Shanghai Fuyuan Investment Co (SFIL) has subscribed for up to 404.1 million shares in Coppermoly to raise up to $6.06 million.

The placement is being conducted at 1.5c per share, a hefty 87.5% premium to the last closing price of 0.8c per share.

Coppermoly, which had $2.2 million in cash at the end of March, will use the funds for further drilling and studies at Mt Nakru, to test the Simuku project, and for regional targeting at the Mak Mak and Kori River projects.

Coppermoly managing director Dr Wanfu Huang said the premium placement reflected the progress the company had made over recent months.

The company recently upgraded the Mt Nakru resource to 309,000 tonnes of contained copper at 0.75% and 300,000 ounces of gold at 0.23 grams per tonne.

"The Mt Nakru deposits are open in multiple directions and the funds raised under the placement will enable us to undertake further drilling to expand the size and quality of the Mt Nakru deposits and to undertake scoping potentially feasibility studies," Huang said.

"We welcome the strong support of SFIL and our existing shareholders and look forward to reporting further strong progress over the remainder of the year."

The placement is conditional on SFIL receiving Chinese regulatory approval by July 31.