Iofina Share Discussion Threads

[bad robot] 23/4/2014 20:19

They need a rights issue or it's game over.

RI possibly at 5p or something. They need to be quick

[bad robot] 23/4/2014 20:16

Cyber

trading 20.5p lows to a high of 27p is not narrow.

That's 30% range from intra low to intraday high.


Cash flow is dire.

[cyberbub] 23/4/2014 20:15

Oh and... does the chemicals division depend entirely on the extraction division for its iodine, or does it also buy in iodine from elsewhere to make up any shortfall in its requirements?Thx.

[cyberbub] 23/4/2014 20:10

Can any longtermers please confirm:Does the chemicals division pay the extraction division the going rate ($40ish) for the iodine it extracts? Or does it give the iodine to the chemicals division at cost, and the chemicals division then records the full profit on the derivatives sales?The US patent for IOsorb was only granted last year, I have assumed that it is a 20-year patent is that correct?Thanks.

[diggulden] 23/4/2014 20:10

Today should make everyone realise a very important lesson.

Iodine production is at the peril of the site operators where Iofina have plants. If Midstates announced tomorrow that they intend to alter brine output at IO2 then production would fall off a cliff.

The business model is great, but only if operators are processing the brine through Iofina's plants.

When Iofina have 20 plants operating with several different operators in different locations, the risk is somewhat reduced.

Makes perfect sense in hindsight, I have blatantly missed this point since day 1.

The advantage with mining Iodine is you own the resources you are mining, Iofina don't own anything, they just have an agreement with the oilies that the brine will be processed through a plant with a cut given back to the operator.

Bottom line, no brine = no Iodine. An expensive lesson.

[gadolinium] 23/4/2014 20:10

Good post Rockstar,
Trucking has got to be the answer they must surely have considered this as a backup strategy when they built these plants. I must admit I am a bit dubious about the mobile iosorb units. I am not an engineer but how on earth do you miniturise a blowout tower? These are pretty big piece of kit and I presume the height is dictated by the residence time of the descending brine droplets.

[madchick] 23/4/2014 20:08

Maybe IOF are awaiting some substantial payments (eg from large order delayed from last year)? Clutching at straws...

[rogerbridge] 23/4/2014 20:07

I agree that the long term future should be good, still paper losses to nurse until then.

[madchick] 23/4/2014 20:06

Nice post Rock Star

[cyberbub] 23/4/2014 20:05

Good post Rock Star.Just looking back at the half-year results for last year... the company appeared to have made a small loss, but in reality had a substantial iodine inventory and trade receivables... which makes the drop in cash levels to just $2.3m hard to understand, I would have expected more like $4-5m myself.If they hit their 400mt target I don't think the company will need a cashcall - if they did see a cash shortfall surely the time to have done it would have been a couple of months ago at say 50p? Having said that the management have obviously got things badly wrong so who knows...NAI

[che7win] 23/4/2014 20:05

Rock Star,
Good post, as I understand it the fracking dies down after a while, next year will look a lot better, meanwhile if we stay cash flow positive then we will recover.

[rogerbridge] 23/4/2014 20:05

Mr Lantz informed us on 14th April that IO4 &IO5 were in full production and we would be updated with the results. Very misleading.
On this basis some here bought in or increased their holdings directors need explain.
Heads should roll and the directors need to dip deeply into their pockets after the results and buy a serious amount of shares.

[cyberbub] 23/4/2014 19:59

Bad robot, the share price spread today has been very narrow for most of the day and the share price itself has stayed relatively stable... so someone is buying IMO...

[bad robot] 23/4/2014 19:54

I wonder if Mister Big will be yawning tonight or crying.
It will be extremely difficult to dump 5M shares. He will not even get 10p .



mister big 17 Apr'14 - 17:54 - 19180 of 19742 9 1

Yawn !!!
Have a nice weekend :)

[gadolinium] 23/4/2014 19:50

iodocoins!

That made me chuckle on a day when not much else has.

Thanks,

[rock star] 23/4/2014 19:46

I backed this 2 years ago based on the management experience of Chris Fay and ability and industry knowledge of Lance Baller. My current view of the executive management is not repeatable.

The business concept is as good as you will find but clearly over the past 12 months since Lance Baller left things have not been run as they should.

The hardest part has been done. Building the plants with minimum dilution. Big tick in the box. The established Iodine Chemicals business is exceeding expectations so selling iodine with good margins is not an issue.

The current issues are iodine production and cash. Rather than put plants on established SWD's with consistent brines they appear to have built on new sites that CHK are actively drilling.That will be great when the brines settle down but not great for coming weeks. At least IO1 and 2 are working profitably. A year ago the two combined were producing daily production runs of around 1t per day. We also know IO1 is profitable producing just 1t per week.

The simple solution is to truck in brines(as they do with IO1)from the mega ppm sites locally. We know they have one site with 2000ppm and 1000bpd. Who needs a mini unit? Just truck in a 1000bpd at 2000ppm to io3 or 4 as that will produce the same iodine as 100ppm at 20,000 bpd. IO1 trucks in 20-30k per day. To truck in 1000bpd would be easy.

Now they have spend the money on building the plants they need to milk the cash from iodine production. Cash is lower than I hoped- I expected it to bottom at $4m but this is due to reduced iodine production. In my calculations they only need produce in the region 70-80t per quarter to be profitable with the 4 plants. The figures today suggests they will produce average 110t per quarter for the next 3 quarters so they should be profitable for the year.

April 2013-14 for IOF? The missing year.

IOF are very lucky they have such a low cost production model or else the execution errors over the last 9 months would have killed them.

[rogerbridge] 23/4/2014 19:45

Williston cracking on channel 4 news now

[alfie4048] 23/4/2014 19:34

Yes cyber.

What we need to understand now is this...

Can IOF 'tread water' comfortably at a 400 MT per year production rate until brine supply increases, given current iodine prices.

Also, some may have missed this from todays RNS...

Iofina Chemical has enjoyed a good start to the year and has performed ahead of management's expectations.

[norbert dentressangle] 23/4/2014 19:22

AB was advocating a buy to friends (according to said friends) back in 2010 whilst seemingly flogging his own holding. I remember desperate emails being sent to him regarding the fall from 80p to 20p and his reply was always 'buy more'. Slippery

[cyberbub] 23/4/2014 19:12

Can we have some rational commentary on the company's prospects please, rather than the somewhat existential question of whether a paper loss is a loss?

[masurenguy] 23/4/2014 18:57

It is absurd to say that you haven't lost anything if the current price is lower than the price you paid just because you have not sold. Anybody's net worth is an amalgamation of cash and other assets.
The value of 'other assets' will fluctuate and they are worth whatever they are valued at any particular moment in time. A paper loss on shares is still a loss at todays valuation. By not selling you have not crystallised that loss but that is all. It is no different from the equity that you have in your house. If you have positive equity you can use it as collateral - if you are in negative equity you can't.

I have a small position in IOF - it is around 55% under water at todays close. Until or unless the shareprice rises above the price that I paid I am sitting on a loss. I have other shares where I am sitting on paper profits which remain as profits unless the shareprice falls below the price I paid.

It is an illusion to believe that you are not in a loss position because you have not sold. Obviously retaining the shares may result in a heavier loss or possibly a profit in due course if the price rises. However, anyone who paid more than todays closing price for their shares has made a loss as at today so don't kid yourself otherwise. Just try to raise a loan or credit against your shares at the price you paid if you want further proof.

If you have confidence that the shares will rise in the future then your loss may turn into a profit when the price recovers to your purchase level. However those who bought today will be in profit immediately if and when the price rises again.