Iofina Share Discussion Threads

[superg1] 15/12/2013 21:25

WoodP

No issue I've had some good exchanges with CR up front and behind the scenes. I agree the AIM is full of complete tosh and the boards to go with it.

That's why I spend so much time digging away trying to spot the potential twists and turns, once they can break out of the initial phase into decent cash generation then comfort starts to kick in but complacency can't.

The CFO question was a good one because most funds go all wobbly with no CFO in place. The regs are far less strict on the AIM and their have been plenty of BOD deceptions in the past. A CFO in place is seen as essential by funds for any AIM company. The extra position has been added as the company started to deliver.

I know CR is reluctant re the AIM and in particular US companies, look at me, I won't touch CEY due to Egypt issues, or anything in an unstable country. To me at the flick of a switch it seems they can do what they like. That's what caused the CEY crash and the subsequent fear to invest in that share.

My interest here, is the finding of a significant commercial resource of something that is more commercially scarce than gold, it's essential for health in food for all life, pharmaceuticals and a range of technology uses. Iodine is not an end product in many cases but simply used as a catalyst to make something else. That type of worldwide, numerous range of uses, offers demand security to a good level, scarcity of resources offers barriers to entry. IOF have identified a potential huge resource, no one has the tech to use in the US, and the patent assists on the protection.

So overall it's a fabulous opportunity, in an existing market of growing demand where the world leaders in the industry are really struggling on infrastructure and costs.

We know Japan is in decline is demand looks likely to continue to climb. To the likes of CR, it may be of interest, once delivery is clearly embedded and risks reduced.

At least he looks at the AIM, the vast majority of the market don't.

[worraps] 15/12/2013 21:21

CR, that's fine, you're welcome. Nice post 12804.....refreshing to see some sincerity here.

[crosseyed] 15/12/2013 21:19

frog1,

Regarding valuation of inventories, this from the 2012 Annual Report (p35)...

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost includes all expenses directly attributable to the manufacturing process as well as suitable portions of related production overheads, based on normal operating capacity. Costs of ordinarily interchangeable items are assigned using the first in, first out cost formula. Net realisable value is the estimated selling price in the ordinary course of business less any applicable selling expenses.

If the iodine stock was bought in the market, then presumably it would be valued at the buying price or the current market rate (if lower).
If the iodine was produced from the IOsorb plants, or from re-cycled iodine liquids by IOC, then one would expect the valuation to be considerably lower than market price.

An earlier post indicated that IOF stock-piled iodine bought in the market to ensure sufficient raw materials for IOC processing to meet customer orders during the early days of the IOsorb plants. The inventory valuation would then be somewhat higher than raw material derived from in-house processing, and should fall on average as the latter becomes the prime, or only, source of supply. Perhaps that will be reflected in the 2013 accounts.

c

[woodpeckers] 15/12/2013 20:36

CR, as always I appreciate your opinion, I was just confused that you were taking time to 'investigate' a stock which is of the type that you always stay well clear of. I do think that you have got this one wrong FWIW. There hasn't been much director buying at Booker either but still doing good! ;-)

[jackabite] 15/12/2013 20:30

Ansana

Blood pressure? check :)
mental health? check :)

Mission accomplished? failed, could do better, need to crank it up a bit tomorrow when this tanks.

Superpooh knows the script and why I am here, you have his big trash talking mouth to thank for that!

[monty panesar] 15/12/2013 20:18

I think what CR says is very fair. I'm not sure it is a leaky stock though.

[ansana] 15/12/2013 20:03

Jackrabbits do give over, there is no substance to your posts just just malice. You have no clue about the company, your blood pressure must be off the scale and as for your mental health well its time you made an appointment and kept it.

[woodpeckers] 15/12/2013 19:34

CR, as an avid reader of your thread I am as aware as most people that you don't invest in AIM stocks as you consider them too risky. I genuinely believe you to be one of the 'good guys' on the boards, but am now confused then as to why you are taking such an interest here? Maybe have it wrong, but are we tempting you to stray??? ;-)

[cockneyrebel] 15/12/2013 19:24

worraps, missed the RNS looking through the list, sorry - was looking for 'Director Change' as they had used for the CEO.

CR

[jackabite] 15/12/2013 19:23

rybnikcat 15 Dec'13 - 01:01 - 12761 of 12799 7 0

superg1

Just catching up on posts at this late hour.

I have immense respect for your research and analytical abilities, but you owe frog1 an apology. How could you suggest he take his posts to another thread? No matter whose posts he reminds you of, he has not written a single thing that any reasonable person could object to.

Although I am grateful for the abundant information that you provide about IOF and its competitors, your own contributions are not perfect; some sentences use such poor English that cryptic skills are needed to decipher them.


The above highlights what a bully does when the share price is dropping. He tries to preserve face by eradicating anyone he see's as a dissident.

Poor poor show by superpooh and even his own ramp crew can see that.

Embarrassing.

[meadow2] 15/12/2013 18:42

If remember rightly, some companies give a pre-close forecast close to their year end but I'm not sure that Iofina do so. Perhaps they should, we're only a couple of weeks away!

[ansana] 15/12/2013 18:22

Thanks Noli I will print and file these.

