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Miner to Pay in Bitcoins for Work at Tungsten Project

Nov. 12 (Bloomberg) -- A Canadian mining company agreed to pay a contractor in Bitcoins for exploration work to be carried out at a property that contains tungsten.

Alix Resources Corp. said today in a statement it will pay Ridge Resources Ltd. for the work at its Windy property about 15 kilometers (9 miles) north of Cassiar, British Columbia.

As Ridge completes the work, it will quote payment in Canadian dollars and Vancouver-based Alix will convert the price into the digital currency, Alix Chief Executive Officer Michael England, 50, said in a phone interview.

“We are a mining exploration company so yes, this is a bit different,” he said. “There’s a lot of expectations that Bitcoins are going higher, so why not start accumulating?”

The shares rose 33 percent to 4 Canadian cents in Toronto on trading volume 17 times the three-month average, giving Alix a market value of C$2 million ($1.9 million).

“I’m surprised someone’s willing to take payment through Bitcoins,” Brian Huen, managing partner with Red Sky Capital Management Ltd. in Toronto, which manages about C$220 million, said by phone. “I certainly personally wouldn’t take that currency for services I’m rendering.”

Alix has also teamed up with a software vendor to operate a Bitcoin exchange. Depending on the success of the venture, Alix may shift its focus to Bitcoins entirely, England said.

“We want to take advantage of this niche, this explosive sector,” he said.

Bitcoin has surged this year. It opened today at $343.63 and traded as high as $357 on BitStamp, an online exchange. The virtual currency was introduced four years ago and exists as software that’s designed to be untraceable, making it an attractive tender for those seeking to trade anonymously via the Internet.

To contact the reporter on this story: Eric Lam in Toronto at elam87@bloomberg.net

To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net

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