Iofina PLC (LON:IOF)

Iofina PLC (LON:IOF)


Share Price
19.58 p
Change
1.975 (11.22 %)
Market Cap
£37.56 m
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Iofina PLC

Iofina plc is the holding company of a group of companies involved in the exploration and production of iodine and natural gas which has been discovered on acreages that the Group has acquired and is currently acquiring.Iofina is fully vertically integrated into specialty chemical manufacturing through its wholly owned subsidiary Iofina Chemical.

EPIC: IOF
Market: LSE:IOF
52-week High/Low: 33.18p / 9.88p
Sector: Energy
Market Cap: £37.56 m
Website: www.iofina.com
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Big Picture – A Deep Dive Examination of Iofina PLC


Iofina PLC Snapshot

Iofina plc is the holding company of a group of companies involved in the exploration and production of iodine, produced water and natural gas with complete vertical integration into the specialty chemical iodine derivatives business. Iofina also provides third party brine stream operators with a turnkey mid stream fee based solution to extract iodine. The Group has production operations in the United States in the states of Texas, Montana, Oklahoma and Kentucky.

The presence of both iodine and natural gas has been discovered on acreages (Atlantis Field) which the Company holds through its wholly owned subsidiary Iofina Resources, Inc. The presence of iodine, co-produced water and natural gas allows the Group to generate three revenue streams over a single cost structure. A dual revenue approach has worked successfully in the Mobara field in Japan, which has been produced iodine and natural gas for over 50 years.

Iodine is a rare element that is only produced in a few countries in the world, with over 92 per cent. coming from Chile (58 per cent.) and Japan (21 per cent.). This has resulted in the US and Western Europe becoming major net importers to meet growing demands from pharmaceutical and industrial manufacturers. Iodine demand is growing at over 6 per cent. per annum driven by a combination of increased usage in a wide variety of sectors from pharmaceutical manufacturing, LCD screen manufacturing, medical imaging, cosmetics, biocides in paints and pesticides, as well as the emergence of new uses for iodine and greater consumption from developing countries such as India and China.

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MID STREAM

Iofina’s Wellhead Extraction Technology® (WET®) can quickly and efficiently be deployed to any location and adapt to variations in brine water streams. As a result, Iofina is able to deploy WET® units to producers’ sites throughout North America, presenting a mid-stream option to third party producers and a new revenue source from their waste brine streams. Co-produced brine water from oil and gas production is the largest waste stream in North America. Thus turning in a cost to a cash flow.

The WET® approach employs two different iodine extraction methods, depending on brine chemistry and temperature for optimal efficiency. This flexibility removes some of the operational issues experienced previously by adapting to the specific characteristics of each operator’s brine streams.

The first technology for cold brine streams is a chemical-based method using an anion exchange resin as an absorption media, to which the iodine anions are attracted. It can also be based on a “physical system” that separates out iodine molecules in a physical trap using carbon. This method, which may require pre-filtration, has lower iodine yield efficiency.

The second method is called the WET® IOsorb® method; it is used on larger higher temperature brine streams which may include oil and other impurities.

Iofina larger WET® IOsorb® plants are capable of handling up to 30,000 barrels per day (bpd). The plants are built to ensure full redundancy, meaning production can be switched across to backup twin components to maintain 24/7 operation for lower down times and high iodine yield efficiency. Custom designed plants or multiple WET® IOsorb® plants can be used together in the event that a site produces more than a single unit can handle. The WET® units are crucial to Iofina’s ability to extract third party brine streams from oil, gas and salt water disposal (SWD) producers in a rapid and highly cost effective manner that had not previously been available in the iodine industry.

Iofina compact mobile WET® units are capable of production rates of up to 6,000 bbpd per unit. The mobile WET® units are mounted in a standard trailer or skid mounted that can be rapidly deployed to locations using an articulated truck. Iofina has technology including a patent and patent applications relating to its technology for capturing iodine from iodine-rich brine from wells and converting it into a range of iodine molecules.

Our WET® IOsorb® plants are capable of producing between 50mt to over 450mt of iodine per annum each, depending on flow and iodine concentrations at these target locations. Locations with abnormally high concentrations will produce even more iodine than stated above.

