Iofina Share Discussion Threads

[richi_rich13] 03/5/2014 12:53

This is a very different company compared with 2 weeks ago.

The BOD were clearly way out of their depth and as I wrote on here at the time (17691) was a very very long way back to regaining the trust of the city. They were setting themselves ever decreasing targets and consistently missing them. To the extent I believe they were either blatent lies or just unbelievably incompetent. The RNS were becoming increasingly desperate, and even if they managed to turn the company around would never have regained the credibility required. Lance realized this. The fact the terrible RNS on 23/4 was signed by Lantz and the Final results 25/4 was signed by Lance said, this was the end of the shambles and now things change.

But what will change? For me one thing and the most important thing..Transparency. We had no idea how the company was doing either operationally or strategically. Production figures were hidden, build times were consistently changing, future plans systematically cut, brine issues hidden all given with awful excuses. I don't mind setback, as long as they have the ability and nouse to deal with them and communicate them. And this is what will change, I believe we will know what is going on in the company, and why lance is so significant.

Regarding the technology, I believe that it is proven. At the moment it is proven as a good technology able to produce significant iodine at relatively cheap costs. It is YET to be proven as an outstanding technology able to produce loads of iodine consistently and cheaply. BUT, don't take your eye off the long game, in a year it was never going to be able to prove that, it had neither the capacity or management to. It still may not have in a years time, that's just how the chemicals industry is, it is not a short term game. The only plant you can judge is IO2, IO1 was a prototype and the others have yet to have supply to be judged. But the signs are the technology has the ability to be outstanding and at this price I don't believe it represents any of the outstanding potential.

[bobsworth] 03/5/2014 11:48

SG thanks for keeping us upto date on the Chilean front.

Makes our recent set backs, which can be overcome, look very short term and insignificant.

[orslega] 03/5/2014 10:57

rikivilla - understand the frustration - my take is that the technology is proven - IO1 & 1O2 are real evidence, in particular IO2. IO2 suffered with same brine supply issues last year but now has more brine than it can handle. Deployment of mobiles in that area will be advantageous. We are told that once the Chesa brine supply situation changes, Iofina will be well placed for decent production from IO3-IO5. Three, possibly four full sized plants producing will quickly transform the current situation.

The Chile research is very relevant imo; when Iofina come on line with larger production there is reasonable prospect of higher prices for iodine. It seems to be pointing that way which can only be good for the business model. Payback of capex even quicker.

Iodine is still a rare commodity, few players with prices subject to volatity as the attached link below demonstrates. As we know, other players also have much higher opex and clearly are affected by other factors which will not impact Iofina (US regulate heavily in all respects). Can only leave Iofina very well placed imo

"Iodine prices were largely stable around US$32/kg throughout 2010 and the beginning of 2011. In March of that year, prices went from US$33/kg to US$97.5/kg on the spot market because of the Japanese earthquake and later some seasonal production drop off in South America. A further factor was Cosayach of Chile idling a significant proportion of its capacity because of lack of water following the closure of illegal wells"

hxxp://www.roskill.com/reports/industrial-minerals/iodine

Without stating the obvious, it does seem that there have been some fundamental managerial problems which have added to the frustration. CEO resigning in such a short term speaks volumes. Personally am very pleased to see Lance Baller back in the driving seat. If he says they'll do 400MT FY 2014, have every confidence he'll do that and good deal more.

Latest broker note suggests monthly production updates will be the norm - much more LB style. So Tuesday for April figures....

[dcgray21] 03/5/2014 10:24

Riki - I think 171mT from a couple of the older design units may suggest otherwise but time will tell

[rikivilla] 03/5/2014 09:50

All this research on Chile,Japan etc is great but let's get this very straight - it is totally irrelevant in terms of where IOF is at the moment. What matters to current and potential investors at present is whether the tech can operate on a commercial basis and no matter what spin you put on it this has NOT been proven yet. After so many broken promises on what basis would you invest unless it is set in stone as to what this technology can actually do - at present not a lot.

[superg1] 03/5/2014 07:51

What SQM said in their recently released annual report on the employee topic

The Chilean labor code (Código del Trabajo or ―Labor Code‖) has recently established new procedures for labor matters which include oral trials conducted by specialized judges. The majority of these oral trials have found in favor of the employee. These new procedures could increase the probability of adverse judgments in labor lawsuits which could have a material adverse effect on our business, financial condition and results of operations.

