Iofina Share Discussion Threads

[chumbo] 01/7/2013 10:48

Thanks SG & Sand. Do you expect that following grant of he first rights there will be a hiatus or will we be applying for the second 75kbpd in short order? If so this surely raises the prospect of 200kbpd sales during H2 2014 which would inform the valuation for a possible sale of the water side? I am assuming commitment to roll out the 200kbpd in Montana in due course but no firm steer on ND applications as yet ("we are revisiting ND" comment).

[superg1] 01/7/2013 10:40

Sand that's why I put in the email line, 'row agreements' never heard of them.

But Doh!
ROW is obviously right of way of course, and the Montana water bureau have ROW forms.

top left

[uppompeii] 01/7/2013 10:38

Lets hope his crops dont need harvesting then...

[sandbag] 01/7/2013 10:33

To further expand on Sg1s post:
It's like having rights to draw water from a lake or river. it's no good at all unless you have "Right of Way" to get there. i.e from the main road. You would need Rights of Way through a farmer's field.

[superg1] 01/7/2013 10:08

Just to cover the point Chumbo here is the response I got-:

'They want to confirm our row agreements which we now have. Those are right a ways'

IOF know that I understand the water rights backwards so no need expand for me. I have seen emails to various persons on the point.

IOF can't build the depot until the water rights are given.

I'm no so sure they are playing with a straight bat, when they say no water revenue this year.

They can't really a depot in the winter if the permit took that long. However they have said 90 days of which we are more than half way through.

So if they get rights by August then they have time to build it imo, they are not complicated build projects, or as Chris Fay said, 'not rocket science', they are low capex too.

However if they can't get the depot in quickly, why not simply cut a deal short term, with existing depots who sell iof water post permit achieved. Opex is so low it's a good deal for both and meets demand.

So with a bit of logic that could happen, but as I say I'm working on logic of how to create cash flow from it, earlier.

But then I fully expect the water division to be taken over post rights achieved.

Once rights are achieved no doubt broker notes will add a value in which has been absent up to this point.

75k bpd for starters is a fair bit of profits for IOF, so I'm now watching for 'application correct'.

it can move very quickly from that point.

[chumbo] 01/7/2013 09:55

SG: Do we have a feel for the lead time between permit issue and the first water sales? I appreciate we may not see revenue during 2013 as we have a terminal to build. Also, I don't recall (but probably miossed) any stated gameplan for applications for the second and third tranches of the original 200kbpd application.

[superg1] 01/7/2013 09:51

Just to add on water permits.

There was an article a while back about beefing up the number of staff to process the applications due to the Oil boom.

I have noted they have changed the web pages and that a number of applications have entries on them that would normally take months in the past.

Clearly they have their backsides in gear and the 90 day comment to get the permit seems to be feasible.

[superg1] 01/7/2013 09:37

Durden yes already dealt with city aware. IOF

Many permits have that. I am surprised the IOF permit is being dealt with so quickly they normally take ages.

So it shows the IOF permit is being progressed.

Had comms myself on the subject with IOF as have others.

Now it should soon move to application correct, and then things could move very quickly as I can demonstrate re a similar application by someone else.

The permit for another was granted a few weeks back, but it is for a different area to IOF

[durden82] 01/7/2013 09:22

Hi guys,Infrequent poster here but wanted to point out that the water application has been updated - it says deficiency letter sent on 28/06/13.

[captain_kurt] 01/7/2013 08:40

Interesting...the past 4 days we have had a pattern of selling 100k in the first 1 hour. It's not too late lol

[warmsun] 01/7/2013 08:38

Excellent - nice to hear some 'positivity' (is that a real word?)on the BB :)

[ansana] 01/7/2013 08:21

Ck I agree I saw/became aware of the information you refer to yesterday so I have popped on to say that independently crossed referenced comms are looking very good. Shorters beware, the cavalry are on the way with substantive news. Although I had decided not to look in for a few days I thought this post was worth making.

[rogerbridge] 01/7/2013 08:20

Nice to hear from you again Hurricane.

