Iofina Share Discussion Threads

[jasisdad] 28/6/2015 08:33

When I first bought in for a "watching" amount in July 13 at £1.44 a MM friend of mine had said it was a buy as it looked like it would be sold. Problem was I forgot to ask him his thoughts when I bought loads at £2!!Question: with a market cap of just over 31m and with such huge upside, why haven't other bigger Iodine companies tried to buy us recently? Or frankly a wealthy individual/fund/investment firm.My only take is that those actually in the Iodine world realise the upside is much harder to predict or is not there. And yes if I think that I should sell but I am paid up, have already written off my investment here and frankly I'm too pig headed to admit I may have been wrong!

[bogg1e] 27/6/2015 23:54

che, can you post the entire article please? Thanks

[serratia] 27/6/2015 23:26

Interesting 3 red ticks would any of the three or is it one with three avatars care to say why they think -
We will not make the volume/the iodine price won't rise and the water application will fail. I'm open for reasoned debate.

[che7win] 27/6/2015 23:04

SQM:

On water usage for iodine, read last line:

The Chilean miner has issued a statement clarifying the status of arbitration proceedings between the company and state development body CORFO, asserting that neither party has walked away from the negotiating table. Meanwhile, SQM is said to be facing increasing pressure over its water usage for its iodine operations in Tarapaca.

[serratia] 27/6/2015 21:22

Well I'm still here not sold any and have been buying. All paid for. My reasons - the risk is to the upside.
Iodine production last year around 320 t + recycle. This year on a 580 - 600 ton rate + recycle. Costs $20/kg maybe less and iodine selling at $30 today. An extra 260 tons is worth about £1.7m added profit. Can they deliver ? They're on plan so far the old crew have gone so I think they'll deliver.
Water - A surprise result, the regulators don't want a judicial review for reasons explained. I still feel there is a good chance of it going through. There's no way anyone can predict this one but I'm going for 60:40 in our favour.
Iodine price - The excellent work by superg makes it clear that iodine prices have to rise. A $1 rise adds around £400k to the bottom line.

Putting all that together for me the risk here is to the upside. Nothing is certain if it was it would be priced in already. For me the odds are for an increase in profit. I'm happy to hold for quite a while.

[superg1] 27/6/2015 20:26

There is a difference between lies and fail to deliver. Plans were set in place

If you feel that way, and have some, selling them must be the obvious move. I know I would if I felt the way you do.


Nip in the road is a poor one. A rogue decision which has he bureau and others fearing a judicial review.

It has been said by the HE his decision is a complete U turn compared to all other permits issued.

George forgot to apply for the permits to produce iodine (io5 and 6). Io3 to 6 it seems they changed the locations. Io5 and 6 they changed the design. A suggestion of 200k dollars to fix each of those (already done) They didn't arrange power for io5, so had a high cost generator.

A cluster wotsit from a bunch of twits.

The last recent issue was a skeleton left over that wasn't spotted until late on and I mean 20 minutes to go late on (that's another story)

I think you'll find io2 does half the work. That was the first plant in OK from the old team. The intended sites still exist and were like the io2 site.

The information about SQM and others is to understand the industry and where it is. They are relevant, as proven in 2011/2012. The only difference this time is that we can see it coming and know what happens when it does.

[rogerbridge] 27/6/2015 19:08

Some sensible posts, I belive that we are all very dissapointed with the boards past management and that is reflected in the share price.

Tom does seem as though he has a handle on the company and word from the AGM and conversations elsewhere seem to be positive.

I only wish that the previous management had not borrowed so much and had not gone hell for leather without the ability to manage the expansion.

I have made a decision to stay invested and the only reason is that my shares should be much higher in 12 months than they are now. In fact it may be quicker if we get the green light for water, or we see the iodine price increase.

Like most here, I am a lot wiser now and take any comments with a pinch of salt, from now on I want to see it in the figures.

[peterz] 27/6/2015 18:18

Senden-

"but I have certainly started to ask myself whether I really believe this investment will ever actually bear fruit, or whether I'm simply staying put because I can't stomach taking such a stonking financial hit"?

I imagine your comment above resonates with many respected posters that have been silent on this bb of late…

I hope the BOD do not continue to let us down with both performance and the information they offer us.

