Member Info for taufour

"Flood of 5,000 share buys - anyone know what that's all about?"

Hi. You make it difficult for anyone to respond, because of course nobody *knows* what that is all about.

But, it is interesting to try to make informed inferences from what we *can* know.

Today so far has been a continuation of yesterday's pattern, with the remarkable feature being a preponderance of small O-trades on the buy side, the average being about gbp 4k just like you say.

A-trades continue as usual, quite balanced, nothing of note there I would say.

To me it looks like the main thing going on at the moment is private investors fortifying their positions, and perhaps new private investors coming in.

Today's pattern of trading interestingly different from yesterday's, see http://www.luku.org/snap/SXX/rneuigd2/

The A-trades are preponderant, and are quite unbalanced between orders on the bid side and the ask side of the book, while the O-trades (mainly buys) are more of a background activity.

It appears as though institutional investors are dribbling shares into the market, and that (so far) these are being absorbed successfully, but the story is only just beginning.

Hi again whichway, "the snap-shots of the trading day I've just looked at for SXX are overwhelmingly A."

Yes, good point, and I should have worded my post more clearly referring to volume rather than the number of trades.

I have a cron job which runs snapshots regularly, and the impression I get is that the long term tendency for SXX is that at least two thirds of the trades are A trades, but at least two thirds of the volume is from O trades.

In other words, there is a continuing trickle of small A trades, whereas the O trades are less frequent but on average much larger.

It's also worth noting that the A trades are overwhelmingly either on the bid or on the ask; whereas the O trades are much more spread out in between, and it is there that there are interesting patterns to be observed (provided the volume is large enough to make any patterns interesting).

Hi whichwaynow, "But it is an automated system. There are no market makers."

Hmmm ... are you sure? I think what you are saying applies to A trades ('automated trades' in LSE terminology), whereas in my previous post I was discussing O trades ('Off-book') which are not through SETS and involve market makers ... the point being that today SXX trading has been overwhelmingly O trades

(And yes it's complex, because market makers themselves use SETS to adjust the amount of shares they hold)

"The issue as many will know is that the simplistic algorithm that colours them red/blue on the various websites is only very approximate. You can’t use it to make any judgements or decisions"

What one can do is look at patterns and make inferences. Today was mostly O trades (as opposed to A trades) where there is a relatively clear distinction between selling (to a MM) and buying (from a MM). Particularly interesting are the middle-priced or near-middle-priced trades, where as we know the usual way of colouring them red/blue is unreliable.

Let us look at two possible scenarios for O trades; scenario (1) is:

volume near the bid (likely sells): a fairly large number, say X
volume in the middle (uncertain): a fairly large number, say y
volume near the top (likely buys): a much larger number, approx x+y

Scenario (2) is:

volume near the bid (likely sells): a very large number, say x
volume in the middle (uncertain): a fairly large number, say y
volume near the top (likely buys): a not so large number, approx x-y

Well, in scenario (1) it looks like the mid-priced trades were mainly sells, with the market makers trying to entice sellers by offering a good deal (well above the bid)

and in scenario (2) it looks like the mid-priced trades were mainly buys, with the market makers trying to entice buyers by offering a good deal (well below the ask)

So in scenario (1) it sees that the market makers *want shares*, whereas in scenario (2) they are trying to *dispose of* shares.

If that makes sense (not a foregone conclusion!) then you might be pleased to hear that for SXX, today was decidedly more like scenario 1 than scenario 2.

Hi Phil, "Hopefully the link works, let me know if not." I think I have to say that the link does not work, or at least not as intended, because it appears to lead into an alternative universe where the deposit still lies under the Zechstein sea.

"On May 13, 2019, a Vertical Shaft Sinking Machine (VSM) of Herrenknecht reached the final shaft depth of 115.2 m creating the pilot shaft for the Woodsmith mine. This is the deepest shaft ever to be drilled underwater with a VSM and thus is world record!"

Hello MrC I have interacted with you on other boards for more than 2 years (at least it feels like more than 2 years) and I will vouch for you as an always sincere and usually interesting poster but I do feel that your initial post here was singularly uninformed, to the point of being idiotic, not like you at all. You can do so much better and I hope you will.

Thanks myo. What I'm wondering (as a first approximation) is this:

Shareholder grief about stage 2 is largely due to the extra costs incurred by the tunnel re-design announced last September;

but that re-design might make it possible to increase the eventual capacity of the mine to 26 mtpa, increasing the eventual profitability of the project by nearly a third;

which could "pay for" a good chunk of the shareholder dilution entailed by stage 2.

Hi duracell, "If the tunnel is wider than originally planned then we could install a slightly wider conveyor system and/or make the conveyor run slightly faster (larger motors) to take us past 20MTPA. The next question is can we get that from the mine to the MTS with the hoist system we are buying and installing."

Someone (I think it was you) explained that phase 2 is based on deepening the MTS shaft to poly level in order to turn it into a second production shaft.

So the key question would be what is the diameter of that deepened shaft.

If both production shafts have the same diameter, and if there is room at 360m in the MTS shaft for the extra machinery, then one might imagine that each shaft could do 13MTPA yielding a total of 26MTPA.

If one could edit the title of a thread, I would change '2017' to '2016'.

The November 2016 prospectus is available at www.morningstar.co.uk/uk/nsm

Oddly, it does not appear to have been ever published as an RNS, and I suspect many forum members including me did not see it at the time (at least, there is no trace on my laptop of my having downloaded it then).

Not only that, but although most of the prospectus is textually searchable, the SRK report appears to have been tacked on to the end, not in textual form but as a photocopied image dated September 2016, so it is not textually searchable.

I'm surprised no one complained about this.

