July 19 (Bloomberg) -- Shares of Oxiana Ltd., the second- biggest Australian gold miner by market value, headed for the biggest gain in two months after it said second-quarter gold production rose 75 percent and it found more of the metal.

Gold production rose to 54,906 ounces at the Sepon mine in Laos in the three-months ended June 30, Melbourne-based Oxiana said in a statement. Oxiana also said it found more gold and copper at the Sepon project in Laos and at Prominent Hill in South Australia state.

``The shares have risen on a couple of things, there's been good exploration at Sepon, they've added gold resources at Prominent Hill and the production report wasn't bad,'' Keith Williams, a Melbourne-based analyst at Wilson HTM Investment Group said. Williams kept his ``hold'' recommendation on the stock.

Oxiana has doubled the capacity of its gold plant in Laos and is also looking to benefit from rising base metals prices by planning to mine more copper. The company increased its ability to benefit from the surging prices by this month buying Newmont Mining Corp.'s Golden Grove zinc and copper mine in Western Australia for A$265 million ($200 million).

Oxiana shares rose as much as 4.5 cents, or 5.1 percent, to 93 Australian cents on the Australian Stock Exchange. The stock traded at 92.5 Australian cents at 1:42 p.m. Sydney time. A close at that price would be the stock's biggest gain since May 19.

Exploration at Prominent Hill increased gold resources by 1 million ounces to 2.6 million ounces, the company said in a statement to the exchange. The project also has 1.5 million metric tons of copper resources. Resources are estimates of contained mineral that haven't been shown by mining studies can be profitably mined.

Drilling at Sepon found ore containing as much as 4.37 grams of gold per ton and with as much as 9.7 percent copper, Oxiana said.

To contact the reporter on this story: Matt Chambers in Melbourne at mchambers1@bloomberg.net

Last Updated: July 18, 2005 23:45 EDT