Optimisation of Cut-off Grades During Design of Underground Mines

The theory of declining optimimum cut-off grades is more than 25 years old, but for a number of reasons it is still not widely used in industry. A lack of faith in the veracity of estimated grades is not in itself a reason to abandon any attempt to optimise cut-off grades. The use of declining cut-off grades has been thought to cause high-grading, but in fact this is only true if an artificially high discount rate is used in the calculations. Perfect application of an optimum cut-off grade should ensure that only ore generating more than a minimum net return is mined, and that as much as possible of the ore capable of generating that return is mined. Therefore differing mining costs in different parts of some underground mines necessitate local modifications to cut-off grade. Optimisation of cut-off grade is of necessity an iterative process. Integration of that process into a feasibility study need not be excessively time-consuming. A number of approximations can be made to speed the optimisation (any attempt to achieve a high level of accuracy is probably doomed to failure by a lack of precise cost and price projections). A procedure is outlined for optimising cut-off grade during planning of a typical underground mine.