ARCHER MATERIALS LIMITED — Investor Presentation 2012

Aug 9, 2012

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ARCHER EXPLORATION LIMITED

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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 eighteen years experience in the field of activity being reported. Mr Bollenhagen has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” relating to the reporting of Exploration Results. 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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Presentation Outline

• Corporate Overview

• Graphite and the Graphite Market

• Archer’s Graphite Deposits

• Campoona

• Sugarloaf

• Archer’s Operating Philosophy

• Environmental Studies and Community & Stakeholder Engagement

• Campoona – Possible Development Schedule

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Corporate Overview
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About Archer

• Archer Exploration Limited is a South Australian based minerals exploration company with 15 granted mineral tenements, all in South Australia.

• Archer listed on ASX in August 2007.

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Archer Sna shot p ASX Code AXE Shares 82,142,763 Unlisted Options 6,000,000 Share price (27 July 2012) $0.20 Cash (30 June 2012) $12.7 million Market Cap (27 July 2012) $16.4 million

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Exploration focus

• Principal focus for exploration is at the Campoona and Sugarloaf Graphite Projects near Cleve on Eyre Peninsula, South Australia.

• Archer has discovered broad drill intercepts of high grade graphite at both Campoona and Sugarloaf.

• Archer will complete the current phase of drilling at Campoona by mid-August 2012 and at Sugarloaf by mid-September 2012 and then recommence drilling at Campoona following the 2012 harvest to better define the graphite resources.

• The Company will also be conducting “regional” exploration on additional graphite prospects within its 918km[2] Cleve tenements.

• Archer has also committed exploration expenditure to its most promising gold, manganese, magnesite and copper prospects in SA.

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Graphite and the graphite
market
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What is Graphite?

• Crystalline allotrope of carbon - nonmetallic, opaque, grey to black mineral with a metallic lustre.

• Key properties – flexible, soft, low friction resistance (lubricity), thermally and electrically conductive, high melting point (> 3,550[o] C), non-toxic and chemically inert.

• Properties vary according to purity and size of graphite crystal.

• 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.

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Photomicrograph - Growth
spirals in graphite crystal
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Graphite Uses

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Graphene
Electric motor brushes
Refractory bricks to line blast furnaces
Carbon steel forging
BMW Hero
Graphite crucibles
Pencils
Valves 9
Dry cell batteries Graphite brake pads
Graphite Graphite
Traditional Uses for High Tech Uses for
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Growing Market

• China produces around 75% of the world’s graphite.

• Amorphous Graphite: 70% of world production, grade 15% - 99%C. Widely used in industrial applications.

• Crystalline Flake Graphite: rare, low grade (2–6%C and rarely >10%C), found .

• as flat platy crystals disseminated in metamorphic rocks

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2011 Graphite market is forecast to grow by 67% to 2Mt by 2020.

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Graphite Prices – rising on strong demand

• Increasing demand worldwide from growing traditional uses and rapidly emerging new technological applications.

• Prices negotiated between the buyer and seller based on crystal size and carbon content. Settled prices generally around the posted price level.

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Price variation with Size Price variation with Purity

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Archer’s Graphite Projects
•
Campoona
•
Sugarloaf
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Wildhorse Plain Graphite

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Wildhorse Plain (918km[2] area)

• Flake graphite recorded in many regional samples

• Large areas not explored for graphite

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Campoona Drilling

• Resource drilling nearing completion at Campoona Shaft.

• 50m x 20m spaced RC drilling completed with diamond drilling in progress.

• High grade graphite - 15-50m thick within a regional shear.

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Central
Campoona
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Plan view of Campoona drilling

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Campoona Graphite

• Highly conductive graphitic schist within proto-gneiss.

• Pinching and swelling evident in 3D.

