73

GEOLOGICAL RESERVES - CUT-OFF GRADES

K F LANE

This
is
a
philosophical
paper.
It
discusses some of the concepts underlying the
estimati on of geol ogi cal
reserves and the
determination of cut-off grades.
It explores
how they i nterrel ate and how they merge
eventually
with
mine
design
and
mining
reserves.
The main intent is clarification,
particularly
in
certain
areas
where
misconceptions are common.
WHAT IS A GEOLOGICAL RESERVE?
It is usually defined as an estimate of the
mineralisation in the ground without reference
to any mining restraints. The objective of such
a reserve is to gi ve a quanti tati ve descri pti on
of the grade distributions of the minerals
,:,ithin ~ deposit based only upon sampl ing
1nformat10n.
9f course, tb~ purpose of an exploration
sampl1ng programme 1S usually the identification
and delineation of a deposit ai a potential
target for mining. However, it is important to
have methods for describing the mineralisation
whi ch are independent of mi ni ng consi derati ons.
One reas~n for this is that, in the early
stages, llttle attention may have been paid to
the feasibility of mining; another is that it
i~ often valuable to have figures which are not
b1assed by the premature imposition of mining
parameters.
The quantities quoted for a geological
r~serve are
always tonnages and grades (or
f1gures.related to tonnages and grades) in grade
categor1es. There may be several minerals or
several kinds of mineralisation; there may be
seve~al.
zones;. ~ut
the
crucial
summary
stat1st1cs descn ptlVe of a mining target are
size and quality - tonnage and grade.

mining context to define ore as distinct from

waste. Material with a grade in excess of the
cut-off grade is mined and treated as ore;
material below cut-off grade is left or dumped
as waste.
HOW DO CUT-OFF GRADES RELATE TO GEOLOGICAL
RESERVES?
The answer is that there is no direct
relationship at all.
One is an operational
parameter which is relevant only to an operating
mine, and the other is a set of statistics
describing grade variations within a deposit for
which even a preliminary proposal to mine might
not exist.
Nonethel ess the expressi on 'cut-off grade'
is sometimes applied to geological reserve
figures. Tables are compiled quoting tonnages
at different 'cut-off grades'.
These tables
actually gi ve the cumul ati ve tonnages above
certai n grade 1evel s. The expressi on 'cut-off
grade I can be gi ven a perfectly good meani ng in
this context but it is inconsistent with its
meaning in an operational mining context.
Of course, popular usage can ascribe
different meanings to the same expression in
different contexts, but the practice can be
misleading. In this case it is more than just
misleading;
it is the cause of a number of
serious misconceptions.

1.

WHAT IS A CUT-OFF GRADE?

In common us~ge, cut-off grade is an
expression which 1S used with insufficient
discrimination in several contexts. Here, as in
the book "The Economic Definition of Ore" it
will be taken as the term used in an operati~nal

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The fact that certain grade levels are

quoted as cut-off grades in geological
reserve tabul ati ons is often construed as
implying that they constitute considered
values for' an operational cut-off grade.
This is not necessarily the case at all.
The subj ect may well not have been gi ven
even passing consideration.
The grade level s for describing grade
distributions
should
be
chosen
with
reference to the range and pattern of grade
variations in the deposit. Their purpose
is to reveal the detail of the grade
distribution because this is likely to be
an
important
factor
influencing
the
economics and the choice of mining method
and mine design.

Th.e AustralasIan InSlIlute of MIning and Melilllurgy

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K F Lane

!t is true that the grade distribution may,

1n the event, affect the choice of cut-off
grade.
For exampl e, a natural
grade
boundary is an obvi ous candi date for
consideration as an operational cut-off
grade because of the convenience of
implementation.
However, there are many
other factors which are also important.
Despite the observations of the preceding
paragraphs, it was the practice some time
ago to. try to choose grade category
boundar1es which were coincident with
1i kely operati ona 1 cut-off grades.
The
motive was primarily to save work.
The
campi 1ati on of grade tonnage di stri buti ons
fo~ massive deposits was a huge undertaking
Wh1 ch coul d be simpl ifi ed if only a few
grade categori es were i dentifi ed and thei r
boundaries
were
taken
at
possible
operational cut-off grade values.
Nowadays, with computer systems for reserve
estimati on, the work content is far 1 ess
important
than
the
qua 1 ity
of
the
analysis. In these circumstances, it is a
~rave .mi s~ake to prej udi ce any subsequent
1nvest1gat1ons of the economic and mining
factors
determining cut-off grades by
1imi ti ng the range of grade tonnage data
that is available.

