ARCHER MATERIALS LIMITED — Investor Presentation 2012

Apr 29, 2012

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ARCHER EXPLORATION LIMITED

Graphite and More

SAREIC Conference Adelaide 30th April – 2[nd] May 2012

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 eighteen 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.

Althou g h Archer Ex p loration Limited believes that its ex p ectations reflected in these forward-lookin g 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

• Archer Assets

• Project Pipeline

• Graphite and the Graphite Market

• Archer’s Graphite Deposits

• Campoona

• Sugarloaf

• Archer rapG hite ummaryS

• Late Mail

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Corporate Overview Archer Exploration:AXE

ASX Code : AXE 40 35 Shares on Issue 77,142,763 30 Unlisted Options on Issue 6,270,000 25 20 Share price at 26 April 2012 $0.35 15 Cash at 31 March 2012 $4.08 million 10 _ SPP to raise $1.5M in progress_ 5 Market Capitalisation $27 million 0 Directors Chairman Greg English Directors Gerard Anderson Mineral Exposure Tom Phillips AM • Graphite • Uranium Alice McCleary Hon. John Dawkins AO • Copper - IOCG • Iron Ore Peter Meers • • Magnesite/magnesia Phosphate • Manganese ± REE • Coal ± CSG • Gold • Barite

The limited number of shares on issue and commodity exposure offers shareholders considerable leverage as exploration advances and deposits mature 4

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Archer Assets

Exploration Tenements

• 19 g ranted mineral tenements coverin g p ortions of E y* re Peninsula, Leigh Creek, West Roxby, Burra and World’s End areas.

• 3 ELA’s.

• 100% of mineral rights other than uranium on EL4693 Wildhorse Plain .

Key Projects

2 Emerging Graphite Deposits

• Campoona – high grade deposit.

• Sugarloaf – very large, high grade dominantly amorphous deposit.

• 100% of several other higher metamorphic grade graphite prospects in “graphite province” where flake graphite has been identified .

Magnesite

JORC Measured, Indicated and Inferred Resources at Leigh Creek of 413Mt grading 40.3% MgO. (Source MDL 2001 Report)

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Archer’s tenement status as at 26 April 2012

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Large portfolio of prospective tenements hosting at least two very promising mineral deposits

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Archer’s Value Proposition

• Primarily focused on Graphite.

• Two developing graphite deposits at Campoona and Sugarloaf.

• Several additional prospects where petrology has identified flake graphite.

• Huge land bank of 918 km[2] in graphite “province”.

• Less than 1% of the tenement holding has been drilled by Archer .

• Historic wide spaced EM has defined over 40km of strike of high EM response thought to be attributable to graphite that remains un-drilled.

• Tight capital structure, 77 million shares on issue, market capitalisation of $27 million.

• • T ra d e on mu lti p es muc l h l ower th a t C ana di an peers.

• Significant cash at bank to fund aggressive drill-out of graphite deposits and prospects.

• Next stage of resource drilling at Campoona set to start within 2 weeks.

• Targeting initial JORC resource in H1, 2013.

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Archer’s graphite projects are quickly taking shape

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1
Project Pipeline Reserve ≈ 100%
Mt Hutton
Archer is an exploration company. The Pug Hill
pr nc pa asse s o i i l t f th e ompany are s C it ResourceTermination Hill4 ≈70% Probability of
significant mineral tenements and mineral
Development at T0
deposits. Mt Playfair Witchelina
≈ 50% where To = Apr 2012
Advanced Exploration Project 3
Shareholder value is increased by;
Campoona Graphite
-
moving projects up the
Ketchowla Mn / REE Sugarloaf Graphite * SAMAG reports
development pyramid,
-- discovering new deposits,joint ventures, Cost Mineralised ProjectWHP Fe WHP – Epithermal AuSalt Ck Mn 8
WHP Cu
-
project acquisition,
Bender Au/Cu Napoleon’s Hat Au WHP Graphite
- asset sale. Watervale Au
Actual # of Projects
Geophysical / Geochemical Anomaly 2
Pindari Ni / REE World’s End Cu
Tenement / Geological Target 23
3 ELA’s (Graphite, Phosphate & Barite, REE, Coal)
19 Granted Tenements
100% of non uranium mineral rights on WHP
Concept / Project Review 3
Commodity Reviews
Industrial Minerals – Graphite,
Strategic Minerals REE 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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Archer Graphite

Numerous graphite deposits and prospects in 918km[2] tenement package.** _Archer has accepted conditions for the grant of ELA148/11 Cleve West**_

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Archer has a substantial land position in “graphite province”

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What is Graphite?

