Xanadu Mines (ASX:XAM) is set to raise about AU$5.5 million via the placement of 100 million shares priced at AU$0.055 apiece, according to a Tuesday filing with the Australian bourse.

As part of a consultation period with Zijin Mining Group, it will be allowed to participate in the placement on a pro-rata basis to maintain its 19.4% shareholding in the company, subject to documentation, and regulatory and shareholder approvals, the filing said.

Proceeds will be used for the Red Mountain and Sant Tolgoi projects, new project acquisition and exploration, funding for the Khuiten joint venture, and working capital, according to the filing.

Xanadu Mines shares fell nearly 2% in morning trade Wednesday.

Price (AUD): $0.06, Change: $-0.001, Percent Change: -1.75%