Cutoff grade

Cut-Off grade is the minimum grade required in order for a mineral or metal to be economically mined (or processed). Material found to be above this grade is considered to be ore, while material below this grade is considered to be waste.

The cut-off grade can be determined through a variety of methods, each of varying complexity. Cut-off grades are selected to achieve a certain objective, such as resource utilization or economic benefit. Dividing these objectives even further gives way to specific goals such as the maximization of total profits, immediate profits, and present value. It is important to recognize that the cut-off grade is not simply calculated to a definitive answer. It is in fact a strategic variable that has major implications on mine design. The cut-off grade is adapted as the economic environment changes with regard to metal prices and mining costs, and is therefore a constantly changing. Metal value is not the only factor affecting the profitability of a block. The presence of unwanted (often hazardous) material in a block may increase the processing cost. This should also be considered when classifying waste rock and ore.

This definition is different than the break even point as the break even point define a volume or time, the cut off grade is the factor that exists in mining industry between volume and costs