Digihost Technology Inc. (“
Digihost” or the
“
Company”) (Nasdaq: DGHI; TSXV: DGHI), an
innovative U.S. based Bitcoin (“
BTC”) mining
company, is pleased to provide unaudited BTC production results for
the month and quarter ended March 31, 2022 combined with an update
on the Company’s operations. All monetary references are expressed
in USD unless otherwise indicated. Additionally, Digihost announces
a new dividend policy pursuant to which Digihost expects in the
future to declare dividends payable to shareholders in either BTC
or cash, at the election of the shareholders.
“Throughout the first quarter of 2022, the
Company continued to make progress on the deployment of the 10,600
M30S and M30S+ miners we acquired last year,” said Michel Amar,
Chairman and CEO of Digihost. “With more than half of those miners
currently in operation we have more than doubled our hashrate from
415 PH at year-end 2021 to approximately 1 EH/s today, which at
current network difficulty equates to approximately 4.25 coins per
day on a run rate of over 120 coins mined per month. I am also
pleased to announce to our shareholders that Digihost has adopted a
new dividend policy pursuant to which the Company expects to
declare future dividends that will be based upon our net income.
Dividends under the new policy will be payable in either BTC or
cash at the election of each shareholder. Future levels of
dividends will be established by the Digihost’s Board of Directors
based upon market conditions at the time. It is expected that the
first dividend will be 10% of net income.”
“Additionally, to avoid unnecessary dilution to
our shareholders, the Company will begin to monetize a portion of
BTC mined to fund the Company’s operating costs and SG&A
expenses, thereby removing the need to access equity markets in
order to fund these costs. Digihost is also pursuing opportunities
to leverage its existing asset base to finance future
infrastructure and equipment expansion through debt financing.”
Production Highlights for March
2022
- Mined 75.24 BTC during the month,
increasing total holdings to 797.47 BTC valued at approximately
$36.3 million as of March 31, 2022, based on a BTC price of
$45,500.
- Ethereum (“ETH”) holdings of
1,000.89 ETH valued at approximately $3.3 million as of March 31,
2022, based on an ETH price of $3,300.
- Total digital asset inventory value
consisting of BTC and ETH of approximately $39.6 million as of
March 31, 2022.
Year-Over-Year Quarterly
Comparison
The Company mined approximately 81.57 more BTC
in Q1 2022, compared to Q1 2021, representing an increase of
approximately 78%. Using the March 31, 2022 and March 31, 2021
closing BTC prices (from CoinDesk), the value of the Company’s BTC
mined in Q1 2022 increased by approximately $2.3 million, or 37%
compared to Q1 2021.
Figure 1. Year-over-year Quarterly BTC
Production
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Q1 2022 |
Q1 2021 |
QoQ Increase |
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Mined
BTC |
186.83 |
105.26 |
81.57 |
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Approximate BTC value |
$45,539 |
$58,919 |
($13,380 |
) |
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Production Value |
$8,508,051 |
$6,201,814 |
$2,306,237 |
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Mining Deployment and Shipment
Updates
Since its February monthly update, the Company
received an additional 1,600 miners from its 2021 order consisting
of a combination of M30S and M30S+ models and currently has in
operation a fleet of approximately 11,500 miners.
Infrastructure Update
During March 2022, Digihost completed
substantial infrastructure installation work at its facility in
North Tonawanda, New York (news release: March 14, 2021). The
Company is currently running uninterrupted mining operations at
this site as it continues the installation of several critical
infrastructure support systems and lining up its buildout in
parallel with additional miner deployments. The Company is under
contract and is waiting for final Public Service Commission
approval to complete this acquisition.
2022 Estimated Hashrate
In 2021, Digihost operated at an average
hashrate of approximately 275PH, producing an adjusted EBITDA* of
$14.01 million in the process. The Company anticipates a 1.5 EH/s
average hashrate in 2022 which is approximately 5.5 times the
Digihost’s average hashrate in 2021. Over 90% of the energy
consumed by the Company in its BTC mining operations is received
from sources that create zero carbon emissions.
* Adjusted EBITDA is a non-IFRS financial
measures and should be read in conjunction with, and should not be
viewed as an alternative to or replacement of, measures of
operating results and liquidity presented in accordance with IFRS.
Readers are referred to reconciliations of Non-IFRS measures
included in the Company’s MD&A.
Dividend Policy
The Company announces today that its Board of
Directors has approved a new dividend policy pursuant to which the
Company expects to declare a future dividend payable in either BTC
or cash at the option of each shareholder. Future levels of
dividends will be established by the Board based upon market
conditions at the time. It is expected that the first dividend will
be 10% of net income to be paid to shareholders of record during Q3
of 2022 based upon the Company’s net income for the six months
ended June 30, 2022. Further announcements will be made on the
declaration and payment of a dividend.
