Iofina Share Discussion Threads

[hew] 22/8/2013 21:43

che7win, yes, in due course iodine production EPS and all the related numbers will indeed matter a great deal. But at present the meaningful ones are rooted in the Chem Div alone - and they will not make us rich. Indeed combining those with those from iodine production does nothing but obfuscate the situation. I would welcome the two sets being presented separately and combined only where essential for corporate compliance.

800% growth does indeed sound impressive, but if the start point is from a trivial level, representing little more than a side effect of the progressive development of the production system, it means little. And any significant investor will seek the underlying basis.

[worraps] 22/8/2013 21:11

che7win.....your last paragraph there sums up the current market situation beautifully. It's so refreshing to see it put simply sometimes! Thank you.

[che7win] 22/8/2013 20:30

Baguette,
we have end users in the chemicals divison which is a long established business.
I guess we can leverage those customers to some degree but I take your point that we need to find customers and maybe that's whats happening in India and other places.

Marketing is something that probably needs addressing after plant 4...

Hew, these results don't matter to some degree because they don't show the future growth path of the company.
3p EPS this year becoming 24p EPS next year is 800% growth. If that happens, the market will not ignore it; at some point that growth will be understood.
It isn't believed now otherwise we wouldn't be sitting at a forward P/E of 5.66, we would be 5 times the current share price....that will only happen of course when the market is confident that the company won't mess up the opportunity they have to upset an established industry.

[worraps] 22/8/2013 17:53

BAGUETTE

I must say that longsight's 7376 post earlier, in which he said "The temporary lack of a CEO is really just a silly detail imo in the context of the bigger picture. ditto the speed of roll-out"......left me staring at the screen in disbelief.

The 10 week absence of a CEO, and the speed of roll-out, are just silly details?

What???? To me, they are extremely BIG details!!

I agreed that the fact that the technology works, and with the patent too, is a huge accomplishment to take us forward with confidence.

[everybodywangchungtonight] 22/8/2013 17:29

Another well balanced non emotional response by N3.

Some of you really do need to get your head out of the sand and listen to a balanced debate.

EWCT

[hew] 22/8/2013 17:11

Baguette, yes, excellent point re preparation for Sales - though I hope we don't see that aspect spelt out in the Interims! Our own Chem Div as a first customer does give a slightly gentler start to the sales process.

[jointer13] 22/8/2013 17:07

bag...you talk as if we will never have a ceo ever again.
that is not the case.

[jointer13] 22/8/2013 17:01

hew...that is a good post.

[baguette] 22/8/2013 17:00

longsight I have been harking on about the importance of a CEO and fortunately Worraps agrees that this cannot be lightly dismissed. There is one hell of a lot to be done at the moment. There are some on here who are now saying "the technology works so everything's fine"

Sorry but I have sat in on countless Regional and global market presentations and the Sales/Marketing bosses will always be analysing and presenting the risks from competitors. The most powerful presentation I ever saw was from a European Market Director who presented himself as our key Competitor and for 45 minutes gave a detaled analysis of how they would steal a major piece of our share - it was some eye opener because human nature is to look forward with blinkers.

SQM and others will NOT just sit back and let IOF take chunks of the market - no way. There are many moves they can take to destabilise the market, re-price the market, destabilise IOF unsettle the customer regarding our capabilities etc. Even if they have higher Opex numbers does not mean that will not find ways to make life difficult without having to resort to a "Take Out"

If I were them I would be trying to tie my customers into longer term deals whilst telling them that IOF is in a mess with delayed production and no boss in place.

