Nevada-based Black Rock Petroleum Company has entered into agreement with Optimum Mining Host to deploy and operate up to 1 million Bitcoin mining machines.
Black Rock’s proposed mining operation would span three natural gas producing sites located in Alberta. The first 200,000 machines would be deployed at the Quirk Creek Gas Plant, a recently announced planned acquisition by Black Rock. The firm has planned to allocate 300,000 machines to a second site in Alberta, with the remaining 500,00 allotted to a third site yet to be identified.
Black Rock CEO Zoltan Nagy commented, “The Quirk Creek property is perfectly situated to service those markets. Current production levels are good, and our engineers have looked at the property’s historical production records and analysed recent reserve evaluations, and we are confident we have the expertise, technology and resources to materially increase production and, in turn, the cash flow of the site and to host and operate bitcoin miners at an energy cost of circa three cents Canadian per KWH.”
The contracted term between Black Rock and Optimum Mining is two years, with the option to extend by 12 months with notice. As the CBC noted, no time line has been established for this deal. The CBC also reported U.S. bitcoin mining engineer Brandon Arvanaghi as saying he was “skeptical” of the “astronomical” number of miners Black Rock is proposing to install.
Arvanaghi continued, “The logistics of bringing such a large number of mining rigs to rural Alberta would be challenging.”
Indeed, Charles Selby, president of Caledonian Midstream Corporation, commented, “Given our current gas production, a more reasonable number of miners would be 10,000 rather than the 200,000 referenced in the press release."
Whether they can deliver on this plan, Black Rock's optimistic projections point to the large outflow of mining machines from China. Many miners are relocating to new stable sources of energy in wake of China’s ban. If Black Rock succeeded in installing and operating 1 million bitcoin miners, it would run the equivalent of one third of the current global mining capacity.