As of December 31, 2013, we had concluded advanced negotiations with four labor unions, which represent 8.5% of our total unionized workers, signing new agreements with each for the next three years. We are in the process of negotiating collective labor contracts with the 21 remaining unions. We are exposed to labor strikes that could impact our production levels. If a strike occurs and continues for a sustained period of time, we could be faced with increased costs and even disruption in our product flow that could have a
material adverse effect on our business, financial condition and results of operations.


With the apparent announcement of an indefinite strike by a number of unions for the entire affected area. I suggest it well worth keeping an eye on things to see if this problem, that has been brewing for some time, is materially going to affect Chilean iodine production. In relation to the Chile iodine production industry, the strike area seems to be the iodine production hotspot.

[superg1] 03/5/2014 07:45

The circumstances pre general strike a report from Mid April that covers the issue and SQM treatment of workers gets a mention.



The Chief of Staff to the Governor of Tarapacá Mitchel Cartes Tamayo, threatened union leaders discounting workdays officials not to attend work, regardless of whether these were also affected by the earthquake. This was reported to the Minister of Labour by Javiera Blanco Suarez Regional CUT leaders of Tarapaca. The next day was officially reported that the penalty would not apply.

This is far from being isolated in the Tarapacá Region, as reported Grimaldos Mauro Valenzuela President of the regional CUT Tarapaca in conjunction with trade unions, the Labour Minister Javiera Blanco Suarez, and reflects the precarious workers are in Punjab after the earthquake.

They claim that in the area of ​​health workers have to endure pressure from both local authority and hospital, said pressure lies in the obligation to work on because the infrastructure both hospital and primary health unsafe conditions are heavily damaged, which were established in report on structural damage that specifically affect hospital Iquique situation the same hospital authority has tried to hide with patches of kraft paper and cold glue.

Also in the education sector have received reports of subsidized schools whose supporters have pressured teachers to be present on the premises without the authorization to operate as they could not rely on the assessment of damage to the infrastructure of the property.

For FTZ workers reveal dramatic realities, such as workers who provide shippers in the walled sheds ZOFRI, these workers provide services to date for which they must have a card that identifies them as such by the administering ZOFRI SA, these workers are denied the right to health, years of service, unemployment insurance, etc..

On trade sector also existed many complaints, some of them pointed to some shops and supermarkets chose to open its doors to the public without security conditions and minimum hygiene for staff, within the best known is Market Leader opened its doors without drinking water for staff.

In the mining sector, companies like SQM complaint, the day of the earthquake did not generate the conditions for its workers being moved from site to their homes, and also the day after the fact forced to raise workers to meet their shifts , even moving his staff not entitled to the transfer of workers, also practice by Minera Cosayach roads.

All this was reported to the White Minister during his recent visit to Iquique, noting that all reported cases have in common the lack of judgment, but deepening that this lack is allowed in the case of decrees disaster areas due to that this legislation leaves everything to the discretion of the employer and also empowers, not paying wages, hours extend, terminate the employment relationship citing art. 159 fortuitous event or force majeure, leaving the incomplete defenseless workers. It is for this situation to change and asking for an end to poverty picture in which today are all workers of Tarapaca.

[superg1] 03/5/2014 07:22

'GENERAL STRIKE DEMANDING SOLUTIONS SHAKES IQUIQUE AFTER THE EARTHQUAKE'

'as organizations before individualized declare that no reply by the highest authority of our country, we will initiate an indefinite strike.'



The Earthquake has caused problems it would appear a general strike has started in the iodine production area of Iquique

A recent SQM report mentioned labour law changes and how that may impact them.


The area affected by the quake is called Iquique, the region is called Tarapaca.

A recent report link showed how poorly employees were being treated by SQM. In that report it talked of the poor housing, damaged hospital and so on.

If this is a decent sized general strike then a number of iodine producers are in the area and having noted prior reports it would seem the likes of SQM, Cosayach and others will be affected. It doesn't seem to be a short term problem that popped up, it's been building for some time, with the earthquake damage triggering action.

The report seems to cover a number of serious issues, well worth a read as it would appear they want the region declared as a disaster area, with many demands. The actual link covers a list of many unions and organisations

Any sustained disruption to this region involving strikes, could potentially cause a shortage of iodine near term. The report is recently out so well worth keeping an eye on what is going on.

