Paxton purchased the shares at 47 pence each for a transaction cost of £18,800, it said in a statement.

He now holds 175,000 shares in the gold mining company, or 0.18 per cent of the share capital.

Paxton also holds options over 1 million shares, or around 1.03 per cent of the capital.

Meanwhile, finance director Kiran Morzaria also today bought 6,340 shares at 47 pence each for £2,979.80.

Morzaria now holds 47,280 shares in the firm - or around 0.05 per cent of the share capital.

He also holds options over 700,000 Vatukoula shares, representing around 0.72 per cent of the issued share capital.

It produced gold at a "significantly" higher rate in the six months to February 29 this year, than in the second half last year, although production was "in line" with the comparable period in 2011. 

Vatukoula unearthed 242,769 tonnes of ore and waste - a 24 per cent increase from 195,832 tonnes in the comparable period last year.

And it produced 29,999 ounces of gold compared to 30,000 ounces in the comparative period.

Revenues for the half year stood at £30.4 million -  21 per cent higher than in the same period in 2011, when it stood at £25.2 mln.

The firm also benefitted from the increases in gold prices, with the average realised gold price at US$1,678 in the period compared to US$1,328 per ounce in 2011.

That offset increases in mining, processing and overheads, and led to a gross profit for the period of £4.9 million, compared to £4.2 mln in 2011, the company said.

Vatukoula chief executive David Paxton told investors: "We continued to exceed our mine development targets for the half year. 

"Achieving these development targets will enable us, in the longer term, to mine higher tonnages and at higher grades and will result in a lower cash cost per ounce of gold."

However, he did note the heavy rainfall in Fiji in January and April this year had affected access to and from the mine area. 

"However, I am pleased to report that the mine itself remained secure and protected, albeit with some water ingress which caused temporary disruptions in production and will reflect in third quarter gold sales being lower than planned."

The firm's focus remained on building long-term cost effective sustainable gold production, at 100,000 ounces per year, he said.

Operationally, highlights of the period saw an inferred resource figure of 142,000 ounces defined and a new high mineralised system discovered during exploration drilling.

Paxton concluded by saying that although the mine suffered production hurdles during and after the reporting period, every effort was being made to ensure that "there will be no materially adverse effect" on the company's guidance of 65,000 ounces for the year ending August 31 this year.

Tom Elder, at broker WH Ireland, said today's results provided little new information on operational progress from the Q2 results announced on March 19.

He highlighted that it would be the Q3 results which would be "pivotal" in assessing the firm's operational turnaround, "not so much from an ounces produced perspective but from a profitability per ounce perspective".

"The Vatukoula Gold mine is a significant gold mine with a long operating history and a substantial resource base. These latest results may well mark the nadir of subdued operating performances and we therefore reiterate our 'BUY' recommendation," he said, targeting a price of 122 pence a share.

As at 10.49am, shares in the firm were trading up 2.41 per cent, at 45.5 pence each.

It produced gold at a "significantly" higher rate in the six months to February 29 this year, than in the second half last year, although production was "in line" with the comparable period in 2011. 

Vatukoula unearthed 242,769 tonnes of ore and waste - a 24 per cent increase from 195,832 tonnes in the comparable period last year.

Revenues for the half year stood at £30.4 million -  21 per cent higher than in the same period in 2011, when it stood at £25.2 mln.

The firm also benefitted from the increases in gold prices, with the average realised gold price at US$1,678 in the period compared to US$1,328 per ounce in 2011.

That offset increases in mining, processing and overheads, and led to a gross profit for the period of £4.9 million, compared to £4.2 mln in 2011, the company said.

Vatukoula chief executive David Paxton told investors: "We continued to exceed our mine development targets for the half year. 

"Achieving these development targets will enable us, in the longer term, to mine higher tonnages and at higher grades and will result in a lower cash cost per ounce of gold."

However, he did note the heavy rainfall in Fiji in January and April this year had affected access to and from the mine area. 

"However, I am pleased to report that the mine itself remained secure and protected, albeit with some water ingress which caused temporary disruptions in production and will reflect in third quarter gold sales being lower than planned."

The firm's focus remained on building long-term cost effective sustainable gold production, at 100,000 ounces per year, he said.

Operationally, highlights of the period saw an inferred resource figure of 142,000 ounces defined and a new high mineralised system discovered during exploration drilling.

Paxton concluded by saying that although the mine suffered production hurdles during and after the reporting period, every effort was being made to ensure that "there will be no materially adverse effect" on the company's guidance of 65,000 ounces for the year ending August 31 this year.

“Ingress of water into the mine has rendered some minor areas inaccessible but otherwise production areas remain unaffected,” it said.

On Sunday evening, water carrying debris entered the Smith Shaft, which was transporting 11 miners in a man-riding cage to the underground workings.