[bobbyshilling] 15/12/2013 18:09

Well I am expecting that the three plants that are currently producing will get us to the end of year exit rate of minimum 700mt - and after all, we have not been informed by the company that this is now not achievable despite the delays with IO4-6, and they could have included that info in any recent rns if that was the case. If 700mt is achieved from the three plants, (with IO1 being a lower producer as we know), then that makes IOF very good value at this share price

It is a question really of will the suppositions, based on info we already know, prove to be accurate. Of course, that is up to the individual to decide.

EDIT, thanks Noli.

[noli] 15/12/2013 18:08

That's they key information. Cost in chile have sky rocketed and will increase again with the new president due to taxes. All the best areas have already been mined leaving only higher cost mines.

In 2009 iodine prices were $25 and iof were selling at $28, so all companies were selling at these prices and Sqm were taking market share at those prices. When you consider Chile mines now shutting down, rising costs of power,water,wages,strikes,infrastructure not in place and a falling iodine price, its no wonder they are struggling. These guys are knackered, they have no chance of taking market share at these prices,only losing it, they have left the door wide open and have no chance of recovery until the iodine price firms, it could take 18 months which means 18 months for iof to get the business plan rolled out on these high yielding sites.

Iof were on low yields 60 to 70% on the Wets at $25/28kg, now they are on 98% yields and the lowest cost producer in the world. They have ppms in the thousands at certain sites and over a 100 sites, with iosorb,hydrosorb,maxsorb and mobiles units. We should see all of these over the next 12 months, i have put a couple of slides up from the pdf on the iof site showing the volume and value matrix.

Dont forget when looking at these, they are using 70% yields, not 98% that we are currently on. Plus the current iodine price is nearer $50 than the $25 shown below. And we are selling through the derivative side so we get a mark up on that as well.

[worraps] 15/12/2013 18:04

CR

Mr Gary Dale Gatchell was notified to the market on 16th August, as an executive director, and also that he would be serving as FD from the 3rd Sept.

All the facts and news releases about IOF are under 'news', as I'm sure you really know!

[scrutable] 15/12/2013 17:59

crosseyed

I very much believe that your figure 223mT for IO#3 is already far too low.

On the other hand the late delivery of towers for IO#4/5 and the confusion of replanning IO#6 will slow the expected rate of climb of profitability for at least two more months.

The margins are however still fat enough to point expectations to $15+m/pa per plant, ranking the current share price for consideration as Best Buy of the whole market right now.

[cockneyrebel] 15/12/2013 17:45

When was the FD appointed iofra? I saw the CEO go and the replacement - when was the FD appointed?

CR

[superg1] 15/12/2013 17:26

CR I like nano it's just the imbalance of the US company v nano that makes the US side look a screaming bargain, and it seems it's all down to US sentiment plus the lack of a visible partner/backer over there

Room in the market for all if it takes off, but my initial view of disappointment in nano was the analysts not knowing others were out there, it was easy to spot. having said that I don't rate analysts, and you can't really blame them, time constraints v workloads and the need for a report of some type, has them under pressure, a diligent PI, and there are many on plenty of shares will identify information that an analyst would miss.

As for IOF, the business model is laid out, yes start ups and AIMs can have a rough opening ride, and many go a decade or more of getting nowhere. That's where all the volatility and chaos goes on.

But the fact is we made a call about how Chile would end up going backwards while the market was seeing it as a safe haven and recording outperform on many shares there.

It's taken them a year or more to change SQM on the highs from an outperform, to a sell on prices way below it's high.

They said buy at $60 and now sell at $23. I saw it coming and so did others here. That was all about keeping an eye on the competition.

Once you have established an investment interest of high risk, then it's best to place close attention to the relevant sector, and any competition.

The sector is strong, as it is in so many applications, the market is strong, and IOF have significant cost advantages over the market leaders. It's the market leaders that are feeling the pain not IOF. IOF just have to deliver producing plants to have a viable and potentially strong business.

1500mt from the first 6 plants imo, is not a bridge too far.

Even at $10 per kg profit it covers $15m per year, but for now notes have $10 - $15 opex, some say $10 to $20.

Chile smaller mines, which happen to be among the world leaders, have opex of $40, so there is no room for them in a market of $30 per kg. That's the key Chile supplies 60% of world demand. The market with cheaper alternatives disappeared in the $100 per kg spike.

So just looking at it as for it's business position and opportunity, it seems very lucrative. Delivered as a material producer, and it is, so that's the main risk, delivery or not. On that point they are making progress. They are not years behind like some rotten AIM shares, just months.

I don't see sales as a problem going forward. If IOF have quantity and they want a contract, they have the room on margins to force others out. That may not be necessary, but if in the coming few years, IOF get to material levels of production they could aggressively push others out of the market.

By my calcs and the brokers, after io6 they will have completely replaced Sirocco, who took 12 years to get to their 2 year intended target. Sirocco have suspended operations.

[naphar] 15/12/2013 16:47

Cross, re the non iodine products.
I don't know or remember so much there.
As I recall, it's a government contract, which has a year or so break scheduled every so often. H1 2013 was in that break time, so no H1 revenue. I think it comes back in line some time during H2 2013.

Try a search on here and I am sure you will find some more info.

[iofra] 15/12/2013 16:33

CR the directors you refer to (current CEO and FD) weren't employed by the company when the price 'dipped to this level'!