Wesdome Gold Mine saw both its operating cash flow and its all-in sustaining cost (AISC) rise in the second quarter of 2017 as the company worked to increase its reserves and head grades, and open new production areas.

The company reported AISC of $1,770/oz for the last quarter, an increase from last year’s $1,687/oz for the same time frame. But for the first half of the year AISC is down in comparison to 2016, decreasing to $1,608/oz from $1,982/oz.

CEO Duncan Middlemiss said the higher production costs are due to the company’s push to get its reserves up from an “uncomfortably close” point of about a month in inventory.

“We had a deficit of stope reserve and we’ve now brought that back to a comfortable level,” Middlemiss said the company’s second quarter earnings call on August 3. “It cost us a little bit of money upfront but we made up this ground in the second quarter. I think we’re back on track and we’re going to start to see normalization of our costs.”

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The company also reported the average grade at its Eagle River Underground mine had increased to 10.7 grams/tonne (g/t) for the first half of 2017, up from 6.6 g/t in the first two quarters of 2016. “We have shifted our focus to quality tonnes by employing stringent dilution control initiatives of enhanced cable bolting, modified stope design and narrower scoop trams to lessen the undercutting of stop openings,” said Middlemiss.

The company reported an increased operating cash flow of $10.6 million in the first half of 2017, up from $2.1 million in 2016.

The improvement is part of the company’s focus on exploring and developing new areas at all three of its properties. At Eagle drilling has been ongoing, and Wesdome vice-president of exploration George Mannard said the company has made “significant progress towards the development of an exploration ramp” at its Kiena project in Val d’Or, Quebec. The company expects to be back drilling at the Kiena Deep discovery in September or October and is drilling other underground targets in the meantime.

The company has steadily reduced its operating costs and increased revenues and production since Middlemiss took over in August 2016. Known as a “fixer,” Middlemiss told CIM Magazine in July that the company’s newfound success should be chalked up to its investment in exploration.