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The Waterberg Project

The Waterberg PGM Project is located in South Africa on the Northern Limb of the Bushveld Complex. Waterberg represents a large-scale platinum group metal resource with an attractive risk profile given its shallow nature. The project facilitates fully mechanised production with the potential to have amongst the lowest operating costs in the PGM sector.

Waterberg is a joint venture between Platinum Group (37.05%), JOGMEC (Japan Oil, Gas and Metals National Corporation) (21.95%), BEE partner Mnombo Wethu Consultants (Pty) Ltd. (26%) and Impala Platinum Holdings Ltd. (Implats) (15%). As a result of Platinum Group’s 49.90% ownership in Mnombo the Company has an effective interest in the Waterberg JV of 50.02%.

Platinum Group Metals Ltd. made the initial discovery of this completely new section of the Bushveld Complex in November 2011. The initial exploration was funded by JOGMEC. In October 2017 Implats purchased a 15% interest in the Waterberg Project for USD $30M and acquired an option for a US $166M Acquisition and Development Commitment along with a first right of refusal for concentrate offtake. JOGMEC retains a right to all metal marketing.

A Pre-Feasibility Study (PFS) was completed in 2016 and a Definitive Feasibility Study is in progress for completion in calendar Q1 2019. The DFS will study the PFS mining scale and a potentially smaller scale, lower capital option for development. The deposit starts at approximately 150m from surface, to be developed with decline ramps and remains open for expansion with significant resources yet to be converted to reserves.

The Waterberg Project has a number of highly attractive characteristics as a low-cost, shallow, bulk mineable project with significant scale and growth potential. The participation of Implats, the world’s second largest platinum producer with fully integrated mine to market operations, represents a significant step in the advancement of the Waterberg Project towards potential development and production. Sixty one percent of Waterberg reserves and resources of PGMs are palladium. Auto preferences recently have supported a robust palladium market.

A resource update was announced on October 25, 2018. Current Measured and Indicated Resources (100%) stand at 26.34 million ounces (242M tonnes at 3.38 g/t 4E) at a 2.5 g/t cut-off. Reserves will be updated as part of the planned 2019 Definitive Feasibility Study.

Mineral Resources were completed by Charles Muller of CJM Consulting – see Press Release dated October 25, 2018. Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, marketing or other relevant issues. The quantity and grade of reported inferred mineral resources in this estimate are conceptual in nature. There is no guarantee that all or any part of the mineral resource will be converted to a mineral reserve.

Mineral Resource Estimate effective September 27, 2018:

4E = Platinum Group Elements (Pt+Pd+Rh+Au). The cut-offs for Mineral Resources have been established by a qualified person 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 as a whole entity. Conversion Factor used – kg to oz = 32.15076. Numbers may not add due to rounding. Mineral Resources do not have demonstrated economic viability but there must be a reasonable expectation for eventual economic extraction. A 5% and 7% geological loss has been applied to the Measured, Indicated and Inferred categories respectively. Effective Date September 27, 2018. The upper and lower bound metal prices used in the determination of cut-off 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$2.54/lb Cu, US$/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.

Total aggregate 2.5 g/t 4E cut-off grade Mineral Resources at Waterberg on a 100% project basis have increased slightly since those reported in October 2016.

  1. The Mineral Resources are classified in accordance with the SAMREC 2016 standards. There are certain differences with the "CIM Standards on Mineral Resources and Mineral Reserves"; however, in this case the QP believes the differences are not material and the standards may be considered the same, but SAMREC 2016 stipulates different disclosure requirements. A separate SAMREC compliant Mineral Resource statement has been prepared and signed-off by the competent person (Mr. Charles J Muller). Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability but there are reasonable prospects for eventual economic extraction. Inferred Mineral Resources have a high degree of uncertainty.
  2. A cut-off grade of 2.0 g/t and 2.5 g/t 4E for both the T and the F-Zones is applied to the selected mineral resources.
  3. Cut off for the T and the F-Zones considered costs, smelter discounts, concentrator recoveries from previous engineering work completed on the property by the Company. The Mineral Resource model was cut-off at an arbitrary depth of 1,250 meters, although intercepts of the deposit do occur below this depth.
  4. Mineral Resources were completed by Mr. CJ Muller of CJM Consulting.
  5. Mineral Resources were estimated using kriging methods for geological domains created in Datamine from 437 original holes and 585 deflections. A process of geological modelling and creation of grade shells using indicating kriging was completed in the estimation process.
  6. The estimation of Mineral Resources has taken into account environmental, permitting and legal, title, and taxation, socio-economic, marketing and political factors.
  7. The Mineral Resources may be materially affected by metals prices, exchange rates, labor costs, electricity supply issues or many other factors detailed in the Company's Form 20-F annual report.
  8. The data that formed the basis of the estimate are the drill holes drilled by Platinum Group, which consist of geological logs, the drill hole collars surveys, the downhole surveys and the assay data. The area where each layer was present was delineated after examination of the intersections in the various drill holes.
  9. There is no guarantee that all or any part of the Mineral Resource will be upgraded and converted to a Mineral Reserve. Mineral Resources do not have demonstrated economic viability but there are reasonable prospects for eventual economic extraction.

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