Course

Cut-off Grades & Mine Strategy Optimization

Level: Introductory
Facilitators: 
Eric Frazier, AMC Consultants
Andrew Hall, AMC Consultants

Abstract:
Many technical planning staff and executive decision makers in the mining industry do not realize how critical the selection of cut-off grades is to their company’s success. The goals implicit in the cut-off derivation are the de facto company’s goals, regardless of what the chairman or president might tell the shareholders! Yet commonly used cut-offs derived by break-even calculations are virtually guaranteed to not maximize, for example, profits or net cash flow measures.
This introductory and foundational course is designed to remove the mystique surrounding cut-off grades. It initially describes increasingly complex cut-off models that progressively account for costs and prices (break-even cut-offs stop here!), the grade distribution of the resource, and the capacities and capabilities of the mining equipment and treatment plants. It then demonstrates how the optimum cut-off policy and all other key value-driving decisions should be based on the results of a comprehensive evaluation focused on delivering the company’s and other stakeholders’ goals. Counterintuitive to many is the common discovery that optimum cut-offs are often unaffected by cost and price assumptions or changes and may vary over time and from place to place within the deposit. Cut-offs are an output from the planning process, not a predetermined input into it.
The techniques described also identify robust plans that manage the trade-offs between upside rewards and downside risks if the assumptions underlying the plan turn out to be wrong, as they inevitably will be! Misconceptions and objections are discussed and results from case studies presented.

Short Course Objectives:
Through a combination of theory and case studies the course will provide attendees with an overview of different methodologies used to calculate cut-off grades and their benefits and limitations. The course will also introduce mine strategy optimization as a means to determining the optimal cut-off grade. 

Target Audience: 
Engineers and geologists throughout the industry involved in mine planning and the estimation of Mineral Resources and Mineral Reserves; Finance and investment personnel. 

About the instructors: 
Eric Frazier, MEng, P.Eng. Principal Mining Consultant, AMC Consultants Eric is a professional mining engineer with 15+ years’ experience in mine planning, project evaluation and economic modelling across multiple underground mining methods and commodities. His experience includes 11 years working at operating mines in Ontario, followed by 3 years in a corporate role for an intermediate multi-national base metals mining company. Eric joined AMC Consultants in 2023 where he focuses on mine strategy optimization. This work involves working with clients to understand how their corporate vision influences the operating strategies for their operations and evaluating the impacts of multiple strategic levers to identify the optimal operating strategy for each asset. This work commonly includes determining the optimal cut-off grade for either the overall mine or individual areas within the mine.
Andrew Hall, Managing Director, AMC Consultants with more than 30 years of practical mining and project management experience, Andrew’s primary expertise covers strategy optimization, feasibility study assessment, technical due diligence, and business improvement / transformation of underground and open pit metalliferous mines. Andrew was appointed Chief Executive Officer of AMC Consultants in 2023 and Managing Director in 2024. Andrew has extensive experience conducting mine strategy optimizations around the world across a wide range of commodities and mining and processing methods throughout the project life cycle. Prior to being appointed Chief Executive Officer, he was the Executive Lead - Advisory, where Andrew was instrumental in advancing the AMC Hill-of-Value® process for mine strategy optimization.