Iofina Share Discussion Threads

[superg1] 29/12/2014 12:51

jb

News today about Porche.

I suspect the trickle buyer that prompted the price move knew it was coming at some point.

I didn't buy any as in my post, it was just for those that may fancy a low level punt as that is all that could be achieved without moving the price.

Still one to watch as they have some interesting products.

[superg1] 29/12/2014 12:43

Pleco

My slant on it.

they put this in news

at this time, only a portion of one objection is valid. The other invalid objections points may be resubmitted to the DNRC during December for further consideration. The objection deemed valid may result in a contested case hearing before a DNRC Hearing Examiner whereby the objector must prove that the permit was preliminary granted in error.

So in other words 2 objections were not valid on all points, and part of one objection was deemed valid.

When this happens the bureau replies to the objectors giving them 15 days to send in further info if they wish.

My Crystal ball (an expensive deluxe version)tells me the 15 day rule had a final date of 23rd December for the last permit with 2 having earlier expiry dates.

The bureau includes any letter post-marked with a date of the 23rd or before. The bureau have a 7 day rule to cover that, so they wait 7 days post expiry date just to make sure nothing is going to arrive.

So by now, in theory, if any of them did reply then the bureau will have those letters and be assessing whether any extra points raised are valid.

If they have no replies then all we have, as in the rns, is a weak point deemed valid, where the onus is on the objector to prove things, not iof.

The hearing rule requires a hearing within 90 days from the public notice expiry date (1st December).

The bureau automatically updates the hearing box for a valid objection once the objection process is complete. So in the next few days a date should appear in the hearing box. It will appear as that is their administration process, it doesn't mean there will be a hearing.

Typically having checked other permits, they choose a date of a few days inside the 90 days. So I have a date of around 27th Feb that will appear in that box.

Once that is determined then the applicant can make contact with the objector to potentially settle any points.

If they can't agree a hearing may happen which may be earlier than 27th February.

I suspect the Culbertson depot objection has some valid points on beneficial use. However as pointed out in posts much of the content is inaccurate and not facts.

On another example the complaint of lack of detail in LOIs making them invalid, is a dead end for the objector. The bureau is awash with granted permits where the LOIs have less detail than the described contents of the inside of a ping pong ball.

[che7win] 29/12/2014 12:33

Ahhh Boggle,
So you think that Iran, with one of the largest reserves of oil in the world, is developing a nuclear capability for peaceful means?
It certainly isn't, they don't need nuclear power generation for energy.

Sorry it's Saudi Arabia that has watched a lame duck American President do nothing to stop Iran, they have taken things into their own hands:

[bogg1e] 29/12/2014 11:27

Che, the most important 15 American security services have stated to congress that Iran has NO nuclear arms ambitions. Only Israel is hammering away at the risks they feel Iran poses and thanks to heavily pro-Israeli lobby groups in the UK (eg Conservative friends of Israel) and in the States (eg the Anti-Defamation league, amonst others) are pushing our foreign policies to reflect the Israeli agenda.

[bogg1e] 29/12/2014 11:24

Pleco, the objections had til 11th december to be reviewed by the authorities. Now we add on 22 days for the objectors to prove thier objections are correct and the Montana water authorities are wrong in awarding the licence. This should take us (incl. days for holiday season) to about january 5th. However there is one onbjection that is valid, which may mean going to a hearing examiner which must be within 90 days of the date of receipt of the objections, which takes us to end february latest. Although arbitration before then between IOF and the objector could mean the objection is dropped before the hearing dater (which hasn't been given yet).

[che7win] 29/12/2014 09:18

Thanks superg,
Algeria pleading over the weekend for a cut in OPEC production.

The thing is - OPEC haven't been able to increase oil production in the last decade, Iraq and Iran have the ability, but other OPEC countries are struggling.

The Middle East has a power struggle going on right now. Saudi needs to crush Iran before Iran gets Nuclear bomb capability.
They are trying to get Iran to agree to curtail its nuclear ambitions, if that were to happen it would change the picture again, lots of politics at play IMHO.

[jbe81] 29/12/2014 09:14

Good call, huge rise for the volume, no rns showing on my monitor

[pleco] 29/12/2014 09:08

Can you please remind me of the latest guess at when we will hear about the water rights application. Thanks.

[superg1] 29/12/2014 09:04

Che

Thanks for the links, there is a large amount of info in those.

