The document discusses factors to consider when determining an optimal production rate for a mine. It notes that the maximum rate yields the greatest financial return due to fixed costs, but a mine that is too small will not recover invested capital quickly enough. It also states that a larger mine size requires more upfront development time before seeing cash flow and that the mine life should be at least 7 years to allow for corrections and flexibility. Finally, it presents two formulas for relating production rate to ore reserves and annual deepening based on mine characteristics.

1. PRODUCTION RATE From the purely financial side - the maximum rate yields the greatest return due to the fixed cost involved in mining If the mine size is too small, the operating profit will be too small to recover invested capital and necessary return over the first few years of operation For underground mines the production rate varies from 40000 t/year up to 5 Mt/year

2. PRODUCTION RATE On the other hand : Greater mine size requires a greater development before production and so the capital would be invested over a longer period of time before a positive cash flow is achieved If the production life of the mine is too short there will be : insufficient opportunity to correct plant defects or operating inefficiencies, insufficient time to exploration of deeper levels of the deposit insufficient flexibility to react to market fluctuation Minimum production life of mine is about 7 years

3. ANNUAL GOLD PRICES

4. PRODUCTION RATE Thus : No magical formula can be applied to determine the ideal production rate Statistically the production rate is related to the ore reserve

5. PRODUCTION RATE Taylor formula (1986) where : T - mine tonnage rate, tons per operating day T r - diluted ore reserves, tons D yr - number of days per year of operation at full capacity,  250

6. PRODUCTION RATE Average annual deepening formula where : T - mine tonnage rate, tons per operating day h y - average annual deepening, m per year S - horizontal section of orebody, m 2  - ore density, t/m 3 D yr - number of days per year of operation at full capacity,  250 days k r - recovery k d - dilution k dip - dip correction factor k width - width correction factor

7. PRODUCTION RATE Correcting factors k dip and k width Average annual deepening, m/year