Iofina Share Discussion Threads

[woodpeckers] 21/8/2014 16:24

Thanks gad. When you say you're not aware of any Iofina patent application in Chile are you saying that you can't track one? The RNS last August stated "The issued patent was originally filed in the United States and has been also filed in Chile and Japan shortly thereafter." so presumably we are still waiting for news on that one too?
Interestingly Proactive investors have it as China not Chile but I'm presuming that is their error.

[superg1] 21/8/2014 15:43

lol

It's already hitting balloon shops in Brum.



SORRY!

Due to the global shortage of Helium Gas we are now no longer able to supply Helium Gas Bottles for rental purposes to customers.

And the US annual helium balloon event (the big type) that has been running since 1995. This year, you guessed it, they can't do it.

Helium is proving too hard to get hold of, and they say even if they could get it, it would costs them $12000 to fill one balloon.

Helium is needed for super-cooled magnets for MRI's deep sea diving (prevents the bends), ailments asthma, emphysema and other conditions that affect breathing, welding, Helium-neon lasers use the element extensively. These instruments are used for barcode reading. The same element is needed to monitor small fractures in ships and other vehicles.

Helium dating is relied on to date rocks that contain uranium and titanium. The gas is used for protection during germanium crystal and silicon production.

NASA space programs use the gas to fuel their shuttles. Liquid fuels are volatile. They are packed with corrosive material that could destroy a spacecraft's casing. To avoid this problem, a craft is filled with helium gas. The same process is used in blimps and air balloons. It is preferred to hydrogen for two reasons. It is lighter and not flammable. The element is also used to keep nuclear reactors cool.

scientists use it in cryogenics, high-energy accelerators, and silicon wafer manufacturing.

So now you know why it's hit a crisis (US federal reserve complacency)

Why the price is going to go up and demand to continue to rise. (technology and lack of commercial production opportunities, combined with the recovery costs)

[verymaryhinge] 21/8/2014 15:19

very weird..

[superg1] 21/8/2014 15:00

VHM

Very weird and a requested round of applause for the auctioneer at the end ???.


A simple case of those guys spending decades doing it another way, handing out cheap Helium 'to the boys'. There were mutterings of a chosen few getting cheap gas in the last year or two, they then whack it up to the going rate and sell it on.

Think of poor old Balloon man, he is paying at a rate of $560 per Mcf, so when they were selling at $75 and 85 over the last 2 years, someone somewhere was making a packet and the US gov were losing revenue.

There is talk of some bidders most put out by what happened. They just had no idea those sort of prices would appear and didn't account for it.

Air products got 10 of the 12 lots, so they clearly did appreciate the pending crisis.

It's going to be an interesting topic over the next year or two.

[woodpeckers] 21/8/2014 12:47

I presume that we haven't yet got the patents for our technology in Chile and Japan? It was stated in last Augusts RNS that they had been applied for, any idea how long before we can expect any news on them?

Just stumbled across this report which is admittedly from March but still makes interesting reading with your lunch.

[brucie5] 21/8/2014 12:41

i like the way this chart is going. Topped up further at 64. Great depth of coverage here as well chaps, thanks.

[orslega] 21/8/2014 12:34

sg1 - good posting/info on IOF non core helium asset, many thanks

[che7win] 21/8/2014 12:19

Strings to bows:

Iodine: worth ~£200-£500m over next 2-5 years?
Water: £30-£50m though JV?
Oil and Gas: £50-£100m?
Helium: £10-£50m?

Pure guesswork, but surely a doubler from here with the last three business capable of outgrowing the iodine business, who knows where we end up.

[verymaryhinge] 21/8/2014 12:14

I just looked at that auction .. how very weird the auctioneer is.. mickey mouse almost..

[che7win] 21/8/2014 12:13

Meb,
IOF has no commercial interest in Weil 1 well (unless the structure extends into IOF territory), I think Superg is saying that the likelihood is that IOF acreage sits over helium deposits.

By implication, we may have a hidden assets, one which we could exploit, probably by a JV.

[superg1] 21/8/2014 12:10

Meb

$233k was the entire cost of the Weil 1 well. I do have the complete break down.

That was Weil approaching Brainstorm. Brainstorm drill via their linked company GS producing.

