Archer Exploration Limited (ASX:AXE) Report Significant Wide Intervals Of Graphite Drilled At Sugarloaf

Perth, May 2, 2011 AEST (ABN Newswire) - The Sugarloaf graphite deposit is located on Carappee Hill EL 3711 near Darke Peak on Eyre Peninsula, South Australia. Archer Exploration Limited (ASX:AXE) has completed four RC drill holes at Sugarloaf during April 2011.

The purpose of the drill program was to follow up historically reported wide but un-assayed intervals of graphitic schist encountered during gold exploration. Significant graphitic intervals were identified in 3 of the 4 holes.

Figure 1 (see link at the bottom of the release) shows the locations of the holes drilled which cover a strike length of 1000m. SLRC11_002, 003 and 004 were drilled near historic holes that had reported (but not assayed) intervals of highly graphitic schist. Holes 001, 002 and 004 intersected very wide graphitic intervals confirming the accuracy of the historic mineralogical logging. Hole 003 did not repeat the intervals that were previously reported. Archer does not believe that the historical log for the corresponding hole was incorrect. Analysis suggests that the orientation of the drill hole may have been incorrectly recorded. It is believed that hole SLRC11_003 should have been drilled towards 270 degrees and not 090.

SLRC11_002 (2770N)

This hole was drilled to confirm the historical interval from hole SLR041, which reported 61m of graphite downhole.

Figure 2 below (see link at the bottom of the release) is a simple section highlighting the significant Total Carbon grades intersected down hole.

Graphite was intersected throughout the entire hole, the highest grade reported being 3m @ 15.4 % TC from 33m. A true width of approximately 40m can be applied, with graphitic schist extending to a vertical depth of at least 100m. Sporadic outcrops of graphite can be observed at the surface.

SLRC11_001 (2950N)

Hole SLRC11_001 was drilled north of outcropping graphite.

Figure 3 (see link at the bottom of the release) is a simple section highlighting the significant Total Carbon grades intersected down hole.

In hole SLRC11_001 the graphite is present as two zones separated by a chlorite schist (possible shear zone and termed marker unit). The first zone has an apparent true width of 12m and the second 25m. The highest grade reported is 3m at 19.22% TC.

SLRC11_003 (3370N)

This hole was drilled on the western edge of a previously drilled section that recorded a wide graphitic intersection.

The hole appears to have been collared too far to the east and has missed the main graphitic schist zone.

No chlorite marker unit was intersected.

SLRC11_004 (3770N)

This hole was drilled to test the reported graphitic schist in an historical drillhole, SLR002.

The first 80m of the hole comprised mafic schists and dolerite. The transition to graphite was marked by the chlorite marker unit, similar to that seen in SLRC11_001. The hole was terminated at 151m in graphitic schist. The whole interval from 81-151m downhole returned an intersection of 70m grading 10.04% TC.

The hole collar was preserved should re-entry with diamond drilling be required to take deeper controlled samples for metallurgical and graphite characterisation tests.

The highest TC reported was 3m at 25.23% TC from 93m.

The interval in SLRC11_004 is highly encouraging since outcrop can be observed to the east. Other holes drilled to the east on the section do not have reliable co-ordinates and similar to other historical holes have no carbon analyses to quantify their carbon and graphite compositions.

The drilling indicates that the previously reported exploration target of 9 to 20Mt* of highly graphitic schist is likely to be a conservative estimate.

*The potential quantities and grades presented are conceptual in nature, there has been insufficient exploration to define an overall Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource

The next steps

Selected samples have been sent for petrological examination to identify the graphite nature, flake size and host mineralogy.

Further assaying, other than Total Carbon, will be performed on the four drill holes to determine the total chemistry of the intervals.

The quality of the graphite present will be determined via composite samples that will be selected for beneficiation and metallurgical and mineralogical test work.

For the complete Archer Exploration Limited announcement including tables and figures, please refer to the following link:
http://www.abnnewswire.net/media/en/docs/182944.pdf

Contact

Mr Greg English Chairman Archer Exploration Limited Tel: +61-8-8272-3288 Mr Gerard Anderson Managing Director Archer Exploration Limited Tel: +61-8-8272-3288 Email: info@archerexploration.com.au http://www.archerexploration.com.au