Gold miner Millennium Minerals has been on the hunt for gold at its Nullagine site in WA’s pilbara region.

And the company says its “dedicated exploration program” has paid off.

Total ore reserves as at the end of December amounted to 375,300 ounces — a 70 per cent increase from the 2017 total of 221,600.

Extending the life

Millennium (ASX: MOY) says the prospective life-cycle of its Nullagine project has now increased to four years.

That projection is based on extrapolated 2018 production rates of 100,000 ounces (ozpa).

However, “the company’s objective is to further increase its ore reserve base to deliver a plus-five year mine life”, Millennium said.

The latest increase was driven by a new ore reserve totalling 220,000 tones. It’s expected to yield 27 grams per tonne (g/t) for a total of 27,100 ounces.

In addition to some success in its exploratory drilling programs, Millennium says it can also boost ore reserves via the conversion of existing sulphide resources.

The net result is that total production for the 2019 calendar year is now forecast at 90,000-100,000 tonnes, up from 75,000-80,000 last year.

Despite a relatively positive market update, the market was unexcited.

Shares in Millennium are down 2 per cent in afternoon trade at 22 cents — still up from around 17 cents in the middle of last year, when Stockhead columnist Barry Fitzgerald said it looked like good value.

Get on board the gold train?

Millennium isn’t the only gold mining stock to have struggled for traction, as gold prices waned near multi-year lows for much of last year.

However, the sector has come in for renewed interest in recent months amid a volatile period for global markets.

Known as a classic “safe haven” trade, capital usually flows into gold when investors shy away from riskier assets such as equities.

In light of the market ructions that rattled global investors in December, gold has climbed back above $1,800 an ounce from its mid-2018 low of around $1,600.

If it stays there, Millennium hopes to book a nice margin on its production costs; the company’s 90,000-100,000 tonne production forecast is based on a cost range of $1,300-$1,375 an ounce.

For now, investors still aren’t throwing capital at the gold miner — perhaps waiting for more evidence of consistent cash flows after the company almost sunk in early 2016, weighed down by operational problems combined with too much debt.