9 March 2018
Clear Leisure Plc
(“Clear Leisure” or “the Company”)
Bitcoin Mining
Investment Update
and Conversion of
Debt into Equity
Miner One Limited
Clear Leisure (AIM: CLP) is pleased to announce that, following
its notification on 19 January 2018
regarding the Company’s 50% owned joint venture, Miner One Limited
(“Miner One”), a blockchain data centre operator, the first data
mining computers (“miners”) have now completed testing and the
Mining Mobile Unit (“MMU”) is operational and ready to be shipped
to its permanent home in Serbia, once the latest order of miners is
fulfilled.
Photos of the MMU can be found at
clearleisure.co.uk/investments/miner-one.
The Company can further confirm that the first fractions of
Bitcoins have already been extracted in ‘mining pool mode’, where
the available Miner One computing power has been pooled with other
cryptocurrency miners and taken a portion of the mining results.
This approach assures a continuous daily stream of fractions of
Bitcoin mined, instead of waiting for the full 12.5 Bitcoin reward
of a block, if and when mined (see Glossary, below).
The results to date would indicate that the joint venture will
likely produce more Bitcoins and at a lower average cost than
originally envisaged. A DCF valuation over a period of five years,
assuming, as at 8 March, mining profitability, mining difficulty,
Bitcoin price, projected hash power and miners typology, estimated
cost of energy and an 8% discount rate, generates a current
valuation of €389,000, as compared to the Company’s initial
investment of €200,0001.
Miner One has now placed an order for a number of Baikal Giant
X10 units, currently one of the best performing and most profitable
multi-crypto currencies miner machines available, as well as an
additional order for a number of Antminer S9 and L3+
high-performing mining machines. The use of Giant X10 and L3+ units
allows for the mining of different types of cryptocurrencies, which
from time to time can be easier to extract and can be easily
converted into Bitcoins, increasing the potential productivity of
the MMU.
Negotiations with the low-cost energy provider, located in
Serbia, are now nearing completion and, when the next batch of
miner machines has been delivered (expected within the next 10
days) and installed, the MMU will be shipped to the Serbian
site.
Debt Conversion
On 21 September 2017, prior to the
final Ivrea Court winding up petition hearing, the Company
announced that it had entered into a €500,000 loan agreement with a
UK private company to enable Clear Leisure to buy from a Mediapolis
creditor the sum of €4.3 million of debt at an 88% discount to face
value.
The Company has agreed with the lender to settle €250,000 of the
loan by issuing 22,321,429 Clear Leisure Plc 0.25p new ordinary
shares (“the New Shares”), at 1p per share, a 31.6% premium on
yesterday’s closing share price of 0.76p.
The New Shares will be credited as fully paid and will rank pari
passu in all respects with the existing ordinary shares of 0.25p
each in the capital of the Company, including the right to receive
all dividends and other distributions declared, made or paid in
respect of such shares after the date of issue. Application has
been made for the 22,321,429 New Shares to be admitted to trading
on AIM with admission expected to occur on 14 March 2018.
The Company's enlarged issued share capital, following the above
conversion, will comprise 390,946,049 Ordinary Shares. This figure
may be used by shareholders in the Company as the denominator for
the calculations by which they will determine if they are required
to notify their interest in, or a change in their interest in, the
share capital of the Company under the FCA's Disclosure and
Transparency Rules.
Francesco Gardin, CEO and
Executive Chairman of Clear Leisure, commented: “We are very
pleased with the rapid progress made by Miner One, following a
successful test phase on the first Mining Mobile Unit, which is now
ready to become operational. Although not yet at full power, it is
already generating, indirectly, revenues for the Company.
“We are also pleased with the €250,000 conversion of debt at a
premium on the current share price.”
1 Key assumptions for DCF calculation: mining
profitability based on 8 March 2018
mining difficulty (3.29060598876e+12), Bitcoin price ($10,000), projected hash power (346 THs - tera
hashes per second - although mining hash power needed varies
depending on type of machine and cryptocurrencies mined), miners
utilised (Antminer S2-9; Antminer L3+; Baikal Giant X10) and
estimated cost of energy (€/KWh 0.04).
-ends-
For further information please
contact:
Clear Leisure Plc
+39 335 296573
Francesco Gardin, CEO and Executive
Chairman
SP Angel Corporate Finance (Nominated Adviser & Joint
Broker)
+44 (0)20 3407 0470
Jeff Keating / John Mackay
Leander (Financial PR)
+44 (0) 7795 168 157
Christian Taylor-Wilkinson
About Clear Leisure Plc
Clear Leisure plc (AIM: CLP) is an AIM listed investment company
with a portfolio of companies primarily encompassing the leisure
and real estate sectors mainly in Italy. The focus of management is to pursue
the monetisation of all of the Company’s existing assets, through
selected realisations, court-led recoveries of misappropriated
assets and substantial debt-recovery processes. The Company has
recently launched a joint venture initiative in the cryptocurrency
mining sector. For further information, please visit,
www.clearleisure.co.uk
Glossary of Terms
Bitcoin Mining
Bitcoin mining is the process of using computer hardware to do
mathematical calculations for the Bitcoin network in order to
confirm transactions. Miners collect transaction fees for the
transactions they confirm and are awarded bitcoins for each block
they verify.
Block
Blocks are found in the Bitcoin blockchain. Blocks connect all
transactions together. Transactions are combined into single blocks
and are verified every ten minutes through mining. Each subsequent
block strengthens the verification of the previous blocks, making
it impossible to double spend bitcoin transactions.
Block Reward
When a block is successfully mined on the Bitcoin network, there
is a block reward that helps incentivize miners to secure the
network. The block reward is part of a “coinbase” transaction which
may also include transaction fees. The block rewards halve roughly
every four years. The current reward is 12.5 Bitcoins per block
mined and will presumably be halved in mid 2020.
Blockchain
The Bitcoin blockchain is a public record of all Bitcoin
transactions. You might also hear the term used as a “public
ledger.” The blockchain shows every single record of Bitcoin
transactions in order, dating back to the very first one. The
entire blockchain can be downloaded and openly reviewed by anyone,
or you can use a block explorer to review the blockchain
online.
Difficulty
Difficulty is directly related to Bitcoin mining (see mining
below), and how hard it is to verify blocks in the Bitcoin network.
Bitcoin adjusts the mining difficulty of verifying blocks every
2016 blocks. Difficulty is automatically adjusted to keep block
verification times at ten minutes.
DCF analysis
Discounted cash flow (DCF) analysis is a method of valuing
a project, company, or asset using the concepts of the time value
of money. All future cash flows are estimated and discounted by
using cost of capital to give their present values.
Hash Rate
The hash rate is how the Bitcoin mining network
processing power is measured. In order for miners to confirm
transactions and secure the blockchain, the hardware must perform
intensive computational operations which is output in hashes per
second (THs is tera hashes per second).
Pool Mining
As part of Bitcoin mining, mining “pools” are a network of
miners that work together to mine a block, then split the block
reward among the pool miners. Mining pools are a good way for
miners to combine their resources to increase the probability of
mining a block, and also contribute to the overall health and
decentralization of the Bitcoin network.
Source:
https://support.blockchain.com/hc/en-us/articles/213276463-Bitcoin-terms-glossary