Thursday, November 25, 2021


Platinum Metals : Annual Report by International Issuer (Kind 20-F)

Platinum Group Metals Ltd.: Kind 20-F – Filed by newsfilecorp.com UNITED STATES…

By Staff , in Platinum , at November 24, 2021








Platinum Group Metals Ltd.: Kind 20-F – Filed by newsfilecorp.com

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal yr ended August 31, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition interval from __________________ to ____________________

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of occasion requiring this shell firm report _________

Fee file quantity: 001-33562

PLATINUM GROUP METALS LTD.
(Actual title of Registrant as laid out in its constitution)

British Columbia

(Jurisdiction of incorporation or group)

Suite 838 – 1100Melville Road

Vancouver, British Columbia

CanadaV6E 4A6

(Tackle of principal government places of work)

Frank R. Hallam

Phone: (604) 899-5450

Facsimile: (604) 484-4710

Platinum Group Metals Ltd.

Suite 838 – 1100Melville Road

Vancouver, British Columbia

CanadaV6E 4A6
(Identify, Phone, E-Mail and/or Facsimile quantity and Tackle of Firm Contact Particular person)

Securities registered or to be registered pursuant to Part 12(b) of the Act:

Title of every class Buying and selling Image Identify of every change on which registered
Frequent Shares, no par worth PLG NYSE American

Securities registered or to be registered pursuant to Part 12(g) of the Act: None

Securities for which there’s a reporting obligation pursuant to Part 15(d) of the Act: None

Point out the variety of excellent shares of every of the issuer’s lessons of capital or widespread inventory as of the shut of the interval coated by the annual report: 75,189,717 widespread shares

Point out by examine mark if the registrant is a well known seasoned issuer, as outlined in Rule 405 of the Securities Act.
Sure ☐ No ☒

If this report is an annual or transition report, point out by examine mark if the registrant shouldn’t be required to file experiences pursuant to Part 13 or 15(d) of the Securities Change Act of 1934.
Sure ☐ No ☒

Point out by examine mark whether or not the registrant (1) has filed all experiences required to be filed by Part 13 or 15(d) of the Securities Change Act of 1934 throughout the previous 12 months (or such shorter interval that the registrant was required to file such experiences), and (2) has been topic to such submitting necessities for the previous 90 days.
Sure ☒ No ☐

Point out by examine mark whether or not the registrant has submitted electronically each Interactive Knowledge File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) throughout the previous 12 months (or for such shorter interval that the registrant was required to submit and put up such information).
Sure ☒ No ☐

Point out by examine mark whether or not the registrant is a big accelerated filer, an accelerated filer, a non-accelerated filer, or an rising development firm. See the definition of “giant accelerated filer,” “accelerated filer,” and “rising development firm” in Rule 12b-2 of the Change Act.

Massive accelerated filer ☐

Accelerated filer ☒

Non-accelerated filer ☐

Rising development firm ☐

If an rising development firm that prepares its monetary statements in accordance with U.S. GAAP, point out by examine mark if the registrant has elected to not use the prolonged transition interval for complying with any new or revised monetary accounting requirements† supplied pursuant to Part 13(a) of the Change Act. ☐

† The time period “new or revised monetary accounting customary” refers to any replace issued by the Monetary Accounting Requirements Board to its Accounting Requirements Codification after April 5, 2012.

Point out by examine mark whether or not the registrant has filed a report on and attestation to its administration’s evaluation of the effectiveness of its inside management over monetary reporting underneath Part 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting agency that ready or issued its audit report. ☒

Point out by examine mark which foundation of accounting the registrant has used to organize the monetary statements included on this submitting:

U.S. GAAP ☐ Worldwide Monetary Reporting Requirements as issued by the Worldwide Accounting Requirements Board ☒ Different ☐

If “Different” has been checked in response to earlier query, point out by examine mark which monetary assertion merchandise the registrant has elected to observe.
Merchandise 17 ☐ Merchandise 18 ☐

If that is an annual report, point out by examine mark whether or not the registrant is a shell firm (as outlined in Rule 12b-2 of the Change Act).
Sure ☐ No ☒

iii

TABLE OF CONTENTS

INTRODUCTION 5
GLOSSARY OF TECHNICAL TERMS 13
PART I 16
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS 16
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE 16
ITEM 3. KEY INFORMATION 16
ITEM 4. INFORMATION ON THE COMPANY 44
ITEM 4A. UNRESOLVED STAFF COMMENTS 108
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS 108
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 123
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 145
ITEM 8. FINANCIAL INFORMATION 146
ITEM 9. THE OFFER AND LISTING 149
ITEM 10. ADDITIONAL INFORMATION 151
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 168
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES 168
PART II 169
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES 169
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS 169
ITEM 15. CONTROLS AND PROCEDURES 169
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT 170
ITEM 16B. CODE OF ETHICS 170
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES 170
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES 171
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS 171
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT 171
ITEM 16G. CORPORATE GOVERNANCE 171
ITEM 16H. MINE SAFETY DISCLOSURE 172
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 172
PART III 173
ITEM 17. FINANCIAL STATEMENTS 173
ITEM 18. FINANCIAL STATEMENTS 173
ITEM 19. EXHIBITS 174
SIGNATURES 175
EXHIBIT INDEX 176

INTRODUCTION

The knowledge contained on this annual report on Kind 20-F for the yr ended August 31, 2021 (the “Annual Report“) of Platinum Group Metals Ltd. (the “Firm” or “Platinum Group“) is present as of November 24, 2021, besides the place a unique date is specified.

Monetary info is introduced in accordance with Worldwide Monetary Reporting Requirements (“IFRS“), as issued by Worldwide Accounting Requirements Board (“IASB“), relevant to the preparation of monetary statements and in accordance with accounting insurance policies based mostly on IFRS requirements and Worldwide Monetary Reporting Interpretations Committee interpretations.

For additional info please check with Observe 2 to the accompanying consolidated monetary statements.

Foreign money and International Change Charges

All financial quantities set forth on this Annual Report are expressed in United States {dollars} (“U.S. {Dollars}” or “USD” or “$” or “US$“), besides the place in any other case indicated. The Firm’s useful forex is the Canadian greenback (“Canadian Greenback” or “CDN” or “C$” or “CAD“) and is reported in a USD presentation forex. The Firm’s South African subsidiaries use the South African Rand (“Rand” or “R” or “ZAR“) as a useful forex.

The next desk units forth the speed of change for the USD expressed in CAD in impact on the finish of the durations indicated, the common of change charges in impact on the final day of every month throughout such durations, and the excessive and low change charges throughout such durations based mostly on the posted Financial institution of Canada change charges.

U.S. {Dollars} as expressed in Canadian {Dollars} Yr Ended August 31,
2021 2020 2019
Price at finish of interval $1.2617 $1.3042 $1.3295
Common charge for interval $1.2688 $1.3458 $1.3255
Excessive for interval $1.3396 $1.4496 $1.3642
Low for interval $1.2040 $1.2970 $1.2803

The every day common change charge on November 19, 2021 as reported by the Financial institution of Canada for the conversion of USD into CDN was $1.00 equals C$1.2639.

The next desk units forth the speed of change for the USD expressed in Rand in impact on the finish of the durations indicated, the common of change charges in impact on the final day of every month throughout such durations, and the excessive and low change charges throughout such durations based mostly on the posted charges by The Federal Reserve of New York.

South African Rand as expressed in U.S. {Dollars} Yr Ended August 31,
2021 2020 2019
Price at finish of interval R14.5075 R16.8916 R15.1925
Common charge for interval R15.0013 R16.0676 R14.3372
Excessive for interval R17.1875 R19.26367 R15.4725
Low for interval R13.4500 R14.0020 R13.285

The every day common change charge on November 19, 2021 as reported by the Federal Reserve of New York for the conversion of USD into Rand was $1.00 equals Rand 1570.75.

Share Consolidations

On January 28, 2016, the Firm’s widespread shares (“Frequent Shares” or “shares ofFrequent Inventory“) had been consolidated on the premise of 1 new share for ten outdated shares (1:10) (the “2016 Share Consolidation“).

On December 13, 2018, the Frequent Shares had been additional consolidated on the premise of 1 new share for ten outdated shares (1:10) (the “2018 Share Consolidation“, and along with the 2016 Share Consolidation, the “Consolidations“). The aim of the Consolidations was to extend the Frequent Share worth to be in compliance with the NYSE American’s (outlined beneath) low promoting worth requirement.

The conversion charge of the Firm’s convertible senior subordinated $20 million combination principal quantity of 6 7/8% convertible notes, issued June 30, 2017 and maturing on July 1, 2022 (the “Notes“), and the train costs of any excellent choices and warrants, and the variety of Frequent Shares for which such securities are exercisable, had been appropriately adjusted to offer impact to the Consolidations, as relevant, in accordance with the phrases of their governing devices.

Until in any other case indicated, all info included on this Annual Report, together with, with out limitation, all share and per share quantities, buying and selling and per share costs, notice conversion charges and possibility and warrant train costs, is introduced after giving impact to the Consolidations.

Models of Conversion

The next desk units forth sure customary conversions from the Worldwide System of Models (metric models) to the Customary Imperial Models:


Conversion Desk
Metric Imperial
1.0 millimetre (mm) = 0.039 inches (in)
1.0 metre (m) = 3.28 ft (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 quick tons (ton)
1.0 g/t = 0.029 oz/ton

Ahead-Trying Statements

This Annual Report and the paperwork integrated by reference herein include “forward-looking statements” throughout the which means of the USA Non-public Securities Litigation Reform Act of 1995 and “forward-looking info” throughout the which means of relevant Canadian securities laws (collectively, “Ahead-Trying Statements”). All statements, aside from statements of historic reality, that tackle actions, occasions or developments that the Firm believes, expects or anticipates will, might, might or may happen sooner or later are Ahead-Trying Statements. The phrases “anticipate”, “anticipate”, “estimate”, “might”, “might”, “may”, “will”, “would”, “ought to”, “intend”, “consider”, “goal”, “price range”, “plan”, “technique”, “objectives”, “goals”, “projection” or the adverse of any of those phrases and related expressions are meant to determine Ahead-Trying Statements, though these phrases will not be current in all Ahead-Trying Statements. Ahead-Trying Statements included or integrated by reference on this Annual Report embrace, with out limitation, statements with respect to:

• the well timed completion of further required financings and potential phrases thereof;

• the reimbursement, and compliance with the phrases of, indebtedness;

• the completion of acceptable contractual smelting and/or refining preparations with Impala Platinum Holdings Ltd. (“Implats“) or one other third occasion smelter/refiner;

• the projections set forth or integrated into, or derived from, the Waterberg DFS (as outlined beneath), together with, with out limitation, estimates of mineral assets and mineral reserves, and projections regarding future costs of metals, commodities and provides, forex charges, capital and working bills, manufacturing charge, grade, restoration and return, and different technical, operational and monetary forecasts;

• the approval of a water use licence and environmental permits for, and different developments associated to, a deposit space found by the Firm on the Waterberg property (the “Waterberg Mission“) situated on the Northern Limb of the Bushveld Complicated in South Africa (the “Bushveld Complicated“), roughly 85 km north of the city of Mokopane;

• the Firm’s expectations with respect to the end result of the Appeals (outlined beneath) filed towards the regulator’s determination to grant the mining proper for the Waterberg Mission (the “Waterberg Mining Proper“) and the end result of a evaluation utility to put aside a choice by the Minister of the Division of Forestry, Fisheries and the Atmosphere (“DFFE”) to refuse condonation for the late submitting of the group’s enchantment towards the grant of an Environmental Authorization for the Waterberg Mission;

• the negotiation and execution of long run entry agreements, on cheap phrases, with communities acknowledged as titled landowners of three farms the place floor and underground mine infrastructure is deliberate, and rezoning for mining use;

• the event of efficiency indicators to measure and monitor key environmental, social sustainability and governance actions on the Waterberg Mission;

• compliance with the phrases and circumstances of our credit score settlement with Sprott Non-public Useful resource Lending II (Collector), LP (“Sprott“);

• the impacts of COVID-19 on our operations;

• the adequacy of capital, financing wants and the provision of and potential for acquiring additional capital;

• income, money movement and value estimates and assumptions;

• future occasions or future efficiency;

• growth of subsequent technology battery expertise by the Firm’s new battery expertise three way partnership (described beneath);

• governmental and securities change legal guidelines, guidelines, rules, orders, consents, decrees, provisions, charters, frameworks, schemes and regimes, together with interpretations of and compliance with the identical;

• developments in South African politics and legal guidelines regarding the mining business;

• anticipated exploration, growth, development, manufacturing, allowing and different actions on the Firm’s properties;

• venture economics;

• future metallic costs and forex change charges;

• the identification of a number of large-scale water basins that would present mine course of and potable water for the Waterberg Mission and native communities;

• the Firm’s expectations with respect to the outcomes of litigation;

• mineral reserves and mineral useful resource estimates; and

• potential adjustments within the possession constructions of the Firm’s initiatives.

Ahead-Trying Statements mirror the present expectations of beliefs of the Firm based mostly on info at present out there to the Firm. Ahead trying statements in respect of capital prices, working prices, manufacturing charge, grade per tonne and concentrator and smelter restoration are based mostly upon the estimates within the technical report referred to on this Annual Report and within the paperwork integrated by reference herein and ongoing price estimation work, and the ahead trying statements in respect of metallic costs and change charges are based mostly upon the three yr trailing common costs and the assumptions contained in such technical report and ongoing estimates.

Ahead-Trying Statements are topic to numerous dangers and uncertainties which will trigger the precise occasions or outcomes to vary materially from these mentioned within the Ahead-Trying Statements, and even when occasions or outcomes mentioned within the Ahead-Trying Statements are realized or considerably realized, there could be no assurance that they’ll have the anticipated penalties to, or results on, the Firm. Elements that would trigger precise outcomes or occasions to vary materially from present expectations embrace, amongst different issues:

• the shortcoming of the Firm to generate enough more money movement to make funds on its indebtedness underneath the 2019 Sprott Facility (outlined beneath) and the Notes, and to adjust to the phrases of such indebtedness, and the restrictions imposed by such indebtedness;

• the Firm’s further financing necessities;

• the Firm’s $20.0 million preliminary principal secured credit score facility, as amended, (the “2019Sprott Facility“) (which has an excellent principal steadiness of $3.6 million as of the date of this Annual Report) with Sprott and the opposite lenders occasion thereto (the “Sprott Lenders“) is, and any new indebtedness could also be, secured and the Firm has pledged its shares of Platinum Group Metals (RSA) Proprietary Restricted, the Firm’s wholly owned subsidiary situated in South Africa (“PTM RSA“), and PTM RSA has pledged its shares of Waterberg JV Sources Proprietary Restricted (“Waterberg JV Co.“) and Mnombo Wethu Consultants (Pty) Ltd. (“Mnombo“); to the Sprott Lenders underneath the 2019 Sprott Facility, which probably might outcome within the lack of our curiosity in PTM RSA and the Waterberg Mission, within the occasion of a default underneath the 2019 Sprott Facility or any new secured indebtedness;

• the Firm’s historical past of losses and expectations that can proceed to incur losses;

• the Firm’s adverse money movement;

• the Firm’s means to proceed as a going concern;

• uncertainty of estimated manufacturing, growth plans and value estimates for the Waterberg Mission;

• the Firm’s means to carry properties right into a state of economic manufacturing;

• the potential impression of COVID-19 on the Firm;

• discrepancies between precise and estimated mineral reserves and mineral assets, between precise and estimated growth and working prices, between precise and estimated metallurgical recoveries and between estimated and precise manufacturing;

• fluctuations within the relative values of the U.S. Greenback, the Rand and the Canadian Greenback;

• volatility in metals costs;

• the chance that the Firm might turn out to be topic to the Funding Firm Act of 1940, as amended (the “Funding Firm Act“);

• Implats or one other third occasion might not enter into contractual smelting and/or refining preparations with Waterberg JV Co. on favorable phrases, or in any respect;

• the flexibility of the Firm to accumulate the required floor entry rights on commercially acceptable phrases or in any respect;

• the failure of the Firm or the opposite shareholders of Waterberg JV Co. to fund their professional rata share of funding obligations for the Waterberg Mission;

• any disputes or disagreements with the opposite shareholders of Waterberg JV Co. or Mnombo;

• the Firm is topic to evaluation by numerous taxation authorities, who might interpret tax laws in a way totally different from the Firm, which can negatively have an effect on the ultimate quantity or the timing of the fee or refund of taxes;

• the Firm’s means to draw and retain key administration staff;

• contractor efficiency and supply of companies, adjustments in contractors or their scope of labor or any disputes with contractors;

• conflicts of curiosity among the many Firm’s officers and administrators;

• any designation of the Firm as a “passive overseas funding firm” and potential hostile U.S. federal revenue tax penalties for U.S. shareholders;

• litigation or different authorized or administrative proceedings introduced towards the Firm, together with the present litigation introduced by Africa Vast Mineral Prospecting and Exploration (Pty) Restricted (“Africa Vast“), the previous 17.1% shareholder of Maseve Investments 11 Proprietary Restricted (“Maseve“), the Appeals (outlined beneath) introduced by individuals from sure host communities towards the grant of the Waterberg Mining Proper, a evaluation utility introduced by a number group towards the choice of the Minister of the Division of Forestry, Fisheries and the Atmosphere (“DFFE“) to not condone the late submitting of an enchantment towards the Environmental Authorization granted to Waterberg JV Co and an utility for an pressing injunction to halt early works by Waterberg JV Co. (the “Environmental Authorization“) pending the outcomes of the varied appeals and critiques;

• precise or alleged breaches of governance processes or cases of fraud, bribery or corruption;

• exploration, growth and mining dangers and the inherently harmful nature of the mining business, together with environmental hazards, industrial accidents, uncommon or surprising formations, security stoppages (whether or not voluntary or regulatory), pressures, mine collapses, cave ins or flooding and the chance of insufficient insurance coverage or incapacity to acquire insurance coverage to cowl these dangers and different dangers and uncertainties;

• property, zoning and mineral title dangers together with faulty title to mineral claims or property;

• adjustments in nationwide and native authorities laws, taxation, controls, rules and political or financial developments in Canada, South Africa or different nations through which the Firm does or might perform enterprise sooner or later;

• gear shortages and the flexibility of the Firm to accumulate the required infrastructure for its mineral properties;

• environmental rules and the flexibility to acquire and keep crucial permits, together with environmental and water use licences;

• excessive competitors within the mineral exploration business;

• delays in acquiring, or a failure to acquire, permits crucial for present or future operations or failures to adjust to the phrases of such permits;

• any hostile determination in respect of the Firm’s mineral rights and initiatives in South Africa underneath the Mineral and Petroleum Sources Improvement Act of 2002 (the “MPRDA“);

• dangers of doing enterprise in South Africa, together with however not restricted to, labour, financial and political instability and potential adjustments to and failures to adjust to laws;

• the failure to keep up or improve fairness participation by traditionally deprived South Africans within the Firm’s prospecting and mining operations and to in any other case adjust to the Broad-Primarily based Socio-Financial Empowerment Constitution for the South African Mining Trade, 2018 (the “Mining Constitution 2018“);

• sure potential hostile Canadian tax penalties for foreign-controlled Canadian corporations that purchase the Frequent Shares;

• socio financial instability in South Africa or regionally, together with dangers of useful resource nationalism;

• labour disruptions and elevated labour prices;

• adjustments in South African state royalties;

• interruptions, shortages or cuts within the provide of electrical energy or water;

• traits of and adjustments within the tax programs in South Africa;

• a change in group relations;

• South African overseas change controls impacting repatriation of income;

• land restitution claims or land expropriation;

• restriction on dividend funds;

• the chance that the Frequent Shares could also be delisted;

• volatility within the worth of the Frequent Shares;

• the train of inventory choices or warrants leading to dilution to the holders of Frequent Shares;

• future gross sales, conversion of senior subordinated notes or issuances of fairness securities reducing the worth of the Frequent Shares, diluting traders’ voting energy, and decreasing our earnings per share;

• imposing judgements based mostly on the civil legal responsibility provisions of United States federal securities legal guidelines;

• world monetary circumstances; and

• different dangers disclosed underneath the heading “Danger Elements” on this Annual Report, in addition to within the paperwork integrated by reference herein and therein.

These elements needs to be thought-about fastidiously, and traders mustn’t place undue reliance on the Firm’s Ahead-Trying Statements. As well as, though the Firm has tried to determine vital elements that would trigger precise actions or outcomes to vary materially from these described in Ahead-Trying Statements, there could also be different elements that trigger actions or outcomes to not be as anticipated, estimated or meant.

Any Ahead-Trying Assertion speaks solely as of the date on which it’s made and, besides as could also be required by relevant securities legal guidelines, the Firm disclaims any intent or obligation to replace any Ahead-Trying Assertion, whether or not because of new info, future occasions or outcomes or in any other case.

The mineral useful resource and mineral reserve figures referred to on this Annual Report and the paperwork integrated herein by reference are estimates and no assurances could be on condition that the indicated ranges of platinum (“Pt“), palladium (“Pd“), rhodium (“Rh“) and gold (“Au“) will probably be produced. Such estimates are expressions of judgment based mostly on information, mining expertise, evaluation of drilling outcomes and business practices. Legitimate estimates made at a given time might considerably change when new info turns into out there. By their nature, mineral useful resource and mineral reserve estimates are imprecise and rely, to a sure extent, upon statistical inferences which can finally show unreliable. Any inaccuracy or future discount in such estimates might have a fabric hostile impression on the Firm.

Cautionary Observe to U.S. Buyers

Estimates of mineralization and different technical info included or integrated by reference herein have been ready in accordance with Canada’s Nationwide Instrument 43-101 – Requirements of Disclosure for Mineral Initiatives (“NI 43-101“). The definitions of confirmed and possible reserves utilized in NI 43-101 differ from the definitions in SEC Trade Information 7 of the U.S. Securities and Change Fee (the “SEC“). Beneath SEC Trade Information 7 requirements, a “ultimate”, “definitive” or “bankable” feasibility research is required to report reserves, the three-year historic common worth is utilized in any reserve or money movement evaluation to designate reserves and the first environmental evaluation or report have to be filed with the suitable governmental authority. Because of this, the reserves reported by the Firm in accordance with NI 43-101 might not qualify as “reserves” underneath the present SEC requirements. As well as, the phrases “mineral useful resource”, “measured mineral useful resource”, “indicated mineral useful resource” and “inferred mineral useful resource” are outlined in and required to be disclosed by NI 43-101; nonetheless, these phrases are usually not outlined phrases underneath SEC Trade Information 7 and haven’t usually been permitted for use in experiences and registration statements filed with the SEC. Mineral assets that aren’t mineral reserves shouldn’t have demonstrated financial viability. Buyers are cautioned to not assume that any half or the entire mineral deposits in these classes will ever be transformed into reserves. “Inferred mineral assets” have a large amount of uncertainty as to their existence, and nice uncertainty as to their financial and authorized feasibility. It can’t be assumed that each one or any a part of an inferred mineral useful resource will ever be upgraded to the next class. Beneath Canadian securities legal guidelines, estimates of inferred mineral assets might not kind the premise of feasibility or prefeasibility research, besides in uncommon circumstances. See “Reserve and Mineral Useful resource Disclosure”. Moreover, disclosure of “contained ounces” in a useful resource is permitted disclosure underneath Canadian securities legal guidelines; nonetheless, SEC Trade Information 7 usually solely permits issuers to report mineralization that doesn’t represent “reserves” by SEC Trade Information 7 requirements as in place tonnage and grade irrespective of unit measurements. Accordingly, info contained on this Annual Report and the paperwork integrated by reference herein containing descriptions of the Firm’s mineral deposits will not be corresponding to related info made public by U.S. corporations topic to the reporting and disclosure necessities of SEC Trade Information 7. The Firm has not disclosed or decided any mineral reserves underneath the present SEC Trade Information 7 requirements in respect of any of its properties.

On October 31, 2018, the SEC adopted a ultimate rule (“New Closing Rule“) that replaces Trade Information 7 with subpart 1300 of Regulation S-Ok and new disclosure necessities which are extra intently aligned with present business and world regulatory practices and requirements, together with NI 43-101. The Firm shouldn’t be at present required to, nor does it, adjust to the New Closing Rule.

Reserve and Mineral Useful resource Disclosure

As a result of uncertainty that could be hooked up to inferred mineral useful resource estimates, it can’t be assumed that each one or any a part of an inferred mineral useful resource estimate will probably be upgraded to an indicated or measured mineral useful resource estimate because of continued exploration. Confidence in an inferred mineral useful resource estimate is inadequate to permit significant utility of the technical and financial parameters to allow an analysis of financial viability enough for public disclosure, besides in sure restricted circumstances set out NI 43-101. Inferred mineral useful resource estimates are excluded from estimates forming the premise of a feasibility research.

NI 43-101 requires mining corporations to reveal reserves and assets utilizing the subcategories of confirmed reserves, possible reserves, measured assets, indicated assets and inferred assets. Mineral assets that aren’t mineral reserves shouldn’t have demonstrated financial viability.

A “mineral reserve” is the economically mineable a part of a measured and/or indicated mineral useful resource demonstrated by a minimum of a preliminary feasibility research. This research should embrace sufficient info on mining, processing, metallurgical, infrastructure, financial, advertising, authorized, environmental, social, governmental and different related elements that reveal, on the time of reporting, that financial extraction might fairly be justified. A mineral reserve consists of diluting supplies and allowances for losses which can happen when the fabric is mined or extracted. A “confirmed mineral reserve” is the economically mineable a part of a measured mineral useful resource for which amount, grade or high quality, densities, form and bodily traits are estimated with confidence enough to permit the suitable utility of technical and financial parameters to help detailed mine planning and ultimate analysis of the financial viability of the deposit. A “possible mineral reserve” is the economically mineable a part of an indicated, and in some circumstances, a measured mineral useful resource for which amount, grade or high quality, densities, form and bodily traits are estimated with enough confidence to permit the suitable utility of technical and financial parameters in enough element to help mine planning and analysis of the financial viability of the deposit.

A “mineral useful resource” is a focus or incidence of strong materials in or on the Earth’s crust in such kind, grade or high quality and amount that there are cheap prospects for eventual financial extraction. The placement, amount, grade or high quality, continuity and different geological traits of a mineral useful resource are recognized, estimated or interpreted from particular geological proof and information, together with sampling. A “measured mineral useful resource” is that a part of a mineral useful resource for which amount, grade or high quality, densities, form, and bodily traits are estimated with confidence enough to permit the suitable utility of technical and financial parameters to help detailed mine planning and ultimate analysis of the financial viability of the deposit. Geological proof is derived from detailed and dependable exploration, sampling and testing and is enough to substantiate geological and grade or high quality continuity between factors of commentary. An “indicated mineral useful resource” is that a part of a mineral useful resource for which amount, grade or high quality, densities, form and bodily traits are estimated with enough confidence to permit the applying of technical and financial parameters in enough element to help mine planning and analysis of the financial viability of the deposit. Geological proof is derived from adequately detailed and dependable exploration, sampling and testing and is enough to imagine geological and grade continuity between factors of commentary. Mineral assets that aren’t mineral reserves shouldn’t have demonstrated financial viability. An “inferred mineral useful resource” is that a part of a mineral useful resource for which amount and grade or high quality are estimated on the premise of restricted geological proof and sampling. Geological proof is enough to indicate however not confirm geological and grade or high quality continuity. An inferred mineral useful resource relies on restricted info and sampling gathered by means of acceptable sampling strategies from areas comparable to outcrops, trenches, pits, workings and drill holes.

A “feasibility research” is a complete technical and financial research of the chosen growth possibility for a mineral venture that features appropriately detailed assessments of relevant mining, processing, metallurgical, infrastructure, financial, advertising, authorized, environmental, social, governmental and different related operational elements and detailed monetary evaluation which are essential to reveal, on the time of reporting, that extraction is fairly justified (economically mineable). The outcomes of the research might function the premise for a ultimate determination by a proponent or monetary establishment to proceed with, or finance, the event of the venture. A “preliminary feasibility research” or “pre-feasibility research” is a complete research of a spread of choices for the technical and financial viability of a mineral venture that has superior to a stage the place a most well-liked mining technique, within the case of underground mining, or the pit configuration, within the case of an open pit, is established and an efficient technique of mineral processing is decided. It features a monetary evaluation based mostly on cheap assumptions on the relevant mining, processing, metallurgical, infrastructure, financial, advertising, authorized, environmental, social, governmental and different related operational elements and the analysis of every other related elements that are enough for a certified particular person, appearing fairly, to find out if all or a part of the mineral useful resource could also be transformed to a mineral reserve on the time of reporting. “Cutoff grade” means (a) in respect of mineral assets, the bottom grade beneath which the mineralized rock at present can’t fairly be anticipated to be economically extracted, and (b) in respect of mineral reserves, the bottom grade beneath which the mineralized rock at present can’t be economically extracted as demonstrated by both a preliminary feasibility research or a feasibility research. Cutoff grades fluctuate between deposits relying upon the amenability of ore to mineral extraction and upon prices of manufacturing and metallic costs.

GLOSSARY OF TECHNICAL TERMS

“3E” means platinum, palladium and gold.

“4E” or “PGE” means platinum, palladium, rhodium and gold.

“anomalous” refers to a pattern or location that both (i) the focus of a component(s) or (ii) geophysical measurement is considerably totally different from the common background values within the space.

“anorthosite” is a rock comprised of largely feldspar minerals and minor mafic iron-magnesium minerals.

“assay” is an evaluation to find out the amount of a number of elemental elements.

“Au” refers to gold.

“cm” is an abbreviation for centimetres.

“Cu” refers to copper.

deposit” is a mineralized physique, which has been bodily delineated by enough drilling, trenching, and/or underground work, and located to include a enough common grade of metallic or metals to warrant additional exploration and/or growth expenditures. Such a deposit doesn’t qualify as a commercially mineable ore physique or as containing ore reserves, till ultimate authorized, technical, and financial elements have been resolved.

diamond drill” is a kind of rotary drill through which the reducing is finished by abrasion fairly than percussion. The reducing bit is about with diamonds and is hooked up to the top of the lengthy hole rods by means of which water is pumped to the reducing face. The drill cuts a core of rock that’s coated in lengthy cylindrical sections, an inch or extra in diameter.

“exploration stage” refers back to the stage the place an organization is engaged within the seek for minerals deposits (reserves) which aren’t in both the event or manufacturing stage.

“fault” is a fracture or break in a rock throughout which there was displacement.

felsites” refers to an igneous rock that accommodates a gaggle of sunshine coloured silicate minerals, together with feldspar, feldspathoid, quartz, and muscovite

fracture” is a break in a rock, normally alongside flat surfaces.

“gabbro” is an intrusive rock comprised of a mix of mafic minerals and feldspars.

“grade” is the focus of an ore metallic in a rock pattern, given both as weight % for base metals (i.e., Cu, Zn, Ni, Pb) or in grams per tonne (g/t) or ounces per quick ton (oz/t) for treasured or platinum group metals.

“g/t” refers to grams per tonne.

“ha” is an abbreviation for hectare.

harzburgite” is quite a lot of peridotite consisting largely of the 2 minerals, olivine and low calcium (Ca) pyroxene (enstatite). It generally accommodates just a few % chromium wealthy spinel as an adjunct mineral.

“hectare” is an space totaling 10,000 sq. metres or 100 metres by 100 metres.

“intrusive” is a rock mass shaped beneath earth’s floor from molten magma, which was intruded right into a pre-existing rock mass and cooled to strong.

“km” is an abbreviation for kilometre.

kriging” is the numerical modeling by making use of statistics to useful resource calculations (or different earth sciences issues). The strategy acknowledges that samples are usually not impartial and that spatial continuity between samples exists.

“m” is an abbreviation for metres.

“mafic” is a rock sort consisting of predominantly iron and magnesium silicate minerals with little quartz or feldspar minerals.

magmatic” means pertaining to magma, a naturally occurring silicate soften, which can include suspended silicate crystals, dissolved gases, or each; magmatic processes are at work underneath the earth’s crust.

“mineralization” refers to minerals of worth occurring in rocks.

ML/day” refers to megalitre/day.

“Mt” is an abbreviation for million tonnes.

MVA” refers to megavolt ampere.

“Ni” is an abbreviation for nickel.

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

“outcrop” refers to an publicity of rock on the earth’s floor.

“Pd” refers to palladium.

pegmatoid” is an igneous rock that has the coarse grained texture of a pegmatite however that lacks graphic intergrowths or sometimes granitic composition.

“PGM” refers to platinum group metals in accordance with the periodic desk of parts, together with platinum, palladium, rhodium and gold.

plagioclase” is a type of feldspar consisting of aluminosilicates of sodium and/or calcium, widespread in igneous rocks and sometimes white.

“Pt” refers to platinum.

“pyroxenite” refers to a comparatively unusual dark-coloured rock consisting mainly of pyroxene; pyroxene is a kind of rock containing sodium, calcium, magnesium, iron, titanium and aluminum mixed with oxygen.

“quartz” is a standard rock-forming mineral (SiO2)

“Rh” refers to rhodium, a platinum metallic. Rhodium shares a number of the notable properties of platinum, together with its resistance to corrosion, its hardness and ductility. Wherever there may be platinum within the earth, there may be rhodium as effectively. The truth is, most rhodium is extracted from a sludge that continues to be after platinum is faraway from the ore. A excessive share of rhodium can be present in sure nickel deposits in Canada.

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

tailings” is the fabric that continues to be in any case metals thought-about financial have been faraway from ore throughout milling.

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

troctolite” is a gabbro made up primarily of olivine and calcic plagioclase, usually having a noticed look likened to a trout’s again.

UG2” refers to Higher Group 2 Chromitite Layer or Reef.

“ultramafic” refers to varieties of rock containing comparatively excessive proportions of the heavier parts comparable to magnesium, iron, calcium and sodium; these rocks are normally darkish in coloration and have comparatively excessive particular gravities.

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not relevant.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not relevant.

ITEM 3. KEY INFORMATION

A. [Reserved]

B. Capitalization and Indebtedness

Not relevant.

C. Causes for the Provide and Use of Proceeds

Not relevant.

D. Danger Elements

The Firm’s securities needs to be thought-about a extremely speculative funding because of the nature of the Firm’s enterprise and current stage of exploration and growth of its mineral properties. Useful resource exploration and growth is a speculative enterprise, characterised by numerous vital dangers together with, amongst different issues, unprofitable efforts ensuing not solely from the failure to find mineral deposits but additionally from discovering mineral deposits, which, although current, are inadequate in amount or high quality to return a revenue from manufacturing. Buyers ought to fastidiously think about the entire info disclosed within the Firm’s Canadian and U.S. regulatory filings previous to investing within the Firm. With out limiting the foregoing, the next threat elements needs to be given particular consideration when evaluating an funding within the Firm’s securities. Extra dangers not at present recognized to the Firm, or that the Firm at present deems immaterial, might also impair the Firm’s operations.

DangersReferring to the Firm

The Firm could also be unable to generate enough money to service and pay its debt or in any other case adjust to the phrases of its debt, the phrases of the agreements governing the Firm’s debt might prohibit its present or future operations and the indebtedness might adversely have an effect on the Firm’s monetary situation and outcomes of operations.

The Firm’s means to make scheduled funds on its indebtedness, together with the fee of the remaining principal and curiosity on the Firm’s Notes due July 1, 2022 and the 2019 Sprott Facility due August 14, 2022, will rely on its means to boost further funding by the use of debt or fairness choices. It is going to additionally rely on the Firm’s monetary situation and working efficiency, that are topic to prevailing financial and aggressive circumstances and to sure monetary, enterprise, legislative, regulatory and different elements past its management. If the Firm’s further funding, money flows and capital assets are inadequate to service and pay its debt obligations, or if any crucial extensions or waivers the Firm’s lenders are usually not out there, the Firm might face substantial liquidity issues. This might additionally power the Firm to scale back or delay investments and capital expenditures or to dispose of fabric belongings or operations, search further debt or fairness capital or restructure or refinance its indebtedness. The Firm might not have the ability to impact any such various measures on commercially cheap phrases or in any respect. Moreover, even when profitable, these options might not permit the Firm to satisfy its scheduled debt service obligations.

As well as, a breach of the covenants underneath the Firm’s debt devices might end in an occasion of default underneath the relevant indebtedness, or different occasions of default might happen. Such default might end in secured collectors’ realization of collateral. It could additionally permit the collectors to speed up the associated debt, outcome within the imposition of default curiosity, and outcome within the acceleration of every other debt to which a cross acceleration or cross default provision applies. Specifically, a cross default provision applies to sure of the Firm’s indebtedness, together with the Notes. Within the occasion a lender accelerates the reimbursement of the Firm’s borrowings, the Firm might not have enough belongings to repay its indebtedness. Within the occasion a lender accelerates the reimbursement of the Firm’s borrowings, the Firm might not have enough belongings to repay its indebtedness.

The Firm’s debt devices embrace numerous covenants that impose working and monetary restrictions on it and will restrict its means to interact in acts that could be in its long-term finest curiosity. Specifically, the 2019 Sprott Facility requires the Firm to take all steps and actions as could also be required to keep up the itemizing and posting for buying and selling of the Frequent Shares on a minimum of one of many Toronto Inventory Change (the “TSX“) or the NYSE American LLC (the “NYSE American“). The 2019 Sprott Facility additionally restricts the Firm’s means to:

  • modify materials contracts;

  • get rid of belongings;

  • use the proceeds from permitted tendencies and financings;

  • incur further indebtedness;

  • make further investments in Mnombo in extra of $15.0 million;

  • enter into sure strategic transactions, together with transactions with associates aside from PTM RSA;

  • prepay every other indebtedness;

  • grant safety pursuits or encumbrances; and

  • use proceeds from future debt or fairness financings.

The Indenture (outlined beneath) governing the Notes additionally consists of restrictive covenants, together with, with out limitation, covenants limiting the incurrence of indebtedness and the usage of proceeds from asset gross sales. On account of these and different restrictions, the Firm:

  • could also be restricted in the way it conducts its enterprise,

  • could also be unable to boost further debt or fairness financing,

  • could also be unable to compete successfully or to benefit from new enterprise alternatives, and

  • might turn out to be in breach of its obligations to the opposite shareholders of Waterberg JV Co., Mnombo and others,

every of which can have an effect on the Firm’s means to develop in accordance with its technique or might in any other case adversely have an effect on its enterprise and monetary situation.

Additional, the Firm’s upkeep of considerable ranges of debt might adversely have an effect on its monetary situation and outcomes of operations and will adversely have an effect on its flexibility to benefit from company alternatives. Substantial ranges of indebtedness might have vital penalties to the Firm, together with:

  • limiting the Firm’s means to acquire further financing to fund future working capital, capital expenditures, acquisitions or different basic company necessities, or requiring it to make non-strategic divestitures;
  • requiring a considerable portion of the Firm’s money flows to be devoted to debt service funds as a substitute of different functions, thereby decreasing the amount of money flows out there for working capital, capital expenditures, acquisitions and different basic company functions;

  • growing the Firm’s vulnerability to basic hostile financial and business circumstances;

  • exposing the Firm to the chance of elevated rates of interest for any borrowings at variable charges of curiosity;

  • limiting the Firm’s flexibility in planning for and reacting to adjustments within the mining business;

  • inserting the Firm at a drawback in comparison with different, much less leveraged opponents; and

  • growing the Firm’s price of borrowing.

The Firm would require further financing, which will not be out there on acceptable phrases, if in any respect.

The Firm doesn’t have any supply of working revenues. The Firm will probably be required to supply further financing by the use of personal or public choices of fairness or debt or the sale of venture or property pursuits with a view to have enough working capital for continued exploration and growth on the Waterberg Mission, in addition to for basic working capital functions and compliance with, and reimbursement of, its current indebtedness. The Firm may give no assurance that financing will probably be out there to it or, whether it is out there, that will probably be provided on acceptable phrases. Any failure to well timed full any required financing might end in a default underneath the 2019 Sprott Facility and the Notes. Unexpected will increase or acceleration of bills and different obligations might require further capital as of an earlier date. If further financing is raised by the issuance of Firm fairness securities, management of the Firm might change, safety holders will endure further dilution and the worth of the Frequent Shares might lower. If further financing is raised by means of the issuance of indebtedness, the Firm would require further financing with a view to repay such indebtedness. Failure to acquire such further financing might outcome within the delay or indefinite postponement of additional growth of its properties or perhaps a lack of property pursuits.

If the Firm fails to acquire required financing on acceptable phrases or on a well timed foundation, this might trigger it to delay growth of the Waterberg Mission, outcome within the Firm being compelled to promote further belongings on an premature or unfavorable foundation or end in a default underneath its excellent indebtedness. Any such delay or sale might have a fabric hostile impact on the Firm’s monetary situation, outcomes of operations and liquidity. Any default underneath the Firm’s excellent indebtedness might outcome within the lack of its complete curiosity in PTM RSA, and due to this fact its pursuits within the Waterberg Mission.

The Firm has granted safety pursuits in favour of the Sprott Lenders over all of its private property, topic to sure exceptions, and the Firm has pledged its shares of PTM RSA, and PTM RSA has pledged its shares of Waterberg JV Co. and Mnombo to the Sprott Lenders underneath the 2019 Sprott Facility and the Modification Settlement which can have a fabric hostile impact on the Firm.

To safe the Firm’s obligations underneath the 2019 Sprott Facility, it has entered right into a basic safety settlement and the Modification Settlement underneath which the Firm has granted safety pursuits in favour of the Sprott Lenders over all of its current and after acquired private property, topic to sure exceptions. The Firm has additionally entered into share pledge agreements pursuant to which it has granted a safety curiosity in favour of the Sprott Lenders over the entire issued shares within the capital of PTM RSA. PTM RSA has additionally assured the Firm’s obligations to the Sprott Lenders and pledged the shares the Firm holds in Waterberg JV Co. and Mnombo in favour of the Sprott Lenders. These safety pursuits and assure might impression the Firm’s means to acquire venture financing for the Waterberg Mission or its means to safe different varieties of financing. The 2019 Sprott Facility has numerous covenants and provisions, together with fee covenants and monetary checks that have to be glad and complied with throughout the time period of the 2019 Sprott Facility. There isn’t any assurance that such covenants will probably be glad. Any default underneath the 2019 Sprott Facility, together with any covenants thereunder, might outcome within the lack of the Firm’s complete curiosity in PTM RSA, and due to this fact the Firm’s pursuits within the Waterberg Mission.

The Firm has a historical past of losses and it anticipates persevering with to incur losses.

The Firm has a historical past of losses. The Firm anticipates continued losses till it may efficiently place a number of of its properties into industrial manufacturing on a worthwhile foundation. It could possibly be years earlier than the Firm receives any income from any manufacturing of metals, if ever. If the Firm is unable to generate vital revenues with respect to its properties, the Firm will be unable to earn income or proceed operations.

The Firm has a historical past of adverse working money movement and will proceed to expertise adverse working money movement.

The Firm has had adverse working money movement in current monetary years and, as at August 31, 2021, we held money and money equivalents of $6.3 million and had a working capital deficit of $23.6 million. Our historic common month-to-month burn charge for basic and administrative prices over the twelve month interval ended August 31, 2021 was roughly $0.4 million. We at present have restricted monetary assets and no sources of working revenues and because of this will probably be required to fund our working capital deficit, working bills and different bills by means of financing. The Firm’s means to attain and maintain constructive working money movement will rely on numerous elements, together with the Firm’s means to advance the Waterberg Mission into manufacturing. To the extent that the Firm has adverse money movement in future durations, the Firm might must deploy a portion of its money reserves to fund such adverse money movement. The 2019 Sprott Facility requires that the Firm keep consolidated money and money equivalents of a minimum of $1.0 million and dealing capital (as outlined within the Sprott Facility) in extra of $500,000. There could be no assurance that further debt or fairness financing or different varieties of financing will probably be out there if wanted or that these financings will probably be on phrases a minimum of as favorable to the Firm as these obtained beforehand. The Firm could also be required to boost further funds by means of the issuance of further fairness or debt securities to fulfill the minimal money steadiness necessities underneath the 2019 Sprott Facility. Moreover, the Firm is required to make curiosity funds on the Notes twice per yr. The Firm’s means to make these curiosity funds in Frequent Shares is restricted by the phrases of the Indenture (outlined beneath), and the Firm could also be required to make a portion or all of those curiosity funds in money. The 2019 Sprott Facility gives that fifty% of the proceeds of such financings are required to be paid to the Sprott Lenders in partial reimbursement of the 2019 Sprott Facility. The 2019 Sprott Facility and the Notes mature in 2022. There could be no assurance that further debt or fairness financing or different varieties of financing will probably be out there as wanted or that these financings will probably be on phrases a minimum of as favorable to us as these obtained beforehand.

The Firm might not have the ability to proceed as a going concern.

The Firm has restricted monetary assets. The Firm’s means to proceed as a going concern depends upon, amongst different issues, the Firm establishing industrial portions of mineral reserves and efficiently establishing worthwhile manufacturing of such minerals or, alternatively, disposing of its pursuits on a worthwhile foundation. Any surprising prices, issues or delays might severely impression the Firm’s means to proceed exploration and growth actions. Ought to the Firm be unable to proceed as a going concern, realization of belongings and settlement of liabilities in aside from the traditional course of enterprise could also be at quantities materially totally different than the Firm’s estimates. The quantities attributed to the Firm’s exploration properties in its monetary statements signify acquisition and exploration prices and shouldn’t be taken to signify realizable worth. The Firm has suffered recurring losses from operations and vital quantities of debt payable with none present supply of working revenue. Additionally, as at August 31, 2021, the Firm had a internet capital deficiency of $23.6 million that raised substantial doubt about its means to proceed as a going concern.

The Firm’s properties will not be introduced right into a state of economic manufacturing.

Improvement of mineral properties includes a excessive diploma of threat and few properties which are explored are finally developed into producing mines. The industrial viability of a mineral deposit depends upon numerous elements that are past the Firm’s management, together with the attributes of the deposit, commodity costs, authorities insurance policies and regulation and environmental safety. Fluctuations out there costs of minerals might render reserves and deposits containing comparatively decrease grades of mineralization uneconomic. The event of the Firm’s properties would require acquiring land use consents, permits and the development and operation of mines, processing crops and associated infrastructure. The Firm is topic to the entire dangers related to establishing new mining operations, together with:

  • the timing and value, which could be appreciable, of the development of mining and processing amenities and associated infrastructure;

  • the provision and value of expert labour and mining gear;

  • the provision and value of acceptable smelting and/or refining preparations;

  • the necessity to get hold of and keep crucial environmental and different governmental approvals and permits, and the timing of these approvals and permits;

  • within the occasion that the required permits are usually not obtained in a well timed method, mine development and ramp-up will probably be delayed and the dangers of presidency environmental authorities issuing directives or commencing enforcement proceedings to stop operations or administrative, civil and prison sanctions being imposed on the Firm, its administrators and staff;

  • delays in acquiring, or a failure to acquire, entry to floor rights required for present or future operations;

  • the provision of funds to finance development and growth actions;

  • potential opposition from non-governmental organizations, environmental teams or local people teams which can delay or forestall growth actions; and

  • potential will increase in development and working prices on account of adjustments in the price of gasoline, energy, supplies and provides and overseas change charges.

The prices, timing and complexities of mine development and growth are elevated by the distant location of the Waterberg Mission, with further challenges associated thereto, together with water and energy provide and different help infrastructure. For instance, water assets are scarce on the Waterberg Mission. If the Firm ought to determine to mine on the Waterberg Mission, it should exploit native sources of water lately delineated by take a look at drilling and develop the infrastructure required to move water to the venture space. Equally, the Firm might want to safe an appropriate location by buy or long-term lease of floor or entry rights on the Waterberg Mission to determine the floor rights essential to mine and course of.

It is not uncommon in new mining operations to expertise surprising prices, issues and delays throughout growth, development and mine ramp-up. That is notably so given the outbreak of the COVID-19 pandemic. Accordingly, there are not any assurances that the Firm’s properties, will probably be introduced right into a state of economic manufacturing.

Estimates of mineral reserves and mineral assets are based mostly on interpretation and assumptions and are inherently imprecise.

The mineral useful resource and mineral reserve estimates contained on this Annual Report and the opposite paperwork integrated by reference herein have been decided and valued based mostly on assumed future costs, minimize off grades and working prices. Nonetheless, till mineral deposits are literally mined and processed, mineral reserves and mineral assets have to be thought-about as estimates solely. Any such estimates are expressions of judgment based mostly on information, mining expertise, evaluation of drilling outcomes and business practices. Estimates of working prices are based mostly on assumptions together with these regarding inflation and forex change, which can show incorrect. Estimates of mineralization could be imprecise and rely on geological interpretation and statistical inferences drawn from drilling and sampling evaluation, which can show to be unreliable. As well as, the grade and/or amount of treasured metals finally recovered might differ from that indicated by drilling outcomes. There could be no assurance that treasured metals recovered in small scale checks will probably be duplicated in giant scale checks underneath onsite circumstances or in manufacturing scale. Amendments to the mine plans and manufacturing profiles could also be required as the quantity of assets adjustments or upon receipt of additional info throughout the implementation part of the venture. Prolonged declines in market costs for platinum, palladium, rhodium and gold might render parts of the Firm’s mineralization uneconomic and end in diminished reported mineralization. Any materials reductions in estimates of mineralization, or of the Firm’s means to develop its properties and extract and promote such minerals, might have a fabric hostile impact on the Firm’s outcomes of operations or monetary situation.

Precise capital prices, working prices, manufacturing and financial returns might differ considerably from these the Firm has anticipated and there are not any assurances that any future growth actions will end in worthwhile mining operations.

The capital prices to take the Firm’s initiatives into industrial manufacturing could also be considerably larger than anticipated. Not one of the Firm’s mineral properties has an working historical past upon which the Firm can base estimates of future working prices. Selections in regards to the growth of the Firm’s mineral properties will finally be based mostly upon feasibility research. Feasibility research derive estimates of money working prices based mostly upon, amongst different issues:

  • anticipated tonnage, grades and metallurgical traits of the ore to be mined and processed;

  • anticipated restoration charges of metals from the ore;

  • money working prices of comparable amenities and gear; and

  • anticipated weather conditions.

Capital prices, working prices, manufacturing and financial returns and different estimates contained in research or estimates ready by or for the Firm might differ considerably from these anticipated by the Firm’s present research and estimates, and there could be no assurance that the Firm’s precise capital and working prices is not going to be larger than at present anticipated. On account of larger capital and working prices, manufacturing and financial returns might differ considerably from these the Firm has anticipated.

The impression of the present COVID-19 pandemic might considerably impression the Firm.

In December 2019, a novel pressure of coronavirus often called SARS-CoV-2 which is liable for the illness often called COVID-19 surfaced in Wuhan, China and has unfold world wide, with ensuing enterprise and social disruption. COVID-19 was declared a worldwide pandemic by the World Well being Group on March 11, 2020. The pace and extent of the unfold of COVID-19, and the period and depth of ensuing enterprise disruption and associated monetary and social impression, are unsure. Additional, the extent and method to which COVID-19, and measures taken by governments, the Firm or others to aim to scale back the unfold of COVID-19, might have an effect on the Firm and can’t be predicted with certainty.

COVID-19 and the associated measures taken by authorities have had and will proceed to have an hostile impression on many features of the Firm’s enterprise together with, worker well being, workforce productiveness and availability, journey restrictions, contractor availability, provide availability, the Firm’s means to keep up its controls and procedures relating to monetary and disclosure issues and the provision of insurance coverage and the prices thereof, a few of which, individually or when aggregated with different impacts, could also be materials to the Firm.

With impact from March 26, 2020, the Authorities of South Africa ordered a tough nationwide lockdown till April 21, 2020, the place all residents of South Africa might solely depart their residence underneath strictly managed circumstances (e.g. to purchase meals, search medical help) with a view to tackle the COVID-19 pandemic. The onerous lockdown was thereafter prolonged to April 30, 2020. At present, South Africa is underneath a phased risk-alert lockdown course of, with Stage 5 being the onerous, drastic lockdown that was imposed throughout April 2020 and Stage 1 being a return to normalcy, however retaining the usage of masks, sanitizers, and social distancing. Stage 1 was re-implemented on September 21, 2020. The relief of the onerous lockdown resulted within the variety of infections growing and accelerating in South Africa. In response the Authorities moved South Africa from Stage 1 to an adjusted Stage 3 lockdown on December 29, 2020, with additional Stage 3 changes made on January 11, 2020. On March 1, 2021, South Africa moved to an adjusted Stage 1 because of vital reductions in new infections. On Might 31, 2021, the nation was moved from adjusted degree 1 to an adjusted alert degree 2, on account of a 3rd wave of infections. On June 15, 2021, the nation was moved to alert degree 3. On June 28, 2021, the nation was moved to adjusted degree 4, with the Delta variant quick turning into the dominant pressure within the nation. The Firm can’t present any assurances that governments in Canada or South Africa is not going to implement measures that end in suspension or discount of growth operations at Waterberg or different initiatives the Firm is concerned in.

As well as, the precise or threatened unfold of COVID-19 globally, and responses of governments and others to such precise or threatened unfold, might even have a fabric hostile impact on the worldwide financial system, might proceed to negatively have an effect on monetary markets, together with the worth of palladium and platinum and the buying and selling worth of the Firm’s shares, might adversely have an effect on the Firm’s means to boost capital, and will trigger continued rate of interest volatility and actions that would make acquiring financing or refinancing debt obligations tougher or costlier. Moreover, with regard to the Firm, the COVID-19 pandemic and the measures applied for the prevention, mitigation and administration thereof might end in delays within the grant of a water use licence or different authorisations and permits required for the Waterberg Mission by cause of regulatory officers not being out there, the restriction on the motion of individuals to conduct inspections and website visits and the shortcoming to satisfy with group consultative boards.

The present COVID-19 world well being pandemic is considerably impacting the worldwide financial system and commodity and monetary markets. The continued world COVID-19 pandemic has triggered and continues to trigger vital lack of life and has resulted in curtailment of financial actions the world over as native administrations and governments search to restrict unfold of the illness, together with by means of lockdown insurance policies, restriction on enterprise actions and enterprise shutdowns. The total extent and impression of the COVID-19 pandemic is unknown and up to now has included excessive volatility in monetary markets, fluctuations in financial exercise, excessive volatility in commodity costs (together with gold, silver, palladium and oil and fuel) and has raised the prospect of a world recession. As effectively, as efforts are undertaken to gradual the unfold of the COVID-19 pandemic, the operation and growth of mining initiatives could also be impacted. If a good portion of our workforce turns into unable to work or journey to the Firm’s operations on account of sickness or state, federal or provincial authorities restrictions (together with journey restrictions and “shelter-in-place” and related orders limiting sure actions that could be issued or prolonged by authorities), the Firm could also be compelled to scale back or droop exploration actions and/or growth initiatives which can impression liquidity and monetary outcomes. In response to COVID-19, most of our staff have been requested at instances to earn a living from home. We do make use of cybersecurity measures; nonetheless, these safety management mechanisms might not all the time achieve success.

Due to the extremely unsure and dynamic nature of occasions regarding the COVID-19 pandemic, it’s not at present attainable to estimate the impression of the pandemic on the Firm’s enterprise. Nonetheless, these results might have a fabric impression on the Firm’s operations, and the Firm will proceed to observe the COVID-19 pandemic scenario intently.

Pandemics and public well being crises, comparable to COVID-19, might have an effect on the geographies the place our operations are situated and people the place PGMs are marketed and consumed, thereby having an hostile impression on our enterprise, together with the next:

  • Journey restrictions in reference to COVID-19 might negatively impression our staff’ means to journey as required to finish their duties to the Firm;

  • Political and financial elements could also be negatively affected by the COVID-19 pandemic, which can in time period negatively impression the Firm’s enterprise; and

  • World market circumstances attributable to the COVID-19 pandemic might have an effect on the speed of shopper spending, which might adversely have an effect on the market worth and outlook for PGMs, leading to a adverse have an effect on to our total monetary efficiency.

Up to now, our operations haven’t been negatively affected in a fabric approach by the COVID-19 pandemic. Nonetheless, there isn’t a assurance that this can stay true sooner or later and the Firm’s enterprise and monetary place could also be negatively affected by a spread of exterior elements associated to the COVID-19 pandemic that aren’t inside our management.

The COVID-19 pandemic continues to evolve as nations are going through new waves of outbreaks. The last word extent to which the pandemic impacts our enterprise, liquidity, outcomes of operations and monetary situation will rely on future developments, that are extremely unsure and can’t be predicted presently, together with the supply and effectiveness of vaccines, future mutations of the COVID-19 virus and any ensuing impression on the effectiveness of vaccines, the period and extent of the pandemic and waves of an infection, journey restrictions and social distancing, the period and extent of enterprise closures and enterprise disruptions and the effectiveness of actions taken to include, deal with and stop the illness. If we aren’t in a position to answer and handle the impression of such occasions successfully, our enterprise or the worth of our fairness shares could also be adversely impacted.

To the extent the COVID-19 pandemic adversely impacts the Firm’s enterprise and monetary outcomes as mentioned above, it could even have the impact of heightening lots of the different dangers described on this “Danger Elements” part.

The Firm is topic to the chance of fluctuations within the relative values of the U.S. Greenback, the Rand and the Canadian Greenback.

The Firm could also be adversely affected by overseas forex fluctuations. Efficient September 1, 2015, the Firm adopted U.S. {Dollars} because the forex for the presentation of its monetary statements. Traditionally, the Firm has primarily generated funds by means of fairness investments into the Firm denominated in Canadian {Dollars} or U.S. {Dollars}. Within the regular course of enterprise, the Firm enters into transactions for the acquisition of provides and companies primarily denominated in Rand or Canadian {Dollars}. The Firm additionally has belongings, money and liabilities denominated in Rand, Canadian {Dollars} and U.S. {Dollars}. A number of of the Firm’s choices to accumulate properties or floor rights in South Africa might end in funds by the Firm denominated in Rand or in U.S. {Dollars}. Exploration, growth and administrative prices to be funded by the Firm in South Africa may also be denominated in Rand. Settlement of gross sales of minerals from the Firm’s initiatives, as soon as industrial manufacturing commences, will probably be in Rand, and will probably be transformed to U.S. {Dollars}. Fluctuations within the change charges between the U.S. Greenback and the Rand or Canadian Greenback might have a fabric hostile impact on the Firm’s monetary outcomes.

As well as, South Africa has up to now skilled double-digit charges of inflation. If South Africa experiences substantial inflation sooner or later, the Firm’s prices in Rand phrases will improve considerably, topic to actions in relevant change charges. Inflationary pressures might also curtail the Firm’s means to entry world monetary markets in the long term and its means to fund deliberate capital expenditures, and will materially adversely have an effect on the Firm’s enterprise, monetary situation and outcomes of operations. Downgrades, and potential additional downgrades, to South Africa’s sovereign forex scores by worldwide scores businesses would seemingly adversely have an effect on the worth of the Rand relative to the Canadian Greenback or U.S. Greenback. The South African authorities’s response to inflation or different vital macro-economic pressures might embrace the introduction of insurance policies or different measures that would improve the Firm’s prices, cut back working margins and materially adversely have an effect on its enterprise, monetary situation and outcomes of operations.

Metallic costs are topic to alter, and low costs or a considerable or prolonged decline or volatility in such costs might materially and adversely have an effect on the worth of the Firm’s mineral properties and potential future outcomes of operations and money flows.

Metallic costs have traditionally been topic to vital worth fluctuations. No assurance could also be on condition that metallic costs will stay steady. Vital worth fluctuations over quick durations of time could also be generated by quite a few elements past the management of the Firm, together with:

  • home and worldwide financial and political developments;

  • expectations of inflation;

  • forex change fluctuations;

  • rates of interest;

  • world or regional consumption patterns;

  • speculative actions; and

  • will increase or decreases in manufacturing on account of improved mining and manufacturing strategies.

Low metallic costs or vital or continued reductions or volatility in metallic costs might have an hostile impact on the Firm’s enterprise, together with the quantity of the Firm’s mineral reserves, the financial attractiveness of the Firm’s initiatives, the Firm’s means to acquire financing and develop initiatives, the quantity of the Firm’s revenues or revenue or loss and the worth of the Firm’s belongings. An impairment within the worth of the Firm’s belongings would require such belongings to be written right down to their estimated internet recoverable quantity.

The Firm might turn out to be topic to the necessities of the Funding Firm Act, which might restrict or alter the Firm’s enterprise operations and will require the Firm to spend vital assets, or dissolve, to adjust to such act.

The Funding Firm Act usually defines an “funding firm” to incorporate, topic to sure exceptions, an issuer that’s engaged or proposes to interact within the enterprise of investing, reinvesting, proudly owning, holding or buying and selling in securities, and owns or proposes to accumulate funding securities having a price exceeding 40 % of the issuer’s unconsolidated belongings, excluding money gadgets and securities issued by the U.S. federal authorities. The Firm believes that it’s not an funding firm and isn’t topic to the Funding Firm Act. Nonetheless, future transactions that have an effect on the Firm’s belongings, operations and sources of revenue and loss might elevate the chance that the Firm could possibly be deemed an funding firm.

The Firm has obtained no formal willpower from the SEC as to its standing underneath the Funding Firm Act, however the Firm might sooner or later decide that it’s crucial or fascinating to hunt an exemptive order from the SEC that it’s not deemed to be an funding firm. There could be no assurance that the SEC would agree with the Firm that it’s not an funding firm, and the SEC might make a opposite willpower with respect to the Firm’s standing as an funding firm. If an SEC exemptive order had been unavailable, the Firm could also be required to liquidate or get rid of sure belongings, together with its pursuits in Waterberg JV Co., or in any other case alter its enterprise plans or actions.

If the Firm is deemed to be an funding firm, the Firm can be required to register as an funding firm underneath the Funding Firm Act, pursuant to which the Firm would incur vital registration and compliance prices, which is unlikely to be possible for the Firm. As well as, a non-U.S. firm such because the Firm shouldn’t be permitted to register underneath the Funding Firm Act absent an order from the SEC, which will not be out there. If the Firm had been deemed to be an funding firm and it did not register underneath the Funding Firm Act, it might be topic to vital authorized restrictions, together with being prohibited from participating within the following actions, besides the place incidental to the Firm’s dissolution: providing or promoting any safety or any curiosity in a safety; buying, redeeming, retiring or in any other case buying any safety or any curiosity in a safety; controlling an funding firm that engages in any of those actions; participating in any enterprise in interstate commerce; or controlling any firm that’s engaged in any enterprise in interstate commerce. As well as, sure of the Firm’s contracts won’t be enforceable and civil and prison actions could possibly be introduced towards the Firm and associated individuals. On account of this threat, the Firm could also be required to considerably restrict or alter its enterprise plans or actions.

The failure of the Firm or its three way partnership companions to fund their pro-rata share of funds underneath the respective joint ventures might have a fabric hostile impact on the Firm’s enterprise and outcomes of operations.

Funding of Waterberg Mission prices is required to be supplied by Waterberg JV Co. shareholders on a professional rata foundation. The power of the Firm, and the flexibility and willingness of its three way partnership companions, to fulfill required funding obligations is unsure.

The Firm’s solely materials mineral property is the Waterberg Mission, which is comprised of two adjoining venture areas previously often called the Waterberg Joint Enterprise Mission, which was created in 2009 as a three way partnership between the Firm, the Japan Oil, Fuel and Metals Nationwide Company (“JOGMEC“) and Mnombo (the “Waterberg Joint Enterprise Mission“), and the Waterberg Extension Mission, which was created in 2009 as a three way partnership between the Firm and Mnombo (the “Waterberg Extension Mission“). The Firm agreed within the Mnombo shareholders’ settlement to fund Mnombo’s professional rata share of prices for the unique Waterberg Joint Enterprise Mission space by means of the completion of a definitive feasibility research (“DFS”) for the Waterberg Mission. The Firm introduced the constructive outcomes of the DFS on September 24, 2019 and filed a associated NI 43-101 technical report on October 7, 2019. The shareholders of Waterberg JV Co. formally accredited the DFS on December 5, 2019. Mnombo is accountable to fund its proportionate share of prices for the Waterberg Extension Mission space. The power of Mnombo to repay the Firm for advances and accrued curiosity as at August 31, 2021 of roughly R 100.4 million (roughly $6.9 million as at August 31, 2021) or to fund future funding within the Waterberg Mission is unsure. If the Firm fails to fund Mnombo’s future capital obligations for the Waterberg Mission, Mnombo could also be required to acquire funding from various sources, which will not be out there on favorable phrases, or in any respect. If Mnombo is unable to fund its share of such work, this will delay venture expenditures and will end in dilution of Mnombo’s curiosity within the Waterberg Mission and require the sale of the diluted pursuits to a different certified broad-based black financial empowerment (“BEE“) entity.

As a result of the event of the Firm’s initiatives relies on the flexibility to finance additional operations, any incapacity of the Firm or of a number of of the opposite shareholders of Waterberg JV Co. or Mnombo to fund their respective funding obligations and money calls sooner or later might require the opposite events, together with the Firm, to extend their respective funding of the venture. On this occasion, such events could also be unwilling or unable to do on a well timed and commercially cheap foundation, or in any respect. On the Maseve Mine, the Firm was adversely affected by the failure of Africa Vast to fulfill its professional rata share of funding. The incidence of the foregoing, the failure of any shareholder, together with the Firm, to extend their funding as required to cowl any shortfall, in addition to any dilution of its pursuits within the Firm’s ventures because of its personal failure to fulfill a money name, might have a fabric hostile impact on the Firm’s enterprise and outcomes of operations.

Any disputes or disagreements with the opposite shareholders of Waterberg JV Co. or Mnombo might materially and adversely have an effect on the Firm’s enterprise.

The Firm participates in corporatized joint ventures and will enter into different joint ventures and related preparations sooner or later. PTM RSA is a celebration to the Waterberg Mission shareholders’ settlement with three way partnership companions Implats, JOGMEC, Mnombo and Hanwa Co. Ltd. (“Hanwa“). PTM RSA can be a 49.9% shareholder of Mnombo and the connection among the many shareholders of Mnombo is ruled by the Mnombo shareholders’ settlement. Any dispute or disagreement with one other shareholder or three way partnership accomplice, any change within the identification, administration or strategic path of one other shareholder or three way partnership accomplice, or any disagreement among the many Mnombo shareholders, together with with respect to Mnombo’s position within the Waterberg Mission, might materially adversely have an effect on the Firm’s enterprise and outcomes of operations. If a dispute arises between the Firm and one other shareholder or three way partnership accomplice or the opposite Mnombo shareholders that can not be resolved amicably, the Firm could also be unable to maneuver its initiatives ahead and could also be concerned in prolonged and dear proceedings to resolve the dispute. This might materially and adversely have an effect on the Firm’s enterprise and outcomes of operations.

If the Firm is unable to draw and retain key members of administration, the Firm’s enterprise is perhaps harmed.

The Firm’s growth up to now has depended, and sooner or later, will proceed to rely, on the efforts of its senior administration together with Frank Hallam, a director and Interim President and Chief Govt Officer of the Firm; Greg Blair, Interim Chief Monetary Officer and Kris Begic, Vice President Company Improvement of the Firm. The Firm’s future success might also rely on its means to draw and retain new certified executives. The Firm at present doesn’t, and doesn’t intend to, have key particular person insurance coverage for its current senior administration. Departures by members of senior administration might have a adverse impression on the Firm’s enterprise, because the Firm might not have the ability to discover appropriate personnel to exchange departing administration on a well timed foundation or in any respect. The lack of any member of the senior administration staff or the shortcoming to draw new certified executives might impair the Firm’s means to execute its marketing strategy and will due to this fact have a fabric hostile impact on the Firm’s enterprise, outcomes of operations and monetary situation.

If the Firm is unable to acquire the companies of expert and skilled personnel, the Firm’s enterprise is perhaps harmed.

There may be at present a scarcity of expert and skilled personnel within the mining business in South Africa. The competitors for expert and skilled staff is exacerbated by the truth that mining corporations working in South Africa are legally obliged to recruit and retain traditionally deprived individuals (“HDPs“), as outlined by the MPRDA and ladies with the related expertise and expertise at ranges that meet the transformation goals set out within the MPRDA and Mining Constitution 2018. If the Firm is unable to draw and retain sufficiently skilled, expert or skilled personnel, its enterprise might endure, and it could expertise considerably larger workers or contractor prices, which might have a fabric hostile impact on its enterprise, outcomes of operations and monetary situation.

Conflicts of curiosity might come up among the many Firm’s officers and administrators because of their involvement with different mineral useful resource corporations.

Sure of the Firm’s officers and administrators are, and others might turn out to be, related to different pure useful resource corporations that purchase pursuits in mineral properties. Frank Hallam, a director and Interim President and Chief Govt Officer of the Firm (1), can be Chief Monetary Officer and Company Secretary of West Vault Mining Inc. (“WVM“), a public firm with mineral exploration properties in Nevada. John A. Copelyn, a director of the Firm, can be Chief Govt Officer of Hosken Consolidated Investments Restricted (“HCI“), a major shareholder of the Firm and the holder of a various group of investments together with resort and leisure, interactive gaming, media and broadcasting, transport, mining, clothes and properties. Diana Walters, non-executive Chairman and a director of the Firm, was previously an government officer of Liberty Metals & Mining, LLC (“LMM“) and can be a director of Atmos Vitality Company and Trilogy Metals Inc. Stuart Harshaw, a director of the Firm, can be director, president and CEO of Nickel Creek Platinum Corp. and a director of Constantine Metallic Sources Ltd. and Worldwide Tower Hill Mines Ltd.

Such associations might give rise to conflicts of curiosity now and again. On account of these potential conflicts of pursuits, the Firm might miss the chance to take part in sure transactions, which can have a fabric hostile impact on the Firm’s monetary place. The Firm’s administrators are required by legislation to behave truthfully and in good religion with a view to the very best pursuits of the Firm and to reveal any curiosity that they might have in any venture or alternative of the Firm. If a topic involving a battle of curiosity arises at a gathering of the board of administrators of the Firm (the “Board“), any director in a battle should disclose his curiosity and abstain from voting on such matter.

The Firm is at present topic to litigation and will turn out to be topic to further litigation and different authorized proceedings, which will adversely have an effect on the Firm’s monetary situation and outcomes of operations.

All corporations might turn out to be topic to authorized claims, with and with out advantage. The Firm’s operations are topic to the chance of authorized claims by staff, unions, contractors, lenders, suppliers, three way partnership companions, shareholders, governmental businesses or others by means of personal actions, class actions, administrative proceedings, regulatory actions or different litigation. On September 20, 2018 the Firm reported the receipt of a summons issued by Africa Vast, previously the holder of a 17.1% curiosity in Maseve, whereby Africa Vast had instituted authorized proceedings in South Africa towards the Firm’s wholly owned subsidiary, PTM RSA, Royal Bafokeng Platinum Restricted (“RBPlat“) and Maseve Sale Transaction (outlined beneath). Africa Vast is looking for to put aside or be paid elevated worth for, the Maseve Sale Transaction. Whereas the Firm believes that the Africa Vast motion is factually and legally faulty, no assurance could be supplied that the Firm will prevail on this motion. If Africa Vast had been profitable, it might have a fabric hostile impact on the Firm.

