Exco Resources (ASX: EXS) is enjoying some very healthy margins in gold production at the 75% owned White Dam project in South Australia, as operating costs remain under $500 an ounce as spot gold sits above $1400 an ounce.

During January and February the project produced 19,378 gold ounces, with the net cash flows attributable to Exco around $12 million.

This production level puts the joint venture on target for above 100,000 gold ounces in 2011.

The differentiating factor between this project and many others, is that Exco has achieved a very profitable life of project average sale price of A$1,368 per ounce, which the company said is 30% above budget.

Exco's 75% share of production to date is 51,858 ounces.

Another major benefit for Exco is the potential to extend the life of the operation, with the joint venture partners commencing a further $500,000 near mine exploration program.

Resource modelling analysis of White Dam has led to the completion of an updated resource estimate containing:

- Depleted to end of 5.99 million tonnes at 1.00 grams per tonne (g/t) gold for 192,899 ounces September 2010, cut off 0.3g/t gold; or
- Un-depleted 7.82 million tonnes at 1.02g/t gold for 257,567 ounces, cut off 0.3g/t gold.

Ordinary Kriging completed the resource estimate.