DEER LODGE (AP) -- Louisiana-Pacific Corp. has signed a letter of intent to sell its Deer Lodge sawmill to Sun Mountain Logging for an undisclosed amount.

Officials said employees were told Thursday of the deal with Sun Mountain, which is owned by state Sen. Sherman Anderson, R-Deer Lodge, and his wife, Bonnie. No immediate changes have been announced. The mill employs 261 workers.

''We will continue to operate in a normal fashion," said manager Mike Nelson.

Louisiana-Pacific and the Andersons said they hope to have the sale completed by early October.

Louisiana-Pacific announced plans to sell some of its assets in May 2002. In the fall, Louisiana-Pacific took the mill off the market, but continued talking to prospective buyers.

''We had some real viable buyers because of the job our people are doing," Nelson said.

Sherman Anderson said he wanted to buy the mill because of its importance to Deer Lodge, Butte, Anaconda and other area communities. He said the mill is already a successful business and does not need any changes.

''Even though some of it is relatively new to me, I've been close enough to know what it entails," Anderson said. ''I know that I have the capacity to make it work and pay out and, at the same time, try to retain the stability of what the mill brings to the area."

Anderson has been in the timber business since 1965. Sun Mountain Logging was established in 1976 and employs 35 to 40 people.

The Deer Lodge sawmill was established in 1961 and bought by Louisiana-Pacific in 1973. It has an annual payroll of more than $7 million.

The sawmill has an annual production capacity of 125 million board feet of 2x4 and 2x6 boards. A finger-joint plant that is also part of the operation has an annual production capacity of 110 million board feet.

In May, Louisiana-Pacific announced the planned closure of its sawmill in Belgrade, effective on Friday.