Bitfarms Ltd. announced it has entered into an equipment lease with BlockFills for 1,000 WhatsMiner M31S miners to be delivered and installed by the end of November. The 1,000 new Miners are in addition to the non-binding Letter of Intent (LOI) with Blockfills, announced on Sept. 21, to lease approximately 7,000 new generation miners with a cost of $12 million to $15 million. As previously reported, the equipment covered by the LOI represents approximately 800 to 840 petahash per second (PH) of new computing capacity to be added to Bitfarms’ operations by the end of 2020.
New Equipment Lease
On Oct. 8, Bitfarms entered an equipment lease with BlockFills, for an additional 1,000 WhatsMiner M31S miners for a term of 24 months carrying an implicit annual interest rate of 9.5 percent. The lease also includes a bargain purchase option which, when exercised, will transfer ownership of the equipment to Bitfarms at end of the lease term for a nominal amount. Bitfarms will make weekly lease payments that will fully retire the capitalized cost of the miners over the term of the lease. The new mining hardware is expected to be fully operational by the end of November and will add approximately 72 PH to the Company's installed computing power as well as consuming approximately 3.5 megawatts (MW) of electricity.
After completion of all leases with BlockFills, as per the terms of the LOI, Bitfarms’ estimated expansion in 2020 will total 935 PH. After retirement and sale of previous generation mining equipment, Bitfarms’ entire mining equipment fleet will consist of over 17,000 new generation miners representing 1.31 EH of computational power and an overall efficiency of 21.86 PH/MW, placing it amongst the top of all publicly traded mining operations.
With the successful installation of this new computational capacity, Bitfarms expects that it will bring its average cost per Bitcoin down to approximately $6,000 by the end of the year (based on market conditions on Oct. 12 with a Bitcoin price of $11,400).
Emiliano Grodzki, Interim Chief Executive Officer of Bitfarms, added, “Bitfarms continues to solidify its position as the industry leader in terms of operational hash rate, efficiency and financial performance. The new equipment will fully utilize the installed infrastructure at our five high-powered data centers and will immediately be accretive to our financial performance. Unlike many of our competitors, Bitfarms operates all its computing power through its own facilities with wholesale energy prices avoiding costly hosting arrangements that may be terminated by the host with short customary notice periods. This positions Bitfarms uniquely as a sustainable and long-term mining operation.”