[bocker01] 27/6/2015 17:35

Monts they're hardly going to say that we need the money because we might go bust, plus in April 2014 lots of issues were not known eg iodine price situation. They wisely took the dosh while it was there, what they said at the time was most likely what they thought.

[rhwillcoll] 27/6/2015 16:42

Actually, when all is said and done, it's up to the individual to decide whether or not to stay invested here. If I genuinely felt like a few of the posters here, I would have recently sold up and moved on. Too painful to have drip drip drip of continuous negative feelings/thoughts about any company or situation, and far better to move on and draw a line: life is indeed too short. I think it was Harold Macmillan who talked about "events, my dear boy, events".

Well, each to their own. For myself, I have garnered all the current information
that I can, including going to the AGM. Satisfied myself as to the integrity and capability eg of Lance and Tom. And especially, tried to do my sums. My "take" from the recent production update and from the AGM etc is that the company has now, at long last, been able to turn a very big corner. Not only are we now producing over 50MT per month, but this is on a consistent basis, with current OPEX at these production levels being very low. Finncap say $20, but other indications are that it may be even better than that (Lance talked about this level being stated "for competitive reasons"). Well, we must be selling (ie the iodine over and above IC) at $30 or slightly above. Then there are the IC sales, then there are probably some non-iodine sales. It seems to me that we are doing pretty OK.

So, I'm satisfied with what the company has achieved (to supply its own chemical division, and to be in a position to build up iodine stock outside of that, at a growing rate). That is, we have a growing company here, and very well-positioned for further roll-out: an extra 100 MT pa rolling average over the next four months from further efficiencies, then a replacement IO1 plant probably early in 2016, which should add a further 200MT pa. Add up 600MT + 100MT + 200MT - well, I'd say we'll be more or less at 1,000 MT pa on a rolling basis. RB Energy will go pop in the near future: an extra $2 per kg - so, we're up to $32, etc.

Well, with all the Chile problems: energy costs, labour costs, water availability, fraud, and with increase in world iodine demand of 1400MT per annum, plus with world production currently less than world demand, I think that IOF is in a good place.

The upshot for me and the missus: we're staying right here with all our shares. There'll be larger entities sniffing the company out in due course, given our current low CAPEX and OPEX. I'm very happy to wait until then. Investing always was for the patient. Just a few thoughts as to where I am with all this.
PS Yes, the lowest cost iodine producer in the world, and with extremely low cost roll-out, as and when it is prudent to do so.

[freshvoicem] 27/6/2015 15:13

Monts
I have to agree it is very difficult to reconcile what has been said at various times with facts subsequently released.
We are cash positive .......not much money at year end
We are lowest cost producer....we aim to be in lowest quartile......up to 60$ under G&G
Further expansion.......no new plants this year
Nip in the road..........no water
Not to mention all the massive promises of number of plants and output Lance made, before he left the company for health reasons, which is why the price shot up to over £2.
If they were honest at the time I guess there would be a lot less of us on this BB now.

[monts12] 27/6/2015 14:37

superg1 27 Jun'15 - 10:05 - 34229 of 34233 1 5
"So when I say SQM comments are BS it's because I read what they say, then research it v the actual facts."

SG why not focus on how IOFs comments are BS and read what they say, then research it v the actual facts?


April 2014 RNS

Commenting on today's announcement, Lance Baller, Non-executive Chairman and Co-founder stated:

"We are pleased to have completed this convertible bond issue with Panacea. While this financing is not needed to sustain the current operations of the business, it allows us to look at further expansion through the construction of mobile units or plants similar to IO#2, both of which would be expected to be accretive to earnings."

IOF have lied to and misled their investors in virtually every RNS/IR/media event they have released in recent memory, I can't understand why so many people cannot see that? Does constant talk of SQMs problems/Chile change the reality here?

[severnof9] 27/6/2015 12:05

SG1

Thank you for the detailed research you have provided.

It is clear that the controlling families of Cossayach or SQM are strangers to good governance and the rule of law.

Did you say previously that the current president of Chile is no friend of SQM? If so Coordinadora por la defensa del agua y la vida should perhaps petition the President to provide support.

