A cutoff grade is the minimum concentration of gold in a deposit that can be economically extracted, considering current market conditions and costs. In technical terms, it acts as a benchmark or threshold, helping to define which parts of a mineral deposit are classified as resources. For example, think of a ladder where each rung represents a higher concentration of gold in the rock. Everything above a certain rung—the cutoff grade—is counted as part of the resource, while everything below it isn’t.

This threshold directly impacts the reported size and classification of measured, indicated, and inferred resources in technical reports like those compliant with JORC Code, NI 43-101, or S-K 1300 standards. Factors such as prevailing gold prices, production costs (AISC), and site-specific conditions influence the cutoff grade. As these economic and operational parameters change, the cutoff grade can be adjusted, causing the reported quantity of resources to shift even though the physical amount of gold in the ground remains unchanged. Ultimately, the cutoff grade is a critical component of resource estimation in the traditional mining model, where economic factors determine what portions of a deposit are economically viable to extract.