The purchase price is $A9.55 million plus $6.45 million in environmental bond obligations, but the company said the total cost to purchase the project and bring it back into production at a rate of 100,000 ounces per annum was $36.4 million.

Navigator has secured a $16 million senior debt funding facility from RMB Resources, comprising a fixed and floating charge over all of the company’s assets.

The loan will be divided into two tranches with the first tranche of $9 million dependent on the company raising a minimum of $6 million in new equity, the completion of facility and security documentation, and the issue of 7.5 million options to RMB.

An additional 4.5 million options are to be issued to RMB before the end of October.

The second tranche of $7 million is subject to no material adverse changes and the provision of updated corporate budgets.

If all of the second tranche is drawn, a further 9 million options will be issued to RMB.

As some of the options will exceed the company’s 15% placement capacity limit, shareholder approval will be required for the facility, which does not require any hedging.

Navigator has also appointed investment bank Casimir Capital to manage a $15 million institutional placement in the United States, Canada and the United Kingdom.

The company recently returned from an investor roadshow overseas and received strong interest.

Clients will be offered shares at 17c with a free attaching half option, exercisable at 25c by November 30, 2011.

The placement will comprise two equal tranches with the second tranche requiring shareholder approval.

Placement of the first tranche will meet a key condition of the debt facility and allow the company to settle the Bronzewing transaction.

Navigator will also seek to raise a further $9 million via a rights issue to shareholders on the same terms as the institutional placement.

The company is in discussions to have the rights issue fully underwritten, with completion targeted for mid-November.

The company will hold a shareholder meeting in October to seek approval for the placements.

Of the total $40 million Navigator is aiming to raise, $2 million will fund trial mining at Leonora, while the remaining $1.6 million will be used for working capital.

Navigator announced in July that it would trial mine 75,000 tonnes of ore at its Leonora gold project in Western Australia to produce around 5000oz.

The trial mining will help the company determine the mix of ore required to optimise materials handling and gold recovery.

The company expects the exercise to be cash flow position in the range of around $500,000.

Meanwhile, Navigator said based on the targeted timetable, production at Bronzewing will kick off in March 2010.

Bronzewing has been on care and maintenance since February last year when its former owner View Resources went into administration.

The company commissioned Coffey Mining to complete a high level fatal flaw review of the Bronzewing project and reported probable reserves of 6.32 million tonnes grading 1.9 grams per tonne gold for 385,000oz of gold.

Coffey also reported indicated and inferred resources comprising 12.56Mt grading 2.1gpt gold for 850,000oz of gold.

Casimir also commissioned Behre Dolbear Australia to conduct its own fatal flaw review as part of due diligence, with Behre concluding there were no fatal flaws.

Behre ranked the highest risk as medium, and this was for mining costs and recovered mine grade.

Shares in Navigator fell 7% or 1.5c to 19.5c today.