The Duketon operations in Western Australia produced 80,090 ounces of gold in the December quarter at all-in sustaining costs of $A951 an ounce.

Costs were below the lower end of full-year guidance of $980-1050/oz.

Quarterly production was up by 7% quarter-on-quarter due to an 11-12% improvement in grades at Garden Well and Rosemont, as well as the introduction of ore from the new Gloster mine.

First half production totalled 154,702oz, putting the company on track to meet FY17 guidance of 300,000-330,000oz and exceed FY16 production of 305,084oz.

Mining at the new Erlistoun pit began during the December quarter, with ore sent to the Garden Well plant for processing in the current quarter.

Duketon generated cash of $64.5 million during the December quarter, up from $59.6 million, despite a lower gold price.

The company sold 71,092oz gold at an average price of $1719/oz, down from $1765/oz in the September quarter.

Cash and bullion increased by $26.6 million to $129.7 million after expenses including $7.7 million for pre-strip mining and $2.4 million in start-up capital for Gloster and Erlistoun, $2.6 million for the Rosemont cutback, and $6.8 million on exploration at Duketon and McPhillamys in New South Wales.

Regis drilled 56,473m during the quarter, with potential development McPhillamys getting some attention for the first time in a while.

The company drilled 7250m at McPhillamys, with some significant results.

Diamond infill drilling returned 58m at 2.74 grams per tonne gold from 45m; 121m at 1.22gpt gold from 156m; 83m at 1.43gpt from 214m; 95m at 1.38gpt from 257m; 106m at 1gpt from 195m; and 62m at 1.58gpt from 23m.

The results will be used to update the 2.2 million ounce resource.

Exploration at Duketon focused on Rosemont and Tooheys Well.

At Rosemont South, results included 2m at 108.5gpt gold from 125m; 4m at 27.29gpt from 162m; and 2m at 51.26gpt from 103m; while drilling under the Rosemont main pit delivered 4m at 82.05gpt from 249m; 4m at 33.54gpt from 280m; and 13m at 8.19gpt from 274m.

Tooheys Well drilling highlights included 41m at 2.91gpt gold from 93m; 19m at 2.1gpt from 63m; 5m at 22.81gpt from 52m; 42m at 2.28gpt from 161m; 8m at 4.85gpt from 71m; and 10m at 3.82gpt from 56m.

Regis shares opened 3.2% higher at $3.17 and are up by around 6.7% so far this year.