Revenue in 2022 was $142 million, compared to $169 million in 2021, and Adjusted EBITDA was $52 million. Over the full year, we more than doubled our production capabilities and expanded our hashrate to deliver mining increases from 3,453 bitcoin in 2021 to 5,167 bitcoin mined in 2022. In February 2023, Bitfarms surpassed the milestone of 20,000 bitcoin mined since the Company's inception over five years ago.

Overall, Bitfarms more than doubled its hashrate in 2022, increasing it further in 2023 with 4.7 exahash per second at the end of February 2023.

Our financial highlights in Q4 are as follows:

• Mined 1,434 bitcoin compared to 1,515 in Q3affected in large part by the 20% increase in average total network difficulty from Q3 to Q4.
• Earned revenue for the quarter of $27 million compared to $33 million in Q3 2022. The lower revenue reflects a 14% decline in the average bitcoin price quarter-over-quarter and approximately 5% fewer bitcoin mined during the quarter as the network difficulty increased more than offset our average hashrate increase of 13%.
• Generated $54 million of proceeds from selling 3,039 bitcoin (1,434 from production and 1,605 from treasury) and received $3.6 million net cash proceeds from the sale of our De la Pointe farm in December.
• Decreased indebtedness by retiring our three oldest and most expensive equipment debt financings for $8 million, fully extinguishing our revolving bitcoin-backed credit facility, and we opportunistically settled about $22 million of term loan indebtedness in exchange for $8 million.

Other 2023 Financial Achievements to Date:

• Restructured our equipment financing with BlockFi, paying off the outstanding balance of $21 million for a settlement of $7.8 million in February 2023. In addition, we paid off in-full about $380,000 due to Reliz for $118,000. These moves reduce our principal and interest payments by more than $1.6 million per month, eliminating about $20 million in future debt service payments.
• Exited February 2023 with just $23 million in total indebtedness which is scheduled to fully amortize through February 2024, well in advance of the expected halving date.
• In summary, over the past nine months, we increased our financial flexibility and liquidity by reducing debt by more than $140 million and lowering capex commitments by almost $70 million.

State of Farm Operations to Date

Bitfarms ended 2022 with a total of 10 farms in 4 countries. We have 188 megawatts in operating capacity – 95% of which is powered by sustainable hydroelectricity. An additional 40 megawatts of built capacity in Argentina, which is awaiting approvals prior to commissioning, will allow for substantial and timely expansion. We also successfully completed our ambitious Canadian expansion ahead of schedule, increasing our hydro-powered megawatts.

Operating highlights include:

• Sherbrooke Quebec achieved full capacity of 96 megawatts under our power purchase agreement at our three recently built farms.
• Paraguay farm benefited from the installation 2,888 new MicroBT M30s. This addition added a net 168 petahash per second at the farm, bringing the total hashrate to 288 petahash per second on January 31, 2023, and improving our overall efficiency improved to 39 watts per terahash.
• Washington state is operating 20 megawatts and generating approximately 600 petahash per second.
• Rio Cuarto, Argentina, which has approximately 10 megawatts online and an additional 40 megawatts of capacity built and ready for the installation of more miners. Approval of our Power Permit, which we expect very soon, will support the purchase, and import 8,000-9,000 miners using some of our $22.4 million in hardware credits. Based on the current prices of miners, we expect the credit to more than cover our capital expenditure requirements to bring this 50 megawatts warehouse into full production during 2023.
• When Rio Cuarto is complete, we fully expect our corporate hashrate will increase to 6.0 exahash per second for our existing portfolio and this farm should become our lowest cost producer due to its very favorable electricity contract.

Mining Economics

Bitfarms' Q4 direct cost of production per bitcoin has remained relatively steady in the last 10 quarters and averaging just under $11,100 in Q4, continues to be among the lowest reported in the industry. The $1,500 increase from $9,600 per bitcoin in Q3 is less than the 20% increase in network difficulty as the Company benefitted from greater mining efficiency and a modest decrease in our total cost of electricity per kilowatt hour.

Gross mining profit in Q4 was $9 million (33% of revenue) compared to $17 million (52% of revenue) in Q3. This reflects a 15% lower average bitcoin price in Q4 compared to Q3 and overhead costs of $16,800 (up $2,500 from Q3). Importantly, our cash costs of production in Q4 2022 remained below the average bitcoin price of $18,100, thus delivering operating profitability.

Conclusion

Bitfarms is managed with the 2024 halving in sight. Our performance metrics are consistently industry-leading, and we have maintained low direct costs of production. Even at Q4 2022's depressed bitcoin price levels, we continued to generate positive cash from mining operations.

With our greater financial flexibility, we have increased our evaluation of potential acquisitions and greenfield expansion opportunities. Our experienced global management team is highly capable of finding and negotiating new international opportunities and building new farms economically and cost-effectively.

