ARCHER MATERIALS LIMITED — Proxy Solicitation & Information Statement 2010

Oct 31, 2010

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Archer Exploration Limited ABN 64 123 993 233

Level 1, 28 Greenhill Road Wayville, SA 5034 Australia Telephone +61 (0)8 8272 3288 Facsimile +61 (0)8 8272 3888 info@archerexploration.com.au www.archerexploration.com.au

NOTICE OF EXTRAORDINARY GENERAL MEETING

Archer Exploration Limited ABN 64 123 993 233

Notice is hereby given that an Extraordinary General Meeting of the shareholders of Archer Exploration Limited (Company) will be held at Norman Waterhouse Lawyers, Level 15, 45 Pirie Street, Adelaide, South Australia 5000, on Friday 3 December 2010 at 10.00 am (Adelaide time) for the purpose of transacting the business referred to in this Notice of Extraordinary General Meeting.

The Explanatory Memorandum that accompanies and forms a part of this Notice of Extraordinary General Meeting describes the Ordinary Business to be considered.

Ordinary Business:

1) Issue of Options to Managing Director

To consider, and if thought fit, to pass the following resolution as an ordinary resolution:

‘That, approval be given for the issue of 5,000,000 Options to Gerard Anderson (Managing Director) on the terms set out in the accompanying Explanatory Memorandum.’

By order of the Board

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Craig Gooden Company Secretary 1 November 2010

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NOTES ON VOTING

VOTING ENTITLEMENTS

The Board has determined that, in accordance with the Company’s Constitution and the Corporations Regulations 2001 (Cth), that the members entitled to attend and vote at the Extraordinary Meeting shall be those persons who are recorded in the register of members at close of business on Wednesday 1 December 2010.

Proxies

Appointment of Proxy

A shareholder who is entitled to attend and vote at the Extraordinary General Meeting may appoint up to two proxies to attend and vote on behalf of that shareholder. A proxy need not be a shareholder of the Company. A proxy form is included with this Notice of Extraordinary General Meeting.

If a shareholder appoints two proxies, the appointment of the proxies may specify the proportion or the number of that shareholder’s votes that each proxy may exercise. If the appointment does not so specify, each proxy may exercise half of the votes. Fractions of votes will be disregarded.

A proxy form must be signed by the member or their duly appointed attorney, or in the case of a body corporate, executed in accordance with the corporation’s constitution, or signed by a duly authorised officer or attorney.

To be effective, the Company must receive the completed proxy form signed by the member and, if the form is signed by the shareholder’s attorney or authorised officer of a corporation, the authority under which the proxy form is signed (or a certified copy of the authority).

The proxy’s appointment and, if applicable, the authority appointing an attorney, must be sent by post or fax by no later than 10.00 am (Adelaide time) on Wednesday 1 December 2010 to:

• 1) the Company’s registered office at Level 1, 28 Greenhill Road, Wayville 5034 (facsimile number (08) 8272 3888 ); or

• 2) the Company’s share registrar, Computershare Investor Services Pty Limited, as listed below:-

• 3) Custodian Voting – for Intermediary Online subscribers only (Custodians) please visit www. intermediaryonline.com to submit your voting intentions.

Mail:	In person:	Fax:
Archer Exploration Limited	Archer Exploration Limited	Archer Exploration Limited
C/- Computershare Investor	C/- Computershare Investor	C/- Computershare Investor Services Pty
Services Pty Limited	Services Pty Limited	Limited
GPO Box 242	Level 5, 115 Grenfell Street	(within Australia) 1800 783 447
Melbourne VIC 3001	Adelaide SA 5001	(outside Australia) +61 3 9473 2555
Australia	Australia

If you require an additional proxy form, please contact Computershare Investor Services Pty Limited.

Appointment of Company representative

A body corporate may elect to appoint a representative, rather than appoint a proxy, in accordance with the Corporations Act. Where a body corporate appoints a representative, the Company requires written proof of the representative’s appointment to be lodged with or presented to the Company before the meeting.

