Iofina Regulatory News (IOF)

9 May 2008 07:00

Iofina PLC09 May 2008 Iofina plc ("Iofina" or "the Company") Placing and Admission to AIM Iofina today announces the admission ("Admission") of its ordinary shares totrading on the London Stock Exchange's AIM Market ("AIM") under the ticker: IOF.The Company has raised over £15.1 million in a placing of ordinary shares of 1pence ("Ordinary Shares") at a placing price of 55 pence per ordinary share("Placing Price"). The market capitalisation of the Company at the Placing Priceis approximately £51.6 million. Highlights - Iofina is involved in the exploration and production of both iodineand natural gas which have been discovered on acreages which the Group hasacquired, and is currently acquiring, which the Company has named the AtlantisProspect. The Atlantis Prospect is located in the state of Montana, USA. - The presence of both iodine and natural gas allows the Group togenerate dual revenue streams over a single cost structure. The dual revenueapproach has worked successfully in the Mobara field in Japan which has beenproducing iodine and natural gas for over the past 50 years - Iodine is a rare element which has resulted in the US and WesternEurope becoming major net importers to meet growing demands from pharmaceuticaland industrial manufacturers. - The Company plans to market its iodine to the largest commercialcustomers in the US and Europe including the pharmaceutical industry and thedairy industry. Uses include pharmaceutical manufacturing, LCD screenmanufacturing, medical X-ray contrast media, human and animal consumption,pesticides and biocides. - The Group's proprietary Wellhead Extraction Technology(TM) (WET(TM))method will allow low cost production metrics and high operational efficienciescompared to other large gas/iodine fields in Mobara, Japan and Oklahoma, USA. - The Directors believe that Iofina's low cost development strategy andits dual revenue streams are expected to provide both excellent margins andreduced revenue volatility since the two product streams relate to separateunrelated market conditions. The Group intends to become a leading global iodine producer and the largestsingle producer of iodine in North America within five years. Placing StatisticsNumber of Existing Ordinary Shares 66,361,569Placing Price 55pNumber of Placing Shares 27,454,545Number of Ordinary Shares in issue on Admission 93,816,114Percentage of Enlarged Issued Share Capital represented by the Placing Shares 29.26 per cent.Percentage of Enlarged Issued Share Capital held by the Directors on Admission 29.25 per cent.Gross proceeds of the Placing £15.1 millionEstimated proceeds of Placing receivable by Company (net of expenses) £13.7 millionMarket capitalisation of the Company on Admission at the Placing Price £51.60 million The net proceeds of the Placing will be applied towards providing the Group withadditional funding, principally for drilling, production and extractionoperations. The remainder of the funds will be applied towards acquiringadditional leases, seeking additional prospects and further working capital tosupport the growth and development of the business. Strand Partners Limited is nominated adviser to the Company and MirabaudSecurities Limited is broker. The admission document can be found at theCompany's website: www.iofina.com Commenting, David Schneider, PhD., CEO of the Group, said: "We are delighted that our new investors, who include a number of leadinginternational institutional investors, have recognised this unique opportunity.We believe we will have a very strong position in a market where the dynamicsare working strongly in Iofina's favour because of our utilisation of costeffective methods and chemical expertise." Enquiries:Lance Baller Nominated Adviser:Iofina plc James Harris/Angela PeaceTel: +44(0)20 7751 4401 Strand Partners Limited Tel: +44(0)20 7409 3494 Broker: Media Contact:Rory Scott Chelsea HayesMirabaud Securities Limited Pelham Public RelationsTel: +44(0)20 7321 3360 Tel: +44 (0)20 7743 6675 www.iofina.com Key Highlights Iofina has acquired over 30,000 acres in the Atlantis Prospect with leasingrights for the production of both gas and iodine. The Atlantis Prospect is anunconventional natural gas resource located between two of the most significantbiogenic gas fields in North America which so far have produced 6.5Tcf valued atover US$67.8 billion at current prices. The water bearing nature of thestructure has historically made the Atlantis Prospect difficult to commercialisefor traditional E&P companies. Iofina expects to turn the cost of handling thiswater into a significant revenue stream by capitalising on the dual revenue ofnatural gas and