Iofina Share Discussion Threads

[naphar] 03/4/2014 15:34

oops now I'm doing it

[naphar] 03/4/2014 15:34

MB - think you need to learn how to use a calculator!

[crosseyed] 03/4/2014 15:33

sheeza,

Regarding your post 18312:

I'm amazed at the recent price rise. Am I wrong?
Perhaps!

- my worries are:
- in December IOF reported that plants 1 and 2 had completed 'extensive planned maintenance', and that IOF4 and 5 towers would be built one of titanium, and one of fibreglass, suggesting a possible corrosion problem

I believe it was reported that IOF changed to fibreglass tanks because (a) they are cheaper, and (b) they are locally sourced in the US.
However, because of the big demand for fibre-glass containers resulting from the huge upsurge in shale oil/gas, they also continued to order titanium vessels from the Ukraine expecting quicker, though more expensive, deliveries. That turned out not to be the case; delays in their delivery were at least partly responsible for the delays in commissioning of the IOsorb plants. That is not to deny that IOF were also over-optimistic in their construction estimates.

- plants 1-6 all appear to be constructed close to one another. In March, IOF reported that production is as anticipated only when the volume of available brine is up to plan. If there are problems with 3 plants, I wonder about 6. (Production from fracking sites is heavily concentrated early - they soon move on)

Are they actually that close together?
IO#1 is in Texas with truck delivery of cold brine
IO#2 is in Oklahoma with contracts through Midstates Petroleum using hot brine delivered by pipeline (far more efficient both in delivery and extraction properties).
IO#3 is also in Oklahoma though in an entirely different location whose contracted supplier is, I believe, Chesapeake.
I don't know the exact whereabouts of suppliers of IO#4 and 5, though they are both located in Oklahoma in the same vicinity.
IO#6 is reported as being close to IO#2 with the same supplier. It is known that the pipeline to IO#2 has a much greater capacity than one plant can cope with (~50,000 barrels/day).
The website photos of the various sites do not indicate immediate proximity to other sites.

Whilst individual fraccing sites are quite short-term, they are also growing in numbers at an increasing rate. Individual wells will be producing for decades. I believe that they continue to produce brine throughout their life which must otherwise be disposed of (normally through salt-water-disposal wells). There is much more synergy now with IOF's uptake of that water which may also be used for further fraccing. I am quite sure that IOF have their rationale right in this respect. After all, their original plan was to drill shallow gas wells in order to obtain copious brine supplies for their core iodine business - very low gas prices put paid to the economics of that idea.

I feel confident that IOF will sort out the brine distribution problem. After all, with their royalties from the process on an otherwise costly wate product, the operators have an incentive to make it work.

- I think I'm right that IOF originally considered 9 sites for this year., They are stopping at the six which were actually in the pipeline. I guess they have concluded that big expensive plants on fixed sites are a mistake, hence the 'review'. If the technology and design of mobile plants was robust, they would have switched directly to mobile since that's where the raw material is.
- the change of direction could mean write off and costly development of robust mobiles. Revenues from the fixed towers should fill the gap til the Autumn...

An alternative viewpoint is that IOF have paused to review both the technology, and the logistics of the developments to date, along with the economics and planning of further plants. There is no evidence that big procesing plants are a mistake. They state clearly: "The Board believes there is overwhelming evidence that the Group's WET(R) IOSorb(TM) technology patented process has proven itself to a high level."

...but at the end of the review, I expect a strong case for a major switch to mobiles, a large cash call, and a hammering of the SP

That is speculative with little support from what is known or stated.

c

[king_roster_iii] 03/4/2014 15:29

Only 52 weeks in a year

[mister big] 03/4/2014 15:28

7mt a week is 2,555 a year which can't be right way to high!

[che7win] 03/4/2014 15:24

Sheeza,
completely wrong.

Corrosion of titanium, have you thought that one through?
Fibreglass means suppliers available from US to build towers, also means bigger plants possible.

Extensive maintenance - no, better maintenance of towers and cleaning, standard O&G procedures.

No problems with the plants, extreme cold weather more of a problem last quarter but moving to a much better quarter.
Coldest winter in 20 years.

They are now operating at over 7MT a week.

Mobile model is in addition, another angle.

The model works, I've talked it through with the company, but they can do much better on operations.

No write off, I think you're pulling my leg.

