ARCHER EXPLORATION

LIMITED

ASX : AXEwww.archerexploration.com.au

Leigh Creek Magnesite

Revisited 2010

Sept 2010For

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Disclaimer

Competent persons statement

The exploration results reported herein, insofar as they relate to mineralisation, are basedon information compiled by Mr. Wade Bollenhagen, Exploration Manager of ArcherExploration Limited. Mr. Bollenhagen is a Member of the Australasian Institute of Miningand Metallurgy who has more than fifteen years experience in the field of activity beingreported. Mr. Bollenhagen consents to the inclusion in the report of matters based on hisinformation in the form and context in which it appears.

Forward looking statements

The information in this presentation is published to inform you about Archer ExplorationLimited and its activities. Some statements in this presentation regarding estimates orfuture events are forward looking statements.

Although Archer Exploration Limited believes that its expectations reflected in theseforward-looking statements are reasonable, such statements involve risks anduncertainties and no assurance can be given that actual results and outcomes will beconsistent with these forward-looking statements.

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Background

ASX Listing 14th August 2007

ASX code “AXE”

Exploration Base – AdelaideProjects – South Australia

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Leigh Creek Magnesite Revisited

• Early 21st Century - Impact of China

• Post WW2 Magnesium Market

• Magnesium Future

Leigh Creek Magnesite History

Magnesium Metal

• Geology

• Leigh Creek Magnesite Resources

Archer and the Leigh Creek Magnesite Deposits

Leigh Creek Magnesite a New ParadigmFor

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Leigh Creek Magnesite History.

1914 First documented magnesite mining

1947 FH Faulding small quantities mined for

pharmaceutical and Chemical use.

1984 -85 30,000 t to QAL(Gladstone) for water

treatment (44.7% MgO, 4.2% SiO2, 2.4%

CaO, 0.13% Al2O3, 0.16% Fe2O3)

SAMAG

1997-98

Resource diamond drilling at 5 Prospects

SAMAG 1999 Resource Estimate

April 1999 Declared SAMAG magnesium metal project a

Major Development

AXE 2010 Licence Application

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AMC a Sardine trying to give birth to a Whale

AMC Mothball Stanwell Magnesium Project June 2003

Magnesium Metal 1998-2002

Australian Magnesium Corporation QMAG

AMC Prospectus to raise $500m Oct 2001 Dow Electrolytic Process

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Magnesium Metal

• 4 times lighter than Iron and a

third lighter than Aluminium

• 4 C’s Computers, cameras, cell

phones, cars

• Superior strength to weight ratio.

• Mg is the Aluminium of the new

century

Magnesium 1998-2002F

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nly

1959 Convair RB-36D Peacemaker U.S.A.F.

Intercontinental strategic bomber.

Contained 8.6 tonnes magnesium

saved 26 tonnes steel or 2.9 tonnes Al.

1970s BMW Rennsport motorcyle.

Magnesium engine and magnesium

gearbox castings.

Magnesium

Last

Century

From 1936 Volkswagon

1965 Beetle 20 kgms/vehicle Mg Metal

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Magnesium v’s Aluminium

Bauxite Alumina Aluminium

Al atomic No 13.

3rd most abundant crustal element Al Metal 30 m tonne pa BusinessPrice approx $2,000/tonne

Mg atomic No 12.

8rd most abundant crustal element Mg Metal 0.8 m tonne pa BusinessPrice approx $2,800/tonne

Bayer Process

Electrolytic Reduction

0

200,000

400,000

600,000

800,000

1937

1941

1945

1949

1953

1957

1961

1965

1969

1973

1977

1981

1985

1989

1993

1997

2001

2005

0

10,000,000

20,000,000

30,000,000

40,000,000

Al Production

Mg Production

Mg the Aluminium of the new century?

WW2For

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Electrolysis Process – Mg MetalFirst Commercial Production 1852

Beneficiated Magnesite >40%

MgO

HCl Leach

Calcium Removal

Purification Filtration

Boron Removal

Fluid Bed Drying

MgCl2 .2H2O

Magnesium 1998-2002

Electrolytic Cells

Magnesium to Casting

Cl2

Becdancour . Canada

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Magnesium Metal

ProcessesElectrolytic Reductionv’s

Thermal Reduction

KMgCl

MgCO3

H4Mg3Si2O9

MgCa (CO3)2

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0

100000

200000

300000

400000

500000

600000

700000

Other

Israel

EU

USA

Canada

Russia

China

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Other

Israel

EU

USA

Canada

Russia

China

1990 – 2009WorldMagnesium Metal Production

Nth America Plant Closures1999 Dow Texas

2007 Nork Hydro Quebec

Timminco Ontario

Before GFCGrowth 10% pa

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QuarryDolomite 20%

MgO

Gas Fired Rotary Kiln

Cool CalcinedDolomite

Ball Mill Grind and Mix

Ferrosilicon

Briquette Press

Retort Furnace

Magnesium 2010 Thermal Reduction

Magnesium Crowns

Magnesium Ingots

FeSi

Residue

Refining & Casting

Sludge

Quarry Dolomite

Retort Furnace

Magnesium Crowns

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Pigeon Process Advantages• Capital Cost <$500 /tonne annual production v Electrolytic Capital

Cost $10,000/tonne annual production

• Retorts can be added progressively - incremental expansion of

production

• Dolomite is an abundant source material

• Process has high tolerances suitable for developing nation.

