ARCHER MATERIALS LIMITED — Investor Presentation 2011

Aug 31, 2011

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Archer Exploration Limited

Graphite Magnesite Manganese

AIMEX 2011 MINING MISSION TO AUSTRALIA from India September 2011

Gerard Anderson Managing Director

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Disclaimer

Competent persons statement

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.

Forward looking statements

The information in this presentation is published to inform you about Archer Exploration Limited and its activities. Some statements in this presentation regarding estimates or future events are forward looking statements.

Although Archer Exploration Limited believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results and outcomes will be consistent with these forward-looking statements.

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Corporate

ASX Code AXE Shares on Issue 67,142,763 Unlisted Options on Issue 6,270,000 Share price at 28/8/2011 $0.20 Market Capitalisation $13.4 million Cash at Bank as at 30/6/2011 ≈$2.7million Directors Chairman Greg English Non – Executive Directors Tom Phillips Mineral Exposure Alice McLeary Hon. John Dawkins • Graphite • Uranium Peter Meers • Magnesite/magnesia • Iron Ore Gerard Anderson • Manganese ± REE • Phosphate • Copper ± IOCG • Coal ± CTL • Gold • Barite

The limited number of shares on issue and commodity exposure offers shareholders 3 considerable leverage as exploration advances and deposits mature

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Assets

Exploration Tenements

• 100% of 19 tenements covering ≈9,500km[2 ] covering Eyre Peninsula, Leigh Creek, West Roxby, Burra and World’s End.

• 100% of 3 ELA’s covering >1,100km[2] .

• 100% of minerals other than uranium on Wildhorse Plain and Elbow Hill covering 895km[2] .

Graphite

• 100% owned Sugarloaf deposit. Exploration Potential of 24 – 37Mt grading 10-12% total carbon*. Petrology indicates fine fine flake graphite averaging 100µm.

• 100% of several large flake to ultra coarse flake (250µm – 1,000µm) graphite occurrences on Wildhorse Plain.

*The potential quantities and grades presented are conceptual in nature, there has been insufficient exploration to define an overall Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource

Magnesite

JORC Measured, Indicated and Inferred Resources at Leigh Creek of 413Mt grading 41.3% MgO. (Source MDL 2001 Report)

Manganese

Seven manganese prospects including Ketchowla and Salt Creek plus Farm-Out JV with OMM Holdings over EL3711.

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Portfolio of prospective tenements hosting outstanding mineral deposits

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Project Status Reserve ≈ 100%
Mt Hutton
Archer is an exploration company. The Resource Pug Hill 4
principal assets of the Company are its ≈ 70% Probability of
Termination Hill
significant mineral tenements and mineral Mt Playfair Witchelina Development at T0
deposits. Advanced Exploration Project 3 ≈ 30% where To = April 2011
Sugarloaf Graphite
Shareholder value is increased by; Ketchowla Mn / REE
- moving projects up the Wildhorse Plain Graphite * Refer Slide 8
≈ 10%
development pyramid, Mineralised Project 6
- discovering new deposits, Cost WHP Cu Salt Ck Mn
WHP Fe
- joint ventures, Bender Au/Cu Napoleon’s Hat Au
Watervale Au
-
project acquisition, Actual # of Projects
- asset sale. Geophysical / Geochemical Anomaly Island Lagoon IOCG 6
Apollo U
Pindari Ni / REE World’s End Cu
Evelyn Dam IOCG
WHP - Au
Tenement / Geological Target 22
3 ELA’s ( Phosphate & Barite, REE, Coal )
19 Granted Tenements
Concept / Project Review 4
Commodity Reviews
Industrial Minerals – Graphite,
Strategic Minerals REE West Roxby IOCG Magnesite, Phosphate, Barite
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Probability of Success

Archer has an several mineral projects at various stages of evaluation

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Graphite & the Graphite market

Graphite exhibits both metallic and nonmetallic properties:

Metallic properties:

• Excellent conductor of heat and electricity

• Highest natural strength and stiffness of any material

Nonmetallic properties:

• High natural lubricity

• Maintains strength and stability to temperatures in excess of 3,600[o] C

• One of the lightest reinforcing agents

• Highly resistant to chemical attack

Graphite Market

Amorphous Graphite

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Photomicrograph - Growth spirals in graphite crystal

Microcrystalline graphite ≈70% of world graphite production and consumption. Graphite content ranges from 15% to 99% . Widely used in industrial applications for its high melting point, resistance to thermal shock and lubrication.

