May 28, 2012

 

Iofina raises US$6.7 million for scaling up iodine production

In order to scale up production going forward, as the company incurred losses in its record sales in 2011, Iofina, announced Monday (May 28), that it has raised GBP4.3 million (US$6.7 million) in new funding through a share placing.

 

Through the placing it is issuing 11.5 million shares priced at GBP0.375 (US$0.58) each - a slight premium to Sunday's (May 27) closing price. The new capital allows Iofina to continue rolling out its WET IOsorb iodine extraction technology without delay as part of its effort to scale up production.

 

"With the uncertainty in the global markets, the directors believe it is prudent for the company to be fully funded in order to maximise its business plan," the company said.

 

"Without the placing, Iofina would have to slow down the roll out of its plant in the second half of 2012. 

 

"The net proceeds will be used to meet Iofina's funding requirements in relation to the current rollout of the third and fourth plants, iodine leases and to provide the working capital needed for the anticipated increase in sales from iodine production."

Iofina explains that the roll out of further plants can be funded from future cash flows. The placing was arranged by Investec and Iofina's major shareholder Stena Investment is buying the bulk of the new shares. It is buying 10.2 million shares, taking its stake in the company to around 16%.

 

Also today the company released its final results statement for 2011, a year in which it has been laying the foundations for the scaling up of its iodine production business. Following record sales, revenues increased to GBP10 million (15.6 million) from GBP8.8 million (US$13.7 million) in the prior year and it halved losses to GBP1.6 million (US$2.5 million) from GBP3.3 million (US$5.1 million).

 

The company says that iodine prices are still near all-time highs and it expects the global iodine market to remain robust for the foreseeable future. Last year's operations were focused on maximising iodine recovery from its existing recycling locations but Iofina says that substantial growth is achievable in the current year as newer recovery technologies are now in place. And it has secured a pipeline of sites and brine streams for its upcoming rollout programme through 2012 and 2013.

 

"The board has confidence in the period ahead for Iofina as its iodine production business has matured to afford a wide area scalable build out," said chief executive Lance Baller.

 

"With the pipeline of large production sites for 2012 and 2013 we have the ability, capital, iodine derivatives distribution and reputation among our clients for an excellent year. 

 

"I am encouraged about the group's recent success in the iodine recycling business which completed the full circle of iodine production, iodine chemical derivatives products and reuse of iodine waste streams." 

 

Baller added, "While iodine and iodine derivatives are the Group's core focus going forward, the board believes a lucrative outcome in the form of revenue from our water resource or potential deep rights will materialise."