ARCHER MATERIALS LIMITED — AGM Information 2013

Oct 30, 2013

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Archer Exploration

Annual General Meeting 31 October 2013

Gerard Anderson Managing Director

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Disclaimer

Competent persons statement

The exploration results reported herein, insofar as they relate to mineralisation, are based on information compiled by Mr Wade Bollenhagen, Exploration Manager of Archer Exploration Limited. Mr Bollenhagen is a Member of the Australasian Institute of Mining and Metallurgy who has more than nineteen years experience in the field of activity being reported. Mr Bollenhagen has sufficient experience which is relevant to the styles of mineralisation and types of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ relating to the reporting of Exploration Results. Mr Bollenhagen consents to the inclusion in the report of matters based on his information in the form and context in which it appears.

The information in this report that relates to the Mineral Resource estimation has been prepared by Mr B Godsmark who is a Member of the AusIMM and peer reviewed by Mr G Reed who is also a Member of the AusIMM (CP). Mr Godsmark is a full time employee of Mining Plus Pty Ltd and Mr Reed is a sub-contractor to Mining Plus Pty Ltd., both have more than five years’ experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Godsmark and Mr Reed have consented in writing to the inclusion in this announcement of the Mineral Resource estimation information in the form and context in which it appears.

Forward looking statements

The information in this presentation is published to inform you about Archer Exploration Limited and its activities. Some statements in this presentation regarding estimates or future events are forward looking statements.

Although Archer Exploration Limited believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results and outcomes will be consistent with these forward-looking statements.

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Presentation outline
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• Corporate overview

• 2013 highlights

• Corporate strategy

• Key Company projects

• Archer Graphite

• Campoona

• Sugarloaf

• Magnesite

• Copper

• Robertstown

• Gold

• Wildhorse Plain Epithermal

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Corporate overview

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Corporate overview

13 Exploration Licences and the rights to minerals other than uranium on Wild Horse Plain.

The tenement portfolio hosts a number of significant projects.

Mineral Exposure

• Graphite

• Copper

• Gold

• Magnesite/magnesia

• Manganese ± REE

• Coal - CSG

• Phosphate

• Barite

• Iron ore

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Archer’s tenement position at 30 September 2013

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Corporate overview
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ASX Code: AXE Shares on Issue 82,362,763 Unlisted Options on Issue 8,075,000 Share price at 30/10/2013 $0.15 Market Capitalisation $12.4 million Cash at 30/09/2013 $7.8 million

Who we are

Chairman

• Greg English

• Directors

• Gerard Anderson

• Tom Phillips

• Alice McCleary

Senior Staff

• Wade Bollenhagen

• Claude Walter

• Dr David Lock

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The limited number of shares on issue and commodity exposure offers shareholders leverage as exploration advances and deposits mature.

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Highlights 2013

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Highlights 2013

Archer Graphite Campoona

Outstanding progress made throughout the year. We have great confidence that we have a very robust project.

Geology/Resources

• RC and diamond Resource drilling completed at Campoona Shaft on 50m x 20m spacing

• Phase 1 JORC Resource December 2012.

• Infill drilling at Central Campoona to 50m x 20m spacings. JORC pending.

• Drilling along and adjacent to the Campoona Shear identified three further graphite occurrences with the same morphology as Campoona.

Metallurgy

• Marketing study completed.

• Defined metallurgical characteristics of the entire Campoona Shaft deposit.

• Sample preparation facility established at Lonsdale during September 2012.

• Rigorous bench-scale testing (35 individual bench-scale tests) completed.

• Bulk flotation tests almost complete with 12 kilograms of concentrate undergoing final recleaning.

• Key elements of process design identified.

• The goal of producing high grade to ultra-pure concentrates has been achieved repeatedly.

• Expect to produce >98% concentrates from flotation then upgrade to customer specifications.

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Highlights 2013

Archer Graphite Campoona (ctnd)

MLP/PEPR

• Baseline Spring Flora and Fauna Studies completed as start of MLP/PEPR process.

• MLP/PEPR commenced.

• Longstanding community consultation.

Land

• Purchased Sugarloaf Property.

• Entered into a Binding Heads of Agreement to purchase 120 acres of land at Campoona Shaft.

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Highlights 2013

Copper

• Robertstown and World’s End (Mimic)

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assessed as significant copper targets.

Gold

• Anomalous epithermal-style gold defined at Bartel. Extensive mapping conducted.

• EM surveys over Wonna and Watervale completed September 2012.

Magnesite

• HPGR crushing and tumbling to abrade fine talc delivered high quality magnesia grading >95% MgO and ≈2.5% SiO2.

