MINERAL sands miner Iluka Resources has continued its run of good news, boosting full-year production guidance as it attempts to take further advantage of soaring zircon and titanium dioxide prices.

Because of higher grades and good operating performance at its Murray Basin mine, Iluka said it was expecting to produce 550,000 tonnes of zircon this year, up from the 500,000 tonnes forecast.

Production guidance for Iluka's titanium dioxide feedstocks -- rutile, synthetic rutile and ilmenite -- all rose, adding to the zircon boost to lift total mineral sands guidance from 1.4 million to 1.545 million tonnes.

Importantly, Iluka's cost guidance of $560 a tonne remained unchanged.

The guidance increase was announced with a strong second-quarter production report in which zircon production rose 4 per cent from the previous quarter to 141,100 tonnes, rutile rose 17 per cent to 73,800 tonnes and ilmenite rose 9 per cent to 199,400 tonnes.

Grades were also higher.

That "generated improved production outcomes, enhancing Iluka's position as a key supplier of zircon and high-grade titanium dioxide in markets that are undersupplied", Iluka said.

Iluka's share price surged 230 per cent in the past year as the company lifted zircon production to record levels at the same time mineral sands prices were rising after years of global underinvestment in new mines.

Yesterday, Iluka's shares rose 59c, or 3.5 per cent, to $17.44, just shy of their June 16 $17.62 record.

Iluka said second-quarter revenue jumped 52 per cent from the previous quarter to $343.9m, bringing first-half revenue to $570.2m -- a 50 per cent jump on last year's first half.

Credit Suisse analyst Matthew Hope said second-quarter revenue had beaten his estimate of $337m, despite lower physical sales because of delayed shiploading. This implied higher realised prices, he said.

Iluka increased capital expenditure guidance from $100m to $179m, partly because of plans to increase production.

Full-year zircon sales were expected to be 5 per cent lower than production and rutile was forecast to be 15 per cent lower because the company planned to hold over volumes in reserve for a planned 2012 mine move at the Murray Basin project.