Iofina Share Discussion Threads

[odvod] 01/6/2015 11:58

I misread SQM :( position

[bogg1e] 01/6/2015 11:54

take a look at this, from mid way through last year:

hxxp://www.bnamericas.com/news/mining/SQM_Determined_to_Complete_Cosayach_Purchase

"When the deal (SQM buying Cosayachs assets) was reported to be on the verge of collapse, sources at Cosayach announced the company was in talks with Holland's DSM, one of the world's largest iodine producers, which also has a plant in northern Chile, about a possible friendly takeover. "

Who are DSM?

[bogg1e] 01/6/2015 11:18

Cheers sg. The thing is if Cosayach have so many debt obligations, why haven't they gone bankrupt yet? Or is this what the courts will decide, if Cosayach are evading payments to stay afloat?

[1madmarky] 01/6/2015 11:02

SQM have the cash 250 million from a bond issue. Would you buy an iodine mine in Chile with iodine prices low and the previous owner now bankrupt?

[odvod] 01/6/2015 10:49

"SQM want both Cosayach and the RB mine."

Sorry to disagree. You make an assumption that SQM can be the only buyer so it can drive them both down. But why risk huge cash outflow and some other organisation buys them? Free market, bigger boys drilling noses and waiting to hit etc.

SQM has troubles on its own. Buying time because of the legal time frames, paying out "preferred" contractors, shredding the documents etc is what I saw many times to as clean as possible

Pure speculation from my side.

[superg1] 01/6/2015 10:44

Fresh the water result isn't in yet. In theory it should be this week.

[superg1] 01/6/2015 10:43

Bog

easy answer

SQM want both Cosayach and the RB mine. Algorta had thoughts of expanding as did Bullmine and a new entrant (given up). Toyota backed Algorta and entered Chile at a time of flying prices.

This opportunity is more or less the last chance saloon to finish off Cosayach, they have been trying for 15 years.

RB/Sirocco wanted to add in nitrates (15yrs of chatting about it) so do/did others.

SQM are strangling them, The RB mine is up for sale and at $30 per kg and loss making in should make it rather cheap to buy. The same goes for Cosayach.

Most have now spent their money and they are losing cash on production.

SQM knew the Cosayach and RB pain was coming and they have made sure it's as painful as possible.

The SQM Cosayach history is one littered with hate and countless court cases against each other.

In 2001 it was nearly all over for Cosayach and SQM were to take them out. That was the state street bank case for $100 mill, which for some reason dragged on until late last year and is now $120 mill.

S street $120 mill.

German bank $70 mill.

Fraud $82 mill plus up to 4 times that in fines.

Slavery case concluding in 2 weeks could mean more fines.

Hipermarc apparent fraud just surfaced, $42 mill.

I doubt they have made any payment to the banks yet.

[roundup] 01/6/2015 10:37

It's rising against sells; maybe this is a good omen.

[odvod] 01/6/2015 10:36

Lets look at the vol. If it is higher and down today you might be right.

[freshvoicem] 01/6/2015 09:59

Looking at the drop today, and the one the day BEFORE the results, I wonder if someone has found out the HE result?
Hope not, but then hope is all we really have left here.

[roundup] 01/6/2015 09:48

It baffles me why HE is going to the very last day to make his determination, surely if it were clear cut the decision would have been made right away.

[odvod] 01/6/2015 09:42

Bogg1e - its about buying time. It usually is.

[bogg1e] 01/6/2015 09:38

SG, one thing I am struggling to understand is why SQM are continuing to sell iodine at such low prices when Cosayachs debts are so great that even if they were able to sell their iodine at a profit, it wouldn't cover their losses. In effect SQM doesn't need to push the iodine price down this far. Im wondering if other factors are involved, but that also strikes as unlikely. Given that the low price of iodine means several producers must have shut down til the iodine price rises and given that global iodine demand is equal to or greater than current production, its hard to fathom why the iodine price persists to remain this low. Perhaps as you have suggested its down to inventory and waiting for that to clear, but surely any inventory is now running low.

[jbe81] 01/6/2015 09:29

Surprised its not currently around the 40p mark, greta buying opportunity, added some more last week.

[superg1] 01/6/2015 09:23

It's a fair bet od but the stuffing no doubt will have been knocked out of a few.

I have bought as all the odds are in IOF's favour, it's down to individual decisions. Sods law can't be written off.

Perhaps most will wait for actual news then decide (avoiding sods law), which is the sensible option, as in all shares.

[odvod] 01/6/2015 08:47

Will the bottom hold? Attack on 30p will happen. Good trading opp. Buy low just before the water news.

[bogg1e] 01/6/2015 08:42

Thanks sg.

[superg1] 01/6/2015 07:32

Following on from the above.

You can see that Cosayach had illegally produced excess iodine in 2014.

We know that RB had 800mt of inventory plus about 1200mt of production in 2014. The inventory was built up after they stopped supplying iodine in H2 2013.

So last year from the bits I have, RB sold about 1600 mt into the market (400mt more than they produced).

Cosayach had illegal production adding about 2000mt on top into the market, but by mid year were dealt with by the court.

SQM have dropped production by about 1700 my but if you read their waffle, you wouldn't know it. There is still that 17% less Caliche at NV still amounting to 6000mt figure that hasn't been explained by them.

RB dead, with about 400mt in the inventory for this year imo.

