One aim of formation blasting is to achieve good fragmentation for excavation efficiency. When the material size distribution, which guarantees optimum dragline performance, is known, this can be used as an input for blast design. While empirical guidelines have been suggested from experimental observations, there have been no scientific studies to further explore fragmentation impact on dragline excavation efficiency. In this study, a payload model is formulated, verified and validated for simulating dragline excavation performance. The model is based on the Distinct Element Method (DEM), which simulates material flow behavior using discrete particle-to-particle interactions. An experiment was conducted to evaluate whether the payload model and the DEM technique are suitable for fragmentation studies. Generally, the results of the study confirm that the payload model can predict mean payloads, within about 17.1% mean error of experimental results. For dragline operations, the simulation results also suggest that optimum excavation efficiency is possible when formation blasting achieves a fragmentation size distribution from 0.1% to 26% of the bucket width. The dragline bucket is fully loaded (with a fill factor of 1.4) through a 5-m drag distance for 2.5 to 25 cm sized particles, whereas the bucket must be dragged through 15 m to be completely full (with a fill factor of 1.44) for 45 to 50 cm particle sizes. This study represents the first scientific investigation into the correlation between formation fragmentation and dragline excavation performance. It also presents DEM as a suitable method for formation fragmentation studies.