PRAIRIE LITHIUM LIMITED — Capital/Financing Update 2011

Feb 8, 2011

8 February 2011

ASX Media Release

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

Olympic Park Appointed to Oversee Drilling during the Bankable Feasibility Study at Kangwane

Highlights:

• Appointment of Olympic Park to oversee drilling at the Kangwane Anthracite Project to complete the Bankable Feasibility Study
• Olympic Park and SRK Consulting have reviewed the historical exploration and drilling database, including preliminary resource modeling
• The initial drill program will consist of an additional 7,000m of drilling including confirmatory, in-fill and step-out exploratory drilling
• The drill program is designed to enhance the quality of the existing JORC-compliant resources, increase the total resource base and prepare reserves for development
• Reaffirmation of corporate strategy to be a coal producer focusing on high quality metallurgical coal

The Directors of emerging coal producer ZYL Limited (ZYL or the Company) are pleased to announce that the Company and its joint venture partners have appointed Olympic Park Trading (Pty) Ltd (Olympic Park), a specialist mining engineering consultant, as the independent mining engineers to the Kangwane Anthracite Project (Kangwane or the Project).

Olympic Park, in conjunction with SRK Consulting (SRK) will oversee the drilling program during the Bankable Feasibility Study (BFS) at Kangwane.

Olympic Park and SRK have completed the review of the historical exploration and drilling undertaken by Mining Corporation Limited (MCL) in the 1980's enabling the identification of key areas to target during the drilling program.

During the BFS, Olympic Park will complete an additional 7,000m of drilling, which will consist of a combination of confirmatory, in-fill and step-out exploratory drilling.

The drilling program is designed to enhance the existing exploration results, increase the global resource base and to delineate Proven and Probable Reserves at Kangwane.

Olympic park recently mobilised drill rigs on site for the complete drilling program which, together with the associated laboratory analysis and testing is expected to take approximately 2-3 months to complete.

ZYL Managing Director, Dr Eric Lilford, stated:

"We're delighted to have appointed Olympic Park as the independent consultant tasked with the responsibility to oversee the drilling in the conduct of the BFS. The appointment of a local South African mining engineering consultant with specialist experience in coal is a notable progression of our activities and we look forward to the commencement of drilling."

The Kangwane Project, located in the Mpumalanga province of South Africa, has an existing 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.

A geomagnetic flyover will be completed and, commensurate with this, an additional drilling program may be conducted at the Kangwane Project. This additional drilling program will be designed to enhance the quality of the existing resource and delineate additional open-cut areas to enable the rapid exploitation of the Kangwane deposit.

In support of the Company's strategy to focus on high quality metallurgical coal, ZYL considers the Kangwane project to be an exciting opportunity for its shareholders to participate in the development of an advanced stage, high grade coal project.

Kangwane is located approximately 100km from the coast by rail to the Maputo Port's Matola Terminal in Mozambique. The Project is positioned north of Swaziland within close proximity to the major town of Nelspruit, which is situated less than 100km to the west, and is ideally located for both the internal and export markets for future anthracite production. Figure 1 below provides an overview of the location.

Figure 1: Kangwane Anthracite location map, illustrating rail infrastructure, proximity to port and nearest cities

The strategic location of Kangwane offers significant opportunities given its proximity to rail, port, water, electricity and roads. The rail siding, which is located on the southern tip of the Kangwane tenement feeds directly into the main rail line which continues eastward to the Matola Port Terminal in Maputo and, in the other direction, to the inland markets established on the Highveld in South Africa. The Project is also located to the immediate north of an existing anthracite operation which currently transports its washed product to internal customers on the Highveld where various ferro-chrome, ferro-manganese, vanadium and platinum producers operate.

For further information regarding the Company, please contact the Company on +61 8 9486 4036 or refer to www.zyllimited.com.au

Yours faithfully,

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."

About ZYL Limited

ZYL Limited is an ASX listed coal mining and development company operating in South Africa. The Company's key project, Kangwane Anthracite, 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 all 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.

Kangwane Anthracite - Project Highlights

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

• o Exploration Target of 400Mt to 450Mt1 at an expected calorific value range of 6,635 kcal to 6,712 kcal

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

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

• o The North and South Pits will be the focus of the Company during the BFS due to the near surface nature of the coal.

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

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

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

• o 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

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

• o Highly experienced Management Team

• o Adjacent to operating Nkomati Anthracite coal mine

• o 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.