Iofina uses its proprietary patented and patent pending technology on its own production and offers it to third party producers on a contract basis. This allows the operator to have additional income on a waste brine stream. We are oil field proven and are on many of the sites of the largest E&P companies in North America. If you are interested in Iofina as iodine operator on your existing brine stream please e-mail [email protected] or call Forest Dorn in Business Development at +1 303-222-1215.

WELLHEAD EXTRACTION TECHNOLOGY®

Iofina’s Wellhead Extraction Technology® (WET®) can quickly and efficiently be deployed to any location and adapt to variations in brine water streams. As a result, Iofina is able to deploy WET® units to producers’ sites throughout North America, presenting a mid-stream option to third party producers and a new revenue source from their waste brine streams. Co-produced brine water from oil and gas production is the largest waste stream in North America. Thus turning in a cost to a cash flow.

The WET® approach employs two different iodine extraction methods, depending on brine chemistry and temperature for optimal efficiency. This flexibility removes some of the operational issues experienced previously by adapting to the specific characteristics of each operator’s brine streams.

The first technology for cold brine streams is a chemical-based method using an anion exchange resin as an absorption media, to which the iodine anions are attracted. It can also be based on a “physical system” that separates out iodine molecules in a physical trap using carbon. This method, which may require pre-filtration, has lower iodine yield efficiency.

The second method is called the WET® IOsorb® method; it is used on larger higher temperature brine streams which may include oil and other impurities.

Iofina larger WET® IOsorb® plants are capable of handling up to 30,000 barrels per day (bpd). The plants are built to ensure full redundancy, meaning production can be switched across to backup twin components to maintain 24/7 operation for lower down times and high iodine yield efficiency. Custom designed plants or multiple WET® IOsorb® plants can be used together in the event that a site produces more than a single unit can handle. The WET® units are crucial to Iofina’s ability to extract third party brine streams from oil, gas and salt water disposal (SWD) producers in a rapid and highly cost effective manner that had not previously been available in the iodine industry.

Iofina compact mobile WET® units are capable of production rates of up to 6,000 bbpd per unit. The mobile WET® units are mounted in a standard trailer or skid mounted that can be rapidly deployed to locations using an articulated truck. Iofina has technology including a patent and patent applications relating to its technology for capturing iodine from iodine-rich brine from wells and converting it into a range of iodine molecules.

Our WET® IOsorb® plants are capable of producing between 50mt to over 450mt of iodine per annum each, depending on flow and iodine concentrations at these target locations. Locations with abnormally high concentrations will produce even more iodine than stated above.

Iofina uses its proprietary patented and patent pending technology on its own production and offers it to third party producers on a contract basis. This allows the operator to have additional income on a waste brine stream. We are oil field proven and are on many of the sites of the largest E&P companies in North America. If you are interested in Iofina as iodine operator on your existing brine stream please e-mail [email protected] or call Forest Dorn in Business Development at +1 303-222-1215.

IODINE

Iofina iodine is marketed under the brand names IOflo® and IOprill® based on the form desired.

Iodine is a shiny, blue-black, solid element, which derives its name from the Greek word ‘iodes’ which means ‘violet’ in reference to its colour. It has an atomic number of 53 and forms one of the halogen group of elements, of which it is the least reactive.

Iodine is essential to many forms of life, including human, and is found in thyroid hormones. A lack of iodine in the human body results in a condition known as ‘goitre’ in which the thyroid gland in the neck becomes enlarged. In order to assure an adequate amount of iodine in the diet, table salt is routinely iodized. Iodine is also used as the core commodity in a wide variety of products and in many cases there is no substitute

Iodine is primarily obtained as a by-product with nitrate minerals that are associated with caliche deposits in places such as the Atacama Desert of Chile. It is present in seawater, which contains about 0.05 ppm iodine, meaning that there are approximately 35 million metric tons of iodine in the world’s oceans, but extraction is impractical at these low concentrations. Iodine was first isolated from seaweed, and dried seaweeds, (particularly those of the Liminaria family) contain as much as 0.45 per cent. iodine. Prior to 1959, seaweed was a major source of iodine and it remains a significant source for iodine in the diets of many people around the world.

