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1 ABN ASX Announcement 31 August ABN Archer secures $2.2m farm-out deal for non-core exploration assets in SA s mid-north Highlights Binding JV agreement signed with private Australian resources group, Cobalt Bull Pty Ltd, for farm out of Archer s non-core cobalt, gold, copper and manganese tenements in SA s mid north Cobalt Bull to pay Archer $200,000 cash and spend a minimum of $2m on exploration over 3 years with Archer to retain 25% interest Archer to continue to focus on development of its flagship Leigh Creek magnesite project and the advanced Campoona graphite project Magnesite and graphite developer, Archer Exploration Limited (ASX: AXE ) is pleased to announce that the Company has executed a legally binding Farmin and Joint Venture Agreement (JVA) with Cobalt Bull Pty Ltd (Cobalt Bull) covering Archer s non-core exploration assets in South Australia s mid north region. Under the terms of the JVA, Cobalt Bull will pay Archer $200,000 cash and sole fund A$2.0 million on exploration and other related exploration activities on EL 5433 (Burra North - cobalt & manganese), EL 5540 (Spring Creek - copper), EL 5749 (Napoleons Hat - gold), and EL 5794 (Bull Hills - gold & copper) (collectively the Tenements) to earn a 75% interest in the Tenements. Cobalt Bull, a private Australian mining company whose management is also associated with the development of the Mount Morgan Gold-Copper Project in QLD and Peko Gold-Cobalt- Copper Project in NT, must spend the $2.0m within 3 years to earn the 75% interest. The Tenements being farmed out by Archer exclude the Company s core graphite and magnesite tenements elsewhere in SA at Leigh Creek and on Eyre Peninsula. Archer Exploration Limited Level 1, 28 Greenhill Rd Wayville SA

2 Archer Executive Chairman, Mr Greg English: The execution of the JVA will allow Archer to continue to focus on our prime objective, the development of the Campoona Graphite Project and the Leigh Creek Magnesite Project. Whilst our focus is clearly on our advanced magnesite and graphite projects, Archer has always believed in the potential of our other tenements, generally assembled across SA s well mineralised mid-north footprint and see this partnership as a way to unlock some of the inherent value held in these assets. The JVA secures a significant and non-diluting on-ground exploration spend across these assets while allowing Archer shareholders to maintain exposure through our 25% Joint Venture Interest to any exploration and discovery success by Cobalt Bull on the Tenements. Figure 1: Map showing location of JVE Tenements (EL 5540, 5769, 5794 and 5433)

3 About the Tenements The Tenements are highly prospective for cobalt, gold, lithium, copper and manganese. Burra North (Ketchowla) The Burra North (Ketchowla) Project (EL 5433) is an advanced cobalt-manganese prospect, with grades up to 0.50% Co occurring over several large outcropping mineralisation zones within a strike area zone of 18km 7km. The cobalt is hosted in manganese ore, with in-situ grades of 15-20% Mn also being achieved. Initial leaching and beneficiation tests on the Ketchowla ore indicate the viability of simple processing for recovery of a battery grade cobalt product and a manganese concentrate grading approximately 40% Mn. Appreciable levels of other metals occur throughout the mineralised zone, including significant outcropping lithium grades up to 0.95% Li 2O, which require follow up exploration and drilling activities. In addition, anomalous copper (0.3% Cu) and nickel (0.4% Ni) have been observed in the cobalt-manganese ore, providing potential for additional metal by-product recovery and an increase in the overall cobalt equivalent grade. The tenement itself is located ~30km from the East-West Rail Corridor and ~100km from Port Pirie, providing a sale and transport logistics pathway for all products produced. Spring Creek The historic Spring Creek copper mine (EL 5540) is located 30km south of the township of Wilmington. The mine has a history of high grade copper mining with grades of +10% Cu reported, however mining ceased in 1918 when the mine de-watering pump failed and the mine flooded. Copper carbonates exist on the surface above the mine and within the backs and walls of the un-worked sections of the drives. Underground face sampling on the uppermost level of the historic Spring Creek Copper Mine confirmed the presence of significant copper mineralisation peripheral to the former production stopes. Sampling by Archer identified a copper halo consisting of approximately 2% copper (as malachite and azurite) outside of the main stopes including: 3.0% Cu; 1.3% Cu and 1.9% Cu. Primary sulphides were never encountered meaning that the primary mineralisation is likely to occur below the existing flooded mine workings. Napoleons Hat Napoleons Hat (EL 5769) contains numerous historic gold mines and workings. Rock chip sampling programs within quartz veined sandstones of the tenement intersected anomalous gold mineralisation, with the most significant results being 8.88 g/t, 6.42 g/t, 3.84 g/t and 1.91 g/t gold at surface.

