RareX (ASX:REE) received firm commitments to raise AU$2.7 million, before costs, via a share placement to institutional and professional investors at AU$0.022 per share, according to a Wednesday Australian bourse filing.

The placement will result in the issue of around 122.7 million new fully-paid ordinary shares. Settlement is expected to occur on May 21.

The placement included a one-for-two free-attaching option exercisable at AU$0.035 and expiring 36 months from the issue.

Its board agreed to subscribe for AU$75,000 on the same terms as the Placement, subject to shareholder approval.

It will use the proceeds to progress the procurement process for the Mrima Hill rare earth-niobium-phosphate-manganese project in Kenya as part of a consortium with Iluka Resources (ASX:ILU), among others.

Its shares plummeted 13% in recent trading on Wednesday.