Bitfarms Ltd. (NASDAQ: BITF) First Quarter 2022 Earnings Conference Call May 16, 2022 11:00 a. m. m. ET
Participating companies
David Barnard – LHA Investor Relations
Geoff Morphy – President
Jeff Lucas – Chief Financial Officer
Emiliano Grodzki – President and CEO
Conference Call Participants
Kevin Dede – H. C. Wainwright
Chris Brendler – District Attorney Davidson
Operator
Hello and welcome to Bitfarms’ first quarter 2022 financial results conference call. [Operator Instructions] Please note that this is being recorded lately.
I would now like to entrust the conference to David Barnard of LHA Investor Relations. continue.
David Barnard
Thank you, Antoine. Hello everyone and welcome to the call for the Bitfarms convention for the first quarter of 2022. With me is Emiliano Grodzki, CEO of Bitfarms; Geoff Morphy, President and Chief Operating Officer; and Jeff Lucas, Chief Financial Officer.
Before you begin, please note that this call is streamed live over the Internet with a presentation attached. To view the slides, you can log in to www. bitfarms. com under Investor Presentations. If you prefer to pay attention to the call on your smartphone, you can also download the presentation from there. I remind you that Bitfarms issued a press release this morning pronouncing its monetary effects for the first quarter of 2022.
Returning to slide 2, Je would also like to remind you that some of the statements we make are forward-looking and, in this regard, Bitfarms cautions auditors that forward-looking statements and data are based on safe assumptions and points of threat that may cause actual effects to differ materially from the Company’s expectations.
Auditors do not place undue reliance on forward-looking statements or data. Review today’s press release and check out the dangers outlined in Bitfarms’ public presentations in www. sedar. com and www. sec. gov/edgar.
The Company assumes no legal responsibility to revise or update any forward-looking data or statements other than those required by applicable securities laws. In the course of this call, the Company will address certain issues that are not identified under IFRS and that do not have a standardized meaning prescribed through IFRS and that would possibly be comparable to similar measures presented through other companies.
The Company uses the following non-IFRS measures: gross mining profit; gross operating margin; EBITDA, EBITDA margin; Adjusted EBITDA and adjusted EBITDA margin as supplementary data to complement IFRS measures to account for a greater share of the effects of the Company’s operations from a control perspective.
Gross mining profit is explained as gross profit, depreciation and other minor parts included in the sales charge of the company’s mining segment. Gross mining margin is explained as a percentage received by dividing gross mining profit by revenue from the company’s mining segment.
The direct production charge represents bitcoin’s direct charge based on overall electric power prices and Bitcoin mining-like prices, divided by the total number of Bitcoin mined.
EBITDA is earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is EBITDA minus adjustments in Bitcoin Holdings and G fees
We refer the auditors to today’s earnings release and the MD
During today’s call, President and Chief Operating Officer Geoff Morphy will review our operations for the quarter. CFO Jeff Lucas will do a detailed monetary review and CEO Emiliano Grodzki will make some closing remarks after the Q&A session. We have asked investors to submit the questions beforehand that I will read to monitor after opening the call to analysts in Q
With that, I pass the to Geoff Morphy.
Geoff Morphy
Thank you David. Je welcomes everyone to today’s call. Despite the erosion of Bitcoin prices, we achieved another beneficial quarter with revenue of $40 million, a gross mining profit of $30 million, representing a mining gross margin of 76% and an adjusted EBITDA of $32 million, or 80% of revenue. By increasing our hash rate, we have continued to grow faster than the Bitcoin network, as our hash rate at the end of the quarter was 2. 7 exahash in line with the second, up 22% from 2. 2 exahash as of December 31, 2021.
To date, our hash rate is 3. 4 exahash, which is about 1. 5% of the market in line with the percentage based on recent Bitcoin network measurements of about 224 exahash in line with the second. increase relative market place in line with percentage gain as we execute our expansion plans, as capital, supply chains, and other constraints may delay overall network expansion.
In the first quarter, we mined 961 Bitcoins at an average of $8,700 consistent with Bitcoin.
Moving on to more details, related to our first quarter achievements, we started production at the Bunker and Leger sites and in the city of Sherbrooke, Quebec. This, combined with the start of production at our 10 MW plant in Villos Angelesrica, Paraguay, in January, brought our total number of wind farms in production to nine and our operating capacity to our existing 137 MW. Also in Sherbrooke, we acquired another location known as Garlock, where we will expand an 18 MW facility to replace the existing De los Angeles Pointe facility scheduled to close in February 2023.
