Mr. Geoff Morphy reports

BITFARMS MINES 383 BTC IN AUGUST 2023

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

"In August, we powered up new miners and continued to optimize the fleet at several locations, driving our hashrate up to 5.6 EH/s [exahashes/second]," said Geoff Morphy, chief executive officer of Bitfarms. "At Baie-Comeau, Que., our newest production facility ran smoothly at around five MW [megawatts] throughout the month, and we completed the racking of all miners redeployed there. The remaining step to reach 11 MW of production at Baie-Comeau is to energize the six MW power line, which we expect to be completed in September. This, in conjunction with final miner installations in Rio Cuarto, Argentina, supports our ability to achieve our target hashrate of 6.3 EH/s by the end of September, 2023."

"In Paso Pe, Paraguay, we started our expansion with the purchase of 1,920 MicroBT M53S+ hydro-cooling miners and 20 MW of associated specialized containers. We plan to construct a 50 MW substation to power a 30 MW air-cooled warehouse contiguous with these containers. With long-lead-time items, such as the primary transformer, on order and our groundbreaking planned for September, 2023, we are targeting the 50 MW to be fully commissioned in Q1 2024," added Mr. Morphy.

Ben Gagnon, chief mining officer of Bitfarms, said, "In August, 2023, BTC production was 383, an increase of 1.3 per cent in July, 2023, despite a 6.3-per-cent network difficulty increase during August. Miner deployments and more moderate weather in Quebec and Washington also improved production conditions in the second half of August as our average EH/s climbed from 4.7 EH/s in the first 15 days of August to 5.5 EH/s in the latter 16 days of August.

"Focusing on continuous improvement and capital efficiency, we completed our Magog farm upgrade with the installation of 2,862 S19J Pro+ miners. With a price of $13/TH [terahash], or only 46 per cent of the cost of higher-efficiency XP miners, the S19J Pro+ miners deliver 85 per cent of the hashrate. With this upgrade, energy efficiency, which includes the energy needs of all supplementary equipment such as fans, lights and networking hardware, improved from 45 w/TH to 28 w/TH at Magog and from 38 w/TH to 37 w/TH across our entire portfolio," concluded Mr. Gagnon.

Mining review

August production of 383 BTC was 1.3 per cent higher than the 378 BTC mined in July due to increased corporate capacity and more moderate weather facilitating greater uptimes.

Network difficulty increased 6.3 per cent in August, compared with July, as bitcoin miners continue to invest in capacity in anticipation of higher bitcoin prices. Year to date through the end of August, difficulty increased 57.3 per cent while the BTC price was up roughly 64.4 per cent, resulting in a 6.5-per-cent improvement in mining economics as measured by U.S. dollar/TH/day.

August, 2023, select operating highlights:

• 5.6 EH/s on-line as of Aug. 31, 2023, up 43.5 per cent from Aug. 31, 2022, and up 5.7 per cent from July 31, 2023;
• 5.1 EH/s average on-line, up 3.3 per cent from July, 2023;
• 74.6 BTC/average EH/s, down 2 per cent from 76.1 in July, 2023;
• 383 BTC mined, up 1.3 per cent from July, 2023, and down 28.3 per cent from August, 2022;
• 12.4 BTC mined daily on average, equivalent to about $337,300 per day and approximately $10.5-million for the month based on a BTC price of $27,200 on Aug. 31, 2023;
• Fully utilized remaining miner credits with the purchase of:
  • Eight MicroBT 2.4 MW hydro containers and 1,920 MicroBT M53S+ hydro miners for deployment to new 50 MW Paso Pe farm in development;
  • One MicroBT one MW hydro container and 100 MicroBT M53S+ hydro miners for deployment in Quebec.
• Purchased 900 M50 118 TH Miners for $13/TH for deployment in Quebec and Argentina with cash;
• At Paraguay, initiated first phase of development for 150 MW hydropower contracts;
• At Rio Cuarto, Argentina:
  • Increased hashrate to 960 PH;
  • Completed planned deliveries with receipt of 3,150 Bitmain S19J Pro+ and 710 S19j Pro miners;
  • Planned deliveries of 1,068 M50 and 2,549 Bitmain S19J Pro+ on schedule for September installation and energization.
• At Magog, Que., increased hashrate 49 per cent to 340 PH with the installation of 2,862 S19 Pro+ miners;
• At Baie-Comeau, Que.:
  • Consistently operated at about five MW throughout August and on track to reach 11 MW in September, 2023;
  • Installed total of 2,535 Whatsminer M31S+ miners redeployed from Magog.
• At Washington, upgraded ventilation and cooling systems, increasing average uptime.

Bitfarms' BTC monthly production

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

MONTH     BTC MINED 2023     BTC MINED 2022

January              486                301      
February             387                298      
March                424                363      
April                379                405      
May                  459                431      
June                 385                420      
July                 378                500      
August               383                534      
Total YTD          3,281              3,252     

 

August, 2023, financial update:

• Sold 323 BTC of the 383 BTC mined, generating total proceeds of $9-million;
• Reduced total outstanding indebtedness by $1.9-million, resulting in a remaining balance of $11.8-million at Aug. 31, 2023;
• Added 60 BTC to treasury, increasing custody to 654 BTC, representing approximately $17.8-million based on a BTC price of $27,200 at Aug. 31, 2023.

Conferences and events

Bitfarms plans to attend the following coming events:

• Sept. 7: Third annual Needham Virtual Crypto Conference;
• Sept. 11 to 13: HC Wainwright Conference, New York;
• Sept. 14: Bitfarms analyst day, New York;
• Sept. 25 to 27: POW (Proof-of-Work) Summit, Prague;
• Oct. 11 to 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 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.