Alliance Mineral Assets' substantial shareholder Burwill Commodity has cut a planned investment in the lithium miner, taking only 13 million new shares of a proposed 23.9 million share placement at 33 cents each.

The firm carried out a placement exercise to sell the remaining 10.9 million shares at 34 cents apiece.

Placement agent and underwriter Canaccord Genuity had to mop up 7.6 million unsubscribed shares after placing out only 3.3 million shares with an unnamed Australian institutional investor.

The 34 cent per share placement price represents a discount of about 8.7 per cent to Alliance Mineral's volume-weighted average price of 37.25 cents on Wednesday.

No reason was given for Burwill's trimmed investment.

Net proceeds from the underwritten placement shares amounted to about $3.48 million, with 43 per cent of the proceeds to be allocated as capital expenditure for the Bald Hill Lithium and Tantalum Project in Western Australia, Alliance Mineral said.

In addition, 43 per cent will be used as working capital for the Bald Hill project, and the remaining 14 per cent will be used for future exploration and other initiatives at the Bald Hill project.

The underwritten placement shares represent about 1.65 per cent of Alliance Mineral's enlarged issued share capital.

The company also issued 3.5 million new compensation shares to five individuals after the plan was approved at an extraordinary general meeting held on June 25.

They are Mr Ong Kian Guan, with 250,000 shares; Mr Mahtani Bhagwandas, with 250,000 shares; Mr Leaw Mun Ni, with 1.125 million shares; Mr Shaun Menezes, with 1.125 million shares; and Mr Tony Dominkovich, with 750,000 shares.

Alliance Mineral shares yesterday closed one cent lower at 36.5 cents.