Toronto Stock Exchange listed company Iron Bridge Resources (TSX: IBR) announced the launch of a subsidiary named Iron Chain Technology (ICT), dedicated to crypto currency mining and hosting operation.
The Calgary, Alberta-based company plans to own and operate crypto currency mining data centers at Canadian oil and gas field sites, taking advantage of cheap, clean burning natural gas to generate its own electricity. IBR is confident that the proposed structure will benefit from one of the low cost power regions in the world.
Reason to enter crypto currency mining
The natural gas market in Western Canada has been significantly negatively impacted by strong supplies and persistent pipeline takeaway restrictions. This has led to AECO prices that trade in the $1.50 per GJ range in the futures market. This pricing environment, combined with the emergence of block chain and crypto currencies 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.
About Iron Bridge
Iron Bridge Resources Inc, formerly RMP Energy Inc, is a Canada-based independent crude oil and natural gas company. The Company is engaged in the exploration for, development and production of crude oil, natural gas and natural gas liquids (NGLs) reserves in the Western Canadian Sedimentary Basin within the province of Alberta, Canada. The Company’s areas of operations and focus is located in the Montney light oil fairway at Ante Creek, Waskahigan and Gold Creek in West Central Alberta, with additional Alberta-based operations in Grizzly, Kaybob, Pine Creek, Gilby, the Deep Basin area of Ricinus and its Big Muddy asset base in Southern Saskatchewan.
Iron Chain Technology will operate its crypto currency mining facility near IBR’s oil and gas operations at Elmworth, Alberta. ICT is currently mining with equipment sourced and assembled by technology professionals who have been engaged by the company. ICT is also 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 crypto currency coin that gets mined going forward.
ICT project details
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. ICT’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, ICT is interested in pursuing industrial scale hosting opportunities.
Part of ICT’s strategy involves the sourcing of crypto currency mining rigs using processing gear that is not experiencing high levels of demand that many rig components currently are seeing. Being located in a cold jurisdiction where power is very cheap, ICT 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.
Iron Bridge CEO, Rob Colcleugh said
“We are very excited to be joining the blockchain movement and together with our new technology team, we hope to contribute to the ecosystem by helping to increase transaction speeds and lower transaction costs. Our IBR shareholders are expected to benefit from increased natural gas netbacks as we convert our clean, low priced gas to electricity and then direct that electricity to profitably mine cryptocurrency and host platforms for third-party mining equipment.”
ICT Chairman Josh Young said
“While North American natural gas prices have been weak for a number of years, I am encouraged by the potential that ICT represents for our Iron Bridge shareholders. With natural gas pipeline infrastructure constraints representing persistent pricing challenges, I support our management team’s efforts to find all means possible to improve the value received from our production streams.”