Iofina PLC (AIM:IOF, OTC:IOFNF) news that the starting gun has been fired on its next growth phase, with new brine supply agreements for its latest iodine plant expansion concluded, paving the way for construction to begin should "be well received" according to analysts at finnCap.
The 'house' broker's analysts said: "This will be Iofina’s sixth operating iodine plant; with an anticipated construction time of just six months and an expected capacity of 100-150 MT, it will rapidly and materially boost Iofina’s iodine production and deliver a fast payback on investment."
They noted that the plant will be located in Western Oklahoma, a region of growing brine supply that management intends to develop into a new core area.
"It will further diversify Iofina’s iodine production business, which continues to operate well – Q3 output of 143 MT from its five current plants was in line with expectations, keeping it on track for the H2 production guidance of 255-275 MT," the analysts added.
Given that the delays to the IO#9 plant have weighed on the shares, the finnCap analysts repeated their 33.00p target price for Iofina, with the stock trading at 22.00p approaching the market close on Friday, up 3.5% on Thursday's closing price.