On and following March 5, 2021, the Firm obtained three notices of enchantment, filed by particular person appellants from native communities, towards the January 28, 2021 determination of the DMRE granting the Waterberg Mining Proper. One group filed an utility for an order within the Excessive Court docket of South Africa to evaluation and put aside the choice by the Minister of the DFFE (the “Environmental Minister“) to refuse condonation for the late submitting of the group’s enchantment towards the grant of an Environmental Authorization for the Waterberg Mine in November 2020. Waterberg JV Sources (Pty) (Ltd.) (“Waterberg JV Co.”) is opposing the evaluation utility in addition to the Appeals and believes these are all with out advantage.

On July 30, 2021, Waterberg JV Co. obtained an pressing interdict utility from a gaggle situated close to deliberate floor infrastructure. Waterberg JV Co. promptly filed an answering affidavit denying urgency and arguing that the applying is with out advantage. The Candidates haven’t responded and had been obliged to take away their utility from the pressing court docket roll. The appliance might proceed as a traditional Excessive Court docket utility. Host group Ketting has utilized to affix as an occasion to the applying and one other host group submitted a confirmatory affidavit, each communities being in help of the Waterberg Mine. The Ketting Group joinder utility was filed on November 16, 2021 however a timeframe for the listening to of the interdict utility is unsure or might by no means happen.

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(1) Frank Hallam was appointed Interim President and Chief Govt Officer of the Firm on July 29, 2021, following the resignation of R. Michael Jones as a director and officer of the Firm.

The Firm believes that each one necessities specified underneath the Nationwide Environmental Administration Act, the Mineral and Petroleum Sources Improvement Act and different relevant laws have been complied with and that the DFFE appropriately accredited and the DMRE appropriately issued the Environmental Authorization. The Firm additionally believes that the management and majority of residents within the host communities help the Waterberg Mission.

The result of litigation and different authorized proceedings that the Firm could also be concerned sooner or later, notably regulatory actions, is tough to evaluate or quantify. Plaintiffs might search restoration of very giant or indeterminate quantities, or equitable treatments comparable to setting apart the Maseve Sale Transaction, and the magnitude of the potential loss regarding such lawsuits might stay unknown for substantial durations of time. Appellants might search the reversal of granted permits, leading to vital delays and uncertainties. Protection and settlement prices could be substantial, even with respect to claims that don’t have any advantage. As a result of inherent uncertainty of the litigation course of, the litigation course of might take away from the effort and time of the Firm’s administration and will power the Firm to pay substantial authorized charges. There could be no assurance that the decision of any specific authorized continuing, together with the Africa Vast motion, is not going to have an hostile impact on the Firm’s monetary place and outcomes of operations.

An precise or alleged breach or breaches in governance processes or fraud, bribery and corruption might result in private and non-private censure, regulatory penalties, lack of licenses or permits and will injury the Firm’s popularity.

The Firm is topic to anti-corruption legal guidelines and rules, together with the Canadian Corruption of International Public Officers Act and sure restrictions relevant to U.S. reporting corporations imposed by the U.S. International Corrupt Practices Act of 1977, as amended, and related anti-corruption and anti-bribery legal guidelines in South Africa, which usually prohibit corporations from bribing or making different prohibited funds to overseas public officers with a view to get hold of or retain a bonus in the midst of enterprise. The Firm’s Code of Enterprise Conduct and Ethics (the “Code of Conduct“), amongst different governance and compliance processes, might not forestall cases of fraudulent habits and dishonesty nor assure compliance with authorized and regulatory necessities. The Firm is especially uncovered to the potential for corruption and bribery owing to the monetary scale of the mining enterprise in South Africa. In March 2014, the Organisation for Financial Cooperation and Improvement (the “OECD“) launched its Section 3 Report on Implementing the OECD Anti-Bribery Conference in South Africa, criticizing South Africa for failing to implement the anti-bribery conference to which it has been a signatory since 2007. The absence of enforcement of company legal responsibility for overseas bribery coincides with current development in company exercise in South Africa’s financial atmosphere. Allegations of bribery, improper private affect or officers holding simultaneous enterprise pursuits have been linked in recent times to the very best ranges of the South African authorities. To the extent that the Firm suffers from any precise or alleged breach or breaches of related legal guidelines, together with South African anti-bribery and corruption laws, it could result in regulatory and civil fines, litigation, private and non-private censure and lack of working licenses or permits and will injury the Firm’s popularity. The incidence of any of those occasions might have an hostile impact on the Firm’s enterprise, monetary situation and outcomes of operations.

Dangers Associated to the Mining Trade

Mining is inherently harmful and is topic to circumstances or occasions past the Firm’s management, which might have a fabric hostile impact on the Firm’s enterprise.

Hazards comparable to fireplace, explosion, floods, structural collapses, industrial accidents, uncommon or surprising geological circumstances, floor management issues, energy outages, inclement climate, cave-ins and mechanical gear failure are inherent dangers within the Firm’s mining operations. These and different hazards might trigger accidents or dying to staff, contractors or different individuals on the Firm’s mineral properties, extreme injury to and destruction of the Firm’s property, plant and gear and mineral properties, and contamination of, or injury to, the atmosphere, and will outcome within the suspension of the Firm’s exploration and growth actions and any future manufacturing actions. Security measures applied by the Firm will not be profitable in stopping or mitigating future accidents and the Firm might not have the ability to get hold of insurance coverage to cowl these dangers at economically possible premiums or in any respect. Insurance coverage towards sure environmental dangers shouldn’t be usually out there to the Firm or to different corporations throughout the mining business.

As well as, now and again the Firm could also be topic to governmental investigations and claims and litigation filed on behalf of individuals who’re harmed whereas at its properties or in any other case in reference to the Firm’s operations. To the extent that the Firm is topic to non-public damage or different claims or lawsuits sooner or later, it will not be attainable to foretell the final word consequence of those claims and lawsuits because of the nature of private damage litigation. Equally, if the Firm is topic to governmental investigations or proceedings, the Firm might incur vital penalties and fines, and enforcement actions towards it might outcome within the cessation of sure of the Firm’s mining operations. If claims, lawsuits, governmental investigations or proceedings, together with Part 54 stoppage notices issued underneath the Mine Well being and Security Act, No. 29 of 1996 (the “MHSA“), are resolved towards the Firm, the Firm’s monetary efficiency, monetary place and outcomes of operations could possibly be materially adversely affected.

The Firm’s prospecting and mining rights are topic to title dangers.

The Firm’s prospecting and mining rights could also be topic to prior unregistered agreements, transfers, claims and title could also be affected by undetected defects. Though Waterberg JV Co. had the unique proper to use for and be granted the mining proper in regard to the Waterberg Mission by cause of its prior holding of the prospecting rights over the venture space, a profitable problem to the exact space and placement of those claims might outcome within the Firm being unable to function on its properties as permitted or being unable to implement its rights with respect to its properties. This might outcome within the Firm not being compensated for its prior expenditures regarding the property. Title insurance coverage is mostly not out there for mineral properties and the Firm’s means to make sure that it has obtained safe claims to particular person mineral properties or mining concessions could also be severely constrained. These or different defects might adversely have an effect on the Firm’s title to its properties or delay or improve the price of the event of such prospecting and mining rights.

The Firm is topic to vital governmental regulation.

The Firm’s operations and exploration and growth actions in South Africa and Canada are topic to intensive federal, state, provincial, territorial and native legal guidelines and regulation governing numerous issues, together with:

  • environmental safety and land use;

  • administration and use of hazardous and poisonous substances and explosives;

  • administration of tailings and different waste generated by the Firm’s operations;

  • administration of pure assets;

  • exploration, growth of mines, manufacturing and post-closure reclamation;

  • exports and, in South Africa, potential native beneficiation quotas;

  • worth controls;

  • taxation;

  • rules regarding enterprise dealings with native communities;

  • labour requirements, BEE legal guidelines and rules and occupational well being and security, together with mine security; and

  • historic and cultural preservation.

Failure to adjust to relevant legal guidelines and rules might end in civil or prison fines or administrative penalties or enforcement actions, together with orders issued by regulatory or judicial authorities enjoining or curbing operations, requiring corrective measures, set up of further gear, remedial actions or restoration of prices if the authorities attend to remediation of any environmental air pollution or degradation, any of which might outcome within the Firm incurring vital expenditures. Environmental non-profit organizations have turn out to be notably vigilant in South Africa and give attention to the mining sector. A number of such organizations have lately instituted actions towards mining corporations. The Firm might also be required to compensate personal events struggling loss or injury by cause of a breach of such legal guidelines, rules or allowing necessities. It’s also attainable that future legal guidelines and rules, or a extra stringent enforcement of present legal guidelines and rules by governmental authorities, might trigger further expense, capital expenditures, restrictions on or suspensions of the Firm’s operations and delays within the growth of the Firm’s properties.

The Firm might face gear shortages, entry restrictions and lack of infrastructure.

Pure useful resource exploration, growth and mining actions are depending on the provision of mining, drilling and associated gear within the specific areas the place such actions are performed. A restricted provide of such gear or entry restrictions might have an effect on the provision of such gear to the Firm and will delay exploration, growth or extraction actions. Sure gear will not be instantly out there or might require lengthy lead time orders. A delay in acquiring crucial gear for mineral exploration, together with drill rigs, might have a fabric hostile impact on the Firm’s operations and monetary outcomes.

Mining, processing, growth and exploration actions additionally rely, to at least one diploma or one other, on the provision of sufficient infrastructure. Dependable roads, bridges, energy sources, gasoline and water provide and the provision of expert labour and different infrastructure are vital determinants that have an effect on capital and working prices. On the Waterberg Mission, further infrastructure will probably be required previous to graduation of mining. The institution and upkeep of infrastructure, and companies are topic to numerous dangers, together with dangers associated to the provision of kit and supplies, inflation, price overruns and delays, political or group opposition and reliance upon third events, lots of that are exterior the Firm’s management. The shortage of availability on acceptable phrases or the delay within the availability of any a number of of this stuff might forestall or delay growth or ongoing operation of the Firm’s initiatives.

Exploration of mineral properties is much less intrusive, and usually requires fewer floor and entry rights, than properties developed for mining. The Firm has not secured any floor rights on the Waterberg Mission aside from these entry rights legislated by the MPRDA. If a choice is made to develop the Waterberg Mission, the Firm might want to safe such rights. No assurances could be supplied that the Firm will have the ability to safe required floor rights on favorable phrases, or in any respect. Any failure by the Firm to safe floor rights might forestall or delay growth of the Firm’s initiatives.

The Firm’s operations are topic to environmental legal guidelines and rules which will improve the Firm’s prices of doing enterprise and prohibit its operations.

Environmental laws on a world foundation is evolving in a way that can guarantee stricter requirements and enforcement, elevated fines and penalties for non-compliance, extra stringent environmental evaluation of proposed growth and the next degree of duty and potential legal responsibility for corporations and their officers, administrators, staff and, probably, shareholders. Compliance with environmental legal guidelines and rules might require vital capital outlays on behalf of the Firm and will trigger materials adjustments or delays within the Firm’s meant actions. There could be no assurance that future adjustments to environmental laws in Canada or South Africa is not going to adversely have an effect on the Firm’s operations. Environmental hazards might exist on the Firm’s properties that are unknown at current and which have been attributable to earlier or current house owners or operators for which the Firm could possibly be held liable. Moreover, future compliance with environmental reclamation, closure and different necessities might contain vital prices and different liabilities. Specifically, the Firm’s operations and exploration actions are topic to Canadian and South African nationwide and provincial legal guidelines and rules governing safety of the atmosphere. Such legal guidelines are frequently altering and, on the whole, have gotten extra onerous. See Merchandise 4.B. – South African Regulatory Framework.

Amendments to present legal guidelines, rules and permits governing operations and actions of mining corporations, or extra stringent implementation thereof, might have a fabric hostile impression on the Firm and trigger will increase in capital expenditures or manufacturing prices or a discount in ranges of manufacturing at producing properties or require abandonment or delays in growth of latest mining properties. Environmental hazards might exist on the Firm’s properties which are unknown this present day, and which will have been attributable to earlier house owners or operators or which will have occurred naturally. These hazards, in addition to any air pollution attributable to the Firm’s mining actions, might give rise to vital monetary obligations sooner or later and such obligations might have a fabric hostile impact on the Firm’s monetary efficiency.

The mineral exploration business is extraordinarily aggressive.

The useful resource business is extremely aggressive in all of its phases. A lot of the Firm’s competitors is from bigger, established mining corporations with larger liquidity, larger entry to credit score and different monetary assets, and which will have newer or extra environment friendly gear, decrease price constructions, simpler threat administration insurance policies and procedures and/or larger means than the Firm to resist losses. The Firm’s opponents could possibly reply extra rapidly to new legal guidelines or rules or rising applied sciences or dedicate larger assets to the growth of their operations, than the Firm can. As well as, present and potential opponents might make strategic acquisitions or set up cooperative relationships amongst themselves or with third events. Competitors might adversely have an effect on the Firm’s means to accumulate appropriate new producing properties or prospects for exploration sooner or later. Competitors might additionally have an effect on the Firm’s means to boost financing to fund the exploration and growth of its properties or to rent certified personnel. The Firm might not have the ability to compete efficiently towards present and future opponents, and any failure to take action might have a fabric hostile impact on the Firm’s enterprise, monetary situation or outcomes of operations.

The Firm requires numerous permits with a view to conduct its present and anticipated future operations, and delays or a failure to acquire such permits, or a failure to adjust to the phrases of any such permits that the Firm has obtained, might have a fabric hostile impression on the Firm.

The Firm’s present and anticipated future operations, together with additional exploration, growth actions and graduation of economic manufacturing on the Firm’s properties, require permits from numerous nationwide, provincial, territorial and native governmental authorities within the nations through which the Firm’s properties are situated. Compliance with the relevant environmental laws, permits and land use consents is required on an ongoing foundation, and the necessities underneath such laws, permits and consents are evolving quickly and imposing further necessities. The Waterberg Mission prospecting rights and the Waterberg Mining Proper issued by the Division of Mineral Sources and Vitality (“DMRE“) are additionally topic to land use consents and compliance with relevant laws on an ongoing foundation.

As well as, the period and success of efforts to acquire, amend and renew permits are contingent upon many variables not throughout the Firm’s management. Scarcity of certified and skilled personnel within the numerous ranges of presidency might end in delays or inefficiencies. Backlog throughout the allowing businesses, notably given the COVID-19 pandemic, might additionally have an effect on the allowing timeline of the Firm’s numerous initiatives. Different elements that would have an effect on the allowing timeline embrace the variety of different large-scale initiatives at present in a extra superior stage of growth, which might decelerate the evaluation course of, and vital public response relating to a selected venture. As effectively, it may be tough to evaluate what particular allowing necessities will finally apply to all of the Firm’s initiatives.

Data Techniques and Cyber Safety

The Firm’s operations rely on info expertise (“IT“) programs. These IT programs could possibly be topic to community disruptions attributable to quite a lot of sources, together with pc viruses, safety breaches and cyber- assaults, in addition to disruptions ensuing from incidents comparable to cable cuts, injury to bodily crops, pure disasters, terrorism, fireplace, energy loss, vandalism and theft. The Firm’s operations additionally rely on the well timed upkeep, improve and alternative of networks, gear, IT programs and software program, in addition to pre-emptive bills to mitigate the dangers of failures. Any of those and different occasions might end in info system failures, delays and/or improve in capital bills. The failure of data programs or a element of data programs might, relying on the character of any such failure, adversely impression the Firm’s popularity and outcomes of operations.

Though up to now the Firm has not skilled any materials losses regarding cyber assaults or different info safety breaches, there could be no assurance that the Firm is not going to incur such losses sooner or later. The Firm’s threat and publicity to those issues can’t be absolutely mitigated due to, amongst different issues, the evolving nature of those threats. Because of this, cyber safety and the continued growth and enhancement of controls, processes and practices designed to guard programs, computer systems, software program, information and networks from assault, injury or unauthorized entry stay a precedence. As cyber threats proceed to evolve, the Firm could also be required to expend further assets to proceed to change or improve protecting measures or to analyze and remediate any safety vulnerabilities.

Dangers of Doing Enterprise in South Africa

Any hostile determination in respect of the Firm’s mineral rights and initiatives in South Africa underneath the MPRDA might materially have an effect on the Firm’s initiatives in South Africa.

With the enactment of the MPRDA, the South African state turned the only regulator of all prospecting and mining operations in South Africa. All prospecting and mining licenses and claims granted by way of any prior laws turned often called the “outdated order rights”. All prospecting and mining rights granted by way of the MPRDA are “new order rights”. The remedy of latest functions and pending functions is unsure and any hostile determination by the related regulatory authorities underneath the MPRDA might adversely have an effect on title to the Firm’s mineral rights in South Africa, which might cease, materially delay or prohibit the Firm from continuing with its exploration and growth actions or any future mining operations.

A variety of things and ideas have to be taken under consideration by the Minister of Mineral Sources and Vitality (the “Minister“) when contemplating functions for brand new order rights. These elements embrace the applicant’s entry to monetary assets and acceptable technical means to conduct the proposed prospecting or mining operations, the environmental impression of the operation, whether or not the applicant holds an environmental authorization, water-use licence and waste administration licence and, within the case of prospecting rights, concerns regarding honest competitors. Different elements embrace concerns related to selling employment and the social and financial welfare of all South Africans and exhibiting compliance with the provisions relating to the empowerment of HDPs within the mining business. All of the Firm’s present prospecting rights and the Waterberg Mining Proper are new order rights.

The evaluation of a number of the provisions of the MPRDA or the Mining Constitution 2018 could also be subjective and depends upon the views of the DMRE as as to if the Firm is in compliance. The Waterberg Social and Labour Plan (outlined beneath), as an illustration, will include each quantitative and qualitative objectives, targets and commitments regarding the Firm’s obligations to its staff and group residents, the achievement of a few of which aren’t completely throughout the Firm’s management.

The Minister has the discretion to cancel or droop mining rights underneath Part 47(1) of the MPRDA as a consequence of the Firm’s non-compliance with the MPRDA, environmental laws, the phrases of its prospecting rights or the phrases of the Waterberg Mining Proper.

The Part 47 course of includes a number of, successive levels which embrace granting the Firm an inexpensive alternative to point out why its rights shouldn’t be cancelled or suspended. Pursuant to the phrases of the provisions of Part 6(2)(e)(iii) of the Promotion of Administrative Justice Act, No. 3 of 2000 (the “PAJA“) learn with Part 6 of the MPRDA, the Minister can direct the Firm to take remedial measures. If such remedial measures are usually not taken, the Minister should once more give the Firm an inexpensive alternative to make representations as to why such remedial measures weren’t taken. The Minister should then correctly think about the Firm’s additional representations (which concerns should additionally adjust to PAJA) and solely then is the Minister entitled to cancel or droop a mining proper. Any such cancellation or suspension will probably be topic to judicial evaluation if it’s not in compliance with the MPRDA or PAJA, or it’s not lawful, cheap and procedurally honest underneath Part 33(1) of the South African Structure (the “Structure“).

Failure by the Firm to satisfy its obligations in relation to the MPRDA, its prospecting rights or its mining proper, might result in the suspension or cancellation of such rights and the suspension of the Firm’s different rights, which might have a fabric hostile impact on the Firm’s enterprise, monetary situation and outcomes of operations.

The failure to keep up or improve fairness participation by HDPs within the Firm’s prospecting and mining operations might adversely have an effect on the Firm’s means to keep up its prospecting and mining rights.

The Firm is topic to numerous South African statutes geared toward selling the accelerated integration of HDPs, together with the MPRDA, the Broad-Primarily based Black Financial Empowerment Act, 2003 (the “BEE Act“), and Mining Constitution 2018. To make sure that socioeconomic methods are applied, the MPRDA gives for the Mining Codes which specify empowerment targets in step with the goals of Mining Constitution 2018 (the “Mining Codes“). The Mining Constitution 2018 Scorecard requires the mining business’s dedication of candidates in respect of possession, administration, employment fairness, human useful resource growth, procurement, mine group growth and housing and dwelling circumstances. For possession by BEE teams in mining enterprises, the earlier mining constitution (“Mining Constitution 2010“) set a 26% goal by December 31, 2014.

The South African authorities awards procurement contracts, quotas, licenses, permits and prospecting and mining rights based mostly on quite a few elements, together with the diploma of HDP possession. The MPRDA and Mining Constitution 2018 include provisions regarding the financial empowerment of HDPs. One of many necessities which have to be met earlier than the DMRE will challenge a mining proper is that an applicant should facilitate fairness participation by HDPs within the prospecting and mining operations which outcome from the granting of the related rights.

The Firm has sought to fulfill the foregoing necessities by partnering, on the working firm degree, with corporations demonstrating 26% HDP possession. The Firm has partnered with Mnombo in respect to the Waterberg Mining Proper and for the prospecting rights.

The Firm is glad that Mnombo is majority-owned by HDPs. The contractual preparations between Mnombo, the Firm and the HDPs require the HDPs to keep up a minimal degree of HDP possession in Mnombo of greater than 50%. Nonetheless, if at any time Mnombo turns into an organization that’s not majority owned by HDPs, the possession construction regarding the Waterberg Mining Proper and the prospecting rights and functions over the Waterberg Mission could also be deemed to not fulfill HDP necessities.

On September 27, 2018, the Minister introduced the implementation, with rapid impact, of Mining Constitution 2018.

Mining Constitution 2018 units out new and revised targets to be achieved by mining corporations, essentially the most pertinent of those being the revised BEE possession shareholding necessities for mining rights holders. The Mining Constitution 2018 not applies to prospecting rights. Mining Constitution 2018 gives revised possession constructions for mining rights holders. The appliance of the revised possession constructions relies on whether or not the holder of the mining proper was granted the mining proper after September 27, 2018, had an utility for a mining proper accepted earlier than September 27, 2018 or had an current mining proper that was granted previous to September 27, 2018. Holders of current mining proper who achieved a minimal of 26% BEE shareholding, or who achieved a 26% BEE shareholding however whose BEE shareholders exited previous to September 27, 2018 will probably be recognised as BEE possession compliant at some stage in the mining proper and any interval of renewal thereof. New mining rights holders will probably be required to have a minimal 30% black particular person shareholding (which incorporates African, Colored and Indian individuals who’re residents of the Republic of South Africa or who turned residents of the Republic of South Africa by naturalisation earlier than April 27, 1994, or a juristic particular person managed and managed by such individuals) (a 4% improve from the beforehand required 26% underneath the Mining Constitution 2010), which shall embrace financial curiosity plus a corresponding share of voting rights, per proper or within the mining firm which holds the appropriate. Candidates for mining rights whose functions have been filed and accepted earlier than September 27, 2018 (as is the place with Waterberg JV Co.) could have a interval of 5 years from the efficient date of the appropriate inside which to extend their BEE shareholding to 30%. Whether or not such 30% will probably be required to mirror the Stipulated Distribution to staff, communities and black entrepreneurs (as outlined beneath) shouldn’t be clear. The Firm holds an opinion from senior counsel advising that such distribution shouldn’t be required, however such opinion shouldn’t be a assure.

The BEE possession factor of 30% BEE shareholding is ring fenced and requires 100% compliance always, aside from as set out in Mining Constitution 2018. The 30% BEE shareholding for brand new mining rights have to be distributed as to:

(i) a minimal of 5% non-transferable carried curiosity to qualifying staff from the efficient date of a mining proper. The definition of qualifying staff excludes staff who already personal shares within the Firm as a situation of their employment, besides the place such is a “Mining Constitution” requirement;

(ii) a minimal of 5% non-transferable carried curiosity from the efficient date of a mining proper, or a minimal 5% fairness equal profit; and

(iii) a minimal of 20% shareholding to a BEE entrepreneur, of which 5% should ideally be for girls (collectively, the “Stipulated Distribution“).

The carried curiosity of 5% to every of the group and the staff have to be issued to them for gratis and freed from encumbrance. The prices to the appropriate holder of such challenge could be recovered from the event of the mineral asset.

A holder can declare an possession offset credit score for beneficiation on the premise of a DMRE accredited “beneficiation fairness equal plan”. Nonetheless, the baselines for beneficiation are nonetheless required to be decided by the Minister.

The Waterberg Mission shareholders’ settlement confirms the ideas of BEE compliance and contemplates the potential switch of fairness and the issuance of further fairness to a number of broad based mostly black empowerment companions at honest worth in sure circumstances, together with a change in legislation or imposition of a requirement upon Waterberg JV Co. In sure circumstances, Mnombo could also be diluted with fairness transferred or issued to totally different black empowerment shareholders.

A further tax can be being raised for Human Useful resource Improvement. A proper holder will probably be required to pay 5% of the “leviable quantity”, being the levy payable underneath the South African Abilities Improvement Act, No. 97 of 1998, (excluding the necessary statutory expertise levy) in direction of important expertise growth actions comparable to science, expertise, engineering, arithmetic expertise in addition to artisans, internships, apprentices, bursaries, literacy and numeracy expertise for workers and non-employees (group members), graduate coaching applications, analysis and growth of options in exploration, mining, processing, expertise effectivity (vitality and water use in mining), beneficiation in addition to environmental conservation and rehabilitation.

In regard to employment fairness, the Mining Constitution 2018 units minimal ranges for the participation of black individuals on all ranges of firm administration.

Compliance with a mining proper holder’s mine group growth obligations, principally by way of its accredited social and labour plan (“SLP“), is a ring-fenced factor of Mining Constitution 2018 which requires 100% annual compliance at some stage in the mining proper.

Topic to circumstances contained within the prospecting rights and the Waterberg Mining Proper, the Firm could also be required to acquire approval from the DMRE previous to present process any change in its empowerment standing underneath Mining Constitution 2018. As well as, if the Firm or its BEE companions are discovered to be in non-compliance with the necessities of Mining Constitution 2018 and different BEE laws, together with failure to retain the requisite degree of HDP possession, the Firm might face attainable suspension or cancellation of its rights underneath a course of ruled by Part 47 of the MPRDA.

As well as, Mining Constitution 2018 requires that its provisions be applied in accordance with Implementation Pointers, printed on December 19, 2018. This creates larger uncertainty in measuring the Firm’s progress in direction of, and compliance with, its commitments underneath Mining Constitution 2018 and different BEE laws.

On March 27, 2019, the Minerals Council South Africa introduced that it had launched evaluation proceedings towards the Minister to put aside sure provisions of Mining Constitution 2018. Primarily the evaluation involved a requirement within the Mining Constitution 2018 that mining companies re-empower themselves with a view to renew mining licenses or switch mining rights, opposite to the so-called ‘as soon as empowered, all the time empowered’ precept. Judgment in favour of the Minerals Council South Africa was handed down on September 21, 2021. The court docket confirmed the ‘as soon as empowered, all the time empowered’ precept, confirmed that the Mining Constitution 2018 was a coverage doc and never subordinate laws and held {that a} breach of the Mining Constitution 2018, of itself, couldn’t end in cancellation of a mining proper. The Minister has indicated that he intends to enchantment this judgment.

The Firm is obliged to report on its compliance with Mining Constitution 2018 towards Mining Constitution 2018 Scorecard, together with its share of HDP shareholding, to the DMRE on an annual foundation.

When the Firm is required to extend the proportion of HDP possession in any of its working corporations or initiatives, the Firm’s pursuits could also be diluted. As well as, it’s attainable that any such transactions or plans might must be executed at a reduction to the correct financial worth of the Firm’s working belongings or it could additionally show crucial for the Firm to supply vendor financing or different help in respect of some or the entire consideration, which can be on non-commercial phrases.

At present, the South African Division of Commerce, Trade and Competitors is liable for main authorities motion on the implementation of BEE initiatives underneath the auspices of the BEE Act and the Generic BEE Codes (outlined beneath), whereas sure industries have their very own transformation charters administered by the related authorities division (on this case, the DMRE). The BEE Act (outlined beneath) got here into operation on October 24, 2014. Amongst different issues, the BEE Modification Act, by means of part 3(2), amends the BEE Act to make the BEE Act the overriding laws in South Africa with regard to BEE necessities and would require all governmental our bodies to use the Generic BEE Codes or different related code of excellent follow when procuring items and companies or issuing licenses or different authorizations underneath every other legal guidelines, and penalize fronting or misrepresentation of BEE info. The Trumping Provision (outlined beneath) got here into impact on October 24, 2015. On October 30, 2015, the South African Minister of Commerce, Trade and Competitors exempted the DMRE from making use of the Trumping Provision for a interval of twelve months on the premise that the alignment of Mining Constitution 2018 with the BEE Act and the Generic BEE Codes was an ongoing course of. The Mining Constitution 2018 purports to be aligned with the Generic BEE Codes. The Trumping Provision expired on October 31, 2016 and no new utility for exemption was made. Usually talking, the amended Generic BEE Codes will make BEE-compliance by mining corporations extra onerous to attain. The DMRE and business our bodies are conscious of the implications of the Trumping Provision. However that there was no additional extension of the exemption in respect of the Trumping Provision, up to now, the DMRE continues to use the provisions of Mining Constitution 2010 and Mining Constitution 2018, as relevant, and never the Generic BEE Codes. See Merchandise 4.B. – South African Regulatory Framework – Black Financial Empowerment within the South African Mining Trade, and -Mining Constitution.

The Generic BEE Codes and Mining Constitution 2018 require Mnombo to be 51% held and managed by HDPs to qualify it as a “black-controlled firm” or a “BEE Entrepreneur” and therefore a certified BEE entity. Mnombo is presently 50.1% owned and managed by HDPs.

If the Firm is unable to attain or keep its empowered standing underneath Mining Constitution 2018 or adjust to every other BEE laws or insurance policies, it could not have the ability to keep its current prospecting and mining rights and/or purchase any new rights; and due to this fact, can be obliged to droop or get rid of some or all of its operations in South Africa, which might seemingly have a fabric hostile impact on the Firm’s enterprise, monetary situation and outcomes of operations.

Socio-economic instability in South Africa or regionally, together with the chance of useful resource nationalism, might have an hostile impact on the Firm’s operations and income.

The Firm has possession pursuits in a major venture in South Africa. Because of this, it’s topic to political and financial dangers regarding South Africa, which might have an effect on an funding within the Firm. Downgrades, and potential additional downgrades, to South Africa’s sovereign forex scores by worldwide scores businesses would seemingly adversely have an effect on the worth of the Rand relative to the Canadian Greenback or U.S. Greenback. South Africa was remodeled right into a democracy in 1994. The federal government insurance policies geared toward redressing the disadvantages suffered by the vast majority of residents underneath earlier governments might impression the Firm’s South African enterprise. Along with political points, South Africa faces many challenges in overcoming substantial variations in ranges of financial growth amongst its individuals. Massive elements of the South African inhabitants shouldn’t have entry to sufficient training, well being care, housing and different companies, together with water and electrical energy. The Firm additionally faces numerous dangers from deliberate, malicious or prison acts relating to those inequalities, together with theft, fraud, bribery and corruption.

The Firm can be topic to the chance of useful resource nationalism, which encompasses a spread of measures, comparable to expropriation or taxation, whereby governments improve their financial curiosity in pure assets, with or with out compensation. Though wholesale nationalization was rejected by the ruling occasion, the African Nationwide Congress (the “ANC“), main into the 2014 nationwide elections, a decision adopted by the ANC on nationalization requires state intervention within the financial system, together with “state possession”. A variety of stakeholders have proposed methods through which the State might extract larger financial worth from the South African mining business. A name for useful resource nationalization has additionally been made by the Financial Freedom Fighters, a political occasion underneath the management of Julius Malema.

The Firm can’t predict the longer term political, social and financial path of South Africa or the style through which the federal government will try to handle the nation’s inequalities. Actions taken by the South African authorities, or by its individuals with out the sanction of legislation, might have a fabric hostile impact on the Firm’s enterprise. Moreover, there was regional, political and financial instability in nations north of South Africa, which can have an effect on South Africa. Such elements might have a adverse impression on the Firm’s means to personal, function and handle its South African mining initiatives.

Labour disruptions and elevated labour prices might have an hostile impact on the Firm’s outcomes of operations and monetary situation.

Though the Firm’s staff are usually not unionized presently, commerce unions might have a major impression on the Firm’s labour relations, in addition to on social and political reforms. There’s a threat that strikes or different varieties of battle with unions or staff might happen at any of the Firm’s operations, notably the place the labour power is unionized. Labour disruptions could also be used to advocate labour, political or social objectives sooner or later. For instance, labour disruptions might happen in sympathy with strikes or labour unrest in different sectors of the financial system. South African employment legislation units out minimal phrases and circumstances of employment for workers, which kind the benchmark for all employment contracts. Disruptions within the Firm’s enterprise on account of strikes or additional developments in South African labour legal guidelines might improve the Firm’s prices or alter its relationship with its staff and commerce unions, which can have an hostile impact on the Firm’s monetary situation and operations. South Africa has lately skilled widespread unlawful strikes and violence.

Modifications in South African State royalties the place lots of the Firm’s mineral reserves are situated might have an hostile impact on the Firm’s outcomes of operations and its monetary situation.

The Mineral and Petroleum Sources Royalty Act, No. 28 of 2008 (the “Royalty Act“) successfully got here into operation on Might 1, 2009. The Royalty Act establishes a variable royalty charge regime, through which the prevailing royalty charge for the yr of evaluation is assessed towards the product sales of the extractor throughout the yr. The royalty charge is calculated based mostly on the profitability of the mine (EBIT) and varies relying on whether or not the mineral is transferred in refined or unrefined kind. For mineral assets transferred in unrefined kind, the minimal royalty charge is 0.5% of product sales and the utmost royalty charge is 7% of product sales. For mineral assets transferred in refined kind, the utmost royalty charge is 5% of product sales. The royalty will probably be a tax-deductible expense. The royalty turns into payable when the mineral useful resource is “transferred,” which refers back to the disposal of a mineral useful resource, the export of a mineral useful resource or the consumption, theft, destruction or lack of a mineral useful resource. The Royalty Act permits the holder of a mining proper to enter into an settlement with the tax authorities to repair the proportion royalty that will probably be payable in respect of all mining operations carried out in respect of that useful resource for so long as the extractor holds the appropriate. The holder of a mining proper might withdraw from such settlement at any time.

The DFS overlaying the Waterberg Mission made sure assumptions associated to the anticipated royalty charges underneath the Royalty Act. If and when the Firm begins incomes income from its South African mining initiatives, and if the royalties underneath the Royalty Act differ from these assumed within the feasibility research, this new royalty might have a fabric and hostile impression on the financial viability of the Firm’s initiatives in South Africa, in addition to on the Firm’s prospects, monetary situation and outcomes of operations.

Interruptions, shortages or cuts within the provide of electrical energy or water might result in disruptions in manufacturing and a discount within the Firm’s working capability.

The Firm procures the entire electrical energy crucial for its operations from ESKOM Holdings Restricted, South Africa’s state-owned electrical energy utility (“ESKOM“), and no vital various sources of provide can be found to it. ESKOM has suffered from extended underinvestment in new producing capability which, mixed with elevated demand, led to a interval of electrical energy shortages. ESKOM has usually established enough capability to satisfy South Africa’s present necessities however stays severely under-capitalized and wide-spread energy cuts or load-shedding are applied when the electrical energy grid is underneath stress. Since 2008, ESKOM has invested closely in new base load energy technology capability. Its principal new initiatives, an influence station often called Medupi, and an influence station often called Kusile, have been topic to delays. The final Medupi unit has been commissioned and in July 2021, ESKOM introduced Medupi had achieved industrial operation standing, whereas Kusile is anticipated to be accomplished within the 2024 – 2025 fiscal yr. ESKOM is closely depending on coal to gasoline its electrical energy crops. Accordingly, if coal mining corporations expertise labour unrest or disruptions to manufacturing (which have occurred traditionally in South Africa, together with a coal strike by roughly 30,000 Nationwide Union of Mineworkers members which lasted for about one week in October 2015), or if heavy rains, notably throughout the summer season months in South Africa, adversely impression coal manufacturing or coal provides, ESKOM might have problem supplying enough electrical energy provide to the Firm.

The Firm depends on the provision of water in its areas of operations. Shifting rainfall patterns and growing calls for on the prevailing water provide have triggered water shortages within the Firm’s areas of operations.

If electrical energy or water provides are inadequate or unreliable, the Firm could also be unable to function as anticipated, which can disrupt manufacturing and cut back revenues.

Traits of and adjustments within the tax programs in South Africa might materially adversely have an effect on the Firm’s enterprise, monetary situation and outcomes of operations.

The Firm’s subsidiaries pay several types of governmental taxes in South Africa, together with company tax, payroll taxes, VAT, state royalties, numerous types of duties, dividend withholding tax and curiosity withholding tax. The tax regime in South Africa is topic to alter. After having printed numerous papers on the introduction of a carbon tax, the South African authorities launched the Second Draft Carbon Tax Invoice 2017 (the “Carbon Invoice“) printed in December 2017, along with an Explanatory Memorandum in respect of the Carbon Invoice (the “Explanatory Memorandum“).

On Might 26, 2019, the Carbon Invoice was signed into legislation because the Carbon Tax Act, No. 15 of 2019 (the “Carbon Tax Act“), leading to a carbon tax being applied on June 1, 2019. See Merchandise 4.B. – Enterprise Overview – Carbon Tax/Local weather Change Insurance policies.

It’s also attainable that the Firm might turn out to be topic to taxation in South Africa that’s not at present anticipated, which might have a fabric hostile impact on its enterprise, monetary situation and outcomes of operations.

Group relations might have an effect on the Firm’s enterprise.

Sustaining group help by means of a constructive relationship with the communities through which the Firm operates is vital to persevering with profitable exploration and growth. As a enterprise within the mining business, the Firm might come underneath strain within the jurisdictions through which it explores or develops, to reveal that different stakeholders’ profit and can proceed to learn from the Firm’s industrial actions. The Firm faces opposition with respect to its present and future growth and exploration initiatives which might materially adversely have an effect on its enterprise, outcomes of operations, monetary situation and Frequent Share worth, with communities looking for larger profit from native mining operations.

Beneath the Mining Constitution 2018 there’s a larger give attention to mine group growth. A proper holder should meaningfully contribute in direction of mine group growth in step with the ideas of the social license to function. A proper holder should develop its SLP, in session with related municipalities, mine communities, conventional authorities and affected stakeholders, and determine developmental priorities of mine communities. The recognized developmental priorities have to be contained within the SLP. See Merchandise 4.B. – South African Regulatory Framework – Mining Constitution.

South African overseas change controls might restrict repatriation of income.

Since commencing enterprise in South Africa, the Firm has loaned or invested roughly CDN$847 million (internet of repayments) as at August 31, 2021 into PTM RSA in South Africa. The Firm obtained approval from the South African Reserve Financial institution (“SARB“) prematurely for its investments into South Africa. Though the Firm shouldn’t be conscious of any legislation or regulation that may forestall the repatriation of funds it has loaned or invested into South Africa again to the Firm in Canada, no assurance could be on condition that the Firm will have the ability to repatriate funds again to Canada in a well timed method or with out incurring tax funds or different prices when doing so, on account of authorized restrictions or tax necessities at native subsidiary ranges or on the mum or dad firm degree, which prices could possibly be materials.

South Africa’s change management rules prohibit the export of capital from South Africa. Though the Firm shouldn’t be itself topic to South African change management rules, these rules do prohibit the flexibility of the Firm’s South African subsidiaries to boost and deploy capital exterior the nation, to borrow cash in currencies aside from the Rand and to carry overseas forex. Change management rules might make it tough for the Firm’s South African subsidiaries to: (a) export capital from South Africa; (b) maintain overseas forex or incur indebtedness denominated in foreign currency echange with out approval of the related South African change management authorities; (c) purchase an curiosity in a overseas enterprise with out approval of the related South African change management authorities and compliance with sure funding standards; and (d) repatriate to South Africa income of overseas operations. Whereas the South African authorities has relaxed change controls in recent times, and continues to take action, it’s tough to foretell whether or not or the way it will additional chill out or abolish change management measures within the foreseeable future. There could be no assurance that restrictions on repatriation of earnings from South Africa is not going to be imposed on the Firm sooner or later.

The Firm’s land in South Africa could possibly be topic to land restitution claims or land expropriation which might impose vital prices and burdens.

To the extent that the Firm’s working subsidiaries purchase or lease privately held land, such land could possibly be topic to land restitution claims underneath the Restitution of Land Rights Act, No. 22 of 1994, as amended (the “Land Claims Act“) and the Restitution of Land Rights Modification Act 15 of 2014 (the “Restitution Modification Act“), which took impact on July 1, 2014. Beneath the Land Claims Act and the Restitution Modification Act, any one that was dispossessed of rights in land in South Africa after June 19, 1913 because of previous racially discriminatory legal guidelines or practices with out fee of simply and equitable compensation, and who (topic to the promulgation of additional laws) lodges a declare on or earlier than June 30, 2019, is granted sure treatments. A profitable claimant could also be granted both return of the dispossessed land (known as “restoration“) or equitable redress (which incorporates the granting of an acceptable proper in various state-owned land, fee of compensation or “various aid“). If restoration is claimed, the Land Claims Act requires the feasibility of such restoration to be thought-about. Restoration of land might solely be given in circumstances the place a claimant can use the land productively with the feasibility of restoration depending on the worth of the property.

The South African Minister of Agriculture, Land Reform and Rural Improvement (“Land Reform Minister“) might not purchase possession of land for restitution functions and not using a court docket order until an settlement has been reached between the affected events. The Land Claims Act additionally entitles the Land Reform Minister to accumulate possession of land by the use of expropriation both for claimants who’re entitled to restitution of land, or, in respect of land over which no declare has been lodged however the acquisition of which is straight associated to or affected by such declare, will promote restitution of land to claimants or various aid. Expropriation can be topic to provisions of laws and the Structure – which give, on the whole, for simply and equitable compensation.

Nonetheless, the ANC has declared its intention to proceed with an orderly means of land expropriation, probably with out compensation being paid to landowners. The type of this course of stays unclear.

There isn’t any assure, nonetheless, that any privately held land rights couldn’t turn out to be topic to acquisition by the state with out the Firm’s settlement, or that the Firm can be adequately compensated for the lack of any land rights. Any such claims might have a adverse impression on the Firm’s South African initiatives and due to this fact an hostile impact on its enterprise, working outcomes and monetary situation.

Dangers Referring to the Frequent Shares

The Firm has by no means paid dividends and doesn’t anticipate to take action within the foreseeable future.

The Firm has not paid any dividends since incorporation, and it has no plans to pay dividends within the foreseeable future. The Firm’s administrators will decide if and when dividends needs to be declared and paid sooner or later based mostly on the Firm’s monetary place on the related time. As well as, the Firm’s means to declare and pay dividends could also be affected by the South African authorities’s change controls. See Merchandise 4.B. – South African Regulatory Framework – Change Management.

The Frequent Share worth has been risky in recent times.

In recent times, the securities markets in the USA and Canada have skilled a excessive degree of worth and quantity volatility, and the market worth of securities of many corporations, notably these thought-about exploration or development-stage mining corporations, have skilled large fluctuations in worth which haven’t essentially been associated to the working efficiency, underlying asset values or prospects of such corporations. There could be no assurance that continuous fluctuations in worth is not going to happen.

The elements influencing such volatility embrace macroeconomic developments (together with developments with COVID-19) in North America and globally, and market perceptions of the attractiveness of specific industries. The value of the Frequent Shares can be more likely to be considerably affected by quick time period adjustments in treasured metallic costs or different mineral costs, forex change fluctuations and the Firm’s monetary situation or outcomes of operations as mirrored in its earnings experiences. Different elements unrelated to the efficiency of the Firm which will impact the worth of the Frequent Shares and different securities embrace the next:

  • the extent of analyst protection out there to traders regarding the enterprise of the Firm could also be restricted if funding banks with analysis capabilities don’t observe the Firm’s securities;

  • lessening in buying and selling quantity and basic market curiosity within the Firm’s securities might have an effect on an investor’s means to commerce vital numbers of securities of the Firm;

  • adjustments to South African legal guidelines and rules might need a adverse impact on the event prospects, timelines or relationships for the Firm’s materials properties;

  • the dimensions of the Firm’s public float might restrict the flexibility of some establishments to spend money on the Firm’s securities; and

  • a considerable decline within the worth of the securities of the Firm that persists for a major time period might trigger the Firm’s securities to be delisted from an change, additional decreasing market liquidity.

Securities class motion litigation usually has been introduced towards corporations following durations of volatility out there worth of their securities. The Firm might sooner or later be the goal of comparable litigation. Securities litigation might end in substantial prices and damages and divert administration’s consideration and assets.

The Firm could also be unable to keep up compliance with NYSE American and TSX continued itemizing requirements and our Frequent Shares could also be delisted from the NYSE American and TSX equities markets, which might seemingly trigger the liquidity and market worth of the Frequent Shares to say no.

The Frequent Shares are at present listed on the NYSE American and the TSX. The Firm is topic to the continued itemizing standards of the NYSE American and the TSX and such exchanges will think about suspending dealings in, or delisting, securities of an issuer that doesn’t meet its continued itemizing requirements. With the intention to keep the listings, the Firm should keep sure goal requirements, comparable to share costs, shareholders’ fairness, market capitalization and, share distribution targets. Along with goal requirements, the NYSE American might delist the securities of any issuer, amongst different causes, if the issuer sells or disposes of principal working belongings, ceases to be an working firm or has discontinued a considerable portion of its operations or enterprise for any cause or the NYSE American in any other case determines that the securities are unsuitable for continued buying and selling. The Firm might not have the ability to fulfill these requirements and stay listed on the NYSE American and the TSX.

Delisting of the Frequent Shares might end in a breach or default underneath sure of our agreements. With out limiting the foregoing, a TSX or NYSE American delisting would end in a default (until any required waivers could possibly be obtained) underneath sure or all of our excellent indebtedness, which might have a fabric hostile impression on us. A delisting of the Firm’s Frequent Shares might additionally adversely have an effect on the Firm’s popularity, means to boost funds by means of the sale of fairness or securities convertible into fairness and the phrases of any such fundraising, the liquidity and market worth of the Frequent Shares and the flexibility of broker-dealers to buy the Frequent Shares.

The train of excellent inventory choices or settlement of excellent restricted share models will end in dilution to the holders of Frequent Shares.

The issuance of Frequent Shares upon the train of the Firm’s excellent inventory choices and settlement of the Firm’s excellent restricted share models (“RSUs“) will end in dilution to the pursuits of shareholders and will cut back the buying and selling worth of the Frequent Shares. Extra inventory choices, RSUs and different warrants and rights to buy Frequent Shares could also be issued sooner or later. Workout routines or settlement of those securities, and even the potential of their train or settlement, might have an hostile impact on the buying and selling worth of the Frequent Shares. The holders of any issued and excellent inventory choices or warrants are more likely to train them at instances when the market worth of the Frequent Shares exceeds the train worth of the securities, and RSUs shouldn’t have a money train worth. Accordingly, the issuance of Frequent Shares upon train of such securities will seemingly end in dilution of the fairness represented by the then excellent Frequent Shares held by different shareholders. The holders of any issued and excellent inventory choices or warrants could be anticipated to train or convert them at a time when the Firm would, in all chance, have the ability to get hold of any wanted capital on phrases that are extra favorable to the Firm than the train phrases supplied by any such inventory choices and warrants.

Future gross sales, conversion of senior subordinated notes or issuances of fairness securities might lower the worth of the Frequent Shares, dilute traders’ voting energy and cut back the Firm’s earnings per share.

The Firm might promote fairness securities in choices (together with by means of the sale of debt securities convertible into fairness securities) and will challenge further fairness securities to finance operations, exploration, growth, acquisitions, debt reimbursement or different initiatives. For instance, the Firm accomplished personal placements of Frequent Shares in June 2020, October 2020 and December 2020, accomplished a US at-the-market providing of Frequent Shares in November 2020 and has performed a US at-the-market providing since February 2021.

As well as, the Notes issued on June 30, 2017, bear curiosity at a charge of 6 7/8% every year, payable semi-annually on January 1 and July 1 of every yr, starting on January 1, 2018, in money or on the election of the Firm, in Frequent Shares or a mix of money and Frequent Shares, and can mature on July 1, 2022, until earlier repurchased, redeemed or transformed. Topic to sure exceptions, the Notes are convertible at any time on the possibility of the holder, and could also be settled, on the Firm’s election, in money, Frequent Shares, or a mix of money and Frequent Shares, topic to sure restrictions on issuing Frequent Shares.

The Firm can’t predict the variety of widespread shares that will probably be issued in respect of such curiosity funds, the timing or quantity of conversions of Notes, workouts of inventory choices, or the dimensions or phrases of future issuances of fairness securities or securities convertible into fairness securities or the impact, if any, that future issuances and gross sales of the securities could have in the marketplace worth of the Frequent Shares. As well as, the conversion worth of the Notes is topic to adjustment in sure circumstances. Any transaction involving the issuance of beforehand approved however unissued Frequent Shares, or securities convertible into Frequent Shares, would end in dilution, probably substantial, to shareholders. Workout routines of presently excellent inventory choices might also end in dilution to shareholders.

The Board has the authority to authorize sure affords and gross sales of the securities with out the vote of, or prior discover to, shareholders. Primarily based on the necessity for added capital to fund anticipated expenditures and development, it’s seemingly that the Firm will challenge the securities to supply such capital. Such further issuances might contain the issuance of a major variety of Frequent Shares at costs lower than the present market worth.

Gross sales of considerable quantities of securities, or the provision of the securities on the market, might adversely have an effect on the prevailing market costs for the securities and dilute traders’ earnings per share. A decline out there costs of the securities might impair the Firm’s means to boost further capital by means of the sale of further securities ought to the Firm need to take action.

Judgments based mostly upon the civil legal responsibility provisions of the USA federal securities legal guidelines could also be tough to implement.

The power of traders to implement judgments of United States courts based mostly upon the civil legal responsibility provisions of the USA federal securities legal guidelines towards the Firm, its administrators and officers, and the specialists named herein could also be restricted on account of the truth that the Firm is integrated exterior of the USA, a majority of such administrators, officers, and specialists reside exterior of the USA and a considerable portion of the belongings of the Firm and mentioned individuals are situated exterior the USA. There may be uncertainty as as to if overseas courts would: (a) implement judgments of United States courts obtained towards the Firm, its administrators and officers or the specialists named herein predicated upon the civil legal responsibility provisions of the USA federal securities legal guidelines; or (b) entertain unique actions introduced in Canadian courts towards the Firm or such individuals predicated upon the federal securities legal guidelines of the USA, as such legal guidelines might battle with Canadian legal guidelines.

There could also be hostile Canadian tax penalties for a overseas managed Canadian firm that acquires the securities of the Firm.

Sure hostile tax concerns could also be relevant to a shareholder that may be a company resident in Canada and is, or turns into, managed by a non-resident company for the needs of the “overseas affiliate dumping” guidelines within the Revenue Tax Act (Canada) (the “Tax Act“). Such shareholders ought to seek the advice of their tax advisors with respect to the implications of buying the securities.

The Firm could also be a “passive overseas funding firm” for its present and future tax years, which can have hostile U.S. federal revenue tax penalties for U.S. traders.

Potential traders within the securities who’re U.S. taxpayers needs to be conscious that the Firm could also be categorised as a “passive overseas funding firm” or “PFIC” for its present tax yr ending August 31, 2022 and could also be a PFIC in future tax years. If the Firm is a PFIC for any tax yr throughout a U.S. taxpayer’s holding interval of the securities, then such U.S. taxpayer usually will probably be required to deal with any acquire realized upon a disposition of the securities or any so-called “extra distribution” obtained on the securities, as extraordinary revenue, and to pay an curiosity cost on a portion of such acquire or extra distribution. In sure circumstances, the sum of the tax and the curiosity cost might exceed the whole quantity of proceeds realized on the disposition, or the quantity of extra distribution obtained, by the U.S. taxpayer. Topic to sure limitations, these tax penalties could also be mitigated if a U.S. taxpayer makes a well timed and efficient “certified electing fund” or “QEF” election (a “QEF Election“) underneath Part 1295 of the Inside Income Code of 1986, as amended (the “Code“) or a mark-to-market election (a “Mark-to-Market Election“) underneath Part 1296 of the Code. Topic to sure limitations, such elections could also be made with respect to shares of Frequent Inventory. A U.S. taxpayer who makes a well timed and efficient QEF Election usually should report on a present foundation its share of the Firm’s internet capital acquire and extraordinary earnings for any yr through which the Firm is a PFIC, whether or not or not the Firm distributes any quantities to its shareholders. Nonetheless, U.S. taxpayers needs to be conscious that there could be no assurance that the Firm will fulfill the file holding necessities that apply to a certified electing fund, or that the Firm will provide U.S. taxpayers with info that such U.S. taxpayers require to report underneath the QEF Election guidelines, within the occasion that the Firm is a PFIC and a U.S. taxpayer needs to make a QEF Election. Thus, U.S. taxpayers might not have the ability to make a QEF Election with respect to their shares of Frequent Inventory. A U.S. taxpayer who makes the Mark-to-Market Election usually should embrace as extraordinary revenue annually the surplus of the honest market worth of the shares of Frequent Inventory over the taxpayer’s foundation therein. This paragraph is certified in its entirety by the dialogue beneath underneath the heading “Sure United States Federal Revenue Tax Issues – Passive International Funding Firm Guidelines.” Every potential investor who’s a U.S. taxpayer ought to seek the advice of its personal tax advisor relating to the tax penalties of the PFIC guidelines and the acquisition, possession, and disposition of the shares of Frequent Inventory.

The Firm’s development, future profitability and talent to acquire financing could also be impacted by world monetary circumstances.

World monetary circumstances proceed to be characterised by excessive volatility. In recent times, world markets have been adversely impacted by the credit score disaster that started in 2008, the European debt disaster, COVID-19 and vital fluctuations in gasoline and vitality prices and metals costs. Many industries, together with the mining business, have been impacted by these market circumstances. World monetary circumstances stay topic to sudden and fast destabilizations in response to financial shocks. A slowdown within the monetary markets or different financial circumstances, together with however not restricted to shopper spending, employment charges, enterprise circumstances, inflation, gasoline and vitality prices, shopper debt ranges, lack of obtainable credit score, the state of the monetary markets, rates of interest and tax charges, might adversely have an effect on the Firm’s development and profitability. Future financial shocks could also be precipitated by numerous causes, together with debt crises, a continued rise within the worth of oil and different commodities, the volatility of metallic costs, geopolitical instability, terrorism, the devaluation and volatility of world inventory markets, well being crises and pure disasters. Any sudden or fast destabilization of world financial circumstances might impression the Firm’s means to acquire fairness or debt financing sooner or later on phrases beneficial to the Firm or in any respect. In such an occasion, the Firm’s operations and monetary situation could possibly be adversely impacted.

ITEM 4. INFORMATION ON THE COMPANY

A. Historical past and Improvement of Platinum Group

The Firm is an organization organized underneath the legal guidelines of British Columbia, Canada. The Firm was shaped on February 18, 2002 underneath the Firm Act (British Columbia) pursuant to an order of the Supreme Court docket of British Columbia (the “Court docket“) approving an amalgamation between Platinum Group Metals Ltd. and New Millennium Metals Company. On January 25, 2005, the Firm was transitioned underneath the Enterprise Companies Act (British Columbia) (the “BCBCA“).

The Firm’s head workplace is situated at Suite 838 – 1100 Melville Road, Vancouver, British Columbia, Canada, V6E 4A6 and its phone quantity is (604) 899-5450. The Firm’s registered workplace is situated at Gowling WLG (Canada) LLP, Suite 2300 – 550 Burrard Road, Vancouver, British Columbia, Canada, V6C 2B5.

Data relating to the Firm’s organizational construction is supplied underneath Merchandise 4.C. – Organizational Construction.

Since its formation, the Firm has been engaged within the acquisition, exploration and growth of platinum and palladium properties. PTM at present holds pursuits in platinum properties within the Northern Limb of the Bushveld Complicated. The Firm’s enterprise is at present performed primarily in South Africa.

At current, the Firm’s sole materials mineral property is the Waterberg Mission. Outcomes of a DFS focusing on a big, thick PGM useful resource with the target to mannequin a large-scale, fully-mechanized mine was introduced by the Firm on September 24, 2019. A considerable portion of the Waterberg Mission’s prospecting space stays unexplored.

In 2019, the Firm based Lion Battery Applied sciences Inc. (“Lion Battery“) in partnership with Anglo American Platinum Restricted (“Amplats“) to help the usage of palladium and platinum in lithium battery functions.

Along with the data supplied beneath relating to the Firm’s principal capital expenditures and divestitures over the last three monetary years, see Merchandise 5.B. – Liquidity and Capital Sources – Fairness Financings for info on use of proceeds from fairness financings. No public takeover affords by third events in respect of the Firm’s shares or by the Firm in respect of different corporations’ shares have occurred over the last and present monetary yr. The SEC maintains an web website containing experiences, proxy and knowledge relating to issuers that file electronically with the SEC at www.sec.gov. The Firm’s web tackle is www.platinumgroupmetals.internet.

Current Developments

The next is a abstract of the Firm’s noteworthy developments since September 1, 2020:

September 2020 At-The-Market Providing Gross sales Settlement
On September 4, 2020, the Firm entered into an Fairness Distribution Settlement (the “Gross sales Settlement“) with BMO Capital Markets Corp. (“BMO“). Beneath the Gross sales Settlement, Platinum Group might promote its Frequent Shares now and again for as much as $12.0 million in combination gross sales proceeds in “at-the-market” transactions (the “2020ATM“). No affords or gross sales of widespread shares had been made in Canada, on or by means of the amenities of the TSX or different buying and selling markets in Canada, or to anybody recognized by BMO to be a resident of Canada.
Lion Battery Granted U.S. Patent
On September 14, 2020, the Firm reported that the U.S. Patent and Trademark Workplace issued Patent No. 10,734,636 B2 entitled “Battery Cathodes for Improved Stability” to Florida Worldwide College (“FIU“). Beneath a sponsored analysis settlement (“SRA“), Lion Battery has unique rights to all expertise being developed by FIU together with the patents granted. The patent consists of the usage of platinum group metals and carbon nanotubes and different improvements in a lithium battery.
October 2020 Non-Brokered Non-public Placement
On October 15, 2020, the Firm reported the closing of a non-brokered personal placement of Frequent Shares with Main Shareholder HCI, by means of its subsidiary Deepkloof Restricted (“Deepkloof“), at a worth of $2.18 every (the “October 2020 Non-public Placement“). An combination of 1,146,790 Frequent Shares had been subscribed for and issued leading to gross proceeds to the Firm of $2.5 million. The October 2020 Non-public Placement allowed HCI to keep up its curiosity within the Firm at over 31%.
November 2020 At-The-Market Providing Accomplished
On November 30, 2020, the Firm introduced the completion of the 2020 ATM with the sale of 5,440,186 Frequent Shares at a median worth of $2.21 for gross proceeds of US $12.0 million. The ultimate gross sales settled on December 2, 2020. No affords or gross sales of Frequent Shares had been made in Canada, to anybody recognized to be a resident of Canada or on or by means of the amenities of the Toronto Inventory Change or different buying and selling markets in Canada.
December 2020 Non-Brokered Non-public Placement
On December 8, 2020, the Firm closed a non-brokered personal placement of 1,121,076 Frequent Shares at a worth of $2.23 per share (the “December 2020 Non-public Placement“) with HCI by means of its subsidiary Deepkloof, leading to gross proceeds to the Firm of $2.5 million and permitting HCI to keep up roughly a 31% curiosity within the Firm as they held previous to the 2020 ATM accomplished by the Firm on November 30, 2020, as described above.
Lion Battery Granted Second U.S. Patent
On December 8, 2020, the U.S. Patent and Trademark Workplace issued Patent No. 10,682,103 B2 entitled “Battery Cathodes for Improved Stability” to FIU. Beneath the SRA, the patent is licensed to Lion Battery and covers a preparation technique utilizing PGM catalysts in carbon supplies to be used as cathodes in lithium batteries, together with lithium-ion, lithium-air, and lithium-sulfur batteries. The brand new patent broadens safety for US patent 10,734,636 B2.
January 2021 Waterberg Mining Proper Granted
On January 28, 2021, the DMRE granted Waterberg JV Co. the Waterberg Mining Proper.
February 2021 At-The-Market Providing Gross sales Settlement
On February 5, 2021, the Firm entered into an Fairness Distribution Settlement with BMO to promote its Frequent Shares now and again for as much as $50.0 million in combination gross sales proceeds in “at-the-market” transactions (the “2021 ATM“). For the interval ended August 31, 2021, the Firm bought 2,502,790 Frequent Shares at a median worth of $4.3754 pursuant to the 2021 ATM for internet proceeds of $10.68 million after charges and bills of $0.27 million. Subsequent to August 31, 2021, as of November 24, 2021, the Firm issued an extra 4,433,448 Frequent Shares at a median worth of $2.63 pursuant to the 2021 ATM for internet proceeds of $11.4 million after charges and bills of $0.29 million. No affords or gross sales of widespread shares had been made in Canada, to anybody recognized to be a resident of Canada or on or by means of the amenities of the TSX or different buying and selling markets in Canada.
March 2021 Waterberg Mining Proper Notices
On March 5, 2021, the Firm obtained discover of an enchantment to the choice by the DMRE granting the Waterberg Mining Proper (the “March 2021 Discover“). The discover was filed by a small group of 4 particular person appellants from a local people. Later in April 2021, the Firm obtained discover of two related appeals (along with the March 2021 Discover, the “Appeals“).
April 2021 Waterberg Mining Proper Notarially Executed
On April 13, 2021, representatives of the DMRE and Waterberg JV Co. accomplished a notarial execution of the Waterberg Mining Proper.
Might 2021 Waterberg Mining Proper Notices (cont’d)
In Might 2021, the Firm additionally obtained discover of an utility for an order within the Excessive Court docket to evaluation and put aside the choice by the Environmental Minister to dismiss an utility for condonation for the late submitting of an enchantment towards the Environmental Authorization granted for the Waterberg Mine on November 10, 2020 (the “Evaluation“), and in August 2021, obtained discover that the Mining and Environmental Justice Group Community of South Africa, claiming to be a group networking physique, along with a gaggle of residents from sure communities situated close to deliberate floor infrastructure related to the Waterberg Mine (the “Candidates“), intend to use for an order (the “Software for Movement“) within the Excessive Court docket restraining Waterberg JV Co. from carrying on mining associated actions on parts of the farms Goedetrouw and Ketting pending the finalization of the Appeals and the Evaluation and the grant of varied regulatory authorizations. The Firm believes that each one necessities specified underneath the MPRDA have been complied with and that the DMRE appropriately granted the Waterberg Mining Proper. Counsel appearing for Waterberg JV Co. has filed formal rebuttals to the Appeals, is opposing the Evaluation, and has filed answering papers to the Software for Movement. The Ketting Group has utilized to affix the Software for Movement as a celebration, and one other host group submitted a confirmatory affidavit, each in help of Waterberg JV Co. The Ketting Group joinder utility was filed on November 16, 2021 however a timeframe for the listening to of the interdict utility is unsure or might by no means happen. The Firm continues to work in a local weather of mutual respect with acknowledged municipal and local people management.
June 2021 Lion Battery Granted Third Patent
On June 15, 2021, the U.S. Patent and Trademark Workplace issued Patent No. 11,038,160 B2 entitled “Battery Cathodes for Improved Stability” to FIU. The patent covers a preparation technique utilizing PGM catalysts in carbon supplies to be used as cathodes with elevated emphasis on lithium sulphur batteries and broadens safety for US patent 10,734,636 B2 overlaying the composition of carbon cathodes containing PGMs.
July 2021 Waterberg Mining Proper Registered
On July 6, 2021, Waterberg JV Co. accomplished the registration of the Waterberg Mining Proper on the Mineral and Petroleum Titles Registration Workplace.
Lion Battery Agreements Amended
On July 6, 2021 the Firm and Anglo agreed to extend the deliberate funding to Lion by an additional $2.73 million, to a complete of as much as $6.73 million, with a view to permit the acceleration of sure analysis and commercialization actions. On the identical date, Lion Battery agreed to extend the deliberate quantity of analysis funding to FIU by an additional quantity of $1.0 million, for a complete of as much as $4.0 million. If the Firm ought to fail to contribute its share of a required subscription to Lion Battery, it might be in breach of its settlement with Lion Battery and its curiosity in Lion Battery could also be topic to dilution.

B. Enterprise Overview

Normal

The Firm is a platinum and palladium centered exploration, growth and working firm conducting work totally on mineral properties it has staked or acquired by the use of possibility agreements or functions within the Republic of South Africa and in Canada.

The Firm’s sole materials mineral property is the Waterberg Mission, which was the topic of the DFS accomplished in 2019 as described on this Annual Report. The Firm continues to judge exploration alternatives each on at present owned properties and on new prospects.

The Firm at present conducts no product gross sales, doesn’t at present distribute any product and doesn’t have any supply of working revenues presently. The Firm will probably be required to supply further financing by the use of personal or public choices of fairness or debt or the sale of venture or property pursuits with a view to have enough working capital for continued exploration and growth on the Waterberg Mission, in addition to for basic working capital functions and compliance with, and reimbursement of, its current indebtedness.

Principal Product

The Firm’s principal product from the Waterberg Mission, in accordance with the Waterberg DFS, is deliberate to be a PGM bearing focus. The focus will include sure quantities of eight parts comprised of platinum, palladium, rhodium, gold, ruthenium, iridium, copper and nickel. Pursuant to a transaction with Implats (as additional described beneath, the “Implats Transaction“), Implats has acquired a proper of first refusal to enter into an offtake settlement, on industrial arms-length phrases, for the smelting and refining of mineral merchandise from the Waterberg Mission.

Implats Transaction

On November 6, 2017, the Firm, together with Waterberg JV Co., JOGMEC and Mnombo accomplished the primary part of the Implats Transaction whereby Implats bought an combination 15.0% fairness curiosity in Waterberg JV Co. for $30 million. The Firm obtained consideration of $17.2 million from Implats for the sale of an 8.6% curiosity within the Waterberg Mission and JOGMEC obtained $12.8 million for the sale of a 6.4% curiosity within the Waterberg Mission.

Pursuant to the Implats Transaction, Implats acquired a proper to extend its stake in Waterberg JV Co. to 50.01% by buying an extra 12.195% fairness curiosity from JOGMEC for $34.8 million and incomes into the remaining curiosity by making a agency dedication to an expenditure of $130.0 million in growth work (the “Buy and Improvement Possibility“). Implats additionally acquired a proper of first refusal to smelt and refine Waterberg focus. The constructive outcomes of the DFS had been introduced on September 24, 2019 and the Waterberg Mission Definitive Feasibility Examine and Mineral Useful resource Replace Technical Report dated September 4, 2019 (the “DFS“) was delivered to the Waterberg JV Co. shareholders on October 4, 2019 for evaluation and approval. After approval by Waterberg JV Co. or Implats of the DFS, Implats had an possibility inside 90 enterprise days to elect to train the Buy and Improvement Possibility.

Pursuant to the Implats Transaction, Implats additionally acquired a proper of first refusal (“ROFR“) to enter into an offtake settlement, on industrial arms-length phrases, for the smelting and refining of mineral merchandise from the Waterberg Mission. Hanwa will retain a proper to obtain platinum, palladium, rhodium, gold, ruthenium, iridium, copper and nickel in refined mineral merchandise on the quantity produced from the Waterberg Mission.

On March 31, 2020, the Implats’ Buy and Improvement Possibility was amended and restated by formal settlement (the “Amended Name Possibility Agreement”), to increase the termination date from April 17, 2020 to ninety calendar days following receipt of an executed mining proper for the Waterberg Mission.

In consideration for the modification, Implats agreed to fund the 2020 Work Program. The 2020 Work Program, budgeted to price as much as Rand 55 million, was geared toward growing confidence in particular areas of the Waterberg DFS whereas awaiting the grant of a mining proper and Environmental Authorization.

On June 15, 2020, Implats delivered an election discover stating their election to not train the Buy and Improvement Possibility. Implats acknowledged that however the constructive progress achieved on the 2020 Work Program up to now, and the strategic alignment between the Waterberg asset and Implats acknowledged portfolio goals, the unprecedented occasions led to by the COVID-19 pandemic necessitated Implats to re-evaluate the impression of the elevated financial uncertainty on Implats’ technique and threat urge for food within the quick, medium and long run. Implats reiterated their help of each the Waterberg Mission and the three way partnership companions and plans to stay an lively 15% participant, together with funding of their share of prices, topic to future concerns.

On August 11, 2020, additional to the election discover delivered by Implats and pursuant to the Amended Name Possibility Settlement, Waterberg JV Co. delivered to Implats the Subscription Failure Discover to formalize the termination of the Buy and Improvement Possibility. Waterberg JV Co. additionally recorded the termination of the offtake negotiation interval with Implats because of the events not reaching a focus offtake settlement throughout the 30-day prescribed interval. The Firm continues to debate and negotiate for offtake phrases with Implats; nonetheless, the Firm can be carrying on discussions with different potential focus offtake events, topic to the ROFR.

Specialised Talent and Data

Varied features of the Firm’s enterprise require specialised expertise and information, together with the areas of geology, engineering, operations, drilling, metallurgy, allowing, logistical planning and implementation of exploration applications in addition to authorized compliance, finance and accounting. The Firm faces competitors for certified personnel with these specialised expertise and information, which can improve its prices of operations or end in delays. The Firm has discovered that it has been capable of find and retain staff or interact consulting specialists with the required expertise as described above when wanted.

Workers and Contractors

The Firm’s present complement of managers, workers and consultants in Canada consists of 5 people. In July 2021 the Firm’s CEO resigned. As a element to a separation settlement, the previous CEO is to be out there as a guide to the Firm till December 31, 2021. The Waterberg Mission is at present operated by the Firm using its personal workers and personnel. Contract drilling, geotechnical, engineering, safety and help companies are utilized as required. Operations on the Waterberg Mission are funded by Waterberg JV Co. and its shareholders. The Firm’s present complement of full time managers, workers, consultants and informal employees in South Africa consists of 9 people, inclusive of two people lively on the Waterberg Mission conducting exploration and engineering actions associated to the execution of DFS suggestions earlier than a attainable manufacturing determination by Waterberg JV Co.

International Operations

The Firm conducts its enterprise in South Africa, which hosts a big and well-developed mining business. This, amongst different elements, means the infrastructure in lots of areas is well-established, with well-maintained roads and highways in addition to electrical energy distribution networks, water provide and phone and communication programs. Electrical producing capability has been strained by demand in recent times in South Africa, however further capability is at present underneath development. Extra water infrastructure may also be required. See “Danger Elements”.

