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They should get into memecoins - Petecoin anyone?
They have some energy credits which will help them, but they are done for by year end barring some miracle.
Hash won't drop, S21's are coming through, and in many cases you can fit twice the hash into the same slot as the previous old gen miner.
The constant expansion of the last year has been a drag for us miner investors, but it's pretty clear now why it had to happen, and also why many are moving to AI for revenue support.
Q1's coming next month and should look good on the surface with pre-halving revenue and FASB profits.
Argo are going to need to pivot into some other form of crypto biz, they cant afford to stay in this business. Next month they are mining 50 if they are lucky and at this price thats 3.3 million revenue a month, problemos!
Bear or bull market Argo lose money, hopefully these inferior miners get ironed out and Global hashrate starts dropping a little bit.
1.4 EH to make 1 BTC per day at 630 EH thats mental! the economics dont work for many, Either btc needs to fly or a lot of these miners have to start accepting the futility of btc mining and give it up.
Indeed - and we have the HK ETF go live next Tuesday as our next source of hope.
Really hoping to start moving to 100 soon as I'm keen to get out. A little more patience.....
To add to miner woes fees cratering won't help anyone, oh well that reprieve was fun while it lasted, back to btc price hopium instead.
Just checked the last 10Q - 4.4 per kwh
Hexam - yeah, it's all these other costs that make the other half of the puzzle - wages, interest, bonuses, etc. Plus trying to grow operations, and grow HODL etc.
Argo has 30/JT machines so electricity input costs there are doubled, not sure what their power cost per kwh is though.
But hash will keep growing and the next bear will be brutal.
CB - I prefer a top-down approach to costs i.e. looking at what it has actually cost them but it gets much the same answer.
I agree that CLSK etc. should be mining at around $30k per BTC (post-halving, normal fees) just allowing for electricity costs (and is another thing that makes the current $31k for ARB pre-halving look silly/misleading/wrong). Other cash costs would perhaps (up to) double that so I would think most miners are slightly cash generative at today's price - they don't need it go up to $100k. However, this doesn't leave much to invest in growth so they need a higher BTC to do that (and show profitability allowing for non-cash costs) or fees to remain so high - though of course they haven't been shy to issue equity to fund growth instead!
Different miners and setups have different values. I think Cleanspark's were around 4.6 or something per kwh last time I checked. 40% overhead for cooling sounds too high to me, I think the mining industry achieves 10-30%.
My mistake on electric cost. Industrial is around 9c
So your calc is 21mw+40% = 29.4mw
29400*24*0.09 = $63504
Electric cost is around 35c kwh.
Data centre cooling is approx 40% of energy costs on average.
Perhaps Lanz, but Argo need it more than anybody else. Anyway, those like CLSK and MARA can survive comfortably with BTC less then $100k especially if other, weaker miners go to the wall.
That's not true.
You've all missed my calculation adventures, so here's one for old times sake.
The S21 Pro that Cleanspark are buying is 15 J/T. It can mine for an electricity cost of $29k.
Workings:
- Current network hash of 630EH
- Rewards only excluding fees of 450BTC per day.
- 1.4EH is required to mine 1BTC a day average.
- electricity cost of 5 cents per kwh
- S21 Pro is 234 TH
- 5983 machines required at 3510 W each = 21MW requirement - add 10% for cooling let's say 24MW
- 24MW at 5 cents per kwh
- 24000*0.05*24 = 28800
What if you add fees? What if the electricity price is lower than 5 cents?
Most miners, not just Argo NEED Bitcoin to be 100k by the autumn or a substantial drop in difficulty, but that looks to still be going up in May.
Ah yes, the notes do go to 30 then start again 1-6 for some reason that I can't make sense of.
Employees = 30, wages = 6mil, indicating average salary of $200k.
So for 2023 they mined on average 4.8 bitcoin per day, for the 1st qtr 2024 they mined on average 3.5 bitcoin per day, thats a drop off of 25% albeit sold at a much higher average price. this is BEFORE the having, that will drop to around 2 bitcoin per day. with the best will in the world revenues will be $70 mill for the year. will it break even on the year I doubt it
I don't know what that table is at the end but the earlier (!) note 10 gives 30 as the number of employees.
If $31k really is their pre-halving cost of electricity/hosting only per BTC then heaven help them.
The $18m quoted falls due between now and June 25, rather than this year, not that that makes everything hunky dory - far from it!
I see they've finally had to mention the Emergent write off, hidden pretty deep into the results considering the company raised money from shareholders for this.
More weirdness with altcoin reporting, like-for-like looks very different as they've grouped most of them together now including NFTs. Given a value of $500k+ which is a lot of shtcoins to hold for a company that has material uncertainty over it's ability to continue. And how can 31.7k USDC be worth $55k? Are auditors asleep?
I don't think the 31 includes depreciation Hexam, but like you this is out of line with previous reports and unclear on some items, and as I said it seems to be truncated.
"Something that stood out for me was the sky high direct bitcoin costs in Q1, $31k direct mining costs in Q1, that's a huge jump and would suggest that cash break even is actually more like $100k post halving right, Hexam?"
I'm struggling to make sense of some of their numbers including this one. $31k direct mining cost is ridiculously high for Q1, and before halving, and much higher than last year (it was less than $12k in the last reported figures). One possibility is that this includes depreciation which some companies include in 'direct' costs but ARB hasn't before - but their description of costs in the financials of 'power and hosting costs' instead of 'direct costs' suggests they do now?
In addition their Q4 numbers seem inconsistent with end Q3 with depreciation of mining hardware only going from $18.2m to $18.7m but their cost of mining has shot up from $24m YTD Q3 to $36m full year. This implies virtually no depreciation for Q4 and a 50% uplift in mining costs. I can't see any notes though of a change in treatment/methodology.
My best guess is that the $31k DOES include depreciation and that this change of approach has somehow screwed up the presentation in the financials (hopefully it is just presentation/me missing something and not an actual mistake)!
So I think the $60-70k still holds but if the direct cost does only includes electricity and hosting then it doesn't and they are in big trouble - especially as they say they have $18m of further debt service obligations to be met before the end of June.
In the meantime if anybody can make more sense on what on earth is going on with their numbers then please shout - hopefully I've just missed something or messed up somewhere?!
The report seems to be truncated stopping at note 6, which suggests only 6 employees - which doesn't sound right. Anyone got the full report?
The question is what's the cash burn now from May onwards, with BTC at $65k and hash rate at all time highs - $2m? That would mean runway only until Q4.
Hopefully Thomas answers that and a few other testing questions I've put forward for the Investor Meet
No end game here.....onwards $ upwards !....
A very clean (easy to understand) set of results. Better than most would have expected, still doesn’t make them sustainable post halving……….
Hash rate at all time highs, but going to be a while before these companies admit the inevitable and switch off rigs.
Yes end game is coming. Everyone knows that, at least that is those with more than half a brain cell.
Positive RNS...debt been reduced , BTC production stable , cash in bank...profit on BTC....done well considering all the turmoil..!
Quick glance makes me think they are losing money mining now HC.
Fees back down below 1. Think end game is coming.