Iofina Share Discussion Threads

[neddo] 13/1/2014 11:52

stop making things up, ? we like to read facts not peoples imagination t/o etc ?

[pigeon1] 13/1/2014 11:19

Hoping for broker notes to be released now from numis and gmp. Told they were out there in OK just before the pre xmas rns and collapse in anticipation of this appointment so hoping they were pushing for a kitchen sink and all rns to rebase expectations and give a nice level to come on as broker at.

Opens way now for hopefully positive updates on progress at 4 and 5, latest production figures after that disappointing figure last time, and I HOPE (word i'm using a lot lately), something on sales confirmations for product as that scared a lot of us.

Also wondering if they will look to renegotiate terms of Stena loan to improve working capital forecasts through next year.

Nervously hopeful....

[che7win] 13/1/2014 11:00

Bocker,
Also want to say, your two posts are spot on.

Changing subject, As gadolinium says, we don't have the expense of mining for our resource, that is why our margins are so good.

We turn a waste product into a revenue source for the oil companies, it's a win, win situation.

[bobsworth] 13/1/2014 10:29

Pleased to see dyslexic Investec getting the boot. Lets hope this marks the end of those badly written RNS's.

Having GMP Securities Europe LLP as a joint broker who fully understand the minerals market bodes well for Iofina.

Fund Raising? No Chance!

[superg1] 13/1/2014 10:25

Serra

In another way, we all remember those cheap holidays from years back, and all those cheap villas and other property, so everyone piled in and bought the cheap property and holidays, which by nature of the demand lost their bargain value in quick time.

Chile had cheap labour and resources abound, so everyone piled in to get involved in the mining sector in Chile due to the boom.

Strikes came re the cheap labour, and now the mining folk are well paid, truck drivers $80k per year. The mining boom sapped the energy capacity, electricity prices went up and the infrastructure is struggling to cope.

Water use for mining went up, and the years long drought is getting worse. Much of Chiles power comes from Hydro, so you can see the issue there. A number of planned projects have been blocked by the courts for Environmental reasons.

The Chile gov say it will take many years to get the infrastructure right.

The mines need seawater and now a bill is being considered to force that on any mine doing over 150 litres per second.

That means 70km of pipeline to carry water 7000 feet up. Energy sapping pumping stations which one mine has quoted will end up as 1/3rd of their power expenditure.

So over the last few years the Chile cheap market, did what all chased booms do, whether it's guar beans, or holiday properties.

The Chile Barrick mine went from a concept price of under $2 bill, to a forecast actual recently to over $10 bill. Hence they have abandoned it having spent $3 bill on it.


Mentioning the cheap labour and boom, it went on for years, while Chileans struggled with low wages, and paying for education etc. Their farming suffered as the mines depleted water resources. Hence you now have the Chile guys fighting expansion in certain areas and trying to block power plants through the courts. They have been very successful.

Meanwhile the new Gov just in, wants reforms and hope to raise the taxes on miners to pay for those reforms.

So basically things were cheap 5 years ago, but it has all changed.

We saw the Chile situation coming and warned about it, while brokers were saying buy Chile stocks. Some had SQM on outperform on it's highs.

[gadolinium] 13/1/2014 10:01

Serrata post 14576:

'Anyone able to say why IOF can reduce the costs so much ?'

Just catching up on posts so a late reply.

My view is that Iofina's costs are low because they are pig backing on an oil industry waste product, some else is doing all the expensive stuff! Some one else drills the well and mantains it, separates the brine and pumps it to Iofina's plant for free. After Iofina have extracted the iodine they pump it back to the originator and they dispose of the spent brine at no cost to Iofina. Iofina only have to cover the cost of processing the brine and paying a modest royalty to the oil company.
Compare this to the Chile operators, they have to mine the caliche rock, transport it to the plant, mill the rock, leach it with expensive water to obtain an iodine rich leachate. Only after performing all these expensive, energy and water intensive processes are they then in a position to start the chemical treatment for extracting the iodine from their leachate which is effectively equivalent to Iofina's brine, which they by contrast, obtain more or less for free. No wonder their opex is higher!
We don't know the opex for Iochem or Woodward in the US, but I imagine it is less than Chile, but more than Iofina, since they have to cover the cost of operating their own brine wells and disposing of the spent brine stream themselves.

