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(Sharecast News) - Iodine and specialty chemicals manufacturer Iofina said in an update on Tuesday that it produced 103.8 metric tonnes of crystalline iodine from its five operating 'IOsorb' plants in Oklahoma in the first quarter.
The AIM-traded firm said that production was in line with its internal budgeted projections for the period, adding that it was on track to achieve its first half projection of between 225 and 240 metric tonnes of crystalline iodine.
It said recently, two plants experienced lower-than-expected water supplies due to saltwater disposal maintenance work undertaken by one of the company's partners, which would help to provide more reliable water flow in the longer term.
The board said that maintenance work was now complete.
It added that encouragingly, it had witnessed increased levels of oil and gas workover activity in its core areas from partners, with reinvestment happening in fields due to higher oil prices and stabilised markets.
Iodine prices continued to rise on the back of the ongoing strong global demand for iodine and iodine derivatives, especially in Asia.
Currently, iodine spot prices stood at $60 per kilogram and above, with the firm projecting prices to remain "robust" throughout 2022.
Iofina also reported that it was close to finalising an agreement for the construction of 'IO9' with a new brine supply partner.
Beyond the impact of Covid-19, negotiations were further prolonged due to personnel changes on the partner's side.
In order to minimise supply chain impacts, the effects of inflation and contractor availability, a number of major items had now been ordered, contractors secured, and plans put in place to execute IO 9.
The company said the construction timelines should be similar to its performance on IO7 and IO8.
Iofina said it was also evaluating further sites and partners for future iodine plants.
Elsewhere, the firm said its chemicals division's iodine derivatives were in high demand, adding that it was currently working to improve efficiencies and increase capacities for certain iodine and non-iodine products.
Additionally, Iofina Chemical was expecting to complete a laboratory upgrade in the second quarter to improve its research and development capabilities.
Finally, the group said it was working with its current lending partner on terms to extend its revolving line of credit and other items to expedite growth opportunities.
"The market continues to move in our favour with the ongoing strong demand for our products and iodine prices rising to $60 per kilogram and above - a trend we expect to continue over the course of the year," said president and chief executive officer Tom Becker.
"We are encouraged to see that our oil and gas partners are now reinvesting in their assets in order to increase production on the back of the higher oil and gas prices."
Dr Becker said the company was also pleased that "good progress" was being made on the IO9 location and construction.
"We expect the final agreements to be executed very soon and we will confirm this to the market as soon as it is completed."
At 0941 BST, shares in Iofina were up 5.03% at 20.35p.