I also hope that the water issues of SQM come to prominence. The fact that SQM are listed and the SEC regulates them is bonus

The issue remains though that we need either Cossayach to go bust or SQM to have water rights suspended. One or other would be inevitable if these were in the UK but in Chile there is no certainty of either.

[superg1] 27/6/2015 11:20

Santiago just saw it's driest May for 45 years and is in a bit of a drought mess.


No worries El Nino is on the way (rain).

Apparently not

The head of Monitoring and Dissemination Meteochile, Arnaldo Zuniga said that to enact the phenomenon of "El Niño" sea temperature must be above 0.5 ° C for a period of at least three months. "Between January and March, the temperature of the surface of the ocean rose one degree, but in the next three months decreased, which did not allow a sea link with the atmosphere so that the evaporation of water and formation of cloudiness occurs" he said.

Zuniga said that the direct cause of why lowered ocean temperature is unknown, but claimed that this leads to the conclusion that we are in the presence of a phenomenon of "El Niño Weak" and facing an uncertain scenario. In response, the expert "does not rule out that 2015 is a dry year."


Tbh I hope that get their el Nino for the sake of the drought that is devastating the country. It won't any difference re the mining north.

Another dry year like 2014 and the last 5 years could be catastrophic for them.

I say like 2014 but so far it's been much worse than 2014

'In fact, there is a significant rainfall deficit in relation to 2014. In addition, according to estimates by weather, poor air quality tend to stay, "said Environment Minister Paul Badenier.'

[superg1] 27/6/2015 10:46

I have copied the actual comments from that link into the helium header.

I have also kept copies in case that web page mysteriously becomes unavailable.

Consider the SQM bribery/fraud meltdown and have a read of the water rights history for their main mine.

Then consider the same challengers to the original award are going after SQM re environmental damage.

Basic news is out in small corners of the media, once it gathers pace, the market will want answers re the risk.

The risk is spelt out in great detail and it looks like a substantial risk.

We are not talking long court appeals here, there are laws in place on water rights to protect national reserves.

What SQM say is cobblers.

As in the details, corruption and bribery to achieve those rights is apparent, and gets a mention.

The original requests were refused and Cosayach fought for 6 years to get them and failed.

Up pop SQM a bit of wheeling and dealing no doubt, and it was sorted in quick time for them.

The more I read that link the more corrupt SQM look. I do hope the water issue raises it head to levels that SQM can't ignore. t seems highly likely.

I ask politely to IR SQM emails as a concerned investor about the current news but I don't get a reply. Hmmmm perhaps the IR folk are in a high annual leave period. I'll try next week :-)

[superg1] 27/6/2015 10:23

Now the archive as it's relevant.

Those nasty water thieving Cosayach folk, send them to prison for it. They did on the back of an SQM allegation, one boss got 61 days.

SQM recent events to show over the last few years the extensive bribery corruption and fraud.

So who stole the water?

Was it Cosayach?

The answer, which may surprise you, is NO, technically no.

SQM are the thieves.

Cosayach applied for those rights before SQM and for various reasons got turned down. It went through he courts and still they couldn't get them, there was considerable evidence not to allow the rights and many challenges to the award of them.

Then up pops SQM applies for rights and gets then along with huge expansion.

You wonder why Cosayach drilled wells and 'stole' water. It was their water, they were first to apply and no doubt by bribery and corruption SQM got the rights.

Have a read this explains it all in great detail. No analyst and no SQM investor has the slightest clue about the history.





I'm looking forward to the eventual SQM comments about the challenge to their NV mine. I wonder what BS they will come up with.

[superg1] 27/6/2015 10:05

So when I say SQM comments are BS it's because I read what they say, then research it v the actual facts.

As you can see not only can they not expand at NV without causing damage, but it seems current water use and production IS causing damage and the head of the EIA is involved.

That damage was hidden by Cosayach water theft actions.

I sit quietly with some things in the 'archives' ready to mention them if it becomes appropriate.

I have long stated that SQM can't expand at NV due to water. Why would they abandon it in a $665 mill move if they can expand to 11,500mt at the location. It was supposed to be abandoned by now.

On paper they can, in truth they can't, it's just a lie and they know it.

