Iofina Share Discussion Threads

[king_roster_iii] 21/9/2013 13:44

What about putting together a series of IOF investor vignettes, entitled

"What were you doing the weekend before you got rich?"

:)

[dr andrewd] 21/9/2013 13:41

Naph,

I hear what you say about getting the plants up to speed. Lets say each plant takes 3 months to ramp up to full production as you suggest, the impact of this actually results in the production rates quoted being achieved 6 weeks later than I quote (checked with a spreadsheet). So no concerns with that delay for me if it happens.

We should also bear in mind the following:
- there is a post from July suggesting IO3 is capable of 600-700mt and perhaps it could be even higher than that?
- this means IO1-4 should be able to crack 1500mt on their own
- it is also rumoured that brine is already in place for IO3-6, so ramp up may start from >50% capacity once commissioned.
- as Noli points out some plants for 2014 are likely to be higher capacity Maxsorb units
Hence I tend to see the upside been more likely than not.

Anyway all will be proven in the fullness of time, but any small delays due to ramp up of production won't affect the future of the company.

[noli] 21/9/2013 11:34

One of the key points for next year is the Maxsorb = Plant/Hydrosorb = Unit. How many Maxsorb's can iof build on higher bpd and decent ppm rather than high ppm, we know the average ppm in OK is 300 so a 50 to 80k bpd plant will do very well indeed compared to the 30k plants.

The Hydrosorb units are for 800ppm plus brines so again excellent once in play, as iof mention plants to be built and not units, next year we will see 30k & 50k bpd plants come online. IOF state 6 in total.

Then i am pretty sure we will see at least 1 mobile unit, a lot more imho and also at least 1 Hydrosorb unit. These have not been counted by iof in the rollout.

[neddo] 21/9/2013 11:25

two working days left too buy ?

[naphar] 21/9/2013 11:15

Dr Andrew,

Nice analysis, although I do disagree slightly.
Assuming we continue to ignore water, mobile pods etc etc, I think your analysis overstates the production potential a bit, even though I am happy to agree a 300-450mt output range is viable at full capacity.

Where I disagree is with the annual production numbers you associate to Io2-6 for 2014, IO7-12 for 2014 and so on. It seems to me that the forecasts you have there assume IO5-6 will be producing at full capacity in 2014, and that IO7-12 will be producing at full capacity for on average, 5 months of the year. I get the logic for the 5 months average operational time, but I think the first 3 months of production will always be slower, maybe achieving 25%,50%,75% capacity, or 1.5 months full capacity production from a potential 3. So more like 3.5 months average production for IO 7-12 is more realistic, but still assumes full brines are available to use that capacity and there are no interruptions etc.

I don't wish to be critical about your production numbers, but based on your stated assumptions, I feel the operational realities of life means the outputs you have stated above are optimistic.

Of course, that does not mean they are not achievable when reality differs to assumption in 2014. We could have production from minis, some of the plants could be at the higher end of or exceed your case 2 450mt per plant, we could install the plants quicker and get in 8 not 6. On the flip side, things could go the other way.

[meadow2] 21/9/2013 11:03

A passing thought; the new CEO and the new CFO were together in the past at Voyant Technologies, so there should be no delay in their establishing a working relationship at IOF. This, perhaps, explains the delay in the CEO's appointment if he was keen to bring the CFO with him.

[che7win] 21/9/2013 10:52

From the chart below, we are still trending up on a longer term bowl structure, right now there's no reason why we don't get a good uplift from here.

I think year high is possible by year end:

[che7win] 21/9/2013 09:56

Dr Andrew,
Yes, good post. The only external factor I have my eye on is the iodine price.
I have worked on a margin of $30 per kg and I still see the share price tripling from here.

That chart is looking good for long term holders, I think it's rising faster as time goes by. I'll elaborate later.

[dr andrewd] 21/9/2013 09:42

Che. i agree. Also:

Lots of positive info is about. The CEO RNS suggests IO3 is complete and IO4-6 are in build. Rumours suggest IO2 could be at or around full capacity for brine with brine all sorted for the new plants and IO7-8 to start construction this year. Clearly we now have a CEO that understands how to roll out the plants which bodes well for the future.

Last month I posted some projections for iodine production, it sounds increasingly likely to me that we will achieve the higher level in my prediction next year. My projections and the assumptions I used to generate them as I posted last month are below:

"I will use the following assumptions:
- revenue $55 per kilo of raw iodine produced
- margin $40 per kilo of raw iodine produced
- plant output presented for two cases for each year
- case 1 - conservative 300 t/yr (based on 1t per day for 300 days per year which is where we might expect IO2 to be now)
- case 2 - close to capacity 450 t/yr (based on 1.5t per day for 300 days per year which is where we might expect IO2 to be at in the future with new brines and 30kbpd)
- plant roll out is up to IO6 this year, another 6 plants next year and a further 8 in 2015
Note the is considerable upside to this as the minis etc are ignored etc...

