Iofina Share Discussion Threads

[superg1] 29/1/2014 19:29

alfie

I doubt they will produce iodine there while higher rates exist elsewhere. They are clearly concentrating on ok at the moment, but yes good point, there may well be a cross over on the pricing point to make it attractive.

From memory I think gas was $7/$8, but then iodine was $25 per kg.

The gem of the bunch up there now is the water, so 3 revenues in one should they go that route.

30k bpd is equal to the discharge permit, cold brine 70% yields I suspect

should equate to about 50/60 mt of iodine, $1 pb water perhaps, and no idea re gas quantity from 30k bpd would need to look it up.

EDIT

Still looks like gas is cheap in the US to me.

So the water option is about 4 times the value of iodine revenue plus gas unknown, some used for gas generators I would suspect, such as the wall corner pumping station gas generator

[rhwillcol] 29/1/2014 19:16

Monty: I totally agree with your post above. This is a cash generating machine, and I am happy with the company's current production, current supply to their chemical derivatives division, plus extra production of raw iodine for external sales. They are generating a lot of cash, and with a lot more to come in the near future.

[alfie4048] 29/1/2014 19:11

Does anyone know how high the price of gas has to go before production from the Atlantis field becomes a proposition.
I note the price has recovered from lows of $2.5mcf to over $5mcf in recent times.

Thanks in anticipation.

[monty panesar] 29/1/2014 18:10

I am very pleased to see sales are going well.With a fairly dramatic increase in production likely to happen in next 6 weeks or so with 2 new plants coming on line good to know the cash is coming in.
They should(even accounting for teething issues etc)come March/April be producing over 50mt per month with a street value of over $2m per month with >50% margin. That is not including the Chemical division which consistently makes money.

Markets obviously not helping but a lot of nerves soothed. In 3 months time we should be looking back saying what was everyone getting their knickers in a twist about.

[ansana] 29/1/2014 17:04

I understand that we can expect figures in the quarterly production updates. Don't get excited now form an orderly queue.

[shonny] 29/1/2014 17:04

A fair bet for the sixties next week then. Should see 50p by the end of February.

[gripton] 29/1/2014 16:34

Is this 7 down days bar one ? Almost like SULA
I certainly won't be winning any investment prizes this year, and it's still only January FFS

[bobsworth] 29/1/2014 16:06

frog1
Can you add two 00's to the 4 mt per year

[frog1] 29/1/2014 15:57

crosseyed

That revenue is in line with the last rns of 2013. In the interims 2013, they had forecast over $11m for H2 which would have given $23m, they then said revenues would the flat from 2012 to 2013, which meant around $18.6m. This is apparently due to an order delayed from H2 2013 to H1 2014. To reconcile the figures, that would have been of the order of $4m to $4.5 milion of revenue moved from 2013 to 2014 - a nice start once 2013 is out of the way. There were no sales of Iodine in 2013 as far as I know so a big inventory build.

The good news is that they have started selling raw iodine which to me is a hurdle they have overcome. They have said they are now supplying all the needs of IOF Chemical, which is around 400 mt per year. I don't know how raw Iodine is sold (in what sort of quantities), I hope they ship reasonably large quantities and not from the inventory they bought last year.

Anyway, they are making the figures deliberately opaque which always raises an alarm for me. As sg said, when they have more plants running it will be much easier to give production figures, each plant has a much lower impact and any shutdowns will cause a lower % disruption. That will make it easier to forecast and be proactive with the market. I suspect that is why they say they will become more transparent in 3 months (actually they said they will give quarterly production updates so it may still not be transparent given today's update). At the moment, I suspect they are struggling with lower than expected returns that are compounded by outages that are having a significant impact. Given all the upbeat stuff put out last year, that is difficult to manage without spooking the market further so I have some sympathy with the current management. They are in the nitty gritty of delivery now which is always much harder than the early stages. You always pick up all those problems that could be deferred until the end. You know the old ballpark figures - last 20% of a project takes 80% of costs and time. Add to that the spectre of insufficient funds to see them through and they have picked up a tough job IMO.

As I said all that diminishes the more plants they have producing and the threat of funding is out of the way..

[crosseyed] 29/1/2014 15:34

frog1,

Thanks for that. $18.8 million in revenues for 2013 (v $18.644 million in 2012) is somewhat less than I had estimated given the H1 revenues of $11.556 million and the considerably greater production indicated (though not in hard numbers) from IO#1, IO#2 (for the full 6 months) and a contribution from IO#3 during Nov and Dec, with improved brine delivery (accelerated from October to IO#2).

