Member Info for Hexam

BTC mining difficulty to adjust tomorrow (ca. -10%). Prob. Kazakhstan related.

Hi Krauty - where are you seeing this as it looks like there won't be much change to me?

HGN - Agreed. In particular more than with most other industries this is a race. The more our competitors mine the less we do so it very much matters how well they are doing, or not doing, and especially how quickly they are growing compared to Arb.

"Well I suppose Hexam if you believe in the long term prospects of bitcoin then the current HODL + 6 months more @$100k is almost $400m. Irrespective of the growth plan one could probably more than treble their money from here simply from bitcoin going on a run around the time of Texas completion..."

Agreed, but having belief in BTC and thinking it will up 150% in a few months are two different things. I also agree what BTC is doing in the future is much more important than what it is doing now (which was actually in the first part of my response).

Agree debts are relatively low but outstanding loans are actually $60m I think ($40m from notes and $20m remaining with Galaxy if they did what they said they were going to do with this loan).

"Bitcoin movement, funding of machines [+growth plans generally] and comparisons to competitors" are precisely the sort of things that will drive the sp in the future so I think it is good to discuss (or 'squabble' about) them here. I THINK arb is a good bet but I don't see how current HODL and revenues show that it definitely is. For me the growth plan, how it is funded and how well it is executed will be the key things.

AB - Great spot! It makes the cost per BTC much closer and depends on what costs included but Mara still wins out on coins mined per EH basis though that's getting closer too.

I suspect once immersion comes online and we have the lower power costs we could well be the most efficient miner based on a cost per BTC basis but I get tired of people claiming it is true now and never evidencing it or just quoting the 80%+ mining margin. Have they really compared dozens of miners on a truly like-for-like basis?

AB - Mara for one. Like you I don't like Mara for lots of reasons but their efficiency (either on a mined per PH or cost per BTC basis) appears better than us.

One thing to note with ARB is that they only include hosting and electricity in their direct costs of mining but I haven't found any others yet that do this - e.g. others include the cost of machines too. So the 80%+ margin looks good but it can be misleading. We are still very efficient though - just not quite the best.

ARB do have great mining efficiency. It is NOT best in sector.

Interesting and largely positive RNS with quite a few bits to it:

Very good mining figures - maybe down to the recently installed machines improving efficiency?
Interesting though that no update on PH so perhaps installation of remaining c.100PH not yet complete?
Confirmation of approx. amount of Celsius settlement from ARBs point of view (approaching $1.5m)
Extra 64 HODL but most likely just bought some more - including from settlement amount above?
Big losses in the month but this simply reflects fall in BTC (which also explains drop in mining margin)
May just be being cautious with H1 reference for Texas wording but admit that did leap out at me

From Final Prospectus:

"Phase 1 of this development is currently in progress, comprising and expected to be completed in the first half of 2022, and includes the electrical interconnection, infrastructure and machine hosting facilities that are expected to support 100 MW of power capacity using immersion technology, at an estimated cost of $50 million. Phase 2 of this development, which is expected to be completed in the second half of 2022 and is expected to support an additional 100 MW of power capacity using immersion technology, at an estimated cost of $30 million. The costs of these facilities have been covered from the Company’s existing cash resources and the net proceeds of the Fundraising. These estimates do not include the cost of the mining machines that the Company will operate at the new mining facility"

We were told at one stage Texas build was $80m split I think $50m phase 1 and $30m phase 2 (or other way round). Can't remember what exactly this included though. The land I thought was around $20m. The machines, yes, anybody's guess.

@chuz - $100m for the land?? Where does this come from/relate to? Though pricey I thought the Texas land cost a lot less than this. Unless I've got your meaning/question wrong?

AB - It's an excellent question, especially as it seems to spike pretty often like that (but not so pronounced). I could understand if this was a graph of one company's actual hashrate as variation in downtime will always be expected - but this should average out across the industry (barring events like China and Kazakhstan). As has been mentioned price is a big factor in global hashrate but this wouldn't explain sudden and extreme day to day changes. Also the hashrate chart is far spiker than the price chart.

The only thing I can imagine for these very short-lived spikes (and troughs) is it may simply be down to the way hash rate is recorded that might be creating timing anomalies. Other than that it must be something in the way the whole system operates that makes it not a 'smooth production line' but my knowledge of this is far too limited to even to begin to suggest what this might be.

"Assuming BTC recovers , new operation in Texas goes as planned , Kazakhstan mining reduces not sure why price of £1.70 is considered ramping. May not happen in a month but end of 1st quarter realistic target."

If Texas goes to plan and even if all of Kazakhstan mining shuts down it is still more than likely that ARB will be mining less coins than they are today - especially if BTC recovers - as there are no new machines expected until at least Q2 assuming we have now reached 1.7EH. So yes, I think a view that the sp is going to double in a few months is unrealistic without some very pleasant surprise news.

Beyond that I can see better times as Texas gets up and running and depending on what plans emerge for further growth and how this is funded. We should also know more about Pluto by then and hopefully just how beneficial immersion will be. Even then lots could go right... and lots could go wrong.

"Just to put it out there also, last time it went to this price of around 85p it went to 1.70p within month .. feel your boots DYOR on fundaments"

Yes, but that was largely on the back of nasdaq FOMO. What's the trigger this time? Agree with sentiment of 'DYOR on fundamentals'. I did and invested based on them but at the moment although I think 85p is cheap I can't see anything in the fundamentals to suggest 170p is realistic in the near term unless there is some significant, surprise news. If anybody's got any analysis that suggests otherwise though would be keen to see it...

I think you just need to change the sign for the tax in your calcs as it is an income here not an outgo. It's very confusing how they've presented it.

Yes, asset write-downs are a non-cash item. Must admit I would never normally think of looking at this much detail on what isn't the main P/L statement - that's some impressively deep research!

Actually though filing deadlines may differ the accounting standards will be the same so definitely can’t see final figures being submitted before the accounting year ends.

Hi Herdie - I’m pretty sure they can’t file completed accounts ahead of year end else it would contain a lot of estimates!?! But then I’m only familiar with UK accounting so who knows??

"One thing to note the yearly accounts will be filed and RNSd shortly one would hope so at least Arbk investors will have some meat on the bone."

@Herdie - Last year's results came out in April. I know the interim results last year were a month earlier than the previous year's but do you really think we'll get the annual results '"shortly"? I agree they should offer up some useful info - including the price of the latest machines. Btw also agree that December mining figures are likely to be around 200 - give or take.

Mary - Nick was talking about the Citi target of 425p which does, I think, seem bizarre. Agree with your sentiment on EZJ sp though and looks like there will be more easing of restrictions today including the ending of pre-departure tests for UK arrivals.