This press release constitutes a “designated news release” in connection with the company’s prospectus supplement dated March 4, 2022 to the short form base shelf prospectus dated February 23, 2022.
TORONTO, Nov. 1, 2022 (GLOBE NEWSWIRE) — Digihost Technology Inc. (“Digihost” or “Company”) (Nasdaq: DGHI; TSXV: DGHI), an innovative US-based Bitcoin (“BTC”) mining company, is pleased to provide unaudited comparative BTC production results for the month ended October 31, 2022, along with an operational update. All monetary references are expressed in USD unless otherwise stated.
The company mined 74.58 BTC in October 2022, compared to 41.84 BTC in October 2021, an increase of 32.74 BTC or about 78%.
Production highlights for October 2022
- Mined 74.58 BTC, resulting in a total holding of 118.16 BTC at the end of October worth approximately $2.45 million based on a BTC price of $20,705 as of October 31, 2022.
- Ethereum (“ETH”) holdings of 800.89 ETH at the end of October valued at approximately $1.29 million based on an ETH price of $1,620 as of October 31, 2022.
- Total value of digital assets, consisting of BTC and ETH, of approximately $3.74 million as of October 31, 2022. In addition, the company had cash of approximately $3.42 million at the end of October. Cash and liquid assets as of 31 October 2022 amounted to approx. USD 7.16 million. This compares to cash and liquid assets of approximately $7.46 million as of September 30, 2022.
- In line with management’s commitment to avoid equity dilution for its shareholders, the company sold a portion of its BTC production during October to fully fund energy costs. Natural gas prices fell approximately 25% during the month of October.
- The company continues to remain debt-free as of October 31, 2022.
- The company’s mining operations continue to remain cash flow positive.
“Despite current volatile economic conditions, Digihost has been able to maintain good liquidity levels for cash and crypto holdings on a month-to-month basis relative to the size of our business and just as importantly, the company continues to be debt free. We have maintained these liquidity levels while we have internally funded 100% of our infrastructure development and secured electric utility bonds,” said Michel Amar, Chairman and CEO of Digihost. “Assuming continued market conditions, including current BTC prices, hashing difficulties and energy costs, the company expects to continue to generate positive cash flow from operations to fund its existing development initiatives and will adhere to its policy of remaining debt-free. I am also pleased to be able to report to our shareholders that during the month of October I continued to increase my position in Digihost by buying shares in the open market.”
Year-over-year monthly comparison
The company mined approximately 32.74 more BTC in October 2022, compared to October 2021, representing an increase of approximately 78%.
Figure 1. Year-over-year Monthly BTC production
| Oct-22 | Oct-21 | MoM increase | ||||
| Mined BTC | 74.58 | 41.84 | 32.74 | |||
| Approximate BTC value | $20,705 | $61,319 | ($40,614) | |||
| Production value | $1,544,179 | $2,565,587 | ($1,021,408) | |||
North Tonawanda Power Plant Acquisition Update
The Company continues to move forward with final documentation and approval requirements related to Digihost’s purchase of a 60MW power plant in North Tonawanda, NY (“NT“). As mentioned earlier, management expects this significant transaction to close in the fourth quarter of 2022.
With the power plant running at 50 MW, the company will be able to increase its current operating capacity of 650 PH by approximately 150%, thereby increasing Digihost’s hash rate to approximately 1.6 EH.
Development of sites in Alabama
Alabama Phase 1 development continues on schedule and on budget. Phase 1, scheduled for completion in Q4 of 2022, will provide the company with 22MW of power capacity, resulting in additional mining capacity of approximately 550 PH. When combined with the incremental mining capacity from the NT power plant, Digihost’s total computing power by the end of Q4 could reach approximately 2.2 EH.
Digihost is building the necessary infrastructure to provide the Alabama property with a total power capacity of 55 MW, with the additional 33 MW expected to be operational by the end of the first quarter of 2023, resulting in a total computing power available to the company of approximately 3, 0 EH.
