Iofina Share Discussion Threads

[superg1] 03/12/2014 17:24

Another late run today of around 35000 shares but this time without the stop loss option which was used up yesterday.

Is that you Mr B? staying off the BB and let the uncertainty serve up some cheap shares. Just like you pointed out in a post last week.

'strangely I agreed with your shorting comments, perfectly healthy business particularly if it produces more cheap shares for me.'

[superg1] 03/12/2014 16:57

A fun topic those water laws (not). I keep looking for angles that probably don't exist due to thinking of the nature of laws here.

I mean wouldn't it be nice an easy if it was the age you can drink alcohol in a pub. Of course you all know the age is 18yrs or over. ...... No it isn't.

[joestalin] 03/12/2014 16:46

Thanks, SG

Hopefully, it will be rejected by Christmas Eve.

[superg1] 03/12/2014 16:38

Joe

No

If objections are deemed not valid they sent a letter to the objector telling them so and they have 15 days to raise valid points, with substantial evidence based on facts.

If valid objections are identified a provisional hearing date will automatically be put into the hearing date box. That has to be within 90 days of the objection deadline, hence my guesstimate of 27th February appearing if they deem any point valid.

An extension to the 90 days considering IOFs circumstances on evidence already gathered is highly unlikely.

A hearing listed doesn't mean a hearing will happen the objector and applicant can come to agreement prior to the hearing date.

If objections are not deemed valid and any further info provided is not deemed valid then it's likely to be awarded post mid December. The earliest I expected news in any case without an objection was around the 15th. The bureau exclude the first 7 days post closing date due to postmark rules. Typically it takes about 2 weeks for them to formally grant a permit after the closing date of an uncontested public notice period.

In another twist if the objector is not considered a person of standing, then they can raise any issue they like, it won't be deemed valid.


Simple eh!

[monkeymagic3] 03/12/2014 16:31

"The pangs of despised love, the law's delay,"

[joestalin] 03/12/2014 15:23

DAK - Is there a firm date when this will be finally decided? This constant prevarication reminds me of a novel by Franz Kafka.

[superg1] 03/12/2014 14:48

Sancler

On the abide by the rules point.

That's where US laws support the applicant. It's very clear that if you hit the criteria the permit must be awarded.

Perhaps you weren't around when there was a news item on the topic in ND.

Bob Shaver the head of the water division faced with a large number of objections on an application said,

'If the applicant hits all the criteria, by law the permit has to be awarded'.

That's the way it is.

[superg1] 03/12/2014 14:43

Sancler if you click on Yes on the permit site it brings the Full document up including the original preliminary determination to deny.

Eg

On that document for diversion it states

41. The adequate means of diversion statutory test merely codifies and encapsulates the case law notion of appropriation to the effect that the means of diversion must be reasonably effective, i.e., must not result in a waste of the resource.

So while we both scratch heads on the actual ability to supply 77,000 bpd 24/7 it's not pertinent.

The more I read the more convinced I become that options to object are very limited, in a hearing they would have to provide substantial evidenced facts to show why criteria are not met.

The fact the water bureau used the Atlantis INC and Atlantis LLC as potentially two companies, is just plain ridiculous. Personally I'd have been embarrassed to try and raise that issue in front of any decision maker.

Like claiming you weren't supplied a pint when the order came in two full 1/2 pint glasses.

[superg1] 03/12/2014 13:02

Engelo

Prior to the plan they said extra supply was taking the price down. The majority of Japanese production is taken up by a long term exiting end user network Japanese.

There is nowhere for the end user market to go to replace SQM iodine, so them taking the price down to regain 30% of the market can mean only one thing.

Had they taken it down to attract new buyers, that would explain it, but they have taken it down AND reduced production.

They claim to be producing/supplying 27/28% of the market currently. Knowing they are producing around 8.5k mt that would out the market around 32000 mt which is about right, excluding the demand rise this year.

They dumped 2,500 mt of production at the El toco mine and Iris plant. Had they not done that they would have 34% of the market.

We know historically those 2 have been offline when prices were lower. Clearly they are higher cost operations and were part of the cost cutting exercise. If not the desire to gain 30% of the market would be to simply leave those open.

They didn't close them to support the iodine price, they did so to strip back their costs per kg to it's best rate to take the market into an area some Chile producers will find very painful.

Had they kept their price higher Cosayach and RB could get more for their iodine giving them a stronger position.

SQM kept going on about limited data available due to private companies but they did mention Algorta releasing one bit of data.

As we know at the time that showed opex of 35 to 38 per kg. SQM know the Japanese have a major interest there.

The production increase plans game wasn't working, so now they are dragging the weak under water.

SQM said they expect a drift in Q4, to the bottom, possibly into early 2015. They used those words, they know as they are controlling it and they are doing so with a strategy as declared in their last results.

The figures didn't add up with the cut backs for production v demand in 2015. Nothing has changed my view on that. The situation on production potential levels has dropped after the recent events surrounding Cosayach and RB.

[awolagain] 03/12/2014 12:30

Anyone with L3/2 see that 200k trade...what side was it on and is it a very late trade from a few days ago?

Thanks

[che7win] 03/12/2014 12:18

SQM are the same in iodine as Saudi Arabia is in oil.

They are dominant in their field, they are the biggest producer and they maintain that dominance by maintaining their market share at the cost of margins in the short term.

IOF is not a threat or likely to be in the near future, we should be marking our intention to grow regardless of the price, hence this statement:

"With the design completion of our mobile IOsorb® technology and the successful production of IOprillTM iodine, the Board is excited about Iofina's future and is dedicated to progressing towards becoming the global leader in iodine and iodine derivatives. We look forward to updating shareholders on our continued growth, expansion of iodine production facilities and maximising shareholder value."

