Iofina Share Discussion Threads

[superg1] 21/11/2013 18:35

I have paid some casual attention re GDG as it just makes interesting reading. re the apparent theft, someone revealed and apparent lapse of GDG leases as they didn't take the minimum action to retain the leases (something like that).

I personally don't hold out much hope for any company trying to take on the Chinese in their own back yard. It seems China are aware of rules but just ignore them, as in the case of IP.

I'd be amazed if GDG gets a penny off the Chinese re that scenario.

The simple analogy for me is to imagine an IOF lease in China, with the Chinese dropping plants all over it, and then IOF saying 'hey that's ours, you owe us money'. I think I know what the end result would be. So I think a bet that a company will defeat state owned thieves, is a long odds bet.

I have been impressed by the GDG strength v all the bear attempts to destroy its credibility, although it got hit a bit today. There are no visible volumes, to justify any of the moves, it seems like a behind the scenes tussle.

Yet another spin off?? I was discussing that point with someone just days back, I will look it up.

[titus10] 21/11/2013 18:34

Jamonit (11472)

Wouldn't this subject be better dealt with on the TA thread?

Briefly, it's always possible to find points on a graph to join up. The redeeming feature of this one is that it's logarithmically-scaled, so at least the relative value of any move is directly comparable to any other. Surely the ultimate stupidity is drawing straight lines on arithmetically-scaled charts. To make any sense, such lines would need to be curved to compensate for changes in the value scale, but "chartists" still do it. No wonder TA is misunderstood and denigrated.

That said, one might ask what relevance or magic is offered by, e.g., connecting the top in Oct12 with the bottoms in Aug and Nov 13?

This is surely just "beauty in the eye of the beholder" stuff, isn't it? Sometimes referred to as curve fitting.

If all participants in this market drew the same three converging lines on this chart, would they be persuaded to buy or sell at the convergence point? Buy, probably - because they want price to rise. Forgive the faint irony, if you can.

IOF had a Primary Bull move between Oct 11 and Apr 13, with a '5-Wave Extension' terminating in June. (The 'extension' usually happens because "buy the dips" has become the mantra during the bull market, perhaps followed blindly by those who have yet to experience a real bear market).

What followed has been referred to before and some experienced chart analysts may see the situation now as in the '1st step above the base, with right-hand extension' phase. If/when such consolidations continue over time, some call the situation 'an explosion waiting to happen'. It could coincide with the convergence point on your chart (why not?), but I doubt if the magic lines will have caused it.

My own view, fwiw, is that the share price is base building, having completed it's ABC correction which normally follows a full Primary move. Anything unforeseen can happen, but all the information we have acquired on this excellent forum favours price development to the upside - i.e. a new Primary Bull move in this share.

Of course, all of this is just analysis and probability projection, be it technical or fundamental. M&A anyone?

[superg1] 21/11/2013 18:16

Same here Cross that's why I said it, no delete button so you have to open the darn promotion stuff to get rid of it.

From Seeking Alpha re the Conference call notes. A lot of ducking and weaving on the iodine subject-:

Patricio G. Contesse - Chief Executive Officer and President
The prices are today in the range of $45 to $60 this moment. If we saw at the beginning of this year, demand will grow in the range of 8% to 4%, between 2% and 4%, but it became the lower range of 2%, just 2%. In the case of supply, it's not easy for us to have information because some of the companies are private companies where there's no availability of public information. We have seen that anyhow as voted that is now making publicly their information, that the volume had not increased that much. In the case of Atacama Minerals, we see stable situation in terms of supply, a little bit increase this year of more production. I don't know exactly how much of that production are selling anyhow. We see cost reaction increasing the volumes and Bullmine 2. Exactly the numbers, what to -- how much more are producing, it's hard to take.

