Tuesday, June 8, 2010

Grade Cut-Off

a. What is it?
b. What is is used for?
c. Grade cut-off curves and their uses.

Grade Cut-Off Or cutoff grade ?
A pessimist
The grade at which the mineral resource can no longer be processed at profit, or….
An optimist
The minimum grade at which the ore can be processed at profit.
A break-even grade ?

Cut-Off Grade Calculation

a. Plot of grade vs. net ore value is a straight line
b. Need to calculate the net ore value at two points and
* plot the grade-profit line
* define the equation of this line
c. Example: consider a copper deposit…..

Problem (Hustrulid and Kuchta, pp. 373 and following)

a. Calculate net profit at 0.55 and 0.35% Cu
b. Consider saleable copper obtained from 1 t of ore and define its value
c. Consider technology: recoveries at all stages lower the amount of copper
* Mill, concentrator, smelter, refinery, other
Consider all costs:
* Mining, milling, concentrating, smelting, refining, transport, sales

Do we want to include overheads ? Fixed costs ? Main office costs ?

“Sidetracking”
a. Not always do we produce the final product
* Sell a copper concentrate to Japan? Trona mine?
b. But we need to know “cash value” of product for BEG
* Cash value: all costs, fixed and variable, incurred in cash
* Include cost of refining smelting even if done by others
c. Sometimes we have by-products
* Example Bingham Canyon: Cu, Au, Ag, +++
* Related credits deducted from gross cash costs

Grade Cut-Off


Steps In Defining Each Point…
a. Define the profit (loss) per tonne of ore
b. Do the same for another ore grade
c. Construct a net value vs. grade plot
d. Determine the cut-off grade
* Cut-off grade is where the line crosses “0 profit” line

How does the stripping ratio fits here?

What Goes To The Mill ?

Grade Cut-Off vs. Stripping Ratio

Grade – Tonnage Curves
What is that ?

Grade – Tonnage Curves


Another Example


Grade-tonnage curves
a. Define the relation between tons of ore and the grade cut-off; usually:
* The lower the grade, the higher the tonnage
* The higher the grade, the lower the tonnage
b. Consider accuracy of grade / tons estimates
c. Allow for optimization of cut-off grades
* Higher grade means small mine and mill, little product
* Low grade means more capital cost but more product
d. Remember: cut-off grade is a function of changing economics!