Bitfarms Ltd. (NASDAQ/TSX: BITF) ("Bitfarms" or the "Company"), a
global leader in vertically integrated Bitcoin data center
operations, has, through one of its subsidiaries, entered into a
second miner hosting agreement (the "Hosting Agreement") with
Stronghold Digital Mining Hosting, LLC, a subsidiary of Stronghold
Digital Mining, Inc. (NASDAQ: SDIG) (“Stronghold”) at
Stronghold’s Scrubgrass site in Pennsylvania.
Under the terms of the Hosting Agreement,
Bitfarms will deploy an additional 10,000 miners, originally
expected to be used for its Yguazu, Paraguay site, to Stronghold’s
Scrubgrass site. Energization is anticipated to start in December
2024.
“Optimizing our assets with these rapid upgrades
at Stronghold’s Pennsylvania sites will provide significant
near-term value for Bitfarms,” stated Ben Gagnon, CEO. “The 20,000
miners we are deploying at the two sites between the two hosting
agreements will boast efficiency of ~20.5 w/TH, continuing to
improve our overall fleet efficiency. Vertically integrating our
operations with Stronghold’s existing power generation
infrastructure reduces capital expenditure requirements and allows
us to take greater control over our cost of power via energy
trading and better utilization of the T21’s wide range of operating
modes. We look forward to completing our acquisition of Stronghold
and executing our strategy to increase our U.S. footprint and
diversify beyond Bitcoin mining.”
The initial term of the Hosting Agreement will
expire on December 31, 2025, after which it will automatically
renew for additional one-year periods unless either party provides
written notice of non-renewal. Pursuant to the Hosting Agreement,
Bitfarms will pay Stronghold a monthly fee equal to fifty percent
of the profit generated by the Bitfarms miners. In connection with
the execution of the Hosting Agreement, Bitfarms also deposited
with Stronghold $7.8 million, equal to the estimated cost of power
for three months of operations of the Bitfarms miners, which will
be refundable in full to Bitfarms at the end of the initial
term.
About BitfarmsFounded in 2017,
Bitfarms is a global vertically integrated Bitcoin data center
company that contributes its computational power to one or more
mining pools from which it receives payment in Bitcoin. Bitfarms
develops, owns, and operates vertically integrated mining
facilities with in-house management and company-owned electrical
engineering, installation service, and multiple onsite technical
repair centers. The Company’s proprietary data analytics system
delivers best-in-class operational performance and uptime.
Bitfarms currently has 12 operating Bitcoin data
centers and two under development, as well as hosting agreements
with two data centers, in four countries: Canada, the United
States, Paraguay, and Argentina. Powered predominantly by
environmentally friendly hydro-electric and long-term power
contracts, Bitfarms is committed to using sustainable and often
underutilized energy infrastructure.
To learn more about Bitfarms’ events,
developments, and online communities:
www.bitfarms.comhttps://www.facebook.com/bitfarms/https://twitter.com/Bitfarms_iohttps://www.instagram.com/bitfarms/https://www.linkedin.com/company/bitfarms/
Glossary of Terms
- EH or EH/s = Exahash or exahash per
second
- w/TH = Watts/Terahash efficiency
(includes cost of powering supplementary equipment)
Forward-Looking Statements
This news release contains certain
“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. The statements and information in this
release regarding the impact of the Hosting Agreement, projected
growth, target hashrate, opportunities relating to the Company’s
geographical diversification and expansion, deployment of miners as
well as the timing therefor, closing of the Stronghold acquisition
on a timely basis and on the terms as announced, , the ability to
gain access to additional electrical power and grow hashrate of the
Stronghold business, performance of the plants and equipment
upgrades and the impact on operating capacity including the target
hashrate and multi-year expansion capacity, the opportunities
to leverage Bitfarms’ proven expertise to successfully enhance
energy efficiency and hashrate, and other statements regarding
future growth, plans and objectives of the Company are
forward-looking information.
Any statements that involve discussions with
respect to predictions, expectations, beliefs, plans, projections,
objectives, assumptions, future events or performance (often but
not always using phrases such as “expects”, or “does not expect”,
“is expected”, “anticipates” or “does not anticipate”, “plans”,
“budget”, “scheduled”, “forecasts”, “estimates”, “prospects”,
“believes” or “intends” or variations of such words and phrases or
stating that certain actions, events or results “may” or “could”,
“would”, “might” or “will” be taken to occur or be achieved) are
not statements of historical fact and may be forward-looking
information.
