Iofina Share Discussion Threads

[pleco] 29/12/2014 15:15

Thanks sg1 for the help. My problem is whether to top up now or wait!

[pcjoe] 29/12/2014 14:52

Maybe so SG but the locals wouldnt have any say in it - If IOF ended up being taken over by Iochem that is - The IOF leases ( & terms of contract therein) would also transfer across - but legal protection for locals in that

IOF could also go it alone using Iochems underground MO ( Doesnt sound too sophisticated) - Another string to the bow etc - Even if the Miss Lime oil game slows down due to the new economics - Still plenty of Briny Iodine to go for by IOF - Reassuring that I reckon

Wonder how that strategic review is going - IOF been around long enough now to know what is working & what is not - Hopefully any MO alterations etc coming together to take advantage of any foreseeable improvement in market

[rogerbridge] 29/12/2014 14:45

A buyout of £2.00 would not do it for me, but we are up against time needed to fully develop our resources and technology. In addition the water business is a utility type of business and of particular value is the hot water supply.
We have leases that are not fully valued and possible revenue down the road from oil and helium. The chemical division is highly profitable and should continue to develop with the aid of the lowest cost iodine inputs in the world and new added value products. Patented technology is also not valued in the price.
This is some business!
There is no doubt in my mind that the board are gearing IOF up for a sale, but we need time. The longer IOF have to exploit these resources and technology, the higher a takeout price will be.
My only concern is that it could happen too quickly and before full value can be seen by the market.

[superg1] 29/12/2014 14:25

The locals don't like iochem as iochem screwed them on lease deals many years ago.

[pcjoe] 29/12/2014 14:18

Been checking out the opposition - Iochem based nearby in Oklahoma - Impressive current production at 1200T per annum from their own wells - I may be wrong but I dont see them having wells going down 2 miles into sandstone as claimed - Iodine bearing brine much shallower than that - probably! - wells likely outstretching from plant like spider legs? - Must be Finite one would think but plant been there since 1987 & possibly still plenty of "legs" in it

No direct 3rd party hassles once leases signed although not sure sure if disruption free from any nearby oil related workings

Costs of brine recovery including drilling? - Dont know but seems like reliable procurement method

On the basis of this IOF`s extensive iodine leasing must be pretty valuable one would think - Might put Iochem in the frame for any takeover?

[superg1] 29/12/2014 14:00

Joe

I keep pointing it out, much of the value of IOF is hidden but very relevant re T/O rules.

re T/O valuations from the T/O code.

29.1 a

(a) Type of asset
This Rule applies not only to land, buildings, plant and equipment
but also to other assets, eg contracts, stocks, intangible assets and
individual parts of a business. Where such other assets are involved, the
Panel should be consulted in advance.

The list of assets is quite extensive and would take a long time to value.

That rule is one of the main reasons that IOF came to the AIM for the protection under that rule.

That is also why they were very active on contracts with O and G companies and gained 82,000 acres of brine leases in the prime areas of OK. They said they have over 100 commercial sites available.

Brine leases are unique to Montana and OK. In OK if you secure 55% of the brine in leases then there is a rule/process which allows you to get 100%.

A buyer under the rules simply wouldn't get IOF at these low prices.

[bogg1e] 29/12/2014 13:26

£10.

[joestalin] 29/12/2014 13:19

Magwich - I made the comment some months ago that my worst fear was the company getting taken over cheaply. I do not foresee a fire sale, so maybe it will come down to what shareholders would accept.

Personally, I would sell for a figure in excess of 2 quid. Anyone else got a target figure?

[superg1] 29/12/2014 12:51

jb

News today about Porche.

I suspect the trickle buyer that prompted the price move knew it was coming at some point.

I didn't buy any as in my post, it was just for those that may fancy a low level punt as that is all that could be achieved without moving the price.

Still one to watch as they have some interesting products.

[superg1] 29/12/2014 12:43

Pleco

My slant on it.

they put this in news

at this time, only a portion of one objection is valid. The other invalid objections points may be resubmitted to the DNRC during December for further consideration. The objection deemed valid may result in a contested case hearing before a DNRC Hearing Examiner whereby the objector must prove that the permit was preliminary granted in error.

So in other words 2 objections were not valid on all points, and part of one objection was deemed valid.

When this happens the bureau replies to the objectors giving them 15 days to send in further info if they wish.

