Iofina Share Discussion Threads

[1madmarky] 05/10/2014 11:44

Was thinking about a previous point raised about the current water depot where ours will be not being able to sell all its water. It is only a small depot (I believe) thus would not be able to supply enough to encourage oil companies to rush in and develop the area. If we get the permit then there would be sufficient water available for fracking thus perhaps that would encourage the oil companies to start developing the area sooner than they otherwise would have. Thus we create the supply and the demand will follow. Just how I see it developing, thus it might be a slow burner to start with, thus do a JV with some money up front and let someone else worry about the water. Just my opinion. GLA

[simmy1699] 05/10/2014 11:38

Nice article http://share-knowledge.org.uk/2014/10/04/its-raining-bucks-at-iofina/. "And then, on Friday evening (after the market close), details emerged that Montana State had preliminarily granted Iofina's application for a water extraction permit." "Perhaps the stated aim of "becoming the global leader in iodine and iodine derivatives" in this week's interim report should have been taken more seriously." "payment should see Iofina entering 2015 with enough cash to roll out multiple mobile iodine extraction units while resuming their build program for the larger iodine extraction plants."

[tim3416] 05/10/2014 11:35

Come on ammons, I hear what your saying but allow us a bit of excitement this weekend after the year we've had!

[superg1] 05/10/2014 11:30

A few FACTS to consider.

I'm not saying IOF could sell all of that water, but here are a few points that could help some understand why they may achieve that when some depots sell less than half their allocation.

Contracts

Water sellers must have a contract with the buyer before they can sell the water to them, there can be no random selling to casual buyers. On that front I note a new name on a letter of intent so maybe that will appear as a new contract.

Feasibility and convenience.

Dozens of water 'depots' exist, but many of these are just tin sheds with a pump or two (often farmers selling their irrigation allowance). The pump or two is also relevant to some actual depots. IOF's depot is shown as a 10 pump depot.

Taking a 2 pump depot and the desire to get enough water to frack a well of 100,000 barrels. It would take about 20 mins to hook up, fill up and leave for a 100 barrel tanker. A maximum of 6 trucks per hour in pit-stop mode. Finally after 1 week of constant filling up nose-to-tail, you have your water for one well.

If it's a slickwater well you'll be filling up for one well for 2 1/2 weeks.


Now think about that and the time the trucks queuing would be spending sat idly waiting in the queue for hours on end.

That is a waste of time and money, big players want big facilities and big supplies. Time is money.

So I imagine Halliburton and other big players have headaches over rounding up all the water they need from various locations big and small. Not forgetting they are in competition with many others. Reliability of the supply and the size of the supply is very important.

Aquifers

The vast majority of supply for fracking currently comes from aquifers. This is a major concern for both the Montana and ND water bureaus. The aquifers deplete much faster than they recharge. Both states want transition to surface water supply to protect the aquifers.

Halliburton actually mentioned that in detail on one of their reports (I'll try and find it). They highlight the aquifer issue and it's probably why they are keen to secure large surface water contracts.


Temporary permits.

Many temporary permits have been in place to supply the industry. This required a temporary break of legislation which does not allow irrigation water to be sold for Industrial use. That emergency measure will be removed when the water supply infrastructure is up to speed.


Most 'depots' are the tin shed type with small permits.

Many of them are like a burger van in the layby, but with limited time and limited burgers. The IOF depot will be a McDonalds in the water depot world.

So greasy Bob's burger van, off the beaten track, where he stills looks like he has a hangover, and you'll be waiting for ages, and he may run out, or McDonalds drive-through.

If you are a truck firm on piece-work payments, which depot do you want your water from.

The water supply industry currently has a poor infrastructure, depots like the one IOF are looking set to build, will be the lead examples and state-of-the- art.

[neddo] 05/10/2014 11:29

naphar
4 Oct'14 - 12:23 - 25269 of 25344 0 0


What's wrong Neddo? Did you go short?

naphar,
that is a shout of glee for a change?

[joestalin] 05/10/2014 11:07

Please forgive my sarcasm, but the only people who really know what the share price will be in 12 months are the chartists.

[angel of the north] 05/10/2014 11:05

Getting ahead of ourselves? Creo que no!
My thoughts are that the share price is WAY too low already for where we are so the water news just adds to that. Realistic share price for me is stick a £1 sign in front of current s.p.

For the 'game' - tomorrow 70p and next year 220p - there! I've said it lol!

