Quarterly gold production reached 61,191 ounces of gold, up 9% over the same half of last year.

That was largely thanks to a record quarter at Fosterville in Victoria of 37,245oz at a record mill grade of 7.5 grams per tonne gold.

Fosterville achieved record recoveries of 90.8%, as did Cosmo in the Northern Territory at 94.2%.

Production for the first half was 119,248oz gold, ahead of guidance of 205,000-220,000oz.

The strong performance boosted the company’s cash balance by 34% to $US69.9 million after investing around $3.6 million in growth capital.

Newmarket has been conducting an aggressive exploration program at Fosterville to grow resources and reserves, with eight rigs in operation.

The company advanced 121m on growth development to complete a drill drive off the Harrier decline to establish a platform for drilling to test down-plunge extensions of the Phoenix and Lower Phoenix gold systems.

It comes after drilling late last month hit the first recorded visual gold at the Harrier South system.

Results included 3.4m at 22.13gpt gold and 3.35m at 10.3gpt gold.

“Entering the second half of 2016, Newmarket Gold is well positioned with a strong balance sheet, essentially no debt, record Q2 2016 operating results, unhedged production with the Australian denominated gold price averaging $A1689/oz over the quarter, and an experienced leadership team that is focused on creating shareholder value,” Newmarket president and CEO Douglas Forster said.

“As a result of our strong first half operating results, Newmarket is reviewing 2016 production and cost guidance with the view to revising guidance when the company announces our Q2 2016 financial results on July 29, 2016.”

RBC Capital Markets is forecasting Newmarket to report free cashflow of $US17 million for the second quarter.

“Newmarket remains one of the top free cashflow generators, and we estimate a free cashflow yield of 14% in 2016 versus the Tier III average of 2.3%,” RBC analyst Stephen D Walker said yesterday.

Newmarket is capitalised at nearly $C700 million in Canada.

Its chief financial officer Robert Dufour will speak at Diggers & Dealers in Kalgoorlie next month, in the company's debut at the forum.