Nasdaq-listed Marathon Patent Group has agreed to a joint venture deal with U.S. independent power producer Beowulf Energy to deliver cheap electricity for its bitcoin mining operations in the country’s north.
In a statement on Tuesday, Marathon said that it will co-locate a bitcoin mining facility within Beowulf’s Big Horn Data Hub at its 105-megawatt power station in Hardin, Montana.
The company will pay Beowulf – which builds and operate electric power plants – $0.028 per kilowatt-hour (kWh) for the supply of electricity at the facility. This is 38% below Marathon’s aggregate electricity cost for mining and data center management, currently at $0.034/kWh.
Marathon said reduced power costs will also lower its breakeven costs to mine one bitcoin from the existing $7,500 to $4,600.
According to the statement, Marathon will install 11,500 S19 Pro Antminers it recently acquired from Bitmain Inc. at the new site. The machines have the capacity to generate 1.265 exahash per second of bitcoin mining power. The farm is expected to become fully operational by the second quarter of 2021.
With 500 miners already at the site, the company says it intends to grow the facility to a hashrate of 3.32 EH/s in the future.
“The closing of this joint venture with Beowulf represents the completion of a long journey to own a bitcoin mining facility,” commented Marathon chairman and chief executive officer Merrick Okamoto.
“Partnering with an experienced independent power producer enables us to maintain control and certainty of Marathon’s energy and operational costs, at rates that represent some of the lowest in North America.”
Beowulf said it has earmarked an additional 500 megawatts of generation capacity for “subsequent blockchain and data center expansion.” Under the joint venture deal, the energy firm will become a shareholder in Marathon, as the later retains 100% of the bitcoin mined at the farm.
Shares of Marathon fell 2.5% to $2.36 on the Nasdaq Stock Exchange Tuesday. The stock is down from a 52-week high of $5.25. But it has also dropped to a low of $0.35 over the same period.
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