Web Site : http://www.iofina.com/

11th April 2008 Note on IOF : Link to web folder click here

Iofina is the holding company of a group of companies involved in the exploration and production of iodine and natural gas which have been discovered on acreages which the Group acquired, or is currently acquiring, in the state of Montana, USA. The Company has named its discovery the Atlantis Prospect. The natural gas co-exists with formation water containing relatively high levels of dissolved iodide. Iodine is a rare element, which the US currently imports to meet growing domestic demand from pharmaceutical and industrial manufacturers. The leases held by the Group give it the right to explore, drill and produce both iodine and natural gas. The Directors believe that the dual revenue streams of iodine and gas, together with the relatively low cost extraction process, will create an attractive business model with substantial strategic value.

Iofina was incorporated on 15 March 2005 in the UK and registered in England and Wales. In January 2006 the Group acquired the entire issued share capital of Iofina Inc. and its wholly owned subsidiary Iofina Natural Gas Inc., each of which is a Colorado corporation, with the objective of becoming a low cost producer of iodine and natural gas. Iofina Chemical Inc., a Colorado corporation, was created as the specialty chemical division of Iofina Inc. in May 2006. The Groups Atlantis Prospect is located between two of the most significant biogenic gas fields in North America, which have so far produced a total of 6.5 Tcf, valued at over US$50 billion at current prices. Since its incorporation the Group has steadily acquired over 30,000 net acre land position in northern Montana, on which a major aquifer containing natural gas has been discovered in the Eagle and Virgelle formations, sedimentary formations of Cretaceous age lying at depths of 1,000 to 1,500 ft below the surface. This unconventional, shallow natural gas resource can only be produced in conjunction with large volumes of formation water, and consequently the industry has previously struggled to commercialise gas discoveries in the area. The formation water is an unusual sodium chloride brine with high concentrations of iodide but relatively low levels of dissolved salts (approximately 6,500 mg/L), and has no contaminants or hydrocarbons other than methane, thereby reducing processing costs. Iofina intends to produce gas along with water, but to also extract the high levels of iodine which the formation water contains.

In addition to its acreage position, the Group currently owns four pilot wells, an iodine processing facility building and the Iofina Express #1 pipeline which ultimately connects into the TransCanada Pipeline, a major transcontinental gas pipeline serving markets in the north-eastern United States.

Future looking good for this one.

http://www.thisismoney.co.uk/money/markets/article-2137335/SMALL-CAPS-FOCUS-New-site-acquisition-mappable-events-Iofina.html

http://www.proactiveinvestors.co.uk/companies/news/43318/iofina-raises-43-mln-to-support-scaling-up-of-iodine-production-43318.html

Been ticking up gently for a few weeks and now threatening to breakout. Great potential. I'm in this one for the long term, but dyor etc.

Starting to motor again following today's news.

Some big news brewing here, broke through the 46p resistance yesterday and full steam ahead again today.

Heading towards the 60s now - still time to get on board before 17th September re. RNS out this morning.

Investec raised target price from 64p tp 70p following the RNS this morning.

http://www.lse.co.uk/FinanceNews.asp?ArticleCode=w4r3plf2f0j3rsw&ArticleHeadline=RESEARCH_ALERTInvestec_raises_Iofina_target_price

Shares in short supply now - next stop 70p imo,dyor etc.

Up another 5p this morning. Presentations tomorrow - and then this could get really interesting. Investec's target of 70p beginning to look very modest.

Healthy retrace this morning, small tree shake, but not many sellers around - despite the best efforts of a shorter nutter on another bulletin board. Ended the day a very small plus after a steady stream of buys from around 10.30am. Which suggests that existing holders are not going to sell and some, like myself, are going to top-up on any small dips. A lot of mileage in this. Ride the winners, dump the losers, as they say in the share business.

http://www.advfn.com/newspaper/azeez-mustapha/10713/iofina-plc-buy

Having another go at breaking through 70p again.

Investec's target of 70p didn't take long to reach and predictions of this reaching 90p by the end of the year are now looking distinctly feasible. Long term hold imo.

Article just released from proactiveinvestor.co.uk


The 278% rise in the Iofina (LON:IOF) share price over the last year suggests the market has well and truly caught onto the company’s potential.

But if chief executive Lance Baller and his team can deliver on some fairly ambitious targets, then the current valuation starts to look a little conservative.

Iofina would probably reside among the specialty chemicals companies, though what it actually does is unique.

Using its trademarked IOsorb system it extracts iodine from the waste brine created by oil and gas companies in North America.

The plan is to roll out a number of plants across the major fields including Texas, California and Oklahoma.

Its first of these plants, IO#1, in Texas, is capable of processing 30,000 barrels of brine a day, and got underway in August. However, the maximum the site operator can produce is 20,000 barrels per day.

