Iofina Share Discussion Threads

[superg1] 30/6/2013 20:19

SCM Bullmine who they mention

A google translate, but you get the gist of the trouble SCM have this month

The Superintendence of the Environment (SMA) yesterday began a process mining sanctions against Bullmine SCM iodine, which manages the project with the same name of the company, located in the Region of Tarapaca.

The healing process took shape after the sanctioning body to realize that the company does not have a sufficient waterproofing in the pool of sulfuric acid to prevent stroke, and also ponds with acid radier lack some in his based, among others.

[superg1] 30/6/2013 20:14

Boggle, they switched to reporting in $ too, which added to the time line.

As for iodine demand dropping, I'm not sure where you plucked that one from.

All report strong demand, that's the beauty of iodine it is in so many products.

Due to the price rises, some products that could use a cheaper version, did so, but if iodine prices dropped, then they would return to the iodine based products.

Other sectors grew, and for many uses, there is no substitute.



It does mention pressure on prices as new supply comes on board, but that's the while point of investing in IOF, some of those it lists are in the 30', 40' and higher on opex.

Price drops wipes their supply out, which pushed the price up. The crucial level imo for that end some supply is around the $45-50 per kg mark.

I did note this month SCM bullmine have some issues with the authorities. They look to be a disjointed bunch and I have them on a countdown to disappearing off the iodine map. I believe they are one of the mines with near break even opex.

[n3tleylucas] 30/6/2013 19:04

Accounts? Nah, they have 6 months post-year end to submit finals, 7th May was well within the rules. You'll see a few whose year end is end Dec suspended tomorrow, those who failed to submit in time lol ... just watch.

[freshvoice] 30/6/2013 18:57

How late are the accounts Bogg1e?

[n3tleylucas] 30/6/2013 18:51

I think the inventory point is more about how quickly raw I is getting through IC and sold as derivative product Bogg1e.

[bogg1e] 30/6/2013 18:48

Surely, given the fine line between iodine supply and demand, any iodine surplus will be sold or consumed internally? Is it really a problem? The only thing i can think of is that demand for iodine based products may have dropped due to a general decline in consumption thanks to economic insecurity..?

The point about the accounts being late is a concern. It suggests, not fiscal shannanigans, rather a lack of staff in the accounts department. I'd rather higher staff costs, than flaunting of regulations. The last thing they need is the IRS breathing down their necks.

[superg1] 30/6/2013 17:39

There was a mention of a big order for the chem div, that's why they were in Chile sourcing the raw product late last year.

[n3tleylucas] 30/6/2013 17:02

Well, this is why the I production updates are a little obscure, because there's no IC updates on how much is being actually sold out the door, ie how much money you're actually making. All updates should include I production & all IC sales for each quarterly update.

[retiree] 30/6/2013 17:01

Record order left inventory higher at year end.

[naphar] 30/6/2013 16:38

Escape, yes, but others have made some good points. I did not check recently, but if finished goods inventory was 25%, then it possibly points more to other reasons than those I have posted. Either way, my points on how it could come through as a cost remain, and IMO it should be nothing to worry about, I cannot see the raw iodine needing to be written off any time soon.

Of course, I do not want to see inventories rising too much in the interims, unless it is with good reason. Fast growth of the derivatives business would be a good reason, your inventory will naturally rose as your sales do.

If they are not using their excess iodine in derivatives manufacture so far (I guess it would not be excess if they were) is it being sold on the market or held as stock. If held as stock, why. They might have a good reason if it happens.

[escapetohome] 30/6/2013 15:58

Thanks Naphar - that explains it then - All it needs to be done now is to quiz the management exactly what is the reason for the inventory - points 1- 5 or a combination of all.

[monty panesar] 30/6/2013 15:43

Inventories will probably drop at the interim stage assuming they put iodine in at cost due to the fact they are getting it at sub $20 rather than $60 last year.Having said that chemical division is constantly expanding so inventories volume wise are likely to rise.
Others might be able to confirm this.

[dcgray21] 30/6/2013 15:35

ETH - inventory was £4m but overall working capital position at y/e was robust . Only 25% of the £4m related to finished goods, the rest to raw materials and WIP which could have made sense as they began to push production thr IO1 / 2.

[naphar] 30/6/2013 15:23

Escape, he is right, we had roughly that level if inventories in the year end accounts.

I don't understand his point about it coming through as a cost in the 2013 accounts. He is probably right and possibly not. Let me explain.

When you sell goods, you recognise the revenue in the P&L. The goods have to come from somewhere, you reduce your inventory level and put the corresponding amount as cost of sales in the P&L. In this instance, it does of course show as a cost, but you also show a revenue, and as long as you sell for more than a cost, you show some gross profit.

Alternatively, it might have to be written off as obsolete stock, because it has been ruined or is out of date (normally foods, drugs etc) or is no longer saleable. In that case, inventory value is reduced and the cost is sent to the P&L under cost of sales as a write off.

