Iofina (LSE:IOF) — Investor Presentation

0:01 Good afternoon, ladies and gentlemen, and welcome to the IOFINA PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time via the q and a tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so, and these will be available via your investor meet company dashboard. Before we begin, if I may, I would like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. And I'd now like to hand you over to CEO, Tom Becker. Good afternoon, sir. Thank you very much, and, it's a pleasure to be able to, present, an update for IOFINA, in particular, our, an update from our 2022 results and an outlook for, where we're going as a company. And I'm here with our CFO. I'm Tom Becker. I'm the CEO. I'm here with our CFO, Malcolm Lewin, and we'll be presenting, some information with you today. I will I will say that as we we are very proud of where we've come as an organization, and we'll be looking to, continue the momentum that we have in our specialty chemical business moving forward. We understand that we probably have a mixed audience today, some of which are investors who have known the IOFINA story for a long period of time and some of which are new to the story. So we

1:32 hope that this presentation provides the proper background for for all people and enough detail for, you know, the company's vision and how things are going. So without further ado, this is the general agenda that we're gonna be doing today, a general background of the business, what we do, why we do it, and why we're unique and how we do that. We'll be touching on the iodine market because in particular, if you're familiar with IOFINA, we are manufacturers of iodine and iodine based specialty chemicals and why that, and we play in this iodine market and, why that's important. We're very proud of our 2022 results, which came out a couple of weeks ago, and we'll be going through those in a bit of details. And then I think, for us, we really wanna give that message out to, where we see IOFINA going as a company, how we continue to have plans for growth in our organization.

2:30 So to start on a business background overview, what do we do and what and how do we do it? So IOFINA is a is a specialty chemical company. We have expertise in halogen based chemistries, so chemistries around iodine, chlorine, fluorine, with a particular focus on iodine because we have two business units. One is IOFINA Resources, and one is IOFINA Chemical. And the IOFINA Resources business unit is actually a manufacturer of iodine. What we do is, in the state of Oklahoma, we've established some technology and have built five operating plants that take iodine out of produced, oil and produced water that is a that is a byproduct of the oil and gas operation. So when oil and gas hydrocarbons come up from, wells, often and pretty much all the time, brine water co is coproduced with the oil and gas.

3:32 And the oil and gas operators have to separate this brine from the hydrocarbons and is a waste product for them. What IOFINA has been able to do is, develop technology over the course of a number of years to be able to take this waste stream and and partner with these oil and gas companies and extract iodine from that waste stream. We are we've been doing this for a long period of time. These plants are located in the Western Part of Oklahoma. And in fact, all of IOFINA's operations are in The United States. And last year, we actually generated a little over 500 metric tons of crystalline iodine from these plants and look to continue to grow that. And this is a key raw material for us, iodine, which we, sell to the open market, and we also, create value added products from that iodine. And that's, leads me to our second business unit, which is IOFINA Chemical, which is based in Northern Kentucky in The United States.

4:28 What IOFINA Chemical does is it takes iodine and creates other products, products that go into various applications, which we'll get into here shortly. But it is the sales arm of IOFINA. So we take our iodine. We either create value added products or sell the iodine directly into the market to other iodine users. We also are diversified beyond our iodine capabilities, and iodine chemical also produces chlorine based and fluorine based compounds that go into various industries. And in fact, the chlorine and fluorine based compounds that we produce at IOFINA Chemical, were was about, a quarter of our sales last year. So it's significant part of our business and provides us diversification.

5:17 We're the second largest iodine producer in North America, and iodine market is a growing market. So we feel we're a we're a interesting player with growth opportunities in an ever expanding market. To give a little bit more background into the IOFINA resource side of the business and how our operations work, you can see pictures down below of our Iodine production plants. And I I I o two, four, six, seven, and eight are operating plants in the state of Oklahoma. And IO number nine, which we'll get into in a little bit, is a plant that's under construction that we hope to have online and anticipate having online before the end of the second quarter. We're a lowest cost producer. We think we're one of the most environmentally friendly producers of iodine in the world. We've established our own unique technology that takes this third party produced brine, which is, you know, fairly dirty. It contains some hydrocarbons in it that aren't fully separated in in the oil and gas separation thing, but we are able to put our technology in place and isolate iodine.