Graphite Properties:

Metallic properties:

• Excellent conductor of heat and electricity

• Highest natural strength and stiffness of any material

Nonmetallic properties:

• High natural lubricity

• M a n a ns s reng i t i t th an d s a t bilit y o empera ures o t t t f 3 , 600[o] C

• One of the lightest reinforcing agents

• Highly resistant to chemical attack

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Graphite Market

Photomicrograph ‐ Growth spirals in graphite crystal

Amorphous Graphite

Microcrystalline graphite ≈70% of world production and consumption. Graphite content ranges from 15% to 99% C. 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 graphitic 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). Three main flake sizes:

Fine flake (100 - 149µm) Medium flake (149–177µm) Large flake (>177µm)

Substitution of graphite by other minerals is highly unlikely as there is simply no other mineral so versatile and with such unique physical 9 and chemical properties.

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Uses for Graphite

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hite
for Grap
al Uses
Tradition
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Carbon steel forging
Electric motor brushes
Graphite crucibles
Refractory bricks to line blast furnaces
Pencils
Valves
hite
for Grap
ch Uses
High Te
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Dry cell batteries Graphite brake pads
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Emerging New Technology Uses for Graphite

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Zero EV motor cycles

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

Ceramics

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Ceramic fibres

Graphite strips are deposited onto silicon with industrystandard lithography to obtain a densely-packed memory.

Super high strength composites

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Graphene - the new super material

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

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

• Nano-electronics for logic, memory and interconnects.

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

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

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• Thermal management.

Graphene predicted to have a profound impact on the future development of mankind

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Super fast graphene computer chips

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Graphene molecular structure

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Film of graphene
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Graphite Supply* – China 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
	M i ex co	5	5	3 100 ,
	Norway	2	2	(4)
	Sri Lanka	11	11	(4)
	Ukraine	6	6	(4)
	Oth C t i er oun r es	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 reportedly declining and supply suffers from the seasonal closure of mines. It is reported that up to 180 graphite mines in the Hunan Province have been closed recently taking up to 200,000 of amorphous graphite out of the market. Mine closures in part to preserve resources. China has imposed 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.

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Graphite demand

Strong continuing demand for traditional uses in steelmaking, refractories, brake and clutch materials, gaskets, plastics and composites , batteries , semiconductors , carbon brushes in electric motors , and oils and greases .

Potentially exponential growth in flake graphite market resulting from increased demand from high value strategic applications such as:

• Lithium-ion batteries for EV and HEVs - the USA has 200,000,000 of the estimated 750,000,000 cars in the world. Research by the University of California predicts that by 2030, 64% of all US made cars will be electric. US stimulus bill includes tens of billions of dollars in loans, grants, and tax incentives for battery and HEV research and manufacture to make US auto industry competitive.

China’s current 5-Year Plan gives electric vehicles special status. The government said it will do “whatever is necessary” to make the industry a global leader, and allocated $17 billion in funding to the cause (Diggers $& Dealers Vol18, Issue 4).

• -

• Green energy initiatives fuel cells are considered by the USGS to use as much graphite as all other uses. Proton exchange membrane technology predicted in automotive, building and smaller applications.

• New generation pebble bed nuclear reactors - fuel is embedded in graphite balls. Each PBNR requires 100t of graphite at start up and 20-30 tpa. China committed to nuclear with plans to build 30 plants (6GW) by 2020 and with 300GW planned by 2050.

• Electronics - including semiconductors and computer chips.

• Emerging uses for graphene.

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Who wouldn’t want to drive an Audi e-Tron?