• Some drilling intercepts to date:

Hole id	Intercept
CSRC12_009	67m @ 10.1%Cfrom 0m (incl25m @ 13.2%C)
CSRC12_010	48m @ 12.5%Cfrom 24m (incl20m @ 16.5%C)
CSRC12_041	64m @ 11.8%Cfrom 54m (incl27m @18.5%C)
CSRC12_042	46m @ 9.3%C from 29m (incl20m @ 13.3%C)
CSRC12_048	56m @ 10.6%Cfrom 11m (incl28m @ 17.1%C)
CSRC12_050	32m @ 9.3%C from 30m (incl18m @ 12.8%C)
CSRC12_053	47m @ 6.7%C from 32m (incl14m @ 10.6%C)
		Campoona Drill Section	16

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Campoona Graphite

• EM highlights continuity of graphitic horizons.

• Historic EM has indicated >40km of potential strike of graphitic units.

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Cross section of Campoona EM

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Campoona Graphite Concentrate

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Liberation
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CSRC12-007 (84-85m) : Photomicrograph showing homogeneous evenly distributed crystalline graphite. Graphite varies from 30 – 350 micron and visually estimated to average 180 micron in length

Photomicrograph of medium flake graphite concentrate

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Sugarloaf Graphite

• Exploration Target of 40 – 70Mt grading 10-12% total carbon*.

• 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

• Petrology: graphite varies from 30 – 150 micron (averages100 micron).

• Records show up to 15% flake from historic shafts.

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Numerous drill holes drilled to test goldcopper soil anomalism recorded significant graphite intercepts over a >2km strike

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Sugarloaf Graphite

• Sugarloaf EM: 4km long, 40m in true thickness.

• Preliminary metallurgical test work from a sample from hole SLRC11_004 produced graphite concentrate radin 82%C. g g

• Diamond drilling in August 2012 to supply quality samples for metallurgical test work.

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Stacked EM sections over Sugarloaf showing folded graphite limbs Sugarloaf has enormous potential

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Operating Philosophy
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Archer’s Operating Philosophy

Archer fully understands its environmental and social responsibilities if mining proceeds. The Company has defined a series of goals that it would commit to: Environment

• Identify environmental aspects and design to minimise impacts

• Keep the project footprint to a minimum

• Design to maximise the project’s visual amenity

Social Licence

• Archer will be an active member of the community

• Employ locally wherever possible and fully commit to up-skilling local workforce in mining and plant operations

• Encourage employees to live locally

• Support local businesses and buy locally where it makes commercial sense to do so

• Local road upgrades

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Environmental studies and Community engagement

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Environmental Baseline Studies

• Archer is in the process of commissioning Environmental and Social Baseline Surveys with fieldwork planned to commence in September 2012.

• It is important that flora and fauna studies be conducted over at least one Spring i d .

• per o

• Work to provide coverage that will lead to an assessment of potential impacts of the project.

• The Survey is designed to support an Environmental and Social Impact .

• Assessment process as part of any future Mine Lease Proposal

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Community & Stakeholder Engagement

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If exploration studies indicate an economic project, the Company would be required to complete extensive technical studies (environmental, mining, geotechnical, utilities, mineral processing, tailings storage, transport and mine rehabilitation). The proponent also has to demonstrate extensive consultation with the community and other stakeholders including:

• Comprehensive studies that meet regulatory and legislative requirements.

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• Identify and engage with all relevant stakeholders.

• Community and stakeholder engagement to identify real and perceived issues and develop measures to address them prior to formal approvals processes.

• A variety of communication and engagement techniques would be developed, including information sheets, community newsletters, community workshops and feedback mechanisms (depending on community preferences)

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Campoona 2013 milestones
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Campoona – Key Milestones for 2013

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Campoona Shaft Drilling
Central Campoona Drilling
Commenced Metallurgical Characterisation
Resource Estimation Campoona Shaft
Resource Estimation Campoona Central
Environment & Community Baseline Studies
Community Engagement
Sample
Pilot Plant / Plant Design
Reserve Estimation
Feasibility Study
2012
2013 2014
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Exploration &
esource Drilling
R
Project
Development
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• *Reserve estimation is scheduled however this will be dependant on the results of the resource estimation and metallurgical characterisation that are both yet to be completed.

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Contact details

Archer Exploration Limited

Ph: +61 8 8272 3288 Fax: +61 8 8272 3888 Email: info@archerexploration.com.au

Thank you

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