Iofina Share Discussion Threads

[sandbag] 29/1/2014 10:14

" However incoming brine volumes have been affected recently due to the Operator's significant fracking and drilling activity in the area, which is affecting overall iodine production levels."

We have to remember that the people we get the brine off are oil companies. The people doing the drilling are drilling companies contracted to the oil companies. Their job is to drill wells as quickly as possible to the oil co.s instructions & specifications. Despite the fact that we have agreements with the oil co.s to process their waste brine their priority and the priority of the drilling company is drilling for oil. As far as the oil company is concerned we are low priority and as far as the contractors are concerned we're probably just a pain in the backside who gets in their way wanting our pipelines run around their drill site.

The outcome is that we're presently getting less brine as more drilling / fracking goes on but we'll ultimately get lots more. Meanwhile Chile goes down the pan. I can live with that.

[jointer13] 29/1/2014 10:13

[...]

Iofina gives upbeat progress report
January 29 2014, 7:24am

Iofina (LON:IOF) said construction of its new iodine plants is progressing to plan, leaving it on course to hit production targets for 2014.
The group, which extracts the element from brine taken from onshore oil and gas fields in the US, said its IO#4 and IO#5 plants will be built and handed over by the contractor next month. After that, "start-up activities" will commence. Work on IO#6 is underway.
The bitter winter conditions appear to have had little impact on construction or production. Output and volumes remain consistent from producing plants IO#2 and IO#3, Iofina said.
However the firm is working with field operator supplying brine to IO#3, where significant fracking and drilling activity is affecting overall iodine production levels.
"The increased drilling is a positive indication of the operator's view to continue expansion and the company expects newly drilled wells to be tied into existing and planned locations potentially increasing brine volumes," Iofina told investors.
The group said was "encouraged" by its first external raw iodine sales in January and will continue to market the product externally as production increases from new plants.
January sales are as planned and order activity is promising, it added.
Chief executive George Lantz said: "The board is encouraged by today's update.
"Against a backdrop of severe weather, the construction of IO#4 and IO#5, located in Oklahoma, are progressing well.
"We look forward to steadily increasing production as additional plants continue to come on line and we look forward to updating the market on production levels on a quarterly basis.
"Management continues to expect iodine production during 2014 to be on plan."

[engelo] 29/1/2014 10:09

longsight: yes there are unknowns, and the division of opinion is between those who think info is held back for competitive reasons, and those like yourself who think there maybe something to hide.

If IOF choose to be more forthcoming then fine, otherwise the info will be evident in the H1 report.

The new management style is low key and conservative, so if George says plant optimisations can be made I tend to believe him.

It is a fact that the US imports ca 6000 Mt pa, and common sense dictates that most users would welcome a US supplier. Then there's the world market. It is a fact that sales have already been made by IOF to India.

[n3tleylucas] 29/1/2014 10:05

roundup,

There are plenty of bulls on here to post the "positives" and ignore this bit;

"However incoming brine volumes have been affected recently due to the Operator's significant fracking and drilling activity in the area, which is affecting overall iodine production levels".

I think that's important, and not a desperate attempt to find a negative.

[longsight] 29/1/2014 10:02

Bobsworth

we'll see on that. As to the othr comment that they don't give the info because of predators. Bull. Are they suggesting that maybe they shd not publish accounts as well [for the same reason]?

EDIT as to predators, they can read the assumptions on here - i.e., it is a delusion that they can't access all the info that persuades many on here that opex is US$21 or whatever.


Is the share price of iodine fixed?

[sandbag] 29/1/2014 10:00

Sorry, duplicate post.

[bobsworth] 29/1/2014 09:59

longsight open your eyes they are selling raw iodine for $20/kg profit and lots of it! You should have gone to spec savers mate!

[sandbag] 29/1/2014 09:58

longsight
29 Jan'14 - 09:17 - 15503 of 15507 0 0


Not very helpful. I wd like the following:

1 Production qty
2 Opex
3 Selling price
-----------

So would any potential predator.

[longsight] 29/1/2014 09:56

che7win

How do you get the opex number?

