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Platinum Group Metals: Vancouver, Bc V6C 2B5 P: 604-899-5450 F: 604-484-4710 News Release

The following excerpt is from the company's SEC filing.

No. 15-307

Platinum Group Metals to Drawdown US $40 million Sprott

Facility and enters into New Financing for US $40 million,

Subject to Shareholder and Regulatory Approval


Platinum Group Metals Ltd.

(PTM-TSX; PLG-NYSE MKT) (Platinum Group or the Company) reports that it has delivered notice to Sprott Resource Lending Partnership (Sprott) for the drawdown of a US $40 million working capital facility executed in February, 2015 (the Sprott Facility). The Company has also entered into agreements with its l argest shareholder Liberty Metals & Mining Holdings, LLC, a subsidiary of Liberty Mutual Insurance (LMM) for a further US $40 million loan facility, subject to regulatory and disinterested shareholder approval and Waterberg Project partner approval.

These financings are planned to allow the Company to complete its ramp-up at the WBJV Project 1 platinum mine (Project 1) and for general working capital. Cold commissioning of the plant is in process and platinum and palladium concentrate production is set to commence in the weeks ahead. First concentrate delivery to Anglo Platinums Waterval smelter at Rustenburg is planned for January 2016. Underground development is ongoing.

R. Michael Jones, CEO and Co-founder of Platinum Group said, We are pleased to finalize these arrangements and we will be looking for prompt approval by regulators and shareholders. These important financing steps avoid the equity market and allow our team to focus on the commencement of production and ramp up.

Platinum Group has delivered the construction and development of Project 1 within the updated budget and schedule. At planned steady state production in 2018 Project 1 is expected to be one of the lower cost conventional PGM mines in South Africa with an expected cash cost of approximately US $625 per 4E ounce (see July 15, 2015 press release Project Update and Third Quarter Results).

The Company continues to work on growth at the large Waterberg Project, funded by the Japan Oil, Gas and Metals National Corporation, with continued drilling, resource modelling, mine design, metallurgy and infrastructure planning all underway. Exploration to expand and further delineate Waterberg is ongoing. Waterberg is dominantly a palladium deposit with associated platinum, gold, copper and nickel. An update on drilling and engineering at Waterberg is planned shortly.

US $40 Million Additional Loan with Production Payment

LMM and the Company have entered in to a second lien credit agreement with respect to a US $40 million loan to the Company (the LMM Loan).


The interest rate on the LMM Loan is 9.5% over LIBOR and the Company estimates that the total amount of interest payable would be approximately US $17,723,118 (based on an undiscounted aggregate of all interest payable to December 31, 2020 based on current LIBOR). Interest payments on the LMM Loan will be accrued and capitalized until December 31, 2016, and then paid to LMM quarterly thereafter. The first 20% of principal and capitalized interest is to be repaid on December 31, 2018 and then in tranches of 10% of the principal at the end of each calendar quarter beginning on March 31, 2019 and for each of the next 7 quarters of the facility.

In consideration for the advancement of, and pursuant to, the LMM Loan, the Company has granted to LMM a production payment right, as described below. If the Company exercises its right to buy back a portion of the production payment, then the LMM Loan payback will be deferred, with 10% of the principal and capitalized interest to be repaid on each of September 30, 2019 and December 31, 2019, followed by 20% of principal and capitalized interest to be repaid on each of March 31, 2020, June 30, 2020, September 30, 2020 and December 31, 2020.

Under the LMM Loan, the Company will provide a subordinated pledge of 100% of the shares of Platinum Group Metals RSA Pty Ltd. (PTM RSA), its wholly owned South African subsidiary. The LMM Loan will be subordinated to the Sprott Facility and scheduled to be repaid after Sprott.

The Company is in process to make an application to the South African Reserve Bank (SARB) for the approval of a guarantee provided by PTM RSA against the cash component of the LMM Loan. This approval is required for the advance of the LMM Loan. Events of default under the Sprott Facility are also treated as events of default under the LMM Loan, and vice versa.

The drawdown of the Sprott Facility for US $40 million is contingent on the closing of LMM Loan as outlined here-in, or alternative funding being available, so that the Company has the estimated financial resources to complete its planned ramp-up of Project 1 during 2016.

Sprott, in first lien position, has agreed to amend its original terms and enter into an inter-creditor agreement to allow for the second lien position for LMM as outlined herein. The Sprott Facility is to be re-paid during 2017 (see the terms and conditions of the Sprott Facility in the Companys news release dated February 16, 2015). The Company, Sprott and LMM worked co-operatively and positively on an arms-length basis to complete the arrangements.

Pursuant to the LMM Loan, and subject to regulatory and disinterested shareholder approval, Platinum Group Metals Ltd. (Canada) has entered into a life of mine Production Payment Agreement (PPA) with LMM granted...