[crosseyed] 21/11/2013 17:06

superg1,
Replied. (I get so used to receiving ADVFN blurb that I don't always check the mailbox!)
c

[superg1] 21/11/2013 16:49

Cross

Check your PM box

[crosseyed] 21/11/2013 16:44

superg1,

Many thanks. Very valuable information.

c

[postman_pat] 21/11/2013 16:21

"By the end of 2013 the group will have six plants in operation and house broker Investec says 24 could be up and running in three years. It estimates each new plant adds 10p a share of value."

So at £1.65 now with 3 plants running + 21 more in next 3 years that's a share price of £3.75 on iodine alone to look forward to by the end of 2016 and start of 2017!

Thought we would do better than that + explains why the share price is not rising as fast as I thought it would.

[the librarian] 21/11/2013 15:58

Export rates:


'The Librarian - 05 Aug 2013 - 07:58:12 - 6500 of 11472



I did read somewhere that the Arysta export rate was about $25 and the % are set on that, which makes sense because you can't predict price volatility and ain't going to set it at $55!'

I'm not going to trawl back through but that is the rate approx.

[rhwillcol] 21/11/2013 15:56

Octopus: maybe Warren Buffett had the likes of you in mind when he made that famous quote >:)

[superg1] 21/11/2013 15:06

I will add in links as I go to this post-:

Shares magazine



Operating costs are $10 to $20 per kilogramme (kg) compared with an iodine price of around $50

A comment by First Columbus in their first note-:

The long run scenario outlined above shows the potential profitability of Iofina's model and demonstrates the influence of iodine content on operating income. IO#2 for example is expected to produce iodine at a cost of just $10 per kg compared to $20 per kg at IO#1.

They have fixed costs across plants per month of £50k for power, $50k for labour . Total fixed costs around $120k per month. Chemical costs 7 cents pb. Operator 11%, but you would need to add more for the lease owner.

The model shows io2 doing around 17.5 mt per month, which we now know, is well below what it will actually do. The higher the production rates, the lower the opex goes for individual plants.

[superg1] 21/11/2013 15:04

Crosseyed

It's mentioned in many places. Sometimes $10 to $20, sometimes $10 to $15, I will try and dig out the reference points.

From what I can see, there are fixed costs, like power, labour, insurance, and chemicals, along with royalties, operator and lease owner for OK.

Going on operators, I heard around 10% at one presentation, mineral lease forums are common in the US, and I think around 5% to 6% on those. So around 16% or more on royalties BUT, I don't think they are based on current prices which fluctuate. I doubt I will find it again, but I recall an item about US export rates (fixed figure), which they can be based on, which I believe is much lower than going rates.

[bobsworth] 21/11/2013 14:39

crosseyed
Knowing what a great job you did on EME's financial model and sharing it with fellow posters on their bb Iam looking forward to you sharing with us your financial model on Iofina.

[baguette] 21/11/2013 14:27

Johncs

Just come in and read your hugely pompous post no 11445 - telling many of us how you think we think and what a load of idiots we are.

Lets be clear - it is management setting out their SHORT TERM targets not us. They should be taking into account the vagaries of business, supply chains, delays etc. If the economy is booming and there are supply difficulties that should be factored into RNS's in words.

I am sure many of us ask only that when they repeat quite strongly their short term goals, plants to be built etc, it is for them to either adhere to the plan or have already set out good reasons to miss them.Every time a deadline is missed many posters just twist the argument in another direction saying it does not matter.

Sure we all think the longer term business plan is really sound in principal and is based on management who have a good vision and strong technical and engineering bases. What I remain unimpressed with is constant failure to meet their own short term targets. i.e. Communications are still poor and no numbers are included so a comment like "Record Production" is utterly meaningless and just weasel words - we have no idea what output is coming from the much vaulted io2 despite it being such a critical factor in the company's growth

[titus10] 21/11/2013 14:02

Octopus - well, that one is more about leverage & short selling, isn't it?

[octopus100] 21/11/2013 13:42

Titus - isn't the converse of his say - when the tide goes out you can see who has been swimming naked.

