American Uranium (ASX:AMU) launched a pro rata non-renounceable rights issue to raise around AU$2.6 million before costs, offering eligible shareholders in Australia, New Zealand, and Canada one new share for every six held at AU$0.12 per share, according to a Friday filing with the Australian bourse.

The participants will also receive one free attaching option for every two new shares subscribed, exercisable at AU$0.16 and expiring on June 30, 2029, although these options will not be listed on the Australian Securities Exchange, per the filing.

New shares will rank equally with existing shares, while shareholders may take up all, part, or none of their entitlement, with any shortfall potentially allocated to exempt investors at directors' discretion within three months of closing, the filing said.

The proceeds will be used to fund permitted infill and expansion drilling, as well as hydrogeological and metallurgical programs at Lo Herma in Wyoming, US, in preparation for the planned third quarter scoping study, the filing added.