My Crystal ball (an expensive deluxe version)tells me the 15 day rule had a final date of 23rd December for the last permit with 2 having earlier expiry dates.

The bureau includes any letter post-marked with a date of the 23rd or before. The bureau have a 7 day rule to cover that, so they wait 7 days post expiry date just to make sure nothing is going to arrive.

So by now, in theory, if any of them did reply then the bureau will have those letters and be assessing whether any extra points raised are valid.

If they have no replies then all we have, as in the rns, is a weak point deemed valid, where the onus is on the objector to prove things, not iof.

The hearing rule requires a hearing within 90 days from the public notice expiry date (1st December).

The bureau automatically updates the hearing box for a valid objection once the objection process is complete. So in the next few days a date should appear in the hearing box. It will appear as that is their administration process, it doesn't mean there will be a hearing.

Typically having checked other permits, they choose a date of a few days inside the 90 days. So I have a date of around 27th Feb that will appear in that box.

Once that is determined then the applicant can make contact with the objector to potentially settle any points.

If they can't agree a hearing may happen which may be earlier than 27th February.

I suspect the Culbertson depot objection has some valid points on beneficial use. However as pointed out in posts much of the content is inaccurate and not facts.

On another example the complaint of lack of detail in LOIs making them invalid, is a dead end for the objector. The bureau is awash with granted permits where the LOIs have less detail than the described contents of the inside of a ping pong ball.

[che7win] 29/12/2014 12:33

Ahhh Boggle,
So you think that Iran, with one of the largest reserves of oil in the world, is developing a nuclear capability for peaceful means?
It certainly isn't, they don't need nuclear power generation for energy.

Sorry it's Saudi Arabia that has watched a lame duck American President do nothing to stop Iran, they have taken things into their own hands:

[bogg1e] 29/12/2014 11:27

Che, the most important 15 American security services have stated to congress that Iran has NO nuclear arms ambitions. Only Israel is hammering away at the risks they feel Iran poses and thanks to heavily pro-Israeli lobby groups in the UK (eg Conservative friends of Israel) and in the States (eg the Anti-Defamation league, amonst others) are pushing our foreign policies to reflect the Israeli agenda.

[bogg1e] 29/12/2014 11:24

Pleco, the objections had til 11th december to be reviewed by the authorities. Now we add on 22 days for the objectors to prove thier objections are correct and the Montana water authorities are wrong in awarding the licence. This should take us (incl. days for holiday season) to about january 5th. However there is one onbjection that is valid, which may mean going to a hearing examiner which must be within 90 days of the date of receipt of the objections, which takes us to end february latest. Although arbitration before then between IOF and the objector could mean the objection is dropped before the hearing dater (which hasn't been given yet).

[che7win] 29/12/2014 09:18

Thanks superg,
Algeria pleading over the weekend for a cut in OPEC production.

The thing is - OPEC haven't been able to increase oil production in the last decade, Iraq and Iran have the ability, but other OPEC countries are struggling.

The Middle East has a power struggle going on right now. Saudi needs to crush Iran before Iran gets Nuclear bomb capability.
They are trying to get Iran to agree to curtail its nuclear ambitions, if that were to happen it would change the picture again, lots of politics at play IMHO.

[jbe81] 29/12/2014 09:14

Good call, huge rise for the volume, no rns showing on my monitor

[pleco] 29/12/2014 09:08

Can you please remind me of the latest guess at when we will hear about the water rights application. Thanks.

[superg1] 29/12/2014 09:04

Che

Thanks for the links, there is a large amount of info in those.

It made me chuckle that an 18 yr old lady golfer made the news, but not the attack on the Libya port.

[superg1] 29/12/2014 08:42

Hmm

I should have reacted to the strange price move on starcom a few weeks back as mentioned here. News today and up over 100%.

I did say any buying and it looked like it would move sharply. I didn't think it would be that sharp though.

[che7win] 29/12/2014 07:52

One other thing, demand for oil is increasing relentlessly, figure 11, page 9:

That supply growth is coming from one main area in volume - the US, meanwhile Dubai, North Sea and other areas are in terminal decline.

Look at the facts and dyor to see the true picture:



Oil will bounce strongly in 2015 IMHO, please DYOR and don't listen to Bulls or Bears, I have given you some facts.

You might also want to look at how fracking costs are expected to fall further as costs fall inline with oil price falls.

