Viridis Mining and Minerals (ASX:VMM) is set to raise AU$3.5 million at an issue price of AU$0.33 per new share to new and existing institutional investors, according to a Tuesday Australian bourse filing.

It will issue around 10.6 million new shares under the placement, the filing said.

It will use the funds to speed up work on its Colossus ionic adsorption clay rare earth element project in Brazil, including a pre-feasibility study as well as the next phase of environmental approvals.

The miner said its short-term focus is to finalize the scoping study at the project.

The firm's shares fell 16% on market close.