Iofina Share Discussion Threads

[superg1] 28/3/2015 10:24

What we or I'm now waiting for is details or not of how it has affected the mining areas in relation to the iodine content.

Folks in the sector consider that if the rain has been heavy enough it may have affected the iodine in the ground.

EG

The Caliche mined is just feet under the surface and is generally 1 to 2 metres thick.
They mine it, pile it into very large heaps with an impermeable layer underneath. They then pump loads of water onto it which leaches out the iodine, they collect the water and remove the iodine from the water.

So now I'm wondering, considering how bad it has been, whether the iodine content in the Caliche for the 3 mines mentioned, has been decimated and washed away deep underground, leached out by the heavy rain. I would be surprised if the ppm at least hasn't been reduced.

But then it's not just those 3 mines, as they have had heavy rain at all the iodine mines in Chile. Pozo Almonte was hit too but not as bad, which is where all the remaining mines are. All of those mines are still operational. They had plenty of rain so the iodine leaching problem is possible.

[che7win] 28/3/2015 10:17

Superg,
I genuinely think the market is missing out the stunning growth - 90% iodine production increase and 35% chemical increase - and that was from a bad year in 2014.

Fracking I'm sure has curtailed this quarter. I know that oil companies pushed capex into December last year as a direct result of the oil declines to boost production this year without showing capex in 2015.
Only for that, our production would have been higher.

Its all out there, I expect the market will look back in a months time at this price as a bargain, we'll see!

One thing I'm pleased with, the business is operating efficiently. I haven't even mentioned the turmoil in Chile, nor the strong US dollar which weakened this month, factors that should eventually work in our favour.

Sentiment is still to turn here.

[phsycho] 28/3/2015 10:11

V Useful summary SG,, ty

[superg1] 28/3/2015 10:04

Just so you can catch up Roger, typically nothing happens in a week, but in short to show you haven't missed anything.

SQM

Old CEO for 25 years chucked out and being investigated for bribery and tax evasion.
SQM offices raided a few days back to seize accounts and digital records after the court supported the authorities.
A major shareholder (15%) has demanded Ponce Lerou is thrown out stating his presence having been convicted of insider trading is unacceptable. As you probably know 3 Potash corp directors resigned from SQM, Potash have 32% of SQM shares.
The 15% holder sold some last week.
The Atacama hit by heavy rain worst for 80 years, state of emergency in some areas.
SQM mine Pedro de Valdivia which is in that area (3.1k mt pa) has had operations suspended. Check out the various news on that rain event.
SQM mention rain/flood related issues at the port of Tocopilla too and I believe that's where they export their goods.

RB Energy

Yesterday was deadline day for final bids and the share price on the OTC market dropped 70%. It's now around 0.5 cents it's lowest ever.
Their Aguas Blancas mine (1200 mt) is in the Antofagasta area so operations there are probably currently suspended. If we go by the share price event and volumes yesterday they are finished.

Algorta Norte

Also in the flood hit area so I suspect their operations are suspended too, they claimed they would hit 3000mt last year.

So in all operations are probably suspended at 3 iodine mines (7.3k mt worth per year).

Turkmenistan

They only do about 500mt per year but I thought they'd have very low opex. Gad spotted they have stopped supplying India. After a bit if digging we realised their currency has strengthened against the dollar, so in real terms the iodine price to them is around $25 per kg. We note they stopped supplying India around the $35 mark before their currency strengthened. So it would seem at least $30 or more per kg is their opex rate.

So while you were away, nothing happened really.

[che7win] 28/3/2015 10:00

No growth priced in to the share, yet:

"Iofina produced a total of 327.7MT (2013: 171MT) of crystalline iodine in 2014 from its IOsorb® plants across the USA, a like-for-like increase of over 90%. This 2014 production total was achieved in spite of lower than expected water volumes in December, due to fracking in Iofina's Oklahoma production area. The Company expects to produce 220-260MT of crystalline iodine in H1 2015 from its existing IOsorb® plants.

Furthermore, the Board expects overall Revenue in 2014 to be over 35% higher than 2013 Revenue, in a year when iodine prices fell more sharply than expected. Iofina's specialty chemical derivatives producer, Iofina Chemical, continues to be a market-leader and the Board remains highly encouraged by its performance."

If we build no more plants this year, we should see an uplift to 440MT of raw iodine, at least a 30% increase in growth, but I personally expect more.
Combine that with a 20% increase in Chemical growth, (expected 35% growth last year from above statement) and we should be well into meaningful cash flow.

NO GROWTH PRICED IN, I think the market will be surprised to the upside. The growth here is from a low base, if the market gains confidence, a growth premium will start to influence the share price. That will mean a large growth in the share price (I expect 100%) is a possibility.

