Iofina Share Discussion Threads

[bobbyshilling] 26/10/2013 20:53

Others can see the logic in my post. I'm not looking at tomorrow's figures. You are of course welcome to stick with your views on the way this company is going, that's up to you. Most here know what I mean, so if you can't work out the content of my post, nothing else to be said.

[n3tleylucas] 26/10/2013 20:32

Makes you a hypocrite though.

[bobbyshilling] 26/10/2013 20:30

Yes I can!!

[n3tleylucas] 26/10/2013 20:20

No, you can't suddenly create a climate where you dismiss delays after attacking those who've consistently said profits will be poor because of delays.

[bobbyshilling] 26/10/2013 20:17

Almost all on this thread are well able to comprehend the content of my post.

[n3tleylucas] 26/10/2013 20:06

Why attack those who predict delays then?

[bobbyshilling] 26/10/2013 19:38

Yes, exactly right! I don't know why some are so concerned about hitting targets "spot on" in terms of timescale. IOF is still a relatively young company that is progressing (rapidly) to major iodine producers, and a couple of months drift, should it even happen, is nothing in the big picture.

Goodness, I have been invested in some oilers that would love to be only a couple of months behind in their plans. As has been pointed out already, the water permit is worth 2-3 units, and is in the final part of progression. Any lapse in time frame if it does occur should be more than compensated for by that alone.

[n3tleylucas] 26/10/2013 16:09

Good to see you back jcs.

[n3tleylucas] 26/10/2013 16:05

This is not new news, it came from the PPI back in July and is designed to redistribute the pension tax-relief from the very wealthy to the modest. It's a good idea, and has been welcomed by Gov. If it's introduced, it will not save Gov money, simply spread it out to benefit modest pension pots.

[johncsimpson] 26/10/2013 16:01

RE SIPPs - As Microloine says no taxation on any lump sum withdrawn - up to 25% from the fund post age 55. After that, any SIPP 'income' (be it draw-down, annuity etc.} is treated as unearned income and added to any other income e.g. state pension other earned income etc. and taxed in the normal way depending on which tax bracket all this 'income' falls in to.

[superg1] 26/10/2013 14:55

Che

That's why I say I'm chilled and don't really worry about io5 or 6 being complete/producing by 31st Dec

I would think they will update us re production in that timeframe, and going on the figures, just from io1 and 2 on rates suggested, it should look very attractive v the 700-1000 figure with 4 plants to add to that.

That's probably part of why they put the 700-1000. They can hit the range with half the plants suggested.

We have seen the daft comments pre news to try and create fear. If it gets to......'beware the end is nigh' type comments, as we head towards xmas, if io3 is producing well, no it isn't, if io4 is producing it looks rosy, If io5 and 6 are involved on production it's outperform time by a decent margin.

If not, and io6 is up to speed by the end of February, then in those two months post year end, production could be at double the low end 700 target.

I understand some like targets met, but to be 'blinkered' on timeframes could cause unnecessary angst for some.

For me I won't be selling post io6 or 10, so I don't think too much about it.

[che7win] 26/10/2013 14:25

Superg,
Good posts this morning, cheers.

I have these figures going through my mind working overtime, so I like to rationalise them via a post as much for my own benefit as others.

I took the 1MT comment from the operational update comment:
"The Company also recorded a daily high of over 1000kgs in the second quarter compared with a high of 695kgs in the first quarter."

I don't disagree with anything you say, your figures make sense.

Like you I'm holding confidently, the margin of safety looks good here and a lot of news to come.

[superg1] 26/10/2013 14:09

Micro

Potentially that's a huge difference, I think it attracts 40% tax generally, so one to look up.

[superg1] 26/10/2013 13:10

Engelo

I go on a bit but I'm glad to see the message was clear. We have enough facts and figures from io1 and 2 to have a fair idea of what extra bpd will do at io2.

I did ask if the extra bpd, and it seems it is as good as, or a higher ppm than the original brine.