2013
- recycling - 60t
- H1 - IO 1+2 65t
- H2 - IO 1+2 180t
- H2 - IO 3+4 100t
- H2 - IO 5+6 no meaningful production
Total = 405t - total revenue = $22.2M total margin = $16.2M
I could easily see this being 100t either side of this, but a good indication for raw iodine only. (Edit: I now believe we more likely to be north of 405t that not)

2014 (assume given that indications are that IO7 and 8 to start this year, IO7 will start producing end Feb with new plants starting every 2 months thereafter)
IO1 60t
IO 2-6 1500t - 2250t
IO 7-12 750t - 1125t
Recycling 60t
Total = 2370t - 3495- total revenue = $130.3M - $192.2M total margin = $94.8 M - $139.8M

2015
IO1 60t
IO 2-12 3300t - 4950t
IO 13-20 1050t - 1575t
Recycling 60t
Total = 4470t - 6645t- total revenue = $245.8M - $365.4M total margin = $178.8 M - $265.8M

For 2014, after tax and exchange rate, eps is approx 37p to 55p per share.

So on a 2014 PE of just 4, at 37p eps, pretty much covers the present share price. Remember, this is only for iodine production and ignores everything else. IMO this is a bargain for a growth company."

"So for clarity, my prediction gives between 37p and 55p eps and a very simple analysis therefore gives the following for shareprice based on predicted 2014 eps.
- PE 10 , £3.70 and £5.50
- PE 20, £7.40 and £11.00
- PE 30, £11.10 and £15.50

Therefore, I look forward to indications for the half year results that this will be achieved without water, oil, helium etc etc etc. looking forward to the results"

So in summary, my previous predictions still look to be good with the upside case looking more likely for 2014 onwards and if the company achieve the planned roll out (increasingly more likely with a CEO that has already proved himself in this area) then IOF is currently a bargain.

Bring on the interims.

[che7win] 21/9/2013 09:10

We know about this years production problems, that's why the share price declined from the summer. I expect that is largely behind us, but the market is still pricing IOF backwards, not forwards.
As an example of a business that stumbled, the market priced wrong and then the market couldnt ignore that the growth was there all along, just look at SGP over the last year...

Any reiteration in the results about opex costs and plants 3,4,5,6 being on track will change the outlook here.

Just a reminder that Investec's conservative sum-of-the-parts valuation of 230p a share assumes Iofina builds 12 plants by 2016 (the broker ascribes no value to the proposed water operation at this time).

The company has stated 6 plants next year which will meet Investecs plant target one year early. That and any water revenue will mean Investec holding or upgrading future growth - provided the iodine price doesn't fall too far.

As for measuring a stalwart against a growth company, MKS has a PEG above 1 next year (its stable and not cheap); Iofina has a PEG of 0.02 and 470% growth next year. There is no comparison.

ASC has a PEG of 3.21, its results were dazzling but they would need to be at a P/E of 118. The market is paying a very, very high price for that growth, I partly understand why as its a quality business, but very expensive (incidentally Titus well done on your trade).

No, if you were doing a proper search, you would be comparing the fundamental outlook of stocks to compare what companies can match the growth expected of IOF, then compare that to the share price to see if the growth is priced in.

Based on the following criteria which IOF fulfills:
a maximum price earnings ratio of 8
a minimum earnings per share growth of 200%
a maximum price earnings growth of 0.02
a minimum cashflow ps/ earnings ps of 0.01

I find 3 uk listed companies to compare with IOF.

They are:
TLDH
HAWK
PAA

The only one I would consider is HAWK.

The market has IOF priced on a forward P/E less than 7 against growth of 470% and that doesn't include water, gas, oil, helium developments.

Any positive news and IOF will explode upwards here, the market is right now wanting confirmation of that growth.

To be on a propective P/E of 20, the IOF share price would need to triple from here.

That's why I remain here and have been adding as much and as fast as possible.

[bobsworth] 21/9/2013 08:54

Looking forward to the Trolls being blown away and torched by Iofina in the coming months.

Ping it on Iofina!

[n3tleylucas] 21/9/2013 00:15

So what will be the main talking point next week?

I believe Investec will issue a note downgrading both profits and share price target.

