Digihost Announces 129% Annual Increase in Quarterly Bitcoin Production and Provides Operations Update

This press release constitutes a “designated press 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.

TORONTO, July 05 2022 (GLOBE NEWSWIRE) — Digihost Technology Inc. (“Digihost“or the”Company”) (Nasdaq: DGHI; TSXV: DGHI), an innovative Bitcoin based in the United States (“BTC”) mining company, is pleased to provide unaudited comparative BTC production results for the month and quarter ended June 30, 2022, combined with an operations update. All currency references are in USD unless otherwise stated.

Production Highlights for June 2022

  • Mining 72.18 BTC, resulting in a total of 293.30 BTC at the end of June valued at around $5.8 million based on a BTC price of $19,785 as of June 30, 2022.

  • Ethereum (“ETH”) holdings of 1,000.89 ETH at the end of June valued at approximately $1.07 million based on an ETH price of $1,067.29 as of June 30, 2022.

  • Total value of digital asset inventory, consisting of BTC and ETH, of approximately $6.87 million as of June 30, 2022. In addition, the Company held cash of approximately $5 million and instruments derivatives of approximately $500,000 as of June 30, 2022. Cash and cash assets as of June 30, 2022 totaled approximately $12.4 million.

  • On June 14, 2022, the Company repaid its $10 million secured loan facility by monetizing a portion of its BTC holdings. The Company currently has no debt.

Year-over-year quarterly comparison

The Company mined approximately 141.71 BTC more in Q2 2022, compared to Q2 2021, representing an increase of approximately 128.9%. Using BTC closing prices for June 30, 2022 and June 30, 2021 (from CoinDesk), the value of the Company’s BTC mined in Q2 2022 increased by approximately $1.1 million, or 29% from in Q2 2021.

Figure 1. Quarterly BTC production year over year

Q2 2022

Q2 2021

QoQ increase

mined BTC

251.68

109.97

141.71

Approximate BTC value

$19,785

$35,041

($15,256

)

Production value

$4,979,489

$3,853,459

$1,126,030

Quarter to Quarter Comparison

The Company mined an additional 65.85 BTC during Q2 2022 compared to Q1 2022, representing a 35% increase.

Figure 2. BTC production quarter over quarter

Q2 2022

Q1 2022

QoQ increase

mined BTC

251.68

186.83

64.85

Approximate BTC value

$19,785

$45,539

($25,754

)

Production value

$4,979,489

$8,508,051

($3,528,563

)

Operational update

Digihost is pleased to announce that planning is well advanced on the company’s new location in Alabama (please refer to Digihost’s press releases dated June 14 and June 22, 2022) and mining operations are expected to begin on fourth trimester. Based on current management-negotiated electricity rates with Alabama Power, Digihost expects its operational break-even point to occur at a BTC price of approximately $12,000. The company’s move to Alabama and the opening of a new headquarters in Houston, Texas earlier this year are milestones in line with Digihost’s strategic plan to diversify jurisdictional risk.

Although Digihost’s operations are currently located in Buffalo and North Tonawanda, the Company has no plans to open new mining facilities in New York State (“NYS”). Due to the recent significant increase in energy costs in New York State, the company plans to reduce operations during peak hours at current BTC prices. Additionally, Digihost will continue its practice of drawing less electricity from the grid when consumer demand periodically increases due to warm weather conditions expected in the coming months.

In the current inflationary environment, management has implemented additional internal control measures to ensure compliance with its aggressive cost control program. Zero-based budgeting has been implemented line by line, regardless of expenditure category. This cost control program has already resulted in material savings.

Don Christie, Chief Operating Officer, said, “We are pleased to report on our progress in diversifying our operations on a jurisdictional basis. We will pursue this strategy while constantly monitoring changes in the political environment in which our industry operates. I would also like to thank our employees for their support in implementing our cost control program as we navigate this difficult time for our industry and the economy as a whole. I am confident that as a result of these cost savings and the additional steps we have taken to strengthen our balance sheet, Digihost will emerge from this period of inflation as a stronger, more disciplined and more profitable business.”

About Digihost

Digihost is a growth-oriented blockchain technology company primarily focused on BTC mining. Through its self-mining operations and joint venture agreements, the Company currently chops at a rate of approximately 650 PH/s.

All accommodation costs and joint venture profit sharing are treated as operating expenses in the Company’s consolidated financial statements.

For more information, please contact:

Digihost Technology Inc.
www.digihost.ca
Michel Amar, Managing Director
T: 1-818-280-9758
Email: michel@digihost.ca

Caution
Trading in the Company’s securities should be considered highly speculative. No stock exchange, securities commission or other regulatory authority has approved or disapproved of 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 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 the securities laws of Canada and the United States. The forward-looking information contained in this press release includes information on possible further improvements in the profitability and efficiency of mining operations. including, as a result of the Company’s expansion efforts, the Company’s long-term growth potential 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 requirements and the uncertainty of additional financing, including the ability of the Company to use the Company’s market offering program (the “ATM Programme”) and the prices at which the Company may sell ATM Program securities, as well as general capital market conditions; stock dilution resulting from the ATM program and other stock issuances; risks related to the strategy of maintaining and increasing Bitcoin holdings and the impact of Bitcoin price depreciation on working capital; regulatory and other unforeseen issues that prohibit us from declaring or paying our shareholders dividends payable in Bitcoin; the continuing 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; Public Service Commission or other regulatory or board approvals received on a timely basis, or not at all; the acquisition of the facilities in North Tonawanda, New York, closing on time or not at all; ability to access additional power from the local power grid; a decline in cryptocurrency prices, trading volume or, more 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 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 could have a material adverse impact on the Company’s operations; digital currency price volatility; and other related risks as more fully described in the Company’s Annual Information Form and other documents disclosed in the Company’s filings on www.sedar.com. The forward-looking information contained in this press release reflects the Company’s current expectations, assumptions and/or beliefs based on information currently available to the Company. In connection with the forward-looking information contained in this press release, the Company has made assumptions about: the current profitability of cryptocurrency mining (including prices and volume of current trading activity); the profitable use of the Company’s assets in the future; the Company’s ability to profitably liquidate its digital currency inventory 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 to energy regimes in the jurisdictions in which the Company operates; the ability to adhere to Digihost’s dividend policy and the timing and amount of dividends based on, among other things, the Company’s results of operations, cash flow and financial condition, capital requirements current and anticipated Digihost Terms and Conditions of Business; and there will be no regulations or laws that prevent the Company from carrying on business. The Company has also assumed that no material events occur outside of the normal course of business for the Company. Although the Company believes that the assumptions inherent in forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and, accordingly, undue reliance should not be placed on such information due to the inherent uncertainties therein. .

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