Our absolute discipline, evidenced by our track record of operating excellence, ensures that Bitfarms is well positioned to take advantage of emerging opportunities and continues to be a respected consolidator in the industry.

We look forward to updating you with our Monthly Production Reports and our Q1 Conference Call in May.

For more information on Bitfarms, visit www.bitfarms.com.

Disclaimer Regarding Forward-Looking Information:

This blog presentation has been issued as a matter of interest to investors and other followers of Bitfarms Ltd. This presentation contains forward-looking information and Bitfarms cautions readers that forward-looking information is based on certain assumptions and risk factors that could cause actual results to differ materially from the expectations of Bitfarms. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. In particular, the ability of the Company tp expand its business on a profitable basis, effectively manage debt loads, and successfully identify and successfully identify and acquire expansion on terms which are economic or at all is forward-looking information. There can be no assurance that the intentions, plans and future actions of the Company will prove to be effective as actual results and future events could differ materially from those anticipated the forward-looking information.,. Readers should not place undue reliance on forward-looking information. Please refer to other risks set out in the public documents of Bitfarms filed on https://www.sedar.com/. Securities regulators including the Toronto Stock Exchange and Nasdaq have not reviewed the information disclosed in this blog presentation and no securities regulator accepts responsibility for the adequacy or accuracy of this content." The Company undertakes no obligation to revise or update any forward-looking information other than as required by law.

The post Bitfarms Fourth Quarter 2022 Financial Results Recap appeared first on Bitfarms Ltd. (BITF).

Bitfarms' third quarter saw the Company continue to experience successes, position itself better to endure the 'crypto' winter, and thrive in the long run. 

No one can control or predict the price of bitcoin – a reality of this business. All miner's margins have been compressed. Recent events have also brought closer scrutiny and concern to the market. However, Bitfarms remains insulated as our bitcoin transactions are audited by a Big Four accounting firm. The Company continues to differentiate itself operationally and financially with its:

• Low-cost structure
• Efficient operations and fleet
• Stable energy pricing

This has resulted in superior mining profitability in Q3. Year to date, we've mined 4,219 bitcoin. On a year-to-date basis, this places us third in total production amongst the public miners – a testament to our ability to scale the business and generate consistent results. Benefiting from stable low energy costs, we've maintained profitable mining operations each quarter, as evidenced by $10 million in positive Adjusted EBITDA in Q3 2022. We've deleveraged our balance sheet, reducing financial risk and better positioning us to consider the increasing number of opportunities within the industry.

Q3 2022 Highlights

Turning to highlights of our results, Bitfarms mined 1,515 bitcoin in the third fiscal quarter, up 21% from Q2 2022, and we mined an additional 486 bitcoin in October. Although the growth in Q3 2022 production was offset by weaker bitcoin prices, we continued to deliver solid performance metrics and reduced both the direct costs and total cash costs of production.

As well as generating Adjusted EBITDA of $10 million and consistently being one of the largest publicly traded producers of Bitcoin, Bitfarms remains one of the lowest cost producers. For the last 2 years, we have kept our direct cost of production under $10,000 per bitcoin and, in fact, lowered these costs by $500 in the most recent quarter.  Our costs have remained relatively stable as we benefit from a portfolio of geographically diverse and mostly hydro-power contracts providing low-cost energy.

As new production came online in both Canada and Argentina, we increased our corporate hashrate 17% from the end of Q2 to 4.2 EH/s at the end of Q3. During the month of October, we were mining 15.7 bitcoin per day in daily production, and slightly over 115 bitcoin per average EH/s, which is the highest industry percentile in efficiency and performance.

While the industry is facing challenges due to the sharp decline in the price of Bitcoin, we benefit from experience in managing through past industry cycles, and we further benefit from stable electricity costs while rising energy prices have an outsized impact on those peers that rely on fossil fuel generated electricity.

At the end of the quarter, we had 10 farms in production in 4 countries and are predominantly drawing power from 3 hydro-electricity utilities that are geographically diverse. We now have a capacity of 182 megawatts, which is operating at 4.4 EH/s, and we have a clear path to ending the year at 188 megawatts running at 5 EH/s, with considerable future upside from Argentina.

State of Farm Operations to Date

Bitfarms ended the quarter with 10 locations and 176 megawatts in capacity, an increase of 39 megawatts from 9 locations and 137 megawatts in capacity at June 30, 2022. In October, we increased our total corporate capacity by 6 megawatts, bringing the current total to 182 megawatts.

In Sherbrooke Quebec, we have power supply commitments with Hydro-Sherbrooke for a total of 96 megawatts. The three recently constructed facilities in our Sherbrooke campus called Leger, The Bunker, and Garlock) are in close proximity, which affords numerous efficiency advantages, and we are in the final stages of completing our 2022 expansion plan. As we stated in our press release on November 4th, our hydroelectric energy agreements in Quebec remain in place, and we are excited about continuing to partner with local communities for future growth.

