Cut-off grade calculations for an open-pit mine

"The objective of this paper is to demonstrate how the optimum cut -off grade can be calculated for typical large tonnage openpit mines. In the examples, it is assumed that the concentrator tonnage is fixed and that there are no market restrictions. The mining rate is assumed to be variable. This is usually the situation at an operating property.ModellingA model of the ore body is required to examine alternate cutoff grade strategies. The model must be accurate in its relationship between grade and tonnage. Table I shows a typical relationship between ore tons and grade for various cut-off grades. The average strip ratio is also shown. For higher cutoff grades, the ore tonnage is decreased and the ore grade is increased. Strip ratio increases with the cut-off grade.Using the relationship between ton s and grade, and assuming a homogenous, long life orebody, a simple calculation of the optimum cut-o ff grade can be made. The objective is to maximize the present value of cash flows. For the long life homogenous orebody example this objective is satisfied by maximizing present cash flows.Cash flow is calculated by subtracting operating cost from revenue . Operating cost will increase with the cut -off grade as the strip ratio increases."