydrological work has identified several large-scale aquifers and test drilling has indicated these should be able to provide mine process and potable water for the Waterberg Project and local communities.  Further test drilling of these water basins was completed in 2019 and 2020 and additional drilling is planned as a pre-implementation objective.  An earlier work and drilling program conducted by the Capricorn District Municipality identified both potable and high mineral unpotable water resources in the district. Several boreholes proximal to the Waterberg Project identified large volumes of high mineral unpotable water not suitable for human consumption. Hydrological and mill process specialists investigated the use of this water as mine process water. In general, ground water resources identified proximal to the Waterberg Project have potential for usage for both mining and local communities. 

The establishment of servitudes for power line routes and detailed planning and permitting for South Africa's state-owned electricity utility, ESKOM, is substantially complete.  Power line environmental and servitude work is being completed by TDx Power in coordination with ESKOM.  TDx Power has progressed electrical power connection planning for approximately a 70 km, 137MvA line, to the Waterberg Project.  Engineering refinement of steady state power requirements has resulted in a reduced demand of approximately 90MvA at steady state.  Bulk power design and costing work for steady state requirements has commenced.  ESKOM is expected to assist project engineers to determine electrical power sources and availability.  A temporary power line for the construction period from the nearby grid at Bochum is being designed and costed.  Community engagement regarding power line routes for the last few kilometres to mine site are underway.


PLATINUM GROUP METALS LTD.

Subsequent to the January 28, 2021, grant of the Waterberg Mining Right, planned geo-technical drilling was completed during the months of July to October of 2021 at a cost of approximately R15.8 million. The geotechnical drilling campaign consisted of 46 boreholes drilled along the planned centerline of two sets of twin declines and box-cut positions.  Geotechnical qualified persons monitoring the drill program stated that in general, the rock mass encountered along both planned decline routes can support the planned excavations with no major problem areas expected.  In 2023, during the work being conducted under the Initial Work Program, at the request of local communities, the south decline T Zone path was adjusted to increase the land area accessible for cattle grazing.  As a result, additional geotechnical drilling was conducted.  Geotechnical qualified persons assessed the rock quality along the amended pathway and identified some areas impacted by faulting, which resulted in project engineers adjusting mine plans to accommodate.

Additional work continues in the project area related to environmental baseline studies and the surveying of infrastructure locations, roadways, power and water servitudes, etc.  Final documentation for the application for a WUL is ready for filing with the Department of Water and Sanitation, subject to the Kgatlu community's landowners' consent.  Negotiations for long term surface access agreements with host communities are advancing.

On October 18, 2022, the board of directors of Waterberg JV Co. approved in principle the R380 million (approx. $21.03 million at that time) preconstruction Work Program, focused on early infrastructure, de-risking and project optimization.  Specific work items include initial road access, water supply, essential site facilities, a first phase accommodation lodge, a site construction power supply from state utility ESKOM and advancement of the SLP.  The Work Program is to be funded and completed in a series of stages between October 2022 and August 2024.  The Waterberg DFS Update was also budgeted under the Work Program and is to include a review of cut-off grades, mining methods, infrastructure plans, scheduling, concentrate offtake, dry stack tailings, costing and other potential revisions to the project's financial model. 

The Initial Budget stage of the Work Program was approved for funding of R45 million (approx. $2.49 million at October 18, 2022) by the board of directors of Waterberg JV Co. on October 18, 2022.  The Initial Budget work was then completed by approximately March 31, 2023.  Work included infill and geotechnical drilling, mineral resource geology, feasibility engineering, infrastructure engineering and surveying.  Work was also carried out to identify, delineate and assess local deposits of calcrete and other aggregate materials that may be suitable for road building and infrastructure pad foundations.

The Initial Budget infill drilling program commenced in early November 2022 targeting near surface, modelled inferred mineral resource blocks that had good potential for conversion to higher confidence levels, which would allow them to be added to early mine plans, potentially reducing early capital expenditure and the period to first mining.  The Infill Drill Program was successfully completed in February 2023 and consisted of 16 T Zone NQ boreholes and 16 F Zone NQ boreholes.  Mineralized material recovered from the drill program was assayed and was also utilized to produce a sample concentrate for further metallurgical study.  Detailed results of infill drilling can be found in Company news releases dated January 26, 2023, and March 30, 2023, respectively.  The waste rock material remaining after assaying and sample concentrate production is being processed to determine dry-stack tailings characteristics.  If dry stack tailings methods are implemented in the DFS Update mine water consumption could be reduced by 40% to 50%.