It will be the first of six opened between now and the end of next year, and is the bench-test that shows IOsorb works and can be done on a commercial scale.

The second, IO#2 in Oklahoma, a retrofit of an existing facility, is capable of handling 30,000 barrels.

It will provide the market with definitive evidence that this latter day feat of alchemy is not only economically viable, but significantly cash generative.

The plan thereafter is to build a new plant per quarter. And with tie-ups with some of the significant shale oil and gas producers (companies such as Chesapeake, Devon and Mid-States, broker Investec reveals), this is eminently achievable.

Iofina is well financed following May’s £4.3 million share placing at 37.5 pence, which was taken up by just two cornerstone investors, Legal & General and Stena.

“We were originally hoping to use debt on certain things,” reveals CEO Baller.

“But debt is difficult to do unless the whole business is making money.”

The oil industry provides a good yardstick as to just how potentially cash generative these plants are.

A traditional oil well drilled by any of the trio mentioned earlier will reach payback in around four years.

By contrast IO#1 will do that in half the time, while IO#2 will achieve this crucial landmark “in a matter of months”, says the Iofina CEO.

“Any time in oil and gas business you have less than a 24 month payback you are onto good thing,” he adds.

According to Investec, the first two plants will produce around 230 metric tonnes of iodine a year, while Baller thinks the figure may be closer to 300 metric tonnes.

Either way it will barely make a dent on the world supply of the chemical, which is used in the pharmaceuticals, electronics and contrast media.

Even at the lower figure, the pair are capable of generating just shy of US$1 million a month at US$50 per kilogram of iodine, the City broker estimates.

The current spot price is $70 plus and the fundamentals for the market look good.

“The Chileans are reluctant to bring on new supplies due to water challenges, energy constraints, and the high amount of capex required,” says Baller.

“When you are teetering on the verge of a recession miners are a little more cautious about committing. Pricing looks like it is going to be robust.”

Investec reckons the company will generate revenues of £18.4 million and pre-tax profits of £4.1 million in 2013, with sales rising to almost £26 million in 2014, giving profits of more than £10 million.

Currently a total of 32,000 metric tons of iodine are produced each year, with the market predicted to grow at a rate of 6-10% annually.

This means that up to 3,200 metric tonnes of iodine will be needed just to meet demand. And this isn’t happening.

New production is costly to bring on stream, and the market leaders, Sociedad Quimica y Minera (SQM) of Chile, and the three Japanese groups, Sumito, Mitsubishi and Toyota, are probably happy to see the price drift higher.

Although Iofina’s output will initially be very modest by world standards, it has the ability to ramp up very quickly and far more cheaply than its rivals.

Where it might cost one of the existing miners between US$70 and US$120 million in capex to bring an extra 1,000 metric tonnes of iodine into the market, the outlay for Iofina to make the same leap might be closer to US$20 million, CEO Baller reckons.

The costs of producing iodine using the IOsorb technology are very competitive at between “mid-teens” dollars per kilo and “mid-30s”, depending on where it is being produced.

And as the number of plants ramps up so the costs are expected to fall to some of the best in the industry.

Baller and his team have some very ambitious plans to become a world leader in iodine.

At that level it will have overtaken SQM’s production, which would be a major achievement.

And remember the Chilean group, which is quoted on the NYSE, has a market capitalisation in excess of US$15 billion based mainly around this market leading position in iodine.

Whether Iofina would be allowed to get to this level as an independent company remains to be seen.

“What has always been evident is that any successful company that has been independent outside Chile and Japan has been acquired,” says Baller.

The current share price of 69.75 pence is just short of the Investec target of 70 pence a share.

However in the note initiating coverage of the group, the brokerage provided an “upside target” more than double that initial figure.

“We set our base case generic model conservatively for iodine price and content, particularly,” says analyst Stuart Joyner.

“Therefore the potential upside in the share price to better operating performance is considerable – hence the importance of successful commissioning of the first plants to the performance of the shares.”

Investec target price of 70p always looked way out, double it and it begins to look more realistic - and that's in the short term imo.

http://www.thisismoney.co.uk/money/markets/article-2217977/SMALL-CAPS-FOCUS-High-hopes-Iofina-share-price-rose-300-year.html?ito=feeds-newsxml

Fascinating article on the importance of iodine for anyone who is interested. The article originated in America - where more than one third of the population is obese.

http://www.hotspringsnutritionandnaturalhealingcenter.com/obesity_and_other_ill-effects_from_iodine_deficiencies.html

Share price has just had a short period of consolidation and now looks set to have a go at the next resistance level = 74p - then it's onwards to 83p imo.

doodlebug, this is a solid company and the SP is likely to hit your 83p target soon. Good write up in adv*n

Nearly at that target now, question is how high it will go from here.

doodlebug, good call - £1 before year end?