It made me chuckle that an 18 yr old lady golfer made the news, but not the attack on the Libya port.

[superg1] 29/12/2014 08:42

Hmm

I should have reacted to the strange price move on starcom a few weeks back as mentioned here. News today and up over 100%.

I did say any buying and it looked like it would move sharply. I didn't think it would be that sharp though.

[che7win] 29/12/2014 07:52

One other thing, demand for oil is increasing relentlessly, figure 11, page 9:

That supply growth is coming from one main area in volume - the US, meanwhile Dubai, North Sea and other areas are in terminal decline.

Look at the facts and dyor to see the true picture:



Oil will bounce strongly in 2015 IMHO, please DYOR and don't listen to Bulls or Bears, I have given you some facts.

You might also want to look at how fracking costs are expected to fall further as costs fall inline with oil price falls.

[magwich] 28/12/2014 19:57

If SQM do want to buy IOF, then they won't want the iodine price too high. So IOF remain cheap to buy out? A bit of double edged sword?

[pcjoe] 28/12/2014 19:20

A Question maybe for IOF Che - They`ll know their rivals MO better than us - We have the brine/iodine & unique compliant processing plant - Just a matter of getting the cheapest, cleanest, warmest & highest PPM brine to that plant - Cutting out the 3rd party screwups/dependancy/royalty does appeal IMHO

[che7win] 27/12/2014 21:44

Superg,
Interesting details there, I didn't realise the restrictions on SQM for production of lithium in their area - Chile has tight regulations.


Pcjoe, I agree, I think there could be some mileage in looking at that avenue, especially if we were to take over some old wells.
An IOchem collaboration could be very worthwhile, they have experience in managing extraction, I think you know more about this area than most.

[superg1] 27/12/2014 18:29

I just had a recap on the Cosayach SQM lease battle that went on earlier this year.

It turns out it's to do with 22,000 Hectares of lithium leases where SQM produce lithium (Salar de Atacama). SQM lost that case and Cosayach retained the leases. SQM list the area as the highest concentrate of lithium in Chile.



That is the same area where CORFO are now challenging SQM, but I have just spotted a little twist that I was unaware of.

A paragraph on the web

Thus, the regulator accepted the complaint made on 16 May by National Income Life Insurance Company, controlled by businessman Francisco Javier Errazuriz, who accused SQM in the financial statements for the first quarter of 2014 only referred to pay US $ 4.8 million required by CORFO and the request to establish an arbitration to establish any additional payments, omitting the circumstances that led to the complaint of the state entity.

Francisco Errazuriz owns Cosayach and it would seem by also owning the National Income Life Insurance Company, it has allowed him to stand alongside CORFO in the dispute over the rest of the leases.

The one string SQM had left on their bow was to hammer Cosayach on iodine prices. As in 3 card brag, the person with the most cash in their pocket, wins.

[superg1] 27/12/2014 18:11

Che

There have been a number of events over the last year to suggest what SQM are doing.

There have been some SQM v Cosayach cases.

Case 1

There was a dispute over who had the rights to leases for a large area for lithium. SQM had registered their name, but Cosayach were claiming they held the leases.

It went to court and Cosayach won. SQM wanted that area for the lithium interest.

Case 2

SQM had for some time been claiming theft of water by Cosayach.

SQM won and as we know Cosayach had many wells closed down.

Case 3

SQM contested the EIA permit for Minera Copiapo (Cosayach owned). That permit related to the transfer of sea water to the area Cosayach and SQM produce Iodine. The same area that the water theft occurred.

SQM lost that case but have appealed holding things up.


Problems SQM face

They suspended their move meaning they have no seawater planned for their current area. The iodine water rights could be suspended and this risk is identified by them.

CORFO are challenging them and SQM may lose what looks like their entire current lithium production area.


The solution that is currently a problem

Cosayach have a large area for lithium leases which they could exploit.

Cosayach have a planned seawater pipeline to the area SQM currently operate (250 litres per second.

Cosayach had illegally produced iodine and ran up an excess inventory.

If iodine prices remained high, Cosayach could build their pipeline and perhaps find the funds to produce lithium.

SQM last year started cutting costs and closing mines.


SQM were aware Cosayach were going to be hit by state street bank for $120 mill. Cosayach also got hit by a German bank for $70 mill. The IRS are investigating Cosayach for $82 mill in tax evasion and can fine them 4 times that on top.

