Cut-Off Grade 2 (Equivalent Grade)
This article deals with Equivalent Grade and why it is so important in the mineral resource industry. The factors that are applied in the conversion of In-Situ grades (like those generated by geological block models) to Equivalent Grade are described and the calculation process that is used for the conversion is presented.
Cut-Off Grade 3 (Poly-Metallic Deposits)
In this Article I describe the complexities with calculating Equivalent Grade for poly-metallic deposits. A worked example is presented for a Copper/Gold/Silver deposit. The process used to express the Equivalent Grade in terms of any of the three major metals of interest is explained.
Cut-Off Grade 4 (Tonnage, Grade, and Costs)
In this article the concept of Cut-Off Grade is tied together with the concept of the Tonnage/Grade relationship for the resources and reserves for any given deposit. The importance of selecting the right Cut-Off Grade and how it is applied to determine the specific tonnage and grade of a deposit is explained. A simple gold deposit is used as an example for both resource and reserves estimation at any given Cut-Off Grade. The importance of accurately converting the tonnage/grade relationship from a resource to a reserve is discussed. The ramifications of getting the Cut-Off Grade wrong in determining the tonnage and grade for a deposit and the economic impact of that error is presented. Finally, the appropriate selection of the cost base used to establish the Cut-Off Grade is discussed, specifically what should be included and what should be excluded from the cost base.
Cut-Off Grade 5 (Incremental Ore)
In this article the concept of Incremental Cut-Off Grade is explored. What is incremental cut-off and incremental ore? How, when, and where should incremental ore be added into a mine plan. What happens when you can no longer deliver a full production plan at grades above the all-in-sustaining cut-off grade? Strategies to rationally apply decision making tools based on economic contributions from low grade material are presented and explained.
Cut-Off Grade 6 (Sustaining Capital)
In this article, the importance of including Sustaining Capital in the total cost used to calculate Break Even Cut-Off Grade (BECOG) is explored. In most cases, including Sustaining Capital costs in your cut-off calculations will increase your cash flow and resulting NPV.
The Money Pit and Ultimate Death Spiral of Small Scale Mines - A Rant
In this somewhat tongue-in-cheek article, I explore the challenges faced by small scale mineral exploration and development companies to find, promote, and fund the hypothetical and geologically weak "Dead Horse Deposit". I explore the lengths to which the board of directors, managment team, business investors, analysts, and investors will go to make this deposit something it is not.
A Simple Desktop Economic Analysis Tool for Underground Mining Projects
This article describes the operation of a Simple Desktop Economic Analysis Tool for Underground Mining Projects. This tool takes the results of a tonnage grade sensitivity analysis of a mineral resource at variuos Cut-Off grades and allows the user to apply basic design concepts and input parameters to rapidly evaluate the economic potential of the deposit under a selected project development strategy. The tool works with either base or precious metals. It allows the user to apply various modifying factors to the base resource to create a pool of "potentially mineable material" for analysis. The tool makes heavy use of pull down menus to populate various fields to establish Operating, Sustaining, and Capital costs for the project. It then creates a production schedule, revenue stream, and expenditure profile based on these inputs. Finally, a set of typical Cash Flow metrics are generated. The tool is simple and easy to use.