What was found
(CAN) FLIGHT 41, NR 1 ENG FAILURE ON CLIMBOUT SHORTLY AFTER TAKEOFF THROUGH 3200 FT ASL, CREW HEARD A BANG FROM NR 1 ENG AFTER CLIMB THRUST WAS SET & FLAPS HAD RETRACTED. CREW IDENTIFIED PROBLEM AS NR 1 ENG NOT PRODUCING THRUST & THE 'EGT' WAS PEGGED HIGH OFF GAUGE. NR 1 ENG WAS SHUTDOWN & MAX CONTINUOUS THRUST SET ON NR 2. FIRE BOTTLES NOT DISCHARGED. NO INDICATION OF FIRE OR HIGH TEMPERATURES AFTER ENGINE WAS SHUTDOWN. CREW DECLARED AN EMERGENCY & RETURNED TO YLW. A/C LANDED WITHOUT INCIDENT. INSPECTION REVEALED NR 1 ENG TURBINE BLADES MELTED DOWN TO APPROX 3 INCH STUBS. MAINTENANCE REPLACED NR 1 ENG. ENG GROUND RUNS & SYS CHECK COMPLETED. AIRCRAFT RETURNED TO SERVICE WITH NO FURTHER INCIDENTS.