Our Leger farm continues to operate smoothly at its 30-megawatt capacity, delivering 740 petahash per second from 7,400 miners. On November 10th, we energized our first 6 megawatts in the 18,000 square foot Garlock farm, with the full 18 megawatts expected to be in production in early December.

Phase 3 of The Bunker is progressing as planned with 6 megawatts energized in late October and the remaining 6 megawatts expected to be online in early December. The Bunker, first activated in March 2022, is currently drawing 42-megawatts, and running 9,400 miners. In December, at full build out, The Bunker will be a 48-megawatt farm, housing 12,400 latest generation miners and contributing over 1.2 EH/s.

We expect to retire our original farm in Sherbrooke called de la Pointe by the end of this month and anticipate completing the sale of its real estate by the end of December, which will result in cash proceeds of $3.5 million which will be used to fund growth. The permanent closure of the de la Pointe facility and replacement and full build out of our Sherbrooke campus is running 3 months ahead of schedule.

As announced November 1, Bitfarms has adjusted our plans for our Argentina build out. We completed construction of Warehouse 1 recently and are continuing the process of commissioning. More specifically, the initial 10-megawatt module of the first 50-megawatt warehouse was completed in September, and the additional four 10-megawatt modules were completed in October and early November. At present, we are operating at almost 9 megawatts capacity with 2,300 miners delivering 237 petahash. 

We have worked hard to establish a consistent track record of execution against our stated goals and growth plan, leading to us doubling our hash rate to 4.4 EH/s year to date. However, in transparency, construction of our farm in Rio Cuarto, Argentina has moved along on plan and on budget. However, there are macro developments within the country that impedes importation of all foreign equipment, including our miners. We are working to resolve these issues.

As part of this announcement, we adjusted our year end guidance from 6 EH/s to 5 EH/s. We are working with the regulatory authorities and our logistics providers to remedy this matter. The country is wrestling with high inflation, currency devaluation, and a significant debt burden. Importation approval for mining and IT equipment has been delayed, which has adversely affected our ability to bring in the additional 12,000 miners we need to operate the first warehouse at its full capacity. 

In addition, our private power producer in Rio Cuarto is still awaiting approval of its final operating permit to provide power to us. In the meantime, our farm is drawing power during this start-up and commissioning phase from the provincial electrical utility at a higher cost than our agreement with the power producer. On a daily basis, we continue to evaluate operations and these higher than anticipated energy costs. At around 4% of total production, this temporary variance has limited impact on our total direct costs of production. While the power producer expects the necessary permit to be forthcoming before the end of 2022, we expect higher costs of production at the facility until we can draw at least 26 megawatts.

Since launching in January, Paraguay operations continue to run smoothly, consistently contributing about 125 petahash. With its extensive hydro power infrastructure, we continue to look for new opportunities in the country. 

Q3 Financial Results

Bitfarms is proud to report continued profitable growth during Q3 2022. We have maintained our financial strength and flexibility to execute on our growth plan, ending the third quarter with cash of $36 million and 2,064 bitcoin valued as of September 30th at $40 million, for total liquidity of $76 million.

Our quarterly revenue was $33 million, compared to $42 million in Q2 2022, reflecting the 21% increase in Bitcoin mined offset by a 35% decline in the average Bitcoin price quarter over quarter. We achieved Adjusted EBITDA for 3Q 2022 of $10.3MM, representing a 31% margin, as compared to Adjusted EBITDA of $18.7MM, for a 45% margin, in 2Q 2022.

Bitfarms' direct cost of production per bitcoin in Q3 2022 averaged $9,400 and is among the lowest reported in the industry. This is a $500, or 5%, decrease in production cost from $9,900 per BTC in Q2 2022 and was driven by a combination of:

• slightly lower average network difficulty,
• an approximate 2% improvement in our mining efficiency as measured by joules per terahash,
• the beneficial impact of a stronger US dollar vs. Canadian dollar on our Canadian electricity costs.

The direct cost of production in the quarter includes the additional electricity costs associated with the start-up and commissioning phase in Argentina and a full accrual for potential Canadian Value Added Tax, or VAT, legislation that affects the VAT rate, but which has not yet passed into law.  Excluding the accrual for this potential legislation, our direct cost of production during the quarter would be $8,300.  This proposed legislation is being actively challenged by a coalition of Canadian miners, with whom we are heavily involved, which is seeing early indications of success to date.

It's worth emphasizing that, among the benefits of being over 95% hydro, we enjoy very stable electricity costs. Over the past two years, our quarterly direct cost to mine bitcoin has remained in the narrow range of $6,900 to $9,900. While many of our industry peers wrestle with the impact of rising fossil fuel costs, our electricity costs have been relatively impervious to the impact.

The total cash cost of production during the quarter was $14,300. This includes the direct mining costs, fixed cost of sales including rent, technician salaries, as well as cash general and administrative expenses. The $14,300 total cost of production represents a $2,700 decrease, or 16%, from $17,000 per Bitcoin in Q2 2022 and well below the current price of Bitcoin.