6:24 These plants, we can build in a fairly short amount of time. It generally takes us around six or seven months to build a plant with rapid payback. How does our our our plants operate? Well, first of all, we have to put them in the right areas. So we have a geological team of, at our IOFINA resource division that helps us identify where potential sites are for iodine plants. So general criteria of what makes, a good location for IOFINA is large volumes of water being produced and good amounts of concentrated iodide in the solution. When I say good amounts of concentration of iodine, we're talking still part per million kinda levels of iodide in the solution. So what our process does is it takes the iodine rich brine. We do some chemical processes to it, and we use the actual natural process properties of iodine to help remove it from the water. So, similar to dry ice, iodine likes to go to the gaseous state fairly easily.

7:31 And, our technology allows us to essentially, blow out and reconcentrate the iodine into a solution, which we can then isolate pure, crystalline iodine and be able to sell into the open market. We're excited about the future prospects of IOFINA resources, and we'll get into the steps that we're taking in order to expand our production in Oklahoma.

7:59 To take a little bit of step back of, the market that we're into. So iodine is produced globally and is about a 37,000 metric ton market. So it's a it's a niche market, but it's an ever growing market. And this and the graph that is shown on this particular slide, shows a bit of history of, world production of iodine with the red line and, iodine price with the yellow line. And as you can see from the graph, iodine production and consumption has generally grown, with GDP kind of levels over a course of time. So the iodine growth the iodine market tends to grow somewhere between two to 5% per year. So as we speak today with a 37 36 to 37,000 metric ton market, the iodine market is growing at somewhere between five hundred and fifteen hundred tons a year.

8:52 Most of the world's iodine is produced in Chile. About 60% of the world's iodine, maybe slightly higher than that, and it's produced from an ore that's in the Atacama Desert, an ore that is concentrated at hundreds of parts per millions of levels of iodates. And the manufacturers in Chile, use a process where they blow up, the top layer of the Atacama Desert where some of these ore pockets are held. They, use mining operations to to, break up this rock, put it in big, heat piles, and leach out the iodine, or, excuse me, the iodates with water in the process and then refine it to create iodine.

9:38 The rest of the world's iodine is generally made from brine, but what makes IOFINA a little bit unique is that we are actually partnering with third third part third party oil and gas operators that are already producing this,

9:50 this brine. And we feel that our production is a much more environmentally friendly way to produce iodine than, for example, our Chilean counterparts. We're not breaking up ore in the Atacama Desert. We're not using, a lot of, trucks and mining equipment in order to extract iodine, but we actually are taking essentially a waste stream, and without IOFINA being there, would be wasted. The IOFINA would never be, isolated from this waste stream. So we partner with oil and gas operations. We pay them a fee in order to reduce their costs of their injection costs of this waste product that they have, and we extract a value valuable commodity from that. The I as I touched on already, the iodine market continues to grow.

10:43 The highest we're getting into some applications of iodine and where it goes into and and what areas are growing. But, the highest, demand growth is in Europe and in Asia. We saw, in our operations, 2022 demand stronger than anticipated. And so far this year, demand for our products has been strong. The the major areas of growth are a lot of the human health care applications of iodine. We'll show those applications here in a moment. But I'll particularly say that X-ray contrast media, so injectable drugs to help CT and X-ray scan readings are a a major area of growth, and we anticipate this to be a continued area of growth as world as world especially in Asia where health care is going to be continually improved access to the masses of of population there.

11:42 Item price, as you can see, has jumped around a bit over the last decade. There's there's a number of reasons that caused a spike back in 2011, due to some Chilean and and, Chilean production issues and then some other, and then those prices came back down when additional supply came online. But as you can see in the near term, iodine prices, have gone up significantly. And as a, iodine producer and work we've done as being a solid low cost iodine producer, IOFINA has benefited from that. Current spot prices are at or near $70 a kilo, and we sell almost all of our iodine on the spot market. The the contract prices in in iodine are slightly lower than the in that spot prices, and that's historically been the case.

12:36 Our view on price right now is that there's

12:39 there's no reason to believe from our point of view that item prices will change much in the near term, although, factors that are out of our control may change that, but that's our current viewpoint.

