Riedel Resources (ASX:RIE) received firm commitments to raise around AU$1 million through the issue of 40 million shares at AU$0.025 each, split into two tranches, according to a Friday filing with the Australian bourse.

The issue price represents a 7.4% discount to the company's last closing price on Tuesday.

The first tranche will see the issue of about 13.9 million shares for AU$347,000, and the second tranche will see the issue of about 26.1 million shares for AU$653,000, subject to shareholder approval, the filing said.

The company also intends to undertake a share purchase plan (SPP) for eligible shareholders to raise up to AU$3 million, at the same price as the placement, the company said.

The SPP is set to open on June 27 and close on July 18, the company added.

Proceeds will be used for exploration and study activities at the Kingman Project and for working capital.

708 Capital was the sole lead manager for the placement and will receive 10 million broker options exercisable at AU$0.06 with a three-year expiry from the date of issue, subject to shareholder approval, the filing added.