DURHAM, N.C., March 20, 2019 /PRNewswire/ — MGT Capital Investments, Inc. (OTCQB: MGTI) today provided the following operating update to investors.
As reported several weeks ago, MGT completed the move of its Swedish operations to locations in Colorado and Ohio. At that time, we stated that when Bitcoin mining economics allow for profitable operation, we would re-commence mining. All but 600 miners are currently racked and plugged in, and ready to start operation. Over this period, we have negotiated with our counterparties in both locations, and are pleased to announce that we have entered into a letter of intent with Standard Power of Ohio that is expected to vastly improve Bitcoin mining economics for MGT.
The LOI, non-binding and subject to definitive agreement, is expected to result in profitable Bitcoin mining even at a sub-$2,000 price of Bitcoin, assuming a stable Difficulty Rate. The proposed arrangement envisions a management agreement whereby MGT provides up to 2,400 miners and Standard Power provides the hosting facility and infrastructure. After paying net electricity costs and onsite labor, the two companies will split the operating profit.
The key to maximizing profitability will be the utilization of an algorithmic hedging strategy executed by Standard Power working hand in hand with MGT. This strategy will utilize futures markets to hedge specific peaks on the power demand curve, thereby leading to a lower average net cost of power utilized from the energy provider. The models which drive the strategy estimate hedging approximately 10% of the power used by mining operations; netting against the corresponding downtime in production (inclusive of rebooting), unit costs of mining should be reduced considerably.
Steve Schaeffer, Chief Operating Officer of MGT, commented, “This proposed agreement is a win-win for both sides, and provides a template for the balance of our machines. I believe this unique approach of Standard Power and MGT may lead to dramatic changes in the typical host/miner relationship going forward. Under this structure the hosting center is secure that it maintains a reliable long-term client, while the miner now has an ability to control power pricing to effect a profitable mining model even in the down cycles.”
About MGT Capital Investments, Inc.
With facilities in Washington, Colorado and Ohio, MGT Capital Investments, Inc. (OTCQB: MGTI) ranks as one of the largest U.S. based Bitcoin miners. MGT oversees the operation of approximately 6,000 Bitmain S9 miners, and 50 GPU-based Ethereum mining rigs. Further, the Company continues to execute on an expansion model to secure low cost power and grow its crypto assets materially.
For more information on the Company, please visit: https://mgtci.com
This press release contains forward–looking statements. The words or phrases “would be,” “will allow,” “intends to,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” or similar expressions are intended to identify “forward–looking statements.” All information set forth in this news release, except historical and factual information, represents forward–looking statements. This includes all statements about the Company’s plans, beliefs, estimates and expectations. These statements are based on current estimates and projections, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These risks and uncertainties include issues related to: rapidly changing technology and evolving standards in the crypto mining industry; the ability to obtain sufficient funding to continue operations, maintain adequate cash flow and execute its business strategy; volatility in the Bitcoin market; and other factors set forth in the Company’s most recently filed annual report and registration statement. Readers are cautioned not to place undue reliance on these forward–looking statements, which reflect management’s analysis only as of the date hereof. The Company undertakes no obligation to publicly revise these forward–looking statements to reflect events or circumstances that arise after the date hereof. Readers should carefully review the risks and uncertainties described in other documents that the Company files from time to time with the U.S. Securities and Exchange Commission. MGT Capital Investments, Inc. provides no assurance regarding the actual outcome of the events contemplated by any forward-looking statements included in this release.
Investor and Media Contact:
SOURCE MGT Capital Investments, Inc.