Several mineral miners are shifting from exploring gold and other metal deposits to mining in the digital space for cryptocurrencies. Those who do are reaping gains that cannot be sourced from any mineral deposit area.

In December 2017, Israel’s Natural Resources Holdings Ltd. saw a rise in investor confidence after announcing its 75 percent stake purchase in Backbone Hosting Solutions Inc. The Canadian-based company conducts cryptocurrency mining operations under the name Bitfarms.

Bitfarms has four farms and two plants under construction. The facilities have a capacity of 25 megawatts and 250 petahash, making it the largest crypto mining operations in North America in terms of capacity.

After its announcement to enter the crypto market, the share price of the Israeli miner surged 159 percent to 25.40 shekels or $7.27. Natural Resources Holdings also invests in metals mines in North America.

In Canada, the world’s largest hub for natural resource miners, such business shift has been threatening its mineral mining industry which, in recent years, has been seeing a decline in new investors. “People used to invest in prospectors and exploration because they wanted to take risks and they wanted to have fun,” said Sean Roosen, chief executive of Osisko Gold Royalties Ltd., via The Globe and Mail.

Roosen lamented that the difficulty in scouting for resources is adding to the sky-high operating costs. Also, minerals that are available are now hard to access, dispelling potential investors for the capital cost it warrants.

“That money has now moved over to cryptocurrency,” said Roosen, adding that much of Canada’s speculative equity has been taken by cannabis companies.

One of America’s oldest mineral miners has also joined the trend. Mansfield-Martin Exploration Mining, Inc. (OTCMKTS:MCPI) mines and explores 6,000-acre properties in four historic sites in Tombstone District in Arizona.

The firm recently inked a deal to back up Qu Ltd. The terms of the deal have since expanded to Mansfield-Martin providing up to 5 million oz. silver doré to Qu Ltd. in support of the latter’s Silverback initial coin offering. Funding from the ICO is hoped to bring forth a new cryptocurrency.

Mansfield-Martin’s Tombstone Mine Run Program covers approximately 165,000 tons of unprocessed materials, putting the mining firm at an advantage of fulfilling its commitment. At present, the company anticipates delivery of its portion of the silver production to Qu Ltd. with a portion of the payment in Silverbacks.

The gold mining sector raked in an average of 11 percent profits last year as compared to the cryptocurrency markets’ 20,000 percent gains. Thus, it makes perfect sense for mineral miners to start venturing into cryptocurrency not just in Canada but all across the globe. Investors go where the money is.

From gold to Bitcoin: Mining companies expand their ventures was originally published in Keeping Stock on Medium, where people are continuing the conversation by highlighting and responding to this story.


About crypto currency expert

No Comments

Be the first to start a conversation

Leave a Reply

Your email address will not be published. Required fields are marked *

12 + 6 =