PLATINUM GROUP METALS LTD.

During May 2023, as a part of the Initial Budget, Waterberg JV Co. also drilled exploration borehole WE153 on a prospecting right owned by Waterberg JV Co. located adjacent to the north of the Waterberg Mining Right.  Borehole WE153 was collared along a projected strike line approximately 16 km north from the area of delineated T Zone mineral resources and approximately 8 km north from the area of delineated F Zone mineral resources.  Borehole WE153 did intercept T Zone and F Zone mineralization as reported in the Company's news release dated May 17, 2023, and in the Company's May 31, 2023, third quarter MD&A.

The Stage Two Budget component of the Work Program for a further R64.5 million (approx. $3.57 million at October 18, 2022) of funding for period May 1, 2023 to August 31, 2023, was approved by Waterberg JV Co. on March 24, 2023.  Activities in the Stage Two Budget include mineral resource estimation and modelling, Waterberg DFS Update engineering, pre-construction engineering, electrical power supply engineering and the permitting and licensing of construction aggregate borrow pits at locations identified near the planned Waterberg mine site.

As at the date of this AIF, the board of directors of Waterberg JV Co. and its shareholders are in process to approve funding in the amount of R29.8 million (approx. $1.62 million at November 17, 2023) for a Stage Three Budget covering approximately a six month period from September 2023 to February 2024.  The Stage Three Budget is intended to fund work activities currently underway, including completion of the Waterberg DFS Update, and normal project maintenance.  Funding for the balance of the Work Program, for approximately R241.3 million (approx. $13.1 million as at November 17, 2023), will be considered as a Stage Four Budget in February 2024, after the Waterberg DFS Update has been assessed in the context of prevailing market conditions in 2024. 

Concentrate Offtake

The Company and Waterberg JV Co. are assessing commercial alternatives for mine development, financing and concentrate offtake.  Discussions with potential financiers are ongoing.  Before a construction decision can be undertaken arrangements will be required for Waterberg Project concentrate offtake or processing.  Obtaining reasonable terms for Waterberg concentrate offtake from an existing smelter/refiner in South Africa is considered the preferred option.  The Company is in discussion with several South African smelter operators, including Implats, with a view to arranging formal concentrate offtake arrangements for the Waterberg Project.  Although discussions continue, to date no formal concentrate offtake terms have been achieved.

As an alternative to a traditional concentrate offtake arrangement, the Company is conducting internal research and formal studies to evaluate the economic feasibility of establishing a smelter and base metal refinery business, jointly with third-party investors or partners, capable of processing Waterberg concentrate.  The Waterberg DFS stated that "Additional smelting capacity may need to be constructed in the industry to be able to treat the flotation concentrate from Waterberg and the other potential Platreef miners."  Conceptually, a Waterberg matte furnace and base metal refinery would be operated as a separate business from the Waterberg Project.  Such a facility could provide fair market offtake terms to Waterberg JV Co., and possibly to other PGM miners, allowing for the production of an upgraded product for sale in the market without the need for treatment by a third-party smelter operator. 

An internal pre-feasibility study for a Waterberg matte furnace was completed for the Company by industry experts in late calendar 2021.  The pre-feasibility study assessed the construction and operation of a 20 MW smelting furnace with two off air-blown converters capable of producing a matte suitable as feed to a standard base metal refinery in South Africa or elsewhere.  In 2022, the Company completed a scope of work for a smelter and base metal refinery definitive feasibility study examining plant and infrastructure requirements, down stream beneficiation, optimal location analysis, as well as down stream marketing considerations, permitting and power and water requirements.  Submission of tenders for specific technical components of the engineering work were requested from industry recognized engineering firms in late calendar 2022 and early 2023.  The Company is currently considering the estimated cost to complete the smelter definitive feasibility study vs the third-party concentrate offtake discussions and alternative opportunities it is working on at this time.


PLATINUM GROUP METALS LTD.

The Company is currently assessing the economic feasibility of constructing a matte furnace and base metal refinery outside of South Africa to process Waterberg concentrate.  Working with a potential partner in a jurisdiction with less expensive power and water, engineers working for the Company have completed a trade off study which indicates that savings on power and water substantially offset the cost of additional concentrate transportation.  Before concentrate could be exported from South Africa, a formal government approval would be required.  Further studies are underway.

