ARCHER MATERIALS LIMITED — Investor Presentation 2014

Apr 1, 2014

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Company Update Presentation

April 2014

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Corporate Snapshot
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Archer is in a strong financial position to advance its flagship Campoona Graphite Project while maintaining a tight capital structure

Capital Structure

Capital Structure
Shares on Issue	83.6M
Performance Rights(expiring 31/07/16)	3.4M
Share Price(as at 31/03/14)	$0.18
Market Capitalisation	$15.1M
Cash(as at 31/12/13)	$7.2M
Enterprise Value	$7.9M

Board & Management

Chairman	Greg English
Managing Director	Gerard Anderson
Non-Executive Director	Tom PhillipsAM
Non-Executive Director	Alice McCleary
Company Secretary	Craig Gooden

Trading History

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Share Ownership Summary
(as at 25/03/14)
Board &
Management
17.2%
Top 20
(Excluding
Other
Board &
Shareholders
Management)
60.3% 22.4%
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Project Locations
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Focused on progressing Priority 1 targets

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Campoona Resource
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High grade resource defined

Campoona JORC Resource (5%C lower cut-off grade)*

Area	Resource Category	Tonnes (Mt)	Graphite (% C)	Contained Graphite (tonnes)
Campoona Shaft	Measured	0.339	14.8	50,200
	Indicated	1.056	12.7	134,100
	Inferred	0.837	10.7	89,600
Central Campoona	Inferred	0.295	12.5	36,900
Combined	Total	2.527	12.3	310,800

* This information was prepared and first disclosed under the JORC Code 2004 (Archer Exploration Limited, ASX Announcement 6[th] December 2012). It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported.

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Drilling at Central Campoona
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Campoona Shaft
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Central Campoona
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Central Campoona 2012 JORC Inferred Resource of 520kt grading 11.6% C (5%C lower cut-off grade) announced in ASX Announcement 18[th] February 2014

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Diamond drill cores from CSDD12_002

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High Purity Graphite
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Rigorous deposit wide metallurgical testing completed

• Comprehensive bench scale tests completed on samples across the entire deposit

• High purity graphite concentrate repeatable for all three geologic horizons from flotation (97-99.4% TGC)

• Recoveries of ≥90%

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-
Campoona Shaft metallurgy update for 75µm
Upper Clay Horizon
97% - >99%C concentrates from mechanical cell flotation
>90% Recovery
NORTH SOUTH
Upper BOCO
95% - 97%C
≈90% Recovery
Lower BOCO
96% - 97%C
90-95% Recovery
Complete Clay
Graphite Schist
Alteration
Chlorite rich
0 100 Gniess and
Deposit open at depth beyond 120m of surface Schist cross cutting
metres Amphibolite
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High Purity Graphite
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High quality fine natural graphite concentrates

 Bulk flotation tests emulated high purity results derived from bench-scale testing

• Acid cleaning of lower grade concentrates (92% TGC) results in concentrates grading >99.5% TGC

 Robust results provide confidence for Archer to enter the higher value end of the graphite market

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Typical Campoona concentrate prior to re-cleaning

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Bulk flotation concentrates

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Bulk flotation re-cleaner concentrates + tail under SEM

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Campoona Product Options
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Two-year research program with University of Adelaide commenced into graphite and graphene related products

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Graphite Prepared Semi- Prepared Archer Graphene
Materials products Products Product Examples
Graphene
Nanosheets
Graphene Oxide
Sheets
Graphene
Hydrogels
Campoona Graphite
Graphene from raw Archer Graphite
Concentrates Graphene
Aerogels
Graphene
Sheets
Graphene Aerogel
Graphite Composites
Flakes (92%)
Membrane of graphene sheets from raw graphite
Graphene
Powders
Intercalated
Graphite
Graphene
Films
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Graphene aerogel from raw graphite

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Marketing
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Market fundamentals and high purity product support customer engagement for Campoona graphite

• High purity Campoona graphite concentrates to be provided to specific market segments for assessment

• Market interest from Asia and North America

• Seeking to negotiate off-take agreements with prospective buyers

• Discussions supported by high purity product and strong market fundamentals

• Research agreement entered with Adelaide University to focus on new product opportunities for Archer graphite and graphene products

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Market Demand Snapshot

• Target markets include:

• Batteries – dry cell, alkaline and lithium-ion

• Recarburisation of steel

• Brake pads

• Carbon brushes

• Lubricants and greases

Market Supply Snapshot

• Chinese supply (~70% of market) is declining due to mine closures, increasing costs and environmental challenges

• Emerging production capacity especially in Africa & Australia

• Graphite identified as a critical industrial mineral by USA & UK

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Mining Lease Progress
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Progressing Campoona Mining Lease Proposal for submission in Q3/Q4 2014

Task	Work undertaken to date	Work inprogress
Ecology	Spring & Winter baseline surveys	 Impact assessment in progress
Air quality	Project reviewed & GAP analysis	 Modelling in progress
Hydrogeology	Desktop study completed	 Completed
Geochemistry	Draft report completed	 Sampling and Analysis Plan.  Conceptual AMD management plan has commenced
Socio-Economic & Community Consultation	Stakeholder engagement plan Focus group 2-Monthly CCC meetings Community newsletters	 Two-monthly newsletters  Community open days planned
Surface Water	Desktop study	 Finalising document
Visual Amenity	Fieldwork completed	 Preparation of photos and text for the MLP
Tailings Management	Tailings workshop Tailings Option Assessment	 Tailings Option Assessment
Mine Closure Plan	Information review & gap analysis started	 Awaiting final mine plan
MLP & PEPR	Kick-off meeting Table of Contents	 Awaiting studies to progress further.  Awaiting final mine plan
Regulator Liaison	Meetings with government stakeholders undertaken	 Regular meetings
Permitting Review	Draft Permit Register completed in February 2014	 Completed
Cultural Heritage	Desktop cultural heritage study completed in December 2013	 Completed
Noise	Review of various project documents and gap analysis	 Desktop modelling and reporting in progress
Traffic	Desktop traffic study completed	 Finalise desktop assessment