12:55 Just to touch on the applications of iodine and where it's used. As I've already mentioned, the largest single use of iodine is X-ray contrast media, and our view is that that is the, largest growth opportunity in the near term for iodine. But iodine is used in a number of different applications, whether it's biocides and antiseptics. I think the things that, most of us will be familiar with is when you have a wound and they rub that orangish kind of brown solution on you. That's generally an iod an iodine, antiseptic to, to promote and, prevent disease or prevent any kind of issue with the wound. But there's a number of different other applications of iodine, which, IOFINA either sells our iodine directly into, or we create, value added components at IOFINA Chemical. So examples of those are the pharmaceutical industry.

13:52 IOFINA Chemical creates, additives or or compounds that are used in the synthesis of certain drugs. For one example, a simvastatin uses a compound that IOFINA chemical creates, to produce that, statin drug to, lower cholesterols. But there's other applications that we're all familiar with too. LCD screens have polarizing films involved with them. There's, animal health and and human nutrition health. Iodine is an important, micronutrient for thyroid function in humans, and it also has positive benefits for, animals in their development as well. So iodide is, fortified into salts in most areas around the world and other food sources and for a lot of animal feed applications.

14:47 Other things that IOFINA Chemical is involved with are some other biocides that are, for example, used in paints and coatings and prevent mold and mildew from being generated in in those paints and coatings and as a preservative in personal health care applications. Industrial catalysts use iodine to promote processes that create things like acetic acid, and you can see some other applications here. But, we're excited about the iodine market. We see this continue to be a growing market, and, this is the market that IOFINA, is involved with. To give a quick review before I hand it over to Malcolm here, I'm very proud of, our 2022 results.

15:33 Five years in a row now, we've had record EBITDA and revenue for the organization. We'll go into the numbers here in a little bit more detail. We made over 500 tons of our crystalline iodine. We benefited from the hard work we've done in the past in our production by a higher iodine price, and, we've also diversified our business nonaudit sales. So you can see some other bullet points here on this particular slide of some things we do. That's a lot of things about our company from a a sales standpoint and and financial standpoint, and Malcolm will get into a little bit more detail here in a second. But we're also proud of our operations. We focus a lot of time and effort into investor meetings on our our results, but, operationally, safety comes first for us.

16:19 We're proud that we had no lost time injuries in 2022, and that has also, moved. We also had no lost time injuries so far in 2023, and that's a key for us in any kind of, manufacturing operation too. The most important thing is our employees and keeping them safe and doing things the proper way to manufacture things safely, but also make sure our employees are in a good atmosphere for the working conditions. Some other things that we've accomplished in 2022, we continue to grow as an organization. Our quality and quality management systems are very important to us. IOFINA Chemical applied for and received ISO certification, ISO 9,001 certification in December.

17:12 And we follow, you know, matrix on our customer satisfaction and quality of products, and happy to say we hit all of those all of those internal goals in 2022 and and challenge ourselves even more in 2023. And I think the most important thing, and we'll get back to this in a little bit, is that we continue to expand our operations. And we started, construction on IO Number 9

17:39 late in, 2023, and we'll be, putting that up online here shortly. So I'm gonna hand it over to Malcolm here right now, which will who will, discuss our 2022 results in a little bit more detail. Okay. Thanks, Tom. So looking at the financial highlights on the current slide, it's apparent IOFINA is continuing on the upwards trajectory of the last few years with a big boost of profits in 2022 resulting from very substantial increases in the price of iodine. Revenue was up 8% to 42,800,000. Gross profit was up 47% to 15,800,000, and EBITDA was up 65% to 11,500,000. At the same time, bank debt was reduced from 8,200,000 to 6,800,000, and cash increased from 3 point sorry, I beg your pardon, 5,300,000 to 5,900,000, resulting in a reduction in net debt from 3,000,000 to 900,000.

