Precious metal junior Mandalay Resources (TSE:MND) said it's on track to reach production guidance of between 138,000 and 163,000 ounces of gold equivalent for 2017 after it posted first quarter stats.
The miner, which produces gold, antimony and silver in Australia, Chile and Sweden, expects production to ramp up in coming months along with sales.
In the three months to end March it produced 32,481 ounces of gold equivalent from the three mines - Cerro Bayo, Bjorkdal and Costerfield - down from 39,965 ounces in the same three months in 2016.
In the previous quarter (to end December), it produced 31,293 ounces.
Sales of gold equivalent ounces came in at 34,801 ounces in the latest quarter, down from 40,808 ounces in the first quarter of 2016.
Mark Sander, president and chief executive of Mandalay, told investors: "First quarter sales were within the guidance range given in the press release on Feb. 16, 2017, and we expect improving production at all sites in the balance of the year to support higher sales in the coming quarters."
At Costerfield in Australia, in subsequent quarters, output is seen to lift as grades are forecast to increase as it extracts higher-grade stopes in the Cuffley and N lodes later in the year, he said.
At the Swedish Bjorkdal mine, in the first quarter, production of higher-grade underground ore was limited due to a bottleneck of underground haulage.
"Additional underground loading and haulage capacity was added at the end of March, which is expected to directly increase the stope production and in turn increase the rate of delivery of high-grade underground ore for the remainder of the year," said Sander.
Initiatives at Cerro Bayo...
He went on: "Operationally, Cerro Bayo has implemented a number of initiatives to generate cost reductions and improve operational efficiency.
"Mine production during the first quarter of 435,076 ounces of silver and 2,735 ounces of gold demonstrates significant quarter-over-quarter progress compared to production of 365,214 ounces of silver and 2,807 ounces of gold in the previous quarter."
Sander said he expected to see Cerro Bayo production in Chile continue to grow in 2017 as a greater number of development headings and production stopes become available from the Coyita mine.
"As well, we have optimized plant shift schedules to reduce costs and match the planned ore production of the mine," he added.
Shares in Toronto were unchnaged at $0.59.