2
By comparing crustal abundance to an element’s concentra-
tion within a deposit, exploration geologists can begin to
set thresholds to identify anomalous targets. Such anoma-
lies also suggest geological processes that concentrated these
elements, forming potential mineral deposits (Moon et al.,
2006). Table 1 and Figure 1 show the concentration of trace
elements (ppm, except where noted) within the upper con-
tinental crust, compiled from Rudnick and Gao (2003),
Hu and Ga o (2008), and Park et al. (2012).
CUT-OFF GRADE IN MINERAL
EXPLORATION
Understanding the cut-off grades of mineral deposits being
actively mined is one criterion to determine if concentra-
tions in an exploration target is high enough. Unlike eco-
nomic cut-off grade which determines whether a mineral
deposit is profitable to mine, preliminary cut-off grade
attempts to assess the potential viability of a mineral deposit
in its exploration stage. This is necessary for exploration
teams to determine whether to allocate more resources for
further exploration work based on how the project com-
pares with metrics from similar existing projects in active
production.
DETERMINANTS OF CUT-OFF GRADE
The size (tonnage) of a mineral deposit plays a key role in
defining cut-off grade. Large deposits will generally give
more flexibility to mine lower grades due to economies of
scale, which could make lower grade deposits with large
tonnages economically viable. Conversely, small deposits
require higher cut-off grades in ensuring profitability due
to cost in mining and processing smaller volumes of ore.
Variations in mining and processing methods also
affect cut-off grades of different mineral deposit types.
Brine lithium deposits, such as Salar del Hombre Muerto
in Argentina and Salar de Atacama in Chile, both contain
lithium in saline groundwater, which generally rely on solar
evaporation to concentrate lithium over time. Lithium-
bearing pegmatites contain lithium as spodumene or other
lithium minerals where traditional mining and processing
techniques are required to exploit the deposit. Due to the
lower cost associated with brine deposits, they generally have
lower cut-off grades, ~200 mg/L (Zheng, MP, et al., 2023),
while pegmatite lithium deposits require higher cut-off
grades between 0.4% and 1.0% Li2O (Patriot, 2023 SEC,
2023) due to high cost of mining and processing of the ore.
Additionally, the cut-off grade of a mineral deposit
is affected primarily by the economic value of its associ-
ated by-products and co-products. For instance, niobium,
uranium, or zirconium can be recovered as byproducts in
some REE deposits. These byproducts tend to increase the
profitability of the deposit and can reduce the cut-off grade
of the primary REE. The Bayan Obo deposit is the world’s
largest REE resource and also contains iron and niobium as
co-products. Revenues from the iron ore production ulti-
mately subsidize the REE production cost, thereby reduc-
ing the economic burden on REE extraction (Castor &
Hedrick, 2006)
METHODOLOGY
In determining the cut-off grade of critical minerals for fur-
ther exploration work, a review of minerals deposits of active
operating mines of either the same or similar types were
conducted. These deposits were classified into three cat-
egories (low, medium, and high targets) based on their eco-
nomic cut-off grades. The classification serve as benchmark
for establishing thresholds for exploration cut-off grades.
Exploration grade thresholds are set at least 90% of the low-
est cut-off grade observed in operating mines of similar or
comparable deposits. By benchmarking to known operating
grades, this ensures exploration efforts align with realistic
economic and operational standards thereby minimizing the
risk of pursuing sub-economic grades (Rendu, 2014).
COMPARISON WITH EXISTING
MINERAL DEPOSITS
In determining the exploration cut-off grade for critical
minerals, it is essential to compare prospective deposits
with known operating mines of either the same or similar
deposits. This process of benchmarking will help set realis-
tic expectations for determining cut-off grades reasonable
enough to justify further exploration.
For instance, the Mountain Pass mine, which is among
the most significant REE deposits in the world, is a car-
bonatite-hosted REE deposit with TREO cut-off grade
between 2–3% (SEC, 2021) and an average grade of ~8%
(NS Energy, 2020). The Bayan Obo deposit in China is
the largest REE deposit in the world, accounting for about
70% of global REE production (Statista, 2023). It is also
a carbonatite-hosted deposit with an average grade of ~5%
TREO (Castor &Hedrick, 2006). While its TREO cut-off
grade is not explicitly stated, it is expected to be lower than
that of the Mountain Pass deposit. Comparatively, similar
deposits with TREO cut-off grade around 1% may be con-
sidered significant, particularly when sustained by favorable
recovery rates and large-scale operations.
