Atlas South Sea Pearls shares have jumped after it announced plans to raise up to $5 million alongside a proposal to acquire fragrance and flavour manufacturer Essential Oils of Tasmania.

Atlas said it would pay $650,000 in shares as consideration for the acquisition.

At close of trade today, Atlas shares were up 14.9 per cent, trading at 5.4 cents.

Essential Oils of Tasmania has a 30-year history in plant processing, extraction and aging of perfume ingredients.

The purchase remains conditional on Atlas raising at least $1.5 million in new working capital and obtaining shareholder approval.

Atlas said it intends to raise up to $5 million to boost working capital and fund its expansion plans.

"The company is investigating a range of alternatives to raise this capital including through equity or debt raisings and will make a further announcement when the structure of the raising is settled," the company said in a statement.