Iofina Share Discussion Threads

[odvod] 23/1/2015 07:35

SG1 - Link please

[superg1] 23/1/2015 07:35

That indmin comment made no sense last month. I thought they must mean SQM and their lithium lease court issue.

Now after that find it's obvious they mean Algorta. It talked about losing the right to mine in the country which couldn't be SQM either.

So it's Algorta and looks serious to me.

I know for sure some in the sector were unaware of the details above.

[bobsworth] 23/1/2015 07:16

Agree SG and all this being the net result of them over supplying the market and weakening the price of iodine below their Opex costs.

As for that bunch of crooks called Cosayach mining looks like the law has finally caught up with them with a mountain of fines to pay.

Soon it will be SQM v Iofina!

[superg1] 23/1/2015 07:02

Aha

It's clicked and now makes sense.

Industrial Minerals comment in December which at the time made no sense.

'Market insiders in Chile said that total iodine output has declined, with one source saying that some companies are “in a real mess” regarding their legal rights to continue extracting iodine in the country.'

That will be Algorta Norte then the new arrivals in the sector. Those are the one's where Toyota Tsusho have a 25.5% stake.

That's 4 out of 5 Chile producers potentially facing serious issues.

Cosayach various crimes and lost court cases = demands for payments stacking up to $300 mill last count.

RB about to default on debts so they got court protection. $200 mill plus owed likely to go bust.

Algorta. It looks like they could lose their right to mine. I estimate they hit 2000mt last year although they claimed they would do 3000mt.

SQM Lithium leases under threat in a legal battle. The drought and associated water laws could see their water rights suspended.

An interesting year ahead.

[superg1] 22/1/2015 17:29

I have no idea.

What I do know is that the current team is superb, that they have ground breaking tech and a patent protected business model for an enormous iodine resource which had been over-looked by others.

They state they want to be world number 1 and they could be in time.

The Japan resource is irreversibly in decline. Commercial Iodine resources are rare.

Chile is heading into a mess on power and water. A matter we forecast when the Chile boom was in play. Now every Chile miner talks about high costs, power and water problems. Near term tax goes, FUT closes, wages up and in exchange rate terms it's about as it is going to get for them.

IF someone like a Japanese trading company appears for stake and supplies cash as in the case of Algorta, then things change overnight.

Most of those trading companies are linked into the iodine supply network from production to the various end uses, They know it's scarce and they know the problems in Chile as they have fingers in Copper and other mines.

So to me it's a great investment case. Iodine use continues to grow as do new applications for it.

Technology is the main driver for iodine use so I guess that's a great sector to be in, as it's not going backwards.

[arab3] 22/1/2015 16:58

what price are you hoping for here in the end sg1 ?

[jbe81] 22/1/2015 16:36

For the rest of us, the possibility of a water JV any time(although we may have to wait) and of Mr B , at any time, deciding to increase his stake( you may have a better idea on this too), makes the current share price a very good buy IMO(I bought some more last week at sub 31p)

[superg1] 22/1/2015 16:18

Yes Jbe but no rush as the market doesn't get it.

Someone bought 1 mill plus and took I into the 60's a while back. A strong buyer or other events may appear at any point.

The gamble to sit tight imo could be scuppered by a water JV, but then that type of event would probably be a trigger for a fund to act anyway, so price isn't much of an interest, and with such an event 800k shares short won't want to hang around either.

There is a fair chance I may spot a positive event before others.

[jbe81] 22/1/2015 16:00

Superg you don't think now is a good time to buy some more? For the first time in 2 years Iof would be 1 of my strongest tips for the IOF share tip page! I still like ORM, even more so after the last holdings rns, but its just sit and wait there.

[superg1] 22/1/2015 15:18

Gad

SQM said 37 then that they would take it as low as 30 in Q4, which seems to have happened.
They also said they expect the bottom to be Q4 or early 2015 depending on unknown inventories with others.