Crystalline Flake Graphite

Flake graphite occurs only in a few locations around the world usually as flat platy crystals disseminated in metamorphic rocks. Total carbon grades are generally low ranging mostly from 2-6% C and rarely >10% C.

Flake graphite is classified and marketed based on the size of the graphite crystals (flake size) and by the carbon content (generally >94%C). Strong growth from high tech uses. Three main flake sizes:

Fine flake (-100 mesh or <149µm)

Medium flake (+100 -80 mesh or 149–177µm) Large flake (+80 mesh or >177µm)

Substitution of graphite by other minerals is highly unlikely as there is simply no other mineral so versatile and with such unique physical and chemical properties. 6

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Uses for Graphite

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Carbon steel forging
Electric motor brushes
Graphite crucibles
Refractory bricks to line blast furnaces
Pencils
Valves
Dry cell batteries Graphite brake pads
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Emerging New Technology Uses for Graphite

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Construction of a high temperature PEMFC: Bipolar plate as electrode with in-milled gas channel structure, fabricated from conductive composites (enhanced with graphite, carbon black, carbon fiber, and/or carbon nanotubes for more conductivity);[[5]] Porous carbon papers; reactive layer, usually on the polymer membrane applied; polymer membrane

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Ceramics

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Ceramic fibres

Graphite stripes are deposited onto silicon with industry-standard

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Zero EV motor cycles

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EVs & HEVs - Tesla’s Roadster and the Tesla S

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Super high strength composites

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Graphene - the new super material

Graphene is a unique atom-thick carbon-based material derived from graphite that has exceptional physical and chemical properties. Applications are continually being generated as research unlocks its unique attributes:

• Superior composite materials that have high-specific stiffness and strength.

• Nano-electronics for logic, memory and interconnects.

• Transparent and electrically conductive films for image display and solar photovoltaic devices.

• Energy storage devices such as batteries and ultra-capacitors.

• Thermal management.

Nearly 200 companies, including Intel and IBM, are currently involved in graphene research.

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Super fast graphene computer chips

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Graphene molecular structure
Film of graphene an atom thick
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Graphite supply* – China first, then daylight….

Country	Mine Production 2009 (kt)	Mine Production 2010e (kt)	Reserves (kt)
Unites States	-	-	-
Brazil	76	76	360
Canada	25	25	(4)
China	800	800	55,000
India	130	130	5,200
North Korea	30	30	(4)
Madagascar	5	5	940
Mexico	5	5	3,100
Norway	2	2	(4)
Sri Lanka	11	11	(4)
Ukraine	6	6	(4)
Other Countries	3	3	6,400
World Total (rounded) ~~*~~	1,100	1,100	71,000

~~* Source - USGS~~

China produces around 75% of the world’s graphite. Quality is declining as surface oxide deposits are depleted resulting in increasing costs as mines go deeper. Supply suffers from the seasonal closure of mines in northern China over winter.

China has a 20% export duty plus a 17% VAT and has instituted an export licensing system to ensure supply to its domestic economy.

The dominance of China as a producer coupled with measures introduced by the Chinese government are creating supply concerns for the rest of the world. Supply issues are exacerbated by the lack of exploration and new mine development over decades.

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Graphite prices

Graphite Prices Rising on Strong Demand:

Graphite has a posted price however prices are negotiated between the buyer and seller based on graphite crystal size and the carbon content with settled prices generally around the posted price level.