Voting by proxies

A proxy may decide whether to vote on any motion, except where the proxy is required by law or the constitution to vote, or abstain from voting, in their capacity as proxy. If a proxy is directed how to vote on an item of business, the proxy may vote on that item only in accordance with the direction.

If a proxy is not directed how to vote on an item of business, the proxy may vote as he or she thinks fit.

Where more than one proxy is appointed, neither proxy is entitled to vote on a show of hands. If a shareholder appoints the chairperson of the meeting as the shareholder’s proxy and does not specify how the chairperson is to vote on an item of business, the chairperson will vote, as proxy for that shareholder, in favour of that item on a poll.

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EXTRAORDINARY GENERAL MEETING – EXPLANATORY MEMORANDUM

Archer Exploration Limited ABN 65 123 993 233

This Explanatory Memorandum has been prepared for the information of shareholders in connection with the Extraordinary General Meeting of shareholders to be held at Norman Waterhouse Lawyers, Level 15, 45 Pirie Street, Adelaide, South Australia 5000 Friday 3 December 2010 at 10.00 am.

This Explanatory Memorandum should be read in conjunction with the accompanying Notice of Extraordinary General Meeting, and is a brief explanation of Agenda Items 1 in the Notice of Extraordinary General Meeting and why the Company is seeking this shareholder approval.

RESOLUTION 1. Grant of Options to Managing Director

The Company proposes to issue 5,000,000 Options to Gerard Anderson, Managing Director, or his nominee. If approved, the Options will be issued at no cost to Gerard Anderson, but will, if capable of being exercised, require the payment of the exercise price set out below.

The terms and conditions of the Options are set out in Annexure A. The exercise price will be 20 cents per share subscribed for and the Options will be exercisable on the terms set out in the accompanying Explanatory Memorandum before 30 November 2013 ( Expiry Date ).

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Gerard Anderson Assoc. Applied Geology, Grad Dip Bus.MSc (Director since 14 July 2008)

Gerard Anderson is a geologist with 36 years of experience including 15 years in senior exploration and mine management roles including Exploration Superintendent at the Boddington Gold Mine for Worsley Alumina, Chief Geologist at the Bronzewing Gold Mine, Chief Geologist at Kalgoorlie Consolidated Gold Mines (Superpit and Mt Charlotte), General Manager of Golden Grove operations for Normandy and Newmont, General Manager Joint Ventures for Newmont, Managing Director Croesus Mining NL and Managing Director of Centrex Metals Ltd.

The Board has reviewed the market standard of remuneration for the position of Managing Director of a publicly listed company of a size comparable to the Company. Based on this, the Board considers it appropriate to issue 5,000,000 Options to Mr Anderson in order to retain his services and ensure that his remuneration is in line with the market standards.

Resolution 1 seeks Shareholder approval to the allotment and issue of these Options for the purposes of ASX Listing Rule 10.11.

ASX Listing Rule 10.11 provides that a company must not issue or agree to issue securities to a related party, including a director, without first obtaining the approval of members. For this purpose ASX Listing Rule 10.13 provides that the following information must be provided to shareholders:

• the Options will be issued to Gerard Anderson, or his nominee;

• the maximum number of Options to be issued under resolution 1 is 5,000,000;

• 5,000,000 of the Options will be issued as soon as practicable after this meeting and, in any event, no later than 1 month after the date of this meeting;

• 2,000,000 A class Options will vest immediately on issue, 1,000,000 B class options will vest on 31 October 2011, 1,000,000 C class Options will vest on 31 October 2012 and the final 1,000,000 D class Options will vest on 31 October 2013.

• the Options will be issued for nil consideration, on the terms set out in Annexure A;

• each share issued pursuant to the exercise of the Options will rank equally with existing ordinary fully paid shares of the Company; and

• no funds will be raised by the issue of the Options. The funds raised pursuant to the exercise of the Options will be used for the Company’s working capital requirements.

