Iofina Share Discussion Threads

[testuser123] 04/12/2013 12:24

Must admit I stopped keeping track on Sirocco a while back on the basis that they were a dead man walking. SG - just wondering whether they mentioned the solar farm in any of the recent updates.

For the benefit of others, at the end of January this year Sirocco signed a deal with a company called Etrion to build a solar plant with an 8.8 MW capacity due to go online Q2 next year (see

The problem here for Sirocco is that it is set up as a take or pay agreement. If sirocco shut down production then they will still have to pay for all that power anyway (albeit at a reduced rate). If they can't worm their way out of it then there may be an unexpected hole in the next set of accounts (next to all the expected holes :) ).

Now that said, Etrion is 22% owned by Lundin Corp, so they may be able to negotiate a get out of jail free if construction hasn't started already.

Either way if I get chance later on I'll have a quick dig, but if anyone's seen anything please shout.

[superg1] 04/12/2013 12:03

Picking up on other bits

'In line with other Chilean producers the company has decided to reduce production until the market returns to balance, which is expected by 2015.'


Well that's where it gets interesting too.

Demand hasn't severely been affected, just over production in Chile.

Sqm had plans to expand to around 14000mt in the coming years. In fact it seems they have pulled back from 11k mt to 8k mt.

SCM Bullmine had plans to expand but haven't yet (v high opex).

Cosayach had plans to get back on track, but that EIA application to expand was cancelled earlier this month.

Algorta/acf Minera, are the only real unknown, but their first half figures, contradict expansion claims.

Much of the above has only just been put into action and it looks like a swing of the pendulum too far back on production. It seems they clearly intend to force the price of iodine up.

As for the worries about IOF being able to sell iodine, the iodine cartel aka Chile, just threw the door wide open. Not that we needed it, IOF will march all over them anyway on the back of delivery.

What a joy it is to see the world's biggest producers defend prices at 3 times IOF's forecast opex.

[che7win] 04/12/2013 12:02

Noli,
My fear too, the vultures are circling and watching.

They're watching IOF with one eye and each other with the other one.

If a bid is initiated, it's game over for us, although I hope we retain the after, gas and oil interests.

SQM must be past the head scratching phase, wondering why supply to us was not renewed. I wonder when they twigged that we were supplying ourselves.

I would think the news on Sirocco is a game changer for us, $45 must be the pain threshold for a lot of suppliers.

[superg1] 04/12/2013 11:49

JcS

Sirocco says its mining and heap leach operations will continue in 2014 with a forecast production of approximately 1,000 tonnes of iodine. Sales levels for 2014 are budgeted at approximately 1,300 tonnes, with heap leach production being supplemented by current iodine inventories.

It is anticipated that both the leach and slurry plant will be restarted early in 2015 and that completion of the grinding mill installation will follow soon after.


It's a bit confusing.

I've called Sirocco spot on all year and if that had been on the AIM, I've have warned every investor to get out.

My comments to the company were right, although SJ the president came up with some decent points, it's all worthless now. I suspect he saw this coming so got out, to avoid the tag of being connected to a failed company.

So no nitrates, and off below levels they were at 10 years ago under the name Atacama minerals.

IMO there won't be any production in 2014 or 2015, that particular parrot is dead, more will follow imo

[roboben] 04/12/2013 11:45

JCS - Thanks. Looking forward to it!

[johncsimpson] 04/12/2013 11:36

I'll put something up at the end of the day (late evening) if only the current chart(s) - I use several - won't be too much to read though Roboben; I'm not taking on or competing with 'fingers'. . .

[roboben] 04/12/2013 11:23

JCS - I, too, look forward to reading your TA analysis on the appropriate thread.

[roboben] 04/12/2013 11:21

I see that at 10:02 someone spent over £225k buying 138,462 of these.

SG - Please don't tell me you've spent a whole weeks pocket money all at once again?

[orslega] 04/12/2013 11:13

ck - three winners, not forgetting Iofina shareholders!lol

[noli] 04/12/2013 11:11

The way i see it at the moment, everthing is stacking up against the ennis short, imho they will have to close it soon.

[captain_kurt] 04/12/2013 11:06

Agreed there will be only two winners in the Iodine market in 2014.

Iofina and the company that successfully bids for Iofina

[freshvoice] 04/12/2013 10:51

JCS interested in what you base that on, I agree but not from a TA point of view?

[titus10] 04/12/2013 10:46

JCS

Why not share it with those interested on the IOF TA thread?

[johncsimpson] 04/12/2013 10:35

pcjoe - Just from memory, macca's not posted for about 2 weeks, jonnybig got caught out over the weekend with a provable lie and hasn't posted since, Gene Savin (another one of that tribe) tried to offer support to jb but admitted he'd be looking for a new alter ego . . . I'd say the wheels are coming off for our troll-friends.

[superg1] 04/12/2013 10:33

More Sirocco BS.

Earlier this year they said 1600mt, then for H2 they are moving to inventory building (which with thought was highly suspect).

In Q3 results they said they had produced 1070 mt for the year.

They stated they had produced 320 mt for Q3 and sold NO IODINE.

