Canadian Zinc Corp. said Tuesday that Vatukoula Gold Mines plc, in which it holds a 20 per cent stake, has reported an increase in gold production for its quarter ended May 31.

The company said as a result of an increase in underground mine production and higher mining grades, Vatukoula saw gold production for the quarter increase by 17 per cent to 8,711 ounces from 7,470 ounces in the previous quarter.

The increased gold production reduced the cash cost per ounce to US$680 per ounce for the third quarter from US$915 per ounce in the second quarter, Canadian Zinc said.

Canadian Zinc is developing its Prairie Creek Mine in the Northwest Territories.

The company also holds approximately 548 million shares of Vatukoula.