Our overall gross mining profit for the quarter was $17 million, compared to $27 million in the second quarter. This represents a 52% gross mining margin for the quarter in comparison to 66% in the prior quarter.

We ended the third quarter with total liquidity of $76 million comprising $36 million cash and 2,064 bitcoin valued at $40 million. Subsequent to the quarter, we paid down a further $3.2 million on our equipment-backed facilities and paid off in full our most expensive loan, raised another $1.9 million under our ATM, and reached agreement to sell our de la Pointe property for $3.6 million, of which we will expect to receive net proceeds of $3.5 million to supplement our cash balance.

Summary

To summarize our strong market position and our growth strategy, we are operating with 182 megawatts and 4.4 EH/s, a doubling in just the past 11 months. We remain diversified, with mining production in 4 countries – Canada, the US, Paraguay and Argentina. 

We are sustainable, with operations currently 95% powered by hydroelectricity. We have also continuously led the industry in transparency, from establishing the monthly production report standard to our corporate website, which provides unparalleled information about our mining operations.

Our performance metrics are consistently industry leading. In October, we recorded 115.7 'bitcoin-mined-per-average-exahash', placing us at the top of industry-performance from our assets. Even at recent bitcoin price levels, we continued to generate positive cash from mining operations.

The experienced, internationally based management team at Bitfarms has demonstrated they are highly capable of finding and building new farms in a cost-effective manner and are capable of generating sector leading results. With Bitcoin prices down, this is indeed an impressive performance and positions the company very well for future growth, to turn to distressed and under-performing companies, or to consolidate on a larger scale.

Looking at where we are today, Bitfarms has a strong balance sheet and financing resources, including positive cash flow from operations, to fund its continued growth. We're following a path of growth with discipline, and as evidenced by our track record of operating excellence, we are well positioned to take advantage of emerging opportunities and be a consolidator in the industry.

It's worth noting that we grow and manage our business with the 2024 halving in our sights.  All of our current indebtedness is scheduled to mature on or before February 2024, in advance of the expected halving date.

We are living and working in very challenging times. Context and results are paramount when you consider what Bitfarms has achieved this quarter and this year. In an industry where there are many performance metrics and comparisons, I would like to reiterate 3 points about Bitfarms:

1. Year to date, we've mined 4,219 bitcoin. This places us 3rd in total production amongst the public miners, a testament to our ability to scale the business.
2. Benefiting from stable low energy costs, we've maintained profitable mining operations each quarter, as evidenced by $10 million in positive Adjusted EBITDA in Q3 2022.
3. We've deleveraged our balance sheet, reducing financial risk and better positioning us to consider the increasing number of opportunities within the industry.

We look forward to our future investor conferences, including the Ladenburg Thalmann Second Virtual Crypto Expo 2022 in December and the Needham 25th Annual Growth Conference in New York in early January.

Disclaimer Regarding Forward-Looking Information:

This blog presentation has been issued as a matter of interest to investors and other followers of Bitfarms Ltd. This presentation contains forward-looking information and Bitfarms cautions readers that forward-looking information is based on certain assumptions and risk factors that could cause actual results to differ materially from the expectations of Bitfarms. Readers should not place undue reliance on forward-looking information. Please refer to those risks set out in the public documents of Bitfarms filed on https://www.sedar.com/. Securities regulators including the Toronto Stock Exchange and Nasdaq have not reviewed the information disclosed in this blog presentation and no securities regulator accepts responsibility for the adequacy or accuracy of this content."

The post Bitfarms Third Quarter 2022 Financial Results Recap appeared first on Bitfarms Ltd. (BITF).

Bitfarms mined 1,257 bitcoin in Q2, up 31% from our first quarter of 2022 and we followed that by mining another 500 bitcoin in July alone. Our increase in production momentum completely offset weaker bitcoin prices, allowing us to grow revenue sequentially to $42 million. We also generated cash from mining operations, as defined by Adjusted EBITDA, of $19 million. Compared to the results of other publicly traded bitcoin miners, our results ranked significantly higher than most.

The Bitcoin mining industry has experienced challenging trends in thus far in 2022, including the accelerating decline in bitcoin price since November 2021, with the most severe impact to prices starting in early May 2022. Yet, Bitfarms continued our growth trajectory and expanded operations.

We increased our corporate hashrate 33% from the end of Q1 to 3.6 exahash per second at the end of Q2. We are now just shy of 4 exahash per second, which means we continued to gain market share. We estimate we now represent approximately 2% of the Network hashrate—a company record.

In June and July, we took decisive actions to maintain our financial flexibility and increase our liquidity. In doing so, we reduced the balance of our bitcoin-backed loan facility from $100 million to $23 million as of the end of July and secured new equipment financing of $37 million.

