UPDATE 2-Ontario forest fire halts gold projects

Fri May 25, 2012 5:27pm EDT

* State of emergency declared in Timmins, Ontario

* Brigus Gold mill shutdown by power outage

* Lake Shore Gold halts mine operations due to smoke

* Brigus shares down 1.2 pct, Lake Shore down 2.2 pct

* 45 forest fires across Ontario, authorities say

TORONTO, May 25 (Reuters) - Two more Canadian companies - Brigus Gold Corp and Lake Shore Gold Corp - have joined the list of miners halting operations in northern Ontario as dozens of forest fires caused power outages and forced evacuations in the region.

Brigus suspended gold production at its Black Fox mill near Timmins, about 700 kilometers (450 miles) north of Toronto, because of a power outage. The company expects electricity to be restored early next week, it said on Friday.

Its Black Fox mine, some 30 km away, is still operating, and the company is stockpiling ore to be processed once power comes back online, the company said in a statement.

Smoke from a forest fire about 15 km southwest of Lake Shore Gold's Timmins West project forced it to halt operations there on Thursday. The underground mine remains temporarily closed.

"We canceled the day and night shift for tomorrow, and then it's just day to day after that," company spokesman Mark Utting said.

Lake Shore sees no impact from the fire on its production forecast right now, as it has large stockpiles of ore available at both its Bell Creek mill and Timmins West mine. Operations at Bell Creek, east of Timmins, have not been affected by the fire.

There are now 45 fires active in the province, 43 of which are in the northeast region, according to the Ontario Ministry of Natural Resources website.

The blaze near Timmins has led the city to declare a state of emergency. About 120 people have been evacuated in the area.

Dry conditions and strong winds have set off the fires, which have also threatened areas near Kirkland Lake, east of Timmins.

Shares of Brigus closed down 1.2 percent at 84 Canadian cents on Friday on the Toronto Stock Exchange, while Lake Shore's stock slid 2.2 percent to 88 Canadian cents.

ON WATCH

Goldcorp Inc, Canada's second largest gold producer, said it was monitoring the situation closely at its Porcupine mine in Timmins. The gold mine produced 273,100 ounces in 2011.

"At this time, since we are located on the east part of town, we are currently not at risk of losing any infrastructure. Should the degree of risk to our people and property change, our staff will take action," said spokeswoman Christine Marks.

A spokeswoman for St Andrew Goldfields Ltd, which owns mines northeast of Kirkland Lake, said forest fires in the area have not affected its operations.

Earlier this week, fires near Kirkland Lake, 600 km north of Toronto, caused power outages and disrupted operations at mines owned by Kirkland Lake Gold Inc and AuRico Gold Inc . The fires damaged electricity lines used to power mining and milling operations at the sites.

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