A MONTH after restarting processing operations at the Ranger uranium mine, Energy Resources of Australia has increased its 2011 production guidance by 200 tonnes.

The company was forced to slash its production guidance to 2400t from the previous forecast of around 3800t, the same as 2010 production, after suspending its processing plant due to an above average wet season in the Northern Territory.

ERA said today 2011 uranium oxide output is expected to be 2600t.

The company suspended the plant on January 28 for an initial period of 12 weeks, but subsequently extended that period in April.

Operations restarted on June 14, giving the company just 17 production days for the June quarter.

As a result, quarterly production was just 83t from the processing of 75,000t of ore.

Production for the six months to June 30 was 601t, down 65% on last year.

One positive for the company was that mill recovery was slightly higher than the previous quarter and the corresponding period in 2010, at 88.8%.

Ore mined was 20,000t as the company was forced to focus on ore in the upper benches of Pit 3 until water levels dropped.

Mining will move deeper into the pit as the water recedes and ERA is installing and commissioning additional pond water treatment capacity to allow access to the bottom of the pit.

High-grade ore at the bottom of the pit is not expected to be reached before the December quarter.

During the quarter, the company spent $A1 million on exploration and has spent $6 million on evaluation so far this year.

A decision on the Ranger 3 Deeps decline is in its final stages of the ERA approval process and a draft environmental impact statement for the Ranger heap leach project will be submitted to the board later this year.

ERA has previously flagged a loss of $20-30 million for the six months to June 30.

ERA shares have been hit hard in recent months, falling from over $14 late last year to a 12-month low of $3.95 last month after the company lowered reserves and profit and production guidance and in the wake of the Fukushima nuclear crisis.

In its quarterly uranium outlook released earlier this month, Resource Capital Research has tipped ERA’s share price to remain volatile over the next 12 months.

Shares in ERA, which is 68.4%-owned by Rio Tinto, gained 5c this morning to $4.11.