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Graphite Prices

Graphite Prices Rising on Strong Demand:

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

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	$2500 - $3000
				, ,
	Medium Flake	94-97%	149µm - 177µm	$2,200 - $2,500
	Fine Flake	94-97%	<149µm	$2,000 - $2,400
	Amorphous	80-85%	<100µm	$850

Price is driven by purity (%TGC) and crystal size.

Purity and size drive price.

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Wildhorse Plain Graphite

Flake graphite recorded in many regional samples – Campoona, Council Pit, Wilklow and Others

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Literature searches identified several regional graphite occurrences. Historic EM has indicated >40km of potential strike. Large areas not covered by EM.

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Campoona Graphite EM

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• Historic EM flown on 1km centres

• August 2011 EM flown on 100m centres

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• Excellent correlation between data sets

• High resolution EM provides opportunity to model EM response with graphite morphology to derive a predictive exploration tool.

• EM highlights continuity of graphitic horizons.

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Plan view of Campoona drilling to date

Cross section of Campoona EM

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EM offers an effective exploration tool to identify graphite-bearing horizons.

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Campoona Graphite

• High grade graphite - 15-40m thick highly conductive graphitic schist within proto - gneiss and pegmatite .

• Pinching and swelling evident in 3D.

• Drilling intercepts to date:

• CSRC12 _ 003 24m @ 10 . 4%C from 49m (incl 10m @ 16 7%C. )

• CSRC12_006 21m @ 15.0%C from 46m

• CSRC12_007 25m @ 10.9% C from 64m (incl 14m @ 15.6%C )

• CSRC12_008 38m @ 8.60%C from 0m (incl 22m @ 10.3%C )

• CSRC12_009 67m @ 10.1%C from 0m (incl 25m @ 13.2%C )

• CSRC12 _ 010 48m @ 12 . 5% C from 24m (incl 20m @ 16 5%C. )

• CSRC12_011 3m @ 6.2%C from 0 and 6m @ 8.0%C from 6m

• CSRC12_012 23m @ 11.4%C from 0m (incl 16m @ 12.9%C )

• CSRC12_013 24m @ 10.00%C from 21m (incl 10m @ 12.5%C)

• S evera l resu lt s pen di ng

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Campoona rD ill Section

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Graphite at Campoona with >6km strike extent

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Campoona Graphite

Petrology

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	Drill Hole	Depth	Flake length Range (µm)	Average Length (µm)	TGC (%)
	CSRC12‐003	53‐54	30‐500	200	20.4
	CSRC12‐004	11‐12	30‐200	100	0.82
	CSRC12‐006	49‐50	30‐250	120	16
	CSRC12‐006	52‐53	30‐300	185	159
	CSRC12‐007	28‐29	30‐200	100	. 0.15
	CSRC12‐007	72‐73	30‐300	120	16.9
	CSRC12‐007	84‐85	30‐350	180	13.4
	G2RC12‐002	8‐9	na	na	0.07
	G2RC12 002 ‐	21 22 ‐	na	na	0 06 .	CSRC12‐007 (84‐85m) : Photomicrograph showing homogeneous evenly distributed graphite. Graphite varies from 30 – 350 micron
	G2RC12‐003	13‐14	60‐350	200	0.54
	G2RC12‐004	52‐53	60‐350	180	0.16
	G2RC12‐004	44‐45	na	150	0.33
	G2RC12‐005	19‐20	40‐280	200	0.22
	G2RC12‐005	25‐26	60‐600	350	0.27

CSRC12‐007 (84‐85m) : Photomicrograph showing homogeneous evenly distributed graphite. Graphite varies from 30 – 350 micron and v suai lly estimated t o average 180 m cron n engi i l th

Preliminary Metallurgy

Excellent recoveries have been obtained on these two samples so far with good TGC grades via simple flotation and a fine regrind.

• . The focus to date has been achieving best possible grade of amorphous graphite.

• CSRC12-003 delivered a graphite concentrate grading 88% TGC at a 92% recovery.

• CSRC12 - 006 delivered a graphite concentrate grading 86% TGC at a 93% recovery

• .

