Ore grade measures the concentration of valuable metal contained in ore.
For gold, grade is commonly reported in grams per tonne (g/t) or sometimes ounces per ton. Base-metal grades are often reported as percentages.
Contained-metal relationship
A simplified gold relationship is:
1Contained Gold (grams)
2= Ore Tonnes Ć Gold Grade (g/t)If one million tonnes of ore average 2.0 g/t gold:
11,000,000 tonnes Ć 2.0 g/t
2= 2,000,000 grams of contained goldContained metal is not the same as recovered or payable metal.
Grade versus recovery
Metallurgical Recovery Rate answers a different question.
Grade tells investors how much metal is contained in the feed. Recovery tells them what proportion of that contained metal the process successfully recovers.
A simplified bridge is:
1Recovered Metal
2ā Processed Tonnes Ć Grade Ć Recovery RateA high-grade ore body with poor recovery can produce less saleable metal than a lower-grade ore body with strong recovery and much higher throughput.
Head grade, feed grade, and reserve grade
The word "grade" can refer to different populations of material.
- Reserve grade describes the modeled grade of material classified within a mineral reserve.
- Mined grade describes material actually extracted.
- Head or feed grade describes material entering the processing plant.
These are not automatically identical.
Mining dilution, ore loss, stockpiling, blending, and sequencing can cause actual processed grade to differ from reserve grade.
Why grade affects unit cost
Many mining costs are incurred per tonne rather than per ounce.
If the same plant processes the same tonnes at a higher recovered grade, more ounces can be produced over roughly the same processing-cost base. That can reduce unit cost per ounce.
The reverse can occur when grade declines.
This is why grade changes often help explain movements in Total Cash Cost and All-In Sustaining Cost.
Higher grade is not automatically better economics
Grade alone does not determine mine quality.
Economics also depend on:
- recovery;
- throughput;
- Strip Ratio;
- mining method;
- depth and haul distance;
- metallurgy;
- labor and energy;
- sustaining capital;
- royalties; and
- metal prices.
A lower-grade open-pit deposit can be highly economic if it is cheap to mine and process at scale. A high-grade underground deposit can still be expensive because of complex access, ground conditions, or metallurgy.
Cutoff grade matters
The cutoff grade is an economic threshold used to classify material as ore versus waste under stated assumptions.
It can change with commodity prices, costs, recovery, mine design, and other inputs.
Ore grade should not therefore be interpreted independently of the cutoff assumptions used in the mine plan.
Grade variability and mine sequencing
Reported grade can move significantly from period to period because miners sequence different zones of an ore body.
Temporary high-grade phases can boost production and lower unit cost without implying that the entire reserve has improved. Likewise, a lower-grade period can be planned rather than evidence of operational failure.
Filing examples
Dakota Gold's 2025 Form 10-K discloses heap-leach feed grade alongside tonnes processed, strip ratio, recovery, production, and AISC. Other technical-report disclosures similarly connect grade to recoverable output and mine economics.
Sources:
Bottom line
Ore grade is a physical concentration measure, not a profit metric. It becomes economically useful when paired with processed tonnes, recovery, strip ratio, mine method, and cost structure. Investors should preserve whether the disclosed number is reserve, mined, or plant-feed grade before comparing mines.
Continue Research
Continue from the concept into the Grizzly Bulls research surface that best matches the next question. These links are research continuations, not recommendations or required steps.
Compare mining companies
Continue into stock comparison for company-level operating and valuation context.
Explore more topics in the Financial Research Encyclopedia.