Graphite Product	Carbon Content (%)	Graphite Size (µm)	Price (US$/t)
Large Flake	94-97%	>177µm	$2,500 - $3,000
Medium Flake	94-97%	149µm - 177µm	$2,200 - $2,500
Fine Flake	94-97%	<149µm	$2,000 - $2,400
Amorphous	80-85%	≈ >37µm	$850

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Graphite demand trends

• Traditional uses in steelmaking, refractories, auto parts, gaskets, composites, batteries, semiconductors, carbon brushes and oils and greases is increasing with increasing industrial output.

Growth in the flake market from increased demand from high value strategic applications in electronics and computers and high tech uses constantly being identified.

• Lithium-ion battery market having a significant impact on the graphite market especially for the prized flake graphite as the demand for mobile energy storage systems increases. Lithium-ion batteries for EV and HEVs - USA has 200,000,000 of the estimated 750,000,000 cars in the world. UCLA research predicts that by 2030, 64% of all US made cars will be electric . US government has provided billions of dollars in loans, grants, and tax incentives for research in support of US auto industry and battery manufacture.

( Each HEV requires ≈ 11kgs spherical graphite. Up to 70% of flake is destroyed making spherical graphite)

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BMW i8 (HV)
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Porsche HV 918 Spyder 718 horsepower, mid-engine V-8 and two Audi e-Tron concept car (EV) electric motors. Claim 78.4 mpg.

EVs and HEVs don’t have to be ugly

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Graphite demand trends

Growth in the flake market also coming from green energy initiatives including fuel cells and new generation nuclear power and from the evolving applications for graphene.

• Green energy initiatives especially fuel cells and solar electricity applications. Governments worldwide are backing green energy initiatives in response to the threat of climate change. Fuel cell technology is seen as the future for sustainable, portable, self- contained energy solutions.

• Pebble bed nuclear reactors (PBNR) offer a solution for safe nuclear power. In PNBRs the fuel is embedded in graphite balls . PNBRs are cheaper to build and operate than conventional reactors, use inert gases as coolants rather than complex water cooling systems and cool naturally when shut down. They operate at higher temperatures giving more fuel efficiency and they can directly heat fluids for low pressure gas turbines.

• Graphene is set to have a profound impact on the future development of mankind. Potential applications include replacement of silicon in semi-conductors; replacing of carbon fibers in composite materials to enable lighter and stronger aircraft; an additive or coating to plastics to enable them to conduct electricity; increasing the efficiency of electric batteries; transparent conductive coatings for solar cells etc. The list is expanding all the time.

Graphite and graphene are very much minerals of the “new age” offering a growing array of opportunities in the worldwide push for green energy solutions.

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Graphite market trends

Graphite is facing increasing demand worldwide from growing traditional uses and rapidly emerging new technological applications.

Archer likens the emerging importance of graphite to that of the recent history of Rare Earth Elements (“REE”) and lithium. Few people realized how quickly REE and lithium would increase in importance as more and more advanced applications were discovered. Fewer understood the strategic importance of REEs and lithium.

The Company with its extensive landholding hosting a large number of high grade, wide, outcropping graphite occurrences (including rare and prized large flake graphite) is in a strong position to rapidly advance exploration and capitalize on the surging demand .

. Anyone can have 20:20 vision in hindsight

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Significant Land Position in “Graphite Province”

Large & medium flake potential – Campoona, Campoona South - Grid 2, Mt Shannan, Wicklow & Others

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Archer has a substantial land position in “graphite province”

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Sugarloaf Graphite

Exploration Potential

• 100% owned Sugarloaf deposit has Exploration Potential of 24 – 37Mt grading 10-12% total carbon*. Petrology indicates deposit consists of fine crystalline flake graphite averaging 100µm in size.

*The potential quantities and grades presented are conceptual in nature, there has been insufficient exploration to define an overall Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource

• Deposit outcrops, is sub-vertically dipping with a consistent aggregate true width of 40 metres.

