The funds will be allocated to geotechnical studies for port and road, sample analysis and processing, and permitting and approvals for the Tier 1 Toliara Sands Project in Madagascar.
The company is offering one new fully ordinary paid share for every 16 shares held at $0.17 per share. World Titanium shares were last trading at $0.26.
World Titanium will issue a total of 18.6 million shares.
Investor interest has been strong in World Titanium recently with shares jumping 73% to $0.26 today, compared to the low of $0.15 in mid-November.
The company recently inked a deal that will see the company and Sichuan Lomon Titanium, a major Chinese titanium dioxide pigment producer, jointly develop the Ranobe Mine, part of the Toliara Sands Project.
Under the deal, Sichuan Lomon Titanium will contribute the US$300 million capital required to develop an 800,000 tonne per annum ilmenite mine.
The joint venture would secure all funds required for a much larger initial development at Ranobe, and eliminate the need for World Titanium to raise any development equity or debt capital.
It would also secure an offtake commitment for 80% of the ilmenite that the mine would produce, sufficient to cover all operating costs in almost any price environment.
This dramatically reduces the financing and offtake risk for the project.
The level of interest from potential strategic partners for the Ranobe Project was considerable - reflecting the size, grade and simplicity of the proposed development.
The joint venture will be formed by Sichuan Lomon Titanium acquiring 50% of World Titanium's wholly-owned Mauritian subsidiaries, which hold the Ranobe mining and exploration licences, and the other Toliara Sands Project exploration licences at Ankililoaka, Basibasy and Morombe.
On signing of the definitive deal documents following the due diligence period, Sichuan Lomon Titanium will also subscribe for 43.25 million World Titanium shares at the 30 day VWAP to raise up to A$8.2 million.
Toliara Sands Project
The Toliara Sands Project hosts a Resource of 959 million tonnes at 6.1% total heavy mineral, including a 161 million tonne Reserve at 8.2% total heavy mineral, at Ranobe.
The exploration permits at Ranobe, Ankililoaka, Basibasy and Morombe contain a total exploration target in excess of 4.7 billion tonnes of mineralisation.
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