[longsight] 29/1/2014 09:55

timbo - because I was invested for a time & I am very interested in how the story plays out. Why shd my motivation matter to you? You shd play the ball & not the man. I post very little these days & only post if I think I can genuinely add something [e.g. my reasons for not holding]. I am not short which I think suffers from the same difficulty i.e. how do you value IOF?

[che7win] 29/1/2014 09:52

Longsight,

Everything I have posted this week is accurate, it isn't guesswork, it isn't my opinion, it is after investigation.

Opex costs are around $21 and will fall depending on efficiency of the plant.
Selling prices between $40 a $44 kg right now.

BTW, I have never met or talked to superg, I paddle my own canoe and do my own investigations as best I can. My own analysis indicates he is spot on.

IO#2 I'm satisfied can do the 700MT on its own, that is my true conviction if they keep on top of maintenance.

DYOR.

[longsight] 29/1/2014 09:51

have a good day everyone. I'll follow the story but probably want to see actual numbers - & impact of new supply [i.e. IOF's] - before I think of buying.

[timbo237] 29/1/2014 09:47

longsight

Why would you personally want iodine sell price and demand for Iofina when you have no interest in this share?

Post 15017
That last RNS update was imo concerning. I have no clear view on opex or sale price. What is "optimisation"? Sounds like a fancy word for this process isn't working very well & we are fiddling around with it. I don't trust the opex assumptions. And I don't trust the sale price assumptions either. I sold some time ago & never had any interest in buying back at any price

[superg1] 29/1/2014 09:40

Longsight

While the company is in early expansion mode, actual opex, actual production to base that on and full costs won't be known.

It's as all comment in the rns, raw iodine sales, so they now have surplus iodine, and buyers or it.

They haven't jumped and down about it, but after may years they just made the some big relative steps.

Just over 1 year ago they were buying iodine at big prices for the chem div. Through 2013 they produced enough to supply the chem div with all it's needs.
Today we see they have surplus and have begun to sell raw iodine.

The cost efficiencies will nowhere near be fully embedded yet. Numis gave guidance of $21 per kg costs, which is half of some of the main market suppliers.

By virtue of economies of scale, fixed costs like chemicals, should come down as IOF move forward.

Over 2014, they should have a far guide of actual opex for io2 to 6.

They seem to separate the divisions, and the hem div has kept things going nicely which includes 'all in' costs.

The £21 per kg, seems to relate purely to production costs, and is an all in forecast for that sector.

Sirocco (Chile) pre mining suspension quoted costs of $41 per kg.

I see in the gold sector the investors look favourably upon, Highland gold, Medusa, Pan Africa, and to some extent CEY (Country issues hold it back).

They do that because all shares have been hit in the sector, but the above the have opex way below the market average. Good solid basic reasoning imo

[longsight] 29/1/2014 09:32

I suspect they don't know opex - which then makes me doubt one of the key assumptions i.e. lo cost iodine producer. All this optimisation of the kit etc etc [not explained]. Not explained previously were the reasons for the lo output. They must know the output. What is it? What will it be?

A lot of unknown variables.

Also want some comment on iodine sell price & demand. If there is oversupply now & therefore weak prices, what will be the impact of IOF's additional supply? I think to rely on SG's analysis on this point wd be a mistake. You can know about every iodine miner but the mkt is opaque [e,g. inventory] in many ways & the cost curve does not justify simplistic assumptions on mkt behaviour.

So say opex is US$30? share price US$??? - esp in say 2 years time?

[uppompeii] 29/1/2014 09:28

Bobsworth - genuine question. Why is it "derampers" give misinformation when everyone elses "information" is not far short of guesswork either? As clearly demonstrated by the current sp?

[bobsworth] 29/1/2014 09:23

Good to see Iofina making steady progress and addressing issues as they arise.

Towers installed on IOF#4 & 5 and hand over to the operator for commissioning is welcome news.

Now selling raw iodine produced by themselves will be the making of this Company.