[patrich2] 05/10/2014 11:04

well I'm not to shy, 64 tomorrow, £1.25 by year end, and £3 this time next year, thats with all going to plan

[madchick] 05/10/2014 10:48

I'm all for realism, but I'm also up for a bit of fun.

I don't think long-term investors can really get ahead of ourselves when the share price is less than 50p, but I guess we are in for a volatile time of it in the next week or so and short-termers may get burnt.

I can't even begin to guess on the share price as there are so many unknowns (the strategy, any JV deal, any takeover offer, unforeseen problems, unforeseen bonuses). I'm also dithering between muted response and rapid re-rate tomorrow!

Pure finger in the air with my eyes shut - 68p tomorrow because logically the share price should be higher than recent highs on the news (I know, the market is not logical and actually it seems too much to hope for in one day from the current levels!)

This time next year - I don't know if I can even begin and I'm too shy to say!

[ammons] 05/10/2014 10:15

I see we are getting ahead of ourselves again because of a preliminary determination to grant the water application (not even RNS'd yet) and a few rumours..............

[bocker01] 05/10/2014 10:09

Wooly, there are more water apps to come even if through a JV. Slick water will swallow it all up. 20 per event hot water sales in a 50 percent JV makes us as much profit as 100 percent cold water in a 100 percent owned water services co. The iodine plant roll out will rocket. There will be iodine off take agreements coming into play. The share price was at the 2 quid level before a combination of water disappointments and lack of control by the dismissed management team screwed it all up. Since the 2 quid and now there has been serious solid progress and tangible achievement.

[woolybanana] 05/10/2014 09:49

Just for fun, anyone want to have a guess at the share price peak tomorrow, and the price in twelve months time?
I reckon 60 tomorrow and 200 next year

[woodpeckers] 05/10/2014 09:48

RB Energy financing scuppered by unreceptive market

By Laura Syrett
Published: Friday, 03 October 2014

The company admitted last month that it was facing financial hardship and was planning to sell its Chilean iodine project. Today RB Energy has said it may need to shut down its lithium project in Canada if it cannot secure the funding necessary to keep it afloat.

Vancouver-headquartered RB Energy Inc. said Friday that its latest effort to raise funds for the development of its Quebec Lithium project has not been completed owing to what it described as “difficult market conditions”.

The company issued a statement on 15 September stating that it was “in a...

[magwich] 05/10/2014 09:22

I think it is wrote by a PI, one probably on here?

[orslega] 05/10/2014 08:59

that share knowledge link above talks about 28m barrels per annum....is that right? Seems on low side....see comment info in header, 37m

[rhwillcoll] 05/10/2014 08:51

May I raise as a discussion point the stated aim of progressing towards becoming the global leader in iodine derivatives, and not just iodine. How could this be achieved? The only two ways I know are by organic growth, and by acquisition (is there a third?). There must be several derivatives companies
out there which we could shortly afford to buy, and supply?

".... the Board is excited about Iofina's future and is dedicated to progressing towards becoming the global leader in iodine and iodine derivatives"

[superg1] 05/10/2014 08:49

Stevo


As said, all Macca ever did was throw in an apparent load or research, so he could add lies into the pot.

I've never waivered from saying they would get the permit, It wasn't a wild hope, the laws are clear as listed in your post. IOF news in the build up was spot on, so they did have all the aspects needed to meet the law.

I've always had the line that they couldn't refuse IOF as it would set a precedent for any future permit, but in any case just be plain devisive and against US laws.

Once they declared the water being legally available and other aspects, only one
real problem remained, that was beneficial use. If the letters of intent weren't falsified then it was job done. I didn't think for a minute they were, so the permit was always going to be awarded.

As detailed in the result, and mentioned before you only need 50% of the amount applied for covered by letters of intent.

In a hearing the examiner is independent, they have a simple process to follow which is the law. Once the law was applied they got the permit.

I have noted Halliburton included letters of intent to match the need for the original split down of 3 depots.

I'm not convinced they will go for 3 depots but we'll have to wait and see. The 3 depot total volume jump from 100k to 200k acres per day was purely down to the 50% rule imo.

Slickwater fracking could be a driver for any growth there. 77,000 bpd is a lot of water. Well it seems that way until you realise a slickwater well would take 3 to 4 days supply, that means it's only enough for around 100 wells over the course of a year.

Now the decision is in play time to do so serious digging on the water situation in the area, and the plans of the operators.

