Iofina plc (LON:IOF) shares jumped 20% higher today as it said its newest iodine production plant, to be called IO#7, will be built in the core area of the company’s current Oklahoma operations and boost production signicantly.
In late afternoon trading, Iofina shares were 2p higher at 12p, with 'house' broker finnCap maintaining a 20p price target on the stock.
The new plant will be based around the existing IO#3 plant, which was hitherto Iofina’s highest cost per kilo plant. As IO#7, though, the new plant will have similar production capabilities and cost structure to Iofina’s lowest per kilo production cost plant.
Iofina is likely to draw on its Term Loan Facility to fund this project.
Construction is expected to take four to five months. Iofina projects that IO#7, once fully operational, is expected to contribute more than a 40% increase in annual iodine production, along with a significant reduction in overall per kilo cost of production.
''The Board is excited to announce the start of construction of IO#7, utilising some of IO#3's resources, so helping to reduce the overall cost of IO#7,” said chief executive Dr. Tom Becker.
“This new plant is the beginning of the next stage of management's vision of prudent expansion and continued reductions in the cost of iodine production.”
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