There may be additionally entry to supplies and expert labour in South Africa because of the existence of many platinum, chrome, gold and coal mines. Smelter complexes and refining amenities are additionally situated in South Africa. South Africa has a longtime authorities, police power and judiciary in addition to monetary, well being care and social establishments, though such establishments underwent vital change following the autumn of apartheid and free elections in 1994 and are persevering with to be developed. The system of mineral tenure was overhauled by new laws in 2002, which got here into power in 2004. Since 1994, South Africa has been thought-about an rising democracy. See “Danger Elements”.

Labour in South Africa

The gold and platinum mining industries in South Africa witnessed vital labour unrest in recent times and calls for for larger wages by sure labour teams. Each authorized and unlawful or “unprotected” strikes have occurred at a number of mines because the starting of August 2012. In June 2014, the Affiliation of Mineworkers and Development Union accepted a negotiated wage settlement to finish a five-month lengthy strike affecting a major proportion of the platinum business. Up to now, the Firm has seen no hostile labour motion on its operations in South Africa. See “Danger Elements”.

Environmental Compliance

The Firm’s present and future exploration and growth actions, in addition to future mining and processing operations, if warranted, are topic to varied state, provincial and native legal guidelines and rules within the nations through which the Firm conducts its actions. These legal guidelines and rules govern the safety of the atmosphere, prospecting, growth, manufacturing, taxes, labour requirements, occupational well being, mine security, hazardous substances and different issues. Firm administration expects to have the ability to adjust to these legal guidelines and doesn’t consider that compliance could have a fabric hostile impact on the Firm’s aggressive place. The Firm intends to acquire and keep all licences and permits required by all relevant regulatory businesses in reference to its mining operations and exploration actions. The Firm intends to keep up requirements of compliance in step with up to date business follow.

Aggressive Situations

The worldwide PGM mining business has benefited from long-term rising demand from the worldwide automotive and fabrication sectors. In 2020 South Africa’s PGM mining sector represented roughly 66% of world platinum mine provide and 29% of world palladium mine provide. From mid-2012 till early 2019 world financial uncertainty, elevated provide from recycling and slower development created a weak marketplace for PGMs. Decrease market costs for PGMs mixed with labour unrest triggered stoppages and closures of some larger price platinum mines and shafts in South Africa. The marketplace for PGMs, palladium and rhodium particularly, has improved since 2019, leading to the next total metallic basket worth. In 2021, the impression of a world scarcity of semi-conductor chips resulted in diminished world automotive manufacturing. The concurrent discount in demand for PGMs resulted in costs for every of the PGMs to fall from their zeniths, which occurred in roughly February to April of 2021. Nearly the entire South African platinum and palladium provide comes from the geographic constraints of the Western, Northern and Japanese Limbs of the Bushveld Complicated, leading to a excessive diploma of competitors for mineral rights and initiatives. South Africa’s PGM mining sector stays beholden to financial developments within the world automotive business, which in 2020 accounted for about 37% of the whole world demand for platinum and 80% of the whole world demand for palladium. A protracted downturn in world car and light-weight truck gross sales, leading to depressed platinum costs, usually leads to declining manufacturing as unprofitable mines are shut down. Alternatively, sturdy car and light-weight truck gross sales mixed with sturdy fabrication demand for platinum, most frequently leads to a extra sturdy business, creating competitors for assets, together with funding, labour, technical specialists, energy, water, supplies and gear. From late 2015 to early 2021, the worth of palladium greater than quadrupled on account of rising gasoline automotive sector demand, whereas platinum costs are at about the identical worth now as they had been in 2015, having rebounded considerably from very low worth ranges skilled in late 2018. The South African business is dominated by three or 4 producers, who additionally management smelting and refining amenities. Because of this, there may be basic competitors for entry to those amenities on a contract foundation. If the Firm strikes in direction of manufacturing on the Waterberg Mission, it can turn out to be uncovered to lots of the dangers of competitors described herein. See “Danger Elements”.

Mineral Property Pursuits

Beneath IFRS, the Firm defers all acquisition, exploration and growth prices associated to mineral properties. The recoverability of those quantities depends upon the existence of economically recoverable mineral reserves, the flexibility of the Firm to acquire the required financing to finish the event of the property, and any future worthwhile manufacturing; or alternatively upon the Firm’s means to get rid of its pursuits on an advantageous foundation.

The Firm’s key growth venture and exploration targets are situated within the Bushveld Complicated. The Bushveld Complicated is comprised of a collection of distinct layers or reefs, three of which include the vast majority of the financial 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) throughout the Bushveld Complicated: (i) the Merensky Reef (“Merensky” or “MR“), which is mined primarily across the Western Limb of the Bushveld Complicated, (ii) the Higher Group 2 Layer or Reef (“UG2“), which is mined primarily across the Japanese Limb of the Bushveld Complicated and (iii) the Platreef (“Platreef“), discovered throughout the Northern Limb. These reefs exhibit intensive geological continuity and predictability and have a longtime historical past of financial PGM manufacturing. The Merensky, UG2 and Platreef have been producing PGMs because the Nineteen Twenties, Seventies and Nineties, respectively.

For an additional dialogue of the Firm’s materials and non-material mineral properties, see Merchandise 4.D. – Property, Plant and Gear.

South African Regulatory Framework

The Firm is topic to South African authorities rules that have an effect on all features of the Firm’s operations. Accordingly, the sections beneath set out the first legal guidelines and regulatory ideas to which the Firm is topic.

Black Financial Empowerment within the South African Mining Trade

The transition from an apartheid regime to a democratic regime introduced with it a dedication by the South African state, as enshrined within the Structure, to take legislative and different measures to redress the outcomes of previous racial discrimination towards black South Africans, or because the MPRDA defines them, “HDPs”. Beneath the MPRDA, the idea consists of any affiliation, the vast majority of whose members are HDPs in addition to juristic individuals if HDPs personal and management the vast majority of the shares and management the vast majority of the shareholders’ votes.

This idea and course of to take legislative and different measures to redress the outcomes of previous racial discrimination towards black South Africans is understood in South Africa as BEE. The mining business was considered one of many industries recognized by the South African authorities as requiring reform to result in equitable profit from South Africa’s mineral business to all South Africans and to advertise native and rural growth and social upliftment of communities affected by mining.

The regulatory regime governing the South African mining business has due to this fact essentially modified over the previous decade. Laws governing mining and BEE throughout the mining sector consists of, amongst different legal guidelines, rules and insurance policies, the MPRDA, the Mining Codes and the Requirements pursuant to the MPRDA, Mining Constitution 2018, Mining Constitution 2018 Scorecard and the Mining Titles Registration Act No. 16 of 1967 (as amended). The aforementioned laws and insurance policies, nonetheless, are business particular and the generic BEE regulatory framework in South Africa is regulated by way of the BEE Act, which units outs the South African authorities’s coverage in respect of the promotion of BEE. The BEE Act additionally permits the Minster of Commerce, Trade and Competitors to publish generic BEE Codes of Good Observe (“Generic BEE Codes“), being codes of excellent follow that tackle, amongst different issues, the indications to measure BEE and the weightings to be hooked up to such indicators, in addition to sector particular codes of excellent follow (check with dialogue beneath on sector codes).

The Generic BEE Codes had been initially printed in 2007 and set out seven indicators or parts by way of which BEE compliance is measured. Every factor has a scorecard by way of which numerous sub-elements are set out, along with a goal for compliance with every sub-element and a corresponding variety of weighting factors. An entity’s BEE compliance is measured by way of every of those scorecards and the combination rating will then decide that entity’s BEE compliance degree. Unbiased BEE verification businesses are approved to confirm an entity’s compliance and supply it with a verification certificates which can set out its rating and ensure its BEE compliance degree. The seven parts of BEE compliance set out within the unique Generic BEE Codes are possession (which measures the extent to which black individuals personal the measured entity), administration management (which measures the extent to which black individuals kind a part of the board of administrators and prime administration of the entity), employment fairness (which measures the extent to which black persons are employed with the varied administration ranges of the entity), expertise growth (which measures the extent to which the entity has undertaken expertise coaching for the advantage of its black staff), preferential procurement (which measures the extent to which the entity procures items and companies from BEE compliant and black-owned corporations), enterprise growth (which measures the extent to which the entity has contributed in direction of the event of black-owned or BEE compliant corporations), and socio-economic growth (which measures the extent to which the entity has contributed in direction of the socio-economic growth of black individuals).

The unique Generic BEE Codes had been considerably amended on October 11, 2013 and such amendments turned efficient from Might 1, 2015. Usually talking, the amended Generic BEE Codes search to make BEE compliance extra onerous to attain. The entire variety of factors required to attain sure ranges of BEE compliance have been elevated. The weather of administration management and employment fairness have been consolidated right into a single factor referred to solely as administration management, and the weather of preferential procurement and enterprise growth have been consolidated right into a single factor known as enterprise and provider growth. The weather of possession, expertise growth and enterprise and provider growth are categorised as precedence parts to which minimal thresholds of compliance connect and topics an entity to a penalty of a discount in its BEE compliance standing by one degree if the entity fails to attain any of such minimal thresholds. The Generic BEE Codes had been amended once more on Might 31, 2019 to make sure adjustments to make clear how small and medium enterprises needs to be assessed for BEE compliance and to amend the targets and factors for sure parts.

As well as, the BEE Act was amended by The BEE Modification Act, which got here into operation on October 24, 2014 (the “BEE Modification Act“). The provisions of part 3(2) set out within the BEE Modification Act states that “within the occasion of any battle between this Act and every other legislation in power instantly previous to the date of graduation of the BEE Act, 2013, this BEE Act prevails if the battle particularly pertains to a matter handled on this Act” (the “Trumping Provision“). The BEE Act gives that part 3(2) will come into impact one yr after the date on which the President proclaims the BEE Act into legislation and due to this fact turned operative on October 24, 2015. Nonetheless, on October 30, 2015 the Minister of Commerce, Trade and Competitors exempted the DMRE from making use of the Trumping Provision till October 31, 2016 on the premise that the alignment of the then Mining Constitution 2010 with the BEE Act and the BEE Codes was nonetheless ongoing. There has not been an additional extension of this exemption.

Part 10(1)(a) set out within the BEE Act gives that “each organ of state and public entity should apply any related code of excellent follow issued by way of this Act in figuring out qualification standards for the issuing of licences, concessions or different authorizations in respect of financial exercise by way of any legislation“. This can require all governmental our bodies to use the Generic BEE Codes or different related codes of excellent follow when procuring items or companies or issuing licenses or different authorizations underneath every other legal guidelines, and to penalize fronting or misrepresentation of BEE info.

The provisions of part 3(2) and 10(1)(a) point out that the DMRE can be obliged to use the provisions of the BEE Act and of any BEE code of excellent follow gazetted by way of the BEE Act when issuing rights, permissions or permits by way of the MPRDA sooner or later.

A code of excellent follow refers back to the Generic BEE Codes or any sector-specific code of excellent follow which has been developed and gazetted by way of the provisions of the BEE Act after session with the related business stakeholders and the Division of Commerce, Trade and Competitors. It doesn’t embrace Mining Constitution 2018 as a result of it was not developed and gazetted by way of the BEE Act. The implications of the above provisions of the BEE Act are that until a mining sector code is developed and gazetted, or until an additional exemption is granted by the Minister of Commerce, Trade and Competitors, the DMRE wouldn’t be entitled to use Mining Constitution 2018 when issuing rights, permissions or permits (after graduation of the above talked about sections of the BEE Modification Act) and can be required to use the Generic BEE Codes. Whereas the goal for possession underneath the Generic BEE Codes is identical as in Mining Constitution 2010 i.e. 26% (versus the present Mining Constitution 2018’s 30%), the remaining parts of the Generic BEE Codes by way of which BEE compliance is measured are materially totally different from these set out in Mining Constitution 2018. As well as, the extent of BEE compliance is decided underneath the Generic BEE Codes just about an entity’s total rating and corresponding BEE compliance degree, and Mining Constitution 2018’s scorecard doesn’t include the identical methodology. Thus, if the Generic BEE Codes had been to use to the mining business, it might place the business at a drawback and create uncertainty.

Part 10(2)(a) set out within the BEE Act gives that “the Minister might, after session with the related organ of state or public entity, exempt the organ of state or public entity from a requirement contained in subsection (1) or permit a deviation therefrom if specific objectively verifiable information or circumstances relevant to the organ of state or public entity necessitate a deviation“. Such an exemption or deviation is required to be printed within the authorities gazette. It appears attainable, however it’s not sure whether or not the DMRE might apply for such an exemption in respect of the mining business.

The DMRE and business our bodies are conscious of the implications of the Trumping Provision. However that there was no additional extension of the exemption in respect of the Trumping Provision, up to now, the DMRE continues to use the provisions of Mining Constitution 2018 and never the Generic BEE Codes.

It is very important keep in mind that none of Mining Constitution 2018, Mining Constitution 2018 Scorecard or the Mining Codes are drafted as legislative paperwork. They’re devices of coverage and as such are steadily ambiguous, loosely worded and tough to interpret with precision.

The MPRDA seeks to facilitate participation by HDPs in mining ventures. Complying with the HDP regime is a prerequisite for being granted and sustaining prospecting and mining rights. Each utility for a mining proper underneath the MPRDA should reveal that the granting of such proper will:

  • considerably and meaningfully increase alternatives for HDPs, together with girls, to enter the mineral and petroleum business with a view to profit from the exploitation of the nation’s mineral and petroleum assets; and

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

The Mining Constitution

The unique mining constitution was developed to offer substance and steering to the empowerment provisions underneath MPRDA, which got here into impact on Might 1, 2004. The unique mining constitution set out numerous targets which had been to be achieved by mining corporations by 2009 and 2014. Amongst different targets, mining corporations needed to obtain a 15% HDP possession by 2009 and a 26% HDP possession by 2014. Possession pertains to possession of mining belongings, whether or not by means of the holding of fairness, partnership, three way partnership or direct holding.

However the uncertainties in BEE laws relevant to mining corporations with regard to the measurement of HDP possession, it’s accepted follow (as confirmed in part 2.1.2 of the Mining Codes) that the so-called flow-through and modified flow-through ideas are relevant to the calculation of not directly held HDP pursuits (i.e. the place there may be partial HDP possession in a company construction above the extent of the corporate holding the prospecting or mining proper). When it comes to the flow-through precept, the extent of oblique possession, proportionally diminished to mirror partial HDP shareholding in intermediate corporations, can be calculated to find out the proportional oblique HDP shareholding within the firm holding the appropriate. Beneath the modified flow-through precept, an organization with greater than 51% HDP possession (outlined as a Traditionally Deprived Individuals Owned and Managed Firm in Mining Constitution 2018) might, at anyone degree in a company construction, attribute 100% HDP possession to that firm for the needs of making use of the flow-through precept.

On September 13, 2010, the Mining Constitution 2010 got here into impact setting targets (a few of which remained the identical as these within the unique mining constitution) to be achieved by mining corporations by December 31, 2014 (the implementation of which wanted to be reported to the DMRE by mining corporations in 2015), which targets included:

  • Possession: this entails 26% significant financial participation by HDPs and 26% full shareholder rights for HDPs. Mining Constitution 2010 refers to BEE entities versus HDP corporations however retains the 26% possession goal.

  • Housing and dwelling circumstances: occupancy charge of worker lodging of 1 particular person per room and all conversion of worker hostels have to be absolutely achieved.

  • Employment fairness: 40% HDP participation at Board degree, at government committee degree, in center administration, in junior administration and 40% HDP participation inside core expertise.

  • Human useful resource growth: 5% human useful resource growth expenditure centered on HDPs as a share of complete annual payroll.

  • Mine group growth: implementation of accredited group initiatives.

  • Sustainable growth and development:

  • implementation of accredited EMP (outlined beneath) measured yearly towards the accredited plans;

  • implementation of motion plans on well being and security measured yearly towards the accredited plans; and

  • utilization of South African based mostly analysis amenities for the evaluation of all South African sourced mineral samples.

  • Beneficiation: contribute a share of further manufacturing quantity in direction of native beneficiation of mineral commodities in accordance with the beneficiation technique launched pursuant to the phrases of part 26 of the MPRDA. No such technique has but been finalized.

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

Mining Constitution 2010 included targets, measures and weightings by which mining proper holders had been assessed towards the obligations in keeping with the Mining Constitution 2010 Scorecard.

The Waterberg Mining Proper was adjudicated upon and granted in accordance with the possession necessities of Mining Constitution 2010, on condition that it was lodged and accepted previous to the approaching into power of the present Mining Constitution 2018.

On September 27, 2018, the Minister introduced the implementation of Mining Constitution 2018 which units out new and revised targets to be achieved by mining corporations, essentially the most pertinent of those being the revised BEE possession shareholding necessities for mining rights holders. Mining Constitution 2018 gives for the publication of ‘Implementation Pointers’ by November 27, 2018. This creates larger uncertainty in measuring a mining proper holder’s progress in direction of, and compliance with, its commitments underneath Mining Constitution 2018.

On March 27, 2019, the Minerals Council South Africa introduced that it had launched evaluation proceedings towards the Minister to put aside sure provisions of Mining Constitution 2018. Primarily the evaluation involved a requirement within the Mining Constitution 2018 that mining companies re-empower themselves with a view to renew mining licenses or switch mining rights, opposite to the so-called ‘as soon as empowered, all the time empowered’ precept. Judgment in favour of the Minerals Council South Africa was handed down on September 21, 2021 however the Minister has indicated that he intends to enchantment the judgment. The court docket confirmed the ‘as soon as empowered, all the time empowered’ precept, confirmed that the Mining Constitution 2018 was a coverage doc and never subordinate laws and held {that a} breach of the Mining Constitution 2018, of itself, couldn’t end in cancellation of a mining proper.

Beneath Mining Constitution 2018, new mining rights holders will probably be required tohave a minimal 30% BEE shareholding (a 4% improve from the required 26% underneath the Mining Constitution 2010) which shall embrace financial curiosity plus a corresponding share of voting rights, per proper or within the mining firm which holds the appropriate. Waterberg JV Co. has a interval of 5 years from April 13, 2021 inside which to extend its BEE shareholding to 30%, on condition that its utility was accepted previous to September 27, 2018. Mining Constitution 2018 stays unclear as as to if such shareholding will probably be required to be distributed amongst staff, communities and black entrepreneurs as detailed beneath, and if that’s the case, in what percentages. Waterberg has obtained an opinion from senior counsel advising that such distribution shouldn’t be required. Holders of current mining rights who achieved a minimal of 26% BEE shareholding, or who achieved a 26% BEE shareholding however whose BEE shareholders exited previous to September 27, 2018 will probably be acknowledged as BEE possession compliant at some stage in the mining proper and for any interval of renewal thereof.

A brand new mining proper granted after the approaching into impact of Mining Constitution 2018 (aside from the place the applying for the appropriate was accepted by the DMRE earlier than September 27, 2018) will need to have a minimal of 30% BEE shareholding, relevant at some stage in the mining proper, which have to be distributed as to (i) a minimal of 5% non-transferable carried curiosity to qualifying staff; (ii) a minimal of 5% non-transferrable carried curiosity to host communities, or a minimal 5% fairness equal profit; and (iii) a minimal of 20% efficient possession within the type of shares to a BEE entrepreneur, a minimal of 5% which should ideally be for girls.

The carried curiosity of 5% to every of the group and the staff have to be issued to them for gratis and freed from encumbrance. The prices to the appropriate holder of such challenge could be recovered from the event of the mineral asset.

The fairness equal profit regarding communities refers to a 5% equal of the issued share capital, for gratis to a belief or related automobile arrange for the advantage of host communities. The intention behind introducing this various is in order that communities accessing the advantage of possession is not going to be delayed. The host group would obtain an financial profit as if it was the holder of a 5% fairness curiosity.

Mining proper holders might declare an fairness equal possession offset for beneficiation in accordance with a DMRE accredited beneficiation fairness equal plan.

The Mining Constitution 2018 additionally units deadlines by which the BEE shareholding should vest for brand new rights, specifically a minimal of fifty% should vest inside two thirds of the period of a mining proper; and the prescribed minimal 30% goal shall apply at some stage in a mining proper.

A mining proper holder will probably be required to spend money on Human Useful resource Improvement by paying 5% of the “leviable quantity”, being the levy payable underneath the South African Abilities Improvement Act, No. 97 of 1998, (excluding the necessary statutory expertise levy) in direction of important expertise growth actions comparable to science, expertise, engineering, arithmetic expertise in addition to artisans, internships, apprentices, bursaries, literacy and numeracy expertise for workers and non-employees (group members), graduate coaching applications, analysis and growth of options in exploration, mining, processing, expertise effectivity (vitality and water use in mining), beneficiation in addition to environmental conservation and rehabilitation.

Mining proper holders should promote financial growth by means of creating and/or nurturing small, medium and micro enterprises and suppliers of mining items and companies. Inside 6 months of implementation of the Mining Constitution 2018, proper holders should submit a 5-year plan indicating incremental implementation of inclusive procurement targets.

Aminimal of 70% of a holder’s complete analysis and growth price range have to be spent on South African based mostly analysis and growth entities, both within the public or personal sector and solely South African based mostly corporations or amenities could be utilized for the evaluation of all mineral samples throughout the mining worth chain.

Mining Constitution 2018 additionally gives for minimal employment fairness thresholds at numerous ranges of administration. These embrace:

  • Board – a minimal of fifty% are HDP’s, 20% of which have to be girls.

  • Govt Administration – a minimal of fifty% are HDP’s on the government director degree as a share of all government administrators proportionally represented, 20% of which have to be girls.

  • Senior Administration – a minimal of 60% are HDP’s proportionally represented, 25% of which have to be girls.

  • Center Administration – a minimal of 60% are HDP’s, proportionally represented, 25% of which have to be girls.

  • Junior Administration – a minimal of 70% are HDP’s proportionally represented, 30% of which have to be girls.

  • Workers with disabilities – a minimal of 1.5% staff with disabilities as a share of all staff, reflective of nationwide or provincial demographics.

Mining proper holders should additionally develop and implement a profession development plan (aligned with its SLP) in step with the demographics of South Africa, which plan should present for (i) profession growth matrices of every self-discipline (inclusive of minimal entry necessities and timeframes); (ii) develop particular person growth plans for workers; (iii) determine a expertise pool to be quick tracked in step with wants; and (iv) present a complete plan with targets, timeframes and the way the plan can be applied.

Mining proper holders should meaningfully contribute in direction of Mine Group Improvement with a bias in favour of mine communities each by way of impression in addition to in step with the ideas of the social license to function. This factor, along with the possession factor are ring-fenced and require 100% compliance always. In session with related municipalities, mine communities, conventional authorities and affected stakeholders, mining proper holders should determine developmental priorities of mine communities and make provision for such priorities in prescribed and accredited SLPs, to be be printed in English and one or two different languages generally used throughout the mine group. Mining proper holders who function in the identical space might collaborate on sure recognized initiatives to maximise the socio-economic growth impression in step with SLPs.

Holders should implement 100% of their SLP commitments in any given monetary yr of the mining proper holder. Any amendments and/or variations to commitments set out in SLPs (together with budgets) shall require approval by way of part 102 of the MPRDA, and proper holders will probably be required to seek the advice of with mine communities.

Housing and dwelling circumstances for mine employees as stipulated within the Housing and Dwelling Situations Requirements, developed by way of part 100(1)(a) of the MPRDA, together with first rate and inexpensive housing, provision for house possession, provision for social, bodily and financial integration of human settlements, safe tenure for the staff in housing establishments, correct well being care companies, inexpensive, equitable and sustainable well being system and balanced vitamin. Beneath Mining Constitution 2018, holders should submit housing and dwelling circumstances plans to be accredited by the DMRE after session with organized labor and the Division of Human Settlement. To offer clear targets and timelines for functions of implementing the aforesaid housing and dwelling situation ideas the DMRE launched the reviewed Housing and Dwelling Situations Customary for the Minerals Trade on December 11, 2019.,

Mining Constitution 2018 gives, for the primary time, a regime for junior miners who meet the qualifying standards and grants such corporations exemption from sure parts/targets. The regime for junior mining corporations is restricted to mining proper holders who, both by means of holding a single or a number of mining rights, have a mixed annual turnover of lower than Rand 150 million.

Mining proper holders who’ve a turn-over of much less that Rand 10 million every year are exempt from the next parts/targets set out within the Mining Constitution 2018: Employment Fairness Targets (if they’ve lower than 10 staff); Inclusive Procurement Targets; in addition to Enterprise and Provider Improvement Targets, and are required to solely adjust to the next parts/targets Possession factor (however undefined as to composition of BEE shareholding); Employment Fairness Targets (if they’ve greater than 10 staff); Human Useful resource Improvement Targets; and Mine Group Improvement Targets.

Mining proper holders who’ve a turn-over of between Rand 10 million and Rand 50 million every year are required to adjust to the next parts/goal: Possession factor (however undefined as to composition of BEE shareholding); Human Useful resource Improvement Targets; Employment Fairness Targets (at group degree); and Mine Group Improvement Targets.

New Order Mining and Prospecting Rights Beneath the MPRDA

The entire Firm’s prospecting rights in addition to the Waterberg Mining Proper are so-called new order rights (i.e. rights granted underneath the MPRDA) versus outdated order rights, being rights granted underneath pre-MPRDA laws. Beneath the MPRDA, mining corporations working in South Africa had been required to use for conversion of outdated order rights into new order prospecting and mining rights issued by the South African state by way of the MPRDA. New order rights in respect of mining are granted for a most interval of 30 years, with renewals of as much as 30 years at a time. Prospecting rights are legitimate for a interval of 5 years, with one renewal of as much as three years. Moreover, the MPRDA gives for a retention interval after prospecting of as much as three years with one renewal of as much as two years, topic to sure circumstances. The holder of a prospecting proper granted underneath the MPRDA has the unique proper to use for and, topic to compliance with the necessities of the MPRDA, to be granted a mining proper in respect of the prospecting space in query.

The brand new order rights are transferable solely with the approval of the Minister and are topic to varied phrases and circumstances, together with graduation of operations inside specified durations, upkeep of continuous and lively operations and compliance with work applications, social and labour plans, EMPs and empowerment necessities.

New order rights could be suspended or cancelled by the Minister if a holder has breached its obligations underneath the phrases of the rights and has did not treatment such breach after written discover of the breach from the Minister and after being given a possibility to reply. As well as, mining rights might probably be cancelled for non-compliance with the Mining Constitution 2018.

Useful resource Nationalism

The idea of useful resource nationalism encompasses a spread of measures, comparable to expropriation or taxation, whereby governments improve their financial curiosity in company entities exploiting pure assets, with or with out compensation. The present South African authorities has publicly acknowledged that it doesn’t intend to nationalize the mining business.

At its 53rd nationwide convention in December 2012, the ANC rejected wholesale nationalization. It was resolved that state intervention within the financial system would give attention to beneficiation. Strategic minerals, which embrace platinum group metals, coal and iron ore, will probably be recognized and particular public coverage measures could also be put in place. Additional state interventions might embrace “state possession” by means of the state mining firm, and mineral useful resource rents by means of the imposition of latest taxes or a super-profits tax.

Atmosphere

South Africa has a complete and always evolving environmental regulatory framework, notably regarding mining. The Structure entrenches the appropriate to an atmosphere that’s not dangerous to human well being or well-being and imposes an obligation to guard the atmosphere for the advantage of current and future generations by means of cheap legislative and different measures. The Structure and Nationwide Environmental Administration Act (“NEMA“) grant authorized standing to a variety of individuals and curiosity teams to carry authorized proceedings to implement their environmental rights, such that claims could be made towards personal and public entities and the South African authorities.

Environmental impacts of mineral useful resource operations (together with prospecting and mining of mineral assets and exploration and manufacturing of petroleum) are, at current, primarily regulated by 4 items of laws, specifically, the MPRDA, NEMA, Nationwide Environmental Administration: Waste Act (“NEMWA“) and Nationwide Water Act (“NWA“).

South African environmental legislation is basically permit-based and requires companies whose operations might have an environmental impression to acquire licenses and authorizations principally from the DMRE, Division of Water and Sanitation (“DWS”) and the DFFE, which frequently include stringent circumstances regarding development and operational necessities, in addition to monitoring and reporting obligations.

Environmental laws additionally stipulates basic compliance necessities. It incorporates a “polluter pays” precept and likewise imposes an obligation on a gaggle of specified events wider than the precise polluter to take cheap measures to evaluate, forestall and tackle air pollution (even that which was approved by legislation). This responsibility is retrospective in its utility. A failure to take such measures might end in governmental authorities taking measures towards, and recovering prices from, a wider vary of events than the one on whom the responsibility primarily rests. This latter group features a successor in title to a property and based mostly on worldwide jurisprudence, is large sufficient to incorporate a lender or a shareholder of an organization who triggered the air pollution, though the potential legal responsibility of shareholders and lenders has not but been thought-about by South African courts.

NEMA gives for the appointment of Environmental Administration Inspectors and Environmental Mineral Useful resource Inspectors on the DFFE and DMRE respectively. These inspectors have wide-ranging powers and may undertake each introduced and unannounced inspections and investigations. Prison prosecutions have been initiated and directives and compliance notices issued following numerous these inspections.

Beneath NEMA, it’s a prison offence for any particular person unlawfully and deliberately or negligently to commit any act or omission which causes, has triggered or is more likely to trigger vital environmental air pollution or degradation or unlawfully and deliberately or negligently commit any act or omission which detrimentally impacts or is more likely to have an effect on the atmosphere in a major method. A most prison nice of as much as Rand 10 million and/or a jail time period of as much as ten years could also be imposed for such an offence. The NWA establishes the same prison offence in relation to water air pollution and numerous offences by way of different environmental laws, such because the NEWA, will represent prison offences underneath NEMA.

Directives or compliance notices will also be issued underneath NEMA, the MPRDA or the NWA for the non permanent or everlasting shut down of amenities at a mining operation or your complete mining operation, on account of environmental transgressions. NEMA additionally gives that administrators and sure firm officers will also be held liable of their private capability for the prices of rehabilitating environmental air pollution or degradation.

The environmental regulation of mining has undergone a transition. NEMA is now the first environmental laws regulating mining and never the MPRDA. On account of this transition, the vast majority of the MPRDA’s environmental regulation provisions had been deleted (“Pre-MPRDA Modification Act Environmental Provisions“) and the Nationwide Environmental Administration Legal guidelines Modification Act, No. 25 of 2014 (“NEMLAA”) launched particular provisions regulating mining into NEMA. The Minister has nonetheless retained the majority of his environmental regulation competencies underneath the NEMLAA’s amendments, to be undertaken in accordance with NEMA. This transition has created some gaps as some provisions had been repealed however the entire crucial amendments have but to begin underneath the MPRDA and sure rules underneath NEMA are excellent.

Beneath the Pre-MPRDA Modification Act Environmental Provisions, earlier than 8 December 2014, environmental administration plans and environmental administration applications (“EMPs“) had been required to be accredited by the related delegated authority on the DMRE earlier than a prospecting proper or mining proper respectively turned efficient.

Along with requiring that an EMP be accredited underneath the MPRDA, an environmental authorisation or an built-in environmental authorization (“EA“) was required for sure actions which are incidental to mining, listed in a collection of Environmental Influence Evaluation (“EIA“) Laws printed underneath the NEMA. This consists of vegetation clearance; development of roads, amenities in proximity to a watercourse and amenities which will trigger air pollution; and storage of harmful items, the place the actions exceeded specified thresholds (“Listed Actions“). An EA was not required for mining or prospecting actions.

This place modified on 8 December 2014 when the 2014 EIA Laws commenced underneath NEMA, changing the 2010 EIA Laws. Mining and prospecting actions that commenced after this date required an EA, as did related infrastructure and earthworks straight associated to the prospecting and extraction of a mineral useful resource.

There are presently no provisions in power within the MPRDA or NEMA deeming EMPs accredited underneath the MPRDA to be EAs issued underneath the NEMA, which creates gaps in relation to the obligations of mineral proper holders with an accredited EMP. Sure 2013 amendments to the MPRDA (following the implementation of the Mineral and Petroleum Sources Improvement Act No. 49 of 2008) launched a deeming provision nonetheless it has not but commenced. This provision gives that an EMP accredited underneath the MPRDA earlier than and on the time of the NEMA coming into power will probably be deemed to have been accredited and an EA issued by way of NEMA. An identical provision was proposed in earlier iterations of the Nationwide Environmental Legal guidelines Modification Invoice B14D-2017 (“NEMA Invoice”), which was first launched to the Nationwide Meeting in Might 2017. While that is nonetheless an object of the NEMA Invoice, the related provision has not been included within the newest iteration. There are additionally no transitional provisions deeming approvals to EMP functions that had been submitted earlier than NEMLAA and accredited after NEMLAA to be deemed to be EAs. This has created the scenario the place strictly talking candidates for mineral rights at the moment are required to submit an utility for an EA, regardless of an utility for EMP approval being beforehand submitted. In follow nonetheless, the DMRE views EMPs submitted underneath the MPRDA to be EAs. Aligned with this method by the DMRE, the 2014 EIA Laws had been lately amended to incorporate a transitional association regulating the auditing necessities in respect of EMPs for mineral rights accredited prior to eight December 2014 and nonetheless in impact.

NEMA requires an EA earlier than Listed Actions begin and it’s a prison offence to begin such Listed Exercise with out the required EA. An individual who has commenced a Listed Exercise with out an EA might apply for rectification of this state of affairs however can be required to pay a most administrative nice of Rand 5 million and might also face prison penalties. Current amendments to the 2014 EIA Laws now additionally require that landowner consent be obtained in making use of for an EA for mining associated actions, which aligns with current case legislation on the matter. Previous to the modification, an applicant for a mineral proper and related actions was solely required to seek the advice of with landowners as a part of the thorough public participation course of prescribed underneath the 2014 EIA Laws.

Beneath the NWA, water can’t be owned, however is as a substitute held in belief for the individuals of South Africa underneath the State’s custodianship. A water use licence or built-in water use licence (“WUL“) is required to undertake sure water makes use of specified within the NWA. This consists of water storage; abstraction; disposal of wastewater into the atmosphere; dewatering a mine; and impacting on watercourse’s movement. Usually, giant scale water customers, comparable to mines, are required to both apply for WULs or, in sure circumstances, solely to register water makes use of if small water volumes are abstracted or saved or the impacts to watercourses are low. In sure cases, an entity might proceed with a water use that was performed lawfully previous to 1998 underneath the predecessor to the NWA, the Water Act, No. 54 of 1956, with out the requirement for a WUL. Conducting a water use with out the required WUL is illegal.

Laws printed underneath the NWA regulate water use in relation to mining actions, offering for limitations on the situation of mining infrastructure and necessities for separation of soiled and clear water programs. If a water use or water administration is illegal, the DWS might challenge administrative directives to implement the NWA’s provisions or cease the illegal water use. Prison proceedings will also be instituted. Penalties for offences are a most nice and/or imprisonment of Rand 200,000 and 5 years, respectively. Upon a second conviction, the utmost nice and/or imprisonment are Rand 400,000 and ten years, respectively. Progress has been made by the DWS in addressing the backlog of pending WUL functions, firstly with the publication of rules prescribing a 300-day utility course of and extra lately with the revision of the net WUL portal E-WULAAS that reduces the DWS’ decision-making interval to 90 days. Official amendments capturing this truncated time interval haven’t, nonetheless, been gazetted as but. Suggestions from the DWS to the mining business has additionally indicated that, owing to capability constraints, this timeline is unlikely to be adhered to.

The Nationwide Environmental Administration Air High quality Act No. 39 of 2004 (“AQA“) regulates air high quality and air pollution in South Africa and prohibits the enterprise of actions listed underneath AQA, together with sure mining associated and processing actions, with out an atmospheric emission license (“AEL“). Minimal emission requirements have been set for every Listed Exercise. Amenities that had been operational earlier than these rules got here into power had been afforded a “grace interval” inside which to adjust to the extra stringent air emission requirements contained within the rules till 2015. If a facility didn’t adjust to the 2015 air emission requirements, upgrading of the amenities was crucial. Such amenities might want to adjust to much more stringent air emission requirements from 2020. Extra upgrades might due to this fact even be required earlier than 2020 to adjust to the 2020 air emission requirements, for which vital capital expenditures (“CAPEX“) could also be required. Alternatively, an utility for a once-off postponement of the time interval for compliance with air emission requirements could also be attainable however the grant of any postponement can’t be assured. The Greenhouse Fuel Emission Reporting Laws printed on April 2017 and amended in September 2020 require sure industries, together with mining and prospecting actions, to register as emitters with the DFFE and to report yearly on their greenhouse fuel (“GHG“) emissions.

In relation to local weather change concerns and compliance, there was no motion on the promulgation of the Local weather Invoice (outlined beneath), which was launched to Parliament in June 2018. The DFFE did, nonetheless, publish South Africa’s draft up to date Nationally Decided Contributions (“Draft Up to date NDC“) in March 2021 by way of the Paris Settlement, of which it’s a signatory. The Draft Up to date NDC units out South Africa’s GHG emission targets, finance help necessities and long-term decarbonisation plans, and makes provision for the implementation of Nationwide Local weather Change Adaptation Technique interventions for sure precedence sectors, together with the mining sector. Additional, in June 2021, DFFE printed the draft Nationwide Guideline for Consideration of Local weather Change Implications (“Draft Guideline“) for remark. The Draft Guideline is meant to formulate a constant method for all sectors in respect of local weather change impression assessments (“CCIAs“) undertaken for functions of an EA, AEL and waste administration licence (“WMLs“) utility, offering for minimal necessities and generic ideas for involving local weather change specialists within the EIA course of; defining the roles of the environmental evaluation practitioner, specialists and different stakeholders; and outlining the extent and content material of CCIAs.

NEMWA regulates the storage, remedy, recycling and disposal of waste, amongst different issues, together with waste generated by the mining sector. Its provisions are additionally related usually to the Firm’s operations. WMLs are required for sure waste administration actions, depending on sure thresholds in relation to the waste. Though WMLs are usually not required for waste storage, such actions should adjust to sure norms and requirements. Residue stockpiles and deposits regarding prospecting, mining, exploration or manufacturing actions regulated underneath the MPRDA had been beforehand exempt from NEMWA. This was modified by amendments underneath theNEMLAA and WMLs had been required from the Minister for residue stockpiles and deposits since September 2, 2014, in the event that they represent “waste” and in the event that they fall above the thresholds for which a WML is required, until an entity “lawfully performed” these actions previous to September 2, 2014. The NEMA Invoice has proposed amendments to NEMWA such that the regulation of residue stockpiles and deposits are faraway from NEMWA and will probably be regulated by NEMA. Having beforehand lapsed, the NEMA Invoice was revived by the Nationwide Council of Provinces in October 2019 and as on the finish of August 2021, was nonetheless into account by the provinces and Choose Committee on Land, Atmosphere, Mineral Sources and Vitality. It’s not sure when it may be anticipated to be handed by the Nationwide Council of Provinces. In that case handed, it can thereafter be signed into legislation by the President and WMLs is not going to be required for residue stockpiles and deposits. When it comes to the 2014 EIA Laws, an EA would nonetheless be required.

Each the MPRDA and NEMA have provisions regulating rehabilitation and closure, which aren’t fully constant. The MPRDA gives {that a} mineral proper holder stays chargeable for any environmental legal responsibility, air pollution, ecological degradation, the pumping and remedy of extraneous water, compliance to the circumstances of the EA and the administration and sustainable closure of a mine, till the Minister has issued a closure certificates (“Rehabilitation and Closure Legal responsibility“). NEMA gives {that a} mineral proper holder stays liable for Rehabilitation and Closure Legal responsibility however the problem of a closure certificates.

Beneath the MPRDA and NEMA, when the Minister points a closure certificates, he might retain any portion of such monetary provision for latent and residual security, well being or environmental impression which can turn out to be recognized sooner or later.

The Pre-MPRDA Modification Act Environmental Provisions required that monetary provision for atmosphere rehabilitation and closure prices have to be supplied by an applicant for a mineral proper previous to the approval of an EMP. NEMA now requires that this monetary provision have to be made previous to the issuing of an EA underneath NEMA.

New Monetary Provision Laws in regard to rehabilitation had been printed underneath NEMA on November 20, 2015, (“2015 FP Laws“) which have been extremely contentious on account of gaps and contradictions with the Revenue Tax Act No. 58 of 1962; MPRDA and NEMA. They are going to require a considerable improve in monetary provision required for rehabilitation, as they’re way more onerous and now require monetary provision to be supplied for annual rehabilitation and, extra considerably, the remediation of latent or residual environmental impacts which can turn out to be recognized sooner or later together with the pumping and remedy of polluted or extraneous water (“Future Rehabilitation“). The Minerals Council South Africa (previously the Chamber of Mines) has acknowledged that the 2015 FP Laws might have a crippling impact on the mining business. Owing to the numerous criticism towards the 2015 FP Laws and former iterations. Till the brand new rules are promulgated, three units of draft rules have been printed since November 2017, proposing to overtake the monetary provisioning regime. The most recent draft was printed for remark in August 2021 (“2021 Draft FP Laws“), which seem to have thought-about the criticism levelled towards the 2015 FP Laws and former iterations. Till the brand new rules are promulgated, the 2015 FP Laws stay relevant. To accommodate business whereas the regulatory framework is being streamlined, numerous compliance extensions have been printed in respect of the 2015 FP Laws. In April 2021, the most recent, and fourth, extension for compliance with the 2015 FP Laws for current mineral rights holders was printed and pushed the deadline to June 19, 2022. It’s hoped that the 2021 Draft FP Laws are finalised and promulgated previous to this date.

Candidates for brand new mining rights submitted after 20 November 2015 are nonetheless nonetheless required to supply monetary provision by way of the 2015 FP Laws. Belief funds might solely be used for Future Rehabilitation and never annual or ultimate rehabilitation (being the decommissioning and closure of the prospecting, exploration, mining or manufacturing operations on the finish of the lifetime of operations). The monetary automobile used for Future Rehabilitation should, on issuance of a closure certificates, be ceded to the Minister or if a belief fund is used, the trustees should authorise fee to the Minister. The aforesaid is contradictory to the Minister’s discretion within the MPRDA and NEMA to retain a portion of the monetary provision.

A mining or prospecting proper could be suspended or cancelled underneath the MPRDA, or a mining proper utility could also be refused, if there may be non-compliance with environmental laws.

Mine Security

Mine security in South Africa is ruled by the MHSA, which is enforced by the Inspectorate of Mine Well being and Security, part of the DMRE. The reporting provisions of the MHSA are aligned with the Worldwide Labour Group’s Code of Observe on Recording and Notification of Occupational Accidents and Illnesses. Beneath the MHSA, the Firm is obligated, amongst different issues, to make sure, so far as fairly practicable, that the Firm’s mines are designed, constructed and geared up to supply circumstances for secure operation and a wholesome working atmosphere and are commissioned, operated, maintained and decommissioned in such a approach that staff can carry out their work with out endangering their well being and security or that of every other particular person. The Firm can be obliged to make sure, so far as fairly practicable, that individuals who are usually not staff, however who could also be straight affected by the Firm’s mining actions are usually not uncovered to any hazards regarding their well being and security. The MHSA additionally authorises mine inspectors to challenge security compliance notices to mines underneath part 55 of the MHSA and, ought to the inspectors really feel that the motion is warranted, to briefly shut half or the entire operations underneath powers conferred by part 54 of the MHSA, pending compliance with the compliance discover.

An employer who has been instructed to briefly shut a mine or any half thereof in a piece 54 discover has the treatment of approaching the court docket that handles labour legislation circumstances (the “Labour Court docket“) for pressing aid to droop the operation of the part 54 discover till a evaluation utility to put aside that discover is decided by the Labour Court docket.

The Mine Well being and Security Modification Act, No. 74 of 2008, which got here into impact on Might 30, 2009, criminalizes violations of the MHSA, will increase the utmost fines to Rand 1 million per incidence and creates the chance that mining rights could possibly be revoked for continued security violations. Plenty of tips on the implementation of necessary codes of follow underneath sections 9(2) and 9(3) of the MHSA have been issued by the Chief Inspector of Mines and govern the availability of private protecting gear for girls within the mining business in South Africa; trackless cell machines; cyanide administration; underground rail sure gear; conveyor belt set up for transport of mineral, materials or personnel; and risk-based fatigue administration.

Royalty Funds

The Royalty Act imposes a royalty on the primary switch of refined or unrefined minerals, payable to the state, calculated on the precise or deemed product sales quantity on the statutorily decided saleable situation (i.e. whether or not the mineral is in a refined or unrefined situation as decided in accordance with Schedule 1 and a pair of, respectively, of the Royalty Act).

The royalty charge in respect of refined minerals is calculated by dividing earnings earlier than curiosity and taxes, or “EBIT” (as outlined for functions of the Royalty Act), by the product of 12.5 instances gross income, calculated as a share, plus an extra 0.5%. EBIT refers back to the taxable mining revenue of the holder of the appropriate (with sure exceptions comparable to no deduction for curiosity payable and overseas change losses) earlier than assessed losses however after capital expenditure. There may be additionally an arm’s size adjustment, the place relevant. A most royalty charge of 5% of income applies to sophisticated minerals.

The royalty charge in respect of unrefined minerals is calculated by dividing EBIT by the product of 9 instances gross income, calculated as a share, plus an extra 0.5%. A most royalty charge of seven% applies to unrefined minerals.

When it comes to the Tax Administration Legal guidelines Modification Act, 24 of 2020, the Tax Administration Act, 28 of 2011 was amended to supply for the fee of curiosity on royalties payable underneath the Royalty Act and for the rate of interest with regard to refunds due underneath the Royalty Act.

Mining Taxation Evaluation

Within the 2013 price range speech, the Minister of Finance introduced that the mineral and petroleum royalty regime has broadened the South African tax base and allowed for elevated income during times of excessive commodity costs, whereas offering aid to marginal mines when commodity costs and profitability are low. The broader evaluation of the South African tax system will think about whether or not this method is sufficiently sturdy and assess what essentially the most acceptable mining tax regime is to make sure that South Africa stays a aggressive funding vacation spot.

To present impact to bulletins made by the Minister of Finance in his 2013 price range speech, the Davis Tax Committee (“DTC“) was established to evaluate South Africa’s tax coverage framework and its position in supporting the goals of inclusive development, employment, growth and financial sustainability. The Phrases of Reference of the DTC features a evaluation of the present mining tax regime. The DTC submitted its First Interim Report on Mining on July 1, 2015 and made numerous suggestions, together with that:

  • the mining company revenue tax regime be aligned with the tax system relevant to different taxpaying sectors usually, leaving the royalty system to answer the non-renewable nature of mineral assets; and

  • the upfront capital expenditure write-off regime be discontinued and changed with an accelerated capital expenditure depreciation regime in parity with the write-off durations supplied for in respect of producing belongings.

These suggestions are nonetheless into account by the South African authorities.

The DTC launched its second and ultimate report on hard-rock mining in December 2016.

Amongst the varied proposals, the DTC really useful that the upfront CAPEX write-off regime needs to be discontinued and changed with an accelerated CAPEX depreciation regime. The accelerated CAPEX depreciation regime will present for write-off durations in step with that of producing, specifically on a 40/20/20/20. The elimination of the upfront CAPEX tax allowance regime paves the way in which for the elimination of ring fences geared toward stopping the set-off of future CAPEX expenditure towards the tax base of different mining operations and towards non-mining revenue.

The second and ultimate report additionally indicated that complete evaluation of carbon taxes has been undertaken by a separate stream throughout the DTC and due to this fact the report accommodates no feedback on carbon taxes.

The Minister of Finance may undertake these suggestions which in flip may impression the online current worth and inside charge of return of the venture.

Through the 2020 legislative cycle, it was initially proposed within the draft Taxation Legal guidelines Modification Invoice, 2020, that amendments be made to the provisions coping with the particular capital expenditure allowances for mines. Nonetheless, following the general public session course of, these amendments weren’t included within the Taxation Legal guidelines Modification Invoice, 2020. These amendments had been additionally not launched within the present 2021 legislative cycle however could also be proposed once more in future years.

Change Management

South African legislation gives for change management which, amongst different issues, regulates the movement of capital from the Frequent Financial Space of South Africa, Namibia, Lesotho and eSwatini (previously Swaziland) (“CMA”). The Foreign money and Exchanges Act, No. 9 of 1933 empowers the President of South Africa to make rules in regard to any matter straight or not directly regarding forex, banking or exchanges. The Minister of Finance is liable for all issues relating to change management coverage, and sure of those powers and features have been delegated to the SARB, extra particularly the Monetary Surveillance Division.

The Change Management Laws 1961 (the “Change Management Laws“), that are administered by the Monetary Surveillance Division are utilized all through the CMA and regulate transactions involving South African change management residents, together with corporations. The essential objective of the Change Management Laws is to mitigate the adverse results attributable to a decline of overseas capital reserves in South Africa, and to forestall South Africa’s steadiness of funds from being adversely affected, which can outcome within the devaluation of the Rand towards different currencies. It’s the acknowledged goal of the authorities to attain equality of remedy between residents and non-residents for change management functions because it pertains to inflows and outflows of capital. Whereas the South African authorities has relaxed change controls in recent times and in 2020 it was introduced that the Change Management Laws can be repealed and changed by a capital movement administration framework. In 2021, the Minister of Finance introduced that the capital movement administration framework can be considerably accomplished in 2021, though no indication has been given as to when it can come into impact. One of many most important options of the brand new framework, is that it’s going to abolish the present negative-based checklist system that applies underneath the Change Management Laws, which states that, for instance, transactions involving the export of capital are prohibited, until permitted by way of an exception. The Firm expects present change controls to stay in place till such time because the capital movement administration framework is launched and the Minister of Finance might present a sign as to when precisely it can come into impact.

The Firm is topic to varied types of such controls. The Firm is mostly not permitted to export capital from South Africa, maintain overseas forex, incur indebtedness denominated in foreign currency echange or purchase an curiosity in a overseas enterprise with out the approval of the related South African change management authorities.

Nonetheless, there are not any change management restrictions between the members of the CMA as they kind a single change management territory. Lesotho, Namibia and Eswatini have their very own change management authorities in addition to their very own acts or rules and rulings however by way of the Frequent Financial Space Settlement, their utility have to be a minimum of as strict as that of South Africa. Accordingly, the Firm is not going to require the approval of the Monetary Surveillance Division for investments and transfers of funds from South Africa to different CMA nations.

Carbon Tax/Local weather Change Insurance policies

When it comes to the Paris Settlement underneath the United Nations Framework Conference on Local weather Change, South Africa’s GHG emissions are mentioned to peak throughout the interval 2020 till 2025, then plateau from the interval 2025 till 2035, the place after GHG emissions are mentioned to say no from 2036. Nonetheless, it’s estimated that the phasing in of acceptable carbon taxation can cut back South Africa’s GHG emissions by between 35 per cent and 44 per cent beneath enterprise as normal.

It’s towards this background that the Carbon Tax Act was lastly assented to by the President on Might 22, 2019 and commenced with impact from June 1, 2019. As per the Carbon Tax Act’s Preamble, “the South African authorities is of the view that imposing a tax on GHG emissions and concomitant measures comparable to offering tax incentives for rewarding environment friendly use of vitality will present acceptable worth alerts to assist nudge the financial system in direction of a extra sustainable development path.”

The introduction of carbon tax will happen in a phased method, which permits for developmental challenges confronted by South Africa, encourages funding in additional vitality environment friendly expertise and ensures that South Africa’s competitiveness shouldn’t be being compromised.

Within the 2019 carbon tax yr (which ran from 1 June to 31 December) , the Carbon Tax Act levied the tax at a charge of Rand 120 per ton of carbon dioxide equal (“CO2-eq“) emissions on recognized actions that exceed prescribed GHG emission thresholds. The tax charge has been elevated yearly on the charge of the November shopper worth index (“CPI“) as decided by Statistics South Africa that falls throughout the earlier tax interval in contrast with the November CPI that falls throughout the tax interval, plus 2%. This adjustment will apply yearly till December 31, 2022. Because of this, the carbon tax charge for the 2020 carbon tax yr was R127 per tonnes CO2-eq and for the 2021 carbon tax yr, the speed is R134 per tonnes CO2-eq. From December 31, 2022 onwards, the tax charge have to be elevated in step with CPI equal to the change within the November CPI as decided by Statistics South Africa that falls throughout the earlier tax interval in contrast with the November CPI that falls throughout the tax interval previous to the earlier tax yr . This provision within the Carbon Tax Act could also be amended, relying on adjustments made to South Africa’s commitments underneath the Paris Settlement. Phasing-in of the tax has nonetheless provisionally allowed for a diminished tax charge.

The primary part of the carbon tax will run till the top of 2022. As a result of numerous business particular tax-free emissions allowances starting from 60 per cent to 95 per cent supplied for underneath the Carbon Tax Act, an preliminary efficient carbon tax charge as little as Rand 6 to Rand 48 per ton of CO2-eq emitted utilized within the carbon 2019 tax yr. These allowances embrace a/an:

• primary tax-free allowance for gasoline combustion emissions of between 60% and 75%;

• further tax-free allowance for industrial course of emissions as much as 10%;

• further tax-free allowance in respect of fugitive emissions of 10%;

• commerce publicity allowance of as much as a most of 10%;

• efficiency allowance not exceeding 5% of the whole GHG emissions of the taxpayer throughout the related tax interval;

• carbon price range allowance of 5% for corporations who’ve a carbon price range, which suggests a restrict on complete GHG emissions from a selected firm, inside a selected time period. It’s understood that this allowance is simply out there to entities who voluntarily take part in part 1 of the carbon price range and acquire the written consent of the DFFE; and

• carbon offset allowance of both 5% or 10%.

A taxpayer, aside from a taxpayer in respect of which the utmost complete allowance is expressly stipulated in Schedule 2 of the Carbon Tax Act to represent 100%, is simply entitled to obtain the sum of the allowances talked about above in respect of a tax interval to the extent that the sum of the allowances doesn’t exceed 95% of its complete GHG emissions.

Closing rules required for the implementation of the carbon offset and commerce publicity allowances and efficiency allowances underneath the Carbon Tax Act have been printed. The Carbon Offset Laws had been amended in 2021 to include, amongst different issues, adjustments clarifying the usage of carbon credit from accredited Clear Improvement Mechanism initiatives issued underneath nationwide registries to be eligible for itemizing as eligible South African carbon offsets.

Moreover, and as beforehand dedicated to by the South African Nationwide Treasury, part 1 of the tax can be electrical energy impartial in offering credit for the renewable vitality premium constructed into electrical energy tariffs and electrical energy technology levy. The impacts of the tax on the vitality sector will due to this fact solely feed by means of to the buyer upon the graduation of part 2 in January 2023. Nonetheless, within the 2021 draft Taxation Legal guidelines Modification Invoice (“Draft TLAB“), it was proposed that the renewable vitality premium even be out there to liable carbon taxpayers who conduct electrical energy technology actions and buy further renewable vitality straight underneath the REIPPPP (Renewable Vitality Unbiased Energy Producers Procurement Programme) or from impartial energy producers. The proposal is that for personal purchases or underneath the REIPPPP, this is able to apply the place an influence buy settlement is in place. If the proposed modification is adopted in present kind, it’s proposed that it apply from January 1, 2021, that’s, for the 2021 carbon tax yr.

It should additional be famous that the Explanatory Memorandum printed with the final model of the Carbon Tax Invoice in November 2018 gives for a evaluation of the impression of the carbon tax on the finish of part 1 (December 31, 2022). The evaluation will understandably permit for “changes to the design of the carbon tax together with the charges and degree of tax-free thresholds that can take into consideration the financial circumstances and progress made to scale back GHG emissions, in step with NDC (Nationally Decided Contribution) commitments“.

The South African nationwide treasury famous within the Explanatory Memorandum that the impression of the primary part has been designed to be income impartial, and revenues will probably be recycled by the use of decreasing the present electrical energy technology levy, credit score rebate for the renewable vitality premium, in addition to a tax incentive for vitality effectivity financial savings.

Regardless of its current introduction, amendments have already been made to the Carbon Tax Act by means of the Taxation Legal guidelines Modification Act, 34 of 2019, which was promulgated on January 15, 2020. Along with the varied technical and clarification amendments, one of many key amendments included clarification relating to the CPI that can inform annual changes to the speed of the carbon tax. As famous above, the November CPI of the present and prior tax interval at the moment are in comparison with decide the rise within the carbon tax charge.

Additional amendments had been applied within the 2020 legislative cycle as per the Taxation Legal guidelines Modification Act, No. 23 of 2020 (“TLAB 2020“). Among the amendments embrace aligning the carbon gasoline levy adjustment with the Carbon Tax Act and permitting a carbon tax “Move By” for the regulated liquid fuels sector.

Within the present legislative cycle, quite a few amendments have been proposed, together with these to the renewable vitality premium referred to above, the scope and definition of carbon sequestration, clarifications relating to the carbon price range allowance and aligning the Carbon Tax Act Schedule 2 emissions actions with the GHG Reporting Laws of the DFFE. Subsequent to the publication of the TLAB 2020, the general public was given a possibility to make submissions on the TLAB 2020 and public hearings had been held by Nationwide Treasury and SARS in September 2021. As was the case in 2020, Nationwide Treasury and SARS printed their draft Response Doc throughout October 2021, which can cope with a number of the submissions made by numerous stakeholders. The following step within the legislative course of is to await the revised Draft TLAB, which can seemingly be tabled with the Medium-Time period Price range Coverage Assertion (“MTBPS“). The MTBPS is at present scheduled for November 4, 2021.

In accordance with the financial stimulus bundle introduced by South African President Cyril Ramaphosa in April 2020, the submitting requirement and the primary carbon tax fee which was due by 31 July 2020 was delayed to October 31, 2020. In 2021, taxpayers had been required to file and pay their carbon taxes for the 2020 tax yr by July 31, 2021.

Local weather Change Invoice

Little progress seems to have been made in respect of the proposed Local weather Change Invoice (the “Local weather Invoice“) because it was first printed for remark in June 2018. The Local weather Invoice, amongst different issues, seeks to control the proposed carbon price range and permits for the willpower of sectoral emission targets.

In his State of the Nation Tackle in February 2020, President Cyril Ramaphosa confirmed that the Local weather Invoice will probably be finalised as a part of the “transfer to a low carbon development trajectory”, with no indication by way of timing. This was, nonetheless, previous to declaration of a nationwide state of catastrophe in March 2020 because of the COVID-19 pandemic.

With easing of native lockdown COVID-19 rules, local weather change regulatory developments are gaining momentum, with the Cupboard of the Authorities of South Africa approving the institution of the Presidential Local weather Change Coordinating Fee (“PCCC“), in addition to South Africa’s first Low Emission Improvement Technique 2050 (“LEDS“) throughout September 2020.

The PCCC flows from South Africa’s Nationally Decided Contribution underneath the Paris Settlement and will probably be formally established by means of the Local weather Invoice, the latter which the LEDS confirms will “kind the legislative basis for (South Africa’s) local weather change adaptation and mitigation response”. Regardless of these developments which are integral to the general local weather change response, there may be nonetheless little indication of when the Local weather Invoice could be anticipated to be formally promulgated, with the LEDS merely offering that it’s “forthcoming”.

The Local weather Invoice will obligate the Environmental Minister to find out GHG emission thresholds that can inform an entity’s carbon price range allocation. In accordance with the LEDS, post-2020, the carbon price range will probably be aligned with the carbon tax, which “might embrace the choice of imposing the next tax charge as a penalty for emissions exceeding the carbon price range”. The Environmental Minister has additional indicated that, as soon as the Local weather Invoice is signed into legislation, carbon price range and mitigation plan rules will observe.

South African Firms Act

The Firm’s South African subsidiaries are topic to the South African Firms Act, No. 71 of 2008 (“Firms Act“) which got here into power on Might 1, 2011. The intention of the Firms Act is to modernize firm legislation in South Africa in order that it’s comparable with main jurisdictions world wide.

The Firms Act has launched quite a few new authorized ideas into South African firm legislation, and there are due to this fact some areas of uncertainty within the utility and implementation of the Firms Act in these early levels of its existence. Varied compliance obligations have been led to for corporations and their boards, together with a requirement to make sure that an organization’s constitutional paperwork are aligned with the Firms Act, and that any shareholders’ agreements which are in place are aligned with the corporate’s memorandum of incorporation and the Firms Act. There was primarily a two-year “grace interval” for such alignment course of to happen, in that, topic to sure exceptions, for 2 years after the graduation date of the Firms Act (Might 1, 2011), a pre-existing firm’s shareholders’ settlement and/or constitutional paperwork would have prevailed within the case of any inconsistency with the Firms Act. The place at present, after the lapse of the grace interval, is that an organization’s memorandum of incorporation prevails over the shareholders’ settlement and the Firms Act in flip prevails over each. Though not peremptory, the Firm has registered new memoranda of incorporation for the Firm’s South African subsidiaries.

The Firms Act additionally requires that sure classes of corporations have in place sure committees, specifically audit committees (for all public and state-owned corporations) and social and ethics committees (for all listed public corporations and state-owned corporations in addition to different corporations that attain a sure “public curiosity rating” by way of the Firms Laws, 2011). The “public curiosity rating” takes under consideration the variety of shareholders and staff of the corporate, in addition to the quantity of the corporate’s debt and annual turnover.

Failure to adjust to the Firms Act can result in compliance notices being issued by the Firms Mental Property Fee (“CIPC“), administrative fines and civil legal responsibility for damages attributable to non-compliance. The Firm’s South African subsidiaries might also be liable underneath the Firms Act to “any” different particular person for any loss or injury suffered by that particular person because of the Firm’s subsidiary’s non-compliance with the Firms Act.

The Firms Act extends shareholders’ rights and recourse towards corporations and administrators. Additionally, administrators, prescribed officers and committee members will now face extra intensive and stricter grounds for private legal responsibility for his or her actions in finishing up their features throughout the firm than was the case underneath the earlier regime. The Firms Act introduces class motion fits towards corporations, administrators and firm officers by individuals whose rights are affected by the corporate. Firms will thus face a larger threat of litigation and the prices thereof. Minority shareholders’ rights within the context of mergers and different basic transactions have additionally been elevated considerably, such because the introduction of appraisal rights and the flexibility to put aside and evaluation particular resolutions approving such transactions. This might outcome within the hindrance of such transactions.

The Firms Act has additionally launched pretty intensive regulation of monetary help given amongst associated and interrelated corporations, in that there have to be shareholder approval, compliance with solvency and liquidity checks, and equity and reasonableness in relation to such monetary help. This as an illustration impacts intra group mortgage and safety preparations, as effectively transactions with third events the place ensures or different safety inside a gaggle of corporations is given. This impacts monetary help given by South African corporations and would accordingly have an effect on monetary help given by South African corporations to non-South African associated entities.

The Firms Act prohibits corporations from creating any additional par worth shares. If an organization needs to extend its share capital, it should convert all of its pre-existing par worth shares into shares of no par worth. The income authorities have issued a ruling with respect to the tax remedy of such conversions to the impact that such conversions shall not be considered as “disposals”. This will likely turn out to be related in respect of the Firm’s South African subsidiaries ought to their share capital be required to be elevated at any stage for no matter cause.

An vital innovation of the Firms Act is that of enterprise rescue, which is modelled to some extent on the USA “Chapter 11” chapter procedures. Enterprise rescue is a largely non-judicial, industrial course of that goals to rescue a financially distressed firm and maximize the chance of the corporate’s continued existence on a solvent foundation.

Firms in South Africa could be deregistered in the event that they fail to timeously lodge their annual returns. Which means the corporate ceases to exist as a separate juristic particular person, and that each one of its rights and belongings devolve to the state by operation of legislation. An organization’s registration could be reinstated by utility both to the CIPC or the Excessive Court docket. On an organization being reinstated to the register of corporations, the rights and belongings of such firm routinely re-vest, with retrospective impact, within the firm. The Firm ensures that always the requisite filings and returns of its South African subsidiaries with CIPC are up-to-date and thereby ensures that such subsidiaries are usually not deregistered.

Land Use

The Spatial Planning and Land Use Administration Act 16 of 2013 (“SPLUMA”) prescribes ideas for the regulation of land use in South Africa on a nationwide, provincial and municipal degree. Nonetheless, land use planning is especially regulated on a municipal degree since municipalities are constitutionally empowered to control the efficient administration of land use planning inside their respective jurisdictions. Municipal land use planning is regulated by means of municipal planning by-laws, spatial growth frameworks and land use or zoning schemes. Land-use or zoning schemes mirror all permissible land use rights in respect of land located throughout the municipality’s space of jurisdiction. Deviations from the land-use or zoning scheme are solely permissible upon utility for the required departure, land use consent or re-zoning utility, as regulated by the relevant scheme and the related municipal planning by-law learn with SPLUMA.

Whereas beforehand it was in dispute whether or not municipal planning had the facility to control mining actions, April 2012 Constitutional Court docket judgments within the circumstances of Maccsand (Proprietary) Restricted v Metropolis of Cape City and Others and Minister for Mineral Sources v Swartland Municipality and others confirmed that city planning approvals and consents are required for mining actions. A Excessive Court docket determination has indicated that such consents will likewise be required for prospecting actions. The impact of those judgments is that each one mining and prospecting operations must be performed on land which is appropriately zoned for mining or prospecting. Mining corporations run the chance of being interdicted from persevering with with their operations pending a re-zoning if the land on which they’re working shouldn’t be appropriately zoned. The sensible implications of complying with these judgments are quite a few. These embrace that there could also be totally different land makes use of on one property, notably the place solely prospecting is going down. These implications will must be thought-about additional by the Firm’s operations. That is additional sophisticated by the truth that there are a number of provincial land use planning legal guidelines for various provinces.

Along with statutory controls, sure personal legislation rights, comparable to the actual rights created by the use of registered restrictive circumstances of title or servitudes, might also impression on land use planning on the whole. Land use or zoning schemes are topic to the actual rights created by restrictive circumstances of title. The implication is that if a land-use or zoning schemes allow a land use which is prohibited by a restrictive situation of title, such situation will first need to be eliminated by way of the related laws (municipal planning by-laws learn with SPLUMA). Servitudes might also impression on land use planning, as an illustration servitudes registered in respect of infrastructure. Contravention of those actual rights might end in a demolition order being granted in respect of illegal growth.

One other side which requires consideration is who ought to apply for such re-zoning. Though landowners would sometimes be the applicant, the Firm’s operations are usually not all the time performed on land which the Firm owns. Accordingly, the Firm might need to get hold of an influence of legal professional from the landowner to acquire amendments to land use or zoning schemes in municipalities through which the Firm intends to prospect or mine and has obtained rezoning permission the place required.

Dealing in Treasured Metals

All operations which purchase, refine, beneficiate, possess or get rid of gold, any metals of the platinum group, or any ores of such metals, are required to acquire authorisations to take action underneath the Treasured Metals Act No. 37 of 2005 (the “Treasured Metals Act“). These authorisations embrace metallic beneficiation licences, refining licences and treasured metals export approvals. Purposes for such authorisations have to be made to the South African Diamond and Treasured Metals Regulator. Refining licences could be issued for as much as 30 years, while treasured metals beneficiation licences could be issued for durations of as much as ten years. The problem of sure licences underneath the Treasured Metals Act requires that the applicant be compliant with the BEE provisions of the Mining Constitution 2018.

Land Claims

Beneath the Land Claims Act, as amended, any one that was dispossessed of rights in land in South Africa after June 19, 1913 because of previous racially discriminatory legal guidelines or practices with out fee of simply and equitable compensation is granted sure treatments and is entitled to redress. When it comes to the Land Claims Act, individuals entitled to institute a land declare had been required to lodge their claims by December 31, 1998.

The Land Claims Act additionally entitles the South African Land Reform Minister to accumulate possession of land or rights in land by the use of expropriation and to switch the expropriated land or rights in land to profitable claimants. Notably, the Land Reform Minister might elect to not expropriate land and will present various aid to the claimant, as directed by part 25(7) of the Structure. Expropriation can be topic to provisions of the Expropriation Act 63 of 1975 and part 25(2) of the Structure, which give, on the whole, for simply and equitable compensation.

The Land Reform Minister might not, nonetheless, restore land to a claimant and not using a court docket order or an settlement being reached between the affected events for the needs of reaching restitution.

The Restitution Modification Act got here into impact on July 1, 2014. The Restitution Modification Act launched vital amendments to the Land Claims Act, most notably permitting for land claims by individuals beforehand disposed of land underneath apartheid legal guidelines to once more be submitted, regardless of the earlier cut-of date having expired roughly 15 years in the past. The brand new interval for lodging claims will probably be till June 30, 2019, which can arguably create a attainable resurgence of latest restitution claims. Nonetheless, in Land Entry Motion of South Africa and Others v Chairperson of the Nationwide Council of Provinces and Others, the Constitutional Court docket discovered that the Restitution Modification Act was invalid as parliament did not fulfill its obligation to facilitate public involvement in accordance with part 72(1)(a) of the Structure. Because of this, the Constitutional Court docket interdicted the Fee of Restitution of Land Rights from processing claims lodged from July 1, 2014 till all claims submitted previous to December 31, 1998 by way of part 6(1)(a) of the Land Claims Act have been finalised. Parliament has since this judgment circulated a invoice, which can repeal the Restitution Modification Act, as soon as promulgated. When it comes to this invoice, the brand new interval for the lodging of claims will nonetheless be till June 30, 2019.

With the intention to substantiate a declare for restitution, an individual is required to reveal that:

  • he/she is an individual, or it’s a deceased property dispossessed of a proper in land after June 19, 1913, because of previous racially discriminatory legal guidelines or practices;

  • he/she is the direct descendant of an individual referred to above who has died with out lodging a declare and has no ascendant who: (i) is a direct descendant of an individual referred to above and (ii) has lodged a declare for the restitution of a proper in land; or

  • it’s a group or a part of a group dispossessed of a proper in land after June 19, 1913, because of previous racially discriminatory legal guidelines or practices.

Beneath the Land Claims Act a profitable claimant could also be granted both return of the dispossessed land (known as “restoration”) or equitable redress (which incorporates the granting of an acceptable proper in various state-owned land; or fee of compensation). If restoration is claimed, the Land Claims Act requires, inter alia, the feasibility of such restoration to be thought-about. Beneath current case legislation, restoration of land might solely be given in circumstances the place a claimant can use the land productively, with the feasibility of restoration being depending on the prices.

