In a statement, Extract said it had agreed to issue 7.299 million shares to Kalahari subsidiary Kalahari Uranium at a price of $8.35 per share, representing a 5% discount to the three-day volume weighted average price (VWAP) of Extract shares from December 3 to 7.

Following the placement, Kalahari’s stake in Extract is expected to increase 1.71% from 100 million shares, or 41.12% of the shares on issue, to 107.34 million shares or 42.83% of the shares on issue.

Proceeds from the placement, together with existing cash balances of around $39.7 million, will fund Extract’s drilling programs, engineering and optimisation initiatives in support of the definitive feasibility study on the Husab uranium project, and the start of initial engineering and pre-development work at the project.

The placement is conditional on, among other things, Extract and Kalahari entering into a formal subscription agreement.

The placement is expected to be wrapped up on or before January 7 next year or if shareholder approval is required, within two business days of shareholder approval.

Today’s news comes after Extract announced it had delayed the timing of its DFS into the Husab project.

In his address at Extract’s annual general meeting last month, chief executive officer Jonathan Leslie said the company’s board now expected to release the DFS during the first quarter of 2011.

Leslie said the DFS was originally going to be released this quarter “as part of our aggressive timeline of moving from exploration to production”.

“[The delay] will allow the board to first undertake a process of review, validation, value engineering and optimisation prior to finalisation,” he said at the time.

Extract is targeting the first quarter of 2014 for plant commissioning.

Shares in Extract were down 9c to $9.16 in early afternoon trade.