Benzinga | Aug 4, 2021 08:15AM EDT

The9 Limited And KazDigital Earlier Announced Signing Of Term Sheet On Establishment Of Joint Venture

The9 Limited (NASDAQ:NCTY) ("The9"), an established Internet company, today announced that its wholly-owned subsidiary NBTC Limited and Kazakhstan enterprise KazDigital Ltd (hereinafter referred to as "KazDigital") have signed a non-binding term sheet (the "Term Sheet") regarding the establishment of a joint venture company in Kazakhstan to build a cryptocurrency mining site with a capacity of 100MW. It will be used to deploy The9's mining machines and potentially other third-parties' mining machines.

According to the Term Sheet, both parties will invest their own assets to establish the joint venture. KazDigital will invest assets related to construction and infrastructure of the mining site into the joint venture, and The9 will invest cash or mining machines in the joint venture. The assets invested by both parties will be evaluated by a third-party impartial institution in order to confirm their fair value and ensure that both parties invest equivalent assets.

After establishment of the joint venture, construction of the total capacity of the cryptomining site will be completed in four stages: first stage of 25MW has been completed on August 1 this year, the remaining 75MW will be gradually completed in the third and fourth quarters of this year and the first quarter of 2022, with installation of 25MW per quarter.

KazDigital will be responsible for future operation and management of the joint venture. It will also be responsible for submitting relevant reports to The9. The9 will first transport 1,000 mining machines to Kazakhstan for trial operation to ensure streamline processes and operations in the future.

Both parties are bound by 6 months exclusivity period regarding development of similar cooperation in Kazakhstan, however this does not include the right of The9 to seek other mining sites in Kazakhstan for hosting and co-location of its mining machines. Both parties will carry out due diligence process within two months after signing of the Term Sheet.

"We believe that we should capture the current unique opportunity of the rapidly changing cryptocurrency mining environment and should accelerate the deployment of our mining machines. In the near future, we will continue to actively seek for low-cost electricity and sustainable energy mining facilities in different regions of the world to accelerate the deployment of large-scale cryptocurrency mining machines for ourselves and other partners by both self-construction of mining facilities and hosting cooperation with mining facilities companies," said Cai Zhifang, Chief Executive Officer of NBTC Limited