Hut 8 Mining Corp.(HUTMF) 首席执行官 Andrew Kiguel 在 2019年 第二季度业绩 - 收益电话会议记录
Hut 8 Mining Corp. (OTCQX:HUTMF) Q2 2019 Earnings Conference Call August 19, 2019 10:00 AM ET
Hut 8 Mining Corp.（[OTCQX：HUTMF]）2019年第二季度收益电话会议2019年8月19日美国东部时间上午10:00
Andrew Kiguel - Chief Executive Officer
Jim Vaiopoulos - Chief Financial Officer
- Andrew Kiguel - 首席执行官
- Jim Vaiopoulos - 首席财务官
Deepak Kaushal - GMP Securities
Dan Weiskopf - Private Investor
- Deepak Kaushal - GMP证券
- Dan Weiskopf - 私人投资者
Welcome to the Hut 8 Mining Second Quarter Filing Conference call. My name is John and I will be your operator for today’s call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions] Please note the conference is being recorded. And I will now turn the call over to Andrew Kiguel.
欢迎来到Hut 8矿业第二季度备案电话会议。 我的名字是John，我将成为今天电话的运营商。 此时，所有参与者都处于只听模式。 稍后我们将进行问答环节。 [操作员说明]请注意正在录制会议。 现在我将把这个电话转给Andrew Kiguel。
Thank you very much and welcome everybody to the Hut 8 Q2 conference call. As per previous quarters, the call is being recorded and will be posted on our website as well joining me here is Jim Vaiopoulos, our CFO who will review the financials and then we will open it up to questions.
For second quarter, just to get right into the highlights, we recorded record quarterly revenue of $28.3 million and adjusted EBITDA of $17.3 million. Remind that, the most Bitcon that we ever mined in the quarter at 2,816. Our net income for the quarter including the revaluation was $33.7 million which works out to $0.43 per share. That included a gain of $22.4 million under reassessment of our Bitcoin inventory as most people on the call would know part of our value proposition is to retain our Bitcoin inventory and for that quarter, we were able to benefit from the price of Bitcoin increasing throughout the quarter. We were also successful in decreasing our corporate overhead which reduced to $637,000 from $747,000 in Q1 to $994,000 in Q4 of 2018. As well, we are quite proud that we were able to reduce our various initiatives to reduce our cost per Bitcoin to $2,757 per Bitcoin as compared to $2,950 in Q1 and $395 in Q4 and Q2 and our working capital has also increased.
So, just maybe with that, I will turn it over to Jimmy and I will make some closing remarks.
非常感谢，欢迎大家参加Hut 8 Q2电话会议。按照前几个季度，电话会被记录下来，并将发布在我们的网站上，以及我在这里加入我的是我们的首席财务官Jim Vaiopoulos，他将审核财务报告，然后我们将提出问题。
Thank you, Andrew. This is Jim Vaiopoulos speaking CFO of Hut 8. Before continuing, I would like to remind you that all amounts in the financial statements and discussed on this call are in Canadian dollars unless stated otherwise. This is a record quarter for Hut 8 we ever expect, including revenue, subsequent mines, lowering of operating expenses and overhead, cost per Bitcoin, adjusted EBITDA and net income. This quarter started strong as the Bitcoin price began to significant rally on April 2, 2019 when Bitcoin increased by 18% in 1 day. Over the quarter, the Bitcoin price increased 160%, while the net worth difficulty rate increased by only 24%, allowing for an increased overall mining profit margin of 63% for the quarter.
In the second quarter of 2019, Hut 8 mined 2,816 Bitcoin resulting in revenue of $28.3 million compared with the same period of the prior year of 786 Bitcoin mined with revenue of $7.8 million. The reason for the difference year-over-year was because Hut 8 increased the number of Block boxes under operation to 85 in Q2 2019 from 17 in Q2 2018. We continue to focus on the optimization of electricity allowing for the decrease in operating cost by 18% from $12.6 million in Q1 2019 to $10.4 million in Q2 2019. Hut 8’s cost per Bitcoin for Q2 2019 was $2,757, a 30% decrease from the prior quarter in Q1 2019 of $3,950. In a quarter where network difficulty increased by 24%, it was an achievement for Hut 8, but the cost per Bitcoin decreased by nearly $1,200.
