Cut off Grade and Grade skewnessLode deposits are considered primary gold deposits because they are bedrock deposits that have not been moved.
They come in a range of shapes and sizes — indeed, the US Geological Survey notes that they can “form tabular cross-cutting vein deposits but also take the forms of breccia zones, irregular replacement bodies, pipes, stock-works, and other shapes.
No single grade distribution could universally fit these grade distributions.
However, negative skewness would be close to the norm,
That is, if you accept that a normal distribution curve is bell shaped....a peak exactly in the center..lode deposits tend to have a long left limb and a short quickly decelerating right limb.
In such cases, the mean ( average grade ) will be signjfucantly lower than the mode ( peak grade ) .
So, let's assume that such might be the case for Murchison underground .
The cutoff grade for NOA 7/8 is 3 grand per ton but still estimates 118,000 ounces at an average grade of 4.6 gms per ton.
Now, the average grade mined by WGX in its underground mines is about 2.7 gms per ton.
So, from such an observation, one might assume that at current POG ( instead of $1300 for NOA estimation purposes ) decreasing the cut off grade to 2.5 gms and considering the negative skewness of the grade distribution, significant increases in the amount of economic ore would accrue to our asset base .
While I am fine with high grading as it maximizes revenues for acquisitions or sales, I can also see a scenario in which higher productions for a longer mine life might accrue by reducing cut off grades..