Agnico-Eagle reeling from Nunavut mine fire

A wayward wolverine may be to blame for a fire that burned down the kitchen at Agnico-Eagle Mines Ltd.'s Meadowbank gold mine in Nunavut earlier this month, forcing the company to scale back production.

No one was injured in the March 10 fire, in which the mine's camp kitchen facilities were completely destroyed.

However, Agnico-Eaglewas forced to lower Meadowbank's production targets and send at least 300 of its workers home while the kitchen is being rebuilt.

President and chief operating officer Eberhard Scherkus told CBC News the kitchen fire has cost Agnico-Eagle about $18 million in direct costs, and Meadowbank is expected to produce 14 per cent less gold this year.

Scherkus said it appears the problem that led to the fire began with a frozen pipe under the kitchen.

"One of our electricians went underneath to repair the heat trace, and he was unable to complete the job," Scherkus said Tuesday.

"The following day, when he did go to repair the heat trace, there was a wolverine under it. So he did not go to repair it, for obvious reasons. And within the next day or so, we had a short circuit and it went up in flames."

Production target lowered

Agnico-Eagle announced on Tuesday that it has changed its 2011 production target to 310,000 ounces of gold, down from earlier estimates of 360,000 ounces.

The company's stock dropped by $1.40 on the Toronto Stock Exchange at the end of trading Tuesday.

The Meadowbank mine is about 110 kilometres north of Baker Lake in Nunavut's Kivalliq region. Officials have said the mine's kitchen prepared meals for up to 400 mine workers.

For now, a temporary kitchen is being used at an exploration camp about 10 kilometres away to feed a skeleton crew that's being kept on-site to keep the mine's mill running.

All non-essential staff were sent home shortly after the fire occurred, but Scherkus said the mine should resume full production later this week.