Critical Metals said on Thursday it will raise $50 million through a private investment in public equity $(PIPE)$ deal with an institutional investor to fund development of its Tanbreez rare earth deposit in Greenland.

Shares of the company rose 17% in premarket trading.

The Tanbreez project is critical as an alternative source of heavy rare earths that are key to electric vehicles, wind turbines and defense, with Western nations working to reduce their reliance on China for these vital resources.

The company said proceeds from the deal will strengthen its balance sheet and support work at Tanbreez, which holds about 4.7 billion metric tons of rare earth minerals.

Under the agreement, the company will issue 1.47 million shares and pre-funded warrants for about 1.56 million shares.