Iofina Share Discussion Threads

[scrutable] 30/1/2014 16:59

peterz
nice of you to notice my absence - hopefully with regret! I still hold 32k, a small fraction of the original holding thanks to my resolve to keep the portfolio in balance.

That was much derided by sg and others when IOF was displaying the arc of a comet and multi bagging. It takes some doing to retain a shareholding when leveraged x4 times and the share price falls by 70% as IOF has done since it peaked at 240p. Everyone who was geared and did not keep their IOF holding to below 15% of their total was pulped - several times.

Having most of your money in a single share is plum stupid anyway. Geared it is lunacy, a cert that you will lose it all. IG offers excellent margin trades to open your account, but once you are short of margin, call you out when they feel like it. Unless you work to the 15% rule you will be wiped out at the latest within 3 months. All share prices oscillate stickily within their own trading band. In most cases a 10-12% natura
l fall x4 will let IG confiscate your holding. And that IS repeat IS a cert.

I don't post much on IOF these days because I have nothing new to say but I do lurk, noticing with regret that no company, including IOF ever has enough news to satisfy our impatience

[n3tleylucas] 30/1/2014 16:58

Hey cheggers, I knew the lucky 75 guess would come out soon.

[che7win] 30/1/2014 16:53

dc,
the company have some issues to address, that is how I reconcile last years early figures to the current ones.

All part of the learning curve, the company underneath is strong.

I mentioned yesterday about errors in the Numis note.

Another one - IOF doesn't use a run-of-the-mill blowing out method as per the other US iodine producers, the Numis note was incorrect in that regard. We are significantly different, otherwise our process could handle oil and other impurities.

IOF should have other patents that they are/have filed as per last summers patent RNS, we have a unique business proposition that is different from those old patents registered back in the 1930's.

Time for management to communicate properly to investors and the outside world.

[tsmith2] 30/1/2014 16:48

46k bought at 81p after hours?

[dcgray21] 30/1/2014 16:44

che7win - With you on your numbers for next year . My model gives 1300MT to get to $60M rev as per Numis note but I run off $45/kg sale price for Iodine . However there are a few variables as we know that have a big impact on where you end up so hopefully these will become clearer to us once the Q production updates arrive - and all this excludes any water ...pure upside.

[che7win] 30/1/2014 16:36

superg,
on the water, I think I get it, hence our three separate locations for the water stations :-)

[che7win] 30/1/2014 16:25

N3tley,
I happen to thing a lot of last years comments by those investors attending presentations is actually not far off the mark.

Your method indicated it was worth 225p, are you changing your method or does it only work when it suits you?

Compare this to TUNG and it's TUNG that looks expensive. TUNG is on a P/E of 65 - for next year! Barmy. We would be at 455p if valued on that basis, They haven't even got the banking licence, that's like us going back to before having any plants.

Put EPS from iodine of 7p this year on a forward P/E of 20 (whatever way you look at this business it will grow 50% next year), and you have 140p.

Now, your method was two years out, I'm only looking at this year, your valuation of 225p still stands.

9 plants at year end is a run rate of at least 1300 MT next year.

Your alter ego made a lucky guess of 75p when your other half's method indicated 225p, I guess I could say you are both right and wrong at the same time.
I can't give you any credit for that; the share hit 250p last year, you were wrong most of the time, you may be right this month, but you will shortly be wrong again.

Enjoy your time in the limelight, give your alter ego a pat on the back.

I analyse values independently of sentiment.
The market can take a share anywhere, governed by panic. I am not in the least concerned about this, as long as the business performs and potential is there, I assess the current price to my valuation.

I price the business significantly higher than the current stock price, that is all that matters to me.

[superg1] 30/1/2014 16:15

Bobby that's were strategic positioning of depots comes in and the price variations for water.

E.G. if you are at a depot where they have to travel further to get it, your price has to be lower. Hence far from wells would sell at 60 cents pb, and those close $1 pb plus.

It's all down to overall cost, no one will drive 40 miles more to get their petrol 5p a litre cheaper if the travel costs wipe out the savings.

Many of the ND depots are small and just farmers converting irrigation rights on a temp basis.

If it all happens then hot water may feature. Hot water is supplied from depots too in some cases. If you look at Armstrong the opex is quoted as 3 cents per degree pb (something like that) with a 70 degree increase needed meaning $2.10 opex pb. I'm working from memory but it came out at around the $2.10 costs mark to heat a barrel.

