[Update] Forest fires threaten Kirkland Lake, Timmins

VANCOUVER — Raging forest fires that ignited near the towns of Kirkland Lake and Timmins in north-eastern Ontario have forced residents from their homes, and impacted four regional gold operations, as fire crews and the Ministry of Natural Resources combat the seasonal blaze.

Authorities evacuated roughly 300 people from homes and cottages located in the Goodfish and Nettle Lake areas near Kirkland Lake on May 22, as provincial police closed Highway 144 southwest of Timmins, and limited westbound traffic on Highway 101.

A fire within 30-km of Timmins forced the town of 43,000 residents to declare a state of emergency late May 24, leading to the evacuation of 225 people from outlying communities,

“We have a fire that’s out of control, it’s the biggest fire in Ontario so we are on guard, that’s for sure,” Timmins Mayor Tom Laughren told CTV News.

Crews continue to fight the fire with helicopter water dumps and pumper trucks. Ontario’s Ministry of Natural Resources reported late May 24 that the Timmins fire is exhibiting “extreme behaviour” due to strong winds. Fires near Kirkland Lake have been partially subdued, though a number of dangerous “hot spots” continue to cause concern.

The region has a long history of gold mining, with the Kirkland Lake-Timmins region now home to four active gold operations.

AuRico Gold (AUQ-T, AUQ-N) operates its Young-Davidson mine roughly 70 km west of Kirkland Lake, while Kirkland Lake Gold’s (KGI-T, KGI-L) flagship Macassa facilities lie on the western edge of the township.

Brigus Gold‘s (BRD-T, BRD-X) Black Fox mine is roughly 30 km east of Timmins, and Lake Shore Gold (LSG-T) operates the Timmins West mine 18 km east of the town.

AuRico announced on May 21 that a power disruption at Young-Davidson had impacted its operations.

A fire passed roughly 70 km east of AuRico’s mine site, and reportedly damaged several power poles feeding its main 115-kilovolt (kV) power supply. The company is currently using an unaffected 44-kV construction line, and Ontario Hydro-One is attempting to have full services up and running within the week. AuRico reported no adverse affects to its open pit operations, which continue at normal levels, but ore processing has been suspended.

The company expects Young-Davidson to hit commercial production in the third quarter, with a 2012 production guidance of between 65,000 and 75,000 oz. gold at average costs of $450 to $550 per oz. The mine poured first gold at the end of April, and its mill has exceeded operating expectations with a throughput rate of 5,300 tonnes per day through the first two weeks of May.

On May 24 Brigus’ Black Fox Mill was also hit by power interruptions that caused a suspension of milling operations and gold production. The company reported no damage to its infrastructure, and continues to stockpile ore for processing once its mill is back up and running. Despite the temporary suspension of milling operations, Brigus remains confident it will meet its second quarter production target of 18,000 to 21,000 oz. gold and will release production numbers for the quarter in early July.

“As always, the health and safety of our employees is our top priority and we are taking every step to ensure no one is at risk. Our thoughts go out to all those who have been affected,” said Wade Dawe, president and CEO of Brigus.

Kirkland Lake Gold suspended production activities at its Macassa gold mine on May 21. The fire reportedly passed close to the company’s property and mill, though no infrastructure was affected outside of a power line feeding the mill and damages to its three-shaft complex. Kirkland subsequently closed down mining operations and evacuated its facilities, leaving behind a skeleton crew “to keep the site secure, monitor the situation, and assist government and utility efforts as required.”

Kirkland’s regional gold operations have current throughput levels of 1,450 tonnes per day, and the company expects its mine to produce between 105,000 and 200,000 oz. of gold this year. Kirkland is also in the process of a US$20 million expansion program that would increase milling capacity to 2,200 tonnes per day and pump up gold production to 250,000 to 300,000 oz. per year by 2014.

The company released an update on May 23, indicating that operations would be down for at least a week, citing May 30 as the earliest date it could expect production workers to be back on the job.

Kirkland is taking the unexpected shut-down in stride, using the production delay to complete maintenance and project work that require electrical shutdowns, including a priority three-day hoist motor maintenance job.

Lake Shore’s Timmins West operations were suspended on May 24 following smoke exposure on-site caused by high winds in the area. All surface and exploration work have been put on hold, though Lake Shore maintains a stockpile of 16,000 tonnes of ore for processing, which represents roughly eight days of production. The company reports another 6,000 tonnes of ore on surface at Timmins West, and 35,000 tonnes of low-grade material at its mill.

“In terms of production, with the large stockpile we have at the mill we expect there to be no impact on our processing activities,” commented president and CEO Tom Makuch. “Our production guidance for the second quarter and full year 2012 remain unchanged.”

Help arrived from other jurisdictions late May 24, as 80 firefighters and an incident management team from British Columbia arrived, and additional waterbombers from Newfoundland and Manitoba were mobilized.