ARCHER MATERIALS LIMITED — Share Issue/Capital Change 2010

Jan 6, 2010

7 January 2010

Dear Option Holder,

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RE: EXPIRY OF LISTED OPTIONS – 13 FEBRUARY 2010

As at the date of this letter you are the registered holder of ASX listed options (Options) in Archer Exploration Limited (ASX code AXEO), which are due to expire at 5:00pm (Australian Eastern Standard Time) on 13 February 2010 unless exercised on or before that date.

Please read the following information carefully.

In accordance with the ASX Listing Rules the Company provides the following information:

• Each Option allows the holder to apply for one fully paid ordinary Archer share;

• The exercise price of each Option is $0.25;

• All Options will expire at 5:00pm AEST on 13 February 2010 and Options not exercised by that time will lapse with no value;

• Quotation of the Options will cease at close of trading on Friday 5 February 2010; and

• The latest market price of fully paid ordinary Archer shares prior to the issue of this notice was 15 cents ($0.15) on 31 December 2009 with highest and lowest sale price on the ASX for the three months preceding the date of this notice being:

Highest - 15.5 cents ($0.155) on 7 December 2009. Lowest - 12 cents ($0.12) on 12 November 2009.

To convert your Options to Archer shares please complete the enclosed Application Form on Exercise of Options Expiring 13 February 2010 and return it together with your payment of the total exercise price to Computershare Investor Services Pty Limited, Level 5, 115 Grenfell Street, Adelaide SA 5000 (GPO Box 1903, Adelaide SA 5001) before 5:00pm AEST on 13 February 2010. If your Option holding has changed since 4 January 2010 then please multiply the exercise amount of $0.25 by the number of Options to calculate the amount payable.

If you have any queries, please contact the Share Registry on 1300 556 161 (within Australia) or +61 3 9415 4000 (outside Australia).

Yours faithfully,

Greg English

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Chairman Archer Exploration Limited

Number of options held: Amount due on exercise:

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