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MINING ECONOMICS

Gold Cutoff Grade Calculator

Estimate a simplified break-even gold grade using operating cost, assumed gold price, and metallurgical recovery.

GOLD CUTOFF GRADE

Calculate Break-Even Gold Grade

Estimate the gold grade required for recovered metal value to equal a specified operating cost per metric tonne of ore.

GOLD ECONOMICS

Gold Cutoff Grade

Calculate a simplified break-even grade from operating cost, gold price, and metallurgical recovery assumptions.

USD/t

Enter the operating cost per metric tonne of ore that the recovered gold value must cover.

USD/oz t

Enter the assumed gold price per troy ounce.

%

Enter the assumed percentage of contained gold recovered during processing.

Estimated Break-Even Gold Grade

0.8712 g/t Au

Simplified break-even estimate based on recovered gold value and the specified operating cost.

Recovered Gold Value at 1.0 g/t Au

$114.78/t ore

Estimated recovered gold value per metric tonne of ore at a reference grade of 1.0 g/t Au.

Simplified Margin at 1.0 g/t Au

+$14.78/t ore

Recovered gold value minus the specified operating cost. This is not net profit.

This calculator estimates a simplified break-even grade. Actual mining and processing cutoff grades may differ due to mining methods, dilution, variable costs, recovery assumptions, capacity constraints, and other economic factors.

CUTOFF GRADE FUNDAMENTALS

Cutoff Grade Fundamentals

Understand the mathematical relationships between gold grade, operating cost, metallurgical recovery, and recovered metal value.

Break-Even Gold Grade Formula

A simplified break-even gold grade estimates the grade at which recovered gold value per tonne of ore equals a specified operating cost per tonne.

Break-Even Grade (g/t Au) = [Operating Cost (USD/t) × 31.1034768] / [Gold Price (USD/oz t) × Recovery Fraction]

This relationship assumes constant recovery, constant gold price, and no additional deductions beyond those represented by the specified cost.

Gold Grade & Unit Conversions

Gold grades are commonly expressed in grams per metric tonne (g/t Au), while gold prices are commonly quoted in US dollars per troy ounce.

One troy ounce contains approximately 31.1034768 grams. Converting between these units allows recovered gold value to be calculated per metric tonne of ore.

A grade of 1.0 g/t Au represents one gram of contained gold per metric tonne of material, before metallurgical recovery is applied.

Worked Cutoff Grade Example

Consider a gold operation with a specified operating cost of $100 per metric tonne of ore, an assumed gold price of $4,200 per troy ounce, and metallurgical recovery of 85%.

Break-Even Grade = (100 × 31.1034768) / (4200 × 0.85)

The resulting break-even grade is approximately 0.8712 g/t Au. At this grade, modeled recovered gold value equals the specified operating cost, before any additional economic deductions.

Recovered Gold Value

Recovered gold value estimates the gross value of gold recovered from one metric tonne of ore at an assumed grade, recovery, and gold price.

Recovered Value (USD/t) = [Gold Grade (g/t) × Recovery Fraction × Gold Price (USD/oz t)] / 31.1034768

At 1.0 g/t Au, 85% recovery, and a gold price of $4,200 per troy ounce, the estimated recovered gold value is approximately $114.78 per metric tonne of ore.

UNDERSTANDING CUTOFF GRADES

Understanding Cutoff Grades

Explore how operating assumptions influence cutoff grades and why a simplified break-even calculation may differ from an operational mining threshold.

Cutoff Grade vs. Break-Even Grade

A cutoff grade is a threshold used to classify or select mineralized material for a particular mining, processing, or reporting purpose.

A simplified break-even grade identifies the grade at which modeled recovered metal value equals a specified cost per tonne.

Operational cutoff grades may differ because mining decisions depend on incremental costs, processing capacity, material destinations, recovery, and broader project economics.

Operating Cost Assumptions

Operating costs may include mining, processing, site administration, transportation, and other expenses, depending on the economic model.

The cost entered into this calculator should represent the specific expenses that recovered gold value is intended to cover.

Using total site costs, processing-only costs, or incremental costs can produce different break-even thresholds. These cost definitions should not be treated as interchangeable.

Metallurgical Recovery

Metallurgical recovery represents the percentage of contained gold recovered through processing. Recovery depends on mineralogy, liberation, processing methods, and operating conditions.

Lower recovery reduces the recovered gold value per tonne of ore and increases the break-even grade when all other assumptions remain constant.

Actual recovery may vary with ore type, grade, particle size, and metallurgical characteristics. A single recovery percentage is therefore a simplifying assumption.

Gold Price Sensitivity

Gold price directly influences the estimated value of recovered metal. Higher assumed prices reduce the simplified break-even grade, while lower prices increase it.

For example, increasing gold price from $4,200 to $5,000 per troy ounce reduces the modeled break-even grade from approximately 0.8712 to 0.7318 g/t Au, assuming $100/t operating cost and 85% recovery.

Gold price assumptions are uncertain and may change over the life of a mining project. Sensitivity analysis is useful for evaluating how these changes affect economic thresholds.

APPLICATIONS & LIMITATIONS

Applications & Economic Limitations

Understand where simplified cutoff-grade estimates can be useful and which geological, operational, and economic factors require more detailed analysis.

Ore and Waste Classification

Cutoff grades may help determine whether mineralized material is directed to processing, stockpiling, or waste disposal.

However, a grade above a simplified break-even threshold does not automatically mean that material should be classified as economically mineable ore.

Material classification also depends on mining geometry, processing characteristics, costs, recovery, and the economic criteria applied to the operation.

Mining Method Considerations

Open-pit and underground mining operations may have substantially different mining costs, selectivity, dilution, and material-handling requirements.

Underground operations may require additional development, ground support, ventilation, and selective extraction, while open-pit operations must consider waste stripping and pit geometry.

These factors influence the appropriate economic thresholds and cannot be represented by a universal cutoff-grade assumption.

Dilution and Geological Variability

Mining dilution occurs when material outside the intended mineralized zone is included during extraction, potentially reducing the grade delivered to processing.

Geological variability, grade uncertainty, ore loss, and differences in metallurgical behavior may also affect the recovered value of mined material.

This calculator assumes that the entered grade relationships apply directly to processed material and does not explicitly model dilution or mining recovery.

Resource and Economic Evaluation

Cutoff-grade assumptions are important in mineral resource evaluation, mine planning, and economic studies, but they must be supported by appropriate technical and economic information.

A simplified break-even calculation does not establish reasonable prospects for eventual economic extraction, demonstrate economic viability, or convert mineral resources into mineral reserves.

Detailed evaluations may require geological models, metallurgical testwork, mining designs, cost estimates, scheduling, and economic analysis conducted by qualified professionals.