Iofina Share Discussion Threads

[rhwillcoll] 17/10/2014 22:52

Bobsworth: great post - thank you. Uppompeii - with your "glass half empty",
perhaps you could do with a refill :)

[arlington chetwynd talbot] 17/10/2014 22:35

The only thing he didn't mention is the only thing that can possibly save this.

[uppompeii] 17/10/2014 22:32

On the wine Bobsworth?

[bobsworth] 17/10/2014 22:28

Call it wishful thinking but I reckon many of us are going to look back at this share in the coming months and wish we had topped up even more when it was languishing here at sub 45p!!!!

I say this because I believe, like many here, that the granting of the preliminary water rights, with (over ruled) or without objections, will be a major game changer for Iofina.

Why? Because I hear the chances of these water rights attracting a significant upfront competitive JV cash deal are extremely high, especially with their scope and acquired expertise to expand!

A significant cash injection would allow Iofina to quickly start expanding again which in turn would be further fuelled when the water revenue streams are turned on.

With the Chileans now in turmoil & grappling with spiralling costs and the spot market rapidly moving to an under supply, this opportunity to quickly expand soon could certainly place Iofina on the road to becoming a global leader in the supply of Iodine

With long term supply agreements also waiting in the wings and lessons now learned on how best to expand with their new pods etc, the timing of a water JV with cash to expand their iodine core business could not be better.

Just look what they could do with all the cash:

Possible cash to Invest in their core business
- $5,000,000 (Mr Big’s Cash Convertible Bond)
- $2,500,000 (2014 Cash)
- $10,000,000 (JV Upfront Cash)
Total = $17,500,000

They could earmark $16,000,000 for rapid expansion & hold back $1,500,000 in reserves knowing they will be rapidly heading to become cash generative.

Based on $600k a pod & $400k a pad & $2.5m fixed site plant they could:

1. Build IOF#7 on 5 month build & targeting a rich ppm site – cost $2,500,000.
2. Immediately order 8 mobile pods on 2 month build & install and place on the existing 2 pads – cost $4,800,000.
3. 1ST 6 months build 3 more pad sites with electric hook ups on 6 month build – cost $1,200,000 (1 Pad = 3 to 4 pods!).
4. Q2 order 10 more mobile pods for delivery & install on the 3 new pad sites Aug Q3 - $6,000,000.
5. Recruit extra staff to service the pods & run fix site - $1,500,000.
Total = $16,000,000.

Possible Iodine Production/yr

IOF#1 to 6 = 500 to 600mt /yr
IOF#7 = 150 to 200mt/yr
18 Mobile Pods = 850 to 1,000mt /yr
Total = 1500 to 1800mt /yr.

………;……̷0;……R30;……230;. and better still if :-

- they exceed these production rates
- the price of iodine starts to rise
- their opex costs continue to fall
- their capex cost continue to fall
- they move to 2 shift working in their derivative division
- and the long term supply agreements come with their own upfront cash investment to expand and supply

NAI

[superg1] 17/10/2014 21:29

More on oil.

Bakken v Norwegian oil.

[festario] 17/10/2014 17:46

AVATAR333 ! Have you finally tired of wishing everyone 'Good Morning' over on the GKP thread?

[arlington chetwynd talbot] 17/10/2014 16:24

Don't you think 2 disappointments a year is enough?

[che7win] 17/10/2014 16:17

Will do, pity they don't do quarterly results :-)

[arlington chetwynd talbot] 17/10/2014 16:15

Indeed, cash outflow! lol

When there's some actual cash inflow in any results, do let me know ;)

[bobbyshilling] 17/10/2014 16:14

GWMO is worth looking at. Good copper grades, politically safe, expecting some news towards a maiden JORC resource any time soon. Just £2.8m mkt cap.

[che7win] 17/10/2014 16:11

Better to look at cash flow from operations i.e. strip out depreciation/amortisation etc.

Net cash outflow from operating activities ($576,011) (H1 2013 $2,861,170)

If they can do this in a messy H1, H2 with a $1.5m to $2m cut in admin expenses and 6 running plants could show positive cash flow.

Hint: Cash increased $1.25m since June (including some capex).

Nice :-)

[arlington chetwynd talbot] 17/10/2014 16:04

Yes it's all marvellous, a golden age, everyone making money... erm...

· Net loss of $1,303,081 (H1 2013: net loss of $124,410);

[che7win] 17/10/2014 16:01

engelo,
yes refracking needed, that's the nature of the business, but I think fracking in the area profitable down to $50.

IOF are a value enhancer for the O&G companies, we add value from a waste product, so any O&G company with IOF sitting at the end of their brine waste is getting an advantage over others.

[engelo] 17/10/2014 15:14

SG: many thx for oil input. Great place to learn stuff :-)30 years!! I just didn't realise it was that long. Presumably as flows decline refracking needed, though.

[bobbyshilling] 17/10/2014 15:07

SG, that's the way I fathom it too; Iofina is pretty much immune to whatever happens to the oil price.

[superg1] 17/10/2014 13:22

1MM

That was the point I tried to explain the other day. The fracking is a new boom in Oklahoma. The iodine rich brine in large amounts was going down disposals wells long before any frack boom due to the wells that having been producing for years.

If they stopped all fracking tomorrow it would be great as there would be no flow disruption, flows would increase to the sites, and we are all happy.

Obviously those wells already completed add to the pot of the total amount of brine and new iodine rich sites will be apparent.

io2 was on 18.7k bpd but due to the fracking around it the number jumped to 51k bpd. Disruption since has been the operator using brine (tapping into the pipeline network) to frack more wells. That reduces flow to the SWD.

So if fracking stopped, IOF more or less overnight have higher levels of flow at consistent rates.

Investors have been longing for less or no frack disruption for some time, which means no more wells drilled near an io plant that affects the brine flow. Yet as soon as the oil price dropped it seems people panicked about no fracking???

Wells drilled stay in production for about 30 years.

[1madmarky] 17/10/2014 11:46

Ok, so basically the chance of fracking in OK to stop due to a fall in the price of crude is..... zero!
Cos the price of crude will bottom out as too many oil exporting countries need a high price.

[cyberbub] 17/10/2014 11:43

Bryproj, the references to $105, $120 etc are the world market sale prices, not the production costs, which will vary dramatically from country to country. Obviously the difference between the national average production cost and the world sale price (multiplied by annual production volumes) is the money that flows into each country's coffers. I am sure that all oil producing countries will be making a gross profit on oil even at $80, but when multiplied by the output it is not enough to finance their government spending budgets.That's my interpretation anyway FWIW

[superg1] 17/10/2014 10:40

Good point.

For some like Saudi and similar countries it's something like 90%.

[bryproj] 17/10/2014 10:35

Agreed SG. A number of these countries have few (if any) other income sources so they really do need high oil prices.

[superg1] 17/10/2014 10:30

Bry

Whatever the reasoning is on price factors it just shows how painful it is for some countries. Folk may consider they are very well placed when in fact it's crippling for them.

[bryproj] 17/10/2014 10:10

I understood the break even cost per barrel to be what they need to balance the countries books rather than the cost to get the oil out of the ground.

[1madmarky] 17/10/2014 10:02

Yea surprised to see the break even points so high for so many countries. And suggests that a good fracked well is still a licence to print money.

[arlington chetwynd talbot] 17/10/2014 09:38

Oh, you mean the 11 buys v 11 sells voting? Yes that is surprising! There are clearly more bears than this thread would have us believe. Interesting.