Iodine is also retrieved from underground brines (formation waters containing many dissolved salts and ions) which are associated with natural gas and oil deposits as in Japan and the USA. However, production from caliche, as in Chile, is currently the most important and lowest cost source of the element.

Iodine is currently produced in nine countries, with output concentrated in Chile, Japan and the USA. Chilean companies currently control about half of the world’s nominal capacity and account for around 58 per cent. of global production while Japan produces 21 per cent. of the current global supply of iodine. In the USA, which only accounts for 5 per cent of global production, three producers of crude iodine, all Japanese owned operating in Oklahoma, supply about 28 per cent. of domestic demand, with the remainder having to be imported. The supply for iodine has been and continues to be extremely limited. Worldwide Estimated Consumption of Iodine by Region and Country

Uses

Due to its high reactivity, iodine forms numerous compounds which have a wide variety of medical and industrial uses. Iodine is also considered to be an essential element to human growth, with a recommended daily allowance of 150µg. It also has an excellent ability to absorb X-rays and as such is frequently used as a substitute in the production of various diagnostic contrast-media.

Some of the pharmaceuticals and crop protecting agents have iodine as the substituent. Iodine, being a simple substance and having an anti-biotic function by nature, is used as a raw material for the production of various bactericides or disinfectants. Iodine compounds are added to table salt and feed to treat and prevent “iodine deficiency symptom”. Iodine also has a wide range of other uses, for example, in photo-sensitisers, catalysts, stabilisers and polarising films on the liquid crystal display. The iodine derivatives market is $5-6.5 billion per year annum with substantial profit margins.

Prices

Iodine is a rare element with a large and diverse range of commercial uses. The current world market is approximately 32,100 metric tons per year, showing a growth rate of 6 per cent. per year between 2000 and 2011 driven by strong growth in existing markets, increased demand from developing countries and the continual development of new uses. Strong growth combined with a tightly controlled supply from just a few countries has resulted in a long term bullish uptrend for iodine prices which have increased over 500 per cent since 2002.

Iodine Substitutes and Alternative Sources

For many of iodine’s uses, there is no comparable substitute. For example, other substances cannot replace its applications in pharmaceuticals, and human and animal nutrition. There are some chemical applications for iodine that can be accomplished using other chemicals. For example, bromine and chlorine can be used in place of iodine for ink and colorant purposes, and for disinfectant purposes.

SCIENCE OF IODINE

Iodine is included in the element list of the lesser 1/3 in abundance and is therefore classified as a rare element. It is classified as a non metallic element – showing that it has little of the characteristics of metallic elements. Its appearance however is metallic, dark bluish black in color. It is a solid, not a liquid or gas like the halogens above it in the periodic table. It is however volatile and therefore when heated it sublimes to a purple vapor. It is included in the seventh column of the periodic table, fourth in this halogen column. It has a characteristic odor and a sharp acrid taste. Like the other halogen elements it is diatomic, meaning that in its atomic state there are two atoms bound together to give one entity referred to as I2. Elemental Iodine can easily be reduced chemically or electrochemically to iodide ion by the addition of an electron, and can easily be oxidized chemically or electrochemically, yes by removal of from 1 to 7 electrons. It is quite interesting that both the addition of one electron and the removal of from 1 to 7 electrons eliminate the color of elemental Iodine. This interesting fact is extremely useful and used extensively for a number of analytical procedures for Iodine analysis. It is also interesting to note that Iodine is slightly soluble in water; however the addition of iodide ion increases the solubility in water substantially. Iodine’s atomic diameter is quite large and heavy. Its size and weight and physicochemical parameters significantly affect its chemistry when compared to other halogens and make it a most unique and interesting state of elemental matter to work with and include in the development of useful value added products.

In addition to the inorganic chemistry of elemental Iodine there is another class of quite different and interesting chemistry involving bound or organic Iodine chemistry. Iodine combines with other elements such as, carbon to produce what is referred to as organo Iodine compounds or organic iodides. There are two very interesting and different kinds of publications describing these chemistries; the first involves the formation of organo iodides or intermediate compounds to be used for subsequent synthesis. Organo Iodine intermediates quite often offer the simplest way to accomplish a synthesis task. The second kind of increasingly popular publications describe new Iodine derivative chemistry using new substituents and modified oxidation states for the contained Iodine compounds that allowed new synthetic pathways known as chemical functionality.