From the recent release


Iquique, Asfunshi Hospital Association officials Iquique, Residents and Families, All Along the Regional Confederation of Workers Tarapacá You are directed by the following;


As you know several days ago our area was hit hard by two earthquakes which generated great damage to our region, region and 29 days of this fact is still delayed due to the lack of effectiveness of the Regional Authority, have witnessed insecurity and abandonment in which they are affected in the region, with this we mean weak solution in housing, as is today April 30, 2014 still have fellow workers and their families living in tents under unsanitary conditions and unsafe.


We must also be clear that this precariousness revealed after the earthquake, had been brewing long before April 1, due to poor construction of housing and the lack of a social property policy enough for the entire population; the existence of a single hospital to care for patients of Iquique and Alto hospice, added to the lack of specialists, supplies and infrastructure for public health; insecurity and lack of investment in the public sector of the port; precariousness and orphans where the Chargers are ZOFRI workers, drivers of public transportation, about labor rules, we emphatically denounce the loss giving rise to workers decree disaster area as this decree mostly deepens helplessness against the rules.


Ultimately this disaster has only served to expose the level of insecurity in the Chilean life because of dereliction of duty by the state and the government of the day, who have transferred their responsibilities to the private sector, leaving the basic needs of population are governed by the laws of the market.


That is why all the organizations individualized and request the following:


Covered in art. 32 n ° 20 of the constitution require presidential republic, use of the power that this gives you is done, Given that the Tarapaca region has been declared a disaster area, we place the authority to use 2 % of the national budget.


Clarification that is the plan for development and reconstruction of the state. As well each of the same government benefits and requirements for access to, to ultimately clarify who are rightful owners thereof.


1 -. Financing families that accommodate victims,
2 -. Rental subsidy,
3 -. Emergency housing for those who opt for the two.


-To be assigned by the government authorities the necessary subsidies to cover the housing needs of our neighbors members of the Committees of the Region generated to solve the neighbors with quality tenants and have requirements to access government housing subsidies.
-Installation of Psychological care center to address the various problems of post earthquake trauma victims, funded by the Regional Government.
In education, the University debt forgiveness.
-Regarding Social housing debtors in payment or default, the immediate and complete cancellation of housing debt.
Tax-Exemption from VAT for nationalization and community organizations with legal personality merchants and productive initiatives.
In housing-housing solution and require immediate reconstruction in each sector in need, this solution should be comprehensive and that we have not only affected those who are homeowners, but also renters, relatives. We demand that the solution is not only for those who have homes Serviu.
-While emergency housing delivery is done we demand provide decent facilities where they can locate the affected families.
-We demand emergency housing; request that sectors where emergency housing is fixed (not temporary) and damaged homes near the land is located.
-Require tenants and associates give housing, a fixed spot, that have electrical, sewer and private baths.
-That soil surveys are conducted in order to not happen home construction on saline land which due to dampness generated tunnels under the houses handed over to families again, also demand an investigation to determine criminal and civil responsibilities who allowed the construction on unsuitable land for housing.
-Take into account increases the cadastre homes.
-Give priority in the use of labor for the construction of the commune people do this to combat unemployment.
-We demand reliable cadastral survey for the entire social community in the region of Tarapaca.
-Request doctors visit the camps and generate hospital.
-Invoking the law of disaster and declare to the people of the Region of Tarapaca as victims to avoid discrimination between affected and are owners, landlords and relatives, bonuses or benefits for the entire region to equalize.
-Free and quality require food assistance to families that determine the land that are at risk.


Delegate, this document reflects the call for help making Tarapacá Region High Authority to our country, we must also show our anger at the incompetence demonstrated by the regional authority, which has been noted for its inaction and arrogance against problems of the region. As likewise require you to do part in the search for solution to the above people and their representatives.


Faced with the above require the highest authority a statement regarding this request, for which we believe and by virtue of the time elapsed and no further response within 72 hours from receipt of this document, as organizations before individualized declare that no reply by the highest authority of our country, we will initiate an indefinite strike.

[monkeymagic3] 02/5/2014 22:14

Bogg1e- that would explain why Carol Vorderman was sat in a car on my drive crying. I had assumed she was frustrated because she couldn't work the sat nav.

