Iofina Share Discussion Threads

[rhwillcoll] 17/6/2015 08:35

How does the quality of Iofina's iodine compare to that of Chile and to that of
Japan? If better quality, then would we obtain a premium for our raw iodine, over and above eg that imported to India and to China? Do we know what that extra premium might be? I seem to remember at last year's AGM that Iofina's iodine quality is high, and that there's a good premium for the prilled? I cannot remember the actual figures, or if they were given.

[che7win] 17/6/2015 08:11

The off-take comment looks like an interesting comment to me.Advertising to would-be customers that we iodine to sell, I would think there will be high demand in American markets, next door to us.Anyone wanting high quality iodine supply or wanting to diversify will be keen...

[someuwin] 17/6/2015 08:02

Strong start.

[aja5] 17/6/2015 08:00

Act....you need to lay off the special brew !

[naphar] 17/6/2015 07:35

ACT
You are missing one thing.... its not a change in strategy. The strategy was to always sell raw iodine to the market, when they produced enough in excess to IC needs. They were never going to be able to ramp up IC production to match raw iodine output, and they never planned to, despite people on here thinking they should.
One new plant in the right location can produce about half what IC currently needs. Ramping up IC to match a fast (if they can ever manage it) ramp up in iodine output was never going to work, and I will say again, was never the strategy.
They have a prilling agreement in place for that very reason, they were originally going to buy their own prill plant for that very reason, until they found prill capacity nearby they could subcontract at a good rate.
Now they need to expand iodine output, to take advantage of what could soon be a rising iodine price.

They have to find the balance though, they don't want to expand so much that they push the price down more per kg than they push down their opex per kg ideally.

[superg1] 17/6/2015 07:30

Serratia

That figure was the combined production.

It seems the production in the area only started to build about 8 years ago. Then when damage was caused SQM have been able to point the finger at Cosayach with their illegal wells.

The first case would have started before 2011 and obviously the damage takes time to become apparent.

Cosayach had their wells closed in May 2014 and now that news report about SQM has appeared and environmental damage at the location.

My assumption is that Cosayach are not now stealing water as they would have been the authorities first port of call. So SQM have become the stand out reason for the damage due to aquifer depletion.

It's not an easy fix if the authorities decide to take action. How can they quantify what levels of extraction may stop the damage.

SQM were supposed to be working with the environment dept to prevent this, but it's that dept that has raised the issue against them.

There are organisms in the area that only occur in 4 places on the planet, so it's a very important site. So if the decision is that water rights need to be suspended then that is likely to be what happens.

The Salar de Llamara is classified as a priority site in the Regional Biodiversity Conservation Strategy of the Tarapacá Region due to a native tamarugo (Prosopis Tamarugo) forest and lagoons with stromatolites located there.

As part of the Pampa Hermosa project, SQM uses its Environmental Monitoring Plan to observe a series of environmental variables in order to ensure that the project’s activities adhere to the provisions of the environmental assessment. The company monitors tamarugo vitality using high-resolution satellite images taken each year in November, when the greatest amount of vegetation occurs.

The question is are they causing damage or is there a risk of damage. The first report mentioned serious damage done with more complainants lining up. Other reports talk of the risk to cause damage.

The priginal news article said this

Through a motion of agreement that included most members of the Regional Council of Tarapaca, in mid-April it was decided to refer to the mining environmental authority. According to the Minister Richard Godoy, Pampa Hermosa "has caused tremendous environmental damage."

Btw

Other media sites have caught onto it so there are a few more reports about it, including the regional papers.

[kreature] 17/6/2015 00:50

morning ACT........Are you seeing this as a Buy now?

[superg1] 16/6/2015 22:11

Going on those stats all plants should be wiped out imminently defeating 83 billion to 1 odds.

Sods law means we'll get the permit the day following day just as Saudi take oil prices to 3 cents per barrel.

Prices at the pumps should drop by a penny a litre about 6 years later.

