PERTH (miningweekly.com) – ASX- and TSX-listed Troy Resources on Friday reported that its $45-million Casposo gold/silver project, in Argentina, was on schedule to produce its first gold in the September quarter, less than 12 months after construction started.

The company said in its March-quarter report that work was continuing on all areas of the Casposo plant, with the commissioning of the crusher conveyor section expected in late May, and the commissioning of the remainder of the facilities in June and July.

Mining of the initial Kamila pit was progressing as planned, with the aim of having about one-month of mill feed on the run-of-mine (ROM) stockpiles before the mill starts production.

“The highlight for this quarter has again been the exceptional progress at Casposo,” CEO Paul Benson enthused.

The plant had been delivered to and assembled on site, while progress had also been made on finalising the updated mining reserve and production schedule, which would be released in May.

“We also have had success with in-fill drilling at the Julieta structure and expect to release an initial resource for this deposit in the June quarter,” he added.

In the last resources update for the project, Troy estimated that the Casposo project hosted an indicated mineral resource of more than 2,3-million tons, grading at 5,4 g/t gold and 201,7 g/t silver, for 602 500 oz contained ounces.

The indicated resources for the project consists of 414 600 oz gold and 15,3-million ounces silver, at an average grade of 7,9 g/t gold.

But Benson also noted that Troy had lowered its production guidance for the Andorinhas mine, in Brazil, to 30 000 oz for the 2010 financial year. This was because the company continued to mine in the low-grade areas of the mine, with higher stoping grades only coming on line during June.

“We expect production in the 2011 financial year to be significantly higher,” Benson said.

The Andorinhas plant treated 58 329 t of underground ore, and produced 6 633 oz of gold for the quarter. This was up from the 6 463 oz in the previous comparable period.

Gold production at the Sandstone project, in Australia, decreased to 7 994 oz, down from the 8 074 oz produced in the previous corresponding period, and from the 10 112 oz produced during the December quarter.

At Sandstone, Troy finished mining the Lord Nelson pit during the quarter and processed low-grade stockpiled material. The company has one last pit to mine, the small tonnage, medium-grade Eureka deposit.

Production from the mine was expected to cease, and the mine to be put on care-and-maintenance, during the September quarter.

Troy reported 14 627 oz of gold production for the quarter and also announced that it had signed a A$25-million revolving debt facility with Investec Bank (Australia). The company said it held A$27,6-million in liquid assets.