• Graphite structure shows no sign of thinning or decreasing in graphite content with depth.

• Open along strike to the north and south and at depth.

• High probability that the eventual Exploration Potential to be >40Mt.

Sugarloaf is shaping to be a very large graphite deposit

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Wildhorse Plain Graphite

Significant potential – Campoona

In the mid 1980s airborne electro-magnetic surveys were conducted as part of exploration focused on base metals. A highly conductive graphitic schist over 4km long was identified adjacent to Lower Middleback jaspilite at Campoona Hill . A small historic shaft exists on the graphitic schist.

Other elongate EM conductors, which are parallel to the graphitic schist were drilled by ESSO at High Bluff and were confirmed as graphitic in origin.

A 1991 petrology report identified the graphite ranging in size 100µm to 300µm with an average flake size of 200µm (large flake).

Two samples collected in June 2011 and were submitted for petrological examination by Pontifex and Associates in Adelaide. Results confirm the 1999 observations. Graphite content was reported as 25-30%. Size ranged mostly 10µm-50µm (width) x 250µm (length).

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Photomicrograph - reflected light, graphite is the white mineral, scale is 100µm (0.1mm)

Large flake graphite identified in several locations on Wildhorse Plain associated with high grade metamorphic rocks

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Wildhorse Plain Graphite

Significant potential – Campoona South

At the southern end of the Campoona EM anomalies lies a graphite outcrop that assayed 25.4% C .

Hand specimens had visible large flake graphite to 1,000µm (1mm).

Petrological examination reported graphite content at 15-20%. Overall graphite size ranged from 5µm to 80µm (width) x 300µm (length) with an average size estimated at 50µm x 250µm (large flake).

Prominent outcrop of high grade coarse grained graphite at Campoona South.

Graphite occurs within “heterogeneous, fine layered quartz-feldspar microgneiss, together with quartz-graphite schist”.

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Photomicrograph - reflected light, graphite clots are the white aggregates, scale is 200µm (0.2mm)

Hand specimen from Campoona South showing coarse graphite flakes up to 1mm

Large flake graphite identified in several locations on Wildhorse Plain associated with high grade metamorphic rocks

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Wildhorse Plain Graphite

Significant potential – Council Pit

The Council Pit is a disused historic borrow pit.

The graphite content was reported between 15-20%. The overall size of graphite ranges from 2µm to 50µm (width) x 1,000µm (length) with the average 20µm x 300µm (large flake). The range in length to 1,000µm is classified in the graphite market as Super Large graphite.

The graphite occurs within “schistose micro-gneiss, with thin intricately intercalated schistose layers of quartz-feldspar-graphite and scattered amphiboles”.

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Photomicrograph - reflected light photograph, graphite is white to light yellowish, scale is 50µm

Large flake graphite identified in several locations on Wildhorse Plain associated with high grade metamorphic rocks

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Archer Graphite Summary

Deposit Comparison

Company	Deposit	Lower Cut-off Grade (%C)	Resource (t)	Resource Grade (%C)	Graphite Size (µm)
Archer Exploration	Sugarloaf	1%C	40Mt*	11.7%C*	Fine
Northern Graphite	Bissett Creek	1%C	20Mt	1.97%C	Large
		2%C	8.8Mt	2.58%	Large
		3%C	1.3Mt	3.27%	Large
SER – Mega Graphite	Uley Main Road1	3.8%C	6.6Mt	8.7%C	Medium and Large

*The potential quantities and grades presented are conceptual in nature, there has been insufficient exploration to define an overall Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource

1 Uley Exploration Potential 25-150Mt (Recent sale/demerger with Mega Graphite values Uley at >AUD$70 million)

Sugarloaf is more than competitive

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Archer Graphite Summary

Huge land bank in emerging graphite province

• Archer has 924km[2] of the highly prospective Cleve Uplands.

• Sugarloaf deposit :

• Exploration Potential *of ≈40Mt @10-12% C and is open along strike and at depth.