Farm Progression

Since quarter end, we increased total electrical capacity across all locations by 29 megawatts to 166 megawatts. Today, we are approaching 18 bitcoin/day in daily production, and we are running at 135 bitcoin per average exahash per second in July, which is in the top quartile of efficiency and performance.

We ended the quarter with 9 locations and 137 megawatts in capacity, up from 8 locations and 121 megawatts in capacity in March 2022. Leger started production in April, initially adding 16 megawatts of capacity, which has since expanded to its full capacity of 30 megawatts and, in conjunction with The Bunker Phase 2, increased our total corporate capacity to 166 megawatts as of August 2022. Construction continues on two facilities in Canada and the first two warehouses in Argentina.

We continued expanding operations in Q2 by bringing online The Bunker Phase 2 in the City of Sherbrooke, Quebec, which added 18 megawatts of new capacity, and installing 10,300 miners. These key contributing factors boosted production in the quarter and led to a total of 1,257 bitcoin mined in Q2. Our contracted power with Hydro-Sherbrooke within the City of Sherbrooke is for a total of 96 megawatts. With the creation of The Bunker, Leger and Garlock, we expect to be fully operational at these farms by the end of December, two months ahead of schedule.

The Bunker, first activated in March 2022, is currently drawing 36 megawatts, and running 9,000 miners from its first two Phases. Phase 3, which is targeted for completion in the fourth quarter of this year, will add another 12-megawatts. Leger contributes 30 megawatts and is operating 7,400 miners delivering over 740 petahash per second. With Garlock, we completed the warehouse clean-up and building improvements, and plan for electrical infrastructure, louvers, fans, racks, and miners to follow in September. We expect Garlock to be fully operational by year end. With 18 megawatts at Garlock, 48 megawatts at The Bunker, and 30 megawatts at Leger, we will fully utilize our 96-megawatt power contract in the City of Sherbrooke.

De la Point is presently operating at 18 megawatts and is planned to come offline, coincident with the commissioning of Garlock, by the end of 2022, two months ahead of schedule. With its earlier than expected termination, we can begin the sale process for this property and plan to convert this unencumbered real estate into cash in early 2023.

In Rio Cuarto, Argentina, we are building out the first two warehouses of the contracted plans for up to 210 megawatts. Two other warehouses remain under consideration for future expansion, utilizing available capacity and otherwise stranded power.

During Q2, we made significant progress on construction of our first two 50-megawatt warehouses and associated infrastructure. The initial electrical supply line is nearing completion, with the connection expected to take place soon. We have already imported over 4,800 miners, and the installation of racking, miners, servers, and data cabling in the first warehouse is underway, with miners expected to be installed in mid-September. We anticipate beginning production at the first 50-megawatt warehouse in the fourth quarter of 2022 and expect to complete construction at the second 50-megawatt warehouse in the first quarter of 2023.

To better align our capital plan with our production schedule, we successfully renegotiated the timing of some miner deliveries for our second 50-megawatt warehouse. The net effect shifted $39 million in scheduled capex from Q4 2022 to the first nine months of 2023.

In Paraguay, we are building on our experience from constructing 8 farms in North America and continue to believe this jurisdiction is ripe with opportunities for expansion.

In total, we have 9 farms in production in three countries and are drawing power from five hydro-electricity providers. Today, we have a capacity of 166 megawatts and an additional 63 megawatts under development that are expected to come online this year, for a total planned capacity of 229 megawatts by the end of the year, representing 89% growth in nine months.

Operational Achievements

One of our tools for continuous improvement is our recently revamped proprietary miner management system, called MGMT-2. It enables us to manage at an individual miner level the hundreds of thousands of miners across our globally decentralized farms with a focus on maximizing uptime.

MGMT-2 features improved controls, tracking, sensors, alarms, visualizations, and performance metrics, enabling increased efficiency in operations. As noted earlier, we are at 135 bitcoin per average exahash per second in July, which is top quartile efficiency and performance. Another measure of efficiency, Joules per terahash is realizing steady improvements. At the end of July 2022, we were at 40.6, improving 17% compared to 49.1 in June 2021.

Looking ahead, we plan to further optimize the performance of our fleet by prioritizing the most economic repairs, thus maximizing cash flow. Additional features, such as variable load, hashrate control and under clocking are under development. Along with integrating bitcoin mining economics, we also will be incorporating external data to better optimize our operations, such as grid load balancing and market pricing, taking our operational control to the next level.

Fleet Status

Regarding fleet activity during the quarter, we installed 10,300 latest generation miners. The first 4,800 were imported into Argentina and are being staged for our first 50-megawatt warehouse, which will be made operational in the coming months. Year to date, we have installed over 25,000 miners, bringing our total installed base to over 44,000 active miners. 4,000 miners currently in transit, in addition to the 25,000 installed, account for approximately 80% of our planned miner deliveries for 2022.