[orslega] 05/10/2014 08:12

fully expect an RNS tomorrow - OK they might not have had the "official letter" but they know it's coming. The market therefore needs to be informed.

As to share price reaction - not sure it will be set alight immediately - a little early for that in the process. But it will come.

I also would prefer a JV - I would not want the BoD being distracted from getting the iodine business back on track. Had enough of that. Let someone else take on the Water business after parting with big $ for the privilege. Those big $ will facilitate a serious roll out and the timing couldn't be better as the tide turns in Iofina's favour. (Would have preferred the Water news earlier in the year, but those pen pushers in the Bureau had to have their fun...).

This news should not hold up the strategic review; I imagine that is at an advance stage.

[superg1] 04/10/2014 23:38

Roger

Maybe they were waiting for the news before they considered the options.

I'm interested in the thought processes of the funds that are loitering. It's been said for a while now by folk in the right places that funds will wait until consistent production is in play. They are happy to pay higher prices with more risk removed.

However what now, as I know form the first time around they all talked about how lucrative water would be.

Trying to get inside their heads, imo the first thought would be, we'll get some through fund raising for a depot. Mr B will know hands were in the air when the $5 mill note was in play.

However this team don't like dilution and we know Hal previously would have paid cash up front and paid for everything. So I don't see dilution as the probable way to fund a depot. So what do funds do then?

Most likely we are going to end up with a few crazy days early next week, with churn all over the place. Where the price will go I have no clue, the market can do some weird things. Those that may have been, or intent on are selling may hold off. Others that have been sitting on hands will probably buy.

I'd be surprised if an rns doesn't come on Monday, I doubt IOF will wait for the letter to arrive.

A fully automated depot is an expensive thing, but it's a great problem to have.

[che7win] 04/10/2014 23:35

Superg,
Sounds like Siroccos mine is way overpriced.

Probably half the value if we use iodine prices around current levels. They are selling iodine driving down the valuation of their own mine.

If they are going to push that sale through, I can't think if a worse time to do so. Who would want to pay for a mine that is going to be running at breakeven.

Canadian Lithium was a dud, it's suck the whole business unfortunately.

[superg1] 04/10/2014 23:22

Che

I know you have an interest in Sirocco. Investors think the value is $156 mill, but there is a few major points they missed.

The NPV has a sensitivity factor of $14m per $1 drop in the price of iodine. They based the valuation on $45 per kg with Sirocco having recently selling it at $36, that a sensitivity drop of $126 mill in the value. They owe $40 mill in debts.

In costs rises they show a $10 mill drop fro every 2.5% cost rises. With tax to be rising 7% and the minimum wage up 25% both with 2 years, that will certainly take them to higher costs and a further devaluation. That excludes the pending water reforms which should push costs up and power cost rises that seem never ending in Chile.

All that valuation includes a forward view of the ALP doing most of the production. You know my views about the ALP and imo it will never return due to corrosion issues and can't return at these prices.

I found the main cost issue there and it's a $5.71 per kg increase for the ALP v heap leach on the opex, almost entirely loaded on power usage.

Then NPV records a figure forecast of $23.05 for use of the ALP, when in fact the last 3 opex levels reported were 35/38 and 41.

In other words it's worthless.

I note ACF minera off-loaded that mine to them years ago, it's been a dud with nothing to show for it since Atacama minerals (Sirocco) took it on over 10 years ago.

[rogerbridge] 04/10/2014 22:36

It would have been helpful if we could have had the strategic review before we received this fabulous water news.
IOF must have considered the options and I am looking forward to the boards reasoning on the way ahead.
What a wonderful position to be in.

Personally, I would not like a complete sale and favour a JV as a safer move into this industry. Immediate prospects of a cash injection or the partner fully funding the plants.

Having said that, I take naphar's point that it is not rocket science and we have a renowned expert on the water industry. 100% income would be a very nice earner.

IOF is now generating cash, the question is would that be enough fund a move into the water industry and for it's plans for our core iodine business?

How quickly would they want to move, and how would that affect finances?

The board have hinted that cash would be required and there would be no shortage of institutions or individuals willing to fund part or all of the project.That is If this was the boards favoured way forward.

Until we know what IOF's plans are in relation to the timing of expansion and becoming the world leader in iodine we can only guess.

We have two distinct vertically integrated and one future earning streams (pun)
The board will be looking at all options and I have confidence in Lance and Tom to take the right steps forward to becoming the global iodine leader.