Generation Hemp Inc (OTCQB:GENH) has announced a new strategic direction into sustainable energy projects, starting with bitcoin mining, and a change in its corporate name to Evergreen Sustainable Enterprises, Inc. within the next several weeks.
The company explained that its board of directors and management team have been studying and actively participating in several green bitcoin activities over the past 12 months.
Due to management's extensive background in the energy sector, it said it became apparent that the skills necessary for bitcoin mining in a sustainable energy environment already existed. In particular, locating stranded energy projects on a smaller scale, negotiating land transactions, power purchase agreements, and managing actively operated mining projects all could be done with skill sets already existing within the company.
"While the changes we have announced today are significant from a future direction perspective, we believe them to be in the overall best interest of our shareholders for the future,” Evergreen Sustainable Enterprises chairman and CEO Gary Evans said in a statement. “All of our mining sites under development should generate immediate net cash flow to the company during a period when the bitcoin mining sector is down along with the overall capital markets.
READ: Generation Hemp posts record revenue in July by processing more hemp biomass and pre-selling some inventory
Evans noted that current mining site locations in development exceeded six and include Arkansas, Kentucky, and Costa Rica. Due to its extremely low cost of energy and its emphasis on green resources, the company is being contacted by many different industry participants for potential joint ventures or partnerships at its new sites.
“Our financial models indicate our ability to generate positive cash flow at substantially lower Bitcoin trading levels than the current price of approximately $18,000,” Evans added. “We are deploying the highest quality and most efficient new equipment at a fraction of the cost just six months ago.”
As a first move in its sustainable energy bitcoin mining activities, the company said wholly-owned subsidiary Cryptorica has closed on the purchase of 80% of Toro Energía Sociedad Anonima, a Costa Rican corporation with ownership of a hydroelectric dam in Costa Rica.
The source of approximately one megawatt of power produced from the hydroelectric dam (six generators) will be used to power new Bitcoin mining machines at an extremely low cost, it added. The remaining 20% ownership of Toro will be retained by the Kopper family which has owned and operated the dam for over 30 years.
"We are very excited to partner with Gary Evans and his team in one of our family assets in order to take our extremely low-cost energy and convert this green resource into much higher profits,” said Eduardo Kopper, one of the current family owners of Toro. “We are anxious to install 300 brand new bitcoin mining machines over the next few months at the Toro location. We are already discussing additional new venture opportunities. We both have the same philosophy of maintaining very low costs in order to maximize profitability. When the price of Bitcoin starts its upward trajectory, we will be extremely well positioned."
Hydroelectric power
Hydroelectric power is a clean and renewable energy source that is used to generate electricity by harnessing the energy of falling water and can provide a reliable and a very cost-effective source of energy for bitcoin mining operations, Evergreen Sustainable Enterprises said, adding that it can help reduce the carbon footprint of cryptocurrency mining as many cryptocurrencies are produced using fossil fuels, which continues to contribute to greenhouse gas emissions and climate change.
By using hydroelectric power, it said bitcoin mining can be made more environmentally friendly and sustainable and can help improve the stability and reliability of cryptocurrency networks. Hydroelectric power is a relatively stable and reliable source of energy, compared to other sources such as coal or fossil fuels, which can be prone to price fluctuations and supply disruptions.
Evans went on to say: "Our existing midstream operations of processing hemp have continued to work in 2022 at close to 100% of capacity as previously announced.”
“Hemp biomass prices have continued to slowly improve this year as excess supply has dwindled,” he added. “This situation is going to exacerbate later this year and into next year due to minimal farmer plantings. Generation Hemp is in a unique position to capitalize on this forthcoming shortage due to current inventory levels, farmer relationships, along with anticipated ever-increasing demand in a supply-starved market.”
Product development
The company said its management team is currently working on additional new product developments after successfully launching its two existing product lines, Rowdy Rooster Hemp animal bedding and Gas Monkey Spill-Jack spill absorbent over the past 12 months.
Evergreen Sustainable Enterprises said all existing operations of Generation Hemp will continue to be maintained as a fully operating wholly-owned subsidiary. It noted that Generation Hemp remains the largest hemp processing entity (mid-stream hemp processing) in the US, with its operations based in western Kentucky. All existing full-time personnel remain in place at both the corporate and subsidiary levels, it said.
Evergreen Sustainable Enterprises, Inc. is a Dallas/Fort Worth-based sustainable green energy company. The company is parent to Generation Hemp, a wholly-owned subsidiary hemp company that operates in the midstream sector.
With operations in western Kentucky and Denver, Colorado, the company uses its proprietary technology to dry, clean, process and store hemp. In addition, Generation Hemp also owns and leases real estate to companies needing seed storage facilities located within the greater Denver area.
Contact the author at stephen.gunnion@proactiveinvestors.com