Ann: Quarterly Activities Report , page-2

Hi All,

So it looks like we are set for a very interesting quarter coming up.

The BHP deal looks likely to go through and will provide an additional 3 Million dollars to the bottom line, pumping the cash reserves to 4.5million. With 67,142,763 shares on issue this provides an enterprise value of just $5.8m @ roughly 8.5 cents per share. Very undervalued IMO. At the current burn rate of 500k per quarter, its enough to last 2 years.

The following mention at the end of the report is important to consider very carefully.

"Archer is close to finalising a commercial arrangement with a German graphite company to conduct metallurgical test work and act as an independent expert."

We know Archer just presented to the London Graphite conference and they stipulated within their presentation they were looking for a partner. It seems it has come in the form of a very large German Graphite company. From this list I speculate it is SDL Group.

http://www.metalbulletin.com/EventDetails/0/4366/Graphite-Conference.html

Here is a little about SDL and how large they are. (Check out the Investor presentation 2012)

http://www.sglgroup.com/cms/international/home/index.html?__locale=en

The graphite community appears to be very tight nit, especially considering the below comment.

"Archer was approached by a prominent US graphite mill to test samples. Samples were collected and despatched with the expectation that results would be available during the December quarter."



I seriously believe that once drilling has completed within the coming quarter, we will have a good idea of the size of the tenement and the value of our graphite.

A takeover will happen IMO and i would be interested in others on what value you would place this at? Surely more than 5.8Million please???

Some simple peer comparisons..

Strategic Resources -SER
Market Cap - 40 Million (however Mega has valued this at 70m Canadian dollars (which also includes 1.5 % royalties)

Currently subject to a takeover from Mega Graphite they have a known resource of the following.

*Indicated 4.3 million tonnes at 9.4% carbon
*Inferred 2.3 million tonnes at 7.5% carbon

SER are in a position to produce now and I am not sure of the capex involved in bringing a new mine to life, however with AXE currently we have a exploration target of between 24-37Mt grading 10-12%.

We all know the Graphene and Graphite story and what will unfold in the next 10 years.

DYOR, however I will be buying on any weakness


Rambleon