Operating Decisions Based On Cash Flow Analysis

Maintaining overall optimum profitability at a mine site necessitates constant reassessment of operating strategies. In essence, each strategy is a particular combination of envisaged capital expenditure, income flow and elapsed time. Selecting a strategy, based on profita¬bility potential requires each contemplated strategy being subjected to discounted cash flow analysis; even with a computer such analysis can be cumbersome. The chapter discusses a 'shortcut' technique which assigns profitability rankings to alternate strategies and iden¬tifies those aspects of a. strategy which impact heavily on profitabil¬ity. This technique can yield quick assessments of sufficient accuracy for many operating strategy decisions. taken on site at on-going mines.