Comparative study of cut-off grade optimization methods in underground gold mining

Optimization of cut-off grade is a key to maximizing profit in mine planning. Cut-off grade is an indicator used in mining to separate waste material and ore. Cut-off grade optimization is very complicated because there are many variables to consider. The variables were grouped into three major groups: production (mining), processing, and refining activities. This complexity is the basis for the many methods introduced for optimizing cut-off grades. Some of these methods are Break-even Analysis, Grade-Profit Curve, Lane's Methodologies, to Hill of Values optimization concepts. Lane, 1998 introduced one comprehensive method. This model optimizes cut-off grades in the production (mining) scope, processing, and refining activities. These three variables include economic factors, namely the price and cost per unit, and technical factors such as the mine's grade and production capacity. All variables will be elaborate to get the maximum profit or Net Present Value (NPV). This study aims to determine the maximum profit from a gold mining business with underground methods. Underground mining optimization must be considered geological models (volume, tonnage, and grade), mining cost components, and other technical parameters become variables that must consider in determining underground mining optimization. Break-even cut-off grade and Mortimer method result in cut-off grade 5.42 g/t and Lane resulting cut-off grade 5.5 g/t.