It's an ore that doesn't contain a very high proportion of valuable minerals. The term could also be applied to richer ores containing large amounts of undesirable impurities, arsenic for example. The opposite would be a high-grade ore, which contains a lot of the mineral or metal that you want to extract. Low-grade ores are less valuable than higher-grade ones. Also, recovery rates for low grade ores tend to be lower than for high grade ores - that is, a lower percentage of the total amount of metal in the ore is extracted successfully. The definition of low- and high-grade depends on the resource in question. For copper, low grade ores have less than 1% copper. For gold, an ore having 1% gold by mass would be considered (very) high-grade, as gold is more valuable than copper. As other answerers pointed out, the cutoff for iron ore is even higher, as iron is less valuable than copper.
Low grade ore is a type of iron ore and is a naturally occuring iron-rich rock. It was the main supply of iron ore for many centuries of the World's early history of production of iron. Since the 1950's North America's main supply has been low-grade ore. Low grade ore is usually 25% - 30% iron, as opposed to hi grade ore, which contains roughly 60% iron.
