Cryptostar (CSTR.V) has signed an LOI with an Alberta based private energy company for 120 megawatts at among the lowest electricity rates in North America to support their bitcoin mining efforts.
The all-stock deal puts Cryptostar in position for Bitcoin’s halving next month by giving it access to cheap, accessible and renewable energy.
“This LOI with the Alberta Partner is consistent with the Company’s long term expansion plans into low cost energy regions in North America and solidifies Cryptostar’s objective to become one of the lowest cost Bitcoin producers in North America,” said David Jellins, chief executive officer of Cryptostar.
The Alberta energy company has access to three sites in Alberta, and is permitted to generate and supply up to 30 MW of power, and intends to raise that to 120 MW for Cryptostar when they get the approval from the applicable regulatory authorities.
Highlights of the Transaction:
- Projected power cost will be amongst the lowest in the Province of Alberta;
- Non-dilutive transaction to Cryptostar’s minority shareholders through the generous support of the major shareholder;
- Cryptostar’s position further strengthened to become one of the lowest cost Bitcoin producers in North America.
You can be forgiven for not being familiar with Cryptostar. They haven’t exactly been forthcoming with news and promotion since their arrival on the scene. Their recent moves were in December, when they moved into the burgeoning cryptocurrency mining scene Newfoundland and Labrador by taking up some real estate for their data centre expansion.
“The agreement with Tier 1 is consistent with the Company’s long term expansion plans into low cost energy regions in North America and paves the way for CryptoStar to take advantage of extremely favourable power costs in Newfoundland and Labrador. CryptoStar is now positioned to become one of the lowest cost Bitcoin producers in North America.” said Jellins.
The company is spread out between Canada, Iceland and the United States. Keeping to the coldest provinces and states is good cost cutting leading into the halving, because the company can save money on air conditioning. The only way to mine bitcoin is through ASIC rigs—and the price of cooling down facilities full of servers can eat into your bottom line—but if you can open the doors and let mother nature do it for you, then you can save yourself the hassle.
Now their Alberta acquisition compounds that—adding even more low cost electricity to the value proposition brought by the company. Their Alberta partner has also agreed to grant Cryptostar a right of first refusal for entry into power supply agreements for up to 120 MW for cryptocurrency or data centre usage, and the purchase of their power gener generation business. The agreement will last for five years, and renew automatically for another five unless terminated.
The Australian company formerly known as Adrenaline Pty. Ltd, who his Cryptostar’s largest shareholder, is funding this venture, offering a transfer of 32,5000,000 to the Alberta company and acting as an arm’s length advisor when they enter into the agreement for at least 20 MW of power. The share transfer will be non-dilutive.
The company is currently evaluating the most optimal financing structure to best take advantage of one of the lowest cost operating environments in the crypto mining industry.
—Joseph Morton