The facts and recent news tells you it's all lies. So the next one that says

'Simple SQM can just expand and add some production' they have low costs etc etc, then do some research.

[superg1] 27/6/2015 09:56

So following on from that post, let's break down what SQM say and compare them to the facts.

Don't forget in the conference call for year end results they led analysts to believe they produced more in 2014 than 2013 which was a lie.

That particular analyst thought SQM were on 12,500 mt production per year for the last few years, their peak record rate was 10,900mt when they opened up El Toco again (now closed).

So where can SQM expand and what do they mean by capacities to expand etc.

Pedro de Valdivia maxed out at 3.2k mt they have no expansion capacity there.

Easy answer from you guys is create some more heaps to leach. No they can't. PV is a vat leach process. Ore taken by truck, then by train to the facility, for some aspects they have to heat the water to leach out the iodine.


El toco

Yes they can open that for a production capacity of 1.7k mt` but would need prices a lot higher to make it viable. Recent actions suggest $40 to $45 plus per kg needed. Plus they would need to re-employ over 1000 staff they dumped.


NV

Current capacity 8,500 mt but can go to 11000 mt with expansion. The BS around that statement is obvious to me and explained below. Btw that capacity includes the Iris plant.


So this is their claim

'We have the flexibility to adjust our production according to market conditions. Our total current production capacity at our iodine production plants is approximately 13,300 metric tons per year.'

PV 3.2k mt

ET 1.7 mt

NV 8.5k mt (current capacity)

total 13,400mt 'capacity'

Analysts read that cobblers and think all is ok.


Note

'according to market conditions'

That's all about price they can't open El Toco unless the price is much higher. so at current prices that's 1.7mt they can't do..


NV current capacity 8,500mt, ????????

So why when the price took off did SQM not increase production at NV. They did start up the Iris plant to add about 1000mt which they had previously closed. They then closed the iris plant at the same time as El toco but then opened it again in Aug 2014.

With the market crying out for iodine and paying over $100 per kg, the max output was 6,100mt. The SQM inventory completely expired in that period, so why didn't they add that extra capacity of 2,400mt.

What they actually did was open up the old expensive mine for 1700mt, then closed it once prices went below $45.

The answer is simple...... water.

Note the comment about the approved environmental study about Pampa hermosa (NV) and the 570 litres per second rights that I have mentioned many times.

Those are unused rights and are what SQM are relying on for the expansion claims.

Those rights cover the aquifer that feeds the Tamarugal national reserve.

May 2014 Cosayach are prosecuted by SQM and the environmental authority for theft of water and environmental damage to the national reserve. Cosayach did the same in 2011 causing damage then.

So Cosayach stole water which SQM have rights too (570 litres per second) but haven't been using. That is is their expansion option.

The reports estimate the water theft amounted to 400 litres per second which is well within the 570 l/s rights.

Current capacity of 8,500 and expand to 11000 mt relies on the use of more water and the exploitation of the 570 l/s rights in full.


So SQM took Cosayach to court for using those unused rights, and have been very helpful with the EIA showing how use of 70% of their unused rights has caused environmental damage. A Cosayach boss got 61 days in prison.

Nice one SQM great job.

Doh. SQM just evidenced and proved in court that use of the water they want for expansion causes serious damage to the national reserve, not use over 570 litres but just 70% of it.

But hang on production in he area and water use was lower in 2007 than anything in 2011 but still claims of environmental damage were being caused.

So what were SQM producing at the location when Cosayach were stealing water and causing damage in 2010 and 2011. 4,800mt and 5,200 mt.

Cosayach had 33 wells closed in 2011 and 38 wells closed in 2014. They had obviously opened them up again. The drop in production by closing those wells in 2011 is reported as about 4000mt.

Through 2012 to 2014 SQM increased to 6000mt for each year, 800 to 1200mt more than 2010/2011. That's about 25% of what Cosayach were doing illegally.

So we know without doubt that 3000mt of production, by use of that aquifer, over and above current use, causes serious environmental damage.


May 2014 Cosayach well closed. Nov 2104 Cosayach pipeline complete. Finally after 5/6 years of water theft and environmental damage Cosayach behave themselves.

NV is a relatively new mine and was doing 2,200 mt in 2005 and 4000mt in 2008.

