ARCHER MATERIALS LIMITED — AGM Information 2016

Oct 27, 2016

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Archer Exploration Limited

2016 Annual General Meeting

28 October 2016

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Contents
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AXE has 2 major projects progressing towards commercialisation

Significant progress being made with the Leigh Creek Magnesite project AXE is focused on capital efficiency and promotion of early cash flow projects

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Magnesite Graphite Other project opportunities
• World leading resource • 100% owned project • Cobalt Bull JV
• • •
Toll processing Multi decade mine life Archer to receive $200k
opportunities utilising • cash payment and retain
Mine Lease Proposal
a 25% interest in select
existing infrastructure
prepared for lodgement tenements with Cobalt
•
Test work successfully •
Ultra-pure product testing Bull to spend $2m on
completed in advance of has confirmed suitability for exploration over 3 yrs
bulk trial battery production • Prospective for cobalt,
•
Agreements negotiated to • manganese, copper and
Advanced product
gold
fast track development
specification testing proves
•
• Additional Exploration
Growing demand for ability to manufacture a
licenses are prospective
magnesia range of graphene products
for: agricultural carbon,
• Attractive project • Access & availability of
barite, tin, coal to liquids,
economics services including water
lithium and base metals
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2

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Diversified business
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• Leigh Creek Magnesite

• World’s largest magnesite deposit of its type & 20+ year resource.

• Advanced negotiations with established commercial kiln operators regarding toll treatment

• Commercial calcining of magnesite expected to commence CY2017

• Quick path to production and cash flow generation

• Potential to generate long term growth

• Campoona graphite

• Advanced ultrapure carbon project

• Lithium battery grade graphite

• Successful graphene manufacture

• Option to expand into large flake

• Other opportunities

• Cobalt Bull

• Barite

• Coal to liquid

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Cobalt Bull JV
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• Lithium, tin and base metal exploration prospects

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Magnesite production can fund future growth
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Other opportunities

Graphite project cash flows

Magnesite project cash flows

Time (yrs)

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Leigh Creek Magnesite
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Magnesite outcrop

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World’s largest cryptocrystalline resource
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Leigh Creek Magnesite Project is 48% of world cryptocrystalline resources

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• Cryptocrystalline magnesite is a unique and scarce mineral representing only 7% of world’s total magnesite resources

• Cryptocrystalline can produce a wide range of valuable commercial products including Dead Burn Magnesia (DBM) and Caustic Calcine Magnesia (CCM)

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6%
Australia - Leigh Creek
6%
Australia - Other
48%
13%
Turkey
China
India
17%
Other
10%
World cryptocrystalline magnesite resources 6
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Country	Resources (Mt)
Australia – Leigh Creek	453
Australia – Other	97
Turkey	162
China	121
India	59
Other	59
Sub Total	951

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Source: Industry Consultant. Various industry publications

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Leigh Creek Magnesite Deposits
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• 6 magnesite deposits that extend for more than 120km NW of Leigh Creek Township

• Magnesite is a series of parallel dipping beds with dolomite interburden

• Closure of Alinta’s operation’s has created government and local support for projects in this region

• Mutual cooperation with Bowmans Intermodal to identify shared infrastructure possibilities

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Additional Information
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Leigh Creek Magnesite Project conceptual development layout

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CSIRO testing
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• Calcining test work of Leigh Creek Magnesite successfully completed by CSIRO

• Test designed in conjunction with commercial kiln operator

• Further testing to be conducted by kiln operator to establish temperature, residency

• time and other parameters

• Critical work ahead of a bulk trial

• Positive preliminary results

• Final report due in coming weeks

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Removing deadburn magnesia from furnace

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Cooling of deadburn sample

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Deadburn magnesia product

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Favorable market; Strong demand growth
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Demand for magnesia is expected to continue growing through 2017, at a rate of 3.6% pa ( growth trend rate of the last 12 years = 4.7% pa)

Global Magnesia Demand Expected Growth

	2017E	Growth (%)
	(‘000 t)
High Value
Deadburn (DBM)	2,197	3.5
Electrofused (EFM)	965	3.8
Caustic calcined (CCM)	866	7.6
	4,028	4.4
Low Value
DBM	6,770	3.5
CCM	1,811	2.5
	8,581	3.3
Total	12,609	3.6

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Magnesite Project highlights - Scope
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• No capital required for production process.

• Bulk trials to confirm characteristics of monolithic deadburn magnesia product ( MDBM ) – market continuing to grow

• Advanced discussions with local kiln operators about possible toll processing

• Paul Rix (Archer NED) – 12 years magnesia marketing experience (ex QMag Marketing Manager).

• Potential customers identified. Marketing to be aided by bulk trial which will produce quantities to supply samples

• Potential for low cost expansion dependant on kiln access, customer demand and regulatory permissions

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Key dates – magnesite project
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Q4 16 H1 17 H2 17 H1 18

Activity � Lab testing Bulk trial /pilot test Secure offtake Sign toll processing agreement Magnesite mining Magnesite toll processing Customer sales

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Key investment takeaways
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Emerging industrial minerals	�	Cryptocrystalline magnesite has superior physical and chemical
producer		characteristics enabling the production of high value magnesia
		products
	�	Management has extensive magnesite marketing expertise
Close proximity to	�	Magnesite close to existing towns (no-FIFO)
established industrial infrastructure	�	Access to existing power, water, rail and all weather bitumen road connections to the port of Adelaide
	�	Magnesite = low capital cost
Robust project concept	�	Straight forward project concept and strategy
	�	Magnesite project with outstanding project economics with
		expansion opportunity
Rapid pathway to financing	�	Agreement with toll processors provides low cost and rapid
and production		pathway to production
	�	First product sales targeted for early 2018

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Eyre Peninsula Graphite Project
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“Positioning for the New Economy”

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Carbon and Graphite projects
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• Eyre Peninsula Graphite

• Capable of producing ultra pure ultra fine battery grade graphite, and suitable for graphene manufacture

• Continuing to seek off-take partners with potential to move to early production

• Indicative life of mine revenue of A$858 million and NPV of A$126m over 17 year mine life

• Multiple graphite expansion opportunities (Waddikee prospects and projects)

• Pre-production capital costs of A$36m with a further A$25 million expansion capital ($18m in Year 6 and $7m in Year 14).

