Argonaut Gold's (TSE:AR) shares retreated after the Mexico-focused miner posted a 12 percent decline in gold equivalent production for its second quarter.
The company produced 30,310 ounces of gold equivalent from its El Castillo and La Colorada mines in Mexico, down from 34,572 ounces in the same period last year.
Shares dropped more than 8 percent on Tuesday afternoon to C$4.19, amid a general decline in metals and mining stocks in Toronto as gold prices extended losses.
The company said it has seen steady improvement at its operations through the first half of the year, and as a result, anticipates a strong second half of 2014. At its El Castillo mine, the daily mining rate improved from 87,000 tonnes per day in the first quarter to 91,000 tonnes per day in the latest period.
At its La Colorada mine, an additional tertiary crusher was added to the crushing circuit and was commissioned at the beginning of July in an effort to further increase crushing capacity. There were a record 880,000 tonnes of crushed ore loaded to the leach pad during the second quarter.
"Operationally we have achieved marked improvement quarter over quarter in our mining and processing," said president and CEO Pete Dougherty.
"These operational improvements will lead to production increases in the 2nd half of the year as we see mining capacity and gold recovery increasing."
Argonaut is also continuing to work toward permitting at both the San Antonio and Magino projects.
"The company continues to advance all of our projects as we work to build up our production profile to join the ranks of the intermediate gold producers," the chief executive said.