LAUSR

ABSTRACT An optimal cut-off grade policy maximises the net present value of an open-pit mining operation and defines a schedule of cut-off grades and the corresponding supply of materials to various destinations. Generally, the cut-off grades are dynamic and decline with the exhaustion of reserves from one year to the next. Thus, stockpiling of the low-grade uneconomic material during earlier years becomes an option to process or blend stockpiled material during later years of mine life. Stockpiling is an established practice in the mining industry and given its significance; as an alternative to traditional cut-off grade models, this article presents a mixed integer programming-based mathematical model that offers an optimal cut-off grade policy with an option to stockpile using three different strategies. The implementation of the new formulation using a case study mining operation available in literature reveals the value of the new model.