PRAIRIE LITHIUM LIMITED — Capital/Financing Update 2003

Aug 5, 2003

6 August 2003

Company Announcements The Australian Stock Exchange Ltd

Dear Sir

Re: Prospectus Shortfall Placement

Pursuant to the Prospectus dated 18 February 2003 in relation to a pro-rata issue of shares and options, we wish to advise that the Company has agreed to place 30 million shares and options from the shortfall in the issue, at a combined price for each share and option of 1.2 cents. The placement will be made to an unrelated party, Kefu Underwriters Pty. Ltd.

An Appendix 3B will be lodged upon allotment of the shares and options.

Yours faithfully ZYLOTECH LTD

J R MAGUIRE COMPANY SECRETARY