Iofina Share Discussion Threads

[the librarian] 12/8/2013 10:27

I think they will superg, the leaching plant moves the process forward much more quickly, if it's an add on why not take advantage of it? I expect even the price drop will add profit to their bottom line.

[superg1] 12/8/2013 10:15

A bit more re Sirocco

I forgot to mention Nitrates. Caliche contains Nitrates which is the potash sector. Nitrates come out in the leaching process. SQM have covered that sector for years.

In recent reports Sirocco have updates plans to exploit the nitrates. Recent news in that sector has caused a big crash in related shares.

This Sirocco may now have to re-think, or dump that idea.

[superg1] 12/8/2013 09:50

Water

I think there was a debate on here re 'can rights in one state, result in water being taken out in another'.

The relevant area being Montana and ND. The Missouri flows right through the Montana and ND boom.

I did find a recent application for a Montana permit where they have put an 'out of state' request for part of the rights. The guys involved know the water supply industry, so for now it seems such an option is available.

[warmsun] 12/8/2013 09:31

Great posts sg - thank you, as always its appreciated

[superg1] 12/8/2013 09:16

Bob

It's always been the same plan for me. I don't trade. While the business plan remains the same and looks to be going in the right direction then I won't be going anywhere.

We look at H1 production this year (io plants) and the exit rate intend for 2013 is for 10 times that.

A planned 600mt for H1 2014. 400mt of that can be sold as bulk iodine over the period, but while that is going on other plants will be coming online.

400mt $55 per kg adds $22m to whatever the chem div does in that H1. Then you can add more for the non iodine product that kicks back in for the period.

I am using base prices there. The fact is during that period the chem div margins will grow and IOF will be hitting the market with raw iodine to end users.

That progress won't drop on the market from Jan 1st, it will build to that level, over the coming months.

I don't worry re timeframes. It doesn't matter to me if they hit the 1200mt rate In Feb or later.

If they hit a 1200mt in rate in Jan, I'll still be here for the next 500/1000mt.

I am fully aware the market hasn't a clue re iodine. What us guys said would happen in Chile over the last 12 months has happened.

The big factor in any resource sector, is the price, extent of resources, and operating costs.

Iodine in commercial terms is rare, it's a growing market, prices are high, and if they drop, iof seem to have the lowest potential opex. In some case outrageously lower than others. So if times get tough, Chile mines close, and the price bounces.

Chile's own government admits the infrastructure is in a mess and will take a long time to fix. Due to the Chile iodine situation no-one has been looking beyond that boundary and it's a niche market.

others have gone to Chile to get involved but have seen capex and opex soar.

Investor plans differ, Some go short term, some panic at every twist and turn, others are long term.

IOF plan to have somewhere between 1000 and 2000mt production next year it seems, judging on comments and the roll out.

In fact if we go on the planned daily exit rate and 6 more plants next year, they will be then producing as much or more than, the number 2,3 and 4 in Chile, but at 1/3 rd to 1/4 the opex.

Over 2013 to 2014 the demand curve should add a need of around 2500 mt. India may tweak that upwards.

Mid point 1500mt. $55 per kg, the base price $82m revenue. Forecast opex at high production rates would have $60m of that as profit.
That doesn't include the extra the chem div would add on for derivatives.

Water $80k per day potential (base price) for the first depot A slice of an annual rate of $29m revenue. If they talk hot water, for some of it, then it needs revising up. All hot water means around $150m revenue.

50/ 50 split around $90m pa.

Water is just an extra, but now water flooding is getting a mentioned, which I need to do more on, but it sounds like a lot more water than fracking alone uses and hot water is used.

So I'll happily sit and watch the story unfold.

Then we have the potential oil interest.

Moves either way are not a concern to me.

I bet every investor can name a share, or many of them that they kick themselves over exiting. Investing is a gamble, whether it's an AIM or a Blue chip. I bet many say SQM as a dead cert 12 months back, look at the chart, analysts were pumping it. They simply didn't look closely enough.

I see the 'I wish.............' re those that were in ASOS early and left, on many threads.

Investing in anything should be a 5 year plan, but paying attention to the progress on the way.

Plenty are sitting holding shares in companies that are well ahead of themselves but will have no real income for 3 plus years, even then, as we know, many will not achieve what they planned, or to any degree.

Look at what IOf have, and the business plan they have. Where will they be at, in 3 years.

Where were they at 3 years ago.

The starting point was Iodine $25 per kg. a 50ppm iodine source with 70% yields, and no real sign of fracking around.

The picture is hugely different now. The 3 forks has always been under them, but the USGS and others are now very excited about it. look how quickly the Bakken expanded is 2 years.

I just keep posting to share the info. I enjoy the research, and if you look at the wider perspective, How much could I have made on shorting SQM and others.