If approval is given under ASX Listing Rule 10.11, approval is not required under Listing Rule 7.1.

Recommendation - The Board (other than Gerard Anderson, who makes no recommendation) recommend that shareholders approve Resolution 1 for the issue of 5,000,000 Options to Gerard Anderson.

The Company will disregard any votes cast on this ordinary resolution by Mr. Anderson, or any person who might obtain a benefit (except a benefit solely in the capacity of a holder of ordinary shares) if Resolution1 is passed (a ‘Participating Party’) and any associate of a Participating Party. However, the Company will not disregard a vote if it is cast by a Participating Party as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form or it is cast by a Participating Party who is chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

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ANNEXURE A – TERMS AND CONDITIONS OF OPTIONS TO BE ISSUED TO MR GERARD ANDERSON OR HIS NOMINEE

• 1) Each Option will entitle the holder (Optionholder) to subscribe for one fully paid ordinary share (Share) in Archer Exploration Limited ACN 123 993 233 (Company) (subject to possible adjustments referred to in paragraphs 9, 10 and 11 below).

• 2) a) Each A Class Option is exercisable at any time after 9:00 am Adelaide time following the issue of the options and before 5:00 pm Adelaide time on 30 November 2013 (Expiry Date). Options not exercised before the Expiry Date will lapse.

• b) Each B Class Option is exercisable at any time after 9:00 am Adelaide time after 31 October 2011 and before 5:00 pm Adelaide time on 30 November 2013 (Expiry Date). Options not exercised before the Expiry Date will lapse.

• c) Each C Class Option is exercisable at any time after 9:00 am Adelaide time after 31 October 2012 and before 5:00 pm Adelaide time on 30 November 2013 (Expiry Date). Options not exercised before the Expiry Date will lapse.

• d) Each D Class Option is exercisable at any time after 9:00 am Adelaide time after 31 October 2013 and before 5:00 pm Adelaide time on 30 November 2013 (Expiry Date). Options not exercised before the Expiry Date will lapse.

• 3) The exercise price of each Option is 20 cents (Exercise Price).

• 4) Options are exercisable by notice in writing to the Company, delivered to the registered address of the Company and accompanied by the full payment of the Exercise Price in cleared funds.

• 5) Some or all of the Options may be exercised at any one time or times prior to the Expiry Date.

• 6) Shares issued pursuant to the exercise of any of the Options will rank in all respects on equal terms with the existing Shares in the Company.

• 7) The Company will not seek to have the Options admitted to the official list of ASX and the Options will not be listed on ASX. The Company will make application for new Shares allotted on exercise of the Options to be admitted to the official list of ASX.

• 8) Each Option will be freely transferable at any time before the Expiry Date.

• 9) Options will not entitle the Option holder to participate in any new issue of securities by the Company unless the Option has been duly exercised prior to the relevant record date. The Company will ensure that for the purposes of determining entitlements to participate in any new issues of securities to holders of Shares, that the record date will be at least seven business days after the date the issue is announced.

• 10) If there is a bonus issue to the holders of Shares:

• a) the number of Shares over which the Option is exercisable will be increased by the number of Shares which the holder of the Option would have received if the Option had been exercised before the record date for the bonus issue; and

• b) no change will be made to the Exercise Price.

• 11) If, prior to the Expiry Date the issued capital of the Company is reorganised, the rights of the Optionholders may be varied to comply the ASX Listing Rules which apply to the reconstruction.

• 12) Unless the Board in their absolute discretion determine otherwise, Options held by an Eligible Person or a Permitted Nominee (as the case may be) shall lapse upon the earlier of:

• a) the Expiry Date;

• b) a determination by the Directors that the Eligible Person or Holder has acted fraudulently, dishonestly or Eligible Person is in breach of their obligations to a Group Company; and

• c) 30 days after an Eligible Person ceases to be an Eligible Person for any reason other than Retirement, Permanent Disability, Redundancy or death.

