Bitfarms signs MOU on 200 MW in South America 2020-10-26 07:40 ET - News Release
Mr. Emiliano Grodzki reports
BITFARMS ANNOUNCES MEMORANDUM OF UNDERSTANDING FOR 200 MEGAWATTS (MW) OF ELECTRICITY IN SOUTH AMERICA AT AVERAGE PRICE OF US$0.02 PER KWH
Bitfarms Ltd. has signed a non-binding memorandum of understanding (MOU) with a private energy producer to secure exclusive use of up to 200 megawatts of electricity in South America at an average price of two U.S. cents per kilowatt-hour.
200 MW of Low-Cost Electricity in South America
Under the terms of the non-binding MOU, Bitfarms will be provided with up to 200 MW of electricity capacity with no deposits nor any purchase commitments. The direct price of the electricity will average US 2 cents per kWh. The first 60 MW of power is to be provided from an existing power plant which allows for a low incremental cost of electrical infrastructure required to be made by the Company. Bitfarms is in discussions with local engineering and project management firms to develop initial capital investment cost estimates to operationalize the first 60 MW of mining infrastructure.
Emiliano Grodzki, Interim CEO of Bitfarms, commented, "At 2 cents per kWh, even the previous generation Bitmain S9 mining rig produces approximately the same gross mining margin before amortization costs as the newer Bitmain S17+ at 4 cents per kWh under current Bitcoin mining market conditions. This simple comparison demonstrates the significant competitive advantage that results from having access to a large amount of low-cost power."
"As previously announced, during the second fiscal quarter of 2020, Bitfarm's average cost of electricity to mine a Bitcoin (in USD) was US$5,075", noted Mr. Grodzki. "Under the terms of the MOU and under the same prevailing conditions, our cost would have been about half which would be about US$2,538 per Bitcoin before amortization of infrastructure costs. This simple example demonstrates the significant competitive advantage that results from having access to a large amount of low-cost power. At this level, this would make Bitfarms one of the most low-cost Bitcoin miners in the world."
Mr. Grodzki added, "Securing the lowest electricity cost possible, without the need for capital intensive deposits and long-term purchase commitments, in a jurisdiction without heavy tariffs on mining equipment, is vital to Bitfarms' strategic goals of long-term sustainability and global market leadership. We are extremely pleased to have taken this important step to potentially secure 200 MW of electricity at globally competitive rates and look forward to operationalizing it in the near to medium term."
About Bitfarms Ltd.
The Company owns and operates computing centres that power the global decentralized financial economy. Bitfarms provides computing power to cryptocurrency networks such as Bitcoin, earning fees from each network for securing and processing transactions. Powered by clean and competitively priced hydroelectricity, Bitfarms operates five computing centres in Quebec, Canada. Bitfarms' experienced management team includes industrial-scale data centre operators and capital markets professionals, focused on building infrastructure by developing and hosting one of the industry's most efficient ecosystem growing around blockchain-based technologies.