BlueRock Diamonds said it raised about £500,000 through a placing and subscription to develop and expand mining activities at its Kareevlei Diamond Mine in South Africa.
The company for placed 33,3 million ordinary shares at a price of 1.5p each.
Each new placing share would be accompanied by a warrant to subscribe for a further new share at a price of 3p each.
BlueRock said it would continue to upgrade its crushing and processing plants at Kareevlei to increase efficiencies and reliability.
The company said it would up the recovered grade at Kareevlei from the current expectation of 3.5 to 4.5 carats per hundred tonnes (cpht).
"These funds will allow us to do the necessary preparation to Pipe 1 and put us in a position to be mining kimberlite from Pipe 1 during Q3 2018,” said company chief executive Adam Waugh.
“We are currently mining Pipe 2 and continue with our bulk sampling work at Pipe 5.
"We are excited by the potential we've seen at Kareevlei particularly, as we have been progressing deeper into Pipe 2. We look forward to continuing to expand our operations and soon having kimberlite available from three of our five identified kimberlite pipes."
Kareevlei contains five diamondiferous kimberlite pipes and had an inferred mineral resource of 359,000 carats.