Cut-off grade (COG) is a standard, industry-accepted method used to determine which part of a mineral deposit to include in a Mineral Resource or a Mineral Reserve estimate, or potentially in an operation’s Life of Mine Plan (LOM). It is the minimum grade (or value) at which mineralized material can be economically mined or processed. The selected COG is essentially a trade-off between the revenue (inclusive of losses) that the potentially-economic material contributes to the mine’s cash flow vs. the cost to extract that same material. COG is an essential parameter for determining reserves, for generating production and business plans, and ascertaining the potential profitability of a stope or open-pit bench.
Selecting the correct COG is essential. It affects the mine plan, cash flow, mine cost, sustainability and profitability of the operation. However, the work required to generate the optimum COG is often not given the requisite attention and diligence.
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