The debris caused minor injuries to the miners who were taken to the neighbouring medical clinic.

Chief executive David Paxton said: “To date, we believe that there has been no material effect on the production forecasts as a result of the ongoing rains or the minor accident in the shaft.”

The heavy rainfall has impaired the country’s infrastructure and some Vatukoula employees who live outside the area have been unable to attend work.

The Vatukoula gold mine, which is located in the northern part of the Viti Levu island, contains 680,000 oz of gold reserves and 4.3 million oz of gold resources. Together with its London headquarters Vatukoula has around 700 hundred employees.

A tropical cyclone on Monday brought rain that closed the airport in Viti Levu, which is a 90 minute drive from the mine.

The share price rallied to 56 pence after briefly dipping to below 50 pence this morning before the statement.

Gold miner Vatukoula (LON:VGM) said today it remains on course to produce 65,000 ounces of gold in the current year after production picked up sharply.

The Fiji-focused miner produced 52,157 ounces in the year to August, below expectations at the start of the year after it was forced to change the way it developed the mine.

The group today said the decision to move to high-speed development will result in increased production levels and lower costs in the years to come.

Revenues in the year to August rose by 19% to £47.9 million, but the additional mining costs meant a loss of £3.93 million against a profit of £3.67 million. Cash costs per ounce rose to $1,349, up from US$884.

Vatukoula sold 53,461 ounces of gold during the year, slightly below the previous twelve months, though the average realised price jumped from $1,157 per ounce to $1,439.

Underground ore delivered increased by 40% compared to the previous year, while the underground development for the year was 24,453 up from 8,720 metres achieved in the previous year, which the firm said was the result of the on-going development programme.

Chief executive David Paxton said: “This significant increase in development, coupled with operational efficiencies introduced over the second half, are laying the solid foundations required to achieve our strategic objectives of expansion, sustainable production, operational optimisation, and growth.”

The group added it is still considering an additional listing on a North American market as it believes that this will provide exposure to a market with a broad number of comparable underground gold mining companies.

Broker Shore Capital said the shares are still being affected by disappointment that the company will not hit its earlier prediction of an annualised rate of 100,000 ounces by the second quarter of this year, but operational results should improve from now on.

The Fiji-based miner produced 52,157 ounces in the year to August, below expectations at the start of the year after it was forced to change the way it developed the mine.

The group today said the decision to move to high-speed development will result in increased production levels and lower costs in the years to come.

Revenues in the year to August rose by 19% to £47.9 million, but the additional mining costs meant a loss of £3.93 million against a profit of £3.67 million.

Vatukoula sold 53,461 ounces of gold during the year, slightly below the previous twelve months, though the average realised price jumped from $1,157 per ounce to $1,439.

Underground ore delivered increased by 40% compared to the previous year, while the underground development for the year was 24,453 up from 8,720 metres achieved in the previous year, which the firm said was the result of the on-going development programme.

Chief executive David Paxton said: “This significant increase in development, coupled with operational efficiencies introduced over the second half, are laying the solid foundations required to achieve our strategic objectives of expansion, sustainable production, operational optimisation, and growth.”

The group added it is still considering an additional listing on a North American market as it believes that this will provide exposure to a market with a broad number of comparable underground gold mining companies.

Vatukoula Gold Mines (LON:VGM) announced this morning that it had discovered a new ore zone at its gold mine in Fiji. Shares in the firm responded by putting on 9.9 per cent in early trading to hit 97.5 pence each.

The firm said that drilling intersected three new high-grade mineralised structures at the Vatukoula Gold Mine, which form part of the new ore zone – dubbed ‘Baron d’Este’. It also pointed out that this is the first new discovery of a high-grade ore zone at Vatukoula since the discovery of the Prince William ore zone in the 1980s.

The zone has been intersected between 300 and 700 metres below the surface. Significant composite intersections include: 124.7 grams of gold per tonne over 0.46 metres; 33.6 grams per tonne over 2.86 metres; 25.46 grams per tonne over 1.07 metres; and 39 grams per tonne over 0.48 metres. 

Meanwhile, the firm said that drilling is continuing to further define the extent of the new discovery.

“The discovery of the Baron d’Este ore zone is highly encouraging as it represents the first new high grade ore zone discovery at our Vatukoula site for over 20 years,” said David Paxton, Vatukoula’s chief executive officer. “The discovery also substantiates our belief that our Fiji operation has excellent potential to expand its current resource and reserve base with high grade ore zones. Because of the ease of access of this new ore zone, we believe this discovery will assist in increasing our long-term production profile.”

Gold recovery decreased at Vatukoula Gold Mines (LON:VGM) during its third quarter after the Fijian miner continued to focus on improving its infrastructure in order to sustain long-term production.

