Here's What's Driving MGT Capital Investments Inc. (OTCMKTS:MGTI) Right Now

MGT Capital Investments Inc. (OTCMKTS:MGTI) is a company that we have covered quite a lot here at Insider Financial over the past 12 months, with our most recent coverage detailing the launch of the company's Sentinel network security device.Outside of network security, however, and as a result of McAfee's efforts over the last year or so, MGT has positioned itself as a leader in the bitcoin space and, specifically, the mining side of the industry. MGTI Daily ChartThis week, the company has served up an update as to the progress of its mining operations and, with it, has offered markets a degree of clarity into the metrics associated with said operations – something that has been missing previously and that, we think, should serve to ease a large portion of the risk-associated sentiment surrounding this stock near term.Here is what we learned and what we are looking for next as supportive of a longer-term bull thesis for MGT.So, historically, the company has bought its own mining equipment and set it up to mine bitcoin at a facility in Washington. Based on updates during 2017 so far, the total mining power of the facility came in at around 10 Ph/s.As per the latest announcement, however, MGT is now operating a sort of management service, which adds an entire new vertical to the company's operations. To explain this a little further, a bunch of investors just gave the company the capital required to buy 2,000 S9 Antminer mining rigs, with shipment expected by the end of fourth quarter 2017, and, in return, will receive 50% of the net profits that derive from the bitcoin that means miners produce.MGT will take the other 50% of the net profit and will also receive 10% of gross revenues as a management fee. The investors also received about 350,000 shares of restricted MGT common stock and 350,000 warrants to acquire stock at an exercise price of $2.00 per share.So what is the impact of this additional shipment on MGT's operations?On full deployment, the total number of mining machines will consist of approximately 4,700 Bitmain Technologies S9 Antimer rigs, which, when at full power, will be generating hash power in excess of 60 Ph/s.That's a substantial amount of hash power and it positions MGT as one of the biggest, if not the biggest, bitcoin miners in the US. The company's mining operations are expected to generate over $2.0 million in monthly revenue, assuming recent pricing and difficulty rates, which will factor down to around $1.1 million in EBITDA when operating costs are taken into consideration (consisting primarily of management fees, profit sharing, electricity and hosting.This all translates to projected annual revenues of around $25 million and EBITDA of $13 million, as MGT just reported, will far exceed ongoing corporate capital requirements.There is around $4.6 million in debt on the books and this is all in the form of secured notes convertible into MGT common stock.The key thing to recognize here, then, is that the fresh mining rigs will do two things for the company: first, allow it to become cash flow positive and second, allow it to kick off fresh operations in a brand-new vertical, mining management.As bitcoin adoption increases and awareness becomes more mainstream, mining management is likely going to be a substantial industry, with traders and investors looking to gain exposure to bitcoin mining without having to invest in their own hardware.What are we look for going forward?Primarily, we want to see the smooth delivery and implementation of these additional devices and, beyond that, some numbers filed with the SEC that reinforce the claims made surrounding revenue potential.We'd also like to get some idea of the scale of the initial rollout of (and the demand for) the above mentioned Sentinel product.Check out our previous coverage of this one here. We will be updating our subscribers as soon as we know more. For the latest updates on MGTI, sign up below!Image courtesy of Mirko Tobias Schäfer via FlickrDisclosure: We have no position in MGTI and have not been compensated for this article.