The Offtake ROFR allows Implats the opportunity to match concentrate offtake terms offered to Waterberg JV Co. by a bona fide third-party.  Any transaction between Waterberg JV Co. and any one or more shareholders must be entered into on a bona fide arms-length basis and for fair value.  Under the terms of the Waterberg Shareholders Agreement governing Waterberg JV Co., Hanwa holds the exclusive right to purchase or direct the sale of all or part of the Waterberg Project concentrate or contained metal therein.

Non-Material Mineral Property Interests 

The non-material mineral property interests of the Company include prospecting rights located in South Africa.  These non-material property interests are not, individually or collectively, material to the Company.

5.4 SOUTH AFRICAN REGULATORY FRAMEWORK

The Company is subject to South African government regulations that affect all aspects of the Company's operations.  Accordingly, the sections below set out the primary laws and regulatory concepts to which the Company is subject.

Black Economic Empowerment in the South African Mining Industry 

The transition from an apartheid regime to a democratic regime brought with it a commitment by the South African state, as enshrined in the Constitution, to take legislative and other measures to redress the results of past racial discrimination against black South Africans, or as the MPRDA defines them, "HDPs".  Under the MPRDA, the concept includes any association, the majority of whose members are HDPs as well as juristic persons if HDPs own and control the majority of the shares and control the majority of the shareholders' votes. 

This concept and process to take legislative and other measures to redress the results of past racial discrimination against black South Africans is known in South Africa as BEE.  The mining industry was one of many industries identified by the South African government as requiring reform to bring about equitable benefit from South Africa's mineral industry to all South Africans and to promote local and rural development and social upliftment of communities affected by mining.


PLATINUM GROUP METALS LTD.

The regulatory regime governing the South African mining industry has therefore fundamentally changed over the past decade.  Legislation governing mining and BEE within the mining sector includes, among other laws regulations and policies, the MPRDA, the Mining Codes and the standards pursuant to the MPRDA, the Mining Charter, the Mining Charter Scorecard and the MTRA (as amended).  The aforementioned legislation and policies, however, are industry specific and the generic BEE regulatory framework in South Africa is regulated in terms of the BEE Act, which sets outs the South African government's policy in respect of the promotion of BEE.  The BEE Act also permits the Minister of Trade, Industry and Competition to publish Generic BEE Codes, being codes of good practice that address, among other things, the indicators to measure BEE and the weightings to be attached to such indicators, as well as sector specific codes of good practice (refer to discussion below on sector codes).

The Generic BEE Codes were originally published in 2007 and set out seven indicators or elements in terms of which BEE compliance is measured.  Each element has a scorecard in terms of which various sub-elements are set out, together with a target for compliance with each sub-element and a corresponding number of weighting points.  An entity's BEE compliance is measured in terms of each of these scorecards and the aggregate score will then determine that entity's BEE compliance level.  Independent BEE verification agencies are authorized to verify an entity's compliance and provide it with a verification certificate which will set out its score and confirm its BEE compliance level.  The seven elements of BEE compliance set out in the original Generic BEE Codes are ownership (which measures the extent to which black people own the measured entity), management control (which measures the extent to which black people form part of the board of directors and top management of the entity), employment equity (which measures the extent to which black people are employed with the various management levels of the entity), skills development (which measures the extent to which the entity has undertaken skills training for the benefit of its black employees), preferential procurement (which measures the extent to which the entity procures goods and services from BEE compliant and black-owned companies), enterprise development (which measures the extent to which the entity has contributed towards the development of black-owned or BEE compliant companies), and socio-economic development (which measures the extent to which the entity has contributed towards the economic development of black people).

The original Generic BEE Codes were substantially amended on October 11, 2013, and such amendments became effective from May 1, 2015.  Generally speaking, the amended Generic BEE Codes seek to make BEE compliance more onerous to achieve.  The total number of points required to achieve certain levels of BEE compliance have been increased.  The elements of management control and employment equity have been consolidated into a single element referred to only as management control, and the elements of preferential procurement and enterprise development have been consolidated into a single element referred to as enterprise and supplier development.  The elements of ownership, skills development and enterprise and supplier development are classified as priority elements to which minimum thresholds of compliance attach and subjects an entity to a penalty of a reduction in its BEE compliance status by one level if the entity fails to achieve any of such minimum thresholds.  The Generic BEE Codes were amended again on May 31, 2019, to make certain changes to clarify how small and medium enterprises should be assessed for BEE compliance and to amend the targets and points for certain elements. 