In the first quarter of 2022, we gained and installed more than 10,500 miners and, in April 2022, another 5900 new miners were installed, adding more than 590 PH/s to our hash rate since the end of the first quarter.
One of our main strengths lies in our experience and operational capabilities. To this end, we have officially unveiled our evolved second-generation internal mining control system, which has been in beta for nine months. One minute.
Slide four summarizes our existing operational sites. We have the first quarter of 2022 with six farms in operation, five in Quebec and one in Washington state. Since then, with the 3 new farms I just highlighted, we have moved to nine operational sites, as shown on this slide.
Now, I’d like to take a moment to detail operations, plans, and progress at some of those locations.
Turning to slide 5. We entered into an electritown contract with Hydro Sherbrooke in the city of Sherbrooke, Quebec, for a total of 96 megawatts. This location operates at 30 megawatts and is expected to be partially offline until the end of the current quarter of 2022, and is expected to be fully retired in February 2023 when our new services in Sherbrooke become operational. The bunker, first activated in March 2022, is recently accelerating its first phase of operation to 18 megawatts. To date, we have recently taken out 12 megawatts.
Underneath the structure, our stages 2 and 3, which involve 18 megawatts and 12 megawatts respectively. And those stages remain the goal of being completed right now and in the third quarter of 2022. Once the structure is complete, the bunker is expected to be 48 megawatts. facility, which houses 13,000 miners and is expected to supply 1. 3 exhash in line with the moment.
Another new location in Sherbrooke located a short distance from the Bunker is called Léger, in which we finished the construction of 16 megawatts with a total of 30 megawatts. This location began production on April 6 and lately generates more than 250 PH/s. Once completed, this facility will be able to deliver more than 740 PH/s.
Our last location in Sherbrooke is called Garlock, which we acquired in mid-March 2022. Garlock’s assets combined with Bunker and Léger’s services are intended to relocate the De los Angeles Pointe facility and make full use of the company’s electric power contracts in this municipality. According to the cooperation agreement announced in the past through the company with the city of Sherbrooke, which concluded in September 2021. Each of the new locations in Sherbrooke will take advantage of the complex noise design and relief systems with which our company has evolved professionally. the assistance of third-party sound engineers and hardware vendors in 2020 and 2021.
Continue to slide 6, moving on to the southern hemisphere. We started production at our 10-megawatt farm in Villarrica, Paraguay, in January. Here is a picture of the facility as our farms in Canada and the United States. through hydropower and cheap electricity, and after gaining a foothold in the country and enjoying the art there, we are sure of the long-term and greater growth opportunities in the country.
Continue to slide seven. In Rio Cuarto, Argentina, we have contracted plans of up to 210 megawatts consisting of 4 internal warehouse-type structures at the doors of a personal strength company, which will serve to have capacity and otherwise block energy. With a 4-phase system For this project, one hundred megawatts of capacity are currently being structured in the first two phases. Phase 1, which reaches a 50 megawatt facility. We expect to finish in October 2022. Phase 2, which is another 50-megawatt facility, is also under construction and our revised schedule for the final touch of the structure and initial production is in the first quarter of 2023.
The deployment of 27,500 miners is planned for these two facilities. Given the negative impact of recent geopolitical times on natural fuel prices, we are reassessing the timing and scale of the future complete structure of the Rio Cuarto farm. However, to be clear, Argentina remains a hot domain for new growth opportunities. We are active in the region and plan to eventually expand a varied mix of farms in the country.
Let’s move on to slide eight. In summary, the total number of farms in production is now 9, up from 6 in early 2022. This includes the addition of 2 operational farms in Canada and Paraguay. To date, we have a capacity of 137 megawatts, more than 106 megawatts on December 31. We have another 92 megawatts in progression that are expected to enter service in 2022, for a total plant capacity of 229 megawatts through December 31, 2022.
Let’s move on to slide 9. Bitfarms remains one of the largest and most successful Bitcoin miners in the world. Since our inception in 2017, we have been a decentralized and vertically incorporated global self-extraction operation. Our in-house functions and infrastructure, the addition of our wholly owned and intermediate legal fix electrical contractor subsidiary with over 30 legal electricians allows us to remain one of the cheapest miners in the industry.
Our strategy remains to diversify our mining portfolio by prioritizing places with profitable and reliable electricity. With proven experience, extensive infrastructure and a strong control team, we are better placed than ever to execute our expansion plans for 2022 and beyond. As an example of our ongoing improvement effort, we recently introduced our revamped internal miner control formula that has been in beta for nine months. This second-generation control software has been updated to allow the company to manage loads of thousands of miners. in its global decentralized mining farms with the aim of maximizing availability.