Based on current infrastructure construction and miner deliveries schedules, we are targeting:

●    4.2 exahash per second as of September 30, 2022

●    6.0 exahash per second as of December 31, 2022

In addition, with the contracted miner deliveries scheduled we expect to add 1.2 exahash per second when fully operational in the first half of 2023.

Q2 Financial Results

Growth in mining operations and strong execution benefitted our top and bottom lines in a difficult bitcoin market environment. We executed certain financing activities to maintain financial liquidity and flexibility to best sustain our growth plan.

Our quarterly revenue was $42 million, up 4% from the prior quarter as our higher bitcoin production offset the decline in bitcoin prices. In comparison to the prior year quarter, our revenues were up 14%, reflecting almost 500 more BTC mined than the prior year period.

Bitfarms' average direct cost of production per bitcoin in Q2 2022 was $9,900, among the lowest reported in the industry. This is a 14% increase in production cost from $8,700 in Q1 2022. Gross mining profit was $27 million, impacted by the decline in the price of bitcoin, compared to $28 million in Q2 2021.

We continued to generate cash from mining operations, with Adjusted EBITDA margin of 45% of revenue and Adjusted EBITDA of $19 million. Our financing strategy continues to focus on maintaining the strength and flexibility of our balance sheet and protecting shareholders' investment, while supporting our key financial goal of funding our planned growth at a relatively lost overall cost of capital.

As part of this, we adjusted our bitcoin management strategy to sell a portion of our bitcoin production and treasury holdings to partially fund our operating needs and ongoing growth investments. We also secured $37 million in equipment financing during the quarter, which is in addition to the $32 million in equipment financing we obtained in February. We raised $9.6 million in net proceeds from the judicious application of our ATM program that we launched a year ago.

In all, we ended the second quarter with cash of $46 million and 3,144 bitcoin valued as of June 30th at $62 million, for total liquidity of $108 million. In addition, after quarter end, we paid down a further $15 million on our bitcoin-backed facility and raised another $4.1 million, net of expenses, under our ATM.

The End of Bitfarms' Second Quarter

Bitfarms was able to maintain a strong market position and maintain our growth strategy even during market volatility this past quarter. While other bitcoin mining companies struggled to keep a lid on costs of electricity fueled by commodities, our long-term hydroelectric contracts sustained the cost of production among the lowest in the industry, giving us the edge we needed to stay ahead of the curve.

Bitfarms is following a path of growth with discipline, and as evidenced by our track record of operating excellence, we are well positioned to take advantage of emerging opportunities and be a consolidator in the industry.

We look forward to our future industry events coming up, including the Needham 2nd Annual Virtual Crypto Conference on September 8, the HC Wainwright 24th Annual Global Investment Conference from September 12-14, BTIG 2nd Annual Digital Assets Conference from September 19-20, and the B. Riley 2nd Annual Crypto Conference on September 29.

We will also be launching our new website soon. In addition to an improved look and feel and easier navigation, it includes many metrics from our operations and monthly production reports that will be useful in tracking our results and progress. Additional functionality is envisioned and will be added to the website in the future. Please be sure to visit Bitfarms.com in the next several days.

We look forward to updating you with our monthly production reports as well as other developments and on our Q3 conference call in November.

Disclaimer Regarding Forward-Looking Information:

This blog presentation has been issued as a matter of interest to investors and other followers of Bitfarms Ltd. This presentation contains forward-looking information and Bitfarms cautions readers that forward-looking information is based on certain assumptions and risk factors that could cause actual results to differ materially from the expectations of Bitfarms. Readers should not place undue reliance on forward-looking information. Please refer to those risks set out in the public documents of Bitfarms filed on https://www.sedar.com/. Securities regulators including the Toronto Stock Exchange and Nasdaq have not reviewed the information disclosed in this blog presentation and no securities regulator accepts responsibility for the adequacy or accuracy of this content.

The post Bitfarms Second Quarter 2022 Financial Results Recap appeared first on Bitfarms Ltd. (BITF).

Altogether, we communicated five key messages about Bitfarms:

1. We are a low-cost miner.
2. We produce recognizable results leveraging five years of operational experience and the multiple benefits arising from our vertically integrated self-mining business model.
3. We are nimble and flexible, led by experienced entrepreneurs.
4. We are uniquely diversified with people and operations in four countries.
5. We have a strong foundation, capable of acting upon opportunities brought about by current market conditions.

These takeaways also gave us the opportunity to officially introduce the experienced management team who drive Bitfarms to the forefront of industry performance. Each team member presented timely information about their respective departments and how they contribute to Bitfarms' sustainability and development.

By the end of the day, we had fostered a deeper understanding of Bitfarms and a much clearer vision of how we are different from other publicly traded Bitcoin mining companies.