I note the potash market is taking a turn as end users demand rises and they had let their inventories drop on the higher prices. Now potash is low they are buying to stock up.

Let's see where we are in a month or two but any upset on the production side now, (RB, Cos or SQM, water laws) and things should accelerate.

That doesn't include the weak peso and Yen which has 90% of the world's iodine production costs at the lowest relative cost rate for many years.

If those currencies swing back at any point over the coming years then the price will climb at a time Chile gets hit with extra everything on tax and costs.

[odvod] 22/1/2015 14:35

free stock charts from uk.advfn.com

[gadolinium] 22/1/2015 14:02

Super,
Agree the signs indicate a gradual increase in Zauba prices on the Indian market.

My favourite indicator is the 99.5% grade. Although only two thirds through the month the average price is continueing to slowly rise over last month. So far the average price for 99.5% grade this month is $32.06/kg, compared to $31.42 last month and a nadir of $30.73 the month before that. If this months price is maintained these will be the first monthly increases in over a year, albeit the volumes are not high.

[captain_kurt] 22/1/2015 13:32

Good find Super....so it seems Iodine prices are continuing to move upwards throughout this month.

[arlington chetwynd talbot] 22/1/2015 13:08

I hold a can of Export.

You hold nuts.

[neddo] 22/1/2015 13:02

can we? you hold iof nuts?

[superg1] 22/1/2015 13:02

NO

But apparently I sold the lot and shorted it from posts by morons at the time.

I could have said I bought Star and had a gloat about my big gains but that would have been untrue, even though I tracked and called the bottom with a big move likely (as in posts).

I did move some into isa's when the opportunity came and will continue to do so each year.

I'm looking at timing now to get some more IOF shares. Pre hearing will probably be my time to buy but it depends on sentiment. It could be much earlier though depending on other relevant potential events.

Timing doesn't necessarily mean the best price, but it's nice if they cross.

I'll be buying FUM if the turn comes, for the potential bounce alone.

One other my finger keeps twitching over, as there is some building background market noise in circulars, raising the awareness and opportunities but not the share itself.

[arab3] 22/1/2015 12:02

superg
did you sell any IOF near the peak ?

[superg1] 22/1/2015 12:01

If you want my tip history where I suggest things look like they will go up, then it goes like this.

FUM 21p, went eventually to 107, said get out at 80 and suggested IOF which look set to fly 17p to 240 ish and back to 30's now.

AVN get the hell out, £7 plus, GDL get the hell out 25p plus, PLE get the hell out 33p, all got nailed big time and imo they will never return to their previous prices. I expect PLE to go bust as it stands.

ATUK buy at 7/8p went to 60p I got out as the herd arrived sending it to daft levels, right call and it's drifted but still very interesting and one to watch.
Spoilt by the herd and some daft CEO comments and actions.

I have 3 I haven't mentioned all well up thanks.

Starcom mentioned recently as it looked like something was up re volumes and price moves.

258% in one day when the event came, folks that bought on the lows are still well up. One to keep an eye on.

My tips currently. Watch for an oversold FUM as there has been a large overhang being sold aggressively, it could bounce once that dries up.

What I didn't mention it that someone has gone. Besides Henderson Someone recently snapped up 1.875 mill of then on the drop. I think HH are the only major seller left if not done already so potentially a traders game due within weeks.

IOF Still here and it looks like an exciting future to me, I don't care what others think.

3 others being watched. 2 look superb value and one needs to drag back a bit but is an overlooked share.

1 down 75% that I said get out of (tipped by share prophets heavily)

When I think the market has spotted them and started to act, I'll mention them.

Thank heavens for the gloom otherwise they would be at daft unattractive prices.

[superg1] 22/1/2015 11:44

Albany

You've nailed it.

Check out the recent links re the Ashley wheeler guy, then check his posting history on that site. 100's of them all to do with the US companies and the US stock market.