 

BOARD OF DIRECTORS

The current composition of the Board is as follows:

Lance J Baller, Non-Executive Chairman


Mr. Baller was co-founder, CEO and President (2010-2013) of Iofina Plc since prior to his departure for health reasons in June 2013. Mr. Baller returned to Iofina plc as Non-Executive Chairman April 2014. Mr. Baller is the former managing partner of The Elevation Fund and Elevation Capital Management. Mr. Baller is the former managing partner of Shortline Equity Partners, Inc., a mid-market merger and acquisitions consulting and investment company in the United States. He has actively served on the investment, audit, corporate governance, and compensation committees, while on the board of directors of companies in Asia and North America. Mr. Baller is also a former vice president of mergers and acquisitions, financing and corporate development at Integrated Biopharma, Inc. and prior to this a vice president of the investment banking firms UBS AG and Morgan Stanley. He has served as Chairman to various companies and has lead successful restructurings. Mr. Baller is on the board of trustees of Index Funds and also serves as the chairman of the audit committee and as the audit committee financial expert under the Sarbanes-Oxley Act of the United States for Index Funds. Mr Baller is Chairman of the Audit Committee and Member of the Compensation Committee.

Dr. Thomas M. Becker, CEO and President

Dr Becker has served as President/CEO of Iofina plc since September 2014 and has led Iofina Chemical since March 2010. Dr. Becker is a recognized expert in the global iodine market and has extensive production knowledge of iodine and iodine derivatives. Dr. Becker holds a PhD from the University of Cincinnati and a BS from Indiana University, both in Chemistry. Prior to Iofina/H&S Chemical, Dr. Becker worked as an Oak Ridge Scholar on behalf of the US EPA and worked for various other chemical manufacturing companies. He has extensive experience in scale-up of chemical processes from laboratory to pilot to full scale production.

Malcolm T. Lewin, CFO

Mr. Lewin is based in the UK and has over 30 years of experience in finance and accounting for both public and private companies. As well as being a partner in a chartered accounting firm for 11 years, he has acted for various companies listed on AIM and other exchanges. In particular, from 2000 to 2003 he was the Finance Director of Oxford Metrics plc, an AIM company supplying motion capture and visual geometry systems. From 2004 to 2006 he was the Finance Director of Real Estate Investors plc, an AIM property investment company with interests in quality commercial and industrial properties. From 2006 to 2011 he was a Director and CFO of Hunter Bay Mineralo Venture Exchange with interests in South America and Canada. From 2011 to 2014 he was CFO and Treasurer of VolitionRX Limited, an OTC life sciences company focused on developing blood tests for a broad range of cancer types and other conditions. Mr. Lewin has an MA in Classics from Oxford University and qualified as a chartered accountant with Coopers & Lybrand.

Dr. William D. Bellamy, Non-Executive Director

Dr. Bellamy is the former Senior Vice President of the Water Business Group at CH2M HILL, Inc. (“CH2M”), a company he had worked at for 30 years until his recent retirement. CH2M is one of the largest consulting engineering companies in the world providing leadership and strategic direction for the water business and application of technologies worldwide. Dr. Bellamy has participated in energy and sustainability forums, including as a panellist at the World Future Energy Conference in Abu Dhabi, the World Bank Sustainable Cities Symposium and the Future of Water Economic Forum. Dr. Bellamy serves as Professor of Practice at the University of Wyoming, where he teaches graduate courses and is responsible for securing grants and research funding in the areas of water resources, water treatment and sustainable energy development. Dr. Bellamy has a PhD in Civil Engineering from Colorado State University, an MSc in Civil (Environmental) Engineering from the University of Wyoming and a BSc in Electrical (Bio-Medical) Engineering from the University of Wyoming. Dr Bellamy is Chairman of the Compensation Committee and Member of the Audit Committee.