On transport costs, in a presentation Chesa quote $1 pb per hour of travel.

Oasis who are big acreage holders, look like they will switch to pipelines for everything, including fresh water.

Logic tells me, if they want piped fresh water they will want a big supplier, the less pipelines in place = cost savings.

[n3tleylucas] 30/1/2014 16:08

Yeah cheggers, but it's nearer to my 75p than anything you've ever said.

[che7win] 30/1/2014 16:06

dcgray,
thanks for your reply, the warm water has a much higher price, but then there are higher input costs with heating it.

Whatever way we look at this, we can cut our profits by 50% and still look at significant share appreciation from here.

Funny old market this, Mr Market seems to have panicked himself into irrational depression.

[dcgray21] 30/1/2014 15:58

che7win - I use an avge of $1.5 for revenue based on $1 for cold and $2 for warm and 50/50 split with 20 cents cost of sale . For full year FY15 that would add 9p to EPS at whatever multiple you deem appropriate . By hook or crook we are in the ballpart re EPS impact . I understand IOF are looking for 200k bpd so there could be a furthur uplift in FY15 and positive tsunami of EPS in FY16. All non core of course and based off a cheap hot water price as per one of SG's recent comments I believe abut warming technology lowering the revenue point.

[bobbyshilling] 30/1/2014 15:44

che7win, well if that is the case, that is good to hear. Thanks.

[che7win] 30/1/2014 15:29

bobby,
we are not in the O&G businses, we would be providing a service to supply water at a pos site.

O&G companies would be doing the trucking.

Our costs are to pump water. The truck drivers arrive, swipe their card at the pump and fill the tankers.

[bobbyshilling] 30/1/2014 15:23

che7win, who pays the tanker drivers, is it IOF or the oil companies, separately. If it is IOF, then 10cents per barrel will not even pay for their fuel.

[superg1] 30/1/2014 15:05

Jointer

I'll let you know how it goes, glass pressed against window and freezing me bits off, ear stuck to glass, anyone got some warm water.

Can't type much, fingers won't move.

[che7win] 30/1/2014 15:03

captain,
the market doesn't assign any value to the water. I'm throwing a few figures out here for debate.
Some parameters (water prices may be higher, warm water also changes parameters)
1. Water application for 80,000 barrels of water per day.
2. 80,000 x 365 days = 29200000 barrels over the year.
3. Selling price $1 - $2 per barrel (others will know better).
Lets assume $1, cost 10 cents = $0.9 margins.
4. 29200000 x 0.9 cents = $26,280,000 pbt.
5. Exchange rate 1.65 = £15,927,272.
6. Tax @ 30% = £4,778,181.
7. PAT = £11,149,090.
8. EPS for water = 8.7p

Worth 80p on the share price in a normal year at best case scenario.

This year - assume we would have a good six months revenue if complete by end of June.
Also, no guarantee we would have 80,000 demand every day - I don't know.

[n3tleylucas] 30/1/2014 12:09

Water boarding is more fun.

[captain_kurt] 30/1/2014 12:05

Plants IO4/5 are going to be delivered in Q1
Iodine production meeting the demand of our chemicals division
First external sales are happening
Quarterly updates on their way with figures
Water board meeting today with high hopes.

Life isn't so bad after all lol

[peterz] 30/1/2014 12:04

Worse than here!

[madchick] 30/1/2014 11:49

o/t - anyone watching BLNX? Carnage!

[superg1] 30/1/2014 10:41

Disruption.

As said before, some asked post io2 what was the disruption.

In OK the produced water is allowable to use for fracking, so when wells are in progress near an SWD they would use some frack water going to that SWD, so it disrupts things, obviously any new wells add to the brine pot once complete.

If they used fresh water, then that would dilute the ppm for 1 to 2 weeks for each well completed as the flow back water exits and geos to the SWD.

When the drilling moves on, all you have left is an SWD probably up to max capacity on normal brine.

Produced water used for fracking, is the probable disruption, but fresh water has the same effect by virtue of dilution.

Logic leaves those two options, and as it clearly states that drilling is going on disrupting SWD X then those new wells will add to the SWD pot.

[n3tleylucas] 30/1/2014 09:34

I've already hinted that bulls must keep this supra-£100m... haven't I graham?

[shonny] 30/1/2014 09:33

Todays dive about to commence I see.

[n3tleylucas] 30/1/2014 09:32

That's right cityboy5.