April Iodine Production Update

RNS Number : 2635G

Iofina PLC

06 May 2014

 

6 May 2014

Iofina plc

("Iofina" or the "Company")

(LSE AIM: IOF)

April Iodine Production Update 

Iofina, specialists in the exploration and production of iodine and iodine specialty chemical derivatives, is pleased to announce a production report for the month of April (or "the period").  The Company produced 21.8 metric tons (mt) of crystallised iodine in the period.  This production rate is in line with our recently revised production target.  Plants IO#1, IO#2 and IO#3 were profitable for the period.  IO#4 is anticipated to be profitable for May, after running continuously for a month. 

IO#1 Production Plant

Due to necessary and minor upgrades, IO#1 was temporarily closed during the period. We are pleased to report that, as a result of the upgrades, production at IO#1 has increased by over 25 per cent.  This addition was afforded by the successful completion of increased trucked water by the Operator.  The plant is now running at record capacity.  The IO#1 plant had a promising exit-rate for the month that is anticipated throughout May. 

IO#2 Production Plant

IO#2 was shut down for a total of 13 days in the period. The Company completed yearly plant maintenance during seven days in April.  The remaining six days were due to failure of the injection pump, owned by the Producer at their injection site.  Going forward, the Company will plan for maintenance only when the site is shut down by the Operator, to enable the utmost run-time.  While in operation during the period production at IO#2 was robust and in line with Company's expectations.

IO#3 Production Plant

The Board is pleased to report that IO#3 had seen a record monthly production rate, despite its limited brine due to the producer's recently announced fracking schedule.  IO#3's plant performance and run-time, excluding lower brine flows, is encouraging.

IO#4 Production Plant

IO#4 was commissioned during the period following receipt of regulatory approval. IO#4 initially experienced start-up issues but, once dialed in, the plant operated as expected.  The Company anticipates improvements to allow greater volumes of brine to IO#4 which currently is maximized at 20,000 barrels per day. 

IO#5 Production Plant

IO#5 was commissioned during the period following receipt of regulatory approval.  IO#5 was unusual and had no start-up issues.  The Company was able to prove that the plant operations at IO#5 ran smoothly by the production of iodine and then temporarily shut-in the site.  The mobile power generation unit was removed and returned to the local rental firm saving the Company nearly $100,000 per month including rental and fuel costs.  Hard power is expected in the next 60 days.  Once wired into the power grid, the Company will restart production at IO#5.

IO#6 Production Plant

IO#6 construction continues to move forward as planned.  The Company recently decided to only use Company construction employees for the completion of IO#6, resulting in significant cost savings.  The commissioning time line is expected to be unchanged and, as reported, IO#6 is expected to be operational by the end of Q2.

The Company has focused to reduce supply chain operating expenditure through all business lines.  These savings will be noticed in April and realized throughout the month of May.  The supply chain management improvements will reduce monthly operating expenditure for the Company, resulting in lower production cash cost. The Company's production cost remains favorable amongst iodine producers.

The Board continues to have strong communications with the producer and is outlining solutions with respect to brine water volume restrictions at IO#3, IO#4, IO#5 and IO#6 which are a function of increased fracking operations by the producer. 

Commenting on today's announcement, Lance Baller, Non-executive Chairman and Co-founder stated: "While the Company is in the early stages of bottom-line optimisation, we are beginning to see promising results.  For the sake of transparency, the Board will report regularly on iodine production rates, whilst keeping mindful of competitive advantage.

Following recent Board changes, the Board and I continue to look at ways to improve performance, communications and to protect and grow shareholder value."

For further information, please contact:

Jeff Ploen, Interim CEO and President

Iofina

Tel: [phone]

John Prior/Rupert Krefting/Huw Jeremy

Numis Securities

Tel: [phone]

Rob Collins/Emily Morris/Liz Williamson

GMP Securities

Tel: [phone]

Media Contact:

Dominic Barretto/Anna Legge

Yellow Jersey PR

Tel: [phone]

About Iofina:

Iofina specializes in the exploration and production of iodine, iodine specialty chemical derivatives and produced water. Iofina's business strategy is to identify, develop, build, own and operate iodine extraction plants currently focused in North America based on Iofina's WET® IOsorb™ technology. Iofina has production operations in the United States, specifically in Texas, Montana, Kentucky and Oklahoma. It has complete vertical integration from the production of iodine in the field to the manufacture of the chemical end-products derived from iodine to the consumer and the recycling of iodine using iodinated side-streams from waste chemical processes in Europe, North America and Asia.  Iofina utilises its portfolio of patented and patent pending technology, proprietary methods and trademarks throughout all business lines.

www.iofina.com

 

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