Cutoff Grades & Life of Mine (LOM)

Cutoff grades determine the minimum grade or quality of ore that must be extracted and processed to make a mining operation economically viable. By setting the cutoff grade appropriately, mining companies can ensure that they are extracting and processing ore at an attractive margin and leveraging the net present value of the site. In some cases, portions of the ore body may be left behind until market conditions or productivity gains make that 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 mine operations. 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 is a constantly moving target which requires world class mining systems and disciplines.

Key Client Challenges:

1. How do we accurately determine the quantity and quality of ore reserves available to determine a mine’s economic viability and lifespan?
2. How do we optimize cutoff grades for ore processing to maximize profitability and minimize waste extraction?
3. How do we plan optimal resource extraction using suitable and available technologies?
4. How do we create a production schedule that helps us plan the sequence and timing of ore extraction, waste removal, and processing activities effectively?
5. How do we effectively plan for mine closure and land reclamation to ensure responsible and sustainable mining practices?
6. How do we incorporate sustainability practices and ESG into our life of mine plan (LOMP) for effective integration into our entire framework and policies?
7. How do we establish positive relationships with local communities and address their concerns effectively to maintain our social license to operate?

Optimizing cutoff grades in life of mine planning 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 profitability of the operation even after closeout.

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 with ongoing optimization can give mining companies the competitive edge they need to balance cutoff grades with net present values of mines for maximum productivity.

Our experts at Unison Mining can work with your teams to adopt and fully utilize existing and new data and analytics tools to determine optimal cutoff grades, incorporating real-time monitoring and automation for accuracy and opportunities to maximize profitability. By enhancing your existing processes, systems, KPIs and controls, we work with your teams to incentivize the behavior changes that can drive full adoption of these solutions and encourage full employee buy-in for lasting, sustainable change.