Krakatoa Resources' (ASX:KTA) share price is up 16% this morning on news it received commitments to raise $560,000 via a placement of over 18.6 million ordinary shares at an issue price of $0.03 per share.

The company's two current major shareholders have agreed to cornerstone the placement.

Krakatoa Resources says funds raised will be used to support exploration at the Mt Clere Rare Earths project as well as working capital.

Its share price is up 16% at 12:20pm AEST.