Bitfarms Ltd. (“
Bitfarms”, or the
“
Company”) (TSXV:BITF // OTC:BFARF), today
provides an update regarding its expansion project in South
America.
On October 26, 2020, Bitfarms announced the
signing of a non-binding memorandum of understanding to secure
electricity at approximately US$0.02 per kWh with the plan to
pursue the development of a 60 MW Bitcoin mining facility in
Argentina. During the past six-months, considerable due diligence
and contractual work has been undertaken to determine the viability
of the expansion project.
- The Company has
since signed a significantly enhanced power purchase agreement with
a utility-grade private power producer in Argentina pursuant to
which Bitfarms is entitled to draw up to 210 MW of electricity at
its discretion. The initial term of the contract is eight years.
During the first four years, the effective cost of the electricity
will be US$0.022 per kWh.
- With a
favourable year-round climate, the facility in Argentina does not
require expensive liquid immersion cooling to keep the miners cool
and operating optimally. The miners will be cooled with fans,
similar to how they are cooled in our facilities in Québec.
- Bitfarms is in
advanced contractual discussions with a construction company
experienced in utility-grade electrical infrastructure and civil
construction to design and build the electrical inter-connection,
the high-voltage electrical lines, and transformers needed for our
operations. We are working on finalizing an engineering procurement
and construction contract with the aim of mining Bitcoin in early
2022 at the new facility.
- The Company is
in advanced discussions with an experienced engineering services
company to monitor construction and ensure that quality and
key-milestones are achieved.
- The proposed new
mining facility is in very close proximity to the utility, and, as
such, the electricity contract does not involve any interconnection
with the local power grid, which has the advantage that electricity
cannot be curtailed during times of unusually high usage. This
means that our miners can be operated with maximum efficiency and
output, regardless of conditions applicable to the local power
grid.
- Bitfarms plans
to relocate a substantial number of its older miners to the new
data centre. While the older miners are less efficient than the new
miners, the low cost of electrical power and the proven reliability
of these miners will extend their economic life. This strategy will
allow our older miners to continue to be accretive to cash flow
from operations and to contribute to Bitfarms’ overall corporate
hashrate.
- A substantial
portion of the recently ordered 48,000 MicroBT miners as announced
on March 2, 2021 are earmarked for the new facility.
- 210 MW is
sufficient to support approximately 55,000 new-generation miners,
which could generate approximately US$650 million of revenues or
11,774 Bitcoin, based on current difficulty levels and a Bitcoin
price of US$55,000.
As a basis of comparison, we previously reported
the break-even cost to mine a Bitcoin during the fourth quarter of
2020 was approximately US$7,500 in Québec. If the new Argentina
facility was operating during the same period, we estimate the
break-even cost to mine the same Bitcoin would have been US$4,125,
a 45% savings as compared to Québec.
With up to 210 MW of low-cost power available to
us, the Argentina facility is expected to be a significant
contributor to Bitfarms achieving its 8.0 EH/s target by the end of
2022. It is also intended to provide geographic production
diversification to reduce risk and serve as an effective hedge for
Bitfarms against the next halving event in 2024.
About Bitfarms Ltd.
Bitfarms is a Bitcoin mining company founded in
2017. It runs vertically integrated mining operations with onsite
technical repair, proprietary data analytics and Company-owned
electrical engineering and installation services to deliver high
operational performance and uptime.
Having demonstrated rapid growth and stellar
operations, Bitfarms became the first Bitcoin mining company to
complete its long form prospectus with the Ontario Securities
Commission and started trading on the TSX-V in July 2019. On
February 24, 2021, Bitfarms was honoured to be announced as a
Rising Star by the TSX-V.
Bitfarms has a diversified production platform
with five industrial scale facilities located in Québec. Each
facility is 100% powered with environmentally friendly hydro power
and secured with long-term power contracts. Bitfarms is currently
the only publicly traded pure-play mining company audited by a Big
Four audit firm.
To learn more about Bitfarms’ events,
developments, and online communities:
Website: www.bitfarms.com
https://www.facebook.com/bitfarms/https://twitter.com/Bitfarms_iohttps://www.instagram.com/bitfarms/https://www.linkedin.com/company/bitfarms/
Defined Terms
EH/s: Exahash per second.
kWh: kilowatt-hour.
MW: A Megawatt is used to measure the output of
a power plant or the amount of electricity required by facility or
an entire city. One megawatt (MW) = 1,000 kilowatts = 1,000,000
watts.