The company also recently secured a $1.3 million surety bond with Alabama Power Company for electrical service, demonstrating customer confidence in Digihost’s operations and ability to meet future business needs and commitments.
Nasdaq listing
As disclosed by Digihost on October 14, 2022, the Company received notice from Nasdaq Stock Market LLC (“Nasdaq”) that the bid price for the Company’s publicly traded shares, for the subsequent 30-day period ending October 9, 2022, had closed below the $1.00 requirement for continued listing on Nasdaq. The Company has been given an initial 6-month period ending on April 10, 2023 to achieve a closing bid price at or above $1.00 for 10 consecutive business days to regain compliance. If compliance is not regained by April 10, 2023, the company may be given an additional 6-month period to achieve compliance. The company is examining options to regain compliance over the next 6 months, such considerations including a possible share consolidation, but management remains confident that its projected growth trajectory in mining capacity over the next 6 months should provide the necessary catalyst to help the company with resolving the deficiency and regaining compliance.
About Digihost
Digihost is a growth-oriented blockchain technology company that primarily focuses on BTC mining. Through its self-mining operations and joint venture agreements, the company currently hashes at a rate of approximately 650 PH/s.
All hosting fees and profit sharing in the joint venture are treated as production costs in the company’s consolidated accounts.
For further information, please contact:
Digihost Technology Inc.
www.digihost.ca
Michel Amar, CEO
T: 1-818-280-9758
Email: [email protected]
Warning
Trading in the company’s securities should be considered highly speculative. No stock exchange, securities commission or other regulatory authority has approved or rejected the information here. Neither the TSX Venture Exchange nor its regulatory 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 press release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking information”) that are based on expectations, estimates and projections as of the date of this press release and are covered by safe harbors under Canadian and U.S. securities laws. Forward-looking information in this press release includes information about potential further improvements in profitability and efficiency across mining operations including, as a result of the Company’s expansion efforts, the potential for the Company’s long-term growth, and the Company’s business goals and objectives. 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 about additional financing, including the company’s ability to use the company’s offering program in the market. (“ATM Programme”) and the prices at which the Company can sell securities in the ATM Programme, as well as capital market conditions in general; share dilution resulting from the ATM program and from other share issues; risks related to the strategy of maintaining and growing Bitcoin holdings and the impact of weakened Bitcoin prices on working capital; regulatory and other unforeseen issues that prohibit us from declaring or paying dividends to our shareholders payable in Bitcoin; continued effects of the COVID19 pandemic could 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 to expand operations in Alabama may not be completed on the timelines the Company expects, or at all; the acquisition of the North Tonawanda, New York facilities closes on time, or at all; the ability to access additional power from the local power grid; a decline in cryptocurrency pricing, volume of transaction activity or, generally, the profitability of cryptocurrency mining; further improvements in profitability and efficiency may not be realized; the digital currency market; the Company’s ability to mine digital currency on the cloud; The Company may not be able to profitably liquidate its current digital currency holdings, or at all; a decline in digital currency prices could have a material adverse effect on the Company’s business; the volatility of digital currency prices; and other related risks as more fully described in the Company’s annual information form and other documents disclosed in the Company’s filings at www.sedar.com. The forward-looking information in this press release reflects the company’s current expectations, assumptions and/or beliefs based on information available to the company. In connection with the forward-looking information in this press release, the Company has made assumptions about: current cryptocurrency mining profitability (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 holdings as needed; historical prices of digital currencies and the Company’s ability to mine digital currencies on the cloud will be consistent with historical prices; the ability to maintain reliable and economical power sources to operate 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 comply with Digihost’s dividend policy and the timing and amount of dividends based on, among other things, the company’s operating results, cash flow and financial condition, Digihost’s current and anticipated capital needs, and general business conditions; and there will be no regulation or law preventing the company from conducting its business. The company has also assumed that no significant events occur outside the company’s normal operations. Although the Company believes that the assumptions contained in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and, accordingly, such information should not be relied upon due to the inherent uncertainty therein.