[magwich] 28/12/2014 19:57

If SQM do want to buy IOF, then they won't want the iodine price too high. So IOF remain cheap to buy out? A bit of double edged sword?

[pcjoe] 28/12/2014 19:20

A Question maybe for IOF Che - They`ll know their rivals MO better than us - We have the brine/iodine & unique compliant processing plant - Just a matter of getting the cheapest, cleanest, warmest & highest PPM brine to that plant - Cutting out the 3rd party screwups/dependancy/royalty does appeal IMHO

[che7win] 27/12/2014 21:44

Superg,
Interesting details there, I didn't realise the restrictions on SQM for production of lithium in their area - Chile has tight regulations.


Pcjoe, I agree, I think there could be some mileage in looking at that avenue, especially if we were to take over some old wells.
An IOchem collaboration could be very worthwhile, they have experience in managing extraction, I think you know more about this area than most.

[superg1] 27/12/2014 18:29

I just had a recap on the Cosayach SQM lease battle that went on earlier this year.

It turns out it's to do with 22,000 Hectares of lithium leases where SQM produce lithium (Salar de Atacama). SQM lost that case and Cosayach retained the leases. SQM list the area as the highest concentrate of lithium in Chile.



That is the same area where CORFO are now challenging SQM, but I have just spotted a little twist that I was unaware of.

A paragraph on the web

Thus, the regulator accepted the complaint made on 16 May by National Income Life Insurance Company, controlled by businessman Francisco Javier Errazuriz, who accused SQM in the financial statements for the first quarter of 2014 only referred to pay US $ 4.8 million required by CORFO and the request to establish an arbitration to establish any additional payments, omitting the circumstances that led to the complaint of the state entity.

Francisco Errazuriz owns Cosayach and it would seem by also owning the National Income Life Insurance Company, it has allowed him to stand alongside CORFO in the dispute over the rest of the leases.

The one string SQM had left on their bow was to hammer Cosayach on iodine prices. As in 3 card brag, the person with the most cash in their pocket, wins.

[superg1] 27/12/2014 18:11

Che

There have been a number of events over the last year to suggest what SQM are doing.

There have been some SQM v Cosayach cases.

Case 1

There was a dispute over who had the rights to leases for a large area for lithium. SQM had registered their name, but Cosayach were claiming they held the leases.

It went to court and Cosayach won. SQM wanted that area for the lithium interest.

Case 2

SQM had for some time been claiming theft of water by Cosayach.

SQM won and as we know Cosayach had many wells closed down.

Case 3

SQM contested the EIA permit for Minera Copiapo (Cosayach owned). That permit related to the transfer of sea water to the area Cosayach and SQM produce Iodine. The same area that the water theft occurred.

SQM lost that case but have appealed holding things up.


Problems SQM face

They suspended their move meaning they have no seawater planned for their current area. The iodine water rights could be suspended and this risk is identified by them.

CORFO are challenging them and SQM may lose what looks like their entire current lithium production area.


The solution that is currently a problem

Cosayach have a large area for lithium leases which they could exploit.

Cosayach have a planned seawater pipeline to the area SQM currently operate (250 litres per second.

Cosayach had illegally produced iodine and ran up an excess inventory.

If iodine prices remained high, Cosayach could build their pipeline and perhaps find the funds to produce lithium.

SQM last year started cutting costs and closing mines.


SQM were aware Cosayach were going to be hit by state street bank for $120 mill. Cosayach also got hit by a German bank for $70 mill. The IRS are investigating Cosayach for $82 mill in tax evasion and can fine them 4 times that on top.

So in the last few months Cosayach are looking at a probable cash burden in fines and court orders of $270 million. It should be a lot higher by the time the IRS finish with them.

They can't afford that, SQM know that as it was the state street bank issue that nearly finished Cosayach way back.

SQM announced they were after 30% plus of the market once more, but their actions didn't support that. However finally they have stated the iodine price drop is an action for them to gain 30% plus of the market. They are trying to force others out and/or make them cheap T/O targets.

It seems obvious to me due to the reasons above that they want Cosayach, they have always wanted to take out Cosayach. But now they have more reason than ever to get them and it's almost become essential that they do.

The first important factor was kill the iodine price to make sure Cosayach had no cash to expand and pay off fines and court orders.

As a side issue it's killing off RB too.


That to me seems to be what SQM are up to, and why.