Geoff Morphy: Well, the $0.06 is something that we’ve been really sort of maneuvering around in our analysis for some time. If it’s better than that, then we can make some investment decisions with some half decent payback periods. We’re watching the network hash rate, which continues to set new records in terms of increases. Boy, we’ve had 45% growth over the last year in terms of our hash price, but difficulties in the network is up sort of almost double that. It’s quite phenomenal. But this excitement here, the ETF excitement, I hope we can see Bitcoin prices of sort of 45, maybe 50 going into the having that’ll produce that type of hash prices that we’re looking for. We will see.
Kevin Dede: Okay, that’s helpful. And then when you think about kind of the power cost distribution across the industry, again, this is an industry question, but I would appreciate your perspective. Where do you think the midpoint is in terms of dollars per megawatt hour? Where would you kind of put the bottom 25%? Where would you put the top 25%? Thank you very much.
Geoff Morphy: Wow. I think probably, and there’s people with a lot more better data than I am, but it’s probably average being sort of $0.055 per kilowatt hour is probably sort of where the average is. You see a lot of hosting contracts that are fair, bit more than that. Like when we go through the having, it cleans a lot of inefficiency up. And we do expect a radical adjustment here. And where 15%, 20% of the network hash rate will probably fall off for a few months. And it just depends where Bitcoin price is and some of these new miners and adoption, how quickly it is replaced. But it will be replaced. This is why I’ll repeat it again through this whole script. And what we’re talking about here is, we are really pushing for improving our cost of production.
We’re bringing down our G&A. And like the biggest factor is electricity costs. So we are expanding in areas where there’s low cost electricity. Argentina and Paraguay is cheaper than where it is in North America. And while there’s no demand response that can pad [ph] your EBITDA and your earnings just in pure margin on Bitcoin Play, you need lower cost electricity. And that’s why we are seeking earnestly, anything under $0.04 per kilowatt hour. And that’s why we think Paraguay, with their dynamics, it’s $0.036 and $0.039 now. And with the potential for some improvement there, like in reduction. And then we’ve got Argentina right now that’s less than $0.03. That’s if you’re going to be successful going forward, you need to be in low cost areas, being able to guess $0.04, $0.045 going forward, especially subject to inflation.
It’s not a good recipe for longevity.
Kevin Dede: I appreciate the color. Thank you. Then one last one, on the election in Argentina, any potential fallout and what it could mean for you doing business there?
Geoff Morphy: We’ve decided to go slow there. We’ve said this many times that we want to see what the election brings, but we’ve seen with a Forbes article just most recently where it said both remaining candidates are pro-Bitcoin. I think how they go about it will be different. We have one more radical candidate that talks about dollarizing the economy and things like that. It’s going to be interesting to play through, but it’s one of the reasons why we have not put our capital budget dollars towards Rio Cuarto at this time, because we want to make sure that we can continue to get the lower cost electricity and just have confidence in continuing capital investments in the country. But even I think in that Forbes article, they talked about the government perhaps getting into Bitcoin mining in a particular area down there, which we’ve looked at.
They think it’s a novel idea, but we were looking at it two years ago and it does represent some of the great opportunity in the country of Argentina going forward, provided that we can put the capital and the right people to play in that area.
Kevin Dede: Geoff, seems like lots of folks are copying you. I’ll turn it over, continue. Best of luck.
Geoff Morphy: Thanks, Lucas.
Operator: This concludes our question-and-answer session. I would now like to turn the call back over to Geoff Morphy for any closing remarks.
Geoff Morphy: Thank you, Operator. We are especially excited about the industry as the having cycle is coming in about five months. Positive developments include increasing confidence that Bitcoin ETFs will be announced later this year and activated in early 2024, and two, in public sentiment that Bitcoin is being recognized as a store of value. Given heightened world uncertainty, we believe these factors may boost the sector and increase its credibility, along with increases to Bitcoin prices sooner than expected, and put the wind at our back as we execute our plan to, one, grow low cost operating capacity to 290 megawatts in Q1, 2024. Two, maintain top decile performance from mining assets and reduce costs as a result of additional sources of stable lower cost energy.
Three, develop more of our 573 MW of contracted yet undeveloped capacity, of which only 240 megawatts are currently in operation. Four, increase productivity with timely and cost effective fleet upgrades, and five remain one of the most highly productive and geographically diverse pure played Bitcoin mining companies in the world and embark upon an accelerated phase of smart expansion as and when conditions present themselves. Thank you all for attending today’s conference call. We look forward to updating you with our monthly reports as well as our other developments, and at our Q4 conference call in March. Thank you.
Jeff Lucas: Thank you all.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may all now disconnect.
