Cryptocurrency mining operation launched by Iron Bridge Resources
CALGARY -- Iron Bridge Resources Inc. has announced the formation and launch of a wholly-owned cryptocurrency mining and hosting operation called Iron Chain Technology Corp. (ICT).
ICT will own and operate cryptocurrency mining data centers at Canadian oil and gas field sites, taking advantage of cheap, clean burning natural gas to generate its own electricity. As a result of this structure and the current Canadian gas price environment, ICT will benefit from some of the lowest cost power in the world.
The company expects to begin operating its pilot cryptocurrency mining facility near IBR’s oil and gas operations at Elmworth, Alberta. The company is already currently mining with equipment sourced and assembled by technology professionals who have been engaged by the company. These professionals are IT systems architects who have extensive experience assembling mining equipment and have a history of profitably mining cryptocurrencies. ICT is providing hosting services for a limited amount of equipment from third-parties, and expects this to be a growth area for the company. The company is currently mining Bitcoin and intends to maintain flexibility with regard to the type of cryptocurrency coin that gets mined going forward.
While North American natural gas prices have been weak for a number of years, the market in Western Canada has been significantly negatively impacted by strong supplies and persistent pipeline takeaway restrictions. This has lead to AECO prices that trade in the $1.50 per GJ range in the futures market. This pricing environment, combined with the emergence of blockchain and cryptocurrencies as increasingly accepted and enduring technologies, provides an opportunity for ICT to become an important infrastructure player by leveraging its sustainable power cost advantage in a safe, stable developed country.
ICT’s pilot cryptocurrency mining project will involve a very modest initial capex investment as a result of its ability to leverage existing infrastructure and excess power generation from IBR’s Elmworth hydrocarbon processing battery, fired by IBR’s clean burning natural gas production, to provide power to the mining control center. The pilot project currently has access to approximately 700 kW of very low cost power with the ability to expand that power generation capability rapidly. The company’s parent company, Iron Bridge Resources, currently produces enough natural gas to power a 45 MW facility and expects to significantly increase that gas production within the next two months when it brings on-stream additional Montney production. ICT is also in discussions with other natural gas producers to work with them on future commercial projects. As a result, the company is interested in pursuing industrial scale hosting opportunities.
Part of ICT’s strategy involves the sourcing of cryptocurrency mining rigs using processing gear that is not experiencing the high levels of demand that many rig components currently are seeing. Being located in a cold jurisdiction where power is abundantly cheap, the company is sourcing components that would be challenging to use in typical grid-connected and warmer climates. This is expected to further reduce capital costs and could be a sustainable competitive advantage in hosting.