Those results came out on 7th November, and they said they expected to produce more than the 320 in Q4 taking it to 1500mt (470mt for Q4 forecast).

HOWEVER

Yesterday they forecast 1000mt for next year plus 300mt from the inventory ????

They are not selling any this year, but have 320mt for Sept.

So on those facts they have been lying it seems imo, as production must have stopped after Q3, if not where is the iodine produced.

I looks like they stopped at 1070 mt, and the 1500 forecast will be 430mt short.

[johncsimpson] 04/12/2013 10:25

superg1 4 Dec'13 - 09:54 - 11871 of 11874

CK

Thanks for the link, it's worse than I thought. They have suspended production and cancelled the mill.

That's it imo you have just seen the end of Sirocco. They now claim they will start up again in 2014 but reduce to 1000mt production, plus about 300mt from the inventory.

---------------------------

Doesn't it say early 2015 not 2014?

[pcjoe] 04/12/2013 10:17

Good call SG - there goes Maccas Xmas bonus

[noli] 04/12/2013 10:09

IOF must really be on these companies watch list especially now with others struggling, i can see a number of companies wanting iof. SQM as we know control the prices for now, if output stays at this level and pricing its must only be a matter of time before a bidding war turns up for iof.

It has been said before, whoever owns iof in the future will be setting the iodine prices, i would like it to be iof, but imho we won't be here this time next year.

[phoenixs] 04/12/2013 09:58

sg, great analysis of the situation. This is a win win for IOF. If prices rise during next they benefit, if prices stay the same for a while, other mines close and then prices rise as IOF production rises rapidly. I hope that Ennismore carry on shorting,they will be in for a very nasty surprise.
In my view there is ONLY 1 Iodine play in the market worth investing in and that is IOF.

[superg1] 04/12/2013 09:54

CK

Thanks for the link, it's worse than I thought. They have suspended production and cancelled the mill.

That's it imo you have just seen the end of Sirocco. They now claim they will start up again in 2014 but reduce to 1000mt production, plus about 300mt from the inventory.

We pointed out their claims earlier this year were complete BS. BUT there is yet another heap of smelly stuff in that update and it just shows how a company can mislead investors.

The whole point of the mill is due to the wear being caused on the ALP, it was supposed to be the answer to their problems.

I had an email exchange will the then President of the company.

I pointed out the mobile slurry machine would push up opex as it's an extra process to combat the 'wear' on the ALP.

The reply was that due to increased production which would created by the ball mill, opex would drop, with a target towards the lower 30's. Opex would drop due to increased production v fixed costs.

The last we saw re Sirocco re opex was $41 per kg (Q3), but now they say they are going to reduce production to 1000mt, when the plan for next year was 2000mt.

What that means is their fixed costs will affect opex to the upside AND without the mill, they have more or less admitted they are not going to try and combat the significant wear on the ALP.

My bet is it's corrosion not wear. That's what the ex CEO who understands iodine thought it was, so I'll go with him.

I think it's odds on that Sirocco is a finished venture. Probably the first failed business of the Lundin group. If they want in on iodine they are going to have a big rethink.

For the bears short it, it's finished imo.

Next to go will be SCM Bullmine. I'm now wondering if Cosayach after recent actions can survive these prices.

This isn't about iodine demand, but Chile small mines chasing the big iodine prices, in a high capex/opex country. A few years ago it wasn't but costs and problems have rocketed, with no short term fix.

What perfect timing for IOF, if they roll out the business plan next year, the Chileans have handed them the market on a plate.

On Lundin know all about IOF by the way, so no doubt that helped the decision. That's not a rumour, that was from comms with the president when I didn't realise they were part of the Lundin group.

The president resigned a while back, and another bod member did recently.

No idea what the price here will do short term, but imo iodine prices will rise next year to the $60 to $70 range.

The impact of the various closed mines (SQM too) won't kick in for a few months, then supply should become tight.

It's clearly a plan by Chile to get prices up.

We said 45-50 dollars was the bottom, with SQM (the lowest cost Chile producer not wanting anything below $45)

It has all come to pass and is covered in posts from many months back.


So Ennis, how will IOF sell iodine in a supply market that is falling apart, closing mines cancelling expansion and reductions. Not a difficult question.

Iodine demand continues, production rates are falling off a cliff as capex/opex is killing Chile producers. An own goal by them considering they practically own the market

The iodine miner lay off count is around 700 plus now

[roboben] 04/12/2013 09:36

V E R Y NICE SG & CK.

Well done!

[noli] 04/12/2013 09:01

Superb info SG, it wont be long before others catch on that only one company can expand and very quickly indeed.

[the librarian] 04/12/2013 08:57

Ought to send those buy comments to the ailing Iodine producers. I think Superg is pleased, great research. I think the fall in potash prices started the rot for Chile and with the base prices of everything coming down and costs going up it has taken its toll.

Calm down dear (SG), you will be making a dent in the ceiling jumping up and down like that :-)

[ansana] 04/12/2013 08:51

Can we see the text.

"the market is aware and has put a BUY IOF comment out. :-)"