Cautionary Statement
Trading in the securities of the Company should
be considered highly speculative. No stock exchange, securities
commission or other regulatory authority has approved or
disapproved the information contained herein. Neither the TSX
Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements
This news release contains certain
“forward-looking information” within the meaning of applicable
securities laws that are based on expectations, estimates and
projections as at the date of this news release. The information in
this release about future plans and objectives of the Company in
respect of the Argentina expansion is forward-looking information.
Other forward-looking information includes, but is not limited to,
information concerning: the intentions, plans and future actions of
the Company, as well as Bitfarms’ ability to successfully mine
digital currency, revenue increasing as currently anticipated, the
ability to profitably liquidate current and future digital currency
inventory, volatility of network difficulty and digital currency
prices and the resulting significant negative impact on the
Company’s operations, the construction and operation of expanded
blockchain infrastructure as currently planned, and the regulatory
environment of cryptocurrency in the applicable jurisdictions.
Any statements that involve discussions with
respect to predictions, expectations, beliefs, plans, projections,
objectives, assumptions, future events or performance (often but
not always using phrases such as “expects”, or “does not expect”,
“is expected”, “anticipates” or “does not anticipate”, “plans”,
“budget”, “scheduled”, “forecasts”, “estimates”, “believes” or
“intends” or variations of such words and phrases or stating that
certain actions, events or results “may” or “could”, “would”,
“might” or “will” be taken to occur or be achieved) are not
statements of historical fact and may be forward-looking
information and are intended to identify forward-looking
information.
This forward-looking information is based on
reasonable assumptions and estimates of management of the Company
at the time it was made, and involves known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of the Company to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking information. Such
factors include, among others, risks relating to: the global
economic climate; dilution; the Company’s limited operating
history; future capital needs and uncertainty of additional
financing; the competitive nature of the industry; currency
exchange risks; the need for the Company to manage its planned
growth and expansion; the effects of product development and need
for continued technology change; protection of proprietary rights;
the effect of government regulation and compliance on the Company
and the industry; network security risks; the ability of the
Company to maintain properly working systems; reliance on key
personnel; global economic and financial market deterioration
impeding access to capital or increasing the cost of capital; and
volatile securities markets impacting security pricing unrelated to
operating performance. In addition, particular factors that could
impact future results of the business of Bitfarms include, but are
not limited to: the construction and operation of blockchain
infrastructure may not occur as currently planned, or at all;
expansion may not materialize as currently anticipated, or at all;
the digital currency market; the ability to successfully mine
digital currency; revenue may not increase as currently
anticipated, or at all; it may not be possible to profitably
liquidate the current digital currency inventory, or at all; a
decline in digital currency prices may have a significant negative
impact on operations; an increase in network difficulty may have a
significant negative impact on operations; the volatility of
digital currency prices; the anticipated growth and sustainability
of hydroelectricity for the purposes of cryptocurrency mining in
the applicable jurisdictions, the ability to complete current and
future financings, any regulations or laws that will prevent
Bitfarms from operating its business; historical prices of digital
currencies and the ability to mine digital currencies that will be
consistent with historical prices; an inability to predict and
counteract the effects of COVID-19 on the business of the Company,
including but not limited to the effects of COVID-19 on the price
of digital currencies, capital market conditions, restriction on
labour and international travel and supply chains; and, the
adoption or expansion of any regulation or law that will prevent
Bitfarms from operating its business, or make it more costly to do
so. For further information concerning these and other risks and
uncertainties, refer to the Company’s filings on www.SEDAR.com
including the annual information form for the year ended December
31, 2020, filed on April 7, 2021. The Company has also assumed that
no significant events occur outside of Bitfarms’ normal course of
business. Although the Company has attempted to identify important
factors that could cause actual results to differ materially from
those expressed in forward-looking statements, there may be other
factors that cause results not to be as anticipated, estimated or
intended. There can be no assurance that such statements will prove
to be accurate as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward-looking
information. The Company undertakes no obligation to revise or
update any forward-looking information other than as required by
law.
Contacts
Investor Relations:
CORE IR+1 516 222
2560Investors@bitfarms.com
For Media Inquiries:CORE
IRJules Abrahamjulesa@coreir.com
YAP GlobalEllis Ballardellis@yapglobal.com
Ryan Affaires publiquesMark
Duschenemarc@ryanap.com
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