I've no idea, I'm guessing IOF would farm it out and take a royalty if there is anything there, perhaps a lump sum too, sale of the leases for the helium, there are lots of options. That may only come post test wells etc, IF there is anything there.

It may not happen, but under all the circs it seems highly likely. There is no quick fix for helium, the federal reserve closure has left everyone with their trousers down.

Don't get confused about the $233k, that was the cost of the well, and I believe that included testing other levels for oil/gas.

[meb123] 21/8/2014 12:07

What I am trying to understand is that if helium is economically viable from Weil 1, does IOF have a 100% interest in it or does it share with Brainstorm ?

[che7win] 21/8/2014 12:01

SG,
if Weil were extracting helium from their acreage, is it possible that
the underlying structure which has trapped the helium would extend under IOF acreage?

In other words, some of the helium they are extracting would legally be IOF's, not sure how this works, I'm sure it's the same with gas/oil wells.

If a structure is large enough such that a well is extracting beyond the leased boundaries, it must need negotiation with surrounding leasees?

I've probably overcomplicated the scenario, it's really a simple question!

[superg1] 21/8/2014 11:55

The problem is that the US have been supplying most of the world.

From a late 2012 report it shows helium use of 180 million cubic metres.

The US in 2011 supplied 140 million cubic meters, BUT 57 of those came from the reserve.

Russia did 6 million. Some have linked up with Gazprom to produce from gas fields.

Gazprom talk of their high concentrations of .24%. Obviously the higher the concentration the lower the production costs.

So while they talk of 1% concentrations in Montana, to the untrained eye it sounds pathetic, but it's 4 times the rate Gazprom have.

Russia reckoned that if they can get producing and catch the Americans out they could see themselves as exporters to the US, IF the US didn't get a grip re the helium reserve etc etc. They were seeing 15% demand rises in their own country down to technology demand, and stated they expect demand to grow.


The federal reserve has a few years left before they shut it, and keep what is left for future home use.

They were to shut it within about a year, but some guys in the business went screaming to the government pointing out the a sizeable chunk of the end-user industry would collapse if they did. They would be completely priced out by many times the current going rate, with a world shortage hitting health and other sectors.

That is why the we are at this current situation.

Helium had unique properties, that nothing else can replace in some circs.

So first will come a production industry boom in the US and price hikes, followed quickly by recycling technology, which some have already started.

So as boring as it was to mention it a year or two ago, the predictions have come to pass.

Now we just have to wait and see whether there is any under IOFs leases, Weil seem to think there is.

[meb123] 21/8/2014 11:41

Thanks Sg, can you please clarify how this works - you say weil 1 is situated on leases owned by Brainstorm . So is IOF a sub-lessee and has paid 223k for the priveledge?

[superg1] 21/8/2014 11:18

Meb

$233k is the amount the Weil 1 well cost. That well is situated on leases owned by Brainstorm energy (6,500 acres).

Weil resources do helium, they noted an old well report Bair 1 and considered the non flammable gas reported.

So they drilled a well called Weil 1 next to Bair, and found helium at saturations of around 1%. They report on that acreage they estimate there is 2 billion cf. It's on their website, and the details suggest they are going to drill more wells and build a helium processing facility.

The helium is probably present due to the Sweetgrass arch fault, which heads north and over the Canadian border.

IOF way back picked up I believe around 500k to 600k acres, but trimmed it down, as they also picked up a rumoured $11m worth of 3D data. So they cut leases based on 3D data, that is what I believe to be the case following questions post historic presentations.

The belief is they now have around 300k acres, and most of which I believe they got for $5 to $10 per acre.

On the lease search website, you will only find a small amount of acreage under the IOF name, but it becomes obvious which other names they are recorded under.

Under those names as recently posted, I have reason to believe IOF leases cover 80/90% plus of all acreage in the area along the Sweetgrass arch north of Weil 1.

What Weil and IOF don't know yet is how far the helium resource extends. Helium resources are present in SW Saskatchewan and Alberta north of IOF in Canada. So the geographical region is known for helium, the Rudyard weil 1 find is new and I believe Weil intend to produce there.

If you end up building helium processing facilities then the payback is enhanced by expanding to any others reserves in the area.

