Definition of Economic Pit Limits Taking into Consideration Time Value of Money

ABSTRACT; his paper proposes new methodology to define the pit limits that yield the maximum net present value (NPV) for a deposit, under a given economic scenario and for a given discount rate. The method uses an algorithm that combines dynamic programming and heuristics. It was tested for evaluating deposits with different sizes and various grade distributions. For the discount rate of zero, the results confirm that the economic pit limits are the same as that defined using Lerchs Grossman method. However, when discount rates higher than zero are used, the pit limits differ, yielding a higher NPV.