Over the last 5 years Cosayach have been battered re environmental damage with their water theft finally defeated in May 2014.

One year on and the annual review (April 2014) comes up re Pampa Hermosa (the NV mine).

News recently out.

'Now it was the turn of the Regional (or Core) Council of Tarapaca, which filed a complaint with the Superintendent of Environment for any breaches of the Environmental Qualification Resolution that would be incurred by the Sociedad Quimica y Minera de Chile (SQM) in its plant "Pampa Hermosa".

'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."

'Meanwhile, sources linked to indigenous communities near the Salar de Llamara indicate that soon also be added to the request made counselors Tarapaca.'

[monkeymagic3] 27/6/2015 09:19

I think that is the biggest point most have taken away here, whilst it was being ramped here, the CEO was actually concerned about his investment and the business was struggling to survive.

April 2014 RNS

Commenting on today's announcement, Lance Baller, Non-executive Chairman and Co-founder stated:

"We are pleased to have completed this convertible bond issue with Panacea. While this financing is not needed to sustain the current operations of the business, it allows us to look at further expansion through the construction of mobile units or plants similar to IO#2, both of which would be expected to be accretive to earnings."

[superg1] 27/6/2015 08:39

Severn

It's nice to see that someone not only reads posts but also checks through the data out there so nice one.


Your posts prompted some thoughts on what I anticipate is the perception of many on here.

This is the topic.

Iodine shortage, easy answer, SQM just open a mine or increase production.

Here is what they have from their data.

Pedro de Valdivia mine current rate 3.2k mt capacity 3.2k mt.

El Toco/Maria Elena (the closed expensive mine) current zero, capacity 1.7k mt.

Pampa Blanca Zero current. closed years ago. Capacity recorded as N/A. In other words it's not viable to produce there and it was to be opened with a $635 mill spend and would take 18 months to 2 years to do it.

Nueve Victoria current 6000mt expansion claim up to 8,500mt


'Operations at the Pampa Blanca site and the El Toco surface mine (which is part of the María Elena site) were temporarily suspended in an effort to optimize
our production facilities with lower production costs.'

The pampa suspension was 5 years ago, El toco has been closed twice, it opened again when prices went mad in 2011/2012. It closed in late 2013 when prices were heading below $45 per kg.

More SQM 2014 comments


'We have the flexibility to adjust our production according to market conditions. Our total current production capacity at our iodine production plants is approximately 13,300 metric tons per year.'

In September 2010, the National Commission for the Environment of Chile (Comisión Nacional del Medio Ambiente or “CONAMA”), currently known as the Environmental Evaluation Service, approved the environmental study of our Pampa Hermosa project in the Tarapacá Region of Chile. This approval allows us to increase the production capacity of our Nueva Victoria operations to 11,000 metric tons of iodine per year and to produce up to 1.2 million metric tons of nitrates, mine up to 33 million metric tons of caliche per year and use new water rights of up to 570.8 liters per second. In recent years, we have
made investments in order to increase the water capacity in the Nueva Victoria operations from two water sources approved by the environmental study of Pampa Hermosa, expand the capacity of solar evaporation ponds, and implement new areas of mining and collection of solutions. Our current production capacity at Nueva Victoria is approximately 8,500 metric tons per year of iodine (including
the Iris operations) and 700,000 metric tons per year of nitrates. Additional expansions may be done from time to time in the future, depending on market conditions.

[superg1] 27/6/2015 08:08

Monts

Yes they would have run out of money at the time the deal was sorted, G and G had made a right old mess of it.

As you note your own line is past tense and it refers to the situation at the time.

'Current opex of low $20s is quoted on this board together with predictions of teens! I still don't know where this comes from. More whispers/nudges/City?'

Not low $20's from me, below $20 currently. The AGM wasn't the only event.


I take it the answers from the AGM shared on here, adjusted and agreed, are what was said at the AGM.

So why what was said in other meetings not acceptable. Much of it hasn't been shared and there have been other chats since.

Here is one for you. 'Iodine at $33 per kg and it's plain sailing'

I expect future prices to be way over that.

I did suggest folks ask about opex at current rates of production and opex at io2.

