Bitfarms moves ahead with plans to open mining facility in Argentina

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Canada-based Bitfarms Ltd. (TSXV: BITF) has updated shareholders about its intentions to expand into South America. 

In 2020, the block rewards miner announced it had signed a non-binding memorandum of understanding to secure electricity at a rate of US$0.02 per kWh with the intention to build a 60MW digital currency mining facility in Argentina. After a period of due diligence to assess the project’s viability, the firm is ready to proceed forward. 

Bitfarms signed a power purchase agreement with an undisclosed private Argentinian power producer enabling the firm to draw up to 210MW of electricity at its discretion. The initial term of the contract will last eight years, with an effective cost of $0.022 per kilowatt-hour for the electricity for the first four years.

According to Bitfarms’ announcement, the company is in advanced contractual discussions with a construction company to design and build the electrical infrastructure needed for the operations. It hopes to finalize the engineering procurement and construction contract so it can begin block reward mining at the new facility by early 2022.  

The proposed mining farm is near the utility, so the electricity contract does not involve any interconnection with the local power grid. Because of the favorable year-round climate, the facility does not require expensive liquid immersion cooling to keep the hardware cool and operating optimally. Fans cool the ASIC mining rigs, similar to how Bitfarms operates its facilities in Québec.

Bitfarms stated the 210MW suffices to support approximately 55,000 new-generation ASIC miners, which could earn about US$650 million of revenues from 11,774 BTC, based on current market conditions. 

It plans to direct a portion of its recently ordered 48,000 MicroBT miners to the new facility to reach its 8.0 EH/s global hashrate target by the end of 2022. Bitfarms will also move a substantial number of its older, less efficient miners to the mining farm to capitalize on the low cost of electrical power. 

As a basis of comparison, Bitfarms disclosed that the break-even cost to mine one BTC at Bitfarms’ Québec facility was approximately US$7,500 during Q4 2020. If the Argentina facility was working during the same period, it estimated the break-even cost to mine the same BTC would have been US$4,125, a 45% savings as compared to Québec.

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