The Punitaqui division includes the Cinabrio copper mine, as well as a swag of Tamaya's other exploration tenements in northern Chile.

In its update, the company said mine production was up more than threefold from June 2007 and this figure confirmed the successful implementation of a new mine plan, designed to target higher-grade ores.

Mined production reached 85,298 tonnes at a 1.33% copper head grade in June, after reaching a high of 85,570t at a head grade of 1.07% copper in May.

The company said it plans to upgrade maintenance functions at the plant, and positive results are expected to show in the second half of 2008.

The upgrade will begin by the end of this month and will involve the installation of mill 10.

The plant is expected to be commissioned after a three-month project schedule, but will not operate at full capacity due to a bottleneck at the filters.

The problem will be addressed as part of a production ramp-up in 2009, but the new mill will process an additional 300-500 tonnes per day in the meantime.

Despite the fall in tonnes mined, plant production was up, reaching 73,361t with 73.4% copper recovery in June, after hitting 80,189t at a recovery rate of 71.8% copper in May.

The company is looking to increase production to 4000tpd, taking monthly production targets to around 120,000t per month.

Despite increased production, Tamaya reports that cash costs have reduced to $US2.15 per pound ($A2.20/lb) in June, 10% lower than the March quarter.

The company said the trends of higher production and lower cash costs should continue in the September quarter.

The Punitaqui total resource stands at 11.6Mt grading 1.3% total copper, which holds a contained 156,000t of copper.

Earlier this year, Sydney-based Tamaya revealed plans to dual-list on the Toronto Stock Exchange later in 2008.

Shares in the company were last trading 8.33% or 0.5c up to 6.5c this morning.