Iofina Share Discussion Threads

[che7win] 25/1/2014 19:25

Superg,
Yes, your post on 15194 was my initial thinking on it, but only after Bocker raising the question.

[superg1] 25/1/2014 19:16

Bobby

Water used by IOF is not an issue.

A simple answer... water marketing, which is about selling/supplying water to others.

Look up John Ames, he's been doing it for many years.

Take the farmers under the irrigation use permits. Irrigation use CAN NOT be downgraded for industrial use, but demand got so high, emergency measures came in so that farmers could switch their right to industrial use, to sell the water to the market.

Irrigation use is the only use that can not be used for any other purpose.

That's why the rights swap works. The USFW rights can be upgraded to any other use, including industrial use.

In time, going on current legislation, all temporary irrigation water supply to the oil and gas industry will cease.

[superg1] 25/1/2014 19:11

Industrial Minerals is a market leading resource for in-depth non-metallic minerals intelligence. Providing insight and analysis on Industrial Minerals since 1967, Industrial Minerals is dedicated to serving the entire market; those who work in any part of the supply chain from mine to market.


In every report about iodine, industrial minerals quote the prices in relation to 99.5% crystal iodine.

Meanwhile Numis arrive telling us that the prices quoted are

"global iodine spot price discussed in the market refers to prilled iodine"

Numis quote crystal as 99.5% and prilled as 99.9%.



Up to you guys really, do you believe the lead in the market that 'discuss' iodine prices based on crystal at 99.5%.

or Numis who say that spot prices discussed in the market refer to prilled iodine at 99.9%.

I can't find anything 'discussed in the market' to support the Numis comment.

[superg1] 25/1/2014 18:59

Got there in the end

the note

'We believe it is important to note that the global iodine spot price discussed in the market refers to prilled iodine, which is the default form of elemental iodine traded. Prilled iodine consists of anhydrous beads containing 99.999% of elemental iodine, while crystalline iodine is a crystalline powder which contains 99.5% elemental iodine'

Compare that with the industrial minerals site that has been reporting on iodine for many years, and made a release this week

"sources reported that prices for iodine crystal (99.5% min, drums, spot and contract) had narrowed downwards to a range of $45-50/kg from $45-55/kg in December"

Note that Numis say the iodine spot price is prilled iodine at 99.9% purity so discount crystal iodine.

BUT industrial minerals give the spot price and contracts figures based on Iodine CRYSTAL, at 99.5% purity.

I don't recall Industrial minerals ever quoting the prilled form.


Numis say they don't account for iodine in the prilled form in their valuation.

Which going by their own comment, they discount the Crystal from which they say is not what reported spot prices are about.

Yet the only guys I ever see officially quoting the prices, do so for crystal iodine and at levels we have all been referring to for some time.


So for now there is only one conclusion

The Numis note comment above starts 'We believe' they are talking about the iodine spot price 'discussed in the market'

The lead in the industry discussing the Spot price in the market is Industrial minerals, and they quote that the price refers to Crystal 99.5% purity iodine.

You see my point, which is it?. For now, after this week, I'm inclined to go with the guys that have been in the industry for years, and charge a fair wedge for subscription to their site.

So if Numis are right, contrary to the those that have been doing it for years, their numbers for their means are right.

If they have got the prilled point wrong, they are out by the percentage they quote.

[bobbyshilling] 25/1/2014 18:58

Excellent sg.

The only thing that was going through my mind as a potential problem might be that the water is not being used directly by IOF, but is going to third parties.

www.ncsl.org/research/...and.../state-water-withdrawal-regulations.aspx‎

If you have a look at this site, and then click onto MT, there is a list of regulations reqd to be met. I was wondering if beneficial use referred directly to IOF, or in our case any oil/gas company that requires the water in Montana.

Having said that, I also think we must be OK, as IOF were advised to scale down their application by the authorities from 200,000bpd to make the application process quicker and less complex, if I recall correctly.

(Sorry, with my limited computer knowledge I don't know how to make the link above an easy click on).

[superg1] 25/1/2014 18:39

Bocker

Yes that's the way I see it, but just trying to treble check. I think some think iodine prices are to do with roiled then you discount for Crystal, but it doesn't appear to be that way.

I'm just trying to recall what a creation note said on that point

[madchick] 25/1/2014 18:38

SG "If any water is to be used out of state they must prove that the use is not contrary to water conservation in Montana."

Couldn't this also be read as meaning that use in ND would be detrimental to Montana because it would be water going to industries in ND when the industries in Montana need it? A bit like setting up a competing business?

So, I would still think IOF has to stay in Montana. Otherwise, the interpretatin is ambiguous and they run the risk of "losing".

[bocker01] 25/1/2014 18:33

Che7win, Boggle, SG1, guess it's rather key isn't it!

[che7win] 25/1/2014 18:25

Bocker,
I don't know the answer, see the link below:



I assume it is crystalline and I know why you are asking the question!

[superg1] 25/1/2014 18:18

That meeting.