The process for lodging a land declare is {that a} declare have to be lodged with the Regional Land Claims Commissioner for the province the place the land in query is located (the “Land Claims Commissioner“). The land declare will then be investigated by the Land Claims Commissioner, after which the declare will probably be printed within the Authorities Gazette and within the media circulating nationally and within the related province. The Land Claims Act gives that, if at any stage throughout the course of the investigation of a land declare, it turns into evident that:

  • there are two or extra competing claims in respect of the identical land (whether or not by communities or in any other case); or

  • the land that’s topic to the declare shouldn’t be state-owned land, and the proprietor or holder of rights in such land is against the declare; or

  • there may be every other challenge which could usefully be resolved by means of mediation and negotiation,

  • the Chief Land Claims Commissioner might direct the events involved to aim to settle their dispute by means of mediation or negotiation. It additional gives that if, upon completion of an investigation of a land declare, it’s agreed that it’s not attainable to settle the declare by mediation or negotiation, the declare could also be referred to the Land Claims Court docket for ultimate willpower.

Beneficiation

The beneficiation of mineral assets in South Africa is regulated by three most important items of laws, specifically the MPRDA, by means of part 26 thereof, thePrecious Metals Actand the Diamonds Act, No. 58 of 1986 (as amended).

Along with the legislative framework geared toward selling native beneficiation of minerals, the DMRE has developed and adopted a beneficiation technique which identifies worth chains for the aim of beneficiation of sure minerals in South Africa (which can be in step with the developmental objectives set out within the Nationwide Improvement Plan adopted by the South African authorities). The Mining Constitution 2018 (as mentioned above) additionally consists of an incentive for mining corporations to offset the worth of the extent of beneficiation achieved by the corporate towards a portion of its BEE Entrepreneur possession requirement, not exceeding 5%, in an effort to advertise native beneficiation.

The laws on the heart of the initiation or promotion of beneficiation of mineral assets is the MPRDA. Part 26 of the MPRDA regulates the Land Reform Minister’s energy to provoke and promote beneficiation of minerals in South Africa. The time period ‘beneficiation’ was not outlined by the MPRDA. Because the part at present reads, the Minister might prescribe ranges of beneficiation of a specific mineral ought to he set up, on recommendation from the Minerals and Mining Board and consulting with the Minister of Commerce, Trade and Competitors, {that a} specific mineral could be beneficiated economically in South Africa. Additional, an individual who intends to beneficiate any minerals mined in South Africa, exterior of the nation might solely accomplish that with the written consent of and in session with the Land Reform Minister.

Labour Relations Act

The Structure provides each particular person the appropriate to honest labour practices. The Labour Relations Act, No. 66 of 1995 (“LRA“) is the principal laws that provides impact to the framework through which staff, employers and industrial relations at a person and collective degree are regulated. As a premise the LRA regulates the style through which staff, employers, commerce unions and employer’s organizations work together and interact with each other within the office. This consists of processes associated to collective bargaining, wage willpower, willpower of phrases and circumstances of employment, the formulation of business coverage and worker participation within the decision-making processes.

The LRA framework holistically is geared on the safety of worker and employer rights by means of numerous constructions. Principally the LRA permits for the creation of commerce unions and employer’s organizations. The extent of entitlement of the commerce union is topic to the dimensions of its membership base. Relying on the variety of staff who’re members of the commerce union, the commerce union will probably be allowed entry to the office, illustration on the office, to have conferences on the office and to entry to info involved with the employment of the staff. To be entitled to enter into collective agreements with the employer, the commerce union will need to have as its members the vast majority of the staff on the office. The LRA endorses a co-operative method whereby two or extra commerce unions can combination their membership for the needs of reaching majority standing in a collective bargaining unit or discussion board.

Collective agreements entered into between the commerce union and the employer will bind all staff employed by the employer, no matter their commerce union affiliations, for the entire interval of the settlement. The LRA doesn’t present for a statutory responsibility to discount collectively or in any other case, and due to this fact such conduct is solely a voluntary determination.

At a larger degree the LRA permits for the creation of bargaining and statutory councils. Such councils could be established each for multiple registered commerce union or employer’s group. Such councils will probably be established per sector or space. Councils on this regard will, amongst others, be entitled to conclude collective agreements and to interact within the decision of disputes.

If a dispute between the employer and worker arises the LRA clearly delineates the lawful context through which this will happen. As a premise the LRA strictly stipulates and regulates the necessities for a lawful strike, lockout or picketing. On this regard the LRA expressly identifies who’s allowed to interact in industrial motion of this nature, which processes have to be adopted and for which functions staff and employers might interact in such industrial motion. Ought to the commercial motion require the events to interact in a means of session and negotiation, the LRA additionally prescribes the procedures to be adopted.

If the conduct of the events, for no matter cause, outcome within the dismissal of staff the LRA establishes the Fee for Conciliation, Mediation and Arbitration (“CCMA“) as a principal discussion board for the decision of disputes ensuing from the dismissal. The LRA defines illegal dismissals as being both routinely or not routinely unfair. The kind of dismissal will rely on the character thereof and the prevailing circumstances on the time of dismissal, an instance being dismissals arising from operational necessities.

A means of mediation and conciliation is peremptory on this regard. Ought to the dispute stay unresolved, events will probably be required to enter right into a means of arbitration, and the award made by the Commissioner can be ultimate.

Employment Fairness Act

The Employment Fairness Act, No. 55 of 1998 (“EEA“) locations an obligation on employers to advertise equal alternative within the office by, amongst different issues, eliminating any types of unfair discrimination within the office.

Part 6 of the EEA prohibits any employment follow or coverage which discriminates, straight or not directly, towards any worker on any ‘arbitrary floor’ or a number of of the grounds particularly listed within the part –

‘race, gender, intercourse, being pregnant, marital standing, household duty, ethnic or social origin, color, sexual orientation, age, incapacity, faith, HIV standing, conscience, perception, political opinion, tradition, language and start’.

The place discrimination is alleged on one of many specified grounds, it’s presumed to be unfair; if the discrimination relies on another arbitrary floor, the complainant should set up unfairness.

Pursuant to current amendments, the EEA now gives {that a} distinction within the phrases and circumstances of employment between staff of the identical employer, that are performing the identical or considerably the identical work or work of equal worth, quantities to unfair discrimination. It is very important notice that the related provision refers to ‘a distinction within the phrases and circumstances’ of employment and isn’t solely restricted to a distinction in remuneration. However, to show such discrimination, the worker might want to reveal that the rationale for the distinction in remedy relies on one of many listed grounds or every other arbitrary floor.

Any occasion might refer a dispute for unfair discrimination to the CCMA which, in flip, should try and resolve the dispute by means of conciliation. Ought to the conciliation be unsuccessful, both occasion might refer the dispute to the Labour Court docket for adjudication.

Alternatively, an worker might refer the dispute on to the CCMA for arbitration if that particular worker earns beneath the earnings threshold as prescribed by the Minister of Employment and Labour. The present earnings threshold is Rand 205,433.30 every year. No matter the foregoing, the worker might also straight method the CCMA to resolve the dispute by means of arbitration the place the worker’s declare for unfair discrimination relies on alleged sexual harassment. Then once more, the events also can comply with refer the matter to the CCMA for arbitration.

Environmental, Social and Governance (“ESG”)

Company Social Duty

Being a accountable company citizen means defending the pure atmosphere related to its enterprise actions, offering a secure office for its staff and contractors, and investing in infrastructure, financial growth, and well being and training within the communities the place the Firm operates in order that it may improve the lives of those that work and reside there past the lifetime of such operations. The Firm takes a long-term view of its company duty, which is mirrored within the insurance policies that information its enterprise selections, and in its company tradition that fosters secure and moral behaviour throughout all ranges of Platinum Group. The Firm’s purpose is to make sure that its engagement with its stakeholders, together with its workforce, business companions, and the communities the place it operates, is sustained, mutually helpful and clear. By constructing such relationships and conducting ourselves on this method, the Firm can tackle particular issues of its stakeholders and work cooperatively and successfully in direction of reaching this purpose.

Strategy

The Firm and Waterberg JV Co. are dedicated to conducting enterprise in a accountable and sustainable method. Our core ESG values are:

  • to maximise the constructive impact of our initiatives and operations for all stakeholders;
  • caring for the atmosphere through which we function;
  • contributing to each the short-term and long-term growth of our host communities;
  • making certain secure and safe workplaces for our staff;
  • contributing to the welfare of our staff and native communities; and
  • selling good company governance, by means of openness, transparency, and accountability.

We’re working to develop a set of efficiency indicators to measure and monitor key environmental, social sustainability and governance actions on the Waterberg Mission. We want to obtain a excessive degree of understanding and dedication from those that perform our day-to-day actions. Our social efficiency indicators intention to cowl social threat administration, grievance administration and group funding. Our environmental efficiency indicators intention to cowl environmental impression mitigation, audits, water, vitality, GHG emissions and environmental remediation and rehabilitation. Well being and security efficiency indicators are additionally to be recorded and monitored.

ESG Reporting and Evaluation

We’ve got partnered with Digbee Ltd. (“Digbee“) to make the most of an business accredited set of frameworks to evaluate and disclose our ESG metrics. Platinum Group accomplished its inaugural ESG disclosure submission with Digbee in October, 2021. Digbee, a United Kingdom based mostly firm, is a brand new mining-focused skilled community and ESG disclosure platform with a purpose to supply improved disclosure and higher entry to capital markets for mining corporations concerned with sturdy ESG practices. Digbee has been endorsed by main monetary companies who help the Digbee ESG initiative comparable to Blackrock Inc., BMO, and Dundee Company.

The Digbee ESG platform amalgamates over thirty initiatives and reporting requirements to generate an acceptable ESG rating for growth stage mining corporations. The Digbee reporting framework encompasses widely known ESG requirements together with, the Equator Rules, the World Reporting Initiative Requirements, the sustainability accounting requirements of the Sustainability Accounting Requirements Board, and the suggestions for simpler climate-related disclosures established by the Activity Power on Local weather Associated Disclosure. Digbee gives a reporting framework to help monetary establishments in their very own evaluation of environmental and social dangers in initiatives.

The Firm’s ESG submission was based mostly on each company degree and venture degree disclosure. As a part of the Waterberg Mining Proper utility course of the Firm developed a large ranging set of research and plans in relation to potential ESG impacts. These research and specialists had been leveraged to kind the premise of the Digbee ESG disclosure and subsequent outcomes.

Primarily based on the data supplied, Platinum Group achieved an overarching rating from Digbee of BB with a spread of CC to AA as of September 2021.

Excessive Stage Constructive Outcomes from Digbee Evaluation

  • The commodities anticipated to be produced from this asset are acknowledged as being vital to the worldwide vitality transition.
  • The unique structure for the mining operation has been altered to scale back its potential impression on native communities, an indication that Platinum Group is listening and reacting to stakeholder engagement.
  • Sturdy Influence Assessments have been accomplished offering good baselines for ongoing ESG monitoring.

Excessive Stage Potential Dangers and Alternatives from Digbee Evaluation

  • The asset is situated in an arid atmosphere with the necessity to handle all water sources, pathways and receptors very fastidiously.
  • Whereas rapid native communities are usually supportive of the venture, interplay between communities and mining corporations within the bigger area have led to civil dissatisfaction up to now.
  • Data submitted pertaining to the Tailings Storage Facility signifies that additional research are required to optimize the administration of all associated dangers.

ESG Goals

We’re persevering with to work on enhancements to our group engagement processes for all our mining and environmental issues. We think about all stakeholders and ensure our dedication to the well being and security of our staff and surrounding communities. Well being and security additionally stay a prime precedence. Our ESG goals embrace:

  • decreasing deliberate water consumption;
  • reaching full compliance with rules and reporting of GHG emissions;
  • reaching minimal impression on vegetation and supporting and enabling native biodiversity;
  • decreasing deliberate industrial waste;
  • resolving particular person group member grievances;
  • persevering with and bettering stakeholder communication and engagement applications; and
  • reaching zero vital environmental incidents;

Environmental

We’ve got commissioned impartial environmental website inspections and environmental administration program compliance assessments on the Waterberg Mission for all our prospecting rights areas. Annual environmental experiences are filed with regulators. Up to now, there have been no vital environmental incidents at our Waterberg operation since exploration started on the property in 2011. As a requirement to the grant of the Waterberg Mining Proper an EIA and EMP had been filed with governmental regulators after a complete session course of with communities, regulators, environmental establishments, and different stakeholders during the last ten years. A number of impartial, third-party specialist consultants accomplished element research as part of the applying course of. The EIA and EMP had been subsequently accredited by the related regulators.

Throughout 2020 an environmental rehabilitation bond was established for the longer term prices of mine closure and environmental restoration. Because the operations on the Waterberg Mission improve, so too will the quantum of this bond.

Throughout 2020 a research analyzing the usage of battery electrical gear for the Waterberg Mission was accomplished and a research analyzing attainable water use discount and dry stacking options for tailings was accomplished.

Moreover, the mineral assets focused on the Waterberg Mission are mineable platinum group metals, being primarily palladium, platinum, and rhodium. These metals are vital parts by way of decreasing dangerous emissions from inside combustion engines. Platinum is a vital factor in gasoline cells and the “hydrogen financial system” on the whole, highlighting the mine’s potential to contribute to a cleaner future.

Social

In response to the COVID-19 pandemic, we supplied and delivered roughly US$5,000 in hygiene provides, medical provides, and private safety gear to native communities close to the Waterberg Mission. We ensured secure operation of exploration and workplace amenities throughout the federal government mandated and really useful exercise suspensions. Up to now, work on the Waterberg Mission has been associated to exploration and engineering actions. Total security efficiency has been excellent and strict security protocols are adopted.

We keep an open communication coverage with communities close to the Waterberg Mission. We responded to issues raised by people relating to water assets, roadways, heritage websites and deliberate infrastructure areas by totally investigating every reported concern or declare. Conferences had been held with group leaders and website inspections occurred with local people members accompanied by impartial consultants, NGOs, authorities businesses and regulators. Though no materials points or occasions of regulatory non-compliance by the Firm have been recognized after these investigations, the Firm stays dedicated to working in a accountable method and continues to work with local people management to make sure any recognized points are resolved in an acceptable {and professional} method and in compliance with governing rules. Primarily based on group conferences and direct suggestions, and partially because of the Firm’s efforts to interact and help native communities, we consider local people residents help the event of the Waterberg Mission and perceive the anticipated financial advantages. Nonetheless, numerous events inside the area people filed the Appeals in 2021 objecting to the grant of the Waterberg Mining Proper. Waterberg JV Co. has responded to every enchantment and can observe the suitable regulatory course of in every occasion.

Social and Labour Plans

The Waterberg Social and Labour Plan (the “Waterberg SLP“) was developed pursuant to DMRE tips for social and labour plans and has been submitted in accordance with regulation 46 of the MPRDA along with the Waterberg Mining Proper utility which was granted on January 28, 2021 and registered on July 6, 2021. The target of a social and labour plan is to align the Firm’s social and labour ideas with the associated necessities established underneath Mining Constitution 2018. These necessities embrace selling employment and avoiding retrenchments, development of the social and financial welfare of all South Africans, contributing towards the transformation of the mining business and contributing in direction of the socio-economic growth of the communities proximal to the Waterberg Mission. Contractors will probably be required to adjust to the Waterberg SLP and insurance policies, together with dedication to employment fairness and BEE, proof of competence by way of rules, dedication to undertake coaching applications, compliance with all insurance policies regarding recruitment, coaching, well being and security, and so on. When it comes to human assets coaching, the Waterberg Social and Labour Plan will set up goals for adult-based training coaching, learnerships and growth of the abilities required by mining business, transportable expertise coaching for transition into industries aside from mining, training bursaries and internships. The Waterberg SLP may also set up native financial growth goals for initiatives comparable to group centre refurbishment, highschool refurbishment, water and reticulation initiatives, housing growth, institution of leisure parks and numerous different localized applications for small scale business, agriculture, entrepreneurship and well being and training.

To help the DMRE accredited Waterberg SLP for affected communities close to the Waterberg Mission, we have now budgeted expenditures amounting to R 335.6 million ($23.11 million at August 31, 2021) over a five-year interval. Expenditures are topic to the grant of all required permits and the graduation of growth actions on website. On the finish of every five-year interval a brand new SLP will probably be established, contemplating precise expenditures up to now and adjustments to regulate for group suggestions, wants and preferences. The present Waterberg SLP consists of the next provisions:

  • Human Useful resource Improvement

Waterberg JV Co. is conscious of the significance of human assets to perform its enterprise goals. Abilities growth is the muse for attaining competent and productive staff who can contribute to assembly the mine’s enterprise goals and likewise contribute to the upliftment of their communities by means of their very own private financial success. The talents growth plan for the Waterberg Mission budgets R 4.98 million ($0.34 million at August 31, 2021) for the achievement of future profession growth alternatives throughout the mining business and past the wants of the mine’s operational necessities. The talents growth plan seeks to attain transportable expertise by means of accredited qualification by licensed coaching suppliers and applications. Emphasis is to be utilized to employment fairness and to participation by traditionally deprived South Africans and ladies. Learnership, internship, bursary and youth coaching applications are deliberate. Targets have been established for procurement and employment ranges for girls and for individuals from the area people.

  • Native Financial Improvement

The Native Financial Improvement (“LED“) program will search to allow native communities to turn out to be economically stronger by bettering infrastructure, enterprise expertise, entrepreneurship, job creation and revenue. An quantity of R 320.6 million ($22.07 million at August 31. 2021) has been budgeted for LED initiatives looking for to amplify alternatives in addition to alleviate poverty throughout the surrounding communities of the mine. Packages are to incorporate infrastructure and academic help to native faculties, mine and group bulk water provide and reticulation, extension and equipping of current clinic/well being amenities, and street development.

  • Administration of Downscaling

A price range of R 10.0 million ($0.69 million at August 31, 2021) has been established for coaching and expertise growth. We performed a social audit and desires and expertise evaluation of the communities close to the Waterberg Mission to find out about these communities and to assist direct our efforts in direction of the issues of significance to them. This work will information our long-term coaching applications meant to extend expert employment alternatives for local people members. Funding in human useful resource growth and facilitation of coaching throughout the lifetime of the Waterberg Mission intends to maintain expertise that can help employment for employees past the lifetime of the mine. The mine intends to adjust to the Primary Situations of Employment Act and the Division of Labour’s Social Plan Pointers with the purpose of building expertise that will probably be of worth to staff at a future time of downscaling and retrenchment.

Governance

The Firm has a Governance and Nomination Committee to make sure good company governance within the Firm’s stewardship. The committee’s tasks embrace, however are usually not restricted to:

  • reviewing and making suggestions regarding respecting good company governance and the Board’s stewardship position within the administration of the Firm;
  • the common analysis of the effectiveness of the board, its members, its committees and their charters;
  • the analysis of the efficiency of particular person administrators, the Board as an entire, and committees of the board;
  • the efficiency analysis of the chairperson of the Board and the chairperson of every Board committee;
  • the efficiency analysis of the CEO and CFO, together with efficiency towards company goals;
  • CEO and CFO succession planning;
  • overseeing compliance with the Firm’s Code of Conduct, monitoring compliance with the code, investigating any alleged breach or violation of the code, authorizing any waiver granted in reference to the code; and
  • overseeing compliance with any guidelines, rules or tips promulgated by regulatory authorities regarding company governance.

On April 30, 2021, the Firm established an Environmental, Well being and Technical Advisory Committee to supervise capital initiatives and materials transactions undertaken by the Firm, its subsidiaries or its associates from an environmental, technical, monetary and scheduling perspective and to be liable for creating and monitoring requirements for making certain a secure and wholesome work atmosphere and to advertise sustainable growth.

The Firm is topic to anti-corruption legal guidelines and rules, together with the Canadian Corruption of International Public Officers Act and sure restrictions relevant to U.S. reporting corporations imposed by the U.S. International Corrupt Practices Act of 1977, as amended, and related anti-corruption and anti-bribery legal guidelines in South Africa, that prohibit corporations from bribing or making different prohibited funds to public officers with a view to get hold of or retain a bonus in the midst of enterprise.

The Firm has beforehand adopted a Code of Conduct, a Claw Again Coverage, and a Whistle Blower Coverage, amongst different customary codes and committees. Throughout 2021 we established an Environmental, Well being, Security and Technical Committee comprised of cross-disciplinary administrators.

We additionally adhere to the company governance insurance policies of the TSX and the NYSE American.

C. Organizational Construction

The Firm’s materials subsidiaries as at August 31, 2021 had been comprised of 1 wholly-owned firm, a 49.9% holding in a second firm, a direct and oblique 50.02% holding in a 3rd firm all of that are integrated underneath the corporate legal guidelines of the Republic of South Africa and a 53.7% holding in a fourth firm integrated in British Columbia. The next chart represents the Firm’s company group as on the date of submitting of this Annual Report:

Notes:

1. Remaining 46.3% curiosity owned by Anglo Platinum Advertising and marketing Ltd., a subsidiary of Amplats.

2. Remaining curiosity owned as to 12.195% by JOGMEC, 9.755% by Hanwa and 15.0% by Implats.

3. Remaining 50.1% curiosity owned by Mlibo Gladly Mgudlwa and Luyanda Mgudlwa. Certified BEE firm.

As on the date of submitting of this Annual Report, the Firm’s solely materials mineral property is the Waterberg Mission, which is comprised of two adjoining venture areas previously often called the Waterberg Joint Enterprise Mission and the Waterberg Extension Mission. The Waterberg Mission is held by Waterberg JV Co., through which the Firm is the biggest proprietor, with a 50.02% helpful curiosity, of which 37.05% is held straight by PTM RSA and 12.974% is held not directly by means of PTM RSA’s 49.9% curiosity in Mnombo, a BEE firm which holds 26.0% of Waterberg JV Co. The remaining pursuits in Waterberg JV Co. are held as to 12.195% by a nominee of JOGMEC, 9.755% by Hanwa and 15.0% by Implats. PTM RSA is the operator of Waterberg JV Co. Waterberg JV Co. and its shares are ruled by a shareholders’ settlement (the “Waterberg Shareholders Settlement“) and its memorandum of incorporation. To trigger the board of administrators of Waterberg JV Co. to take motion, PTM RSA should usually get hold of the approval of the board representatives of a minimum of one different shareholder, which can be Mnombo, through which the Firm has a 49.9% curiosity. As well as, sure issues have to be accredited by a majority, 80% or 90% vote of the Waterberg JV Co. shareholders, relying on the matter, or, in sure circumstances, by particular shareholders. The Waterberg Shareholders Settlement confirms the ideas of BEE compliance and contemplates the potential switch of fairness and the issuance of further fairness to a number of broad based mostly black empowerment companions, at honest worth in sure circumstances, together with a change in legislation or imposition of a requirement upon Waterberg JV Co. In sure circumstances, Mnombo could also be diluted with fairness transferred or issued to totally different black empowerment shareholders.

D. Property, Crops and Gear

Materials Mineral Property Pursuits

Waterberg Mission

The Waterberg Mission is situated 85 km north of the city of Mokopane (previously Potgietersrus) within the province of Limpopo, South Africa, roughly 330 km NNE from Johannesburg. Elevation ranges from roughly 880 to 1365 metres above sea degree.

The property at present covers an combination complete of 79,188 hectares and is roughly centred on UTM coordinate (Latitude 23°21′53″ S, Longitude 28°48′ 23″ E). Of the whole venture space 20,532 hectares are coated by the Waterberg Mining Proper. An additional 58,655 hectares are coated by lively and utilized for prospecting rights. Waterberg JV Co. is at present in course of to use for closure on inactive prospecting rights situated north of the recognized mineralized space.

On September 21, 2017, the Firm accomplished the deliberate corporatization of the Waterberg Mission by the switch of all Waterberg Mission prospecting rights held by PTM RSA on behalf of the three way partnership members into Waterberg JV Co.

Efficient September 21, 2017, Waterberg JV Co. owned 100% of the prospecting rights comprising your complete Waterberg Mission space and Waterberg JV Co. was owned 45.65% by PTM RSA, 28.35% by JOGMEC and 26% by Mnombo, giving the Firm complete direct and oblique possession of 58.62% at the moment.

On October 16, 2017, Implats entered into definitive agreements with the Firm, JOGMEC, Mnombo and Waterberg JV Co., whereby Implats bought shares of Waterberg JV Co. representing a 15.0% curiosity within the Waterberg Mission from PTM RSA (8.6%) and JOGMEC (6.4%) for $30.0 million, giving the Firm complete direct and oblique possession of fifty.02%.

The Waterberg Mission is situated on a newly-discovered extension of the Northern Limb of the Bushveld Complicated. Amplat’s Mogalakwena mine is a Platreef asset additionally situated on the Northern Limb. A considerable portion of the Waterberg Mission prospecting space stays unexplored.

The Waterberg Mission is derived from a gaggle of exploration initiatives that got here from a regional goal initiative by the Firm conceived in 2007 and 2008. The Waterberg prospect focused a beforehand unproven extension to the Northern Limb of the Bushveld Complicated that was overlain by a sequence of sedimentary rocks. The Firm chosen this goal from an inventory of latest concepts supplied by a staff of South African geoscientists. Detailed geophysical and different work indicated potential for a bundle of Bushveld Complicated rocks underneath the sedimentary Waterberg formation cowl rocks. Earlier mineral exploration actions within the space had been restricted because of the intensive sedimentary cowl. Exploration by the Firm due to this fact progressed by means of preliminary exploration actions to delineate preliminary drill targets to primarily drilling centered work now {that a} deposit has been found.

The Waterberg Mission is managed and explored in keeping with a joint Technical Committee (outlined beneath) and is at present deliberate for growth in keeping with the target of reaching a “finest consequence” situation for shareholders and stakeholders.

Technical Report -Waterberg DFS

Technical info on this Annual Report relating to the Waterberg Mission is derived from the Waterberg DFS. Along with the Waterberg DFS, a SAMREC 2016 compliant technical report has ready and signed-off by the Unbiased Certified Individuals. The Unbiased Certified Individuals for the Waterberg DFS and the companion SAMREC technical report are Charles J Muller, B. Sc. (Hons) Geology, Pri. Sci. Nat. of CJM Consulting (Pty) Ltd.; Gordon Ian Cunningham, B. Eng. (Chemical), Pr. Eng., FSAIMM of Turnberry Initiatives (Pty) Ltd.; and Michael Murphy, P. Eng. of Stantec Consulting Ltd.

The Waterberg DFS supersedes the Firm’s prior technical report, the October 2018 Waterberg Report, in addition to the sooner 2016 pre-feasibility research, with respect to the Waterberg Mission. Prior technical experiences and research regarding the Waterberg Mission ought to not be relied upon.

The Waterberg DFS has been evaluated and ready in accordance with NI 43-101 to adjust to the necessities for a definitive feasibility research. The Waterberg DFS complies with disclosure and reporting necessities set forth within the TSX Handbook, NI 43-101, Companion Coverage 43-101CP to NI 43-101, and Kind 43-101F1 of NI 43-101. The Waterberg DFS consists of measured, indicated and inferred mineral assets. Solely measured and indicated assets have been integrated into the DFS mine plan and monetary mannequin. The reader is cautioned that each one estimates of mineral assets have been ready in accordance with NI 43-101 and the Firm has not disclosed or decided any mineral reserves underneath SEC Trade Information 7 requirements.

The next abstract is certified in its entirety just about the complete textual content of the Waterberg DFS, which is integrated by reference herein. The usage of “US$” within the Waterberg DFS denotes USD.

Readers are requested to notice that the Waterberg DFS assumed a long-term change charge for the Rand to the U.S. Greenback of 15 to 1. The Waterberg DFS additionally assumed a venture schedule with a begin date of January 2020. A development determination has not but occurred and though some pre-production work is underway on the venture, a proper begin has not but occurred as of the date of this Annual Report.

1. Waterberg Mission Abstract

(Excerpted from the Waterberg DFS)

1.1 Introduction

This report was compiled for Waterberg Joint Enterprise (JV) Sources (Pty) Ltd. (Waterberg JV Sources), an organization owned by Platinum Group Metals Ltd. (PTM), Impala Platinum (Implats), Japan Oil, Fuel and Metals Nationwide Company (JOGMEC), Hanwa Co. Ltd. (Hanwa) and Mnombo Wethu Consultants (Pty) Ltd. (Mnombo). PTM is listed on the Toronto inventory change underneath the image “PTM” and on the New York Inventory Change underneath the image “PLG.A.”

The aim of this report is to supply an replace to the Mineral Useful resource estimate, replace to the Mineral Reserve, and publish the outcomes of a definitive feasibility research (DFS) for the Waterberg Mission. The Waterberg Mission is the event of a platinum group metals (PGM) mine and Concentrator Plant within the Province of Limpopo, South Africa.

This report was ready in accordance with disclosure and reporting necessities set forth in Nationwide Instrument 43-101 Requirements of Disclosure for Mineral Initiatives (NI 43-101), Companion Coverage 43-101CP to NI 43-101, and Kind 43-101F1 of NI 43-101.

The estimated Mineral Sources for the Waterberg Mission at a 2.5 grams per tonne (g/t) platinum (Pt), palladium (Pd), rhodium (Rh), and gold (Au) (4E) cutoff grade embrace a mixed 242.4 million tonnes at a median grade of three.38 g/t 4E, 0.10% copper (Cu) and 0.18% nickel (Ni) within the measured and indicated (M&I) classes, and an extra 66.7 million tonnes at a median grade of three.27 g/t 4E, 0.11% Cu, and 0.15% Ni within the inferred class.

The estimated Mineral Reserve for the Waterberg Mission at a 2.5 g/t 4E cutoff grade features a mixed 187.5 million tonnes at a median grade of three.24 g/t 4E, 0.09% Cu, and 0.18% Ni within the confirmed and possible classes. The estimated Mineral Reserves accommodates a complete of 19.5 million ounces of Pd, Pt, Rh, and Au.

The important thing consequence of the DFS is the event of one of many largest and lowest money price underground PGM mines globally. The shallow, decline-accessed mine will probably be absolutely mechanized and produce roughly 4.8 million tonnes of ore and 420,000 mixed ounces of Pd, Pt, Rh, and Au in focus per yr at regular state. The mine will produce for about 45 years. Extra outcomes embrace:

• Estimated venture capital of roughly Rand 13.1 billion (US$874 million) plus Rand 3.5 billion in capitalized working prices to attain 70% of steady-state manufacturing.

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

• Payback interval of roughly 11.4 years at 3-year common costs and eight.4 years at spot costs.

• After tax internet current worth (NPV) of Rand 5.62 billion (US$333 million) at an 8% low cost charge (three-year common worth 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$5.56 per pound Ni, US$/Rand 15.95).

• After tax NPV of Rand 14.7 billion (US$982 million) at an 8% low cost charge (spot costs September 4, 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 inside charge of return (IRR) of 13.3% (three yr trailing common worth).

• After tax IRR of 20.7% (Spot Costs September 4, 2019).

1.2 Property Description and Location

1.2.1 Property and Title

The Waterberg Mission is situated 85 kilometres (km) north of the city of Mokopane within the province of Limpopo, South Africa, roughly 330 km NNE from Johannesburg. The entire venture space, lively prospecting rights (PRs), and mining proper utility space covers a complete space of 99 244 hectare (ha). Elevation ranges from roughly 880 to 1 365 metres (m) above sea degree.

1.2.2 Holdings Construction

Platinum Group Metals (RSA) (Pty) Ltd (PTM RSA) is the operator of the Waterberg Mission, with JV companions being Japanese Oil, Fuel and Metals Nationwide Company (JOGMEC), Hanwa Co. (Hanwa), Impala Platinum Holdings Ltd (Implats) and Mnombo Wethu Consultants (Pty) Ltd. (Mnombo). Determine 0-1 reveals the holdings of the Waterberg Mission.

Determine 0-1: Waterberg Mission Holdings

1.3 Geological Setting and Mineralisation

The Bushveld and Molopo Complexes within the Kaapvaal Craton are two of essentially the most well-known mafic / ultramafic layered intrusions on this planet. The Bushveld Complicated was intruded about 2 060 million years in the past into rocks of the Transvaal Supergroup, largely alongside an unconformity between the Magaliesberg quartzite of the Pretoria Group and the overlying Rooiberg felsites. It’s estimated to exceed 66 000 sq. kilometres (km2) in extent, of which about 55% is roofed by youthful formations. The Bushveld Complicated hosts a number of layers wealthy in PGM, chromium (Cr) and vanadium (V), and constitutes the world’s largest recognized Mineral Sources of those metals.

Waterberg is located off the northern finish of the beforehand recognized Northern Limb of the Bushveld Complicated, the place the mafic rocks have a unique sequence to these of the Japanese and Western Limbs of the Bushveld Complicated.

PGM mineralisation throughout the Bushveld bundle underlying Waterberg is hosted in two most important layers: T Zone and F Zone.

The T Zone happens throughout the Important Zone simply beneath the contact of the overlaying Higher Zone. Though the T Zone consists of quite a few mineralised layers, three potential economical layers had been recognized, TZ, T1, and T0 – Layers. They’re composed primarily of anorthosite, pegmatoidal gabbros, pyroxenite, troctolite, harzburgite, gabbronorite, and norite.

The F Zone is hosted in a cyclic unit of olivine wealthy lithologies in direction of the bottom of the Important Zone in direction of the underside of the Bushveld Complicated. This zone consists of alternating models of harzburgite, troctolite, and pyroxenites. The F Zone was divided into the FH (harzburgite) and FP (pyroxenite) layers. The FH layer has considerably larger volumes of olivine in distinction with the decrease mendacity FP layer, which is predominately pyroxenite.

1.4 Deposit Varieties

The mineralised layers of the Waterberg Mission meet some the factors for Platreef-type deposits, the place the mineralisation is hosted by sulphides which are magmatic in origin. The mineralised layers could be comparatively thick, usually larger than 10 m.

The opposite standards regarding the Platreef have but to be demonstrated. Consequently, this mineralisation is deemed to be related, i.e. Platreef-like, however its stratigraphic place, geochemical and lithological profiles counsel a kind of mineralisation not beforehand recognised within the Bushveld Complicated.

1.5 Exploration Knowledge / Data

The Waterberg Mission is a sophisticated venture that has undergone preliminary financial evaluations, a prefeasibility research (PFS) and resulted on this DFS. Drilling up to now has given the arrogance to categorise Mineral Sources as inferred, indicated, and measured.

1.6 Drilling

The info from which the construction of the mineralised horizons had been modelled and grade values estimated had been derived from a complete of 362 293 m of diamond drilling. This report updates the Mineral Useful resource Estimate utilizing this dataset. The drill gap dataset consists of 441 drill holes and 583 deflections on the date of drill information cutoff (01 December 2018).

The administration of the drilling applications, logging, and sampling had been undertaken from a number of amenities: one on the city of Marken in Limpopo Province, South Africa, and the opposite on the farm Goedetrouw 366LR throughout the PR space, or at an exploration camp on the adjoining farm Harriet’s Want.

1.7 Pattern Preparation, Analyses, and Safety

The sampling methodology concurs with Waterberg JV Sources’ protocol based mostly on business finest follow. The standard of the sampling is monitored and supervised by a certified geologist. The sampling is finished in a way that features your complete probably financial unit with sufficient shoulder sampling to make sure your complete financial zones are assayed.

Waterberg JV Sources instituted an entire high quality assurance / high quality management (QA/QC) programme, together with the insertion of blanks and licensed reference supplies in addition to referee analyses. The programme is being adopted and is to business customary. The info is because of this, thought-about dependable within the opinion of the certified particular person (QP).

1.8 Knowledge Verification

Printed logs for 90% of the holes had been checked with the drilled core. The depths of mineralisation, pattern numbers and widths, and lithologies had been confirmed. The total course of from core logging to information capturing into the database had been reviewed on the two exploration websites. Collar positions of some random chosen drill holes had been checked within the area and located to be appropriate. The typical particular gravity (SG) values had been generated for every particular person lithological sort and lacking SG values had been inserted in keeping with the lithological unit. Assay certificates had been checked on a take a look at foundation. The info was reviewed for statistical anomalies.

The people in Waterberg JV Sources’ senior administration and sure administrators of the corporate, who accomplished the checks and designed the processes, are non-independent mining or geological specialists. The QP’s opinion is that the info is sufficient to be used in Mineral Useful resource Estimation.

1.9 Mineral Processing and Metallurgical Testing

Metallurgical testing of the F Zone and T Zone on chosen drill core samples was accomplished at accredited metallurgical laboratories in South Africa with all analyses being carried out with acceptable QA/QC oversight. The financial minerals will probably be recovered by flotation strategies right into a flotation focus appropriate as feed inventory to a smelter and adopted by additional downstream processing at a treasured metals refinery, typical of the PGM business.

The PFS programme chosen essentially the most acceptable metallurgical course of for the optimized restoration of the 4E parts and the affiliate base metals and this was confirmed throughout the DFS variability and manufacturing mix evaluations.

The ore is difficult and isn’t amenable to semi-autogenous milling; due to this fact, a three-stage crushing adopted by two-stage ball milling circuit was chosen for comminution.

The testwork programme was used to develop a grade-recovery relationship focusing on 80 g/t 4E within the flotation focus as feed to a smelter. The focus is predicted to include 2.5% Cu and a pair of.7% Ni along with the contained 4E parts (Pt, Pd, Rh, and Au). The grade restoration relationship was developed for every of the six financial metals with 4Es at 81%, Cu at 82%, and Ni at 48% for the primary 13 years of manufacturing with the corresponding lifetime of mine recoveries being 79%, 83%, and 48%, respectively.

1.10 Mineral Useful resource Estimates

This report paperwork the Mineral Useful resource Estimate – efficient date: 04 September 2019. Infill drilling over parts of the Waterberg Mission space and new estimation methodology made it attainable to estimate a brand new Mineral Useful resource Estimate and improve parts of the Mineral Useful resource to the measured class. All of the JV companions had been concerned within the growth of the most recent Mineral Useful resource Mannequin, acceptable cutoff grades, financial parameters, and Mineral Useful resource Mannequin standards. It was decided in relation to primary working prices and in consideration of the general useful resource envelope for the deposit, that at a 2.0 grams per tonne (g/t) cutoff grade, the deposit has an inexpensive prospect of financial extraction. The Mineral Useful resource Assertion is summarised in Desk 0-1. For functions of the DFS, sensitivity evaluation and comparability to the 2016 PFS, which utilised a 2.5 g/t Pt, Pd, Rh, Au for the (4E) cutoff grade, a Mineral Useful resource Estimate at a 2.5 g/t cutoff grade is the popular situation as proven in Desk 0-2.

Desk 0-1: Abstract of Mineral Useful resource Estimate Efficient 04 September 2019 on a 100% Mission Foundation at 2.0 g/t Cutoff

Complete T Zone at 2.0 g/t (4E) Cutoff
Mineral
Useful resource
Class
Cutoff Tonnage Grade Metallic
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
Useful resource
Class
Prill Cut up
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
Useful resource
Class
Cutoff Tonnage Grade Metallic
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
Useful resource
Class
Prill Cut up
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
Waterberg Mixture Complete 2.0 g/t Cutoff
Mineral
Useful resource
Class
Cutoff Tonnage Grade Metallic
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
Useful resource
Class
Prill Cut up
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 Parts (PGE) (Pt + Pd + Rh) and Au.
  • The cutoffs for Mineral Sources had been established by a QP after a evaluation of potential working prices and different elements.
  • The Mineral Sources acknowledged above are proven on a 100% foundation, that’s, for the Waterberg Mission entity.
  • Conversion issue used – kg to oz = 32.15076.
  • Numbers might not add on account of rounding.
  • A 5% and seven% geological loss had been utilized to the measured / indicated and inferred Mineral Useful resource classes, respectively.

Desk 0-2: Abstract of Mineral Useful resource Estimate efficient 04 September 2019 on a 100% Mission Foundation at 2.5 g/t (4E) Cutoff

T Zone at 2.5 g/t (4E) Cutoff
Mineral
Useful resource
Class
Cutoff Tonnage Grade Metallic
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
Useful resource
Class
Prill Cut up
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
F Zone at 2.5 g/t (4E) Cutoff
Mineral
Useful resource
Class
Cutoff Tonnage Grade Metallic
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
Useful resource
Class
Prill Cut up
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 Mixture Complete 2.5 g/t Cutoff
Mineral
Useful resource
Class
Cutoff Tonnage Grade Metallic
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

Notes:

  • 4E = PGE (Pt + Pd + Rh) and Au.
  • The cutoffs for Mineral Sources had been established by a QP after a evaluation of potential working prices and different elements.
  • The Mineral Sources acknowledged above are proven on a 100% foundation, that’s, for the Waterberg Mission entity.
  • Conversion issue used – kg to oz = 32.15076.
  • Numbers might not add on account of rounding.
  • A 5% and seven% geological loss had been utilized to the measured/indicated and inferred Mineral Useful resource classes, respectively.

Following are the parameters for the Mineral Sources.

• Mineral Sources are categorised in accordance with the South African Code for the Reporting of Exploration Outcomes, Mineral Sources and Mineral Reserves (SAMREC) 2016 requirements. Sure variations exist with the “Canadian Institute of Mining (CIM) Requirements on Mineral Sources and Mineral Reserves;” nonetheless, on this case the corporate and QP consider the variations are usually not materials and the requirements could also be thought-about the identical. Inferred Mineral Sources have a excessive diploma of uncertainty.

• Mineral Sources are supplied on a 100% venture foundation. Inferred and indicated classes are separate. The estimates have an efficient date of 04 September 2019.

• A cutoff grade of two.0 g/t and a pair of.5 g/t 4E is utilized to the chosen Base Case Mineral Sources.

• Cutoff grade for the T Zone and the F Zone thought-about prices, smelter reductions, concentrator recoveries from the earlier and ongoing engineering work accomplished on the property by the corporate, and its impartial engineers. Spot and three-year trailing common costs and change charges are thought-about for the cutoff concerns. The higher and decrease sure metallic costs used within the willpower of cutoff grade for assets 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 metallic costs are based mostly on the estimated 3-year trailing common costs and the spot costs on the time of graduation of the Mineral Useful resource Estimate modelling. The decrease cutoff was examined towards the upper metallic worth within the vary and the upper cutoff was examined towards the cheaper price within the vary.

The target of the cutoff grade estimation was to determine a minimal grade for working break even. Following the PFS, the next elements had been used for the calculation of cutoff at 2.0 g/t 4E at larger potential costs and a pair of.5 g/t 4E at extra conservative decrease costs listed above.

• Working price mining of US$25.00, R379 per tonne, life-of-mine (LOM) common complete working prices (OpEx) US$38 574 Rand common LOM.

• 80 g/t focus, 82% recoveries of the PGMs, 88% of the Cu and 49% of the Ni.

• 85% payability of the PGMs from a third-party smelter, 73% for Cu and 68% for Ni.

These prices recoveries and pay talents had been up to date within the DFS for the consideration of Mineral Reserves.

• Charles Muller of CJM Consulting (South Africa) Pty Restricted (CJM) accomplished the Mineral Useful resource Estimate.

• Mineral Sources had been estimated utilizing extraordinary kriging (OK) and easy kriging (SK) strategies in Datamine Studio3 from 441 mom holes and 583 deflections in mineralisation. A means of geological modelling and creation of grade shells utilizing indicating kriging (IK) was accomplished within the estimation course of.

• The estimation of Mineral Sources thought-about environmental, allowing, authorized, title, taxation, socioeconomic, advertising, and political elements. The Mineral Sources could also be materially affected by metals costs, change charges, labour prices, electrical energy provide points, or many different elements detailed within the firm’s annual info kind.

• Estimated grades and portions for byproducts are included in recoverable metals and estimates within the DFS. Cu and Ni are the worth byproducts recoverable by flotation and for M&I Mineral Sources are estimated at 0.18% Cu and 0.09% Ni within the T Zone and 0.08% Cu and 0.18% Ni within the F Zone.

The info that shaped the premise of the estimate are the drill holes drilled by Waterberg JV Sources, which encompass geological logs, the drill gap collars, the downhole surveys, and the assay information, all of which had been validated by the QP. The world the place every layer was current was delineated after examination of the intersections within the numerous drill holes.

1.11 Mineral Reserve Estimates

The efficient date for the Mineral Reserve estimate contained on this report is 04 September 2019.

The Waterberg Mission Mineral Reserve Estimate was based mostly on the M&I Mineral Useful resource materials contained within the T Zone and Tremendous F Zone (F Zone) useful resource block fashions. The F Zone is comprised of the 5 sub-zones listed beneath.

• Tremendous F-South Zone (F-South)

• Tremendous F-Central Zone (F-Central)

• Tremendous F-North Zone (F-North)

• Tremendous F-Boundary North Zone (F-Boundary North)

• Tremendous F-Boundary South Zone (F-Boundary South)

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

The mine design relies on utilizing the sublevel longhole stoping mining technique with paste backfill. Sublevel intervals and stope dimensions had been established from evaluating mineral useful resource geometry and continuity, geomechanical research design parameters, and optimizing manufacturing charge and useful resource extraction. Particular person stope mining shapes had been created utilizing mineable form optimizer (MSO) software program. Stope sill growth designs had been ready for all stopes and the Mineral Sources contained in growth has been separated from the stopes. The in situ Mineral Useful resource contained within the stope shapes and growth designs had been extracted from the useful resource fashions and embrace all deliberate dilution. Modifying elements utilized to the in situ Mineral Useful resource embrace geological losses, exterior overbreak dilution, and mining losses.

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

The estimated confirmed, possible, and complete Waterberg Mission Mineral Reserves at 2.5 g/t 4E cutoff efficient as of 04 September 2019 are summarized in

Desk 0-3, Desk 0-4, and Desk 0-5.

Desk 0-3: Confirmed Mineral Reserve Estimate at 2.5 g/t 4E Cutoff efficient 04 September 2019

Zone Tonnes Pt Pd Rh Au 4E Cu Ni 4E Metallic
(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 Complete 44 319 244 0.92 2.12 0.05 0.16 3.25 0.09 0.20 143 982 4.629
Waterberg Complete 48 282 938 0.93 2.10 0.05 0.20 3.28 0.09 0.19 158 387 5.092

Desk 0-4: Possible Mineral Reserve Estimate at 2.5 g/t 4E Cutoff efficient 04 September 2019

Zone Tonnes Pt Pd Rh Au 4E Cu Ni 4E Metallic
(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 Complete 126 287 248 0.91 2.01 0.05 0.15 3.12 0.08 0.18 393 578 12.654
Waterberg Complete 139 224 118 0.94 2.02 0.05 0.21 3.22 0.09 0.18 447 564 14.390

Desk 0-5: Complete Estimated Confirmed and Possible Mineral Reserve at 2.5 g/t Cutoff efficient as of 04 September 2019

Zone Tonnes Pt Pd Rh Au 4E Cu Ni 4E Metallic
(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 Complete 170 606 492 0.91 2.04 0.05 0.15 3.15 0.08 0.19 537 560 17.283
Waterberg Complete 187 507 056 0.94 2.04 0.05 0.21 3.24 0.09 0.18 605 951 19.482

Notes:

  • A stope cutoff grade of two.5 g/t 4E was used for mine planning for the mineral reserves estimate

  • Tonnage and grade estimates embrace deliberate dilution, geological losses, exterior overbreak dilution, and mining losses

  • Metallic costs assumed for cutoff grade estimates had been: 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 might not add on account of rounding.

1.12 Mining Strategies

The Waterberg Mission will probably be a 400 000 tonnes per 30 days (tpm) [400 kilo tonnes per month (ktpm)] mechanized underground mining operation accessed by way of declines. The mine design relies on utilizing the Sublevel Longhole Stoping mining technique (Longhole) and backfilling the mined voids with paste backfill.

The Waterberg Mission was divided into the next three mining complexes.

• The South Complicated that features T Zone and F-South

• The Central Complicated that features F-Central

• The North Complicated that features F-North, F-Boundary North, and F-Boundary South

A plan view with the manufacturing areas projected to floor is proven in Determine 0-2 and a longitudinal view of the zones, trying roughly northwest (trying from the footwall), is proven in Determine 0-3.

Determine 0-2: Floor Plan View Exhibiting Mineral Useful resource Extents

Supply: Background – Google Maps

Determine 0-3: Longitudinal View of Waterberg Complexes (Trying Northwest)

There will probably be a field minimize and portal at every advanced, every with twin declines (service decline and conveyor decline) developed to entry and repair the advanced for the LOM.

1.12.1 Geomechanical

Geomechanics core logging and laboratory take a look at information from the PFS and extra information collected as a part of this DFS had been mixed in a database and used to develop a geomechanical mannequin and to be used in rock mass classifications programs to develop rock mechanics parameters for the mine design. The evaluation utilised a number of widespread empirical fashions and was validated with numerical modelling in a number of cases.

Assist necessities for growth headings had been developed and are in step with each empirical calculation strategies and customary help varieties. Usually, major floor help will encompass patterned rock bolts and display, with utility of shotcrete in areas deeper within the mine.

A numerical modelling train was undertaken to judge the evolution of rock mass injury and paste backfill efficiency as mining progresses. The principal findings of the modelling train are listed beneath.

• No requirement exists for substantial designed regional ore pillars.

• No main rock mass injury (stopes and rock pillars) was developed above round 300 m beneath floor. Average to main rock mass injury developed in stope abutments and secondary stope cores in direction of finish of the sequence, particularly beneath 1 000 m.

• Paste backfill dilution in wider elements of the ore physique is predicted, principally affecting secondary transverse stopes. Normally, paste backfill dilution is anticipated to extend with depth and in direction of completion of the mining degree and has been mirrored within the dilution estimates

Backfill stability was assessed primarily utilizing empirical-analytical strategies with developed backfill power necessities validated by benchmarking and restricted three-dimensional (3D) finite factor modelling.

1.12.2 Mine Improvement

All decline and lateral excavations will probably be developed utilizing drill and blast strategies and mechanized diesel-powered cell gear. A abstract of the event totals by advanced is included in Desk 0-6 and the event profile is proven in Determine 0-4.

Desk 0-6: Improvement Portions by Complicated

Merchandise Central
Complicated

(m)
South
Complicated
(m)
North
Complicated
(m)
Waterberg
Complete

(m)
Decline 22 316 37 197 33 398 92 911
Lateral Sublevel and Infrastructure 160 963 112 766 225 750 499 479
Complete 183 279 149 963 259 148 592 390

Determine 0-4: Lateral Improvement Profile

1.12.3 Manufacturing

Mining blocks will probably be established at 100 m vertical intervals and can encompass two sublevels spaced at 40 m (40 m stope peak) and one sublevel spaced at 20 m (20 m uppers stope that will probably be mined beneath the backfilled stopes within the block above). Particular person stopes will probably be 20 m alongside strike and a mix of transverse and longitudinal approaches will probably be used to accommodate the various ore physique thickness. Inside every mining block, stopes have been sequenced and there will probably be a number of stopes within the lively stope cycle. To attain the manufacturing profile, there will probably be a number of mining blocks in manufacturing concurrently.

The manufacturing plan focuses on optimizing the ramp-up interval and maximizing productiveness. Every advanced was scheduled independently as a stand-alone operation. The breakdown of tonnes and grade recovered by mining method and zone is summarised in Desk 0-7.

Preliminary manufacturing will come from the simultaneous operation of the Central and South Complexes, with the North Complicated phased in as soon as manufacturing within the Central and South Complexes begins to ramp down. There will probably be roughly 5 years of ramp up from the beginning of the decline growth in 2021 to attain sustainable 70% of steady-state manufacturing in January 2026. Regular-state manufacturing of 400 ktpm will probably be achieved in Q1 2027 with 300 ktpm from the Central Complicated and 100 ktpm from the South Complicated. Later within the mine life, the North Complicated will ramp as much as keep 400 ktpm manufacturing. The ramp-up and steady-state manufacturing tonnage profiles are proven in Determine 0-5 and Determine 0-6.

Desk 0-7: Life-of-Mine Manufacturing Abstract

T Zone F-Central F-South F-North F-Boundary
North
F-Boundary
South
Ore Tonnes Stope Complete 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 Improvement 1 290 363 4 804 419 1 171 942 3 347 199 1 399 862 988 084
Ore Tonnes – Complete 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 might not add on account of rounding.

Determine 0-5: Manufacturing Tonnage by Month throughout Ramp-up

Determine 0-6: Annual Manufacturing Tonnage Profile

1.12.4 Air flow and Mine Air Refrigeration

The underground cell gear will probably be diesel powered. The required air flow movement will probably 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.

Air flow to every advanced will probably be supplied by floor recent air and return air air flow raises and the portals / declines. The air flow programs will probably be a “pull” system with giant floor followers situated on the exhaust raises. Air flow within the conveyor declines could have recent air pulled from the portals and exhausted with out getting used to ventilate different mine workings.

The underground warmth hundreds will probably be countered by a mix of refrigerated air and uncooled air. The cooling requirement will probably be 20 megawatts refrigeration (MWR), 10 MWR, and 20 MWR for the Central, South, and North Complexes, respectively. Mine air cooling is not going to be required till mining depths attain 700 m beneath floor in 2030.

1.13 Restoration Strategies

The method design for the Waterberg Concentrator Plant was developed based mostly on the intensive metallurgical take a look at work outcomes and former research. The testwork programme developed throughout the PFS and the DFS recognized that the mill-float-mill-float (MF2) configuration following three stage crushing is essentially the most acceptable restoration method for the PGE and the bottom metals for the F Zone and the T Zone ores. The plant design makes provision for the managed mixing of the 2 ore varieties within the crushing circuit. The mixing of the ores doesn’t require a conceptual change to the MF2 flowsheet, however the managed mixing is taken into account advantageous in offering a constant feed composition to the method. Additional optimisation of the reagent addition throughout operation to attain the optimum focus grade and restoration could be accomplished.

The flotation concentrator will produce a focus containing 80 g/t 4E with a mass pull of roughly 3.1%. The concentrator was designed to course of 4.8 Mtpa (400 ktpm) of ROM and can produce 155 kilo tonnes every year (ktpa) of focus to be shipped by street to a smelter. The focus will include 12% moisture whereas the tailings will probably be directed to both the backfill plant for putting as cemented fill underground or to the floor tailings storage facility (TSF).

The plant manufacturing charge is aligned with mine manufacturing and plant manufacturing will begin in January 2024 with ramp-up persevering with till regular state is reached December 2026 as indicated in Determine 0-7.

Determine 0-7: Annual Mill Feed Profile Abstract

The focus manufacturing and contained 4E parts approaching 425 000 ounces every year is indicated in Determine 0-8 together with anticipated the bottom metallic content material in tonnes every year (tpa).

Determine 0-8: Annual Metallic Manufacturing Abstract

1.14 Mission Infrastructure

The Waterberg Mission is situated in a rural space with restricted current infrastructure other than gravel roads, drill gap water, and 22 kilovolts (kV) rural energy distribution with restricted capability. Upgrading is deliberate for all current infrastructure, together with the upgrading of 34km of the gravel roads to the N11 nationwide street.

Along with three mining complexes and one processing facility, the Waterberg Mission infrastructure required for a profitable operation will embrace the development of a brand new 132 kV electrical provide from the ESKOM Burotho 400/132 kV most important transmission station 74 km south of the location. The event and equipping of a neighborhood effectively area unfold over 20 km to supply water.

On the website, a lined TSF, ore stockpile and waste rock storage amenities, backfill preparation and distribution system, and the required floor infrastructure to help mining and processing operations will probably be constructed.

The venture would require 90 mega volt amps (MVA) {of electrical} energy and 6.2 ML/day of business water.

1.15 Market Research and Contracts

One of many JV companions of the Waterberg Mission is Implats; due to this fact, no formal advertising research was commissioned for the DFS.

Metallic worth actions for the financial metals related to the venture (Pt, Pd, Rh, Au, Ni, and Cu) had been reviewed for the previous three years and present that there was a major change out there for the foremost contributors to revenue technology. The metallic costs for the interval to 04 September 2019 normalised to 01 July 2019 are detailed in Desk 0-8.

Desk 0-8: Pricing for all Financial Metals

Interval 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

Supply – ‘Johnson Matthey Metallic Costs’ BMO

Contemplating these metallic costs and the manufacturing profile for the Waterberg Mission, contributors to revenue are summarized in Desk 0-9. The primary 13 years of the manufacturing profile is treating about 25% from the T Zone with a unique prill spilt to the F Zone ore.

Desk 0-9: Financial PGEs and Base Metals for first 13 Years and Lifetime of Mine

Metallic Approximate % of Income
(3-year trailing worth to September2019)
Approximate % of Income
(04 September 2019 Spot Value)
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 settlement was negotiated for the focus however Implats has proper of first refusal to develop the Waterberg Mission and additional deal with the focus produced. It’s anticipated that the payability for the contained metallic in focus will probably be 85% for all 4E parts, 73% for Cu, and 68% for Ni. These net-smelter-return elements are absolutely inclusive of all smelting and refining prices, other than supply to the smelter.

It’s anticipated that the metallic pipeline between supply of focus and fee will probably be 12 weeks. The Mission funds are based mostly on prefunding of the focus with an 85% worth fee obtained in Month 1 and the 15% steadiness paid after the three months, incurring an curiosity cost (as outlined in Part 21).

The focus from Waterberg Mission will probably be very low in chromitite, which can make this materials engaging for mixing with different concentrates; nonetheless, the contained iron (Fe) and sulphur (S) with excessive base metals might require additional optimization of the smelting and base metallic refining protocols. No penalties are anticipated to be positioned upon the focus.

1.16 Environmental Research, Allowing, and Social or Group Influence

In session with the group, the mine footprint was deliberate to exclude areas vital to the group, together with prime grazing areas.

Desk 0-10 reveals key environmental and social licenses and allow functions are required for the Waterberg Mission.

Desk 0-10: Standing of Environmental Licenses and Permits Required for the Waterberg Mission

License / Allow Software Authority Reference Quantity Standing
Mining Proper (with Social and Labour Plan (SLP) Division of Mineral Sources and Vitality (DMRE) LP 30/5/1/2/2 /2/10161MR Granted
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 Administration Licence DMRE LP 30/5/1/2/2 /2/10161MR Submitted
Water Use Licence DHSWA CT11919 Approval to file utility recorded October 7, 2019
Heritage Sources Consent for Improvement South African Heritage Useful resource Company (SAHRA) LP 30/5/1/2/2 /2/10161MR – 12878 Submitted

From an environmental and social perspective, the best impacts from mining are anticipated within the japanese (plant footprint) and south-east-central areas of the proposed mining proper space. This space is the place floor infrastructure is deliberate as that is the shallowest entry for underground mining and is topographically comparatively flat. The findings of the Environmental Evaluation Practitioner and specialists’ assessments have proven that the Waterberg Mission might end in each adverse and constructive impacts to the atmosphere; nonetheless, sufficient mitigation measures are included into the EMPr to scale back the importance of the recognized adverse impacts.

The SLP kinds a part of the mining proper in South Africa. It’s a dedication to sustainable social growth and was submitted, as required, with the mining proper utility. Native landowners, land customers, native authorities and communities had been consulted and up to date from the prospecting stage and are effectively conscious of the venture plans. Land use agreements are at present being concluded with the Goedetrouw Group, the Ketting Group, and particular person property house owners on the farms traversed by the proposed water pipeline and powerlines.

Particular coaching wants had been recognized and an in depth coaching programme is being developed with an internationally recognised organisation to supply the construction and companies required for the preliminary and ongoing wants of the Waterberg Mission.

1.17 Capital and Working Prices

Capital prices to 70% of steady-state manufacturing are estimated predominantly in ZAR, with all price estimates expressed in ZAR actual July 2019 phrases. Modelled prices are transformed to US$ at a long-term actual change charge of 15.00 (ZAR/US$). The true escalation of prices (in ZAR phrases) is estimated to be offset, over time, by the longer term devaluation of the ZAR towards the US$. Estimated capital expenditure is R13 105 M for the Waterberg Mission plus R3 453 M for capitalized working prices to attain the 70% of steady-state manufacturing as detailed in Desk 0-11.

Desk 0-11: Waterberg Mission Capital Value

Value Space ZAR Complete
(ZAR M)
USD Complete
(US$ M)
Underground Mining R6 097 $406
Concentrator R2 580 $172
Shared Providers and Infrastructure R682 $45
Regional Infrastructure R1 229 $82
Website Assist Providers R234 $16
Mission Supply Administration R654 $44
Different Capitalised Prices R331 $22
Contingency R1 298 $87
Complete Mission Capital (excluding Capitalised OpEx) R13 105 $874
Capitalised Working Prices R3 453 $230
Complete Mission Capital (together with Capitalised OpEx) R16 559 $1 104

The SIB expenditure covers all expenditure of a capital nature following the achievement of 70% of the steady-state manufacturing. This consists of all ongoing underground waste growth, development of the North Complicated, and the required infrastructure plus cell gear alternative and different gadgets of a capital nature related to the concentrator and basic mine infrastructure. The entire stay-in-business (SIB) contingency is R21.6 billion unfold over the greater than 40 years of mine life.

The general lifetime of mine capital expenditure profile for the Mission is proven in Determine 0-9.

Determine 0-9: Capital Expenditure Profile for Lifetime of Mine

The LOM working prices following achievement of 70% of steady-state manufacturing and excluding SIB expenditure is summarised in

Desk 0-12.

Desk 0-12: Waterberg Mission Working Value

Value Space LOM Common
(ZAR/t milled)
LOM Common
(US$/t milled)
Mining R345 $23.01
Milling and Processing R132 $8.79
Engineering and Infrastructure R116 $7.76
Normal and Administration R19 $1.25
Complete On-site Working Prices R612 $40.80

The money price per 4E ounce is estimated at US$640 (spot costs) and US$554 (three-year trailing costs), respectively. The money price consists of the smelter low cost as a price, in addition to byproduct credit from Cu and Ni gross sales; due to this fact, the indicated money prices are depending on the prevailing metallic worth assumptions as detailed in Desk 0-13.

Desk 0-13: Waterberg Mission Money and All-In-Value

Metric Spot Costs
(US$ / 4E oz)
Three-year
Trailing Costs

(US$ / 4E oz)
On-site Working Prices $487 $456
Smelting, Refining, and Transport Prices $302 $227
Royalties and Manufacturing Taxes $88 $54
Much less Byproduct Base Metallic Credit $(236) $(184)
Complete Money Value $640 $554
Sustaining Capital $94 $88
Complete All-in Sustaining Value $734 $642
Mission Capital $34 $32
Complete All-in Value $767 $674

1.18 Financial Evaluation

Key options of the Waterberg Mission are listed beneath.

• The Waterberg Mission capital expenditure (CapEx) (unique of sustaining capital) is estimated at R16 559 M (US$1 104 M). The Waterberg Mission CapEx consists of capitalised working prices of R3 453 M as much as 70% of steady-state manufacturing.

• The LOM common OpEx unit price (unique of capitalised OpEx) is estimated at R612 / t milled.

• The Waterberg Mission produces a constructive enterprise case in each the spot and three-year trailing common metallic worth eventualities. At spot costs, the Waterberg Mission yields a post-tax NPV8.0% of R14 736 M (US$982 M), at an IRR of 20.7%, an undiscounted payback interval of 8.4 years, and a peak funding requirement of R9 255 M (US$617 M). At three-year trailing common metallic costs, the venture yields a post-tax NPV8.0% of R5 616 M (US$333 M), at an IRR of 13.3%, an undiscounted payback interval of 11.2 years, and a peak funding requirement of R10 261 M (US$667 M).

• On the two pricing eventualities (spot and three-year trailing common) the venture generates LOM common money prices of US$640 / 4E oz and US$554 / 4E oz, respectively, which locations Waterberg firmly throughout the lowest quartile of regional PGE producers.

1.19 Adjoining Properties

Quite a few mineral deposits have been outlined alongside the Northern Limb of the Bushveld Complicated. The principle initiatives within the space embrace Mogalakwena Mine, Aurora Mission, Akanani Mission, Boikgantsho Mission, Hacra Mission, and Platreef Mission.

1.20 Mission Implementation

The venture schedule assumes a begin date of January 2020 with the graduation of the detailed engineering and goals to attain the next key milestones:

• Begin of Mission – January 2020

• Begin of Development of Central / South Mining Complicated – June 2020

• Begin of Decline Improvement – January 2021

• Completion of the 132 kV Bulk Electrical Provide – April 2022

• Begin of Ore Processing in Concentrator- January 2024

• Achievement of 70% of Regular-state Capability – September 2025

• Completion of Capital Interval – December 2025

The venture schedule is summarised graphically in Determine 0-10.

Determine 0-10: Excessive-level Implementation Schedule

Yr 2020 2021 2022 2023 2024 2025
Quarter Q1 Q2 Q3 This autumn Q1 Q2 Q3 This autumn Q1 Q2 Q3 This autumn Q1 Q2 Q3 This autumn Q1 Q2 Q3 This autumn Q1 Q2 Q3 This autumn
Central / South Mining Complicated
Engineering & Procurement
Development
Underground Mine Improvement
Engineering & Procurement
Field Reduce Development
Decline Improvement
Ore to Floor
70% Regular-state Manufacturing
Bulk Electrical Provide
Engineering & Procurement
Development
Concentrator Plant
Engineering & Procurement
Development
Manufacturing Ramp up
Backfill Plant & TSF
Engineering & Procurement
Development

1.21 Interpretations and Conclusions

The database used for the Mineral Useful resource estimate consisted of 441 drill holes and 583 deflections. The Mineral Useful resource estimate was accomplished utilizing geostatistics finest practices and the M&I Mineral Sources are at an acceptable degree of confidence to be thought-about within the DFS for mine planning.

The geometry and continuity of the mineral useful resource and the rock mass high quality of the mineralized zones and surrounding rock mass make the Waterberg zones amenable to extraction utilizing the Sublevel Longhole Stoping mining technique utilizing paste backfill. The mine design consists of all growth and infrastructure required to entry the Central, South, and North Complexes and mine the estimated Mineral Reserves. A full 3D mine mannequin was created for every advanced and a LOM growth and manufacturing schedule was ready to find out the estimated tonnes, common grade, and metals profile mined and delivered to floor. Particular person stope and growth mining shapes had been created and embrace deliberate dilution and modifying elements to account for geological losses, exterior overbreak dilution, and mining losses. The estimated Mineral Reserves are supported by a mine plan and financial evaluation and reveal constructive economics.

The event strategies and mining strategies are secure and extremely mechanized and use widespread gear and processes which are confirmed and used efficiently within the world mining business. The profitable execution of those strategies to attain deliberate underground mine growth and manufacturing on the Waterberg Mission would require the operation to determine a tradition centered on employee well being and security, funding and emphasis on employee expertise coaching geared towards the gear and expertise used, and structured mine planning.

The metallurgical course of chosen is confirmed expertise and is suitable for the ore to be handled and can produce a focus containing about 80 g/t 4E at a restoration approaching 80%.

The economics present that the Waterberg Mission is financially sturdy with peak funding at R9 255 M and a payback of 8.4 years for spot costs and R10 261 M with a payback of 11.2 years for three-year trailing costs. The money price estimate reveals that the Waterberg Mission will probably be within the decrease quartile of PGM mining operations within the southern African area.

1.22 Suggestions

The important thing suggestions associated to the Mineral Useful resource are summarized beneath.

• It is suggested that devoted Mineral Useful resource definition drilling from each floor and underground be accomplished throughout the entry interval to improve a number of the indicated Mineral Sources to measured Mineral Sources.

• At present, solely the bigger geological constructions have been modelled. It is suggested {that a} detailed structural evaluation is performed and modelled.

The important thing suggestions associated to the mine design and Mineral Reserves are summarised beneath.

• There may be Mineral Useful resource beneath the stope cutoff that’s not included within the mine plan however is adjoining to deliberate growth and stoping areas. A decrease cutoff grade might probably carry this materials into the mine plan with incremental further growth and add to the Mineral Reserves. It is suggested to judge the potential for decreasing the stope cutoff grade.

• There may be Mineral Useful resource that’s above cutoff that would not be included in a longhole stope form on account of native geometry. This materials could possibly be amenable to mining utilizing Reduce and Fill or Board and Pillar strategies. It is suggested to find out the stoping cutoff for this materials and consider the potential to incorporate a few of this materials within the mine plan and add to the Mineral Reserves.

• It is suggested to observe the progress and utility of battery-powered cell gear expertise and consider the alternatives this expertise might current to the Waterberg Mission.

• It is suggested that additional geotechnical and geomechanical work be accomplished as a part of venture execution to validate mine design assumptions and help the detailed design for underground and floor infrastructure.

The next metallurgical take a look at work is really useful throughout venture execution.

• Additional flotation testwork to substantiate the impact of the out there groundwater on flotation efficiency and to find out what changes to the uncooked water circuit can be required (if any)

• Focus thickening and filtration testwork.

• Additional tailings thickening and filtration testwork for affirmation of backfill plant design standards.

It is suggested Waterberg JV Sources proceed their present allowing technique to develop constructive group help and streamline ultimate venture approval as outlined beneath.

• Keep common session actions with all acceptable nationwide, provincial, and native regulatory businesses and officers.

• Keep engagement with native communities.

Waterberg JV Sources has a programme of labor in place to adjust to the required environmental, social, and group necessities. Following is vital work that ought to proceed.

• Environmental, Social, and Well being Influence Evaluation (ESHIA) in accordance with the Mineral and Petroleum Sources Improvement Act (MPRDA), the Nationwide Environmental Administration Act (NEMA).

• Public Participation Course of in accordance with the NEMA.

• Specialist investigations in help of the ESHIA.

• Built-in Water Use License (WUL) Software in compliance with the Nationwide Water Act.

• Built-in Waste Administration License (WML) in compliance with the Nationwide Environmental Administration Waste Act.

If the permits are obtained for development and operation the venture is really useful to maneuver into the detailed design and planning for venture implementation.

It is suggested that the focus off-take discussions be initiated with the JV accomplice (and others) to substantiate the online smelter return payabilities for the financial metals within the focus to be bought by Waterberg, as this can have a fabric impression on the general funds.

Primarily based on the constructive economics from the technical inputs and the monetary evaluation, it is suggested that the Waterberg Mission be thought-about by the members of the Waterberg JV for an funding determination.

* * * * * *

Extra Data

Through the twelve-month interval ended August 31, 2021, the Waterberg Mission incurred and capitalized a complete of $3.7 million (yr ended August 31, 2020 – $3.0 million) of exploration, engineering and growth prices for the Waterberg Mission, of which $0.2 million was 100% paid for by Implats with the remaining $3.5 million being coated on a pro-rata foundation by the Firm, Mnombo, JOGMEC and Implats.

At August 31, 2021, the Firm had capitalized $44.0 million in gathered internet prices to the Waterberg Mission. Complete expenditures on the property since inception, and earlier than price reimbursements by different Waterberg Mission Companions, are roughly $77.5 million.

The DFS was accomplished in September 2019 underneath the path of the Technical Committee appointed by Waterberg JV Co. comprised of members representing the Firm and all different Waterberg Mission Companions – Implats, JOGMEC, Hanwa and Mnombo (the “Technical Committee“).