18:38 We go to the next slide. If we go to the profit and loss account, we can see that within revenue, iodine sales increased by NOK 900,000 or 3% to NOK 31,400,000, whereas non iodine sales increased by NOK 2,200,000 or 22% of sales to 10,800,000. In fact, the volume of iodine sales was down on 2021, which had been a year of bounce back from the pandemic with exceptionally high demand. Following on from that, global iodine price prices increased significantly during the first half of two thousand and twenty two and have remained at that higher level since then. Consequently, the prices achieved by IOFINA for iodine were very much higher

19:22 in in The has the The 22% sales increase in '10 to 10,800,000 for non iodine products was, by contrast, very much volume driven with one key product reflecting some additional inventory demand from a key customer. There are also mainly inflationary cost increases of around 20% related to production of iodine and derivatives. However, the net effect of the selling price increases already mentioned was to lift gross profit by $510,000,010,700,000 to 15,800,000, 38% of sales.

20:09 As Tom's already mentioned, iodine production was 516 metric tonnes compared to sales of 441 metric tonnes. The sales were split fifty-fifty between raw iodine and iodine derivatives. EBITDA improved by 65% from $6,900,000 to $11,500,000 after deducting $4,400,000 in SGA expenses from the gross profit of $15,800,000 Operating profit after depreciation and amortization of $1,800,000 was $9,600,000 up 85% compared to $5,200,000 for 2021. After exceptional income of $500,000 from an old liability no longer due, the profit before financing cost was 10,100,000 compared to $5,400,000 for 2021.

20:59 Pretax profit almost doubled at 10,000,000 compared to 5,100,000 for the previous year. And then finally, on this slide, there is a deferred tax charge of $2,100,000 representing the estimated US liability on profits, which is settled by offset against brought forward tax losses from previous years. Current estimates suggest the balance of brought forward losses will cover 2,023 liabilities, but tax will be payable from 2,024 onwards. Onwards. Okay. Next. Turning to the balance sheet. There is an increase in net working capital from $6,700,000 in 2021 to $13,200,000 in 2022.

21:46 For receivables, this reflects higher selling prices and timing of sales. For inventories, production and purchase costs are higher. And in addition, inventories at end twenty twenty one were somewhat run down following the increase in iodine demand during 2021 and have been rebuilt. The other item to mention is debt and cash balances. Bank debt fell by $1,400,000 from 8,200,000 to 6,800,000, and cash balances increased from 5.2 to 5.9. And I think I've already said, in fact, that as a result, net debt improved from 3,000,000 to 900,000. In fact, as we sit here today, we are actually cash positive, I. E, that is to say that our cash balances exceed our bank debt. The bank loan of 6,800,000 is being paid off at the rate of $1,400,000 with no penalties for early repayments.

22:38 And it's also relevant in this context to note that the debt to EBITDA ratio improved from 1.18 to 0.59, which creates additional scope for further financing if required. Cash flow. The company generated positive cash flow of $5,600,000 after deducting the increases in working capital described above. Capital expenditure totaled 3,100,000, of which 1,800,000 was spent on constructing the new I o nine plant in Oklahoma and $700,000 on two projects at the Kentucky chemical plant to develop efficiency and capacity for a key process and to renew and expand air handling capabilities in the r and d function. As well as its existing cash balances and bank term loan, the company has available to us a revolving line of credit of $6,000,000 currently being extended through September thousand twenty five, and also $4,000,000 additional medium term loan facilities for upcoming capital projects. Neither of these amounts is currently being utilized. Yep.

23:44 Thanks, Malcolm. I think that gives a a nice overview of the details of the financial performance in 2022. I will say that we're very proud of what we've done in 2022 and and the work we've done in previous years to get to these get to these results. Definitely, benefited from a higher iodine price. And but if we didn't do the work in previous years, we wouldn't benefit from that today. I I also wanna just give a little bit of background of kind of how the company has evolved and where we think we're going. So in the mid two thousand teens, I will say that previous, building of iodine plants was at a, a much more rapid level and much less scrutinized level than it probably should have been.

24:36 As the when the current management team came on board, we really focused on, our operations and being one of the lowest cost producers of iodine in the world. Once we got that under control, we started a prudent growth strategy and built a few more iodine plants and also really worked hard on our debt reduction. It brought us to where we are today and the financial results that we had. And back over the last five years, we've continued to increase revenue and profits. So where do we go from here? Well, we've already announced that, we are building and, well underway on the I 09 building of, a new Ivan plant in Central Oklahoma, and it's on track to be online before the end of the quarter.

