Iofina Share Discussion Threads

[rogerbridge] 24/11/2014 16:38

You beat me to cyberbub, just about to say the same thing.
Wait until next month for the action

[cyberbub] 24/11/2014 16:36

Wow - not a single post today!

[engelo] 23/11/2014 18:27

SG thanks for wealth of info.

Re on/off production at Iris could it simply be that the ore quality is variable and the next move is difficult to calculate?

Don't know whether Chile miners ever bother with DFSs, EIAs etc or is it simply finger in the wind?

[y1phr] 23/11/2014 16:51

Interesting reading thanks.

[superg1] 23/11/2014 15:58

I got there eventually in finding the original article re Cosayach. The rumour was that they had damaged the forest in the national reserve of Tamarugal.

The below relates to the eventual prosecution of Cosayach in 2011 and those 33 closed wells. That took Cosayach from over 6000mt to under 2000mt. As we now know Cosayach did the same all over again and had 38 wells closed in May this year with one boss sent to prison.

The area must be quite sensitive to water withdrawal. Cosayach were taking 400 litres per second back then. SQM rights for the same aquifer are 570 litres per second.

In 2006 allegations against the mining company Coyasach by the illegal extraction of water in the pampa Tamarugal to operate its mine began iodine. According to the surrounding communities, the company drew about 400 liters per second, with your permission suggested a maximum of 30 liters, a situation that would have increased drought in the area. In addition, the installation of pipes in the National Reserve Pampa aquifers, have reduced the forest mass in the area. After years of complaints and audits, the 2009 case judicializó. Two years later, in November 2011, the Supreme Court sentenced Cosayach by the illegal extraction of groundwater from 35 wells generated such action and environmental damage (because role 5826-2009). In this regard, the decision states: "The basin of the Pampa aquifers is a particularly vulnerable ecosystem given the scarcity of water and they depend on other environmental components, such as soil, flora and fauna. Then dealing with a particularly fragile ecosystem, water loss by unauthorized removal by technical bodies to ensure rational exploitation precisely cause an impairment of that environment, which can only be assessed as significant. " Finally, the judgment ordered to stop the extraction of water in the 35, remove all the facilities to extract, convey and store groundwater and blind the collection wells lacking water use rights.

[engelo] 23/11/2014 11:44

naphar: agree that IOF have said that derivatives prices are not impacted too much by the iodine price.

Imo this is pure capitalism. Eg what happens to UK retail gas prices if wholesale gas prices fall? British Gas and the other energy suppliers do absolutely nothing. They operate as a loose cartel that will sell over time at the highest price the market will bear.

Think that the iodine derivatives suppliers (as with many other pseudo competitive business sectors around the world) operate in much the same way. There is a moral implication that derivatives prices should fall in tandem with the raw iodine price, but no business or regulatory imperative. Afaict the derivatives market continues strong, so no-one wants to disturb the status quo.

Brilliant for IOF, where the disparity drops straight through to IOF Chem's bottom line :-))

[naphar] 22/11/2014 21:34

Sg
I am sure IOF said at some point in the past that derivatives prices are not impacted too much by changes in raw iodine price.
That makes total sense, because raw iodine is only a portion of the cost of the finished derivative, meaning a 20% reduction in iodine price would, when costed in, result in less than a 20% expected reduction in derivative price. How much less I cannot judge yet.

But, in much the same way as they honoured derivatives contract prices when iodine costs rose so dramatically, not all of their derivatives contracts are likely to reflect the lower iodine price yet. So the volume growth is not necessarily as high as you may be expecting, but nonetheless is still pretty good going on the published revenue data.

[superg1] 22/11/2014 17:59

Cross

You wouldn't have seen it but I included posts way back about at least one non iodine product contract adding to revenue this year.

IOF have a gov contract to supply Lampricide there was an 18 month break in the contract which is back in play fully this year.

The break in the contract is in news from a year or two ago.

Another point is the fact IOF produce their own iodine and that has allowed them to become competitive in other sectors,

Roll back to the high prices. IOF were paying those prices to buy iodine but were honouring contracted rates. So there is a big difference now to paying $50 to $65 per kg for their chem div needs.

Up to the date of the $20m plus comment IOF had produced around 216 mt but they did have some inventory.

There is a big difference in what they produced and took as revenue compared to the iodine price.

Nice facts to know as when the results come the market will have forgotten that point.

On every occasion I've seen it, when profit warnings come the market hits the SP, then they do exactly the same when the results are out. If that isn't MMs working the system I don't know what is.

So we know revenue is up by a decent amount before they ever release results next year.

In presentations a month or two back the competitive edge for other sectors was declared due to their own production. They have created new products too, as also reported in previous news.

Some of the products IOF chem div do are quite specialised, with limited suppliers. That includes customers like intel.

All I know is the iodine price has taken a big hit but their revenue has gone up. So they must be doing a lot more volume be it iodine or non-iodine related products.

[hurricane.] 22/11/2014 16:37

Add in any JV upfront payment in Dec?

