TORONTO, April 20, 2020 /CNW/ - CryptoStar Corp. (TSXV: CSTR) ("CryptoStar" or the "Company"), a cryptocurrency mining and data centre operator, is pleased to announce, further to its news release on April 6, 2020, it has signed a power supply agreement (the "PSA") with an Alberta-based private energy company (the "Alberta Partner") effective April 17, 2020 securing up to 30 megawatts (MW) at among the lowest electricity rates in North America.
Highlights of the Transaction
- 30 MW of power secured with operations to commence as soon as possible
- Projected power cost will be amongst the lowest in the Province of Alberta
- Non-dilutive transaction to CryptoStar's minority shareholders through the generous support of the major shareholder
- CryptoStar's position further strengthened to become one of the lowest cost Bitcoin producers in North America
"We are pleased to have finalized the terms of the PSA with the Alberta Partner. This PSA is consistent with the Company's long term expansion plans into low cost energy regions in North America and solidifies CryptoStar's objective to become one of the lowest cost Bitcoin producers in North America," said David Jellins, Chief Executive Officer of CryptoStar.
Under the terms of the PSA, the Alberta Partner has agreed to commence supplying electrical power to CryptoStar following an initial upfront payment, which will be allocated towards a prepayment of initial power costs and the costs of commissioning the required infrastructure and equipment for CryptoStar's cryptocurrency mining and data operations. The PSA has a term of five (5) years, unless otherwise terminated or renewed in accordance with the terms of the PSA. The Alberta Partner has agreed to continue negotiating exclusively with CryptoStar in respect of further power supply agreements for up to 120 MW at sites in Alberta for CryptoStar's use. The Alberta Partner has also granted to CryptoStar a right of first refusal for the purchase of the Alberta Partner's power generation business or any portion thereof.
A.C.N. 117 402 838 Pty Ltd (formerly, Adrenaline Pty Ltd) ("ACN"), CryptoStar's largest shareholder, has agreed to transfer an aggregate of 32,500,000 CryptoStar shares to the Alberta Partner and an arm's length advisor upon the entry into a Power Supply Agreement for at least 20 MW of power. The transfer of shares is a non-dilutive event for CryptoStar's other shareholders. The transfer of shares from ACN is contingent upon satisfaction or waiver by CryptoStar of certain due diligence conditions as set out in the PSA, which conditions are anticipated to be satisfied or waived on or before April 24, 2020.
The Company anticipates commencing operations in Alberta in Q2, 2020 and that additional data centres (i.e. containerized PODs) will subsequently come online in Alberta throughout 2020.
The Company is currently evaluating the most optimal financing structure to best take advantage of one of the lowest cost operating environments in the crypto mining industry.
About CryptoStar Corp.:
CryptoStar has cryptocurrency mining operations with data centres located in the U.S.A. and Canada. CryptoStar is currently dedicated to becoming one of the lowest cost Bitcoin producers in North America.
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this press release.
This news release contains forward-looking statements. Forward-looking statements can be identified by the use of words such as, "expects", "is expected", "anticipates", "intends", "believes", or variations of such words and phrases or state that certain actions, events or results "may" or "will" be taken, occur or be achieved. Forward-looking statements include those relating to relative power costs to CryptoStar in the Province of Alberta, the intention of the Alberta Partner to continue negotiating exclusively with CryptoStar, the allocation of the initial upfront payment, the entry into subsequent power supply agreements and the terms and conditions thereof, the build out of data centres and containerized PODs in Alberta, the amounts of power allocated for use by CryptoStar in Alberta, that CryptoStar will bring data centres (i.e. containerized PODs) in Alberta in 2020 and the transfer of shares by ACN to the Alberta Partner and an arm's length advisor. Forward-looking statements are not a guarantee of future performance and are based upon a number of estimates and assumptions of management in light of management's experience and perception of trends, current conditions and expected developments, including assumptions related to the availability of funding for the initial upfront payment under the PSA, the satisfactory results of due diligence investigations, as well as other factors that management believes to be relevant and reasonable in the circumstances, including assumptions in respect of current and future market conditions, prices of electrical power, the current and future regulatory environment and future approvals and permits. Actual results, performance or achievement could differ materially from that expressed in, or implied by, any forward-looking statements in this press release, and, accordingly, you should not place undue reliance on any such forward-looking statements and they are not guarantees of future results. Forward-looking statements involve significant risks, assumptions, uncertainties and other factors that may cause actual future results or anticipated events to differ materially from those expressed or implied in any forward-looking statements. Except as required by law, CryptoStar undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
SOURCE CryptoStar Corp.
Renseignements: CryptoStar Corp., Attention: David Jellins, President and Chief Executive Officer, Email: [email protected], W: www.cryptostar.com