We will need to stock build for a time because the worst crime of all is to start building new customers, start supplying, then let them down. Until we have several plants in operation and can measure the average throughputs, downtimes, etc it will not be possible to start suppling large orders - during this time we are relatively weak in the market and so i say we need a talented person in the U.S. working flat out to prepare us not just for production but for Sales

[hew] 22/8/2013 16:47

All these worries about numbers! Surely we can see that IOF is an early stage company and production numbers, revenue, p & l, growth (yes, even eventually to dominate the iodine "world"), and all that stuff, is just not relevant - yet. It is playing into the bears' hands to attach importance and serious estimates to specific production numbers at this stage. Speculation is fun perhaps, but just recognise this is IOF and not Shell. Only the first three stages towards what we anticipate are relevant:

- Concept and development of techniques: Done in H1, now patented
- Practical embodiment and proof of operation: Done in H1 via IO#1,IO#2
- Scaling up to full size operation: In progress, over next 6 -12 months

So, from the interims, I seek only:

- that IO#1 and IO#2 are now running as a matter of routine and producing at a decent rate; maximum every day is not important yet, provided it is clear that optimisation can be seen as achievable in due course.
- that IO#3 and IO#4 are well on course towards operation
- that IO#5 and IO#6 are on the stocks

And of course that the established Chem Div is living up to expectations. For that only, numbers are important.

Solid foundations are what matter now.

[bobsworth] 22/8/2013 16:45

Thanks as ever superg.

[superg1] 22/8/2013 16:42

Bob

Let them wait for the 'poor' results. No matter what results say, those short will call them poor.

Perhaps they'll suggest if it's not 500% growth then it's poor. lol

You won't be aware. For one set of results way back, there was a concerted effort to suggest IOF would be doing £50m of fund raising in the old results.

Didn't come did it and got flattened behind the scenes. A total load of BS.

[engelo] 22/8/2013 16:38

noli: apols for distracting from your excellent post 7402 with these trivia :-)

[engelo] 22/8/2013 16:36

I know we know a great deal more on here, but this is what Shares are saying, and some people read it ;-)

BUY.

Quoting First Columbus Free Cash Flow per share 3.9p 2014, 11.4p 2015

Op costs $10 to $20

Atlantis: est 35 bn barrels water. Awaiting approval for 80k barrels per day expected before end Sept. Could eventually provide $6m per month in revenues.

Summary: Scalable business model, medium term upside from water, share slide (ascribed to loss of Lance and SB/CFD investors' problems) creates entry point.

[worsleybird] 22/8/2013 16:33

Nice piece in Shares Magazine today on Iofina.

[che7win] 22/8/2013 16:29

You will see the increase in inventory from 2012 results, that could explain why...

[engelo] 22/8/2013 16:22

Worries are over: someone just told me that we're in Shares Mag ;-) I have a copy (unopened, arrived to-day) so will post some bits later.

[superg1] 22/8/2013 16:08

Bob

Just so all can be aware. The chem div is a different set up to production and hasn't been commented on yet.

The chem div needs X amount of iodine.

IOF said they bough bulk iodine, and as I recall Chris fay in interview in recent months said IOF have surplus iodine.

So they have had plenty for all the chem div needs for H1, so what the poor results is about is a mystery.

IOF have said there were certain delays, and production less. That extra iodine could have been sold, maybe as a bulk product, but would have probably added to the surplus.

If just go yoy v H1 2012, they have said things have gone well.

So poor what?. The chem div will have done well I suspect.

[noli] 22/8/2013 15:49

This is from July 2012, quite interesting on selling water across borders and swd locations, note Roosevelt and the swd site locations. You need to take ito account where the water permit will be positioned.

The ground water wells data provide completion date, purpose for water, and the drilling company. Based on these sources and information, ground water wells that yield greater than 300 gallons per minute or more are used in the analysis. This results in 272 fresh water locations with individual supply over one million barrels per year (see Eq. 1).
300 gallons X 60 minutes X 7 hours X 365 days = 45,990,000 gallons per year = 1.094 million barrels per year (1)

Water from Montana cannot be sold to other states (Montana Department of Natural Resource and Conservation (b) 2012). The guidance for municipalities report from April 19, 2012 says:

Municipalities may utilize their existing water rights to sell water for oil development as long as the volume and flow of the water rights are not exceeded.
 Municipalities may also expand their water rights under the following conditions: If a municipality wishes to increase its usage, including either the flow rate and/or the volume of its water right, then it must apply for and receive a Beneficial Water Use Permit (Form 600) for the additional flow rate and/or volume before actually increasing its usage. If the municipality expands its service area outside the historic place of use and needs to increase its flow rate and/or volume to service that growth then that also requires a new permit.
If the municipality expands its service area outside the historic place of use in order to sell water, but is not increasing its flow rate or volume, an Application to Change a Water Right (Form 606) ("Change") will need to be filed to add the new place of use.

