Iofina Share Discussion Threads

[brucie5] 09/12/2014 13:38

Personally I'm not going near this again until the last of the downward momentum has been squeezed out of the chart. Having read Boggle's impressive research, and Supergs coverage, the future case does indeed look interesting imo, but if good things come to pass I believe we will see it clearly on the chart. That means a rise to 50/60, and testing of support, imho. I would imagine, on the back of definitively good newsflow. FWIW, NAI.

[meb123] 09/12/2014 13:12

I see the price has settled around 34p . I suspected all along it will drift after the last RNS but its been more than a drift sadly . Assuming all being well with the next market update etc, any views on whether we have hit the bottom ?

[panoramix] 09/12/2014 12:33

octopus,

hxxp://www.dnrc.mt.gov/wrd/water_rts/appro_info/applications/application_status.asp?id=30066181

[che7win] 09/12/2014 12:09

Thanks gad,
Superg, yes, I listened a few times to every word of the SQM cc.

What struck me was they said they know very little about what other iodine players are up to as there was only RB energy and us if course who release results (maybe they are being coy).

They had no idea about the last analysts question on iodine prices who was clearly referring to an Indmin article.

[octopus100] 09/12/2014 11:51

Does anyone have a link to the Montana water board where IOF have their application and the objection is noted?

[cyberbub] 09/12/2014 10:47

I had been hoping we would see a.bounce around these levels, at the support level which we bounced off a few weeks ago... let's see if it's maintained...GLA

[superg1] 09/12/2014 10:39

Of course not forgetting that SQM recent $250 mill loan note when they forecast slashed capex spending and opex reduction.

They don't seem to need it, well not for anything they have yet admitted to.

[superg1] 09/12/2014 10:27

Cosayach

SQM tried to buy Cosayach in 2001 when Cosayach were hit with an $80 mill court settlement. We now know that court case dragged onto this year where it has been finalised at $120 mill.

At the same time a German bank hit them for $70 mill.

In recent times the IRS have found $82 mill worth of false tax claims from Cosayach. They will want that back plus up to 4 times that amount in fines and up to 15 years in prison for the 9 bosses listed in the IRS report.

In May SQM hit them on water theft and 38 wells were closed.

SQM this year lost a case against Cosayach where Cosayach have gained large areas for lithium leases. SQM want those and in fact had registered them in SQM's name.

Cosayach said nah nah, nah nah nah, we are going to do lithium.

That was before the two bank cases of $190 mill and the $82 mill tax fraud, wells closed, and offices raided.

SQM it's said made a comment privately earlier this year. "Cosayach are going to be facing some serious money issues and we will probably end up with them"

In conference calls they refuse to detail how they will get their 30% market share back.

SQM want their lithium leases and want the seawater pipeline that Cosayach had approved. SQM don't have one of those in play but will need one.

Cosayach has built up an excess of illegally produced iodine and SQM knew they had big financial troubles on the way, so SQM took the price down to stifle their cash flow and now Cosayach look worthless.

I plan to go long on SQM at some point in 2015.

[superg1] 09/12/2014 10:16

To summarise that last one for those that don't like long posts.

RB have completed a technical report valuing their iodine mine at $156 mill if iodine prices were $45. For every $1 drop they quote -$14 mill on the valuation.

RB were to expand to 2,200 mt for that valuation but the price drop forced them to abandon the ALP and they are now on 1300mt.

RB have water rights which support the 1300 mt. SQM hold various leases around RB's property.

RB were a threat to SQMs revenue re their lithium mine, they quoted RB as an issue that would send lithium prices down.

RB announced they were in trouble and would sell iodine to support the lithium mine. RB spent Sirocco's $60 mill bank balance.

SQM took the price down and have strangled RB and made their iodine mine worthless. In the next 12 months imo SQM will pick up the RB iodine mine for very little.

Others can't outbid them as with the iodine price so low they don't have any cash.

