Ann: Quarterly Activities Report, page-36

Question!

The Syama circuit update announcement stated that "Resolute estimates the total cost of the roaster repairs at US$5 million. This amount is expected to be offset by operational cost savings from not operating the roaster during the repair period."

Yet the quarterly stated that "The lost production relating to the roaster shut downs has adversely affected unit costs for the Syama sulphide circuit for the September quarter and will also affect the December 2019 Quarter. As a result, Resolute is advising that our Group All-In Sustaining Cost for the twelve months to 31 December 2019 is now expected to be US$1,020 per ounce, up from previously US$960 per ounce"

How do "cost savings" increase your AISC? The way I am reading it they make it sound like its a simple 1 for 1 offset. What "cost savings" could you have by not operating the roaster? Marginal power cost savings? Maybe some labour? I find it hard to find 5M in cost savings, which would align wit the fact that the AISC actually went up.

Can any1 clarify please