During this time of improved Bitcoin mining economics and increased margins, we stayed focused on maintaining our lean cost structure as the overhead expenses continued to decrease quarter-over-quarter steadily. Expenses, excluding non-cash compensation for Q2 2019 were $637,000 compared with $747,000 in Q1 2019 and $994,000 in Q4 2018. Our strategy of mining and holding Bitcoin have paid off as there was a $22.4 million gain on the re-measurement of Bitcoin holdings in Q2 2019. The gain from re-measurement in this quarter was larger than the losses related to these re-measurements in all of 2018 combined and was a result of the consistent strategy to retain the most amount of Bitcoin’s operations adjusted EBITDA was $17.3 million for Q2 2019 which nearly equals the adjusted EBITDA for the full 2018 year of $19.3 million overall in the second quarter net income was $33.7 million and earnings per share which was around $0.43 per share. The increase in Bitcoin price in Q2 2019 also strengthened the balance sheet Hut 8 as adjusted working capital as of June 30 2019 was $38.2 million a large increase from the march 31 2019 adjusted working capital deficit of $497,000 I will now pass the call back over to Andrew.
谢谢你，安德鲁。这是Jim Vaiopoulos，他是Hut 8的首席财务官。在继续之前，我想提醒您，除非另有说明，否则财务报表中的所有金额以及此次电话会议中讨论的金额均为加元。这是我们预期的8小时创纪录的季度，包括收入，后续矿山，降低运营支出和间接费用，比特币成本，调整后的EBITDA和净收入。由于比特币价格在2019年4月2日开始大幅上涨，比特币在1天内上涨了18％，本季度开始走强。在本季度，比特币价格上涨了160％，而净值难度率仅增加了24％，使本季度整体采矿利润率增加了63％。
在2019年第二季度，Hut 8开采了2,816比特币，收入为2830万美元，与去年同期786比特币开采相比，收入为780万美元。与去年同期相比差异的原因是因为8号工厂将2018年第二季度的块箱数量从2018年第二季度的17个增加到85个。我们继续关注电力优化，从而降低运营成本从2019年第一季度的1260万美元增加到2019年第二季度的1,040万美元，增长18％。2019年第二季度每比特币的成本为2,757美元，比2019年第一季度的3,950美元减少30％。在网络难度增加24％的季度中，这是Hut 8的成就，但每比特币的成本下降了近1,200美元。
在改善比特币采矿经济和提高利润率的这段时间里，我们一直专注于维持我们的精益成本结构，因为管理费用继续稳步下降。 2019年第二季度不包括非现金补偿的费用为637,000美元，而2019年第一季度为747,000美元，2018年第四季度为994,000美元。我们采矿和持有比特币的策略得到了回报，因为重新计量比特币持有量增加了2240万美元。 2019年第二季度。本季度重新计量的收益大于2018年全年重新计量的相关损失，这是保持比特币运营最多的一致策略调整后的EBITDA为1730万美元的结果。 2019年第二季度，与第二季度净收入的2018年全年总计1,930万美元的调整后EBITDA相当，为3370万美元，每股收益约为每股0.43美元。 2019年第二季度比特币价格的上涨也加强了资产负债表Hut 8，截至2019年6月30日调整后的营运资金为3820万美元，比2019年3月31日调整后的营运资金赤字497,000美元大幅增加，现在我将把这一回调转回到安德鲁。
Yes, so just some closing remarks again the strategy paid off for us in Q2 we continue to see that the strategy we think will continue to payoff in Q3 where we value the Bitcoin at the end of Q2 is roughly where it's trading today. The only key difference is that through Q2 the average price of Bitcoin was around $7300 through the quarter and it has been fairly consistently in the five figures so far in Q3 so, while the quarter is just a little bit over halfway down we would anticipate that revenues for Q3 would be higher as a result of that. And again depending on should see how it goes We continue to focus on the same strategy, which is we're the only one to mine Bitcoin we want to be the lowest cost produced out there and continue to strive for that of fact had we as I said in my quote had we sold off a bunch of our Bitcoin at the end of