Digihost Announces Cash and Crypto Position and Provides July 2024 Production Update

Rhea-AI Summary

Digihost Technology Inc. (Nasdaq / TSXV: DGHI) has released its unaudited Bitcoin production results for July 2024 and provided an operations update. Key highlights include:

- Cash, BTC, and cash deposits totaled approximately $6.9 million as of July 31, 2024 (based on a BTC price of $65,100).
- Miners at the Company's facilities produced approximately 42 BTC during July.
- Digihost is integrating 11,000 S21 miners, increasing its hash rate to 2.75 EH/s, with a target of 3.2 EH/s by the end of August 2024.
- The Company spent about $0.8 million on capital expenditures and infrastructure support.
- Digihost's consolidated operating capacity across three sites represents approximately 90MW of available power.

The Company continues to monetize a portion of its BTC production to fund energy costs and limit equity dilution for shareholders.

Positive

• Integration of 11,000 state-of-the-art S21 miners, increasing hash rate to 2.75 EH/s
• Target hash rate of 3.2 EH/s by the end of August 2024
• Consolidated operating capacity of approximately 90MW across three sites
• Self-funding strategy to limit equity dilution for shareholders

Negative

• Slight decrease in cash, BTC, and cash deposits from $7.1 million on June 30 to $6.9 million on July 31, 2024
• Capital expenditures of $0.8 million on infrastructure and equipment

Insights

Financial Analyst

Digihost's July 2024 production update reveals some interesting financial dynamics. The company's cash and crypto position slightly decreased from $7.1 million to $6.9 million month-over-month, despite a rise in Bitcoin price. This suggests potential cash burn or reinvestment in operations.

The production of 42 BTC in July, while not explicitly compared to previous months, seems modest. However, the ongoing integration of 11,000 S21 miners is a significant move. These miners, with their 200 TH/s capacity, represent a substantial upgrade in mining efficiency. The projected increase in hash rate from 2.75 EH/s to 3.2 EH/s by August-end indicates a 16.36% growth in mining power.

Digihost's capital expenditure of $0.8 million shows continued investment in infrastructure. The company's strategy of self-funding capex to limit shareholder dilution is prudent, but it's worth noting that this approach may constrain growth rate compared to competitors willing to dilute equity for faster expansion.

The practice of monetizing BTC to cover energy costs is a double-edged sword. While it reduces the need for external financing, it also limits the company's exposure to potential BTC price appreciation. This conservative approach might appeal to risk-averse investors but could underperform in a bullish crypto market.

Overall, Digihost appears to be pursuing a balanced growth strategy, focusing on technological upgrades and operational efficiency rather than aggressive expansion. The success of this approach will largely depend on the broader crypto market conditions and the company's ability to maintain competitive mining costs.

Tech Expert

Digihost's technological strategy, as revealed in their July 2024 update, showcases a significant focus on upgrading their mining capabilities. The integration of 11,000 S21 miners is a notable move in the ever-evolving landscape of cryptocurrency mining technology.

The S21 miners, with their impressive 200 TH/s capacity, represent the cutting edge of mining hardware. This upgrade is expected to boost Digihost's hash rate from 2.75 EH/s to 3.2 EH/s, a substantial 16.36% increase. Such an improvement in hash rate directly translates to increased mining efficiency and potentially higher Bitcoin yields.

However, it's important to consider the broader context. While a 3.2 EH/s hash rate is significant, it still places Digihost as a mid-tier player in the global mining landscape. For comparison, some of the largest mining operations boast hash rates in the double-digit EH/s range.

The phased deployment of these miners is a prudent approach, allowing for gradual integration and troubleshooting. This strategy minimizes the risk of large-scale disruptions that could occur with a sudden, full-scale deployment.

Digihost's focus on energy-efficient miners aligns with the growing emphasis on sustainable cryptocurrency mining. As environmental concerns surrounding Bitcoin mining intensify, this move could position Digihost favorably in terms of both operational costs and public perception.

The company's current operating capacity of 90MW across three sites suggests a decentralized approach to their operations. This strategy can enhance resilience against localized disruptions but may also introduce complexities in management and optimization across multiple sites.

In conclusion, Digihost's technological upgrades demonstrate a commitment to staying competitive in the rapidly evolving crypto mining sector. However, the true test will be in how effectively they can translate these improvements into increased Bitcoin production and, ultimately, financial performance.

HOUSTON, Aug. 01, 2024 (GLOBE NEWSWIRE) -- Digihost Technology Inc. (“Digihost” or the “Company”) (Nasdaq / TSXV: DGHI), an innovative U.S. based blockchain technology and computer infrastructure company, is pleased to provide unaudited comparative Bitcoin (“BTC”) production results for the month ended July 31, 2024, combined with an operations update. All monetary references are expressed in USD unless otherwise indicated.

