1
24-081
Selection and Application of Cutoff Grades in Underground
Mine Planning—Practical Application
John Barber
JC Barber LLC, Prescott, AZ
Paul Schmidt
Stantec Consulting Inc., Chandler, AZ
ABSTRACT
This paper discusses the determination of cutoff grade
(COG), including all revenue and cost factors and how
to apply the COG in the world of engineering studies
and mine planning for underground mines. It provides
the engineer with important considerations and practical
methods to establish COG and methods of using the COG
in the work of mine planning, including the application of
Mineable Stope Optimizer (MSO) software which is avail-
able on several 3D mine planning packages.
INTRODUCTION
Why this Paper is Required
The authors, in the course of their work, have seen wide
variations of how COGs are developed and applied while
evaluating and planning underground mines. We recognize
that one set of practices will not satisfy all situations but do
believe that methodology can be more clearly defined than
we have experienced. This paper is not intended to revise
the strategic work of Lane, Rendu, and others, but to look
at the issue at a more granular level, after the global and
strategic issues are addressed. Some may consider this paper
a refresher on basic mine cost engineering and economics.
Definition of Cutoff Grade
From SME Mining Engineering Handbook: “Cutoff grade is
traditionally defined as the grade that is normally used to
discriminate between ore and waste within a given ore body.
This definition can be extended to differentiate various ore
types for different metallurgical processing options.”
Ultimately, the COG is determined by economics (i.e.,
the economic value [revenue] of the contained material
must exceed a certain threshold).
Another way of considering COG is that it defines the
boundary between ore and waste, or is the minimum grade
used to plan mining operations.
From the perspective of the mine planner, there may
be more than one COG that must be considered in his/
her work.
• Break-Even COG (Incremental) – the minimum
grade that recovers all direct mining, process, and
site costs. It includes in-stope (ore) development,
but does not include level or access development, or
any capital recovery. The break-even COG is used to
refine stope shapes and mineable outlines but should
not be used to determine mineable shape.
• Planning or Design COG—the minimum grade
that recovers all operating costs (direct mining,
required stope specific access development, process-
ing, and site costs). Normally, a stope should not be
included if it will not meet this grade. This should
be the minimum COG used in reporting mineral
reserves. The planning COG is the starting point for
determining mineable shapes.
24-081
Selection and Application of Cutoff Grades in Underground
Mine Planning—Practical Application
John Barber
JC Barber LLC, Prescott, AZ
Paul Schmidt
Stantec Consulting Inc., Chandler, AZ
ABSTRACT
This paper discusses the determination of cutoff grade
(COG), including all revenue and cost factors and how
to apply the COG in the world of engineering studies
and mine planning for underground mines. It provides
the engineer with important considerations and practical
methods to establish COG and methods of using the COG
in the work of mine planning, including the application of
Mineable Stope Optimizer (MSO) software which is avail-
able on several 3D mine planning packages.
INTRODUCTION
Why this Paper is Required
The authors, in the course of their work, have seen wide
variations of how COGs are developed and applied while
evaluating and planning underground mines. We recognize
that one set of practices will not satisfy all situations but do
believe that methodology can be more clearly defined than
we have experienced. This paper is not intended to revise
the strategic work of Lane, Rendu, and others, but to look
at the issue at a more granular level, after the global and
strategic issues are addressed. Some may consider this paper
a refresher on basic mine cost engineering and economics.
Definition of Cutoff Grade
From SME Mining Engineering Handbook: “Cutoff grade is
traditionally defined as the grade that is normally used to
discriminate between ore and waste within a given ore body.
This definition can be extended to differentiate various ore
types for different metallurgical processing options.”
Ultimately, the COG is determined by economics (i.e.,
the economic value [revenue] of the contained material
must exceed a certain threshold).
Another way of considering COG is that it defines the
boundary between ore and waste, or is the minimum grade
used to plan mining operations.
From the perspective of the mine planner, there may
be more than one COG that must be considered in his/
her work.
• Break-Even COG (Incremental) – the minimum
grade that recovers all direct mining, process, and
site costs. It includes in-stope (ore) development,
but does not include level or access development, or
any capital recovery. The break-even COG is used to
refine stope shapes and mineable outlines but should
not be used to determine mineable shape.
• Planning or Design COG—the minimum grade
that recovers all operating costs (direct mining,
required stope specific access development, process-
ing, and site costs). Normally, a stope should not be
included if it will not meet this grade. This should
be the minimum COG used in reporting mineral
reserves. The planning COG is the starting point for
determining mineable shapes.