ARCHER MATERIALS LIMITED — Capital/Financing Update 2018

Aug 29, 2018

ABN: 64 123 993 233

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ASX Announcement (ASX: AXE )

30 August 2018

Leigh Creek Magnesia Project – sale update

Highlights

• Buyer has successfully completed its due diligence enquiries and issued a Notice to Proceed to Completion.

• Archer has received the required third-party approval to satisfy the relevant condition precedent.

• Archer shareholder meeting to approve the sale of the Leigh Creek Magnesia Project to be convened on 3 September 2018.

• Archer and buyer have agreed to extend the Cut-Off Date to 31 December 2019.

Archer Exploration Limited (ASX:AXE, Archer) is pleased to provide this update on the sale of the Leigh Creek Magnesia Project (Project).

Background

The Project tenements are held by Leigh Creek Magnesite Pty Ltd (LCM) and CH Magnesite Pty Ltd (CHM) both of which are wholly owned subsidiaries of Archer. On 2 July 2018, Archer announced the sale of the Project by way of a sale of all of the shares in LCM and CHM.

The terms of the share sale and purchase are set out in detail in the ASX announcement dated 2 July 2018 and the Notice of General Meeting lodged with ASX on 2 August 2018. In summary:

• The sale and purchase of the Project is subject to satisfaction or waiver of the following three conditions precedent: buyer having satisfied itself as to its due diligence enquiries and issuing a Notice to Proceed and paying the amount of $200,000 to Archer (Notice to Proceed); third-party approval to the assignment of a key agreement (Third-Party Approval) and Archer shareholder approval to the sale of the Project (Shareholder Approval).

• Completion is to occur on the earlier of the tenth business day after the Cut-Off Date and such other date agreed between the buyer and Archer.

• Prior to completion, the buyer may appoint a nominee to purchase the Project on behalf of the buyer however, the buyer must guarantee the performance of the nominee.

Update on activities

Archer can confirm that it has received from the buyer a Notice to Proceed and confirmation from the buyer that the amount of $200,000 has been paid to Archer. This means that the Notice to Proceed condition precedent has been satisfied. Archer has also given to the buyer notice and

ABN: 64 123 993 233

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evidence that the Third-Party Approval condition precedent has been satisfied. Shareholder Approval is the only remaining condition precedent left to be satisfied and if Archer shareholders approve the sale of the Project at the General Meeting on 3 September 2018, then all conditions precedent will have been satisfied.

Archer and the buyer have agreed to extend the Cut-Off date by six months from 30 June 2019 to 31 December 2019. This means that completion of the share sale and purchase, and the payment of the remainder of the Purchase Price, will take place ten business days after 31 December 2019, unless Archer and the buyer agree on an earlier date or the buyer elects to extend that date.

Under the share sale deed, the buyer may extend the Cut-Off date by three months (i.e. up to 31 March 2020) by paying the amount of $250,000 to Archer and may also elect to extend the CutOff Date by a further three months (i.e. up to 30 June 2020) by paying an additional $250,000 (i.e. total of $500,000) to Archer.

The sale of the Project will allow Archer to focus on the development and growth of its Advanced Materials business.

For further information, please contact:

Contact Details

Shareholders

Mr Greg English Executive Chairman Dr Mohammad Choucair Chief Executive Officer

For more information about Archer’s activities, please visit our website: https://archerx.com.au/

Tel: +61 8 8272 3288