Shares in Doray Minerals fell at the open after it confirmed plans to raise $18 million in a discounted institutional placement.

As revealed by thewest.com.au on Friday, Doray confirmed it would place 13.85 million new shares at $1.30 in two tranches through Shaw Corporate Finance.

Doray managing director Allan Kelly said demand for shares in the placement was particularly strong.

"We see this as a great vote of confidence, not only in the company's results so far, but also in the prospects of the company going forward," he said.

The company also revealed plans to raise an extra $3 million through a share purchase plan to existing retail investors.

Doray will use the money to fund drilling at its Andy Well and Webbs Patch gold projects in the Murchison region.

Shares in the company were off 8.5 cents, or 5.4 per cent, to $1.49 at 8.30am after emerging from a trading halt.