I see intense research on one or two shares as valuable information for many shares. Simple things like, price, trend, commercial resources, capex and opex v competitors.

Personally I think the Kerogen play potential could be hit by the frack boom. That simply comes down to price and opex. If they can match or beat opex on other methods, it's a viable market, if not, they will struggle.

[john10] 12/8/2013 09:13

SG

I have just come across this article.

7 Reasons Why Oil Prices Won't Plunge.

xxx.forbes.com/sites/christopherhelman/2013/04/29/7-reasons-why-oil-prices-wont-plunge/

Against this there was an analyst on Bloomberg pointing out that there should be an increase Iraqi oil production and that the new government in Iran may lead to a relaxation in sanctions and an increase in the supply of oil.

[bobsworth] 12/8/2013 08:40

Yes great posts sg1, thanks from me too.

This share price is unbelievable considering we are just weeks away from the expected big ping!

Only one thing to do. Hold tight and top up when you can. NAI

[superg1] 12/8/2013 08:06

There's more lol

Re the True Oil well, it looks like there was activity re plans to frack around two months back. Fracking can be vertical as well as horizontal.

So maybe not too long before we know if it's commercial or not.

If commercial it's said the entire area could open up. IOF are in the area.

[rogerbridge] 12/8/2013 08:03

Thanks for the recent posts SG, it made good weekend reading.

[superg1] 12/8/2013 07:59

Dig

Sirocco were one of the Chile guys selling at the lowest price ($56 per kg) earlier in the year when others has their price higher.

I doubt it will contain the spot price. the price we saw recently of $55 to $60 per kg was for large bulk orders. It is however a price I like to work off.

If you hunt around on the net, it can be seen that raw iodine is offered in the $75 to $100 per kg too, and decent sized orders seem to be at that rate too.

My interest in Sirocco is how their plan to reduce plant wear has gone. They were to introduce mobile grinding kit, which is too reduce the size and roughness of the rock they process. They blame the rough rocks for the plant wear.

They say plant wear, but it could be the same problem other Chile guys suffered using that technique years back. That problem is positive ions, that corrode metal.

If it's wear from rough rock, they can create solutions, if it's corrosion it's eventually curtains for that method they use and will be an expensive write off and fix.

They plan to add 388mt this year, so we'll see how they got on over the last Quarter. Replacing kit this year is forecast to cost $34m.

So $34 forecast this year, intent to add 388 mt, opex range last mentioned $35 to $38 per kg.

You can see how that compares to IOF capex for that amount, i01 and 2 should be doing that much within months for under $4m capex and opex much lower.

Io2 up to speed should do that on it's own and at that production rate $10 to $15 opex.

Sirocco were on a rate of around 1200mt for last year.


Iodine demand rises at a rate of about 4% per year (1200mt)

SQM declared they will, 'stick' on production.

Japan in decline

Sirocco plan 388mt

Algorta can't make big moves as they would need another seawater pipeline for that.

Cosayach got hit and went below 2000mt but got a water permit earlier this year. I don't know how much more production that would allow them to do.

SCM Bullmine. 'The strange bunch'. 600 - 1000mt production in recent years. They are said to have very high opex. I think they were the one's I heard about that were trucking in sea water.
The authorities have been on their case in recent months re 'acid leaks' from ponds. The same authorities that shut down the big gold mine. They want to raise $33m for expansion and a seawater pipeline.
However $33m would not seem to cover a pipeline. Sirocco say $50m for one in the future. Pipelines like that are a distance away, as there is the environmental impact assessment hurdles to get over, and that can take time.

US producers other than IOF maxed out, and blocked by law. Iochem the main guys are seeing 8% pa depletion and are having to work hard by, Re-injecting waste brine into their source to keep the pressures up, just to stand still.

[supreme mo] 11/8/2013 22:33

Yes Dig there is a teleconference too where anyone is free to join...

[diggulden] 11/8/2013 22:29

Sirocco set to release Q2 results to the market on Thursday, should give us a good indication on current spot prices for Iodine.

[superg1] 11/8/2013 16:51

Just a case of waiting to see if they get a positive result. I have a very good idea of what they are doing, but don't know the result yet. I haven't missed the result as I've checked every well completion report In Montana since they applied to drill.

There are some nice Oil wells appearing in Richland and Roosevelt county in Montana. That's where the current action is.

There is nice Ok site too, that shows what the wells there are doing as completion reports come in.

[the librarian] 11/8/2013 12:36

True oil not trying to stay 'under the radar' while they get the leases in place? It's catching :-)

Let's hope that they have found conventional oil, that will shake it all up a bit... won't be able to keep it secret for long if they have, word soon gets around!

[bogg1e] 11/8/2013 12:11

SG cheers.