[festario] 03/4/2014 15:12

Good afternoon Mr B.Bears are becoming an endangered species in these parts, however please feel free to make them extinct!

[alphacharlie] 03/4/2014 15:10

engelo correct me if I'm wrong but titanium was sourced in the Ukraine because it was only there that could handle the necessary sizes. Smaller mobile units will presumably be less problematic re size and possibly could be manufactured in the USA or at least closer to home.

[engelo] 03/4/2014 15:08

Sheeza: brunette is alias for Modesty Blaise, so watch out.

[bogg1e] 03/4/2014 15:07

A vodka filled glass ak47.....hmmm....i want one, but not as much as i want one of those 3 foot tall dwarf tyrannosaurus Rex's that have been spotted in Texas over the past year :-)

[engelo] 03/4/2014 15:04

serratia re fibreglass and sourced from US :-) Rather US than Ukraine atm :-)

[ansana] 03/4/2014 15:03

Sheeza all sounds plausible, but there is just one problem while you guess we know. Go on guess some more, not bovered in the slightest. The brunette.

[cyberbub] 03/4/2014 15:02

I can sell 50K in one go at only slightly below bid price... not in Mr Big's league to be fair, but a fair bit by my standard... seems the shares are still in demand??NAI

[mister big] 03/4/2014 15:00

strangely - i had a glass ak47 full of polish vodka, when i last used it, i woke up feeling like i been shot in the head.....i will stick to financial weapons of mass destruction as buffett famously said!

[phoenixs] 03/4/2014 14:49

mister big,absoulutely. RM, I wouldn't want to waste the bullets!

[1madmarky] 03/4/2014 14:47

Sheeza - you need to read the thread some more. The plants are doing fine but mobiles might do even better.

[serratia] 03/4/2014 14:46

Titanium is chosen due to its resistance to corrosion. A paper on various titanium alloys using 200,000 ppm brine concluded -

The results indicate excellent
corrosion resistance for 10 titanium
alloys. Titanium Grade 9 and Alloy
625 also showed fairly good
corrosion resistance near 0.5 mpy in
the deaerated hot brine solution
under pressure. Eight of the alloys
tested displayed a thickened oxide
layer (WG) which would benefit self
healing in slurry type process

A change to fibreglass would reduce manufacturing costs.

[roger melly] 03/4/2014 14:41

mister big
allow me to fetch your AK47

[orslega] 03/4/2014 14:40

good - more buying then please!lol

[croc8] 03/4/2014 14:40

I will drink to that Mister Big.

[mister big] 03/4/2014 14:38

I'm in bear killing mood!!

[bobsworth] 03/4/2014 14:35

crosseyed

It's ironic really that the "under the radar" policy has resulted in a weakened shareprice and leaving Iofina more vulnerable to a takeover.

Lack of regular data updates + clarification of cash position allowed the share price to:
1. Get well ahead of itself pumped by overstated output assumptions.
2. To crash on a bear raid as no upto date data on output and cash position to offset the raid.
Iofina let us all believe that the output data was much better than it was.
A slower consistent rise, backed with accurate data, would have been much better and avoiding the ups and downs that we have now had.
Fingers crossed the promised quarterly data will now result in a steady share price rise and keep the bears at bay.

[sheeza] 03/4/2014 14:33

I'm amazed at the recent price rise. Am I wrong? - my worries are:
- in December IOF reported that plants 1 and 2 had completed 'extensive planned maintenance', and that IOF4 and 5 towers would be built one of titanium, and one of fibreglass, suggesting a possible corrosion problem
- plants 1-6 all appear to be constructed close to one another. In March, IOF reported that production is as anticipated only when the volume of available brine is up to plan. If there are problems with 3 plants, I wonder about 6. (Production from fracking sites is heavily concentrated early - they soon move on)
- I think I'm right that IOF originally considered 9 sites for this year., They are stopping at the six which were actually in the pipeline. I guess they have concluded that big expensive plants on fixed sites are a mistake, hence the 'review'. If the technology and design of mobile plants was robust, they would have switched directly to mobile since that's where the raw material is.
- the change of direction could mean write off and costly development of robust mobiles. Revenues from the fixed towers should fill the gap til the Autumn, but at the end of the review, I expect a strong case for a major switch to mobiles, a large cash call, and a hammering of the share price