The Management Team's Presentation Agenda

The leading presentation was given by Ben Gagnon, Bitfarms' Chief Mining Officer. He covered Miner Procurement and Operational Advantages, giving our attendees a detailed look at the status of our mining fleet, purchase commitments and our anticipated deployments. Ben also shared the performance advantages of MicroBT miners, which make up the majority of our fleet, as compared to Bitmain. He illustrated our recently revised proprietary mining management information system, which in real-time allows us to optimize fleet performance. Investors were able to glean more about our planning rationale and methodology, as well how we manage our operations and mining assets.

Benoit Gobeil, Senior Vice President of Operations & Infrastructure, joined a panel with Ben entitled How We Optimize the Design and Build Out of Our Facilities. As a Master Electrician and one of the founders of Volta Electrique, which Bitfarms acquired a few years ago, Benoit to gave a comprehensive picture of the infrastructure in each of our farms in all four countries. Benoit and Ben discussed everything from how electricity is consumed in our facilities to handling miner repairs.

Our General Manager of our South American Operations, Damian Polla, covered the multiple developments Bitfarms has underway in LATAM. Damian highlighted our efforts to build a solid team and find opportunities outside of Argentina, particularly in Paraguay, along with numerous growth opportunities. Damian detailed how development is progressing in LATAM and explained the benefits of geographic diversification in mining BTC.

Philippe Fortier is our Vice President of Special Projects, and he discussed strategic growth and development opportunities. He illustrated how we evaluate potential acquisitions and new growth opportunities. Among the key criteria are whether the jurisdiction is even investable; the alignment of that opportunity with Bitfarms' core operational capabilities; ESG and value creation potential; whether the electricity market in the region is sustainable and cost efficient. Philippe's examples for each stage of evaluation represented the many factors considered when making strategic growth decisions.

Jeff Lucas, Bitfarms' CFO, delivered remarks on our financing strategy. With current market conditions, having a strategy that supports the achievement and maintenance of sustainable competitive advantages is vital to a Bitcoin mining company. Under Jeff's leadership, Bitfarms focuses on minimizing our overall cost of capital to support our growth initiatives while ensuring financial liquidity and stability. Maintaining financial strength and flexibility is key with the many uncertainties in present market conditions.

Wrapping Up Our First Analyst & Investor Day

After comprehensive and transparent presentations of the Company's current standings, the day continued with tours of our Cowansville, Bunker and Leger farms. In person attendees to view the scale and intensity of our facilities and watched the miners at work.

Bitfarms' first Analyst and Investor Day successfully introduced analysts and institutional investors to the inner workings of our operations and the experienced team running them. The presentations reinforced Bitfarms' standing as a low-cost producer with positive cash mining margins, despite the soft market conditions for Bitcoin.

Our results are driven by strong operational execution and our flexible financial strategy. We are well underway to grow production to 6 exahash in 2022, both on schedule and on budget. We have a considerable number of opportunities for further expansion in each of our geographies in 2022, 2023 and beyond.

We look forward to future events and presentations like this one to show-off our management team and facilities to an expanding group of institutional investors and professionals. The more people know about us, the more they will appreciate what we have achieved and why we are strategically different.

The post Bitfarms' First Analyst & Investor Day Recap by Geoff Morphy appeared first on Bitfarms Ltd. (BITF).

This past week's presentation covered Bitfarms' first quarter financial results, the status of our current operating locations and an update on the company's expansion projects. We also discussed recent external challenges given the price erosion in Bitcoin (BTC) and higher natural gas prices and as such, we discussed how the company is either addressing them or adjusting our operations to minimize risks and maximize returns.

Bitfarms is one of the largest and most profitable BTC miners in the world. In the first quarter of 2022, we generated revenues of $42 million; gross mining profit of $30 million which represents a gross mining margin of 76%, and an Adjusted EBITDA of $32 million, which is 80% of Revenues.

On April 5th, we were pleased to announce that we surpassed 3.0 Exahash (EH/s) per second of computational throughput. Achieving this corporate milestone mere days after our stated target of March 31st is a testament to our advanced planning and the efforts of our experienced and talented construction and electrical teams. This is up 36% from 2.2 EH/s on December 31st, 2021. Recently, our hashrate grew to 3.4 EH/s, representing approximately 1.5% market share. The growth in Bitfarms' corporate hashrate continues to accelerate faster than the BTC network, which is required if we are going to continue to expand revenues, cash flow, and increase the value of the company.

During the first quarter, we mined 961 BTC at an average cost of $8,700 per BTC. We were successful with keeping costs low by remaining consistent with our performance at the start of 2021 and keeping our cost of production at a fraction of the cost of our peers. We have recognized and committed to the importance of having low-cost production due to risks and scenarios such as the recent drop in BTC price. Despite the drop and due to our low production cost, we have maintained healthy margins. As a vertically integrated BTC mining company, we have always taken pride in being an efficient operator. To this end, we have kept our direct cost of mining a BTC at under $9,000 for the past five fiscal quarters.

