Canada’s Squire Mining in Talks to Acquire CoinGeek Assets
Canada-based Squire Mining is negotiating a deal for CoinGeek assets that include multiple mining farms across the globe.
Squire Mining, a Canadian publicly traded company focused on ASIC-based mining, has begun exclusive negotiations over the potential acquisition of assets from CoinGeek, the operator of a crypto news outlet and mining pool, according to a press release.
The estimated purchase price is C$60.3 million ($45.7 million), which comprises about 114.8 million Squire Mining common shares and a vendor-take-back note worth C$25.8 million. The final consideration is subject to post-closing adjustments.
The Canadian company, which has been in a partnership with CoinGeek since August, is in early talks to buy 62,440 ASIC mining rigs spread across farms in Canada, the US, and Kazakhstan. If finalized, the deal will increase Squire Mining’s power by about 960,000 TH/s.
“This transaction would provide Squire with a leading, recognized brand via the acquisition of the CoinGeek.com and CoinGeek name, but it would also make us the largest, publicly traded Bitcoin miner globally. It is expected to deliver significant shareholder value by enabling Squire to become vertically integrated with our growing chip design and manufacturing business, which we would seek to have commercial within 2019,” commented Squire Mining CEO Taras Kulyk.
News of the potential acquisition arrives just days after CoinGeek took the spotlight for attempting to wrest mining control over the Bitcoin Cash network, an undertaking in which it conceded defeat. The negotiations are also unfolding at a time when mining farms are becoming less competitive, and some are shutting down. Despite the lowered difficulty of mining Bitcoin, the block reward is not seen as valuable enough after nearly a year of falling prices with no relief rally in sight.
Additionally, a large part of Bitcoin mining relies on hydroelectric power, and winter is the dry season for most mining farm locations. The electricity-intensive work of mining is highly dependent on discovering cheap electric energy.
With the “hash wars” ended on November 26, CoinGeek continues to dedicate its efforts to the new Bitcoin SV digital asset (BSV), a version of Bitcoin Cash that decided to go its own way. It is unknown where the resources and rigs of CoinGeek would be pointed after the acquisition.
The worsening market for digital assets has also affected Squire Mining’s stock, which sank from about $0.50 in October to recent lows of $0.20. On December 2, the shares were trading at around $0.28 on volumes of just a few thousand dollars per day.