Here’s your 3-minute quick read of Fresh Thinking by Snowden Optiro’s podcast Episode 114.
We’ve pulled out the key insights and takeaways – perfect for when you want the value, minus the headphones.

The Cutoff Grade Strategy That Can Boost Your NPV by 20%

Episode 114 – Fresh Thinking by Snowden Optiro
Featuring: Pedro Ladeira & Tarrant Elkington

Can one decision in your mine planning strategy significantly lift your project’s value?
Yes — and it’s all about how you use your cutoff grade.

In this episode, Senior Mining Consultant Pedro Ladeira chats with Tarrant Elkington, General Manager and optimisation expert at Snowden Optiro, about the often-overlooked power of cutoff grade optimisation – and how, done well, it can boost a project’s Net Present Value (NPV) by up to 20%.

What is Cutoff Grade Optimisation?

It starts with the marginal cutoff grade – the point at which it makes economic sense to process a block instead of sending it to waste.

But here’s the catch: sticking strictly to that marginal value doesn’t always lead to maximum project value.
In many cases, raising the cutoff grade slightly can bring higher-grade material forward, boosting early cashflow – which has a big impact on NPV.

“It’s not just about what’s worth processing – it’s about when you process it.”

Open Pit vs Underground

Cutoff grade optimisation works differently depending on your mining method:

• Open Pit: You have flexibility. You can process higher-grade material early and stockpile lower-grade ore for later. This is where you can really “have your cake and eat it too.”
• Underground: Trickier. If you raise your cutoff, you might sterilise some of the material, meaning it may never be mined. You have less room to manoeuvre — so scenario testing is key.

Modelling & Software

Optimised cutoff grades aren’t just theoretical – they’re driven by modelling and software that accounts for:

• Opportunity cost
• Plant capacity
• Discounted cash flow
• Life-of-mine production rates

Rather than setting a fixed cutoff, the model finds the optimal cutoff per period, based on when and where material delivers the most value.

Practical Considerations

Of course, it’s not just theory – operations matter. Tarrant highlights that you don’t need hundreds of bins or stockpiles. In most cases, a practical range of grade categories (low, medium, high) is enough to implement a smarter strategy on site.

And yes, grade control becomes more important when you’re targeting higher cutoffs – but the potential value uplift can make it worthwhile.

“Cutoff grade optimisation isn’t just an interesting theory. It’s a real lever – and one that can deliver significant value if you get it right.”

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🎧 Catch the full conversation in Episode 114 on your favourite podcast platform, or share this summary with colleagues who might be sitting on untapped value.

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Watch or listen to the full episode
Available now on YouTube, Spotify, Apple Podcasts, and all major platforms.

Stay tuned for more 3-minute articles from our Fresh Thinking 3-Minute Read series.

If you would like to contact either Tarrant or Pedro: contact@snowdenoptiro.com

Here is a LINK to our Snowden Optiro YouTube channel.

Snowden Optiro is a resources consulting and advisory group that provides independent advice, consulting and training to mining and exploration companies, their advisors and investors.

We help mine developers to advance their projects, mining companies to improve their operations and their professionals, and investors to de-risk their investments by the provision of quality advice, training and software in the field of Mineral Resources and Mineral/Ore Reserves.

LINK to Snowden Optiro website