The9 Ltd. (NCTY) stock prices were down by 6.01% as of the market closing on June 3rd, 2021, bringing the price per share down to USD$10.94 at the end of the trading day. Subsequent pre-market fluctuations saw the stock rally by 4.20%, bringing it up to USD$11.40.
Acquisition of Montcrypto
The company announced on June 4th, 2021 that it had signed a definitive agreement to acquire Montcrypto Ltd. The acquisition of the Canadian company will see the building of a 20MW supply of electricity in Calgary, Canada. Montcrypto’s carbon-neutral infrastructure will facilitate a greener and more environmentally friendly power supply to the cryptocurrency mining business.
With the signing of natural gas procurement contracts signed with local oil extraction companies, Montcrypto plans to build carbon neutral cryptocurrency mining facilities that will use natural gas as their primary source of electricity power generation. As per the agreement, NCTY will invest a total of USD$7.6 million in Montcrypto over the course of two phases that will see NCTY obtain the controlling stake of the Canadian company. The completion of these two phases will see the power capacity of the mining facilities pegged at 20MW, which allows for the provision of electricity to operate more than 6000 S19j Antminers.
Terms of Agreement
As per the agreement, NCTY will pay Montcrypto a hosting fee that has been set at a rate of CAD0.037/kWh for a term spanning 5 years. When the entirety of the 20mw carbon-neutral mining facilities will be up and running, the byproduct natural gas in the region will undergo a reduction of almost 53 million cubic meters on an annual basis. Greenhouse gas emissions are forecasted to go down by 128,000 tons.
Investment in Skychain Tech
The company has also recently announced the closing of its investment in Skychain Technologies, another Canadian company that owns cryptocurrency mining facilities and is listed on the TSX Venture Exchange. The investment in Skychain is geared towards the expansion of NCTY’s capacity from 20MW to 32MW, with the mining site located in Birtle, Manitoba. The successful completion of the expansion project will see NCTY deploy its cryptocurrency mining machines there.
Future Outlook for NCTY
Armed with various new strategic partnerships and acquisitions, NCTY is poised to continue expanding and consolidating its footprint in the cryptocurrency mining sector. The company is eager for stability in the price of the cryptocurrency in the midst of recent volatility in its drive for further gains. Current and potential investors are hopeful that management will leverage the resources at their disposal to facilitate significant and sustained increases in shareholder value.