ARCHER MATERIALS LIMITED — Capital/Financing Update 2016

Nov 9, 2016

ABN 64 123 993 233

10 November 2016 ABN 64 123 993 233

ASX Announcement

Application lodged to mine SA graphite deposit

Highlights

• Mining Lease Application lodged for Campoona Shaft graphite deposit on SA’s Eyre Peninsula

• Application underpinned by recent favourable Scoping Study

• Historic step in progressing Archer’s broader Eyre Peninsula Graphite Project.

South Australian magnesite and graphite developer, Archer Exploration Limited (ASX: AXE, Archer) is pleased to advise that Pirie Resources Pty Ltd (a wholly owned subsidiary of Archer) has lodged with the SA Department of State Development, an application for a Mining Lease over the Campoona Shaft graphite project area, 20km north of the township of Cleve on South Australia’s Eyre Peninsula.

The Mining Lease application ( MLA ) covers an area of approximately 68ha and includes the Campoona Shaft graphite deposit – one of several such advanced deposits within the Company’s broader Eyre Peninsula graphite project. The MLA, Archer’s first for this project, is accompanied with applications for miscellaneous purposes licences for associated graphite processing infrastructure at nearby Sugarloaf, including treatment plant, site office, power station, workshop, water supply and tailings storage facility.

Archer’s Executive Chairman, Mr Greg English:

“The application for a Mining Lease at Campoona Shaft is a very significant milestone for Archer and signals the Company’s commitment to continue with the commercial development of the very high grade Campoona Shaft deposit, along with the potential for additional graphite deposits in close proximity.

“Over the past three years, Archer has actively engaged in a community consultation process and completed a series of comprehensive reports and studies that support the MLA. We are very proud of the quality of the work we have completed and of the lodgement of the MLA.

“With an exceptionally high-grade resource of 151,000 tonnes of contained graphite (includes Measured, Indicated and Inferred Mineral Resources), Campoona Shaft is a valuable and strategic asset with the potential to make a significant contribution to Archer shareholders from our maiden mining and revenue stream.”

Archer Exploration Limited Level 1, 28 Greenhill Rd Wayville SA 5034 www.archerexploration.com.au

==> picture [596 x 79] intentionally omitted <==

The purpose of the mining lease application is to seek government sanction for the development of a simple open-cut mining operation to extract high quality graphite at Campoona Shaft and subsequently process the ore at the proposed nearby Sugarloaf plant just to the northwest of the open-pit.

The decision to proceed with a Mining Lease Application follows the completion of a highlevel Scoping Study (refer to ASX announcement dated 19 September 2016) that supported Archer’s future development of the broader Eyre Peninsula Graphite Project.

It found the project is capable of producing ultra-pure and ultra-fine battery grade graphite as well as being suitable for graphene manufacture. The 140,000tpa mine would have an initial pre-production capital cost of just A$36 million with options for further expansion but over its 17-year mine life, would return indicative revenue of A$858 million.

==> picture [486 x 328] intentionally omitted <==

Figure 1: Campoona Graphite Project infrastructure layout

Mr Greg English Executive Chairman Archer Exploration Limited Tel: (08) 8272 3288

Mr Cary Helenius Investor Relations Market Eye Tel: 03 9591 8906

==> picture [596 x 79] intentionally omitted <==

Competent Person Statement

The information pertaining to the Campoona Shaft Mineral Resource estimate was detailed in an announcement entitled “ Archer Exploration announces Australia’s largest JORC 2012 Graphite Resources ”, lodged with ASX on 6 August 2014 and is available to view at www.arccherexploration.com.au. Archer confirms that it is not aware of any new information or data that materially affects the information included in that announcement and that all material assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed.

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.