In addition, the BEE Act was amended by the BEE Amendment Act, which came into operation on October 24, 2014.

The Trumping Provision set out in section 3(2) of the BEE Amendment Act states that "in the event of any conflict between this Act and any other law in force immediately prior to the date of commencement of the Broad-Based Black Economic Empowerment Act, 2013, this Act prevails if the conflict specifically relates to a matter dealt with in this Act".  The BEE Amendment Act provides that section 3(2) will come into effect one year after the date on which the President proclaims the BEE Amendment Act into law and therefore became operative on October 24, 2015.  However, on October 30, 2015, the Minister of Trade and Industry exempted the DMRE from applying the Trumping Provision until October 31, 2016, on the basis that the alignment of the Mining Charter with the BEE Act and the Generic BEE Codes is still ongoing.  There has not been a further extension of this exemption.


PLATINUM GROUP METALS LTD.

Section 10(1)(a) set out in the BEE Amendment Act provides that "every organ of state and public entity must apply any relevant code of good practice issued in terms of this Act in determining qualification criteria for the issuing of licences, concessions or other authorizations in respect of economic activity in terms of any law".  This will require all governmental bodies to apply the Generic BEE Codes or other relevant codes of good practice when procuring goods or services or issuing licenses or other authorizations under any other laws, and to penalize fronting or misrepresentation of BEE information.

The provisions of section 3(2) and 10(1)(a) indicate that the DMRE would be obliged to apply the provisions of the BEE Act and of any BEE code of good practice gazetted in terms of the BEE Act when issuing rights, permissions or permits in terms of the MPRDA in the future.

A code of good practice refers to the Generic BEE Codes or any sector-specific code of good practice which has been developed and gazetted in terms of the provisions of the BEE Act after consultation with the relevant industry stakeholders and the Department of Trade, Industry and Competition.  It does not include the Mining Charter.  The implications of the above provisions of the BEE Amendment Act are that unless a mining sector code is developed and gazetted, or unless a further exemption is granted by Minister of Trade, Industry and competition, the DMRE would not be entitled to apply the Mining Charter when issuing rights, permissions or permits (after commencement of the abovementioned sections of the BEE Amendment Act) and would be required to apply the Generic BEE Codes.  While the target for ownership under the Generic BEE Codes is the same as in the Mining Charter 2010 i.e., 26% (as opposed to the current Mining Charter 2018's 30%), the remaining elements of the Generic BEE Codes in terms of which BEE compliance is measured are materially different from those set out in the Mining Charter 2018.  In addition, the extent of BEE compliance is determined under the Generic BEE Codes with reference to an entity's overall score and corresponding BEE compliance level, and the Mining Charter 2018's scorecard does not contain the same methodology.  Thus, if the Generic BEE Codes were to apply to the mining industry, it would place the industry at a disadvantage and create uncertainty. 

Section 10(2)(a) set out in the BEE Amendment Act provides that "the Minister may, after consultation with the relevant organ of state or public entity, exempt the organ of state or public entity from a requirement contained in subsection (1) or allow a deviation therefrom if particular objectively verifiable facts or circumstances applicable to the organ of state or public entity necessitate a deviation".  Such an exemption or deviation is required to be published in the government gazette.  It seems possible, but it is not certain whether the DMRE could apply for such an exemption in respect of the mining industry.

The DMRE and industry bodies are aware of the implications of the Trumping Provision.  Notwithstanding that there has been no further extension of the exemption in respect of the Trumping Provision, to date, the DMRE continues to apply the provisions of the Mining Charter and not the Generic BEE Codes. 

It is important to bear in mind that none of the Mining Charter, the Mining Charter Scorecard or the Mining Codes are drafted as legislative documents.  They are instruments of policy and as such are frequently ambiguous, loosely worded and difficult to interpret with precision.


PLATINUM GROUP METALS LTD.

The MPRDA seeks to facilitate participation by HDPs in mining ventures.  Complying with the HDSA regime is a prerequisite for being granted and maintaining prospecting and mining rights.  Every application for a mining right under the MPRDA must demonstrate that the granting of such right will:

  • substantially and meaningfully expand opportunities for HDPs, including women, to enter the mineral and petroleum industry in order to benefit from the exploitation of the nation's mineral and petroleum resources; and

  • promote employment and advance the social and economic welfare of all South Africans.

