Struggling uranium miner Energy Resources of Australia will seek to raise $500 million from shareholders in a bid to fund a crucial underground expansion at the company's Ranger mine in the Northern Territory.

ERA is majority owned by Rio Tinto, and the global miner announced this morning it was fully supportive of the raising, would buy its full entitlement and would help underwrite any shortfall.

The money will help fund exploration and feasibility work on the ''Ranger Deeps'' underground project, which ERA hopes will extend the life of the controversial Ranger mine, which is located in a specially excised area that is surrounded by Kakadu National Park.

The Deeps exploration project is considered ERA's best hope of retaining Ranger as a long term, profitable mine, after a terrible year of weather and financial problems for the company.

A severe wet season during the financial year to June 2011 caused significant interruptions to production rates at Ranger, and the high water levels also created operational headaches by swelling the toxic tailings dams close to capacity.

Things got worse when the company filed its annual results, and an operating loss of $22.3 million blew out to a $121.75 million overall loss on the back of a shock downgrading of the company's ore stockpiles.

Shareholders will be offered 12 shares for every 7 they already own at a price of $1.53 per share.

ERA shares are now in a trading halt, but they closed on Tuesday at $3.29.

The offer will also have an institutional and retail component.

ERA expects to make a final decision on whether to proceed with the Deeps project in 2014, once exploration and feasibility studies have been completed.