Pleased also that the Company has listened to its shareholders with the announcement that they will start publishing quarterly production data so we can accurately assess their growth and progress. Quarterly data alone will but end to the endless derampers misinformation on Iofina's performance.

Finally with all this increased fracking in the area the sooner Iofina gets the green light to supply them with piping hot water the better. Bring it on Iofina!

[longsight] 29/1/2014 09:17

Not very helpful. I wd like the following:

1 Production qty
2 Opex
3 Selling price

Without that I am lost in terms of valuing the iodine business. The above info is the least I'd expect from say a junior miner. I don't want to do a Sherlock holmes on the Co like SG does. I just want the facts.

[dcgray21] 29/1/2014 09:16

superg1
29 Jan'14 - 08:01 - 15489 of 15501 1 0

Got it - Thanks

[roundup] 29/1/2014 08:55

N3! You're trying desperately (without success, I might add)to find something negative.

[che7win] 29/1/2014 08:50

I'm sufficiently reassured to believe that this business has all the potential that I ever believed it had.
I'm not wearing rose tinted glasses however; the company has a lot of things to sort out, it's the finer details that they need to concentrate on.

Last year was a learning curve for the company, I am happy to look ahead as I believe that changes can and will sort out the finer details.

The potential to reach the most bullish expectations we had last year is still within our grasp, however, that will need a strengthening of the team and better operational running of the plants.

IO#2 was producing in May last year:
"· Recent production running between 800-900 kilograms ("kgs") per day with an expected 20-50% uplift once fully optimised, giving an annualised production rate in excess of 300 metric tonnes ("MT") per annum as previously forecasted;"

That was on 15,000 Bpd.

We now have 30,000 Bpd supply to IO#2 and it's consistent. I am now satisfied that the company needs to get better at optimisation of plant operations to account for the difference in recent figures.
It's not only the scheduled maintenance of the towers, there are daily maintenance tasks that have to be carried out. That is the finer details which will be key to improvement in iodine production.

All is not lost here, the potential is huge, I just hope now that a takeover doesn't materialise for another 24 months.

My investment here is not based on hope.

I have also read the recent Numis report with interest. There are misunderstandings on comparing our business to other iodine producers in the US and how our technology works.

Makes this business very valuable in my eyes, because our operations are unique therefore lowest cost, but that's for another day.

[superg1] 29/1/2014 08:43

Scrut caution re you know what, rumblings it will get targeted on a spike.

[1madmarky] 29/1/2014 08:43

Very happy with the operational update. They have confirmed that they are able to sell the raw iodine. That is key for me. Even if they have to undercut on price a little to get the sale. Does not matter, they are producing and selling, so just a case of sitting back and watching as they slowly take market share. Quarterly updates.... finally! GLA

[superg1] 29/1/2014 08:34

Research

Yes it seems pointless to most, but it is a huge advantage when making decisions to buy and sell, especially if market reaction reads the news wrong, it provides opportunity.

E.G. Apols if anyone is in MOS, they just put out their results, and the price has been hit hard, but in theory many should have known it was coming as the vast majority of their revenue is via the Argentina peso. Had investors kept an eye on that................................

On that point, iodine prices. I note recently SQM talked about not saying much as they were negotiating supply contracts, others will have been doing the same. Obviously the big contracts have the lowest per unit cost. Industrial minerals comments on that recently. This negotiations have taken place when the Chilean Peso is weak against the dollar, they pay costs in pesos and receive payment in dollars.

So as long as the Chile peso stays weak, the strategy will be fine, but if it strengthens at any point, it will start to squeeze their margins. The current iodine price is suggested to be the floor, due to high Chile opex. Fun times head for them.

[naphar] 29/1/2014 08:29

Oldnotbold

This is NOT a trading statement, this IS an operational update.
I for one am very glad to read this operational update. THE COMPANY have told us all is going according to their plan in terms of production outputs and initiating crude iodine sales.

It might be missing some hard numbers in terms of outputs, but they have been promised in forthcoming quarterly production updates. That is a huge step forward, and maybe a plus point regarding the move from Investec to Numis.

Edit: sorry Dig, I go delayed posting that and see you beat me to it.