TORONTO, May 11 (Reuters) - Shares of Osisko Mining Corp tumbled on Friday after analysts slashed share-price and production forecasts on the fledgling Canadian gold miner, whose only mine cut back operations this week after a fire.
Montreal-based Osisko said on Thursday a fire had forced it to curtail operations at its Canadian Malartic mine, which began commercial production last year. It’s the latest in a series of ramp-up delays at the gold mine, already one of Canada’s largest.
Osisko, which earlier this year forecast 2012 gold output of between 610,000 and 670,000 ounces, indicated that it is now likely to trim its forecast. Malartic produced just over 91,000 ounces of gold in the first-quarter. Once the mine is fully operational, output is expected to top 700,000 ounces a year.
“This was not a good quarter for Osisko, with the mill fire adding to already-considerable woes,” Paradigm Capital analyst Don Blyth in a note to clients. “Clearly, the guidance for the 2012 production will have to be lowered.”
Osisko shares, among the most actively traded on the Toronto Stock Exchange, were down 10.8 percent at C$7.58 by early afternoon.
GMP Securities, which still has a buy rating on Osisko, cut its price target on the miner to C$13.25 from C$19.
“We have significantly reduced our 2012 expectations to 520,000 ounces of production at cash costs of $637 per ounce,” wrote GMP analyst Andrew Mikitchook, who was earlier expecting output of 595,000 ounces at $580 an ounce. (Reporting By Euan Rocha)