Previous to completion of the DFS, an earlier mineral useful resource estimate was accomplished by an Unbiased Geological Certified Particular person for the Waterberg Mission within the October 2018 Waterberg Report. Subsequent to the completion of the October 2018 Waterberg Report, the three way partnership, on the path of its Technical Committee, accomplished an additional 4,127 metres of infill drilling in 4 new drill holes focusing on the T Zone. A further 5 deflections from the mom holes had been additionally drilled. A complete of roughly 523 new assay samples had been accomplished together with 101 QA/QC reference samples and high quality management blanks. New assay information and geological info from this extra drilling was used to generate an up to date mineral useful resource estimate (efficient September 4, 2019), which was then utilized as an enter to the DFS as reported within the Waterberg DFS.

The true width of the shallow dipping (30° to 35°) mineralized zones on the Waterberg Mission are roughly 82% to 87% of the reported interval from the vertical intercepts drilled. For the environment friendly utility of bulk mining strategies and for mine planning, vertical intercepts of three metres or extra are fascinating. Elevated grade thickness zones related to minor footwall troughs or bays alongside the 13 km lengthy layered advanced have lately been recognized.

On account of its shallow depth, good grade and a totally mechanized mining method, the Waterberg Mission has the chance to be a secure mine throughout the lowest quartile of the Southern Africa PGE business price curve.

Waterberg JV Co. utilized for the Waterberg Mining Proper in August 2018 and an EA in July of 2019. Detailed session with communities, native municipalities, the Limpopo Provincial authorities and South African nationwide authorities was accomplished. The EA was granted on August 12, 2020, topic to a public discover interval and finalization of points raised by affected events, which course of was accomplished with the problem of the ultimate EA on November 10, 2020. The Waterberg Mining Rightwas granted by the DMRE on January 28, 2021 and its notarial execution was accomplished on April 13, 2021.

Detailed infrastructure planning has commenced for the Waterberg Mission. Detailed hydrological work and take a look at drilling for water has additionally been accomplished to review the deliberate utilization of recognized sources for vital volumes of floor water. A co-operation settlement between Waterberg JV Co. and the native Capricorn District Municipality for the cooperative growth of water assets has resulted within the identification of water provides and the preliminary design of distribution infrastructure. Hydrological work has recognized a number of large-scale aquifers and take a look at drilling had indicated these are capable of present mine course of and potable water for the Waterberg Mission and native communities. Take a look at drilling of those water basins was accomplished in 2019 and 2020 and extra drilling is deliberate as a pre-implementation goal. An earlier work and drilling program performed by the Capricorn District Municipality recognized each potable and excessive mineral unpotable water assets within the district. A number of boreholes proximal to the Waterberg Mission recognized giant volumes of excessive mineral unpotable water not appropriate for human consumption. Hydrological and mill course of specialists investigated the usage of this water as mine course of water. Normally, floor water assets recognized proximal to the Waterberg Mission have potential for utilization for each mining and native communities.

The institution of servitudes for energy line routes and detailed planning and allowing for an ESKOM electrical service to the venture is effectively superior. Energy line environmental and servitude work is being accomplished by TDxPower in coordination with ESKOM. TDxPower has progressed electrical energy connection planning for about a 74 km, 137MVA, 132kV overhead line to the venture.

DFS engineering work on the Waterberg Mission included useful resource modelling, metallurgical work, optimization of the metallurgical movement sheet utilizing South African and Japanese experience, bulk companies design and mechanized mine planning. Optimization of the mine plan in 2019 included the usage of paste backfill with a view to permit for the next mining extraction ratio as mining could be accomplished subsequent to backfilled stopes with out leaving inside pillars. DRA Initiatives SA (Proprietary) Restricted and Turnberry Initiatives (Pty) Ltd. had been appointed for DFS work on metallurgy, plant design, infrastructure and value estimation. Stantec Consulting Ltd. was appointed for DFS work on underground mining engineering and design and reserve estimation. Charles Muller of CJM Consulting (Pty) Ltd. was appointed as Unbiased Geological and Geostatistical Certified Particular person.

Subsequent to the completion of the DFS, the 2020 Work Program funded by Implats till September 15, 2020 accomplished the next optimization and threat mitigation research:

  • Dry stacking of tailings to scale back water use and cut back tailings impoundment footprint.

  • Affirmation of portal positions and detailed designs.

  • Evaluation of preliminary mining technique, stope and sub degree designs.

  • Detailed benchmarking to comparable operations world wide and particularly in Africa.

  • Detailed simulation of underground mining and floor programs.

  • Doable use of battery electrical underground autos and ensuing diminished air flow and cooling necessities, diminished electrical energy necessities, and opex/capex implications.

  • Doable use of Cellular Tunnel Boring.

  • Evaluation of water demand and provide and take a look at drilling to substantiate water assets.

Complete price of the 2020 Work Program funded by Implats amounted to roughly Rand 24.7 million.

Geo-technical drilling of boxcuts/portals and alongside deliberate decline pathways, budgeted at roughly R 15 million, was not accomplished as part of the 2020 Work Program as such work first required the grant of a mining proper. Subsequent to the grant of the Waterberg Mining Proper in early 2021, the above described program of geotechnical drilling was accomplished on the Waterberg Mission throughout the months of July to October of 2021. The geotechnical drilling marketing campaign consisted of 46 boreholes drilled alongside the deliberate centerline of two units of dual declines and box-cut positions at an estimated price of R 15.80 million. Roughly 11 holes had been drilled vertically, and the remaining holes had been inclined out of the airplane to intersect all attainable discontinuities. A complete of 5,966 metres of drill core had been recovered and a complete of two,696 metres of core had been geotechnically logged from throughout the zone of curiosity. All boreholes besides these within the deliberate box-cut areas had been backfilled with cement upon completion. Downhole geophysical surveys had been performed consisting of optical and/or acoustic televiewer and gamma probes in addition to caliper probes. Three packer checks had been performed in boreholes the place groundwater strikes had been encountered. Core samples of all the foremost geotechnical models encountered had been collected and subjected to laboratory testing. The outcomes of the drilling marketing campaign affirm that the box-cut positions are in sandstone, and the central and southern declines transition from sandstone right into a dolerite sill and again into sandstone earlier than reducing into the igneous rocks of the Bushveld Complicated. Normally, outcomes are as anticipated, and the rock mass is competent. Additionally as anticipated, some help will probably be required for each tunnel units. No downside areas, the place particular mining strategies or non-standard help can be required, have been recognized. Groundwater influx can be not thought-about a threat. The usual follow of probe drilling forward of decline tunnel growth will probably be vital to observe rock high quality and determine appropriate help requirements forward of growth. Geotechnical certified individuals monitoring the drill programme have acknowledged that on the whole, the rock mass encountered alongside each decline routes can help the deliberate excavations with no main downside areas anticipated. Extra work can be now underway associated to environmental baseline research and the surveying of infrastructure areas, roadways, energy and water servitudes, and so on. Closing documentation for the applying for a water use license is prepared for submitting with the Division of Water and Sanitation, topic to the Kgatlu group’s landowners consent.

The Firm can be assessing the potential of establishing a devoted furnace for the processing of Waterberg Mission focus to provide an upgraded product on the market out there with out the necessity for remedy by a 3rd occasion offtaker. An inside pre-feasibility research for such a Waterberg matte furnace was accomplished for the Firm by business specialists in late 2021. The pre-feasibility research assesses the development and operation of a 20 MW smelting furnace with two off air-blown converters able to producing a matte appropriate as feed to a typical base metallic refinery in South Africa or elsewhere. The Firm is in course of to finish additional research analyzing the optimum location for such a furnace in addition to downstream advertising concerns, allowing and energy and water necessities. The Firm can be researching the financial feasibility of buying an current furnace in South Africa that could be refurbished and modified to course of Waterberg Mission focus.

Engineering refinement of regular state energy necessities has resulted in a diminished demand of roughly 90MvA at regular state. Bulk energy design and costing work for regular state necessities has commenced. ESKOM is engaged with venture engineers to find out electrical energy sources and availability. A brief energy line for the development interval from the close by grid at Bochum is being designed and costed. Group engagement relating to energy line routes and completion of an EIA for the facility line routes is in course of.

Non-Materials Mineral Property Pursuits

The non-material mineral property pursuits of the Firm embrace prospecting rights situated in South Africa. These non-material property pursuits are usually not, individually or collectively, materials to the Firm.

ITEM 4A. UNRESOLVED STAFF COMMENTS

None.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The next dialogue of the Firm’s monetary situation, adjustments in monetary circumstances and outcomes of operations for every of the three years ended August 31, 2021 needs to be learn along side our consolidated monetary statements and associated notes included therein included on this Annual Report at Merchandise 18. The Firm’s consolidated monetary statements have been ready in accordance with IFRS as issued by the IASB.

The next dialogue accommodates Ahead-Trying Statements that contain inherent dangers and uncertainties. Precise outcomes might differ materially from these contained in such Ahead-Trying Statements. See cautionary statements in “Ahead-Trying Statements” in the beginning of this doc.

Until in any other case acknowledged, all monetary variations on this merchandise are given on a reported foundation.

A. Working Outcomes

Monetary Overview

Yr Ended August 31, 2021, In comparison with Yr Ended August 31, 2020

For the yr ended August 31, 2021, the Firm incurred a internet lack of $13.1 million (August 31, 2020 – internet lack of $7.1 million). The loss within the earlier comparable yr was decrease on account of a $3.1 million realized acquire on the expiry of warrants within the earlier comparable yr. Within the present yr, share based mostly compensation was $3.2 million (August 31, 2020 $1.6 million) with the rise on account of an elevated honest worth of the choices granted throughout the present yr ensuing from the next share worth on the grant date. Normal and administrative bills had been $5.1 million (August 31, 2020 – $3.7 million) with the rise due largely to a $0.83 million severance fee to the Firm’s former CEO pursuant to a proper separation settlement. Curiosity expense of $5.1 million (August 31, 2020 – $5.5 million) was decrease because of the discount in debt throughout the present yr. The forex translation adjustment acknowledged within the interval is a acquire of $4.9 million (August 31, 2020 – $4.5 million loss) because of the Rand growing in worth relative to the U.S. Greenback throughout the present yr.

Yr Ended August 31, 2020, In comparison with Yr Ended August 31, 2019

For the yr ended August 31, 2020, the Firm had a internet lack of $7.1 million (yr ended August 31, 2019 – internet lack of $16.8 million). The loss within the present interval is decrease predominantly on account of three gadgets, i) a discount on the whole and administrative prices from $4.7 million in 2019 to $3.7 million in 2020 on account of diminished total exercise within the Firm, ii) a discount in curiosity expense from $8.4 million in 2019 to $5.5 million within the present yr on account of decreased debt excellent, iii) the popularity of a acquire of $3.2 million within the present yr predominantly because of the acquire acknowledged on expired warrants whereas in 2019 a lack of $2.7 million was acknowledged on account of a rise within the worth of the embedded derivatives within the Notes. Different gadgets embrace a overseas change acquire of $0.7 million acknowledged within the present yr (yr ended August 31, 2019 – $1.0 million loss) on account of a rise within the worth of the Canadian Greenback relative to the US Greenback within the earlier comparable interval. The forex translation adjustment acknowledged within the yr is a $4.5 million loss (yr ended August 31, 2019 – $0.1 million acquire) due largely to the Rand reducing in worth relative to the U.S. Greenback.

Yr Ended August 31, 2019, In comparison with Yr Ended August 31, 2018

For the yr ended August 31, 2019, the Firm had a internet lack of $16.8 million (yr ended August 31, 2018 – internet lack of $41.0 million). This decrease loss within the present interval is predominantly because of the Maseve Mine closure within the fourth quarter of fiscal 2017, leading to care and upkeep prices of $14.4 million being acknowledged throughout fiscal 2018. Different gadgets embrace curiosity expense of $8.3 million in fiscal 2019 (August 31, 2018 – $18.4 million) with the lower on account of much less debt excellent in 2019. A overseas change lack of $1.0 million was acknowledged in fiscal 2019 (yr ended August 31, 2018 – $4.1 million loss), on account of a bigger lower within the worth of the Canadian Greenback relative to the U.S. Greenback within the earlier comparable interval. Through the yr ended August 31, 2019, a lack of $2.7 million was acknowledged on the valuation of embedded derivatives whereas a acquire of $3.7 million was acknowledged in fiscal 2018, due largely to the rise in market worth of the Firm’s shares, which impacted the valuation of conversion choices and warrants. The forex translation adjustment acknowledged in fiscal 2019 was a acquire of $0.1 million (yr ended August 31, 2018 – $6.4 million acquire) due largely to the Rand reducing in worth relative to the U.S. Greenback. The Firm consolidated its Frequent Shares on the premise of 1 new share for ten outdated shares (1:10), efficient December 13, 2018. See “Introduction – Share Consolidation” for additional info.

Annual Monetary Data

(In 1000’s of {dollars}, apart from per share information)

Yr ended
Aug 31, 2021
Yr ended
Aug 31, 2020
Yr ended
Aug 31, 2019
Curiosity revenue $97(1) $158(1) $364(1)
Web loss $13,063 $7,128 $16,776
Primary loss per share $0.18(2) $0.11(2) $0.52(2)
Diluted loss per share $0.18(2) $0.11(2) $0.52(2)
Complete belongings $51,199 $37,415 $43,633
Long run debt Nil $19,337 $21,560
Brief time period debt $9,088 Nil Nil
Convertible Debt $18,716 $17,212 $18,785
Dividends Nil Nil Nil

Notes:

(1) The Firm’s solely vital supply of revenue throughout the years ending August 31, 2019 to 2021 was [interest income from cash on deposit in interest bearing accounts held by the Company].

(2) Primary loss per share is calculated utilizing the weighted common variety of Frequent Shares excellent. The Firm makes use of the treasury inventory technique for the calculation of diluted earnings per share. Diluted per share quantities mirror the potential dilution that would happen if securities or different contracts to challenge Frequent Shares had been exercised or transformed to Frequent Shares. In durations when a loss is incurred, the impact of potential issuances of shares underneath issued and excellent choices and share buy warrants can be anti-dilutive, and accordingly primary and diluted loss per share are the identical. On December 13, 2018, the Firm consolidated its Frequent Shares on the premise of 1 new share for ten outdated shares (1:10). All info relating to the issued and excellent Frequent Shares, choices and weighted common quantity and per share info has been retrospectively restated to mirror the 2018 Share Consolidation.

International forex fluctuations haven’t materially impacted the Firm’s outcomes of operations in recent times. Inflation in South Africa has been skilled in labour prices over current years, with common inflation being at roughly 4.5% in 2018, 4.12% in 2019 and three.22% in 2020. As a result of financial results of the COVID-19 pandemic, common wages in South Africa declined marginally in 2020. The Firm can present no assurance that overseas forex fluctuations and inflation is not going to materially impression the Firm sooner or later. See “Danger Elements”. The Firm has not entered into any agreements or bought any devices to hedge attainable forex dangers presently. Beneath IFRS, the Firm defers all acquisition, exploration and growth prices associated to mineral properties. The recoverability of those quantities depends upon the existence of economically recoverable mineral reserves, the flexibility of the Firm to acquire the required financing to finish the event of the property, and any future worthwhile manufacturing, or alternatively upon the Firm’s means to get rid of its pursuits on an advantageous foundation. The Firm evaluates the carrying worth of its property pursuits regularly. Administration is required to make vital judgements to determine potential impairment indicators. Any properties administration deems to be impaired are written right down to their estimated internet recoverable quantity.

South African Properties

The Firm conducts its South African exploration and growth work by means of its wholly owned direct subsidiary PTM RSA. The Firm’s materials mineral property is the Waterberg Mission. After a deliberate corporatization of the Waterberg three way partnership accomplished on September 21, 2017, the Waterberg Mission is held by Waterberg JV Co. After giving impact to the Preliminary Buy, the Firm holds a 50.02% helpful curiosity in Waterberg JV Co., of which 37.05% is held straight by PTM RSA and 12.974% is held not directly by means of PTM RSA’s 49.9% curiosity in Mnombo, which holds 26.0% of Waterberg JV Co. The remaining pursuits in Waterberg JV Co. are held by a nominee of JOGMEC (12.195%), Hanwa (9.755%) and by Implats (15.0%). PTM RSA is the supervisor of Waterberg JV Co.

South African Laws and Mining Constitution

The MPRDA, the Mining Constitution 2018 and associated rules in South Africa require that Waterberg JV Co.’s BEE shareholders personal a 26% fairness curiosity in Waterberg JV Co. to qualify for the grant of the mining proper. Inside 5 years of the efficient date of the mining proper, this BEE shareholding have to be elevated to 30%. The DMRE obtained an exemption from making use of the Generic BEE Codes underneath the BEE Act till October 31, 2016 and utilized for an additional extension till December 31, 2016. Whereas this exemption was prolonged to December 31, 2016, no additional exemption was obtained thereafter, and, as a matter of legislation, the Generic BEE Codes now apply to the issuance and upkeep of licenses and different authorizations. As a matter of follow, the DMRE has continued to use the provisions of Mining Constitution 2018 fairly than the Generic BEE Codes. See Merchandise 4.B. – South African Regulatory Framework – Black Financial Empowerment within the South African Mining Trade, and -Mining Constitution.

Materials Mineral Property Pursuits – Waterberg Mission

Waterberg Mission – Actions subsequent to the yr ended August 31, 2021

As of the date of this Annual Report, the Firm, as operator of the Waterberg Mission, continues to conduct pre-production website and engineering work, in addition to work in direction of the completion and grant of all permits required for venture graduation.

Subsequent to August 31, 2021, the geotechnical drilling program described beneath was accomplished. Work now underway consists of environmental baseline research, finding of appropriate combination materials for street constructing and concrete functions, and the surveying of infrastructure areas, roadways, energy and water servitudes, and so on. Waterberg JV Co. obtained approval to use for an built-in water use license from the DWS on October 7, 2019. The appliance course of requires the completion of a number of technical filings, that are anticipated to be submitted in November 2022. After submission of all filings the approval course of is often about ten months in period.

Waterberg Mission – Actions within the yr ended August 31, 2021

Deliberate geo-technical drilling of boxcuts/portals and alongside deliberate decline pathways budgeted at roughly R 15.0 million and proposed geological infill drilling budgeted at roughly R 12.0 million, was not accomplished as part of the 2020 Work Program, as such work first required the grant of a mining proper. Subsequent to the January 28, 2021, grant of the Waterberg Mining Proper, the deliberate geo-technical drilling was accomplished throughout the months of July to October of 2021 at a price of roughly R 15.8 million. The geotechnical drilling marketing campaign consisted of 46 boreholes drilled alongside the deliberate centerline of two units of dual declines and box-cut positions.

Waterberg Mission – Actions within the yr ended August 31, 2020

Subsequent to the completion of the DFS, the 2020 Work Program was commenced in March 2020. Optimization and threat mitigation research, included the next:

  • Dry stacking of tailings to scale back water use and cut back tailings impoundment footprint;
  • Affirmation of portal positions and detailed designs;

  • Evaluation of preliminary mining technique, stope and sub degree designs;

  • Detailed benchmarking to comparable operations world wide and particularly in Africa;

  • Detailed simulation of underground mining and floor programs;

  • Doable use of battery electrical underground autos and ensuing diminished air flow and cooling necessities, diminished electrical energy necessities, and opex/capex implications;

  • Doable use of Cellular Tunnel Boring; and

  • Evaluation of water demand and provide and take a look at drilling to substantiate water assets.

On October 4, 2019, the Firm introduced constructive leads to the Waterberg DFS, together with an up to date mineral useful resource evaluation on the Waterberg Mission from further drilling, efficient September 4, 2019. The Waterberg DFS was filed with the relevant regulatory authorities on October 7, 2019. The DFS was formally accredited by the shareholders of Waterberg JV Co. on December 5, 2019. The Waterberg DFS estimated 6.44 million 4E ounces within the larger confidence measured class (versus 6.26 million 4E ounces within the October 2018 Waterberg Report). Mineral assets estimated within the mixed measured and indicated classes, at a 2.5 g/t 4E cut-off grade, elevated barely to 26.35 million 4E ounces in 242.4 million tonnes at 3.38 g/t 4E (versus 26.34 million 4E ounces in 242.5 million tonnes at 3.38 g/t within the October 2018 Waterberg report). Inferred mineral assets at a 2.5 g/t 4E cut-off grade totaled 7.0 million 4E ounces (the identical as within the October 2018 Waterberg Report). The up to date measured and indicated 2019 mineral useful resource totaling 26.35 million 4E ounces is comprised of 63.0% palladium, 29.1% platinum, 6.4% gold and 1.5% rhodium. The T zone measured and indicated assets elevated in grade from 4.51 g/t 4E within the September 2018 Waterberg Report back to 4.53 g/t 4E within the Waterberg DFS. For extra particulars in regards to the Waterberg DFS see Merchandise 4.D. – Property, Plant and Gear – Technical Report – Waterberg.

The measured and indicated mineral assets within the Waterberg DFS had been used for detailed mine planning within the DFS. The DFS was managed by Platinum Group and the Technical Committee together with members from all three way partnership companions.

The 2020 Work Program was accomplished in mid-September 2020. Inside experiences and research had been delivered by the consulting engineers in October 2020. Geo-technical drilling of boxcuts/portals and alongside deliberate decline pathways, budgeted at roughly R 27 million, was not accomplished earlier than Implats’ funding obligation expired on September 15, 2020 as such work first required floor rights entry pursuant to the grant of a mining proper. Take a look at drilling and evaluation of recognized native water sources was performed in 2020 and accomplished in early September. Complete price of the 2020 Work Program funded by Implats to September 15, 2020 amounted to roughly Rand 24.7 million.

Waterberg Mission – Actions within the yr ended August 31, 2019

Through the yr ended August 31, 2019, roughly $8.4 million was spent on the Waterberg Mission for DFS engineering and exploration actions. At yr finish, $36.8 million in gathered internet prices had been capitalized to the Waterberg Mission. Complete expenditures on the property since inception, earlier than the deduction of accomplice contributions, are roughly $70.4 million. From inception up to now, the Firm has funded each the Firm’s and Mnombo’s share of expenditures on the Waterberg Mission. At August 31, 2019, Mnombo owed the Firm roughly $4.5 million for funding supplied.

At August 31, 2019, the Firm carried complete internet deferred acquisition and exploration and different prices associated to the Waterberg Initiatives of $36.8 million (August 31, 2018 – $29.4 million).

On October 25, 2018, the Firm reported an up to date impartial 4E useful resource estimate for the Waterberg Mission.

On October 10, 2018, the Firm introduced {that a} lately filed mining proper utility for the Waterberg Mission had been accepted by the DMR for consideration. The mining proper utility consisted of a mining work program, social and labour plan and related environmental functions. The method of session underneath the MPRDA and relevant environmental evaluation rules for the mining proper utility has been accomplished. Public session occurred in a constructive local weather of mutual respect and feedback obtained from stakeholders are being addressed.

Detailed DFS engineering work which commenced throughout fiscal 2017 was continued and superior throughout fiscal 2018 and financial 2019.

Waterberg Initiatives – Historical past of Acquisition

The Waterberg Joint Enterprise Mission was initially comprised of a contiguous granted prospecting proper space of roughly 255 km2 situated on the Northern Limb of the Bushveld Complicated, roughly 70 km north of the city of Mokopane. The Waterberg Extension Mission, adjoining to the north, included contiguous granted and applied-for prospecting rights with a mixed space of roughly 864 km2.

On September 28, 2009, PTM RSA, JOGMEC and Mnombo entered right into a three way partnership settlement, as later amended on Might 20, 2013 (the “JOGMEC Settlement“), whereby JOGMEC might earn as much as a 37% taking part curiosity within the Waterberg Joint Enterprise Mission for an non-obligatory work dedication of $3.2 million over 4 years, whereas on the identical time Mnombo might earn a 26% taking part curiosity in change for matching JOGMEC’s expenditures on a 26/74 foundation ($1.12 million).

On November 7, 2011, the Firm entered into an settlement with Mnombo whereby the Firm acquired 49.9% of the issued and excellent shares of Mnombo in change for money funds totaling Rand 1.2 million and an settlement that the Firm would pay for Mnombo’s 26% share of prices on the Waterberg Joint Enterprise Mission till the completion of a DFS.

On Might 26, 2015, the Firm introduced a second modification to the JOGMEC Settlement (the “2nd Modification“) whereby the Waterberg Joint Enterprise Mission and the Waterberg Extension Mission had been to be consolidated and contributed into an working firm, Waterberg JV Co. At August 31, 2017, the Firm held 45.65% of the Waterberg Mission whereas JOGMEC held 28.35% and Mnombo held 26%. Beneath the twond Modification, JOGMEC dedicated to fund $20 million in expenditures over a three-year interval ending March 31, 2018, all of which had been funded by JOGMEC as of August 31, 2017. The Firm remained the Waterberg Mission operator underneath the twond Modification.

On November 6, 2017, the Firm (together with JOGMEC and Mnombo) closed the Preliminary Buy with Implats and Implats acquired the Buy and Improvement Possibility. Additional particulars on this transaction could be discovered above.

On March 8, 2018, JOGMEC introduced that it had signed a memorandum of understanding for the switch of 9.755% of its 21.95% curiosity in Waterberg JV Co. to Hanwa, which was the results of Hanwa profitable JOGMEC’s public tender held on February 23, 2018. JOGMEC and Hanwa have applied the switch of curiosity to Hanwa, together with Hanwa securing the appropriate to a provide of sure metals produced on the Waterberg Mission. JOGMEC has commenced a course of to get rid of its remaining shareholding in Waterberg JV Co.

In July 2021, JOGMEC suggested the Waterberg JV Co. companions that they’d start a course of looking for tenders, first from Japanese corporations, for the acquisition of JOGMEC’s 12.195% curiosity within the Waterberg Mission. The division of JOGMEC that holds the shares in Waterberg JV Co. is restricted by its mandate to solely investing in exploration corporations. With Waterberg JV Co. advancing to the event stage, JOGMEC should search potential purchasers for its shares in Waterberg JV Co. As of the date of this Kind 20-F, JOGMEC has not suggested the Waterberg JV Co. companions of any pending transaction. Ought to JOGMEC suggest a sale of all or any of its pursuits in Waterberg JV Co. to a non-Japanese firm, PTM and Mnombo would have professional rata rights of first refusal to accumulate a portion of the shares proposed on the market on the proposed sale worth.

As of the date of submitting of this Annual Report, Waterberg JV Co. owns 100% of the Waterberg Mining Proper and prospecting rights comprising your complete Waterberg Mission space. Waterberg JV Co. is owned 37.05% by PTM RSA, 12.195% by JOGMEC, 9.755% by Hanwa, 26% by Mnombo and 15% by Implats, giving the Firm complete direct and oblique possession of fifty.02% of the Waterberg Mission.

Non-Materials Mineral Property Pursuits

The non-material mineral property pursuits of the Firm embrace minor property pursuits in Canada and in South Africa. These property pursuits are usually not, individually or collectively, materials to the Firm. All non-material properties have been written off.

Maseve – Sale in Fiscal 2018 to RBPlat

On September 6, 2017, the Firm entered right into a time period sheet to promote all rights and pursuits in Maseve to RBPlat in an total transaction valued at roughly $74.0 million, payable as $62.0 million in money and $12.0 million in RBPlat extraordinary shares, as valued on September 6, 2017 (the “Maseve Sale Transaction“).

Definitive authorized agreements for the Maseve Sale Transaction had been executed on November 23, 2017. The Maseve Sale Transaction was a singular transaction deliberate to shut in two levels. Situations precedent to the primary stage sale of the concentrator plant and sure floor belongings of the Maseve Mine (the “Plant Sale Transaction“) had been fulfilled on February 14, 2018 and a deposit in escrow paid by RBPlat of Rand 41.37 million (roughly $3.5 million at the moment) was launched to the Firm on March 14, 2018. An quantity of Rand 1.29 million ($107,755) from the discharge of the escrow deposit was paid to scale back the 2015 Sprott Facility (outlined beneath) and the steadiness was used to settle sure excellent contractor claims in South Africa.

On April 5, 2018, RBPlat tendered the Rand equal of $54.5 million as ultimate fee for the Plant Sale Transaction. Proceeds from the Plant Sale Transaction had been utilized to totally repay $46.98 million in secured debt on account of Sprott pursuant to a $40 million principal mortgage facility drawn by the Firm in November 2015 (the “2015 Sprott Facility“). The reimbursement to Sprott consisted of the excellent principal quantity of $40.0 million, a bridge mortgage of $5.0 million and all accrued curiosity and charges of roughly $1.98 million. Remaining proceeds from the Plant Sale Transaction had been utilized to partially repay the Firm’s former $40 million principal secured mortgage facility (the “LMM Facility“) with LMM. Later, on April 10, 2018 the Firm obtained a overseas change charge variance quantity of Rand 3.26 million from RBPlat, which was exchanged for $270,000 and likewise remitted to partially repay the LMM Facility.

On April 26, 2018, stage two of the Maseve Sale Transaction closed when RBPlat launched 4.87 million RBPlat widespread shares from escrow to PTM RSA and Africa Vast, price roughly $9.0 million at the moment, for the acquisition of 100% of the issued and excellent widespread shares of Maseve. A ultimate required money fee was made to PTM RSA on Might 29, 2018, funded by the discharge of Maseve’s Rand 58 million environmental bond, valued at $4.6 million when launched. The Firm’s 4.52 million RBPlat shares had been bought on December 14, 2018 and internet proceeds of $8.0 million had been paid to LMM towards the LMM Facility on January 11, 2019.

B. Liquidity and Capital Sources

The Firm’s working capital is at present a direct results of the surplus of funds raised from the sale of fairness shares over expenditures for working prices, engineering prices, exploration prices in addition to administrative bills. The working capital steadiness on the finish of the next durations had been: August 31, 2021: $-23.6 million; August 31, 2020: $-2.4 million; and August 31, 2019: $-0.5 million. Included within the calculation of the working capital steadiness at August 31, 2021 is the 2019 Sprott Facility and the Notes, each of which mature within the fourth fiscal quarter of 2022.

Money and money equivalents at August 31, 2021 totaled $6.3 million; in comparison with August 31, 2020, $1.3 million and August 31, 2019, $5.6 million. The money and money equivalents are attributable primarily to the problem of debt or share capital. Apart from money and money equivalents, the Firm had no materials unused sources of liquid belongings at August 31, 2020, 2019 or 2018.

As described elsewhere on this Annual Report, numerous authorized, contractual or financial restrictions might have an effect on the flexibility of the Firm’s subsidiaries to switch funds to the Firm as wanted to fulfill the Firm’s obligations.

For info on the Firm’s borrowings and associated maturity dates as of August 31, 2021, see “Merchandise 18 – Monetary Statements”, Observe 6 and Observe 7.

Besides within the case of JOGMEC’s $20 million funding dedication, which was absolutely paid and utilized to venture prices by March of 2018, funding of Waterberg Mission prices is mostly required to be supplied by Waterberg JV Co. shareholders on a professional rata foundation. See “Merchandise 4.B. – Principal Product – Implats Transaction”. For anticipated Waterberg Mission capital expenditures, see “Merchandise 4.D. – Materials Mineral Property Pursuits – Waterberg Mission Abstract (Excerpted from the Waterberg DFS)”.

Subsequent to the completion and approval of the DFS, the 2020 Work Program for the Waterberg Mission was funded by Implats from February 1, 2020 till September 15, 2020 and accomplished optimization and threat mitigation research at a price of Rand 24.7 million. “See Merchandise 4. D. – Property, Crops and Gear – Extra Data”.

A base case price range, commencing September 16, 2021, for pre-production work on the Waterberg Mission in fiscal 2021 was accredited by the board of administrators of Waterberg JV Co. in August 2020 at Rand 45.1 million, to be elevated by an extra price range of R 31.7 million topic to the grant of a Mining Proper, all to be funded by Waterberg JV Co. shareholders on a professional rata foundation. By August 31, 2021, an quantity of roughly R 43.4 million was spent towards the whole price range of R 75.8 million.

In July 2021, the Board of Waterberg JV Co. accredited an extension of the fiscal 2021 price range to December 31, 2021 at Rand 43.9 million to allow sure pre-production work to be accomplished which couldn’t begin in time for completion in fiscal 2021. The Firm plans to fund its share of pre-production Waterberg prices from the proceeds of current fairness financings as described beneath at “Merchandise 5. – B. Liquidity and Capital Sources – Fairness Financings”.

The Firm, on behalf of Waterberg JV Co., is at present in dialogue with a number of potential venture financiers for attainable debt, stream or focus pre-pay development financing. Discussions are additionally underway with potential focus offtakers. Fairness contributions on a professional rata foundation by Waterberg JV Co. shareholders are anticipated to be elements of future venture development financing.

Going Concern

The Firm at present has restricted monetary assets and has no sources of working revenue at current. The Firm had a working capital deficit of $23.6 million at August 31, 2021, together with $19.99 million of indebtedness for the Notes, which mature on July 1, 2022, and for $9.4 million pursuant to the 2019 Sprott Facility, which matures on August 14, 2022. As of the date of this Kind 20-F a principal quantity of $3.6 million stays excellent pursuant to the 2019 Sprott Facility. The Firm additionally has non-obligatory commitments for its ongoing share of accredited budgets to fund the Waterberg Mission (as described above at Merchandise 5. B. “Liquidity and Capital Sources”) and to fund ongoing analysis and growth by FIU on behalf of Lion Battery (as described beneath at Merchandise 5 C. “Analysis and Improvement, Patents and Licences, and so on.”). A failure by the Firm to fund its share of such ongoing commitments might outcome within the dilution of its pursuits in both the Waterberg Mission or Lion Battery. For additional particulars of the Firm’s commitments at August 31, 2021 see notice 11 to the Firm’s audited consolidated monetary statements listed in Merchandise 18 hereof and filed as a part of this Annual Report. The Firm’s means to proceed operations within the regular course of enterprise will rely on its means to safe further funding by strategies that would embrace debt refinancing, fairness financing, sale of belongings and strategic partnerships. Administration believes the Firm will have the ability to safe additional funding as required. Nonetheless, there exist materials uncertainties leading to substantial doubt as to the flexibility of the Firm to proceed to satisfy its obligations as they arrive due and therefore, the final word appropriateness of the usage of accounting ideas relevant to a going concern.

Fairness Financings

On January 31, 2017, the Firm introduced the closing of an providing for 1,969,375 Frequent Shares at a worth of $14.60 per share leading to gross proceeds of $29 million. Web proceeds to the Firm after charges, commissions and prices had been roughly $26 million.

On April 26, 2017, the Firm introduced the closing of an providing for 1,539,000 Frequent Shares at a worth of $13.00 per share, for combination gross proceeds of $20 million. Web proceeds to the Firm after charges, commissions and prices had been roughly $18.4 million.

On Might 15, 2018, the Firm introduced the closing of a personal placement with HCI for 1,509,100 models at a worth of $1.50 per unit for combination gross proceeds of $2.26 million. Every unit consisted of 1 Frequent Share and one Frequent Share buy warrant, with every Frequent Share buy warrant permitting HCI to buy one additional Frequent Share at a worth of $1.70 per share for a interval of 18 months till November 15, 2019.

On Might 15, 2018, the Firm additionally introduced the closing of a public providing of 11,745,386 models at a worth of $1.50 per unit for combination gross proceeds of roughly $17.62 million. Every unit consisted of 1 Frequent Share and one Frequent Share buy warrant entitling the holder to buy one Frequent Share at a worth of $1.70 for a time period of 18 months till November 15, 2019.

On February 4, 2019, the Firm introduced the closing of a beforehand introduced non-brokered personal placement of Frequent Shares at worth of $1.33 every. An combination of three,124,059 Frequent Shares had been issued for gross proceeds to the Firm of $4.155 million.

On June 28, 2019, the Firm introduced the closing of a beforehand introduced non-brokered personal placement with HCI of 1,111,111 Frequent Shares at a worth of $1.17 per share for gross proceeds of $1.3 million.

On August 21, 2019, the Firm introduced the closing of a beforehand introduced purchased deal financing with BMO in the USA underneath which the Firm bought 8,326,957 Frequent Shares at a worth of $1.25 per Frequent Share for gross proceeds of roughly $10.4 million. The Firm additionally closed a personal placement with LMM for 7,575,758 Frequent Shares at a worth of $1.32 per Frequent Share for gross proceeds of $10.0 million and a personal placement with Deepkloof for six,940,000 Frequent Shares at a worth of $1.32 per Frequent Share for gross proceeds of roughly $9.2 million. The Firm used a portion of the $29.6 million in gross proceeds from share gross sales described above along with a $20.0 million advance underneath its new 2019 Sprott Facility to totally repay $43.0 million in excellent principal and accrued curiosity due underneath the LMM Facility.

On December 19, 2019, the Firm introduced the closing of a non-brokered personal placement of Frequent Shares at a worth of $1.24 per Frequent Share. An combination of three,225,807 Frequent Shares had been issued for gross proceeds to the Firm of $4.0 million.

On June 17, 2020, the Firm reported closing of a non-brokered personal placement of Frequent Shares at a worth of $1.40 per Frequent Share. An combination of 1,221,500 Frequent Shares had been issued for gross proceeds to the Firm of $1.71 million.

On September 4, 2020, the Firm entered into the Gross sales Settlement with BMO whereby the Firm might promote its Frequent Shares now and again for as much as $12.0 million in combination gross sales proceeds by means of the Firm’s 2020 ATM. On the conclusion of the buying and selling day on November 30, 2020, the Firm had bought 5,440,186 widespread shares at a median worth of $2.2055 for gross proceeds of $12.0 million, thereby finishing the 2020 ATM. Web proceeds after commissions and charges amounted to $11.7 million.

On October 15, 2020, the Firm introduced the closing of a non-brokered personal placement with HCI of 1,146,790 Frequent Shares at a worth of $2.18 per Frequent Share for gross proceeds of $2.5 million.

On December 8, 2020, the Firm introduced the closing of a non-brokered personal placement with HCI of 1,121,076 Frequent Shares at a worth of $2.23 per Frequent Share for gross proceeds of $2.5 million.

On February 5, 2021, the Firm entered into an Fairness Distribution Settlement with BMO to promote its Frequent Shares now and again for as much as $50.0 million in combination gross sales proceeds by means of the Firm’s 2021 ATM. As of November 24, 2021, the Firm has issued a complete of 6,936,238 Frequent Shares at a median worth of $3.26 pursuant to the 2021 ATM for internet proceeds of $22.06 million after charges and bills of $0.57 million.

Convertible Senior Subordinated Notes

On June 30, 2017, the Firm issued and bought the Notes to sure institutional traders. The Notes bear curiosity at a charge of 6 7/8% every year, payable semi-annually on January 1 and July 1 of every yr, starting on January 1, 2018, in money or on the election of the Firm, in Frequent Shares or a mix of money and Frequent Shares, and can mature on July 1, 2022, until earlier repurchased, redeemed or transformed.

Topic to sure exceptions, the Notes are convertible at any time on the possibility of the holder, and could also be settled, on the Firm’s election, in money, Frequent Shares, or a mix of money and Frequent Shares. The preliminary conversion charge of the Notes was 1,001.1112 Frequent Shares per $1,000 principal quantity of Notes, which is equal to an preliminary conversion worth of roughly $0.9989 per Frequent Share, representing a conversion premium of roughly 15% above the NYSE American closing sale worth for the Frequent Shares of $0.8686 per share on June 27, 2017. The conversion charge is topic to adjustment upon the incidence of sure occasions. After giving impact to the 2018 Share Consolidation, the conversion charge is 100.1111 per $1,000 which is equal to a conversion worth of roughly $9.989 per Frequent Share. If the Firm pays curiosity in Frequent Shares, such shares will probably be issued at a worth equal to 92.5% of the straightforward common of the every day volume-weighted common worth of the Frequent Shares for the ten consecutive buying and selling days ending on the second buying and selling day instantly previous the fee date, on the NYSE American change or, if the Frequent Shares are usually not then listed on the NYSE American change, on the principal U.S. nationwide or different securities change or market on which the Frequent Shares are then listed or admitted for buying and selling. On account of a limitation on conversion contained within the indenture governing the Notes, dated June 30, 2017 between the Firm and The Financial institution of New York Mellon (the “Indenture“), not more than 361,312 Frequent Shares could also be issued in settlement of curiosity funds pursuant to the convertible notes due after July 2, 2021.

On July 26, 2017, one holder transformed $10,000 of Notes into 1,319 Frequent Shares, leaving a principal steadiness of $19.99 million in Notes excellent. On January 2, 2018, the Firm issued 244,063 Frequent Shares in settlement of $0.69 million of bi-annual curiosity payable on Notes. On July 3, 2018, the Firm issued 757,924 Frequent Shares in settlement of $0.72 million of bi-annual curiosity payable on Notes. On January 2, 2019, the Firm issued 545,721 Frequent Shares in settlement of $0.69 million of bi-annual curiosity payable on Notes. On July 1, 2019, the Firm paid $0.69 of bi-annual curiosity payable on Notes in money. On January 1, 2020, the Firm issued 517,468 Frequent Shares in settlement of $0.69 million of bi-annual curiosity payable on Notes. On July 1, 2020, the Firm issued 526,471 Frequent Shares in settlement of $0.69 million of bi-annual curiosity payable on Notes. The Firm paid $0.69 million in money for bi-annual curiosity payable on the Notes on each December 29, 2020 and June 28, 2021. Roughly 40% of all Notes curiosity described above was paid to Main Shareholder, Franklin Advisers, Inc.

However the foregoing, no holder will probably be entitled to obtain Frequent Shares upon conversion of Notes to the extent that such receipt would trigger the changing holder or individuals appearing as a “group” to turn out to be, straight or not directly, a “helpful proprietor”, as outlined within the Indenture, of greater than 19.9% of the Frequent Shares excellent at such time or, within the case of a sure notice holder, if it or its associates would turn out to be a “helpful proprietor” of greater than 4.9% of the Frequent Shares excellent at such time. As well as, the Firm is not going to challenge an combination variety of Frequent Shares pursuant to the Notes that exceeds 19.9% of the whole variety of Frequent Shares excellent on June 30, 2017.

Previous to July 1, 2018, the Firm couldn’t redeem the Notes, besides upon the incidence of sure adjustments to the legal guidelines governing Canadian withholding taxes. On or after July 1, 2018 and earlier than July 1, 2019 the Firm shall have the appropriate to redeem all or a part of the Notes at a worth, payable in money, of 110.3125% of the principal quantity of the Notes to be redeemed, plus accrued and unpaid curiosity, if any, to, however excluding, the redemption date; on or after July 1, 2019 and earlier than July 1, 2020 the Firm shall have the appropriate to redeem all or a part of the excellent Notes at a worth, payable in money, of 105.15625% of the principal quantity of the Notes to be redeemed, plus accrued and unpaid curiosity, if any, to however excluding, the redemption date; and on or after July 1, 2020, till the maturity date, the Firm shall have the appropriate to redeem all or a part of the excellent Notes at a worth, payable in money, of 100% of the principal quantity of the Notes to be redeemed, plus accrued and unpaid curiosity, if any, to, however excluding, the redemption date.

Upon the incidence of a basic change as outlined within the Indenture, the Firm should provide to buy the excellent Notes at a worth, payable in money, equal to 100% of the principal quantity of the Notes, plus accrued and unpaid curiosity, if any.

The Firm agreed within the Indenture to trigger a prospectus and a registration assertion to be filed with Canadian securities regulatory authorities and with the U.S. Securities and Change Fee, as relevant, and turn out to be usable and efficient inside six months after June 30, 2017, and to stay usable and efficient for sure durations. The Indenture supplied that if the Firm didn’t accomplish that, it might pay further curiosity on the Notes at a charge of 0.25% every year for the primary 90 days and at a charge of 0.50% every year thereafter, till the Notes turned freely tradable by holders aside from associates and sure different occasions have occurred. A further curiosity cost of 0.25% for the interval January 1, 2018 to March 31, 2018, plus an additional 0.25% for the interval April 1, 2018 to July 1, 2018, was added to the coupon charge of the Notes on the Firm’s election to not file a prospectus and a registration assertion for the Notes with Canadian securities regulatory authorities and with the U.S. Securities and Change Fee. After July 1, 2018 at which period the Notes turned freely tradable by holders aside from associates, the Notes as soon as once more bear curiosity on the coupon charge of 6 7/8% every year.

The Notes will probably be unsecured senior subordinated obligations and will probably be subordinated in proper of fee to the prior fee in stuffed with the entire Firm’s current and future senior indebtedness pursuant to the Indenture. The Firm might challenge further Notes in accordance with the phrases and circumstances set forth within the Indenture. The Indenture accommodates sure further covenants, together with covenants limiting asset tendencies, issuances of capital inventory by subsidiaries, incurrence of indebtedness, enterprise combos and share exchanges.

2019 Sprott Facility

The 2019 Sprott Facility is a credit score settlement with Sprott and the Sprott Lenders pursuant to which the Sprott Lenders supplied a $20.0 million principal quantity senior secured credit score facility advance to the Firm. The unique maturity date of the 2019 Sprott Facility was August 14, 2021. The Firm had the choice to increase the maturity date by one yr in change for a fee in Frequent Shares or money of three % of the excellent principal quantity of the 2019 Sprott Facility two enterprise days previous to the unique maturity date. The Firm elected to increase the maturity date by one yr to August 14, 2022 on $10 million and paid a $0.3 million money to Sprott because the required price. The quantities excellent underneath the 2019 Sprott Facility will proceed to bear curiosity at a charge of 11.00% every year, compounded month-to-month. At August 31, 2021 $9.4 million was excellent on the Sprott Facility. On the time of scripting this Kind 20-F a principal quantity of $3.6 million stays excellent on the Sprott Facility.

Month-to-month curiosity funds totaling $1.59 million had been paid to Sprott within the yr ended August 31, 2021, with an additional $0.17 million in curiosity paid subsequent to yr finish. The Sprott Facility requires a money sweep of fifty% of the Firm’s internet proceeds from fairness choices or new debt securities be utilized to reimbursement of the Sprott Facility. Nonetheless, from the combination internet proceeds of the 2020 ATM, the October 2020 Non-public Placement and the December 2020 Non-public Placement, Sprott allowed the Firm to pay Sprott a diminished quantity of $4.8 million, with the steadiness of what would in any other case be on account of Sprott of $3.39 million being retained by the Firm for working capital and to settle $2.89 million of deferred financial institution advisory charges. Trying ahead, 50% of the online proceeds from the 2021 ATM are to be repaid to Sprott.

Beneath the 2019 Sprott Facility and the Modification Settlement, the Sprott Lenders could have a primary precedence lien on (i) the issued shares of PTM RSA, Mnombo and Waterberg JV Co. held, straight or not directly, by the Firm (and such different claims and rights described within the relevant pledge settlement); and (ii) the entire Firm’s current and after-acquired private property. The 2019 Sprott Facility can be assured by PTM RSA.

Financial institution Advisory Charges

BMO Nesbitt Burns Inc. (“BMO“) and Macquarie Capital Markets Canada Ltd. (“Macquarie“) have supplied strategic advisory companies to the Firm. Efficient October 22, 2018 the formal settlement between the Firm and Macquarie was terminated by mutual consent. Pursuant to the transaction associated to the sale of Maseve and the Implats Preliminary Buy, BMO and Macquarie earned combination advisory charges of roughly $3.8 million. In October 2017, the Firm paid BMO and Macquarie an combination of $1.0 million after the closing of the Implats Preliminary Buy and likewise agreed to pay the remaining steadiness of roughly $2.89 million as quickly as practicable following the ultimate reimbursement of all secured debt. On November 30, 2020 the steadiness of deferred 2017 financial institution advisory charges on account of BMO and Macquarie was paid in full.

Accounts Receivable and Payable

Accounts receivable at August 31, 2021 totaled $0.3 million (August 31, 2020 totaled $0.2 million) being comprised primarily of South African worth added taxes refundable receivable within the present interval. 2021 ATM providing proceeds receivable totaled $0.2 million (August 31, 2020 totaled nil). Accounts payable and accrued liabilities at August 31, 2021 totaled $2.5 million (August 31, 2020 totaled $1.4 million) with the vast majority of payables due on expenditures for the Waterberg Mission.

C. Analysis and Improvement, Patents and Licences, and so on.

We don’t straight interact in analysis and growth actions. A subsidiary of the Firm is investing in analysis and growth.

On July 12, 2019, the Firm, along with an affiliate of Amplats, launched a brand new enterprise by means of a collectively owned firm, Lion Battery, to speed up the event of subsequent technology battery expertise utilizing platinum and palladium. The Firm obtained 400,000 widespread shares of Lion Battery, valued at a worth of $0.01 per share, as the unique founder. Each the Firm and Amplats are to equally make investments as much as an combination of $4.0 million into Lion Battery, of which roughly $1.0 million can be for basic and administrative bills and the commercialization of the expertise developed, topic to sure circumstances. All funding into Lion Battery by the Firm or Amplats is to be in change for most well-liked shares of Lion Battery at a worth of $0.50 per share over an approximate three to 4 yr interval.

On July 12, 2019, the Firm and Amplats every invested $550,000 as a primary tranche of funding into Lion Battery in change for 1,100,000 Lion most well-liked shares every. In June 2020, the Firm and Amplats every invested $350,000 as a second tranche of funding in change for 700,000 Lion Battery most well-liked shares every. In January 2021, Amplats and the Firm every invested $350,000 as a 3rd tranche of funding in change for 700,000 Lion Battery most well-liked shares every. At August 31, 2021 the Firm owned a 53.70% curiosity in Lion Battery.

On July 12, 2019, Lion Battery entered into the SRA with Florida Worldwide College (“FIU“) to fund a $3.0 million analysis program over roughly a three-year interval using platinum and palladium to unlock the potential of Lithium Air and Lithium Sulphur battery chemistries to extend their discharge capacities and cyclability. Beneath the Sponsored Analysis Settlement, Lion Battery could have unique rights to all mental property developed and can lead all commercialization efforts. The primary tranche of funding by Lion to FIU, totaling $1.0 million plus a one-time price of $50,000, was paid by Lion Battery in mid July 2019, with a second tranche of $666,667 funded in June 2020. A 3rd tranche of funding by Lion Battery to FIU of $666,667 was accomplished in February 2021. Lion Battery has supplied combination analysis funding within the quantity of $2.38 million to FIU as of August 31, 2021.

On August 4, 2020, the U.S. Patent and Trademark Workplace issued Patent No. 10,734,636 B2 entitled “Battery Cathodes for Improved Stability” to FIU. The patent consists of the usage of platinum group metals and carbon nanotubes and different improvements in a lithium battery. A second patent associated to this work was issued in December 2020 and a 3rd was issued on June 15, 2021. Additional patents are at present utilized for. Beneath the Sponsored Analysis Settlement, Lion Battery has unique rights to all mental property being developed by FIU together with patents granted. Lion Battery can be reviewing a number of further and complementary alternatives centered on creating next-generation battery expertise utilizing platinum and palladium.

On July 6, 2021 the Firm and Anglo amended the unique Lion Battery funding agreements to permit for as much as $2.73 million of further funding to Lion, bringing the whole attainable funding as much as $6.73 million, with a view to speed up analysis and growth efforts at FIU. If the Firm ought to fail to contribute its share of a required subscription to Lion, it might be in breach of its settlement with Lion Battery and its curiosity in Lion Battery could also be topic to dilution.

D. Development Data

The Firm’s key enterprise goal is to advance the Waterberg Mission to the completion of financing and a development determination.

The Waterberg DFS was formally delivered to the entire Waterberg Mission house owners on October 4, 2019, as required underneath the Waterberg Shareholders Settlement. The shareholders of Waterberg JV Co. formally accredited the Waterberg DFS on December 5, 2019.

An EA was granted for the Waterberg Mission on August 12, 2020, topic to a public discover interval and finalization of points raised by affected events, which course of was accomplished with the problem of the ultimate EA on November 10, 2020.

The Waterberg Mining Proper was granted by the DMRE on January 28, 2021 and its notarial execution was accomplished on April 13, 2021.

On July 6, 2021, Waterberg JV Co. accomplished the registration of the Waterberg Mining Proper on the Mineral and Petroleum Titles Registration Workplace.

The Firm has submitted formal rebuttals to the Appeals and court docket actions filed by numerous native teams of people in opposition to the grant of the Waterberg Mining Proper. The Firm believes that each one necessities specified underneath the MPRDA have been complied with and that DMRE had correctly granted the Waterberg Mining Proper. The Waterberg Mining Proper stays lively.

Market curiosity in palladium and in PGMs on the whole has been sturdy in recent times and the market worth for PGMs was usually growing till early 2021. A worldwide scarcity in semiconductor chips in 2021 resulted in a fabric discount within the world manufacturing of vehicles, leading to a concurrent fall in demand for the usage of PGMs in automotive catalytic converters. On the time of scripting this Kind 20-F metals costs have decreased from current highs as follows:

PGM Current Excessive
Value
Date Present Value Date Variance
Platinum $1,311 Feb 13, 2021 $1,087 Nov 15, 2021 $224
Palladium $2,981 Might 3, 2021 $2,092 Nov 15, 2021 $889
Rhodium $29,800 Mar 23, 2021 $13,500 Nov 15, 2021 $16,300
Gold $2,067 Aug 7, 2020 $1,862 Nov 15, 2021 $205

After a restoration in semiconductor chip manufacturing, we anticipate a medium-term restoration out there for PGMs based mostly on projections for sturdy automotive gross sales in China, the place the biggest quantity of palladium and rhodium are used, the potential for the emergence of a hydrogen-based financial system and the concurrent use of PGMs, in addition to the potential for the usage of PGMs in new lithium battery applied sciences. Because the world seeks to decarbonize and search for options to local weather change, the distinctive properties of PGMs as highly effective catalysts are being utilized to varied applied sciences as attainable options for extra environment friendly vitality technology.

Trying farther forward, the penetration of battery electrical energy trains into the manufacturing and gross sales of vehicles, leading to a decline within the demand for PGMs in inside combustion engine car catalytic converters, is predicted to negatively impression markets for PGMs. The long run use of PGMs in hydrogen gasoline cells and different clear vitality applied sciences might offset some or the entire adverse impression attributable to the penetration of battery electrical energy trains into the manufacturing and gross sales of vehicles.

Though up to now the Firm has not skilled a fabric adverse impression to its enterprise because of the COVID-19 pandemic, due to the extremely unsure and dynamic nature of occasions regarding the COVID-19 pandemic, it’s not at present attainable to estimate the longer term impression of the pandemic on the Firm’s enterprise. Nonetheless, these results might have a fabric impression on the Firm’s operations, and the Firm will proceed to observe the COVID-19 pandemic scenario intently.

The Firm is conscious of the worldwide effort to struggle local weather change and the attainable impression of future laws and regulation designed to scale back carbon emissions and the impression of local weather change. Waterberg JV Co. has performed preliminary research to evaluate the attainable use of battery electrical powered underground mining gear on the Waterberg Mine as a way to mitigate and cut back the mine’s manufacturing and launch of GHG emissions. Three way partnership accomplice Implats lately suggested the Firm of their intention to finish a research and evaluation of the carbon emissions that may be produced by the Waterberg Mine.

Elements which can have a fabric impact on the Firm’s internet gross sales or revenues, revenue from persevering with operations, profitability, liquidity or capital assets, or that may trigger reported monetary info not essentially to be indicative of future working outcomes or monetary situation are set forth in Merchandise 3.D.- Danger Elements”.

E. Vital Accounting Estimates

Not relevant

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Administrators and Senior Administration

The next desk units forth the Firm’s present administrators and government officers, with every place and workplace held by them.

The time period of workplace for every director of the Firm expires on the annual basic assembly of shareholders the place they are often nominated for re-election.

Identify and Place of
Residence
Place Age Date First Elected
or Appointed
FRANK HALLAM
British Columbia, Canada
Director
Interim President and Chief Govt Officer
61 February 18, 2002
July 29, 2021
DIANA WALTERS (1)(2)(3)(4)(5)
Houston, Texas, USA
Director 58 July 16, 2013
TIMOTHY MARLOW (2)(3)(4)(5)
British Columbia, Canada
Director 77 June 15, 2011
JOHN A. COPELYN
Cape City, South Africa
Director 71 Might 15, 2018
STUART HARSHAW (2)(3)(4)(5)
Ontario, Canada
Director 54 April 15, 2019
GREGORY BLAIR
North Vancouver, BC
Interim Chief Monetary Officer 44 July 29, 2021

Notes:

(1) Chairperson of the Board

(2) Member of the Audit Committee of the Firm (the “Audit Committee“)

(3) Member of the Compensation Committee of the Firm (the “Compensation Committee“)

(4) Member of the Governance and Nomination Committee of the Firm (the “Governance and Nomination Committee“)

(5) Member of the Environmental, Well being, Security and Technical Advisory Committee of the Firm (the “EHST Committee“)

Frank Hallam

Mr. Hallam, 61, was the unique founding father of New Millennium Metals Corp, a predecessor firm to Platinum Group Metals Ltd and the Firm’s Chief Monetary Officer and Company Secretary from February 11, 2003 to July 29, 2021. Mr. Hallam has intensive working and monetary expertise on the senior administration degree with a number of TSX and NYSE listed useful resource corporations and has over twenty-seven years of expertise working in East and South Africa. In his position as CFO and director with Tan Vary Exploration he arrange and administered exploration places of work in Tanzania, Ethiopia and Eritrea, amongst others. Mr. Hallam has been concerned in elevating over $1 billion for exploration, mining growth and manufacturing and has been concerned in negotiating and managing property offers with Anglo Platinum Ltd., Barrick Gold Company, Johannesburg Consolidated Investments and Newmont Mining Company. Mr. Hallam was a co-founder and director of West Timmins Mining that was bought by producing firm Lake Shore Gold Corp. in 2009, the place he served as a director till April 2016. Mr. Hallam was a co-founder and former director till 2014 of MAG Silver Corp. Mr. Hallam additionally serves as CFO and Company Secretary of WVM. Mr. Hallam beforehand served as an auditor within the mining follow of Coopers and Lybrand. He’s a chartered accountant and has a level in enterprise administration from Simon Fraser College.

Diana Walters

Ms. Walters, 58, has over thirty years of expertise within the Pure Sources sector, as an fairness investor, funding banker and in working roles. She is the previous President of LMM and was a Managing Accomplice of Eland Capital, LLC, a Pure Sources advisory agency. Ms. Walters has intensive funding expertise with each debt and fairness by means of management roles at Credit score Suisse, HSBC and different companies. Ms. Walters graduated with honors from the College of Texas at Austin with a BA in Plan II Liberal Arts and an MA in Vitality and Mineral Sources. Ms. Walters additionally at present serves on the board of Atmos Vitality Company and Trilogy Metals Inc.

Timothy Marlow

Mr. Marlow, 77, has over thirty-six years of mining engineering and mine working expertise in North America, South America, Africa and Asia. His mining and venture expertise spans the world with particular African expertise in Ghana and Zambia. Mr. Marlow is President of Marlow & Associates since 1995 and was President of Philippine Gold Consulting LLC from 1995 – 2014. Mr. Marlow is a graduate of the Camborne College of Mines and is registered as a CEng, Registered Constitution Engineer within the UK. He’s a member of the Institute of Mining and Metallurgy UK and a Certified Particular person as outlined by NI-43-101 for mining.

John A. Copelyn

Mr. Copelyn, 71, has been CEO of HCI since becoming a member of in 1997. Previous to this, he was a member of the South African parliament and basic secretary of the Southern African Clothes and Textile Staff’ Union. Mr. Copelyn can be Chairman of E Media Holdings Ltd., a JSE listed firm that contains a number of the main media corporations in South Africa, Tsogo Solar Holdings Ltd., which owns and operates inns and casinos and is listed on the JSE, Deneb Investments Ltd., an funding holding firm with pursuits in textile manufacturing and property investments and Niveus Investments Ltd., an funding holding firm.

Stuart Harshaw

Mr. Harshaw, 54, is a seasoned skilled with a profitable profession within the world mining business with Vale SA and Inco Ltd, the place, amongst different issues, he was Vice President of Ontario Operations in command of working six underground mines, a portfolio of processing and refining amenities in Canada and Asia, in addition to advertising and gross sales of a broad vary of concentrates and completed metals worldwide.

Stuart Harshaw is director, president and CEO of Nickel Creek Platinum Corp. and a member of the board of administrators of Constantine Metallic Sources Ltd. and Worldwide Tower Hill Mines Ltd. Mr. Harshaw can be a voting member of the Board of Governors of Laurentian College in Sudbury, Canada. Mr. Harshaw earned a BSc. in Metallurgical Engineering from Queen’s College and an MBA from Laurentian College.

Gregory Blair

Mr. Blair, 44, was appointed Interim Chief Monetary Officer on July 29, 2021 and has been with Platinum Group since 2010 in numerous roles, most lately as Monetary Controller, whereas additionally holding the identical place at WVM. Previous to working at Platinum Group, Mr. Blair labored at a public accounting agency on public firm (primarily mining) audits. Mr. Blair is a Chartered Skilled Accountant (Chartered Accountant) and holds a level in Economics from Simon Fraser College whereas additionally having accomplished the Canadian Securities Course.

There are not any household relationships between any of the individuals named above. Moreover, there are not any preparations or understandings with Main Shareholders, prospects, suppliers or others, pursuant to which any of the individuals named above had been chosen as a director or member of senior administration.

Besides as disclosed beneath, no director or government officer of the Firm (or any of their private holding corporations) is, or throughout the ten years previous the date of submitting of this Annual Report has been, a director, chief government officer or chief monetary officer of any firm, together with the Firm, that was topic to a stop commerce order, an order much like a stop commerce order, or an order that denied the related firm entry to any exemption underneath securities laws that was in impact for a interval of greater than 30 consecutive days:

(a) that was issued whereas the director or government officer was appearing within the capability as director, chief government officer or chief monetary order; or

(b) that was issued after the director or government officer ceased to be a director, chief government officer or chief monetary officer and which resulted from an occasion that occurred whereas that particular person was appearing within the capability as director, chief government officer or chief monetary officer;

Mr. Hallam was a director of Nextraction Vitality Corp. (“Nextraction“) till Might 14, 2020. Nextraction was beforehand topic to Stop Commerce Orders (“CTOs“) issued by the Alberta Securities Fee (“ASC“) and the British Columbia Securities Fee (“BCSC“) in Might 2015 for failure to file annual audited monetary statements, annual administration’s dialogue and evaluation, and certification of annual filings for the yr ended December 2014. The CTOs had been revoked by each the ASC and the BCSC in February 2019 following the submitting of all required monetary and steady disclosure paperwork by Nextraction.

Ms. Walters was beforehand a director of Alta Mesa Sources, Inc. (“AMR“), an impartial vitality firm centered on the event and acquisition of unconventional oil and pure fuel reserves within the Anadarko Basin in Oklahoma. On September 11, 2019, AMR introduced that AMR and sure of its subsidiaries filed voluntary petitions for reorganization underneath Chapter 11 of the U.S. Chapter Code within the U.S. Chapter Court docket for the Southern District of Texas with a view to permit AMR to reorganize its capital construction. On June 10, 2020 Ms. Walters suggested the Firm that her duties as a board member of AMR had ended, and that AMR had accomplished its chapter reorganization course of.

Apart from Ms. Walters as described above, no director or government officer of the Firm, or a shareholder holding a enough variety of securities of the Firm to have an effect on materially the management of the Firm, (or any of their private holding corporations):

(a) is, as on the date of submitting of this Annual Report or throughout the ten years previous the date of submitting of this Annual Report, has been a director or government officer, of any firm, together with the Firm, that whereas the director or government officer was appearing in that capability or inside a yr of that particular person ceasing to behave in that capability, turned bankrupt, made a proposal underneath any laws regarding chapter or insolvency or was topic to or instituted any proceedings, association, or compromise with collectors, or had a receiver, receiver supervisor, or trustee appointed to carry its belongings; or

(b) has, throughout the ten years earlier than the date of this Annual Report, turn out to be bankrupt, made a proposal underneath any laws regarding chapter or insolvency, or turn out to be topic to or instituted any proceedings, association or compromise with collectors, or had a receiver, receiver supervisor or trustee appointed to carry the belongings of that director or government officer.

No director or government officer of the Firm, or a shareholder holding a enough variety of securities of the Firm to have an effect on materially the management of the Firm, (or any of their private holding corporations) has been topic to:

(a) any penalties or sanctions imposed by a court docket regarding securities laws or by a securities regulatory authority or has entered right into a settlement settlement with a securities regulatory authority; or

(b) every other penalties or sanctions imposed by a court docket or regulatory physique which might seemingly be thought-about vital to an inexpensive investor in investing determination.

Promoters

No people acted as promoters of the Firm throughout the two most lately accomplished monetary years or throughout the present monetary yr.

B. Compensation

The next desk units forth all compensation paid or accrued by the Firm to its administrators and members of its administrative, supervisory or administration our bodies for the yr ended August 31, 2021.

Annual Lengthy Time period
Compensation Different Annual Compensation(1) All Different
Identify and Wage Bonus Compensation Choices RSUs DSUs Compensation
Principal Place Yr ($) ($) ($) (#) (#) (#) ($)
Frank Hallam (2)
Director and Interim President and CEO; and former CFO and Corp. Sec.
2021 413,265 27,979 Nil 450,000 54,000 N/A Nil
R. Michael Jones (3)
Former Director, President and CEO
2021 389,370 31,526 Nil 500,000 60,000 N/A 828,000 (9)
Diana Walters (4)
Chairperson and Director
2021 N/A N/A 65,593 Nil N/A Nil Nil
Timothy Marlow (4)
Director
2021 N/A N/A 59,801 Nil N/A Nil Nil
John Copelyn (5)
Director
2021 N/A N/A 49,834 Nil N/A Nil Nil
Annual Lengthy Time period
Compensation Different Annual Compensation(1) All Different
Identify and Wage Bonus Compensation Choices RSUs DSUs Compensation
Principal Place Yr ($) ($) ($) (#) (#) (#) ($)
Stuart Harshaw (4)
Director
2021 N/A N/A 59,617 Nil N/A Nil Nil
Enoch Godongwana (6)(7)
Former Director
2021 N/A N/A 6,352 Nil N/A Nil Nil
Gregory Blair (8)
Interim CFO
2021 108,055 9,458 Nil 52,500 14,000 N/A Nil

Notes:

(1) For added particulars, see Merchandise 6.E. Share Possession.

(2) Ceased to be CFO and Company Secretary of the Firm on July 29, 2021

(3) Ceased to be a director, President and CEO of the Firm on July 29, 2021

(4) Charges paid as to 50% in money and 50% in deferred share models (“DSUs“) granted underneath the DSU Plan (outlined beneath).

(5) Charges paid as to 100% in DSUs.

(6) Charges paid as to 80% in money and 20% in DSUs.

(7) Served as a director of the Firm from June 21, 2021 to August 6, 2021.

(8) Appointed Interim CFO on July 29, 2021.

(9) Severance fee made to the Former CEO of the Firm pursuant to a proper separation settlement.

Through the yr ended August 31, 2021 no quantities had been put aside for the foregoing individuals to supply pension, retirement or related advantages.

Deferred Share Unit Plan

The Deferred Share Unit Plan (the “DSU Plan“) permits administrators who are usually not salaried officers or staff of the Firm or a associated company (known as “Eligible Administrators“) to transform into DSUs the charges that may in any other case be payable by the Firm to them regarding future companies for his or her participation on the Board and on committees of the Board, together with all annual retainers and quantities that may be payable for serving because the Chair of the Board and/or as a chair of a committee of the Board (excluding any reimbursement of bills) (the “Board Charges“). Solely Eligible Administrators are permitted to take part within the DSU Plan. The DSU Plan is run by the Board, or such different individuals as could also be designated by the Board now and again, by means of the advice of the Compensation Committee (the “DSUP Directors“).

With respect to the conversion of Board Charges into DSUs, every Eligible Director might, underneath the DSU Plan, elect to transform a minimal of 20% as much as a most of 100%, in 10% increments, of his or her future Board Charges for the related interval into DSUs in lieu of being paid such charges in money. On the date on which the related Board Charges are payable, the variety of DSUs to be credited to a taking part Eligible Director (a “DSU Participant“) will probably be decided by dividing an quantity equal to the designated share of the Board Charges that the DSU Participant has elected to have credited in DSUs on that price fee date, by the market worth of a Frequent Share on that price fee date. Eligible Administrators are entitled to make an election underneath the DSU Plan in respect of the interval from January 1 by means of December 31 no later than December 31 of the prior yr. Newly elected Eligible Administrators could have 30 days from the date of his/her appointment to make an election in respect of the rest of such calendar yr. All such elections will probably be irrevocable in respect of such interval.

If a DSU Participant turns into a salaried officer or an worker of the Firm or a associated company, such DSU Participant shall thereupon be suspended from additional participation within the DSU Plan within the method set out within the DSU Plan.

The DSUP Directors might also, of their sole discretion now and again, award DSUs to a number of Eligible Administrators for the needs of offering further fairness associated remuneration to such Eligible Administrators in respect of future companies as an Eligible Director. With respect to the award of such DSUs, the DSUP Directors will decide when DSUs will probably be awarded, the variety of DSUs to be awarded, the vesting standards for every award of DSUs, if any, and all different phrases and circumstances of every award. Until the DSUP Directors decide in any other case, such DSUs will probably be topic to a vesting schedule whereby they’ll turn out to be vested in equal instalments over three years with one-third vesting on the primary anniversary of the award and one-third vesting on every of the next anniversaries of the award. The DSUP Directors might think about options for vesting standards associated to the Firm’s efficiency and have the flexibleness underneath the DSU Plan to use such vesting standards to specific awards of DSUs. The DSU Plan additionally gives that: (a) the place the Termination of Board Service (as outlined beneath) of a DSU Participant (or termination of service as a salaried officer or worker, if relevant) happens because of the DSU Participant’s dying, all unvested DSUs of that DSU Participant will vest efficient on the date of dying; and (b) if there’s a change of management (as such time period is outlined within the DSU Plan), all unvested DSUs will vest instantly previous to such change of management.

If money dividends are paid by the Firm on the Frequent Shares, a DSU Participant may also be credited with dividend equivalents within the type of further DSUs based mostly on the variety of vested DSUs the DSU Participant holds on the file date for the fee of such dividend.

Canadian DSU Members are usually not entitled to redeem any DSUs (no matter their vested standing) till after the DSU Participant ceases to be a member of the Board by the use of retirement, non-re-election as a director, resignation, incapacity or dying (every, a “Termination of Board Service“), or termination of service as a salaried officer or worker, if relevant.

