Iofina Share Discussion Threads

[bogg1e] 10/8/2014 23:34

No i just don't know what they are. The whole point of a low p/e is that it covers these additional costs (which are minor when compared to capex and opex) because any reduction in revenues caused by these additional costs will be offset by the higher p/e the actual revenue is valued at.

[naphar] 10/8/2014 22:53

I think he refuses to believe they exist!

[cyberbub] 10/8/2014 22:35

Boggle, you seem to have still not included the central admin costs in your calculation?

[bocker01] 10/8/2014 20:23

Well factor 10 on projected 2014 earnings may be ok for now, I do not really know. Sentiment can cause the market to forget P/E ratios. It usually does. Sentiment's been against us for a year or
so now but I feel a change. We've been from bottom to top to bottom again. Bottom to top on hope. Top to bottom on non-delivery. At the bottom, a company in crisis with no production to speak of, no cash and some incompetents in charge. Now the crisis has ended, we have finance, we have cash on the bank, we are producing iodine and more importantly .... Producing net cash. Founder back in command . Corner turned. Sentiment changing. Only A couple of bits of good news to confirm that the company is now walking the talk not talking the walk and the re rating will be extraordinary

[superg1] 10/8/2014 20:12

gad

The 21.6 mt at 99.5% plus is exactly the same as I am finding on that site and others. In the list it shows 99.5% or some just crude iodine. But the records of the price vary, so something isn't right.

There are 4 or 5 sites some with missing details to try and force subscription

EG one (cybex) with a total price of 48996554.4 INR on 5th August. Divide that by 21,600 kg and you get 2268 INR per kg. That site hides the amount. That price matches what Zauba record on 5th August.

Infodrive and eximguru are others.

As the 21.6 repeats as you say, I'm wondering if it is a contracted rate of some sort, as it definitely stands as the odd one out in the price of imports on the list.

Perhaps a large order that appears in the 21.6mt batches and that would explain the discount v other orders.

Cosayach via Pantheon listed themselves as covering 60% of the Chinese and India market, hence many of those imports are probably Cosayach.

'We have a leadership position in the Chinese and Indian markets with 60 % market share. Pantheon is the world's second largest Iodine distribution company. We have offices in India, Dubai-UAE, Nederland, Dallas-USA and Chile.'

[gadolinium] 10/8/2014 18:27

I posted the figures because I think it is useful to compare one single grade (99.5%) across time, which is what I attempt. If you compare all sorts of different crude grades then you really can't draw any conclusions. For me the trend appears still to be down and not withstanding Cosayach's dumping policy must still reflect in some degree world price and demand. I consider the sales history for the successive 21.6 Mt batches of 99.5 grade sales as particularly interesting as this controls for batch size as well as grade to give a better comparison. My personal aim is to get some feel for the trend in iodine prices, not necessarily an absolute sale price as such and that trend still seems to be downwards to me. You are all free to disagree.

As for the $42/kg achieved by IOF some time back, we do not know either the grade or batch size, both of which affect the price. I suspect it was probably prilled (a premium grade), since it was announced in the same month as the prilling collaboration with another company. IOC have no need for prilled, so I presume the prilling was carried out for external sale.

[superg1] 10/8/2014 17:13

There is a 21.6 mt for 15th July on my link for a rate of 2246 (37.43 per kg).

Then 21.6mt on 5th August 2268 ($37.80 per kg)

I note in that link lower prices show crude iodine not 99.5%. EG iodine from Turkmenistan.

A guide, only India, and differing figures for what look the same items.

Adding yours and mine it makes near 200mt for the month, about 7.5% of the market which I find a bit hot for India.

[superg1] 10/8/2014 16:58

On another factor re India buying.

Cosayach were forced to close 38 wells, and now the family have been hit for $70 mill.

RB/Sirocco look like they are in serious trouble. They had 800mt in their inventory and need cash yesterday, a lot of it.

Tbh I'd be flogging the stuff at whatever price I could get right now, profit v production costs is insignificant compared to their current cash needs. Iodine stock-piled will not keep the lithium side going.

Their results are this Thursday, so I'll be watching for those to see what they report.

News re funding/or not may appear before then.

[superg1] 10/8/2014 16:14

Bog

Flowback water is just that, it tends to come out over the first 2 to 3 weeks.

