A man named as a suspect in the case of a prospecting couple who disappeared in WA's remote Mid West has denied deliberately misleading police in their search for them.

Key points: Graham Milne said he was "good friends" with Raymond and Jennie Kehlet

Graham Milne said he was "good friends" with Raymond and Jennie Kehlet Mr Kehlet's body was found in a mine shaft, but Ms Kehlet was never seen again

Mr Kehlet's body was found in a mine shaft, but Ms Kehlet was never seen again Mr Milne denies having anything to do with the couple's disappearance

Graham Milne was in his second day of evidence at an inquest examining the death of Raymond Kehlet, 47, and the suspected death of his wife, Jennie, 47, during a prospecting trip to Sandstone, about 700 kilometres north east of Perth, in March 2015.

The couple's disappearance sparked the most expensive search in WA history, which ended after Mr Kehlet's body was found down an abandoned mine shaft.

The inquest has heard his cause of death could not be ascertained. No trace has ever been found of Mrs Kehlet.

Mr Milne, who described the Kehlets as "good friends", went on the trip with the couple to help them search for gold.

They were particularly hoping to find what he called the "$3 million dollar patch", but they were ultimately unsuccessful.

When he began his testimony, he initially declined to answer questions because of concerns his testimony may incriminate him, but he was compelled to do so by Coroner Ros Fogliani.

After Mr Milne finished testifying, Ms Fogliani said she was satisfied with the evidence he gave and granted him a certificate of immunity, meaning his evidence would not be admissible in any criminal proceedings against him.

'Abrupt' final exchange

During his testimony Milne told the inquest the last time he saw the couple alive was on Saturday March 21, two days after they arrived and set up camp.

The Kehlets' pet dog Ella ran off from the camp, prompting an "abrupt" exchange. ( Supplied: WA Police )

Mr Milne said that not long after they had breakfast, the couple's dog "took off" and Mr Kehlet chased it using his quad bike, while Ms Kehlet went after it on the quad bike owned by him.

He said he decided not to chase the dog, because it had run away before and he told the Kehlets, "I didn't come up here to chase the dog, I came up here to go prospecting".

When asked by Counsel assisting the Coroner if he had been terse with them, he said he "may have been a little abrupt".

Mr Milne said when Ms Kehlet came back he "reiterated" to her that he was leaving in the early hours of the morning and told her how to put his quad back on his trailer.

He testified he then went out prospecting for about 18 hours and did not return to the campsite until early the next morning.

Mr Milne estimated it was between 2:00am and 3:00am when he got back to the camp and he did not wake the Kehlets.

Raymond and Jennie Kehlet failed to return from a prospecting trip in WA's Mid West. ( Supplied )

"You just don't wake people at that hour of the morning … it'd be a bit inconsiderate I think," he said.

"I finished off packing up my stuff and putting it in the back of the vehicle. I tied the quad bike down … backed off and drove away."

Milne changed story to police

Mr Milne maintained he did not know what had happened to the Kehlets, and when asked in 2015 what he thought happened immediately after they had disappeared, he replied "they were just missing".

He testified he did not know why a cigarette butt with DNA matching his was found near cigarette butts containing Ms Kehlet's DNA at the top of the mineshaft where Mr Kehlet's body was found.

Mr Milne did admit telling a lie to police about the exact route he took when he left the campsite, saying despite what he originally said he had driven briefly on a gravel "shortcut" road.

Graham Milne was the last person to see Raymond and Jennie Kehlet before their disappearance. ( ABC News: James Carmody )

Police testified a GPS coordinate taken later from Mr Milne's car placed him on the gravel road, but he had maintained he did not use it.

On Thursday he told the inquest he did use the road.

"I was actually going to go back to the camp. I thought … I might as well stick with them [the Kehlets] … but I was due to go to work and the crew would be short."

"I was going to ring them and tell them I wasn't coming in. I suppose my conscience got the better of me after I stopped and thought about it."

Mr Milne said he did not tell police because, "it made me out to be an idiot … it was embarrassing".

He said after turning around on the shortcut road he went to a sealed road to make his journey back to Perth, but he could not explain why his vehicle was not captured by service station security cameras that record all vehicle movements on the sealed road.

A large area was searched in attempts to locate Ray and Jennie Kehlet. ( Supplied: WA Police )

Under questioning from the lawyer representing police Mr Milne denied deliberately misleading searchers when he returned to Sandstone after the Kehlets were reported missing.

It was put to him he had not told police previously about all the locations he had been to with the Kehlets on the trip, but he replied he told them what he was asked.

Shootings and 'secret squirrel' locations

Earlier in his evidence, Mr Milne told the inquest that the day they set up camp, he and Mr Kehlet went out on one of the quad bikes and saw two men in a four-wheel-drive.

He said they heard what he assumed was a gunshot from a low-powered rifle.

Mr Milne said Mr Kehlet wanted to "set off a shot just to let them know there was somebody else in the area."

"I put a packet of cigarettes in the middle of a tree and told him to take a crack …," he said.

"The first shot missed, the second went straight through the middle."

Mr Milne testified he thought the Kehlets were sleeping when he did not see them at the campsite. ( Supplied )

Mr Milne was also asked if he had made the Kehlets promise to keep the trip "secret squirrel", but he denied it.

"Why would I tell them not to say anything? It was Ray who was adamant about the area, not me," he said.

Police have testified Mr Milne remained a suspect in the case because some of what he has told them was not supported by the evidence.

But he denies having anything to do with their disappearance.