Stellar Diamonds (LON:STEL) this morning outlined plans to raise £1.9 million via a placing of 38 million shares at 5p each.
Investors have also been granted warrants on a one-for-two basis as part of the fundraising, which can be exercised a12p each.
Around £1 million of the proceeds will be invested in a detailed drilling and diamond evaluation programme on the high-grade Droujba kimberlite pipe located in Guinea, the company said.
A further £200,000 has been earmarked to complete the Tongo kimberlite dyke bulk sampling programme in Sierra Leone.
The balance of the funds will be utilised for “general working capital purposes” and placing expenses, the company told investors.
"We are pleased to have received an oversubscribed interest in the placing from a number of new investors as well as existing shareholders,” said chief executive Karl Smithson.
“Our strategy of evaluating and developing our key kimberlite diamond projects can now be implemented before the end of the year.
“We intend to commence a drilling programme over the high-grade Droujba pipe in November.
“The results will enable geological modelling of the pipe at depth, as well as diamond grade analysis on the core material recovered. In the meantime we are on track to deliver our first bulk sample results from the Tongo kimberlite dykes project in Sierra Leone by the end of October, with full results before the end of the year."