The Mining Charter 

The original mining charter was developed to give substance and guidance to the empowerment provisions under the MPRDA, which came into effect on May 1, 2004.  The original mining charter set out a number of targets which were to be achieved by mining companies by 2009 and 2014.  Among other targets, mining companies had to achieve a 15% historically HDP ownership by 2009 and a 26% HDP ownership by 2014.  Ownership relates to ownership of mining assets, whether through the holding of equity, partnership, joint venture or direct holding. 

Notwithstanding the uncertainties in BEE legislation applicable to mining companies with regard to the measurement of HDP ownership, it is accepted practice (as confirmed in section 2.1.2 of the Mining Codes) that the so-called flow-through and modified flow-through principles are applicable to the calculation of indirectly held HDP interests (i.e., where there is partial HDP ownership in a corporate structure above the level of the company holding the prospecting or mining right).  In terms of the flow-through principle, the level of indirect ownership, proportionally reduced to reflect partial HDP shareholding in intermediate companies, would be calculated to determine the proportional indirect HDP shareholding in the company holding the right.  Under the modified flow-through principle, a company with more than 51% HDP ownership (defined as a Historically Disadvantaged Persons Owned and Controlled Company in Mining Charter 2018) may, at any one level in a corporate structure, attribute 100% HDP ownership to that company for the purposes of applying the flow-through principle.

On September 13, 2010, the Mining Charter 2010 came into effect setting targets (some of which remained the same as those in the previous mining charter) to be achieved by mining companies by December 31, 2014 (the implementation of which needed to be reported on to the DMRE by mining companies in 2015), which targets included:

  • Ownership: this entailed 26% meaningful economic participation by HDPs and 26% full shareholder rights for HDPs.  The Mining Charter referred to BEE entities as opposed to HDP companies but retained the 26% ownership target.

  • Housing and living conditions: occupancy rate of employee accommodations of one person per room and all conversion of employee hostels had to be fully achieved.

  • Employment equity: 40% HDP participation at Board level, at executive committee level, in middle management, in junior management and 40% HDP participation within core skills.

  • Human resource development: 5% human resource development expenditure focused on HDPs as a percentage of total annual payroll.

  • Mine community development: implementation of approved community projects.

  • Sustainable development and growth:

    • implementation of approved EMP measured annually against the approved plans;

    • implementation of action plans on health and safety measured annually against the approved plans; and

    • utilization of South African based research facilities for the analysis of all South African sourced mineral samples.


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  • Beneficiation: contribute a percentage of additional production volume towards local beneficiation of mineral commodities in accordance with the beneficiation strategy introduced pursuant to the terms of section 26 of the MPRDA.  No such strategy has yet been finalized.

  • Reporting: submission of annual reports to the DMRE in respect of compliance with the Mining Charter 2010.

Mining Charter 2010 included targets, measures and weightings by which mining right holders were assessed against the obligations according to the Mining Charter 2010 Scorecard.

On September 27, 2018, the Minister announced the implementation of Mining Charter 2018 which sets out new and revised targets to be achieved by mining companies, the most pertinent of these being the revised BEE ownership shareholding requirements for mining rights holders.  Mining Charter 2018 provides for the publication of 'Implementation Guidelines' by November 27, 2018.  The Implementation Guidelines have created greater uncertainty in measuring a mining right holder's progress towards, and compliance with, its commitments under Mining Charter 2018.

On March 27, 2019, the Minerals Council South Africa announced that it had launched review proceedings against the Minister to set aside certain provisions of Mining Charter 2018.  Essentially the review concerned a requirement in the Mining Charter 2018 that mining firms re-empower themselves in order to renew mining licenses or transfer mining rights, contrary to the so-called 'once empowered, always empowered' principle.  Judgment in favour of the Minerals Council South Africa was handed down on September 21, 2021 but the DMRE has indicated that it may introduce legislative amendments to counter the effects of the judgment. The court confirmed the 'once empowered, always empowered' principle, confirmed that the Mining Charter 2018 was a policy document and not subordinate legislation and held that a breach of the Mining Charter 2018, of itself, could not result in cancellation of a mining right.

The Waterberg Mining Right was adjudicated upon and granted in accordance with the ownership requirements of Mining Charter 2010, given that it was lodged and accepted prior to the coming into force of the current Mining Charter 2018.

