SkyChain Technologies a Vancouver-based company providing blockchain infrastructure services and power solutions, has provided an update on its pending acquisition of a crypto mining hosting facility in Quebec. Through its 100% owned Miningsky Technology subsidiary, the company is among the first to offer a full-service solution for crypto mining, providing fully managed service, transformers, mining containers, and …
SkyChain Technologies (TSXV: SCT), a Vancouver-based company providing blockchain infrastructure services and power solutions, has provided an update on its pending acquisition of a crypto mining hosting facility in Quebec. Through its 100% owned Miningsky Technology subsidiary, the company is among the first to offer a full-service solution for crypto mining, providing fully managed service, transformers, mining containers, and site construction.
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Miningsky, which has been designing and building the transformer, power unit, and PDU equipment since 2018, covers the whole cryptocurrency journey starting from providing its proprietary MiningSky 8-GPU Miner, a high-performance GPU-based miner designed to mine Ethereum and other cryptocurrencies.
The 20 Mw crypto mining hosting facility, located in Sherbrooke and currently running at about 70% or 14Mw capacity, covers 40,000 square feet with significant expansion capacity. The 20Mw capacity can contribute 670Ph/s hashrate to blockchain, and the power capacity can be upgraded to 23Mw without further hardware investment. The Vendor has invested over $8 million to develop the facility.
The site offers potential electricity cost reductions of approximately 20% compared to electricity costs in British Columbia. Due mostly to clean, efficient hydropower, Quebec offers the second-lowest electricity costs in Canada, behind Manitoba, and some of the lowest in the world. Skychain has relocated all its miners from the Houston, British Columbia location to the Sherbrooke site, which will streamline the company’s business model and lower the cost per Kw to its crypto mining clients.
Bill Zhang, CEO, stated: “We are making very good progress with the transaction. With its current growth, we expect the site will be loaded at full capacity once the purchase is completed sometime in Q1 2021. With lower operating costs, this revenue stream should contribute to a solid and profitable operation. The site also a holds excellent potential for an internet data center (IDC) and other high density power consumption industries like GPU (graphics card processing unit) gaming and cloud-related industry services.”
SkyChain has agreed to purchase the entire facility for total consideration of CDN$5.5 million in cash and shares with the cash portion expected to be provided by conventional commercial lending. The cash portion is $3.0 million, of which half is payable upfront and half within 48 months, paid in installments equal to a maximum of 60% of EBITDA until fully paid and any remaining balance payable on the due date. The share portion of the consideration is $2.5 million, for a total of 5 million shares with 3,000,000 shares upfront and the balance of the shares after certain cash payments are made.
The facility will immediately boost monthly revenue to $640,000 per month and will be brought up further to capacity within 2 months.
A review of the target company’s financial information by the company’s auditors and legal due diligence are nearing completion. The proposed transaction is subject to all necessary Stock exchange and regulatory approvals.
Development of SkyChain’s new crypto hosting site in Birtle, Manitoba continues to progress, with a major electrical engineering firm in Winnipeg and Manitoba Hydro International both overseeing project development.
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