With the first shipment through the Port of Adelaide due next week, the company has also resumed concentrate shipments to BHP Billiton’s Olympic Dam mine and is currently supplying more than 10% of its total production to its closest customer.

OZ Minerals chief executive and managing director Terry Burgess told a conference call this morning the company would be increasing shipments over the coming quarter from both ports in a bid to reduce the 20,000-tonne stockpile.

He said the decision to also use the Port of Adelaide was made to bring some optionality and flexibility into the business.

“But our preference, as it is the shortest distance for our customers, is to go through Darwin,” he said.

Copper from Prominent Hill will remain at current levels of around 110,000 tonnes per annum.

The increased gold production, compared to the previous guidance of 80,000-90,000oz, has had a positive impact on production costs.

OZ Minerals is now forecasting average cash costs for 2010 of US80-90c/pound, compared to 85-95c/lb previously.

Elevated precious metal production was due to mining and treatment of higher grade gold ore than planned with 506,000t grading 2.3 grams per tonne achieved.

Most of the gold ore was included in the Prominent Hill resource, however, not as part of the current mine plan.

The company intends to introduce a fourth mining fleet to the open pit over the next two years to increase ore supplies to the mill and reduce unit mining costs by expediting the stage three and four pit cutbacks.

The fleet, which will include an additional excavator and associated trucks, is expected to be operational by the fourth quarter.

Strong copper production was a feature of the company’s March quarter with 31,909t produced in concentrate, along with 41,572oz gold and 202,017oz silver.

The higher copper result was due to good recoveries, which averaged 89%.

Mill utilisation for the quarter was around 88%, well below plan and due to a five-day power outage caused by a severe storm, but the plant did achieve rates above its nameplate capacity of 1000 tonnes per hour with 1150tph achieved.

Total ore milled during the period reached 2,208,192t, down from 2,285,890t in the December 2009 quarter.

Total concentrate sold in the quarter of 40,614 dry metric tonnes was down on the 66,627dmt sold in the December 2009 quarter.

As for the underground feasibility study, work is continuing with a decline planned in the second half of the year to allow further drilling of the Main Underground and Western Gold deposits and to provide access to the Western copper deposit.

Three rigs were operated on the Western copper deposit during most of the quarter, providing information for the current underground mining studies.

Going forward the company will have seven rigs in operation.

High-grade results from the program included 23.5m at 6.40% copper from 438.8m, 157.8m at 2.645 copper from 355.5m, 135m at 4.07% copper from 305m, 50m at 2.56% copper from 337m, 122.6m at 4.65% copper from 336m and 130m at 2.47% copper from 340m.

On the regional front, 13 holes for 8000m targeted 13 prospects – Taurus, Calisto, Bluebird, Peculiar Knob North, White Hill North, White Hill, Nicholl Well, Neptune, Mt Hawker, Pluto, Scylla, Triton and Umbriel.

The one sour note for the group was 13 recorded injuries during the three months, including five lost-time injuries, compared to only two lost-time injuries for the 2009 calendar year.

Shares in OZ Minerals were up 4.51% in morning trade to $A1.27.