Besides with respect to U.S. Eligible Administrators (outlined beneath) a DSU Participant (or the DSU Participant’s authorized consultant, because the case could also be) will probably be permitted to redeem his or her vested DSUs no sooner than following Termination of Board Service (and termination of service as a salaried officer or worker, if relevant) by giving written discover to the Firm to redeem on a number of dates specified by the DSU Participant (or the DSU Participant’s authorized consultant, because the case could also be), which dates shall not, in any occasion, be sooner than the tenth day following the discharge of the Firm’s quarterly or annual monetary outcomes instantly following such termination, or later than December 1 of the primary calendar yr commencing after the time of such termination. The DSUs of an Eligible Director who’s a citizen or resident of the USA, as outlined within the Code, and every other Eligible Director who’s topic to tax underneath the Code with respect to DSUs granted pursuant to the DSU Plan (every, a “U.S. Eligible Director“) will probably be redeemed throughout the calendar yr following the yr through which the U.S. Eligible Director experiences a “separation from service” (as outlined within the Code) on a date chosen by the Firm. Upon redemption of DSUs, the Firm pays to the DSU Participant (or the DSU Participant’s authorized consultant, because the case could also be) a lump sum money fee equal to the variety of DSUs to be redeemed multiplied by the market worth of a Frequent Share on the redemption date, internet of any relevant deductions and withholdings. The DSU Plan doesn’t entitle any DSU Participant to accumulate Frequent Shares in reference to the redemption of vested DSUs underneath the DSU Plan.

The DSU Plan additionally accommodates provisions that apply to DSU Members who’re topic to tax in each the USA and Canada. For such DSU Members, in restricted circumstances specified within the DSU Plan the place there’s a battle within the necessities of U.S. tax legal guidelines and Canadian tax legal guidelines, the related DSUs will probably be forfeited.

C. Board Practices

Following the resignations of R. Michael Jones and Enoch Godongwana as administrators of the Firm on July 29, 2021 and August 6, 2021, respectively, the Board decided the variety of administrators at 5 (5) and at present consists of 5 (5) administrators. Every present director was elected on the Firm’s annual assembly of shareholders held on February 18, 2021. Every director elected or appointed holds workplace till the following annual assembly of the Firm or till his or her successor is elected or appointed, until his or her workplace is earlier vacated in accordance with the Articles of the Firm (the “Articles“) or the provisions of the BCBCA. See “Administrators and Senior Administration” for the dates on which its present administrators had been first elected or appointed.

On January 13, 2015, the Board adopted a majority voting coverage (the “Coverage“), as amended on February 18, 2015. The Coverage requires that any nominee for director who receives a larger variety of votes “withheld” than votes “for” his or her election will probably be required to tender a proposal to resign (a “Resignation Provide“). The Coverage applies solely to uncontested elections, that are elections of administrators the place the variety of nominees for election as director is the same as the variety of administrators to be elected at such assembly. Following a young of a Resignation Provide, the Governance and Nomination Committee will think about the Resignation Provide and can suggest to the Board whether or not or to not settle for or reject the Resignation Provide or to suggest various actions. The Governance and Nomination Committee will probably be anticipated to suggest accepting the Resignation Provide, besides in conditions the place extraordinary circumstances would warrant the relevant director to proceed to serve on the Board. Inside 90 days following the relevant annual basic assembly, the Board will make a willpower of the motion to take with respect to the Resignation Provide and can promptly disclose by information launch its determination to just accept or reject the director’s Resignation Provide or to suggest various actions as referenced within the Coverage. If the Board has determined to reject the Resignation Provide or to pursue any various motion aside from accepting the Resignation Provide, then the Board will disclose within the information launch its causes for doing so. The relevant director is not going to take part in both the Governance and Nomination Committee or Board deliberations on his or her Resignation Provide.

We’ve got not entered into contracts offering for advantages to the administrators upon termination of workplace, aside from as described beneath.

Agreements with Govt Officers

The next units forth the plans or preparations in respect of remuneration for the Firm’s Interim President and Chief Govt Officer and Interim Chief Monetary Officer in respect of compensation to such officer within the occasion of termination of employment (because of resignation, change of management or change of tasks).

Frank R. Hallam, our Interim President and Chief Govt Officer(2) ( “Hallam“), has an annual base wage of CAD$475,000, and is entitled to an annual bonus on the discretion of the Compensation Committee and the Board. Pursuant to the phrases of Hallam’s employment settlement, dated July 5, 2012, which was initially entered into in contemplation of his place as Chief Monetary Officer, Hallam might resign by giving 90 days’ written discover and thereafter be entitled to his annual wage earned to the date of cessation, along with any excellent earned however untaken trip pay, reimbursement of any ultimate bills and all bonuses earned in respect of any interval earlier than the date of cessation (collectively, the “Closing Wages“).

________________________________
(2) Frank R. Hallam was appointed as Interim CEO and President of the Firm on July 29, 2021 following his resignation as CFO and Company Secretary of the Firm.

If Hallam is terminated with out trigger or resigns for good trigger (as outlined beneath), the Firm pays Hallam:

(a) the Closing Wages; and

(b) an extra quantity equal to 24 months of Hallam’s annual wage (the “Severance Interval“), and

Hallam’s present advantages will proceed till the sooner of the top of the Severance Interval and receipt of comparable advantages by means of different employment.

Within the case of both a termination or resignation for good trigger following a Change of Management (as outlined beneath), the Firm pays severance as follows (the “COC Severance“):

(a) the Closing Wages;

(b) an extra quantity equal to 24 months’ annual wage (the “COC Severance Interval“);

(c) an extra lump sum equal to the sum of the quantities paid as bonuses to Hallam in respect of the finished three bonus years previous the date of termination divided by 36 (the “Common Month-to-month Bonus“) multiplied by the variety of accomplished months within the present bonus yr by means of to the termination date; and

(d) an extra lump sum equal to the Common Month-to-month Bonus multiplied by the variety of months within the COC Severance Interval, and

Hallam’s present advantages will proceed till the sooner of the top of the COC Severance Interval and Hallam’s receipt of comparable advantages by means of different employment.

As well as, Hallam shall have a particular proper to resign on one month’s written discover, delivered inside 60 days following a Change of Management, through which case Hallam will probably be entitled to obtain the COC Severance.

Upon a Change of Management, any non-vested choices held by Hallam will probably be deemed vested on a Change of Management. The place the Change of Management is a transaction through which the shares of the Firm are to be bought or in any other case exchanged or acquired, such vesting shall happen in order to allow Hallam, at his election to take part within the transaction in respect of any such non-vested possibility shares, supplied that if, for any cause such Change of Management transaction doesn’t full, the choices shall revert to their unique phrases, together with as to vesting and all choices the vesting of which is accelerated pursuant to the foregoing shall stay open for train till the sooner of their expiry date or one yr from the Change of Management.

Change of Management” means:

(a) the acquisition, beneficially, straight or not directly, by any particular person or group of individuals appearing collectively or in live performance, throughout the which means of Multilateral Instrument 62-104 – Takeover Bids and Issuer Bids (or any successor instrument thereto), of Frequent Shares which, when added to all different Frequent Shares on the time held beneficially, straight or not directly by such particular person or individuals appearing collectively or in live performance, totals for the primary time greater than 50% of the excellent Frequent Shares; or

(b) the elimination, by extraordinary decision of the shareholders of the Firm, of greater than 51% of the then incumbent administrators of the Firm, or the election of a majority of administrators to the Firm’s Board who weren’t nominees of the Firm’s incumbent Board on the time instantly previous such election; or

(c) the consummation of a sale of all or considerably the entire belongings of the Firm, or the consummation of a reorganization, merger or different transaction which has considerably the identical impact; or

(d) a merger, consolidation, plan of association or reorganization of the Firm that leads to the helpful, direct or oblique switch of greater than 50% of the whole voting energy of the ensuing entity’s excellent securities to an individual, or group of individuals appearing collectively and in live performance, who’re totally different from the person who have, beneficially, straight or not directly, greater than 50% of the whole voting energy previous to such transaction.

good trigger” means the incidence of one of many following occasions with out Hallam’s written consent:

(a) upon the fabric breach of any materials time period of the employment settlement by the Firm if such breach or default has not been remedied to the cheap satisfaction of Hallam inside 30 days after written discover of the breach of default has been delivered by Hallam to the Firm; or

(b) a fabric discount in Hallam’s tasks, title or reporting, besides because of Hallam’s incapacity; or

(c) any discount by the Firm in Hallam’s then present annual wage; or

(d) relocation of Hallam’s principal workplace location by greater than 25 kilometres.

Gregory Blair (“Blair“) has an annual base wage of CAD$153,600 and is entitled to an annual bonus on the discretion of the Compensation Committee and the Board. Pursuant to the phrases of Blair’s employment settlement, dated December 3, 2010, which was initially entered into in contemplation of his place as a Senior Accountant, Coverage and Regulation, the Firm might terminate the settlement instantly, at any time, for trigger, which incorporates any prison act or breach of any British Columbia Securities Fee or TSX regulation or coverage that governs Blair’s employment actions. The Firm or Blair might terminate the settlement at any time with out trigger with 30 days’ written discover. Additional, within the occasion of a change of management of the Firm, as outlined underneath securities laws in British Columbia, Blair is entitled to the advantage of all granted choices plus six months’ wage.

Our former President and Chief Govt Officer, R. Michael Jones (“Jones“), was occasion to an employment settlement with the Firm, dated August 1, 2012, which included provisions regarding compensation within the occasion of termination of employment much like these included in Hallam’s settlement. Jones resigned as a director, President and Chief Govt Officer on July 29, 2021. In connection along with his resignation, Jones and the Firm entered right into a separation settlement and launch dated July 29, 2021. Pursuant to the separation settlement, the Firm agreed to pay Jones a lump sum quantity of CAD$1,050,000, much less relevant withholding for revenue tax, which was the equal of 24 months of Jones’ annual wage, to supply 24 months of continued advantages protection, topic to sure circumstances, and to workouts of vested inventory choices for as much as six months. Jones agreed to supply sure consulting companies to the Firm to help with transitional issues solely on the request and path of the Firm on an as wanted foundation till December 31, 2021 in consideration of his inventory choices being exercisable for as much as six months. No more money consideration is payable by the Firm in change for Jones’ consulting companies.

Audit Committee

Audit Committee Constitution

The next is the complete textual content of the Audit Committee’s constitution (the “Constitution“):

1. Normal

The Board of Administrators of the Company (the “Board“) has established an Audit Committee (the “Committee“) to help the Board in fulfilling its oversight tasks. The Committee will evaluation and oversee the monetary reporting and accounting means of Platinum Group Metals Ltd. (the “Company“), the system of inside management and administration of monetary dangers, the exterior audit course of, and the Company’s course of for monitoring compliance with legal guidelines and rules and its personal code of enterprise conduct. In performing its duties, the Committee will keep efficient working relationships with the Board, administration, and the exterior auditors and monitor the independence of these auditors. To carry out his or her position successfully, every Committee member will get hold of an understanding of the tasks of Committee membership in addition to the Company’s enterprise, operations and dangers.

The Company’s impartial auditor is finally accountable to the Board and to the Committee. The Board and Committee, as representatives of the Company’s shareholders, have the final word authority and duty to judge the impartial auditor, to appoint yearly the impartial auditor to be proposed for shareholder approval, to find out acceptable compensation for the impartial auditor, and the place acceptable, to exchange the surface auditor. In the middle of fulfilling its particular tasks hereunder, the Committee should keep free and open communication between the Company’s impartial auditors, Board and Company administration. The tasks of a member of the Committee are along with such member’s duties as a member of the Board.

2. Members

The Board will in annually appoint a minimal of three (3) administrators as members of the Committee. All members of the Committee shall be non-management administrators and shall be impartial throughout the which means of all relevant U.S. and Canadian securities legal guidelines and the foundations of the Toronto Inventory Change and the NYSE American LLC (collectively, the “Relevant Laws“), until in any other case exempt underneath the Relevant Laws.

Not one of the members of the Committee might have participated within the preparation of the monetary statements of the Company or any present subsidiary of the Company at any time throughout the previous three years.

All members of the Committee shall have the ability to learn and perceive basic monetary statements and should have the ability to learn and perceive basic monetary requirements and fulfill all relevant monetary literacy necessities of the Relevant Laws. Moreover, a minimum of one member of the Committee shall: (a) be financially refined, in that she or he shall have previous employment expertise in finance or accounting, requisite skilled certification in accounting, or every other comparable expertise or background which ends up in the person’s monetary sophistication, which can embrace being or having been a chief government officer, chief monetary officer, or different senior officer with monetary oversight tasks; and (b) be an “audit committee monetary skilled” throughout the which means of U.S. federal securities legal guidelines.

3. Duties

The Committee could have the next duties:

• Achieve an understanding of whether or not inside management suggestions made by exterior auditors have been applied by administration.

• Achieve an understanding of the present areas of best monetary threat and whether or not administration is managing these successfully.

• Evaluation vital accounting and reporting points, together with current skilled and regulatory pronouncements, and perceive their impression on the monetary statements.

• Evaluation any authorized issues which might considerably impression the monetary statements as reported on by the Company’s counsel and interact exterior impartial counsel and different advisors every time as deemed crucial by the Committee to hold out its duties.

• Evaluation the Company’s annual and quarterly monetary statements, together with Administration’s Dialogue and Evaluation with respect thereto, and all annual and interim earnings press releases, previous to public dissemination, together with any certification, report, opinion or evaluation rendered by the exterior auditors and decide whether or not they’re full and in step with the data recognized to Committee members; decide that the auditors are glad that the monetary statements have been ready in accordance with Worldwide Monetary Reporting Requirements as issued by the Worldwide Accounting Requirements Board (“IFRS“).

• Pay specific consideration to advanced and/or uncommon transactions comparable to these involving by-product devices and think about the adequacy of disclosure thereof.

• Give attention to judgmental areas, for instance these involving valuation of belongings and liabilities and different commitments and contingencies.

• Evaluation audit points associated to the Company’s materials related and affiliated corporations which will have a major impression on the Company’s fairness funding.

• Meet with administration and the exterior auditors to evaluation the annual monetary statements and the outcomes of the audit.

• Consider the equity of the interim monetary statements and associated disclosures together with the related Administration’s Dialogue and Evaluation, and acquire explanations from administration on whether or not:

  • precise monetary outcomes for the interim interval assorted considerably from budgeted or projected outcomes;

  • usually accepted accounting ideas have been constantly utilized;

  • there are any precise or proposed adjustments in accounting or monetary reporting practices; or

  • there are any vital or uncommon occasions or transactions which require disclosure and, if that’s the case, think about the adequacy of that disclosure.

• Evaluation the exterior auditors’ proposed audit scope and method and guarantee no unjustifiable restriction or limitations have been positioned on the scope.

• Suggest to the Board an exterior auditor to be nominated for appointment by the Company’s shareholders. Topic to the appointment of the Company’s exterior auditor by the Company’s shareholders, the Committee will probably be straight liable for the appointment, compensation, retention and oversight of the work of exterior auditor engaged for the aim of making ready or issuing an auditor’s report or performing different audit, evaluation or attest companies for the Company, together with the decision of disagreements between administration and the exterior auditor relating to monetary reporting. The Company’s exterior auditor shall report on to the Committee.

• Evaluation with the Company’s administration, regularly, the efficiency of the exterior auditors, the phrases of the exterior auditor’s engagement, accountability and expertise.

• Pre-approve all non-audit companies and tax companies to be supplied to the Company or its subsidiary entities by the exterior auditor, or different registered accounting agency.

• Contemplate a minimum of yearly the independence of the exterior auditors, together with reviewing the vary of companies supplied within the context of all consulting companies obtained by the Company, together with:

  • insuring receipt from the impartial auditor of a proper written assertion delineating all relationships between the impartial auditor and the Firm, in step with the Independence Requirements Board Customary No. 1 and associated Canadian regulatory physique requirements;

  • contemplating and discussing with the impartial auditor any relationships or companies, together with non-audit companies, which will impression the objectivity and independence of the impartial auditor; and

  • as crucial, taking, or recommending that the Board take, acceptable motion to supervise the independence of the impartial auditor.

• Make sure that sufficient procedures are in place for the evaluation of the Company’s public disclosure of monetary info extracted or derived from the Company’s monetary statements, aside from the general public disclosure contained within the Company’s monetary statements, Administration’s Dialogue and Evaluation and annual and interim earnings press releases; and should periodically assess the adequacy of these procedures.

• Evaluation any vital disagreement amongst administration and the exterior auditors in reference to the preparation of the monetary statements.

• Evaluation and approve the Company’s hiring insurance policies relating to companions, staff and former companions and staff of the current and former exterior auditors of the Company.

• Set up a process for:

  • the confidential, nameless submission by staff of the Company of issues relating to questionable accounting or auditing issues; and
  • the receipt, retention and remedy of complaints obtained by the Company relating to accounting, inside accounting controls, or auditing issues.

• Meet individually with the exterior auditors to debate any issues that the committee or auditors consider needs to be mentioned privately within the absence of administration.

• Endeavour to trigger the receipt and dialogue on a well timed foundation of any vital findings and suggestions made by the exterior auditors.

• Make sure that the Board is conscious of issues which can considerably impression the monetary situation or affairs of the enterprise.

• Evaluation and oversee all associated occasion transactions throughout the which means of the Relevant Laws.

• Carry out different features as requested by the Board.

• If crucial, institute particular investigations and, if acceptable, rent particular counsel or specialists to help, and set the compensation to be paid to such particular counsel or different specialists.

• Evaluation and re-assess yearly the adequacy of this Constitution and suggest updates to this Constitution; obtain approval of adjustments from the Board.

• With regard to the Company’s inside management procedures, the Committee is accountable to:

  • evaluation the appropriateness and effectiveness of the Company’s insurance policies and enterprise practices which impression on the monetary integrity of the Company, together with these associated to inside auditing, insurance coverage, accounting, info companies and programs and monetary controls, administration reporting and threat administration; and

  • evaluation compliance underneath the Company’s enterprise conduct and ethics insurance policies and to periodically evaluation these insurance policies and suggest to the Board adjustments which the Committee might deem acceptable; and

  • evaluation any unresolved points between administration and the exterior auditors that would have an effect on the monetary reporting or inside controls of the Company; and

  • periodically evaluation the Company’s monetary and auditing procedures and the extent to which suggestions made by the inner audit workers or by the exterior auditors have been applied.

4. Chair

The Committee will in annually appoint the Chair of the Committee from among the many members of the Committee. Within the Chair’s absence, or if the place is vacant, the Committee might choose one other member as Chair. The Chair is not going to have a casting vote.

5. Conferences

The Committee will meet a minimum of as soon as each calendar quarter. Particular conferences shall be convened as required. Notices calling conferences shall be despatched to all members of the Committee, all Board members and the exterior auditor. The exterior auditor of the Company have to be given cheap discover of, and has the appropriate to look earlier than and to be heard at, every assembly of the Committee. On the request of the exterior auditor, the Committee should convene a gathering of the Committee to think about any matter that the exterior auditor believes needs to be dropped at the eye of the Board or shareholders of the Company.

The Committee might invite such different individuals (e.g., with out limitation, the President or Chief Monetary Officer) to its conferences, because it deems acceptable.

6. Quorum

A majority of members of the Committee, current in particular person, by teleconferencing, or by videoconferencing, or by any mixture of the foregoing, will represent a quorum.

7. Removing and Emptiness

A member might resign from the Committee and might also be eliminated and changed at any time by the Board and can routinely stop to be a member as quickly because the member ceases to be a director of the Company. The Board will fill vacancies within the Committee by appointment from among the many administrators in accordance with Part 2 of this Constitution. Topic to quorum necessities, if a emptiness exists on the Committee, the remaining members will train the entire Committee’s powers.

8. Authority

The Committee might:

  • interact impartial counsel and different advisors because it determines crucial to hold out its duties.

  • set and pay the compensation for any advisors employed by the Committee; and

  • talk straight with the inner and exterior auditors.

The Committee might also, throughout the scope of its tasks, search any info it requires from any worker and from exterior events, to acquire exterior authorized or skilled recommendation, and to make sure the attendance of Company officers at conferences as acceptable.

9. Secretary and Minutes

The Chair of the Committee will appoint a member of the Committee or different particular person to behave as Secretary of the Committee for functions of a gathering of the Committee. The minutes of the Committee conferences shall be in writing and duly entered into the books of the Company and will probably be circulated to all members of the Board.

10. Funding

The Company shall present for acceptable funding, as decided by the Committee, for fee of

(a) compensation to any registered public accounting agency engaged for the needs of making ready or issuing an audit report or performing different audit, evaluation or attest companies for the Company;

(b) compensation to any advisers employed by the Committee; and

(c) extraordinary administrative bills of the Committee which are crucial or acceptable in perform its duties.

Composition

The Audit Committee has been comprised of Stuart Harshaw (Chair), Diana Walters and Timothy Marlow since February 20, 2020. All three members of the Audit Committee are impartial and financially literate, which means they can learn and perceive the Firm’s monetary statements and to grasp the breadth and degree of complexity of the problems that may fairly be anticipated to be raised by the Firm’s monetary statements.

Related Training and Expertise

Along with every member’s basic enterprise expertise, the training and expertise of every member of the Audit Committee that’s related to the efficiency of his or her tasks as a member of the Audit Committee are set forth beneath:

Member Expertise/Training
Stuart Harshaw, BSc. A seasoned skilled with a profitable profession within the world mining business with Vale SA and Inco Ltd, the place, amongst different issues, he was Vice President of Ontario Operations in command of working six underground mines, a portfolio of processing and refining amenities in Canada and Asia, in addition to advertising and gross sales of a broad vary of concentrates and completed metals worldwide. Mr. Harshaw is President, CEO and a director of Nickel Creek Platinum Corp. and a member of the board of administrators of Constantine Metallic Sources Ltd. and Worldwide Tower Hill Mines Ltd. and of the Board of Governors of Laurentian College of Sudbury, Canada. Mr. Harshaw earned a BSc. in Metallurgical Engineering from Queen’s College and an MBA from Laurentian College. The Board has decided that Mr. Harshaw is impartial throughout the which means of the NYSE American Firm Information.
DianaWalters,
BA, MA.
Ms. Walters has over 30 years within the monetary companies sector and has served on the audit committee of different publicly traded corporations. Ms. Walters graduated with honours from the College of Texas at Austin with a BA in Plan II Liberal arts and an MA in Vitality and Mineral Sources. Ms. Walters has labored on the pure assets sector as an fairness investor, funding banker and in working roles and has beforehand served as audit committee Chair of AMR. As well as, she gained intensive funding expertise with each debt and fairness by means of management roles at Credit score Suisse, HSBC and different companies. The Board has decided that Ms. Walters is an audit committee monetary skilled throughout the which means of the rules promulgated by the SEC and is impartial throughout the which means of the NYSE American Firm Information.
TimothyMarlow, C.Eng., MIMMM. Mr. Marlow is a registered Constitution Engineer within the UK with over 36 years of expertise in mining engineering and mine operations within the Americas, Africa and Asia. Mr. Marlow has held roles starting from venture engineer, companies and upkeep superintendent, and basic supervisor to Vice President of Operational Excellence for a multi mine group. His mining and venture expertise span the world together with particular African expertise in Ghana and Zambia. Mr. Marlow is a graduate of the Camborne College of Mines and is registered as a C.Eng, Registered Constitution Engineer within the UK. He’s a member of the Institute of Mining and Metallurgy UK and a Certified Particular person as outlined by NI-43-101 for mining. The Board has decided that Mr. Marlow is impartial throughout the which means of the NYSE American Firm Information.

Tasks

See the Constitution described above for disclosure on the Audit Committee’s tasks.

Reliance on Sure Exemptions

At no time, because the graduation of the Firm’s most lately accomplished monetary yr has the Firm relied on any of the exemptions set out in Part 2.4 (De Minimis Non-audit Providers), Part 3.2 (Preliminary Public Choices), Part 3.4 (Occasions Outdoors Management of Member), Part 3.5 (Loss of life, Incapacity or Resignation of Audit Committee Member), Subsection 3.3(2) (Managed Firms), 3.6 (Non permanent Exemption for Restricted and Distinctive Circumstances) or Part 3.8 (Acquisition of Monetary Literacy) of Nationwide Instrument 52 110 – Audit Committees (“NI 52-110“), or an exemption from NI 52-110, in complete or partially, granted underneath Half 8 of NI 52-110.

Audit Committee Oversight

At no time because the graduation of the Firm’s most lately accomplished monetary yr was a suggestion of the Audit Committee to appoint or compensate an exterior auditor not adopted by the Board.

Pre-Approval Insurance policies and Procedures

The Audit Committee is allowed to evaluation the efficiency of the Firm’s impartial auditors and pre-approves all audit and non-audit companies to be supplied to the Firm by its impartial auditor. Previous to granting any pre-approval, the Audit Committee have to be glad that the efficiency of the companies in query shouldn’t be prohibited by relevant securities legal guidelines and won’t compromise the independence of the impartial auditor. All non-audit companies carried out by the Firm’s auditor for the fiscal years ended August 31, 2021 and August 31, 2020 have been pre-approved by the Audit Committee.

Exterior Auditor Service Charges (By Class)

Disclosure on the combination charges billed by the Firm’s present impartial auditor, PricewaterhouseCoopers LLP, throughout the fiscal yr ended August 31, 2021 and August 31, 2020 are described underneath “Merchandise 16.C. Principal Accountant Charges and Providers”.

Whistleblower Coverage

The Audit Committee has established a Whistleblower Coverage which outlines procedures for the confidential, nameless submission by administrators, officers, staff, consultants and, as acceptable, sure third events of the Firm (the “Lined Individuals“), relating to the Firm’s compliance with all relevant authorities legal guidelines, guidelines and rules, company reporting and disclosure, accounting practices, accounting controls, auditing practices and different matter regarding fraud towards shareholders (the “Accounting Considerations“), with out concern of retaliation of any variety. If a Lined Particular person has any issues about any of the Accounting Considerations which they think about to be questionable, incorrect, deceptive or fraudulent, the Lined Particular person is urged to come back ahead with any such info, complaints or issues, with out regard to the place of the particular person or individuals liable for the subject material of the related criticism or concern.

The Lined Particular person might report their concern in writing, by phone or e-mail and ahead it to the Chairman of the Committee or to exterior counsels of the Firm. All submissions will probably be handled on a confidential and nameless foundation, besides when the Accounting Considerations check with violation of any relevant legislation, rule or regulation that pertains to the company reporting and disclosure, and to violation of the Code of Conduct, when the particular person making the submission have to be recognized for functions of performing the investigation. Additional, the Firm is not going to discharge, self-discipline, demote, droop, threaten or in any method discriminate towards any one that submits in good religion an Accounting Concern. Promptly following the receipt of any complaints submitted to it, the Committee will examine every criticism and take acceptable corrective actions. A replica of the Whistleblower Coverage is posted on the Firm’s web site at www.platinumgroupmetals.internet.

Compensation Committee

Composition

The Compensation Committee has been comprised of Diana Walters (Chair), Stuart Harshaw and Timothy Marlow since February 20, 2020. All three members of the Compensation Committee are impartial.

Tasks

The tasks of the Compensation Committee embrace however are usually not restricted to:

• Evaluation, approve and report back to the Board yearly on administration’s succession plans for all government officers, aside from the CEO, together with particular growth plans and profession planning for potential successors.

• Evaluation and suggest to the Board for approval the final compensation philosophy and tips for all administrators and government officers, together with the CEO. This consists of incentive plan design and different remuneration.

• Evaluation and make suggestions to the Board with respect to all choices granted and RSUs awarded underneath the Share Compensation Plan (outlined beneath) and all DSUs awarded underneath the DSU Plan (collectively the “Plans“), together with the phrases and circumstances of these awards.

• Evaluation and suggest to the Board the compensation, together with wage, incentives, advantages and different perquisites, of all administrators and government officers, apart from the CEO.

• Report on government compensation as required in public disclosure paperwork.

• Evaluation and approve company objectives and goals related to CEO compensation, consider the CEO’s efficiency in mild of these company objectives and goals, think about the Governance and Nomination Committee’s report respecting the CEO’s efficiency and suggest to the Board the CEO’s compensation degree based mostly on this analysis, together with wage, incentives, advantages and different perquisites.

• Set up compensation and recruitment insurance policies and practices for the Firm’s government officers, together with establishing ranges of wage, incentives, advantages and different perquisites supplied to executives of the Firm and its subsidiaries; supplied, nonetheless, that the compensation of particular person government officers shall be topic to the Board’s approval.

• Administration of the Plans and recommending to the Board awards underneath the plans.

• The Committee shall evaluation all government compensation disclosure earlier than the Firm publicly discloses this info.

• The Committee will yearly evaluation and re-assess the adequacy of the Compensation Committee constitution and suggest updates to the Compensation Committee constitution and can obtain approval of all adjustments from the Board.

Governance and Nomination Committee

Composition

The Governance and Nomination Committee has been comprised of Timothy Marlow (Chair), Diana Walters and Stuart Harshaw since February 2020. All three members of the Governance and Nomination Committee are impartial.

Tasks

The tasks of the Governance and Nomination Committee embrace however are usually not restricted to:

• evaluation and make suggestions to the Board respecting company governance on the whole and relating to the Board’s stewardship position within the administration of the Firm;

• evaluation, approve and report back to the Board on:

◾ the institution of acceptable processes for the common analysis of the effectiveness of the Board and its members and its committees and their charters;

◾ along side the Chair of the Board, the efficiency of particular person administrators, the Board as an entire, and committees of the Board;

◾ the efficiency analysis of the Chair of the Board and the Chair of every Board committee; and

◾ repeatedly, the efficiency analysis of the CEO, together with efficiency towards company goals.

• CEO succession planning;

• oversee compliance with the Code of Conduct, monitor compliance with the Code of Conduct, examine any alleged breach or violation of the Code of Conduct, authorize any waiver granted in reference to the Code of Conduct; and

• oversee compliance with any guidelines, rules or tips promulgated by regulatory authorities regarding company governance.

Environmental, Well being, Security and Technical Advisory Committee

Composition

The EHST Committee was established on April 30, 2021 and has been comprised of Stuart Harshaw (Chair), Diana Walters and Timothy Harlow since August 9, 2021. All three members of the EHST Committee are impartial.

Tasks

The EHST Committee is liable for offering environmental and security oversight, advisory help, steering and help to administration in respect of development, commissioning and operation of the Firm’s mines, and aiding the Board in offering venture oversight. In finishing up its duty, the EHST Committee will evaluation, monitor and report and make suggestions to the Board on:

  • the timing, scope and execution of any preliminary or definitive feasibility research that the Committee or the Board has decided to be materials to the Firm;

  • the Firm getting into any new materials contracts (i.e., > US$5.0 Million), together with, however not restricted in relation to, engineering, procurement and development, venture financing and focus offtake;

  • the progress of any materials development undertaken, together with materials development prices and the standing of fabric contract associated to development and any dispute or litigation which can come up;

  • the steps being taken in direction of making ready for brand new operations, together with the commissioning plan and the implementation of that plan, in addition to the achievement of ongoing human useful resource wants;

  • the mine manufacturing plan, as proposed and revised now and again, and the implementation of such plan;

  • mine operations and manufacturing;

  • any dangers related to any of the foregoing and originating acceptable threat administration methods for consideration by the Board;

  • overseeing the event of labor practices that present secure, wholesome working circumstances for all personnel together with contract staff, defending public security, and compliance with all occupational well being and security legal guidelines and rules;

  • work with administration to develop programs for gathering of security statistics and reporting security outcomes for the aim of monitoring and managing security efficiency;

  • the evaluation of environmental dangers and the Firm’s threat administration applications;

  • analysis of the Firm’s environmental efficiency from a finest practices standpoint together with efficiency by the Firm’s contractors;

  • evaluation of any materials variances and non-compliance points; and

  • every other matter deemed vital by the EHST Committee.

D. Workers

As of August 31, 2021 the Firm’s complement of managers, workers and consultants in Canada consisted of roughly 5 people. The Firm’s complement of managers, workers, consultants, safety and informal employees in South Africa at present consisted of roughly 9 people, inclusive of two people lively on the Waterberg Mission conducting exploration and engineering actions. The Waterberg Mission is operated by the Firm using its personal workers and personnel. Contract drilling, geotechnical, engineering and help companies are utilized as required.

E. Share Possession

With respect to the individuals listed in ITEM 6, B. Compensation, above, who’re present administrators, officers or staff of the Firm, the next desk discloses the quantity and % of the Frequent Shares excellent held by these individuals, as of the date of this Annual Report. The Frequent Shares possess similar voting rights. [NTD. Info as of Aug 6, 2021 – update accordingly]

Identify and Title No. of Shares (1) (2) % of Shares
Excellent of the Class(3)
Frank R. Hallam
Director and Interim President and CEO
23,488 *
Diana Walters
Chairperson and Director
Nil *
Timothy Marlow
Director
300 *
John A. Copelyn
Director
Nil(4) N/A
Stuart Harshaw
Director
Nil *
Gregory Blair
Interim CFO
4,846 *

Notes:

* Lower than one %

(1) Consists of helpful, direct and oblique shareholdings for all administrators aside from John A. Copelyn. Please check with Observe 4 beneath for Mr. Copelyn’s helpful, direct and oblique shareholdings).

(2) Doesn’t embrace inventory choices and different rights to buy or purchase shares.

(3) There are 79,725,574 shares of Frequent Inventory issued and excellent as of November 24, 2021.

(4) Doesn’t embrace shares owned by HCI, of which Mr. Copelyn is the Chief Govt Officer. For an outline of such shares, see “Merchandise. 7.A – Main Shareholders”.

The next desk discloses the choices and RSUs excellent held by the aforementioned individuals as of the date of submitting of this Annual Report:

Choices (1) RSUs (2)
Identify and Title Date of
Grant/Award
or Issuance
# of Shares of
Frequent
Inventory Topic
to Issuance
Train
Value in
CAD Per
Share
Expiry Date # of Shares of
Frequent
Inventory Topic
to Issuance
Maturity (3)
Date
Frank R. Hallam
Director and Interim President and CEO
Apr 9, 2019 275,000 $2.61 Apr 9, 2024 30,255 Dec 15, 2022
Dec 2, 2019 300,000 $1.81 Dec 2, 2024 36,000 Dec 15, 2022
Dec 16, 2020 450,000 $6.58 Dec 16, 2024 54,000 Dec 15, 2023
Choices (1) RSUs (2)

Identify and Title
Date of
Grant/Award
or Issuance
# of Shares of
Frequent
Inventory Topic
to Issuance
Train
Value in
CAD Per
Share
Expiry Date # of Shares of
Frequent
Inventory Topic
to Issuance
Maturity (3)
Date
Diana Walters
Director (Chairperson)
Apr 9, 2019 16,800 $2.61 Apr 9, 2024
Dec 2, 2019 12,000 $1.81 Dec 2, 2024
Timothy Marlow
Director
Apr 9, 2019 11,200 $2.61 Apr 9, 2024
Dec 2, 2019 8,000 $1.81 Dec 2, 2024
John A. Copelyn
Director
Apr 9, 2019 16,800 $2.61 Apr 9, 2024
Dec 2, 2019 12,000 $1.81 Dec 2, 2024
Stuart Harshaw
Director
Apr 9, 2019 11,200 $2.61 Apr 9, 2024
Dec 2, 2019 8,000 $1.81 Dec 2, 2024
Gregory Blair
Interim CFO
Apr 9, 2019 25,000 $2.61 Apr 9, 2024 4,668 Dec 15, 2022
Dec 2, 2019 35,000 $1.81 Dec 2, 2024 9,334 Dec 15, 2022
Dec 16, 2020 52,500 $6.58 Dec 16, 2024 14,000 Dec 15, 2023

Notes:

(1) Vesting as to 33 1/3% on the primary date after every of the 12, 24 and 36-month of the Date of Grant

(2) Vesting as to 33 1/3% on every of the 12, 24 and 36-month anniversary of the Date of Award.

(3) All vesting and issuance or funds, as relevant, in respect of an RSU shall be accomplished no later than December 15 of the threerd calendar yr commencing after the Date of Award for such RSU.

Share Compensation Plan

The Share Compensation Plan (as amended) (the “Share Compensation Plan“) was initially adopted by the Firm and accredited by the shareholders on February 23, 2017 (the “Adoption Date“). As of the Adoption Date, the Share Compensation Plan govern all awards of RSUs and grants of choices to buy Frequent Shares (the “Choices“).

The Share Compensation Plan is a ten% “rolling” plan whereby the variety of Frequent Shares which can be issuable pursuant to RSUs awarded and Choices granted underneath the Share Compensation Plan, along with these Frequent Shares issuable pursuant to every other security-based compensation preparations of the Firm or its subsidiaries, is a most of 10% of the issued and excellent Frequent Shares on the time of the award or grant.

The Share Compensation Plan gives members (every, an “SCP Participant“), who might embrace members who’re residents or residents of the USA, with the chance, by means of RSUsand Choices, to accumulate an possession curiosity within the Firm. The RSUs will rise and fall in worth based mostly on the worth of the Frequent Shares. In contrast to the Choices, the RSUs is not going to require the fee of any financial consideration to the Firm. As a substitute, every RSU represents a proper to obtain one Frequent Share following the attainment of vesting standards decided on the time of the award. The Choices, then again, are rights to accumulate Frequent Shares upon fee of financial consideration (i.e., the train worth), topic additionally to vesting standards decided on the time of the grant.

Goal of the Share Compensation Plan

The acknowledged objective of the Share Compensation Plan is to advance the pursuits of the Firm, its subsidiaries and its shareholders by: (a) making certain that the pursuits of SCP Members are aligned with the success of the Firm and its subsidiaries; (b) encouraging inventory possession by such individuals; and (c) offering compensation alternatives to draw, retain and encourage such individuals.

The next individuals will probably be eligible to take part within the Share Compensation Plan: any officer or worker of the Firm or any officer or worker of any subsidiary of the Firm and, solely for functions of the grant of Choices, any non-employee director of the Firm or any non-employee director of any subsidiary of the Firm, and any guide (outlined underneath the Share Compensation Plan as a guide that (x) is a person that gives bona fide companies to the Firm pursuant to a written contract for companies with the Firm and such companies are usually not in reference to the provide or sale of securities in a capital-raising transaction and don’t straight or not directly promote or keep a marketplace for the Firm’s securities, or (y) in any other case satisfies the necessities to take part in an “worker profit plan” as outlined in Rule 405 underneath the U.S. Securities Act of 1933, as amended, registered by the Firm on Kind S-8). Non-employee administrators of the Firm is not going to be eligible to take part within the Share Compensation Plan in respect of RSUs. Beneath the Share Compensation Plan, non-employee administrators of the Firm will proceed to be eligible to take part in respect of Choices, nonetheless, solely on a restricted foundation. See “Restrictions on the Award of RSUs and Grant of Choices” beneath. Beneath the present Share Compensation Plan, administrators of the Firm have been technically eligible to take part on a discretionary foundation with none limits on participation.

Administration of the Share Compensation Plan

The Share Compensation Plan is run by the Board or such different individuals as could also be designated by the Board (the “SCPDirectors“) based mostly on the advice of the Compensation Committee. The SCP Directors decide the eligibility of individuals to take part within the Share Compensation Plan, when RSUs and Choices will probably be awarded or granted, the variety of RSUs and Choices to be awarded or granted, the vesting standards for every award of RSUs and grant of Choices and all different phrases and circumstances of every award and grant, in every case in accordance with relevant securities legal guidelines and inventory change necessities.

Variety of Frequent Shares Accessible for Issuance underneath the Share Compensation Plan

The variety of Frequent Shares out there for issuance upon the vesting of RSUs awarded and Choices granted underneath the Share Compensation Plan will probably be restricted to 10% of the issued and excellent Frequent Shares on the time of any grant.

As of November 24, 2021, the Firm has 79,725,574 Frequent Shares issued and excellent. Accordingly, the combination variety of Frequent Shares that could be issued pursuant to the Share Compensation Plan is 7,972,557 much less 4,377,513 Frequent Shares issuable pursuant to RSUs and choices excellent underneath the Share Compensation Plan.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. Main Shareholders

The Firm shouldn’t be straight or not directly owned or managed by one other company(s), by any overseas authorities or by every other pure or authorized particular person(s), severally or collectively.

There are not any preparations recognized to the Firm the operation of which can at a subsequent date end in a change in command of the Firm.

The next desk discloses the holders of the Frequent Shares who’re recognized or believed by the Firm to be the helpful house owners of 5% or extra of the Frequent Shares (the “Main Shareholders“). The chances within the desk beneath are based mostly on 79,725,574 Frequent Shares excellent as November 24, 2021, besides as famous.

Identification of Particular person or Group Quantity and Nature of
Helpful Possession
% of
Class
Hosken Consolidated Investments Restricted (1) 21,297,526 26.7%
Franklin Sources, Inc./Franklin Advisers, Inc. (2) 9,584,486 12.0%

Notes:

(1) Primarily based on info HCI supplied to the Firm as of November 22, 2021, HCI by means of its wholly owned subsidiary Deepkloof had sole voting and dispositive energy with respect to • Frequent Shares.

(2) Primarily based on info Franklin Sources, Inc./Franklin Advisors, Inc. supplied to the Firm as of October 27, 2021, Franklin Sources, Inc./Franklin Advisers, Inc. had sole voting and dispositive energy with respect to 9,223,174 Frequent Shares. Franklin Sources, Inc./Franklin Advisors, Inc. additionally holds an $8.0 million principal quantity of convertible notes that are convertible into as much as 361,312 underlying shares and that are reported within the desk above.

Besides as disclosed within the desk above, the Firm shouldn’t be conscious of every other particular person or group who owns greater than 5% of the issued and excellent Frequent Shares as of November 24, 2021.

Of their capability as shareholders of the Firm, the Firm’s Main Shareholders have the identical voting rights as different holders of the Frequent Shares.

We’re conscious of the next vital adjustments within the share possession held by the foregoing Main Shareholders over the previous three years:

Primarily based on info out there to the Firm, as of November 4, 2021, roughly 43.69% of the Firm’s excellent Frequent Shares had been beneficially owned in the USA, by roughly 18,607 holders with U.S. addresses.

B. Associated Celebration Transactions

For functions of this part, a Associated Celebration means (a) enterprises that straight or not directly by means of a number of intermediaries, management or are managed by, or are underneath widespread management with, the corporate; (b) associates; (c) people proudly owning, straight or not directly, an curiosity within the voting energy of the corporate that provides them vital affect over the corporate, and shut members of any such particular person’s household; (d) key administration personnel, that’s, these individuals having authority and duty for planning, directing and controlling the actions of the corporate, together with administrators and senior administration of corporations and shut members of such people’ households; and (e) enterprises through which a considerable curiosity within the voting energy is owned, straight or not directly, by any particular person described in (c) or (d) or over which such an individual is ready to train vital affect. Shareholders beneficially proudly owning a ten% curiosity within the voting energy of the Firm are presumed to have a major affect on the Firm for functions of this disclosure.

Neither the Firm nor any of its subsidiaries has made any mortgage or assure in favor of any Associated Celebration, nor has any Associated Celebration been indebted to the Firm or its subsidiaries, since September 1, 2020.

Neither the Firm nor any of its subsidiaries is a celebration to any transactions since September 1, 2020 or any presently proposed transactions involving a Associated Celebration, which transactions are materials to the Firm or the Associated Celebration or are uncommon of their nature or circumstances, besides as follows or as described elsewhere on this Annual Report:

(1) Franklin Advisers, Inc., a Main Shareholder, subscribed on behalf of sure funds for $8 million of the principal quantity of convertible notes issued by the Firm on June 30, 2017. Primarily based on info supplied to the Firm as of October 27, 2021 by Franklin Advisers, Inc., the Firm believes that Franklin Advisers, Inc. continues to carry such notes. Transactions regarding the convertible notes are extra absolutely described elsewhere on this Annual Report.

(2) HCI, a Main Shareholder, not directly acquired by means of its subsidiary, Deepkloof, 1,146,790 Frequent Shares within the October 2020 Non-public Placement and 1,121,076 Frequent shares within the December 2020 Non-public Placement, as extra absolutely described elsewhere on this Annual Report.

(3) Compensatory issues regarding the Firm’s administrators and government officers are described in Merchandise 6 of this Annual Report.

C. Pursuits of Specialists and Counsel

Not relevant.

ITEM 8. FINANCIAL INFORMATION

A. Consolidated Statements and Different Monetary Data

See the audited consolidated monetary statements listed in Merchandise 18 hereof and filed as a part of this Annual Report. These monetary statements embrace the consolidated steadiness sheets as at August 31, 2021 and 2020 and the statements of operations and money flows for the three years ended August 31, 2021, 2020 and 2019.

These consolidated monetary statements have been ready in accordance with IFRS as issued by the IASB. The consolidated monetary statements have been ready underneath the historic price conference.

Authorized Proceedings

On August 28, 2018, the Firm obtained a summons issued by Africa Vast within the Excessive Court docket of South Africa whereby Africa Vast, previously the holder of a 17.1% curiosity in Maseve, instituted authorized proceedings in South Africa towards the Firm’s wholly owned subsidiary PTM RSA, RBPlat and Maseve (“Defendants“) in relation to the Maseve Sale Transaction. Africa Vast sought to put aside the Maseve Sale Transaction, alternatively, sought that Africa Vast be paid the “true worth” of its 17.1% shareholding in Maseve, to be decided on the time previous to the implementation of stage one of many Maseve Sale Transaction. Africa Vast averred that (i) pursuant to the time period sheet pertaining to the Maseve Sale Transaction the Defendants disposed of Maseve’s most important asset (allegedly the plant) with out Africa Vast’s consent as required underneath the Maseve shareholders settlement; (ii) such disposal considerably devalued its shares in Maseve which (iii) resulted within the disposal of Africa Vast’s shares in Maseve by means of a drag-along provision in Maseve’s constitutional paperwork and (iv) that Africa Vast didn’t have an election to refuse to get rid of its shareholding.

On November 21, 2018, within the Excessive Court docket of South Africa, RBPlat, as second defendant, filed exceptions to Africa Vast’s “particulars of declare on the grounds that they had been imprecise and embarrassing and/or lacked averments essential to maintain a reason for motion”. The Firm, as first defendant, was not required to file any movement or heads of arguments associated to the Africa Vast particulars of declare till such time because the exceptions filed by RBPlat had been heard and dominated upon by the Excessive Court docket.

Each Africa Vast and RBPlat filed heads of arguments regarding RBPlat’s exceptions with the Excessive Court docket on or round March 11, 2019. Subsequently, on March 27, 2019, the Excessive Court docket in Johannesburg held a listening to at which RBPlat’s exceptions had been argued earlier than two judges. Following the listening to, the judges ordered that RBPlat’s exceptions be upheld. Africa Vast was additionally ordered to pay prices.

On April 17, 2019, Africa Vast filed amended particulars of declare with the Excessive Court docket of South Africa, whereby Africa Vast seeks to put aside the Maseve Sale Transaction. Africa Vast claims (i) that pursuant to the definitive authorized agreements pertaining to the Maseve Sale Transaction the Defendants disposed of Maseve’s most important asset (allegedly the plant and sure floor belongings) with out Africa Vast’s consent as required underneath the Maseve shareholders settlement; (ii) had it not been for such disposal, Africa Vast wouldn’t have disposed of its shares in Maseve; and (iii) that Africa Vast was compelled to get rid of its shares in Maseve. Within the various, Africa Vast seeks merely to put aside the sale of the plant and sure floor belongings. Senior counsel for RBPlat and PTM RSA have each reviewed the amended particulars of declare as filed by Africa Vast.

On Might 9, 2019, the Firm filed discover within the Excessive Court docket calling upon Africa Vast to provide these agreements and paperwork upon which it has based mostly its declare. Africa Vast has declined to provide these paperwork.

Statements of defence have individually been filed by the Firm and by RBPlat and Maseve. In every occasion the statements of defence embrace a particular plea of nonjoinder. The Defendants contend that different entities, having a direct and substantial curiosity within the aid which Africa Vast seeks, must have been joined by Africa Vast as defendants in these proceedings. Following a case administration assembly held earlier than the 2 judges, and upon a listening to having been scheduled in regard to the particular pleas of nonjoinder, Africa Vast made the choice to proceed with a joinder utility (and the necessity for a particular listening to in regard to the pleas of nonjoinder was averted). Africa Vast has now filed additional amended particulars of declare in an try and appropriate the non-joinder challenge and the Firm has filed an amended assertion of defence pursuant thereto.

On November 12, 2020, Africa Vast delivered but an additional modification to its particulars of declare. Africa Vast, by way of these additional amended particulars of declare, seeks to put aside the Maseve Sale Transaction, and an order directing that RBPlat return to Maseve all belongings obtained by it pursuant to the sale transaction, and that the shares transferred pursuant thereto, be returned to it. In consequence of this growth a case administration assembly adopted earlier than the choose allotted to cope with this matter, and the choose directed that the matter proceed in accordance with the follow directive pertaining to industrial court docket issues.

The matter proceeded to trial within the Excessive Court docket over the interval October 4 to eight, 2021. Closing heads of argument are scheduled to be filed within the Excessive Court docket by Africa Vast by October 29, 2021 and by the defendants by November 9, 2021. Closing arguments earlier than the Excessive Court docket have been scheduled for March 1 and a pair of, 2022. A ruling by the court docket would then be anticipated within the following weeks after ultimate arguments are heard.

Whereas each the Firm and RBPlat consider and have been so suggested by their respective authorized counsel, that the Africa Vast motion is factually and legally faulty, no assurance could be supplied that the Firm will prevail on this motion.

Tax Audit South Africa

Through the 2014, 2015 and 2016 fiscal years, PTM RSA claimed unrealized overseas change variations as revenue tax deductions in its South African company tax returns within the quantity of Rand 1.4 billion. The change losses emanate from a Canadian Greenback denominated shareholder mortgage superior to PTM RSA and weakening of the Rand. Beneath relevant South African tax laws, change losses could be claimed within the occasion that the shareholder mortgage is assessed as a present legal responsibility as decided by IFRS.

For the years in query, the intercompany debt was categorised as present in PTM RSA’s audited monetary statements. Throughout 2018, the South African Income Service, or SARS, performed an revenue tax audit of the 2014 to 2016 years of evaluation and issued PTM RSA with a letter of audit findings on November 5, 2018. SARS proposed that the change losses be disallowed on the premise that SARS was not in settlement with the reclassification of the shareholder mortgage as a present legal responsibility. SARS additionally invited the Firm to supply additional info and arguments if we disagreed with the audit findings.

The Firm and its advisors responded to SARS throughout 2019 and refuted the problems raised.

On June 30, 2020, the Firm obtained a letter from SARS reporting the finalization of the above revenue tax audit with no reassessment or adjustment to the Firm’s tax returns for the three years audited.

Dividend Coverage

We’ve got not declared any dividends since incorporation and don’t anticipate doing so within the foreseeable future. The next restrictions might forestall the Firm from paying dividends or distributions:

  • The change controls of the Authorities of South Africa. See Merchandise 4.B. – South African Regulatory Framework;

  • In 2012, the Authorities of South Africa changed the longstanding secondary tax on companies with a dividend tax levied on shareholders. Earlier than the brand new dividend tax turned legislation, secondary tax on companies had been levied at a charge of 10% on all dividends declared by corporations resident in South Africa. The present charge of dividends tax is 20%. Beneath an current tax treaty between Canada and South Africa, the efficient charge underneath the brand new dividend tax in South Africa on dividends paid from PTM RSA to the Firm will probably be 5% of the gross quantity of dividends, supplied the Firm continues to carry a minimum of 10% of the capital of PTM RSA. Dividend taxes are to be withheld by companies in South Africa on behalf of shareholders and remitted to the South African Income Service; and

  • The 2019 Sprott Facility specifies that the Firm might not declare and pay dividends throughout the time period of the 2019 Sprott Facility, besides with the prior written consent of the Sprott Lenders.

The Firm has no present dividend or distribution coverage and has no current intention to alter its dividend or distribution coverage, because it anticipates that each one out there funds will probably be invested to finance the expansion of its enterprise. The Firm’s administrators will decide if and when dividends needs to be declared and paid sooner or later based mostly on the Firm’s monetary place on the related time.

B. Vital Modifications

There have been no vital adjustments since August 31, 2021, besides as in any other case mentioned herein.

ITEM 9. THE OFFER AND LISTING

A. Provide and Itemizing Particulars

There isn’t any provide related to this Annual Report.

Buying and selling Historical past

The next desk units forth the excessive and low market costs for the Frequent Shares on the TSX and on the NYSE American for every full quarterly interval throughout the two most up-to-date fiscal years ended August thirty first and any subsequent interval:


PERIOD
TSX
HIGH CDN$
TSX
LOW CDN$
NYSE AMERICAN
HIGH USD$
NYSE AMERICAN
LOW USD$
2021
Fourth Quarter 5.05 3.20 4.52 2.47
Third Quarter 6.61 4.15 5.34 3.27
Second Quarter 8.00 2.94 6.27 2.26
First Quarter 3.42 2.26 2.65 1.70
2020
Fourth Quarter 3.45 1.87 2.60 1.37
Third Quarter 2.60 1.33 1.97 0.94
Second Quarter 3.60 1.76 2.75 1.32
First Quarter 2.50 1.73 1.89 1.31

The next desk units forth the excessive and low market costs of the Frequent Shares for the 5 most up-to-date fiscal years ended August 31:

YEARS ENDING
AUG. 31
TSX
HIGH CDN$
TSX
LOW CDN$
NYSE AMERICAN
HIGH USD$
NYSE AMERICAN
LOW USD$
2021 8.00 3.20 6.27 2.47
2020 3.60 1.33 2.75 0.94
2019 2.89 1.40 2.17 1.05
2018 8.60 1.20 6.96 0.90
2017 38.70 6.50 30.00 5.17

The next desk units forth the excessive and low market costs for the latest six months:


MONTH
TSX
HIGH CDN$
TSX
LOW CDN$
NYSE AMERICAN
HIGH USD$
NYSE AMERICAN
LOW USD$
October 2021 3.13 2.44 2.53 1.93
September 2021 3.66 2.29 2.92 1.79
August 2021 3.98 3.20 3.20 2.47
July 2021 4.64 3.56 3.72 2.78
June 2021 5.40 4.22 4.52 3.41
Might 2021 6.48 4.89 5.33 4.04

The closing worth of the Frequent Shares on November 19, 2021 was C$3.300on the TSX and $2.6200on the NYSE American.

There have been no buying and selling suspensions within the prior three years.

B. Plan of Distribution

Not relevant.

C. Markets

The Frequent Shares are listed on the TSX underneath the image “PTM” and on the NYSE American underneath the image “PLG”.

D. Promoting Shareholders

Not relevant.

E. Dilution

Not relevant.

F. Bills of the Concern

Not relevant.

ITEM 10. ADDITIONAL INFORMATION

A. Share Capital

Not relevant.

B. Memorandum and Articles of Affiliation

Incorporation

The Firm was shaped by the use of an amalgamation of Platinum Group Metals Ltd. and New Millennium Metals Company on February 18, 2002 underneath the Firm Act (British Columbia) pursuant to an order of the Court docket. The Firm was transitioned to the BCBCA on January 25, 2005. The Firm’s British Columbia incorporation quantity is BC0642278.

Objects and Functions

Neither the Discover of Articles nor the Articles include a limitation on objects and functions.

Administrators

Half 17 of the Articles offers with the administrators’ involvement in transactions through which they’ve an curiosity. Article 17.2 gives {that a} director who holds a disclosable curiosity in a contract or transaction into which the Firm has entered or proposes to enter shouldn’t be entitled to vote on any administrators’ decision to approve that contract or transaction, until all the administrators have a disclosable curiosity in that contract or transaction, through which case all or any of these administrators might vote on such decision.

Pursuant to the BCBCA, a director doesn’t have a disclosable curiosity in a contract or transaction merely as a result of the contract or transaction pertains to the remuneration of the director in that particular person’s capability as a director of the Firm.

Half 8 of the Articles offers with borrowing powers. The Firm, if approved by the administrators, might: (i) borrow cash within the method and quantity, on the safety, from the sources and on the phrases and circumstances that they think about acceptable; (ii) challenge bonds, debentures and different debt obligations both outright or as safety for any legal responsibility or obligation of the Firm or every other particular person and at such reductions or premiums and on such different phrases as they think about acceptable; (iii) assure the reimbursement of cash by every other particular person or the efficiency of any obligation of every other particular person; and (iv) mortgage, cost (whether or not by the use of particular or floating cost), grant a safety curiosity in, or give different safety on, the entire or any a part of the current and future belongings and enterprise of the Firm.

{Qualifications} of Administrators

The Articles don’t specify a retirement age for administrators.

Administrators are usually not required to personal any Frequent Shares of the Firm.

Part 124 of the BCBCAprovides that a person shouldn’t be certified to turn out to be or act as a director of an organization if that particular person is:

1. underneath the age of 18 years;

2. discovered by a court docket, in Canada or elsewhere, to be incapable of managing the person’s personal affairs;

3. an undischarged bankrupt; or

4. convicted in or out of the Province of British Columbia of an offence in reference to the promotion, formation or administration of an organization or unincorporated enterprise, or of an offence involving fraud, until:

a. the court docket orders in any other case;

b. 5 years have elapsed because the final to happen of:

i. the expiration of the interval set for suspension of the passing of sentence and not using a sentence having been handed;

ii. the imposition of a nice;

iii. the conclusion of the time period of any imprisonment; and

iv. the conclusion of the time period of any probation imposed; or

c. a pardon was granted or issued, or a file suspension ordered, underneath the Prison Information Act (Canada) and the pardon or file suspension, because the case could also be, has not been revoked or ceased to have impact.

A director who ceases to be certified to behave as a director of the Firm should promptly resign.

Part 120 of the BCBCA gives that each firm will need to have a minimum of one director, and a public firm will need to have a minimum of three administrators.

Rights, Choice and Restrictions

The entire shares within the approved share construction of the Firm are of the identical class, being the Frequent Shares and, as soon as issued, rank equally as to dividends, voting powers, and participation in belongings and in all different respects, on liquidation, dissolution or winding up of the Firm, whether or not voluntary or involuntary, or every other distribution of its belongings amongst its shareholders for the aim of winding up its affairs after the Firm have paid out its liabilities. The issued Frequent Shares are usually not topic to name or evaluation rights or any pre-emptive or conversion rights. The shareholders of the Firm are entitled to at least one vote for every Frequent Share on all issues to be voted on by the shareholders of the Firm. There are not any provisions for redemption, buy for cancellation, give up or sinking funds, and there are not any provisions discriminating towards any current or potential holder of Frequent Shares because of such shareholder proudly owning a considerable variety of Frequent Shares.

The rights of shareholders of the Firm could also be altered solely with the approval of the holders of two/3 or extra of the Frequent Shares voted at a gathering of the Firm’s shareholders known as and held in accordance with the Articles and relevant legislation.

Shareholder Conferences

The BCBCA gives that: (i) a basic assembly of shareholders have to be held within the Province of British Columbia, until in any other case supplied within the Firm’s Articles or until the final assembly is absolutely digital assembly (Article 10.4 of the Articles gives {that a} assembly of shareholders of the Firm could also be held in or exterior of the Province of British Columbia as decided by a decision of the administrators); (ii) the Firm should maintain an annual basic assembly of shareholders not later than 15 months after the final previous annual basic assembly and as soon as in each calendar yr; (iii) for the aim of figuring out shareholders entitled to obtain discover of or vote at a gathering of shareholders, the administrators might set a date because the file date for that willpower, supplied that such date shall not precede by greater than 2 months (or, within the case of a basic assembly requisitioned by shareholders underneath the BCBCA, by greater than 4 months) or be lower than 21 days earlier than the date on which the assembly is to be held; (iv) a quorum for the transaction of enterprise at a gathering of shareholders of the Firm is the quorum established by the Articles (Article 11.3 of the Articles present that the quorum for the transaction of enterprise at a gathering of shareholders is 2 individuals who’re, or who signify by proxy, shareholders who, within the combination, maintain a minimum of 5% of the issued shares entitled to be voted on the assembly); (v) the holders of not lower than 5% of the issued shares entitled to vote at a gathering might requisition the administrators to name a gathering of shareholders for the aim of transacting any enterprise that could be transacted at a basic assembly; and (vi) the Court docket might, by itself movement or on the applying of the Firm, upon the applying of a director or the applying of a shareholder entitled to vote on the assembly: (a) order {that a} assembly of shareholders be known as, held and performed in a way that the Court docket considers acceptable; and (b) give instructions it considers crucial as to the decision, holding and conduct of the assembly.

Limitations on Possession of Securities

Besides as supplied within the Funding Canada Act, there are not any limitations particular to the rights of non-Canadians to carry or vote the Frequent Shares underneath the legal guidelines of Canada or the Province of British Columbia or within the Firm’s constating paperwork. See “Change Controls” beneath on this Annual Report for a dialogue of the principal options of the Funding Canada Act for non-Canadian residents proposing to accumulate the Frequent Shares.

Change in Management

There are not any provisions within the Articles or Firm’s constating paperwork that may have the impact of delaying, deferring or stopping a change within the management of the Firm, or that may function with respect to any proposed merger, acquisition or company restructuring involving its firm or any of its subsidiaries.

Possession Threshold

There are not any provisions within the Articles requiring share possession to be disclosed. Securities laws in Canada requires that shareholder possession (in addition to possession of an curiosity in, or proper or obligation related to, a associated monetary instrument of a safety of the Firm) have to be disclosed as soon as an individual beneficially owns or has management or path over, straight or not directly, securities of a reporting issuer carrying greater than 10% of the voting rights hooked up to all of the reporting issuer’s excellent voting securities. This threshold is larger than the 5% threshold underneath U.S. securities laws at which stockholders should report their share possession.

Modifications to Capital

There are not any circumstances imposed by the Articles governing adjustments within the rights of holders of Frequent Shares the place such circumstances are extra vital than is required by the legal guidelines of the Province of British Columbia.

Description of Capital Construction

The Firm’s approved share construction consists of a limiteless variety of Frequent Shares with out par worth, of which 79,725,574 Frequent Shares, 536,992 RSUs and three,840,521 Choices had been issued and excellent as of November 22, 2021. The entire issued Frequent Shares are absolutely paid. The Firm doesn’t personal any of its Frequent Shares.

Frequent Shares

The entire shares within the approved share construction of the Firm are of the identical class, being the Frequent Shares and, as soon as issued, rank equally as to dividends, voting powers, and participation in belongings and in all different respects, on liquidation, dissolution or winding up of the Firm, whether or not voluntary or involuntary, or every other distribution of its belongings amongst its shareholders for the aim of winding up its affairs after the Firm have paid out its liabilities. The issued Frequent Shares are usually not topic to name or evaluation rights or any pre-emptive or conversion rights. The shareholders of the Firm are entitled to at least one vote for every Frequent Share on all issues to be voted on by the shareholders of the Firm. There are not any provisions for redemption, buy for cancellation, give up or sinking funds, and there are not any provisions discriminating towards any current or potential holder of Frequent Shares because of such shareholder proudly owning a considerable variety of Frequent Shares.

The rights of shareholders of the Firm could also be altered solely with the approval of the holders of two/3 or extra of the Frequent Shares voted at a gathering of the Firm’s shareholders known as and held in accordance with the Articles and relevant legislation.

Restricted Share Models

The entire variety of RSUs that could be awarded underneath the Share Compensation Plan shall not exceed 2.5% of the issued and excellent Frequent Shares now and again. RSUs vest as to 33 1/3% on every of the 12, 24 and 36 month anniversary of the award date. All vesting and issuances or funds, as relevant, in respect of a RSU shall be accomplished no later than December 15 of the threerd calendar yr commencing after the award date for such RSU.

The next desk units out the variety of Frequent Shares issuable pursuant to excellent RSUs as of the date hereof, together with the award date and expiry date of the RSUs.

No. of RSUs Award Date Expiry Date
117,010 April 9, 2019 December 15, 2022
171,195 December 2, 2019 December 15, 2022
226,787 December 16, 2020 December 15, 2023
22,000 August 9, 2021 December 15, 2024

Choices

The entire variety of Frequent Shares that could be issuable on train of Choices underneath the Share Compensation Plan shall not exceed 7.5% of the variety of issued and excellent Frequent Shares now and again. The next desk units out the variety of Frequent Shares issuable pursuant to excellent Choices as of the date hereof, together with the train worth and expiry of the Choices.

No. of Choices Train Value per Possibility Expiry Date
1,048,502 $2.61 April 9, 2024
1,153,519 $1.81 December 2, 2024
1,497,500 $6.58 December 16, 2025
99,000 $3.90 August 9, 2026
42,000 $3.40 September 10, 2026

C. Materials Contracts

Neither the Firm nor its subsidiaries has been a celebration throughout the two years instantly previous the publication of this Annual Report back to a contract that’s materials to the Firm, apart from (i) contracts entered into within the extraordinary course of enterprise, and (ii) contracts mentioned elsewhere on this Annual Report.

D. Change Controls

Canada has no system of change controls. There are not any Canadian governmental legal guidelines, decrees, or rules regarding restrictions on the repatriation of capital or earnings of the Firm to non-resident traders. There are not any legal guidelines in Canada or change management restrictions affecting the remittance of dividends, income, curiosity, royalties and different funds by the Firm to non-resident holders of the Frequent Shares, besides as mentioned beneath underneath “Merchandise 10.E. Taxation.”

There are not any limitations underneath the legal guidelines of Canada or within the organizing paperwork of the Firm on the appropriate of foreigners to carry or vote securities of the Firm, besides that the Funding Canada Act might require {that a} “non-Canadian” not purchase “management” of the Firm with out prior evaluation and approval by the Minister of Innovation, Science and Financial Improvement. The acquisition of one-third or extra of the voting shares of the Firm would give rise a rebuttable presumption of the acquisition of management, and the acquisition of greater than fifty % of the voting shares of the Firm can be deemed to be an acquisition of management. As well as, the Funding Canada Act gives the Canadian authorities with broad discretionary powers in relation to nationwide safety to evaluation and probably prohibit, situation or require the divestiture of, any funding within the Firm by a non-Canadian, together with non-control degree investments. “Non-Canadian” usually means a person who’s neither a Canadian citizen nor a everlasting resident of Canada throughout the which means of the Immigration and Refugee Safety Act (Canada) who has been ordinarily resident in Canada for not multiple yr after the time at which she or he first turned eligible to use for Canadian citizenship, or an organization, partnership, belief or three way partnership that’s finally managed by non-Canadians.

E. Taxation

Canadian Federal Revenue Tax Penalties

The next is, as of the date hereof, a basic abstract of the principal Canadian federal revenue tax concerns underneath the Tax Act and the rules thereunder (the “Laws“) usually relevant to a helpful holder of Frequent Shares who, in any respect related instances, for the needs of the Tax Act, (i) offers at arm’s size with the Firm, (ii) shouldn’t be affiliated with the Firm, (iii) holds such Frequent Shares as capital property, (iv) is neither resident nor deemed to be resident in Canada, (v) doesn’t use or maintain, and won’t be deemed to make use of or maintain, Frequent Shares in or in the midst of carrying on a enterprise in Canada, and (vi) is a resident of the USA for functions of the Canada-United States Revenue Tax Conference (1980) (the “Canada-U.S. Tax Conference“), and is a “qualifying particular person” throughout the which means of the Canada-U.S. Tax Conference (every, a “US Resident Holder“). In some circumstances, individuals deriving quantities by means of fiscally clear entities (together with restricted legal responsibility corporations) could also be entitled to advantages underneath the Canada-U.S. Tax Conference. US Resident Holders are urged to seek the advice of their very own tax advisors to find out their entitlement to advantages underneath the Canada-U.S. Tax Conference based mostly on their specific circumstances.

Frequent Shares will usually be thought-about to be capital property to a US Resident Holder until the US Resident Holder holds or makes use of the Frequent Shares or is deemed to carry or use the Frequent Shares in the midst of carrying on a enterprise of buying and selling or dealing in securities or has acquired them or deemed to have acquired them in a transaction or transactions thought-about to be an journey or concern within the nature of commerce.

This abstract doesn’t apply to a US Resident Holder (i) that may be a “monetary establishment” for functions of the mark to market guidelines contained within the Tax Act; (ii) an curiosity through which is or would represent a “tax shelter funding” as outlined within the Tax Act; (iii) that may be a “specified monetary establishment” as outlined within the Tax Act; (iv) that may be a company that doesn’t deal at arm’s size for functions of the Tax Act with an organization resident in Canada and that’s or turns into as a part of a transaction or occasion or collection of transactions or occasions that features the acquisition of the Frequent Shares, managed by a non-resident company for the needs of the overseas affiliate dumping guidelines in Part 212.3 of the Tax Act; (v) that experiences its “Canadian tax outcomes” in a forex aside from Canadian forex, all as outlined within the Tax Act; (vi) that’s exempt from tax underneath the Tax Act; or (vii) that has entered into, or will enter into, a “artificial disposition association” or a “by-product ahead settlement” with respect to the Frequent Shares, as these phrases are outlined within the Tax Act. Such US Resident Holders ought to seek the advice of their very own tax advisors with respect to their holding of Frequent Shares.

Particular concerns, which aren’t mentioned on this abstract, might apply to a US Resident Holder that’s an insurer that carries on an insurance coverage enterprise in Canada and elsewhere or a certified overseas financial institution (as outlined within the Tax Act). Such US Resident Holders ought to seek the advice of their very own advisors.

This abstract doesn’t tackle the deductibility of curiosity by a US Resident Holder who has borrowed cash or in any other case incurred debt in reference to the acquisition of Frequent Shares.

This abstract relies upon the present provisions of the Tax Act and the Laws in power as of the date hereof, particular proposals to amend the Tax Act and the Laws (the “Tax Proposals“) which have been introduced by or on behalf the Minister of Finance (Canada) previous to the date hereof, the present provisions of the Canada-U.S. Tax Conference, and counsel’s understanding of the present printed administrative insurance policies and assessing practices of the Canada Income Company (the “CRA“). This abstract assumes that the Tax Proposals will probably be enacted within the kind proposed and doesn’t take into consideration or anticipate every other adjustments in legislation, whether or not by the use of judicial, legislative or governmental determination or motion, nor does it take into consideration provincial, territorial or overseas revenue tax laws or concerns, which can differ from the Canadian federal revenue tax concerns mentioned herein. No assurances could be on condition that the Tax Proposals will probably be enacted as proposed or in any respect, or that legislative, judicial or administrative adjustments is not going to modify or change the statements expressed herein.

This abstract shouldn’t be exhaustive of all attainable Canadian federal revenue tax concerns relevant to the holding of Frequent Shares. This abstract is of a basic nature solely and isn’t meant to be, nor ought to it’s construed to be, authorized or revenue tax recommendation to any specific US Resident Holder. US Resident Holders ought to seek the advice of their very own revenue tax advisors with respect to the tax penalties relevant to them based mostly on their very own specific circumstances.

Quantities Decided in Canadian {Dollars}

Usually, for functions of the Tax Act, all quantities regarding the Frequent Shares have to be expressed in Canadian {Dollars}, together with price, adjusted price base, proceeds of disposition, and dividends, and quantities denominated in U.S. {dollars} have to be transformed to Canadian {Dollars} utilizing single every day change charge printed by the Financial institution of Canada on the actual date the actual quantity arose, or such different charge of change as could also be accepted by the CRA. US Resident Holders might due to this fact understand further revenue or acquire by advantage of adjustments in overseas change charges and are suggested to seek the advice of with their very own tax advisors on this regard. Foreign money tax points are usually not mentioned additional on this abstract.

