Title: Cut-off grade optimisation to maximise the net present value using whittle 4X

Authors: J. Githiria

Addresses: Department of Mining and Mineral Processing Engineering, School of Mines and Engineering, Taita Taveta University College, P.O. Box 635-80300, Voi, Kenya

Abstract: Cut-off grade optimisation is necessary for operational decision making in the many different circumstances affecting mine operations. The cut-off grades are supposed to reflect particular circumstances of specific mines in order to achieve the maximum economic return over the life of the mine. The relationship between cut-off grade and NPV provides a means by which cut-off grades are optimised. Using Lane's approach, the economics involved in each stage are identified independently and integrated to provide an optimum cut-off grade. A block model from a hypothetical gold mine is used to illustrate how Whittle 4X applies Lane's approach to generate an optimal cut-off grade policy for the mine. The cut-off grade in this project slightly changes along the mine life. Higher grade ore is mined in the early years (years 2 and 4) while the lower grade ore is mined later.

Keywords: cut-off grade optimisation; NPV; net present value; grade-tonnage distribution curve; mining industry; processing; refining; whittle 4X; block modelling; gold mines; mine life.

DOI: 10.1504/IJMME.2016.079993

International Journal of Mining and Mineral Engineering, 2016 Vol.7 No.4, pp.313 - 327

Received: 27 Jan 2016
Accepted: 08 Jun 2016

Published online: 26 Oct 2016 *

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