Abstarct: Designing of the mines often has been relied on the influence of the technical parameters and the geological model is considered as deterministic. This model is possible in some aspects, one from the grade aspect and the other from geological aspect. Geological uncertainty is related to shape and continuity of the deposit which it can be reduced by adequate limits. In this research, open-pit vs underground mining limit and the investigation of the influence of grade uncertainty on it has been studied in case of Chahgaz Iron Ore Mine. To do this, the grade distribution of the deposit has been estimated using Kriging Method and also has been simulated by Sequential Gaussian Simulation Method and the surface-underground limit has been determined separately in similar circumstances. For these purposes in this research, SGeMs, WinGsLib, Datamine and NPV Scheduler softwares have been used for statistical and geostatistical studies, modeling and simulation and finally for optimization. The results of this research show that the Kriging estimation model has been overestimated in cut-off grades lower than the average of the initial data grades and thus the determined area by Kriging method has been larger than the determined area by 100 simulated models. Chahgaz deposit has been divided into two eastern and western ore bodies which the open-pit vs underground mining limit level in eastern and western ore bodies using the estimation model has been determined 1560 and 1570 meter, respectively, while this parameter using simulation models has had the most abundance in 1620 and 1580 meter levels.