• IM process halted pending resolution of a dispute relating to the ownership of the Mt Hutton portion of the greater Leigh Creek magnesite deposits.

EM survey data at Wonna and Watervale with targets identified for drill testing

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Corporate strategy

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Corporate strategy

1. Develop Campoona Graphite

• Complete bulk flotation tests.

• Marketing of Campoona products.

• Value – add research.

• Complete Mining Lease Proposal and Programme of Environmental Protection and Rehabilitation.

• Investigate funding opportunities including the potential to have an equity partner.

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2. Discover, De-Risk, Monetise Magnesite

• The Leigh Creek magnesite deposits are World Class in terms of Resource size and grade. Trade sale process initiated.

Manganese

• Non-core asset. Initial discussions with an interested party.

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Company projects

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Graphite

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Graphite Properties

Metallic properties:

• Excellent conductor of heat and electricity

• Highest natural strength and stiffness of any material

Nonmetallic properties:

• High natural lubricity

• Maintains stability to temperatures of 3,600[o] C

• One of the lightest reinforcing agents

• Highly resistant to chemical attack

Graphite Market

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Growth spirals in graphite crystal

Amorphous Graphite

Microcrystalline graphite ≈70% of world production. Widely used in industrial applications for its high melting point, resistance to thermal shock and lubrication . Grades mostly ≤85% C.

Flake Graphite

Mostly occurs as flat platy crystals in metamorphic rocks. Carbon grades are generally low mostly from 2-6%TGC and rarely >10%TGC.

Flake is classified and marketed based on the size of the graphite crystals (flake size) and by

the carbon content (generally >94%TGC). Three main flake sizes:

• Fine flake (-200 mesh or 75 – 149 microns)

• Medium flake (+100 - 80 mesh or 149 – 177 microns)

• Large flake (+80 mesh or >177 microns)

Synthetic Graphite

As large as Natural Graphite market but around 14 times the natural market value. Made from high quality petroleum coke and used where grades need to be typically >99% C.

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Archer Graphite

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Substantial land position (1,100km[2] ) in graphite province. Two main deposits – Campoona and Sugarloaf plus several nearby flake occurrences.

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Campoona Geology

• Graphite outcrops.

• 10-50m thick highly graphitic schist.

• Deep complete oxidation.

• Upper Claystone - ≈5m thick clay-rich highly graphitic zone of graphite + kaolin + quartz

• Upper BOCO - porous graphite + quartz + kaolin + tourmaline ± garnet ± iron oxides ± sillimanite ± muscovite gangue. Feldspars all converted to kaolin and most removed. Some clay-rich zones occur as cavity fill.

• Lower BOCO - Below ≈60m depth the graphitic schist becomes progressively more competent. Strong weathering persists to at least 100m depth. Feldspars all converted to illite ± kaolin with minor smectite below 80m.

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Campoona Shaft Schematic Long Section
NORTH SOUTH
Complete Clay
Graphite Schist
Alteration
Chlorite rich
0 100 Gniess and
Deposit open at depth beyond 120m of surface Schist cross cutting
metres Amphibolite
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Outcropping, thick, high grade graphite deposit

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Campoona JORC Resource

 Average JORC Resource grade of 12.3% C.

Campoona JORC Resource (5%C lower cut-off grade)

Area	Resource Category	Tonnes (Mt)	Graphite (% C)	Contained Graphite (tonnes)
Campoona Shaft	Measured	0.339	14.8	50,200
	Indicated	1.056	12.7	134,100
	Inferred	0.837	10.7	89,600
Central Campoona*
	Inferred	0.295	12.5	36,900
Combined	Total Resource	2.527	12.3	310,800

• *Central Campoona Resource estimation confined to 200m of known strike of 1,400m

Campoona is in the upper quartile of world graphite deposits in terms of grade. The Resource can support a long-life (15 – 20 year) project.

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Outstanding natural liberation

Prolonged intense lateritic weathering has resulted in high natural liberation of the graphite from clay + quartz ± tourmaline ± garnet ± sillimanite ± muscovite gangue.

Typical highly purity Campoona concentrate.

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Outstanding natural liberation

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High purity concentrates & excellent recovery

Bench-scale and bulk flotation testing of Campoona graphite have delivered excellent results.

• Rigorous bench-scale testing to define key processing parameters.

• Scale-up bulk flotation tests emulate bench-scale results.

• Pure -75 micron concentrates grading 97- >99% C.

• Final cleaning results pending.

