TORONTO, April 6, 2020 /CNW/ - CryptoStar Corp. (TSXV: CSTR) ("CryptoStar" or the "Company"), a cryptocurrency mining and data centre operator, is pleased to announce it has signed a letter of intent ("LOI") with an Alberta Based Private Energy Company (the "Alberta Partner") effective April 3, 2020 for up to 120 megawatts (MW) at among the lowest electricity rates in North America.
CryptoStar and the Alberta Partner plan to execute the first power supply agreement for the first 20 MW of power within the next 14 days.
Highlights of the Transaction
- 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
"This LOI with the Alberta Partner 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.
The Alberta Partner currently possesses, controls or has access to a certain three sites in Alberta and is currently permitted to generate and supply an aggregate of 30 MW.
The Alberta Partner intends to, upon approval by applicable regulatory authorities, generate and supply an aggregate of 120 MW of power to CryptoStar.
The Alberta Partner has agreed to grant to CryptoStar a right of first refusal for: (i) entry into Power Supply Agreements for up to 120 MW of electrical power generated by the Alberta Partner to be used for cryptocurrency or data centre usage; and (ii) the purchase of the Alberta Partner's power generation business or any portion thereof. The Power Supply Agreements will have a term of five (5) years, which shall automatically renew for additional five (5) year terms unless terminated in accordance with the terms thereof.
The first 20 MW of power will allow for approximately 444 PH/s of mining Hashrate to be deployed for CryptoStar and its customers in containerized PODs within 60 – 90 days with further Hashrate deployed over the remainder of 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.
A.C.N. 117 402 838 Pty Ltd (formerly, Adrenaline Pty Ltd), 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 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 generate and supply an aggregate of 120 MW of power to CryptoStar and the applicable regulatory approval thereof, the entry into 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, the transfer of shares by A.C.N. 117 402 838 Pty Ltd to the Alberta Partner and an arm's length advisor and the Hashrate to be deployed for CryptoStar and its customers within 60 - 90 days. 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 ability of the Alberta Partner and CryptoStar to identify suitable sites (beyond the first 30 MW of power) for data centre use, obtain relevant permits and approvals relating thereto, 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.
For further information: CryptoStar Corp., Attention: David Jellins, President and Chief Executive Officer, Email: [email protected], W: www.cryptostar.com