Two weeks go, while in the thick of negotiations to lock down the target mentioned in today’s news, the directors of Block One Capital (BLOK.V) had to go release a “we have no idea why our stock is going nuts” news release to satisfy regulators.
They weren’t alone. Pretty much everyone in the market with any positive news right now is on a dotcom-like run, but Block One stock action was running hotter than many.
It’s running hot again today, but this time there’s no secret as to why.
Block One Capital Inc. has signed a binding term sheet to acquire 90 per cent of the equity of TG12 Ventures Inc., a private company engaged in cryptocurrency mining. Under the binding term sheet, the company is to invest up to $2.3-million (U.S.) to acquire up to 90 per cent of TG12. The investment is to be made over a 12-month period and will be based on various milestones. The first investment is scheduled to be made immediately, pursuant to which the company will acquire a 40-per-cent interest in TG12 for a $250,000 (U.S.) investment.
That’s a similar cost point as the Calyx Bio-Ventures deal announced today, but BLOK is getting a little more for it – namely, 40% of this:
TG12 has entered into a purchase agreement to acquire 1,000 S9 Antminer cryptocurrency miners. The S9 Antminers are manufactured by Bitmain, one the world’s most recognized bitcoin/cryptocurrency companies.
The deal is cheap because, well, the rigs aren’t in place yet. Or at hand. It will get more expensive when that changes.
The first batch of S9 Antminers is scheduled to be shipped and delivered in January, 2018, and be operable in February, 2018. Pursuant to the purchase agreement, the full 1,000 units are to be delivered and be operable in February, 2018.
The Calyx deal is for less rigs, but they’re running now, while crypto is actively pounding on the market. The Block One deal will be bigger, but kicks in later, which means if crypto is a long term win, Block One’s deal is superior.
The S9s are planned to operate at a co-location facility located in Montreal, Que., Canada, where the all-in cost of operating the miners, inclusive of electricity, rent, cooling, general rig maintenance and management, is estimated to be about 10 U.S. cents per kilowatt-hour.
BLOK stock ran on the news, up 35.7% at the time of writing, similar to the run CYX is having on the same day.
— Chris Parry
FULL DISCLOSURE: Calyx is an Equity.Guru marketing client. Block One is negotiating a program currently and may be a client at a future date.