IOF

Making iodine gives the junior market gas producer an extra speciality that could prove valuable

by Tom Sieber

A new addition to the junior market, energy industry specialist Iofina is somewhat esoteric. Mainly a producer of natural gas, the company is also involved in producing iodine. The chemical is used in cattle feed, paint, cosmetics, pharmaceuticals and the production of medical equipment such as X-ray machines.

At present the global market is dominated by Japan and Chile. The former accounts for 29% of production world-wide and the latter 60%. A limited supply coupled with growing demand has seen prices double since 2003.

In the US, which only accounts for 5% of global production, three producers of crude iodine, all operating in Oklahoma, supply about 28% of domestic demand, with the remainder having to be imported.

Iofina, which is the only independent iodine producer in the US, explores for and produces its natural gas and Iodine on the Atlantis prospect in Montana. The company believes that, by having dual revenue streams from iodine and natural gas, Atlantis will become highly profitable.

Finance director Lance Baller acknowledges the company will be on the radar for larger companies. He says: ‘It’s most likely we will be bought out in the next 18 to 24 months and we will be looking to maximise shareholder value in

that time.’

Shares says: The business is cashflow-positive and its model is compelling.