Global Blockchain Technologies Corp., a company that provides investors with access to a variety of blockchain holdings, has announced that its wholly-owned subsidiary Global Blockchain Mining Corp. has entered an agreement to acquire a 49.9% interest in CoinStream Mining Corp., the streaming model cryptocurrency mining company.
Under the terms of this agreement, Global Blockchain Mining Corp. will provide strategic upfront capital and an additional payment upon delivery of the cryptocurrency to select operators and operation, in exchange for a stream of future cryptocurrency production at a fixed price.
CoinStream has aggregated 10 megawatts of power in purpose-built data centres located in low power cost jurisdictions – under $0.04/kWh in Winnipeg, Manitoba, Canada. Once funded, the initial streaming agreements provide for the delivery of a total of 2,500 bitcoins per year for five years at a fixed rate of $1,000 USD per bitcoin at the time of delivery. In the event that the price of bitcoin trades above $15,000, the fixed cost payment would increase to $1,500. In addition, in the event that the network hashrate rises above certain predetermined levels for a sustained period of time, the fixed cost payment would be adjusted upward. For the duration of the contract, Global Blockchain Technologies Corp. anticipates that it would receive 12,500 bitcoins, which represents a current undiscounted value of $112.5 million CAD under current bitcoin prices.
In return, Coinstream will provide $10 million USD, applied to CAPEX-related costs, to its industry operating partners. It will also retain full ownership of the underlying mining equipment, until its initial contribution of capital is paid back, and a 50% ownership of the ongoing value of the equipment thereafter. The CoinStream team will continue to operate the business under Global Blockchain Mining Corp.
Global Blockchain Technologies Corp. also intends to pursue a share-dividend spin-out of Global Blockchain Mining Corp. Pending shareholder and regulatory approval, Global Blockchain Mining Corp. will spin out into a publicly-listed Canadian entity. Global Blockchain Mining Corp. intends to offer investors cost predictability, direct leverage to increasing cryptocurrency prices, additional growth through the acquisition of new streams, and a diversified operational base.
Global Blockchain Technologies Corp. President Shidan Gouran said: “Revenue stream financing is now common for other commodities like gold, lithium mines, oil fields, and farms. By bringing this model to cryptocurrencies, we believe that this model will offer Global Blockchain Technologies Corp. the opportunity to undergo extraordinary growth and become the largest virtual miners in the space. In addition, we are confident that we will provide investors a readily calculable value for our contracts, which can be easily modelled at various bitcoin prices.”
With the acquisition of Coinstream and its underlying streaming agreements, Global Blockchain Technologies Corp. aims to provide non-dilutive capital to existing cryptocurrency miners operating in the most favourable jurisdictions. By doing this, it hopes to become the preferred source of capital for miners.
Steven Nerayoff, Global Blockchain Technologies Corp. Chairman, said: “The streaming model allows those who seek to fully leverage the potential price growth of cryptocurrencies to de-risk against the need to maintain operations, or concern themselves with changing costs and technologies. The strategy also gives us the potential to scale aggressively and quickly in multiple locations, further reducing risk. By focusing on the aggregation of bitcoin and other major currencies, at or near the direct cost of mining at or near the direct cost of mining, we are offering the maximum benefit to shareholders in a strong cryptocurrency market.”