Shares in Australian Strategic Materials were up more than 30 per cent during trading after banking its first round of funding from a cohort of South Korean investors.

Shares in Australian Strategic Materials were up more than 30 per cent during trading after banking its first round of funding from a cohort of South Korean investors.

The critical metals company told the ASX it had raised $US15 million ($A21.7 million) at $8.90 apiece from an investment consortium called KCF Energy, which initially partnered with ASM last year.

KCF comprises three South Korean private equity firms, namely Cerritos Holdings Polo Equity Partners (Kamur Partners) and ACE Equity Partners.

It’s the first injection of funding Australian Strategic has received as part of a revised conditional agreement rubber-stamped between the parties in July 2021, albeit less than first agreed.

The consortium was initially set to invest $US250 million ($A362.7 million) for a 20 per cent stake in ASM’s Dubbo rare earths project in New South Wales as per their first arrangement.

However, ASM says that it is still negotiating an arrangement for the consortium to source or provide the rest of the funds – to the tune of $US280 million (A$406.5 million) - be it through the consortium or another strategic investor.

Negotiations on the framework agreement come days after the partnership opened a critical metals plant in South Korea, which will process neodymium magnet alloys from the Dubbo project once it comes online.

ASM managing director David Woodall said the potential transactions represent a phased investment into the business.

"We welcome this investment in ASM from our Korean partners as we continue discussions and agree on terms to progress our Dubbo Project and importantly ASM’s mine-to-metals strategy,” Mr Woodall said in a statement.

Australian Strategic Materials shares were up 8.94 per cent at 3:18pm AEST to trade at $5.73.