• Plants are small and mobile can follow cheap energy

Disadvantages• Labour intensive

• Batch Process individual retorts typically produce < 200 kgms/batch

• Dolomite source material 20% MgO v’s 40% MgO in Magnesite

• Consumes 1.08 tonnes of FeSi/tonne of Mg.

• Plants are currently polluters.

• China’s dominance of production is a concern to consumers.

Magnesium Future Pigeon Process ?F

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Die Casting ( 40%)US Auto Mg Die CastingConsumption2000 - 75,000 tonnes2008 -34,000 tonnes

Aluminium Casting (27 %)No SubstituteAl. beverage can 1.1% Mg in can body

4.5% Mg in can top2008

Current Mg Consumption

Desulphurizing Steel ( 23%)Mg’s affinity for SulphurPrice Sensitive

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Magnesium in the 21st Century

Thermal reduction of MgO (from magnesite) with carbon.

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ARCHER and the Leigh Creek Magnesite Deposit

• Identified SAMAG Magnesite Resource Feb 2010

• License Application Feb 2010

• PIRSA Offer Aug 2010

• Expect Grant Sept 2010

• Archer 100% owner

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232KmsRail

Photo from Myrtle Springs Pit owned by MIL.

* Tenements are Exploration license applications

Regional Historic “Resources”Area Measured Indicated Inferred MgO

Pug Hill 10 10 42.7%

Termination Hill 4 5 20 42.8%

Mt Hutton 18.3 42 53 42.9%

Mt Playfair 10 10 42.7%

Witchelina 23.7 94 99 40.0%

Source: SAMAG Project Report 1999

• High quality > 42% MgO (magnesite 47% MgO)

• Low impurity magnesite chemical sediment

• Large outcropping Deposits

• Adjacent to existing rail link & infrastructure

Leigh Creek Magnesite History 1998-2000

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Magnesite Geology

Resources 6 Deposits

• Paleoproterozoic Age

• Ancient “Coorong “

• 120 kms strike length

• Multiple Beds

• Vast Resource Potential

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Magnesite Geology

Hymapper at Witchelina

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Leigh Creek Magnesite Project 1998-2000Pastoral Leasehold

Mt Hutton Pit Design Outcropping Magnesite

• Independent Resource Estimate & audit.

• Baseline Environmental Study• Geotechnical Study• EIS for 200kpa mining

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A New Paradigm For Leigh Creek Magnesite

Previous work has focused on Magnesium Metal

Magnesia (Mg0) market has expaned• Refractories supplying the Steel Industry

• Expansion into building Products (MgO)• Board – binder for bricks• Chemical applications – lateritic Ni/Co

Magnesia Market Advantages• Lower capital cost• Broad range of consumers• Magnesia is a bigger market

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Magnesium Metal

Magnesite Uses

63%

23%

14%

Refractory Chemical Metal

Refractory MgO

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Electrical Steel Grade MgO

Wastewater and Water Treatment

Electric Utilities

Agriculture

Food Grade

Pulp Bleaching

Flame Retardant and Smoke Depressant

Magnesia

CHEMICAL USES

• Lateritic Ni/Co

Chemical Precipitation of

Ni & Co from Sulphate

solutions

• MgO Board

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MgO Board

• MgO Board approved for construction in US 2003 – Florida Mold Resistant• Beijing Olympics preferred construction material - Internal & external

Brick and Binding

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Caustic CalcinedMagnesite

40,000 tpaVertical Shaft Furnaces up to 2,300oC

DeadburnedMagnesite

ElectrofusedMagnesite

10,000 tpaElectric Arc Furnaces 2,800 – 3,000oC

Chemically ActiveFillers, fertilizers, industrial, pharmaceutical

Magnesite

1000OC

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DeadburnedMagnesite DBM

Caustic CalcinedMagnesite CCM

ElectrofusedMagnesite EFM

Critical Contaminants- Product Specific

Critical Contaminants- CaO, SiO2, Fe2O3

Al2O3

Critical Contaminants- CaO, SiO2, Fe2O3

Al2O3

$ 450-590* $ 750* $ 1200*

* Indicative Only

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Product SpecificationMgCO3 MgCO3

Talc

Talc

30k tonnes 1984-85

44.7% MgO; 2.42% CaO; 4.21% SiO2

0.13% Al2O3; 0.16% Fe2O3

For DBM and EFM SiO2 and CaO are too high.

Leigh Creek Magnesite

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To Meet Refractory Specifications • SELECTIVE MINING

Mt Hutton alone 17 Beds unique mineralogy over >4 Kms

probably low SiO2 Units

• BENEFICIATIONFlotation or heavy media

Pure MgCO3

NB Historic metallurgy focused on CaO removal for Mg Metal Production

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Caustic Calcined MgO

LCM - Order of Magnitude StudyLeigh Creek Mine

200KT MgCO3

Markets

200kt Crushed MgCO3

Crushing Plant

Rail to Pt Pirie

Calcine

Mine 200kt Magnesite 800kt O&WCrush to 20mm – remove fines $3-$5/t

100kt MgOCapital $30-35m.

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OUTLOOK 2010 -11

INVESTOR PRESENTATION 2010

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