Gold Plant Start-Up Performance – The Financial Impact

Gold plant performance during the start-up period, which extends until capacity production is sustained, has a major impact on the internal rate of return and the net present value of gold projects regardless of mining and processing configurations. The start-up period experiences substandard production, extra expenses, and sometimes reduced recovery. This results in lost profits, a portion of which are recouped at the end of the life of the mine. Poor start-up performance can put projects into financial jeopardy. The gold mining industry regularly experiences start-ups ranging from good to poor. Problem areas, which affect start-up performance, include shortcomings in ore reserve sampling and testing, equipment design and installation, untrained plant operators, inability to cope with problems which arise, and organization of the maintenance program. An investment, equal to 0.5% to 1.0% of plant capital cost, in programs to prepare for start-up, in advance, is recommended. Investment in such a program will make a good start-up possible. Without it the best result which can normally be expected is a fair start-up. Developers of new gold mines are urged to compare the cost of this investment with the anticipated increase in project net present value. Funds for this investment should be included in feasibility studies.