Not ramping, but this stock is currently overlooked by the markets, just look at QPP up from 25p late last year to 125p when the market becomes overly bearish.
What happens if we do get the water application, it's not priced in at all, what about even £1m profits from this division in a years time? Worth 20p a share on that and a £8m cash JV?

Historical growth was hopelessly optimistic, but the market has swung the other way here and priced in no growth. Yet I still expect 50% iodine growth from existing iodine plants and additional growth from a few more plants this year on top of that.
The admin expenses have reduced, offset by Lance joining the payroll a bit, but these costs are fixed, so profits should rise exponentially.

In addition, any new plants will be built much cheaper, as construction crews in the US will be keen for business with the oil business side declines.

As Crosseyed has said, we supply all our iodine internally, the company should prioritise Chemical division growth ahead of everything else, margins indicate this is the best option.

Shareholder apathy is creating an opportunity here for fresh investors at keen prices, I am really keen to hear the news to come, especially with the AIM market starting to follow the coattails of other indexes.

[che7win] 28/3/2015 09:47

We have 1st quarter iodine production, water, strategy update and full year results to come, all could come in the next month.

No positive results from ANY of these events priced into the share price, so it will be interesting to see what happens if news is positive, especially with sentiment so low.

[serratia] 28/3/2015 09:47

No problem. I was daft, didn't read it properly, just saw the winners and assumed the one at the top to be first not noticing the colour code.
Just posted it as Fox Marble had been mentioned somewhere. For those interested pay more attention than me and look for the ones highlighted in yellow.

hxxp://www.stockmarketawards.com/winners/

[superg1] 28/3/2015 09:38

Where did you go, Amsterdam? :-)

Maybe Bogg1e's pad.

[rogerbridge] 28/3/2015 09:16

I have been away for a week and decided not to take my IPad, it was quite refreshing, never done it before.
Personally, I am not concerned about the lack of feedback from IOF.
Events are changing rapidly and we do not know for certain the water outcome.
My word for today is chill out.

[superg1] 28/3/2015 09:06

They use the colour code chart to identify the winner which was Gemfields.

I don't particularly want to make you look daft but that list you have put is alphabetically arranged.

Now if you look at the 23 categories and assume your method of identifying the winners, you may note that by pure coincidence every winner is the first alphabetically.

I'm going for Gemfields as they are highlighted in a sort of beige colour. Then at the top of the list a square of the same colour is listed and alongside it it says 'winners'.

Fox Marble is in blue. The colour code for blue says 'other nominees'

Simple mistake I know but I didn't want you chasing the winners as potential good investments. I was surprised you mentioned Fox marble had won it. While they are interesting and one to watch, they have been pretty dormant over the last year.

[serratia] 28/3/2015 01:00

3

Best Basic Resources PLC
.



Fox Marble Hldngs Plc
.



Gemfields Plc
.



Glencore Plc
.



Petra Diamonds Plc
.



Rare Earth Minerals Plc

[superg1] 27/3/2015 21:10

Gad

I see the last 21.6 mt came in at $26.93, perhaps that triggered someone to sell.

The others are still around the 30 mark and as we know Turkmenistan have pulled the plug.


What they may not realise is that the price is about 2 weeks behind which is when the peso was at it's weakest point of around 640 per $.

[superg1] 27/3/2015 20:35

RB now 70% down.

If I took that as an indicator it could be bye bye Aguas Blancas mine very shortly..

[crosseyed] 27/3/2015 19:33

superg1,

Knowing what I know from studying the market do I want IOF signing long term supply agreements for $30 per kg? No way.

Not when they can use the iodine instead through IOChem to generate $66.5/kg from derivative products.

That's the imputed average over 2014.
The average cost during 2014 of IOsorb-produced iodine was about $30/kg.
Efficiency improvements during 2014 and presumably ongoing should see the profit margin ($23/kg of sourced iodine) rapidly improving too as Iosorb costs steadily reduce from about $27/kg at year-end 2014 to $21/kg by year-end 2015.

Please DYOR. Those costings are not official; they are deduced from my cost model.

c

[trav5] 27/3/2015 18:51

27 March 2014 was also the date IOF announced its strategic review one year later we are none wiser!

[superg1] 27/3/2015 18:36

?

Wasn't it Gemfields.

[superg1] 27/3/2015 17:49

Re the date quiz the 27th of March was one of them.

27th March = deadline day for RB energy bids.

Market open, RB are still on the OTC market share price down 41%

[superg1] 27/3/2015 17:12

See

Mines as mentioned in previous posts affected

[neddo] 27/3/2015 16:49

keep your head, now

[serratia] 27/3/2015 16:25

Fox Marble won best resources.

hxxp://www.stockmarketawards.com/winners/