I had assumed that there might be a contribution from non-Iodine products in H1, as there was in 2012 amounting to revenues of $2.251 million. Do you think that there might have been such a contribution in H1 but none in H2? It's all guesswork really, though.

c

[bobsworth] 29/1/2014 15:20

"We look forward to updating the market on production levels on a quarterly basis."

So I guess the first quarterley set of production data will be begining of April reflecting 6 plants in full production.

[croc8] 29/1/2014 15:16

Shoddy, you are as insightful and as well researched as ever. It must take you hours to come up with your comments.

[shonny] 29/1/2014 15:02

Yesterdays rise was just a glitch in the downward spiral of the share price. Todays update was another jam tomorrow spiel. Plenty words but no figures. If the figures were good they would have said so. Never mind, according to one deluded ramper it's going to be £3 by year end. Unbelievable.

[che7win] 29/1/2014 14:48

I agree with others, figures are needed in the RNSs.

[che7win] 29/1/2014 14:48

Crosseyed,
Sorry, I am not privy to any confidential or market sensitive information, your guess is as good as mine.

[masurenguy] 29/1/2014 14:43

This mornings update has not been positively received in the market as I expected. This comment "production levels at IO#3 are coming in as expected when the volume of brine received from the Operator is as anticipated. However incoming brine volumes have been affected recently due to the Operator's significant fracking and drilling activity in the area, which is affecting overall iodine production levels." indicates that production levels have been impacted but failing to quantify to what degree creates further uncertainty which the market does not like.

[frog1] 29/1/2014 14:30

crosseyed

I only saw the $18.8mrevenue that Numis stated for 2013. At 20%GP that is a GP of about $3.4m. Admin is over $4m so say $4.5 that's nett before interest of -$1.1m. Interest will be around $0.5m so I make it a loss of at least $1.6m for 2013.

This RNS seems to satisfy those that think the company is all understatement, below the radar etc. who work with numbers that the market just do not recognise. It has antagonised those of us who want transparency, with a view of 'The Plan' and the appearance of real control from the management. To some it must come across as they are hiding bad news, that the plants are not what they believed, but definitely not something that makes me likely to increase my investment. If an oil company acted like this over flow rates from its wells, it would be crucified, so no wonder the share price is down again.

[superg1] 29/1/2014 14:18

Pheonix

Yes, but you could get a scenario where the bureau ask for extra data, post meeting, having reviewed submissions. It all depends what the queries are obviously, and maybe IOF will update us post meeting re what it was all about, I don't know.

[crosseyed] 29/1/2014 14:03

che7win,

Re...
IO#2 was producing in May last year:
"· Recent production running between 800-900 kilograms ("kgs") per day with an expected 20-50% uplift once fully optimised, giving an annualised production rate in excess of 300 metric tonnes ("MT") per annum as previously forecasted;"

What do you think was the total iodine production for 2013 from IO#2 and in total?

Although I have not seen the Numis note, it has been suggested that IOF will not have attained a positive net profit on the year which would suggest that IO#2 did not reach anything like its "optimal" potential. In fact, it was indicated in the last RNS that the plant was out of action for some time in November.

The above statement would indicate over 25mT/mth and since then we know that brine supply was increased to up to 50,000 bbl of brine/day in October with the larger pipeline (though I understand the plant's capacity to be around 30,000 bbl/d). That in itself would suggest perhaps 35mT/mth. Do you think that is likely?

By the way, I do believe in the Iofina story, and have been steadily buying during this negative preiod, but like other posters here, such as frog1 and longlife, I would like to see some hard numbers rather than phrases like "to plan" without that plan having been clearly identified, and how it might have changed. 700-1000mT? Total year? Exit rate? Hmm...

c

[monkeymagic3] 29/1/2014 13:46

If ever a share price movement was reflective of investor sentiment, this was it.

[phoenixs] 29/1/2014 13:34

super,
Do you know what the timescale is re the water board meeting? Is there a date by which time they have to either deny or accept the application?

[bobsworth] 29/1/2014 13:33

chew7win

Many thanks for the explanation and appreciate you refraining on the figures.

Just pleased to hear there is an existing solution that should therefore not add to the opex.

Looking forward to their quarterly production data which will hopefully reflect their due diligence to daily maintenance to avoid residue build up.

[superg1] 29/1/2014 13:12

Octopus

Glad to see someone has fat fingers like me.

I don't think IOF intend to be that aggressive in the meeting

'waterboard meeting'

but it is an option if the officials fail to comply with IOF's demands.

I'm still chuckling having pictured the potential. They will have to be careful with the amount thy use, and ensure loss efficiencies and get a temporary permit, but I'm not sure it comes under beneficial use, well not in their language anyway.

I reckon they should send Dr Khalev on that basis, it has a good ring to it for such a meeting.