[crosseyed] 22/11/2014 16:07

OK. So just a tad over 25% then :}
c

[tim3416] 22/11/2014 15:59

"Year-to-date, revenues through to September have surpassed the USD$20M level compared with total Company revenues in 2013 of USD$18.8M. The Company reiterates its year-end forecast of 325-350 MT of produced crystallized iodine."

[naphar] 22/11/2014 15:58

In the 6 October RNS

[crosseyed] 22/11/2014 15:52

naphar,
Splitting hairs just a wee bit: 2013 revenues were $15,929, upped by 25% gives $19,911k. So where did you see that sales surpassed $20 million by September?

As regards the split between Raw Iodine Sales and Non-iodine Products, that's a moveable feast as far as my estimates go. I had thought that there was an indication of some early sales of raw iodine, though I don't recall seeing it quantified.

Anyway, let's hope for at least $25 million by year-end.

c

[naphar] 22/11/2014 15:43

Cross

We know they sold some raw iodine earlier this year, although that sale was only 5-10mt IIRC.

We also know that revenues to end September had surpassed $20m. That's likely to have included the raw iodine and non iodine sales at that point, or they should have been more specific in what was included.

Given the anticipated usual year end slow down I think your total revenue forecast could be a bit high, but might expect somewhere over the $25m mark myself.

[crosseyed] 22/11/2014 15:22

Thanks che7win, and of course superg1, for your excellent posts.

A point that has been gnawing at the back of my mind concerns revenues. It has been stated that 2014 revenues to the end of September exceed 2013 revenues up to September (that was clarified) by 25%, ie about $19.9 million.

But what comprises those revenues?
My year-end estimates are shown in brackets...

- Iodine derivative sales, most certainly, consuming 342 mT of iodine) [$24,200k]
- Raw Iodine sales ? [$1,200k from 30 mT]
- Non-iodine Products ? [$2,442k]
- Total revenues 2014 [$27,882]

There is some indication that both Raw Iodine and Non-iodine Products will figure in this year's revenues though the amounts shown are conjecture on my part.

Any thoughts?

[dcgray21] 22/11/2014 14:56

Strat plan will be a pivot moment . If IOF can demonstrate constant iodine production of 40-50mT per month through 4Q then that will begin to eliminate doubt on their ability to deliver . Expansive but most importantly deliverable and achievable targets for Fy15 - 1000mT plus - supported by the JV upfront cash and possibility of $11m ( annualised ) coming in from 50% water share plus Japanese call off orders should hopefully move the share price towards the £1 mark by 1Q15 . I'd also like to see IOF make some reference for plans to monetise the Japanese patent as well . That also leaves the helium and oil bubbling away in the background . FY14 was truly an annus horribilis ( who will ever forget the RNS on St George's day ) but the worm is finally turning .

[monty panesar] 22/11/2014 13:58

On the water figures the previous indications from a JV are that IOF will make around $0.5 a barrel for cold water and $1 for hot water. The plant capacity is 77k barrels per day. I think revenues of over $30k per day for IOF for doing nothing are achievable and the plant to be operational a year from now. How people want to discount this to the current price is up to them but over $11m of cash per year isn't to be sniffed at. Also once this permit is complete they can put in for further water rights.

[ansana] 22/11/2014 13:38

In view of the discussion it's worth posting this again as a reminder."Water shortage deepens in central and northern ChileBy Business News Americas staff reporter - Friday, September 26, 2014Chile's water resources will grow scarcer in 2014-15, following below average rain and snowfall in central and northern regions."The past five years have been one of the driest periods in the last 100 years," water department director Carlos Estévez said."The water situation is normal in the south, but quite serious in northern and central Chile," public works undersecretary Sergio Galilea said.The country's northern and central regions, spanning between Atacama (III) and O'Higgins (VI), have experienced a 50% rainfall deficit and an 80% snowfall deficit for the season. Rainfall is a major source of water supply into the area's rivers and reservoirs, apart from snow and glacier melt.El Yeso, a major source of drinking water for Santiago's metropolitan area, saw water reserves decline 31% in August compared to the same year-ago month, and is currently at 58% of its capacity. Galilea said the reservoir contains enough water to meet residential demand.In Atacama and Coquimbo regions (IV), however, the situation is more critical, as water resources are insufficient to cover a growing demand.Galilea also said the government is considering a range of measures, including drilling deeper wells and redistributing water, to maintain water irrigation needs for farmers.President Michelle Bachelet is about to send to congress a bill that would limit water rights and extend government authority to regulate the sector, claiming the current system has led to misuse and mismanagement of water resources."

[superg1] 22/11/2014 13:02

The Iris plant circs are a bit of a mystery.

In 2006 SQM bought it from DSM minera for around 100 mill dollars.

It was producing a good amount at the time, then at some point they stopped it. Then back on again through the high prices and then suspended again at the end of last year.

On water and the permit, the potential varies significantly depending on the amount of sales and what percentage would be hot water.

The final depot plan if there are adjustments to the cold/hot pump ratio will give us an idea re forward planning. More so if it's a JV as if it was Hal then they will know their hot water demand.

[hurricane.] 22/11/2014 12:52

Does he come out after 6 cans or 8?

[hurricane.] 22/11/2014 12:46

Heartwell you can't even get a link correct. Turkey for Xmas anyone ?