It will be a bad news week, very uncomfortable ... for some.

You have been warned.


On a brighter note, have a great weekend everyone, whatever the site.

[n3tleylucas] 20/9/2013 22:57

looking at the bigger picture

[superg1] 20/9/2013 21:15

Ceo done io3 built, it seems from that last rns, and io4 to 6 just like they said would happen.

io2, I did said the GMP note is out of date.

Personally the CEO timing and any delays in builds (no sign of that) is of no concern to me.

I believe they are going to build these first 6 plants then build some more.

For the umpteenth time, IOF have said quite clearly that they have sites of 450mt plus, some sites higher, and numerous sites of extremely high ppm.

The reverse calculations form production figures show the ppm is there, and that they just need the bpd.

Io2 was at 18.7k bpd , but dropped back it seems on that update re production. GMP have it at 80% flow rates (24k).

The desire is 30k bpd. That extra brine is more than io1 does.

Some wonder if the BPD will be available. The facts we keep posting about the boom seems to fall on deaf ears in some cases.

All will become clear, but from the wells that have appeared over the last few weeks and months around io2, they should have more brine than they know what to do with, as I'm sure will be seen shortly.

400mt plus puts io2 at over $20m revenue p.a. There will be a few more like io2 yet.

If you have one going at a rate of over 400mt, the next 4 will surely make IOF a material producer.

They have given a clue, as from those plants they expect to go over 1200mt per year.

Where the share price is, or what it is doing right now, doesn't reflect the business plan.

Add in the next 6 and does that mean we are up to 2500mt or more. In 12 months from now, form very little to maybe one of the top producers.

PI's will come and go. I'm very confident in my investment here for much higher prices than those that exist now, as are a number of institutions and serious investors.

It's all about patience, and looking at the bigger picture.

[monts12] 20/9/2013 19:47

Webby
If you are in the South you should attend the Investor Presentation in London next week as per RNS of 6th September:
"A presentation for retail investors will be held at The Grange St Paul's Hotel, 10 Godliman Street, London, EC4V 5AJ on Wednesday 25 September 2013 at 2.00 p.m."


Don't bother with the IOF website, it's been a bit neglected of late but that will be fixed soon from what I understand.

[mikkydhu] 20/9/2013 19:20

I think the share price fell because it had risen too far without actual sales figures to support it. It was waiting for a trigger. That trigger was provided first by Lance Baller's illness and resignation and then by the disappointing update. Good news on iodine production may help restore the share price to some extent, but there is nothing like a positive trading update to make a real difference to it.

[1madmarky] 20/9/2013 19:10

Monty Panesar from the old thread

EverybodyWangChungTonight - 10 May 2013 - 16:26:09 - 24700 of 26229
Forgive me if I am wrong, but with so much delivered last night it is impossible to remember everything to the nth degree of accuracy.

I thought (possibly wrongly) that JP said that without a US listing (which they don't have nor forsee having) that they are 'prohibited' from 'soliciting' presentations (including II's) but with the exception that they are allowed to 'present' at trade shows.

Anybody else hear it that way?

TIA
EWCT

[malachey] 20/9/2013 19:01

worraps: I was not rewriting history. just because lance going caused the share price to tank doesn't mean that the internal appointment of an unknown guy will cause a big rise, and I was surprised to see that that was the assumption yesterday before the market opened.

it doesn't matter now anyway. onward and upward!!

[1madmarky] 20/9/2013 18:59

Monty Panesar, I don't think they can try and sell IOF to US investors as they are not listed in the US. Think they need an ADR listing or something like that. I know it has been discussed before and a valid reason as to why they could not sell to US investors was accertained. Will see if I can find the answer.

[webby] 20/9/2013 18:42

Personally I am impressed with what the new CEO has achieved so far in a "consultancy"role and I guess that the other board members are as well or they would not have given him the job.

Mr Lantz (62) joins the Board with a demonstrable track record spanning over 30 years in industry. He was most recently a consultant to the Group division, Iofina Resources, Inc. During his time with Iofina Resources, Inc. Mr Lantz helped achieve a daily record iodine production. Mr Lantz was also responsible for financial controls, business development, and managed the build-out of the Group's IO#3, and the on-going construction of IO#4, IO#5, and IO#6, iodine extraction plants based on Iofina's WET® IOsorb™ technology."

Presumably his position as "consultant" was to see how he would perform. I guess that "record daily iodine production" and the much quicker roll out of IO3-6 were as a result of his efforts?

Can't see the location of the upcoming presentations on the IOF site. Am I blind?
I live down South. Is there one anywhere near me?