We have been bullish on Global Blockchain Technologies Corp (TSXV: BLOC) for a while and decided to do a write up on the company back in early November. The Company has a solid team behind it and have been quietly raising funds and making investments and now some plans are in place to generate some significant future revenues.
BLOC Initial Investment (49.9% stake in Coinstream)
Coinstream Mining Corporation’s strategy is to become a diversified cryptominer through a variety of approaches; direct mining and global streaming arrangements.
One investment that Coinstream made was into Distributed Mining Inc. (DMI) via a 25% equity stake.
This is a big deal on its own as DMI’s software enables all devices the ability to participate in mining cryptocurrency.
It is focused on gaming console (which have a high processing power ideal for cryptomining) and mobile phones games (offers mass adoption). The downloadable software is available via a partnered site and had the potential to allow any unused computer or device to mine.
- Cryptoba Investment
Coinstream made a subsequent investment into Cryptoba for $10M USD and 3.8M shares of $BLOC to provide capital in exchange for bitcoins via a streaming arrangement. Coinstream provides the funds to Cryptoba to be used for mining equipment and infrastructure.
Cryptoba will deliver a stream of 2,500 bitcoins per year to Coinstream for up to 5 years. In exchange Cryptoba will be compensated with $1000 USD per Bitcoin (if the market price of Bitcoin is < $15,000 USD) that fee will raise to $1,500 if the market price of Bitcoin increases.
Cryptoba is leasing a 10MW purpose-built date centre facility in Manitoba which has access to the low power rate of under $0.04 per KWH. The money will be used for them to get their facility set up.
Quick back of the envelope Math:
|Est. Market Price of Bitcoin (USD)||$15,000|
|Less Max Fee to Cryptoba||$1,500|
|Net Profit per Bitcoin from Cryptoba||$13,500|
|Bitcoins per year delivered to Coinbase||2,500|
|Number of years||5|
|Profit from the arrangement (USD)||$ 168,750,000|
Not a bad return for a $10M USD + 3.8M share investment
Global Blockchain recently closed their $30M USD financing which was necessary to finalize the Coinbase investment and the Cryptoba investment.
THE S9 COUP
BLOC recently announced they were able to procure a large order of 6,666 Antminer S9s directly from the manufacturer for $20M USD. That is only $3,000 USD per unit (resellers are selling them for up to $8,000 USD for delivery in Feb) and they intend to use these miners for “Investment Purposes” and will be delivered in March 2018.
If BLOC was to sell just enough of their S9’s to Cryptoba to get their facility up and running to receive the streaming of 2,500 bitcoins per year they will only need to sell about ~3000 S9 units to achieve their objective.
(2,500 bitcoins needed / 0.84 Bitcoin mined annually per S9)
That leaves roughly 3,666 units to be held for investment purposes………hmmmm
It appears that they are not done with their investments and have already publicly stated that they are “actively completing due diligence on a number of investments”……
The potential news flow with the use of the remaining S9 units along with the potential of a SpinCo. based on their earlier statements add a number of potential short term catalysts for this company.
Fortune Favours the Bold
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