(In subsequent prospectuses, for example April 2017, the SRK report is re-dated to April 2017 and is textually searchable)

So anyway, in the November 2016 prospectus, to get to the 'risks' section of the SRK report you have to manually press Page-Down enough times to get to it.

If you actually do that, you find it says:

"The detailed design work for the MTS tunnel might lead to design changes inclusive of increases to the tunnel diameter."

So what I'm thinking now is that this tunnel re-design was on the table right from the very beginning, even perhaps in the DFS (most of which presumably has never been published). For stage 1 the company went with the narrower diameter for pragmatic reasons and for stage 2 wiser heads prevailed and insisted on the larger diameter.

It would be great if this means that Phil's suggestion might be possible and the tunnel could actually do more than 20mtpa.

Hello Sippnoob, in that case can you explain how the HUR sp is lower today than it was in March 20017? Genuine question. Maybe there have been corporate events (eg share consolidations) which would make the chart I am looking at meaningless, I have no idea. But I think that if you are going to post like you just did, you should at least address this sort of question. Thanks.

Notice how the skeptical question is subtly changing.

In previous years, it was whether the mine would be built.

Nowadays, it is more along the lines of whether it will be built by the Sirius that we know.

I think this is progress.

In the prospectus (April 2017) at the time of moving from AIM to the main market it says in the competent persons report by SRK (p143 of report or p406 of prospectus)

"The detailed design work for the MTS tunnel might lead to design changes inclusive of increases to the tunnel diameter."

From time to time posters ... in understandable excitement ... post things like "2 million trade just gone through!" (and sometimes they just leave it at that, without comment, as if no further comment needed).

It is interesting to consider how much these big trades actually contribute to the daily volume in the market. Does volume mainly come from a few large trades, or are these dwarfed in aggregate volume by the sheer number of small trades?

To look at this, the volume kings page at http://luku.org/vkings/ aggregates trades of similar size and breaks out the result into quantiles which evenly divide up the total volume. This can give an idea of how small, mid-sized and large trades compare in contributing to the volume in the market over a period of time.

For example, looking at year-to-date and using 5 quantiles, we find ( see snapshot at http://luku.org/snap/SXX/c458txh3/ ) that a fifth of the total volume in the market has been contributed by the 532 trades of 375k or more shares (with an average of 833k and a max of 10m) ...

and another fifth has been contributed by 93k trades of 15k or fewer shares (with an average of 5k).

So the real Volume Kings may actually (at least sometimes) be the community of small scale private investors swinging the market just as much as the traders who deal in millions.

I like the IG article ( https://www.ig.com/uk/news-and-trade-ideas/shares-news/sirius-minerals--digging-in-deep-pockets-190516#information-banner-dismiss )

except that I do object to their use of the term "cost-overrun" (where it says "after failing to win round ministers and being hit by around $600 million of cost-overruns, the company had to rely more on its shareholders and the banks")

I think that if an aspect of the project is re-designed before construction has even begun, it is misleading to call it a cost-overrun, it should be called a re-design.

I mean, imagine saying that all these billions now in play are a gigantic cost-overrun on the original slurry pipeline proposal (circa 2012), that would be silly.

Out4nowt: "I notice there are quite a few very low value sells recorded, ie £11 total value. Can someone enlighten me as to why this is? Why would anyone sell such small value? Surely trading fees make it almost pointless."

I've also wondered, and was tempted to introduce a mode called "Volume Pawns" to match "Volume Kings" in the undulating spread plotter at http://luku.org/tau but decided it would be more sensible to add an option in the 'range' menu where one can set both lower and upper limits for trade volume.

So, according to the snapshot of month-to-date at http://luku.org/snap/SXX/b64v8pm5/ there has been a steady trickle of between one and two hundred trades per day of up to 500 shares each, evenly balanced between long and short.

What I find surprising is that there have been almost as many small O trades (523) as A trades (731).

I imagine that a fully automatic trading entity which enjoys no or minimal trading fees could be set to adjust its position every day depending on some complicated formula derived from world economic events, and this might sometimes mean a daily trade of only a few dozen shares. That could explain the small A trades. But the steady trickle of small O trades is puzzling.

I thought that an O trade meant an actual person pressing a button on a laptop or mobile phone. Now I'm beginning to wonder if O trades can also be done with no or minimal fees by automatic entities.

"Who knows how these parasites work?"

Parasites? Think of them as good gut bacteria. Their role is to take a lot of shares all in one go at 15p, and to sell them on bit by bit to PIs as they come along at 17p. Shorting is essential to that process, and that process is essential to companies like SXX getting funding.

Phil "How realistic would it be to have another conveyor suspended below the first one?"

You mean 40mtpa through the tunnel? Almost exactly equals 3 production shafts @ 13.2mtpa. (Sorry, couldn't resist)

me: "It looks like initially 1 production line, increasing to 3 as the project progresses. But, arithmetically, how does this jibe with envisaged production rate of 10m tpy initially, increasing to 20m tpy as the project progresses?"

duracellAA: "The plan is to sell 7mtpa as finished product and 3mtpa as chipped product"

Thanks that casts some light but it's still puzzling.

If each production line can do about 7m tpy, then two lines could cover the intermediate target of 13m tpy and three lines the eventual target of 20m tpy. But how does this jibe with the production capacity of the deep shafts?

If one shaft can do 10m tpy, then how does the intermediate 13m tpy work? Or if one shaft can do 13m tpy, then why isn't the eventual target 26m tpy?

If it is the capacity of the tunnel which limits the eventual target to 20m tpy, could it have been worth making it a bit bigger, to do 26m tpy? Or is that what happened last September?

Hello LL, "Why have we raised 3.8 billion and not 3.6 billion?"

My understanding (someone please correct if wrong) is that this is because of the more expensive finance costs incurred by plan B instead of plan A.