Iofina Share Discussion Threads

[naphar] 31/8/2013 12:06

On the water, taking what I think is a conservative view in most respects, I get the following:-

One application 80,000bld
300 days a year supply at $1 a barrel
90% margins
80000x300x.9x$1=$21.6m profit per annum
1.6 ex rate, 33% tax
$21.6m /1.6 x .67 = £9.045m
127m shares, gives 7.1p eps.

Minimum PE of 10 is 71p per 80k bpd approvalor 83p if they can sell for 350 days.
Of course, early on we should achieve a PE greater than 10, to represent the future growth potential.

What value would you put on the water business with 6 terminals supplying 80k bpd 300 days a year, with Atlantis aquifer and rights swap, growth potential and the potential to supply hot water?

[freshvoice] 31/8/2013 11:59

Bogg1e
Are you REALLY interested in this company, or trying to make trouble?
Your continual engagement with the Troll and recent remarks, and references to things that you reference have me wondering what your motives are?

[naphar] 31/8/2013 11:53

Che,
"Then, we have the water opportunity with expected revenue of $6m per month at 90% margins next year on cold water. If we operate water supply from April next year, that's 9 months in 2014 which could result in £30m profit which more than covers a market cap of 320p alone (£30m profits over 9 months is £40m over a year). "

I am lost! $6m revenue a month would be from 3 water applications, no?

But you go on to say:-
" What would it be worth on £40m profit and another two applications granted on the same terms? £1 billion? "

Are they 2 more in Montana? On top of the 3 I guess you used for the $6m a month revenue?

Do you really think we will be able to sell water from 3 applications in Montana from April onwards? I think that will be a mighty long shot. If we can build one terminal before this year is out, we might sell from one for the full year, but if we don't get approval soon that will probably not happen. If approval does not come soon enough to build a terminal this year, I don't think it will start being built til at least April next year (harsh winters). At that point we might, at a stretch have 3 approvals and be able to start building 3 terminals. So possibly half a year or so revenues from three terminals, but maybe a long shot?

Either way, subject to approval, very lucrative for 2015 as the first full year.

[che7win] 31/8/2013 11:12

I bought another couple of tranches here yesterday.

Overall, I really can't tell what will happen in the next month with results coming up, but in the long term, this price is a bargain IMHO. The market knows what results next month will be like on the iodine production (it should have been better) and good chemical divison results, I would say thats largely priced in. I expect 3p EPS this year largely coming from H2, I hope the market is aligned to those expectations otherwise there may be further disappointment.

What none of us know is what will accompany the results, what the company will say on the impending plant acceleration, the water, the CEO etc. To me, the share price is starting to react to prospects (I watch trades and their timings closely), it's too dangerous to be out if you want to accumulate more here cheaply IMHO. I feel the share could react up very swiftly as greed starts to takeover, look for the share price to breach the psychological 150p barrier (where Dr Fay bought) for the start of a recovery. The trades have changed in the last couple of days, they forced my hand to buy yesterday.

I will exercise a lot of patience here, STVG was my biggest share last autumn which I sold down to purchase here.
I'm really no better off having made the switch, I knew STVG was completely undervalued but this was and still is too good an opportunity to miss.

I don't know how big this company can become but it is an easy bagger from here with upside to £10 possible within the medium term. The potential is there for the company to create value; the good thing is that it is largely within the company's control to realise this.

I'm really amazed to have found a company with a competitive moat like here. Its derisked since I first started to invest by the patent award, secondly by all the iodine leases they now have in the high ppm areas and thirdly by two plants operating in the field continuously. Maybe the company can tell us more when they've tied up the last few leases on prospects next month?

All they have to do is roll out plants as planned to see multiple pounds on the share price.

Then, we have the water opportunity with expected revenue of $6m per month at 90% margins next year on cold water. If we operate water supply from April next year, that's 9 months in 2014 which could result in £10m profit which more than covers the current market cap.

Throw in gas and helium potential and the company really is derisked and quite vulnerable to a company buying and breaking it up to release value.

Imagine the water division doing a JV and being divested to shareholders within 18 months. What would it be worth on £12m profit?

So many strings to the bow here, I would like to see all divisions divested over time to realise value.

A lot of news to come.

Some may laugh at Investecs £30.7m pre-tax profits forecast for next year (24.12 EPS), but the water division isn't included. If water is granted in the next month, how much will the share price rise for the profits increase next year?

My point is, I can't predict the next year, but at the current price and with growth prospects ahead, I can't find a better risk/reward investment in the market right now.

PS: I'm quite happy for the share price to stay at this level, it allows me to stay in greed mode.

[che7win] 31/8/2013 10:28

Naphar,
You are correct and well spotted, a silly mistake on my part so I've edited my post to not mislead. I'm just amazed that the recovery rates are so low.

I thought a 25% recovery rate would be the norm, not 4%!

[peterz] 31/8/2013 10:20

Bogg1e -

After your relatively long involvement with IOF and apparently plausible questions to those generous enough to entertain our questions, you now choose to surface questions that come from a different place and may cause uncertainty not in IOF but in the possibility that our share price might drop. They may fear that fracking discussions such as yours may encourage 'fear selling'. If you have found enough information which leads you to doubt your shareholding you have another choice.