During the three months to 31 May, gold production was 11,395 ounces – down four percent compared with Q3 2010 – although the amount of underground ore mined and delivered increased by 37 percent to 90,352 tons.

The reason for the lower grade of gold mined and delivered to Vatukoula’s mill is because currently approximately 52 percent of the ore delivered to the mill is from development areas of the mine. Because of the large dimensions involved this ore is delivered at roughly 50 percent of the grade achieved from the same area using normal stoping techniques.

Vatukoula said that development is now “a crucial part” of the underground infrastructure, and achieving the development targets will allow it to mine at a consistent grade. During the third quarter, the firm completed 6,349 metres of development, compared with 5,610 metres in Q2 2011.

For the first nine months of its 2011 financial year, Vatukoula completed 17,704 metres of development – which is almost three times as much as the comparable period for 2010.

Last week, Vatukoula said it had completed the £6 million fundraising it requires to begin the development of the ’18 level’ decline at the Philip shaft at the Vatukoula mine on Fiji and also to the firm’s biomass project at Vatukoula.

The company expects to complete the decline at Vatukoula within two years. It believes that by bringing the mine forward in this area it should be able mine high-grade ore bodies, which in the medium term will increase the mine head grade.

During the three months to 31 May Vatukoula sold 11,652 ounces of gold (Q3 2010: 11,299 ounces) at an average price of US$1,453 (Q3 2010: US$1,155). The mine made a loss for the period of £2.8 million (Q3 2010: £2 million profit).

“While the effect of the increased development has been to reduce the underground recovered grade, we are building the essential underground infrastructure to provide for sustainable long term production,” said David Paxton, Vatukoula's CEO. “The proposed 18 level decline program, will not only give us a huge acceleration in long term development, in a high-grade area, but also provide the mine with on-the-job training of Fijian Miners in high-speed-development practices."

The company issued 4.8 million new shares at a placing price of 125 pence each.

At the end of May, Vatukoula said it needed to carry out the fundraising in order to begin the development of the ’18 level’ decline at the Philip shaft at the Vatukoula mine on Fiji and also to the firm’s biomass project at Vatukoula.

The company expects to complete the decline at Vatukoula within two years. It believes that by bringing the mine forward in this area it should be able mine high-grade ore bodies, which in the medium term will increase the mine head grade.

The planned decline, between the 18 level and 21 level, is aimed at providing access to the lower level Prince Dolphin and Prince William ore bodies, which have mineral reserve grades of 11.5 grams per ton and 6.7 grams per tonne respectively.

The firm’s CEO, David Paxton, described this development programme as “a key part” of the firm’s long-term strategy.

The biomass project is expected to provide between 10 and 15 megawatts of energy to the Vatukoula mine. A feasibility study for this is targeted for the end of this month, and indications from Fiji Sugar Corporation are that the project will be commissioned in late 2012.

At 10.32am today, Vatukoula’s share price was down less than a penny at 109 pence.

The placing was subscribed to by Zesiger Capital Group, which has received 4.8 million shares at a price of 125 pence each.

Vatukoula, which also announced its interim results today, said it will use some of the cash raised to begin the development of the ‘18 level’ decline at the Philip shaft at the firm’s Vatukoula mine on Fiji. The plan envisages the completion of the decline within two years and mining of the ore bodies there to continue for a total of five years.

The firm believes that by bringing the mine forward in this area, it should be able to mine higher-grade ore bodies, which in the medium term will increase the mine head grade. The planned decline, between the 18 level and 21 level, is aimed at providing access to the lower level Prince Dolphin and Prince William ore bodes, which have mineral reserve grades of 11.5 grams per ton and 6.7 grams per tonne respectively.

“The development programme is a key part of our long term strategy, and the management believe this area of focus holds significant potential for the future of the Vatukoula mine,” said David Paxton, the firm’s CEO.

Meanwhile, some of the funds raised will be used to fund the firm’s biomass power project. A feasibility study for this is targeted for the end of next month, and indications from Fiji Sugar Corporation are that the biomass project will be commissioned in late 2012.

The biomass project is also expected to provide between 10 and 15 megawatts to the Vatukoula mine.

In its interim results, Vatukoula said that turnover for the 12 months to 28 February increased to £25.2 million (H1 2010: £16.5 million), while pre-tax profit increased to just over £1 million (2010: £813,000).

The firm added that daily tons mined and milled have continued to increase, although Vatukoula remains behind its targeted rate. Consequently it anticipates a lower than forecast production during the third and fourth quarters of the current financial year, targeting gold production of 55,000 ounces of gold for the year to 31 August.

Vatukoula’s shares were down nine per cent at 129.25 pence each at 2:50pm.