Take the posts from way back of an average ppm of around 300 for the area around Arysta (North West OK college project available to view online), then the figures that came out, support ppms in that range. The production figures backed that up. 18.7k bpd at that rate would do .8mt per day average at 90% yields and 10% downtime. So the figures stack up.

So if IOF move io2 to 30k bpd then we really need not worry about the timeframes of io4 to 6 as io3 should het us to 700mt. It would be nice at least to have io4 up and running by the year end, adding to the pot.

At the rate they forecast, 250mt per plant, then the one water depot is worth about 3 io plants if water is $1 pb.

So io3 going well should get us to 700mt, io4 running would be good insurance in case of problems elsewhere, but could take us to a 1000mt rate. Io5, 6 and a water depot forecast are in some ways a bonus, as it would surely take the production rate over the forecast by some way.

Even with delays, which may only be short (E.G. 4 to 8 weeks), then what significant difference will that make. It could affect the sentiment of some, but that's where patience overrides common sense.

If one mentally sets a deadline (often done on financial report periods) then 'mistakes' can be made with no real justification. It just means X amount of revenue is being generated on 28th February instead of 31st December.


For companies rapidly expanding I see little point in worrying about an rns that can include monthly periods 8 months or more prior to the rns.

For July this year we know io2 had been knocked back in June, and had hoped to increase brine in July, but an rns didn't explain that that very well.

By the time we get to H2 13 results maybe late March/early April next year, we could have 7 or 8 plants, some pods, and a water depot and maybe more.

[ansana] 26/10/2013 12:37

Possibly and particularly if IO4-6 are delayed and IOF has said the market needs clear information and recognises that some find it difficult to grasp the in's and out's of iodine production and its translation into profit then IOF will decide if they are close to hitting or exceeding their target of 700 - 1000mt that the time is right to release clearly stated production figures. Now that would surprise and please the market,and strike fear into their competitors and set us up very nicely for 2014. I said all that without mentioning the water.

[engelo] 26/10/2013 12:15

SG: thanks for your excellent runthrough of prospects. Cheered me up for the w/e.

For those (I include myself) a bit preoccupied by short term targets i've taken the following message from it:

IOF current guidance is 700-1000 Mt by EOY. This is what the mkt officially knows and is a baseline of current expectations and the current share price

If/when this range is exceeded at EOY by I01-6, the mkt will be delighted. If exceeded by I01-4 only, the mkt will be even more delighted irrespective of when further plants come on line. So a big plus for 2013 :-)

Further ahead, the tidal wave of the plant rollout is all to come, with further pluses at every step.

Only question is when IOF will release information on production rates.

[superg1] 26/10/2013 11:04

Che

Thanks for the post, some good work there.

Re

IO#2 was producing around 1Mt per week at its peak on 18000bpd. Supply is now 50,000bpd, let's assume they can get 36000bpd, twice the throughput of earlier in the year.
Capable easily of 2MT per day = 600mt running 300 days a year.
IO#2: 600mt = 180p


It looks like some errors/typos there.


In the rns they said .8 to .9mt per day for io1 and 2 with a potential 50% upside.

Io1 was reported earlier as 1 mt per week (.15mt per day).

So in theory io2 on 18.7k bpd was on around a .7 mt average, although peaks for the 2 were said to be 1mt per day (.85 mt for io2).

Using 30k v 18.7 that would mean a factor of 1.6 on the average .7mt, putting io2 over the 1.1 mt mark, .85mt 1.35mt.

Io2 was on old brines and I suspect the new brine will be slightly higher on the ppm, so 1.1mt may be under what it will do on 30k bpd.

So I have io1 (old figures) and io2 (30k bpd) in the 1.25 to 1.5mt per day range.

If io2 can cope with 10 or 15% more bpd that adds on .11 to .16 mt for io2 (not including better ppm brine)

Then we have io1 that was said could go to 80 to 100mt from it's 52 previously reported, so about .1 mt to add there in the middle range.

