Lion Selection Group (ASX:LSX) committed to sub-underwrite AU$1 million on a priority basis as part of a planned AU$5 million rights issue fundraising by mining firm PhosCo (ASX:PHO), according to a Tuesday Australian bourse filing.

Lion Selection agreed to advance a loan to PhosCo for AU$500,000, to be offset by the sub-underwriting commitment to fast-track drilling including extensional drilling at PhosCo's Gasaat phosphate project and scout drilling at the Sekarna phosphate project, both in Tunisia.

PhosCo's fundraising was conducted at AU$0.05 per share, triggering the conversion of a AU$250,000 converting note investment held by Lion into 6.6 million shares at AU$0.04 with 6.6 million options exercisable at AU$0.05 per share.

PhosCo concurrently signed a mandate letter with the European Bank for Reconstruction and Development for a potential $5 million strategic investment. It will use the funds for a bankable feasibility study at the Gasaat project.