In the case of OK they are using produced water anyway it seems, so no dilution. Either way not an issue.

My interest was the impact on freshwater demand in ND where they are reporting excellent results using over and above previous methods.

Gad

I checked Zauba and the exchange rates this morning




Over the period shown the start shows 400 and 600kg for 2366 INR

then on the 6th Aug 6000kg for 2360 with a bit of a curve down in between and similar prices.

In theory the 400 and 600kg should have been a higher price and the 6000kg lower due to the bulk order.

at the time of shipping the exchange rate was around 60 rupees per dollar.

2350/60 = $39.33 per kg for that 6 mt. The same rate paid a month earlier for .6mt

INR is now around 61 giving $38.69 per kg at the last 6mt rate.


The lowest mid July for 10mt was 2185 ($36.41 per kg)

Something to keep an eye on going forward.

I note your 21.6 which isn't on the page and may be on a different search criteria

[monts12] 10/8/2014 15:24

I think PE 10 will be applied by market until trust is regained by evidence of consistent production increases and (above all) profitability. When this is achieved, a PE of 20-25+ will be merited and the shares will be re-rated upward imo

[bogg1e] 10/8/2014 15:22

gad, i don't think that matters, we know the lowest prices are driven by Cosayach undercutting the market whose product is inferior to IOF's. The most recent figures quoted for IOF's iodine is $42 per kilo when the market price was $38 per kilo.

[bogg1e] 10/8/2014 15:19

When i first bought in at 225p, the p/e, being based on projected forward 2013 earnings, was at the ridulous p/e of 75!!!!

If the same bubbly enthusiam were applied to the eps above, that would be £5.25 per share!!!!!!!!!!!!!!!!!!!!!!!!!!!

[gadolinium] 10/8/2014 15:18

Looking at the Zauba site for 99.5% iodine imports to India in the past month it seems import prices are still continuing to slowly decline.

Average import prices for the year to date are as follows, month ($/kg):

Jan (43.73), Feb (40.87), Mar (38.97), Apr (39.08), May (38.29), June (37.37), July (36.18).

Looking back there is an interesting bulk order for the very specific amount of 21.6 MT, delivered each month over the last year, I presume from the specificity of the amount that this is a single regular contract. It is interesting to look at this since it is probably a single customer and single supplier. This order has gradually fallen in value over the year and continues to do so.
The dates delivered and price/kg (Indian Rupees) for this order were as follows:
22.01.14 (2645), 10.02.14 (2639), 26.02.14 (2416), 17.05.14* (2213), 28.05.14 (2185), 30.06.14 (2122) and 26.07.14* (2038).

* = duplicate deliveries of 21.6 MT.

[bocker01] 10/8/2014 15:02

At factor 10 Boggle, which is not appropriate for a growth stock. Nice calcs. Thanks for sharing them!

[bogg1e] 10/8/2014 14:56

OK chaps Thanks for the feedback on the revenue calaulcation for 2014. I have amended it as follows:

2014 Revenue Estimate and Value Per Share

Iodine Production = 400 tonnes (50 tonnes sold as pure iodine and 350 tonnes sold as derivatives)
Raw Iodine Wholesale price = $42 per kg/$42,000 per ton
Operating Costs (Opex) = $22 per kg/$22,000 per ton (including land lease and brine operator royalty payments)
Net Margin per Kilo = $20 per kg/$20,000 per ton
IOC Added Net Value = $25 per kilo/$25,000 per ton
Interest on debts = $1,275,000
Tax = $0 (due to 5 years of development costs [capex] that can be offset against it)

50 (tonnes) x $20,000 (wholesale price) = $1,000,000

Then we add the net value from IOC to the remaining tonnage:

350 (tonnes) x $45,000 ($20,000 + $25,000) = $15,750,000

Then the two are added together to derive the combined net revenue (EBIT)

$1,000,000 + $15,750,000 = $16,750,000

Then we deduct interest on loans and taxation:

$16,750,000 - $1,275,000 (interest on debts) - $0 (tax) = $15,475,000 net revenue


$15,475,000 (net revenue) / 127,314,398 (shares in issue) = $0.12 (Earnings Per Share) x 10 (conservative p/e) = $1.20 per share / 1.7 (US/GBP exchange rate) = 70p per share

[bogg1e] 10/8/2014 14:01

SG, to elaborate on Fresh's question. Could slickwater fracking be used in Oklahoma, which would surely dilute the ppms? On the other hand most of the water pumped into the well would be the first to come back up; the "flowback" period, which would imply that the iodine rich brines would be fairly undiluted?? Any o&G engineers know? Tia.

