What is a cut-off grade?

Cut-off grade is the lowest grade at which a tonne of rock generates enough revenue to cover the cost of mining and processing it. Material above the cut-off is ore; below it is waste. It is the dividing line that turns geology into economics.

Cut-off is not fixed. It falls when commodity prices rise (more marginal material becomes economic) and rises when costs climb or prices fall. An open-pit operation with low mining cost can run a far lower cut-off than a deep underground mine.

For drill results, the cut-off a company chooses to report intervals matters: a low reporting cut-off pads interval width with marginal material and flatters gram-metres; a higher cut-off reports tighter, higher-grade cores. Good disclosure states the cut-off used ("intervals reported above a 0.3 g/t Au cut-off"). When comparing companies, check they are using comparable cut-offs — otherwise the intercepts are not like-for-like.