The broker’s target price is now 230p (up from 164p) based on the assumption of 12 plants following the company’s aim to roll-out additional plants in Oklahoma.
Iofina said today it would switch the location of its third and fourth IOsorb plants near to the second plant (IO#2) in Oklahoma due to the better economics and performance of IO#2.
By moving IO#3, Investec said the company expects a higher production rate due to a higher temperature from direct well supply of brine.
IO#4 will also be installed in Oklahoma, close to IO#2, and construction will start three weeks after IO#3, using the same contractors to be more cost effective and more efficient.
Revenues in 2012 rose by 16% to a record US$18.6mln as the first of the iodine extraction plants (IO#1) came on stream. Iodine sales rose by almost 50% to US$16.4mln.
The second plant, IO#2, came on line just after the year end.
Iofina’s process extracts iodine from the brine produced from onshore oil and gas wells in the US.
Iofina is also developing a range of smaller mobile satellite units to deploy where there is a lower brine throughput but high iodine concentrations.
There was a loss for the year of US$1.13mln, reduced from US$$2.65mln a year earlier, and Iofina said the second half of 2012 was the strongest in group history.
Group profitability had also increased substantially in the current year, it added, with the higher production from IO#1 and IO#2 and iodine prices holding steady.
Chris Fay, executive chairman, said: "2012 was a breakthrough year for Iofina not least with the successful start-up of IO#1 with IO#2 following shortly after year end, proving the success of our IOsorb technology.
“Iofina Chemical continued to maintain its reputation for quality iodine derivatives and also commenced processing waste iodine streams.”
Shares jumped 10% today to 205.4p.