Test work in progress will determine what grades can be achieved without total liberation of the graphite to maximize flake recovery. These tests are in progress and should be available during the 3[rd] week in May.

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Graphite at Campoona with >6km strike extent

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Sugarloaf Graphite

• Sugarloaf area first explored for gold, base metals and uranium .

• Goldstream then Helix identified a coincident gold and copper soil anomaly. The two companies drilled a total of 41 drill holes across Sugarloaf. Best intercept was 3m @ 1g/t Au in a laminated quartz vein.

• 23 of the 41 drill holes recorded wide intervals of graphite however no assaying for carbon was undertaken. Historic samples were not retained.

• In 2008 Archer drilled 5 RC holes to further test the gold and copper potential. The northernmost drill line including CHRC010 was assayed for carbon.

• In 2011 Archer conducted initial drill campaigns on Sugarloaf and surrounding Wildhorse Plain graphite occurrences.

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

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Graphite recorded over wide drill intercepts in numerous holes

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Sugarloaf Graphite

Exploration Target

• Sugarloaf has Exploration Target of 40 – 70Mt grading 10-12% total carbon*. The previous estimate of 24-37Mt was based on the western limb only.

• *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 consists of fine graphite with petrology indicating an average size of 100 micron. Historic records indicate up to 15% flake from shafts on the eastern graphite limb.

• Drilling and EM indicates Sugarloaf to be 4km in length and averages some 40 m n rue i t thi c k ness.

• Metallurgical test work from a sample from hole SLRC11_004 grading 10%C produced a graphite concentrate grading 82%TGC.

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Stacked EM sections over Sugarloaf showing folded graphite limbs

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Sugarloaf is a very big high grade deposit

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Archer Graphite – Deposit Comparison

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Emerging Graphite Deposits
Average Grade (%C)
Ex p ected Cam p oona and Su g arloaf
U ey Main Roa l d
resource grade range.
Raitajarvi
Nunasvaara
Emerging Graphite
Lac Knife
Deposits Average Grade
Kringel (%C)
Kearney
Bissett Creek
0 5 10 15 20 25
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Whilst not at resource stage, it is reasonable to assume that the expected resource grade of Campoona and Sugarloaf could be 10 – 15%C.

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Archer’s graphite projects are quickly taking shape

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Archer Graphite – Summary

• Large prospective land bank with exploration at an early stage.

• Less that 1% of land bank explored to date.

• Historic graphite prospects; Grid 2, A405, Mt Shannan, Council Pit, Wilklow, Miltalie, Calkookra, Ben Buy with an aggregate potential strike of over 40km.

• EM offers an excellent ex p loration tool.

Campoona

• –

• Petrology identified flake graphite at Campoona (maximum 200 500 micron with many sam p les with visuall y estimated avera g e g ra p hite >180 micron ) .

• Sub vertical high grade graphitic schist within proto-gneiss and pegmatite.

Sugarloaf

---

• Exploration Target * of 40 70Mt grading 10 12%C makes Sugarloaf a very large medium high grade deposit.

• Graphite mostly fine averaging around 100µm. Amorphous flotation concentrates grade >80%TGC.

• 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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Archer’s graphite projects are quickly taking shape

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Archer Graphite – 2013 Exploration Plan

Campoona

• Trench sampling.

• Infill drilling to a nominal 100m x 20m line spacing.

• Diamond drilling for metallurgical test work.

• Infill to 50m x 20m to support JORC Measured Resource by April 2013 .

• Commence baseline environmental studies.

Sugarloaf

• Trench sampling.

• Diamond drilling for metallurgical test samples.

Regional

• Detailed mapping

• Initial drill screening of graphite prospects.

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Archer’s graphite projects are quickly taking shape

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Late Mail … West Roxby Tenement Sale

• Binding Sale and Purchase Agreement signed with BHP Billiton on 30[th] April 2012 for the sale and purchase of 5 West Roxby tenements for $8 million.

• A g reement conditional on Ministerial Consent to renewal and transfer of the Tenements.

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Full settlement will boost Archer’s cash position to over $12 million before proceeds from current SPP

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