Xtract Resources (LON:XTR) expects profits at its Chepica mine in Chile to be running at US$500,000 per month by August, it said today.
In May, the mine made its first profit, but is now on track to achieve a profit margin of 60% by the end September. That compares to a previous forecast of a 35% margin.
Xtract added it expects to maintain this level of profitability, while quarterly revenue from the third quarter onwards should comfortably exceed its earlier estimate of US$1.2mln per quarter.
Open pit mining commenced in March and is continuing on two open pit areas, with a third open pit area currently being prepared for mining. In total, throughput should reach 10,000t by September.
Xtract raised £4.75mln through placings in March and May and will use US$700,000 for underground support, new development and on-mine exploration.
A further US$500,000 will be spent on on-mine exploration and drilling in the next three months.
Xtract also committed to developing the Colin, Francisco and Theoni prospects, in addition to a fourth prospect, Chepica Main.
Jan Nelson, chief executive, said: "We are absolutely delighted with the excellent progress made at Chepica over the past few months and that we are on track to exceed forecasted revenue and profit for Q3 2015, as we committed to investors as part of our fundraising.”
Shares rose 4% to 0.355p.