Forest fires still hurting Goldcorp Musselwhite ops

Thu Jul 21, 2011 2:46pm EDT

* Goldcorp says operations at Musselwhite still halted

* Co says too early to estimate potential output impact

* Co says surface infrastructure largely unaffected

* Other mines, projects in the area not impacted by fires

By Euan Rocha

TORONTO, July 21 (Reuters) - Forest fires that forced Goldcorp (G.TO) to evacuate employees from its Musselwhite gold mine in northwestern Ontario are still having an impact on operations at the site, a company executive said on Thursday.

"We are still in the midst of a significant fire situation in northwestern Ontario near the mine," Goldcorp's head of investor relations Jeff Wilhoit said, noting that it was too early to assess the impact on 2011 production. "It is improving...but we still have quite a few fire fighters in the area."

The Canadian gold miner evacuated the majority of its 380 employees and halted mining operations at the mine a week ago, switching to site-based generator power, as the fires destroyed a section of the transmission line that supplies power to the site.

The Musselwhite mine, nearly 500 kilometers north of Thunder Bay, Ontario, is in a remote part of the province and workers at the site are typically flown in and out.

The mine produced nearly 260,000 ounces of gold in 2010 and accounted for about a tenth of Goldcorp's output.

Wilhoit said the company hopes to provide more details on the potential impact to production when it reports second-quarter results next week.

"The surface infrastructure has by and large been unaffected by the fires," said Wilhoit. "There has been some superficial damage, some charring of electric poles and some damage to electrical lines, so clearly restoring power to the site is our priority from an operations perspective."

Wilhoit said the company hoped to be able to begin to ramp up operations over the next couple of weeks as support staff start to return.

Northwestern Ontario is also home to Red Lake, Goldcorp's largest mine by far. The Ontario Ministry of Natural Resources has said crews are also fighting fires in the Red Lake area, although operations at the Red Lake mine are not impacted.

"We don't expect those fires to threaten the mine." said Wilhoit, noting that operations at its Porcupine mine in the region have also not been impacted by the fires.

Both Barrick Gold (ABX.TO), which operates the Hemlo mine in northern Ontario, and Detour Gold (DGC.TO), which is developing the Detour Lake deposit, said operations have not been impacted by the fires.

Over 300,000 square kilometers of Ontario forestland have been damaged by the fires, triggered by dry weather and strong winds. That compares with 150 square kilometers damaged in 2010, according to Ontario Ministry of Natural Resources data.

Media reports indicate that nearly 4,000 people have been evacuated from their homes. (Editing by Janet Guttsman)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.