Putting that together, it gives a conservative low end of 1.25 mt per day for the 2, up to around 1.5mt plus per day.

That's a 450mt to 550mt p.a. rate. from io1 and 2.

We know recycling is not mentioned in those early production figure reports, that was purely io1 and 2.

Recycling was said to be around balanced out at 5 mt per month. I asked re that it is, sporadic supplies as the waste product arrives to be recycled.

So if you add in recycling with io1 and 2, then it's 500 to 600mt p.a. rate that IOF may already be on.

Thus, while some go on about io4 to 6 and timelines, I doesn't bother me. IOF quoted 700mt to 1000mt as a daily rate by the year end.

If we took io3 to 6 to be just 200mt plants that's 800mt to add once they are all fully running.

On that basis if they get io3 running at a decent level the 700mt mark should be gone. If they get io4 in and up to speed, in theory they are knocking on the door of 1000mt or beyond it.

io5 and 6 when up to speed would in theory give a 100% outperform on the lower 700mt figure.

That's not including the point that it seems 1 or 2 of the next run of plants could be similar to io2 performance or better. So just one of those added to io1 and 2, could take it straight to the 1000 mark.

Then beyond that comes the max sorb plants which could be 50k units, 80k units and so on. With those sizes even on low ppm they should be 500mt plus.

Those are the figure and points I'm working off. IOF have said they want to build up to IO6 by the year end, but also quoted 700-1000mt as the expected daily rate.

If they are running on decent rates on 6 plants then the 700-1000 rate would be smashed.

If they have io3 up to speed then 700mt should be gone, if io4 running well then near the 1000. So it will be hard for 'the market' to be disappointed, based on the above and if 700 to 1000 mt is reported as the rate for just up to io3 or 4, it's a big plus.

Then in that timeframe I consider the water permit, not priced in, would kick things on. So imo I don't see io5 and 6 not completed by the year end as having a material affect on the share price, v the current price.

In short, I'm very chilled about IOF for the next few months and beyond. The fact that io2 suddenly shifted from less than 18k bpd to over 50k bpd at the site was massive.

That's why I say it's not about the number of plants but ppm plus bpd.

If IOF add another plant, or pods to process the brine at the io2 location, assuming it stays around the 50k bpd mark, then in theory the io2 site is a potential 700mt plus site on it's own.

[microcline] 26/10/2013 10:52

Attention we few, we happy few, we band of brothers with pensions.

I read in yesterday's edition of MoneyWeek that the treasury has been "gauging opinion" on "slashing" the amount of tax free cash you can withdraw from your fund. Presently its 25%. I read somewhere it could be reduced to a maximum of £36,000.

Who the hell are they "gauging opinion" from?

[writz] 26/10/2013 10:09

Titus, I'd be interested to know what you think drives price movement in a way that makes it amenable to TA.

I get SG's position - that buying and selling on the basis of anticipated changes in value is essentially crowd behaviour, and that bigger crowds will tend to assemble, producing a higher probability of a predictable move, when there's an obvious trend or turning point - because the chart itself is an arena in which risk can be raised or reduced.

So the big and simple TA ideas, like channels, breakouts and double tops, all seem to have concrete predictive value. By contrast, Fibonacci levels and MacD and wave theory, on the application of which two experienced chartists might differ widely, seem for that very reason less likely to produce "crowd certainty" and concerted movement.

Of course, that's assuming all participants in the market are rational and human, and admitting that it's only ever a probabilities game ... but you've been playing it far longer than I have, and seem to thrive on it, so I'd like to know if I'm missing something! TIA. Writz

[che7win] 26/10/2013 09:05

Scenario:

Lets assume IOF has margins of $30 per kg produced. I assume the iodine price will be between $40 and $50 next year so I'm taking the median value $45 and $15 cost (this cost will be much lower for IO#2, see below).

