Grade and tonnage and geometry are important, the most important, but price of product and costs of things such as fuel are also very important.

I used to work for Falconbridge and we had/have a mine in the Dominican Republic, a laterite mine. Ore grade is low and only approx 1.4% Ni, but back then the oil price was as low as 15$/barrel; and we made good money. Now the oil price is 5 times that and the mine is shut down, and the process may be changed to use natural gas instead of naptha to lower fuel cost.

The problem with low grade open pit, if in addition there is a lot of overburden and rock, is that you have to move a lot of material just to get a little gold. The operating cost will be heavily dependent on fuel costs as well as labour costs. In addition you have to buy more machinery for each unit gold produced. It could be difficult to predict long term operating costs.

So as an example, if the cut off is 0.7 g/tonne and your average grade is 1.0 g/tonne; you are very sensitive to any increase in costs as well as price of gold. On the other hand, if the cut off is still 0.7 g/tonne and your average grade is 1.3 g/tonne, your paper profit doubles per tonne and your profit is much less sensitive to variations to costs as well as price of gold