So in the last few months Cosayach are looking at a probable cash burden in fines and court orders of $270 million. It should be a lot higher by the time the IRS finish with them.

They can't afford that, SQM know that as it was the state street bank issue that nearly finished Cosayach way back.

SQM announced they were after 30% plus of the market once more, but their actions didn't support that. However finally they have stated the iodine price drop is an action for them to gain 30% plus of the market. They are trying to force others out and/or make them cheap T/O targets.

It seems obvious to me due to the reasons above that they want Cosayach, they have always wanted to take out Cosayach. But now they have more reason than ever to get them and it's almost become essential that they do.

The first important factor was kill the iodine price to make sure Cosayach had no cash to expand and pay off fines and court orders.

As a side issue it's killing off RB too.


That to me seems to be what SQM are up to, and why.

[pcjoe] 27/12/2014 16:48

Che - If I remember right it was IOCHEMS final above ground processing that was the dodgy environmental part of their production - But at circa 1000T per annum Iodine production they appear to have a proven & pretty reliable track record and are not dependant on any third party for survival

Apparently the Iodine "well" is running a little dry in their neck of the woods & as we all know IOF have a lot of the areas top Iodine hot spots sewn up by leases

Cant help but thinking that there might be some synergy re their extraction tech & know how & our processing plant - Even if just another string to the bow.....

[bogg1e] 27/12/2014 14:58

Given Lances proximity to SQM, is it likely that lance has been steering the company towards a buy out by SQM? Cheers

[che7win] 27/12/2014 09:48

I expect that we will be taken out over the next couple of years, either by SQM or a Japanese outfit.

We know IOCHEM is our chief US rival, not really a rival as they aren't allowed to expand operations due to their environmentally unfriendly extraction:



I believe their production is declining around 9% per year, probably closer to 1000MT production levels now and they are Japanese owned.
Taking us over would be a nice fit for those Japanese businessmen.

Then we have SQM, who we know are dominant in their field and therefore would not allow us to be taken over if we have a distinct competitive advantage in iodine production (see statement below).
I would say at this stage, our leases are more valuable than our iodine plants, simply because we haven't fully exploited those leases properly as we are still ramping up.

We either do a JV on iodine next year, sell to a business that can throw capital at building out plants to fully exploit those leases, or we fund capital from the water venture or through plant funding.

SQM statement makes it clear:

"New business ventures
From time to time we evaluate opportunities to expand in our current core businesses or within new businesses in which we believe we may have sustainable competitive advantages, both within and outside Chile, and we expect to continue to do so in the future.

We are continuously exploring the possibility of acquiring controlling interests in companies that have mining properties in our core business areas, and that are in early stages of development. Consistent with our business strategy, we will continue to evaluate acquisitions, joint ventures and alliances in our core businesses and, depending on all facts and circumstances, may seek to acquire controlling stakes or other interests related to our core businesses outside of Chile and Latin America, including in other emerging markets.,"

In conclusion, we need more plants, simple as that, we have capacity in Oklahoma for 12 full sized plants, or many more mobile units.
We have the know how, we have the leases, the value is there to be exploited, but IOF needs to get a move on otherwise someone else will take up the batten.

Cheap take out for the likes of SQM, I wonder what they think itf we move up to 700mt plus production of raw iodine next year? Surely worth taking us out when we are valued so low, having done all the hard work.

To me, the mobiles offer potential for us to exploit all those leases, the final cherry on top that kicks us into the hands of a rival.

[che7win] 27/12/2014 09:16

Tax to rise sharply in Chile:

"In 2005, the Chilean Congress approved Law No. 20,026 that establishes a specific tax on mining activity (Ley que Establece un Impuesto Específico a la Actividad Minera, or the “Royalty Law”), establishing a royalty tax to be applied to mining activities developed in Chile.