Alternatively, we might not make any sales, and the inventory might still be deemed to carry the same value. In that case, it will stay in inventory.


There are a few possible reasons why stock may have been higher than previous year.
1) expected orders may not have come through or may have been delayed, whilst the stock might have been produced ready.
2) might have been producing the stock ready for a big order early in 2013.
3) having had a supply of our own iodine, we might have been producing some strategic holdings of certain inventory levels to enable quick reaction to urgent orders.
4) poor management of inventories and derivatives orders
5) other reasons I can't think of right now


Hope that helps a bit. I wish I had asked at the presentation, but forgot to ask on a couple of points. It would certainly be interesting to know the reason.

[dcgray21] 30/6/2013 15:20

Thanks Engelo and SG1

[escapetohome] 30/6/2013 14:10

Guys - I was trolling through the other thread and noted Mr Johnnysmall's comment reproduced in para below Post 9567 of Iofina holdings in company thread.-

I am suspicious of the year end 2012 inventories (stock in our language) figure of over $4 million which represents a whopping 25% of cost of sales (compared with 15% last year).

I know we have a good record on this thread for welcoming and responding to challenges from doubters. So I wonder anyone with accounting knowledge can verify Mr Jonnysmall's assertion about the inventories. If true maybe we can put this fact to the company to get a response.

Mr Jonnysmall is also mentioning once again the matter of late filing of accounts. If true this is a fact that would worry me. As an investor I expect accounts to be filed on time.

SG - Thanks for the reply- How is your current relationship with the company going in your role as BB representative? Have you established a rapport with DR C Fey in the same way as Lance? Can we expect email exchanges directly with company as before. All this seems to have gone very quiet.

Above all keep up the posts, we had setbacks before and you kept posting whist maintaining the rapport with company and getting answers to questions. This reasurred investors and helped them to keep hold of their shares. I note that many are saying they will post less frequently. However, this may assist in separating/breaking up the flock.

[superg1] 30/6/2013 14:04

dc

No idea, I just work on price v how far into the future profits are expected.

If that figure comes out at anything over 18 months, then it's too far off and retraces will come, some in the last year or two have been 3 to 5 years ahead of themselves, so they could only go one way imo.

[rugrat2] 30/6/2013 14:01

Another month slips by and time for a recap on permits issued to MidStates so far this year, relevant to IOF. After a bumper month in May, just six have been added in June, with no particular pattern to the placing.
Having had the news from the AGM that higher ppms are about to come on stream at IO#2, I have had a look to try to assess the likely area that they will come from.
Firstly I have had a look at a random sample of permits over the last couple of years and MidStates appear to be drilling their laterals consistently in the same level in the Miss Lime formation, so it is definitely a geographic issue and not a target formation change.
Looking at the most recently published dates of wells coming into production (between 5 and 7 weeks ago) the quickest from permit to production has been over 12 weeks, with over 17 weeks being the norm. I would expect that interval to have reduced a little as we have moved to late spring/early summer so any wells coming on stream now are likely to have been permitted before mid April at the latest, and more likely in Feb/March. Looking at the permitting on the map, that is likely IMO to place the higher ppm area to the west of IO#2 very roughly as marked, across the county boundary. I am afraid the colours on the image are beginning to bleed as it gets altered and resaved.

[superg1] 30/6/2013 13:58

Sand
???

fat fingers, didn't mean that at all. I will correct it. I meant I know it's not what many want, But a T/O is highly likely within 18 months imo.

Interest can arrive a lot earlier than that, but those events take time.

[n3tleylucas] 30/6/2013 13:49

What % should you worry? Well 10% is probably the starting point. Mind you, if the shorts rocket from a low base, even a low % can be worth noting.

Obviously t/o situations are totally different, there you'll find massive hedging (protecting - locking in) positions in case the offer fails lol, so ignore those.

[n3tleylucas] 30/6/2013 13:36

The problem with that link? It doesn't report short selling under 0.5%. That may not sound a lot, bear with me.

You can short up to 636,421 shares without having to notify the FCA.

If a few firms short sub-0.5%, the numbers the FCA publish become meaningless.

[engelo] 30/6/2013 11:37

dcgray; fwiw imo no easy answer. You'd have to watch on whether the % short was moving up or down over time, and what the share price is doing at the same time. High % can be a danger signal of course, but otoh shorts have to close....

[engelo] 30/6/2013 11:31

SG: thanks for shorttracker link. Excellent presentation of data. 1st thought was 'would be nice if you could sort on %short' and then realised that the site does it for you :-) OT Nanoco up with the leaders...

[sandbag] 30/6/2013 11:20

"I still say IOF will be bought out, it' now what many want, but their main business is potentially very damaging for others and they have very deep pockets."

Sg1,

Could you please explain "it's now what many want"?

Thanks.

[dcgray21] 30/6/2013 10:45

SG1 - many thanks for the link re short tracking . Do you have a rule of thumb about the % short holding that would discourage you from investing in a stock ?