Mine and processing operations were temporarily suspended at Nullagine for part of February as a precautionary measure ahead of Cyclone Rusty.

While the operation was unscathed by the cyclone, Millennium said February’s output had been affected.

In a release to the Australian market today, Millennium confirmed that the outperformance of the mine for March had put the company’s operations for the March quarter back onto guidance of 18,000-20,000 ounces.

The Nullagine operation managed to establish a new monthly record for total volume mined and hauled at 22,000 bank cubic metres, 15% above budget.

A new record for gold output was set, with gold dor&#233 poured for March amounting to 8300oz with fine gold production estimated at 7250oz after the processing of 141,000t of ore during the month, representing an 18% jump from the prior record.

“The latest performance demonstrates the mines operational capability in meeting or exceeding its nameplate production parameters,” Millennium said.

During March, Millennium also started delivering its price protection program, selling 4050oz at an averaged hedged price of $A1634 per ounce, up from the average spot price received of $1536/oz.

Millennium made the first gold pour from its 1.36 million ounce Nullagine project last October with commercial production being declared in February.

Early production guidance for this financial year was set at 78,000-83,000oz at a design throughput of 1.5 million tonnes milled.

However, production could be boosted with the company targeting an expansion from the current design throughput to at least 1.7Mtpa for FY13.

In a note, Patersons Securities resources analyst Tim McCormack said all was going well operationally for Millennium. He believed its March quarter production forecast of 19,700oz would be matched or exceeded.

Patersons has retained its buy recommendation for the company with a price target 5c per share.

Millennium plans to release detailed production, cost and cash flow performance in its March quarterly report in the coming weeks.

Millennium had started repaying its debt facilities following a $1 million repayment towards the end of March. At the end of the month, Millennium held about $11.5 million in cash and cash equivalents.

Shares in Millennium dropped 4.8% to 2c.