ARCHER MATERIALS LIMITED — Investor Presentation 2011

May 2, 2011

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Archer Exploration Limited “Focused on the critical few”

SAREIC Conference Adelaide 2-3[rd] May 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 64,428,477 Share price at 29/4/2011 $0.175 Market Capitalisation $11.3 million Cash at Bank as at 31/3/2011 $2.92 million Directors Chairman Greg English Non – Executive Directors Tom Phillips Alice McLeary Hon. John Dawkins Mineral Exposure Peter Meers • Graphite • Uranium • Magnesite/magnesia • Phosphate • Manganese ± REE • Iron Ore • Gold • Coal • Copper ± IOCG • 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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Tenement Position

Exploration Tenements

• 100% of 18 tenements covering 9,042 km[2 ] over Eyre Peninsula, Leigh Creek, West Roxby, Burra and World’s End areas.

• 100% of 3 ELA’s covering 1,513 km[2] .

100% Sugarloaf Graphite Deposit Exploration potential 9-20Mt* of highly graphitic schist.

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

7 Wholly Owned Manganese Prospects and Deposits Seven manganese prospects including Salt Creek and Ketchowla.

Farm-In

Archer earning 100% of the rights to all minerals other than uranium on EL3377 (Wild Horse Plains) and EL3653(Elbow Hill) covering 895km[2] - prospective for manganese, copper and tin.

Joint Venture

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JV with OMM Holdings over the Mn & Fe within EL3711 Jamieson Tank.

Archer has a large portfolio of prospective tenements

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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 2 ≈ 30% where To = April 2011
Sugarloaf Graphite
Shareholder value is increased by;
Ketchowla Mn / REE
- * Refer Slide 8
moving projects up the
≈ 10%
development pyramid, Mineralised Project 6
- discovering new deposits, Cost WHP Cu WHP Fe Salt Ck Mn
- joint ventures, Bender Au/Cu Watervale Au Napoleon’s Hat Au
-
project acquisition, Actual # of Projects
- asset sale. Geophysical / Geochemical Anomaly 6
Island Lagoon IOCG Apollo U
Pindari Ni / REE World’s End Cu
Evelyn Dam IOCG
WHP - Au
Tenement / Geological Target 21
3 ELA’s (Phosphate, Barite, Coal)
18 Granted Tenements
Concept / Project Review 4
Commodity Reviews
Industrial Minerals –
Strategic Minerals REE West Roxby IOCG Magnesite, Graphite,
Phosphate, Barite
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Probability of Success

Archer has a solid pipeline of mineral projects at various stages of evaluation

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2011 First Order Priorities

Graphite Carappee Hill 100% Sugarloaf deposit Area 54 km2 Wildhorse Plains Area 895 km2 Target >20Mt Inferred Resource containing >2.5Mt graphite Amorphous/flake graphite Graphite Characterisation	Termination Hill EL and Witchelina ELA Area 962 km2 TARGET Mine producing 75,000 - 150,000tpa caustic calcined magnesia Magnesite Business Development Calcine Characterisation	Manganese Ketchowla 100% Neales Flat 100% Kanyaka 100% Stone Hut 100% Area 2,466 km2 TARGET DSO Mn Wild Horse Plains (Salt Creek& Miltalie) Nth Cowell 100% Jamieson Tank Area 1,042 km2 TARGET DSO Mn Eyre Peninsula Adelaidean Exploration and Resource Definition	Manganese Ketchowla 100% Neales Flat 100% Kanyaka 100% Stone Hut 100% Area 2,466 km2 TARGET DSO Mn Wild Horse Plains (Salt Creek& Miltalie) Nth Cowell 100% Jamieson Tank Area 1,042 km2 TARGET DSO Mn Eyre Peninsula Adelaidean Exploration and Resource Definition	Manganese Ketchowla 100% Neales Flat 100% Kanyaka 100% Stone Hut 100% Area 2,466 km2 TARGET DSO Mn Wild Horse Plains (Salt Creek& Miltalie) Nth Cowell 100% Jamieson Tank Area 1,042 km2 TARGET DSO Mn Eyre Peninsula Adelaidean Exploration and Resource Definition
		Manganese
		Wild Horse Plains (Salt Creek& Miltalie) Nth Cowell 100% Jamieson Tank Area 1,042 km2 TARGET DSO Mn Eyre Peninsula
				Ketchowla 100% Neales Flat 100% Kanyaka 100% Stone Hut 100% Area 2,466 km2 TARGET DSO Mn

Archer is focused on the critical few

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What is Graphite?

