Sustainable Mining: The View From a Swiss Miner in Iceland

Transcript

good morning morning um i think uh to be great if we could be added to that whatsapp group um and i'll get our members to come and visit those two there's those weekly meetings two monthly meetings welcome to this year's cvc it's a privilege to be here and we're humbled to be in the company of so many pioneer in industry pioneer experts um and and industry experts thank you for the organizing team for such a great event um it's uh it's it's it's really it's really great to be here and um yeah with uh congratulations to the previous speakers i mean this is really a tough act to follow um and uh just when i was hoping to speak after joe biden no luck you know so um

as you can see we've been allocated to the widow swiss with marmatech we're swift space mommy we're a swift space mining company we'll chat we'll chat a little about who we are and what the future holds so it's really about our story in the crypto mining in the crypto mining space um humans are very strange creatures i mean my colleagues came to me a week or two back and said um can you do the presentation for us so i said um yeah no problem what is what what what slot what what have we been allocated so they said sustainability complete panic i mean as my previous colleague said sustainability and crypto mining they don't coexist so i had visions of as a south african maybe i had visions of somebody running in in the room throwing tomatoes at me and i quickly quickly calm down safe up here

towards that door it's not because i want to run out it's because i'm afraid of who may come in um i quickly calm down remember that's that we're actually one of the good guys and that's what we try and best we want to explain to you today sustainable energy at marmatech is part of our dna as we get into more detail of our conversation a little bit later on today you'll notice that we've been fortunate enough to build our business around an energy around an energy energy solution that is cost effective and eco-friendly let's let's let's all face it a day doesn't go bar today we're not reminded of and rightly so of the importance of um of in all our industries of developing sustainable clean energy solutions

so what do we do different we are very we're rather fortunate our unique selling position is we have a simple turnkey mining solution um operationally we are almost 100 carbon neutral that's that's quite something to be able to say we have strong intellectual capital we we have efficient hardware and we have a specially developed algorithm our technology helps us identify the more profitable cryptocurrency to generate and that improves hardware performance and and yield again like i said you we're just gonna we it's our it's we're we a um we we're relatively a young startup so when we use this opportunity to tell you

a little bit about ourselves so our team our team is currently only seven people people strong we have programmers technicians uh buy it very important for us and a um and an investment relations team our mission is really to support the the security and development of the crypto ecosystem and we want to become one of the larger more agile sustainable energy based mining firms our strategy our current strategy is simple we want to it's it's minor and infrastructure development we also want to maintain using sustainable energy only we also want to maintain a lean resilient cost effective business focusing on strong balance

sheets and and cash flow uh in the short term we'd like to improve our hash rate and maintain our unique selling position which is underpinned by our carbon neutral status we're fortunate to have low cost energy power and that's thanks to our mining facility in iceland our company's headquarter companies headquartered in two um commonly known as the crypto as the gateway to the crypto valley recent last year we opened up a um and an offices in zurich and because of the bank new zealand being the banking sector you know banking powerhouse was very important for investment relations team we have eight we have eight um mining

halls with servers in iceland arsenal offers the cheapest electrical tariff in in the north atlantic and europe and it's um because of the climate it provides our servers with natural cooling it's very interesting what the previous speakers spoke about so i think i think that there's some interesting solutions there that i think we need to talk about eco and we have an eco-friendly power source which is generated by hydra and and geothermal our partners our partners are our key partners of inco bank it's very important in switzerland with financial services we're onboard stella we're registered with the with the swiss ombudsman for financial services and crypto valley we're a member of crypto valley

our history next slide please tom i asked you a little bit about our history in 2018 yes we're very we're a fledgling company the founders made it a mutual friend's birthday party they both had a common interest in in crypto mining wanted an operation in tunisia the other one had an operation in switzerland and with already having some collective mining experience they divided they decided to join forces and um they embarked on a very thorough and comprehensive financial and business development plan and it wasn't long before a proof of concept was born okay um they immediately they immediately went into markets to identify some some key um strategic partners and uh yeah the rest is history partnerships are elaborating a little