25:23 We continue to look, with various, multiple oil and gas producers, which we've targeted at specific sites to come up with commercial terms for an I O 10 plant here in the near future as well. We also continue to invest in the IOFINA chemical division, have completed processes in 2000, well, late two thousand twenty two, early two thousand twenty three three. We completed a laboratory expansion product so that we can focus on growth at chemical, not only with working on our existing processes, but developing new products like you see here below. We're working on anhydrous lithium iodide, products for animal nutrition, products that are nonion based that will, hopefully continue the growth of our nonion products, which were, significantly higher in 2022 compared to 2021.

26:24 Just to touch briefly a little bit more on I 09, here's some recent pictures in the bottom left of the construction of I 09 that were taken in the last couple of weeks. We're well underway, for this, plant. It's with a new partner that we haven't partnered with before. Once operational and water is flowing at full capacity, through the plant and we are extracting iodine, we are anticipating that this plant will produce an additional 100 to a 150 metric tons of crystalline iodine on an annual basis. To build these plants, it costs about currently about $4,000,000, and we've actually used some parts and pieces from an IO five plant to help reduce the cash outlay for IO number nine.

27:11 We're we're proud of how how we develop our technology and how, we can, build these plants. These plants, we believe, are great investments, have a quick return on investments, and we estimate IO number nine's turnaround on investment to be less than two years. And we are building IO nine in an area of Oklahoma where we think, future plants will follow IO number nine. So this particular slide tries to show where we are striving to build a new core area of iodine production for IOFINA in the state of Oklahoma. The map on the left is the Western part of Oklahoma. The two large blue stars indicate approximately where our current iodine plans plants are producing iodine. There's four plants up in the northern part of the state and one on the further further west part of the state.

28:09 Where where and why are we building I 09 where we are and are in negotiations with other oil and gas producers for future plants? Well, we're in this area where this green box is blown up here on the right side. So we're in an area of high density of oil and gas production, high rates of additional inputs and investments from oil and gas producers. And the more more, hydrocarbons that are produced, guess what, the more brine is produced as well. So, IO number nine is being built in this Tri County area, and the negotiations for IO number ten and eleven and beyond are with operators currently in this area. And we, by building plants close to one another in a new core area, in an area of growth, we believe these plants will have long term viability and can actually share resources from an operational standpoint between the plants.

29:09 So I talked about, goals for some organic growth, which include the building of IO number nine. The, the board and the management team is committed to build future plants beyond IO number nine and is currently negotiating with multiple potential partners for IO number 10. We prioritize these partners and spend more time working to try to get to commercial terms with these partners. It's not an easy process, but we are hard work at developing a scheme to build IO number 10 soon after IO number nine. And our goals are to continue to build plants at least on a yearly basis so that we are able to double our iodine production in the next three to five years, and therefore be one of the, very close, if not the largest producer of iodine in North America.

30:02 Some longer term visions for the, for the group are continuing area expansions of where we can produce iodine. We're very focused on our Oklahoma operations now, but, spend some time in exploratory efforts to look for other iodine sources with high volumes of water to look for, you know, the future growth of IOFINA years down the road. Other areas that we're looking at are increased mobility of plants and being able to control the water source more than we do today, which includes potentially even looking at old hydrocarbon wells and converting them to brine wells to to supply either production at plants. The specialty chemicals unit is also not something that we forget about. We're looking to increase our production footprint at IOFINA Chemical down the road and invest in new halogen based molecules, not only iodine based, but, chlorine and fluorine based wells so that we are expanding our product, offerings within our known, chemistries and chemistry set that we know how to do.

31:13 But as we move on as an organization, the management team and the board is is it feels like, we're in a different phase for IOFINA now. We've we've done a nice job at reducing debt, improving our balance sheet, prudently growing our IOFINA operations. And now we will start to look for other opportunities potentially outside of our organic growth, which we've which we've tried to tell you about here today. So we will look at individual product lines, add on businesses, whether they're in iodine chemistry or similar types of specialty chemical areas to assist the growth of IOFINA. What I hope investors know about this management team is that we are very prudent and analytical about how we grow the operation. So currently, we're looking at targeted businesses that could, we believe, help, the growth of IOFINA, the expansion of products that we offer to customers.

