UPDATE 1-Cameco restarts Port Hope conversion plant early

* Resumes UF6 production at Ontario plant

* Had expected to resume output in third quarter

* No change to fuel services production outlook

TORONTO, June 17 (Reuters) - Cameco Corp (CCO.TO: Quote, Profile, Research) said on Wednesday it has restarted production of uranium hexafluoride (UF6) at its Port Hope, Ontario, nuclear fuel conversion facility, slightly ahead of schedule.

The uranium producer suspended production of UF6 -- used in the uranium enrichment process -- last December after failing to come to terms with its main supplier of hydrofluoric acid, which is needed to produce UF6.

Cameco said last month it planned to restart output early in the third quarter after resolving the acid supply dispute.

"Cameco continues to make progress in negotiations with other suppliers to broaden and diversify its supply base," the Saskatoon, Saskatchewan-based company said in a statement.

The restart does not alter Cameco's expected 2009 fuel services production of 8 million to 12 million kilograms of uranium, it said.

Cameco's shares were down 51 Canadian cents, or 1.8 percent, at C$28.31 on the Toronto Stock Exchange, outperforming a 4 percent decline for the S&P/TSX materials index.

($1=$1.14 Canadian) (Reporting by Cameron French; editing by Rob Wilson)