PRAIRIE LITHIUM LIMITED — Capital/Financing Update 2011

May 12, 2011

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ASX Code: ZYL

13 May 2011

Company Announcements Office Australian Securities Exchange Level 4 Exchange Centre 20 Bridge Street Sydney NSW 2000

ZYL completes $30 million Institutional Capital Raising

Highlights:

• ZYL has successfully completed an institutional capital raising of $30 million via the Company’s re-compliance Prospectus

• The institutional capital raising enables ZYL to increase its interest in Kangwane Metallurgical Coal Project (Kangwane Project) to 50.12%

• The capital raising will fund the completion of the feasibility study, commercial development and mine construction at the Kangwane Project

• ZYL to become solely focused on mining and be re-instated to Official Quotation on the ASX following its re-compliance with Chapters 1 and 2 of the ASX Listing Rules

The Directors of emerging metallurgical coal producer ZYL Limited ( ZYL or the Company ) are pleased to announce the successful completion of an institutional capital raising of 150 million fully paid ordinary shares ( Shares ) at an issue price of A$0.20 per share to raise A$30 million.

The institutional capital raising closed oversubscribed and was strongly supported by both new and existing institutional and sophisticated investors in Australia, Asia and Europe. RBC Capital Markets and Patersons Securities Limited acted as Joint Lead Managers and Bookrunners to the institutional capital raising.

The Company considers the investment from institutional investors to be an overwhelming endorsement of the Kangwane Metallurgical Coal Project and provides the necessary support for ZYL to pursue its corporate strategy of becoming a Metallurgical Coal producer in late 2012.

The Kangwane Project hosts a JORC-compliant resource of 114.1Mt , of which 21.4Mt is in the Measured category, with the balance being a combination of Indicated and Inferred Resources.

The Bankable Feasibility Study ( BFS ) and initial drilling program is rapidly progressing at the Kangwane Project, and it is expected that a resource and reserve upgrade will be announced in the coming months.

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Use of Proceeds

The proceeds from the institutional capital raising will fund:

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• completion of the BFS for the Kangwane Project, associated drilling program, an aerial geophysical survey and further preparation of the box cut to potentially extract a bulk sample from the Kangwane Project;

• ZYL’s equity contribution for capital expenditure items in connection with mine construction and development; and

• general working capital purposes.

Re-instatement of Official Quotation on the ASX

The Company is continuing to work with the Australian Securities Exchange (ASX) to satisfy the final conditions and apply for the re-quotation of the Company’s securities to the Official List of the ASX. The Company will continue to update shareholders of the anticipated re-quotation timetable.

For further information regarding the institutional capital raising or the re-compliance process of the Company, please contact the Company on +61 8 9486 4036 or refer to www.zyllimited.com.au

Yours faithfully,

Dr Eric Lilford Managing Director ZYL LIMITED

Competent Persons Statement:

Information in this announcement that relates to exploration results, mineral resources or ore reserves is based on information compiled by Mr Dawie Van Wyk who is a consultant to the Company and is a member of a Recognised Overseas Professional Organisation. Mr Van Wyk has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration, Mineral Resources and Ore Reserves’. Mr Van Wyk consents to the inclusion in the presentation of the matters based on his information in the form and context in which it appears.

Important Information - Mineral Exploration Targets:

It should be noted that the reporting of conceptual exploration targets is carried out in accordance with Clause 18 of the December 2004 JORC Code which permits the reporting of exploration target size and type with strict conditions, these being stated by the Australasian Joint Ore Reserves Committee (JORC) as :

“Any such information relating to exploration targets must be expressed so that it cannot be misrepresented or misconstrued as an estimate of Mineral Resources or Ore Reserves. The terms Resource(s) or Reserve(s) must not be used in this context. Any statement referring to potential quantity and grade of the target must be expressed as ranges and must include (1) a detailed explanation of the basis for the statement, and (2) a proximate statement that the potential quantity and grade is conceptual in nature, that there has been insufficient exploration to define a Mineral Resource on the property and that it is uncertain if further exploration will result in discovery of a Mineral Resource on the property.”

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About ZYL Limited

ZYL Limited is an ASX listed coal mining and development company operating in South Africa. The Company’s key project, the Kangwane Anthracite Project, is an advanced stage high quality metallurgical coal project located in the Mpumalanga province of South Africa.

The Kangwane Project is well located in close proximity to key infrastructure and coal mining support services and presents the Company with the opportunity to take advantage of both the internal markets of South Africa and the export markets through the use of the Maputo Terminal at the Matola Port in Mozambique.

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Kangwane - Project Highlights

• Potential Production within 2 years from the commencement of the BFS – 1 year BFS and 1 year construction

• Existing JORC Compliant Resources of 114Mt including an export quality Measured resource of 21.4Mt determined by independent geologists

Coal Resource Estimate Statement (JORC Code and SAMREC Compliant)
Total Measured Coal Resource (GTIS)	21.4 Mt
Total Indicated Coal Resource (GTIS)	25.5 Mt
Total Inferred Coal Resource (GTIS)	67.2 Mt
Total JORC compliant Coal Resources at Kangwane Anthracite	114.1 Mt

• Exploration Target of 400Mt to 450Mt[1 ] at an expected calorific value range of 6,635 kcal to 6,712 kcal

• Comprehensive drilling database of 149 diamond drill holes for a total of 18,567 metres over 33km strike length

• Focus on open-cut areas to the north and south

• Coal is known to sub-crop on the western side and has been measured to dip gently at 6[o] to 7[o] to the east

• Opportunity to extend mining to an underground regime once the open-cut areas have been economically depleted

• Existing box-cut on the property to facilitate the removal of a bulk sample for metallurgical testing and marketing trials

• Project located approximately 100km from Maputo Port by direct rail link , with an existing rail siding on the property. Road, power and water all located nearby

• Coal seam widths between 4m and 6m , dipping to the East at 6[o]

• Highly experienced Management Team

• Adjacent to operating Nkomati Anthracite coal mine

• Siyanda Resources (JV / BEE partner) has extensive experience in South African coal mining, currently operating two mines and previous owners of the Koornfontein Coal Mine.

1 The potential quantity and grade of the above Exploration Target is conceptual in nature and there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource.

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