Managed Mining FAQ

What are my Portfolio management options?

Aurum offers three options for portfolio management:

  1. Long Bitcoin (we hold BTC to be sold during a price rise)
  2. Long USD (we sell the Bitcoin for USD as its mined)
  3. Trade/Speculate (we trade the Bitcoin and speculate on altcoins)
What about Insurance?
MineOn LLC (a subsidiary of Aurum Capital Ventures, Inc.) is responsible for obtaining insurance on all mining servers in the Managed Mining Program. The cost will be subtracted on a monthly basis from the mining rewards.
What about Maintenance?

Aurum estimates two hours of routine monthly maintenance on mining servers for a $100k deployment. We bill in 15- minute increments at $75/hour. This cost is debited from the joint account and an itemized breakdown of the work will be provided.

How do you decide what is routine maintenance and additional maintenance?

  • Routine = rebooting, firmware updates, setting changes, replacing a fan
  • Extra charges = changing major physical components of the machines, control board, and hash-board replacement
  • The fee would be debited from the account and you would receive an itemized breakdown of the 15-minute billing cycle for the tech work
What happens if Aurum constructs another mining site with cheaper power?
If Aurum constructs a new facility with cheaper power rates when you are mining with us, Aurum will relocate and deploy all Managed Mining customer machines to the new facility if it makes sense financially. The reason it wouldn’t make sense financially is if the shipping costs outweighed the expected revenue increase.
What type of energy does Aurum use?
Our flagship facility located in Grundy Center, Iowa utilizes a source of stranded wind power.
Does Aurum use battery technology?
Batteries are currently not economically viable to use at large scale crypto mines because of the low-cost power required to run the machines. It is usually easier to turn the miners off when power prices are spiking vs using a battery to store the lost energy.
What is Hedging mining risk?

Through the Bitcoin futures markets, miners can hedge 6-months out by selling our future production.

How do you get paid out?

Each Managed Mining Customer is provided with a managed account through our prime broker, Tagomi. Mining rewards will be received through the account daily. Each month Aurum will reconcile the account to cover the direct operating charges - after this is completed and approved the investor will receive their 80% profit payout. The account is jointly owned meaning no funds can move without both parties' approval.

What is the ordering process for miners?
Since the price and availability of miners change for us every 24 to 48-hours, we do not quote machines by available batches for Managed Mining investors. Instead, after the investment amount has been agreed upon and the investor sends funds, Aurum will move forward with purchasing the most efficient and cost-effective machines available.
Does Aurum have performance reports?
We have reports from customer’s machines running in our facility. We can also provide reports from the bitcoin network.
What is the exogenous risk that you think is infinitesimally small where all your fundamental investment theories get blown out of the water because this highly improbable event occurs?

The event would be a catastrophic event at the site. This would be covered under the insurance though. The insurance policy covers theft.

Why are miners seeking outside capital?
The mining industry is self-financed and not bankable. Fundraising enables us to secure lower-cost power opportunities.
What is the exit strategy?
Throughout the past four years, Aurum has sold more than $8m in bitcoin mining hardware and infrastructure through the secondary resale markets. This experience allows us to work within these channels to reliably and consistently liquidate hash rate at any time. We take advantage of the supply gap to optimize this return opportunity.
What is the difference between MMP and hosting?
Aurum is vertically integrated into the Bitcoin mining industry meaning we actively buy and sell mining hardware & infrastructure, mine ourselves, partner with investors to mine, and finally service speculative miners through co-location hosting. Hosting is a business line enabling Aurum to
Are all of the direct operating charges reconciled at the end of the month?
Yes, all of the charges are covered from mining rewards produced which are reconciled through Tagomi at the end of each month.
Do you net more money by selling the machines or continuing to operate them?

Yes, hash rate typically trades in backwardation when is it overvalued so selling makes more sense financially 

What is the typical equity split for independent site projects?
We take a 20% performance - this effectively makes it an 80/20 split.
Can you explain the direct operating charges?

Mining Pool Charge

  • Charge that allows us to get steady payouts.
  • We make a 2-3% margin

Facility Infrastructure Charge

  • Covers the costs to deploy the miners (land, equipment, fans, all sunk costs)
  • Covers costs we’ve already sunk

Tech support charge

  • Used on % of power generation to support and maintain the operation
  • Raw cost to cover on-site technicians

The performance fee

  • Covers the management fee

Repair escrow fund

  • The fund we put aside to maintain equipment and purchase replacement parts on the equipment