[superg1] 11/8/2013 11:57

certmapper.cr.usgs.gov/data/noga95/prov28/text/prov28.pdf206;


For those wondering about what shales are under iof, Rugrat did some very solid work on it.

For ease note page 20/21. in the link pdf, that shows a diagram of the shales.

The parts relevant for IOF are North and The Sweetgrass arch.

The Sweetgrass arch is the western section of IOF leases.

Note the 3 forks runs under iof. In the Sweetgrass arch column note the 3 froks is split, showing the potlatch and 3 forks.

That is the section where IOF say a conventional oil play has been found next to their acreage.

That is True Oil. That mystery well of theirs, not yet showing on well maps, is exploring the Potlatch.

The relevant well.

'No, single or double drilling rig to drill to 3450' TD, Potlatch Formation vertical well test. Possible Bakken horizontal depending upon shows.'


Note the potlatch seems to overlap the 3 forks.

The info one or two dug out, was that True oil have found oil in that well.
It was suggested it was Bakken play, that could open up the area. That info came before I spotted the Bakken comment in the intent to drill report.

Note in that list of shales, the Nisku is below it.

I have already posted about the Weil 1 well and contents of that well report, I.E weil think there is a chance it could open up a new play.

However True Oil is further down the road and it's seems from IOF comments and other research, suggests True Oil, have made a discovery.

Why else would they supposedly risk big fines for not doing a completion report and are rumoured to be trying to expand their lease area.

The wells currently shown as oil producing, are not at the same level as this 'confidential well' .

In fact I've only just realised myself, that it's at the same level as the 3 forks which head west under the entire IOF acreage.

The True oil circs are relevant as IOF have acreage around that well. all they say in an rns is that conventional oil has been found adjacent to their acreage.



That's pretty much got it covered re the Oil.

Weil had oil shows on the Nisku and Duperow while looking for Helium (found that too).

True Oil seem to have hit oil, on the potlatch/bakken/3 forks.

IOF talk of the 3 forks as their most prolific looking oil play.

East of IOF, the USGS report big oil reserves in the 3 forks, just months back.
In recent days media reports on various companies going after the 3 forks oil came out.


Pan west, True oil and Weil, have keyhole surgery going on now, talking oil.

All laid out so that if the True oil completion doc appears, we know exactly what that means for commercial oil potential.

So besides everything else, keep an eye on what other companies sat around iof are doing, as IOF have leases right next to these guys.

[superg1] 11/8/2013 11:08

Back on iodine

For those at that heard. A comment as made openly about 1600mt of iodine paste/mud/cake.

That is the product that comes out of the io plants.

The chem div will need x amount, then beyond that, the 1600mt market kicks in for the paste.

So it seems on production increases, and thing over the chem div need goes off to end users in the paste form.

There are many uses for iodine, form animal feed to high end electronic gas derivatives.

Iof hope to exit 2013 as the US top producer. Iochem (Toyota) do 1200mt per year.

That's around 3.3mt per day, it would seem on figures around it wouldn't need 6 plants to have a production rate at that daily level.

Io2 up to speed with new brine in that timeframe would mean more than a third of that covered.

Then we add what io1 is doing and recycling, which from my calcs, should come out at about,.4 to .5 mt per day.

so io2 up to speed and half of that figure is covered, without 4 more plants.

The chance are we could see a pod or two, and I have those in the 50 to 150mt range.

A 1200mt rate as bulk iodine on the lowest rate is $66m revenue, before and 2014 plants feature or more pods.

But then if they have up to io6 running pre year end the figure could be significantly higher.

It all comes don to bpd and ppm not plant numbers. Plant x can do 5x what io1 can do, so do we call it 5 plants in one.

But then a pod could do more than io1, so do we call io1 a mini pod.


We use the $55 to $60 rate, but iodine is offered on various sites for $75 to $100 per kg, and at that price for sizeable orders.

Imo it's best early on to go for bulk supply at the lower prices, hitting and forming relationships with big end users for continuity.

Some of those end users will be still stuck in higher priced contracts, when the scramble for those came post the Japan earthquake.

Looking at the daily rate needed v some figures we are already aware of, it isn't a tall order.

Personally I don't care if IOF only get to 800mt as an exit rate, and 1200mt 2 or 3 months later or more. All I care about is that the business plan is being executed.

The model I'm interested in is the capex and opex v the rest of the world. That 'world' is more or less Chile.

Chile opex for some, is well up in the 30's and 40's. If they want to maximise their returns they need to keep prices high. They simply could not compete on price with a delivering iof.

Job adverts days old, as bag and others mention are still appearing on various fronts. Plants ordered and being built, production increasing etc etc.

