Breakeven Cutoff Grade Calculator
The breakeven (marginal) cutoff grade is the ore grade at which revenue exactly equals cost, so profit is zero.
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Before you rely on this: First-pass guide only. Verify safety-critical or regulated work against the relevant standards, your project requirements and a qualified professional.
How to use this calculator
- Enter the total cost per tonne of ore — combine mining, processing and general/administration (G&A) costs into one $/t figure.
- Enter the metal price in dollars per troy ounce and the metallurgical recovery as a percent; add payability if the smelter/refinery does not pay for 100% of recovered metal (leave blank for 100%).
- Read the breakeven cutoff grade in g/t (also shown as a percent). Grade above the cutoff is economic on these assumptions; grade below it is not.
How it works
The breakeven (marginal) cutoff grade is the ore grade at which revenue exactly equals cost, so profit is zero. Revenue per tonne of ore = grade x recovery x payability x metal price, with grade in g/t and price converted from troy ounces (1 troy ounce = 31.1035 g). Setting revenue equal to cost per tonne and solving for grade gives: cutoff grade (g/t) = cost per tonne / (metal price per gram x recovery x payability).
Because a mass grade in g/t equals parts-per-million by mass, the same cutoff is shown as a percent using 1% = 10,000 g/t. This tool uses a simple, single-metal breakeven and does not include treatment/refining charges, transport, royalties, discounting or dilution beyond what you fold into the cost per tonne — set the cost input to reflect the boundary you want (e.g. a marginal mining cutoff vs a full internal cutoff). Always confirm assumptions against real cost data, assays and metallurgical testwork.
Worked example
Gold ore at $45/t cost, $2,000/oz price. For a gold operation with total cost of $45 per tonne of ore, a gold price of $2,000 per troy ounce, 90% metallurgical recovery and 98% payability: price per gram = 2,000 / 31.1035 = $64.30/g; payable value = 64.30 x 0.90 x 0.98 = $56.71/g; breakeven cutoff grade = 45 / 56.71 = 0.793 g/t. Ore grading above 0.793 g/t pays its way; ore below it is (marginally) uneconomic on these assumptions.
Common mistakes
- Mixing price units — the price must be per troy ounce per metric tonne here. Entering a per-gram or per-pound price gives a wildly wrong cutoff.
- Forgetting recovery and payability — using 100% recovery understates the cutoff. Real recovery (e.g. 88–95%) and payability move the breakeven grade up.
- Leaving costs out — the cost input should bundle mining, processing and G&A per tonne of ore. Using only the processing cost produces an artificially low cutoff.
Frequently asked questions
What is a breakeven (or marginal) cutoff grade?
It is the ore grade at which the value of recovered, payable metal exactly equals the cost of mining and processing that tonne — profit is zero. Ore above the cutoff earns money; ore below it loses money on the assumptions used, so it is often sent to waste or stockpiled.
Why is the price in troy ounces per tonne?
Precious metals are quoted in troy ounces, and mine grades are in grams per metric tonne. This tool converts using 1 troy ounce = 31.1035 g, so a g/t grade and a $/oz price combine correctly. For base metals quoted differently, convert the price to $/oz first or adjust the cost input accordingly.
Does this include treatment, refining, transport or royalties?
No — it is a simple single-metal breakeven. Fold those charges into the cost-per-tonne input (or use payability to approximate smelter deductions) if you want them reflected. For a full economic cutoff with discounting and dilution, use detailed mine-planning software and a competent professional.
What is payability?
Payability is the fraction of recovered metal the buyer actually pays for after smelter/refinery deductions. If the offtake pays for 98% of recovered gold, enter 98%. Leave it at 100% if the metal is sold as refined product with no deduction.
Related tools
- Cost per Tonne Calculator
- Ore Waste Ratio Calculator
- Strip Ratio Calculator
- Mine Life Calculator
- Net Smelter Return (NSR) Calculator
- Grams per Tonne to Ounces per Tonne Converter
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