Optimizing cut-off grades of single metal open pit mines with multiple Saleable Products

Determination of optimum cut-off grade with the purpose of maximizing net present value during the mine life is one of the important and fundamental issues in economy and design of mine. The basic algorithm to determine the cut-off grades that maximize the NPV of an operation subject to mining, milling, and refining capacities was proposed by Lane. This algorithm can only be used in single metal deposits for one type of saleable product and is not appropriate for deposits with multiple products. This paper describes objective function for single metal multi-product deposits. For this purpose, the operation process in mine No.1 of the Golgohar iron mine with three types of products (sized, concentrate and pellet) for sales is used to model the function. Then Golden Section Search method was used to determine optimum cut-off grade. This approach could solve the problem easily and rapidly. Consequently, by considering 0.01% accuracy in computation, optimum cut off grades and net present value were calculated as 40.5-47.5% and 18487 billion Rial, respectively.