Iofina Share Discussion Threads

[arlington chetwynd talbot] 28/10/2014 19:32

Well, it could be argued that you are being punished for hopelessly optimistic initial targets that were missed by a staggering margin.

That may well be partly the cause.

However, there's still a feeling you are unjustifiably low, and I'm not too sure that's a correct assumption.

The estimated near-term revenues and losses/profits suggest this is actually still far too high on fundamentals.

The chart is actually looking as bad as at any stage during the past two years.

I'd like to see Banksy's brokers back-off from propping this up and let's see where the true wider market takes this.

Artificially high atm.

[engelo] 28/10/2014 15:48

Hew: tend to agree that it's a bit perverse to stop monthly updates after all the production disappointments we have been through. Personally expect October to be very good indeed.

Going back to May's 40 Mt:

"IO#1 had record monthly production, with the plant continuing to run at record capacity, with little to no downtime."

"IO#2 achieved record monthly production, with the Company still seeing more optimisation potential in the coming months."

"IO#3 had another record monthly production rate, despite its limited brine due to the producer's fracking schedule."

"IO#4 had a record month but did not meet the Company's targets. Minor issues were addressed and performance is on track to meet June 2014 production. The issues were a result of debris still being contained within the system which needed to be removed and cleaned. We see consistent brine capacity at the site even during fracking which is encouraging. The Company is moving forward on improvements to allow greater volumes of brine to IO#4 which currently is maximized at 20,000 barrels per day."

It's a reasonable expectation imo that as of now I02, I03 and I04 are all producing more than they were in May. In particular we know our flagship I02 has got rid of the oil contamination and has a new optimised SWD system (and higher throughput??)

Then we can add a full month's production from I05 and I06.....

[superg1] 28/10/2014 15:33

roundup

Worse still RHPS were tipping it sue to the Japan disaster and it went up. What the Japan situation meant was that IOF had to pay high prices for raw iodine for the chem div, but they honoured the prices for the end products.

There are plenty now much further forward but well down on the share price It seems to me the market will start to look for those with actual revenue.

The iodine price has taken a hit but it's still above the pre chaos price.

EG if the price got back to 50-55 per kg sometime in the future it's $15 mill extra profit per 1000mt, which should put the share price well beyond it's current level.

In theory IOF opex will be coming down while the main producers will be seeing increased costs.

SQM seem to have some problems as yet unknown, the dive in recent weeks can't be obviously attributed to anything.

That said they have a number of issues.

Significant future competition on lithium and potash, the bosses and the on-going effect of that fraud case. Tax increases, minimum wage increases, but that water law potential for their iodine production is their biggest risk at the moment. If Chile force suspension of operations due to a drought, the iodine price will go nuts again. Cosayach are in that area too.

[cyberbub] 28/10/2014 15:02

Personally I think the chart (SP and volume) are looking very good for a recovery at the moment... assuming we get good news and no bad news...IF the upcoming strategic review sounds credibly bullish about iodine expansion... AND we get the water permit without further obstacles... then I really struggle to see how we will stay much below 100p... if iodine prices rise to $50+ next year then make that 125-150p...GLA no advice intended

[cyberbub] 28/10/2014 14:57

Well it's always good to be skeptical on the stock market... that prevent expensive mistakes... though it can also miss lucrative opportunities... ya pays ya money...

[roundup] 28/10/2014 14:55

Fresh. That is a very negative way of looking at what we have been told by management. I fear you are definitely a "glass half empty ," man.

[freshvoicem] 28/10/2014 14:50

Lance knows what the rate is, Hew and the rest of us can only guess. It is worrying because history shows the production rate shortfall is proportional to the delay in reporting it. Hence no report is seen as bad news hidden.

[roundup] 28/10/2014 14:49

Hew. There is nothing at the moment to indicate that we will not meet the end of year target set by management.

[roger melly] 28/10/2014 14:35

Well you're so clever Hew, maybe we should retire the Board of Iofina and put you in charge as you seem to know better than Lance et al...

[hew] 28/10/2014 14:05

Roundup: "with six plants producing raw iodine at an increasing level every month". Would that we knew that! Or were shortly going to receive a Monthly Update for October. (Yes, we have repeatedly been assured that the projection for the year will be met, but that is not the same thing.)

I'm as keen as anyone that iodine production steadily rises and I believe that would lead to a corresponding rise in the share price but I believe a serious error was made by the Board in cancelling monthly updates and I don't expect any meaningful share price movement for some time. Until hard news under one heading or another.

[serratia] 28/10/2014 11:14

O/T,

At a presentation in Sept Sirius said the potash price was $220/ton. They need to raise $2.2 Bn. Prices between $110 and $170/t work for them.

[engelo] 28/10/2014 11:09

AFPO another potential source: share price picking up there

"Shares in Sub-Saharan Africa-focused African Potash (LON:AFPO) climbed over 5% Tuesday after the miner announced it has intersected multiple potash seams at the second exploration drill hole at its Lac Dinga potash project, in the Republic of Congo."