Q1 as a lot of people were suggesting we would have missed it on that game we continue to monitor it We view ourselves partially as managing that inventory we continue to monitor it and be strategic as to when we sell we trying to make sure even the financing fiat cost that we try and time when we're selling. And so far this quarter we have been very successful in doing that so despite where you might see the price of Bitcoin at every given moment generally we have been selling at higher prices and taking advantage of the peaks that we have been seeing my last comment just respect to correlation between Hut 8 price and the price of Bitcoin correlation is historical looking figure so, one other things I have been question asked in the past we have had a correlation of around 90% of the price of Bitcoin it is always a backwards looking measure as to at that time to do the analysis in the correlation that’s what it has been one of the things that we have saw over the course of Q2 was unfortunately the correlation between the Hut 8 price and the price of Bitcoin so might have decoupled a little bit and a what have decoupled a little bit and while we saw the pretty good correlation to the price of Bitcoin at is dropped over the quarter close to the 69% from what used to be closer to 90% or even higher, so again we don’t control the share price when we do our best to perform be transparent to the market and stay within the mandate that we have and we hope that the market responds obviously we don’t have a higher correlation to the price of Bitcoin but, again we don’t control that the buying’s on on the market we just trying to be transparent and do a good job so, with that operator we will turn it over to Q&A
是的，所以只是一些结束语再次说明策略在第二季度为我们带来了回报我们继续看到我们认为在第三季度我们继续回报的策略，即我们在第二季度末对比特币进行估值大致是今天的交易。唯一的关键区别在于，截至第二季度，比特币的平均价格在本季度达到了7300美元左右，到目前为止在第三季度的五个数字中一直保持相当稳定，而本季度仅略微超过一半，我们预计到因此，第三季度的收入会更高。应该再看看它应该如何发展我们继续关注同样的战略，我们是唯一一个开采比特币的人，我们希望成为那里生产的最低成本，并继续努力，因为我们是我在报价中说过，我们在第一季度末卖掉了一大堆比特币，因为很多人都建议我们会错过它，我们继续监控它我们认为自己部分管理库存我们继续对我们的销售情况进行监控并具有战略性，我们试图确保即使是我们尝试的融资法定成本以及我们销售时的时间。到目前为止，本季度我们已经非常成功地做到了这一点，所以尽管你可能会在每个特定时刻看到比特币的价格，但我们一直在以更高的价格出售并利用我们最后评论的峰值。关于Hut 8价格和比特币相关价格之间的相关性是历史看的数字所以，我过去曾问过的其他一件事我们已经得到比特币价格的90％左右的相关性它总是向后看衡量当时在相关性中的分析，这是我们在第二季度看到的事情之一，遗憾的是，Hut 8价格与比特币价格之间的相关性可能已经解耦了我们看到与比特币价格相关的相当好的相关性在一个季度下降到接近69％，而过去接近90％或前夕更高，所以当我们尽最大努力对市场保持透明并保持在我们的授权范围内时，我们再次控制股价，我们希望市场反应明显我们没有更高的相关性比特币的价格但是，我们再次无法控制市场上的买入，我们只是想透明并做好工作，所以我们将把它转到Q＆A
Thank you we will now begin the question and answer session [Operator Instructions] and our first question is from Deepak Kaushal from GMP Securities
Hey guys good morning. Thanks for taking my questions pretty straight forward quarter following your pre release earlier in the summer. Andrew you mentioned that you are strategic on when you sell your Bitcoin so by our math I kind of noticed your fiat cash balance is going to be increased in the quarter does that imply that you guys sold more Bitcoin when you needed to recover your costs and if so, what kind of rational behind that.
