The Mudgee Guardian was on-site at a fire on Burrundulla Avenue in Mudgee's East on Thursday evening.
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Police have said that they are still investigating how the fire was started but confirmed the initial fire started in a shed and spread into adjoining yards. The fire brigade and police worked quickly to contain the fire.
Emergency services were on the scene including police and ambulance. No one appears to have been injured.
Nearby homes were evacuated as a precaution.
It is believed that the structure that caught fire contained some amount of fibro asbestos material.