[cyberbub] 02/5/2014 21:47

I think you would need more than IOF's annual iodine output for disinfectant in that situation then....

[bogg1e] 02/5/2014 21:19

Especially as hes dead.

[superg1] 02/5/2014 16:56

Uncle Sam's iodine is much cheaper to produce (-:.

Of course I meant SQM, they report doing some recycling.

[escapetohome] 02/5/2014 15:35

Further very very very nice action on NCCL today. Could things be picking up after some years of extreme underperformance and cruxifiction of this share by Mr Market?

I am told by a contact that someone has used Direct Market Access to try to hover up shares.

Due to the lack of response I will not be revealing my next tip as I can only guess many followers of the spotty kid have me on filter.

But be careful shares can fall too , far too far way way way below what is ( reasonable.

That said I personally will be hanging on to my NCCL shares, and only invested what I could afford to lose, so a measured investment from me here.

As escape alyays says ' protect your capital'

[ansana] 02/5/2014 15:12

SG u been reading Lord of the Rings again. Samwise?

[superg1] 02/5/2014 14:51

Not asked recently over recycling. I know way back they said margins are tight there IE higher costs. That speaks volumes re SQM production costs as they have now included recycling.

Non iodine products. Control of Sea Lamprey I believe and yes 2013 the contract had a gap, it's on an old rns somewhere. Non iodine can mean iodine used in the process but not present in the end product.

[crosseyed] 02/5/2014 13:33

naphar,

Many thanks. All these details help to build up the picture for a quite recent investor :)

c

[naphar] 02/5/2014 12:25

Cross

I believe the non iodine contract had a break in it for 2013. They don't buy every year. It's back on for 2014 I understand.

Recycling is not a regular monthly thing but said to average 5m a month. Could have gone up. Some months they do none.

On last year's iodine, let's not forget they inherited some when they bought the IO2 site. Cannot remember how much. But it should have helped.

[crosseyed] 02/5/2014 11:40

Does anyone know definitively that IO Chemicals continue to re-cycle iodine? And is the estimate of 5 mT/month still valid?

I take it that the production of 171 mT during 2013 was entirely from the IOsorb plants plus probably a further 60 mT of re-cycled iodine available for the production of derivatives. That's still well below the derivatives production capacity of 360 mT which I assume to be made up with bought-in iodine, or maybe they produced below capacity

Another production problem: the Annual Report for 2012 broke down iodine products ($16.393 million) and non-iodine products ($2.251 million). There was no such break-down in the 2013 Annual Report, just the total revenues of $18,931 million. Does that mean there were no non-iodine products in the year, or that IOF have chosen not to provide that break-down?

Thanks,
c

[superg1] 02/5/2014 08:43

So many times people think it's sour grapes, but it seems blatantly obvious to me, and folk in far better places were highly suspicious of it.

Just a fact of financial world life, and we have to get on with it, it's the same on every share, and the very basics of business. You have to look after your best customers, otherwise you don't have a business.

[rhwillcol] 02/5/2014 08:37

Level 2 very strong: lots of AT trades. I agree totally with superg1 and what happened yesterday - saw it myself. Yours disgustedly, etc.

[che7win] 02/5/2014 08:33

naphar,
it doesn't rule it out either.
My point is, the other plants between them are largely discounted, I reckon they will work around the brine issues so that plants 3-6 will be producing *some* brine, it makes the target of 400 MT achievable and actually on the low side.

It's a kitchen sink job in other words, taking in the most pessimistic scenario.

superg,
agreed have to say, I have more faith in GMP's original note and their update.

If we were to fund water and do it alone, it would be worth up to 50p a share at 50 cents; a JV, giving away half the business leaves it worth half that.

[bocker01] 02/5/2014 08:26

SG, unless I've misread something, GMPs note was put together the day prior to the loan note. GMP figured that at 400 tons this year, IOF needed no further funding. Their note stressed conservative assumptions even before USD5m became available the next day for expansion. Also GMP based their DCF calc on 7 times 2015 earnings (no USDD5m of new plants) with substantial growth thereafter due to relative cost advantages vs Chile etc. GMP streessed that SQM are on 15 x earnings with no future growth possible - with the clear inference that ths differential may not be justified on the "growth (IOF)/ no growth (SQM)" scenarios.