32:15 But any kind of, looking at these kind of m and a offerings will be done very prudently and with a a microscope of a view on that particular m and a acquisition. There's nothing imminent in this area, but the management team is committed to exploring whether or not add ons to the business will make sense. And with the financial position that IOFINA is today versus where it was a few years ago, we feel now is the right time to, look at these opportunities. And so in summary, I just wanna kind of, tell you why we're excited about our business and why we think, we're an interesting company for investors. We have a unique technology. It's a proven low cost technology in a in a market where, there's growth, internationally.

33:07 We are a producer of iodine in North America, and we believe our production, compared to the other ways that iodine is produced globally is much more environmentally friendly. As we've stated, the iodine market continues to grow in applications such as human health care applications and X-ray contrast imaging, continues to grow, and, we wanna be part of that. We've proven ourselves from our financial results and our in the and our, production activities that are we're not a start up. We have proven technology and can build these plants with rapid paybacks. We've worked hard on our balance sheet and our financial position. We've never been in a more advantageous position than we are now with record setting e EBITDA of over 11 of over 11,500,000 last year.

33:55 While we're focused on iodine, we are a diversified business, not only in our iodine production that has multiple plants that produce iodine, but we are have diverse value added products that contain iodine, chlorine, and fluorine and are committed to the r and d efforts to expand those product offerings. And lastly, I'll just say, I think we have a diversified skilled management team with various backgrounds, chemistry, finance, geology, oil and gas, and we're actually looking to add on to this management experience as we enter our next phase of growth with IOFINA. And for that and to that, I think, I wanna thank everyone for attending today's presentation.

34:43 We are excited about the future of IOFINA, and, I'm gonna hand it back over to Jake as we, review questions for the question and answer period. Tom, Malcolm, that's great. And thank you very much indeed for your presentation this afternoon. If I may, I'll just bring back up your camera there. Ladies and gentlemen, please do continue to submit your questions just by using the Q and A tab that's situated on the top right hand corner of your screen. But just while the company take a few moments to review those questions that were submitted already, I would like to remind you that a recording of this presentation along with a copy of the slides and the published Q and A can be accessed via your investor dashboard. Malcolm, Tom, we did receive a number of pre submitted questions ahead of today's event. And as you can see there in the q and a tab, we've also received a number of questions throughout your presentation this afternoon as well.

35:31 So firstly, thank you to all of those on the call for taking the time to submit their questions. And Tom, Malcolm, perhaps if I may just hand back to you to respond to those questions where it's appropriate to do so, and then I'll pick up from you at the end. Thank you. Great. Thanks. The first question that we have has to deal with, does our wet technology have the facilities to extract lithium from the oil and gas produced water, and there are any plans to implement this in our process. So, to answer the first question fairly directly, our iodine production technology is not direct would not directly, extract lithium from oil and gas produced water. However, there's a lot of and, we've looked into, these particular brines in the lithium in the brines that we, extract our iodine from.

36:22 The iodine, it's the lithium con, concentrations in these brines are generally lower, than where other lithium producers are extracting lithium from. However, I'll say there's a lot of research and industrial development, that are dealing with direct lithium extraction. So lithium extraction that takes it directly from brines without an evaporation process. These are kind of newer technologies and are higher cost technologies compared to the more traditional brine, lithium technologies, which involve evaporation of concentration of lithium. I'll say there's no direct lithium production from these brines for us now, but, you know, we are talking with people that are in the direct lithium extraction space to see if there is a potential of partnering with these types of technologies to provide a more holistic holistic kind of, product offering to our oil and gas provider so that they can provide, while we, provide them benefits for our iodine production, if we can provide them additional benefits from other mineral production, we will do so. But I think those are a few steps away.

37:42 Okay. The the second question is, does IOFINA see the Chilean government's move on the lithium industry as an opening negotiation position for larger royalties involvements or a prelude to full nationalization. There are other natural resources being in the firing line too. And I can say, first of all, you know, I I would I would be hesitant to speak for the Chilean government's strategy or intent. However, we feel that, you know, this type of policy does, potentially indicate more risk for investment into Chile, but I could say, you know, essentially, right now, I think it's too a little bit too early to tell. I think from what we understand is that it's it was lithium specific.

