Differential Cut-Off Grades

Detailed underground mine design and optimisation studies undertaken by the author over the past few years have clearly demonstrated that additional value can be created by varying the cut-off grade (COG) spatially throughout a deposit as well as over time. This additional value can be particularly significant for marginal operations. This paper, by way of worked examples, illustrates the conceptual and practical considerations of applying a differential cut-off policy for an underground mine to both maximise value and manage risks associated with production and metal price volatility. Consideration is given to both the design stage of a new mine and to the strategic and practical application of a differential cut-off policy in an operating mine.