Digihost Provides September 2024 Production Update and Tier 3 Data Center Initiative

Rhea-AI Summary

Digihost Technology Inc. (Nasdaq / TSXV: DGHI) has released its unaudited Bitcoin production results for September 2024. The company held approximately $9.2 million in cash, BTC, and cash deposits as of September 30, 2024. Miners at Digihost's facilities produced approximately 35 BTC during September, a decrease from the previous month due to a temporary outage at the North Tonawanda power plant for maintenance.

The company spent about $0.3 million on capital expenditures and is developing its initial Tier 3 data center, expected to be completed by the end of 2025 or Q1 2026. Officers and directors of Digihost entered agreements to acquire 685,038 subordinate voting shares in private transactions. Currently, Digihost's consolidated operating capacity is approximately 90MW with a hashrate of 2.75 EH/s.

Positive

• Digihost held $9.2 million in cash, BTC, and cash deposits as of September 30, 2024
• The company is developing a Tier 3 data center, expected to be completed by Q1 2026
• Officers and directors acquired 685,038 subordinate voting shares, showing confidence in the company
• Digihost's current operating capacity is 90MW with a hashrate of 2.75 EH/s

Negative

• Bitcoin production decreased to 35 BTC in September due to a temporary power plant outage
• The company's cash and BTC holdings decreased from $10.4 million in August to $9.2 million in September

Insights

Financial Analyst

The September 2024 production update for Digihost reveals mixed results. The company's cash and BTC holdings decreased from $10.4 million to $9.2 million month-over-month, primarily due to a temporary outage at their North Tonawanda power plant. This resulted in lower BTC production of approximately 35 BTC for September.

However, there are positive indicators for future performance:

• The completed maintenance at the North Tonawanda facility is expected to increase mining efficiencies and reduce downtime.
• The company's strategic initiative to develop a Tier 3 data center by Q1 2026 could diversify revenue streams and leverage existing high-voltage assets.
• Insider buying, with officers and directors acquiring 685,038 shares, signals confidence in the company's prospects.

Digihost's current operating capacity of 90MW and hashrate of 2.75 EH/s position it competitively in the mining sector. The company's focus on self-funding capital expenditures ($0.3 million in September) demonstrates fiscal responsibility and limits shareholder dilution.

While the short-term production dip is a concern, the long-term outlook appears positive if the company can successfully execute its Tier 3 data center strategy and maintain operational efficiency improvements.

Tech Expert

Digihost's strategic pivot towards building a Tier 3 data center is a significant development that could reshape the company's future. Tier 3 data centers offer 99.982% uptime and are designed for mission-critical operations, potentially opening up new revenue streams beyond cryptocurrency mining.

The company's plan to leverage existing high-voltage assets for this initiative is clever, as it should reduce development costs and time-to-market. This move aligns with industry trends towards diversification and could position Digihost as a more resilient player in the tech infrastructure space.

The current hashrate of 2.75 EH/s is respectable for a company of Digihost's size, but it's the future potential that's most intriguing. If the Tier 3 project succeeds, Digihost could transition from a pure-play crypto miner to a more diversified tech infrastructure provider, potentially reducing its exposure to cryptocurrency market volatility.

However, investors should note that building and operating Tier 3 data centers requires significant expertise and capital. The success of this initiative will depend on Digihost's ability to execute effectively in a new, highly competitive market segment.

HOUSTON, Oct. 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 September 30, 2024, combined with an operations update. All monetary references are expressed in USD unless otherwise indicated.

Monthly Production Highlights for September 2024

The Company held cash, BTC and cash deposits of approximately $9.2 million as of September 30, 2024 (based on a BTC price of $63,900 as of August 31, 2024 per CoinMarketCap), as compared to $10.4 million as of August 31, 2024 (based on a BTC price of $58,970 as of August 31, 2024 per CoinMarketCap).

• Between self-mining and hosting agreements, miners at the Company’s facilities produced approximately 35 BTC during the month of September. The decrease in BTC produced as compared to the prior month’s production was due to a temporary outage at Digihost’s power plant located in North Tonawanda for turbine repair and maintenance. The Company anticipates an increase in mining efficiencies, greater asset longevity and a reduction of downtime in the future at that facility as a result of the completed maintenance.
  
  
• Officers and directors of the Company entered agreements to acquire 685,038 subordinate voting shares of the Company in private transactions.
  
  
• The Company spent approximately $0.3 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 when commercially viable.
  

Tier 3

The Company is in the process of building its initial Tier 3 data center with a target completion date at the end of 2025 or Q1 2026.

Alec Amar, President of Digihost, commented, “We are excited to announce the launch of a new strategic initiative of the Company focused on developing Tier 3 infrastructure. By utilizing the high-voltage assets from our current operations, we expect to significantly lower development costs and shorten the time to bring this infrastructure to market, driving innovation and growth in high-performance computing.”

Purchase of shares

The Company is pleased to announce that Michel Amar, director and Chief Executive Officer of Digihost, and Alec Amar, director and President of Digihost, entered into share purchase agreements with a seller to acquire 150,000 and 535,038 subordinate voting shares of the Company, respectively, increasing their personal holdings of Digihost. The shares are being acquired by way of a private transaction at a price of $1.18 per share pursuant to share purchase agreements, and closing remains subject to the fulfillment of certain conditions.

Operations Update

Presently, Digihost’s consolidated operating capacity across its three sites represents approximately 90MW of available power, and Digihost is mining at a 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 Bitcoins did Digihost (DGHI) produce in September 2024?

Digihost produced approximately 35 Bitcoins in September 2024.

What caused the decrease in Digihost's (DGHI) Bitcoin production in September 2024?

The decrease was due to a temporary outage at Digihost's power plant in North Tonawanda for turbine repair and maintenance.

What is Digihost's (DGHI) current operating capacity and hashrate?

Digihost's current consolidated operating capacity is approximately 90MW with a hashrate of 2.75 EH/s.

When is Digihost (DGHI) expecting to complete its Tier 3 data center?

Digihost expects to complete its initial Tier 3 data center by the end of 2025 or Q1 2026.