Abstract
Cut-off grade optimisation is necessary for operational decision making in the many different circumstances affecting mine operations. The cut-off grades are supposed to reflect particular circumstances of specific mines in order to achieve the maximum economic return over the life of the mine. The relationship between cut-off grade and NPV provides a means by which cut-off grades are optimised. Using Lane's approach, the economics involved in each stage are identified independently and integrated to provide an optimum cut-off grade. A block model from a hypothetical gold mine is used to illustrate how Whittle 4X applies Lane's approach to generate an optimal cut-off grade policy for the mine. The cut-off grade in this project slightly changes along the mine life. Higher grade ore is mined in the early years (years 2 and 4) while the lower grade ore is mined later.
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