I believe someone said $20 per kg was the answer given, but other figures have been mentioned below that depending on monthly rates.

Note they have also erred on the side of caution in recent times hence the 220 to 260mt estimate, te low end of which they are set to beat by about 30%

From the collective info I've gained over the last few weeks and without quoting anyone, I'd put recent opex at about $17/$18 per kg.

They mention the io1 move as a 200mt plant, that doesn't fit with other comments so that a cautionary comment too as they can't predict frac and other disruptions, so that will be a comfortable figure.

If they continue through June at the same rate as Apr/May then I have H1 production as about 290 mt.

I think I noted an io2 not up to full speed comment for that period in the AGM posts. If that's right and it gets up to speed, the extra tweaking is largely to so with io2.

They have a few io2 sites planned. Do you realise what that plant is doing and capable of yet and what opex that means.

re

'Wouldn't a price rise resurrect a lot of competitors?'

SQM have just demonstrated what they would do. Those competitors were all looking to expand when the price was high. All of them from Bullmine to Algorta Norte and including RB energy. There was also a new arrival, Sergio a wealthy guy who was going to cash in too.

It was all abandoned well before $30 per kg. SQM closed El Toco when the price was $45

That's the problem to expand they have to spend many millions.

EG SQMs move to Pampa Blanca was to cost $635 mill.

RB ball mill $15 mill, seawater pipeline $50 mill. That $65 mill expense would have taken opex up. The ball mill was for the ALP. The final opex before it closed was $41 per kg

Bullmine replacing trucking in water, $33 mill for a pipeline.

SQM had to abandon their move as the potash price crash shafted them financially.

The price drop just isn't just about Cosayach it was about ending the plans of others. The only bit they failed on was the Cosayach pipeline, they tried to block that through the courts.

The end result as in the comments in the media was that it was an attempt to control the iodine market and nothing more, they had no grounds to stop it.

SQM say (not me), that Cosayach current opex is $33 per kg.

I'm waiting for feedback from someone that has a contact in Cosayach at the moment. No one you guys can think of, and I don't know what will be said, or whether I can share share it or not.

Take SQM comments. We can't be sure how much Cosayach are doing etc etc.

What a load of cobblers that is. The Cosayach mines are on their doorstep, the workers for both mines come from the same small towns. I don't believe for one minute that SQM don't have some sources working within Cosayach.

"We don't know, can't be sure"

Yeah right, they are all together in the middle of a desert with Pozo Almonte as the only near town (10,000 inhabitants). Cosayach operations are 400 yards from the edge of town, with just one road that leads to the port.

With a sun hat, a deck chair, a crate of cold beers and a note pad I could work out who was doing what, Bullmine, SQM, ACF Minera, and Cosayach.

Easier still just ask in the local shop. Iodine is all that happens in Pozo Almonte.

SQM

"We can't be sure, we don't know" etc. What a load of cobblers, they probably have someone working in the Cosayach accounts dept.

SQM and Cosayach hate each other with a passion, SQM spend millions trying to disrupt Cosayach through the courts.

A few pesos can get them all the info they need on Cosayach.

[monts12] 26/6/2015 22:17

Monty what were they saying last week?
I'll tell you what they told me:
In response to my question at the AGM about the purpose of the last loan, Lance stated that if it were not for the Panacea loan ($5m) they would have run out of money.
I found this astonishing bearing in mind Tom had repeatedly stated that the cash balance was increasing (above the $7.5m figure we were last told) in various interviews over the year. Why would he do that then show a massive loss of $6m in the final results bearly 6 months later? Even after exceptionals, it's shocking. Apparently G&G took opex over $60/kg for a while.
They don't mind telling you the opex in retrospect!
Current opex of low $20s is quoted on this board together with predictions of teens! I still don't know where this comes from. More whispers/nudges/City?
Or where? What is the plan, sit and do nothing? Wait for Chile to implode? More "tweeking"? Wait for the inevitable price rise? Wouldn't a price rise resurrect a lot of competitors?
The share price means nothing to some people on here, I think that says it all.....the market must be wrong then? I see instis aren't exactly piling in while it's cheap. Why not? They want it cheaper? Or not at all?

[monty panesar] 26/6/2015 20:04

Not what they were saying last week!