Iofina Share Discussion Threads

[woodpeckers] 23/1/2015 10:58

SG, out of interest why is H1 "buying season"? I wouldn't have thought that iodine was a seasonal product.

[superg1] 23/1/2015 10:54

And the other point.

If someone had 10k to invest at £2 it bought 5000 shares.

If they geared it would be up to 20,000 shares

Now it would buy 30,000 shares, a gearing of six fold without gearing.

If they geared it would be up to 120,000 shares.

A difference fully geared of 100,000 shares.

A few folks with just £10k could easily move it if an event happened.

If the 800k short get a sniff of an iodine price rise or any of the events, they will want out on the lows. None will want to be around for permit awarded JV etc.

A handful flying in with shorts closing + share price chaos imo.

That's why I say it's about timing and the above is why I watch and watch, to spot any sign of a definitive catalyst.

I can see plenty now that have already happened as posted about, but as the market doesn't get it, it allows some time to line the ducks up.

[superg1] 23/1/2015 10:43

My thought process

No worries for most re the permit, some may buy pre hearing taking a bet. Some may wait for the result.

Other factors and news may well appear before then but I can only guess re timings. I imagine the strategic review will be expansion due to the comments in releases.

Cash fine as we can work it out, no problem there, sales doing very well. H1 is iodine buying season.


Inventories dropping and so is production I have always forecast the effect re that should be H1 2015 as the buying season and dropping inventories and supply collide.

Iodine is cheap at the moment, any hint of a shortage and end users start to build their own inventory which magnifies the supply problem.

As it stands the figures seem to suggest a production shortage is on the way.

Any glitch like RB closing down and I'll probably be one of the first to spot it and quickly realise the impact of that. The same goes for other Chile news.

Fund buying, that is a genuine risk but I'm thinking with the market as it is aggression is unlikely.

Shares in short supply signals, then PIs buying and a fund become an share price hike up issue for a buyer.

Iodine price turning and sign of a material jump of $2- $3 and I believe a shortage price effect will accelerate.

So I'm lurking with intent, and the digging has gone up in light of the pending events.

Multiple iodine mine issues.
H1 buying season.
Hidden from the market production drops.
End user reaction if they sniff a price rise and shortage.
IOF news, water permit, JV water, JV iodine, Strategic review, fracking slows (production increase) etc etc etc.

At high prices it needs those events to happen.

At low prices it's suicidal to short it.

NB those short on the lows in QPP could have lost over 200% that's why I don't bother with shorts, you can't possibly predict your potential losses and ensure you have cover.

[che7win] 23/1/2015 10:08

TPL,
new management doing a stirling job to clear up the mess, chart starting to get interesting now.

Didn't like the fund raising last week, but hopefully that's the last of it.

Don't say I didn't warn you, it will rise strongly IMHO but dyor :-)

[superg1] 23/1/2015 09:56

If I thought the market would react, I wouldn't post the details and let PIs know first (and certain city folk).

[superg1] 23/1/2015 09:54

Od

yes it seems it all started early last year and may explain why reports were appearing that Algorta were cutting back production.

It all makes sense now re the comments about them through the year.

The last media comment from them suggested they did around 1000mt in H1 2013, which worked out as opex of $35 to $38 per kg, going on their revenue v profit comment.

They claimed they would do 3000mt in 2013, which was always unlikely to be achieved but now almost certainly wasn't.

There ultimate first stage final goal was 4000mt, but it seems the court case may scupper the lot.

They are restricted by how much seawater they pump. I'm guessing with the exchange rate change they are probably going at break even of or a loss at the moment.

I don't want funds to understand it just yet. If this were the copper industry with all these circs or other such well followed and understood sectors, then the share price would fly.

A potash mine had a collapse affecting .5% of the market and potash shares took off.

Chile does about 33% of the copper market. If the above situations were out there for 80% of Chile coppers mines then the copper market would be going nuts, with 100's of media comments and analysts salivating over the prospects.

[superg1] 23/1/2015 09:40

Rid/Bocker

I can assure you with great confidence that interested parties don't understand the iodine market, let alone the pending situation. That includes those that represent IOF who are experts in the commodity sector.

It's a market that has never existed in investment terms.

A hedge fund top analyst had clients heavily invested in SQM a while back.

I spoke to him on the phone and he has no idea SQM did iodine. He did when the iodine price rose, and now all SQM analysts know about iodine.

If anyone knows of any such commodity that is so essential in 1000's of products that could be heading into a production crisis, let me know as I want in.

A graphite crisis will never happen, as there are a number of moth-balled mines around the world, however within that sector there are some that could stand head and shoulders above the rest due to particular circs.

[superg1] 23/1/2015 09:29

Up

It seems straigh forward and logical to me that it is taking time.

Frack disruption is in play as we know. New wells and new ppms sites appear all the time.

So the formula for the next sites will be BPD x PPM / Potential disruption = opex.

They want opex as low as possible.

There could a be a few new sites in frack disruption mode that in 3 months will see solid consistent brine supplies. Then IOF can work out production and opex based on an individual operators plan.

