FatFish Internet Group (ASX:FFG) has provided the first update on its majority-owned crypto mining operation and its proving to be a lucrative money spinner.
The ASX-listed company paid only US$1m for 51% of crypto mining start-up ‘APAC Mining’ in January this year. Mining commenced at 3 sites in Malaysia in February.
Early Production Results:
APAC Mining has produced approximately 2 Bitcoins and 8 Ethereum every week since operations commenced and the company says its systems aren’t even operating at full capacity yet.
Delays in the completion of electrical work have forced server farms to operate at just 60%, however, the work is expected to be completed within 30 days which will see cryptocurrency production increase to 100% capacity.
Based on the initial results, FatFish now expects the mining operations to produce 170 Bitcoins and 690 Ethereum every year at 100% equipment capacity.
At current market prices (BTC at US$8000 and ETH at US$520), APAC can be expected to generate annualised gross revenue of approximately US$1.7million (AU$2.19million) per annum.
In terms of gross profit the company says its anticipating “a healthy double digit gross profit margin”.
Recently concerns have been raised regarding the profitability of large-scale crypto mining following the major cryptocurrency sell down, but markets have since bounced back.
“It appears that the cryptocurrency market has stabilized and consensus by analysts seem to suggest that cryptocurrency is in a recovery trend,” said FatFish Internet Group.
The company stated its crypto mining operation will remain profitable as long as Bitcoin is trading above US$4,000 and Ethereum above US$250.
The strong initial results have FatFish looking to expand.
The company says it will look to procure additional crypto mining equipment to add to its capacity once the current operation is humming at 100% – with a goal of producing 1 Bitcoin per day in the near future:
“APAC Mining is currently in discussion with various service providers to secure new location and energy supply in Canada and Mongolia, in addition to its existing locations in Malaysia.
“APAC Mining is confident that the energy tariffs of all the locations it is securing are among the most favourable rates of the crypto mining industry.
“As such APAC Mining believes that it has a strong business case to scale up its operating capacity significantly in the near future.”
FatFish Internet Group’s share price soared 30% on yesterday’s close, following the announcement.