December 12, 2011 / 3:18 PM / in 7 years

UPDATE 2-Fire River Gold suspends Alaska mine operations

(Adds COO and analyst comments; updates shares)

* Bad weather conditions hamper fuel-supply flights

* Mine, mill operations stopped to conserve fuel

* Shares fall as much as 19 pct

By Shounak Dasgupta

Dec 12 (Reuters) - Fire River Gold Corp said it will temporarily shut down operations at its Nixon Fork gold mine in Alaska to conserve fuel, as bad weather prevented fuel-carrying aircraft from landing at the site.

Shares of the Canadian gold explorer fell 19 percent to a lifetime low of 19.5 Canadian cents on Monday on the Toronto Venture Exchange.

“The main effect is it delays our revenue, because we are not producing gold right now,” Chief Operating Officer Richard Goodwin said in an interview.

The Nixon Fork mine, which is the company’s only active project, started operations in July, and is expected to produce 50,000 ounces of gold per year once it reaches its full capacity by summer 2012.

The company said it was looking to increase the fuel storage capacity at the site, located in the Tintina Gold Belt — a 200-km (125-mile) wide and 1,200-km (750 mile) long arc extending from northern British Columbia to southwest Alaska.

“It has been really heavily snowing and heavily windy up there for some time now,” COO Goodwin said.

For ferrying fuel to the site, the company completely relies on aircraft, which have not been able to land at the site for 10 days.

“Weather conditions (in Alaska) are not usually very good. But 10 days is kind of extreme,” Loewen, Ondaatje, McCutcheon analyst Michael Fowler said.

“In the longer run, it doesn’t really have much effect (on the company.)” (Reporting by Shounak Dasgupta in Bangalore; Editing by Esha Dey)

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