Monthly Production Highlights for July 2024

• The Company held cash, BTC and cash deposits of approximately $6.9 million as of July 31, 2024 (based on a BTC price of $65,100 as of July 31, 2024 per CoinMarketCap), as compared to $7.1 million as of June 30, 2024 (based on a BTC price of $62,678 as of June 30, 2024 per CoinMarketCap).

• Between self-mining and hosting agreements, miners at the Company’s facilities produced approximately 42 BTC during the month of July.

• As previously disclosed, Digihost entered into a new agreement in which the Company will be integrating 11,000 state-of-the-art S21 miners (200/TH) (the “S21 Miners”) into its facilities, translating to approximately 44MW of shared revenues. The deployment of these next-generation, energy-efficient miners has commenced and will be completed in phases. After July’s installations of S21 Miners, Digihost’s hash rate has increased to 2.75 EH/s and the Company is targeting to be at a total of 3.2 EH/s by the end of August 2024.

• The Company spent approximately $0.8 million on capital expenditures, mining infrastructure support equipment, and deposits. Digihost continues to monitor its capital expenditures closely, using self-funding to limit equity dilution for its shareholders.

• Consistent with management’s ongoing commitment to minimize equity dilution for its shareholders, the Company has continued to monetize a portion of its BTC production to fully fund its energy costs.
  

Operations Update

Presently, Digihost’s consolidated operating capacity across its three sites represents approximately 90MW of available power and is mining at hashrate of 2.75 EH/s.

About Digihost

Digihost is a growth-oriented technology company focused on the blockchain industry. The Company operates from three sites in the U.S. and, in addition to managing its own operations, provides hosting arrangements at its facilities.

For further information, please contact:

Digihost Technology Inc.
www.digihost.ca
Michel Amar, Chief Executive Officer
T: 1-818-280-9758
Email: michel@digihost.ca

Cautionary Statement
Trading in the securities of the Company should be considered highly speculative. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Statements

Except for the statements of historical fact, this news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking information”) that are based on expectations, estimates and projections as at the date of this news release and are covered by safe harbors under Canadian and United States securities laws. Forward-looking information in this news release includes information about potential further improvements to profitability and efficiency across mining operations, including, as a result of the Company’s expansion efforts, potential for the Company’s long-term growth, and the business goals and objectives of the Company. Factors that could cause actual results to differ materially from those described in such forward-looking information include, but are not limited to: future capital needs and uncertainty of additional financing; share dilution resulting from equity issuances; risks relating to the strategy of maintaining and increasing Bitcoin holdings and the impact of depreciating Bitcoin prices on working capital; effects on Bitcoin prices as a result of the most recent Bitcoin halving; development of additional facilities and installation of infrastructure to expand operations may not be completed on the timelines anticipated by the Company, or at all; ability to access additional power from the local power grid; a decrease in cryptocurrency pricing, volume of transaction activity or generally, the profitability of cryptocurrency mining; further improvements to profitability and efficiency may not be realized; development of additional facilities to expand operations may not be completed on the timelines anticipated by the Company; ability to access additional power from the local power grid; an increase in natural gas prices may negatively affect the profitability of the Company’s power plant; the digital currency market; the Company’s ability to successfully mine digital currency on the cloud; the Company may not be able to profitably liquidate its current digital currency inventory, or at all; a decline in digital currency prices may have a significant negative impact on the Company’s operations; the volatility of digital currency prices; and other related risks as more fully set out in the Annual Information Form of the Company and other documents disclosed under the Company’s filings at www.sedarplus.ca and www.SEC.gov/EDGAR. The forward-looking information in this news release reflects the current expectations, assumptions and/or beliefs of the Company based on information currently available to the Company. In connection with the forward-looking information contained in this news release, the Company has made assumptions about: the current profitability in mining cryptocurrency (including pricing and volume of current transaction activity); profitable use of the Company’s assets going forward; the Company’s ability to profitably liquidate its digital currency inventory as required; historical prices of digital currencies and the ability of the Company to mine digital currencies on the cloud will be consistent with historical prices; the ability to maintain reliable and economical sources of power to run its cryptocurrency mining assets; the negative impact of regulatory changes in the energy regimes in the jurisdictions in which the Company operates; and there will be no regulation or law that will prevent the Company from operating its business. The Company has also assumed that no significant events occur outside of the Company's normal course of business. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainties therein. The Company undertakes no obligation to revise or update any forward-looking information other than as required by law.

FAQ

How many Bitcoin did Digihost (DGHI) produce in July 2024?

Digihost's miners produced approximately 42 Bitcoin during the month of July 2024.

What was Digihost's (DGHI) hash rate as of July 31, 2024?

After July's installations of S21 Miners, Digihost's hash rate increased to 2.75 EH/s.

How many new S21 miners is Digihost (DGHI) integrating into its facilities?

Digihost is integrating 11,000 state-of-the-art S21 miners (200/TH) into its facilities, translating to approximately 44MW of shared revenues.

What is Digihost's (DGHI) target hash rate by the end of August 2024?

Digihost is targeting to reach a total hash rate of 3.2 EH/s by the end of August 2024.