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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Progress to Date

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Mine to Mill
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Progressing mine and mill design

Mine

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37º Slope
Max. Op. NPV Pit Shell
11 ha
Fence Limit
47 ha
Cutback 1 (Dark Blue)
Waste
Cutback 2 (Orange)
Dumps
15 ha
Cutback 3 (Light Blue)
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Initial Campoona Shaft pit design will be finalised now geotechnical

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Mill
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Sugarloaf plant conceptual layout

drilling completed

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Infrastructure
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Good supply chain logistics

 Power

 Groundwater at Pindari; SA Water

 Ports – Port Lincoln, Port Adelaide

 Cleve/Kimba sealed road

 Township of Cleve

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Exploration Upside
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Resource extensions highly likely but not an immediate focus

• <2% of 1,100km[2] tenure explored to date

• EM identified several possible graphite bodies along strike from the know graphite occurrences at Campoona

• Initial regional exploration drilling outlined three additional high grade graphitic schist bodies requiring follow up drilling

• Sugarloaf has an 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

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Forward Work Program
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Fully funded for near term work program

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Exploration &
Resource Drilling
Project
Development
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Campoona Shaft Drilling
Central Campoona Drilling
Metallurgical Characterisation
Resource Estimation Campoona Shaft
Resource Estimation Campoona Central
Environmental Baseline
Marketing Studies
Community Consultation
Initial Bulk Sample
Bulk Floats
Concept Study
Reserve Estimation
Pilot-scale Testing
Mining Lease Proposal
(MLP)
Submit MLP to DMITRE
2012 2013 2014
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Project Development Process Summary
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Progressing the development of a new graphite and graphene supply source

Resource & Mining

• Define Resource

• Mining

• Open cut mining

• Predominately free

dig

• Low overall strip ratio

• Mining Lease Proposal to be submitted Q3/Q4 2014

Processing & Testing

• Processing

• Crushing and grinding

• Flotation

• ± Acid treatment

• Drying

o Bagging

Marketing & Export

• Off-take

• Joint venture

• Supply feed for:

• advanced graphene production

• advanced graphite production

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Archer Graphite Highlights
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Delivering high grade, high value fine graphite

• High grade resource with excellent recoveries from all geologic horizons

• High purity product

• Product optionality with value add potential

• Expected low cost mining

• Significant upside leverage at current trading price

Peer Group Snapshot

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25%
Bubble Size Represents
Contained Graphite
20%
Talga Resources
15%
Lincoln Minerals
Archer Exploration Valence
10%
Industries
Triton
Minerals
5%
Lamboo
Resources
0%
0 10 20 30 40 50 60 70 80 90
Enterprise Value (A$M)
Grade (TGC)
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Peer Trading Performance

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550
Lamboo Resources
500
450
Talga Resources
400
Valence Industries
350
300
Triton Minerals
250
200 Lincoln Minerals
150
Archer Exploration
100
50
Jan-14 Feb-14 Mar-14
Normalised Share Price Performance
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Source: Latest Company ASX releases

Source: Bloomberg

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Other Archer Projects – Magnesite
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World’s largest cryptocrystalline magnesite deposit

• 100% interest in Leigh Creek deposit

• Project is located close to existing rail and infrastructure

• Plaint lodged over portion of Mt Hutton Resource. Hearing set for the week of the 23[rd] of June 2014

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Source: SAMAG 1999 JORC Resource Estimate

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Other Archer Projects – Manganese
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Early interest from party interested in manganese joint venture

• 100% interest in 7 manganese deposits and prospects

• Ketchowla, Salt Creek and Jamieson Tank have grades ranging from 15%-20% Mn

• Beneficiation tests on Ketchowla K1 ore indicates that saleable manganese grading ~40% Mn can be recovered.

• Leach tests showed high recovery of Ni, Co, Cu and Zn

• JV discussions

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Rock chip grades and drill hole results K1 & K2 Ketchowla

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Other Archer Projects – Copper & Gold
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Broad range of copper and gold exploration prospects held in South Australia

Key Gold Targets

• Wildhorse Plain - awaiting results of recent drill program testing highly anomalous epithermal gold occurrences at Bartel

• Napoleon’s Hat & Watervale

Key Copper Targets

• World’s End – including Robertstown

• & Mimic

• North Cowell

• Spring Creek

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Summary
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 Strong financial position to progress key projects

 Rigorous testing shows that Campoona delivers high value, high purity graphite

 Market engagement commenced for Campoona graphite

 Exposure to other projects with near term monetisation potential and exploration upside

 All projects well positioned with access to critical infrastructure

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Archer graphite concentrates

Chemically intercalated graphite

Thermally intercalated graphite

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Disclaimer
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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 styles of mineralisation and types of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the 2012 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.

The information in this report that relates to the Mineral Resource estimation has been prepared by Mr B Godsmark who is a Member of the AusIMM and peer reviewed by Mr G Reed who is also a Member of the AusIMM (CP). Mr Godsmark is a full time employee of Mining Plus Pty Ltd and Mr Reed is a sub-contractor to Mining Plus Pty Ltd., both have more than five years‟ experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Godsmark and Mr Reed have consented in writing to the inclusion in this announcement of the Mineral Resource estimation 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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Contacts

Managing Director Gerard Anderson (08) 8272 3288 ganderson@archerexploration.com.au

Investor Relations Rohin Muller (08) 8232 8800 rmuller@adelaideequity.com.au