Iofina Share Discussion Threads

[superg1] 06/10/2014 09:03

Cyber

It's identical, the weekend posts were made with a direct view on the full decision document.

There is more than one web page where they store results.

[cyberbub] 06/10/2014 09:02

Not surprising to see some people who bought in the 40s taking a nice 20% profit in a week... some people have no long term vision...We've had very little discussion of the iodine production figure... still not massive but perhaps a few tons more than many were expecting...?

[stupidboypike] 06/10/2014 09:01

superg, if water can be heated for $2.10 and bought for around $0.7. Why do people pay $5 to $6 for the water ready heated? I'm not being funny, I just don't understand and I would like to!

Best regards SBP

[superg1] 06/10/2014 08:57

I Montana I see one small depot offers 75 cents pb. Where you are in relation to wells affects the price.

This was a carefully selected location having spoken to the main contract Halliburtion.

I would imagine bulk buying contract could mean 60 cents pb for cold, but with competition, who knows.

Slick water may have a huge impact short term as it's only just started in the area. EG Oasis have gone from a 4 well trial to expanding that to 20% of their wells, others are doing the same.

Hot water sells for $5 to $6 pb

Armstrong water heating services, quote 3 cents per degree with their kit, with an average 70 degrees pb needed, giving an opex for heating of $2.10 pb for the heating side of things.

Contracts have to be in place, so those letters of intent may turn into contracts shortly.

Those could include take or pay agreements, as you wouldn't want to be contracted with someone for your allocation, that doesn't meet their promises.

So a wait and see, but I heavily back that a JV will come, if the price is right on cash up front. Like the last one I suspect a JV partner would be expected to pay cash up front plus all costs for development.


Don't forget and now to completely confuse the funds. Water supply develops water disposal revenue, for the JV, and it's a point IOF have mentioned in news in the past.

If your JV partner is taking water to a well, the operator will also want them to take the produced water away.

IOF could not apply for another permit in Montana until this one was concluded, that's the rules. I have no idea if they will go for another, but they have options re the discharge permit, and rights swap deal, no one else in the industry has such assets.

[cyberbub] 06/10/2014 08:56

Is the acre-feet number in the approved permit lower than what we had been talking about over the weekend?

[bogg1e] 06/10/2014 08:51

sbp, naphar, the capex is also wrong, i have it at $0.5 million, i think its now closer to $4.5 mil per depot.

[stupidboypike] 06/10/2014 08:50

Another basic question, how does the hot water side of things work please? Sorry I know this is old ground for many of you. My "fag packet" calcs have got to a very conservative 50p per share for the cold water, would like to understand the hot now.

Best regards SBP

[2vdm] 06/10/2014 08:48

superg1, are you saying that despite profit takers today, this is a good time to get in. I've always liked the iodine story, but was very glad that I stayed clear when the stock was over 150p and the massive drop made me very wary.

[bogg1e] 06/10/2014 08:47

sbp the calculation is for the full application amount of 200,000 barrels (i think, its been a while since i made the calcs, so i shall revise them today given the more exacting data now available)

[naphar] 06/10/2014 08:46

Bogg1e,
How many barrels per day have you based that on?
I think CAPEX, given we plan to also supply hot water, will be much higher.
Thx

[freshvoicem] 06/10/2014 08:44

Very disappointed not to be at high for September yet.

[stupidboypike] 06/10/2014 08:43

Boggle, great start thanks. Looking at the RNS it says 3622 Acre feet. At 7758 barrels per af that makes 28,000,000 barrels. Am I missing something?

Best regards SBP

[superg1] 06/10/2014 08:42

Don't think for a minute any find manager would be rushing to buy, they will now try and get their understanding sorted. They could wait until the objection period has expired.

First things first, they will be on the phone to across the pond later trying to raise their hand for fund raising, but then may learn that IOF are considering options on JVs on the table already or pending. Once the fund raising side is clear, they will make a decision.


As I understand it well, I know how poorly the funds understand it. Not all of them, but most.

You have to be mindful of buyers in the low 40's making a quick profit today and those that had enough on iodine who said they were going to sell.


My bet is a large lump sum will appear via a JV that will significantly change their position. I'll be betting on news like that, so 55p, 65p or whatever is of little interest on scrambling to get in. Churn will come, and the dust will settle, with Insti folk far more clued up over the next week or two.

[bogg1e] 06/10/2014 08:40

Note only half of the amount can potentially be hot water so these calcs do need revision, but the basics are there to do the calcs yourself.

[bogg1e] 06/10/2014 08:39

sbp, these are my calcs for water based on the data collected by SG thus far (and will need to be revised at some point soon):

The remaining potential revenue stream to be considered is the commercial water supply licence in Montana.

For cold water the calculation is as follows:

$1 pbl (revenue) - $0.10 per barrel (opex) = $0.90 (margin) pbl x 64,800,000 = $58,320,000 – $1,500,000 (capex per site $0.5m x 3) = $56,820,000 – 35% Tax ($19,887,000) = $36,933,000 x 10 (conservative p/e) = $369,330,000 / 127,284,000 (shares in issue) = $2.90 per share / 1.5 = £1.93 per share or,

For hot water the calculation is as follows:

$6 pbl (revenue) - $2.50 per barrel (opex) = $3.5 (margin) pbl x 64,800,000 = $226,800,000 – $1,500,000 (capex per site $0.5m x 3) = $225,300,000 – 35% Tax ($78,855,000) = $146,445,000 x 10 (conservative p/e) = $ 1,464,450,000 / 127,284,000 (shares in issue) = $11.50 per share / 1.5 = £7.67 per share

[sleveen] 06/10/2014 08:36

Great news for holders today, better than expected with Sept production figures included.

Well done.

[stupidboypike] 06/10/2014 08:33

superg,

Here is a daft, very basic question!

What are the numbers for the water in simple (and conservative) terms?

I think you posted something like that a long while ago but I can't find it

Best regards SBP

[rogerbridge] 06/10/2014 08:33

Naphar, last time they negotiated with Hal, we were not in such a strong position even so we pulled out of the deal.
There is a huge demand for water and hot water is a bonus.
I suspect we will drive a hard bargain with Hal, or another.

I would like all the revenue, but if we can get the right deal then IOF can focus on the Iodine business and we gave the water business as a cash cow. Not forgetting an up front payment.

[naphar] 06/10/2014 08:31

Well i suspect the funds cannot just go out and hit the buy button, they won't have been expecting it and will have been caught off guard.
It's not so much today that matetrs, but the coming weeks.
And we have not been awarded the permit yet, however unlikely valid objections may seem at this point.

[cyberbub] 06/10/2014 08:30

I have done something this morning for the first time ever on a share... averaged *up* !GLA

[deadend] 06/10/2014 08:28

Like Sg says,the Market doesn't understand it!

[monts12] 06/10/2014 08:26

Well we were well over 60p early Sept, the reaction to this fantastic news looks positively muted!

[owenga] 06/10/2014 08:25

Great news for me. Hoping to pick some up sub 60p. But I have to get compliance approval trade (work in bank) and that will take several hours.... Aaargghhh!