Australian Rare Earths (ASX:AR3) launched a capital raise via a one-for-three non-renounceable rights issue at an issue price of AU$0.068 per share to existing shareholders to raise up to AU$3.6 million, according to a Tuesday Australian bourse filing.

Under the offer, eligible shareholders will be entitled to one free attaching unlisted option for every two shares subscribed for, with an exercise price of AU$0.10 expiring March 30, 2029.

Proceeds will be used to fund its uranium and rare earths projects.

The company's shares rose 2% in recent Tuesday trade.