嘿伙计们早上好。 感谢您在夏季早些时候的预发布之后非常直接地提出我的问题。 安德鲁你提到你在销售比特币的时候是战略性的，所以通过我们的数学我注意到你的法定现金余额将在本季度增加，这意味着当你需要收回成本时，你们卖掉了更多的比特币 如果是这样，那背后是什么样的理性。
So, its never selling more when we need to cover our costs but like there was a period of time where the Bitcoin was trading well over $13000 so we can make the choice to say okay, do we sell some additional Bitcoin here to cover two months of fiat expenses or three months of fiat expenses so we know that that’s locked in provide additional safety what we think is a pretty good price relative to what some other companies do which is we just mine it and just sell it as soon as the mine it so you are not able to capitalize on that so would not say that we are mine we are selling more than when you do but is strategic to say we know what our costs are going to be over the next like four weeks, eight weeks, twelve weeks and so we are capitalizing our most higher prices to make sure that we have that we have that fiat on call so if the price of Bitcoin was to drop to $9500 as it did early last week last week we are not forced to sell I mean unfavorable environment in order to finance our fiat costs.
Got it okay. That makes sense. So on that vein by my math roughly you guys sold forward between may be that’s not the best term but between 600 700 Bitcoin is that $5 million is that math correct or within the range or?
好吧。 那讲得通。 所以按照我的数学粗略地说，你们之间的销售可能是不是最好的术语，但600 700比特币之间是500万美元是数学正确还是在范围内？
I mean it sounds like it’s in the right range and one of the things we have done again you have to wait to see but we have subsequent to Q2 it is significantly what I would say is improved the balance sheet and so again we were able to take advantage of some of those peaks in order to continue to make the company stronger and so one other things that I would hope seeing in the next quarter is an improved cash balance improved balance sheet file less payables and overall since getting in here we want to keep the balance sheet as and as stable as possible and so we will continue to strive towards that.
我的意思是它听起来像是在正确的范围内我们再次做的事情之一你必须等待才能看到，但我们在第二季度之后我会说的是改善资产负债表，所以我们再次能够 利用其中的一些高峰，以继续使公司更强大，所以我希望在下个季度看到的另一件事是改善现金余额改善资产负债表文件减少应付款和整体，因为进入这里我们想要 保持资产负债表尽可能稳定，因此我们将继续努力。
Okay speaking about the balance sheet in terms of debt I know that you have debt with Galaxy and Bitfury. And historically. it’s been tough to get financial services as a crypto currency company have you seen changed in that any options to find a lower debt cost at this stage?
好吧，谈到债务方面的资产负债表，我知道你有与Galaxy和Bitfury的债务。 而且在历史上。 如果你认为在现阶段寻找较低债务成本的任何选择，你看到加密货币公司很难获得金融服务吗？
Yes you know we are always talking to various providers in going out to seek if there is ways to refinance what we have better rates there is advantages and disadvantages to two pieces of debt that we have we are talking to people that we haven’t at this point seems something that is significantly more attractive so for example you can find better rates on the coupon but it comes with other strengths attached by a lot of third party vendor to hold all your Bitcoin and play around with it. We don’t deem that’s necessarily is being a good risk trade off because you are taking substantial counter party risk obviously we are always looking we are always in any stage of Hut 8 since inception we are always in discussions with various capital providers to see what is been done we haven’t issued any equity or done anything on that side since the company went public and that excuse me we haven’t seen anything attractive and so we will keep our cards in play.
Okay that makes sense and it is helpful so excess Bitcoin selling only to pay forward some OpEx only to pay for it some OpEx and trying to maintain a strategic balance sheet still considering on debt side how do you expand your capacity your mining capacity from here? Are you kind of in a pause mode until capital market is a bit better?
We are definitely not in a pause mode we are always in conversations so there is a few things that obviously can’t disclose material on public here on the call but I think given our current Bitcoin balance or current cash balance we would be in positions potentially to do incremental steps to increase capacity that could be done without jeopardizing our significant amount of our Bitcoin balance or balance sheet position.
Okay great. I just have one last question great cost controls just from a forecasting perspective I guess the run rate of roughly 650 or quarter in cash OpEx is that something we can continue to expect going forward or is that there is some seasonality in there and then same on the non-cash side on the stock base cost side? What can we expect?
