Fire disrupts operations at Osisko's Quebec mill

Thu May 10, 2012 3:29pm EDT
 
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TORONTO (Reuters) - Osisko Mining Corp said a fire has disrupted operations at its Canadian Malartic mill in the province of Quebec and estimated it would take two to three weeks to get the gold-processing facility up and running again.

No industrial chemicals or toxic gases were released during the fire and all staff have resumed mining activities in the pit outside the mill, the Montreal-based company said.

The fire, which began late Wednesday night, was extinguished in the early hours of Thursday morning.

Osisko initially informed investors about the fire before the opening bell on Thursday, sending its shares sliding more than 11 percent in early trading.

Osisko shares pared losses through the day and the stock was down 2.9 percent at C$8.15 before being halted ahead of an update issued by the company.

In the update, the company said it plans to use the coming days to perform some maintenance operations at the mill that were originally scheduled for later in the year.

The fire caused limited damage to some equipment, but the company said its SAG mill, ball mill and other systems do not appear to have been damaged.

There were about 50 employees at the mill but no one was injured when the fire broke out, said the company, which is set to report first-quarter results on Friday.

Malartic, Osisko's only operating mine, reached commercial production last year and is expected to produce between 610,000 and 670,000 ounces this year. The company also owns the Hammond Reef Gold Project in Northern Ontario.

Shares of the company pared losses further after trading resumed on Thursday afternoon, with the stock down less than 1 percent at C$8.31.

(Reporting By Euan Rocha in Toronto and Bhaswati Mukhopadhyay in Bangalore; Editing by Frank McGurty)