Lithium deposits occur either as brine or pegmatite
deposits whose concentration of lithium is usually reported
as Li2O% for pegmatite deposits or milligrams per liter
(mg/L) in brine deposits. Salar de Atacama mine in Chile is
By comparing crustal abundance to an element’s concentra-
tion within a deposit, exploration geologists can begin to
set thresholds to identify anomalous targets. Such anoma-
lies also suggest geological processes that concentrated these
elements, forming potential mineral deposits (Moon et al.,
2006). Table 1 and Figure 1 show the concentration of trace
elements (ppm, except where noted) within the upper con-
tinental crust, compiled from Rudnick and Gao (2003),
Hu and Ga o (2008), and Park et al. (2012).
CUT-OFF GRADE IN MINERAL
EXPLORATION
Understanding the cut-off grades of mineral deposits being
actively mined is one criterion to determine if concentra-
tions in an exploration target is high enough. Unlike eco-
nomic cut-off grade which determines whether a mineral
deposit is profitable to mine, preliminary cut-off grade
attempts to assess the potential viability of a mineral deposit
in its exploration stage. This is necessary for exploration
teams to determine whether to allocate more resources for
further exploration work based on how the project com-
pares with metrics from similar existing projects in active
production.
DETERMINANTS OF CUT-OFF GRADE
The size (tonnage) of a mineral deposit plays a key role in
defining cut-off grade. Large deposits will generally give
more flexibility to mine lower grades due to economies of
scale, which could make lower grade deposits with large
tonnages economically viable. Conversely, small deposits
require higher cut-off grades in ensuring profitability due
to cost in mining and processing smaller volumes of ore.
Variations in mining and processing methods also
affect cut-off grades of different mineral deposit types.
Brine lithium deposits, such as Salar del Hombre Muerto
in Argentina and Salar de Atacama in Chile, both contain
lithium in saline groundwater, which generally rely on solar
evaporation to concentrate lithium over time. Lithium-
bearing pegmatites contain lithium as spodumene or other
lithium minerals where traditional mining and processing
techniques are required to exploit the deposit. Due to the
lower cost associated with brine deposits, they generally have
lower cut-off grades, ~200 mg/L (Zheng, MP, et al., 2023),
while pegmatite lithium deposits require higher cut-off
grades between 0.4% and 1.0% Li2O (Patriot, 2023 SEC,
2023) due to high cost of mining and processing of the ore.
Additionally, the cut-off grade of a mineral deposit
is affected primarily by the economic value of its associ-
ated by-products and co-products. For instance, niobium,
uranium, or zirconium can be recovered as byproducts in
some REE deposits. These byproducts tend to increase the
profitability of the deposit and can reduce the cut-off grade
of the primary REE. The Bayan Obo deposit is the world’s
largest REE resource and also contains iron and niobium as
co-products. Revenues from the iron ore production ulti-
mately subsidize the REE production cost, thereby reduc-
ing the economic burden on REE extraction (Castor &
Hedrick, 2006)
METHODOLOGY
In determining the cut-off grade of critical minerals for fur-
ther exploration work, a review of minerals deposits of active
operating mines of either the same or similar types were
conducted. These deposits were classified into three cat-
egories (low, medium, and high targets) based on their eco-
nomic cut-off grades. The classification serve as benchmark
for establishing thresholds for exploration cut-off grades.
Exploration grade thresholds are set at least 90% of the low-
est cut-off grade observed in operating mines of similar or
comparable deposits. By benchmarking to known operating
grades, this ensures exploration efforts align with realistic
economic and operational standards thereby minimizing the
risk of pursuing sub-economic grades (Rendu, 2014).
COMPARISON WITH EXISTING
MINERAL DEPOSITS
In determining the exploration cut-off grade for critical
minerals, it is essential to compare prospective deposits
with known operating mines of either the same or similar
deposits. This process of benchmarking will help set realis-
tic expectations for determining cut-off grades reasonable
enough to justify further exploration.
For instance, the Mountain Pass mine, which is among
the most significant REE deposits in the world, is a car-
bonatite-hosted REE deposit with TREO cut-off grade
between 2–3% (SEC, 2021) and an average grade of ~8%
(NS Energy, 2020). The Bayan Obo deposit in China is
the largest REE deposit in the world, accounting for about
70% of global REE production (Statista, 2023). It is also
a carbonatite-hosted deposit with an average grade of ~5%
TREO (Castor &Hedrick, 2006). While its TREO cut-off
grade is not explicitly stated, it is expected to be lower than
that of the Mountain Pass deposit. Comparatively, similar
deposits with TREO cut-off grade around 1% may be con-
sidered significant, particularly when sustained by favorable
recovery rates and large-scale operations.
Lithium deposits occur either as brine or pegmatite
deposits whose concentration of lithium is usually reported
as Li2O% for pegmatite deposits or milligrams per liter
(mg/L) in brine deposits. Salar de Atacama mine in Chile is