[crosseyed] 21/11/2013 12:16

superg1,

I too, as a recent investor in IOF, appreciate your in-depth posts that have contributed greatly both in background, understanding of the competition (and IOF's great competitive advantages), and your dissemination of information from diverse sources from which you suggest very reasonable metrics.

I am in the process of building my own financial model for Iofina that rather satisfyingly accords well with the figures that Investec have just re-iterated, though a little more optimistic.

There is one figure you mention: the operating cost range of IOF's extraction process of $10-$15/kg. I'm not in any way disputing that range but I wonder if you could indicate your source or reasoning for it.

You also mention in an earlier post the impact of sentiment in share valuation. Whilst a share builds up, and especially before any profit has been declared, valuations can be irrationally high. That can change very quickly, and negatively, when hard figures, such as a net profit, occur. I'm not saying that IOF's share price is irrationally high. I think Investec have it about right with upside and a Buy recommendation.

However, there is a dangerous, though commonly used, tool that gives a superficial measure of how a share is valued: namely, the Price:Earnings Ratio or PER. A PER has no meaning until earnings become positive. (It represents the number of year's earnings implied in the share price ) I expect IOF's net earnings will be positive for the FY 2013; they were very close to break-even in the Interims. The PER is likely to be astronomical. Will that be regarded as a big negative by less knowledgeable investors (punters)? With a consequent negative impact on the sp?

I have an indicative, though admittedly subjective, expected earnings pencilled in of about $3 million for FY 2013. That would translate to a PER of 113 at the current share price (165p/share). I hasten to emphasise that I do not regard the PER as anything other than a superficial filter. The NPV12 valuation of 152p-230p/share indicated by Investec is much more appropriate as a measure (though arguably still overly-conservative). I would also expect the forward PER to fall rapidly given forecast revenues supporting continuously rising share price beyong the current level over the next two years. Of course, it will be several months before IOF's annual accounts are published. It could be a bumpy time.

c

[iofra] 21/11/2013 12:13

Yes neddo 3 plants producing with increased efficiency on the first two giving record production. Patented process that works at full scale. Later builds delayed because of supplies from manufacturers - but when they arrive we know they will work.Lots to look forward to short and long term.

[neddo] 21/11/2013 12:07

just read the rns, how can anyone read any negativity in it, all looks good to me.

[worraps] 21/11/2013 11:57

Lib...anyone who has been in shares for a long time, and certainly for the last five years, would have depleted patience! It's been a horror story.

However, the major part of johncsimpson's very long post, paragraph after paragraph, point by point, was non-stop criticism and derision of other posters.

I reiterate....that is seriously not nice. Even more worrying is the number of green thumbs up that post has. It reminds me of a bully and his little gang of followers.

Alot of people have very seriously suffered during the financial meltdown of the past five years. It has left so many people nervous about their investments, trying hard not to let the shenanigans of the market take any more of their wealth, after having lost so much.

I don't think those people should be derided.

Apart from those that met up at Cheltenham, or at AGMs or PI presentations, we don't know much about each other. For johncsimpson to take it upon himself to suggest that worried investors have nothing wrong in their lives, and only want positive news, is arrogant beyond words. And if he knew anything at all about me, he would be biting his tongue right now, until it bled.

Yes, I am upbeat about IOF. Very.

[crosseyed] 21/11/2013 11:25

longsight,

Re your post 11322, is that Investec note publicly available, and if so do you have a link ?

Thanks,
c

[the librarian] 21/11/2013 11:23

John has been around in shares for a long time and I expect that his patience has been depleted, I value his experience. If you get a thumbs down it means that you have said something important... takes away the art of conversation though.

You are right with SG and patience though, trouble is with typing replies that the little verbal nuances can get misinterpreted and depends what frame of mind you are in when you read them. Anyway glad to see you are upbeat worraps.