bit on our partnerships um we've been able to secure uh strong partnerships in in all the key key aspects of our of our business some of our partnerships include a close personal relationship with financial um they provide all the insurance cover for all of our our equipment in in in iceland it's very we we it's very important for us to make sure that our investment is is always secured um for all exchanges and other services in in the in the banking sector we have a provision a very professional partner in encore bank it's all very well having a mining facility and being able to generate cryptocurrency but to be able to run your business you need to be able to convert them into fiat inco bank is a business to business bank

that that was founded in 2007 and they they provide a first-class service to um they offer services to banks security houses fintech companies an asset marmatec with a first class banking transactional banking service and outsourcing service from a single point in addition since 2020 we've been acting as the income bank blockchain advisors we've been access we've been assisting them with their with their blockchain transactions and validation supports and we also um we also we we we have an exclusive mandate with bank and with that we're able to

provide a cost effective and and fast solution as um we also i mentioned we're part of uh we're a member of the crypto valley recently we're very proud to announce that we have a new board member and it's the director and founder of crypto valley professor dr denzler and he's a bit of a legend in switzerland he's affectionately known as mr block state blockchain in all the media circles we're very privileged to have him on the board and he's providing to be a massive asset for us um initial initial challenges and mining forms set up um this was as a startup it was investment capital albeit we had a strong business model

and we had proof of concept one of the um one of the challenges the traditional swiss private equity market is exactly that that's um it is it is traditional and conservative and the venture capital lay in the generations one or two above us so this um selling a crypto business model to this generation was was really difficult it was a foreign often a foreign concept and that type of venture capitalist was few and far between so at that point in our business life we had to recalibrate the way we where we were thinking so what we did is we went um with the available capital that we had we took took advantage of some market conditions at the time then we were able to secure some very um some well priced high performance uh equipment

out of this actually became a good thing because we we then realized that we if we were more aggressive and and we timed our buying rights and we used economy of scale and um we we uh we we were actually able to to to do better in the procurement side of our business um so now we are so we are so we have a bank we have fema registered we have sourced our equipment so now now where do we go because like i said before everything and this is why i have tremendous respect for for this team is that the entire business model from the start has been trying to find do crypto mining but using a sustainable energy source so what they did was they they did some extensive research in clean energy they have access to to

quite a big network business network and they were able to secure a location in iceland the country is called barren and dark it's uh it and it has got eco-friendly power perfect place for for a computer we were able to secure a lease agreement and and then we started the process of we actually actually then we didn't fully appreciate how fortunate we were because because that was that you know at that stage um and as you can see is what's happening what is happening politically in the last two years there's been a massive shift and and and a lot more voices and the sustainable energy message out there is a lot more

aggressive so we um we were lucky to be i guess we would like to be in the right place at the right time the end of 2019 we began developing our hall our halls and a huge city is outside technician there who spent long days and long nights um setting up the facility and parallel with that with we worked with the local law firm the logos group then some more news some more good news started coming in and they they said that we didn't um there was some new tax legislation out for foreigners and we actually didn't need to set up a um a legal entity there so we could actually run our entire operation from switzerland and that um yeah we were good to go um our initial investors as mentioned previously the demographic of our

initial investments you know viewed crypto as an unknown so um that we stayed positive we kept plugging on and eventually a a major investor broke for us and we had some nice backing and we applied the resource wisely and we were able to start generating results that outperformed our original business model and from that some good results started flowing and with with a good business model a proof of concept and and some strong historical financial information we we now had a stronger sell to our investors and more investors we were on board a lot more investors and you will

find that we today as we speak we are investing in new mining capacity our challenges um price and hardware development i mean cost of miners miners are like any other commodity they supply the mod sensitive the prices have been going up especially for this type of high performance technology and we um we we we uh yeah it's been it's been a challenge for us and uh the processing has been largely tracking the the you know the macro crypto market and what also doesn't help us as a small player a lot of the bigger the bigger buyers come in and they'll buy the dip so whenever there is a dip some of the bigger players come in and buy pull the machinery so what we do is we've we've we look carefully at the opportunities

again with our aggressive pricing model we've been able to we've been able to um we've been able to navigate those waters and so far so good transport route from where we were sourcing our equipment to where it needed to be installed we were trying to work with a three-month lead time and that so from acquisition to installation and opera up being operational in iceland had a three-month lead time so we actually outsourced that to experts um and we and also be very fortunate to have a good uh logistics company handling that for us the other challenge we had was acceptance in banks and institutions in switzerland and now i'd like to refer to an interesting article published by