The software provides advanced controls, tracking, sensors, alarms, visualizations, and functionality metrics, enabling greater power of operations. One of our strengths lies in operations and we are proud of our availability statistics. In fact, our mining apparatus is clean, well maintained, constantly achieves the best availability measures and the type of miner we use now is capable of having a useful and economical life of five years and more. Our mining control formula is one of the participants in those effects and our new generation of miners and even greater contributor.
Our fixed wholly and medium-owned electric subsidiary also contributes to our productivity and efficiency, which carries out planned maintenance and particularly restricts unplanned downtime, while constantly seeking design improvements for efficiency.
For a review of miners and fleet activity, skip to slide 10. MicroBT and Bitmain’s first quarter 2022 deliveries and facilities included approximately 10,500 state-of-the-art miners. To date, our total installation fleet is approximately 36,700 miners. The 48,000 miners ordered in April 2021 began delivering around 4,000 in the same month last January, adding 27,500 planned for Argentina and 20,500 to be installed in Quebec in 2022.
From 2022 to date, we have gained or have in transit only about 17,500 of those services for miners have been performed on various farms. The Bunker currently runs with 2,970 miners and Leger runs with 7,425. Deliveries are made as planned and operate with approximately 4,000 miners consistent with the month. I would also like to remind you that those 48,000 miners were bought at an average of $38. 50 terahash, which is a very hot value even with the existing drop in miners’ values.
Our existing output is now around 14. 5 bitcoins per day, which, based on recent costs of around $30,000 consistent with bitcoin, equates to around $435,000 in revenue. This builds on the earnings we reported on our last call and marks our highest point of production since before the last halving event in May 2020. In addition, with our underproduction of cheap money, Bitcoin mining is still very successful and gives a brief return on investment between miners and related or consistent infrastructure.
Before the component of Jeff Lucas’ presentation, I should point out that despite the drop in the value of Bitcoin, we passed the first quarter of 2022 with favorable effects with a reported net profit of five million and a healthy balance sheet. .
Continue to slide 11 for an analysis of our updated plan and goals for 2022. Our existing infrastructure structure contracts are expected to provide capacity for the exhash of 6 miners through the end of 2022, reflecting changes to our structure plan in Argentina, as in the reported past, as well as ongoing expansion in Canada and Paraguay.
Our quarterly hash rate targets for 2022 based on existing infrastructure structure and lower delivery schedules are expected to be successful at 4. 0 exahash consistent with the time as of June 30, 2022, 4. 2 exahash consistent with the time to September 30, 2022 and 6. 0 exahash consistent with time as of December 31, 2022 We expect miners and miners’ orders Scheduled for delivery in 2022 to be fast: they will produce up to 7. 2 exhash when consistent with nationals.
And finally, opportunities are being evaluated and more will continue to be evaluated that will provide more mining infrastructure and hardware to meet and exceed the company’s purpose of 8 exhash through the end of 2022.
Continue to slide 12.
With that, I’ll pass the call on to Jeff Lucas.
Jeff Lucas
Thank you Geoff. In short, we continue to have strong margins, healthy profitability and a strong monetary position. Let’s talk about some highlights from our first quarter of 2022.
We mined 961 Bitcoins at an average cost of $8,700 consistent with Bitcoin, in line with our old low production cost levels. Overall, we remain an economic producer, providing competitive benefits and monetary flexibility. Even with the significant drop in Bitcoin costs lately we are consistent in control, we maintain healthy margins.
During the first quarter of 2022, we generated a quarterly profit of $40 million, up 42% from last year’s period, which largely reflects the year-over-year accumulation in our hash rate beyond the accumulation of difficulties on the network, even with a decrease in the average value of Bitcoin. We were successful and achieved a net profit source of $4. 5 million for the quarter compared to a loss of $7. 6 million a year ago and achieved adjusted EBITDA of $32 million compared to $20 million a year ago.
From a financial perspective, we will have an additional $40 million obtained under our $100 million revolving credit facility secured through a portion of our Bitcoin, making full use of this line, which then ended up with a $32 million secured device line. The newest financing demonstrates our use of our apparatus to generate undilutable financing resources to fund our continued growth.
Regarding a detailed review of our net revenue stream, our net revenue stream of $4. 5 million in the first quarter is $0. 02 consistent with a completely diluted consistent percentage that includes a loss of $3. 7 million from the revaluation of our Bitcoin holdings as of March 31, 2022, following the decline in Bitcoin value at the end of the quarter. Non-cash repayment expenses of approximately $6. 1 million, net financing revenue source of $4. 1 million, reflecting foreign exchange gain related to our expansion in Argentina and a provision for income tax source of $6. 4 million. This compares to a net loss in the first quarter of 2021 of $7. 6 million or a net loss consistent with a consistent percentage of $0. 06.
