The Arafura Resources Ltd (ASX: ARU) share price is flying higher in early afternoon trading on Tuesday.
There's been no news from the rare earths explorer today but yesterday the company published its options prospectus for a placement of new fully paid ordinary shares.
Shares of the mineral exploration company currently trade for 30 cents apiece, up 5.26%.
Let's go over the details of the company's prospectus.
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Arafura Resources options prospectus
Arafura has released details for 78,389,607 exercisable options, exclusively for investors who participate in its share placement program, announced on 12 August.
One free attachment option will be issued to placement investors for every two shares subscribed under the placement program. Each option has an exercise price of 34 cents per share on or before 18 months from the date of issue.
The company notes that no funds will be raised directly through the issue of new options but, if all of them are exercised, the company will receive $26.65 million before costs. Funds from the options will reportedly be used for developing the company's Nolans project located in Australia's Northern Territory and for general working capital purposes.
If all the options are issued, the company expects to add listed options as an additional class of securities in the company and to increase the number of options on issue by 78,389,607.
A total of 156.7 million new ordinary shares were issued to placement investors for a total of $41.5 million earlier this month. Those shares had an issue price of 26.5 cents each.
Arafura share price snapshot
The Arafura Resources share price is currently up 45% year to date. Meanwhile, the S&P/ASX 200 Materials Index (ASX: XMJ) is down 1.41% over the same period.
The company's current market capitalisation is $526 million.