Graphite is a soft, grey to black, opaque crystalline form of carbon. Chemical formula C.

Key Attributes:

• Exhibits metallic (thermal and electrical conductivity) and nonmetallic (inertness, high thermal resistance, and lubricity) properties.

• Stable in corrosive environments.

Major Uses:

• High-temperature lubricants and friction materials.

• Key component in the aviation, automotive, steel and plastic industries.

• Electrodes and brushes on electric motors.

• High-purity flake graphite is essential for the production of the lithium-ion batteries that are crucial to the electronics industry.

Market Outlook:

• China dominates market producing ≈80% of world supply. China now has a 20% export duty on graphite, as well as a 17% VAT.

• Strong demand growth predicted from:

• the automotive industry - by 2020 hybrid electric vehicles (HEV) powered predominantly by lithium-ion batteries are projected to be 5 - 18% of sales. The 2009 US congressional stimulus bill included tens of billions of dollars in loans, grants, and tax incentives for battery and HEV research and manufacture to “jump-start” US industry.

• emerging fuel cell technologies and next-generation nuclear reactors.

Demand for graphite is expected to grow significantly and prices are on the rise. Fine flake (≈USD1,400/t)

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Sugarloaf Graphite

Sugarloaf consists of graphitic schist where the graphite formed by the concentration and crystallisation of carbon during regional ± contact metamorphism.

Two shafts dug to 63 and 80 feet in 1915 returned values of 25.3% and 15% carbon respectively. There is no record of tonnes mined from the shafts.

In 2004 Helix and Goldstream both drilled portions of the Sugarloaf deposit, although no carbon assays are reported, considerable graphite (up to 70m intercepts) was recorded in drill logs . 23 of 41 holes drilled recorded intervals of graphite.

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Goldstream drill section
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Graphite was not so important then!

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Sugarloaf Graphite

Archer drilling has recorded wide graphite intervals with total carbon values up to 22.9%.

The area has a pronounced EM signature extending over 2.5 km.

Archer drill section across northern Sugarloaf

CHRC010	Inc	10-26m 77-113m 77-85m	16m 36m 8m	@ @ @	11.3% 14.0% 22.9%	total total total	C C C
CHRC016		36-64m	28m	@	11.1%	total	C
CHRC017		12-52m	40m	@	10.8%	total	C
	Inc	28-48m	20m	@	13.1%	total	C
		92-100m	8m	@	10.7%	total	C

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Numerous drill holes record significant graphite intercepts over a 2km strike. Collar locations of historic drill holes are considered to be ± 20m.

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High grade total carbon recorded over wide drill intercepts

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Sugarloaf Graphite

• Graphitic schist adjacent to a felsic intrusion.

• Petrology identified graphite averaging 0.1mm in length.

• Sugarloaf likely to be able to produce amorphous graphite as well as potentially fine flake products.

• Exploration potential to 100m depth of 9 - >20Mt*.

• Felsic intrusive may coarsen flake size proximal to intrusion.

*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

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100µm
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Photomicrograph: Transmitted light (TL). Thin section (TS). Ordinary light (OL). Moderate magnification (x100). Shows typical mode of occurrence and flake size of schistose blackopaque graphite within (muscovite) quartz-rich metasiltstone.

Another sample of weathered graphitic schist from the collar of one of the shafts was assessed as being mostly carbon with minor graphite.

When it comes to graphite – size matters

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Sugarloaf Graphite

Work Program

• Drilling in March – April 2011 confirmed overall strike extent of the highly graphitic schist.