As I mentioned a moment ago, adjusted EBITDA for the first quarter of 2022 is $32 million. This compares to $20 million in the first quarter of 2021 and a low of $44 million in the fourth quarter of 2021. Our margins remain strong with an adjusted EBITDA margin of 80% in the first quarter of 2022, compared to 69% in the first quarter of 2022. a year ago and 74% in the fourth quarter of 2021.
Moving on to slide 13, we’ll take a look at the balance sheet. We ended the first quarter with $77 million in money and 5244 bitcoins valued at $239 million as of March 31. To date, we have around 5900 bitcoins. Working capital as of March 31, 2021 $181 million. This brings us to a discussion about our Investment Strategy.
In the current environment, we are taking prudent steps to maintain the strength of our balance sheet and protect our shareholders’ investment while supporting our key monetary objectives to finance our expected growth and to maintain sufficient flexibility to allow us to temporarily act on opportunities. We identify, all at a low overall cost of capital.
Our $100 million Bitcoin-backed line of credit has been a way to take advantage of the price of our Bitcoin holdings and with an accumulation of holdings, one would expect our extension to apologize as our virtual assets pile up.
Our $32 million appliance investment agreement is another tool in our investment toolkit. Similar arrangements have been explored as we seek to judiciously apply leverage and secure financing that does not dilute by employing unrestricted mining on virtual assets. Our ATM remains in force. And while it’s our most flexible investment source, we can use it very cautiously in light of the depressed valuations seen in the cryptocurrency industry.
With physically powerful economic production and our ongoing expansion activities, the amount of Bitcoins we mine daily and keep on our balance sheet continues to grow. Jeff noted that lately we are adding around 14. 5 Bitcoin every day, which also adds to our economic strength and provides features to leverage it on other assets. While we continue to hold our Bitcoin, and have retained approximately 96% of all Bitcoin we have mined since the launch of this program in January 2021 on our balance sheet, we remain flexible with our investment plans in an effort to minimize our overall charge. of capital
Given the recent drop in Bitcoin prices, our gross margins are high and some of bitcoin’s daily production can also be monetized to fund our ongoing operating expenses. Generating bit claims could be the most attractive investment option in the short term. Overall, Bitfarms is well capitalized and positioned to take advantage of the expansion opportunities presented to us, and we look toward building our good fortune in 2022.
Before turning Geoff around, I commented that we are planning an Institutional Investor and Analyst Day on June 22 in Montreal. The occasion will come with a review of our global operations through our control team and a report of our farms in Quebec. Analysts and institutional investors can tap LHA Investor Relations to learn more about the occasion. We will also be presenting at the H. C. Wainright Global Investment Conference in Miami from May 23-26 and at the DA Davidson Bitcoin and Blockchain Conference on June 2 in New York.
Moving on to slide 14. With that, I will now return to Geoff, who will close our comments ready before opening the call for questions and answers. Jeff?
Geoff Morphy
Before answering your questions, I would like to summarize how well placed we are to continue to succeed in today’s environment. To date, we operate at 137 megawatts and 3. 4 exaash consistent with the moment, a dramatic increase from less than 1 exa to consistent with moment just over a year ago. We now have production in 3 countries: Canada, the United States and Paraguay, and we plan to fully start operating consistently in Argentina until the end of the year.
We continue to outpace network growth. We are one of the largest public Bitcoin miners and estimate that our market consistent with the percentage on the network has more than around 1. 5%. Our production charges are among the lowest in the industry, as evidenced by our first quarter mining direct charge, a sustainable and cheap hydropower. Our order placed in early 2021 for 48,000 miners, which we received in an equivalent consistent with the base month through 2022, has a low contract cost of $38. 50 consistent with terahash, well below existing spot charges and a fraction of the charge many of our peers incurred in the fall of last year.
Our adjusted EBITDA margin is among the highest of our peer companies in the first quarter of 2022, reaching 80% of revenue. hydroelectric power and cheap energy sources. We have a portfolio of new opportunities that we are evaluating. Some are at a complex level of discussion and are being seriously considered, some of which would possibly raise production in 2022 and others by 2023 and beyond.
We have a strong balance sheet and undiluted financial resources and others to fund our continued growth. Significantly, managing world-class operations on a commercial scale enables efficiencies that generate successful effects for our shareholders in times of volatility. And finally, we have built a leadership team that brings operational experience and the ability to drive the most effective and successful operations in the industry and into the future.
