Osisko's Canadian Malartic returns to full operation, but fire damage to stock price is 25%
Osisko Mining Corporation announced on Tuesday that its Canadian Malartic mill returned to full operational status on Saturday evening.
Osisko stock was down another 3.7% today despite the positive news and has now lost 25% of its value since the fire at the Quebec mine was first reported on May 9th.
Production rates are still at ramp-up levels but have now returned to the pre-fire range and according to a statement Sunday throughput production totaled 41,000 tonnes and Monday's 39,000 tonnes following completion of temporary repairs to the damaged number 4 cyclone set.
Osisko announced that equipment and building damage from the fire is estimated between $6 and $8 million and that it is expects the costs of the physical damages to be fully covered subject to a $250,000 deductible.
Permanent repairs of the damage will continue over the next three to four months, with the eventual replacement of the number 4 cyclone. Repairs to the damaged overhead crane and the mill roof will also be completed during this period with minimal impact on production.
The Canadian Malartic mine has 10.7 million ounces of gold reserves according to the latest resource estimate released in March, 2011. The mine in the Abitibi region of Quebec started producing in June of last year and Osisko estimates it will extract about 9 million ounces up to 2027.
The company is valued at $2.6 billion on the Toronto big board and sits on a cash pile of $144 million.