Cut-Off Grade Calculator

Calculate the minimum ore grade needed to cover all mining, processing, and overhead costs at current metal prices.

Cut-off grade (g/t) = total cost per tonne ÷ (metal price × recovery). At $25 mining + $15 processing + $5 G&A, $90/g gold, and 90% recovery, the cut-off grade is 0.56 g/t Au.

Calculator

Mining cost ($/t)Direct mining cost per tonne of ore: drilling, blasting, loading, and hauling.Processing cost ($/t)Mill or processing cost per tonne of ore treated.G&A / overhead ($/t)General and administrative overhead allocated per tonne of ore.Metal price ($/g)Realised metal price per gram (gold). For other metals, adjust units to match — see FAQ.Mill recovery (%)Percentage of the metal in the ore that is actually recovered to saleable product.

Break-even cut-off grade

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How it works

The break-even cut-off is the minimum ore grade at which a tonne of ore exactly covers its cost to mine, process, and sell. Material above the cut-off goes to the mill; below it goes to waste. The formula equates revenue per tonne (grade × price × recovery) to total cost per tonne and solves for grade.

Worked example

$25 + $15 + $5 = $45/t total operating cost. Gold price $90/g, mill recovery 90%: cut-off = $45 ÷ ($90 × 0.90) = $45 ÷ $81 = 0.56 g/t Au. Ore grading better than 0.56 g/t covers its costs; ore below that grade loses money.

Assumptions & limitations

This is the operating cost (internal) cut-off — it uses direct operating costs only and does not include capital amortisation, royalties, refining charges, or opportunity cost. For resource/reserve reporting or pit optimisation, apply a fully-loaded cut-off using Whittle or Lane's algorithm. Metal price should be the long-term realised price (net smelter return), not spot.

Frequently asked questions

Should I include capital costs in the cut-off grade?

For day-to-day mine scheduling decisions, the operating cost cut-off shown here is the correct one to use. For resource classification, reserve reporting, or investment decisions, include capital amortisation and sustaining capital — this raises the cut-off grade and reduces the reserve.

How do I use this for copper, silver, or other metals?

Change the metal price unit to match your commodity (e.g. $/lb or $/t for copper, $/oz or $/g for silver) and interpret the result in the corresponding grade unit. For copper at $9,000/t and 85% recovery with $40/t total cost: COG = 40 ÷ (9 × 0.85) × 1,000 = 5.2 kg/t = 0.52% Cu.

Why does a higher metal price lower the cut-off grade?

A higher price means each gram of metal generates more revenue, so lower-grade ore can cover its costs. This is why mines expand their ore envelopes when metal prices rise — material that was previously waste becomes economic ore.

What is a typical gold cut-off for open pit vs underground?

Open pit mines with low mining costs ($15–30/t) typically see cut-offs of 0.3–0.8 g/t Au. Underground mines with higher costs ($60–130/t) usually require 1.5–4.0 g/t Au. Use your actual cost structure in this calculator rather than industry averages.

Last updated 22 June 2026

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