How is a mine cutoff grade used to decide which material should be mined?

The mine cutoff grade is a critical economic threshold used to distinguish between profitable ore and waste material within a mineral deposit.

Because the concentration of valuable minerals—referred to as grade—varies throughout a deposit, operators must determine the minimum grade required to cover the costs of extraction and processing. Material with a grade higher than this threshold is classified as ore, while material falling below it is considered waste and is generally not mined.1

Determining this cutoff involves balancing several economic factors:
* Extraction Costs: These depend on the chosen mining system, level of mechanization, and the depth or accessibility of the deposit.1
* Market Value: The expected price of the commodity plays a direct role in defining what is economically viable to extract.1
* Break-even Grade: This represents the specific point where the combined costs of mining and mineral processing are exactly equal to the revenue generated by the material.1

Ultimately, the cutoff grade ensures that mining operations remain financially sustainable by prioritizing the removal of material that provides a positive economic return.1