This forward-looking information is based on
assumptions and estimates of management of Bitfarms at the time
they were made, and involves known and unknown risks, uncertainties
and other factors which may cause the actual results, performance,
or achievements of Bitfarms to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking information. Such factors, risks and
uncertainties include, among others: receipt of the approval of the
shareholders of Stronghold and the Toronto Stock Exchange for the
Stronghold acquisition as well as other applicable regulatory
approvals; that the Stronghold acquisition may not close within the
timeframe anticipated or at all or may not close on the terms and
conditions currently anticipated by the parties for a number of
reasons including, without limitation, as a result of a failure to
satisfy the conditions to closing of the Stronghold acquisition;
the construction and operation of new facilities may not occur as
currently planned, or at all; expansion of existing facilities may
not materialize as currently anticipated, or at all; new miners may
not perform up to expectations; revenue may not increase as
currently anticipated, or at all; the ongoing ability to
successfully mine digital currency is not assured; failure of the
equipment upgrades to be installed and operated as planned; the
availability of additional power may not occur as currently
planned, or at all; expansion may not materialize as currently
anticipated, or at all; the power purchase agreements and economics
thereof may not be as advantageous as expected; potential
environmental cost and regulatory penalties due to the operation of
the Stronghold plants which entail environmental risk and certain
additional risk factors particular to the business of Stronghold
including, land reclamation requirements may be burdensome and
expensive, changes in tax credits related to coal refuse power
generation could have a material adverse effect on the business,
financial condition, results of operations and future development
efforts, competition in power markets may have a material adverse
effect on the results of operations, cash flows and the market
value of the assets, the business is subject to substantial energy
regulation and may be adversely affected by legislative or
regulatory changes, as well as liability under, or any future
inability to comply with, existing or future energy regulations or
requirements, the operations are subject to a number of risks
arising out of the threat of climate change, and environmental
laws, energy transitions policies and initiatives and regulations
relating to emissions and coal residue management, which could
result in increased operating and capital costs and reduce the
extent of business activities, operation of power generation
facilities involves significant risks and hazards customary to the
power industry that could have a material adverse effect on our
revenues and results of operations, and there may not have adequate
insurance to cover these risks and hazards, employees, contractors,
customers and the general public may be exposed to a risk of injury
due to the nature of the operations, limited experience with carbon
capture programs and initiatives and dependence on third-parties,
including consultants, contractors and suppliers to develop and
advance carbon capture programs and initiatives, and failure to
properly manage these relationships, or the failure of these
consultants, contractors and suppliers to perform as expected,
could have a material adverse effect on the business, prospects or
operations; the digital currency market; the ability to
successfully mine digital currency; it may not be possible to
profitably liquidate the current digital currency inventory, or at
all; a decline in digital currency prices may have a significant
negative impact on operations; an increase in network difficulty
may have a significant negative impact on operations; the
volatility of digital currency prices; the anticipated growth and
sustainability of hydroelectricity for the purposes of
cryptocurrency mining in the applicable jurisdictions; the
inability to maintain reliable and economical sources of power to
operate cryptocurrency mining assets; the risks of an increase in
electricity costs, cost of natural gas, changes in currency
exchange rates, energy curtailment or regulatory changes in the
energy regimes in the jurisdictions in which Bitfarms and
Stronghold operate and the potential adverse impact on
profitability; future capital needs and the ability to complete
current and future financings, including Bitfarms’ ability to
utilize an at-the-market offering program ( “ATM Program”) and the
prices at which securities may be sold in such ATM Program, as well
as capital market conditions in general; share dilution resulting
from an ATM Program and from other equity issuances; volatile
securities markets impacting security pricing unrelated to
operating performance; the risk that a material weakness in
internal control over financial reporting could result in a
misstatement of financial position that may lead to a material
misstatement of the annual or interim consolidated financial
statements if not prevented or detected on a timely basis;
historical prices of digital currencies and the ability to mine
digital currencies that will be consistent with historical prices;
and the adoption or expansion of any regulation or law that will
prevent Bitfarms from operating its business, or make it more
costly to do so. For further information concerning these and other
risks and uncertainties, refer to Bitfarms’ filings
on www.sedarplus.ca (which are also available on the
website of the U.S. Securities and Exchange Commission (the “SEC")
at www.sec.gov), including the MD&A for the year-ended
December 31, 2023, filed on March 7, 2024 and the MD&A for the
three and six months ended June 30, 2024 filed on August 8, 2024,
and its registration statement on Form F-4 (File No. 333-282657)
filed by Bitfarms with the SEC (the “registration statement”),
which includes a proxy statement of Stronghold that also
constitutes a prospectus of Bitfarms (the “proxy
statement/prospectus”). Although Bitfarms has attempted to identify
important factors that could cause actual results to differ
materially from those expressed in forward-looking statements,
there may be other factors that cause results not to be as
anticipated, estimated or intended, including factors that are
currently unknown to or deemed immaterial by 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. Accordingly, readers should
not place undue reliance on any forward-looking information.
