Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Canadian junior exploration firm Alix Resources (TSX-V:AIX) is making history with its decision of start paying its contractors in bitcoins, amid expectations that the crypto-currency’s value will continue to surge.
The first agreement, announced late Tuesday, was reached with contractor Ridge Resources for tungsten exploration work in Canada’s western province of British Columbia.
“This transaction is the first of its kind within the Canadian junior mining sector and positions Alix as a participant at an early stage in the global Bitcoin marketplace,” said CEO Michael England in a statement.
To explore this model of payment more fully with its other service providers, Alix Resources is also working together with a software vendor to operate a bitcoin exchange. If the venture is successful, the mining company may be converting its operations to bitcoins entirely.
Bitcoins have been growing in popularity in Canada. The world’s first bitcoin ATM opened at the end of October in downtown Vancouver, dispensing hard money in exchange for bitcoins through a palm-scan security system. The four other ATMs are set to be rolled out in Toronto, Montreal, Calgary, and Ottawa next month.
Bitcoin prices have soared as of late, reaching a record high of $395 on Saturday on Japan-based Mt. Gox exchange and other marketplaces, as investors —especially those in China— become increasingly optimistic about the digital currency’s potential growth.
The virtual money was trading close to $400 again Wednesday morning.
4 Comments
Matt
When enough dummies are convinced to buy anything the value will go up. The first guys then cash out and “added value” came into play. Only thing is….they cashed into real money and can actually keep the value.
Regarding this article. Where did Alix get Bitcoins? Bought them? Or just solved a math problem. Junior with no money, makes deal with contractor with no work and presto declares bitcoins an exciting new future. And here we go again year 1998, when the weakest of the out of work mining guys became dot com daredevils, 99.9% which ended up flopping like a fresh caught bitcoin. The joy ahead is too much to anticipate. 🙂
LAMB
Matt – you nailed this one dead-on – paying with imaginary money – and guess where the company is from? right – BC ! No wonder the mining juniors there have a poor reputation.
Myself, I contract out my services for Good Old real Canadian Dollars, NOT something that some computer geek dreamed up. Besides, the original use of BITCOINS was to hide Drug-related transactions, has somehow morphed into something else. SHADES OF BRE-X???
LAMB
This company has $17,067 in cash as of March, 2013 AND owes $900,000, shares are $0.04 per share . So I guess that the imaginary ‘BIT COIN’ is the way to go for them. Nothing ventured, nothing gained as the saying goes.
Bitcoin
You 3 are clearly not knowledgeable enough about bitcoins to make any relevant comments on the subject. Research it more maybe?