• Graphite occurring mostly as well liberated free fine flakes averaging 100µm – liberation tests in progress.

• Continuous outcropping steeply dipping deposit averaging ≈40m in true width.

• Depth of complete oxidation from 70-80m.

• Limited drilling to deliver a JORC Inferred Resource.

The Company tested 3 graphite occurrences on Wildhorse Plain and each has shown through petrology, to have average crystal sizes being LARGE FLAKE.

• Campoona – average flake size 250µm

• Campoona South - average flake size 250-300µm from outcropping very high grade graphite grading >25% C

• Council Pit - average flake size 300µm with a maximum of 1,000µm

• Several more occurrences on Wildhorse Plain are being evaluated.

• Airborne EM completed on 29[th] July 2011 to better define the Campoona – Campoona South trend. Highly encouraging as defined continuous high level electrical responses. Drilling set for mid-late September.

Outstanding potential exists for large flake graphite from high grade

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What is Magnesite and Magnesia?

Magnesium carbonate (MgCO3) was deposited as a chemical precipitate in shallow, marginal marine lagoons and mudflats, and occurs predominantly as cryptocrystalline particles 1–5 µm in size. 86 separate magnesite interbeds within the Skillogalee Dolomite have been recorded at Leigh Creek.

Magnesia (MgO) is produced by heating magnesite typically above 1000[o] C. Magnesia occurs in three forms:

1. Caustic Calcined Magnesia (CCM) is formed by heating magnesite to temperatures up to 1,000[o] C. It is reactive and that reactivity is important for construction materials, industrial applications, in fertilizers and as a soil conditioning agent in agriculture, for water purification and waste water treatment and in the paper and rubber industries.

2. Deadburn magnesia (DBM) is produced by heating CCM to temperatures of 2,300[o] C to produce inert magnesia used for the production of refractory bricks.

3. Electrofused magnesia (EM) is produced by melting CCM to 2,800 - 3,000[o] C to produce crystalline magnesia used primarily in arduous steelmaking applications.

Magnesite / magnesia products are widely used across a number of high growth industries and widely used in high technology consumer goods

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Magnesia Market Growth

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MgO growth closely mirrors that of the steel industry

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MgO Refractory Bricks

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• Industrial applications - concrete

• Building products – Mg board

• Fertilizers and soil conditioners – strong local market

• Water purification

• Waste water treatment

• Acid mine water and acid tailings neutralisation

• Consumer electronics - Mobile phones, laptops, cameras, iPods, PDAs

• High tech alloys – AM-lite

• Magnesium batteries which hold twice the energy of lithium-ion cells likely to be used to power electric cars

• Liquid magnesium battery offers promising solar energy storage technique

MgO Market grows at ≈330ktpa. 63% of market in refractories; 23% in chemicals and 14% into magnesium metal

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Archer’s Leigh Creek Magnesite Deposits

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Mt Playfair
Mt Hutton
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• High quality (>42% MgO)

• Consistent chemical composition over 80 kms strike

• • $millions spent on BFS for Mg metal production

“World Class” is often self-bestowed but rarely deserved – Leigh Creek is an exception

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Leigh Creek 1999 Resource Estimate

Area	Measured (Mt)*	Indicated (Mt)*	Inferred (Mt)*	MgO1
Mt Hutton	18.3	42	53	42.9%
Mt Playfair		11	23	42.5%
Pug Hill		10	10	42.7%
Termination Hill	4	5	20	42.8%
Witchelina	23.7	94	99	40.0%
Total	46	162	205

*Source: Reproduced from MDL Report “Economic Evaluation of the Pug Hill Magnesite Deposit, North Flinders Ranges, South Australia. 2001. Note full BFS completed and JORC resources for 5 deposits and JORC reserve for Mt Hutton calculated. The independent resource estimates were completed by Mr. Colin Arthur (BSc, MSc, FGS, MAusIMM, CGeol, CEng) Manager, Micromine Resource Centre, August 1999. The estimates were based on 69 fully cored DDHs and all other attendant studies required to support resource and reserve estimation.