• 4 RC drill holes were drilled in April 2011. Highly graphitic schist intersections included:

Hole ID	From(m)	To(m)	Interval(m)	Total Carbon(%)
SLRC11_001	60	82	22	12.31%
	96	139	43	10.43%
	139	144	5	6.50%
SLRC11_002	0	9	9	8.77%
	9	20	11	5.78%
	28	38	10	13.05%
	47	63	16	11.08%
	64	75	11	7.05%
	75	93	18	10.77%
SLRC11_003	47	53	6	9.90%
SLRC11_004	81	90	9	6.60%
	90	103	13	15.00%
	106	113	7	10.10%
	124	140	16	12.80%
	140	148	8	8.00%
	148	151	3	17.00%

• A number of samples from varying depths will be collected for further detailed petrology and graphite quality testing.

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Location of 2011 metallurgical drill holes

Whilst at an early stage of evaluation, Sugarloaf has excellent potential

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What is Magnesite and Magnesia?

• Magnesite is magnesium carbonate (MgCO3). Leigh Creek magnesite 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 interbeds within the Skillogalee Dolomite have been identified at Leigh Creek.

Magnesia (MgO) is produced by heating magnesite typically above 750[o] C - 1000[o] C. Magnesia is traded 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 grade (≈42% MgO)

• Consistent chemical composition over 80 kms strike

• 69 DDHs and all other attendant studies completed by previous owner to underpin JORC resource and reserve estimation

• • $millions spent on BFS for Mg metal production

“World Class” is often self-bestowed but rarely deserved – Leigh Creek is an exception 1 4

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MDL’s 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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Leigh Creek Magnesite

Calcining Test Work

• Calcining tests on straight run-of-mine magnesite produced magnesia grading:

• ≥ 90% 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 magnesia (MgO) increased to ≥95% MgO and SiO2 reduced to ≤3.0%.

• Talc - hydrated magnesium silicate H2Mg3(SiO3)4 or Mg3Si4O10(OH)2 is the principal silica contributor.

• Further test work will be undertaken to determine the optimum process flow sheet. Tests are being scoped and are likely to include evaluating flotation prior to calcining.

Further test work being scoped to increase product capability

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Growing the Magnesite / Magnesia Business Crushing Plant
Mine
ROM MgCO3
Crushed MgCO3
Flotation? &
Rail to Spencer Gulf
Calcination Crushed MgCO3
>90% MgO
Caustic Calcined DSO Magnesite
Steadily Growing
Market
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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 cost (Order of magnitude Capex price for 150,000tpa feed calciner and rotary cooler with installation

• $30 million).

• Good supply chain logistics

• Proximal to Leigh Creek

Funding Options

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

Capacity to raise funds by inviting partners to acquire interests in the assets and to participate in project development.

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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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Why the interest? – you do the Math

Magnesite = MgCO3 Magnesia = MgO

Calcine ≈2.1 tonnes of MgCO3 ≈1 tonne MgO

Archer’s JORC magnesite resources at Leigh Creek = 413 million tonnes

1 tonne MgO ≈A$620 (2010 $)

Further test work needed to unlock value

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Manganese

Ketchowla – DSO quality manganese

• 5 main manganese deposits.

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

• Dense media separation and gravity concentration upgraded K1 drill cuttings from 17.47% Mn to >35% Mn at a 23.2% 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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Manganese

Salt Creek

• Widespread manganese intersected in all 19 RC drill holes completed in April 2011.

• The drilling tested 1.5km of strike or just 15% of the known strike length of at least 10km. The eastern limb and western flanks of the syncline yet to be drill tested.

• Significant manganese intercepts including: o 5m @ 12.47% Mn from 14 to 19m in SCRC11_002

• 57m @ 6.44% Mn from 0-57m in SCRC_003 including

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  - **11m @ 12.35% Mn from 42 to 53m**

• 7m @ 12.12% Mn from 5 to 12m in SCRC11_005

• Samples to be collected for dense media and gravity separation.

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Thank You

SAREIC Conference Adelaide 3[rd] May 2011

Archer Exploration Limited ASX Code: AXE Email Contact: info@archerexploration.com.au Phone: +61 8 8272 3288 Facsimile: +61 8 8272 3888 Website: www.archerexploration.com.au

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