ARCHER MATERIALS LIMITED — Capital/Financing Update 2008

Aug 19, 2008

20 August 2008

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SIGNIFICANT COPPER AND GOLD DISCOVERIES FOR ARCHER ON SA’s EYRE PENINSULA

HIGHLIGHTS

• Maiden drilling identifies consistent copper and gold mineralisation along significant strike length at Archer’s 100%-owned Carappee Hill project on Eyre Peninsula.

• Assay results and follow-up rock chip sampling extends strike length at Cu-Au Bender Prospect to 2 kilometres.

• Assay results pending from drilling for magnetite and manganese at nearby Jamieson Tank Prospect.

INTRODUCTION

Assay results from a maiden drilling program by Archer Exploration Limited (ASX: “AXE”) have confirmed consistent copper and gold mineralisation along a 2 kilometre strike length at the Bender Prospect – part of the Company’s 100%-owned Carappee Hill project on the Eyre Peninsula, South Australia.

The results, which were above expectations, were from a wider 18-hole Reverse Circulation (RC) drilling program completed by Archer on 3 July at Carappee Hill. Assaying identified copper values of up to 0.2% copper and gold up to 0.4 g/t gold within the extended strike length at Bender Prospect.

Further assay results are expected within the next three weeks from drilling at the nearby Jamieson Tank Prospect, a magnetite and manganese target to the northwest.

The drilling program was initiated to confirm the significance of previous discoveries by Western Mining Corporation (WMC), which in 1993 intersected significant manganese mineralisation in RC drilling at Jamieson Tank, and to drill test anomalous geophysical and surface copper-gold targets at Bender.

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Figure 1: Location of RC drill holes drilled in June and July 2008 at Carappee Hill.

MAIDEN DRILLING

Archer’s initial drilling at its Carappee Hill tenement has focused on iron and manganese mineralisation at the Jamieson Tank Prospect and copper and gold at the Bender Prospect, to the southeast.

The Company is exploring the tenement for the possibility of either a Sedimentary Exhalative (SEDEX) deposit or a Volcanogenic Massive Sulphide (VMS) deposit, as targeted by previous exploration in the area by WMC and BHP. Examples of SEDEX deposits in Australia are at Mt Isa and Broken Hill, examples of VMS deposits in Australia are Golden Grove and Mt Morgan.

Surface expressions of manganese and the presence of silica-rich rocks are both indicative of such sulphide deposits, while elevated barium levels (+1% Ba) and silver (+1g/t Ag)encountered in Archer’s initial drilling add weight to this concept.

GOLD AT THE BENDER PROSPECT

Historical drilling and soil sampling by both Goldstream Mining (1997) and Helix Resources (2003) identified an extensive gold soil anomaly over an approximately 1km strike at the Bender Prospect. Although follow-up drilling by these companies identified several intervals of gold (+1g/t Au) in weathered material along the Bender structure, this was never followed up. Recent exploration by Archer has resulted in an extension of the strike length of Bender from 1 to 2km.

As a part of Archer’s first drilling program, a series of holes was drilled north of the Bender outcrop (6294700N) to test the continuity of mineralisation and other anomalies. Considerable graphite, sulphides and quartz stockwork veining were encountered in holes CHRC 010, 016 and 017.

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Figure 2: Simplified geological cross section for 6294700N, north of the Bender outcrop, with gold bearing intervals indicated by the histogram.

All assays returned to date are made up of composite samples over 4 metre intervals, with the significant intervals to be re-sampled as single metre intervals. Several encouraging results were returned from holes CHRC010, CHRC012 and CHRC017, including:

CHRC010 105 to 113m averaging 0.15g/t gold, 0.15% copper and 8g/t silver CHRC012 48 to 56m averaging 0.16g/t gold, 0.14% copper and 3g/t silver CHRC016 32 to 36m averaging 0.3% zinc CHRC017 64 to 68m averaging 0.36g/t gold and 0.02% copper.

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Figure 3: Mineralisation envelopes for section 6294700N, drillhole intervals labelled with silver (g/t).

The mineralisation appears to lie in an alteration zone that comprises silica, chlorite, graphite and felsic – intermediate volcanic units. Future exploration will involve deeper holes to be drilled into less oxidised rock to enable a greater understanding of the depth and magnitude of this mineralisation.

