TORONTO (miningweekly.com) – Vancouver-based Rusoro Mining increased second-quarter gold production from its Venezuelan mines by 94% compared with last year, and achieved a 50% decrease in the total cash cost an ounce sold.

Rusoro, which mines gold from its own Choco 10 mine, as well as the Isidora gold mine and mill that it owns in a 50:50 joint venture with the government of Venezuela, reported attributable production for the second quarter of 48 523 oz.

Cash costs improved to $322/oz, compared with $652/oz a year earlier.

The company ended the quarter with $58,7-million in cash, cash equivalents and short-term investments.

For the full year, Rusoro reiterated its production guidance from Choco 10 of 135 000 oz of gold 2009, but lowered its forecast cash cost an ounce to $375/oz of gold, compared with the original target of $420/oz.

Costs will be lower than expected because of improved efficiencies at the mine and mill, the company said.

At Isidora, the company still expects 2009 attributable production (on a 50% basis) of 35 000 oz.

However, the guidance for cash costs at Isidora has been adjusted upwards, to $350/oz, from a previous estimate of $290/oz, because labour costs at the mine site have increased, following the signing of a new collective bargaining agreement.

In May, Rusoro said it had received “highly encouraging” results from a preliminary assessment on expanding production at the company's Choco 10 gold mine, in Venezuela, and plans to complete a feasibility study on the expansion project by the second quarter of next year.

According to the study, the company could increase steady state production at Choco 10 to more than 500 000 oz/y, over a 12-year mine life, at average cash costs of just $331/oz.

Rusoro bought the Choco 10 mine from Johannesburg-based Gold Fields in 2007.

The Isidora operations were acquired last year from US firm Hecla Mining.

Rusoro shares jumped 9,1% on Tuesday, to C$0,42 apiece by 13:26 in Toronto.

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