Bitfarms does not undertake any obligation to revise or update any
forward-looking information other than as required by
law. Trading 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 Toronto
Stock Exchange, Nasdaq, or any other securities exchange or
regulatory authority accepts responsibility for the adequacy or
accuracy of this release.
Additional Information about the Merger
and Where to Find It
This communication relates to a proposed merger
between Stronghold and Bitfarms. In connection with the proposed
merger, Bitfarms has filed the registration statement with the SEC.
After the registration statement is declared effective, Stronghold
will mail the proxy statement/prospectus to its shareholders. This
communication is not a substitute for the registration statement,
the proxy statement/prospectus or any other relevant documents
Bitfarms and Stronghold has filed or will file with the SEC.
Investors are urged to read the proxy statement/prospectus
(including all amendments and supplements thereto) and other
relevant documents filed with the SEC carefully and in their
entirety if and when they become available because they will
contain important information about the proposed merger and related
matters.
Investors may obtain free copies of the
registration statement, the proxy statement/prospectus and other
relevant documents filed by Bitfarms and Stronghold with the SEC,
when they become available, through the website maintained by the
SEC at www sec.gov. Copies of the documents may also be obtained
for free from Bitfarms by contacting Bitfarms' Investor Relations
Department at investors@bitfarms.com and from Stronghold by
contacting Stronghold's Investor Relations Department at
SDIG@gateway-grp.com.
No Offer or SolicitationThis communication is
not intended to and does not constitute an offer to sell or the
solicitation of an offer to buy, sell or solicit any securities or
any proxy, vote or approval, nor shall there be any sale of
securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under
the securities laws of any such jurisdiction. No offer of
securities shall be deemed to be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended.
Participants in Solicitation Relating to
the MergerBitfarms, Stronghold, their respective directors
and certain of their respective executive officers may be deemed to
be participants in the solicitation of proxies from Stronghold's
shareholders in respect of the proposed merger. Information
regarding Bitfarms’ directors and executive officers can be found
in Bitfarms’ annual information form for the year ended December
31, 2023, filed on March 7, 2024, as well as its other filings with
the SEC. Information regarding Stronghold’s directors and executive
officers can be found in Stronghold’s proxy statement for its 2024
annual meeting of stockholders, filed with the SEC on April 29,
2024, and supplemented on June 7, 2024, and in its Form 10-K for
the year ended December 31, 2023, filed with the SEC on March 8,
2024. This communication may be deemed to be solicitation material
in respect of the proposed merger. Additional information regarding
the interests of such potential participants, including their
respective interests by security holdings or otherwise, is set
forth in the proxy statement/prospectus and other relevant
documents filed with the SEC in connection with the proposed merger
if and when they become available. These documents are available
free of charge on the SEC’s website and from Bitfarms and
Stronghold using the sources indicated above.
Investor Relations
Contacts:BitfarmsTracy KrummeSVP, Head of
IR & Corp. Comms.+1 786-671-5638tkrumme@bitfarms.com
Media Contacts:Québec:
TactLouis-Martin Leclerc+1
418-693-2425lmleclerc@tactconseil.ca
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