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Was reading through Finncap reports and commentary. They assume 3EH (100MW) comes online in H1 22, another 100MW in H2 22. They assume with every bitcoin price doubling, difficulty/hashrate also jumps same proportion. So from price of say 40k to 80k for ex, they assume hashrate jumps 150EH to 300 EH. I doubt it will jump at such a pace, especially given the drop from Chinese regulation, but who knows.

They allocated £75m for building cost ie build out and £60m for the machines (unclear whether for 100mw or 200mw). Those numbers were announced in their early June research note and haven’t been revised downwards. Again with rig pricing having dropped, I feel it may be lower. Margin of 75% which feels quite conservative.

More importantly, if we have paid £32m for machines due soon, that can’t be be for a mere 530PH, IF we are looking at £60m for 3EH. Ive looked at other miners purchases, and on average 40m USD buys atleast 1EH capacity. On this alone, disregarding Pluto etc, we should double capacity and therefore forward revenue. Not long to find out. Happy to be corrected on the numbers.

Chaebol: from what little I have read, yes. But like all new tech, there’s a bubble first, then maturity.

So many thoughtful posts! Thank you all. I think of us as journeying as investors. I have myself been vocal on LSE bbs and defended hair tooth and nail, what I thought was “my positions”. (Solg and latterly RMS etc). I can readily recognise myself in others, which is helping me be more tolerant and non judgemental. Worrying can be rational or irrational. Here I don’t have any doubts about my investment. But only your own research can give you that conviction in turbulent times. Good luck all.

Speel: I would say it’s a bit dichotomous that thinking. There is no us and them. The candour in posting by Chaebol, Theeduke etc was raw and rather refreshing to me. The drunks, gamblers, unstable people, chancers etc are all distributed amongst employed and unemployed people. Many functional people are dysfunctional underneath the veneer. People have issues, problems, and they are all trying to overcome their temperaments and make some money. That’s just my humble opinion.

Agree Canetoad. We are the biggest LSE listed bitcoin miner, and offer exposure to blockchain upside, rather than a pure bitcoin play. I was looking at Riot’s expansion plans. They aim to reach 7.7EH by Q4 2022. It’s weird that our capacity too will be near that number. (1EH currently, about 600-700PH in next 2 months, 6EH deployed at Texas in 2022 H1). So the question on valuations will then turn to: efficiency and diversification.

On efficiency, in Q1 21 Riot had 67% mining margin, lower than ours. On diversification, I can’t see any other DeFi type initiatives, or other investments by Riot, happy to be corrected. Argo’s investments in Pluto are being discounted by market presently imho. The YOP tokens being stolen in April, the delay in Pluto IPO (was due May or June I believe) was followed by bitcoin starting its drop. In the meantime Pluto raised 4m (1st round) and £28m in its second round of pre IPO funding. That’s a significant amount of cash which they have been deploying into NFTs, tokens etc. At the exact time NFTs fell, which is what I like. Countercyclical to sentiment. Sentiment is fickle and therein lie opportunities for patient people, who can control their impulses. Imho only. Good luck all

Argobull: if I may add…
Do investors want a bitcoin exposure pure play? Or a company that is proactively diversifying, into the wider crypto space?
Are they convinced that companies like Mara will not see capital flee when bigger monsters like Core Scientific list?
Do investors want exposure to the upside of NFTs, DeFi, revenue via validator nodes, Proof of Stake revenue etc?

In the midst of all the bullish talk about bitcoin, do they want to hear a more realistic outlook: of a cyclical market, of a company that invests strategically, thinks of crypto winters and counter-cyclically?

I posted previously on the superb energy efficiency of the buildings built by our contractor Navier elsewhere. 90s is possible and very likely. Remember also that a company which has a clear diversification strategy and “counter cyclical” investing strategy will attract capital fleeing other pure bitcoin miners, when/if the tide turns. Win win.

Argobull: Core Scientific quotes a 91% margin by “direct self mining” ie owning and operating data centres. That’s the way to squeeze more juice from the same fruit. Vertical integration plus immersion mining plus Uber cheap energy costs. Ready for the next crypto winter too :)

Error: £32m advance payment TO (not from) Core scientific for machines landing Q3, early Q4 21, ie now. We are expanding our capacity by at-least 60% within next 8 weeks, literally as we speak and people are selling. Oh well to each his own.

Zydecoco: well spotted! The AGM document and others had mentioned different numbers, stating 2 stages of 100MW each. It is reassuring to see the clear statement of intent: bringing 200MW of capacity online by first half 2022. The company is staying nimble in considering options, given how volatile the market has been, before committing to machines purchases imho. Machine tech keeps evolving. EPIC has stated it will go for a bitcoin miner eventually (they mentioned 3 more miners this year). Delays due to chip shortages might well happen, it’s the nature of the business. Companies who bought machines at the peak of the fever will not be too happy if a crypto winter comes.

I do think the £32m purchase advance payment from Core Scientific for machines delivered Q3-4 21, could have been highlighted in the half yearly, but as others here have alluded, once institutions enter the fray, PIs can become a bit of a nuisance. I have no doubt the intention is to institutionalise the share register, gradually. We are a fickle bunch and easily relieved of our positions. (I m not speaking for all, of course but a significant number who bought higher will have sadly sold into the FUD being created). I topped up today. Everyone has to do their appraisal of the facts, and act accordingly. No point holding hands. Good luck all.