2.

There is the obvi ous temptati on to assume

that if a mine were to be established and
if it were to operate at one of the quoted
cut-off grade levels then the corresponding
tonnages and grades woul d be estimates of
what might be achieved. This assumption is
false for four main reasons.

i)

Geometry.
It does not follow that the
tonnage quoted as exceeding a gi ven grade
level
will
necessarily be encompassed
~ithin any feasible mine envelope.
Even if
1t were to be, all of it might still not be
recoverable because of practical mining
considerations such as access or roof
support.
Economics. The fact that material is above
the operational cut-off grade does not
necessarily mean that it will be or should
be cl assi fi ed as ore. The cut-off grade
cri~e~ion only applies at the point of
dec1s1on. In other words the material must
be accessed and ready for mi ni ng. Whether
creating the access, by, for example, stope
development underground or another' push
back in the pit, is justified is a capital
investment decision which depends upon the
quantity and average grade of the material
exposed.
It must be above the cut-off
grade, of course, to qua 1i fy as ore but
this condition alone is not sufficient:

ii)

This point is a frequent source of

misunderstanding.
Even
when
the
significance of the cut-off grade solely as
the final criterion for determining ore
~rom developed sources is accepted, there
1S often still a persisting belief that
there must be another cut-off grade whi ch
will determine whether material as yet
undeveloped shoul d be considered as ore.
This is unfortunately not the case. There
is no similar simple criterion.
Mine
design in the sense of determining the
ultimate limits of mine development is
actually
a
quite
intricate
economic
exercise.
Often it involves investment
evaluation techniques when the development
expenditure has to be incurred well in
a?v~nce of mining the ore.
Ultimate pit
llm1ts are an example; stripping may have
to be undertaken long before the ore
beneath can be mined.
i i i) Selectivity.
The
grade
tonnage
distributions have to be based upon some
assumed discrete unit size of material.
The grade measurements are associated with
these units and, statistically, the whole
deposit is regarded as aggregated of them.
In geostatistical jargon the unit is called
the
support.
Some
assumpti on
about
support,
either implicit or explicit,
underlies every mineral distribution.
The support underlying geological reserves
vari es according to the methods used for
estimating the grade tonnage distributions
and it. is often implicit.
The support
underlY1ng any grade tonnage distribution
which is used for estimating the tonnages
and average grades at different operational
cut-off grades should be of minimum mining
unit size. This is the smallest size on
which grade control is likely to be
effectively practiced and is a measure of
the sel ecti vity of the mi ni ng method.
Where the two supports differ, as is
generally the case, the geological grade
tonnage di stri buti ons must be modifi ed
before any valid conclusions about the
effects of cut-off grades can be reached.
i v) Control. In practice, grade control has to
be exerci sed through a sampl i ng programme
whi ch wi 11 introduce a further source of
variability. The imposition of a cut-off
grade
will
be
subject
to
some
misclassification, ore as waste and vice
versa, because of the inaccuracies of the
grade estimation method. This is another
cause of deviation from the geological
grade tonnage distribution.

The Australasian Inslltute of Mining and Metallurgy

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K F Lane

This
effect,
sometimes
called
the
information effect, is often referred to as
dilution although the concept of dilution
i ncl udes a component resulti ng from a
fail ure to achi eve the assumed degree of
selectivity as well as a component from
misclassification.
Also inaccurate grade
control causes some misclassification of
ore as waste which is hardly dilution.
WHAT IS A MINING RESERVE?
There appears to be 1ess of a consensus
about the definition of a mining reserve than a
geological reserve. If it is taken as being a
set of estimates of the tonnages and grades that
might be achievable in practice, then the grade
1imi ts in the di stri buti ons can be referred to
unambiguously as 'cut-off grades'. The tonnages
and grades above each 1imi tare genui ne
estimates of the consequences of worki ng to a
cut-off grade set at that limit.
RECOMMENDATIONS
In the interests of greater clarity
following suggestions are offered.
1.