We know IOF have said engineering and beneficial use. Engineering should not be a problem at all.

Beneficial use from umpteen angles keeps pointing to the bureau checking that the water demand is for Montana not North Dakota (but se below, you may be surprised re that point)

It seems to be nothing other than speculation by the water bureau.

So the meeting, some will have had their own comms with IOF over it, and from the various bits of seen, nothing really changed other than a load of panic and misunderstanding of the process.

In recent weeks, doomsters point to the 30th as a potentially bad day, and bulls a good day.

The fact is the bureau as with every process have a determination period in which to consider what has been said, and the answer could take weeks, so I wouldn't get too excited over the 31st and the days following.

IOF could hit then with a box full of details which can't be fully deliberated over tea and cakes.

BUT taking it from a logical (my logic) point of view re the decision making process.

To award the permit if they are satisfied with the details, means nothing other than internal decisions with no come back.

To not award the permit, and continue with the determination to deny, opens the door to a hearing, and legal teams. So if you are not going to award it, you will want to make sure all your reasons for doing so would stand up to legal scrutiny, which would probably mean filing the report with the legal team, before any decision is made.

So the above basically is an explanation of my one liner, of don't expect a do or die situation on the date mentioned.

However if they are fully satisfied with details given in the meeting, then there is no legal route to cover.

BUT, perhaps many don't realise the basic rules anyway.

If you apply for 50k bpd but the bureau on looking at all the evidence decide you can only legitimately prove use for 30k bpd, then the bureau can award a permit for a lower amount.

That does not involve a refusal of one permit, and re-application it's just a decision, they can approve permits for a lesser amount than that applied for.

I'm not saying that a lesser amount is on the cards just that the bureau can do that.

A quick quiz

Who knows which river/ water basin areas in Montana are restricted ?

More importantly which areas are clearly defined as available and open for water appropriation in Montana.

What particular requirements would IOF have to prove?



Well the answer is where they have applied is open for water appropriation, many areas are not.

But what do IOF have to prove, I doubt many know.

In basic terms that they have customers/contracts and that they can identify where the water will be used.

Those details have been released in news. But then now we have this "Will water be used in ND" query that many have mentioned, and appears to be a point to cover in the meeting.

There is no indication that I'm aware of that they want to use the water in ND.

However let's assume they do, What then ??

I would imagine many think that is not allowed.......Well they would be wrong.

All that happens is that the burden of proof changes. Different states have different rules.

If any water is to be used out of state they must prove that the use is not contrary to water conservation in Montana.

I take that to mean that the use, would amount to a use that would be allowed in Montana. Montana allows water use for fracking/industrial use etc. So the actual use isn't going to affect anything Montana doesn't already authorise.

So no, it wouldn't matter if Halliburton or others intend to use it for fracking in ND, but there is no evidence in any releases that it would be used in ND anyway.

No matter which angle you look at the rules from, if IOF have genuine customers who want water for industrial use, to an amount specified, and that amount is available to appropriate, then there is little legally, that can stop the issue of the permit.

False contracts or no customers would be stop the permit, but then why apply for the darn thing if you have no one to sell water too.

On the point of the 80k bpd, many more than I are aware that IOF have letters of intent and demand, beyond the 80k bpd applied for.

[bogg1e] 25/1/2014 17:58

bocker isnt that what sg is investigating atm?

[bocker01] 25/1/2014 17:43

Che7win

Just for clarity, when you comment "IM Prices February 2014 Jan 24, 2014... Iodine crystal, 99.5% min, drums,. contract, $/kg $45-55", are you referring to crystalline iodine (as produced by Iofina Resources and which is of course also 99.5% pure) rather than prilled iodine which is typically 99.9999% pure?

[bobbyshilling] 25/1/2014 16:44

Thanks sg.

I did note your earlier post re; the three water aspects, well explained, but as you said it takes most a while to understand it, (took me a while too I must add). IOF have put a lot of work in on the water side, so they should be confident, and hopefully will present their case well; I think that a meeting next week face to face with the authorities is better than paperwork going back and forth.

[superg1] 25/1/2014 16:26

Bobby

re the water permit meeting. I will post re that later on the options. The actual water potential (3 options) has been explained.

The circs of the rights of way, and the mention of not carrying on works on wet ground is covered (thanks to the find by Dig)

What we have left is that meeting, and like it or not it seems to me that IOF carry a good deal of confidence in securing that permit, that point hasn't changed, it's just the various processes on going with the water bureau.

Work to do, so I'll cover the meeting later.

[che7win] 25/1/2014 16:06

Schroder,
Raw iodine prices remain steady going into February. It's been like this for a while, so the market seems in balance:

IM Prices February 2014 Jan 24, 2014
... spot, $/kg $45-55. Iodine crystal, 99.5% min, drums,. contract, $/kg $45-55.


Yes, inventory has built up, will take some months to work through. The market has been in deficit to demand for the past few years, only last year with plants coming on stream then flooding excess supply.

