Iofina Share Discussion Threads

[superg1] 03/10/2013 17:29

What was it 24 plants at 200mt each $50 per kg $30 profit.

Around the £100m profit mark call it £60m after tax. PE 15 11.8p per million.

If I went on notes I'd have bought AVN at £7 plus expecting £21 by now.

They get it wrong both ways. It's the same on all shares. All PI's should ignore any note and DYOR, that's what I do. It works well.

Moving on I see the 'will they rns, won't they rns' if the water permit moves to 'Preliminary determination to grant rights'.

Well under the rules re an rns they would have to. That is an opinion of course, or any nomad reading that would think silly PI, what would they know.

This isn't a dig at a nomad, but I doubt they have the first clue what a 'preliminary determination to grant rights' actually reveals.

But hey ho I've been an obsessive researcher and know what that entails. Some of the most boring and web page content out there has some of the best information, if you can stay awake long enough to read it.

Prelim determination to grant, starts a 45 day countdown. Just about any permit out there for anything under US law follows the public notice rule, water permits are just a small section of numerous reasons for public notices.

So when the prelim to grant comes, I expect an rns, otherwise it could potentially be embarrassing for the nomad again, as potentially information will be out there, not announced to the market.

I think we are a nice bunch pointing that risk out. I haven't spelt out what it is, and maybe the information will be blocked, but I don't see how they can block public notice details.

Yes the prelim to grant could drag on, it does on many applications, but on others it can be swift, we'll see. :-)

[frog1] 03/10/2013 17:26

"At an iodine price of US$50/kg. Each can handle a throughput of up to 30,000 b/d and should be capable of averaging 200 tonnes/year of iodine (0.7% of global supply). Extraction costs are US$10-20/kg".

Just taking a quick look here and not done much research. However I'm not sure how Investec get to $20 million in added value from this information.

200 tonnes = 200,000 kg
Assume extraction costs at top end of estimate = $20/kg
Gross profit = $30 /kg
GP on iodine per site = $6,000,000

If 'extraction costs' (what does that mean) include salaries and plant cost, I can't see how this equates to just $20 million in value. If they don't, the plant must be very expensive to run to bring the profit down to only be worth $20 million per plant. That would need something like $4 million extra running cost.

Anyway, now to scaling:-

Assume 18 plants = $108,000,000 gross profit.

From last accounts, admin expenses are running at $5.5 million. Assume this company scales really badly so admin etc. goes up by 9 times (18/2). So admin is $49.5 million. Throw in a lot of interest etc. say a ridiculous $10 million.

That gives costs of $59.5 million and profit of $48.5 million = £30.3 million

According to FT there are 127.28 million shares so that is 23.8p per share.

Assume PE of just 10, that is £2.38p for the iodine alone.

If the cost assumption in these calculations is anywhere near correct, I think £2.38p would just be justified for the iodine if they hit the targets. However, I fail to see how the costs will escalate like this given the model. So I'm afraid I can't really understand how Investec get to the share price.

[n3tleylucas] 03/10/2013 17:20

"Also they give no value for water"



Is this project budgeted for?

[engelo] 03/10/2013 17:01

dig: eoy your model says 166p + 4x50p = 366p. Investec 206. We'll see who's closest: I think you will be :-)

Impo there'll be an RNS next week and that should give us a start.

[orslega] 03/10/2013 16:55

I think the consensus here is that each new plant will add considerably more than 10p to the then share price....

[dorset64] 03/10/2013 16:51

numpty's need to re-read the article before wetting themselves. It says each 'NEW' plant is worth 10p, ie. to the current share price as you well they understand.

[diggulden] 03/10/2013 16:50

Also they give no value for water, and we know that WILL contribute to revenue and margins next year.

FWIW, I have an average plant at 350MT, with costs at closer to $10, each plant adding 50p-60p to the share price

Plus Chemical division add on (although currently restricted to about 400MT throughput per year, with room for expansion to 800MT).

Plus Water.

[orslega] 03/10/2013 16:44

yes, seem to recall reading somewhere, 60-70p per plant was a more realistic possibility based of likely target output, and think that excluded chem division....ah, feel much better now!lol

From my experience house brokers can be way of the mark. They play very safe, plenty of examples of that.

