The placement to institutional investors will raise $6.5 million, while a three-for-four accelerated non-renounceable entitlement offer will raise a further $32.7 million.

The issue price for both offers is 42c, a 12.5% discount to the company’s last closing price of 48c.

Morgans is lead manager and underwriter with Tamesis Partners acting as co-manager.

The proceeds of the raising will be used to repay $US13.8 million to TiZir joint venture partner ERAMET.

Further funds of up to $6.2 million will be put towards the TiZir committed facility to fund senior secured corporate bond obligations.

Remaining proceeds will be used for general working capital commitments.

MDL had $4.9 million cash at the end of December.

Chairman Nic Limb said the company had made significant advances in 2016 in the areas of optimising operations, reducing costs and safety.

“As a result, we have a strong operating platform to take advantage of what we see as the improving outlook for our commodities in 2017,” he said.

“The capital raising will help underwrite the company’s position, alleviate the risk of dilution of our joint venture interest and ensure MDL shareholders will benefit from any future value accretion that is generated by your company.”

MDL has a 50% stake in TiZir, which holds the Grande Cote mineral sands mine in Senegal, and a titanium and ilmenite upgrading facility in Norway.

The Grande Cote operation notched up several production records in the December quarter, while the operation achieved cashflow-positive status for the year.

The TiZir plant in Norway suffered a furnace failure in August, but the furnace has restarted and shipments are due to resume next month.

The company last week reported a full-year net loss of $27.1 million, with its share of TiZir’s loss totalling $31.9 million.

MDL shares remain in a trading halt.