Good afternoon Dear Friends,

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if. You are discussing with a colleague the following cumulative cash cost curve, on which the faciiity where you work is shown as A and a competitor's facility with a C1 cost just above yours is shown as B: Metal {Year} (31 cast {5 per tonne} 15" Quantity {tonnes} Your campany expects to negotiate a new bank debt facility next year, and keeping your facility's C1 cost in the third quartiie would improve the terms it could obtain. Your colleague presents three factors that he believes will help your facility to maintain its third quartile position (all other factors assumed to remain the same). For each of the following factors, indicate that your colleague is Correct, Incorrect, or Need more information, and briey (12 sentences] explain your reasoning: {a} The terms of A's smelter contract are being revised; changes are expected to be favourable and include higher by-product credits and a reduction in penalty per tonne for a contaminant in A's concentrate {b} The company is downsizing its head office and with that change, lowering corporate overhead {although your facility is hiring people in two functions affected to handle related activities directty) [c] A has a much srnalier production than B; even if. and B were to switch places, it is likely that A could remain in the third quartile [3 marks}