Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Chaebol - totally agree, she got out of there as soon as the 'drunken' converstation happened
That should have been a huge red flag, that those who were basically dealing with insider information, all put over Twitter, remained in post and it was a director who left?! She left, imo, because she became immediatly aware of something which she did not want to be associated with
Also, the attempt of PW to improve own terms, whilst acting as independent chair
Said it before, all of the directors are yes people for PW & are part of a legion of PW fans, not healthy
And this all goes bk to the numbers, where senior mgt are unwilling to discuss the number in detail and continuous errors
All being said, ARB is still investible (due to UK based interest), just not at these levels, especially when I am expect to see RIOT at a $1 ($6.8 currently) for example, so that gives some sort of indication as to how the economy will impact Argo SP
BTW, not shorted ARB (and wont due to access), but have MSTR, MARA and Tesla
Just to add that the way I did the estimates doesn't assume a BTC price (implicit if you like in the difficulty assumed) or a coins mined per month (as that's an output rather than an input). For info the number of coins mined in my two scenarios came out as 640 BTC per month in the 0% difficulty increase scenario and 480 BTC per month in the 33% difficulty increase scenario.
I actually think that my difficulty assumptions are too aggressive but on the other hand my electricity assumption may be too conservative. Swings and roundabouts so will be interesting to see what you come up with AB as will be good to compare.
As to profit my assumption of spreading machine cost over 5 years may well not be followed by Argo. If they stick to 3 years this increases the reported cost per BTC by around $5k (on my assumptions) or $4k on the no difficulty increase scenario.
How long can pw act as acting/ interim chairman before corporate Governance rules are broken? Coleen Sullivan bailed quick last year, shes a heavyweight doesnt muck around.
The current set up enables if in bad hands, skullduggery to go on and barring that, this is not a good look at all.
Corporate Laws are being broken whilst fiduciary responsibilities to shareholders arent being met. Awesome !
BTC Price is the main driver, all agree to this
However, ARB is a little more complex now. Early 2021 the SP increase was driven by retail
PW looked to cement more stability by getting more institutional investors, who will look at these financial basics and instituitions have in the main sold out of ARB, leaving retail carrying the bag
Problem investors have now is they are hoping those £3+ targets are reached, but will they, maybe in 3+yrs time, but for time being retail don't have the spare liquidity to pump the price - this is if ARB survives in current guise.
if BTC goes to <$20k for 12-18 months how will it survive, this is why being so dismissive of the real cost is a concern and why I think institutions have bailed.
And 3 years is a long time in crypto
Just to point out as well, why has PW and the board delayed the appointment of an independent chair - from a governance perspective investors should be asking about this, but almost silent
Yes aig, Argo's share price is mostly driven by BTC price.
Seems to me, the real number, moving forward, will be between $20k and $25k
For senior management of Argo to be so dismissive of this number is quite concerning, either they are laissaz faire about it, or trying to withhold it, either which is concerning for investors
But, what investors need to think about is, is a $20k to $25k cost worth the risk for an asset trading at around $29k, with a likely drop off to <$20k imminent?
Always remember, that BTC is a speculative asset, more so now, than 10 yrs ago when it was just a punt. ARB is a leverage against this asset, and the upside leverage only kicks in once BTC has positive sentiment, which is continual, at present the sentiment is very much down and low.
The same people still arguing the last few days with facts on the real overall btc cost now...
Are typically the same ones that were here arguing 6 months ago when Random investors true btc cost for argo was posted!
Too busy arguing and getting caught up with catch phrases of... Smart growth, quarters & years , genius & other meaningless hooks.
Instead of doing their own research.
Thanks harchris that's very useful, and illustrates how low our market cap is. I'll run some similar scenarios next week (just on the phone now) to see what I come up with.
These are some of the scenarios then I see for October 2022 onwards:
Bitcoin stays low, $28k, difficulty doesn't increase, AISC $19k, 670 coins mined a month, $9mx12 = $108m profit before tax
Bitcoin @ $40k, difficulty increases 33%, AISC $25k, 460 coins mined a month, $15m x 12 = $180m profit before tax
Bitcoin @ $55k, difficult increases 40%, AISC $28k, 415 coins mined a month, $27m x 12 = $324m profit before tax
Final possibility generates PBT > today's mcap.
Hexam I'll run some figures next week and we can compare and contrast.
Har chris Discord have the 7-9k breakeven costs as gospel.
They moaned the other day that hive were paying 22k for btc costs and it was way too high. Nobody has done a Hexam on that board, and worked out true cost just the 7-9k mayhem that the bod also tried to hoodwink with hence my 'hocus pocus' accounting qoutes, cos it is hocus pocus!
I'm glad and hopeful investors understand the huge costs of mining btc and not this unicorn 7-9k thats been bandied around for many a moon!
Remember they tried to ask me and flowerpot for Hexams calculations. This is the best info regarding argo we will ever see, the true costings and they aint pretty!
Seems like the rampers are angry with the truth?