Hat's off to you. It's just a case now of linking up the names. One simple use of a word and you nailed it.

So we have a US poster probably with multiple avatars probably kicked out of IOF.

[arlington chetwynd talbot] 22/1/2015 11:41

Yeah, they're troubled. But they can weather it all, can we?

What is your pre-tax loss estimate here for FY 2014 Graham?

Or don't we discuss these things anymore?

che?

[superg1] 22/1/2015 11:28

SQM risks

Below are the risks they list re lithium and iodine.

The first one is in action as CORFO are going through a court court process to end the agreement.

SQM earlier this year had a battle with Cosayach over who owns the other sizeable leases in that area for lithium. Cosayach won the case.

We conduct our mining (including brine extraction) operations under exploitation and exploration concessions granted in accordance with provisions of the Chilean constitution and related laws and statutes. Our exploitation concessions essentially grant a perpetual right to conduct mining operations in the areas covered by the concessions, provided that we pay annual concession fees. Our exploration concessions permit us to explore for mineral resources on the land covered thereby for a specified period 13 of time and to subsequently request a corresponding exploitation concession. SQM Salar S.A. holds exclusive rights to exploit the mineral resources in an area covering approximately 140,000 hectares of land in the Salar de Atacama in northern Chile, of which SQM Salar S.A. is entitled to exploit the mineral resources of 81,920 hectares. These rights are owned by Corfo and leased to SQM Salar S.A. pursuant to a lease agreement between Corfo and SQM Salar S.A. (the ―Lease Agreement‖). Corfo may not unilaterally amend the Lease Agreement, and the rights to exploit the resources cannot be transferred. The Lease Agreement establishes that SQM Salar S.A. is responsible for the maintenance of Corfo’s exploitation right.


Water

As we know the water laws are starting to bit and a recent list came out to charge for rights. SQMs entire Neuve Victoria rights are listed in it.

A few months back Chile brought in drought laws so that they can suspend rights if needed which includes the protection of national reserves. The aquifer SQM use feeds the Tamarugal national reserve.

This year SQM are sitting on a knife edge. As it covers about 70% of their iodine production and practically all of heir lithium.

Cosayach have lithium leases in the same area, and they have an seawater pipeline heading to where SQM need it.

That's why SQM will do all they can this year to acquire Cosayach. If they don't achieve that, they could be serious trouble.


Changes in water rights laws could affect our operating costs
We hold water rights that are key to our operations. These rights were obtained from the Chilean Water Authority (Dirección General de Aguas) for supply of water from rivers and wells near our production facilities, which we believe are sufficient to meet current operating requirements. However, the Chilean water rights code (Código de Aguas or the ―Water Code‖) is subject to changes, which could have a material adverse impact on our business, financial condition and results of operations. For example, an amendment published on June 16, 2005 modified the Water Code, allowing, under certain conditions, the granting of permanent water rights of up to two liters per second for each well built prior to June 30, 2004, in the locations where we conduct our mining operations, without considering the availability of water, or how the new rights may affect holders of existing rights. Therefore, the amount of water we can effectively extract based on our existing rights could be reduced if these additional rights are exercised. In addition, we must pay annual concession fees to maintain water rights we are not exercising. These and potential future changes to the Water Code could have a material adverse effect on our business, financial condition and results of operations.

[superg1] 22/1/2015 11:10

The two SQM risks.

The two current issues are the main threats to their business and it is the two points they highlight as a risk in their Form 20-F (in detail).

While I thought water may be an issue. I didn't see the CORFO issue as becoming such a risk.

[superg1] 22/1/2015 11:07

Gad

Did you see that 3000 kg import from Chile of at $35.28 per earlier this month?.

A repeat order same description this week shows as $36.13.

Others moved from the 31 range to 32 and so on.

In the same timeframe the peso has weakened by 2%, so in theory the price should have gone down not up.

I will keep checking but a slight hint that the price turn may be on. Too early to say, but definitely signs of it.