2.

3.

the

The term 'cut-off grade' should not be

applied
to
geological
reserve
grade
distributions. An alternative term could
be
invented but one
is
not
really
necessary.
It is perfectly possible to
refer to a deposit as conta i ni ng an
estimated tonnage above a certain grade
without employing the prefi x 'cut-off'. In
other contexts it is never used.
For
exampl e, it woul d be strange to say, "there
are only 10% of geologists above a cut-off
IQ of 140" rather than "only 10% of
geologists have IQs above 140".
The support underlying a geological reserve
esti mate shoul d al ways be quoted, or some
standard support shoul d be agreed. There
is a strong case for the latter in order to
avoid the chore of having to quote a figure
which means little to anyone who is not an
expert in the field.
A mining reserve should, as its name
implies, be a set of estimates of the
tonnages and grades that mi ght be achi eved
in practice. This means that the tonnage
grade distributions should be based upon
valid estimates of the effects of operating
at different cut-off grades.
With this
definition a mining reserve can be seen as
the outcome of imposing a mining method, a
mine design and a mine plan on a geological
reserve.

The si gni fi cance of these poi nts goes far

beyond semantics. A mineral deposit is often
regarded as a resource. To regard it in this
way, though, can be misleading.
It is not
usually some clearly defined entity awaiting
exploitation. Rather, it is a concentration of
mineralisation that might provide an opportunity
for an economi c investment. Whether it does or
not depends not only upon the deposit itself but
also upon the way it is developed and mined.
to the formulation
of a
Fundamental
strategy for mining is an understanding of the
pattern of grade variations.
These determine
where to mine, how to mine and what to treat as
ore.
It is important in the search for an
optimum strategy, or even a feasible one, that
no options are closed off prematurely.
It is for this reason that the preservation
of the status of a geological reserve as
independent
of
mi ni ng
cons i derati ons
is
essential.
It is a description of the target
deposit
which
remains
unbiassed
by
any
prel iminary concl usions about mining method or
mine design.
It should be possible to test several
mining methods against the geological reserve
data and to derive mining reserves for a range
of mine desi gns and pl ans.
Cut-off grade
policies and plant capacities can then be chosen
to yield optimum economic returns.
This
process
frequently
involves
the
generati on of i ntermedi ate reserves.
These
shoul d be recognised as such. For exampl e, if
in
the
early
stages
a block model
is
constructed, this may immediately impose implied
values for mining parameters such as bench
hei ght and sel ecti vity. Hence a reserve based
upon the model
is no longer strictly a
geological reserve:
it already incorporates
assumptions about the method of mining and size
of equipment. Then the same model may form the
basis of a mining reserve after the imposition
of pit profiles.
This again is not strictly
according to definition because no allowance for
grade control inaccuracies has been made.
intermediate
reserves
serve
an
Such
important purpose but they shoul d not obscure
the underlying concepts of a geological reserve
whi ch descri bes the deposit, and a mini ng
reserve which gives valid estimates of the
effects of operational cut-off grades.
REFERENCES
Hancock, M C, Gooday, P E, and Breech, G E, 1987.
Ore reserve systems
pri nci pl es and
practi ce,
in
Resources
and
Reserves
Symposium
pp
137-147.
(Australaslan
Instltute of Mining and Metallurgy, Sydney
Branch)
King, H F, McMahon, D Wand Bujtor, G J, 1982.
A guide to the understanding of ore reserve
estimation, Supplement to Proc Australas.
Inst. Min. Metall., No.281:p.21.
Lane, k F, 1988. The Economic Definition of Ore.
(Mining Journal Books:London).

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