PRAIRIE LITHIUM LIMITED — Capital/Financing Update 2011

Jan 18, 2011

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ASX Code: ZYL

18 January 2011

ASX Media Release

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

SRK Consulting to complete Bankable Feasibility Study (BFS) at Kangwane Anthracite project

• Appointment of internationally recognized mining engineering firm, SRK Consulting (SRK), to conduct the BFS at the Kangwane Anthracite Project

• Initial discussions with SRK confirm the attractiveness of the Kangwane Anthracite deposit and emphasises the economic advantage of its close proximity to key infrastructure

• SRK to review the historical exploration information and drill database enabling the rapid planning of future development drilling

• An initial drill program designed to enhance the quality of the existing resources, increase the total resource base and prepare reserves for development is planned for the March 2011 Quarter.

• The BFS will focus on the open-pit areas of the deposit where the company has JORC-compliant measured and indicated category resources.

The Directors of emerging coal producer, ZYL Limited (ZYL or the Company) are pleased to announce the Company has appointed SRK Consulting (SRK) to manage the Bankable Feasibility Study (BFS) at the Kangwane Anthracite Project (Kangwane or the Project).

SRK is an independent, international, geoscientific consulting group with notable expertise in the field of mining and exploration. The Group is a leading proponent of mining due diligence and feasibility studies and provides consultancy to both major mining houses and junior explorers.

During the initial stage of the BFS SRK will conduct an independent review and evaluation of the historical exploration and drilling undertaken by Mining Corporation Limited (MCL) in the 1980’s. As part of this initial review a preliminary economic assessment of the project will be conducted. These preliminary assessments will be used as the basis for the detailed Feasibility Study.

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A geomagnetic flyover will be undertaken during January 2011, based upon these results an additional drilling program will commence at the Kangwane Project. The drill program will consist of a combination of confirmatory, in-fill and step-out development drilling. This drilling program is designed to enhance the quality of the existing exploration results, increase the global resource base and delineate Proven and Probable Reserves to enable the rapid exploitation of the Kangwane deposit.

The Kangwane Project, located in the Mpumalanga province of South Africa, has an existing JORCcompliant resource of 114.1Mt of which 21.4Mt is in the Measured category with the balance being a combination of Indicated and Inferred Resources.

Kangwane is located in the Mpumalanga province of South Africa, approximately 100km from the coast by rail to the Maputo Port’s Matola Terminal in Mozambique. The strategic location of Kangwane offers significant advantages given its close proximity to rail, port, water, electricity and roads.

The rail siding 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 westwards to the domestic South Africa market. The Project is situated to the immediate north of an existing anthracite operation which transports its washed product to domestic ferro-chrome, ferromanganese, vanadium and platinum producers located in the Highveld. Figure 1 below provides an overview of the location.

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

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.

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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.

About ZYL Limited

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

The Kangwane project is 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.

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Kangwane Anthracite - Project Highlights

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• Targeting production within 2 years from the commencement of the BFS

• Existing JORC Compliant Resources of 114Mt including a Measured resource of 21.4Mt

• 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

• The open-cut areas to the north and south of the project will be the focus of the BFS due to the near surface nature of the coal.

• 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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