好，太棒了。 我只是从预测的角度来看最后一个问题是成本控制很大我认为现金OpEx的运行率约为650或四分之一是我们可以继续期待未来的事情，或者那里有一些季节性然后相同的 股票基础成本方面的非现金方面？ 我们能期待什么？
Yes I mean we still like I am guy who likes looking for apart from the big picture but I also like looking for nickels and dimes in the corners something that’s not reflected as we went in to the city medicine hat and we are able to renegotiate our land lease cost and decrease it by about 89% that’s something that will be show up it’s somewhat significant it can get about a $160,000 a year we continue to negotiate you know all of our contracts received it what we can do better we have recently moved into a new office and while we had very cheap break before even the been able to even lower that further and so we are always looking for ways to decrease but I don’t see that a mess there is something out of the ordinary I don’t see that our overhead would be increasing with respect to the mining operations we continue to find ways to optimize in the net better the one imponderable there is just the difficulty. And this is on difficulty this is on the call as difficulty goes up inherently that means that we are mining less Bitcoin and as a result our price per Bitcoin goes on because our costs are somewhat fixed so, we continue again to look at every single aspect of the operations and see where can we reasonably reduce our costs and continue to deliver value to shareholders.
Okay great. Well thanks for taking my questions. I will pass the line.
好，太棒了。 谢谢你提出我的问题。 我会通过这条线。
Our next question is from Matt. Please go ahead. Matt your line is open for your question. Andrew our next question is from Dan Weiskopf.
我们的下一个问题来自马特。 请继续。 马特你的专栏是开放的问题。 安德鲁我们的下一个问题来自Dan Weiskopf。
Hi Andrew Dan Weiskopf here. Good quarter. Thank you. So last quarter I think we touched on electric cost volatility may be my term is not exactly correct have you seen a lot of spikes in that area again it is an art to manage it so you make any comments on how you are managing the volatility in your cost in that area?
嗨Andrew Dan Weiskopf在这里。 好季度。 谢谢。 因此，上个季度，我认为我们触及电力成本波动可能是我的术语不完全正确如果您再次看到该领域的大量峰值，那么管理它是一门艺术，因此您对如何管理波动性做出任何评论 你在那个地区的费用？
Sure so I would divide it into what I would say 3 different areas so about half of our electricity purchases are somewhat locked in and that’s due to 10 year agreement with the City of Medicine Hat and that's been very successful while it is not a 100% locked in at a price it is fairly predictable and our view very low cost on a not just on the Canadian basis but on a worldwide basis on the balance there is two areas so we would buy some additional electricity in the city of medicine hat we have been able to do some as I have mentioned before we always look at in terms of very large metrics the price of bitcoin versus the price of electricity and in some areas it makes sense for us to curtail our use of electricity and sell it back into the grid and so we finally can make money there in some situations where the price of bitcoin is been lower that the price of electricity spikes on the grid we are actually able to make more money in those instances than actually mining there is another piece of it which we call so this is very interesting again we continue to improve upon this and so far this year we have done a good job and we continue to improve but because what we are doing like Hut 8 is not running a hospital or a manufacturing intensive process we are able to shutdown our operations within two minutes and start them back up within two minutes. so we have found is without actually having to curtail so that without actually having to shut anything off the utility provider will actually pay us for the ability to potentially turn this off for a limited periods of time and so there is been periods throughout this summer where again we have not curtail it but they come to us and said we will compensate you or lower your price just for the potential ability to shut you down for a period of time completely at our choice but they will pay us for that and so the initiatives we done around managing our electricity prices have been very successful and continue to get better.
谢谢管理团队。 是的，我们看到收入结果非常好，高达36％，你能否给我们更多的海外出货颜色？ 而且您如何看待来自北方国家的货物？ 我们将来会排除更多国家吗？ 谢谢。...
Alright thank you and one another question and may I probably see this in the filings but it looks like you personally brought stock was that exercise or options or did you buy it in the open markets or are you awarded shares I'm seeing it on Bloomberg. I don’t know?
That was part of my RCU package?
Okay thank you.
[Operator Instructions] and we do have a question again from Matt. Please go ahead. Matt your line maybe on mute.
[操作员说明]我们马特再次提出问题。 请继续。 你的线路可能会静音。
Hi Matt just came through.
Can you hear me?
