Group CEO of Polymetal, Saint-Petersburg, Russia:

V. N. Nesis, Chief Operating Officer, vnesis@polymetal.ru

The article is composed of three parts devoted to design, estimation and utilization of cutoff grades. The first part of the article analyzes development of scientific approaches to designing cutoff grades. The author reviews briefly different development stages and their features that enable relating procedures in use at a company to this or that stage of evolution of scientific idea. The second part focuses on the experience of elaboration and introduction of the estimation procedure in use by Polymetal to determine cutoff grades for operational planning and public reporting in accordance with the Code JORC (2012). Aiming to systematize and simplify the information, the author has generalized information on the cutoff grade estimation procedure and presented its algorithm composed of 5 basic steps each described in detail. The article highlights three moments to be taken into account when developing a dedicated procedure of cutoff grade design, including selection of a key optimization parameter, list of assumptions (with the analysis of the significance of their influences) and variability of costs included in the design. A scenario of applying the approach to taking into account such important factors as productivity balance at such process stages as Mining and Processing (selection of cutoff grade to ensure optimal employment of production capacities) and sales of intermediate products of metallurgical conversion (considering sales discount of an intermediate product). Finally, the article illustrates calculation of cutoff grade for an open pit gold mine with a processing plant having capacity of 2 Mt as the demonstrative example of applicability of the procedure. The cutoff grade design procedure is in use at Polymetal and allows solving all problems set. All in all, the article introduces the reader with the evolution in the scientific approaches to calculation of cutoff grades and allows constructing an algorithm to develop or estimate a cutoff grade design procedure, either actual or new, in terms of its suitability for a mining company based on the provisions of three methods and the experience of a large international company.

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