As a result of the earthquake and tsunami in February 2010, the Chilean government raised the corporate income tax rate in order to pay for reconstruction following the earthquake and tsunami. Such legislation increased the general corporate tax rate from its historic rate of 17.0% to 20.0% for the income accrued in 2011, which was declared and paid in 2012. On September 27, 2012, Law No. 20,630 introduced new amendments to existing tax legislation. Among the amendments introduced, the corporate income tax was maintained at 20% effective for 2013.
On September 29, 2014, Law No. 20,780 was published in the Chilean Official Gazette (the “Tax Reform”), introducing significant changes to the Chilean taxation system and strengthening the powers of the Chilean IRS to control and prevent tax avoidance. The Tax Reform contemplates, among other matters, changes to the corporate tax regime to create two tax regimes. Starting on January 1, 2017, Chilean companies will be able to opt between two tax regimes: (i) the partially integrated regime (sistema parcialmente integrado); or (ii) the attributable taxation regime (sistema de renta atribuida). In both regimes, the corporate tax rate will be gradually increased to 24% in 2016 (21% in 2014, 22.5% in 2015 and 24% in 2016). On or after January 1, 2017, and depending on the tax regime chosen by a company, tax rates may gradually be increased to a maximum rate of 25% in 2017 in the case of the attributable taxation regime or 27% in 2018 in the case of the partially integrated regime. See “Management217;s discussion and analysis of financial condition and results of operations— Impact of Chilean Tax Reform.”

[che7win] 27/12/2014 09:11

Superg,
Re the Indmin article, maybe Corfo might pull iodine leases because of this dispute with SQM. The below isn't iodiine related, but if SQM messed up below, Corfo, the government body granting the leases might look at other SQM leases (iodine related caliche ore):

"Arbitration proceedings under the Lease Agreement for the Salar de Atacama, if determined adversely to us, would materially adversely affect our business and operations
SQM Salar S.A. (“SQM Salar”), our subsidiary, holds exclusive exploitation rights to the mineral resources existing in 81,920 hectares in the Salar de Atacama pursuant to a lease agreement entered into between SQM Salar and Corporación de Fomento de la Producción (“Corfo”), a Chilean government entity, in 1993 (the “Lease Agreement”). The exploitation mining concessions related to such rights are owned by Corfo and leased to SQM Salar in exchange for lease royalty payments to Corfo based on specified percentages of the value of the products resulting from the minerals extracted from the Salar de Atacama brines. For the six months ended June 30, 2014 and the year ended December 31, 2013, revenue related to products originating from the Salar de Atacama represented 38% and 37%, respectively, of our consolidated revenues (corresponding to revenues from our potassium and lithium and its derivatives product lines for such periods). All of our products originating from the Salar de Atacama are derived from our extraction operations under the Lease Agreement with Corfo.
In May 2014, Corfo commenced arbitration proceedings against SQM Salar by filing a claim alleging that (i) SQM Salar had incorrectly applied the formulas to determine lease royalty payments resulting in an underpayment to Corfo of at least US$8.9 million for the period from 2009 through 2013, and (ii) SQM Salar had not complied with its obligation to protect the mining rights of Corfo by failing to mark on site the “HM”, or milestones of measurement, of some of Corfo’s exploitation mining concessions. Based on such alleged breaches of the Lease Agreement, Corfo seeks (i) the payment of at least US$8.9 million plus any other amount that may be due in respect of periods after 2013, (ii) early termination of the Lease Agreement, (iii) the lease royalty payments that would have been paid through 2030 as compensation for such early termination of the Lease Agreement, and (iv) punitive damages (daño moral) in an amount equal to 30% of contractual damages awarded. SQM Salar asserts that both parties applied formulas in accordance with their joint understanding and in a manner consistent with the course of dealing of the parties during the term of the Lease Agreement. SQM Salar also asserts that the breaches alleged by Corfo to have occurred under the Lease Agreement would be technical breaches, and that Corfo may terminate the Lease Agreement solely based on a material breach. While SQM Salar believes that it is likely it will prevail in the arbitration proceeding, an adverse ruling against SQM Salar awarding damages in the amount sought by Corfo or permitting early termination of the Lease Agreement by Corfo would have a material adverse effect on the Company, its business, results of operations and cash flows. In addition, we cannot assure you that Corfo will not use this arbitration proceding to seek to renegotiate the terms of the Lease Agreement in a manner that is not favorable to us. See “Business̵2; Legal proceedings—Corfo arbitral claims.” In addition, we cannot assure you that Corfo will not take other actions in the future in respect of the Lease Agreement that are contrary to our interests."

[neddo] 26/12/2014 18:19

bah humbug

[joestalin] 25/12/2014 11:23

Happy Winterval everyone.

[yasharsad] 24/12/2014 21:54

I don't post very regularly. I'm a holder of iof, and would like to say many thanks to all of you for your efforts to provide up to date information.Good luck all and merry Christmas.