Digihost Provides Update on Deal to Acquire 9,900 Bitcoin Miners and Increase Hashrate by 925PH
TORONTO, May 14, 2021 (GLOBE NEWSWIRE) -- Digihost Technology Inc. (“Digihost” or the “Company”) (TSXV: DGHI; OTCQB: HSSHF) provides an update on its acquisition of 9,900 Bitcoin (“BTC”) miners (the “Miners”) that will increase the Company’s current hashrate by approximately 925PH to 1.145EH, previously announced in the Company’s May 12, 2021 news release. The Company is funding the purchase of the Miners with capital from its equity financings closed since the beginning of 2021 of approximately CA$54,000,000.
In connection with the purchase agreement with Northern Data AG (“Northern Data”) (ISIN: DE000A0SMU87; OTC: NDTAF) to acquire the Miners, the Company concurrently entered into a hosting agreement (the “Hosting Agreement”) with Northern Data in connection with the Miners, whereby Northern Data will provide services to the Company including the installation and hosting of the Miners. Northern Data will host the Miners in proprietary pre-manufactured performance optimized mobile data centers at the Company’s facilities for a term of three years from the date that installation of the Miners at the Company’s facilities is completed. The Miners are expected to be delivered and installed incrementally between August and December of this year, and will be 100% operational by January 2022.
The Company anticipates the costs of developing systems to supply the mobile data centres with power from the facilities will be approximately US$4.5 million, which the Company will fund with capital from its previously completed equity financings. This US$4.5 million cost represents the capital expenditure costs for the 9,900 Miners, and additional costs will need to be incurred if the purchase agreement is expanded to up to 30,000 miners (press release – May 12, 2021).
The Company also wishes to clarify that the Company’s forecast of approximately US$80 million of operating profit in 2022, disclosed in the May 12, 2021 news release, represents the anticipated operating profit from the Company’s share of the profit from the Miners, as well as the operating profit from its existing operations. The forecast was based on BTC metrics on May 12, 2021, being an approximate US$57,000 price of BTC and hashing difficulty rates as of May 12, 2021. The forecast also assumes a hashrate of 1.145EH for 2022, as well as current electricity costs and other operating costs remaining constant. Profitability of mining BTC will be materially impacted by changes in BTC prices, increases in mining difficulty rates and changes in electricity costs. There can be no assurance that the price of BTC will remain at crrent levels or that forecasted operating profit will be realized.
Michel Amar, the Company’s CEO, stated: “Since the beginning of the year, we have achieved operational milestones in support of our growth strategy. We are pleased to be in a position today to have the required funding, power capacity, and access to infrastructure to execute on our strategy for 2021 and beyond.”
About Digihost Technology Inc.
Digihost Technology Inc. is a growth-oriented blockchain technology company primarily focused on Bitcoin mining. The Company's mining facilities are located in Upstate New York, and are equipped with 78.7 MW of low-cost power with the option to expand to 102MW. The Company is currently hashing at a rate of 200PH with potential to expand to a rate of 3EH upon the completion of the previously announced acquisition of a 60MW power plant.
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