[serratia] 16/6/2015 22:08

Thanks SG,

From memory SQM were damaging the environment when producing 5000 to 5400 tpa. So what level is safe for them (if any). If it's say 4000 to 4500 tpa the pipeline gives them 5800 to 6300 tpa.
On that basis even if they get hold of Coysach's pipeline it's not a major difference to their historical overall production.

[superg1] 16/6/2015 22:03

As for Tornadoes which seem to make everyone jump out of their chair.

Fret if you wish about the news that comes on from time to time.

We are in Woods county OK.

Tornadoes have rating of zero to 5, zero being the weakest. They had 1 F3 in 1956.

Over the last 20 years Woods county has had 11, that's one every 2 years.
5 zero rated, four 2 rated and one 1 rated.

The average area they cover is is 13 km2 on their path. So their is 500 to 1 chance of minor damage every two years.

1 reported injury in the last 50 years.

Besides all of that IOF are insured for such damage with revenue protected too.

With the stats I doubt it's expensive.

In the Oklahoma county area in the same time period (50 years) they have had 872 injured and 39 killed.

NW Oklahoma doesn't get the action that other OK counties further East experience.

[superg1] 16/6/2015 21:32

I had a question re weather today as it seems a storm has hit Texas and Oklahoma.

To repeat as has been said many times, IOF plants are about 150 miles NW of Oklahoma city.

Here are the weather details (re he storm). Note the NW point know as the pan handle, where the handle meets the pan that's where IOF plants are.

We are near Alva where today it's sunny, 85f with a 4 mph wind, watch out for the 96f and a raging 8 mph wind by the weekend.



Alva weather

[superg1] 16/6/2015 21:16

Aha

To settle the argument re how much iodine will 127 l/s do.

Cosayach

'This project involves pumping seawater through pipes, which will result in increased production of Crude Iodine 4,000 tons to 6,000 tons per year.'


Note the 4000mt, I heard 3,705 pre 38 wells closed down. So it seems they were on 4000mt with illegal wells and could do 2000mt with the pipeline.

So logically they can do 1800mt (the amount in reports post 2011 wells closed) plus 2000 mt on the 127 l/s seawater.

[superg1] 16/6/2015 21:11

Serratia

I have some more figures for you.

Rights in the relevant area where Cosayach are.

SQM about 777 litres per second.

But also rights listed as Minera Nueve Victoris SA which must be SQM as they have a mine of that name. 63 litres per second.

ACF Minera 61 ls

Cosayach 27.5 ls

They have mine rights listed too at about .5 l/s for two of them and 5 l/s for one.

So rights wise Cosayach have about 32 L/s, so the 400 l/s they were nicking was a tad over their rights.

I know SQM, Cosayach, and ACF buy water from other suppliers.

I think (I'll have to check) that Cosayach buy in about 100 l/s which more or less matches their pipeline rate when you add in their rights

Thanks for the prompt. If Cosayach are behaving re water rights their extraction is 32 litres per second v SQM rights of 840 l/s.

It seems obvious who is doing the environmental damage.

If you want the full list I have it, but it's in Spanish and from 2011.

[superg1] 16/6/2015 20:49

See Monty I knew you had been talking to someone your estimates were too close to mutterings elsewhere

I have it at about 40 cents per kg change in opex per extra mt produced. 50 mt comes out below 20.

Che plays it cool too he got the range spot on, 276 to 290 I think was his estimate.

[che7win] 16/6/2015 20:35

Monty,
Excellent, I harp on about the gearing, but it's precisely because IOF is highly geared.

A $5 rise in iodine prices is a significant boost to profits, I won't sell below 100p, I have no doubt we will pass that when iodine is rising every month.

I was so happy to pick up more at these crazy prices, would expect to get into the 30's by week end, it really doesn't matter to me, my eye is on the business performance.

Those selling will look back and realise what a gift current prices are IMHO.

Pleased as punch :-)

PS: read the RNS carefully, 280Mt Is expected to be beaten...

