DEVELOPMENT OF GENERALIZED CUTOFF GRADE OPTIMIZATION ALGORITHM FOR OPEN PIT MINING OPERATIONS

The determination of optimum cutoff grade is influenced by the economic parameters (price of metal, mining and processing costs, etc.), the capacities of stages (mine, mill, and refinery) in the mining operation, and the grade distribution of the deposit. The cutoff grade changes with the influence of these parameters, sometimes widely, during the life of a mining operation. The theory of optimum cutoff grades is complex. However, this problem can be solved by the availability of algorithms, which could be implemented by the computer programs. This paper presents a cutoff grade optimization algorithm, which maximizes the Net Present Value (NPV) of the mining operation subject to mining, milling, and refining constraints. The benefits of the methodology developed are demonstrated in a case study