For example, if a municipality wants to set up a new water depot a mile outside of its municipal boundary then it needs to file a Change application and receive
authorization before putting the water depot to use.
The potential to haul water from North Dakota to Montana is feasible as long as the company has been issued the "point of diversion" permit for using the water, according to state regulatory officials. The potential to haul water from Montana to North Dakota is not feasible, unless thecompany or individual meets the "Montana Code Annotated 2011, 85-2-311 sub-section (4)"
criteria (Montana Legislature 2011).
The Montana Department of Transportation has indicated that freshwater movements cross the border between Montana and North Dakota despite the stated regulations. This study includes 42 freshwater locations from North Dakota, which will allow for cross-border movements (Figure 2-2). This model includes two scenarios: water procurement crossing borders and water consumption within state boundaries.



2.3. Salt water disposal (SWD) sites
The Montana Oil and Gas Division provided oil well GIS shapefiles. Among the types of wells, 272 active and drilling disposal sites are identified in Figure 2-3. There are 169 SWD sites in North Dakota and 103 sites in Montana. The SWD sites in North Dakota were obtained from the North Dakota oil and gas GIS map viewer (North Dakota Department of Mineral Resources (2012).

[superg1] 22/8/2013 15:39

Bob

Sorry just saw this.

On the issue of the coming interims for 2013 they were strongly indicating the results will be poor and a real disappointment to the market. Their logic being that IOF3 has been delayed by several months and IOF2 has been well below expected output due to additional bore holds etc.

As you know I use filter, but if anyone wants to ask a question just do so.

So the results will be poor they say. Well what do they mean by poor. Yes we don't have the extra IOF production to add, but no I don't think it will affect the chem div and what they have been doing.

Yes IOF did make a bulk iodine purchase to cover the chem div need, and as you know the chem div has it's own production via recycling at 5mt per month.

IOF spent most of last year buying in iodine.

H1 last year was around $7.6m revenue. So if they are saying poor, do they mean a drop yoy.

So is the same revenue poor, 20% up you poor, 30% up yoy, 40% up yoy poor.

Assuming a better production rate with extra brine and new plants, H2 should be more than H1.

So the question is 'what is poor'. no-one is expecting triple digit growth for H1, but we do see that on delivery for the future. Triple digit growth is very rare. Growth is pretty rare too for most share.

If Iof had 40% growth they say ha ha didn't hit 50% etc etc

[engelo] 22/8/2013 15:37

This has all been said before, and I take no credit. The interim figs will not help much in themselves but will imo provide details of rollout progress and add various clues to confirm the following calc which is all important:

Assume rollout on time and the 2013 exit rate as calculated by SG and several others with I02-6 all operating. This is the base rate for 2014. Then assume the 6 plants in 2014 will add 50% to this rate for 2014 as a whole (I07 balances out I12, I08/I11 and so on). 2014 exit rate will be at least double 2013 exit rate, and so it goes on.

Just on the iodine side we have to add mini iosorbs, maxsorbs etc etc, IOF Chem and other things they've undoubtedly been working on.

This is a tinder dry bonfire waiting for a spark and at some point around the interims THE MKT WILL CATCH ON, helped as SG says by other suppliers losing contracts, what the new CEO says, or someone finally understanding the water or the oil, or something else we haven't thought of.

1 month to go imo, max.

[che7win] 22/8/2013 15:34

I happen to think £10 is quite possible in 18 months, but if any one is expecting anything major in these interim results you'll be very disappointed.

64MT is less than 1p EPS, we will have produced as much in July and August than the whole of the first half which won't of course show through to full results...