These 'numbers' cant be spun x;)
How can it be weaponised if the true cost right now is $33,904.00
Surely its only being weaponised if people are saying breakeven costs were 7-9k
Hexams post highlighted the disparity.
The reality is not many thought the btc costings were this high. Surely every investor should know this costings, the miners stay well away from it, obviously.
Thank you Hexam!
Thanks AB - though I'm not sure you're going to be happy/agree with my estimate...
I think the all-in cost at the end of the year/phase 1 may be $25-$30k per BTC based on the following assumptions (compared to Q1):
5.5 EH is reached
Difficulty Increases by one-third
Mining efficiency per EH (before immersion) improves by 20%
Electricity cost per EH improves by a third
Immersion adds 15% to coins mined and 15% to electricity costs
Fixed Costs increase by 50% (bigger operation but growth much lower than EH increase)
Fixed Costs now include share based payments
Cost of new machines + immersion total $225m but spread over a more realistic 5 years rather than 3
The answer drops out as $25k so a cautious range might be $25-$30k especially as I've assumed 5.5 EH hit.
If difficulty does not increase (e.g. because BTC stays low) then the answer drops to under $20k.
These are just my guesses and the answer varies greatly with the assumptions - which are there to be shot at! But hope this is at least a little bit useful for anybody interested in the numbers side.
Harchris, re: electricity costs, 200 mw would be usd 2.88 mil a month at 2 cents per kWh (200 mw X 1000 X 0.02 X 24 X 30 days).
Hexam, LA was talking about chaebol not you. Your maths is correct, but chaebol hijacking this number without context. He has a short and always paints Argo in a bad light. Sometimes he had valid points, but in no way is he balanced and clearly had an agenda. Every so often he gets real, but then reverts to type. You are the most balanced poster on this board in my view.
Harchris, not 100% sure. 20k +/- 30% probably sounds ballpark pre Helios.
Apologies, I meant the breakeven price will be *below the BTC price as long as Helios Phase 1 is complete as planned and hash rate target is met.
Surely what we can say with some confidence is that the breakeven price will be above the BTC price (unless we see a humongous crash of course). Difficulty is about to be adjusted down this week following the recent fall in bitcoin and I see that continuing if bitcoin fails to retake $30k.
If we see ~$25k BTC for extended 'crypto winter' my take is global has rate moves closer to 175EH with Argo mining 850 a month at 5.5EH
Thanks - and I know what you're saying but at least he is being clear on what it represents and has said $25k is achievable. But you're right there is too much focus on this now.
But as it turns out my gut may have been wrong as even that $25k looks optimistic on first pass. I'm checking through my logic but the issue is that difficulty has more impact than I thought - it's sort of a double whammy on the number.
Great, I appreciate that and all your efforts on here - whilst you're right about the £9k figure being extremely misleading you'll also notice that your $34k current AISC figure is being weaponised now - I've seen virtually no mention of the $9k figure recently but the $34k is being repeated numerous times a day by the same poster.
Thanks HarChris for your kind words. I agree that focusing on today's cost is less meaningful and for the avoidance of doubt the number I gave was simply to counter the prominence given to the $9k or so figure for current mining costs per BTC that Argo gave. This was given without much context which was actually made worse in the video later when Alex was so dismissive of two-thirds of the cost base.
Focusing on the £9k figure in the wrong context can be very misleading (as seen by many comments before on this board around this metric) but equally anybody suggesting my $34k is an indicator of long term cost per BTC is being equally misleading (but I don't think they have yet).
And as to 'suiting my narrative' as if I have some malevolent agenda is just gibberish. I focus on numbers because I believe the fundamentals are usually the most important factor to consider as a LTH (rather than TA, short term sentiment, current BTC volatility etc). So I want to understand as much about them as I can in order to influence my own decisions to buy, hold or sell as to me it is even more important to feel when to bail on an investment than as it is in deciding when to invest. Again for avoidance of doubt the financials suggest to me it is NOT the time to bail on ARB.
So I'm happy to give my own view on where the cost may be at the end of the year but it will be just my view and clearly it is not something that can be predicted with too much confidence. So I'll do a bit more thinking but my gut says your $22k looks pretty reasonable!
Well the miners have to expand, opex and capex are the gue cosst to bear for industrial crypto mining so its pointless saying, what was it without helios costs? lol that will eventually reduce it to hopefully a lower rate than the current $33,904.00
22k all in would be a nice dream, 25k achievable.
LA? whats your number?
AB, of course there's too many unknowns to predict accurately right now but what would be your best guess if someone put a gun to your head today for what the accounts at the end of the year would show as the AISC breakeven price? I run my own numbers through a few times with my own predictions of what difficulty will be, whether 5.5EH is met etc and came up with $22k, but I lack a lot of the knowledge that you Hexam and others have - be good to hear what number (or range) you come up with.
You won’t get that answer AB, doesn’t suit their narrative.
Misleading as always. What was it without Helios build costs? What will it be in q2/3/4?