South American Gold Mining Giant Buys Bitcoin

Bitcoin is attracting the attention of public companies in various industries around the world.

Following the public purchase of Bitcoin by MicroStrategy, a US-listed enterprise software company, Nilam, another listed giant traditional gold mining company in South America, announced the purchase of Bitcoin. Compared with MicroStrategy's purchase of Bitcoin through issuing bonds and using the company's net profit, Nilam purchased Bitcoin through the acquisition of special purpose entities.

On March 25, Nilam, a gold mining company listed in South Africa, announced that it had signed a letter of intent with Xyberdata Ltd., a special purpose entity in Mauritius, to acquire 100% of the equity of the special purpose entity to be established in the name of Mindwave, which currently holds 24,800 bitcoins. Nilam will issue newly authorized Class C priority shares in exchange for 24,800 bitcoins at a discount to the current market price. If calculated at the current price of Bitcoin, this transaction will bring Nilam a bitcoin value of more than US$1.7 billion.

According to the announcement, it is expected that after the acquisition is completed, Nilam will acquire 100% of MindWave's equity, making it a subsidiary of Nilam. MindWave's shareholders will exchange their equity in Mindwave for a new class of preferred shares (Class C) authorized and issued by NILA.

Pranjali More, Chief Operating Officer of Nilam Resources, said the acquisition and resulting strategic partnership aligns well with NILA’s vision, mission and core values ​​– that the future of finance will be inclusive and sustainable, pioneering transparent, impactful solutions while driving positive change in the digital economy.

In July 2020, MicroStrategy began exploring alternative assets such as Bitcoin to hedge inflation and cash substitutes. As of March 11, 2024, the company already holds more than 200,000 Bitcoins, worth more than $14 billion. In the first three months of 2024, MicroStrategy has spent more than $1 billion on Bitcoin, accounting for more than half of its total purchases last year. Bitcoin has risen by about 675% since Saylor began buying.

In 2023, the price of Bitcoin skyrocketed, benefiting from the close relationship between the company's stock and the company's reserve Bitcoin. The company's stock MSTR soared 337%. It became one of the companies with the largest increase in the US company valued at US$5 billion or more, surpassing Nvidia's 234% increase and Meta's 194% surge at the time.

On the other hand, Nilam is also a listed company. If we look back at Nilam in three years, will it have the same scale of returns as MicroStrategy? We will have to wait and see. But at least one fact that cannot be ignored is that with the recovery and opening of the Bitcoin bull market, more and more global listed companies across all industries will begin to pay attention to and even invest in Bitcoin in the future.