Australia-based Guildford Coal plans to raise $25m through the issue of new equity, as part of a plan to fund its exploration projects across the globe.

The company, which secured a mining licence for its South Gobi project in Mongolia earlier this year, plans to issue new shares at 70c each, reports Deal Journal Australia.

Guildford, which has market value of $170m, has placed its stock in a trading halt and appointed Foster Stockbroking to lead the equity issue.

The firm has a 70% stake in Terra Energy, which is expected to produce its first coal from the South Gobi project in the first half of this year.

The South Gobi resource now totals 70.4m tonnes of coking coal, an increase from its earlier estimate of 63.1m tonnes.

A mine with an annual production capacity of one to two million tonnes of coal could be built at the South Gobi development site, according to Guildford Coal.