Under Mining Charter 2018, new mining rights holders will be required to have a minimum 30% BEE shareholding (a 4% increase from the required 26% under the Mining Charter 2010) which shall include economic interest plus a corresponding percentage of voting rights, per right or in the mining company which holds the right.  Waterberg JV Co. has a period of 5 years from April 13, 2021, within which to increase its BEE shareholding to 30%, given that its application was accepted prior to September 27, 2018.  Holders of existing mining rights who achieved a minimum of 26% BEE shareholding, or who achieved a 26% BEE shareholding but whose BEE shareholders exited prior to September 27, 2018, will be recognized as BEE ownership compliant for the duration of the mining right and for any period of renewal thereof.  A new mining right granted after the coming into effect of Mining Charter 2018 (other than where the application for the right was accepted by the DMRE before September 27, 2018) must have a minimum of 30% BEE shareholding, applicable for the duration of the mining right. 

Prior to the Minerals Council Judgement, the Mining Charter 2018 provided that the 30% had to be distributed as per the Stipulated Distribution.

The carried interest of 5% to each of the community and the employees, as noted in the Stipulated Distribution, had to be issued to them at no cost and free of encumbrance. The costs to the right holder of such issue were stated as being recoverable from the development of the mineral asset.


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The equity equivalent benefit relating to communities referred to a 5% equivalent of the issued share capital, at no cost to a trust or similar vehicle set up for the benefit of host communities.  The intention behind introducing this alternative was so that communities accessing the benefit of ownership would not be delayed.  The host community would receive an economic benefit as if it was the holder of a 5% equity interest. 

However, the Minerals Council Judgment deleted from the Mining Charter 2018 the necessity of dividing the 30% shareholding in the percentages previously prescribed by Mining Charter 2018.

Mining right holders may claim an equity equivalent ownership offset for beneficiation in accordance with a DMRE approved Beneficiation Equity Equivalent Plan.

The Mining Charter 2018 also sets deadlines by which the BEE Shareholding must vest for new rights, namely a minimum of 50% must vest within two thirds of the duration of a mining right; and the prescribed minimum 30% target shall apply for the duration of a mining right.

A mining right holder will be required to invest in Human Resource Development by paying 5% of the "leviable amount", being the levy payable under the South African Skills Development Act, No. 97 of 1998, (excluding the mandatory statutory skills levy) towards essential skills development activities such as science, technology, engineering, mathematics skills as well as artisans, internships, apprentices, bursaries, literacy and numeracy skills for employees and non-employees (community members), graduate training programs, research and development of solutions in exploration, mining, processing, technology efficiency (energy and water use in mining), beneficiation as well as environmental conservation and rehabilitation.

Mining Charter 2018 also provides for minimum employment equity thresholds at various levels of management.  These include:

  • Board - a minimum of 50% are HDPs, 20% of which must be women.

  • Executive Management - a minimum of 50% are HDPs at the executive director level as a percentage of all executive directors proportionally represented, 20% of which must be women.

  • Senior Management - a minimum of 60% are HDPs proportionally represented, 25% of which must be women.

  • Middle Management - a minimum of 60% are HDPs, proportionally represented, 25% of which must be women.

  • Junior Management - a minimum of 70% are HDPs proportionally represented, 30% of which must be women.

  • Employees with disabilities - a minimum of 1.5% employees with disabilities as a percentage of all employees, reflective of national or provincial demographics.

Mining right holders must also develop and implement a career progression plan (aligned with its SLP) consistent with the demographics of South Africa, which plan must provide for (i) career development matrices of each discipline (inclusive of minimum entry requirements and timeframes); (ii) develop individual development plans for employees; (iii) identify a talent pool to be fast tracked in line with needs; and (iv) provide a comprehensive plan with targets, timeframes and how the plan would be implemented.

Mining right holders must meaningfully contribute towards Mine Community Development with a bias in favour of mine communities both in terms of impact as well as in keeping with the principles of the social license to operate.  This element, together with the ownership element are ring-fenced and require 100% compliance at all times.  In consultation with relevant municipalities, mine communities, traditional authorities and affected stakeholders, mining right holders must identify developmental priorities of mine communities and make provision for such priorities in a prescribed and approved SLP, to be published in English and one or two other languages commonly used within the mine community.  Mining right holders who operate in the same area may collaborate on certain identified projects to maximize the socio-economic development impact in line with an SLP.


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Holders must implement 100% of their SLP commitments in any given financial year of the mining right holder.  Any amendments and/or variations to commitments as set out in an SLP (including budgets) shall require approval in terms of section 102 of the MPRDA, and mining right holders will be required to consult with mine communities.

