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Cutoff Grades & Life of Mine (LOM)

Determine optimal cutoff grades to maximize net present value of mining projects

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Overview

Cutoff grades determine the standards or quality of ore that must be extracted and processed to make a mining project economically viable. By setting cutoff grades appropriately, mining companies can proceed confidently with extraction and ore processing for attractive margins, enhancing the net present value of mining projects. In some cases, portions of the ore body may be left behind until market conditions or productivity gains make the extraction viable.

Setting the right cutoff grade allows mining operators to optimize the use of their finite mineral resources. Managing this effectively requires close communication and flexibility between mine planning and operations teams. As processes become more efficient, mining costs are reduced and ore previously left behind may be unlocked.

However, due to constant market fluctuations in the value for metals and minerals, as well as unpredictable geological conditions, the economic viability of mining operations and the determination of cutoff grades shift constantly. As such, systems and processes need to be effectively implemented to determine optimal cutoff grades according to these shifting factors.

Key Client Challenges

How do we accurately determine the quantity and quality of ore reserves available to determine a mine’s economic viability and lifespan?

How do we optimize cutoff grades for ore processing to maximize net present value of mining projects even with constantly shifting geological conditions?

How do we create a production schedule that helps us plan the sequence and timing of ore extraction, waste removal, and processing activities effectively?

How do we incorporate an integrated life of mine planning (LOMP) process for sustained profitability and productivity?

How YCP Unison Can Help

Optimizing cutoff grades presents opportunities for mining companies to enhance profitability, resource utilization, and sustainability. When considering the entire lifecycle of the mine, including closure and reclamation costs, determining cutoff grades is an important step, potentially extending the life of the mine and ensuring sustained profitability of the operation.

However, it is important to regularly review and update cutoff grades as new information becomes available, including changing market conditions or technological advances. A dynamic, integrated life of mine planning process with ongoing optimization can give mining companies the competitive edge they need to balance cutoff grades with net present values of mining projects and determine economic viability.

Our experts at YCP Unison provide life of mine planning consulting services to help your mine stay profitable throughout the mining lifecycle. Our team helps you fully utilize data and analytics tools to determine optimal cutoff grades, incorporating real-time monitoring to identify opportunities.