May 14, 2012 / 7:58 PM / 6 years ago

UPDATE 1-Osisko says repairs underway at fire-hit mill

* Clean-up, repairs underway after mill fire last week

* Company to give details on restart later this week

* Shares down 12.3 pct at C$6.49 on TSX

* Analysts expect lower output, cut share-price targets

May 14 (Reuters) - Osisko Mining Corp said on Monday that clean-up and repair work is underway at its fire-damaged Canadian Malartic mill in the province of Quebec, but it did not give details on when the gold project’s mill operations would restart.

The miner said it expects the mill to restart in the near term and that a timetable would be provided later this week. Mining activity was not affected by the fire.

Osisko’s shares were down more than 12 percent at C$6.49 on Monday on the Toronto Stock Exchange, after numerous analysts cut their price targets for the stock.

The share price has dropped about 21 percent since a fire disrupted operations at the mill last week. The project was already taking longer than expected to ramp up to full production.

BMO cut its target on the stock to C$11 from C$15 late on Sunday, and re-introduced a speculative designation on its “outperform” rating due to technical uncertainty.

“The company is currently reviewing production guidance, which BMO Research believes will be cut significantly given the ramp-up issues and delays combined with the impact of the fire at the mill,” BMO Capital Markets analyst John Hayes wrote in a note to clients.

Macquarie Equities Research cut its price target on the stock to C$12 from C$14, while CIBC slashed its target to C$15.50 from C$23.

Osisko had forecast 2012 gold output of between 610,000 and 670,000 ounces. 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.

$1=$1.00 Canadian Reporting by Julie Gordon; Editing by Peter Galloway

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