One thousand gold industry workers have rallied in Western Australia's gold mining capital Kalgoorlie to protest the state government's proposed royalties increase.

It wants to increase the gold royalty rate from 2.5 per cent to 3.75 per cent when the spot price eclipses $A1200 per ounce ($US961/oz) as part of a raft of measures to trim mounting state debt.

Treasurer Ben Wyatt has defended the proposal to take an extra $A20 an ounce of profit off gold miners for budget repair as "reasonable".

"I asked treasury to analyse 34 mines ... which accounts for about 95 per cent of gold production in WA," Mr Wyatt told reporters, adding the mines were making about $A440 per ounce at the current gold price.

He dismissed claims by Northern Star Resources chairman Bill Beament that miners could respond by cutting exploration investment by one-third as "rubbish".

The gold price fluctuated across a $300 range in 2016 but exploration still hit record levels, he said.

Monday's rally was organised by local Liberal member Kyran O'Donnell and was attended by state and federal Liberal members, however the WA opposition is yet to adopt a position on the measure.

Opposition Leader Mike Nahan said his party would not be rushed into making a decision but noted Premier Mark McGowan fought against increasing gold royalties when it was first mooted by the Barnett government in August last year.

The WA Nationals have pledged to block gold royalty hikes and, if joined by the Liberal opposition and One Nation, could scupper the bill in the Upper House.

The Chamber of Minerals and Energy estimates about 25,000 people work in the WA gold sector, with more employed in associated industries.

Association of Mining and Exploration Companies acting chief executive Graham Short said reports showed Labor's plan could cost more than 3000 jobs.

"Then to top that, the government appears to be happy to allow 60 per cent of the revenue raised go to other Australian states and territories through the GST redistribution process," he said.

Meanwhile, Ramelius Resources has inked a deal to acquire the Edna May gold mine at Westonia in the eastern Wheatbelt region from Evolution Mining for $90 million.