Okay thank you so we just my question was around the Bitfury partnership where they have been able to give you some financing to do the expansion of the infrastructure do you have a flexibility and the right Bitcoin environment where you could pay off those types of loans n Bitcoin if you wanted to then expand down the road?
Yes. The loan agreement we have with Bitfury has no prepayment penalties no security a lot of flexibility it is a very attractive loan from our standpoint because that loan is so attractive I think we deal less incline to repay it but we absolutely have the ability to pay off the loan in Bitcoin as well as our monthly expenses in Bitcoin to Bitfury.
是。 我们与Bitfury签订的贷款协议没有预付罚款没有担保很多灵活性从我们的角度来看这是一个非常有吸引力的贷款，因为这笔贷款非常有吸引力我认为我们减少了倾向偿还它但我们绝对有能力还清 比特币的贷款以及比特币到比特福的每月费用。
Hi and then just a follow up to that Do you foresee and again we don’t know with Bitfury do you see a potential where they would have a a nanometer shrinkage with their ASIC chip where say hypothetically 12 nm 10 nm is that something you envision that due to the presence of the network hash very difficulty going up over time with Bitcoin you proceeded that’s potential I mean I have no issue with what you guys have done you have done an excellent job with the operations but let’s say 6 months to 12 months down the road do you think Bitfury may potentially release a new die shrink of their ASIC if you can speak to that enough?
嗨，然后只是一个跟进你是否预见到你再次我们不知道Bitfury你看到他们的ASIC芯片会有一个纳米收缩的潜力，假设12纳米10纳米是你想象的东西 由于网络哈希的存在，随着时间的推移，比特币很难上升，你继续发挥这种潜力我的意思是我对你们所做的事情没有任何问题你们已经做了很好的工作，但是让我们说6个月到12个月了 你认为Bitfury可能会释放他们的ASIC的新模具，如果你可以说那么多吗？
Yes so again we have various types of chips from Bitfury the purchase that we did was our most possible and our best performing piece of hardware I think if we were to do anything with them it would have to be at least at that level or better they are very large company they are continuingly looking for ways to make the chips more sophisticated and more efficient and absolutely if it’s a little bit of an interesting quandary which is we can invest money to upgrade the efficiency today by selling a whole bunch of Bitcoin potentially the appreciation on that but the existing equipment even our oldest equipment with our least efficient chips still showing very strong profit margins and so from our perspective I think if we were to look at doing something like this we would look to first to upgrade the oldest equipment although it is still profitable but we want to wait and see what happens with the haven coming up what happens with the price of Bitcoin but it would never be our intention to operate chipsets that are not efficient or not providing profit for shareholders.
So I think from my perspective because I looked at the sector from crypto start to lot of other ones in the space and you ever think that only real group that can pay some cost on Bitcoin and you are stacking set so I congratulate you guys on that I think more shareholders like myself are pretty happy with that and I guess my last, last question would be in Alberta do you guys still have allocation for power capacity that you could expand there with those partnerships and that will be it for me question thank you?
Yes so we are looking at a bunch of different potential sites for expansion we haven’t locked anything down I think if a lot of it depends on to build out a new site so I think in medicine hat currently there isn’t much room for expansion there they are in the process of building another turbine there that would add potentially allow us to expand by 42 megawatt and that will be contagious to what we are set up now but that’s probably 24 months away from being built or longer we are in discussion with various other potential sites in Alberta Quebec the United States so the question there is there any availability of capital that should be been limited in the past and what can we do something that is accretive to shareholders we don’t want to be in a position that lot of other people are in are in where you're just issuing a bunch of cheap equity and then having to suffer for that later on it is important for the management team to keep that the balance sheet or the capital structure somewhat cleaning I think from a warrant perspective and an options perspective we are extremely clean compared to lot of other small caps and other guys who are in this space.
Our next question is from [indiscernible]. Please go ahead.
Good morning guys great quarter I had a I want to see if you could comment on the any changes on the comparative landscape because the Blockstream stuff recently announced that they have a 300 megawatt capacity in Quebec and maybe you can comment on some changes in the industry?