1 Pure magnesite is 47.8% MgO

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413Mt JORC Measured, Indicated and Inferred Resource

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Growing the Magnesite / Magnesia Business Crushing Plant Mine ROM MgCO3 Crushed MgCO3 Flotation? & Rail to Spencer Gulf

Flotation? & Calcination Crushed MgCO3 Caustic Calcined (>$600/t) ± DSO magnesite

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Steadily Growing Market

Focus is on producing either DSO magnesite or high value intermediate products

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Leigh Creek Development Options

Key Attributes

• High grade magnesite deposits

• Huge JORC Resource can support large scale operation for many hundreds of years

• Low capital entry

• Good supply chain logistics

• Proximal to Leigh Creek

Funding Options

Archer has 100% ownership of the magnesite deposits on Termination Hill and Witchelina Els.

Will consider joint venture options to co-develop the deposits.

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Leigh Creek magnesite supply chain logistics
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100% ownership affords Archer flexibility in project development

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Leigh Creek Magnesite

Calcining Test Work

• Calcining tests to 1000[o] C on run-of-mine magnesite produced magnesia grading:

• 92% MgO

• ≈ 4.5% SiO 2

• ≈ 0.3% Al O 2 3

• ≈ 0.6% CaO

≈ 0.4% Fe O 2 3

• To maximise the marketability of magnesia produced the SiO2 level needs to be reduced to ≤3.0% (ideally ≤1.5%) and the magnesia (MgO) increased to ≥95% MgO.

• Talc - hydrated magnesium silicate H2Mg3(SiO3)4 or Mg3Si4O10(OH)2 accounts for much of the SiO2.

• Further test work being undertaken to determine the optimum process flow sheet.

• Results should be available Q3 2011.

Further test work being scoped to increase product capability

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Archer Manganese

Ketchowla – DSO quality manganese

• 5 main manganese deposits with ≈28kms strike potential.

• Medium grade (≈ 20% Mn ± Ni, Co, Cu & Zn, REE).

• Dense media separation and gravity concentration upgraded K1 drill cuttings from 17.47% Mn to ≈38% Mn at a 23%

• recovery. Ni, Co, Cu, Zn and Y also upgraded:

  • Ni (0.258% to 0.412%);

  • Co (0.175% to 0.296%);

  • Cu (0.226% to 0.377%);

  • Zn (0.164% to 0.277%);

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  - **Yttrium  113.2ppm to 204ppm.**

• 90% – 95% recovery of Mn, Ni, Co, Cu & Zn in agitated acid leach tests.

• Peak assays of 0.47% REE (from rock chip samples) and

• 0.36% REE in drill cuttings at K1, K2, K3 and K9 deposits.

• Elevated REEs at K9 not related to manganese and occur within a weathered intrusive?

• Manganese deposits open at depth and along strike.

• Recently completed ground gravity survey has

• identified drill targets extending under surficial cover.

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Ketchowla one of several Archer manganese projects

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Archer Manganese

Salt Creek manganese

• Drilling highlighted that manganese occurs in three different rock units: - High iron manganese associated with banded iron formation.

• Fine manganese in weathered pelitic sediments (clays & schists).

• 5mm fine manganese nodules within transported silica-rich sand.

• The manganese units comprise two limbs of an overturned syncline with a western limb consisting of outcrops of high-iron manganese and an eastern limb of manganese and silica-rich manganese adjacent to quartzite/leached BIF.

• +0.5mm grades 20-25% MnO with recoveries to 30%.

• Strike length consists of 4kms (confirmed) and up to 10kms based on regional historic sampling.

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A plan view of the trace of the fold structures, with regional rock chip results

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Salt Creek – significant undrilled resource potential

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Thank You

If you would like additional information please contact:

Gerard Anderson Managing Director Archer Exploration Limited ganderson@archerexploration.com.au

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