Arafura Resources (ARU) has entered a trading halt as the company prepares to release more details in regards to a capital raise.

Until then, trading of ARU shares will be paused, with the company given until Friday, August 5, to make an announcement.

It is unknown how much it is looking to raise or where the funds will be spent.

The exploration company is focused on rare earth elements and has three projects in the Northern Territory.

Its most recent activities have been focussed on its Nolan project as it works towards commissioning and becoming a major supplier to the neodymium permanent magnet market.

The company finished the June quarter with $24.68 million in cash and cash equivalents, which was expected to last just over two quarters.

Shares in Arafura Resources last traded at 32 cents in August 2.