J. Frank Mermoud, Non-Executive Director

Mr. Mermoud has extensive government and private sector experience and is currently President of Orpheus International, a Washington DC based strategic advisory firm. Mr. Mermoud also serves on the Board of Cub Energy, a Houston based oil and gas company. Mr. Mermoud’s service for the US government has spanned more than three decades, where he has held positions under numerous administrations, including serving as the Secretary of State’s Special Representatives for Commercial and Business Affairs from 2002 to 2009. In this position Mr. Mermoud directed and managed the State Department’s trade and business advocacy programs in Washington DC and in more than 180 countries, and the annual deal flow equated to over US$20 billion. Mr. Mermoud is a graduate of Georgetown University’s School of Foreign Service.

Shareholder Percentage
Luna Nominees Limited (2252340 Acct) (1) 7.8%
Hargreaves Lansdown (Nominees) Limited (HLNOM Acct) 7.1%
Vidacos Nominees Limited (2701 Acct) 6.1%
TD Direct Investing Nominees Europe Limited (SMKTNOMS Acct) 5.0%
Barclayshare Nominees Limited 5.0%
Hargreaves Lansdown (Nominees) Limited (VRA Acct) 4.0%
Hargreaves Lansdown (Nominees) Limited (15942 Acct) 3.9%
Directors (2) 3.5%
Hargreaves Hale Nominees Limited (LON Acct) 3.4%

 

(1) Stena Investments is the beneficial owner of 9,900,000 ordinary shares in the Company, representing 7.8 per cent of the Company's issued share capital

(2) Mr. Lance J Baller is the beneficial owner of 4,500,000 ordinary shares in the Company, representing 3.54 per cent of the Company's issued share capital.

Iofina plc
Registered address:
48 Chancery Lane
London WC2A 1JF
(c/o Keystone Law; Attn: Simon Holden)

Iofina plc
8480 East Orchard Road, Suite 4900
Greenwood Village, Colorado 80111
+44 (0) 20 3006 3135
+1 303-222-1215
+1 303-222-1201 fax

Iofina Chemical, Inc.
1025 Mary Laidley Drive
Covington, KY 41017
+1 859-356-8000
+1 859-356-8712 fax

Iofina Resources, Inc.
8480 East Orchard Road, Suite 4900
Greenwood Village, Colorado 80111
+1 303-222-1215
+1 303-222-1201 fax

Investor relations
+44 (0) 20 3006 3135
Please email us at [email protected]

finnCap Ltd.
Broker and Nominated Adviser
60 New Broad Street
London EC2M 1JJ
Tel: +44 (0) 20 7220 0500
http://www.finncap.com

UHY Hacker Young LLP
Reporting Accountants and Auditors
Quandrant House
4 Thomas More Square
London, E1W 1YW

Yellow Jersey PR Limited
Financial PR Consultants to the Company
1st floor, 30 Stamford Street
London, SE1 9LQ
Tel: +44 (0) 7544 275 882
http://www.yellowjerseypr.com

Keystone Law
Solicitors to the Company
48 Chancery Lane
London WC2A 1JF
(c/o Keystone Law; Attn: Simon Holden)
Tel: +44 (0)20 3319 3700
Fax: +44 (0)845 458 9398
https://www.keystonelaw.co.uk/

Link Asset Services Limited
Registrars to the Company
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
Tel : 0870 162 3100
Tel (overseas): +44 (0) 20 3728 5000
Fax: +44 (0) 20 8639 2342
https://www.linkassetservices.com/

Iofina plc
Registered address:
48 Chancery Lane
London WC2A 1JF
(c/o Keystone Law; Attn: Simon Holden)

Iofina plc
8480 East Orchard Road, Suite 4900
Greenwood Village, Colorado 80111
+44 (0) 20 3006 3135
+1 303-222-1215
+1 303-222-1201 fax

Iofina Chemical, Inc.
1025 Mary Laidley Drive
Covington, KY 41017
+1 859-356-8000
+1 859-356-8712 fax

Iofina Resources, Inc.
8480 East Orchard Road, Suite 4900
Greenwood Village, Colorado 80111
+1 303-222-1215
+1 303-222-1201 fax

Investor relations
+44 (0) 20 3006 3135
Please email us at [email protected]

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