38:30 Could it move into other natural resources like copper or iodine? I think it's too early to say, and we'll just have to follow it as closely as we can. The next question is, can the IPN technology used to extract lithium be applied to extract other valuable chemicals. And I think we've kinda covered the lithium extraction in our brine systems. Our Iodine technology does not have the capabilities of extracting lithium. It does clean up the water a little bit, which may make lithium extraction be a little bit more plausible. But I think lithium extraction from these types of brines are a couple steps away, but we, you know, we do spend a a little bit of time looking at potential other minerals that can be isolated from the brines.

39:17 The next question is, congratulations on transforming the balance sheet. Will you start to reward shareholders with some form of return, either a dividend or a buyback? I would say, currently, we do not, offer a dividend to shareholders, and we have asked for permission, at the last AGM for a potential to buy back shares. And we intend to do that again at this year's AGM, which is which is about a month from now, a little over a month from now. Our view right now is that, we have, we had definitely improved our balance sheet. We also have a tremendous amount of growth opportunities within the organization.

40:04 And right now, we feel the best way to use cash generation is reinvesting into the business and help grow the business. Are these discussions being held at the board level and being under consideration more? Yes. But currently, we've decided to reinvest into IOFINA and its growth opportunities. The next question, if if there are so many sites that could potentially have plants built, why does it always take so long to select a site, as in I O 10, while you were building I O Number nine, or or is there, not as many economical sites, as previously thought? So what I can say is that we are continuing to evaluate potential sites and working on multiple sites at this time with a focus on prioritization of where we think the best sites are and where we think the best sites will be long term for IOFINA.

40:58 Finalizing commercial terms, with oil and gas companies, which are gonna be beneficial to both sides, is frankly a difficult process. We always run a fine line of pushing too hard in negotiations or not pushing hard enough, and, we would continue to work our best to try to come up with commercial agreements to, build future sites. There are a number of economical sites that are available for IOFINA, and these are in negotiations with oil and gas operators. And we prioritize our resources, which where we feel like the best sites will be and the more likely outcome of a positive commercial agreement. We also intend to expand our business development team so that we have more more depth on our team to be able to do these negotiations and get them done as quickly as we can. But I think the the answer, the quick answer is, these are not easy negotiations.

42:00 There are a number of sites we can go to, and we could work hard and diligently to come up with commercial terms and build these plants on a regular basis. The next pre question is now that you're in a strong cash position, where are you expect where you're expected to generate a tremendous amount of EBITDA? And you've highlighted in your annual report that building new plants is a priority, is it fair to assume you will endeavor to build two plants a year as long as iron prices remain at elevated levels? I can say that the board is committed to, building plants at a more rapid rate than what we have in the past. You can look for, from IOFINA in the near term, at least one plant per year, and we've, indicated that by our production our our construction of IO Number 9 and our commitment to build IO Number 10 as soon as commercial terms are agreed upon.

42:54 We are in negotiations with plants further beyond that, but I think you will see a more rapid building of plants than you have in the past. Another question is, the recent Canaccord notes suggest you might expand on IOFINA chemicals. Where can you elaborate this, and how and how much capacity do you have at the Covington site? To answer that pretty quick, we have excess capacity at the Covington site, for certain processes. We have, restricted capacity for other processes, and we are reinvesting in the chemical site in order to expand production of certain products. Being a specialty chemical manufacturer, one side just doesn't fit all. So a lot of this is specialized equipment that is utilized on a product by product basis. So as we expand our IOFINA chemicals product offerings, we will need to expand on that site.

43:55 We do have room for expansion at the IOFINA chemical site. However, if we get to a next phase of IOFINA, we will look at potentially other sites in order to expand the IOFINA Chemical offerings. It looks like we might have a few more questions. With respect to iodine derivative products within IOFINA Chemical, wish to understand pricing versus raw materials. Do we maintain constant EBITDA pro gross profit per kilo by a pricing formula? And second part of the question, do we sell iodine and halogen derivatives through distributors, open market, or mainly through business to business context? So, the quick answer to the first part without getting into too much detail is we we do not try to go through, to gain market share by changing margins in our products.

