Bitfarms Ltd., a global Bitcoin vertically integrated company listed on NASDAQ (BITF) and TSX (BITF), has announced its acquisition of 22 MW of hydro power capacity and a site in Baie-Comeau, Quebec, as it seeks to expand its Bitcoin mining operations.
Adding Reliable Hydro Power in Quebec
Bitfarms’ CEO, Geoff Morphy, announced the acquisition of 22 MW of hydro power capacity in Quebec, stating that it would help the company to cost-effectively expand its operating footprint. The Baie-Comeau area, where the site is located, is home to five hydro-electricity generation facilities with over 5.4 gigawatts nameplate capacity.
The company plans to keep the development and build-out costs low by utilizing its experienced Canadian-based team, hardware credits for miner procurement, and infrastructure equipment repurposed from the December 2022 sale of its De La Pointe facility.
11 MW to Come Online in Q3 2023
Bitfarms’ in-house design team and electricians will retrofit the existing structure, expecting to bring 11 MW online by the third quarter of 2023. The remaining 11 MW is expected to be commissioned during the second half of 2024, providing strategic flexibility around the next Bitcoin halving.
A Little over One Year to Next BTC Halving
With the next BTC halving expected a little over one year from now, the company believes that this expansion should improve its industry position as it continues to pursue other strategic transactions intended to deliver significant value to its shareholders.
Financial Strength and Flexibility
According to Bitfarms’ Vice President of Corporate Development, Phillippe Fortier, the company’s financial strength and flexibility enabled it to act quickly and secure this accretive opportunity during this period of industry transition.
22 MW Increase in Capacity
Fortier also stated that the 22 MW increase in capacity would add over 600 PH/s when in full production, further strengthening Bitfarms’ position in the industry.
Baie-Comeau Agreement Summary
The company has procured an evergreen contract with the local utility for 22 MW of hydro power for US$1.8 million, 40% cash, and 60% in Bitfarms common shares. It has also secured a 10-year lease in an industrialized area with the option to purchase at a fixed price throughout the lease term.
Permitting and zoning for 22 MW deployment with potential for future expansion on the site is already in place. The common stock portion of the purchase price is subject to regulatory approval and customary and contractual resale restrictions for up to 6 months, with the final agreement being subject to customary closing conditions.
Conclusion
Bitfarms’ acquisition of 22 MW of hydro power capacity in Baie-Comeau, Quebec, is an important development for the company, as it seeks to expand its Bitcoin mining operations. The company’s financial strength and flexibility have enabled it to act quickly and secure this accretive opportunity during this period of industry transition. Bitfarms expects to commission the entire 22 MW during the second half of 2024, providing strategic flexibility around the next Bitcoin halving, which is expected a little over one year from now. The company intends to pursue other strategic transactions intended to deliver significant value to its shareholders, further strengthening its position in the industry.
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