Alix Resources all for bitcoin exchange

For those who claim that the mining industry rarely likes to adopt new technology, Alix Resources (TSXV: AIX; US-OTC: ARXFR) has a story to tell.

The Vancouver-based junior explorer — with early stage properties in B.C., Alaska and Arizona — says it plans to pay for upcoming exploration work at its Windy property with bitcoins, and has plans to launch its own bitcoin exchange as a new source of revenue.  

President Michael England says the four-year-old virtual currency — which is gaining global popularity as a form of payment independent of the formal banking sector — has fascinated him from the get-go, but concedes it took constant prodding from his 25-year-old son to move on the technology.

“He was always talking about bitcoins,” England says of his son Mike, who also works at Alix Resources. “We’re still a mining-exploration company — there’s been no change in our business — but we have decided to try it. There’s a huge volume of trade going on in bitcoins, and if we can capture a percentage of those on our exchange, we can make fees off every transaction, and it can help subsidize our other efforts as we continue with our exploration. We look at it as a creative new source of funding.”

Those fees can add up, England’s son adds. “One of the bigger bitcoin exchanges, Mt. Gox, can make anywhere from 0.5% down to 0.2% on a single trade, depending on the volume,” he explains. “Their 24-hour volume is something like 20,000 bitcoins, so they can easily realize $40,000 in fees in a day. That’s before you take out costs — but there’s definitely money to be made.”

Some users are interested in buying bitcoins as a form of investment. The value of bitcoins has exploded in the last four months, England says.

But the little-regulated currency also appeals to users as a way of paying for goods and services, or sending money overseas without having to pay transaction fees to the banks.

There are two bitcoin exchanges in Canada, and Alix Resources expects to have its own exchange up and running in the first quarter of 2014. It has signed an agreement with a private software vendor to license the exchange.

The company updated its progress on Nov. 14, noting that a beta version will begin real-time testing in December. The exchange will use industry-standard practices, such as DDoS protection, cold storage and two-factor authentication to ensure that all exchange activity and information is well secured, the company says.

“While mineral exploration continues to be our main focus, we are confident that increasing shareholder value and financing our projects will be possible through the bitcoin exchange,” England says.

Alix Resources trades at 5¢ per share within a 52-week range of 1.5¢ to 6.5¢ per share.