Then there are the varying royalties, cost factor to introduce electric and services, some sites may have that already.

So it's not just about bang another plant in, but where for the most reliable and economic returns. Going forward they want to link production to a supply contract, so there is that factor too.

That's why it takes time, and it's about getting the right plants in the right places for maximum returns.

I understand they are also working on slashing plant costs, by reviewing what can be ditched and suppliers. Losing dead wood unnecessary add-ons also speeds up build times.

There is not too much guessing in that lot and I'm sure the debate is along the lines of the above.

Furthermore if they have folks interested in JV or taking a stake, that will be a factor too. As it gives a completely different budget to work off.

[bocker01] 23/1/2015 09:28

ridicule, agreed you are quite right and I suspect the wider market still is concerned that IOF is hype not substance. That will change as we start to deliver then I expect the change to be rather dramatic, spurred on by factors such as water and increasing iodine prices both of which could happen rather quickly. Very cheap atm imo.

[ridicule] 23/1/2015 09:14

bocker01 Point taken, but the IOF share price remains depressingly weak given the 2015 prospects. The market clearly does not see the exciting future we see.

[joestalin] 23/1/2015 09:10

I understand that there is around $10m in the bank. How much would be required to build a new mobile unit? I would think that a bit of market foresight would make this something worth looking at, and be ready to commission.

[bocker01] 23/1/2015 09:07

Cyber, on 600 tons production without new plants (which will not be the case) and ignoring the benefits to the IOF derivitive business, every USD10 increase in the iodine price adds at least USD3m to IOF's bottom line. I expect the rebound in prices to be considerably more than a paltry USD10 per kilo. More plants and output in that situation simply turns a major turnaround in IOF's fortune from major to staggeringly good.

[uppompeii] 23/1/2015 09:06

Seriously is that still not done?

I commend you all on your resilience here even as this is still stuck in the 30's.
Time really is marching on though, we are now into 2015, nearly 2 years from its peak and still kissing the lows.

[cyberbub] 23/1/2015 08:58

Yes all looks good, but we can't directly exploit rising iodine prices until we get more plants online and exceed the amount that is required for IOChem's products... need the strategic review ASAP!

[odvod] 23/1/2015 08:51

Perfect storm helping me is what I like.

[bocker01] 23/1/2015 08:49

Ind Min report strapline: "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." As SG quite correctly points out, Chilean producers are in extremely serious trouble. The knock on of even a temporary cessation of just part of their activities will cause a very significant price spike in the current situation of depleted inventories. The likelihood is the cessation will not be temporary and may affect a rather big part of extraction activity.

[superg1] 23/1/2015 08:32

Od

Yes water to go under the bridge yet but what a nice building pile of chaos building for IOF to prosper.

Inventories are dropping it seems and when prices are low are then start to climb end users buy aggressive to get the cheap iodine which accelerates the price.

It happens in every commodity sector, but in iodine they had a very recent reminder of how quickly the price can move when troubles hit.

RB seems a 90% plus certainty to close. They have no seawater and they are away from the others. ACF sold that lot on to RB so they didn't want it.

SQM after Cosayach will be the main event I believe, and under the circs it may be essential that SQM do that, as it's hard to see Cosayach surviving under the 'debt' mountain building.

[odvod] 23/1/2015 08:28

Stupid me DATE: March 2014. Where are we now?

[odvod] 23/1/2015 08:20

Will they not do the dumping to kick the can? And keep on hurting IOF before it all ends for some more time - up to 12 months? What will a receiver do ? Sell off I am afraid. Seing the light but not there yet. More chaos to be had imho. Good time to buy.

[superg1] 23/1/2015 08:09

So all added up half the world's production is under a credible threat.

10% of it would cause chaos.

Worst case scenarios if all failed. Cos/RB bust, Algorta suspended and water rights suspended. Then certain industries (TVs Phones) will collapse including a problem with getting an xray.

[superg1] 23/1/2015 08:05

ALGORTA NORTE S.A. CON FISCO DE CHILE Y OTROS

Google translate

ALGORTA NORTE SA WITH TREASURY OF CHILE AND OTHER

[superg1] 23/1/2015 08:03

Thanks odvod.

I believe it was the Chile treasury. I'll find the line which is the listing header.

[odvod] 23/1/2015 07:49

Decision is on the second level "Corte Suprema" which means this will evolve rapidly.

No altera la conclusión anterior, - they agree with the first level decision - good. The area is Urban and will be used for the port.

Who is going against them mining? State? I can not figure it out. If it is a public prosecutor they are toast.

[roboben] 23/1/2015 07:45

Good find SG.

[superg1] 23/1/2015 07:43

The court listing from this month below, they are 13th from the bottom of page 3. The above was from early 2014 when it all started.



Then a bit of a lol as I spotted a familiar face in the court list.

The listing translates to this

Cosayach NITRATOS SA GENERAL DIRECTION AGAINST WATER.

Looks like the are in trouble again over water