As previously announced Archer Exploration Limited completed a series of drill holes in 2008 testing anomalous copper-gold results grading >0.1g/t Au recorded in close-spaced rock chip samples taken at Sugarloaf. Archer recovered samples from two of those drill holes, CHRC011 and CHRC012, to assay for carbon. These results have now been returned and show that the Sugarloaf graphite deposit is continuous over a strike length of at least 2.2km.

The importance of these recent assays is that they confirm the northern strike continuity of the 2011 drilling (SLRC001 to SLRC004). Additionally and importantly the new drill intervals are close to intrusive felsic rocks that have potential to increase the graphite flake size in adjacent rocks. Petrology has commenced to confirm if larger flake graphite has been developed adjacent to the felsic intrusive bodies.

Updated graphite drill intervals for Sugarloaf

CHRC011

Anomalous graphite occurs throughout the drill hole including two wide intersections of higher grade graphite from 28-36m and from 36-76m down hole.

In reporting carbon assays for graphite it is important to ensure that assays are also conducted to detect other carbon-bearing minerals which if present, may give a false impression as to the grade of the graphite.

From Table 1 (see link at the bottom of the release) it is clear that there is little to no carbonate present in the graphitic ore.

Silica is the dominant gangue mineral present with subordinate chlorite, biotite and trace sulphur contributed by weathered sulphides.

When intervals containing only the highest grades of carbon are considered, it can be seen from the chemistry that other elements comprise very small percentages of the rock, silica will be the dominant material.

CHRC012

The interval 75m to 80m reports 22.56% carbon with one interval (76 to 77m) reporting the highest carbon assay to date at 26.4% carbon.

As with hole CHRC011 there is little to no carbonate present in the graphitic intervals. CHRC012 intersected two very thick graphite horizons from 0-44m and from 50-86m down hole.

The next steps

Samples collected from several of the graphite intervals have been submitted for detailed petrological examination specifically to determine the flake size and morphology of the graphite.

Drilling of the Campoona South and Grid 2 graphite deposits is scheduled to begin late this month.