A.D. Akbari - is with the Department of Mining Engineering Department, Azad University, Science and Research Branch, Tehran, Iran,
M. Osanloo - is with the Department of Mining, Metallurgical and Petroleum Engineering Department, Amirkabir University of Technology, Tehran, Iran
M.A. Shirazi - is with the Department of Industrial Engineering Department, K.N. Toosi University of Technology, Tehran, Iran

Planning and design procedure of an open pit mining project just can be started after ultimate pit determination. In the carried out study in this paper it wasshown that the most important factor in ultimate pit determination and in consequence in the whole planning and design procedure of an open pit mine is the metal price. Metal price fluctuations in recent years were exaggerated and imposed a high degree of uncertainty to the mine planning procedure while none of the existent algorithms of the pit limit determination consider the metal price uncertainty. Real Option Approach (ROA) is an efficient method of decision making in the condition of uncertainty. This approach usually used for evaluation of defined natural resources projects up to now. This study considering the metal price uncertainty used real option approach to prepare a methodology for determining the Ultimate Pit Limits (UPL). The study was carried out on a nonferrous metallic cylindrical ore deposit but the achieved methodology can be adjusted for all kinds of the deposits. The achieved methodology was comprehensively described through the examples in a way that can be used by the mine planners.

Open pit mining; Ultimate Pit Limits (UPL); Price uncertainty; Decision making; Real Option Approach (ROA)