The key input parameters for mine planning and all subsequent mining activities is based on the block models. The block size should take into account for the geological heterogeneity and the grade variability across the deposit. Providing grade models of smaller blocks is more complex and costly than larger blocks, but larger sizes cannot represent areas with high spatial variability accurately. Hence, a unique block size is not an optimal solution for modeling a mine site. This paper presented a novel algorithm to create an adaptive block model with locally varying block sizes aiming to control dilution and ore loss in Sungun porphyry copper deposit of Iran with a complex geometry characterized by multiple dikes. Three grade block models with different block sizes and simulated by direct block simulation are the inputs of algorithm. The output is a merged block model, assigning the smaller blocks to the complex zones, such as ore-waste boundaries, and larger blocks to the continuous and homogeneous zones of the ore body. The presented algorithm is capable to provide an accurate spatial distribution model with a fewer number of blocks in comparison to the traditional block modeling concepts.