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Lodge your vote:

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By Mail:

Computershare Investor Services Pty Limited GPO Box 242 Melbourne Victoria 3001 Australia

000001 000 AXE MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

Alternatively you can fax your form to (within Australia) 1800 783 447 (outside Australia) +61 3 9473 2555

For Intermediary Online subscribers only (custodians) www.intermediaryonline.com

For all enquiries call:

(within Australia) 1300 738 349 (outside Australia) +61 3 9415 4649

Proxy Form

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For your vote to be effective it must be received by 10:00am (Adelaide time) Wednesday 1 December 2010

How to Vote on Items of Business

All your securities will be voted in accordance with your directions.

Appointment of Proxy

Voting 100% of your holding: Direct your proxy how to vote by marking one of the boxes opposite each item of business. If you do not mark a box your proxy may vote as they choose. If you mark more than one box on an item your vote will be invalid on that item.

Voting a portion of your holding: Indicate a portion of your voting rights by inserting the percentage or number of securities you wish to vote in the For, Against or Abstain box or boxes. The sum of the votes cast must not exceed your voting entitlement or 100%.

Appointing a second proxy: You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you appoint two proxies you must specify the percentage of votes or number of securities for each proxy, otherwise each proxy may exercise half of the votes. When appointing a second proxy write both names and the percentage of votes or number of securities for each in Step 1 overleaf.

A proxy need not be a securityholder of the Company.

Signing Instructions

Individual: Where the holding is in one name, the securityholder must sign.

Joint Holding: Where the holding is in more than one name, all of the securityholders should sign.

Power of Attorney: If you have not already lodged the Power of Attorney with the registry, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: Where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please sign in the appropriate place to indicate the office held. Delete titles as applicable.

Attending the Meeting

Bring this form to assist registration. If a representative of a corporate securityholder or proxy is to attend the meeting you will need to provide the appropriate “Certificate of Appointment of Corporate Representative” prior to admission. A form of the certificate may be obtained from Computershare or online at www.investorcentre.com under the information tab, "Downloadable Forms".

Comments & Questions: If you have any comments or questions for the company, please write them on a separate sheet of paper and return with this form.

Turn over to complete the form

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View your securityholder information, 24 hours a day, 7 days a week:

www.investorcentre.com

Review your securityholding

Update your securityholding

Your secure access information is:

SRN/HIN: I9999999999

PLEASE NOTE: For security reasons it is important that you keep your SRN/HIN confidential.

916CR_0_Sample_Proxy/000001/000001/i

MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

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I9999999999
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Change of address. If incorrect, mark this box and make the correction in the space to the left. Securityholders sponsored by a broker (reference number commences with ’ X ’) should advise your broker of any changes.

I 9999999999

I ND

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Proxy Form

Please mark

to indicate your directions

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Appoint a Proxy to Vote on Your Behalf

XX

I/We being a member/s of Archer Exploration Limited hereby appoint

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the Chairman of the meeting

OR

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PLEASE NOTE: Leave this box blank if you have selected the Chairman of the Meeting. Do not insert your own name(s).

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, as the proxy sees fit) at the Extraordinary General Meeting of Archer Exploration Limited to be held at Norman Waterhouse Lawyers, Level 15, 45 Pirie Street, Adelaide, SA on Friday 3 December 2010 at 10.00am (Adelaide time) and at any adjournment of that meeting.

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Items of Business

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PLEASE NOTE: If you mark the Abstain box for an item, you are directing your proxy not to vote on your behalf on a show of hands or a poll and your votes will not be counted in computing the required majority.

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1 Issue of Options to Managing Director

The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business.

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Signature of Securityholder(s) This section must be completed.

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Individual or Securityholder 1 Securityholder 2 Securityholder 3
Sole Director and Sole Company Secretary Director Director/Company Secretary
Contact
Contact Daytime
Name Telephone Date / /
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