Ore Grade
Also: Grade, Mineral content, g/t
Ore grade states how many grams of a precious metal (such as gold or silver) are contained in one tonne of raw ore, and it is the single most important figure for judging whether a mine is economically viable.
Ore grade (also simply grade) is one of the defining figures in mining. It describes the concentration of a recoverable metal within raw ore and, for precious metals, is normally quoted in grams per tonne (g/t). A grade of 5 g/t means that, on average, every tonne of mined rock holds 5 grams of gold (or whichever metal is under consideration). The prevailing gold price is what ultimately decides the minimum grade at which extraction becomes profitable.
How ore grade is measured
Grade is established through systematic sampling — drill cores and trench samples — followed by chemical assay in a laboratory. Many individual samples are combined into a statistically averaged block grade, which then feeds into resource and reserve estimates.
Metal content [g/t] = (contained metal [g]) / (ore weight [t])
For total mine output, a simplified relationship applies:
Metal yield [g] = ore grade [g/t] × tonnage [t] × recovery rate [%]
Cut-off grade: the economic threshold
The so-called cut-off grade is the minimum ore grade below which material is left in the ground, because the cost of processing it would exceed the revenue it generates. It is tied directly to the gold price and the mine's all-in sustaining costs (AISC):
| Mining method | Typical cut-off grade |
|---|---|
| Open pit | 0.3 – 0.5 g/t |
| Underground | 2 – 4 g/t |
| High-grade underground mine | > 8 g/t |
When the gold price rises, the cut-off grade falls — deposits that were previously uneconomic suddenly become worth mining. This mechanism shapes global gold supply, though usually with a lag of several years.
Why it matters to investors and the market
Ore grade is a key indicator of the profitability of mine production and of mining shares. High-grade mines produce at a lower unit cost and are more resilient when metal prices weaken. Low-grade bulk operations offset their thinner content with enormous throughput.
For the primary mining of gold, one trend stands out: the global average grade has been declining for decades, as the easily accessible, rich deposits have largely been worked out. This structurally falling supply from existing mines is a long-term support for the gold price.
In byproduct mining — for instance silver recovered alongside a copper operation — the effective grade of the secondary metal is reported separately and helps to bring down overall costs.
In brief
The higher the ore grade, the more economic the extraction — and the less sensitive a mine is to falling precious-metal prices. The steadily declining global average grade constrains primary supply over the long run and provides structural support to the gold price.