Dividends of Frequent Shares

Topic to an relevant worldwide tax treaty or conference, dividends paid or credited, or deemed to be paid or credited, to a non-resident of Canada on the Frequent Shares will probably be topic to Canadian withholding tax underneath the Tax Act on the charge of 25% of the gross quantity of the dividend. Such charge is mostly diminished underneath the Canada-U.S. Tax Conference to fifteen% if the helpful proprietor of such dividend is a US Resident Holder. The speed of withholding tax is additional diminished to five% if the helpful proprietor of such dividend is a US Resident Holder that may be a firm that owns, straight or not directly, a minimum of 10% of the voting inventory of the Firm. As well as, underneath the Canada-U.S. Tax Conference, dividends could also be exempt from such Canadian withholding tax if paid to sure US Resident Holders which are qualifying non secular, scientific, literary, instructional, or charitable tax exempt organizations or qualifying trusts, corporations, organizations, or preparations operated completely to manage or present pension, retirement, or worker advantages or advantages for the self-employed underneath a number of funds or plans established to supply pension or retirement advantages or different worker advantages which are exempt from tax in the USA and which have complied with particular administrative procedures.

Disposition of Frequent Shares

A US Resident Holder is not going to be topic to tax underneath the Tax Act in respect of any capital acquire realized by such US Resident Holder on a disposition of Frequent Shares until the Frequent Shares represent “taxable Canadian property” (as outlined within the Tax Act) of the US Resident Holder on the time of the disposition and are usually not “treaty-protected property” (as outlined within the Tax Act) of the US Resident Holder on the time of the disposition.

Usually, so long as the Frequent Shares are listed on a chosen inventory change (which at present consists of the TSX and the NYSE American) on the time of its disposition, the Frequent Shares is not going to represent taxable Canadian property of a US Resident Holder, until at any time throughout the 60 month interval instantly previous the disposition the next two circumstances are met concurrently: (a) the US Resident Holder, individuals with which the US Resident Holder doesn’t deal at arm’s size, partnerships whose members embrace, both straight or not directly by means of a number of partnerships, the US Resident Holder or individuals which don’t deal at arm’s size with the US Resident Holder, or any mixture of them, owned 25% or extra of the issued shares of any class or collection of shares of the approved share construction of the Firm, and (b) greater than 50% of the honest market worth of the Frequent Shares was derived straight or not directly, from one or any mixture of actual or immovable property located in Canada, “Canadian useful resource properties”, “timber useful resource properties” (every as outlined within the Tax Act), and choices in respect of or pursuits in, or for civil legislation rights in, any such property (whether or not or not such property exists). The Tax Act might also deem Frequent Shares to be taxable Canadian property to a US Resident Holder in sure circumstances.

Even when the Frequent Shares are thought-about to be taxable Canadian property to a US Resident Holder, the US Resident Holder is not going to be topic to tax underneath the Tax Act in respect of any capital acquire realized by such US Resident Holder on a disposition of Frequent Shares if the Frequent Shares are “treaty-protected property” of the US Resident Holder on the time of the disposition. The Frequent Shares of such US Resident Holder will usually represent “treaty-protected property” for functions of the Tax Act until the worth of the Frequent Shares is derived principally from actual property located in Canada. For this objective, “actual property” has the which means that time period has underneath the legal guidelines of Canada and consists of any possibility or related proper in respect thereof and usufruct of actual property, rights to probe for or to use mineral deposits, sources and different pure assets and rights to quantities computed by reference to the quantity or worth of manufacturing from such assets.

Taxation of Capital Positive aspects and Losses

If the Frequent Shares are taxable Canadian property of a US Resident Holder and are usually not treaty-protected property of that US Resident Holder on the time of the disposition, that US Resident Holder will understand a capital acquire (or incur a capital loss) equal to the quantity by which the proceeds of disposition in respect of the Frequent Shares exceed (or are exceeded by) the combination of the adjusted price base to the Resident Holder of such Frequent Shares instantly earlier than the disposition and any cheap bills incurred for the aim of constructing the disposition.

Usually, one half of any capital acquire (a “taxable capital acquire“) realized by a US Resident Holder have to be included within the US Resident Holder’s revenue for the taxation yr through which the disposition happens. Topic to and in accordance with the provisions of the Tax Act, one half of any capital loss incurred by a Resident Holder (an “allowable capital loss“) should usually be deducted from taxable capital beneficial properties realized by the Resident Holder within the taxation yr through which the disposition happens. Allowable capital losses in extra of taxable capital beneficial properties for the taxation yr of disposition usually could also be carried again and deducted within the three previous taxation years or carried ahead and deducted in any subsequent yr towards taxable capital beneficial properties realized in such years, within the circumstances and to the extent supplied within the Tax Act.

US Resident Holders whose Frequent Shares are taxable Canadian property ought to seek the advice of their very own advisors.

United States Federal Revenue Tax Issues

The next is a basic abstract of sure materials U.S. federal revenue tax concerns relevant to a U.S. Holder (as outlined herein) arising from and regarding the possession and disposition of shares of Frequent Inventory. This abstract is for basic info functions solely and doesn’t purport to be an entire evaluation or itemizing of all potential U.S. federal revenue tax concerns which will apply to a U.S. Holder arising from or regarding the possession and disposition of shares of Frequent Inventory. As well as, this abstract doesn’t take into consideration the person information and circumstances of any specific U.S. Holder which will have an effect on the U.S. federal revenue tax penalties to such U.S. Holder, together with particular tax penalties to a U.S. Holder underneath an relevant tax treaty. Accordingly, this abstract shouldn’t be meant to be, and shouldn’t be construed as, authorized or U.S. federal revenue tax recommendation with respect to any U.S. Holder. This abstract doesn’t tackle the U.S. federal various minimal, U.S. federal internet funding revenue, U.S. federal property and present, U.S. state and native, and non-U.S. tax penalties to U.S. Holders of the possession and disposition of shares of Frequent Inventory. As well as, besides as particularly set forth beneath, this abstract doesn’t focus on relevant revenue tax reporting necessities. Every potential U.S. Holder ought to seek the advice of its personal tax advisors relating to the U.S. federal, U.S. federal various minimal, U.S. federal internet funding revenue, U.S. federal property and present, U.S. state and native, and non-U.S. tax penalties regarding the possession and disposition of shares of Frequent Inventory.

No authorized opinion from U.S. authorized counsel or ruling from the Inside Income Service (the “IRS“) has been requested, or will probably be obtained, relating to the U.S. federal revenue tax penalties of the possession and disposition of shares of Frequent Inventory. This abstract shouldn’t be binding on the IRS, and the IRS shouldn’t be precluded from taking a place that’s totally different from, or opposite to, the positions taken on this abstract. As well as, as a result of the authorities on which this abstract relies are topic to varied interpretations, the IRS and the U.S. courts might disagree with a number of of the conclusions described on this abstract.

Scope of this Abstract

Authorities

This abstract relies on the Code, Treasury Laws (whether or not ultimate, non permanent, or proposed), printed rulings of the IRS, printed administrative positions of the IRS, the Canada-U.S. Tax Conference, and U.S. court docket selections which are out there as of the date of this doc. Any of the authorities on which this abstract relies could possibly be modified in a fabric and hostile method at any time, and any such change could possibly be utilized on a retroactive or potential foundation, which might have an effect on the U.S. federal revenue tax concerns described on this abstract. Besides as supplied herein, this abstract doesn’t focus on the potential results of any proposed laws.

U.S. Holders

For functions of this abstract, the time period “U.S. Holder” means a helpful proprietor of shares of Frequent Inventory that’s for U.S. federal revenue tax functions:

• a citizen or particular person resident of the USA;

• an organization (or different entity taxable as an organization for U.S. federal revenue tax functions) organized underneath the legal guidelines of the USA, any state thereof or the District of Columbia;

• an property whose revenue is topic to U.S. federal revenue taxation no matter its supply; or

• a belief that (1) is topic to the first supervision of a court docket throughout the U.S. and the management of a number of U.S. individuals for all substantial selections or (2) has a sound election in impact underneath relevant Treasury Laws to be handled as a U.S. particular person.

U.S. Holders Topic to Particular U.S. Federal Revenue Tax Guidelines Not Addressed

This abstract doesn’t tackle the U.S. federal revenue tax concerns relevant to U.S. Holders which are topic to particular provisions underneath the Code, together with, however not restricted to U.S. Holders that: (a) are tax-exempt organizations, certified retirement plans, particular person retirement accounts, or different tax-deferred accounts; (b) are monetary establishments, underwriters, insurance coverage corporations, actual property funding trusts, or regulated funding corporations; (c) are broker-dealers, sellers, or merchants in securities or currencies that elect to use a mark-to-market accounting technique; (d) have a “useful forex” aside from the U.S. greenback; (e) personal shares of Frequent Inventory as a part of a straddle, hedging transaction, conversion transaction, constructive sale, or different built-in transaction; (f) acquired shares of Frequent Inventory in reference to the train of worker inventory choices or in any other case as compensation for companies; (g) maintain shares of Frequent Inventory aside from as a capital asset throughout the which means of Part 1221 of the Code (usually, property held for funding functions); (h) are topic to the choice minimal tax; (i) are topic to particular tax accounting guidelines; (j) are partnerships, S companies and different pass-through entities or preparations; (okay) are U.S. expatriates or former long-term residents of the USA; (l) are topic to taxing jurisdictions aside from, or along with, the USA; or (m) personal or have owned or will personal (straight, not directly, or by attribution) 10% or extra of the whole mixed voting energy or worth of the excellent shares of the Firm. U.S. Holders which are topic to particular provisions underneath the Code, together with, however not restricted to, U.S. Holders described instantly above, ought to seek the advice of their very own tax advisors relating to the U.S. federal, U.S. federal various minimal, U.S. federal internet funding revenue, U.S. federal property and present, U.S. state and native, and non-U.S. tax penalties regarding the possession and disposition of shares of Frequent Inventory.

Specifically, it’s famous that the Firm could also be or might turn out to be a “managed overseas company” for U.S. federal revenue tax functions, and due to this fact, if a U.S. Holder is a U.S. shareholder proudly owning 10% or extra of the Firm’s inventory (by vote or worth) straight, not directly and/or underneath the relevant attribution guidelines, the U.S. federal revenue tax penalties to such U.S. Holder of proudly owning shares of Frequent Inventory could also be considerably totally different than these described beneath in a number of respects. If a U.S. Holder owns 10% or extra of the Firm’s inventory (by vote or worth) straight, not directly and/or underneath the relevant attribution guidelines, such holder ought to seek the advice of its personal tax advisors relating to the U.S. federal revenue tax guidelines relevant to an funding in a managed overseas company.

If an entity or association that’s categorised as a partnership (or different “pass-through” entity) for U.S. federal revenue tax functions holds shares of Frequent Inventory, the U.S. federal revenue tax penalties to such entity and the companions (or different house owners) of such entity usually will rely on the actions of the entity and the standing of such companions (or house owners). This abstract doesn’t tackle the tax penalties to any such entity or proprietor. Companions (or different house owners) of entities or preparations which are categorised as partnerships or as “pass-through” entities for U.S. federal revenue tax functions ought to seek the advice of their very own tax advisors relating to the U.S. federal revenue tax penalties arising from and regarding the possession and disposition of shares of Frequent Inventory.

Passive International Funding Firm Guidelines

PFIC Standing of the Firm

If the Firm had been to represent a “passive overseas funding firm” underneath the which means of Part 1297 of the Code (a “PFIC“, as outlined beneath) for any yr throughout a U.S. Holder’s holding interval, then sure probably hostile guidelines might have an effect on the U.S. federal revenue tax penalties to a U.S. Holder because of the acquisition, possession and disposition of shares of Frequent Inventory. Primarily based on present enterprise plans and monetary expectations, the Firm believes that it could be a PFIC for its present tax yr ending August 31, 2022 and could also be a PFIC in future tax years. No opinion of authorized counsel or ruling from the IRS regarding the standing of the Firm as a PFIC has been obtained or is at present deliberate to be requested. The willpower of whether or not any company was, or will probably be, a PFIC for a tax yr relies upon, partially, on the applying of advanced U.S. federal revenue tax guidelines, that are topic to differing interpretations. As well as, whether or not any company will probably be a PFIC for any tax yr relies on the belongings and revenue of such company over the course of every such tax yr and, because of this, can’t be predicted with certainty as of the date of this doc. Accordingly, there could be no assurance that the IRS is not going to problem any willpower made by the Firm (or any subsidiary of the Firm) regarding its PFIC standing. Every U.S. Holder ought to seek the advice of its personal tax advisors relating to the PFIC standing of the Firm and every subsidiary of the Firm.

In any yr through which the Firm is assessed as a PFIC, a U.S. Holder will probably be required to file an annual report with the IRS containing such info as Treasury Laws and/or different IRS steering might require. Along with penalties, a failure to fulfill such reporting necessities might end in an extension of the time interval throughout which the IRS can assess a tax. U.S. Holders ought to seek the advice of their very own tax advisors relating to the necessities of submitting such info returns underneath these guidelines, together with the requirement to file an IRS Kind 8621 yearly.

The Firm usually will probably be a PFIC if, for a tax yr, (a) 75% or extra of the gross revenue of the Firm is passive revenue (the “PFIC revenue take a look at“) or (b) 50% or extra of the worth of the Firm’s belongings both produce passive revenue or are held for the manufacturing of passive revenue, based mostly on the quarterly common of the honest market worth of such belongings (the “PFIC asset take a look at“). “Gross revenue” usually consists of all gross sales revenues much less the price of items bought, plus revenue from investments and from incidental or exterior operations or sources, and “passive revenue” usually consists of, for instance, dividends, curiosity, sure rents and royalties, sure beneficial properties from the sale of inventory and securities, and sure beneficial properties from commodities transactions. Energetic enterprise beneficial properties arising from the sale of commodities usually are excluded from passive revenue if considerably all of a overseas company’s commodities are inventory in commerce or stock, depreciable property utilized in a commerce or enterprise, or provides repeatedly used or consumed within the extraordinary course of its commerce or enterprise, and sure different necessities are glad.

For functions of the PFIC revenue take a look at and PFIC asset take a look at described above, if the Firm owns, straight or not directly, 25% or extra of the whole worth of the excellent shares of one other company, the Firm will probably be handled as if it (a) held a proportionate share of the belongings of such different company and (b) obtained straight a proportionate share of the revenue of such different company. As well as, for functions of the PFIC revenue take a look at and PFIC asset take a look at described above, and assuming sure different necessities are met, “passive revenue” doesn’t embrace sure curiosity, dividends, rents, or royalties which are obtained or accrued by the Firm from sure “associated individuals” (as outlined in Part 954(d)(3) of the Code) additionally organized in Canada, to the extent such gadgets are correctly allocable to the revenue of such associated particular person that’s not passive revenue.

Beneath sure attribution guidelines, if the Firm is a PFIC, U.S. Holders will usually be deemed to personal their proportionate share of the Firm’s direct or oblique fairness curiosity in any firm that can be a PFIC (a ”Subsidiary PFIC”), and can usually be topic to U.S. federal revenue tax on their proportionate share of (a) any “extra distributions,” as described beneath, on the inventory of a Subsidiary PFIC and (b) a disposition or deemed disposition of the inventory of a Subsidiary PFIC by the Firm or one other Subsidiary PFIC, each as if such U.S. Holders straight held the shares of such Subsidiary PFIC. As well as, U.S. Holders could also be topic to U.S. federal revenue tax on any oblique acquire realized on the inventory of a Subsidiary PFIC on the sale or disposition of shares of Frequent Inventory. Accordingly, U.S. Holders needs to be conscious that they could possibly be topic to tax underneath the PFIC guidelines even when no distributions are obtained and no redemptions or different tendencies of shares of Frequent Inventory are made.

Default PFIC Guidelines Beneath Part 1291 of the Code

If the Firm is a PFIC for any tax yr throughout which a U.S. Holder owns shares of Frequent Inventory, the U.S. federal revenue tax penalties to such U.S. Holder of the acquisition, possession, and disposition of shares of Frequent Inventory will rely on whether or not and when such U.S. Holder makes a QEF Election to deal with the Firm and every Subsidiary PFIC, if any, as a “certified electing fund” or “QEF” underneath Part 1295 of the Code or makes a Mark-to-Market Election underneath Part 1296 of the Code. A U.S. Holder that doesn’t make both a QEF Election or a Mark-to-Market Election will probably be referred to on this abstract as a “Non-Electing U.S. Holder.”

A Non-Electing U.S. Holder will probably be topic to the foundations of Part 1291 of the Code (described beneath) with respect to: (a) any acquire acknowledged on the sale or different taxable disposition of shares of Frequent Inventory; and (b) any “extra distribution” obtained on the shares of Frequent Inventory. A distribution usually will probably be an “extra distribution” to the extent that such distribution (along with all different distributions obtained within the present tax yr) exceeds 125% of the common distributions obtained throughout the three previous tax years (or throughout a U.S. Holder’s holding interval for the shares of Frequent Inventory, if shorter).

Beneath Part 1291 of the Code, any acquire acknowledged on the sale or different taxable disposition of shares of Frequent Inventory (together with an oblique disposition of the inventory of any Subsidiary PFIC), and any “extra distribution” obtained on shares of Frequent Inventory or with respect to the inventory of a Subsidiary PFIC, have to be ratably allotted to every day in a Non-Electing U.S. Holder’s holding interval for the respective shares of Frequent Inventory. The quantity of any such acquire or extra distribution allotted to the tax yr of disposition or distribution of the surplus distribution and to years earlier than the entity turned a PFIC, if any, can be taxed as extraordinary revenue (and never eligible for sure most well-liked charges). The quantities allotted to every other tax yr can be topic to U.S. federal revenue tax on the highest tax charge relevant to extraordinary revenue in every such yr, and an curiosity cost can be imposed on the tax legal responsibility for every such yr, calculated as if such tax legal responsibility had been due in every such yr. A Non-Electing U.S. Holder that’s not an organization should deal with any such curiosity paid as “private curiosity,” which isn’t deductible.

If the Firm is a PFIC for any tax yr throughout which a Non-Electing U.S. Holder holds shares of Frequent Inventory, the Firm will proceed to be handled as a PFIC with respect to such Non-Electing U.S. Holder, no matter whether or not the Firm ceases to be a PFIC in a number of subsequent tax years. A Non-Electing U.S. Holder might terminate this deemed PFIC standing by electing to acknowledge acquire (which will probably be taxed underneath the foundations of Part 1291 of the Code mentioned above), however not loss, as if such shares of Frequent Inventory had been bought on the final day of the final tax yr for which the Firm was a PFIC.

QEF Election

A U.S. Holder that makes a well timed and efficient QEF Election for the primary tax yr through which the holding interval of its shares of Frequent Inventory begins usually is not going to be topic to the foundations of Part 1291 of the Code mentioned above with respect to its shares of Frequent Inventory. A U.S. Holder that makes a well timed and efficient QEF Election will probably be topic to U.S. federal revenue tax on such U.S. Holder’s professional rata share of (a) the online capital acquire of the Firm, which will probably be taxed as long-term capital acquire to such U.S. Holder, and (b) the extraordinary earnings of the Firm, which will probably be taxed as extraordinary revenue to such U.S. Holder. Usually, “internet capital acquire” is the surplus of (a) internet long-term capital acquire over (b) internet short-term capital loss, and “extraordinary earnings” are the surplus of (a) “earnings and income” over (b) internet capital acquire. A U.S. Holder that makes a QEF Election will probably be topic to U.S. federal revenue tax on such quantities for every tax yr through which the Firm is a PFIC, no matter whether or not such quantities are literally distributed to such U.S. Holder by the Firm. Nonetheless, for any tax yr through which the Firm is a PFIC and has no internet revenue or acquire, U.S. Holders which have made a QEF Election wouldn’t have any revenue inclusions because of the QEF Election. If a U.S. Holder that made a QEF Election has an revenue inclusion, such a U.S. Holder might, topic to sure limitations, elect to defer fee of present U.S. federal revenue tax on such quantities, topic to an curiosity cost. If such U.S. Holder shouldn’t be an organization, any such curiosity paid will probably be handled as “private curiosity,” which isn’t deductible.

A U.S. Holder that makes a well timed and efficient QEF Election with respect to the Firm usually (a) might obtain a tax-free distribution from the Firm to the extent that such distribution represents “earnings and income” of the Firm that had been beforehand included in revenue by the U.S. Holder due to such QEF Election and (b) will regulate such U.S. Holder’s tax foundation within the shares of Frequent Inventory to mirror the quantity included in revenue or allowed as a tax-free distribution due to such QEF Election. As well as, a U.S. Holder that makes a QEF Election usually will acknowledge capital acquire or loss on the sale or different taxable disposition of shares of Frequent Inventory.

The process for making a QEF Election, and the U.S. federal revenue tax penalties of constructing a QEF Election, will rely on whether or not such QEF Election is well timed. A QEF Election will probably be handled as “well timed” if such QEF Election is made for the primary yr within the U.S. Holder’s holding interval for the shares of Frequent Inventory through which the Firm was a PFIC. A U.S. Holder might make a well timed QEF Election by submitting the suitable QEF Election paperwork on the time such U.S. Holder information a U.S. federal revenue tax return for such yr. If a U.S. Holder doesn’t make a well timed and efficient QEF Election for the primary yr within the U.S. Holder’s holding interval for the shares of Frequent Inventory, the U.S. Holder should still have the ability to make a well timed and efficient QEF Election in a subsequent yr if such U.S. Holder meets sure necessities and makes a “purging” election to acknowledge acquire (which will probably be taxed underneath the foundations of Part 1291 of the Code mentioned above) as if such shares of Frequent Inventory had been bought for his or her honest market worth on the day the QEF Election is efficient. If a U.S. Holder makes a QEF Election however doesn’t make a “purging” election to acknowledge acquire as mentioned within the previous sentence, then such U.S. Holder shall be topic to the QEF Election guidelines and shall proceed to be topic to tax underneath the foundations of Part 1291 mentioned above with respect to its shares of Frequent Inventory. If a U.S. Holder owns PFIC inventory not directly by means of one other PFIC, separate QEF Elections have to be made for the PFIC through which the U.S. Holder is a direct shareholder and the Subsidiary PFIC for the QEF guidelines to use to each PFICs.

A QEF Election will apply to the tax yr for which such QEF Election is well timed made and to all subsequent tax years, until such QEF Election is invalidated or terminated or the IRS consents to revocation of such QEF Election. If a U.S. Holder makes a QEF Election and, in a subsequent tax yr, the Firm ceases to be a PFIC, the QEF Election will stay in impact (though it is not going to be relevant) throughout these tax years through which the Firm shouldn’t be a PFIC. Accordingly, if the Firm turns into a PFIC in one other subsequent tax yr, the QEF Election will probably be efficient and the U.S. Holder will probably be topic to the QEF guidelines described above throughout any subsequent tax yr through which the Firm qualifies as a PFIC.

U.S. Holders needs to be conscious that there could be no assurances that the Firm will fulfill the file holding necessities that apply to a QEF, or that the Firm will provide U.S. Holders with info that such U.S. Holders are required to report underneath the QEF guidelines, within the occasion that the Firm is a PFIC. Thus, U.S. Holders might not have the ability to make a QEF Election with respect to their shares of Frequent Inventory. Every U.S. Holder ought to seek the advice of its personal tax advisors relating to the provision of, and process for making, a QEF Election.

A U.S. Holder makes a QEF Election by attaching a accomplished IRS Kind 8621, together with a PFIC Annual Data Assertion, to a well timed filed United States federal revenue tax return. Nonetheless, if the Firm doesn’t present the required info with regard to the Firm or any of its Subsidiary PFICs, U.S. Holders will be unable to make a QEF Election for such entity and can proceed to be topic to the foundations of Part 1291 of the Code mentioned above that apply to Non-Electing U.S. Holders with respect to the taxation of beneficial properties and extra distributions.

Mark-to-Market Election

A U.S. Holder might make a Mark-to-Market Election provided that the shares of Frequent Inventory are marketable inventory. The shares of Frequent Inventory usually will probably be “marketable inventory” if the shares of Frequent Inventory are repeatedly traded on (a) a nationwide securities change that’s registered with the Securities and Change Fee, (b) the nationwide market system established pursuant to part 11A of the Securities and Change Act of 1934, or (c) a overseas securities change that’s regulated or supervised by a governmental authority of the nation through which the market is situated, supplied that (i) such overseas change has buying and selling quantity, itemizing, monetary disclosure, and surveillance necessities, and meets different necessities and the legal guidelines of the nation through which such overseas change is situated, along with the foundations of such overseas change, be sure that such necessities are literally enforced and (ii) the foundations of such overseas change successfully promote lively buying and selling of listed shares. If such inventory is traded on such a certified change or different market, such inventory usually will probably be “repeatedly traded” for any calendar yr throughout which such inventory is traded, aside from in de minimis portions, on a minimum of 15 days throughout every calendar quarter. Every U.S. Holder ought to seek the advice of its personal tax advisor on this regard.

A U.S. Holder that makes a Mark-to-Market Election with respect to its shares of Frequent Inventory usually is not going to be topic to the foundations of Part 1291 of the Code mentioned above with respect to such shares of Frequent Inventory. Nonetheless, if a U.S. Holder doesn’t make a Mark-to-Market Election starting within the first tax yr of such U.S. Holder’s holding interval for the shares of Frequent Inventory for which the Firm is a PFIC and such U.S. Holder has not made a well timed QEF Election, the foundations of Part 1291 of the Code mentioned above will apply to sure tendencies of, and distributions on, the shares of Frequent Inventory.

A U.S. Holder that makes a Mark-to-Market Election will embrace in extraordinary revenue, for every tax yr through which the Firm is a PFIC, an quantity equal to the surplus, if any, of (a) the honest market worth of the shares of Frequent Inventory, as of the shut of such tax yr over (b) such U.S. Holder’s adjusted tax foundation in such shares of Frequent Inventory. A U.S. Holder that makes a Mark-to-Market Election will probably be allowed a deduction in an quantity equal to the surplus, if any, of (a) such U.S. Holder’s adjusted tax foundation within the shares of Frequent Inventory, over (b) the honest market worth of such shares of Frequent Inventory (however solely to the extent of the online quantity of beforehand included revenue because of the Mark-to-Market Election for prior tax years).

A U.S. Holder that makes a Mark-to-Market Election usually additionally will regulate such U.S. Holder’s tax foundation within the shares of Frequent Inventory to mirror the quantity included in gross revenue or allowed as a deduction due to such Mark-to-Market Election. As well as, upon a sale or different taxable disposition of shares of Frequent Inventory, a U.S. Holder that makes a Mark-to-Market Election will acknowledge extraordinary revenue or extraordinary loss (to not exceed the surplus, if any, of (a) the quantity included in extraordinary revenue due to such Mark-to-Market Election for prior tax years over (b) the quantity allowed as a deduction due to such Mark-to-Market Election for prior tax years). Losses that exceed this limitation are topic to the foundations usually relevant to losses supplied within the Code and Treasury Laws.

A U.S. Holder makes a Mark-to-Market Election by attaching a accomplished IRS Kind 8621 to a well timed filed United States federal revenue tax return. A Mark-to-Market Election applies to the tax yr through which such Mark-to-Market Election is made and to every subsequent tax yr, until the shares of Frequent Inventory stop to be “marketable inventory” or the IRS consents to revocation of such election. Every U.S. Holder ought to seek the advice of its personal tax advisors relating to the provision of, and process for making, a Mark-to-Market Election.

Though a U.S. Holder could also be eligible to make a Mark-to-Market Election with respect to the shares of Frequent Inventory, no such election could also be made with respect to the inventory of any Subsidiary PFIC {that a} U.S. Holder is handled as proudly owning, as a result of such inventory shouldn’t be marketable. Therefore, the Mark-to-Market Election is not going to be efficient to keep away from the applying of the default guidelines of Part 1291 of the Code described above with respect to deemed tendencies of Subsidiary PFIC inventory or extra distributions from a Subsidiary PFIC to its shareholder.

Different PFIC Guidelines

Beneath Part 1291(f) of the Code, the IRS has issued proposed Treasury Laws that, topic to sure exceptions, would trigger a U.S. Holder that had not made a well timed QEF Election to acknowledge acquire (however not loss) upon sure transfers of shares of Frequent Inventory that may in any other case be tax-deferred (e.g., presents and exchanges pursuant to company reorganizations). Nonetheless, the particular U.S. federal revenue tax penalties to a U.S. Holder might fluctuate based mostly on the style through which shares of Frequent Inventory are transferred.

Sure further hostile guidelines might apply with respect to a U.S. Holder if the Firm is a PFIC, no matter whether or not such U.S. Holder makes a QEF Election. For instance, underneath Part 1298(b)(6) of the Code, a U.S. Holder that makes use of shares of Frequent Inventory as safety for a mortgage will, besides as could also be supplied in Treasury Laws, be handled as having made a taxable disposition of such shares of Frequent Inventory.

Particular guidelines additionally apply to the quantity of overseas tax credit score {that a} U.S. Holder might declare on a distribution from a PFIC. Topic to such particular guidelines, overseas taxes paid with respect to any distribution in respect of inventory in a PFIC are usually eligible for the overseas tax credit score. The foundations regarding distributions by a PFIC and their eligibility for the overseas tax credit score are sophisticated, and a U.S. Holder ought to seek the advice of with its personal tax advisors relating to the provision of the overseas tax credit score with respect to distributions by a PFIC.

The PFIC guidelines are advanced, and every U.S. Holder ought to seek the advice of its personal tax advisors relating to the PFIC guidelines and the way the PFIC guidelines might have an effect on the U.S. federal revenue tax penalties of the acquisition, possession, and disposition of shares of Frequent Inventory.

Possession and Disposition of Shares of Frequent Inventory to the Extent that the Passive International Funding Firm Guidelines Do Not Apply

The next dialogue is topic, in its entirety, to the foundations described above underneath the heading “Passive International Funding Firm Guidelines”.

Distributions on Shares of Frequent Inventory

A U.S. Holder that receives a distribution, together with a constructive distribution, with respect to an share of Frequent Inventory will probably be required to incorporate the quantity of such distribution in gross revenue as a dividend (with out discount for any Canadian revenue tax withheld from such distribution) to the extent of the present or gathered “earnings and income” of the Firm, as computed for U.S. federal revenue tax functions. To the extent {that a} distribution exceeds the present and gathered “earnings and income” of the Firm, such distribution will probably be handled first as a tax-free return of capital to the extent of a U.S. Holder’s tax foundation within the shares of Frequent Inventory and thereafter as acquire from the sale or change of such shares of Frequent Inventory. (See “Sale or Different Taxable Disposition of Shares of Frequent Inventory” beneath). Nonetheless, the Firm doesn’t intend to keep up the calculations of its earnings and income in accordance with U.S. federal revenue tax ideas, and every U.S. Holder due to this fact ought to assume that any distribution by the Firm with respect to the shares of Frequent Inventory will represent extraordinary dividend revenue. Dividends obtained on shares of Frequent Inventory is not going to be eligible for the “dividends obtained deduction”. Topic to relevant limitations and supplied the Firm is eligible for the advantages of the Canada-U.S. Tax Conference or the shares of Frequent Inventory are readily tradable on a United States securities market, dividends paid by the Firm to non-corporate U.S. Holders, together with people, usually will probably be eligible for the preferential tax charges relevant to long-term capital beneficial properties for dividends, supplied sure holding interval and different circumstances are glad, together with that the Firm not be categorised as a PFIC within the tax yr of distribution or within the previous tax yr. If the Firm is a PFIC, a dividend usually will probably be taxed to a U.S. Holder at extraordinary revenue tax charges. The dividend guidelines are advanced, and every U.S. Holder ought to seek the advice of its personal tax advisors relating to the applying of such guidelines.

Sale or Different Taxable Disposition of Shares of Frequent Inventory

Upon the sale or different taxable disposition of shares of Frequent Inventory, a U.S. Holder usually will acknowledge capital acquire or loss in an quantity equal to the distinction between the U.S. greenback worth of money obtained plus the honest market worth of any property obtained and such U.S. Holder’s tax foundation in such shares of Frequent Inventory bought or in any other case disposed of. A U.S. Holder’s tax foundation in shares of Frequent Inventory usually will probably be such U.S. Holder’s U.S. greenback price for such shares of Frequent Inventory. Achieve or loss acknowledged on such sale or different disposition usually will probably be long-term capital acquire or loss if, on the time of the sale or different disposition, the shares of Frequent Inventory have been held for multiple yr.

Preferential tax charges at present apply to long-term capital acquire of a U.S. Holder that’s a person, property, or belief. There are not any preferential tax charges for long-term capital acquire of a U.S. Holder that may be a company. Deductions for capital losses are topic to vital limitations underneath the Code.

Extra Issues

Receipt of International Foreign money

The quantity of any distribution paid to a U.S. Holder in overseas forex, or on the sale, change or different taxable disposition of shares of Frequent Inventory, usually will probably be equal to the U.S. greenback worth of such overseas forex based mostly on the change charge relevant on the date of receipt (no matter whether or not such overseas forex is transformed into U.S. {dollars} at the moment). A U.S. Holder could have a tax foundation within the overseas forex equal to its U.S. greenback worth on the date of receipt. Any U.S. Holder who converts or in any other case disposes of the overseas forex after the date of receipt might have a overseas forex change acquire or loss that may be handled as extraordinary revenue or loss, and usually will probably be U.S. supply revenue or loss for overseas tax credit score functions. Totally different guidelines apply to U.S. Holders who use the accrual technique of tax accounting. Every U.S. Holder ought to seek the advice of its personal U.S. tax advisors relating to the U.S. federal revenue tax penalties of receiving, proudly owning, and disposing of overseas forex.

International Tax Credit score

Topic to the PFIC guidelines mentioned above, a U.S. Holder that pays (whether or not straight or by means of withholding) Canadian revenue tax with respect to dividends paid on the shares of Frequent Inventory usually will probably be entitled, on the election of such U.S. Holder, to obtain both a deduction or a credit score for such Canadian revenue tax. Usually, a credit score will cut back a U.S. Holder’s U.S. federal revenue tax legal responsibility on a dollar-for-dollar foundation, whereas a deduction will cut back a U.S. Holder’s revenue topic to U.S. federal revenue tax. This election is made on a year-by-year foundation and applies to all overseas taxes paid (whether or not straight or by means of withholding) by a U.S. Holder throughout a yr. The overseas tax credit score guidelines are advanced, and contain the applying of guidelines that rely on a U.S. Holder’s specific circumstances. Accordingly, every U.S. Holder ought to seek the advice of its personal U.S. tax advisors relating to the overseas tax credit score guidelines.

Backup Withholding and Data Reporting

Beneath U.S. federal revenue tax legislation and Treasury Laws, sure classes of U.S. Holders should file info returns with respect to their funding in, or involvement in, a overseas company. For instance, U.S. return disclosure obligations (and associated penalties) are imposed on people who’re U.S. Holders that maintain sure specified overseas monetary belongings in extra of sure threshold quantities. The definition of specified overseas monetary belongings consists of not solely monetary accounts maintained in overseas monetary establishments, but additionally, until held in accounts maintained by a monetary establishment, any inventory or safety issued by a non-U.S. particular person, any monetary instrument or contract held for funding that has an issuer or counterparty aside from a U.S. particular person and any curiosity in a non-U.S. entity. U.S. Holders could also be topic to those reporting necessities until their shares of Frequent Inventory are held in an account at sure monetary establishments. Penalties for failure to file sure of those info returns are substantial. U.S. Holders ought to seek the advice of their very own tax advisors relating to the necessities of submitting info returns, together with the requirement to file an IRS Kind 8938.

Funds made throughout the U.S. or by a U.S. payor or U.S. intermediary, of dividends on, and proceeds arising from the sale or different taxable disposition of, shares of Frequent Inventory will usually be topic to info reporting and backup withholding tax on the charge of 24% if a U.S. Holder (a) fails to furnish such U.S. Holder’s appropriate U.S. taxpayer identification quantity (usually on IRS Kind W-9), (b) furnishes an incorrect U.S. taxpayer identification quantity, (c) is notified by the IRS that such U.S. Holder has beforehand did not correctly report gadgets topic to backup withholding tax, or (d) fails to certify, underneath penalty of perjury, that such U.S. Holder has furnished its appropriate U.S. taxpayer identification quantity and that the IRS has not notified such U.S. Holder that it’s topic to backup withholding tax. Nonetheless, sure exempt individuals usually are excluded from these info reporting and backup withholding guidelines. Backup withholding shouldn’t be an extra tax. Any quantities withheld underneath the U.S. backup withholding tax guidelines will probably be allowed as a credit score towards a U.S. Holder’s U.S. federal revenue tax legal responsibility, if any, or will probably be refunded, if such U.S. Holder furnishes required info to the IRS in a well timed method.

The dialogue of reporting necessities set forth above shouldn’t be meant to represent an exhaustive description of all reporting necessities which will apply to a U.S. Holder. A failure to fulfill sure reporting necessities might end in an extension of the time interval throughout which the IRS can assess a tax, and underneath sure circumstances, such an extension might apply to assessments of quantities unrelated to any unhappy reporting requirement. Every U.S. Holder ought to seek the advice of its personal tax advisor relating to the data reporting and backup withholding guidelines.

F. Dividends and Paying Brokers

Not relevant.

G. Assertion by Specialists

Not relevant.

H. Paperwork on Show

Extra info regarding the Firm could also be discovered on SEDAR, the system for digital doc evaluation and retrieval, at www.sedar.comand on EDGAR, the SEC’s digital information gathering, evaluation and retrieval database, at www.sec.gov.

Extra info, together with administrators’ and officers’ remuneration and indebtedness, principal holders of the Firm’s securities and securities approved for issuance underneath fairness compensation plans, if relevant, is contained within the Firm’s info round for its most up-to-date annual assembly of shareholders.

Extra monetary info is supplied within the Firm’s Monetary Statements and Administration’s Dialogue and Evaluation for the yr ended August 31, 2021.

Copies of the above could also be obtained, on the Firm’s web site www.platinumgroupmetals.internet; on the SEDAR web site at www.sedar.com; on the SEC’s EDGAR web site at www.sec.gov; or by calling the Firm’s Company Secretary at 604-899-5450.

I. Subsidiary Data

Not relevant.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign money Danger

Whereas the Firm’s monetary statements are introduced in U.S. {dollars}, the Firm’s useful forex is the Canadian Greenback, the useful forex of the Firm’s South African subsidiaries is the Rand, and a good portion of the Firm’s and its subsidiaries’ bills are incurred in Canadian {Dollars} and South African Rand. Due to this fact, the Firm is topic to forex threat with respect to adjustments in change charges among the many U.S. Greenback, Canadian Greenback and South African Rand. The Firm has not entered into any agreements or bought any devices to hedge its forex dangers. A hypothetical 10% strengthening/weakening within the U.S. Greenback versus the Canadian Greenback and Rand would have given rise to a lower/improve in complete loss for the yr ended August 31, 2021 of roughly $3.6 million (2020 – $3.5 million). For additional info, see notice 16 to the Firm’s audited consolidated monetary statements listed in Merchandise 18 hereof and filed as a part of this Annual Report.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not relevant.

PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

Not relevant.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

Sure restrictions on the fee of dividends are described underneath Merchandise 8.A.

ITEM 15. CONTROLS AND PROCEDURES

The Firm maintains a set of disclosure controls and procedures designed to make sure that info required to be disclosed in filings made pursuant to each SEC and Canadian Securities Directors necessities are recorded, processed, summarized and reported within the method specified by the related securities legal guidelines relevant to the Firm. Disclosure controls and procedures embrace, with out limitation, controls and procedures designed to make sure that info required to be disclosed by an issuer within the experiences that it information or submits underneath the relevant securities laws is gathered and communicated to the issuer’s administration, together with its principal government and principal monetary officers, or individuals performing related features, as acceptable to permit well timed selections relating to required disclosure. The Interim Chief Govt Officer and the Interim Chief Monetary Officer have evaluated the Firm’s disclosure controls and procedures as at August 31, 2021 by means of inquiry, evaluation and testing, in addition to by drawing upon their very own related expertise. The Interim Chief Govt Officer and the Interim Chief Monetary Officer have concluded that the Firm’s disclosure controls and procedures had been efficient as at August 31, 2021.

The Firm’s administration, together with the Chief Govt Officer and the Chief Monetary Officer, is liable for establishing and sustaining sufficient inside management over monetary reporting, and evaluating the effectiveness of the Firm’s inside management over monetary reporting as at every fiscal yr finish. Administration has used the framework in Inside Management – Built-in Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Fee to judge the effectiveness of the Firm’s inside management over monetary reporting as at August 31, 2021. Primarily based on this analysis, administration has concluded that the Firm’s inside controls over monetary reporting was efficient as at August 31, 2021.

Attestation Report of Registered Public Accounting Agency

The attestation report required underneath this Merchandise 15 is about forth beneath in Merchandise 18. – Monetary Statements underneath the caption “Report of Unbiased Registered Public Accounting Agency.”

Modifications in Inside Controls over Monetary Reporting

Administration is liable for establishing and sustaining sufficient inside controls over monetary reporting. Any system of inside management over monetary reporting, regardless of how effectively designed, has inherent limitations. Due to this fact, even these programs decided to be efficient can present solely cheap assurance with respect to monetary assertion preparation and presentation. There was no change within the Firm’s inside management over monetary reporting throughout the yr ended August 31, 2021 that has materially affected, or is fairly more likely to materially have an effect on, our inside management over monetary reporting.

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

The Board has decided that Diana Walters is a monetary skilled on the Audit Committee. Ms. Walters has labored on the pure assets sector as an fairness investor, funding banker and in working roles and has beforehand served because the audit committee chair of AMR. As well as, she gained intensive funding expertise with each debt and fairness by means of management roles at Credit score Suisse, HSBC and different companies. Ms. Walters is impartial throughout the which means of NYSE American itemizing requirements.

ITEM 16B. CODE OF ETHICS

The Firm has adopted the Code of Conduct that applies to all of its administrators, officers and staff, together with the Interim Chief Govt Officer and Interim Chief Monetary Officer. The Code of Conduct consists of provisions overlaying conflicts of curiosity, moral conduct, compliance with relevant authorities legal guidelines, guidelines and rules, disclosure in experiences and paperwork filed with, or submitted to, the SEC, reporting of violations of the Code of Conduct and accountability for adherence to the Code of Conduct. A replica of the Code of Conduct could also be discovered on the Firm’s web site, at www.platinumgroupmetals.internet.

The Firm has not granted any waiver, together with any implicit waiver, from a provision of the Code throughout the Firm’s most lately accomplished fiscal yr ending August 31, 2021.

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Exterior Auditor Service Charges (By Class)

The mixture charges billed by the Firm’s present impartial auditor, PricewaterhouseCoopers LLP, throughout the fiscal years ended August 31, 2021 and 2020 are set forth beneath in $:

Yr ended August 31,
2021

($)
Yr ended August 31,
2020

($)
Audit Charges 284,492 255,400
Audit-Associated Charges(1) 68,000 76,480
Tax Charges(2) Nil Nil
All Different Charges(3) Nil Nil
Complete 352,492 331,880

Notes:

(1) The mixture charges billed for assurance and associated companies which are fairly associated to the efficiency of the audit or evaluation of the Firm’s monetary statements, which aren’t included underneath the heading “Audit Charges”.

(2) The mixture charges billed for skilled companies rendered for tax compliance, tax recommendation and tax planning, together with restructuring recommendation.

(3) The mixture charges billed for services and products aside from as set out underneath the headings “Audit Charges”, “Audit Associated Charges” and “Tax Charges”.

Pre-Approval Insurance policies

The Audit Committee’s pre-approval insurance policies are described underneath Merchandise 6.C. Board Practices.

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not relevant.

ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

There have been no purchases of fairness securities by us or by any affiliated purchaser throughout the interval coated by this Annual Report.

ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

None.

ITEM 16G. CORPORATE GOVERNANCE

The Frequent Shares are listed for buying and selling on the NYSE American. Part 110 of the NYSE American Firm Information permits the NYSE American to think about the legal guidelines, customs and practices of overseas issuers in stress-free sure NYSE American itemizing standards, and to grant exemptions from NYSE American itemizing standards based mostly on these concerns. An organization looking for aid underneath these provisions is required to supply written certification from impartial native counsel that the non-complying follow shouldn’t be prohibited by house nation legislation. An outline of the numerous methods through which the Firm’s governance practices differ from these adopted by home corporations pursuant to NYSE American requirements is as follows:

Shareholder Assembly Quorum Requirement: The NYSE American minimal quorum requirement for a shareholder assembly is one-third of the excellent shares of widespread inventory. As well as, an organization listed on NYSE American is required to state its quorum requirement in its bylaws. The Firm’s quorum requirement is about forth in its articles. The Firm’s articles present {that a} quorum for the transaction of enterprise at any shareholders’ conferences is 2 individuals who’re, or who signify by proxy, shareholders who, within the combination, maintain a minimum of 5% of the issued shares entitled to be voted thereat. Nonetheless, if there is just one shareholder entitled to vote at a gathering of shareholders, the quorum is one one that is, or who represents by proxy, that shareholder. If inside one-half hour from the time set for the holding of a shareholders’ assembly, a quorum shouldn’t be current, a gathering convened by requisition of the shareholders shall be dissolved. In every other case a gathering shall stand adjourned to the identical day within the subsequent week on the identical time and place; and, if a quorum shouldn’t be current inside one-half hour from the time appointed for the adjourned assembly, the individuals current and being, or representing by proxy, a number of shareholders entitled to attend and vote at such assembly shall represent a quorum.

Proxy Supply Requirement: NYSE American requires the solicitation of proxies and supply of proxy statements for all shareholder conferences and requires that these proxies be solicited pursuant to a proxy assertion that conforms to the proxy guidelines of the U.S. Securities and Change Fee. The Firm is a overseas personal issuer as outlined in Rule 3b-4 underneath the U.S. Securities Change Act of 1934, as amended, and the fairness securities of the Firm are accordingly exempt from the proxy guidelines set forth in Sections 14(a), 14(b), 14(c) and 14(f) of such Act. The Firm solicits proxies in accordance with relevant guidelines and rules in Canada.

Shareholder Approval Necessities: NYSE American requires a listed firm to acquire the approval of its shareholders for sure varieties of securities issuances, together with personal placements which will outcome within the issuance of Frequent Shares (or securities convertible into Frequent Shares) equal to twenty% or extra of presently excellent shares for lower than the larger of ebook or market worth of the shares. Normally, there isn’t a such requirement underneath British Columbia legislation or underneath the insurance policies of the TSX until the transaction: materially impacts management of the listed issuer; gives consideration to insiders in combination of 10% or larger of the market capitalization of the listed issuer, throughout any six-month interval, and has not been negotiated at arm’s size; or the transaction is a personal placement for an combination variety of listed securities issuable larger than 25% of the variety of securities of the listed issuer that are excellent, on a non-diluted foundation, previous to the date of closing of the transaction the place the worth per safety is lower than the market worth (as such time period is outlined underneath TSX insurance policies) however throughout the reductions allowable underneath TSX insurance policies. The Firm will search a waiver from NYSE American’s shareholder approval necessities in circumstances the place the securities issuance doesn’t set off such a requirement underneath British Columbia legislation or underneath the insurance policies of the TSX.

The foregoing is in step with the legal guidelines, customs and practices in Canada.

ITEM 16H. MINE SAFETY DISCLOSURE

The Firm was not the operator and didn’t have a subsidiary that was an operator of a coal or different mine, as outlined in Part 3 of the Federal Mine Security and Well being Act of 1977, in the USA throughout the yr ended August 31, 2021.

ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not relevant.

PART III

ITEM 17.FINANCIAL STATEMENTS

Not relevant

ITEM 18. FINANCIAL STATEMENTS

Following are the Firm’s Consolidated Monetary Statements for the yr ended August 31, 2021.

Platinum Group Metals Ltd.

Consolidated Monetary Statements

(all quantities in 1000’s of United States {Dollars} until in any other case famous)

For the yr ended August 31, 2021

Filed: November 24, 2021

Administration’s Duty for Consolidated Monetary Statements

The accompanying Consolidated Monetary Statements of Platinum Group Metals Ltd (the “Firm”) are the duty of administration. The Consolidated Monetary Statements have been ready by administration in accordance with Worldwide Monetary Reporting Requirements (“IFRS”) as issued by the Worldwide Accounting Requirements Board (“IASB”) and embrace sure estimates that mirror administration’s finest judgments.

The Firm’s Board of Administrators has accredited the data contained within the Consolidated Monetary Statements. The Board of Administrators fulfills its tasks relating to the Consolidated Monetary Statements primarily by means of its Audit Committee, which has a written mandate that complies with present necessities of Canadian securities laws, United States securities laws, and the USA Sarbanes-Oxley Act of 2002. The Audit Committee meets a minimum of on a quarterly foundation.

Administration’s Annual Report on Inside Management over Monetary Reporting

Administration is liable for establishing and sustaining sufficient inside management over monetary reporting. Inside management over monetary reporting is a course of designed to supply cheap assurance relating to the reliability of monetary reporting and the preparation of the Consolidated Monetary Statements for exterior reporting functions in accordance with IFRS as issued by the IASB.

Inside management over monetary reporting, regardless of how effectively designed, has inherent limitations. Additionally, projections of any analysis of effectiveness to future durations are topic to the chance that controls might turn out to be insufficient due to adjustments in circumstances, or that the diploma of compliance with the insurance policies or procedures might deteriorate.

Administration has assessed the effectiveness of the Firm’s inside management over monetary reporting as at August 31, 2021. In making its evaluation, administration has used the factors established in Inside Management – Built-in Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Fee (“COSO”) to judge the Firm’s inside management over monetary reporting. Primarily based on this evaluation, administration has concluded that the Firm’s inside management over monetary reporting was efficient as at that date.

The effectiveness of the Firm’s inside management over monetary reporting as at August 31, 2021 has been audited by Value Waterhouse Coopers LLP, the Firm’s impartial registered public accounting agency, as acknowledged of their report, which seems herein.

/s/ Greg Blair
Greg Blair
Chief Monetary Officer
/s/ Frank Hallam
Frank Hallam,
President, Chief Govt Officer

Report of Unbiased Registered Public Accounting Agency

To the Shareholders and Board of Administrators of Platinum Group Metals Ltd.

Opinions on the Monetary Statements and Inside Management over Monetary Reporting

We’ve got audited the accompanying consolidated statements of monetary place of Platinum Group Metals Ltd. and its subsidiaries (collectively, the Firm) as of August 31, 2021 and 2020, and the associated consolidated statements of loss and complete loss, adjustments in fairness and money flows for every of the three years within the interval ended August 31, 2021, together with the associated notes (collectively known as the consolidated monetary statements). We even have audited the Firm’s inside management over monetary reporting as of August 31, 2021, based mostly on standards established in Inside Management – Built-in Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Fee (COSO).

In our opinion, the consolidated monetary statements referred to above current pretty, in all materials respects, the monetary place of the Firm as of August 31, 2021 and 2020, and its monetary efficiency and its money flows for every of the three years within the interval ended August 31, 2021 in conformity with Worldwide Monetary Reporting Requirements as issued by the Worldwide Accounting Requirements Board. Additionally in our opinion, the Firm maintained, in all materials respects, efficient inside management over monetary reporting as of August 31, 2021, based mostly on standards established in Inside Management – Built-in Framework (2013) issued by the COSO.

Substantial Doubt In regards to the Firm’s Capacity to Proceed as a Going Concern

The accompanying consolidated monetary statements have been ready assuming that the Firm will proceed as a going concern. As mentioned in Observe 1 to the consolidated monetary statements, the Firm has suffered recurring losses from operations and has a adverse working capital and money outflows from working actions that elevate substantial doubt about its means to proceed as a going concern. Administration’s plans in regard to those issues are additionally described in Observe 1. The consolidated monetary statements don’t embrace any changes which may outcome from the end result of this uncertainty.

Change in Accounting Precept

As mentioned in Observe 2(s) to the consolidated monetary statements, the Firm modified the style through which it accounts for monetary liabilities in 2018.

Foundation for Opinions

The Firm’s administration is liable for these consolidated monetary statements, for sustaining efficient inside management over monetary reporting, and for its evaluation of the effectiveness of inside management over monetary reporting, included within the accompanying Administration’s Annual Report on Inside Management over Monetary Reporting. Our duty is to specific opinions on the Firm’s consolidated monetary statements and on the Firm’s inside management over monetary reporting based mostly on our audits. We’re a public accounting agency registered with the Public Firm Accounting Oversight Board (United States) (PCAOB) and are required to be impartial with respect to the Firm in accordance with the U.S. federal securities legal guidelines and the relevant guidelines and rules of the Securities and Change Fee and the PCAOB.

PricewaterhouseCoopers LLP

PricewaterhouseCoopers Place, 250 Howe Road, Suite 1400, Vancouver, British Columbia, Canada V6C 3S7 T: +1 604 806 7000, F: +1 604 806 7806

“PwC” refers to PricewaterhouseCoopers LLP, an Ontario restricted legal responsibility partnership.

We performed our audits in accordance with the requirements of the PCAOB. These requirements require that we plan and carry out the audits to acquire cheap assurance about whether or not the consolidated monetary statements are free of fabric misstatement, whether or not on account of error or fraud, and whether or not efficient inside management over monetary reporting was maintained in all materials respects.

Our audits of the consolidated monetary statements included performing procedures to evaluate the dangers of fabric misstatement of the consolidated monetary statements, whether or not on account of error or fraud, and performing procedures that reply to these dangers. Such procedures included analyzing, on a take a look at foundation, proof relating to the quantities and disclosures within the consolidated monetary statements. Our audits additionally included evaluating the accounting ideas used and vital estimates made by administration, in addition to evaluating the general presentation of the consolidated monetary statements. Our audit of inside management over monetary reporting included acquiring an understanding of inside management over monetary reporting, assessing the chance {that a} materials weak spot exists, and testing and evaluating the design and working effectiveness of inside management based mostly on the assessed threat. Our audits additionally included performing such different procedures as we thought-about crucial within the circumstances. We consider that our audits present an inexpensive foundation for our opinions.

Definition and Limitations of Inside Management over Monetary Reporting

An organization’s inside management over monetary reporting is a course of designed to supply cheap assurance relating to the reliability of monetary reporting and the preparation of monetary statements for exterior functions in accordance with usually accepted accounting ideas. An organization’s inside management over monetary reporting consists of these insurance policies and procedures that (i) pertain to the upkeep of data that, in cheap element, precisely and pretty mirror the transactions and tendencies of the belongings of the corporate; (ii) present cheap assurance that transactions are recorded as crucial to allow preparation of monetary statements in accordance with usually accepted accounting ideas, and that receipts and expenditures of the corporate are being made solely in accordance with authorizations of administration and administrators of the corporate; and (iii) present cheap assurance relating to prevention or well timed detection of unauthorized acquisition, use, or disposition of the corporate’s belongings that would have a fabric impact on the monetary statements.

Due to its inherent limitations, inside management over monetary reporting might not forestall or detect misstatements. Additionally, projections of any analysis of effectiveness to future durations are topic to the chance that controls might turn out to be insufficient due to adjustments in circumstances, or that the diploma of compliance with the insurance policies or procedures might deteriorate.

Vital Audit Issues

The vital audit matter communicated beneath is a matter arising from the present interval audit of the consolidated monetary statements that was communicated or required to be communicated to the audit committee and that (i) pertains to accounts or disclosures which are materials to the consolidated monetary statements and (ii) concerned our particularly difficult, subjective, or advanced judgments. The communication of vital audit issues doesn’t alter in any approach our opinion on the consolidated monetary statements, taken as an entire, and we aren’t, by speaking the vital audit matter beneath, offering a separate opinion on the vital audit matter or on the accounts or disclosures to which it relates.

Willpower of economic viability and technical feasibility and impairment evaluation of the Waterberg Mission (the Mission).

As described in Notes 2, 3 and 4 to the consolidated monetary statements, the Mission had a carrying worth of $39.6 million as of February 28, 2021 which was reclassified from exploration and analysis belongings to mineral properties. Administration concluded that the technical feasibility and industrial viability of the Mission had been demonstrated throughout the second quarter of 2021 because the mining proper was granted for the Mission. The willpower of technical feasibility and industrial viability of the Mission required vital judgment by administration and took under consideration elements such because the outcomes of the definitive feasibility research and the standing of the granting of the mining proper. Previous to the reclassification, exploration and analysis belongings are assessed for impairment whereby the carrying worth of the Mission was in comparison with its recoverable quantity and administration decided that no impairment cost was required. The recoverable quantity was decided because the honest worth much less price of disposal (FVLCD) utilizing a reduced money movement mannequin. Figuring out the FVLCD required administration to make estimates and assumptions with respect to portions of ore reserves and mineral assets, restoration charges, forecast costs of commodities, change charges, future manufacturing and gross sales volumes, future manufacturing prices, capital and reclamation prices and the low cost charge. Portions of ore reserves and mineral assets, restoration charges, future manufacturing and gross sales volumes in addition to future manufacturing prices, capital and reclamation prices are based mostly on info compiled by acceptable certified individuals (administration’s specialists).

The principal concerns for our willpower that performing procedures regarding the willpower of economic viability and technical feasibility and impairment evaluation of the Mission is a vital audit matter are (i) the numerous judgment required by administration within the willpower of economic viability and technical feasibility considering elements such because the outcomes of the definitive feasibility research and the standing of the granting of the mining proper; (ii) the numerous judgment required by administration, together with the usage of administration’s specialists, whereas figuring out the recoverable quantity of the Mission, together with the usage of vital assumptions comparable to portions of ore reserves and mineral assets, restoration charges, forecast costs of commodities, change charges, future manufacturing and gross sales volumes, future manufacturing prices, capital and reclamation prices and the low cost charge; (iii) the excessive diploma of auditor judgment, subjectivity, and energy in performing procedures regarding the willpower of economic viability and technical feasibility of the Mission and associated impairment; and (iv) the audit effort concerned the usage of professionals with specialised talent and information.

Addressing the matter concerned performing procedures and evaluating audit proof in reference to forming our total opinion on the consolidated monetary statements. These procedures included testing the effectiveness of controls regarding administration’s evaluation for figuring out the industrial viability and technical feasibility and impairment evaluation of the Mission, together with controls over the willpower of the recoverable quantity of the Mission. These procedures additionally included, amongst others, (i) evaluating the elements utilized by administration to find out industrial viability and technical feasibility together with the outcomes of the definitive feasibility research and the standing of the granting of the mining proper; (ii) testing administration’s course of for figuring out the recoverable quantity of the Mission; (iii) evaluating the appropriateness of the discounted money movement mannequin; (iv) testing the completeness and accuracy of underlying information used within the mannequin; and (v) evaluating the numerous assumptions utilized by administration, associated to portions of ore reserves and mineral assets, restoration charges, forecast costs of commodities, change charges, future manufacturing and gross sales volumes, future manufacturing prices, capital and reclamation prices and the low cost charge. Evaluating administration’s assumptions with respect to forecast costs of commodities and change charges concerned evaluating whether or not these assumptions had been cheap contemplating the consistency with exterior market and business information. The work of administration’s specialists was utilized in performing the procedures to judge the reasonableness of portions of ore reserves and mineral assets, restoration charges, future manufacturing and gross sales volumes and future manufacturing prices and capital and reclamation prices. As a foundation for utilizing this work, administration’s specialists’ {qualifications} had been understood and the Firm’s relationship with administration’s specialists was assessed. The procedures carried out additionally included analysis of the strategies and assumptions utilized by administration’s specialists, checks of the info utilized by the administration’s specialists, and an analysis of administration’s specialists’ findings. Professionals with specialised talent and information had been used to help in evaluating appropriateness of the discounted money movement mannequin and the reasonableness of the low cost charge.

/s/PricewaterhouseCoopers LLP

Chartered Skilled Accountants

Vancouver, Canada

November 24, 2021

We’ve got served because the Firm’s auditor since 2007.

PLATINUM GROUP METALS LTD.

Consolidated Statements of Monetary Place

(in 1000’s of United States {Dollars})

August 31,
2021
August 31,
2020
ASSETS
Present
Money $ 6,059 $ 1,308
ATM Providing proceeds receivable (Observe 8) 213
Quantities receivable 263 218
Pay as you go bills 71 385
Complete present belongings 6,606 1,911
Efficiency bonds and different belongings 170 108
Mineral Properties and Exploration Belongings (Observe 4) 43,953 34,939
Property, plant and gear 470 457
Complete belongings $ 51,199 $ 37,415
LIABILITIES
Present
Accounts payable and different liabilities $ 2,463 $ 1,412
Mortgage payable (Observe 6) 9,088
Convertible notes (Observe 7) 18,716
Financial institution advisory charges payable (Observe 11) 2,890
Complete present liabilities 30,267 4,302
Mortgage payable (Observe 6) 19,337
Convertible notes (Observe 7) 17,212
Asset Retirement Obligation 106
Share based mostly liabilities 1,223 509
Lease legal responsibility 130 198
Complete liabilities $ 31,726 $ 41,558
SHAREHOLDERS’ EQUITY
Share capital (Observe 8) $ 890,783 $ 861,890
Contributed surplus 30,102 28,278
Collected different complete loss (159,226 ) (164,124 )
Deficit (759,771 ) (746,313 )
Complete shareholders’ fairness (deficit) attributable to shareholders of Platinum Group Metals Ltd. 1,888 (20,269 )
Non-controlling curiosity 17,585 16,126
Complete shareholders’ fairness (deficit) 19,473 (4,143 )
Complete liabilities and shareholders’ fairness $ 51,199 $ 37,415

Going Concern (Observe 1)

Contingencies and Commitments (Observe 11)

Permitted by the Board of Administrators and approved for challenge on November 24, 2021

/s/ Stuart Harshaw

/s/ Diana Walters

Stuart Harshaw, Director

Diana Walters, Director

The accompanying notes are an integral a part of the consolidated monetary statements.

2

PLATINUM GROUP METALS LTD.

Consolidated Statements of Loss and Complete (Revenue) Loss

(in 1000’s of United States {Dollars} besides share and per share information)

Yr Ended
August 31,
2021
August 31,
2020
August 31,
2019
Bills
Normal and administrative (Observe 14) $ 5,121 $ 3,726 $ 4,677
Curiosity 5,066 5,493 8,355
International change (acquire) loss (698 ) (740 ) 1,006
Share of three way partnership expenditures – Lion Battery (Observe 5) 343 369 595
Inventory compensation expense (Observe 8) 3,184 1,569 787
Closure, care and upkeep prices (restoration) (509 )
$ 13,016 $ 10,417 $ 14,911
Different Revenue
Loss (Achieve) on honest worth derivatives & different devices (Observe 7) $ (52 ) $ (3,203 ) $ 2,732
Loss on the partial settlement of the Sprott Facility 189
Achieve on Sprott extension (48 )
Achieve on honest worth of marketable securities (609 )
Web finance revenue (97 ) (158 ) (364 )
Loss for the yr earlier than revenue taxes $ 13,008 $ 7,056 $ 16,670
Deferred revenue tax expense 55 72 106
Loss for the yr 13,063 7,128 16,776
Objects that could be subsequently reclassified to internet loss:
Foreign money translation adjustment (4,898 ) 4,487 (105 )

Complete loss for the interval

$ 8,165 $ 11,615 $ 16,671
Web Loss attributable to:
Shareholders of Platinum Group Metals Ltd. $ 13,063 $ 7,128 $ 16,776
Non-controlling pursuits
$ 13,063 $ 7,128 $ 16,776
Complete (revenue) loss attributable to:
Shareholders of Platinum Group Metals Ltd. $ 8,165 $ 11,615 $ 16,671
Non-controlling pursuits
$ 8,165 $ 11,615 $ 16,671
Primary and diluted loss per widespread share $ 0.18 $ 0.11 $ 0.52
Weighted common variety of widespread shares excellent:
Primary and diluted 71,912,296 61,537,004 32,534,646

The accompanying notes are an integral a part of the consolidated monetary statements.

3

PLATINUM GROUP METALS LTD.

Consolidated Statements of Modifications in Fairness

(in 1000’s of United States {Dollars}, besides # of Frequent Shares)

# of Frequent
Shares
Share
Capital
Contributed
Surplus
Collected
Different
Complete
Revenue (loss)
Deficit Attributable to
Shareholders
of the Dad or mum
Firm
Non-
Controlling
Curiosity
Complete
Stability August 31, 2018 29,103,411 $ 818,454 $ 25,950 $ (159,742 ) $ (715,344 ) $ (30,682 ) $ 11,152 $ (19,530 )
IFRS 9 transition adoption on September 1, 2018 (5,781 ) (5,781 ) (5,781 )
Stability September 1, 2018 29,103,411 $ 818,454 $ 25,950 $ (159,742 ) $ (721,125 ) $ (36,463 ) $ 11,152 $ (25,311 )
Inventory based mostly compensation 827 827 827
Shares issued for curiosity on Convertible Notes 545,721 687 687 687
Share issuance – financing 27,077,885 35,024 35,024 35,024
Share issuance prices (1,876 ) (1,876 ) (1,876 )
Warrants exercised 1,048,770 1,981 1,981 1,981
Shares issued for mortgage facility 800,000 1,000 1,000 1,000
Contributions of Waterberg JV Co. (1,117 ) (1,117 ) 4,299 3,182
International forex translation adjustment 105 105 105
Web loss for the yr (16,776 ) (16,776 ) (16,776 )
Stability August 31, 2019 58,575,787 $ 855,270 $ 26,777 $ (159,637 ) $ (739,018 ) $ (16,608 ) $ 15,451 $ (1,157 )
Inventory based mostly compensation 1,501 1,501 1,501
Shares issued for curiosity on Convertible Notes 1,043,939 1,374 1,374 1,374
Share issuance – financing 4,447,307 5,705 5,705 5,705
Share issuance prices (514 ) (514 ) (514 )
Warrants exercised 28,040 55 55 55
Contributions of Waterberg JV Co. (167 ) (167 ) 675 508
International forex translation adjustment (4,487 ) (4,487 ) (4,487 )
Web loss for the interval (7,128 ) (7,128 ) (7,128 )
Stability August 31, 2020 64,095,073 861,890 28,278 (164,124 ) (746,313 ) (20,269 ) 16,126 (4,143 )
Inventory based mostly compensation 2,921 2,921 2,921
Restricted Share Models redeemed 121,668 189 (281 ) (92 ) (92 )
Share choices exercised 843,543 2,301 (816 ) 1,485 1,485
Share issuance – financing 10,210,842 27,949 27,949 27,949
Share issuance prices (1,546 ) (1,546 ) (1,546 )
Contributions of Waterberg JV Co. (395 ) (395 ) 1,459 1,064
International forex translation adjustment 4,898 4,898 4,898
Web loss for the interval (13,063 ) (13,063 ) (13,063 )
Stability August 31, 2021 75,271,126 890,783 30,102 (159,226 ) (759,771 ) 1,888 17,585 19,473

The accompanying notes are an integral a part of the consolidated monetary statements.

4

PLATINUM GROUP METALS LTD.

Consolidated Statements of Money Flows

(in 1000’s of United States {Dollars})

For the yr ended
August 31,
2021
August 31,
2020
August 31,
2019
OPERATING ACTIVITIES
Loss for the yr $ (13,063 ) $ (7,128 ) $ (16,776 )
Add gadgets not affecting money / changes:
Depreciation 122 177 235
Curiosity expense 5,066 5,493 8,355
Unrealized overseas change (loss) (1058 ) 128 13
Loss (Achieve) on honest worth of derivatives and different devices (52 ) (3,203 ) 2,732
Achieve on marketable securities (609 )
Loss on partial settlement of Sprott Facility (189 )
Achieve on extension of Sprott Facility 348
Deferred tax expense 55 72 106
Inventory compensation expense 3,184 1,569 787
Share of three way partnership expenditures 343 369 595
Administrators’ charges paid in deferred share models 152 142 112
Web change in non-cash working capital (Observe 12) (2,962 ) (739 ) (502 )
$ (8,054 ) $ (3,120 ) $ (4,952 )
FINANCING ACTIVITIES
Share issuance – warrant train $ $ 48 $ 1,783
Proceeds from issuance of fairness 27,949 5,705 25,024
Fairness issuance prices (1,546 ) (514 ) (1,876 )
Money obtained from possibility workouts 1,485
Sprott Facility principal repayments (10,600 )
Sprott Facility curiosity paid (1,589 ) (2,237 ) (73 )
Convertible notice curiosity paid (1,374 ) (687 )
Money proceeds from debt 20,000
Prices related to debt (318 ) (40 ) (228 )
Lease funds made (91 ) (66 )
Compensation of Liberty debt and manufacturing fee termination (41,023 )
Share unit money settlement (151 )
Money obtained from Waterberg companions 1,829 1,697 3,522
$ 15,594 $ 4,593 $ 6,442
INVESTING ACTIVITIES
Efficiency bonds $ (43 ) $ (67 ) $ 19
Funding in Lion Battery (350 ) (350 ) (554 )
Money obtained from the sale of marketable securities 7,951
Expenditures from restricted money (Waterberg) 126
Expenditures incurred on Waterberg Mission (2,415 ) (4,953 ) (6,990 )
$ (2,808 ) $ (5,370 ) $ 552
Web improve (lower) in money 4,732 (3,897 ) 2,042
Impact of overseas change on money 19 (345 ) 491
Money, starting of yr 1,308 5,550 3,017
Money finish of yr $ 6,059 $ 1,308 $ 5,550
The accompanying notes are an integral a part of the consolidated monetary statements. 5

PLATINUM GROUP METALS LTD.

Consolidated Statements of Money Flows

(in 1000’s of United States {Dollars})

1. NATURE OF OPERATIONS AND GOING CONCERN

Platinum Group Metals Ltd. (the “Firm“) is a British Columbia, Canada, firm shaped by amalgamation on February 18, 2002. The Firm’s shares are publicly listed on the Toronto Inventory Change in Canada and the NYSE American LLC (“NYSE American“) in the USA. The Firm’s tackle is Suite 838-1100 Melville Road, Vancouver, British Columbia, V6E-4A6.

The Firm is a growth stage firm conducting work on mineral properties it has staked or acquired by the use of possibility agreements within the Republic of South Africa.