Other mineralised intervals to be reported from this drilling are presented in the table below.

Hole Id	From(m)	To(m)	Interval(m)	Aug/t	Ag g/t	Cu %	Zn %
CHRC010	14	22	8	0.02	0.71	0.14	0.03
	77	105	28	0.02	2.46	0.05	0.00
	105	113	8	0.15	8.41	0.15	0.00
CHRC011	4	28	24	0.01	0.25	0.08	0.17
	28	64	36	0.02	4.6	0.02	0.08
CHRC012	48	56	8	0.16	3.03	0.14	0.06
	56	84	28	0.06	4.15	0.03	0.01
CHRC016	32	36	4	0.001	0.29	0.03	0.31
	108	110	2	0.004	0.11	0.07	0.23
CHRC017	24	28	4	0.11	0.77	0.02	0.01
	32	56	24	0.08	3.56	0.03	0.02
	64	68	4	0.36	0.60	0.02	0.03
	72	84	12	0.01	0.27	0.02	0.13

Table 1: Significant results from RC drilling at the Bender Prospect.

ROCK CHIP SAMPLING

Results from rock chip sampling following the drilling campaign have confirmed that significant gold mineralisation does outcrop at the surface at the Bender Prospect.

Archer intends to identify the gold mineralised host rocks over the strike of the prospect, which, coupled with detailed structural mapping, will allow for a greater understanding of the mineralised structure and assist in planning future drilling programs.

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Figure 4: Location of anomalous gold results at the Bender Prospect.

UPCOMING RESULTS FROM JAMIESON TANK

Nine holes drilled at the Jamieson Tank Prospect were designed to test the underlying magnetic units as well as the manganese potential of the area. Assay results are still forthcoming for this phase of the drill program. Selected samples have been submitted for Davis Tube Recovery (DTR) analysis by ALS Laboratories. Once the results have been received and interpreted, the assay information will be published.

The locations of the RC holes are listed below

Hole Id	Easting	Northing	Depth	Dip	Azimuth
CHRC001	6296040	622600	127	-60	270
CHRC002	6295938	622809	34	-60	270
CHRC003	6295932	622819	137	-60	285
CHRC004	6295847	622991	120	-60	282
CHRC005	6295864	622962	114	-60	285
CHRC006	6295835	623024	139	-60	279
CHRC007	6294678	623340	115	-60	259
CHRC008	6294673	623357	115	-60	260
CHRC009	6294671	623626	105	-60	261
CHRC010	6294675	623827	121	-60	260
CHRC011	6293980	623443	103	-70	114
CHRC012	6294078	623467	109	-60	95
CHRC013	6295785	623151	127	-60	270
CHRC014	6295660	623077	139	-60	270
CHRC015	6295568	623112	128	-60	270
CHRC016	6294677	623865	110	-60	260
CHRC017	6294680	623795	109	-60	270
CHRC018	6295740	625167	49	-60	290

Table 2: Drillhole locations from the June-July 2008 RC drill program at Carappee Hill.

For further information please contact:

Mr Greg English Executive Chairman Archer Exploration Limited Tel: (08) 8332 5033

The exploration results reported herein, insofar as they relate to mineralisation, are based on information complied 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 fourteen years experience in the field of activity being reported. 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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ABOUT ARCHER EXPLORATION

Archer Exploration Limited is a iron ore, manganese, copper and phosphate explorer focused on the discovery of world-class deposits. The Company has carefully acquired a portfolio of whollyowned projects in the highly prospective Gawler Craton region of South Australia.

The Company’s Carappee Hill Project on South Australia’s Eyre Peninsula contains iron ore grades of up to 57% and manganese grades of up to 53.8%. The Company is undertaking further exploration at Carappee Hill and is assessing a range of options for the further development of this exciting project.

The Company is also well advanced on the exploration of its Olympic Dam style iron oxidecopper-gold-uranium (IOCG-U) deposit. The Evelyn Dam anomaly has early geophysical characteristics similar to those of Olympic Dam and the recent Carrapateena discovery.

The World’s End Project area covers the historic Fairview Phosphate Mine which was last mined in 1903 when it yielded 100 t of hand-picked phosphate ore grading 25% P2O5.

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Archer’s project areas and tenements, covering prospective iron, manganese, copper and phosphate tenements in the Gawler Craton region of South Australia.