[phoenixs] 13/1/2014 09:38

bocker1. Just read your posts. great analysis of IOF.

[phoenixs] 13/1/2014 09:37

rogerbridge, spot on with 14607.

[bryproj] 13/1/2014 09:28

I was wondering whether iof may be considering splitting off the water business when the time (hopefully) comes? It could be beneficial to raise capital for a new company.

[gadolinium] 13/1/2014 09:27

Perish the thought!

[tsmith2] 13/1/2014 08:50

Wonder if the price was walked down last week to allow numis's client in slightly more cheaply?

[pwcarnall] 13/1/2014 08:41

Great news imo, the combination of gmp and numis could prove a catalyst,at least those grossly ambivalent rnss should be sorted.

[bocker01] 13/1/2014 08:39

Investec provided some extremely poor advice particularly in respect of the timing of announcements just before Christmas. Further, their RNS's have been badly worded and ambiguous. Their departure was to be expected. GMP particularly have a North American focus. This is in-line with the company's intent to build up its American investor base.

[n3tleylucas] 13/1/2014 08:18

Yeah Numis are massive graham, £300m... Investec were only £2.6b LOL

[rogerbridge] 13/1/2014 08:11

I am pleased with the change of advisor, I do not believe Investec ever got their head around what IOF were about. Talk about fund raising is hogwash.

[superg1] 13/1/2014 08:10

Che

Yes a few will be pleased, anticipated I suspect. It adds a new energy on the insti front..

[n3tleylucas] 13/1/2014 08:08

Hey graham, they going to list in Canada?

[n3tleylucas] 13/1/2014 08:06

Mind you, Canada is good... you'll get 4 official disappointments a year! LOL

...and in great detail :)

[che7win] 13/1/2014 08:06

Superg,
Nice news this morning :-)

[superg1] 13/1/2014 08:04

No surprise re the fund raising comment, NO, numis a biggy, GMP specialists in the minerals.

Matrix knows what he is talking about.

[orslega] 13/1/2014 08:02

GMP....

"Our analysts are particularly strong at developing solid relationships with the management teams of the companies covered, permitting our clients to gain important insights into our coverage portfolio. These insights are carefully balanced with deep competitive analysis and thorough fundamental financial analysis to arrive at our investment recommendations."

hxxp://www.gmpsecurities.com/equity/default.asp?loc1=equity

[n3tleylucas] 13/1/2014 07:55

If Griffiths McBurney is here for a funding, then what does that say about Stena?

Oh dear...

And please... don't say this is going for a Canadian listing? ffs

You really do have to inform the TSX everything, none of this AIM vagueness LOL

[flying pig] 13/1/2014 07:45

Changing advisers may or may not be "good news". It suggests that the relationship with Investec was unsatisfactory, and that raises questions in itself. Why? It could be personal chemistry, conflicts of interest, etc.

Numis are reputable, but time will tell if they are "better" than Investec. It may suggest a fund raising might be looming or it might not - we will see.

My tea is in bags - so reading tea leaves is hard....

[n3tleylucas] 13/1/2014 07:45

Oh dear... something's gone wrong.

Expect an Investec SELL note soon lol

Their notes have been fairy tales so far, let's see what they really think.

[superg1] 13/1/2014 07:44

serratia

The opex is split, they produce nitrate too via the same process, costs have been rising.

EG costs of sales rose near 7% on iodine in the last report and around 10% on speciality plant nutrition.

E.G. I you go to the latest results, it shows iodine costs as 43% of revenue, but speciality plant nutrition as 77% of revenue.

Combine to 2 revenues and cost of sales, it comes out at 63% which outs it at $31 per kg costs.

As PC points out they have various sector, where fixed costs cross over and certainly much of those costs for iodine are also included in nitrates.

So no it is not easy to work out exactly what the costs is. However they have gone defensive re iodine, and if you note always claimed to be the world's lowest costs producer. until recently when they said one of the lowest.

In the overall picture costs of sales in the recent results account for 66% of revenue.

EDIT

In fact they the two highest costs as Potassium with sales costs of 92% and industrial chemicals as 72%.