We know the machine capacity that got cancelled (Q2 600PH) has now been scheduled to be installed as we speak ie Aug/Sept/early Oct. I found this in the half yearly accounts (Note number 13)

“Mining equipment prepayments consist of payments made and due on mining equipment due to arrive in Q3 and Q4 2021. Payments to ePIC ASIC Asia Limited comprise £3,429,826 and the balance of £32,041,673 was paid to Core Scientific Inc in advance of machine purchases to be received after the period end.”

In other words £32m (45m USD) worth of machines are on order and being installed as we speak. I m no good with the maths ref machine capacity but that sounds higher than 600PH to me. Just a question of patience. Ignore the noise and listen to your instinct.

Thank you to all well researched posts. On the cost of building out Texas, PW stated a rough estimate of 250-500k (USD) per MW. This is full costs ie machines, installation facility, land etc. Exact question asked by Saylor in recent chat: “what’s the money you need to spend to bring 6EH online?”. That’s barely 100m USD, even at the upper end. And that’s discounting costs already sunk in (nearly £50m raised in H1 21, loan against bitcoin and the $100m loan facility available when Helios was purchased). Obviously if the agreement is confidential and there are stages to this, PW isn’t going to shout out the details from the roof tops. These numbers were teased out by Michael Saylor in the recent Saylor Spaces podcast. (From 2 min in the discussion is on build out costs).

https://m.youtube.com/watch?v=-fk6e9xW99o

There are other aspects of profitability for ex the losses carried forward that can be offset. The timing of that boatman report was exactly when profitability was reported. No coincidence. Someone wants it to stay down here and all we can do is clarify facts and try dispel fears. The RNSs have been somewhat subdued in tone and I have wondered if institutions want their pound of flesh before plans are revealed. The ePIC deal moving was a bit disappointing but this team is agile and probably in sight of data/developments they can’t share (yet). All conjecture, but the numbers will be big and will move the dial. 50-100m USD per 6EH 200MW and eventually scaled up to over 800 MW will be interesting. IMHO ARB is undervalued and sadly PIs are selling into FUD whilst institutions are quietly buying. Very familiar story. DYOR. Good luck all

Hilarious to see financial institutions and the “establishment” being defended. Base rate 0.25%, credit card interest rate 21% (for someone with an excellent credit history). Personal loans at an amazing 2.8% (only 11 fold the base rate). Banks are dinosaurs and the meteor might just be bitcoin. Even if it isn’t, I m proud to be an early adopter who saw through the bs system. DYOR.

RC: Agreed, I do think plenty are on the sidelines unwilling to risk it, in case the bull run is finished and waiting for the dust to settle. The update/s on which coin/s we will mine, and exactly what ePIC brings to the game, are of key interest to me this quarter. Their machines are due in early Q4, so not long to wait.

Henry Kwan of ePIC mentions enterprise scale data centres for blockchain based industry; that certainly doesn’t sound like just a bunch of bitcoin miners. He described a “vertical integration of sorts”. We have the mining expertise, we own the facility, ePIC supplies the customised hardware, we do the research together, Luxor offers hashrate optimising. Energy is the missing component, and if we “own” part of the energy supply, that’s the supply chain covered. My instinct is still that we go into De fi.

As others (jakczar) have pointed out, the Texas facilities could host as well as mine for ourselves. I recollect we hosted few thousand machines in Canada for another miner. I liked the comment by Seb about their strategy for growth being “counter cyclical”. Happy to wait patiently.

Good appointments. I m pleased Marco is gone, given Hadron was previously one of ARBs biggest holders, and has sold down.

https://mintomine.com/technical-reports/

The updated resource is 727 million lb of contained copper. At today’s prices, that’s comfortably north of $3billion. The gold and silver are currently on extremely low stream rates. However I expect the gold to be renegotiated. (It was renegotiated for a 12 month period in 2019). To see an integrated explorer developer and producer priced here is irrational. Cash is king. Please DYOR.

I would prefer a gradual rerate after Minto lists. Why would I choose Pere over Minto? Access to tsx vs LSE? Discounted due to obscurity/shot sentiment vs Minto? And lastly the prospect of a rabbit in the hat? Another acquisition? Gati has spades of business experience, where he’s faltered is the salesmanship. Covid delayed our aspirations, I doubt it’s smashed them. The team behind Pere may have already lined something up who knows? When the cash flow is more transparent, and assuming Cu Au stay here, the asset will do its own marketing. All conjecture but certainly the wrong time to dump if one still holds imho.

Pere was designed to be an acquisition vehicle. If the value of Minto appreciates, then by extension Pere will appreciate. Gati and others hold a significant chunk. 48% out of circulation at last count. The liabilities to Capstone etc are due to be paid. Ditto liabilities payment to Pere by Minto which should pay off most of the loan. Mine life is likely to get extended further. We are likely to find new mineralisation in step out drilling. There are explorers with 2-3 holes in the ground and Mcap of 10/15/20m. We have an integrated explorer developer and producer here, valued at less than 50m. This is on target to produce 20MT Cu and significant gold/silver. They renegotiated the gold stream for 12 months last year, no reason they cannot achieve the same going forwards. No doubt this has been arduous journey for LTH, but I’m happy to hold given Au and Cu prices. Sumitomo wouldn’t bother partnering with a minion unless there were bigger plans ahead. Just my two pence.

Kozzi: yes I noticed that comment too, very interesting.
Rory: I also believe it *might* be ETC. Because Henry is very supportive of ETC, it’s migration to ASICs, he’s published a paper on it etc. After all ROI and profitability matters, not mining the most popular coin.

To be clear, I think ARB is aware that being a pure miner is too high risk and they are aggressively pursuing a growth strategy that involves myriad blockchain applications. This will take time to execute, but should lead to more stable and exciting times ahead for share holders.