Pushing purity typically has adverse impacts on YIELD.

• Recoveries through all three Campoona geologic horizons ≥90%. Further improvements expected.

• All three ore horizons can be processed using the same processing method.

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High purity bulk flotation concentrates
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Very few deposits in the world can produce the purity of graphite that Campoona can.

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High purity concentrates & excellent recovery

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SEM image of high purity re-cleaned bulk flotation concentrates

Very few deposits in the world can produce the purity of graphite that Campoona can.

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Repeatability of results

Rigorous bench-scale metallurgical testing undertaken

• 35 bench scale tests completed on samples across the length, breadth and depth of the deposit.

• Concentrates rival synthetic graphite in grade but deliver far higher crystal structure.

• High purity graphite concentrate repeatable for all three geologic horizons representing the uppermost 100m (approx) of the deposit commencing at the surface. Such high purity natural graphite concentrates are rare.

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Campoona Shaft metallurgy update for -75µm
Upper Clay Horizon
97% - >99%C concentrates from mechanical cell flotation
>90% Recovery
NORTH SOUTH
Upper BOCO
95% - 97%C
≈90% Recovery
Lower BOCO
96% - 97%C
90-95% Recovery
Complete Clay
Graphite Schist
Alteration
Chlorite rich
0 100 Gniess and
Deposit open at depth beyond 120m of surface Schist cross cutting
metres Amphibolite
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High purity, high value products

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Stylised Graphite Price (US$/t) vs Grade Curve
$40,000
$30,000
Archer’s
expected
product
range
$20,000
$10,000
$0
80% 85% 90% 95% 97% 99% 99.50% 99.95%
)
$/t
S
U
(
e
c
ir
P
e
iht
p
a
r
G
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• “Prices for flake graphite of 99.0% and higher in particle size ranges from 5 micron to - 100 Mesh will command between A$2,500 to A$5,000 per metric tonne".

Target is to produce >98% C concentrates and undertake post recovery treatment to deliver specific higher grade tailored products to customers. 22

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Exploration upside

Airborne EM and reconnaissance drilling has identified strike extensions and fold repetitions of the target graphitic schist

EM identified several possible graphite	EM identified several possible graphite						North
bodies along strike from the known
graphite occurrences at Campoona.
Initial regional exploration drilling
outlined three additional high grade
graphitic schist bodies and several other
bodies requiring follow-up drilling.
					East
Hole ID Depth Depth Interval C (%)	Location
From(m) To(m)
WHPRC13_002 39 45 6 12.6	Camp _south
WHPRC13_003 0 6 6 7.8	Camp _south
WHPRC13_024 8 17 9 8.1	Camp_east
WHPRC13_032 30 38 8 10.9	Camp_north
			South

Resource extensions highly likely but not needed for 20 years!

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Archer Graphite’s comparative advantages

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Recovery : Excellent recoveries for all geologic horizons. Grade: 12.3%C places Campoona well into the upper quartile of emerging graphite projects. Costs: Expected low capital and operating costs. Long-Life: Phase 1 JORC Resource could support >20 year project. Resource additions expected. Exploration:1,100km[2] land position in graphite province. Many untested graphite occurrences. Mining: Predominantly free-dig, open cut mining with low overall strip ratio. Infrastructure: Critical infrastructure - roads, power, water, accommodation and services all in area. Land : Company owns and has a binding HoA over the freehold land needed to commence operations. Low Sovereign Risk : South Australia one of the world’s most stable AAA mining jurisdictions.

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Sugarloaf graphite

• Drilling by Archer in 2008, 2011 and 2012 recorded significant graphite.

• Sugarloaf EM: 4km long.

• Exploration Target of 40 – 70Mt grading 1012% total carbon*.

*The potential quantities and grades presented are conceptual in nature, there has been insufficient exploration to define an overall Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource

• Petrology: graphite varies from 30 – 150 micron (averages100 micron). Records show up to 15% flake from historic shafts.

• 2 diamond drill holes completed in September 2012. Metallurgical testing once Campoona studies completed.

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Archer purchased the 1,403 acreSugarloaf Property that hosts bulk of Sugarloaf graphite deposit

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Significant graphite intercepts over a >2km strike

Archer Magnesite – Leigh Creek magnesite

• Magnesium carbonate (MgCO3) was deposited as a chemical precipitate in shallow, marginal marine lagoons and mudflats, and occurs predominantly as cryptocrystalline particles 1–5 µm in size. 86 separate magnesite interbeds within the Skillogalee Dolomite have been recorded at Leigh Creek.

