ALKANE Resources shares are expected to firm after receiving strong interest from institutional and sophisticated investors in a $10.4 million placement.
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This includes various funds managed by Fidelity Worldwide Investment as substantial shareholders, with interest from both Australia and internationally.
The placement of 40 million shares at $0.26 per share is within the company's issuing capacity, and is a 4 per cent discount to the last sale price prior to the trading halt, and a 6 per cent discount to the five day VWAP.
Alkane will use the funds to supplement existing cash reserves to progress the DZP front end engineering design for bankable standard capital and operating costs to assist with project funding.
Funds will also be allocated to further DZP product development, enhancement and marketing, the development and acquisition of certain water resources for the DZP and certain acquisitions of land within the DZP area and other DZP related expenditures.
Alkane is targeting production from the DZP in 2016, which is a very large polymetallic resource of the metals zirconium (hafnium), niobium (tantalum), yttrium and rare earths.
The DZP can provide a long term supply of zirconium chemicals independent of the zircon supply chain, and critical rare earths not reliant on China.
