ARCHER MATERIALS LIMITED — Capital/Financing Update 2016

Oct 19, 2016

ABN 64 123 993 233

ASX Announcement 20 October 2016 ABN 64 123 993 233

$200,000 grant received for Leigh Creek Magnesite Project

Archer Exploration Limited (ASX:AXE) is pleased to advise that it has received a $200,000 grant from the South Australian Government’s Upper Spencer Gulf and Outback Futures Program to assist in the development of the Leigh Creek magnesite Project. A media release from the SA Regional Development Minister Geoff Brock confirming the award of the grant is attached.

For further information please contact:

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

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

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About the Leigh Creek Magnesite Project

The Leigh Creek Magnesite Project is located approximately 20 kilometres northwest of Leigh Creek Township, South Australia and is the world’s largest cryptocrystalline magnesite deposit.

Archer has been developing the Project with the results of a recent Project Study (refer to ASX announcement dated 21 March 2016) supporting a simple open pit mining operation, third party processing and the export of high quality caustic calcined magnesia and/or monolithic dead burn magnesia to overseas customers.

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Archer Exploration Limited (ASX code AXE) has 100% ownership of 13 tenements all in South Australia covering more than 4,700 km[2] .

NEWS RELEASE

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Hon Geoff Brock MP

Minister for Regional Development Minister for Local Government

Thursday 20 October 2016

$200,000 grant for new mining opportunity

A $200,000 Upper Spencer Gulf and Outback Futures Program grant will assist in establishing a magnesite mining operation just outside of Leigh Creek.

The open cut mining operation will be developed and operated by Leigh Creek Magnesite Pty Ltd.

After on-site crushing, the magnesite ore will be sent off-site for processing and exported from Adelaide to the USA and Europe.

The Leigh Creek magnesite project is located approximately 20 kilometres from the Leigh Creek township and contains the world’s largest fine-grained magnesite deposit.

The processing of magnesite ore has not previously been undertaken in South Australia.

15 ongoing full-time jobs will be created as a result of the project.

Background

Leigh Creek Magnesite Pty Ltd is a wholly owned subsidiary of ASX-listed Archer Exploration Limited, an active mineral explorer in South Australia.

The $2 million Upper Spencer Gulf and Outback Futures Program is a once-off grants program, which opened in November last year in recognition of the challenges brought about by the downturn of the resources sector and the closure of the Port Augusta power station and Leigh Creek coal mine.

The program supports the delivery of small projects contributing to the economic diversification, resilience and capacity building of Upper Spencer Gulf and Outback communities, creating sustainable economic benefits to the region and the State.

This project aligns with the State Government’s economic priority of ‘Unlocking the full potential of South Australia’s resources, energy and renewable assets’.

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Twitter: @sa_press_sec

www.premier.sa.gov.au

Quotes attributable to Regional Development Minister Geoff Brock

This project will create jobs and business opportunities for people living in the Leigh Creek township and surrounds.

Contractors will undertake the mining, transport and associated works which will create significant opportunities for local businesses.

Projects awarded funding through the Upper Spencer Gulf and Outback Futures Program will stimulate new business activity, support stronger communities, and create job opportunities in the region.

Quotes attributable to Greg English, Executive Chairman, Archer Exploration Limited

We are grateful for the support of the State Government to assist us in undertaking this mining project.

In addition to the benefits to the Leigh Creek community, this project also creates an opportunity to develop a truly world class resource and to use under-utilised infrastructure in South Australia to create a new market for the state.

This project will start a new manufacturing process never seen before in South Australia.

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Media Contact: Richard Lower 0419 838 646

Twitter: @sa_press_sec

www.premier.sa.gov.au