ARCHER MATERIALS LIMITED — Capital/Financing Update 2016

Oct 3, 2016

ABN 64 123 993 233

ASX Announcement 4 October 2016 ABN 64 123 993 233

Leigh Creek Magnesite Project update

Highlights

• CSIRO dead burn magnesia test work completed.

• Dead burn magnesia to be tested by kiln operator to develop field testing techniques for later bulk trial.

• Independent CCM magnesite test work being undertaken by kiln operator to establish temperature, residency time and other parameters for bulk trial.

Archer Exploration Limited (ASX: AXE) advises that CSIRO has completed calcining test work on Archer’s Leigh Creek Magnesite. The aim of the latest test work is:

• To make dead burn magnesia at different temperatures (1,450[o] , 1,550[o] and 1,650[o ] Celsius)

• Send the dead burn magnesia to commercial kiln operator to develop test procedures for analysing DBM quality during the later bulk trial.

In addition to the dead burn test work being completed by Archer, the kiln operator is conducting separate caustic calcined magnesia tests. The results of this test work will be used to design the ideal temperature profile, residence time and other parameters associated with the upcoming bulk trial.

==> picture [223 x 149] intentionally omitted <==

----- Start of picture text ----- with the----- End of picture text -----

==> picture [227 x 151] intentionally omitted <==

Magnesite sample

Positioning of magnesite sample in furnace

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

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

==> picture [222 x 148] intentionally omitted <==

==> picture [220 x 146] intentionally omitted <==

Removing deadburn magnesia from furnace

Cooling of deadburn sample

==> picture [223 x 149] intentionally omitted <==

Deadburn magnesia product

The upcoming bulk trial is a key step in the development of the Leigh Creek Magnesite Project. A bulk trial will determine the technical, economical and physical parameters for future commercial production in an existing rotary kiln. It will also provide Archer with sufficient product for testing by prospective customers

Next Steps

Archer will work closely with the kiln operator to finalise the work program and logistics for the bulk trial.

For further information, please contact:

Mr Greg English	Mr Cary Helenius
Chairman	Investor Relations
Archer Exploration Limited	Market Eye
Tel: (08) 8272 3288	Tel: 03 9591 8906

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

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 Leigh Creek Magnesite Project with the aim of undertaking 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.

==> picture [496 x 405] intentionally omitted <==

Leigh Creek Magnesite Project conceptual development layout