Arc Exploration Ltd. said March 25 that it agreed to acquire Cyprium Australia Pty. Ltd., which holds an option to acquire an 80% interest in the nongold rights over the Cue copper project in Western Australia from Musgrave Minerals Ltd.

The project hosts the Hollandaire volcanic massive sulfide deposit, which contains about 38,800 tonnes of copper in indicated and inferred resources, according to a June 2015 resource estimate, along with "significant upside potential," the company said. The estimate used a 0.5% copper cutoff grade.

Arc will issue 5.75 million shares to acquire Cyprium and pay Musgrave A$250,000 for exercising the Cue option.

Under its deal with Musgrave, Cyprium must spend A$2 million on developing Cue over two years after exercising the option to earn an 80% interest and form an unincorporated joint venture.

Once the deal closes, subject to multiple preceding conditions and shareholder approval, the explorer will rebrand as Cyprium Metals Ltd. Gary Comb and Barry Cahill will be added to the board as directors.

As part of the conditions to complete the deal, Arc must raise at least A$2 million through a placement of at least 10 million shares. Ashanti Capital will act as the lead manager of the capital raising.