Navigator, St Barbara in gold deal

West Perth-based Navigator Resources plans to undertake trial mining at its Leonora gold project after reaching a deal with St Barbara to treat the gold at the Gwalia mill.

The company said it would mine around 75,000 tonnes of ore from two shallow open pits at Leonora to produce about 5,000 ounces of gold.

Mining is expected to start in the December quarter and treatment will take place the following quarter.

Navigator said its commitment to the trial is subject to the gold price staying above $A1,150 an ounce.

Under the agreement, all gold produced will be returned to Navigator for sale.

"This information will be invaluable in the determination of the optimum development scenario for the Leonora Project," Navigator said.

"Given positive results from the trial, subsequent treatment possibilities include a stand alone Navigator facility or the negotiation of a long term ore treatment agreement with SBM [St Barbara]."

The trial mining comes as the company evaluates two separate proposals for debt funding facilities for its acquisition of the Bronzewing gold project from administrators of View Resources.

Navigator said it is determining the best mix of debt and equity for shareholders, particularly given the receipt of shareholder approval yesterday for an equity placement facility of up to 50 million shares.

Shares in Navigator shed 1.5 cents to 19c at 15:41 AEST.