Michel Amar commented, “The Board of Directors
of Digihost is pleased to announce our decision to become the first
public company in the crypto mining space to implement a dividend
policy payable in BTC to its shareholders. We are committed to our
long-term growth strategy and remain focused our goal of providing
value to our investors. The Company believes any dividends declared
under the policy will illustrate the forward-thinking and creative
nature of our management team to deliver benefits to its
shareholders, with the remaining 90% of earnings to be reinvested
to fund future business requirements and opportunities.”
About Digihost
Digihost is a growth-oriented blockchain
technology company primarily focused on BTC mining. Through its
self-mining operations and joint venture agreements, the Company is
currently hashing at a rate of approximately 1 EH/s.
All hosting fees and joint venture profit
sharing are treated as operating expenses in the Company’s
consolidated financial statements.
For further information, please contact:
Digihost Technology
Inc.www.digihost.caMichel Amar, Chief Executive
Officer T: 1-818-280-9758Email: michel@digihost.ca
Cautionary StatementTrading 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
StatementsExcept for the statements of historical fact,
this news release contains “forward-looking information” and
“forward-looking statements” (collectively, “forward-looking
information”) that are based on expectations, estimates and
projections as at the date of this news release and are covered by
safe harbors under Canadian and United States securities laws.
Forward-looking information in this news release includes
information about potential further improvements to profitability
and efficiency across mining operations including, as a result of
the Company’s expansion efforts, acquisitions of equipment and
infrastructure, potential for the Company’s long-term growth, and
the business goals and objectives of the Company, and the Company’s
intention to declare dividends payable to its shareholders that are
payable in Bitcoin. Factors that could cause actual results to
differ materially from those described in such forward-looking
information include, but are not limited to: the ability to obtain
regulatory approval for and complete acquisitions of equipment and
infrastructure on the terms as announced or at all; the ability to
successfully integrate the acquisitions of equipment and
infrastructure on an economic basis or at all; future capital needs
and uncertainty of additional financing, including the Company’s
ability to utilize the Company’s at-the-market offering (the “ATM
Program”) and the prices at which the Company may sell securities
in the ATM Program, as well as capital market conditions in
general; share dilution resulting from the ATM Program and from
other equity issuances; risks relating to the strategy of
maintaining and increasing Bitcoin holdings and the impact of
depreciating Bitcoin prices on working capital; regulatory and
other unanticipated issues that prohibit us from declaring or
paying dividends to our shareholders that are payable in Bitcoin;
continued effects of the COVID19 pandemic may have a material
adverse effect on the Company’s performance as supply chains are
disrupted and prevent the Company from operating its assets; a
decrease in cryptocurrency pricing, volume of transaction activity
or generally, the profitability of cryptocurrency mining; further
improvements to profitability and efficiency may not be realized;
the digital currency market; the Company’s ability to successfully
mine digital currency on the cloud; the Company may not be able to
profitably liquidate its current digital currency inventory, or at
all; a decline in digital currency prices may have a significant
negative impact on the Company’s operations; the volatility of
digital currency prices; and other related risks as more fully set
out in the Annual Information Form of the Company and other
documents disclosed under the Company’s filings at www.sedar.com.
The forward-looking information in this news release reflects the
current expectations, assumptions and/or beliefs of the Company
based on information currently available to the Company. In
connection with the forward-looking information contained in this
news release, the Company has made assumptions about: the current
profitability in mining cryptocurrency (including pricing and
volume of current transaction activity); profitable use of the
Company’s assets going forward; the Company’s ability to profitably
liquidate its digital currency inventory as required; historical
prices of digital currencies and the ability of the Company to mine
digital currencies on the cloud will be consistent with historical
prices; the ability to maintain reliable and economical sources of
power to run its cryptocurrency mining assets; the negative impact
of regulatory changes in the energy regimes in the jurisdictions in
which the Company operates; the ability to adhere to Digihost’s
dividend policy and the timing and quantum of dividends based on,
among other things, the Company’s operating results, cash flow and
financial condition, Digihost’s current and anticipated capital
requirements, and general business conditions; and there will be no
regulation or law that will prevent the Company from operating its
business. The Company has also assumed that no significant events
occur outside of the Company's normal course of business. Although
the Company believes that the assumptions inherent in the
forward-looking information are reasonable, forward-looking
information is not a guarantee of future performance and
accordingly undue reliance should not be put on such information
due to the inherent uncertainties therein.
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