27th Mar 2014 12:35
LONDON (Alliance News) - Iodine producer Iofina PLC saw its shares fall Thursday after it said it had completed its latest extraction plant, but will delay building any new facilities until it has undertaken a review that will aim to improve construction methods and reduce build costs.
In a statement, the company said it has now completed the fifth of its extraction plants based on its wellhead extraction IoSorb technology and the sixth is expected to be completed in the second quarter of this year.
However, the sixth plant will be the last to be built until the company has conducted a review.
"This review, scheduled for completion in the autumn, will include considerations for improvements to construction methodology, reduction in total cost, improvement in time to complete, and optimal plant sizing," the company said.
"Construction of further full size plants will be delayed until this review is complete which will reduce short term capital expenditures and improve cash flows," it added.
Iofina is awaiting final regulatory and approval before starting production at the fourth and fifth of its IoSorb technology extraction plants. The inspection took place March 14 and approval is expected shortly, it said.
It added that the fifth plant has also been tied in to the well operator and production staff are in the process of hydro testing before the plant accepts brine water, and testing the in-line automation systems.
The company is planning to order the first two mobile wellhead extraction IoSorb technology extraction plants in 2014, subject to some minor design alterations. It is hoping to deploy them operationally in the fourth quarter.
"The group has some very high parts per million but low brine volume sites where the units can be economically deployed. The group is highly encouraged by the potential returns of the mobile units and envisages further mobile unit installations in 2015," it said.
Iofina said it will give an update on the first quarter when it releases its 2013 results in the week starting April 21.
Iofina shares were down 14.3% at 54.00 pence Thursday, one of the biggest declines on AIM.
By Steve McGrath; [email protected]; @stevemcgrath1
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