[n3tleylucas] 03/10/2013 16:32

18 plants for 152p INCLUDING 15p for IC? LOL

ffs lads, you've ONLY got 2 working!

ROFL!!!

[orslega] 03/10/2013 16:29

engelo, precisely!lol

[engelo] 03/10/2013 16:28

dig: thanks: explains a lot :-)

orslega: if true, time to sell :-)

[diggulden] 03/10/2013 16:23

It's a conservative figure based on max output of 200MT per plant with Iodine sales price at $50KG and costs based on $20KG. They are the calcs Investec use.


'Broker Investec, meanwhile, suggests Iofina may have as many as 24 plants extracting iodine by end-2016.
At an iodine price of US$50/kg, each plant adds US$20mln of value (10/p share) versus a unit capital cost of US$2 -3mln, the broker estimates.
Each can handle a throughput of up to 30,000 b/d and should be capable of averaging 200 tonnes/year of iodine (0.7% of global supply). Extraction costs are US$10-20/kg, around half that of mined iodine in Chile.
Based on 18 plants, this implies a core, NPV-based valuation of 152p, including Iofina's chemical assets (15p/sh). A further two plants per annum beyond 2016 gives a further uplift of 75p, which is the basis of Investec's 230p target price.'


Worth mentioning, they apply zero add on value for the Chem division, just valuing assets at 15p.

Investec have half the production capability that I am expecting on average, at double the cost!

[jointer13] 03/10/2013 16:22

orslega...I don't think they did,obviously a mistake.

[orslega] 03/10/2013 16:18

"house broker Investec says 24 could be up and running in three years. It estimates each new plant adds 10p a share of value"

10p for each new plant.....don't remember Investec stating that? If true, time to change broker!lol

[n3tleylucas] 03/10/2013 16:13

"house broker Investec says 24 could be up and running in three years."

They're 'avin' a larf...



"It estimates each new plant adds 10p a share of value."

So it's worth 20p then.

... and it's being valued on 17 plants atm?

Sigh... will take 6 years to be really worth 180p at the current rate of 'progress'.

[jointer13] 03/10/2013 16:02

Plays update: Iofina




Iofina (IOF:AIM) 173p Gain to date: 26.3%

First-half numbers (25 Sep) from iodine producer Iofina (IOF:AIM) offer a timely reminder of the scalable nature of its business model as the firm plans to bring four new plants onstream in the remainder of the year.

The shares had been marked down on weather-related outages, the departure due to ill health of chief executive officer Lance Baller and margin calls for spread bet and contract for difference (CFD) traders. Flagged at 137p, they have recovered some ground and with an annualised production rate of between 700 and 1,000 metric tonnes of crystallised iodine in sight we see scope for further upside.

Iofina

Iofina group uses its patented IOsorb technology to extract iodine from the waste brine water produced at unconventional oil and gas fields. Operating costs are $10 to $20 per kilogramme (kg) compared with an iodine price of around $50. By the end of 2013 the group will have six plants in operation and house broker Investec says 24 could be up and running in three years. It estimates each new plant adds 10p a share of value.

Buy

A clear route to growth exists for Iofina. (TS)

[diggulden] 03/10/2013 15:55

News to me engelo, but I would be quite happy for them to get back early, plenty to be cracking on with.

I think we may have been tipped in shares mag yesterday. Or an update to a previous tip anyway, I'm not a subscriber but the link is here:

[jointer13] 03/10/2013 15:48

there going back to the usa as you say extra demand.

[engelo] 03/10/2013 15:42

dig: last week I heard the Europe meetings had been cancelled due to extra demand in the UK, but not certain of this. Think they're probably looking forward to going home...and getting some RNSs out :-)

Anyone know for sure?

[rhwillcol] 03/10/2013 14:35

diggulden: many thanks for the information.

[diggulden] 03/10/2013 14:30

Last UK ones to Insti's tomorrow in London I believe, then off to Europe next week, not sure where.

[rhwillcol] 03/10/2013 14:13

Is the company still doing presentations? If so, then at which places/institutions/dates, and for how much longer? Many thanks for your help.

[engelo] 03/10/2013 13:07

King roster: may be imm.... but will it be RNSed? Think they may have to wait until 45 day local advertising period completed which probably takes us to December.