WPG Resources Ltd (ASX:WPG) recovered 14,124 ounces of gold during the March quarter from its Challenger and Tarcoola mining operations in South Australia.
The company is guiding the market to June year end annual production from Challenger and Tarcoola of between 58,000 and 60,000 ounces of gold.
March quarter all-in sustaining cash costs (AISC) were $1,577 per ounce and are expected to fall materially in the final June quarter.
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During the quarter WPG and its top-tier mining contractor Byrnecut have been working to optimise mining operations at Challenger and Tarcoola, and milling operations at the Challenger processing hub.
The Challenger underground mine entered a transition period during the March quarter, with a new mine planning structure being put into place.
Notably, mining commenced in the virgin Challenger Deeps section of the mine, marking the achievement of a substantial milestone for WPG.
Tarcoola open pit delivering high grades
Tarcoola is located 165 kilometres by road from the Challenger processing mill to which the ore is trucked.
Ounce production records were broken February and March with recover gold in the quarter from Tarcoola of 5,300 ounces and over 21,000 tonnes hauled to Challenger.
The Tarcoola pit enjoyed its best quarter life to date, with strip ratios decreasing as well as achieving access to the first of the very high-grade material in the mine.
Margins expected to improve as costs fall
Total gold revenue from bullion sales was $23.6 million at an average gold price of $1,682 per ounce.
AISC are expected to fall in the June quarter to around $1,400 per ounce and recovered ounces are expected to rise to around 22,500.
Exploration continues at Challenger Deeps and Tarcoola
The focus of future exploration activities at Challenger for the next three months will focus on Challenger Deeps.
Drilling is planned to recommence late April 2018 targeting Challenger West and Aminus ore shoots.
Drilling is also planned at the Deliverance zone at Tarcoola this quarter after high-grade drill results revealed high-grade potential.