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*Scoping Study ASX: 19 September 2016

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Campoona Graphite Project
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Mining Lease (ML) and 2 Miscellaneous Purpose Licenses (MPL)

• ML Campoona Shaft -

• covering open pit mine

• MPL Sugarloaf - covering the Sugarloaf processing site and TSF

• MPL Water - covering the Pindari Borefield and process water line to Sugarloaf and potable water line from Jamieson Tank to Sugarloaf

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“Hub and spoke” development where satellite mines feed a centralised mineral processing facility

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Campoona Graphite - mine
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Conventional, largely free dig open pit mine

• Compact site ~ 68 Ha

• Conventional open pit mine largely free dig to 70m bgl

• Initial mining of 10,000tpa from drop-cut directly into ore

• Ramp to full scale production of 140,000tpa of ore

• Campaign day-shift only mining (notionally spring and autumn for full scale production)

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Conventional open pit operation

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Campoona Graphite - infrastructure
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Access to transport, power, water and other vital infrastructure

Process water

• Two bores -100ML/yr dropping to 60ML/yr with decant recycle

Potable water

• Potable water for final concentrate wash

• Agreement with SA Water for supply of 40 - 80ML/yr

Power

• Electricity demand up to 0.8 MW

• 11kV line 4.75kms west of Sugarloaf plant

Transport

• Cleve-Kimba road B-Double capable

Port

• Port Adelaide preferred as container capable

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Pindari bore field located 7km due north of Sugarloaf processing site

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Sugarloaf Carbon
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Potential soil conditioner

• Sugarloaf hosts unique carbon deposit with an exploration target of 60 – 90Mt at 10-12% TC*

• Within 100m of the proposed graphite processing facility

• Provides an ideal resource for bulk use projects

• Early test work by UniSA is positive with further test work to follow

• It must be noted that whilst the Exploration Target is large, the potential quantities and grades presented in the Exploration Target 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 .

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Extent of Sugarloaf Carbon exploration target

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Appendix Graphene potential
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High grade Campoona graphite concentrate enables production of pure graphene

• Research collaboration agreement with University of Adelaide. Test results showed:

• Production of high grade graphene using one step process.

• Manufacture of numerous products (inks, conductive films, electrodes).

• Graphene electrodes performs well (resistivity of 0.5Ohm/sq).

• Graphene products have enormous potential.

• Further discussions and test work ongoing.

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Selected graphene products : graphene conductive film, conductive flexible polymer, graphene composite and electrodes for batteries and supercapacitors

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Other projects
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Copper - Spring Creek

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Gold – Wonna & Watervale

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Barite – Mt James

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Other portfolio opportunities
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• All tenements are owned 100% by Archer and its subsidiaries except for the uranium rights attaching to EL 5804

• Primary focus on Magnesite and Graphite

• Archer retains a diverse portfolio of exploration assets in South Australia

• Low Marginal cost of maintaining tenements

• Leverage team experience to uncover and crystallise value

	Project	Tenement	Commodity
	Carappee Hill	EL 4861	Graphite
	North Burra	EL 5433	Base Metals
	North Cowell	EL 5434	Base Metals
	Wildhorse Plain	EL 5804	Graphite
	Napoleons Hat	EL 5769	Gold
	Cleve West	EL 4893	Graphite
	Ediacara	EL 4869	Barite
	Ediacara	PELA 567	Coal to Liquids
	Wichelina	EL 4729	Magnesite
	Termination Hill	EL 4567	Magnesite
	Spring Creek	EL 5540	Base Metals
	Mt Messenger	EL 5383	Graphite
	Collaby Hill	EL 5553	Base Metals
	Waddikee	EL 5815	Graphite
	Cockabidnie	EL 5791	Graphite
	Blue Hills	EL 5794	Copper/Gold
	Carpie Puntha	ELA 2016/57	Lithium

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Cobalt Bull Joint Venture
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• Cobalt Bull to earn a 75% interest

• in tenements EL 5749, 5433, 5540 and 5794 through:

  • Upfront payment of $200,000 cash

  • Commitment to spend $2.0m on exploration over 3 years

• JV Agreement subject to conditions precedent which must be satisfied by 30/11/2016.

• Tenements are highly prospective for cobalt, manganese, gold and copper.

• JV allows Archer to focus on core projects whilst still participating in exploration upside.

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Disclaimer
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Scoping Study

Information in relation to the Eyre Peninsula Graphite Project Scoping Study, including production targets and financial information, included in this document is extracted from an ASX announcement entitled “ Positive results from SA Graphite Project scoping study ”, lodged with ASX on 19 September 2016 and is available to view at

www.arccherexploration.com.au. Archer confirms that all material assumptions underpinning the production target and financial information set out in that announcement continue to apply and have not materially changed.

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 .

Competent Person Statement

The exploration results and Sugarloaf Exploration Target 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 eighteen 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 2012 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.

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Archer Exploration Limited

ASX code: Company details:

AXE

Level 1, 28 Greenhill Road Wayville South Australia 5034 www.archerexploration.com.au

Further information:

Greg English (Executive Chairman) T +61 8 8272 3288 genglish@archerexploration.com.au

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