We ended the first quarter with $77 million in cash and 5,244 BTC valued at $230 million as of March 31st. As of recently, we hold just over 5,900 BTC. Having adequate cash and BTC reserves is important as it allows Bitfarms to 1) continue growing the company without resorting to raising dilutive capital and 2) respond to new opportunities as they arise.

Despite the quarter's declining BTC prices, we maintained healthy margins. Bitfarms emerged from Q1 2022 with profitable results, including a reported net income of $5 million, and we exited with a healthy balance sheet. Our Adjusted EBITDA acts as a proxy for cash flow

generated from operations. Our EBITDA margin consistently comes in at a percentage of revenues well beyond many of our peers and most other industries.

Further Q1 2022 achievements include initiating production at both The Bunker and our Leger sites in Sherbrooke, Québec. This, along with commencing production at our 10-megawatt (MW) farm in Villarrica, Paraguay in January, increased our total farms in production to nine and our operational capacity to 137 MW. We have an additional 92 MW under development that are expected to come online in 2022, for a total planned capacity of 229 MW by December 31, 2022.

The Bunker is currently ramping up to 18 MW in its first phase of operations. As of today, we are currently drawing 12-MW. Equipment is now being installed to activate the remaining 6 MW in Phase One over the coming weeks. Phases Two and Three, which involve 18 MW and 12 MW respectively, are under construction. These phases are on track to reach completion in the second and third quarters of 2022. Upon full buildout, The Bunker is slated to be a 48 MW facility, housing 13,000 miners, and anticipated to deliver 1.3 EH/s per second.

Leger, which started production on April 6th, is currently running at 16 MW (with an expectation to achieve 30 MW). The facility is currently generating over 250 petahash per second (PH/s), and upon full build out, will be capable of delivering more than 740 PH/s per second.

Located strategically close to The Bunker and Leger farms, Garlock was acquired in mid-March. Combined with The Bunker and Leger facilities, it is intended to replace the de la Pointe facility and fully utilize Bitfarms' power contracts in the municipality, in accordance with the company's previously announced co-operation agreement with the City of Sherbrooke reached in September 2021.

We began production at our 10 MW farm in Villarrica, Paraguay in January. Like our farms in Canada and the US, this farm is run on low-cost hydropower. And, having established a foothold in the country and gained experience working there, we are increasingly optimistic about further and larger development opportunities within the country.

In Rio Cuarto, Argentina, we have contracted plans for up to 210 MW, which will power four warehouse-style buildings inside the gates of a private power company. These buildings will utilize available capacity and otherwise stranded power. There is a 4-Phase approach to this project. We anticipate completing Phase I, which is for a 50-megawatt facility, in October 2022. Progress on Warehouse One is clearly evident from the picture (taken on May 18th, 2022). Phase II, which is another 50 MW facility, is also under construction. Our revised timing for the activation of BTC mining in the second warehouse is Q1 2023. Together, these facilities are projected to deploy 27,500 miners. 

Given the adverse impact of recent geopolitical events on natural gas prices, we are reassessing the timing and scale of the potential full build-out of the Rio Cuarto farm. However, Argentina remains an attractive area for new development opportunities. We are active in the region and ultimately anticipate developing a diverse mix of farms within the country.

In Q1 2022, we received and installed more than 10,500 miners. And, in April 2022, an additional 5,900 new miners were installed, which added more than 590 PH/s per second to our online hashrate since the end of Q1.

We recently launched our revamped internal miner management system that has been in Beta for the last 9 months. This second-generation management software has been upgraded to enable the company to manage hundreds of thousands of miners across its globally decentralized mining farms, with a focus on maximizing uptime. The software features improved controls, tracking, sensors, alarms, visualizations, and performance metrics, which will ultimately increase operational efficiency.

Our current daily production now stands at about 14.5 BTC per day, which, based on recent prices of about $30,000 per BTC, equates to approximately $435,000 in daily revenue. This builds on the gains we reported in our last call and marks our highest production level since before the last halving event in May 2020. Further, with our low cash costs of production, mining BTC remains highly profitable and offers a short pay back on investments in miners and the related operating infrastructure.

Our strategy continues to focus on diversifying our mining portfolio by prioritizing locations with cost-effective and reliable electricity. With proven expertise, expanded infrastructure and a strong management team, we are better positioned than ever to execute on our growth plans for 2022 and beyond.

In upcoming events, we are excited to present at the HC Wainwright Global Investment Conference in Miami from May 23-26 and at the DA Davidson BTC & Blockchain conference on June 2nd in New York City. We are also planning an Analyst and Institutional Investor Day on June 22nd in Montreal, which will include a review of our global operations by our management team and a physical tour of some of our farms in Quebec.

To learn more about Bitfarms' events, developments, and online communities, visit:

• Link
• Facebook
• Twitter
• LinkedIn
• YouTube
• Instagram

The post Bitfarms First Quarter 2022 Financial Results Recap by Geoff Morphy appeared first on Bitfarms Ltd. (BITF).