SQM said in the recent conference call they may be interested in the mine, but not currently. They re-affirm they will get their 30% market share back.

[gadolinium] 09/12/2014 10:13

Che post 27648,

Excellent summary and a timely reminder of the IODINE investment case here.

Thanks

[superg1] 09/12/2014 09:11

I understand a recent seller has been a margin seller. I share such points not for the benefit of being a bull or hyping anything, it's just plain old information for folk that know me.

I see Hurricane posted about the wildlife issue.

I note it seems to be an objection point and was the same for Culbertson.

The details of the effects on wildlife and requirements are listed in other posts, as in the Culbertson case it was deemed not valid. In regard to that particular point I agree with Hurricane.

[che7win] 09/12/2014 09:09

Superg,
Feels to me that buyers are holding off and waiting for others to make the first move.

The rise once this turns should be swift, once buys do come in...

Low volume sales, the share is in a rut not reflecting the underlying business IMHO.

[superg1] 09/12/2014 08:37

Good post Che.

The margins slashed comment clearly shows the intent, it's pure targeting of negatives with complete ignorance of prior comments.

When the iodine price soared. IOF announced they would honour contracts not raising prices to ensure future good customer relations.

Now the price is down to near it original price pre boom you think IOF have slashed their price. Why would they they never put it up in the first place.

Things may have looked better for new custom, BUT it's the low price that has made some products viable again, like agriculture disinfectants.

What's more when the price went up the Troy corporation announced price hikes on their products. As the price has come down they have said nothing on prices.

Obviously higher prices is more favourable, but if we want Chile producers to disappear, then now is the time for that to happen, a surge in prices or a maintenance of prices over 45/50 would see RB and Cosayach perhaps surviving.

SQM have taken the price here to try to destroy those two companies. They know Bullmine and Algorta are on seawater and higher prices, so they are strangling them too and will probably create cash flow issues for both.

SQM have all the Chile folk by the throat at the moment. They know RB and Cosayach are is serious trouble.

At the end of the day SQM would love to buy Cosayach and perhaps buy and close RB. The way to do that is to make them worthless. The need for that was far greater once both hit serious financial issues.

[jbe81] 09/12/2014 02:04

about time mr b topped up

[monty panesar] 09/12/2014 01:50

Let's hope Santa turns up on time with the water permit. Good to know it is all trival stuff.

[king_roster_iii] 08/12/2014 22:48

To understand the concept of margins you need to understand the difference between cash and profit. Lets be honest now Netley when you say "margins slashed" you mean you crayoned over the wrong line.

[stanle] 08/12/2014 21:27

Superg - Does Wild Cat Trucking have any connection to Wild Cat Water Solutions? Wild Cat Water Solutions have just applied for a water rights in Roosevelt.

[che7win] 08/12/2014 21:11

ACT, you say
"Exactly, margins slashed, selling more to stand still."

Couldn't be further from the truth, let's look at the facts:

1. First of all, yes, they are selling more (as if that is a bad thing!) - considerably more as the chemical side is up year on year as follows:
"Revenue of $13,020,185 (H1 2013: $11,556,468) during a period of declining iodine prices; "
"Iofina Chemical saw record growth in H1, which is expected to continue for the rest the calendar year; "

That is a considerable achievement and not reflected in the price.

Contrary to what you are saying, margins aren't 'slashed', on the IC side they are 'marginally lower':
"Profit margins for iodine based derivatives were slightly affected adversely by falling global iodine prices"

You of course conveniently miss the point that production of raw iodine was up from 62.5mt to 139.9mt H1 and is further accelerating H2 to an expected full year 325mt+.
Why do I mention that? Well, the significance of the raw iodine ramp up is that it feeds directly into Iofina Chemical which means it will INCREASE margins significantly because Iofina Chemical division was paying much higher prices last year for raw iodine.

The only disappointment is that the increase in margins would have been much, much higher had iodine not fallen so much, but nevertheless, the margins are improving because of our vertical integration.