Housing and living conditions for mine workers as stipulated in the Housing and Living Conditions Standards, developed in terms of section 100(1)(a) of the MPRDA, including decent and affordable housing, provision for home ownership, provision for social, physical and economic integration of human settlements, secure tenure for the employees in housing institutions, proper health care services, affordable, equitable and sustainable health system and balanced nutrition.  Under the Mining Charter 2018, mining right holders must submit housing and living conditions plans to be approved by the DMRE after consultation with organized labor and the Department of Human Settlements.  To provide clear targets and timelines for purposes of implementing the aforesaid housing and living condition principles the DMRE released the reviewed Housing and Living Conditions Standard for the Minerals Industry on December 11, 2019.

Mining Charter 2018 provides, for the first time, a regime for junior miners who meet the qualifying criteria and grants such companies exemption from certain elements/targets.  The regime for junior mining companies is limited to mining right holders who, either through holding a single or multiple mining rights, have a combined annual turnover of less than Rand 150 million.

Mining right holders who have a turn-over of less that Rand 10 million per annum are exempt from the following elements/targets set out in the Mining Charter 2018: Employment Equity Targets (if they have less than 10 employees) as well as Enterprise and Supplier Development Targets, and are required to only comply with the following elements/targets: Ownership element (but undefined as to composition of BEE shareholding); Employment Equity Targets (if they have more than 10 employees); Human Resource Development Targets; and Mine Community Development Targets.

Mining right holders who have a turn-over of between Rand 10 million and Rand 50 million per annum are required to comply with the following elements/target: Ownership element (but undefined as to composition of BEE shareholding); Human Resource Development Targets; Employment Equity Targets (at group level); and Mine Community Development Targets.

New Order Mining and Prospecting Rights Under the MPRDA

The Company's prospecting rights as well as the Waterberg Mining Right are so-called new order rights (i.e., rights granted under the MPRDA) as opposed to old order rights, being rights granted under pre-MPRDA legislation.  Under the MPRDA, mining companies operating in South Africa were required to apply for conversion of old order rights into new order prospecting and mining rights issued by the South African state in terms of the MPRDA.  New order rights in respect of mining are granted for a maximum period of 30 years, with renewals of up to 30 years at a time.  Prospecting rights are valid for a period of five years, with one renewal of up to three years.  Furthermore, the MPRDA provides for a retention period after prospecting of up to three years with one renewal of up to two years, subject to certain conditions.  The holder of a prospecting right granted under the MPRDA has the exclusive right to apply for and, subject to compliance with the requirements of the MPRDA, to be granted, a mining right in respect of the prospecting area in question.


PLATINUM GROUP METALS LTD.

The new order rights are transferable only with the approval of the Minister and are subject to various terms and conditions, including commencement of operations within specified periods, maintenance of continuing and active operations and compliance with work programs, SLPs, EMPs and empowerment requirements.

New order rights can be suspended or cancelled by the Minister if a holder has breached its obligations under the terms of the rights or is in contravention of the provisions of the MPRDA and has failed to remedy such breach after written notice of the breach from the Minister and after being given an opportunity to respond.  In addition, mining rights could potentially be cancelled for non-compliance with the Mining Charter 2018.

Resource Nationalism

The concept of resource nationalism encompasses a range of measures, such as expropriation or taxation, whereby governments increase their economic interest in corporate entities exploiting natural resources, with or without compensation.  The current South African government has publicly stated that it does not intend to nationalize the mining industry.

At its 53rd national conference in December 2012, the ANC rejected wholesale nationalization.  It was resolved that state intervention in the economy would focus on beneficiation.  Strategic minerals, which include platinum group metals, coal and iron ore, will be identified and special public policy measures may be put in place.  Further state interventions could include "state ownership" through the state mining company, and mineral resource rents through the imposition of new taxes or a super-profits tax.

Environment

South Africa has a comprehensive and constantly evolving environmental regulatory framework, particularly relating to mining.  The Constitution entrenches the right to an environment that is not harmful to human health or well-being and imposes a duty to protect the environment for the benefit of present and future generations through reasonable legislative and other measures.  The Constitution and NEMA, as well as various other related laws, grant legal standing to a wide range of people and interest groups to bring legal proceedings to enforce their environmental rights, such that claims can be made against private and public entities and the South African government.

Environmental impacts of mineral resource operations (including prospecting and mining of mineral resources and exploration and production of petroleum) are, at present, primarily regulated by four pieces of legislation, namely, the MPRDA, NEMA, the NEMWA and the NWA.