Yes I saw the Blockstream stuff and they announced an affiliation with Fidelity. I I can’t seem to find any information as to whether or not they have raised any capital having access to I could put out a press release later this afternoon that says we have access to 300 megawatts we have sites and things already the issue is building out the sites requires a lot of capital we preferred to air on the side of being conservative and until we are able to actually finance and build the site announcing that we have availability of megawatts driven shouldn’t actually mean very much to people Blockstream seems like a credible company but again I haven’t other than they have access to this capacity in Quebec we speak to Quebec all the time and there is certainly potentially availability there comes down to what’s the price I think they announced that they have access to power at $0.06 I would say that’s about 30% 40% higher than what we are paying now and our electricity and until we sort of see announcement that they are able to raise capital order the equipment in the timeline is to when that is going to be build to me it’s just promotional rhetoric. But again, we keep an eye on them, we keep an eye on all the other publicly listed miners and some of the privately listed miners but there is good company’s so competition I do that as more as the difficulty because the competition is worldwide from a public market standpoint there is some good companies out there, there are some companies with challenges we are trying to focus on us making sure we run the operations as best as we can.
Doesn’t make sense for you guys to have your own maybe solar or wind hardware?
We have looked at it solar is not very efficient the problem with wind and solar is you are never going to get a 100% up time and so solar we have not seen prices actually more competitive we have seen it is more expensive we have looked at when we are looking at a bunch of wind sites the issue is that you can get some very low cost efficient powerful wind but if the wind isn’t blowing you can’t operate your equipment and so that’s a bit of risk so the things we are looking at is there a way to do combination of wind and when the wind is not blowing can you buy your balance of the grid we are looking at all strategic different alternatives but, like I said we wouldn’t be building our own wind we are focused we know what we can do wow and where we don’t have expertise so we wouldn’t be building our own solar assets we are working with several utilities clean energy utilities, to see if there's something that make sense so far we haven’t found anything that make sense again because solar seems to be more expensive and not reliable and wind is definitely attractive pricing but you have this the math needs to work and if you can only run your equipment 65 or 75% of the time your IRR in return on that project is not going to be very strong despite the price of electricity.
Nice, thanks guys.
Our next question is from Deepak Kaushal from GMP Securities.
我们的下一个问题来自GMP Securities的Deepak Kaushal。
Hi guys thanks for taking my follow up just a quick one Andrew last quarter you commented on the constraints you saw in the supply chain for new chips via TSMC and what’s kind of update on that and what’s your thinking today on hash rates which seem to be rising again that’s it for me?
Yes I think the commentary remains the same we are constantly evaluating different forms of equipment that that’s out there and when you go to that large Chinese manufacturers what’s mining Canaan and Bitmain, if you websites and we try look at the equipment it all says sold out that’s because they did not manufacture a lot of it and it says they will begin shipping in November and so we certainly seeing that the hash rates increasing I think that’s probably just a bunch of older equipment that’s being turned on I think there is been some influence of new equipment but the question remains for people that are if you are lucky they are able to get the manufacturing done on time you can get on the priority list but its been shipped out in November I think that tells we rather go to people on the priority list for them how fast can we get that up and running and so my view is that we could see the hash rate increasing here do you want to invest in whole bunch new expensive equipment that may not necessarily pay off certainly I think when we look at the Bitmain and the other stuff right there the price per tera-hash is highly efficient equipment to the extent you can get it, but the price for tera-hash is high so you got a way at this point I suspect people will still be waiting another 6 to 7 months between but when they receive it and then there is going to be time in putting it up this is a very fast moving industry like what happened between now and then I think one of the advantages we have is that Bitfury does have chips available they also have legacy sites available that can be upgraded so our ability should we choose to allocate our capital in that direction or able to raise new capital we could probably the up and running at near and around the same price some more efficiency but we wouldn’t have to wait until 2020 in order to get up and running you could probably be up and running within 2 weeks but incremental capacity.
Okay that’s helpful. Thank you.
[Operator Instructions] and I have no further questions at this time.
Okay great thank you very much everybody.
Thank you very much.
Thank you, ladies and gentlemen that concludes today’s call thank you for participating. You may now disconnect.
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