Mr. Geoff Morphy reports

BITFARMS MINES 411 BTC IN SEPTEMBER 2023

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

"In September, we continued to install new miners and fully energized Rio Cuarto to 51 MW [megawatts], increasing our operating capacity by 9 per cent to 233 MW. Year to date, we increased operating capacity by 24 per cent and upgraded and expanded our fleet with over 15,000 additional miners," said Geoff Morphy, chief executive officer of Bitfarms. "Also in September, our hash rate increased 9 per cent to 6.1 EH/s [exahashes/second], slightly below our Q3 2023 target of 6.3 EH/s, reflecting some electrical infrastructure delays that pushed out the Baie-Comeau, Que., facility's full installation by a couple of weeks.

"We continue to believe that many of our best opportunities for growth and investment will arise around the next bitcoin halving expected to occur in April, 2024. To this end, we are focused on infrastructure and balance sheet strength to provide the financial flexibility to move aggressively when conditions for growth are optimal. We continued to pay down debt, closing September with under $10-million of outstanding indebtedness, all of which is scheduled for repayment in advance of the halving," added Mr. Morphy.

Ben Gagnon, chief mining officer of Bitfarms, said: "As the farm in Argentina became fully energized, our BTC production was 411 in September, up 7.3 per cent from August, 2023, even with a 2.7-per-cent network difficulty increase in the month.

"Executing on our comprehensive fleet management strategy, we have further optimized our miner portfolio while bolstering our balance sheet in anticipation of purchasing the next generation of sub-20 w/TH [watts/terahash] miners after the halving. The September installation of S19 Pro + miners in Argentina nearly doubled the number of sub-30 w/TH miners in operation and shifted the fleet portfolio constitution; it is now comprised of 23 per cent sub-30 w/TH miners, 58 per cent 30 to 40 w/TH machines and 19 per cent 40 to 45 w/TH machines. As expected, we are now well positioned to leapfrog over the XP generation entirely and strategically layer in the new sub-20 w/TH miners for both upgrades and expansion. The recently announced new generation of sub-20 w/TH miners have the capability to rapidly drive hash rate growth and increase energy efficiency around halving at significantly lower costs per TH than XP miners have traded for throughout 2023," concluded Mr. Gagnon.

Mining review

Due to the added corporate capacity supplemented by the moderate weather in North America that minimized curtailment and facilitated uptimes, September production of 411 BTC rose 7.3 per cent from the 383 BTC mined in August, which included an extra day of production.

Network difficulty increased 2.7 per cent in September compared with August, as bitcoin miners anticipating higher bitcoin prices continue to invest in capacity and come on-line. For the nine months ended Sept. 30, network difficulty increased 61.5 per cent while the BTC price was up roughly 63.2 per cent, resulting in a 3.6-per-cent improvement in mining economics as measured by U.S. dollar/TH/day.

September, 2023, select operating highlights:

• 6.1 EH/s on-line as of Sept. 30, 2023, up 45 per cent from Sept. 30, 2022, and up 9 per cent from Aug. 31, 2023;
• 5.84 EH/s average on-line, up 13.7 per cent from August, 2023;
• 70.4 BTC/average EH/s, down 5.6 per cent from 74.6 in August, 2023;
• 411 BTC mined, up 7.3 per cent from August, 2023, and down 14.6 per cent from September, 2022;
• 13.7 BTC mined daily on average, equivalent to about $369,900 per day and approximately $11.1-million for the month based on a BTC price of $27,000 on Sept. 30, 2023;
• Installed 4,600 miners;
• At Paso Pe, Paraguay, construction advanced as planned;
• At Rio Cuarto, Argentina:
  • Increased capacity to full 51 MW and hash rate to 1.475 EH/s;
• At Baie-Comeau, Que.:
  • Remaining installations expected to ramp operating capacity to the full 11 MW in early October, 2023.

Bitfarms' BTC monthly production

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

September, 2023, Financial update:

• Sold 362 BTC of the 411 BTC mined, generating total proceeds of $9.5-million;
• Increased HODL to 703 BTC in treasury;
• Reduced total outstanding indebtedness by $1.9-million, resulting in a remaining balance of $9.9-million at Sept. 30, 2023;
• Added 49 BTC to treasury, increasing custody to 703 BTC, representing approximately $19-million based on a BTC price of $27,000 at Sept. 30, 2023;
• Held $46-million in cash and cash equivalents at Sept. 30, 2023.

Conferences and events

Bitfarms plans to attend the following coming events:

• Oct. 11 to 12: Dawson James Small Cap Growth Conference;
• Oct. 11 to 12: Bitcoin Amsterdam;
• Oct. 25 to 26: Bitcoin Mining Council, Washington, D.C.;
• Oct. 25: Roundtable for Digital Asset Miners;
• Oct. 26: Capitol Hill Fly-in for Education Meetings with Congress;
• Oct. 30 to 31: AIM Dubai;
• Nov. 11: Benzinga Future of Crypto.

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.