Archer Exploration Limited (ASX:AXE) New Results Show Cleve Area as an Emerging Graphite Province

Perth, Sep 9, 2011 AEST (ABN Newswire) - The potential for a new graphite province in the Cleve area of South Australia's Eyre Peninsula has been further strengthened with new results by Archer Exploration Limited (ASX:AXE) adding to a suite of similar results released by the Company over the past two months.

Archer is pleased to announce today petrology results for four additional locations on two tenements directly east and southeast of its main Cleve area graphite projects at Sugarloaf, Campoona, Campoona South and Council Pit.

These locations (see link at the bottom of the release) occur on the Wildhorse Plains JV tenement (EL4693) and on Archer's 100% owned North Cowell (EL 4277) tenement that adjoins Wildhorse Plains.

The new results follow a strategy by Archer to initiate an ongoing ranking process for all of the known graphite occurrences on the Company's extensive Cleve Uplands tenements package, by recovering and sampling drill intervals from historic exploration drilling.

Historic drilling usually targeted EM geophysical anomalies thought to reflect hidden base metals (copper, lead, zinc) but when drilled, the source of the conductivity was invariably related to the presence of graphite.

As graphite was not of interest at the time, drill holes were not assayed for carbon.

Where possible, Archer has now been progressively retrieving historic core and drill chips for carbon assaying and petrological examination, to confirm the previously recorded but unassayed graphite mineralisation.

As a part of this process Archer identified anomalous gold mineralisation at the A405 target, as well as the presence of widespread fluorite. Many other locations report levels of non-economic copper, zinc, silver and REE's, all of which assist in building models for regional exploration.

The Table 1 (see link at the bottom of the release) reports the results of the petrology and summarises visual estimates of graphite abundances, approximate size ranges and "average size" for the additional for locations tested.

A brief description of each of the new graphite areas is presented after the table summaries. Please note, the area L501 (a historic uranium target) is being discussed for the first time.

North Cowell

Reflected light microscopy indicates an approximate total of 10% graphite variably as discrete flakes and in poorly defined shreds, mostly intricately intergrown within the distorted schistose biotite, but rarely incorporated within the equally irregular quartz layers. Individual graphite flakes vary from 5m wide x 30m long, to 50m wide x 350m long. These flakes commonly form composite shredded lenses elongate along the schistosity. No other assays have been performed on the core by Archer.

Rare black and crenulated kernels from 1mm to 3mm maximum dimension, incorporated within several crenulations of the schistose micas are petrographically identified as being "carbonaceous", being composed of compact ultrafine graphite, individual flake size <5m x <20m.

The assaying highlighted anomalous zinc mineralisation including 22m @ 0.15% Zn from 78m downhole.

Graphite flakes range in individual size from 10m x 80m to shredded composites 150m wide x 800m. Average graphite size was estimated as 50m x 250m.

Plates 3 and 4. TS. OL. (x20). Examples of mode of occurrence of graphite, mostly within biotite in Fig 3 (see link at the bottom of the release), and randomly in quartz.

Wildhorse Plain

The minor carbonate is late-stage/interstitial and locally in crosscutting veinlets. The minor graphite occurs as flakes 5m x 20m to 20 x 150m size, scattered as individuals, also in small loose clusters and rarely in very short foliae, all within the phyllosilicate matrix.

Previous sampling of drillholes at the A405 target area identified 11m @ 0.32g/t Au and 7g/t Ag (A405_2) 5.8m @ 0.48g/t Au and 2.9g/t Ag (A405_3A)

Significant epithermal alteration was historically reported during drilling. This is borne out by the reference to a purple tinge was reported in one hole and subsequent sampling by Archer of a nearby pit that identified coarsely crystalline fluorite. It is believed that this occurrence is related to a larger system where fluorite was reported along strike 1.2km NE of A405.

The minor graphite occurs mostly as individual flakes, with a random/sporadic distribution mostly within chloritic-clays. The abundance is difficult to estimate optically but may form about 5% of this sample. Minimum size is about 5m x 40m, maximum about 80um x 200m, average about 40m x 100m, generally weakly crenulated.

EM Survey

In August 2011, AXE announced to the market the results of a close spaced electromagnetic survey completed in early August. The area surveyed is shown in figure 2 (see link at the bottom of the release) highlighted as the blue rectangular area. The close spaced detailed EM survey was to follow up a 1982 Shell survey of the western part of EL 4693 and in particular to provide quality data to try to determine if there is a correlation between conductivity and the morphology and flake size (that is quality) of the graphite present. If successful, this modelling could become a predictive tool to ranking of the numerous graphite prospects and deposits as to graphite morphology and likely economic significance.

From figure 2 (see link at the bottom of the release), it is possible to make several important observations as follows:

1. The close spaced EM survey closely mirrors the historic wide spaced survey data.

2. Both EM surveys accurately reflect outcropping high grade graphite.

3. The Campoona - Campoona South trend is a significant regional trend.

4. There is at least another +20km of strike of highly conductive rocks within the immediate Campoona - Campoona South trend.

5. The geophysical data supports the observation that that the two occurrences at Campoona South and the Campoona Shaft are one continual graphitic unit. This is supported by the geology and the relationship of the graphite to the Middleback Jaspilites (BIF's).

6. The potential for large flake graphite is enhanced by the nearby presence of gneissic granite and the presence of high grade metamorphic mineral assemblages.

In the east (EL 4277), one BIF unit has been mapped by PIRSA, the deformation (pressure and temperature changes the rock has experienced through time) has led to the development of high grade metamorphic mineral assemblages. This rock history and the presence of a large shear zone has resulted in the large flake graphite development observed at Wilklow.

Figure 3 (see link at the bottom of the release) shows that the Campoona area has been intruded by huge volumes of gneissic granite that have provided the right conditions for the formation of large flake graphite.

The next steps

The Sugarloaf prospect, whilst not having voluminous intrusive granitic gneiss, has been intruded by granite. Archer will test for the presence of large flake graphite at Sugarloaf by recovering samples from holes it drilled in 2008 that reported granitic intrusions proximal to the graphitic schist.

Drilling of the Campoona - Campoona South graphite deposits is scheduled to begin later this month.

For the complete Archer Exploration announcement including figures and tables, please view:
http://media.abnnewswire.net/media/en/docs/ASX-AXE-184467.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