UBC Theses and Dissertations

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UBC Theses and Dissertations

Cut-off grade optimization of open pit mines with multiple processing streams Pettingell, Michael Nash


In this study, dynamic cut-off grades and multiple processing streams are used to maximize the value of a mining project based on a finite resource. Optimal cut-off policies are generated using Lane’s method for determining cut-off grade. By maximizing the present value of future profits as a function of cut-off grade, mine project value is increased over the traditional break-even approach. A method for determining multiple cut-off grades at a single deposit was applied to analyze the impact that changes in processing capacity have on NPV. It was found that additional capacity related to a separate mill facility resulted in an economic reclassification of ore and waste. Grade tonnage data used in the case study was simulated to represent the geologic uncertainty associated to low-grade mineral deposits. Results from the hypothetical case study examined in this thesis reveal that a low-grade open pit gold mine will benefit from the use of multiple processing streams when a dynamic cut-off policy is applied. Particularly, when incorporating a “high grade” modular processing stream to maximize the potential revenue of the mineralized material. This means that for a given set of design, production and geological parameters, the classification of ore and waste is what ultimately determines the NPV of a mining project.

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