South African environmental law is largely permit-based and requires businesses whose operations may have an environmental impact to obtain licenses and authorizations from the DMRE, the DWS and the DFFE, which often contain stringent conditions relating to construction and operational requirements, as well as monitoring and reporting obligations. 

Environmental legislation also stipulates general compliance requirements.  It incorporates a "polluter pays" principle and also imposes a duty on a group of specified parties wider than the actual polluter to take reasonable measures to assess, prevent and address pollution (even that which was authorized by law).  This duty is retrospective in its application.  A failure to take such measures may result in governmental authorities taking measures against, and recovering costs from, a wider range of parties than the one on whom the duty primarily rests.  This latter group includes a successor in title to a property and based on international jurisprudence, is wide enough to include a lender or a shareholder of a company who caused the pollution, although the potential liability of shareholders and lenders has not yet been considered by South African courts.


PLATINUM GROUP METALS LTD.

NEMA provides for the appointment of Environmental Management Inspectors and Environmental Mineral Resource Inspectors at the DFFE and DMRE, respectively.  These inspectors have wide-ranging powers and can undertake both announced and unannounced inspections and investigations.  Criminal prosecutions have been initiated and directives and compliance notices issued following a number of these inspections. 

Under NEMA, it is a criminal offence for any person unlawfully and intentionally or negligently to commit any act or omission which causes, has caused or is likely to cause significant environmental pollution or degradation or unlawfully and intentionally or negligently commit any act or omission which detrimentally affects or is likely to affect the environment in a significant manner.  A maximum criminal fine of up to Rand 10 million and/or a prison term of up to ten years may be imposed for such an offence.  The NWA establishes a similar criminal offence in relation to water pollution and various offences in terms of other environmental legislation, such as the NEMWA, will constitute criminal offences under NEMA.

Directives or compliance notices can also be issued under NEMA, the MPRDA or the NWA for the temporary or permanent shut down of facilities at a mining operation or the entire mining operation, due to environmental transgressions. NEMA also provides that directors and certain company officers can also be held liable in their personal capacity for the cost of rehabilitating environmental pollution or degradation.

The environmental regulation of mining underwent a transition a few years ago.  NEMA became the primary environmental legislation regulating mining and not the MPRDA.  Due to this transition, the majority of the MPRDA's environmental regulation provisions were deleted  and the NEMLAA introduced specific provisions regulating mining into NEMA.  The Minister of the DMRE has however retained the bulk of his environmental regulation competencies under the NEMLAA's amendments, to be undertaken in accordance with NEMA.  This transition has created some gaps as some provisions were repealed but all of the necessary amendments have yet to commence under the MPRDA and the necessary regulations under NEMA are outstanding.

Under the Pre-MPRDA Amendment Act Environmental Provisions, before December 8, 2014, EMPs were required to be approved by the relevant delegated authority at the DMRE before a prospecting right or mining right respectively became effective.

In addition to requiring that an EMP be approved under the MPRDA, an EA was required for certain activities that are incidental to mining, listed in a series of EIA Regulations published under NEMA.  This includes Listed Activities such as vegetation clearance; construction of roads, facilities in proximity to a watercourse and facilities that may cause pollution; and storage of dangerous goods, where the activities exceeded specified thresholds.  An EA was not required for mining or prospecting activities.

This position changed on December 8, 2014, when the 2014 EIA Regulations commenced under NEMA, replacing the 2010 EIA Regulations.  Mining and prospecting activities that commenced after this date required an EA, as do associated infrastructure, structures and earthworks directly related to the prospecting and extraction of a mineral resource.  Recent amendments to the EIA Regulations which came into effect on June 11, 2022, have expanded the list of activities which now require an EA, including, any activity including the operation of that activity which requires an amendment or variation to a right or permit in terms of section 102 of the MPRDA; and any activity including the operation of that activity required for the reclamation of a residue stockpile or a residue deposit.


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The 2023 Draft EIA Regulations, which propose several changes in respect of Listed Activities relating to the reclamation or expansion of residue stockpiles and residue deposits.  Both the 2022 EIA Amendments and proposed amendments under the 2023 Draft EIA Regulations seem to be aimed at clarifying longstanding regulatory uncertainties in relation to residue stockpiles and residue deposits, including that (i) in addition to an EA, authorisation is required in terms of the MPRDA for reclamation of residue stockp