Iofina Share Discussion Threads

[the fat controller] 09/7/2014 10:09

The most impressive part for me is this....
"The Company was also profitable for the Period in terms of both EBITDA and net profit."
If it is profitable in a month when production is down by 25%, and it is carrying the ongoing costs of IO5 and 6, then we can be confident that it will be seriously profitable when the brine stream is steady, and two more plants come on stream.
Derisked entirely now, but (once again) we have to be patient.
GLA NAI, TFC

[monkeymagic3] 09/7/2014 10:06

I'm bored.

[1madmarky] 09/7/2014 10:06

Kat, agreed, I guess it depends on how often the brine supply is going to be interrupted and for how long. Would Iof be able to use that time to do their routine maintenance assuming that they knew in advance etc. We are in the very early stages of growth so storage tanks may be viable at certain locations but not others. But yes as Fresh points out, getting continuous brine supply is our achiles heal, however it is in the oil operators interest to play nice as we pay for the water to be disposed of (assuming good ppm content of course).

[superg1] 09/7/2014 09:51

As the business expands there will be no need to worry about storing brine for temporary disruptions.

Such events are only relevant short term with nervous investors looking for steady progress.

At the AGM Lance was clearly saying it's not a case of increasing production at all costs, but increasing production to an identified need.

Most costs are fixed and some plants are not yet fully optimised so the profit margin will grow at those.

Profit reported for the last few months event. The Chem div has near record revenues even the iodine price has been hit hard over the last year.

Supply agreements were discussed at the AGM, I thought there were at least 2 interested, but multiple interest is clearly a lot more than 2.

The beauty of supply agreements (as explained at the AGM) is that the supply can be done all at the start, steady through the supply period, or all at the end. So with those on board IOF wouldn't have to sit on inventory.

It's no secret that the Japanese are interested. I assume others are US based as the US imports around 6000mt per year, and they do love home grown.

Last year IOF were buyers at high prices from Chile. This year they produce their own and are selling some raw iodine.

It sounds as if we the profit game is now breaking through and should continue.

Talking of io5 and 6, one of those is rumoured to be the best of the bunch of io3 to 6. I think io5 so iof that gets a decent bpd rate things should perk up a bit.

[freshvoice] 09/7/2014 09:40

25% drop in production doesn't sound like good news to me! no matter how you spin it. Shows the vulnerability of the business. I think our previous Nomad pointed out the main risk was lack of brine on a continuous basis.

[sandbag] 09/7/2014 09:40

kat,

Right now any cash should be used for upping production rather than being spent on safeguarding against something that may or may not ever happen again.

edit:
Plus the more units you have the less it matters if one does go down for whatever reason.

[kattatogaru] 09/7/2014 09:34

1MadMarky, I think they should consider at least some storage since it appears that disruptions are more frequent than expected. 20K barrels a day is around 318K liters (3180 cu. meters), so you could easily store a week's production in the big 2M L cylindrical floating roof tanks that are standard in refineries and industral plants. It would take a long time for 2M L of brine to cool in such a tank (especially in summer), and they could be cycled through so that the storage brine is constantly topped up with warm brine from the frack sites, to minimise the need for a heating unit. It certainly seems technically feasible, whether it would be economic depends on the capex involved and frequency of brine disruption. But given that we lost about a week's worth of production, it would definitely merit costing out.

[superg1] 09/7/2014 09:31

Picking through the rns


'The exit rate of production for the month was as expected and has remained strong into July in line with guidance'

'The strong June production exit is very encouraging'

'IO#3 demonstrated a sharp increase in run-time and capacity due'

Putting those together it would seem we have a good indication of how the first part July is going.

40.5 in May so it would seem they are at that rate or above going by the io3 comment. 1.3 mt per day for May, so in theory around 12mt so far this month.

[captain_kurt] 09/7/2014 09:22

This should trend higher after todays announcement.
1) Profitable
2) July production should be the highest in the company's history
3) Anticipated longterm supply agreements on the horizon with Iodine users
4) Water hearing in July.

[garfield31] 09/7/2014 09:03

Good to see board doing what they said they would with clear and informative updates.

[1madmarky] 09/7/2014 08:42

Jamonit - very simple. The tech is temperature dependent, so you cannot store the brine. Plus the plants are doing 20-30,000 bpd, that's a lot of brine to store.

[cyberbub] 09/7/2014 08:28

Yes if they could contract say 250mt p.a. at say $45 that would be a nice little hedge that would become increasingly profitable as opex decreases... while leaving all the (hopefully) upside on the remainder...

[che7win] 09/7/2014 08:27

Mister big,
You are very fortunate, I tried to get a quote straight after, they wanted 49.25p for 15k...I was being greedy and hoping for a bit cheaper.

Well done anyway...

[superg1] 09/7/2014 08:27

Good to get that out of the way, now 2 months of steady production amounting to 70mt, so the tech is proven to work.

The strong exit rate for June suggests they are on the 40 mt per month rate.

Oklahoma storm season is in the spring so hopefully a clear run H2.

The multiple interest in supply agreements sounds very promising. So much interest yet Chile reports suggest there is an over-supply situation. But then indmin say no one is selling over $40 kg but from the AGM we know IOF and are it seems.

Can't help the storms but looking very solid going forward.

[che7win] 09/7/2014 08:26

Roger,
My gut feeling now is we are moving up from here, that chart is curving out of the downtrend and the business is producing record iodine production, the trend is up and that will be reflected in the share price.

Once the market realises that iodine prices have bottomed, as hinted in today's RNS, then it will get greedy here.

Bargain price IMHO, the market wanted to hear news before buyers coming on board.

Confidence slowly being regained.

I'm very interested that the company is talking to multiple vendors about an iodine sale agreement, has the market caught on to this yet? I don't think so...

[mister big] 09/7/2014 08:20

That was me !!

[rogerbridge] 09/7/2014 08:10

Update was steady as she goes,so no zoom up in the share price this month, unless we receive Japan news or water, both aare possible.
IO5 & IO6 coming on line this month so by August we should be purring away.
Good news on the iodine price.
No doubts that Lance will exceed end of year target.

[che7win] 09/7/2014 08:09

I just missed buying at open, someone got a bargain at 46.9p.

Can't see us staying this low for long, I think the 50s beckons.

That supply hint is very interesting orslega....

[diggulden] 09/7/2014 08:04

70MT over 2 months with an additional 33% plant capacity due online this month is pretty outstanding in terms of progress compared to this time last year.

[cyberbub] 09/7/2014 08:03

No stampede for the exits so far, by any means!GLA

[cyberbub] 09/7/2014 08:02

Good post alphacharlie