These monetary statements consolidate the accounts of the Firm and its subsidiaries. Lion Battery Applied sciences Inc. (“Lion“) is accounted for utilizing the fairness technique because the Firm collectively controls Lion regardless of proudly owning the vast majority of Lion’s shares. The Firm’s subsidiaries, associates and joint ventures as at August 31, 2021 are as follows:

Place of
incorporation

Proportion of possession
curiosity and voting energy held

Identify of subsidiary

Principal exercise

and
operation

August 31,
2021
August 31,
2020
Platinum Group Metals (RSA) (Pty) Ltd. Improvement South Africa 100.0% 100.0%
Mnombo Wethu Consultants (Pty) Restricted(1) Improvement South Africa 49.9% 49.9%
Waterberg JV Sources (Pty) Ltd.(1),(2) Improvement South Africa 37.05% 37.05%
Lion Battery Applied sciences Inc. Analysis Canada 53.70% 55.00%
Notes:
(1) The Firm controls and consolidates Mnombo Wethu Consultants (Pty) Restricted (“Mnombo“) and Waterberg JV Sources (Pty) Ltd. (“Waterberg JV Co.“) for accounting functions.
(2) Efficient possession of Waterberg JV Co. is 63.05% when Mnombo’s possession portion is mixed with Platinum Group Metals (RSA) (Pty) Ltd. (“PTM RSA“) possession portion.

These consolidated monetary statements have been ready in accordance with Worldwide Monetary Reporting Requirements relevant to a going concern which contemplates that the Firm will have the ability to understand its belongings and settle its liabilities within the regular course as they arrive due for a minimum of twelve months from the date of submitting these consolidated monetary statements. Through the yr ended August 31, 2021, the Firm incurred a lack of $13.1 million, used money of $8.1 million in working actions and at yr finish had money of $6.1 million and a working capital deficiency of $23.6 million. Included in present liabilities was $9.4 million pursuant to the Sprott Facility (as outlined beneath) in addition to convertible notes ($19.99 million) that mature on July 1, 2022. Through the yr the Firm exercised its possibility to increase the maturity date on $10 million of the Sprott Facility to August 14, 2022 with earlier funds permitted. As of the date of submitting these consolidated monetary statements the Sprott Facility principal steadiness has been paid right down to an quantity of $3.6 million. The Firm at present has restricted monetary assets and has no sources of working revenue.

In March 2020, the World Well being Group declared the outbreak of COVID-19 Coronavirus a world pandemic. The pandemic has continued in waves till the current time. Associated adverse public well being developments have adversely affected workforces, economies and monetary markets globally, leading to a interval of financial uncertainty. Provide chain disruptions attributable to the pandemic have negatively affected world automotive manufacturing, leading to a downturn for the costs of platinum, palladium and rhodium. Though the Firm has in a roundabout way skilled a fabric hostile impact because of the pandemic up to now, it’s not attainable for the Firm to foretell the period or magnitude of the attainable hostile outcomes of the pandemic and its results on the Firm’s enterprise or means to boost funds.

The Firm’s means to proceed operations within the regular course of enterprise will due to this fact rely on its means to safe further funding by strategies that would embrace debt refinancing, fairness financing, the sale of belongings and strategic partnerships. Administration believes the Firm will have the ability to safe additional funding as required though there could be no assurance that these efforts will probably be profitable. These elements give rise to materials uncertainties leading to substantial doubt as to the flexibility of the Firm to proceed to satisfy its obligations as they arrive due and therefore, the final word appropriateness of the usage of accounting ideas relevant to a going concern.

PLATINUM GROUP METALS LTD.
Notes to the Consolidated Monetary Statements
(in 1000’s of United States {Dollars} until in any other case acknowledged besides share and per share information)

These consolidated monetary statements don’t embrace changes or disclosures which will outcome ought to the Firm not have the ability to proceed as a going concern. If the going concern assumption weren’t acceptable for these consolidated monetary statements, then changes can be required to the carrying worth of belongings and liabilities, the bills, the reported complete loss and steadiness sheet classifications used that may be crucial if the Firm had been unable to comprehend its belongings and settle its liabilities as a going concern within the regular course of operations. These changes could possibly be materials.

2.BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

These consolidated monetary statements have been ready in accordance with Worldwide Monetary Reporting Requirements (“IFRS“) as issued by the Worldwide Accounting Requirements Board. The consolidated monetary statements have been ready underneath the historic price conference apart from sure monetary belongings and liabilities measured at honest worth.

Vital Accounting Insurance policies

The principal accounting insurance policies utilized within the preparation of those consolidated monetary statements are set out beneath. The Firm has constantly utilized the accounting insurance policies used within the preparation of its IFRS monetary statements all through all years introduced, as if these insurance policies had all the time been in impact apart from the adoption of IFRS 16 Leases, (“IFRS 16“) efficient for the 2020 fiscal yr.

a. Consolidation

The consolidated monetary statements embrace these of the Firm, its subsidiaries, joint ventures and structured entities that it controls, utilizing uniform accounting insurance policies. Management exists when the Firm has (i) energy over the investee, (ii) publicity, or rights, to variable returns from its involvement with the investee, and (iii) the flexibility to make use of its energy to have an effect on its returns.

Non-controlling pursuits within the internet belongings of consolidated subsidiaries are recognized individually from the Firm’s fairness.

Subsidiaries are all entities over which the Firm has management. Subsidiaries are absolutely consolidated from the date on which management is transferred to the Group. They’re de-consolidated from the date that management ceases.

Inter-company transactions, balances and unrealized beneficial properties on transactions between Group corporations are eradicated on consolidation. Unrealized losses are additionally eradicated until the transaction gives proof of an impairment of the asset transferred.

b. Translation of foreign currency echange

Useful forex

Objects included within the monetary statements of the Firm and every of the Firm’s subsidiaries and fairness accounted investees are measured utilizing the forex of the first financial atmosphere through which the entity operates (the useful forex) as follows:

Platinum Group Metals Ltd. Canadian {Dollars}
Lion Battery Applied sciences Inc. United States {Dollars}
Platinum Group Metals (RSA) (Pty) Ltd. South African Rand
Mnombo Wethu Consultants (Pty) Restricted South African Rand
Waterberg JV Sources (Pty) Ltd South African Rand

Presentation Foreign money

The Firm’s presentation forex is the USA Greenback (“USD“)

International Change Charges Used

PLATINUM GROUP METALS LTD.
Notes to the Consolidated Monetary Statements
(in 1000’s of United States {Dollars} until in any other case acknowledged besides share and per share information)

The next change charges had been used when making ready these consolidated monetary statements:

Rand/USD

Yr-end charge:

R14.5241(2020 R16.8916)

Yr common charge:

R15.0043 (2020 R16.0676)

CAD/USD

Yr-end charge:

C$1.2617 (2020 C$1.3042)

Yr common charge:

C$1.2688 (2020 C$1.3458)

Transactions and balances

International forex transactions are translated into the related entity’s useful forex utilizing the change charges prevailing on the date of the transaction. International forex beneficial properties and losses ensuing from the settlement of such transactions and from the interpretation at period-end change charges of financial belongings and liabilities denominated in foreign currency echange are acknowledged within the revenue assertion.

Subsidiaries

The outcomes and monetary place of subsidiaries which have a useful forex totally different from the presentation forex are translated into the presentation forex as follows:

  • Belongings and liabilities are translated on the closing charge on the reporting date;
  • Revenue and bills are translated at common change charges for the interval; and
  • All ensuing change variations are acknowledged in different complete revenue as cumulative translation changes.

c. Joint Preparations

The Firm treats its funding in Lion Battery Applied sciences Inc. as a three way partnership. A three way partnership is a joint association whereby the events which have joint management have rights to the online belongings. Joint ventures are accounted for utilizing the fairness technique of accounting.

d. Change in possession pursuits

The Firm treats transactions with non-controlling pursuits that don’t end in a lack of management as transactions with fairness house owners. A change in possession curiosity leads to an adjustment between the carrying quantities of the controlling and non-controlling pursuits to mirror their relative curiosity within the subsidiary. Any distinction between the quantity of the adjustment to non-controlling pursuits and any consideration obtained is acknowledged in a separate line in retained earnings.

e. Mineral Properties and Exploration Belongings

Exploration exercise includes the seek for mineral assets, the willpower of technical feasibility and the evaluation of economic viability of an recognized useful resource.

Exploration and analysis exercise consists of:

– buying the rights to discover;

– researching and analyzing historic exploration information;

– gathering exploration information by means of topographical, geochemical and geophysical research;

– exploratory drilling, trenching and sampling;

– figuring out and analyzing the quantity and grade of the useful resource;

– surveying transportation and infrastructure necessities; and

– compiling pre-feasibility and feasibility research.

Exploration and analysis expenditures on identifiable properties are capitalized. Exploration and analysis belongings are proven individually till technical feasibility and industrial viability is achieved at which level the related asset is transferred to growth belongings underneath property, plant and gear. Capitalized prices are all thought-about to be tangible belongings as they kind a part of the underlying mineral property.

PLATINUM GROUP METALS LTD.
Notes to the Consolidated Monetary Statements
(in 1000’s of United States {Dollars} until in any other case acknowledged besides share and per share information)

Capitalized exploration and analysis belongings are reviewed for impairment when information or circumstances counsel an asset’s carrying quantity might exceed its recoverable quantity and when the exploration and analysis belongings are transferred to growth belongings. If impairment is taken into account to exist, the associated asset is written right down to the larger of its worth in use and its honest worth much less prices to promote.

h. Property, plant and gear

Property, plant and gear are acknowledged at price much less gathered depreciation and gathered impairment losses. The price of an merchandise of property, plant and gear consists of the acquisition worth or development price, any prices straight attributable to bringing the asset to the situation and situation crucial for its meant use, an preliminary estimate of the prices of dismantling and eradicating the merchandise and restoring the location on which it’s situated, and for qualifying belongings, the related borrowing prices.

The place an merchandise of property, plant and gear is comprised of main elements with totally different helpful lives, the elements are accounted for as separate gadgets of property, plant and gear.

As soon as a mining venture has been established as technically possible and commercially viable, expenditure aside from on land, buildings, plant and gear is capitalised as a part of “growth belongings” along with any associated quantity transferred from “exploration and analysis belongings”. Capitalization of prices incurred ceases when the property is able to working at ranges meant by administration.

Subsequent prices are included within the asset’s carrying quantity solely when it’s possible that future financial advantages related to the merchandise will movement to the Firm and the price of the merchandise could be reliably measured. All repairs and upkeep are expensed to revenue or loss throughout the monetary interval through which they’re incurred.

An merchandise of property, plant and gear is derecognized upon disposal or when no future financial advantages are anticipated to come up from the continued use of the asset. Any acquire or loss arising on the disposal, retirement or scrapping of an merchandise of property, plant and gear is decided because the distinction between the gross sales proceeds and the carrying quantity of the asset and is acknowledged in revenue or loss.

Property plant and gear are recorded at price and are depreciated on a straight-line foundation over the next durations:

Automobiles 3-5 years
Laptop Gear and software program 3-5 years
Furnishings and Fixtures 5-10 years

i. Impairment

Tangible belongings are reviewed for impairment every time occasions or adjustments in circumstances point out that the carrying quantity will not be recoverable.

The Firm conducts inside critiques of asset values that are used to evaluate for any indications of impairment. Exterior elements comparable to adjustments in anticipated future costs, prices and different market elements together with market capitalization are additionally monitored to evaluate for indications of impairment.

If any such indication exists an estimate of the recoverable quantity is undertaken, being the upper of an asset’s honest worth much less prices to promote and its worth in use. If the asset’s carrying quantity exceeds its recoverable quantity, then an impairment loss is acknowledged.

Truthful worth is decided as the quantity that may be obtained from the sale of the asset in an arm’s size transaction between educated and prepared events. Truthful worth of mineral belongings is mostly decided as the current worth of the estimated future money flows anticipated to come up from the usage of the asset, together with any growth prospects.

PLATINUM GROUP METALS LTD.
Notes to the Consolidated Monetary Statements
(in 1000’s of United States {Dollars} until in any other case acknowledged besides share and per share information)

Worth in use is decided as the current worth of the estimated future money flows anticipated to come up from the continued use of the asset in its current kind and from its final disposal.

Tangible belongings which were impaired are examined for attainable reversal of the impairment every time occasions or adjustments in circumstances point out that the impairment might have reversed. When a reversal of a earlier impairment is recorded, the reversal quantity is adjusted for depreciation that may have been recorded had the impairment not taken place.

j. Asset retirement obligations

Provisions for asset retirement obligations are made in respect of the estimated future prices of closure and restoration and for environmental rehabilitation prices (which embrace the dismantling and demolition of infrastructure, elimination of residual supplies and remediation of disturbed areas) within the accounting interval when the associated disturbance happens. The supply is discontinued utilizing a risk-free pre-tax charge, and the unwinding of the low cost is included in finance prices. On the time of building the availability, a corresponding asset is capitalized and is depreciated over the longer term lifetime of the asset to which it relates. The supply is adjusted on an annual foundation for adjustments in price estimates, low cost charges and inflation.

okay.Commerce payables

Commerce payables are obligations to pay for items or companies which were acquired within the extraordinary course of enterprise from suppliers. Accounts payable are categorised as present liabilities if fee is due inside one yr or much less. If not, they’re introduced as non-current liabilities.

l.Convertible Notes

At inception the debt element of the convertible notes is deemed to be the residual worth of the online proceeds after the honest worth of the embedded derivatives are separated. The debt element is then measured at amortized price utilizing the efficient curiosity technique. The embedded derivatives are revalued at every reporting interval with the change in honest worth being recorded in revenue or loss in every reporting interval.

m.Share Capital

Frequent shares are categorised as fairness. Incremental prices straight attributable to the problem of widespread shares and share choices are acknowledged as a deduction from fairness, internet of any tax impact.

n. Share-based fee transactions

Inventory choices

Inventory choices are settled in fairness. The honest values for stock-based awards have been estimated utilizing the Black-Scholes mannequin and recorded as compensation price over the interval of vesting. The compensation price associated to inventory choices granted is expensed or capitalized to mineral properties, as relevant. Money obtained on train of inventory choices is credited to share capital and the associated quantity beforehand acknowledged in contributed surplus is reclassified to share capital.

Restricted share models

Restricted share models (“RSU“) signify an entitlement to at least one widespread share of the Company, upon vesting. RSUs present the choice of being settled in money upon election by the Board of Administrators. The honest worth of RSUs granted is acknowledged as an expense over the vesting interval and is measured on the time of grant.

PLATINUM GROUP METALS LTD.
Notes to the Consolidated Monetary Statements
(in 1000’s of United States {Dollars} until in any other case acknowledged besides share and per share information)

Deferred share models

Deferred share models (“DSU’s“) are measured at honest worth on grant date based mostly in the marketplace worth of the Firm’s shares on the grant date. DSU’s are settled in money based mostly in the marketplace worth of the Firm’s shares on the entitlement date (which is when the respective director ceases to be a director of the Firm). The expense for DSU’s is acknowledged over the vesting interval and the DSU’s are categorised as a legal responsibility. DSU liabilities are adjusted at every monetary place reporting date for adjustments in honest worth. Absolutely vested DSU’s are revalued based mostly in the marketplace worth of the Firm’s shares on the ultimate day of the respective reporting interval with adjustments in honest worth being acknowledged in share-based compensation bills.

o. Revenue taxes

Revenue tax expense represents the sum of the tax at present payable and deferred tax.

Present tax

Present tax expense relies on taxable revenue for the yr. Taxable revenue differs from ‘revenue earlier than tax’ as reported within the consolidated assertion of loss and different complete loss due to gadgets of revenue or expense which are taxable or deductible in different years and gadgets which are by no means taxable or deductible. The Firm’s present tax is calculated utilizing tax charges which were enacted or substantively enacted by the top of the reporting interval.

Deferred tax

Deferred tax is recognised on non permanent variations between the carrying quantities of belongings and liabilities within the consolidated monetary statements and the corresponding tax bases used within the computation of taxable revenue. Deferred tax liabilities are usually recognised for all taxable non permanent variations. Deferred tax belongings are usually recognised for all deductible non permanent variations to the extent that it’s possible that taxable income will probably be out there towards which these deductible non permanent variations could be utilised. Such deferred tax belongings and liabilities are usually not recognised if the non permanent distinction arises from the preliminary recognition (aside from in a enterprise mixture) of belongings and liabilities in a transaction that impacts neither the taxable revenue nor the accounting revenue.

The carrying quantity of deferred tax belongings is reviewed on the finish of every reporting interval and diminished to the extent that it’s not possible that enough taxable income will probably be out there to permit all or a part of the asset to be recovered.

Deferred tax liabilities and belongings are measured on the tax charges which are anticipated to use within the interval through which the legal responsibility is settled or the asset realised, based mostly on tax charges (and tax legal guidelines) which were enacted or substantively enacted by the top of the reporting interval.

The measurement of deferred tax liabilities and belongings displays the tax penalties that may observe from the style through which the Group expects, on the finish of the reporting interval, to recuperate or settle the carrying quantity of its belongings and liabilities.

p. Loss per widespread share

Primary loss per widespread share is calculated utilizing the weighted common variety of widespread shares excellent. The Firm makes use of the treasury inventory technique for the calculation of diluted earnings per share. Diluted per share quantities mirror the potential dilution that would happen if securities or different contracts to challenge widespread shares had been exercised or transformed to widespread shares. In durations when a loss is incurred, the impact of the potential issuances of shares is anti-dilutive, and accordingly primary and diluted loss per share are the identical.

q. Monetary devices (previous to September 1, 2018)

In fiscal 2018, the carrying worth of marketable securities was based mostly on the quoted market costs of the shares as at August 31, 2018 and was due to this fact thought-about to be Stage 1 because the Firm anticipated disposing of those shares throughout the following fiscal yr.

(i) Monetary belongings and liabilities

Loans and receivables – Loans and receivables comprised of money and money equivalents, quantities receivable and efficiency bonds. Loans and receivables are non-derivative monetary belongings with mounted or determinable funds that aren’t quoted in an lively market. They had been categorised as present belongings or non-current belongings based mostly on their maturity date. Loans and receivables had been initially acknowledged at honest worth and subsequently carried at amortized price much less any impairment.

Monetary liabilities had been categorised as both monetary liabilities or at honest worth by means of revenue or loss.

Monetary liabilities – Different monetary liabilities had been initially measured at honest worth, internet of transaction prices and had been subsequently measured at amortized price utilizing the efficient curiosity technique, with curiosity expense acknowledged on an efficient yield foundation. The Firm had categorised accounts payable, accrued liabilities and the debt portion of the convertible notes as different monetary liabilities.

Truthful worth by means of revenue or loss – The Firm had categorised the convertible notice by-product as honest worth by means of revenue or loss and adjusted the honest worth every quarter.

(ii) Impairment of monetary belongings

The Firm assessed at every reporting date whether or not there may be goal proof {that a} monetary asset or a gaggle of monetary belongings was impaired. Impairment losses on monetary belongings carried at amortized price had been reversed in subsequent durations if the quantity of the loss decreased and the lower could possibly be associated objectively to an occasion occurring after the impairment was acknowledged.

r. Monetary devices (since September 1, 2018)

Classification

The Firm classifies its monetary devices within the following classes: at honest worth by means of revenue and loss, at honest worth by means of different complete revenue (loss), or at amortized price. The Firm determines the classification of monetary belongings at preliminary recognition. The classification of debt devices is pushed by the Firm’s enterprise mannequin for managing the monetary belongings and the debt’s contractual money movement traits. Fairness devices which are held for buying and selling are categorised as FVTPL. For different fairness devices, on the day of acquisition the Firm could make an irrevocable election (on an instrument-by-instrument foundation) to designate them as at FVTOCI. Monetary liabilities are measured at amortized price, until they’re required to be measured at FVTPL (comparable to devices held for buying and selling or derivatives) or if the Firm has opted to measure them at FVTPL.

PLATINUM GROUP METALS LTD.
Notes to the Consolidated Monetary Statements
(in 1000’s of United States {Dollars} until in any other case acknowledged besides share and per share information)

Measurement

Monetary belongings and liabilities at amortized price are initially acknowledged at honest worth plus or minus transaction prices, respectively, and subsequently carried at amortized price much less any impairment. Monetary belongings and liabilities carried at FVTPL are initially recorded at honest worth and transaction prices are expensed within the consolidated statements of complete loss. Realized and unrealized beneficial properties and losses arising from adjustments within the honest worth of the monetary belongings and liabilities held at FVTPL are included within the consolidated statements of complete loss within the interval through which they come up.

Derecognition of Monetary belongings

The Firm derecognizes monetary belongings solely when the contractual rights to money flows from the monetary belongings expire, or when it transfers the monetary belongings and considerably the entire related dangers and rewards of possession to a different entity. Positive aspects and losses on derecognition are usually acknowledged within the consolidated statements of complete loss.

s. Accounting Requirements Adopted

Lately Issued Accounting Pronouncements

The IASB has made amendments to IAS 1, Presentation of Monetary Statements (“IAS 1”) which use a constant definition of materiality all through IFRS and the Conceptual Framework for Monetary Reporting, make clear when info is materials and incorporate a number of the steering in IAS 1 about immaterial info. Specifically, the amendments make clear that info is materials if omitting, misstating or obscuring it might fairly be anticipated to affect selections that the first customers of basic objective monetary statements make on the premise of these monetary statements, which give monetary details about a selected reporting entity . Materiality relies on the character or magnitude of data, or each. An entity assesses whether or not info, both individually or together with different info, is materials within the context of its monetary statements taken as an entire. The Firm adopted IAS 1 on September 1, 2020, which didn’t have a major impression on the consolidated monetary assertion disclosures.

Accounting requirements issued however not but efficient

Accounting requirements or amendments to current accounting requirements which were issued however have future efficient dates are both not relevant or are usually not anticipated to have a major impression on the Firm’s monetary statements.

3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES

The preparation of the monetary statements in conformity with IFRS requires the usage of judgments and estimates that have an effect on the quantity reported and disclosed within the consolidated monetary statements and associated notes. These judgments and estimates are based mostly on administration’s finest information of the related information and circumstances, having regard to earlier expertise, however precise outcomes might differ materially from the quantities included within the monetary statements. Details about such judgments and estimation is contained within the accounting insurance policies and notes to the monetary statements, and the important thing areas are summarized beneath.

Areas of judgment and key sources of estimation uncertainty which have essentially the most vital impact on the quantities acknowledged in these consolidated monetary statements are:

• Willpower of ore reserves and mineral useful resource estimates

PLATINUM GROUP METALS LTD.
Notes to the Consolidated Monetary Statements
(in 1000’s of United States {Dollars} until in any other case acknowledged besides share and per share information)

• Willpower of Business Viability and Technical Feasibility of the Waterberg Mission

• Assumption of management of Mnombo for accounting functions

Every of those judgments and estimates is taken into account of their respective notes or in additional element beneath.

Willpower of ore reserve and mineral useful resource estimates

The Firm estimates its ore reserves and mineral assets based mostly on info compiled by Certified Individuals as outlined by Nationwide Instrument 43-101 – Requirements of Disclosure for Mineral Initiatives (“NI 43-101“). The Firm relied upon these estimates when assessing impairment upon the switch of belongings from capitalized exploration prices to growth prices. There are quite a few uncertainties inherent in estimating ore reserves, and assumptions which are legitimate on the time of estimation they usually might change considerably when new info turns into out there. Modifications within the forecast costs of commodities, change charges, manufacturing prices or restoration charges might change the financial standing of reserves and will, finally, end in reserves being restated.

Willpower of Business Viability and Technical Feasibility of the Waterberg Mission

The appliance of the Firm’s accounting coverage for mineral property growth prices required judgment to find out when technical feasibility and industrial viability of the Waterberg Mission was demonstrable. The Firm thought-about the constructive NI 43-101 compliant Feasibility Examine printed December 5, 2019 mixed with the granting of a mining proper on February 3, 2021 that industrial viability and technical feasibility of the Waterberg Mission had been confirmed. At this level, the capitalized acquisition prices had been assessed for impairment, and reclassified to mineral property growth prices inside property, plant and gear.

Previous to reclassification, the carrying worth of the Waterberg venture was assessed for impairment, whereby the carrying worth of the venture was in contrast with the recoverable quantity. The recoverable quantity was decided because the honest worth much less price of disposal (FVLCD) utilizing a reduced money movement mannequin. Figuring out the FVLCD required administration to make estimates and assumptions with respect to portions of ore reserves and mineral assets, restoration charges, forecast costs of commodities, change charges, future manufacturing and gross sales volumes, future manufacturing prices, capital and reclamation prices and the low cost charge. Portions of ore reserves and mineral assets, restoration charges, future manufacturing and gross sales volumes in addition to anticipated future manufacturing prices, capital and reclamation prices are based mostly on info compiled by Certified Individuals as outlined by NI 43-101.

Assumption of management of Mnombo and Waterberg JV Co. for accounting functions

The Firm has judged that it controls Mnombo for accounting functions because it owns 49.9% of the excellent shares of Mnombo and has contributed all materials capital to Mnombo since buying its 49.9% share. At present there are not any different sources of funding recognized to be out there to Mnombo. If sooner or later Mnombo shouldn’t be deemed to be managed by the Firm, the belongings and liabilities of Mnombo can be derecognized at their carrying quantities. Quantities acknowledged in different complete revenue can be transferred on to retained earnings. If a retained curiosity remained after the lack of management it might be acknowledged at its honest worth on the date of lack of management. Though the Firm controls Mnombo for accounting functions, it doesn’t have all-powerful information of Mnombo’s different shareholders actions. Mnombo’s 50.1% shareholders are traditionally deprived South Africans. The Firm additionally decided that it controls Waterberg JV Co. given its management over Mnombo in addition to its energy over the investee.

4.MINERAL PROPERTY and EXPLORATION AND EVALUATION ASSETS

Since mid-2017, the Firm’s solely lively mineral property has been the Waterberg Mission situated on the North Limb of the Bushveld Igneous Complicated. Through the present yr the Waterberg Mission was granted its mining proper (the “Waterberg Mining Proper“) and because of this the Firm reclassified the Waterberg Mission from being an Exploration and Analysis Asset to a Improvement Asset.

Complete capitalized prices for the Waterberg Mission are as follows:

Stability, August 31, 2019 $ 36,792
Additions 2,988
Recoveries from 100% Implats funded implementation price range (1,285 )
International change motion (3,556 )
Stability, August 31, 2020 $ 34,939
Additions 3,745
Recoveries from 100% Implats funded implementation price range (229 )
International change motion 5,498
Stability August 31, 2021 $ 43,953

PLATINUM GROUP METALS LTD.
Notes to the Consolidated Monetary Statements
(in 1000’s of United States {Dollars} until in any other case acknowledged besides share and per share information)

Previous to reclassification on February 28, 2021, the Firm carried out an impairment take a look at whereby the recoverable quantity of Waterberg was in comparison with the carrying worth of the $39,642 and decided that no impairment cost was required.

Key assumptions used to evaluate impairment included the usage of 3 yr common palladium, platinum and gold costs in addition to an 12% low cost charge.

Waterberg Mission

At August 31, 2021, the Waterberg Mission consisted of granted prospecting rights, utilized for prospecting rights and the Waterberg Mining Proper with a mixed lively venture space of 79,188 hectares, situated on the Northern Limb of the Bushveld Complicated, roughly 85 km north of the city of Mokopane. Of the whole venture space, 20,532 hectares are coated by the Waterberg Mining Proper. An additional 58,655 hectares are coated by lively prospecting rights. Waterberg JV Co. is at present in means of making use of for closure on one inactive prospecting proper situated north of the recognized mineralized space, measuring 20,242 hectares.

On March 5, 2021 and subsequently the Firm obtained three notices of enchantment to the January 28, 2021 determination of the South African Division of Mineral Sources and Vitality (“DMR“) granting the Waterberg Mining Proper filed by appellants from native communities. One group filed an utility for an order within the Excessive Court docket of South Africa to evaluation and put aside the choice by the Minister of the Division of Forestry, Fisheries, and the Atmosphere to refuse condonation for the late submitting of an enchantment towards the grant of an environmental authorization for the mine in November 2020. On July 30, 2021, Waterberg JV Co. obtained a restraint utility from a gaggle situated close to deliberate floor infrastructure. One other host group has utilized to affix as a celebration to the applying in help of the Waterberg Mine. Waterberg JV Sources (Pty) Restricted (“Waterberg JV Co.”) is opposing the court docket functions in addition to all appeals obtained. A timeframe for the listening to of court docket functions or the settlement of appeals is unsure. The Waterberg Mining Proper at present stays lively, was notarially executed by the DMR on April 13, 2021 and was registered on the Mineral and Petroleum Titles Registration Workplace on July 6, 2021.

The Waterberg Mission contains the previous Waterberg three way partnership property and the Waterberg extension property. On August 21, 2017, PTM RSA accomplished the cession of authorized title for all Waterberg Mission prospecting rights into Waterberg JV Co. after earlier receiving Part 11 approval of the twond Modification (outlined beneath). On September 21, 2017, Waterberg JV Co. additionally issued shares to all current Waterberg companions professional rata to their three way partnership pursuits, ensuing within the Firm holding a forty five.65% direct curiosity in Waterberg JV Co., Japan Oil, Fuel and Metals Nationwide Company (“JOGMEC“) holding a 28.35% curiosity and Mnombo, because the Firm’s Black Financial Empowerment (“BEE“) accomplice, holding 26%. JOGMEC has since bought 44.4% of its curiosity (9.76% of the Waterberg Mission) to Hanwa Co., Ltd (“Hanwa“).

Implats Transaction

On November 6, 2017, the Firm closed a transaction (the “Implats Transaction“), initially introduced on October 16, 2017, whereby Impala Platinum Holdings Ltd. (“Implats“) bought an combination 15.0% fairness curiosity in Waterberg JV Co for $30 million. The Firm bought an 8.6% curiosity for $17.2 million and JOGMEC bought a 6.4% curiosity for $12.8 million. As a part of the transaction, Implats additionally acquired an possibility to extend its holdings in Waterberg JV Co. to 50.01% (the “Buy and Improvement Possibility“) in change for sure funds and venture funding, and a proper of first refusal to enter into an offtake settlement, on industrial arm’s-length phrases, for the smelting and refining of mineral merchandise from the Waterberg Mission (“Offtake ROFR“) if Waterberg JV Co. proposes to enter into an offtake settlement with a 3rd occasion. JOGMEC or its nominee retain a proper to direct the advertising of Waterberg focus and to obtain, at market costs, platinum, palladium, rhodium, gold, ruthenium, iridium, copper and nickel in refined mineral merchandise on the volumes produced from the Waterberg Mission.

On June 15, 2020, Implats delivered a proper discover of their election to not train their Buy and Improvement Possibility on account of elevated financial uncertainty and diminished threat urge for food within the quick, medium and long-term because of the COVID-19 pandemic. Implats at present retains a 15.0% taking part Waterberg Mission curiosity and the Offtake ROFR. The Firm retains a controlling 50.02% direct and oblique curiosity within the Waterberg Mission.

PLATINUM GROUP METALS LTD.
Notes to the Consolidated Monetary Statements
(in 1000’s of United States {Dollars} until in any other case acknowledged besides share and per share information)

Acquisition and Improvement of the Waterberg Mission

In October 2009, PTM RSA, JOGMEC and Mnombo entered right into a three way partnership settlement with regard to the Waterberg Mission (the “JOGMEC Settlement“). Beneath the phrases of the JOGMEC Settlement, in April 2012, JOGMEC accomplished a $3.2 million work requirement to earn a 37% curiosity within the former Waterberg JV property, leaving the Firm with a 37% curiosity and Mnombo with a 26% curiosity. Following JOGMEC’s earn-in, the Firm funded Mnombo’s 26% share of prices, totalling $1.12 million, till the earn-in part of the three way partnership led to Might 2012.

On November 7, 2011, the Firm entered an settlement with Mnombo to accumulate 49.9% of the issued and excellent shares of Mnombo in change for a money fee of R1.2 million and the Firm’s settlement to pay for Mnombo’s 26% share of prices on the Waterberg JV property till the completion of a feasibility research. Mnombo’s share of expenditures previous to this settlement, and Mnombo’s share of expenditures put up DFS, are nonetheless owed to the Firm ($6.9 million at August 31, 2021). The portion of Mnombo not owned by the Firm is accounted for as a non-controlling curiosity, calculated at $7.4 million at August 31, 2021 ($7.1 million – August 31, 2020).

On Might 26, 2015, the Firm introduced a second modification (the “2nd Modification“) to the prevailing JOGMEC Settlement. Beneath the phrases of the twond Modification, the Waterberg JV and Waterberg Extension properties had been mixed and contributed into the newly created working firm Waterberg JV Co. On August 3, 2017, the Firm obtained Part 11 switch approval from the DMR and title to all of the Waterberg prospecting rights had been ceded into Waterberg JV Co. on September 21, 2017.

Beneath the twond Modification, JOGMEC dedicated to fund $20 million in expenditures over a three-year interval ending March 31, 2018. This requirement was accomplished by $8 million in funding from JOGMEC to March 31, 2016, adopted by two $6 million tranches funded by JOGMEC in every of the next two 12-month durations ending March 31, 2018.

To August 31, 2021, an combination complete of $77.5 million has been funded by all events on exploration and engineering on the Waterberg Mission. Up till the Waterberg property was transferred to Waterberg JV Co., all prices incurred by different events had been handled as price recoveries by the Firm.

5. LION BATTERY TECHNOLOGIES INC.

Lion was integrated on June 17, 2019 with the target to analysis new lithium battery expertise using platinum and palladium. The Firm obtained 400,000 widespread shares of Lion, valued at a worth of $0.01 per share, as the unique founding father of Lion. On July 12, 2019, the Firm and Anglo American Platinum Restricted (“Amplats“) entered into funding, shareholder and analysis agreements to facilitate Lion’s goals. The Firm and Amplats agreed to equally make investments as much as an combination of $4.0 million into Lion, of which roughly $1.0 million can be meant for the commercialization of the expertise developed in addition to basic and administrative bills, topic to sure circumstances. On July 6, 2021 the Firm and Amplats agreed to extend the deliberate funding to Lion by an additional $2.726 million, to a complete of as much as $6.726 million, with a view to permit the acceleration of sure analysis and commercialization actions. All agreed funding into Lion by the Firm and Amplats is to be exchanged for most well-liked shares of Lion at a worth of $0.50 per share over an approximate three to 5 yr interval.

On July 12, 2019, the Firm and Amplats every invested $550 as a primary tranche of funding into Lion in change for 1,100,000 Lion most well-liked shares every at a worth of $0.50 per share. In June 2020, the Firm and Amplats every invested $350 as a second tranche of funding in change for 700,000 most well-liked shares every at a worth of $0.50 per share. In February 2021, the Firm and Amplats every invested $350 as a 3rd tranche of funding in change for 700,000 most well-liked shares every at a worth of $0.50 per share. At August 31, 2021, the Firm owned roughly a 54% curiosity in Lion.

PLATINUM GROUP METALS LTD.
Notes to the Consolidated Monetary Statements
(in 1000’s of United States {Dollars} until in any other case acknowledged besides share and per share information)

On July 12, 2019, Lion entered right into a Sponsored Analysis Settlement (“SRA“) with Florida Worldwide College (“FIU“) to fund a $3.0 million analysis program over roughly three years. On July 6, 2021 Lion agreed to extend the deliberate quantity of analysis funding to FIU by an additional quantity of $1.0 million, for a complete of as much as $4.0 million. The primary tranche to FIU underneath the SRA, totaling $1.0 million plus a one-time price of $50, was funded by Lion in mid July 2019. Analysis work commenced at FIU throughout September 2019. Throughout calendar 2020 FIU accomplished the primary analysis milestone pursuant to the SRA, which triggered a second tranche of funding to FIU within the quantity of $667. Primarily based on analysis development a 3rd tranche within the quantity of $667 was paid by Lion to FIU in February 2021. Lion has supplied combination analysis funding within the quantity of $2.38 million to FIU as of August 31, 2021. At August 31, 2021 the Firm had $144 in unused losses from Lion out there.

On August 4, 2020, the U.S. Patent and Trademark Workplace issued Patent No. 10,734,636 B2 entitled “Battery Cathodes for Improved Stability” to FIU. The patent consists of the usage of platinum group metals and carbon nanotubes and different improvements in a lithium battery. A second patent associated to this was issued in December 2020 and a 3rd was issued in June 2021. Additional patents are at present utilized for. Beneath the SRA, Lion has unique rights to all mental property being developed by FIU together with patents granted. Lion can be reviewing a number of further and complementary alternatives centered on creating next-generation battery expertise utilizing platinum and palladium.

The Firm accounts for Lion utilizing fairness accounting as Lion is collectively managed with Amplats. Lion pays a price of $3 per 30 days to the Firm for basic and administrative companies.

6. SPROTT LOAN

On August 15, 2019, the Firm introduced it had entered right into a senior secured credit score facility with Sprott Non-public Useful resource Lending II (Collector), LP (“Sprott“) and different lenders occasion thereto (the “Sprott Lenders“) pursuant to which the Sprott Lenders superior the Firm $20.0 million in principal (the “Sprott Facility“). The mortgage was instantly drawn and was initially scheduled to mature on August 14, 2021. Principal quantities of the Sprott Facility excellent are charged curiosity at a charge of 11% every year, compounded month-to-month. The Firm elected to train an possibility to increase the maturity date of $10.0 million in principal by one yr in change for a fee in money of $300, being equal to 3 % of the excellent principal quantity not being repaid on the unique maturity date. Throughout fiscal 2021 the Firm made principal repayments of $10.6 million to Sprott, decreasing the principal steadiness due at August 31, 2021 to $9.4 million. Subsequent to yr finish, the Firm has made additional principal repayments of $4.9 million, bringing the principal steadiness due right down to $3.6 million as of the date of publication for these consolidated monetary statements. Scheduled curiosity funds are made month-to-month with curiosity of $1,590 having been paid to Sprott throughout the yr ended August 31, 2021 (August 31, 2020 – $2,237).

The Firm is required to keep up sure minimal working capital and money balances underneath the Sprott Facility and is in compliance with these covenants at yr finish.

All charges straight attributable to the Sprott Facility are recorded towards the mortgage steadiness and amortized utilizing the efficient curiosity technique over the lifetime of the mortgage, aside from $300 price paid to Sprott to increase $10.0 million of the mortgage for one yr which was offset by the accounting acquire acknowledged of $348. In reference to the unique principal advance the Firm issued Sprott 800,000 widespread shares price $1,000. Efficient curiosity of $2,120 was acknowledged throughout the yr ended August 31, 2021 (August 31, 2020 – $2,809).

7.CONVERTIBLE NOTES

On June 30, 2017, the Firm closed a personal placement of $20 million combination principal quantity of convertible senior subordinated notes due in 2022, of which $19.99 million remained excellent at August 31, 2021 (the “Convertible Notes“). The Convertible Notes bear curiosity at a charge of 6 7/8% every year, payable semi-annually on January 1 and July 1 of every yr in money or on the election of the Firm, in widespread shares of the Firm or a mix of money and customary shares, and can mature on July 1, 2022, until earlier repurchased, redeemed or transformed.

Upon maturity the Convertible Notes are to be settled by the Firm in money. The Convertible Notes are convertible at any time previous to maturity on the possibility of the holder, and conversion could also be settled, on the Firm’s election, in money, widespread shares, or a mix of money and customary shares. The conversion charge of the Convertible Notes is 100.1111 widespread shares per $1.0 thousand principal quantity of Convertible Notes, which is equal to an preliminary conversion worth of roughly $9.989 per widespread share, representing a conversion premium of roughly 15% above the NYSE American closing sale worth for the Firm’s widespread shares on June 27, 2017.

PLATINUM GROUP METALS LTD.
Notes to the Consolidated Monetary Statements
(in 1000’s of United States {Dollars} until in any other case acknowledged besides share and per share information)

The Convertible Notes include a number of embedded derivatives (the “Convertible Observe Derivatives“) regarding the conversion and redemption choices. The Convertible Observe Derivatives had been valued upon preliminary recognition at honest worth utilizing partial differential equation strategies at $5.381 million (see beneath). At inception, the debt portion of the Convertible Notes had been diminished by the estimated honest worth of the Convertible Observe Derivatives of $5.381 million and transaction prices regarding the Convertible Notes of $1.049 million leading to a gap steadiness of $13.570 million. The Convertible Notes are measured at amortized price and will probably be accreted to maturity over the time period utilizing the efficient curiosity technique.

On January 2, 2018, the Firm issued 244,063 widespread shares in settlement of $0.691 million of bi-annual curiosity payable on the excellent Convertible Notes.

On July 3, 2018, the Firm issued 757,924 widespread shares in settlement of $0.724 million of bi-annual curiosity payable on the excellent Convertible Notes.

On January 2, 2019, the Firm issued 545,721 widespread shares in settlement of $0.687 million of bi-annual curiosity payable on the excellent Convertible Notes.

On July 1, 2019, the Firm paid $0.687 million in money for bi-annual curiosity payable on the excellent Convertible Notes.

On January 2, 2020, the Firm issued 517,468 widespread shares in settlement of $0.687 million of bi-annual curiosity payable on the excellent Convertible Notes.

On July 2, 2020, the Firm issued 526,471 widespread shares in settlement of $0.687 million of bi-annual curiosity payable on the excellent Convertible Notes.

On January 2, 2021, the Firm paid $0.687 million in money for bi-annual curiosity payable on the excellent Convertible Notes.

On July 2, 2021, the Firm paid $0.687 million in money for bi-annual curiosity payable on the excellent Convertible Notes.

On account of a limitation on conversion contained within the indenture governing the Convertible Notes, dated June 30, 2017 between the Firm and The Financial institution of New York Mellon, not more than 2,954,278 widespread shares, being 19.9% of the variety of widespread shares excellent on June 30, 2017, could also be issued in settlement of curiosity funds or conversions associated to the Convertible Notes. At present, a complete of 361,312 widespread shares stay out there for settlement of future curiosity funds or conversions.

The elements of the Convertible Notes are as follows:

Convertible Observe steadiness August 31, 2019 $ 16,075
Curiosity funds (1,374 )
Accretion and curiosity incurred throughout the yr 2,668
Achieve on embedded derivatives throughout the yr ended August 31, 2020 (157 )
Convertible Observe steadiness August 31, 2020 $ 17,212
Curiosity fee (1,374 )
Accretion and curiosity incurred throughout the yr 2,930
Achieve on embedded derivatives throughout the yr ended August 31, 2021 (52 )
Convertible Observe steadiness August 31, 2021 $ 18,716

PLATINUM GROUP METALS LTD.
Notes to the Consolidated Monetary Statements
(in 1000’s of United States {Dollars} until in any other case acknowledged besides share and per share information)

The Convertible Observe Derivatives had been valued upon preliminary recognition at a good worth of $5.381 million utilizing partial differential equation strategies and are subsequently re-measured at honest worth at every period-end by means of the consolidated assertion of internet loss and complete loss. A acquire of $52 was acknowledged on the honest worth of the Convertible Observe Derivatives at August 31, 2021, (August 31, 2020 – $157 acquire).

8. SHARE CAPITAL

(a) Licensed

Limitless widespread shares with out par worth.

(b) Issued and excellent

At August 31, 2021, the Firm had 75,271,126 widespread shares excellent together with 81,409 shares bought for the online proceeds of $218 on or earlier than August 31, 2021 and issued September 1 and a pair of, 2021 pursuant to an at-the-market providing (“ATM Providing”) ruled by the phrases of an fairness distribution settlement with BMO Capital Markets.

Fiscal 2021

On February 5, 2021, the Firm entered right into a second at-the-market providing (the “2021 ATM“). At August 31, 2021, the Firm had bought an combination of two,502,790 shares pursuant to the 2021 ATM at a median worth of $4.38 per share for gross proceeds of $10,951. Complete charges and bills of $701 have been incurred as of August 31, 2021 in relation to the 2021 ATM. Subsequent to the top of the fiscal yr, to November 22, 2021 the Firm bought an additional 4,433,448 shares pursuant to the 2021 ATM at a median worth of US$2.63 for internet proceeds of $11.4 million.

On December 8, 2020, the Firm closed a non-brokered personal placement with Deepkloof Restricted (“Deepkloof“), a subsidiary of current main shareholder Hosken Consolidated Investments Restricted (“HCI“) for 1,121,076 widespread shares at a worth of $2.23 every for gross proceeds of $2,500 sustaining, HCI’s possession within the Firm at roughly 31% at the moment.

On November 30, 2020, the Firm accomplished the sale of widespread shares pursuant to an at-the-market providing (the “2020 ATM“). Closing gross sales had been settled, and the 2020 ATM accomplished, on December 2, 2020. An combination of 5,440,186 widespread shares had been bought at a median worth of $2.21 per share for gross proceeds of $12.0 million. Complete charges and bills of $592 had been incurred.

On October 15, 2020, the Firm closed a non-brokered personal placement for 1,146,790 widespread shares at a worth of $2.18 per share for gross proceeds of $2.5 million. All shares had been subscribed for by Deepkloof, sustaining HCI’s possession within the Firm at roughly 31% at the moment.

Fiscal 2020

On July 2, 2020, the Firm issued 526,471 widespread shares in settlement of $687 of bi-annual curiosity payable on $19.99 million of excellent Convertible Notes.

On June 17, 2020, the Firm closed a non-brokered personal placement for 1,221,500 widespread shares at a worth of $1.40 every for gross proceeds of $1.7 million, of which 500,000 widespread shares had been subscribed for by HCI, bringing HCI’s possession within the Firm to roughly 32%. A 6% finders price within the quantity of $38 was paid on a portion of this personal placement.

On January 2, 2020, the Firm issued 517,468 shares in settlement of $0.687 million of bi-annual curiosity payable on $19.99 million excellent on the Convertible Notes.

On December 19, 2019, the Firm closed a non-brokered personal placement for 3,225,807 widespread shares at a worth of $1.24 every for gross proceeds of $4.0 million, of which 1,612,931 widespread shares had been subscribed for by Deepkloof on behalf of HCI. A 6% finders price within the quantity of $54 was paid on a portion of this personal placement.

PLATINUM GROUP METALS LTD.
Notes to the Consolidated Monetary Statements
(in 1000’s of United States {Dollars} until in any other case acknowledged besides share and per share information)

Previous to their expiry on November 15, 2019, the Firm issued 28,040 shares upon the train of 28,040 warrants.

(c) Incentive inventory choices

The Firm has entered into Incentive Inventory Possibility Agreements underneath the phrases of its share compensation plan with administrators, officers, consultants and staff. Beneath the phrases of the inventory possibility agreements, the train worth of every possibility is about, at a minimal, on the honest worth of the widespread shares on the date of grant. Inventory choices of the Firm are topic to vesting provisions. All train costs are denominated in Canadian {Dollars}.

The next tables summarize the Firm’s excellent inventory choices:

Variety of Share
Choices
Common Train
Value in CAD
Choices excellent at August 31, 2019 1,554,000 $ 2.61
Granted 1,628,500 $ 1.81
Choices excellent at August 31, 2020 3,182,500 $ 2.20
Granted 1,596,500 $ 6.41
Forfeited (126,936) $ 2.27
Exercised (843,543) $ 2.21
Choices excellent at August 31, 2021 3,808,521 $ 3.96

Quantity Excellent
at August 31, 2021

Quantity Exercisable
at August 31, 2021

Train Value in
CAD

Common Remaining
Contractual Life (Years)

1,497,500

$

6.58

4.30

99,000

$

3.90

4.94

1,058,502

94,769

$

2.61

2.61

1,153,519

122,519

$

1.81

3.26

3,808,521

217,288

3.40

Through the yr ended August 31, 2021, the Firm granted 1,596,500 inventory choices. The inventory choices granted throughout the yr vest in three tranches on the primary, second and third anniversary of their grant.

Through the yr ended August 31, 2020, the Firm granted 1,628,500 inventory choices. The inventory choices granted throughout the yr vest in three tranches on the primary, second and third anniversary of their grant.

Through the yr ended August 31, 2021, the Firm recorded $2,230 of inventory compensation expense (August 31, 2020 – $1,157), of which $1,987 was expensed (August 31, 2020 – $1,032) and $243 was capitalized to mineral properties (August 31, 2020 – $125).

The Firm used the Black-Scholes mannequin to find out the grant date honest worth of inventory choices granted. The next assumptions had been utilized in valuing inventory choices granted throughout the years ending August 31, 2021 and August 31, 2020:

Yr ended August 31, 2021 August 31, 2020
Danger-free rate of interest 0.41% 1.56%
Anticipated lifetime of choices 3.9 years 3.9 years
Annualized volatility1 88% 82%
Forfeiture charge 2.0% 2.1%
Dividend charge 0.0% 0.0%
1The Firm makes use of its historic volatility as the premise for the anticipated volatility assumption within the Black Scholes possibility pricing mannequin.

PLATINUM GROUP METALS LTD.
Notes to the Consolidated Monetary Statements
(in 1000’s of United States {Dollars} until in any other case acknowledged besides share and per share information)

The Firm has established a deferred share unit (“DSU“) plan for non-executive administrators. Every DSU has the identical worth as one of many Firm’s widespread shares. DSU’s have to be retained till every non-executive director leaves the board of administrators, after which period the DSU’s are to be paid. Through the yr ended August 31, 2021, a complete of 23,166 DSUs had been redeemed by a former director at a worth of $3.23 per DSU, calculated utilizing the 5-day quantity weighted common buying and selling worth instantly previous to the payout.

The DSU legal responsibility acknowledged at August 31, 2021 was $1,223. Through the yr ended August 31, 2021 an expense of $742 was recorded in relation to excellent DSUs (August 31, 2020 – $387), with $591 recorded as share-based compensation (August 31, 2020 – $245) and $151 recorded as director charges (August 31, 2020 – $142). Through the yr ended August 31, 2021 absolutely vested DSUs had been revalued and a $9 restoration was recorded to mirror the elevated worth of the absolutely vested DSUs because of the Firm’s share worth appreciation. At August 31, 2021, a complete of 503,951 DSUs had been issued and excellent, of which 304,991 DSUs had vested.

(e) Restricted Share Models

The Firm has established a restricted share unit (“RSU“) plan for officers and sure staff of the Firm. Every RSU represents the appropriate to obtain one Firm widespread share following the attainment of vesting standards decided on the time of the award. RSUs vest over a three-year interval.

The recognised RSU legal responsibility at August 31, 2021 was $770. Through the yr ended August 31, 2021, a inventory compensation expense of $675 was recorded (Might 31, 2020 – $266) of which $598 expensed (Might 31, 2020 – $226) and $77 was capitalized (Might 31, 2020 – $40). Through the interval, 121,668 RSUs had been settled and 24,188 had been cancelled. At August 31, 2021, 547,992 RSUs had been issued and excellent, with 53,438 of those being vested.

9.NON-CONTROLLING INTEREST

The desk beneath reveals particulars of non-wholly owned subsidiaries of the Group which have materials non-controlling pursuits:

Firm Proportion of
possession and
voting rights held
by non-controlling
pursuits
Loss allotted to
non-controlling
pursuits
Collected
non-controlling
pursuits
2021 2020 2021 2020 2021 2020
Mnombo Wethu Consultants (Pty) Restricted 50.1% 50.1% 7,445 7,064
Waterberg JV Co1 63.05% 63.05% 10,140 9,062
Complete $17,585 $16,126

1Consists of the 26% owned by Mnombo

10.RELATED PARTY TRANSACTIONS

All quantities receivable and quantities payable owing to or from associated events are non-interest bearing with no particular phrases of reimbursement. Transactions with associated events are within the regular course of enterprise and are recorded at consideration established and agreed to by the events. Transactions with associated events are as follows:

(a) Through the yr ended August 31, 2021, $858 (August 31, 2020 – $313) was paid or accrued to impartial administrators for administrators’ charges and companies.

(b) Through the yr ended August 31, 2021, the Firm paid or accrued funds of $57 (August 31, 2020 – $54) from West Vault Mining Inc., for accounting and administrative companies. Through the yr the Firm’s former President, CEO and Board Member Michael Jones resigned from all positions at each the Firm and West Vault Mining leaving the Firm and West Vault Mining with one officer in widespread at yr finish.

PLATINUM GROUP METALS LTD.
Notes to the Consolidated Monetary Statements
(in 1000’s of United States {Dollars} until in any other case acknowledged besides share and per share information)

(c) In Might 2018, Deepkloof made a strategic funding within the Firm by the use of participation in a public providing and a personal placement. By the phrases of the Might 2018 personal placement, HCI acquired a proper to appoint one particular person to the board of administrators of the Firm and a proper to take part in future fairness financings of the Firm to keep up its pro-rata curiosity. HCI has exercised its proper to appoint one particular person to the board of administrators. A abstract of HCI’s share acquisitions kind the Firm follows:

Frequent Shares Acquired from the Firm by HCI
Date Placee Shares Value USD Acquisition Methodology
Might 2018 Deepkloof 2,490,900 $1.50 Prospectus Providing
Might 2018 Deepkloof 1,509,099 $1.50 Non-public Placement
February 2019 Deepkloof 2,141,942 $1.33 Non-public Placement
April 2019 Deepkloof 177,000 $1.70 Train of Warrants
June 2019 Deepkloof 80,000 $1.70 Train of Warrants
June 2019 Deepkloof 1,111,111 $1.17 Non-public Placement
August 2019 Deepkloof 6,940,000 $1.32 Non-public Placement
August 2019 Deepkloof 2,856,000 $1.25 Prospectus Providing
December 2019 Deepkloof 1,612,931 $1.24 Non-public Placement
June 2020 Deepkloof 500,000 $1.40 Non-public Placement
October 2020 Deepkloof 1,146,790 $2.18 Non-public Placement
December 2020 Deepkloof 1,121,076 $2.23 Non-public Placement
21,686,849

Throughout 2018 and 2019, HCI additionally acquired 663,005 shares of the Firm within the public market. Through the yr ended August 31, 2021 HCI reported the sale of 1,052,328 widespread shares of the Firm. At August 31, 2021, HCI’s possession of the Firm was reported at 21,297,526 widespread shares, representing a 28.33% curiosity within the Firm.

Key Administration Compensation

The remuneration the CEO, CFO and different key administration personnel and the administrators throughout the years ended August 31, 2021 to 2019 is as follows:

Yr ended August 31,
2021
August 31,
2020
August 31,
2019
Salaries $ 1,236 $ 916 $ 927
Severance1 828
Administrators charges 241 261 171
Share-based funds – administration 2,556 907 393
Share-based funds – administrators 617 52 155
Complete $ 5,478 $ 2,136 $ 1,646

1Through the yr, the Firm’s former President and CEO resigned from the Firm.

11.CONTINGENCIES AND COMMITMENTS

The Firm’s remaining minimal funds underneath its workplace and gear lease agreements in Canada and South Africa complete roughly $282 to February 2024.

From interval finish the Firm’s combination commitments are as follows:

PLATINUM GROUP METALS LTD.
Notes to the Consolidated Monetary Statements
(in 1000’s of United States {Dollars} until in any other case acknowledged besides share and per share information)

Funds Due by Yr
< 1 Yr 1 – 3 Years 4 – 5 Years > 5 Years Complete
Lease Obligations $ 120 $ 162 $ $ $ 282
Environmental Bonds 41 83 83 207
Discovery Drilling 266 266
Convertible Notes (Observe 7)(1) 21,364 21,364
Sprott Facility (Observe 6)(1) 10,578 10,578
Totals $ 32,369 $ 245 $ 83 $ $ 32,697

Notes:

(1) Consists of unamortized deferred finance charges.


Africa Vast Authorized Motion

In April 2018, the Firm accomplished a transaction whereby Maseve Investments 11 (Pty) Ltd. (“Maseve“) was acquired (the “Maseve Sale Transaction“) by Royal Bafokeng Platinum Ltd. (“RBPlats“). Maseve owned and operated the Maseve Mine. In September 2018, the Firm reported receipt of a summons issued by Africa Vast Mineral Prospecting and Exploration Proprietary Restricted (“Africa Vast“) whereby Africa Vast instituted authorized proceedings in South Africa towards PTM RSA, RBPlats and Maseve in relation to the Maseve Sale Transaction. Africa Vast held 17.1% of the shares in Maseve previous to completion of the Maseve Sale Transaction. Africa Vast is looking for, at this late date, to put aside the closed Maseve Sale Transaction. RBPlats consulted with senior counsel, each throughout the negotiation of the Maseve Sale Transaction and in regard to the present Africa Vast authorized proceedings. The Firm has obtained authorized recommendation to the impact that the Africa Vast motion is factually and legally faulty. Varied statements and paperwork had been filed throughout calendar 2021 and a trial to listen to proof occurred within the Excessive Court docket of South Africa October 4 to October 8, 2021. Closing Heads of Argument had been filed on November 9, 2021 and ultimate arguments are to be heard by the Court docket in January 2022.

Financial institution Advisory Charges Payable

Sure deferred financial institution advisory charges associated to the Maseve Sale Transaction and the Implats Transaction turned payable as quickly as practicable after the Firm repaid a $40 million secured mortgage facility on account of Liberty Metals & Mining Holdings, LLC, which was repaid on August 21, 2019. Through the yr, the Firm paid the deferred financial institution advisory charges in full.

12.SUPPLEMENTARY CASH FLOW INFORMATION

Web change in non-cash working capital:

Interval ended August
31, 2021
August
31, 2020
August
31, 2019
Quantities receivable, pay as you go bills and different belongings $ 30 $ 234 $ 195
Fee of financial institution advisory charges (2,890 )
Accounts payable and different liabilities (102 ) (973 ) (697 )
$ (2,962 ) $ (739 ) $ (502 )

Segmented info is supplied on the premise of geographical segments because the Firm manages its enterprise by means of two geographical areas – Canada and South Africa. The Chief Working Determination Makers (“CODM“) critiques info from the beneath segments individually so the beneath segments are separated.

PLATINUM GROUP METALS LTD.
Notes to the Consolidated Monetary Statements
(in 1000’s of United States {Dollars} until in any other case acknowledged besides share and per share information)

The Firm evaluates efficiency of its working and reportable segments as famous within the following desk:

At August 31, 2021 Belongings Liabilities
Canada $ 7,038 $ 29,625
South Africa 44,161 2,101
$ 51,199 $ 31,726
At August 31, 2020 Belongings Liabilities
Canada $ 2,101 $ 40,922
South Africa 35,314 636
$ 37,415 $ 41,558
Complete Loss (Revenue)
for the interval ended
August 31,
2021
August 31,
2020
Canada $ 15,202 $ 10,681
South Africa (7,037 ) 934
$ 8,165 $ 11,615

14.GENERAL AND ADMINISTRATIVE EXPENSES

GENERAL AND ADMINISTRATIVE EXPENSES Yr Ending
August 31,
2021
Yr Ending
August 31,
2020
Salaries and advantages $ 1,794 $ 1,644
Severance1 828
Authorized 505 245
Technical consulting charges 405 194
Accounting 331 284
Insurance coverage 311 241
Regulatory Charges 252 214
Shareholder relations 235 284
Depreciation 122 177
Journey 96 174
Different 242 269
Complete $ 5,121 $ 3,726
1Through the yr, the Firm’s former President and CEO resigned from the Firm.

15. CAPITAL RISK MANAGEMENT

The Firm’s goals in managing its liquidity and capital are to safeguard the Firm’s means to proceed as a going concern and supply monetary capability to satisfy its strategic goals. The capital construction of the Firm consists of share capital, contributed surplus, gathered different complete loss and gathered deficit.

The Firm manages the capital construction and makes changes to it in mild of adjustments in financial circumstances and the chance traits of the underlying belongings. To keep up or regulate the capital construction, the Firm might challenge new shares, challenge new debt, purchase or get rid of belongings.

PLATINUM GROUP METALS LTD.
Notes to the Consolidated Monetary Statements
(in 1000’s of United States {Dollars} until in any other case acknowledged besides share and per share information)

With the intention to facilitate the administration of its capital necessities, the Firm repeatedly updates the Board of Administrators with regard to budgets, forecasts, outcomes of capital deployment and basic business circumstances. The Firm doesn’t at present declare or pay out dividends.

As at August 31, 2021, the Firm is topic to externally imposed capital necessities underneath the Sprott Facility. Please see Observe 6 for additional particulars.

16.FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The Firm examines the varied monetary dangers to which it’s uncovered and assesses the impression and chance of incidence. These dangers might embrace credit score threat, liquidity threat, forex threat, rate of interest threat and different worth dangers.

(a)Credit score threat

Credit score threat arises from the chance that the monetary asset counterparty, might default or not meet its obligations timeously. The Firm minimizes credit score threat by monitoring the reliability of counterparties to settle belongings. The utmost publicity to the credit score threat is represented by the carrying quantity of all of the monetary belongings. There isn’t any materials focus of credit score threat in money and money equivalents, commerce and different receivables and loans.

(i)Money

With the intention to handle credit score and liquidity threat the Firm holds money solely with Canadian chartered and South African banks.

(ii)Efficiency Bonds

With the intention to discover and develop its properties in South Africa, the Firm was required to put up efficiency bonds as monetary ensures towards future reclamation work. These funds are held with Customary Financial institution of South Africa Restricted with the DMR as beneficiary in accordance with the Mineral and Petroleum Sources Improvement Act (the “MPRDA“) and the Firm’s environmental administration programme.

(b)Liquidity threat

The Firm has in place a planning and budgeting course of to assist decide the funds required to help the Firm’s regular working necessities and its exploration and growth plans. The Firm repeatedly updates the Board of Administrators with regard to budgets, forecasts, outcomes of capital deployment and basic business circumstances.

The Firm could also be required to supply further financing by the use of personal or public choices of fairness or debt or the sale of venture or property pursuits with a view to have enough money to make debt repayments and dealing capital for continued exploration on the Waterberg Initiatives, in addition to for basic working capital functions.

Any failure by the Firm to acquire further required financing on acceptable phrases might trigger the Firm to delay growth of its materials initiatives or might outcome within the Firm being compelled to promote a few of its belongings on an premature or unfavourable foundation. Any such delay or sale might have a fabric and hostile impact on the Firm’s monetary situation, outcomes of operations and liquidity. Additionally check with Observe 1 for dialogue of going concern threat.

(c)Foreign money threat

The Firm’s useful forex is the Canadian greenback, whereas the consolidated presentation forex is the USA Greenback. The useful forex of all South African subsidiaries is the Rand, whereas the useful forex of Lion Battery Know-how Inc. is the US Greenback. The Firm’s operations are in each Canada and South Africa; due to this fact, the Firm’s outcomes are impacted by fluctuations within the worth of foreign currency echange in relation to the Rand and Canadian and United States {dollars}. The Firm’s vital overseas forex exposures on monetary devices comprise money, loans payable, warrants, convertible notes, accounts payable and accrued liabilities. The Firm has not entered into any agreements or bought any devices to hedge attainable forex dangers presently.

PLATINUM GROUP METALS LTD.
Notes to the Consolidated Monetary Statements
(in 1000’s of United States {Dollars} until in any other case acknowledged besides share and per share information)

The Firm is uncovered to overseas change threat by means of the next monetary devices denominated in a forex aside from Canadian {dollars}:

Yr ended August 31,
2021
August 31,
2020
Money (Rand) $ 192 $ 100
Money (USD) 5,729 1,189
Accounts receivable (Rand) 439 140
Accounts payable (Rand) 1,686 636
Mortgage Payable (USD) 9,089 19,337
Convertible Observe (USD) 18,716 17,212

The Firm’s complete loss is affected by adjustments within the change charge between its working currencies and the USA greenback. At August 31, 2021, based mostly on this publicity a ten% strengthening/weakening in the USA greenback versus Rand overseas change charge and Canadian greenback would give rise to a lower/improve in complete loss for the yr introduced of roughly $3.6 million, (August 31, 2020 – $3.5 million).

(d) Rate of interest threat

The Firm’s curiosity revenue earned on money and on quick time period investments is uncovered to rate of interest threat. At August 31, 2021, based mostly on this publicity a 1% change within the common rate of interest would give rise to a rise/lower within the internet loss for the yr of roughly $61.

At August 31, 2021, the carrying quantities of money, quantities receivable, efficiency bonds and accounts payable and accrued liabilities are thought-about to be cheap approximations of their honest values because of the short-term nature of those devices.

The revenue taxes proven within the consolidated earnings differ from the quantities obtained by making use of statutory charges to the earnings earlier than provision for revenue taxes because of the following:

2021 2020 2019
Loss earlier than revenue taxes $ 13,008 $ 7,056 $ 16,670
Revenue tax restoration at statutory charges (3,512 ) (1,905 ) (4,503 )
Distinction of overseas tax charges 19 (8 ) (2 )
Non-deductible bills and non-taxable portion of capital beneficial properties 1,061 (216 ) 1,316
Modifications in unrecognized deferred tax belongings and different 2,487 2,201 3,295
Revenue tax expense (restoration) 55 72 106
Revenue tax expense consists of:
Present revenue taxes $ $ $
Deferred revenue taxes 55 72 106
$ 55 $ 72 $ 106

PLATINUM GROUP METALS LTD.
Notes to the Consolidated Monetary Statements
(in 1000’s of United States {Dollars} until in any other case acknowledged besides share and per share information)


The gross motion on the web deferred revenue tax account is as follows:

2021 2020 2019
Deferred tax legal responsibility in the beginning of the yr $ $ $
Tax (expense) regarding the loss from persevering with operations (55 ) (72 ) (106 )
Tax restoration regarding elements of different complete loss 55 72 106
Tax restoration recorded in deficit
Deferred tax legal responsibility on the finish of the yr $ $ $

The numerous elements of the Firm’s internet deferred revenue tax liabilities are as follows:

2021 2020 2019
Convertible notes $ (389 ) $ (661 ) $ (1,024 )
Loans payable (180 ) (247 ) (339 )
Mineral properties (2,597 ) (2,221 ) (2,354 )
Loss carry-forwards 3,166 3,129 3,717
$ $ $

Unrecognized deductible non permanent variations, unused tax losses and unused tax credit are attributed to the next:

2021 2020 2019
Tax Losses:
Working loss carry-forwards – Canada $ 158,619 $ 137,037 $ 125,851
Working loss carry-forwards – South Africa 35,958 100,415 28,925
Web capital loss carry-forwards 204
$ 194,577 $ 237,452 $ 154,980
Non permanent Variations:
Mineral properties $ 7,931 $ 7,672 $ 7,526
Financing Prices 3,611 7,539 13,357
Property, plant and gear 728 697 807
Different 800 603 381
$ 13,070 $ 16,511 $ 22,071
Funding Tax Credit: $ 329 $ 318 $ 312

The Firm’s Canadian working loss carry-forwards expire between 2026 and 2040. The Firm’s South African working loss carry-forwards don’t expire. The Firm’s Canadian unused funding tax credit score carry-forwards expire between 2029 and 2035. The Firm’s Canadian internet capital loss carry-forwards don’t expire.

ITEM 19. EXHIBITS

See “EXHIBIT INDEX”, beneath.

SIGNATURES

The registrant hereby certifies that it meets the entire necessities for submitting on Kind 20-F and that it has duly triggered and approved the undersigned to signal this Annual Report on its behalf.

PLATINUM GROUP METALS LTD.
(Registrant)
Date: November 24, 2021 By: /s/ Frank R. Hallam
Frank R. Hallam
Interim President and Chief Govt Officer

EXHIBIT INDEX

Exhibit Quantity Description
1.1 Articles of the Firm, as amended and consolidated on February 27, 2014 (integrated by reference to Exhibit 1.1 to the Kind 20-F filed by the Firm on December 29, 2017)
2.1 Description of Frequent Share Rights (included underneath Merchandise 10.B of this Kind 20-F)
4.1 Share Compensation Plan, as amended (integrated by reference to Exhibit 99.1 to the Kind 6-Ok filed by the Firm on March 6, 2020)
4.2 Sprott Credit score Settlement dated August 15, 2019 integrated by reference to Exhibit 4.2 to the Kind 20-F filed by the Firm on November 26, 2019
4.3 Convertible Notes Indenture dated June 30, 2017 (integrated by reference to Exhibit 99.1 to the Kind 6-Ok as filed by the Firm on July 5, 2017)
4.4 Complement No. 1 to Convertible Notes Indenture dated January 31, 2018 (integrated by reference to Exhibit 4.12 to the Kind 20-F filed by the Firm on November 30, 2018)
4.5 Fairness Distribution Settlement dated February 5, 2021 (integrated by reference to Exhibit 99.1 to the Kind 6-Ok as filed by the Firm on February 5, 2021)
4.6 Credit score Settlement Modification Settlement dated September 8, 2020 (integrated by reference to Exhibit 4.6 to the Kind 20-F filed by the Firm on November 25, 2020)
4.7 HCI Amended and Restated Subscription Settlement dated Might 10, 2018 (integrated by reference to Exhibit 99.1 to the Kind 6-Ok filed by the Firm on Might 14, 2018)
8.1 Listing of Subsidiaries (included underneath Merchandise 4.C. of this Kind 20-F)
12.1 Certification of Interim Chief Govt Officer
12.2 Certification of Interim Chief Monetary Officer
13.1 Certification of Interim Chief Govt Officer
13.2 Certification of Interim Chief Monetary Officer
15.1 Unbiased Technical Report, Waterberg Mission Definitive Feasibility Examine and Mineral Useful resource Replace, Bushveld Complicated, South Africa” dated efficient September 4, 2019 (integrated by reference to Exhibit 99.1 to the Kind 6-Ok filed by the Firm on October 8, 2019)
15.2 Consent of PricewaterhouseCoopers LLP
15.3 Consent of Charles J. Muller
15.4 Consent of Gordon I. Cunningham
15.5 Consent of Michael Murphy
101.INS XBRL Occasion Doc-the occasion doc doesn’t seem within the Interactive Knowledge File as its XBRL tags are embedded throughout the Inline XBRL doc
101.SCH XBRL Taxonomy Extension Schema
101.CAL XBRL Taxonomy Extension Calculation Linkbase
101.DEF XBRL Taxonomy Extension Definition Linkbase
101.LAB XBRL Taxonomy Extension Label Linkbase
101.PRE XBRL Taxonomy Extension Presentation Linkbase
104 Cowl Web page for Firm’s Annual Report on Kind 20-F for the yr ended August 31, 2021, formatted in Inline XBRL

Disclaimer

Platinum Group Metals Ltd. printed this content material on 24 November 2021 and is solely liable for the data contained therein. Distributed by Public, unedited and unaltered, on 24 November 2021 21:39:11 UTC.

Publicnow 2021

All information about PLATINUM GROUP METALS LTD.

Gross sales 2020

Web revenue 2020 -7,13 M

Web Debt 2020 35,4 M

P/E ratio 2020 -26,9x
Yield 2020
Capitalization 190 M
190 M
EV / Gross sales 2019
EV / Gross sales 2020
Nbr of Workers 13
Free-Float 70,7%

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Platinum Group Metals Ltd. Technical Analysis Chart | MarketScreener

Technical evaluation developments PLATINUM GROUP METALS LTD.

Brief Time period Mid-Time period Lengthy Time period
Traits Impartial Impartial Bearish



Revenue Assertion Evolution

Promote

Purchase

Imply consensus OUTPERFORM
Variety of Analysts 3
Final Shut Value
3,12 CAD
Common goal worth
6,12 CAD
Unfold / Common Goal 96,0%




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