The placement, backed by funds in Hong Kong, Singapore and Australia, was also supported by major shareholder Shenghe Resources, which is maintaining its 12.5% stake by spending A$1.25 million, pending regulatory approvals.

Many of the prominent institutional investors that backed the placement are new to the company. 

The 9c raising was pitched at a 15.88% discount to the 30-day share price average.

The funds will be earmarked for the technical optimisation of Kvanefjeld and for the completion of permitting.

Managing director Dr John Mair said the company was well placed to roll out optimisation work through 2018 that aimed to have Kvanefjeld positioned as the lowest-cost, largest capacity rare earth project outside of China, with the longest projected mine life. 

"In association with Shenghe, we'll be looking to develop a complete path to market and project finance strategy," he said. 

"The demand outlook for rare earths continues to strengthen creating an optimal window to position Kvanefjeld for the development phase."

GEML has spent most of the year working with Shenge to optimise the resource, and next year will complete that work, update the existing engineering and feasibility studies and revise operating and capital cost estimates.

Kvanefjeld has a reserve of 108 million tonnes, enough for a 37-year mine life, although that accounts for just 10% of the resource estimate.

The project will generate rare earths such as the neodymium, praseodymium and dysprosium, plus uranium, zinc and fluorspar by-products. 

The company's shares last traded at 11.5c.