• Magnesia (MgO) is produced by heating magnesite typically above 1000[o] C. The most used magnesia products are:

1. Caustic Calcined Magnesia (CCM) is formed by heating magnesite to temperatures up to 1,000[o] C. It is reactive and that reactivity is important for construction materials, industrial applications, in fertilizers and as a soil conditioning agent in agriculture, for water purification and waste water treatment and in the paper and rubber industries.

2. Deadburn Magnesia (DBM) is produced by heating CCM to temperatures of 2,300[o] C to produce inert magnesia capable of withstanding temperatures up to 3,600[o] C. Deadburned magnesia is used in the production of refractory bricks.

Magnesite / magnesia products are widely used across a number of high growth industries and widely used in high technology consumer goods. MgO Market grows at ≈330ktpa. Market - 63% refractories; 23% chemicals; 14% magnesium metal

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Archer magnesite summary

• Archer’s Leigh Creek is the World’s largest

• cryptocrystalline magnesite deposit

• Fully serviced town of Leigh Creek nearby.

• Good supply chain logistics - Mt Hutton within 20kms privately owned standard gauge rail line, rail connection to Port Pirie, Port Pirie gas lateral.

• Trade sale process commenced.

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Site of historic mining at the Mt Hutton site

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Archer Copper

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Robertstown

• Robertstown rock chips to 1.75g/t Au and 1.14% Cu. 400m x 60m copper soil anomaly defined by auger drilling.

• Cuprite (Cu2O) identified in highly ferruginous gossan.

• Significant historic silver deposit.

• Robertstown EM flown October 2012.

• RC drilling intersected low grade copper.

• Exploration for the future will focus on identifying the location of the historical poly metallic workings on the tenement.

Robertstown and Mimic copper targets

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Archer Gold

Epithermal

• Widespread hydrothermal alteration consisting of argillic and potassic alteration and extensive quartz breccias.

• Petrology recorded free gold associated with antimony within a carbonate host rock that had undergone silica flooding and brecciation.

• EM flown as part of the greater graphite survey indicates possible northeast extension to the alteration supported by fluorite occurrences some 3.5km’s NNE.

• Extensive geological mapping completed.

• EPIRC12_001 recorded 29m @ 0.57ppm Au from 79m including 1m @ 2.15g/t Au.

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Photomicrograph - Carbonate breccia largely replaced by quartz, carrying a free gold (red circle) associated with an equally fine soft grey metallic mineral- possibly antimony

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Exploration drill holes, fluorite localities and rock chips over the recent EM data (140m depth) 29

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Archer Gold

Epithermal

• During 2013 the Company also completed short exploration programmes at the Epithermal gold prospect on Wildhorse Plain.

• Detailed mapping at the Epithermal gold prospect at Wildhorse Plain has identified a > 6km zone of epithermal alteration (potassic + argillic alteration accompanied by fluorite + amethyst + free gold + antinomy). Mapping also identified two areas of extensive brecciation and silicification that carry widespread anomalous gold. A rock chip sample sent for petrological examination recorded free gold associated with antinomy.

• The widespread alteration geochemistry suggests the Epithermal prospect to be a low sulphidation hydrothermal (epithermal) alteration system. The area of known alteration is very large (>6 kms) and is perhaps much larger as it is seen to extend under cover to the North. Enriched gold tenor was demonstrated in 2012 when drilling recorded a 29m intercept grading 0.57g/t Au.

• Low sulphidation epithermal alteration systems often record strong vertical mineral zonation and can host bonanza grade gold veins. In such systems gold is often concentrated through a combination of ground preparation (permeability) and rheological contrast.

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Archer Gold

Wonna & Watervale

• Explored as one area due to the similarities in geology, alteration and gold mineralisation.

• Gold has high nugget effect.

• Previous assay work by Archer reports from one sample taken in the field, a range of assays from 0.01g/t to 17.45g/t can be reported (Watervale, 2011).

• A cautious exploration approach is necessary in evaluating drill targets.

• EM has highlighted several conductive bodies, NOT associated with conductive host rocks, ie. Tapley Hill Formation

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Campoona Work schedule to 30 Sept 2014

Campoona Graphite	Activity	Oct 13	Nov 13	Dec 13	Jan 14	Feb 14	Mar 14	Apr 14	May 14	Jun 14	Jul 14	Aug 14	Sep 14
	MLP/PEPR
	Metallurgical characterisation
	Market assessment
	Geotechnical drilling
	Pilot scale testing?
	Finance options
	Lodge MLP/PEPR

Archer has ample cash reserves to take Campoona through the approvals process

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* .