** Shares of Reedy Lagoon fall as much as 16.7% to A$0.0025, their lowest level since May 14, 2020

** Stock posts its biggest intraday pct decline since July 3

** The diversified miner says it is undertaking a 1 for 1 entitlement offer to raise A$1.24 mln ($836,380.00)

** Offer price of 0.2 AU cents per new share is at ~33% discount to last close on Aug. 22

** Says funds raised will be used for exploration for gold at Burracoppin Gold project, among others

** Shares down 50% YTD at 0350 GMT

($1 = 1.4826 Australian dollars)

(Reporting by Echha Jain in Bengaluru)

((Echha.jain@thomsonreuters.com))