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 comparative BTC production
results for the month ended October 31, 2022, combined with an
operations update. All monetary references are expressed in USD
unless otherwise indicated.
The Company mined 74.58 BTC in October of 2022,
compared to 41.84 BTC in October of 2021, an increase of 32.74 BTC
or approximately 78%.
Production Highlights for October
2022
- Mined 74.58 BTC, resulting in total
holdings of 118.16 BTC at the end of October valued at
approximately $2.45 million based on a BTC price of $20,705 as of
October 31, 2022.
- Ethereum (“ETH”)
holdings of 800.89 ETH at the end of October valued at
approximately $1.29 million based on an ETH price of $1,620 as of
October 31, 2022.
- Total digital asset inventory
value, consisting of BTC and ETH, of approximately $3.74 million as
of October 31, 2022. In addition, the Company held cash of
approximately $3.42 million at the end of October. Cash and liquid
assets as of October 31, 2022 totalled approximately $7.16 million.
This compares to cash and liquid assets of approximately $7.46
million as of September 30, 2022.
- Consistent with management’s
commitment to avoid equity dilution for its shareholders, the
Company sold a portion of its BTC production during October to
fully fund its energy costs. Natural gas prices declined
approximately 25% during the month of October.
- The Company continues to remain
debt free as of October 31, 2022.
- The Company’s mining operations
continue to remain cash flow positive.
“Despite current volatile economic conditions,
Digihost has been able to maintain good liquidity levels of cash
and crypto holdings on a month-to-month basis relative to the size
of our operations and of equal importance, the Company continues to
be debt free. We have maintained these liquidity levels while
internally funding 100% our infrastructure development and securing
bonds for electric service,” said Michel Amar, Chairman and CEO of
Digihost. “Assuming the persistence of current market conditions,
including current BTC prices, hashing difficulty and costs of
energy, the Company expects to continue to generate positive
cashflow from operations to fund its existing development
initiatives and will adhere to its policy of remaining debt free. I
am also pleased to report to our shareholders that during the month
of October, I continued to add to my position in Digihost by
acquiring shares in the open market.”
Year-Over-Year Monthly
Comparison
The Company mined approximately 32.74 more BTC in October 2022,
compared to October 2021, representing an increase of approximately
78%.
Figure 1. Year-over-year Monthly BTC
Production
|
|
|
|
|
Oct-22 |
Oct-21 |
MoM Increase |
Mined BTC |
|
74.58 |
|
41.84 |
|
32.74 |
Approximate BTC value |
$20,705 |
$61,319 |
($40,614) |
Production Value |
$1,544,179 |
$2,565,587 |
($1,021,408) |
|
|
|
|
North Tonawanda Power Plant Acquisition
Update
The Company continues to move forward with
closing documentation and approval requirements related to
Digihost’s acquisition of a 60MW power plant in North Tonawanda, NY
(“NT”). As stated previously, management
anticipates that this significant transaction will close in Q4 of
2022.
With the power plant running at 50 MW, the
Company will be able to increase its current operating capacity of
650 PH by approximately 150%, thereby increasing Digihost’s hash
rate to approximately 1.6 EH.
Alabama Site Build-Out
The Alabama Phase 1 build-out is continuing on
schedule and on budget. Phase 1, scheduled for completion in Q4 of
2022, will provide the Company with 22MW of power capacity
resulting in additional mining capacity of approximately 550 PH.
When coupled with the incremental mining capacity from the NT power
plant, Digihost’s total computing power by the end of Q4 could
reach up to approximately 2.2 EH.
Digihost is building the necessary
infrastructure to provide the Alabama property with total power
capacity of 55 MW, with the additional 33 MW projected to be
operational by the end of the first quarter of 2023, resulting in
total computing power available to the Company of approximately 3.0
EH.
The Company also recently secured a $1.3 million
surety bond with Alabama Power Company for electric service,
demonstrating customer confidence in Digihost’s business and
ability to meet future business needs and obligations.
Nasdaq Listing
As disclosed by Digihost on October 14, 2022,
the Company received notification from Nasdaq Stock Market LLC
(“Nasdaq”) that the bid price for the Company’s
listed shares, for the consecutive 30-day period ended October 9,
2022, had closed below the $1.00 requirement for continued listing
on Nasdaq. The Company has been provided with an initial 6-month
period ending April 10, 2023 to achieve a closing bid price at or
above $1.00 for 10 consecutive business days in order to regain
compliance. If compliance has not been regained by April 10, 2023,
the Company may be granted a further 6-month period to achieve
compliance. The Company is exploring options to regain compliance
in the next 6 months, such considerations including a possible
share consolidation, however, management remains confident that its
projected growth trajectory in mining capacity over the next 6
months should provide the necessary catalyst to help the Company
resolve the deficiency and regain compliance.
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 650 PH/s.
All hosting fees and joint venture profit
sharing are treated as production costs 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, potential for the Company’s
long-term growth, and the business goals and objectives of the
Company. Factors that could cause actual results to differ
materially from those described in such forward-looking information
include, but are not limited to: future capital needs and
uncertainty of additional financing, including the Company’s
ability to utilize the Company’s at-the-market offering program
(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;
development of additional facilities to expand operations in
Alabama may not be completed on the timelines anticipated by the
Company, or at all; the acquisition of North Tonawanda, New York
facilities closing on timely basis, or at all; ability to access
additional power from the local power grid; 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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