Production rose 18% to 13,360 ounces of gold, while all-in sustaining costs fell 38% to A$2012 an ounce.
The company expects the positive trend to continue in the current quarter.
Production for the month of September was 5205oz at AISC of $1833/oz.
Several months' worth of high-grade stockpiles are available for processing and are continuing to build up.
Wiluna said it expects to generate operating cashflow of about $4 per month, based on production of around 5000oz per month.
"During the quarter the company took positive steps towards securing strong transitional cashflows to support sulphide development and commissioning of concentrate production aimed for October 2021," Wiluna executive chairman Milan Jerkovic said.
"Our current free-milling operations have been de-risked significantly via the build-up of high-grade stockpiles from the Williamson mine and margins are expected to increase as the company's operating cost base trends lower."
Wiluna had $13.2 million cash at the end of September, up from $11.4 million three months earlier.
Net debt was $4.7 million as the company started drawing down on a facility to fund the sulphide expansion, which will be repaid by delivering 699oz of gold over 12 months.
The sulphide expansion is expected to lift production to about 120,000oz per annum by this time next year.
The company reported sulphide exploration success during the quarter with hits including 118m at 1.46 grams per tonne gold and 40m at 3.09gpt gold.
Recently updated resources at Wiluna stand at 7.3 million ounces at 1.6gpt gold.
Wiluna shares were up 3.5% to $1.78, valuing the company at $178.8 million.