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Cut-off grade

Work out the break-even grade at which a tonne of rock covers its own mining, processing and overhead costs.

Example numbers are loaded. Replace them with figures from the company's own filings.
Metal
Full-cost break-even cut-off
0.317 g/t
Total cost per tonne
$18.00
Costs and price in the same currency. Leaves out refining charges and payability. A study's own cut-off may differ; read its assumptions.

How it works

This is a full-cost break-even cut-off: cost per tonne divided by the value of the metal recovered from one unit of grade, which is metal price times recovery times the share left after any royalty. A mill or marginal cut-off leaves out the mining cost, because the rock has already been mined.

Costs and metal price must be in the same currency. Gold and silver use price per troy ounce and give a cut-off in g/t. Base metals use price per pound and give a cut-off in percent.

It leaves out refining charges and payability. Economic studies set their own cut-offs with more detail than this, such as different costs for open pit and underground. Read the study's assumptions before comparing.

For education only. Not investment advice. The results are only as good as the numbers entered; check every figure against the company's own filings. See the Disclaimer.

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