"In addition to proving up the value potential of Lac Dinga, African Potash plans to identify other projects in the area to establish a solid portfolio of highly prospective potash assets."

[engelo] 28/10/2014 10:59

Potash Corp is optimistic on prices, but evidently expanding production

"Potash Corp., the world's biggest fertilizer company by market value, estimates that a healthy 58 to 60 million tonnes of the nutrient will be shipped this year, which is more than the 56.5-58 million it had estimated earlier."

"However, it said it is approaching the end of a decade-long, US$8.3-billion investment program to boost its potash production capacity.

It added it expects to generate vast free cash flow in the years ahead after that program ends, opening the door to potential dividend hikes, acquisitions or both."

[superg1] 28/10/2014 10:14

Mag


I've no idea re costs for SXX, but the potash price 5 years ago was near $900 per tonne, now around $280 and if BMO are right soon to be $180.

I note an Australian company have shallow resources in Spain and are due to start production in late 2015, they talk of cheap production costs.

It's all down to production cost per mt. So if SXX are sitting pretty on that front all well and good, but the more that add to the supply the lower the price will go.

SXX would need large financial backing and at a potential $180 per tonne v the 5 times that price when they were in the early stages, will they get the backing?

I just spotted it while looking up SQM and only mentioned it as I recall some here mentioning SXX in the past. Just letting them know as I doubt SXX investors are aware. BMO capital are a lead in that sector and SSX quote them, so it's probably best to be aware of what BMO said just days ago.

[magwich] 28/10/2014 09:43

I should think Sirius shall be able to beat them at their own game as they have found the largest potash deposit ever found?

[superg1] 28/10/2014 08:57

Just had a quick read re SQM potash production.

They quote 48% of the approx. 1 million mt of world sales, so 480,000 mt meaning $48 million revenue lost if that happens.

They claim to have 80% of the Chinese market of 350k to 400k mt.

Looking at their potassium related profit, it puts them really close to break even on that front, especially with higher tax rates and the large minimum wage rises coming in.

[superg1] 28/10/2014 08:28

Having just posted that. Isn't Sirius minerals in that sector, perhaps something to keep an eye on for anyone invested there.

[superg1] 28/10/2014 08:24

I note that SQM took another drop on it's share price yesterday. I've had a hunt for the potential reason and found this.

Many investors to sell potash producers, says BMO Capital
BMO Capital expects the decision by large Russian potash producer Uralkali to change its strategy to volume-over-price to cause a decline of about $100 per ton in potash prices. The firm thinks that many investors will react by selling shares of potash producers Potash (POT), Mosaic (MOS), Agrium (AGU), Compass Minerals (CMP), Intrepid Potash (IPI), and Sociedad Quimica (SQM). The firm expects the stocks to decline, and it keeps a Market Perform rating on the fertilizer sector.

A $100 drop per mt doesn't sound much until you look at the current price of potash of $287 per mt


In 2009 it was just under $900 mt.

In 2012 which saw the high iodine prices it was just under $500.

Through 2013 about $400 per mt.

Now it's $287 and $187 if it drops that $100.

[superg1] 27/10/2014 13:41

Simmy

I think it's very material in it's own right, but the option combined with previous news makes it a nailed on immediate rns need.

The two options are, funding/fund raising to pay for a depot, or potentially partner taking on all costs and paying a handsome lump sum up front. The latter was spelt out by IOF in a presentation.

I expect a JV but can only guess who would that be of about 5 companies I have in mind.

Halliburton, Oasis Petroleum, Select Energy, Nuverra and Baker Hughes (there are others).

Halliburton seem the obvious ones but I know they weren't the lone stalker in the original deal.

[simmy1699] 27/10/2014 12:43

Not checked the AIM rules but it could be open to interpretation what's material, right? After all this is non core business of IOF?

[superg1] 27/10/2014 11:33

Simmy

I very much doubt a company could sit on news like that as it is material. I also suspect that any such deal would not need to wait until the 'no objections' to be agreed.

The only matter imo that would wait until award of the permit, is the broker note.

[simmy1699] 27/10/2014 10:04

The water dream has been on the cards for a couple of years now. I would expect that if the JV route is preferred (and according to the recent RNS, it is), then it would make sense to have already wrapped up a deal for the JV (I.e a transfer of shares by the Holdco of Atlantis). Clearly a transfer would be conditional on the all clear permit. Would any such condition precedent deal have to be reported by IOF? Or would they report it on the RNS following any news about no objections?

[superg1] 27/10/2014 09:23

I think the near term plan is to push as much as they can through the chemical division. There was talk in recent presentations of having to turn down some chem div orders. Those supply contracts for raw iodine also got a mention.

It was said some time back that the chem div with added shifts could probably process around 800mt.

[chumbo] 27/10/2014 09:16

Do we know what kinds of discount is typical in such a deal? 10%?