I suspect the Chileans work a kind of Cartel on the market, they seemed quick since August to shut down mines.
Sirocco has curtailed its mining, SQM is well down on production, deliberately making a decision to restrict production to bring the market back.
It's in their interested to maintain prices around this level.

SQM as the biggest supplier need to maintain decent margins, the smaller miners will be running at breakeven which doesn't make much sense.

The new left wing Chilean government are also raising costs for miners, so a positive for the price of iodine.

[rhwillcol] 25/1/2014 15:17

Hi bobby: trust all is well with you. LOL re chilli! I'm just "vegetating" at the moment!

[bobbyshilling] 25/1/2014 15:05

Hi rhwillcol. Nice to hear from you, yes - good points re your Chile post.

(Things are hotting up in chilli) :)

[rhwillcol] 25/1/2014 14:51

It may well be the case that what is happening right now in Chile re the new left-wing government and its near-term decisions, plus the ongoing Chilean strikes at major ports and potential blockages of iodine exports (thanks superg1 for post 15177), will have a very beneficial effect on the demand for IOF's products and desire for security of supply moving forward. I think we should be pleased that this company is based in the USA, with all the security that that entails, plus with no potential risk to currency exchange as with Argentina, although I'm not sure of the potential effects of this on the Chile Peso (if any). The many customers who currently import iodine from Chile would I imagine now be looking towards iodine supply from elsewhere, and maybe especially from the USA. I would, if I was a company's procurement manager for an essential ingredient for my company's products.

PS Bobbyshilling: thanks for good post above: didn't mean to stem your train of thought and any reaction to it....

[bobbyshilling] 25/1/2014 14:40

Worraps, you are not the only one heavily invested here. You cannot blame the contributions from sg for the share price at the moment. Practically all of sg's posts have been backed up by links and references and like a lot of others, including myself, drawing what we believe to be logical conclusions from information passed on by the company rns's. Also, some gave feed back from the company presentation which they attended, and got information from 'the horse's mouth' so to speak.

Even now we have two completely different valuations going forward from Investec and Numis, and they are supposed to be the experts. It seems to me that even now things could still fall nicely into place. We know that io4&5 are near completion from photographs on the company web site, so we should be hearing pretty soon about them being commissioned. Also we will be hearing about the water permit application, which logically, one would think would go in our favour - after all the time and work the company have put in to get it.

The delays, and the way things seem to have turned out are both very frustrating, I am with you on that point, but this could all turn around very quickly in a short time scale. That is not being rose tinted, we have the info from rns's; it is just how different individuals work things out or uses it. I'm not saying I am not nervous, because I am not as relaxed as I was, that is fair to say, bit I am still holding on, even if things take more time I take the view that it will work out, but again that is only my view.

[superg1] 25/1/2014 14:12

Thanks Monty. I haven't looked yet, but on that point industrial minerals put out a report this week. It has this comment in it, I'm working on others.

'port strikes in central Chile, which have hit metal exports from the country, could affect the availability of iodine as early as Q2 if the action spreads to the northern ports, used to ship the mineral'

[meadow2] 25/1/2014 14:12

Monty P - I'm afraid I'll believe very little until the official, audited and published bottom line shows good profit figures!

[superg1] 25/1/2014 14:08

Thanks Dig. The link to the relevant document is repeated above. The point I mentioned recently is in the document so I didn't read it wrong.

I'm just trying to put the facts out there as a few of us seem to have a better understanding of the various points of the business, better than any nomad or other broker has so far.

I know at the last presentation CF (*note below) said that construction could go on in the winter and that winter shouldn't provide a barrier to construction. LB at earlier presentations said, not winter but spring onwards.

The moot point being the timing of the build v the current circs of waiting for the determinations about the permit.

As we are in mid January, any current determination periods could fall within a timeframe that no work could go on anyway, for reasons below-:

From the link above-:

" Construction activities would cease if precipitation occurs and would not resume until the ground is sufficiently dry to eliminate surface damage by construction equipment."

That seems pretty clear to me, if the ground is wet/risk of cutting it up then work would halt. Logic tells me that work won't start during winter periods, as in Montana I doubt it's dry during winter.


Details assumed correct unless of course that document has been replaced by another which demonstrates that construction work could go on.

* re CF comment.

The document covers the pipeline only, and not the depot, and CF specifically said a depot could be built in the winter, which is technically true, but isn't of much use without the pipelines, but does save time. They could of course have a dry winter too.

[monty panesar] 25/1/2014 13:59

Superg. Most northern ports have been on strike for a while now. The southern ones have got a lot of press because they handle perishable goods.

[monty panesar] 25/1/2014 13:56

Most research I read on smaller companies tends to be very poor and the Numis note seems in this category from what I understand. I hear it didn't have anything in for minisorbs this year and no production from anything beyond io6 this financial year.

It more important what's going on in the field than any analysts finger in the wind estimates.

I want to see 2 new plants running, a water permit and confirmation of sales coming through in next few days and weeks. Far more important than some analyst spiel.