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Wesdome Gold Mines Ltd raised its annual production outlook, citing strong gold production and bullion sales in the third quarter, sending its shares up 5 percent.

The company said it expects to produce more than 90,000 ounces of gold in 2009. In August, Wesdome had projected production of 80,000 ounces of gold.

The Canadian gold producer said third-quarter production was 26,000 ounces of gold, bringing year-to-date production to about 75,000 ounces.

“The third quarter and fourth quarter were expected to be much weaker than the first quarter and second quarter, and therefore this result is a positive surprise,” analyst Michael Fowler at Loewen, Ondaatje, McCutcheon wrote in a note.

“The reason for the strong performance was due to high average grades of 14.5 grams per tonne gold,” added Fowler, who raised his price target on the stock to C$3.50 from C$2.60.

The company’s Eagle River mine produced 17,000 ounces and Kiena mine produced 9,000 ounces of gold in the quarter.

“The grades that they are mining from Eagle River mine looks to be very good, approaching on average half an ounce per tonne,” Jennings Capital analyst Peter Campbell said.

Wesdome said the very strong preliminary third-quarter production results and favourable underlying economic conditions are expected to translate into a strong third-quarter financial performance.

Bullion sales in the third quarter totaled C$21.4 million ($20.7 million), with 20,000 ounces sold at an average price of C$1,071 per ounce.

At Sept. 30, unsold bullion inventory stood at 16,000 ounces, with a market value of C$17.2 million.

Shares of Wesdome were up 4 Canadian cents at C$2.02 Monday morning on the Toronto Stock Exchange.

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