PLATINUM GROUP METALS LTD

CONCENTRATE OFFTAKE AND PROCESSING

The 2024 DFS assumes PGM smelter payability deductions as described above based on current market conditions and ongoing concentrate offtake discussions with several South African smelter/refiners. As a result, smelter payability deductions in the 2024 DFS are modelled at a higher cost than the flat 15% smelter discount assumption modelled in the 2019 DFS. Implats holds a first right of refusal for smelter offtake from the Waterberg Project and Hanwa holds the rights to market the final refined metal at market prices.

Before a construction decision can be undertaken arrangements will be required for Waterberg Project concentrate offtake or processing. The Company and Waterberg JV Co. are assessing commercial alternatives for mine development financing and concentrate offtake. Obtaining reasonable terms for Waterberg Project concentrate offtake from an existing smelter/refiner in South Africa is considered the preferred option. The Company is in discussion with several South African smelter operators, including Implats, with a view to establishing formal concentrate offtake arrangements for the Waterberg Project. Although discussions continue, to date, binding concentrate offtake terms have not been agreed.

The Company is also assessing the economic feasibility of constructing a smelter and base metal refinery ("BMR") to process Waterberg Project concentrate outside of South Africa. On December 20, 2023, the Company announced a Cooperation Agreement with Ajlan & Bros Mining and Metals Co. to study the establishment of a stand-alone PGM smelter and BMR in Saudi Arabia. See the Company's news release dated December 20, 2023, for more details.

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Before Waterberg Project concentrate could be processed in Saudi Arabia, a long term export approval to ship unrefined precious metals in concentrate from South Africa would be required. Platinum Group is working with the Government of South Africa to identify local beneficiation opportunities and to analyze the economic impact of exporting concentrate.