4 Bulk sampling of quartz veins at the Watervale Prospect on the tenement extended the known gold mineralisation to the south, with identified mineralised quartz vein now extending more than 800m in length. The Napoleons Hat tenement also provides the opportunity to discover a primary source to the gold at depth. Underground lodes in the district have been documented by government mine inspectors in the early 1900 s as appearing to be associated with strong sulphide alteration and +1oz gold grades. At the time the miners could not extract the gold associated with sulphides and this form of mineralisation was not mined. Blue Hills At Blue Hills, initial field reconnaissance by Archer sampled spoil piles surrounding the historical workings. The copper appears in workings that follow the basal contact of the Tapley Hill Formation. The copper occurs with quartz and wall rock alteration suggesting an igneous source, this is supported with elevated Be and REE s. Archer believes that potential does exist down dip or along strike (under cover) for discoverable economic copper. Archer has also conducted preliminary assessment of historical gold mineralisation on the tenements which requires follow up exploration activities. About Cobalt Bull Cobalt Bull is a private Australian mining company formed as a cobalt focused spin out of Raging Bull Mining Pty Ltd. Raging Bull s focus is to utilise metallurgical expertise and technology access to target the development of polymetallic ores requiring innovative process solutions. The Raging Bull management team are associated with the development of several resources projects in Australia, including the Mount Morgan Gold-Copper Project in Queensland and the Peko Gold-Cobalt-Copper Project in the Northern Territory. Key Terms of JVA Key terms of the legally binding JVA are: Agreement is between SA Exploration Pty Ltd (SAEX) (a wholly owned subsidiary of Archer) and Cobalt Bull Pty Ltd. Cobalt Bull can earn a 75% interest in the Tenements by paying SAEX $200,000 in cash and spending a minimum of $2.0m on exploration and related activities on the Tenements. Cobalt Bull s right to earn the 75% interest is conditional on the satisfaction or waiver of each of the following Conditions Precedent (Conditions):

5 - Cobalt Bull completing its due diligence enquiries by 16 September 2016; and - Consent of the SA Mineral Resources and Energy Minister under the SA Mining Act and Cobalt Bull completing an IPO or sale of its shares to an ASX listed company by 30 November On satisfaction or waiver of all of the Conditions Precedent (CP Date), Cobalt Bull must pay to SAEX the cash amount of $200,000 and commence $2.0m in exploration spending over 3 years to earn the 75% interest in the Tenements. Cobalt Bull may withdraw from the JVA at any time within months after the CP Date provided that the Tenements are in good standing at the time of withdrawal. If Cobalt Bull elects to withdraw, then it will not earn any interest in the Tenements. SAEX (25%) and Cobalt Bull (75%) will form an exploration joint venture upon Cobalt Bull spending $2.0m on exploration, or paying the amount of any shortfall to SAEX in cash or shares, during the 3 years after the CP Date. Cobalt Bull will be manager of the joint venture and standard industry dilution and exploration joint venture terms and conditions will apply. Next Steps Archer and Cobalt Bull will work cooperatively together to satisfy the Conditions Precedent and commence planning for an upcoming mid-north exploration program. Cobalt Bull may also provide existing Archer shareholders with the opportunity to participate in future investment opportunities associated with the public listing of the JV assets. For further information, please contact: Mr Greg English Mr Cary Helenius Chairman Investor Relations Archer Exploration Limited Market Eye Tel: (08) Tel: The exploration results and exploration targets 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 twenty years experience in the field of activity being reported. Mr Bollenhagen has sufficient experience which is relevant to the style of mineralisation and type 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.

6 Archer Exploration Limited is an Australian Stock Exchange listed company with 100% ownership of 16 tenements all in South Australia covering more than 4,900km 2.