25,000 oz. gold produced at Tulawaka in Q2

A better understanding of the ore body resulted in improved production at the Tulawaka gold mine in Tanzania during the second quarter, MDN (MDN-T) reports today.

MDN has a 30% interest in the mine with operator and 70% owner Pangea Goldfields, a subsidiary of Barrick Gold.(ABX-T, ABX-N)

The mine produced nearly 25,000 oz. gold during the second quarter from 29,000 tonnes grading 18.5 grams gold per tonne. Production for the first half of the year is about 45,000 oz. gold.

The majority of ore sent through the plant was from stockpiled ore. In total, MDN says a 108,000 tonnes of ore grading 7.5 grams per was processed at the plant during the second quarter, achieving a gold recovery rate of 94.5%.

Cash costs averaged US$363 per oz. gold over the quarter and the company received an average price of US$922 pr oz. for the 22,536 oz. gold it sold for total sales of US$20.8 million.

MDN president and CEO Paul-A. Girard says the production level and mining operations from the underground mine improved because of a better understanding of the ore body.

“This has allowed easier acces to higher grade zones and we remain optimistic that we will achieve the year’s mining plan,” Girard said in a statement.

At the end of the quarter the company still had 338,000 tonnes of stockpiled ore grading an average of 2.73 grams gold per tonne, which should take another 11 months to process. The company has been running the plant at a rate of 30,000 tonnes of ore per month due to the hardness of the rock on the stockpiles.

For the first half of 2009, 43,417 oz. gold from Tulawaka has been sold in the spot market at an average price of US$914 per oz.

Tulawaka has been in production since March 2005. The mine has produced nearly 700,000 oz. gold since then.

MDN has been doing exploration work in the surrounding area of Tulawaka as well as in Quebec.

MDN shares were up 5¢ today, or 8%, to 65¢ apiece on a trading volume of 310,000 shares.