[engelo] 03/12/2014 12:01

Seems clear that SQM are effectively controlling the iodine price for domestic reasons eg to take out Cosayach.

But that achieved where do they want the iodine price to go? Up or down? :-))

[arlington chetwynd talbot] 03/12/2014 12:01

Well, a price-war is designed to capture market share and destroy competition.

You are certainly being targeted given your propensity to fund after every annual result.

Can you survive the onslaught? That will depend on Banksy's stomach lining.

[1madmarky] 03/12/2014 11:51

SQM are playing a blinder. Potentially removing two competitors from the market for a short term cost. Brilliant strategy. As long as they leave us alone, of course ;-)

[superg1] 03/12/2014 11:46

Sancler

Are you still here?

I have looked at the legal points and they seem to cover fairly narrow criteria.

Points 1 and 2 Physically and legally available seem to be entirely based on actual water flows, the legal side being a extraction rate where in the opinion of the bureau it would have an environmental impact.

They have set the legal limit remaining. They break it down for each month to show which months water is legally available as flow rates differ throughout the year.

Highest rate legally available 5755 cfs (February) Lowest 2571 cfs (November).

IOF's rate is 5 cfs. All of the permits downstream of them total 44 cfs. So Physically and legally available simply doesn't come into the picture.

Those points were agreed by the bureau as proven, we can see why now from the figures.

Point 3

Adverse effect. This criteria seems limited to those that have an affected water right. I take that to mean anyone downstream of IOF. The bureau list all downstream permits.

From the flow data we can see that going on flow records there is no way the downstream rights would have their ability to withdraw water affected.

In the PDTG it also says this

"The Department finds there will be no adverse effect due to water being physically and legally available in the amount requested and the Applicant’s ability to shut off their pumps during times of water shortage."


Diversion already proven

Beneficial use already proven.

My posts way back suggesting it would have to be awarded were based on the criteria hit, water laws supporting IOF, and the fact the bureau has awarded other permits in similar applications.

I noticed these lines from the hearing examiner when he awarded it.

'The letters of intent provided are not unlike any other letters of intent provided for water marketing which have previously been approved by the
Department.'

'In addition, the uses for which the oil field services intend put the water to use are typical for an oil field service company and the Department has approved such uses under marketing applications in the past'


In the determination to deny the permit (did anyone read it). The evidence the bureau produced is extensive for both the diversion and beneficial use points.

I fail to see how Joe public or any other party can produce significant facts and evidence over and above what has already been raised by the experts in the sector.

This objection issue is a pain in the backside, but it would seem it's nothing more than that. Valid or not, it seems the permit will be awarded.

On the point of valid, I have no idea currently if any points in the objection are deemed valid. There is also no clear indicator to suggest that a point isn't deemed valid simply because it's an issue already covered in the last hearing.

The only point where I can see a success by an objector is by proving that the letters of intent are false. But then it would need to be enough proven false, to take the letters of intent below 50% of the amount applied for.
If you read the preliminary determination to deny, you will see points about validity were raised in great detail and over-turned.

IMO there is virtually nowhere for an objector to go in a hearing.

The only two apparently available objection criteria have already been thrashed out in great detail.

I fully expect the award of the permit. Near term if any objection points are not deemed valid. For a hearing (if it ever got there), the hearing would be before the end of February. I expect the permit to be awarded post any hearing.

If any point is deemed valid as before IOF will probably put in news on what the objection criteria point is.

If I was a rights holder in Montana, based on what I've read re the hearing and criteria, I wouldn't waste $25 to object other than with a view of being a pain in the backside, knowing I'm not going to get anywhere.

[engelo] 03/12/2014 11:45

What IOF are doing is calmly sitting out the low iodine price. They are in the unique position of being able to channel all their production through IOF Chem which we know is doing extremely well, and make good profits from it. Sounds as though IOF Chem production can be increased as necessary.

As SG says the iodine price must give soon and the South American situation could scarcely be better for IOF.

[che7win] 03/12/2014 10:52

The strong dollar is helping Chile, as is the fall in oil.

On another subject, I didn't think oled technologies used iodine, seems I'm wrong:



Anyone know more about this?

[arlington chetwynd talbot] 03/12/2014 10:20

Banksy,

Stop bidding, see if they buy 35... if not bid 30.

[madchick] 03/12/2014 09:31

I'd also been wondering why SQM needed so much money. I'd rather it went to buying up Cosayach or other Chile competitors than buying up IOF.

[superg1] 03/12/2014 09:20

I have touched on it recently.

SQM have reduced their overall opex across their sectors by $140 mill. They plan $50 mill further savings in 2015. They have slashed capex forecasts. They have plenty of cash. but recently went for a $250m loan note.

They keep repeating they have a strategy to get their 30% market share back and taking iodine down to lower prices is part of that strategy.

The biggest pain in the backside for them for over 15 years has been Cosayach. Going on reports the Cosayach businesses are in their worst situation since they started.

I suspect SQM are looking to take them out, they have pummelled them with court cases, and are devaluing their business. The German bank, State street bank, and the IRS have ably assisted all in the last few months.

[superg1] 03/12/2014 09:12

The share price has little to do with value on the AIM.

You are right as if someone did want IOF and the fair value criteria were applied as under the rules, then it wouldn't be anywhere near here.

The value would include the IP, contracts, brine leases and various other aspects, they are all factored in re fair valuation.

The brine leases obtained surely amount to 1000's of tonnes worth of iodine if exploited.