ARCHER MATERIALS LIMITED — Capital/Financing Update 2010

Feb 17, 2010

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18[th] February 2010

Maiden RC drilling underway on Archer’s key Ketchowla manganese project near Burra in SA

A maiden Reverse Circulation (RC) drilling program comprising 42 holes has been commenced by Archer Exploration Limited (ASX code: “AXE”) on its flagship Ketchowla manganese project near Burra in South Australia’s mid-north.

The schedule comprises a total of 2,500 metres of drilling, with the first phase focused on shallow testing of multiple targets defined by rock chip sampling.

Initial analysis results are expected in mid-March. The schedule will move into a more intense second phase involving deeper drilling and a larger capacity drilling rig, from mid March.

Background

Archer Exploration acquired the 100%-owned North Burra Exploration Licence, 4266, on the 15[th] June 2009. The licence is located 43km NNE of the historic Burra township and 36 km from the standard gauge east-west Trans Australian Railway. The North Burra tenement covers a total area of 810 km[2] , with the drilling program announced today covering a footprint of about 140 km[2] .

Results of reconnaissance sampling of the Ketchowla Manganese Deposits have been previously released by Archer Exploration on the 23[rd] September and the 16[th] November 2009 and the 14[th] January this year. This work identified nine larger manganese exposures and many smaller occurrences within a 135 square kilometre area of poor outcrop.

Ketchowla is one of two main areas of manganese mineralisation under assessment by Archer in South Australia. The second, its Jamieson Tank project near Kimba on Eyre Peninsula, recently secured a A$600,000 60% four-year farm-in deal by major Australian manganese producer, OM Holdings Limited and which if successful, will see the Archer and OM form a joint venture to subsequently develop the deposit.

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For further information please contact:

Mr Greg English Mr Mike Hatcher Chairman Chief Executive Officer Archer Exploration Limited Archer Exploration Limited Tel: (08) 8332 5033 Tel: (08) 8332 5033

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 fifteen 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.