credit suisse in june last year and the head and it was headlined digital money in the future and it contains some very interesting viewpoints from extremely high caliber individuals from credit suisse six digital siber swiss national bank and um income bank in this discussion they unpack the opportunities and risks of crypto it's a good read you'll be able to find it online but i'll i'll take away maybe a little bit biased because we're sharing a little bit of a bit of the same view of our own bank but um our takeaway was that banks need to plunge and embrace the embrace the change all bit with a little bit of reservation crypto regulations in switzerland cryptos and virtual currencies are classified as as as assets of property the cryptocurrency's regulation is

remarkably progressive in switzerland um switzerland imposes a registration process and a requirement to obtain a fitment license in order to in order to operate opportunities for us internal efficiency so and again referring to what we would have learned from what was what was displayed in some of the previous speakers uh it's it's really interesting stuff uh fortunately we all are really well positioned from an esg standpoint as a as a company we have we are we we are carbon neutral um and our team but we don't stop there our team it's weekly to brainstorm our whole business uh process to identify ways of doing better

we look at our suppliers what our suppliers footprint are and we look at our own internal efficiencies crypto banks in in switzerland we're very fortunate banks becoming more accommodating and they're making a lot easier for us to do work they make it a lot a lot more affordable new locations um so now we have this operation in iceland but with what's happened over the last couple of years we've realized that you know if you want to grow your business and you want to be a much larger business than you are you need to start looking at new locations so what we've done is we've been able to identify identify another exciting location in europe and um both that location dovetails perfectly with our clean energy ambitions

and um they have political they are politically stable and they have um access to to wind and solar power and they also have the resources and the technical abilities to be able to set up those operations there we have secured the land in one of those locations and we are currently busy with one of the clean but we're busy with modeling our clean energy options uh in those origins um partnerships through new partnerships we've been able to acquire new exchange solutions that develop faster distribution channels and we bring you on new investment all the time and this is why the new investment all the time is quite important is because in iceland we have

available capacity to mine so we the the energy in iceland is 1999.98 renew renewable it's hydra and geothermal we have a total of our capacity at the moment of total of 20 megawatts per hour capacity available and um currently we've only used 25 of that capacity so we still have a lot of available uh uh capacity in iceland and we need to scale up as as fast as we can um our future plans so one thing that we've identified is is securing fixed electrical supply contracts okay and securing and holding

holding long-term well-priced electrical supply contracts after so our approach to this is after identifying a country to expand into we identify the available energy sustainable energy sources that exist there in that in that location then what we do is we we we develop our own sustainable energy solution in that location and again considering to considering the expertise and the technical technical resources that are available there [Music] but then what we always we also make sure that when we develop that that power um we make sure that no energy is lost we feed those that's back into the grid um to ensure that we don't have any

loss of power it sounds simple but it isn't because some of the countries that you're dealing with that requires collaboration with local communities uh local governments um and local authorities and capitalizing on our but we ca we use the already existing good reference in the markets another thing we've identified sorry i'm very very sorry but we've gone a little bit over okay session is starting shortly okay sorry i'll try to closing remarks i'll just finish up one page no problem okay so in closing we live in very interesting times um the goal posts always moving we we're emerging from a pandemic last scene in 100 years we there's one europe last scene in 77 years the shift in the global political landscape is showing there's a stronger climate change voice in in all the legislative houses um we have the

november elections in us in the usa coming up and often candidates in the run-up to these elections campaign on certain issues fed policy inflation global global supply chain review climate change and one can hang one's hat on the fact that uh crypto will be a talking point the ground is fertile and i'm sure that a lot of you feel this way for the industry to come under more pressure especially in sustainability as a fledgling company we're trying to sift through all the noise navigate through these interesting waters as best we can we're well positioned as a young company from an esg standpoint with a lean business model we are efficient flexible and reactive our aim is not only to be a successful business

but to play our part in contributing to the message the messages and conversations ensuring crypto remains relevant and not just a nice to have in your investment portfolio thanks for your time today great [Applause] thank you thank you tara and i didn't have any tomatoes so but there's some lovely croissants uh down down down says thank you all uh for listening uh we have now coffee break