Photo by Jievani Weerasinghe on Unsplash

Bitcoin mining company Bitfarms Ltd. has entered into agreements to acquire 22MW of hydropower capacity and to lease a site in Baie-Comeau, Quebec, Canada.

Under the agreement, Bitfarms is procuring an evergreen contract for 22MW of hydropower for US$1.8 million, 40% in cash and 60% in Bitfarms common shares. The common stock portion of the purchase price is subject to regulatory approval and customary and contractual resale restrictions for up to six months, with the final agreement being subject to customary closing conditions.

Bitfarms is securing a 10-year lease in an industrialised area, with the option to purchase at a fixed price throughout the lease term. The agreement also includes permitting and zoning for a 22MW deployment, with potential for future expansion on the site.

The Baie-Comeau area is home to five hydroelectric generation facilities with over 5.4GW of nameplate capacity.

“Executing our strategy to cost-effectively expand our operating footprint, we have entered agreements to add reliable hydro power in Quebec,” said Geoff Morphy, chief executive officer of Bitfarms.

“Following the closing of the acquisition, we plan to keep the development and build-out costs low by leveraging our experienced Canadian-based team, utilizing a portion of our hardware credits for miner procurement, and applying infrastructure equipment repurposed from the December 2022 sale of our De La Pointe facility. Our in-house design team and electricians will retrofit the existing structure and expect to bring 11 MW online by the third quarter of 2023. We expect to commission the remaining 11 MW during the second half of 2024, providing strategic flexibility around the next BTC halving.”

Bitfarms’ Vice President Corporate Development Phillippe Fortier stated, “Our financial strength and flexibility enabled us to act quickly and secure this accretive opportunity during this period of industry transition. We anticipate this 22 MW increase in capacity will add over 600 PH/s when in full production. With the next BTC halving expected a little over one year from now, this expansion should improve our industry position as we continue to pursue other strategic transactions intended to deliver significant value to our shareholders.”

Bitfarms is a publicly traded Bitcoin mining company that runs vertically integrated mining operations powered by predominantly environmentally friendly hydroelectric and long-term power contracts. Bitfarms has 10 mining facilities in four countries: Canada, the US, Paraguay and Argentina.