Savannah Goldfields (ASX: SVG) is preparing to restart mining at its higher-grade Agate Creek gold mine in Far North Queensland this quarter.

The producer said fresh approvals had cleared the way to resume mining higher-confidence ore reserves, which it expected to lift grades and cut production costs.

Queensland granted an environmental authority amendment on 7 July, allowing expanded mining, with a drill-and-blast contractor due on site in August.

Main image: Savannah Goldfields processing plant Georgetown

Agate Creek holds an ore reserve of 460,000 tonnes at 2.5 grams a tonne for 36,800 ounces of gold.

Ore would be hauled to the company’s Georgetown Gold Processing Plant, about 100 kilometres north, once mining resumed.

Savannah was also studying, with a potential partner, a larger standalone plant to unlock Agate Creek’s broader resource of about 422,000 ounces.

Related: Red Dam rises as Savannah eyes future mining options

The company grew its gold inventory nearby, lifting resources at its Electric Light and Red Dam prospects and reporting maiden Indicated resources at both.

Red Dam rose to 396,000 tonnes at 4.6 grams a tonne for 58,600 ounces, and Electric Light to 364,000 tonnes at 3.9 grams.

Metallurgical tests indicated more than 70 per cent of the gold could be recovered through the existing Georgetown plant without modification.

Savannah maintained gold production at Georgetown through the quarter, selling 834 ounces of gold for proceeds of $5.2 million.

Gold sold for an average of $6,241 an ounce, with a further 349 ounces sold in July.

June-quarter output was held back by grade underperformance from an Inferred Resource mined at Big Reef, which lifted unit costs to a provisional $5,778 an ounce.

The company launched a review of its grade-control methods after feed grades came in below estimates, and expected costs to fall as Agate Creek reserves came on.

The Georgetown plant, the only processing facility within 400 kilometres, anchors Savannah’s hub-and-spoke strategy in a goldfield that has produced more than 10 million ounces.

During the quarter Savannah raised $1.5 million in a placement and sold royalty interests for up to $2 million, backed by DGR Global.