Shares in Kin Mining tumbled to a 2.5-year low after the beaten-down gold play announced a $10.4 million rights issue for further exploration at its Leonora gold project and to repay debt.

The Andrew Munckton-led explorer this morning announced plans to raise the cash via a two-for-five, non-underwritten rights issue priced at a discounted 8c a share.

The news prompted Kin shares to tumble 1.5c, or 16.7 per cent, to 7.5c after they emerged from a trading halt, immediately prompting questions as to whether the company would be able to fill the raising.

Kin said its three biggest shareholders, which include mining rich-lister Kerry Harmanis, would take up their full entitlements in the offer representing about 21 per cent of the company’s stock.

Kin said the cash would be used for ongoing progression and optimisation of the Leonora project, accelerated exploration of new targets and repayment of an outstanding $3 million debt facility with Sprott Private Resource Lending.

“These planned activities have been designed to deliver a pathway over the next nine to 12 months to a fuller understanding of the overall gold endowment potential and optimised development scope of the Leonora gold project,” the company said in a statement.

Kin is targeting a revised feasibility study for Leonora in late 2019.

Leonora hosts a mineral resource estimate of more than 1 million ounces.

Kin suspended work on the 55,000 ounces per annum project in April over concerns it could not complete it within the $35.4 million budget.

That revelation followed an acrimonious split with then-Managing Director Don Harper, who left the board of the gold explorer amid an attempted board coup earlier this year.

New Chief Executive Andrew Munckton told WestBusiness at the Diggers & Dealers Mining Forum in Kalgoorlie in August that Kin needed to rebuild trust.