Ripple holds about 12,000sq.km of exploration permits in Northern Australia in the McArthur and Isa Basins. The transaction will see Auburn take 10 permits from Armour.
The permits are on trend with existing zinc and lead mines and already have 2D seismic coverage.
Under the agreement Auburn will acquire Ripple under an all-scrip deal which, when closed, will see Armour hold a 12.5% interest in Auburn.
Auburn is currently in a pre-IPO period with an intention to float potentially this year.
"The proposed transaction will, on completion, provide Armour with a passive investment in a company which is currently investigating opportunities for an ASX listing event," Armour said in a statement this morning.
"Furthermore, the divestment will allow Armour's board and management to focus their time, and the company's capital, on its core oil and gas business."
Auburn's other major shareholder is ASX-listed base metals producer DGR Global which owns about 45% of the company.
Brisbane-based DGR is also a major shareholder in Armour with a 19.25% stake.
DGR general manager John Bierling said the acquisition was a "highly complementary and logical fit" for Auburn.
DGR's most valuable investment is a 9.9% stake in London and Toronto-listed SolGold, but it also holds stakes in Aus Tin Mining, Dark Horse Resources and IronRidge Resources.
Shares in DGR were untraded at 7.2c, valuing the company at $55.2 million.