[hurricane.] 01/7/2013 07:54

Funds will keep adding cheap stock.
Anyone short, now is a good time for a clear out.
Lots of news flow on the horizon.
You have been warned.

[pcjoe] 01/7/2013 07:50

Thanks SG - but still possibly an additional plus for any buyer I think

[captain_kurt] 01/7/2013 07:36

Rumour is we will get news on IO1,IO2,IO3 and IO4 within the next 10 days :@)

[superg1] 01/7/2013 07:31

Pc they could top lease as once the well is 'abandoned by the O and G company, those with the top lease get first refusal.

However as IOF would already have the iodine lease it makes interest worthless for others and the Oil and Gas has gone.

But then I don't expect IOF to be around beyond next year, so don't worry about that

Iofina isn't an attractive addition for someone to expand, it's potentially revenue destroying for some.

[pcjoe] 30/6/2013 23:59

Interesting about the "Running out" point - Wells working the Mississippi Lime in OK will apparently produce even more brine as they reach the end of their commercial O&G lifespan - At that point IOF could just step in & buy the "useless" old wells for a song - They will have the Iodine leases after all - A long term view, but one that might add even more current value to the company if they can secure some kind of succession to future well ownership (Is O&G top leasing the correct term for this?)

I also happen to like the idea of losing the "partner" at some point - Even more money to be made

[n3tleylucas] 30/6/2013 21:53

10% may have no effect at all on rival producers, in fact that 10% could simply meet the extra world demand. Rivals' individual difficulties would then be the same with or without IOF, assuming a 10% increase in world demand is possible/likely.

[superg1] 30/6/2013 21:28

I forgot, I did mention I thought Sirocco would go too, they have issues and upper 30's capex. However there was something I had missed with them, but that's something for another day.

[superg1] 30/6/2013 21:26

They won't out all out of business.

SQM have quoted extra supply has put them holding back on adding production.

If IOF add 3000mt to the market, that is the biggest increase by any company for many years.

It affects many mines including SCM (600-1000mt), Acf minera (1200mt), Cosayach 2000mt plus, Algorta (2000mt).

Some of those have opex well into the 40's.

E.G. Acf are spending $34m capex this year and the target is to add 388mt. Opex $35-$38 kg and IOF can do that with one plant.

Someone dropping 3000mt on the market in quick time will finish some producers.

That's why the business case stacks up, it's not marginally better, giving them a decent standing in the market, it's ridiculously better.

This is a niche sector, with commercial resources being scarce, that's why it has been important for IOF to tie up the best concentrations.

As for 'when they run out', The current US producers have been doing so out of the same source for 35 years. The Japanese, 50 years.

So we have no need to worry about running out, any time soon. Over the life of a well produced water increases, and iodine does not diminish at anywhere near the rate that oil or gas would. A typical oil well runs for about 15 years.

The US end users import just under 6000mt of iodine, there is a big gao for local supply. If someone is filling that gap, then someone is going to lose out.
Typically the guys with the biggest opex are going to lose out. My guess would be that SCM would be the first to go. We'll see how that pans out.

[steveolds] 30/6/2013 20:54

I still do not understand how IOF producing only 10% of world supply by end 2014 (if I heard/read correctly) necessarily puts other iodine producing companies out of business. Even if IOF sell ALL their 10% at $40 (or whatever) that still leaves the remaining users having to pay the higher price demanded by SQM et al in order to get their hands on some iodine. IOF cannot supply them all. Once IOF run out of product what do the rest do? Buy at a higher price from Chile and japan because they have no choice.

I would have thought that IOF having 10% of world production will not have that much effect on overall price at all. If anything IOF would only slightly undercut the others in order to maximise profits.

IOF having 20% of world production, if that ever happened.......

Anything wrong with my logic???

[superg1] 30/6/2013 20:35

This is well worth a read as it sums up the Chile problems overall.

As you can see the SMA are the one's on the back of SCM they are the officials that shut down the big gold mine.

I think a few mines will get caught out as time goes on.