44:49 So we have a set input of costs, raw material costs. And, generally, product by product, there is a somewhat fixed margin above costs that we, sell our products. So those kind of margins are generally maintained with with most of our IOFINA chemical based products. So I think you see a fairly consistent, although it does change a little bit, but not very much of profit on an individual product basis. And then how do we sell our products and derivatives? It's it's a mix. We do have major customers, which we do direct sales through, especially in The United States and in South America. We we realize that in order to get a global focus, we do need to use distributors and agents to sell our products, and we do have a network of those agents that satisfy our European customers.

45:48 And we have some specific agents in China and India that help with our global sales. So it's a mixture of direct sales and using of distributors and agents. And this is another area of of of, of expansion to our team that IOFINA intends to increase our sales force, in the next year. And, I think the last question I have here is, what is or what was the company's main reason to list on the AIM market in London instead of The US? I think that's a question that can be better answered by the management team that listed at the time, but, I think the the quick answer to that is there were, SQM is a New York Stock Exchange listed company, in involved in iodine chemistry.

46:41 There was actually a Canadian listed company when we went public, that was also involved in iodine. And then I think the the founders at the time, not only saw an opportunity to be unique on the AIM market, but also had, investment contacts in London at the time and took the pump company public in on the AIM market. But I think that's a question that can be better be answered by someone else. Do we see any organic growth expansion expansion via iodine derivative recycling sources? We do play, a little bit into iodine recycling. As, especially in the two thousand teens as iodine prices rose, any kind of stream that had iodide levels, people tend to try to not lose any value of these streams. And we've been involved over the course of period of time of taking some iodide back out of these streams and recycling them.

47:40 So it is a, it is a part of our business, where we use, where we do isolate some iodine from recycled sources. The next question has to do with, m and a. Would you be willing to use shares at these levels, or would the size of any deals be limited by the balance sheet? You know, any any m and a details, I think, would be on a case by case basis. I think larger or sorry, smaller deals would be hopefully handle handled by what we generate in cash or a potential small amount of debt. If it's a transfer transformational kind of acquisition, would be a more complex funding scheme. So, you know, at this particular point in time, it depends on what kind of the m and a deal would look like.

48:31 Do you foresee any investments for iodine extraction outside The US, whether it be Eastern Europe or other areas? I think we have enough opportunities in The US right now where we are focused on expansion within The United States. Although we do, have conversations from time to time about opportunities outside The United States. But, I think in the in the short to medium term, IOFINA will be investing in iodine extraction in The United States. How do you hope cost of production should evolve with additional volume? In in other words, how should I o nine cost per ton compare to your current average? Costs, to produce our iodine are generally on a plant by plant basis.

49:17 The more volume and the higher concentrations of iodide, to be in a very simplistic, situation, the better the the larger the volumes and the higher the concentrations, the lower our cost of production. There are some variables within that. There's are some other chemistries in the water, that affect our production costs. But in general, they're on a case by case basis. It dish the larger amounts of brine that we can get to these plants, the better generally our cost of production. And then it looks like the last question is, can you discuss the agreements of brine supplying the IOFINA? Should we see a more dramatic decline in the item pricing at some point? I'm not really at liberty to say too much about the specific brine agreements that we have with our partners.

50:06 I think in general, I can say that, first of all, the agreements are on a case by case basis and a plant by plant basis. And, but, generally, as for most of the agreements, the higher the iodine price, the more benefit our partners receive and vice versa. So both partners benefit from a higher item price. And then if item prices were to be lower, that would help our actual cost of production, and we wouldn't be as, the amount that would be paid to our partners would be less. So, again, I appreciate everybody's attendance today. I hope that we were able to update where we stand today for IOFINA.

50:55 We appreciate the investor meet company team and the platform they've provided to, for us to be able to communicate with our investors. And I just wanna say that, you know, appreciate the the current investors that we have that have stuck through us through thin and thin thick and thin. I think, you know, we're at a stage right now with IOFINA where we, have established our technology. We've, developed, a growth strategy and are even onto the next phase of the growth of IOFINA, and we hope that, you'll be along for the ride with us. So, with that, I'll say thanks and, turn it back to Jake. Tom, Malcolm, that's great. And thank you very much indeed for updating, investors this afternoon.

51:40 Could I please ask investors not to close this session as you'll now be automatically redirected, for the opportunity to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of IOFINA PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all. Thank you.