Of the total, $2.18 million will be raised through the issue of 158.7 million new shares at 1.37c per share.
The placement will be led by brokers DJ Carmichael and Jett Capital.
Management and directors will chip in for the remaining $258,000, subject to shareholder approval.
Of the $258,000, Regius Resources Group - majority-owned by Mustang COO Cobus van Wyk and director Christiaan Jordaan - will contribute $200,000 for 14.6 million new shares and managing director Dr Bernard Olivier will provide $20,000 in exchange for 1.4 million new shares.
Every two new 1.37c share will come with a two-year 2c free-attaching option.
At Caula, Mustang recently established a JORC measured resource of 22 million tonnes at 0.37% vanadium pentoxide and 13.4% total graphite carbon for 180 million pounds of vanadium and 2.93Mt of graphite, respectively.
Feasibility study drilling at the project is well underway, with the resource likely to be enlarged in the near future.
Mustang's share price fell 6.67% Monday to 1.4c.