As reported a year or two back Helium would became a hot topic, due to the pull back of sales, and price increases by the US federal reserve.

I keep thinking I have done my maths wrong but those $150 prices they paid per 1000 cubic feet, does seem to value Weils 2 billion cf forecast. at $300 mill.

Not forgetting of course is the the federal reserve is the cheapest place to buy helium.

When commodities look like they are going into short supply, those that need them stockpile it, compounding the problem.

11 of the bidders that went didn't get any, they didn't see those prices coming, so some of those have customers to supply aren't going to get any.

They had probably agreed forward sold helium knowing the bargain prices that they get at the federal reserve, now they have a problem.

They got it at $84 to $95 last year which is a big discount against the market.

The first 3 lots went for $161, then $171, then $180 per mcf. Double the last time they went, ooooopps.

There is no quick fix, and in a few years the federal reserve will stop supplying altogether.

Fingers crossed IOF are sitting on a helium jackpot. Weil go after existing resources rather than explore for it, and they suspect there in a large resource in northern Montana in the area where IOF are.

[meb123] 21/8/2014 10:33

Morning Super, very interesting and confirms the attraction of IOF as a long term holding. Let me get this straight. IOF owns land ( or has leased it)costing $233k and is likley to have econmically viable reserves of Helium . Is that proven or do they need to do more surveys . If this is proves to be the case, I would have thought it would be relatively easy for IOF to raise equity capital on that business stream alone. I suspect LB is more focussed on iodine however as the core business . I assume he is also aware of this potential.Why don't you email him to be sure lol

[superg1] 21/8/2014 09:53

.

Scott Sears at the auction. He was there to buy some but had a big grin on his face having not bought any. He is a producer (IACX)

You can see him talking to reporters about half way through the clip.

Supreme Mo, just to clarify, he is the one with 'SCOTT SEARS' below his face when he speaks :-).


Here is the entire auction



I can't help but notice some folk that appear to be of far east origin, not bidding, they just are just scribbling away.

It's quite amusing that about 5 minutes into the start of it, 11 of the 13 bidders realised they hadn't a hope of getting any at the price they wanted. The first lot going at double the price they were paying last year, doh. 11 left with none at all.

I bet Scott did some quick networking post auction, trying to conceal his smile no doubt, saying how tough it is in the business.

[superg1] 21/8/2014 09:10

Sharing thoughts here as something just dawned on me re Weil resources and the Helium.

They decided to drill the Weil 1 well having picked on a well report (Bair 1 non flammable gas)) and drilled Weil 1 next to it.

Having drilled the well they came across some oil shows in the Nisku and Duperow. As a result of that they did a wild cat well, way east in Roosevelt county looking at the Nisku. I don't believe anything came of that but it was an unusual move showing their commitment to explore for oil. The Weil 1 well is not over the 3 forks as far as I can see, they found helium at saturations of 1% plus, which in helium terms is very good.

Weil and Brainstorm comments do suggest the chances of Helium production in the area are very high, they talk of more wells, and a helium processing facility.

I'm sure Weil will want to know just how far the Helium potential goes geographically in the area. I note in SW Saskatchewan, NW of IOF there is commercial helium there, and also in Alberta too. The fact those resources are no too far apart sounds promising.

My point is that The Weil 1 well cost $233k. So if they or anyone else helium related ever link up with IOF, then IOF have the 3D data for any potential likely oil pockets.

So it's logical to me to marry up the two lots of potential, as the helium lies below all of the potential oil levels. They can get the mud logs on the way down just like they did at Weil 1.

At $233k under the circs, it seems daft not too. In fact at that price IOF could do it themselves. It's less than the price of electricity hook up at an iodine plant.

Best to farm it out, but you see my point.

I take it production costs can't be crazily high as Scott Sears had a big smile on his face post the helium auction, as he is a producer.


Helium normally relies on specific circs to create it, which includes deep faults, that is provided by the Sweetgrass arch and other uplifts in the area.

[rogerbridge] 20/8/2014 19:38

The water prospects seem to be coming to the boil and having. Mr Bellamy onboard, who is a acknowledged expert at the top of his game should produce a favourable outcome for IOF.

[serratia] 20/8/2014 18:50

O/T,

The place to visit in Montana -