If you feel so strongly put your case, as a shareholder, to our company. You may, of course, get some support from a few on this BB. You may be aware of who that may be and what they will do with any opportunity / conflict.

I will be holding.

[naphar] 31/8/2013 10:09

Che, 36bn barrels is the 4% they estimate as recoverable, so an increase of 1% is an extra 9bn barrels - not to be sniffed at.

[neddo] 31/8/2013 09:25

frick, frock, freck, frack, couldn't give a toss as long as the share price goes up.

[che7win] 31/8/2013 08:49

The 3 forks mania, a recoverable rate of 4% seems incredibly low, as an example, if they could extract another 1% above that, that's a 25% increase...

[che7win] 31/8/2013 08:45

Superg,
Correct on the patents, there are other patents to come....

"We are delighted we have been issued the patent and will continue to finalise the Company's additional patents and trademarks relating to the Company's IOsorb™ technology to ensure a robust intellectual property (IP) portfolio for the Company."

[superg1] 31/8/2013 08:40

I believe US golf courses use 5 times the water the oil industry does. :-)

Now that's a good use, I wish my course would use a bit more on the greens.

Yes I know it eventually flows back into the systems, but with all the pesticides used on the greens. so it's not ideal

That stuff that took someone's legs off (poisoning) when he put his tee in his mouth.

Don't lick your balls.

[superg1] 31/8/2013 08:36

Boggle

Just be pleased to know those short worry about the water rights just as much as you do. :-)

I must say your slant on it caught me by surprise too. However to soften your discontent, understand that IOF are potentially to become a green supplier of water.

All down to that water discharge permit. I am talking the future here as I read somewhere that they expect to have 30,000 plus wells in the relevant area over time. Each well gets re-fracked around every 18 months. That's a lot of water.

Why could IOF be considered green?

Every other water supplier with permits, extract fresh surface, or ground water to be pumped into the deep layers and useless recycled that fresh water has gone. All that supply that way, create a fresh water deficit.

IOF have a discharge permit to clean and dispose of any water they may produce form Atlantis into the Fresno/Missouri. That is more or less unique and took years to achieve.

That discharge permit had the USFW wanting a rights swap deal. Yes you read that right the USFW want it and of course so do IOF.

The USFW want the deal, for the reasons explained before. The Bowdoin wildlife refuge which took a hammering re rare species and other wildlife, in a drought in 2003. The USFW have no means of getting water into the area if ever the same happens in the future, hence they want rights to any IOF produced water and thus the deal exists.

Atlantis sits upstream of the reserve, all the oil action sits downstream. Fast forward 5 years with rights fully appropriated and the industry struggling for water.

IOF have a 35 billion barrel gas aquifer, with water that can be easily cleaned and permits in place to dispose of it into the river systems.

The permit is for 30k bod as that matches the iodine plant they have in the area. They also have 'stripping facilty' and already have the pipelines in place.

The Fresno reservoir has a 500k bpd storage capacity. In other words IOF down the road could increase their permit to discharge water up to that amount. They then own that water and can take it out downstream.

That is above and beyond any standard water rights they are applying for.

At the moment in ND only 11% of rights are for industrial water. 60% ish are for irrigation. The authorities are allowing irrigation water to be sold temporarily against water legislation rules, that will stop. I would imagine most frack water currently supplied comes form irrigation rights, that won't be allowed to continue, hence companies are gaining rights under the correct regs.

However only one company, in what is becoming one of the biggest oil booms in the US, has a unique rights swap deal and the ability for direct supply.

I fully expect the water division to be taken out by another, the situation is just far too much of a fantastic business opportunity for others in the industry.

Lawyers laughed IOF out of the office re achieving a discharge permit. So IOF did it themselves.

Much like that recent patent, even I'm stunned, I thought they were on about iosorb. No they have patented the business model, which completely stuffs anyone else getting involved via that method.

Iosorb parts are done, with more patents to come.


Oh and by the way, IOF iodine plants can be as low as zero emissions.

So if the water revenue flows, just give that part of your profits to good causes.

[bogg1e] 31/8/2013 01:17

malachey, with you. I had to go digging thru 45 pages of notes to find it!

[malachey] 31/8/2013 00:32

boggle: I was referring to iof's arrangement to supply fresh Atlantis water to the wildlife reserve down river, if needed.

[n3tleylucas] 31/8/2013 00:00

It was still funny the way you told it ... forget about me bud.

[broncowarrior] 30/8/2013 23:56

one ear - del boy re uncle albert.

[n3tleylucas] 30/8/2013 23:38

lol ... one ear made me laugh BW .... Aussie?

Good band bud ...

hic!!!

[n3tleylucas] 30/8/2013 23:33

lol ... hey bud, just post on the non-Premium BB Broadcast Threads with READ/WRITE.

It will take him a while to grasp it, so you've still got a few days grace.

Hymn for bogg1e ... Low - (That's how you sing) Amazing Grace

[broncowarrior] 30/8/2013 23:32

Can't understand whether n3 is sitting on these threads all day every day hoping this drops so he can buy or that he just wants it to drop full stop. If the latter, what a saddo. about as much use as a pair of glasses on a man who only has one ear.

[bogg1e] 30/8/2013 23:25

Net I'll have to change my name to something they would never guess like Biggles or Goggles. I shall swear blind I'm a retired spitfire pilot.