Regardless of the iodine price, the overall business margins are higher AND I imagine are being maintained when comparing H1 to H2. Thats because H2 we have slashed costs which helps maintain those margins.
The fall in iodine prices have been mitigated to some degree by the fall in our plant costs:

"The Company is focused on the resolution of inconsistent production at the current IOsorb® plants to maximize production, reduce costs and reduce cost/kg of iodine. The Company has also taken steps to materially reduce its administrative costs since May of 2014. Sales through the Group’s halogen speciality company, Iofina Chemical, have seen record revenues for the Period, which is now fully integrated through Company produced iodine."

2. "Positive EBITDA for the Period; "

The first half was full of issues, yet they achieved positive EBITDA, but see below...

3. 'Standing still'
"Cash and short term investment position at 30 June 2014 of $6,270,754 ."

Cash at end of September 30th up to $7,500,000, a significant increase occurred over the summer.

4. What's more, and this is an important point, we were very nearly cash flow positive on operations...despite all the issues and the high overheads in H1.

Cash outflow from operations was a mere "$576,011" or £360,000, that is a figure that impressed me and its not inconceivable that H2 could break into positive cash flow.

5. Now to the mobiles....
"With the design completion of our mobile IOsorb® technology and the successful production of IOprillTM iodine, the Board is excited about Iofina’s future..."

I think few have grasped the importance of the mobiles going forward; I believe there will be a step change with the mobiles which is why the company is excited and why we should be...

Read what the company is saying:
"The addition of mobile units to the Group’s portfolio will allow Iofina to take advantage of many more iodine rich sites in a cost effective manner. It will enable the Company to operate on a temporary basis, such as a pilot project or processing a waste stream associated with a water treatment facility or hyper- iodide rich areas with low volumes of brine. Mobile plants will also allow the Company to scale up and down plants at operators’ facilities as production changes, and can be moved to a new location when needed. All of these benefits will assist Iofina in its continued growth to become the world leader in low cost iodine production within a dynamic industry."

In other words, the key advantage of them is flexibility, it means the ability to move to the most advantageous sites and best brine conditions.
They can always be at the best place and not necessarily at the SWD site in my opinion -they could be at the well head, wherever the best location is and that should excite investors.

That is the key to unlock the global leader pretensions that IOF has....the mobiles IMHO.

6. Don't expect the strategy just to be plant roll out, the chemical side will be part of expansion plans - see the last sentence below, production facilities will grow beyond current facilities:

"The Board believes that, with the completion of IO#6 and the focus of the new management team, the Group is well positioned to increase iodine production, reduce operating costs and continue to progress towards becoming the global leader in iodine and iodine derivatives. With the design completion of the Company’s mobile IOsorb® technology and the successful production of IOprillTM iodine, the Board is excited about the future. The Board looks forward to updating shareholders on the Company’s continued growth, expansion of iodine production facilities and maximising shareholder value.

7. IOF is adopting to the conditions, tweaking existing plants, it WILL keep on growing regardless of iodine prices or oil prices.
I wish shareholders could understand that.

All IMHO.

[superg1] 08/12/2014 20:47

On the selling I'm reliably informed one has been around for about 3 weeks now which very much helps on the weakness, someone has also been picking a few up but is obviously happy to let it drift and get them cheaper.

[superg1] 08/12/2014 20:33

AOTN

What is Iofina chemical, and what is their interest in Iodine?

[engelo] 08/12/2014 19:57

All the other iodine suppliers would give their right arms to be in IOF's position.

While they are scrabbling around with stockpiles and wondering where the next bucket of water is going to come from, and no doubt operating at a thumping loss, IOF have a guaranteed profit stream which can be adjusted to the derivatives demand as required.

[che7win] 08/12/2014 19:35

ACT,
you do talk some tat sometimes, lol, I might have to reply to that....if I can be bothered😉

AOTN, your posts are spot on.