- CryptoStar (TSXV:CSTR) has signed a letter of intent to acquire up to 120 megawatts of low-cost power
- The agreement was signed with an unnamed Alberta-based private energy company
- CryptoStar’s largest shareholder, ACN 117 402 838 Pty Ltd, will transfer 32.5 million common shares to the energy company
- CryptoStar (CSTR) is currently up 50 per cent to 6 cents per share, with a market cap of C$6.59 million
CryptoStar (TSXV:CSTR) has signed a letter of intent to acquire up to 120 megawatts of low-cost power, effective April 3.
The cryptocurrency miner currently has existing operations in the USA and Canada. With the increased capacity, CryptoStar could become one of the lowest-cost Bitcoin producers in North America.
CryptoStar signed the agreement with an unnamed Alberta-based private energy company. The company has access to three Alberta sites, and permission to generate and supply up to 30 megawatts of power.
Following approval by the necessary regulatory authorities, the energy company will increase capacity. This will allow it to generate and supply up to 120 megawatts to CryptoStar.
The agreement also grants CryptoStar first refusal for either complete purchase of the energy company or a portion of its operations.
David Jellins, CEO of CryptoStar, commented on the deal.
“This LOI with the Alberta Partner is consistent with the company’s long term expansion plans into low-cost energy regions in North America. It also solidifies CryptoStar’s objective to become one of the lowest-cost Bitcoin producers in North America,” he said.
As consideration for the acquisition, CryptoStar’s largest shareholder, ACN 117 402 838 Pty Ltd, will transfer a total of 32,500,000 common shares to the energy company. This will occur upon closing of the power supply agreement, and will not further dilute the outstanding shares of CryptoStar.
An initial agreement for 20 megawatts is expected to be executed within the next 14 days. Operations are due to commence in the second quarter of this year. Additional data centres will subsequently come on line throughout the rest of 2020.
CryptoStar (CSTR) is currently up 50 per cent to 6 cents per share at 1:09pm EST.
