Mineral exploration company Gulf Industrials (ASX:GLF) plans to raise up to $11.8 million in a rights issue.
GLF shares fell 22.81% in Thursday's trading to $0.044 after the announcement was made.
Gulf Industrials said the proceeds will be put towards a final US$1 million ($932.1 million) payment for its Namekara Vermiculite mine.
It will also go towards the costs of setting up a drilling program and expansion feasibility study at the site.
The three-for-five non-renounceable issue is priced at 4 cents per share – a 30% discount on the trading price prior to the announcement.
It is fully underwritten by Ocean Equities, as well as Vertias Securities, which is also acting as lead manager.
The company's three major shareholders – Jonah Capital BVI, African Lion 3 and Contango Asset Management – have indicated that they will take up their full entitlement.