I know superg talks about it not being about number of plants, but this gives a blunt target for the rollout....

So what would each plant be worth per share on a P/E of 20?

$30 per kg is $3m per 100 MT, ~£2m (£1 to $1.50 exchange rate).
That is 1.6p EPS.
So each 100MT is worth 16p a share at P/E 10, or 30p (rounded down) at P/E of 20.

Each plant value per share works out at:

IO#1: 50mt = 15p

IO#2: Remember, IO2 is a different animal compared to H1:
"The production outlook at IO#2 is positive considering the continuous development of oil wells with high iodine concentration brine being tied into IO#2. Recently a 12 inch brine pipeline was installed at IO#2 by the Operator to increase capacity. Initial volumes exceeded c.50,000 Barrels per Day. While this recent increase is expected to decline during drilling and fracking programmes, overall volume should afford excess brine over plant capacity. "

IO#2 was producing around 1Mt per week at its peak on 18000bpd. Supply is now 50,000bpd, let's assume they can get 36000bpd, twice the throughput of earlier in the year.
Capable easily of 2MT per day = 600mt running 300 days a year.
IO#2: 600mt = 180p

IO#3 to 6: BPD will range from 17000 to 40,000 BUT WILL INCREASE OVER TIME.
This scenario, we can conservatively take 30k Bpd as an average for each of these 4 plants.
Again, ppm is guesswork, but let's assume each of these plants will do 250mt. Remember, IO#2 is more than twice this figure.
Therefore, each plant 3-6 is worth 75p on a conservative analysis.

Assuming the market stays bullish as the world economy is improving, I would think we should be on a P/E of 30. So add 50% to the above figures if you agree.

Conclusion (sticking with P/E 20):
IO1 and IO2 is worth: 195p.

Each plant rollout from IO#3 onwards adds ~75p to the share price. Even if you argue that I'm way out on 250MT for these plants, you still need to add 37.5p for a 125MT scenario.

Water revenue when 100% guaranteed adds up to 80p to the share price.

Add the mini-pods, iodine recycling, chemical division(current growth 51%), oil, gas, helium, further water applications on top.
Next year, add another 6 plants...

Note, I have assumed negligible tax next year due to retained losses, but assume 25% in a normal year.

I can see an explosive rerate here similar to STVG once the market catches on (and clearly it hasn't).

I'm bullish here, so DYOR.

The key here going forward for shareholders: PATIENCE.

PS, I was told last week "I expect that we will publish another update in the very near future."

[the librarian] 26/10/2013 08:43

Enjoyed reading those posts, 'beware a mind set' and 'elephants don't gallop' are both worth remembering, thank you :-)

[nashwan123] 25/10/2013 22:02

obbig60
I'll do a bit more research on best RSI measures. Anyway cheers for reply.

[obbig60] 25/10/2013 20:10

nashwan - I think you are reading too much into this. RSI is calculated (indirectly) from the EMA of the upward changes divided by the EMA of the downward changes for the period you choose. When you get a big step up as we did 22 days ago the RSI shoots up, and 21 days later it starts dropping out of the calculation so there is a step down. If you choose a 14 day period you will see that RSI has been rising for the past few days.

[superg1] 25/10/2013 18:54

Thanks guys

To me TA is driven by reactions to signals in the charts, those following TA, see the signal and so, sell or buy as appropriate which generally embeds the trend and confirms the signal as correct.

Working on my logic, which is probably different to most, therefore not logical, Ta signals can be seen and read in many different ways.

The more skilled and expert you become at it, the less likely you are to be in the majority of the TA group.

Thus thinking outside of the box, there is more likely to be a far larger group buy or sell reaction, from investors that follow TA as with basic knowledge, than there will ever be from the minority expert view.

That's why I picked on M and S. On the basic view it's looks like a perfect break of the trend line support, and then it bounced off the support (now resistance). It's only about 7.5% of 5 year highs, so will need to level out, strong performance aside.

I'll watch and see how it goes.