Then water, revenue, hoped to be in play next year. all the land, rights of way, out-take points etc etc. are sorted, it's in the rns. Buyers for water are lined up.

FC say 1 pb at $80k per day. opex was said to be under 10c pb but 10c to 20c pb was mentioned.

Using the 20c opex rate. $23m per year profit. Will that include hot water???. probably, everyone else is and it's preferred for fracking.

£10m profit per year, with 35% tax deducted, for one depot, and they hope to have 6. If the revenue is to be next year, it doesn't matter if the permit is next month, or the next 6 months. Depots are not difficult. then they plan for another 2 in that area, and 3 more in ND.
Actual permit given news though, will impact the share price.

Going rate for hot, $5 to $6 pb. It's that price due to the cost pb to heat it.

Shop around and you find heating tech suppliers at rates of opex at $2 to $2.50 pb, which they claim is much cheaper than others.

A small part but relevant for those looking at figures, there is an income to add of around $4m for next year, and the year after, for the chem div, that has nowt to do with iodine, and will feature. That should feature in part, in H2 (from memory).

So I don't work on Jan to Dec. E.G. it's a bit useless as a guide, if io5 to 6 start up in Jan 14.

Their are plenty of AIM's on soaring prices, nowhere near profits, or revenue of any type, some are years off. Yet they carry high M/C's and are a one trick pony.

Interesting times ahead on a roll out plan that is in action, not being talked about for 2015 and 16 .

Water too.

[n3tleylucas] 11/8/2013 09:52

"Fine to be sceptical and pose the awkward questions that need to be answered but let's not overegg the difficulties, as we get enough of that from other quarters."

That is contradictory. There should be no grey areas, either it's fine or it isn't. Trying to come across 'all reasonable' whilst in the same breath telling folk to shut up is hardly conducive to proper debate.

Now, tell me ... FC have 10p eps 2014, your own broker has 24p. Do you see my problem? From an investment POV? Eh?

[baguette] 11/8/2013 07:35

Sen. PCJoe made me chuckle with his ironic comment and I just tried a bit of black humour back. You are being a bit serious, but I suppose there are a lot of very tense people who have temporarily lost their humour along the way.

In fact I had just posted that the Director advert makes IOF read really well and in fact represents the company and its opportunities.

For the record I am extremely optimistic that things are all about to change within the next few weeks with several deliverables/updates. The key for me will be getting a new high quality CEO in place - only when we do that will everything start to rush forward.

[senden11] 10/8/2013 21:58

I don't think things are quite that bad, Baguette. Plenty of us sitting around on paper losses but that shouldn't be a problem in the long term - according to the projected roll-out and researched data behind it. Plenty of potential here and all we need is a bit of patience. Fine to be sceptical and pose the awkward questions that need to be answered but let's not overegg the difficulties, as we get enough of that from other quarters.

[baguette] 10/8/2013 19:46

PC Joe maybe in the future but hopefully not because we become part of the famous "suicide brigade"

[pcjoe] 10/8/2013 19:06

Baguette - I liked this line from the job advert "Shareholders are world-renown investors." - That`ll be us then!

[scrutable] 10/8/2013 19:02

Fellow PIs may like this one -no vertigo - direct from posting today on SRX board


SCRUTABLE 10 Aug'13 - 18:50 - 1023

nonic

this is a lovely share - steady price movement free from Bear attacks (touch wood
Low PE relative to others in the sector, whilst arguably the strongest performer amongst them.
(See VSA report comparison with KMR)

* great rutile prices compared with 18 months ago, declining production costs as dry mining increases and soon to supercede dredging.

* around 30% margin PBT-

* Huge ongoing annual increases in production for next 2-3 years at least. Excessive current cash flow - in surplus to declining capex requirements, leading to board consideration of dividend,

* recent 70,000T sales contract implies strong proposition re relative quality compared with other suppliers.

How many opportunities come close to this?


SCRUTABLE 10 Aug'13 - 17:46 - 1021 of 1023 0 0 edit

According to today's FT China consumes 50% of global metals,
and falling annual GDP growth has rebounded YonY from 9.0% to 9.7%.
There were hugely increased imports of copper, nickel etc though stocks are rising.

This implies to me that SRX is experiencing an increase in demand and firmer rutile prices.

Can anyone comment from a position of expert knowledge?

The company's shares trade at the moment on a ridiculously low cash/capitalisation ratio

SCRUTABLE 10 Aug'13 - 18:26 - 1022 of 1023 0 0 edit

phoenix1234 9 Jul'13 - 998
Great link to a very encouraging VSA report with BUY recommendation and 85p target. Thanks. Surprising no one else has commented.

I went last year to the AGM. Only 3 PIs attended, but it was worth while.
Did anyone go this year?. There must have been a chairman's comment on current rutile prices?