[monty panesar] 16/6/2015 19:25

Fantastic news today.Have made massive improvements this year. 50t per month is what we have been waiting for and it looks like being for 3 consecutive months.

Sg. Yes got the opex figures from a old friend who works in City. Ran though the figures a couple of weeks ago. Hope to get some decent feedback on these from the agm.

Difference between 32t per month 6 months ago and 50t has huge a multiplier on gross profit as the costs are fixed.

Still has the same potential to ten bag again from here. This time hopefully on a much sounder footing. Tuck it away for a couple of years and let's see where we are. Rome wasn't built in a day etc etc.

[dr darkstar] 16/6/2015 19:20

Technical bounce on to close the 30p gap

[1madmarky] 16/6/2015 17:14

1600 to 2000 mt probably

[serratia] 16/6/2015 16:33

Thanks SG,

I'm trying to get to what 127 l/s is worth in iodine output terms to SQM.

[superg1] 16/6/2015 16:31

Serratia

Some figures to work off.

Sirocco 2012

AAM Chile has been granted water rights on 20 holes for a total water flow of 212 l/s, of which 110 l/s are permitted to be extracted from the Rosario aquifer and 102 l/s from the Aguas Blancas aquifer. AAM Chile lease a 15 l/s water right from Universidad de Atacama, located in Aguas Blancas aquifer. The current extraction rates are 53 l/s from Rosario and 44 l/s from Aguas Blancas aquifers.

In 2012 they produced 1200mt from 98 ls.

Note that they claimed they could go to over 2000 mt, which under the circs with the water rights seems about right. That would have been from their ALP (abandoned) which has higher yields, heap leach (current) is lower.

I'll add ACF details into this post when I find the facts.

[superg1] 16/6/2015 16:15

Serratia

I'm working from memory on some bits (no time to try and find the reference points but recall the figures.

In 2011 Cosayach were on 6000mt plus of iodine, but in that year it was discovered they were stealing water from the aquifer. The courts dealt with them and forced the closure of 33 wells.

Cosaych have 3 sites in the Tarapaca region near SQM, they are Cala Cala, Negreiros and Soledad. I looked them all up and it seemed they only had an environmental permit for one site, so illegal production at two of them. On the Chile gov EIA site it can be seen that Cosayach stopped the application at one of them.

I forget the full details but some time in April 2013 a judge made a daft decision which was later rescinded. I don't know if that was the catalyst but Cosayach obviously opened up 38 illegal wells as those were closed down and a boss imprisoned in May 2014. In reports 400 ls was mentioned as the amount being stolen

IOF thought they has reached about 3,750 mt per year at the time of the wells closing, which was 2000mt more than had if they hadn't stolen water.

In late 2014 they got their seawater pipeline in place 127 ls.

The 1800 mt was a legitimate water supply, so in theory if they haven't opened up illegal wells, it should be 1800mt plus water they can produce from 127 ls.

I'll try and dig out some facts as Sirocco extraction rates and Acf Minera are listed somewhere.

[serratia] 16/6/2015 15:20

SG,

Perhaps you can confirm or correct me. Coysach were making 3500 tons and using 400 l/sec water. Their pumping rate for the seawater line is 127 l/sec. Unless there's some other factors that means the seawater line will only deliver just over 1100 tpa iodine. If SQM get the line it will still not allow them to stay at 6000 tpa from NV ?

[meb123] 16/6/2015 14:45

SG. A couple of questions if I may . How much iodine do you think Cosayach are producing now compared to their highest levels. As they are in trouble with court cases and debts etc, when do you think is the day of their reckoning ?

[monts12] 16/6/2015 14:25

Hi SG I'll repost in case you missed it:

monts12 16 Jun'15 - 12:14 - 33707 of 33722 1 0 edit

superg1 16 Jun'15 - 11:39 - 33703 of 33705
"Now at some locations they are producing it at under $15 per kg. Some Chile producers are and have been producing at 2 to 3 times that cost."

Can you show me where you get that figure from please SG1?