UPDATE 1.30pm: Northern Minerals has raised $5 million in a placement to further develop its Browns Range heavy rare earths project in the Kimberley.

The company will issue 25 million new shares to institutional and sophisticated investors priced at 20 cents through Bell Potter.

Major shareholder Conglin Yue will take part in the raising, lifting his stake in the company to 19.9 per cent.

Northern Minerals managing director George Bauk said the funds would be used to continue to progress the Browns Range project, where the company was working towards a maiden JORC resource at the Wolverine prospect next month.