[rogerbridge] 10/8/2014 13:42

That is very encouraging news. Even more grist for the mill, or our Japanese friends.

[1madmarky] 09/8/2014 22:22

OUCH is a serious understatement. that's a'lota money. Sod that for a game of soldiers.

[superg1] 09/8/2014 22:02

OUCH

RB/Sirocco

Info shared elsewhere re them..... it doesn't look good. That doesn't include the $5 mill Tewoo paid up front for lithium which has yet to be supplied, and there was me thinking they would be OK with $30 mill of iodine in the inventory.

As of May 31, 2014: TOTAL DEBTS OWED: $223 million. From now until May, 2015, RBI is under obligation to repay $97 million in debts. Some debts with interest rate as high as compound 15.0%. REPAYMENT REQUIRED: (1) Less than One Year $97 million (2) 1-3 Years $77 million and (3) 4-5 Years $49 million. Payments due on contractual obligations for the next five years are outlined in the table below. Total in $'000 $ $ $ $ $ Debt - principal repayments 74,000 16,850 57,150 - - May 2013 convertible debentures 27,496 - - 27,496 - July 2013 convertible debentures 17,519 - - 17,519 - Finance lease obligations 18,424 7,478 8,420 2,526 - Bank term loans 16,579 4,919 9,838 1,822 - Export credit facilities 27,307 26,334 973 - Purchase obligations 10,150 9,900 200 50 - Cash advance from customer 5,892 5,892 - - - Note payable 458 458 - - - Trade & other payables 25,154 25,154 - Total contractual obligations 222,979 96,985 76,581 49,413

[superg1] 09/8/2014 21:54

Fresh

The posts are about the Bakken water use, nothing to do with OK.

All the talk by some was about new techniques, water use to drop etc etc.

They did start off around 100k barrels to frack a well, but they were heading to lower and some as low as 50k.

Now they quote 250k plus.

Estimated use for 2013 was forecast at 3 bill gallons, the actual came in at 5.5 billion.

Halliburton had said they were seeing the water demand turn and expect good growth in fracking. Now it seem the Bakken lot are talking increasing success through slickwater at 250k plus barrels per well.

That's 2.5 times to 5 times the used water used in recent techniques.

So if we are about to enter a slickwater boom, I really can't begin to think how the water supply industry in ND is going to cope.

If there is to be a slickwater boom then there isn't enough water available in acquired rights, so there should be a price hike as majors take contracts etc.

Those slickwater well results are very impressive.

It's worth noting too, that Oasis talk of the positive well in the Elm Coulee field using he method. The surprise to them is it's their well furthest west and it's the best well yet.

Lets hope they get that water permit as demand looks like it's about to take off.

[freshvoice] 09/8/2014 21:00

What does the increased water use do to the iodine ppm coming out afterwards?

[superg1] 09/8/2014 19:35

Roger

I missed it first time around they are talking 250k barrels plus per frack, some are moving entirely over to slickwater.

Oasis were talking trials on a few wells not long back and are now already talking about using it on 60% of their wells.

250k barrels is considerably more than was being used over the last few years.

If they are all racing to go that route I can't see how the current water suppliers will keep up. Some wells were being some with 50k barrels now the preferred method needs 5 times that.

They were talking of a water boom before this slickwater breakthrough, now what.

That rather stuffs the size of the permit debate.

[superg1] 09/8/2014 19:23

They mentioned Oasis who are one of the biggest in the Bakken.

I just checked to see if they comment on slickwater

News release 5th August by Oasis

"Our first slickwater wells in Indian Hills have continued to produce well above our type curve. In addition, early production results from our first Three Forks slickwater well in Red Bank and a slickwater Bakken well in Montana are expanding the completion technique's applicability across more of our inventory. Both of these Oasis wells are producing 35% or more over comparable wells completed with our base completion design."

So it seems the water demand will rise a lot faster than some thought.

[rogerbridge] 09/8/2014 19:22

Very interesting article SG I like the comment "more fracking more water"