Mr. Geoff Morphy reports

BITFARMS MINES 378 BTC IN JULY

Bitfarms Ltd. has provided a bitcoin (BTC) production and mining operations update for July, 2023.

"We follow a disciplined and accretive growth strategy of securing low-cost power and investing capital wisely in highly efficient operations with compelling projected returns," said Geoff Morphy, chief executive officer of Bitfarms. "To this end, in July we initiated an expansion plan to nearly double our hydropower capacity, to 350 MW [megawatts], by acquiring 150 MW of underutilized hydropower in Paraguay. As an industry veteran of over five years with operations in four countries, Bitfarms has a proven track record of expeditiously establishing operations in new jurisdictions. Through expansion in Paraguay, the company seeks to leverage its industry knowledge and economies of scale to drive greater production efficiency. We plan to commence construction on the first 50 MW facility here in Q3 2023.

"In July, we started production at our 11th farm in Baie-Comeau. It is on track to reach its first 11 MW of production in Q3 2023, with an additional 11 MW targeted to come on-line in H2 2024. Upon completion, Baie-Comeau will increase our Quebec portfolio to eight sites and 170 MW of low-cost hydro power. With miner deliveries and installations progressing smoothly in Rio Cuarto, Argentina, we are confident we will achieve our Q3 2023 target hashrate of 6.3 EH/s [exahashes per second]," concluded Mr. Morphy.

Ben Gagnon, chief mining officer of Bitfarms, said: "In July, BTC production was 378, compared to 385 BTC in June, 2023, as difficulty increased another 3.3 per cent in the month. Production was also impacted by intense weather events, including record temperatures and unprecedented wildfires that led to poor air quality in Quebec, and resulted in the temporary throttling back of miners. In addition, our Magog farm went offline for seven days because of a direct lightning strike that disabled its primary electricity transformer, although no other damage was incurred.

"Our strategy for risk mitigation incorporates redundancy and geographic diversification. In the case of Magog, the outage impacted only a small percentage of overall production. Utilizing our highly skilled in-house electrical subsidiary, and reserve equipment and parts, we were able to restore production in less than a week, rather than potentially a month or more if we needed to order parts and equipment," added Mr. Gagnon.

The average BTC price rose in July to $30,100, up 9.1 per cent from $27,600 in June. Of the 378 BTC mined, 333 BTC were sold and 45 BTC were added to treasury, which reached 594 BTC at July 31, 2023.

Mining review

July production of 378 BTC was 1.8 per cent lower than the 385 BTC mined in June, largely due to disruptions caused by extreme weather resulting in lower average EH/s on-line.

Network difficulty increased 3.3 per cent in July compared with June, as bitcoin miners continue to invest in capacity in anticipation of higher bitcoin prices. Difficulty is up 48 per cent year-to-date in 2023, while the BTC price is up roughly 76.5 per cent in the same period, resulting in a 21 per cent improvement in mining economics as measured by United States dollars/terahash/day.

July, 2023, select operating highlights:

• 5.3 EH/s on-line as of July 31, 2023, up 40 per cent from July 31, 2022, and level with June 30, 2023.
• Five EH/s average on-line, down 0.6 per cent from June, 2023.
• 76.1 BTC/average EH/s, down 0.8 per cent from 76.7 in June, 2023.
• 378 BTC mined, down 1.8 per cent from June, 2023, and down 24.4 per cent from July, 2022.
• 12.2 BTC mined daily on average, equivalent to about $356,240 per day and approximately $11-million for the month based on a BTC price of $29,200 on July 31, 2023.
• In Paraguay, acquired two power purchase agreements for up to 150 MW of hydropower: up to 50 MW in Paso Pe, which is in close proximity to the company's existing operations in Villaricca; and up to 100 MW in Yguazu, a new location close to the third-largest hydroelectric dam in the world.
• In Magog, Que., made upgrades to electrical infrastructure for 2,900 new Bitmain miners.
• At Rio Cuarto, Argentina, 2,360 miners have arrived and are being processed by Argentine customs authority, with an additional 5,117 miners in transit.
• At Baie-Comeau, Que., initiated three MW of production, increased to five MW by July 31, 2023, on schedule to reach 11 MW in Q3 2023, and positioned to add another 11 MW of planned hydropower capacity for a total of 22 MW in H2 2024.
  • 1,300 miners now running, of total 2,900 redeployed from Magog.
• In Washington State, upgraded ventilation and cooling systems, increasing average uptime.

Bitfarms' BTC monthly production

The associated table presents an overview of BTC mined per month in each of the first seven months of 2023 and 2022, respectively.

July, 2023, financial update:

• Sold 333 BTC of the 378 BTC mined, generating total proceeds of $9.9-million.
• Reduced total outstanding indebtedness by $1.8-million, resulting in a remaining balance of $13.7-million at July 31, 2023.
• Added 45 BTC to treasury, increasing custody to 594 BTC, representing approximately $17.3-million based on a BTC price of $29,200 at July 31, 2023.

Conferences and events

Bitfarms plans to attend the following upcoming events:

• Aug. 9 to Aug. 10, Canaccord 43rd Annual Growth Conference, Boston;
• Sept. 7, third annual Needham Virtual Crypto Conference;
• Sept. 11 to Sept. 13, HC Wainwright Conference, New York;
• Sept. 14, Bitfarms analyst day, New York;
• Sept. 25 to Sept. 27, POW (proof of work) Summit, Prague;
• Oct. 11 to Oct. 12, Bitcoin Amsterdam.

About Bitfarms Ltd.

Founded in 2017, Bitfarms is a global, publicly traded bitcoin mining company. Bitfarms develops, owns and operates vertically integrated mining farms with in-house management and company-owned electrical engineering, installation service and multiple on-site technical repair centres. The company's proprietary data analytics system delivers best-in-class operational performance and uptime.

Bitfarms currently has 11 farms, which are located in four countries: Canada, the United States, Paraguay and Argentina. Powered by predominantly environmentally friendly hydroelectric and long-term power contracts, Bitfarms is committed to using sustainable, locally based and often underutilized energy infrastructure.

We seek Safe Harbor.