Cosayach no idea where they are right now on production levels other than in the mire and sinking with little hope of rescue.

Note my recent Hipermarc comments (an Errazuriz family company, they won Cosayach). Millions went out of the Hipermarc accounts in the same time frame that state street bank won a case against Hipermarc. Payments listed include to Cosayach and other related companies.

Cosayach looks very much like a sinking ship, so far into to mire that they don't care any more what other fraud they commit or rules they break.

Give it a year or two I and strongly believe Cosayach won't be around.

SQM certainly think that way, and intend to acquire them.

First up re the Cosayach group is the boss and lawyer in court re slavery, due to conclude mid June.

Then comes the $82 mill fraud for 10 bosses, which should see some material media coverage re progress over the next few months.

The Hipermarc accounts have only just been noted by the authorities.

[superg1] 01/6/2015 07:18

Bog

Sorry for the late reply, I've been rushed off my feet since Friday morning. Re your questions.

Bogg1e 30 May'15 - 21:07 - 32902 of 32904 1 0

SG, quick questions if I may, ive been going through my water notes. In regard to Cosayach:

1 In 2014 Cosayach was ordered to close 3 mines: Negreiros, Cala-cala and soleidad, effectively leaving them with zero production Have they actually closed this year?

2 Cosayach had 2000 tonnes of inventory. Do you think this inventory has been sold?

I also note that Cosayachs pipeline is only 250 liters per second and SQM need about 650 to continue operations as they do now. Now the Chilean law to be voted on this month(?) will reduce water consumption from 650 to 150 lps. So even if SQM buy the pipeline that would only give them 400 lps, which would reduce their output from 6000 to 4000 tonnes per year (that's if SQM use the full 650 lps and then solely for their iodine operations).

Any thoughts? TIA.

Bogg1e 30 May'15 - 21:10 - 32903 of 32904 0 0

Now according to notes, SCM Bullmine have high operating costs. Do you think it likely they have closed operations until the price recovers above $35-40 dollars? Tia.

I'll answer the Bullmine one first as I'd heard nothing about them for ages then got info last week.

Bullmine were using seawater at high cost. Since the price drop they have abandoned that. They are apparently using whatever melt water (glaciers) they can get their hands on. It is said to be sporadic and if you look up the Chile drought they talk of reduced melt water being a problem.

In short Bullmine are struggling badly. They used to be on a reported 600 to 1000mt. They had big idea re expansion (like the others) but clearly it 's gone the other way.

Cosayach.

I''l try and keep it brief.

2011 6000mt plus. Courts ordered 33 wells to be closed and which point they went down to under 2000mt.

April 2013 a nutty court ruling had Cosayach with the thought process that they could steal water, so they opened up 38 illegal wells and went production mad taking it up to near 4000mt pa. That would be the excess that they started to sell cheaply.

May 2014 the courts catch up with them, boss off to prison and ordered to close those wells.

They were stealing the water that SQM have rights too, this is the water which SQM rely on for expansion at their NV site. However as in the court case the extraction of that water by Cosayach caused environmental damage to a national reserve. rare trees which rely on the aquifer died.

That's what I say SQM are bluffing re the expansion option at NV.

In truth SQM were to abandon NV and move everything to Pampa Blanca in a $665 mill move.

Due to that move they didn't plan ahead for NV. They have no seawater pipeline planned for the area and it takes years to get the permits to build one.

Late last year the Chile government included the power to suspend water rights to protect National reserves. If they suspend SQM rights at NV, then SQM are completely screwed re iodine production as over 65% of their production comes from NV.

Cosayach did have the pipeline plans in place and completed the pipeline late last year.

SQM did all they could to try and block it. Hence with the change in the water laws SQM need a back up plan for NV. Cosayach have the answer for them on that front and on the lithium lease threat front. So SQM are trying to kill off Cosayach and acquire them.

On the 3 Cosayach sites, which are all near the main SQM site, 2 of them I believe don't have EIA permits to extract iodine. That as you know is of no importance to Cosayach.

Seawater production for them will be expensive and I have no idea if they are carrying on with illegal extraction of fresh water.

A recent comment put Cosayach on 30 to 33 opex per kg. I more recently they sold iodine at $25 in India, so that suggests they are now back in serious trouble desperate for cash.

[flyingbull] 31/5/2015 00:36

The June oil stock challenge is on. Deadline for entries is midnight on Sunday.


Good luck!!!

fb

[bogg1e] 30/5/2015 21:10

Now according to notes, SCM Bullmine have high operating costs. Do you think it likely they have closed operations until the price recovers above $35-40 dollars? Tia.

[bogg1e] 30/5/2015 21:07

SG, quick questions if I may, ive been going through my water notes. In regard to Cosayach:

1 In 2014 Cosayach was ordered to close 3 mines: Negreiros, Cala-cala and soleidad, effectively leaving them with zero production Have they actually closed this year?

2 Cosayach had 2000 tonnes of inventory. Do you think this inventory has been sold?

I also note that Cosayachs pipeline is only 250 liters per second and SQM need about 650 to continue operations as they do now. Now the Chilean law to be voted on this month(?) will reduce water consumption from 650 to 150 lps. So even if SQM buy the pipeline that would only give them 400 lps, which would reduce their output from 6000 to 4000 tonnes per year (that's if SQM use the full 650 lps and then solely for their iodine operations).

Any thoughts? TIA.