Bitfarms Announces Deal for 210 Megawatt Bitcoin Mining Data Centre at US$0.022/kWh
TORONTO, Ontario and BROSSARD, Quebec, April 19, 2021 (GLOBE NEWSWIRE) -- 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.