The9 a Top Gainer Friday on Montcrypto Deal

The Chinese company has seen its stock rise significantly after its entry into cryptocurrency mining.
CapitalWatch StaffJun 04,2021,19:40

The9 Ltd. (Nasdaq: NCTY) surged 21% Friday, to $13.28 per share, on the acquisition of clean energy cryptocurrency mining facilities in Canada and the closing of the Skychain deal.

The Shanghai-based company announced today that it will use the carbon-neutral infrastructure of Montcrypto Ltd. to build a 20MW supply of electricity in Calgary, Canada, to supply electricity to operate more than 6,000 S19j Antminers.

“Montcrypto had signed natural gas procurement contracts with local oil extraction companies and plans to build carbon-neutral cryptocurrency mining facilities by using natural gas as the source of electricity power generation,” The9 wrote in the statement.

Under the deal, The9 will invest CAD$7.6 million in Montcrypto to obtain a controlling stake in the company. The9 said it will pay hosting fee to Montcrypto at a rate of CAD0.037/kWh over a five-year term.

“When all the 20MW carbon-neutral mining facilities are put into use, the byproduct natural gas in the area will be reduced by approximately 53 million cubic meters every year, and the greenhouse gas emissions of 128,000 tons of carbon dioxide equivalent will be reduced,” The9 said.

In addition, The9 announced the closing of the investment in Canada-listed Skychain Technologies Inc., a cryptocurrency mining facilities company. The funds will be used to increase the capacity from 20MW to 32MW at the mining site in Birtle, Manitoba, Canada.

Formerly a troubled mobile game developer in China traded below the $1 minimum bid per share required by the stock exchange, The9 recently delved into cryptocurrency mining and turned its luck around.

In January, the company received backing from several investors from the digital currency mining industry in what appears to be a miraculous save. From its December level of near $3 per share, NCTY stock today has increased fourfold.

Topics:NCTY, The9, Montcrypto, Mining