Digihost Expands Bitcoin Mining Fleet With Addition of 4,640 S19 XPs 150TH Under Multi-Year Hosting Deal
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Insights
The signing of a multi-year hosting agreement by Digihost with a leading manufacturer of digital currency mining servers signifies a strategic expansion in the company's operational capacity. The upfront deposit of $1.8 million enhances Digihost's liquidity, potentially strengthening its balance sheet. Moreover, the acquisition of 4,640 S19 XPs is expected to increase the hash rate by 700 PH/s, which is a significant uptick in computing power. This expansion is crucial as it precedes the next Bitcoin halving event, a phenomenon that historically impacts miners' profitability by reducing the reward for mining new blocks.
From a financial perspective, the company's aim to remain debt-free while minimizing stock dilution is a prudent strategy that could appeal to investors who are wary of equity erosion. Digihost's focus on deploying the latest generation of energy-efficient miners could lead to reduced operational costs and enhanced long-term profitability, especially when considering the impending reduction in Bitcoin mining rewards.
Digihost's involvement in the Community Solar project aligns with the growing trend of blockchain companies seeking sustainable energy sources. The project's capacity to power over 1,000 homes annually demonstrates a significant commitment to renewable energy, which may reduce electricity costs and improve the company's public image regarding environmental responsibility. The long-term benefits of this commitment could include lower energy expenses and potential tax incentives associated with renewable energy investments.
As the global emphasis on sustainability intensifies, Digihost's proactive approach to securing clean energy through the Community Solar project could provide a competitive edge. This is particularly relevant given the energy-intensive nature of cryptocurrency mining and the increasing scrutiny of the environmental impact of such operations. The scheduled ribbon cutting in Q3 of 2024 indicates a timeline for when these solar credits and hence the cost savings, will materialize.
The increase in Digihost's operational capacity to 90MW and its current mining rate of 2 EH/s positions the company competitively within the digital currency mining sector. The expected growth to 2.4 EH/s post-deployment of the new miners could significantly enhance Digihost's market share and revenue potential in a rapidly evolving industry. The timing of this expansion is strategic, as it anticipates the next Bitcoin halving, which typically leads to increased competition among miners due to the reduced supply of new Bitcoin.
Furthermore, the company's commitment to remaining debt-free and minimizing stock dilution suggests a strategic approach to growth that is designed to preserve shareholder value. This approach, coupled with investments in energy efficiency and renewable energy, may resonate positively with investors who are increasingly valuing sustainability alongside financial performance.
This news release constitutes a “designated news release” for the purposes of the Company’s prospectus supplement dated March 4, 2022 to its short form base shelf prospectus dated February 23, 2022.
HOUSTON, March 05, 2024 (GLOBE NEWSWIRE) -- Digihost Technology Inc. (“Digihost” or the “Company”) (Nasdaq: DGHI; TSXV: DGHI), an innovative U.S. based blockchain technology and computer infrastructure company, is pleased to announce the signing of a multi-year hosting agreement with one of the world’s leading manufacturers of digital currency mining servers. All monetary references are expressed in USD unless otherwise indicated.
Under the executed agreement, Digihost will receive an upfront deposit of approximately
The Company plans to deploy these next generation, highly energy efficient and high-performance miners prior to the next Bitcoin halving. The deployment will result in an expected hash rate increase of approximately 700 PH/s, bringing Digihost’s total hash rate to 2.4 EH/s.
Michel Amar, CEO of Digihost, stated, “We are thrilled to be able to execute on an agreement that enables us to both strengthen our financial and overall cash flow position and increase our mining footprint through a partnership with a top-tier digital mining company. The Company continues to pursue opportunities to grow its computing power while remaining debt free, with the main goal being to convert our fleet to the newest generation of miners with minimal stock dilution.”
Community Solar Project
Digihost is currently the anchor subscriber to a 5MW Community Solar project located in Angola, New York. The project produces enough clean energy to power more than 1,000 homes annually. The Company’s long-term commitment to this project allows for the further development and construction of additional community solar projects throughout New York State.
A ribbon cutting for the project is scheduled for Q3 of 2024, which is when the solar credits will begin. Digihost’s participation in this project is not only environmentally prudent but also assists in lowering the Company’s overall costs of electricity.
Operations Update
Presently, Digihost’s consolidated operating capacity across its three sites represents approximately 90MW of available power, and Digihost is mining at hash rate of 2 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. None of the TSX Venture Exchange, its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) or Nasdaq 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 newly-announced hosting agreement and its other 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, including the Company’s ability to utilize the Company’s at-the-market offering program (the “ATM Program”) and the prices at which the Company may sell securities in the ATM Program, as well as capital market conditions in general; share dilution resulting from the ATM Program and from other equity issuances; risks relating to the strategy of maintaining and increasing Bitcoin holdings and the impact of depreciating Bitcoin prices on working capital; regulatory and other unanticipated issues that prohibit us from declaring or paying dividends to our shareholders that are payable in Bitcoin; continued effects of the COVID19 pandemic may have a material adverse effect on the Company’s performance as supply chains are disrupted and prevent the Company from operating its assets; 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; delivery of miners pursuant to the Company’s hosting agreements many 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; 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. 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; the ability to adhere to Digihost’s dividend policy and the timing and quantum of dividends based on, among other things, the Company’s operating results, cash flow and financial condition, Digihost’s current and anticipated capital requirements, and general business conditions; 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.
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