assumed that “we will find the money for later once cashflow begins.” During start-up and ramp-up the number of maintenance and operations personnel required is often about three times the number required after steady state operation at full design rate has been achieved. Unfortunately, this is frequently realized too late, impacting the ramp-up schedule and effectiveness, impairing the business case and wearing out the team. This cascades into increasing costs and time, potentially impacting customers expecting the off-take quality and quantity. 6. IMPLICATIONS FOR INDUSTRY To illustrate the impact of ramp-up performance on realization of value, the present authors have developed a simplified financial analysis for a hypothetical gold processing facility with a capital cost of US$397 million to show how Net Present Value (NPV) is a function of the McNulty Curve Series. For financial comparison, we have assumed that these hypothetical projects continued operations for 30 years (we acknowledge that Series 4 projects will likely be abandoned earlier). NPV was calculated using a discount rate of 10%; a high NPV is considered the best outcome. Figure 3 presents the results. It is seen that a Series 2 result destroys almost half of the Series 1 NPV. This clearly shows the impact of ramp-up performance (i.e., production revenue over time) on NPV. Figure 3 – Understanding the implications of ramp-up performance on NPV. Achieving Series 1 ramp-up performance protects the business case, whereas a Series 4 ramp-up performance destroys it. 202
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