RE: Numbers19 May 2019 15:56
Perhaps i can share a little extra light with reference to mining and numbers.
The 1000 x Bitmain Z11 miners don't actually mine for Bitcoins.
The Z11 mines for coins using the Equihash algorithm. I expect Argo will use the Z11 to mine for Zcash or Zen.
When Argo refers to potential Z11 mining revenue they are using the term Bitcoin as an 'equivalent' measure.
Argo can - and may - exchange mined coins (ZEN or ZEC) for Bitcoins.
The 1000 x Bitmain S17s about to go into production are capable of mining Bitcoins.
At current coin prices the revenue rate from the S17 is slightly below that of the Z11. It wouldn't be wise to calculate the Z11 and S17 producing similar revenue rates. Not least because the variables are potentially considerable.
Other points:
Power usage of the S17 is 25 percent greater than the Z11.
Z11 costs more than the S17 to purchase. The fact Argo paid much less for the Z11 compared to S17 demonstrates the benefits of the timing of their purchase. Excellent price.
When calculating forward mining revenue, while the growth in coin value is very important, it's equally important to measure the rate of difficulty to mine. It's a simple measure that as more miners go on-stream the difficulty to mine is likely to increase (especially as new miners tend to be more powerful than their predecessor).
If the coin you are mining drops in value while difficulty level increases you end up with reduced revenue that can easily lead to a loss. Equally, if the coin you are mining has value growth greater than the rate of 'difficulty to mine' you end up with expanded revenue growth.
IMO we are still below base value for Argo. it was valued below its cash value in the notion they would bleed money against limited revenue. The market is flipping that notion at the moment. We have further to go.
At that point it will come down to daily revenue rates, mining difficulty level, and how the Company are spending revenue beside core product (how much they like to spend on wages, bonuses, wine, offices, cars and pencils).
For me, i'm confident on crypto potential. Good timing, and i'm banking on bull market (with pullbacks). We're going to see some fascinating news releases going forward. As for the company and their management of spending - i wait for results and costs on that one. For now, i'll give them the chance to demonstrate revenue growth and good management.
Strong Buy.
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