iodine, thereby, "converting cost into cash flow(TM)" The gas/water deposits are shallow and can flow naturally under artesianpressure which substantially lowers drilling and artificial lift costs.. MHA Petroluem Consultants, Inc., the Competent Person, estimates that as of 1February 2008 and, based on Iofina's core c.28,000 acres, Iofina has 100.6million kg of iodine in place, making the Atlantis Prospect the largest knowniodine resource in North America. Iodine is a rare element that is only produced in a few countries in the worldwith over 89 per cent. coming from Chile (60 per cent.) and Japan (29 percent.). Supply is relatively restricted due to its scarcity and the fact thatJapan and the United States' ability to operate at full capacity is now limitedby the lack of iodine-rich brine streams and their position relative to existingproduction facilities. As a result production from the current major sourceswill continue to decline. Meanwhile demand is growing at 6.6 per cent. per annumdriven by a combination of increased usage in a wide variety of sectors frompharmaceuticals, manufacturing (LCD screens), medical imaging, cosmetics,biocides in paints and pesticides as well as the emergence of new uses foriodine and greater consumption from developing countries such as India andChina. The US accounts for just five per cent. of global iodine production, from onesite in Oklahoma. Given the strong demand from domestic end-users, the USimports approximately 72 per cent. of its annual requirements. Based on thecurrent acreage and planned drill strategy, Iofina could become the largestproducer of iodine in the US within five years and the only independentproducer, with the other three producers in the US owned by Japanese producers. The US domestic market for natural gas is strong and growing. The AtlantisProspect is well located to supply the US markets and the local infrastructureis highly developed given the extensive gas production in the surroundingMedicine Hat and Tiger Ridge fields. Iofina owns a four mile pipeline ultimatelylinking to the TransCanada pipeline. MHA estimates that, based on Iofina's corec.28,000 acres, the Group has 155.6Bcf of natural gas in place. The extraction strategy is based around an efficient cluster approach with anumber of local wells feeding the gas/brine stream into a central singlecollection/processing point. The commercially ready gas is separated from thebrine and sent straight to the pipeline. The brine is then run through the WET(TM) method where the iodine is collected directly onto the resin column and the water is reinjected. A similar process has been used for over 50 years inJapan's Southern Kanto gas and iodine field. All of the assumptions relating to the Group's resources are based only on thec.28,000 acres leased by the Group as at 1 February 2008. The Group hasidentified and is acquiring portions of the remaining 270,000 acres in theAtlantis Prospect which the Directors believe have similarly favourablesaturations of iodine and natural gas. The Directors believe that there areother iodine/gas formations around the world that Iofina's know how andleadership could be profitably applied to either solely or via joint ventures. The management and non-executive Directors of Iofina have strong track recordsin both oil and natural gas discovery/production, as well as iodine processingand sales. Dr. David Schneider, the Company's CEO, has profitably producediodine derivatives over the last 20 years. The iodine derivatives market isestimated to be worth $2.5-3 billion per annum, offering substantial profitmargins to participants. The management and non-executive Directors of Iofina have strong track recordsin both oil and natural gas discovery/production, as well as iodine processingand sales. David Schneider, the Company's Chief Executive Officer, hasprofitably produced iodine derivatives for over the last 20 years. The iodinederivatives market is estimated to be worth $2.5-3 billion per annum, offeringsubstantial profit margins to participants. The Board also includes Jeffrey Ploen, Non Executive Chairman, who was formerChief Executive Officer of Tamaron Corp, Paradigm Holdings Inc and Tonga CapitalCorp and Christopher Fay CBE, who is currently non-executive Chairman of ExproInternational Group plc and was Chairman and Chief Executive of Shell U.K.Limited. The other Board member is Lance Baller, the Finance Director, who is the formermanaging partner of Shortline Equity Partners, Inc., and who has also served oninvestment, audit and finance committees and on the board of directors ofcompanies in Asia and the United States. This information is provided by RNS The company news service from the London Stock Exchange