Operator, we can now open the question form. Please continue.
Q&A session
Operator
[Operator Instructions] Our first will come from Kevin Dede with H. C. Wow.
Kevin Dédé
Geoff, you talked a little bit about Argentina and maybe an update in light of gas values, can you tell us more?What happens to your PPA? In your opinion, at what value do we consider your electric power costs?
Geoff Morphy
Well, let me start. Kevin, we’re very aware of climate change everywhere right now in terms of currency wars, industrial wars, geopolitical wars, stock market crashes, monetary effects, and supply chain. Therefore, we have sought to be transparent to our investors and financial markets. about our operations. We believe that in those turbulent times, it’s incredibly vital that control is proactive and makes the kind of mandatory decisions to ensure the longevity of the company and its ultimate success.
Argentina is our only allocation affected by herbal fuel costs. And we have a PPA there for 8 years. The first four years, some of it is at $0. 02 consistent with the kilowatt hour and the rest is at market costs. And then, the last four years are absolutely at market costs. Inconsistent retention.
So with prices going up there, we were going to delay our engagement there. We are moving forward with 2 of the warehouses and the other 2, we will make a resolution at the end of this year or next year when we have more visibility of the prices of herbal fuels.
But in the existing climate, we are committed to operating the first warehouse. That’s 50 megawatts in October. And then the moment one finished and activated in the first quarter of next year. The forced acquisition agreement has replaced at all. It’s just that global situations have replaced, and we’re reacting to that.
And what we’re also seeing is that we’re seeing new opportunities in all the other geographies where we’re located, which is Washington state, Quebec and Paraguay, with reliable hydropower where rates are stable and we know what we’re getting. And this has been a major contributor to our low bitcoin mining burden. And that’s a strategy we used a long time ago, and now it’s paying us dividends.
Or do you stick to some aspects?
Kevin Dédé
Oui. Non. Je: This provides a lot of additional color. Thank you very much, Geoff. Je, I am grateful. Also, I’m curious to juggle financing options. I applaud the exploration of all opportunities that can reduce your capital burden. financing agreement of the device and the interest rates related to them. And I think Mr. Lucas communicated about the expansion of the secured loan agreement. Maybe you can tell us a little bit about that.
jeff lucas
Yes, right. So first of all, the cheapest form of financing we have right now is, in fact, the guaranteed installation of BTC, where the declared interest rate is a little above 10%. That’s less than the total charge: the total expense of our existing appliance financing facilities. So we liked it. And we’re researching and exploring the option of proceeding to use that as capital here.
We also have many opportunities, with miners and infrastructure assets unencumbered, so we can also explore to complement our existing appliance financing, a bit more expensive than the BTC-backed facility, but very attractive. But what is vital here that we need to be aware of, in this environment, Kevin, is also that while we are very careful about our monetary situation, our profitability and the best margins for the charge of mining Bitcoin, we must be delicate to take advantage of. These are dubious times ici. Et we have to be delicate with the total long term here.
This brings us to the option of perhaps using some of the Bitcoin we have mined to cover our operating expenses. Now, one thing I should point out here is that when we enter the BTC-backed facility, the purpose of that facility in that There was a time when we were looking to be able to hold a Bitcoin instead of selling it, and if we get the upward appreciation of the interest rate that is relatively hot for the mined BTC, a BTC-backed facility, which is still in position, of course, but we are now assessing what BTC’s upside potential is in the short and long term. And what are some of the other financial desires that we can put in position that in the end may have a lower capital burden?So that’s the kind of thing that motivates part of our mind here.
But overall, I just need to say to close, Kevin, to this comment here, we have wonderful opportunities that Geoff pointed out that we continue. take credit for those to have the investment and capital in a position to allow us to actually take credit for those opportunities.
Kevin Dédé
Jeff, I didn’t have. . . Mr. Murphy, apologies. He hasn’t spent much time in Washington state in the United States. I hope you can feel a little bit at the end of that.
And let us know where you are, please note that there may be only 2 buildings there, where are they?And what is the perspective in terms of power?And what other avenues are they exploring?
Geoff Morphy
Of course, Kevin. Washington is an exciting position for our operations. The Randolph site continues to grow. We have other discussions going on in other parts of the states and with the PUD in that region. Therefore, there are new doors to open there, and we are not yet in a position to announce much. But as in our disclosures here, we have indicated that we have 6 megawatts of checkered canon and we expect to turn them on by the end of this year, pending the request to supply the mandatory infrastructure.
Another 6, we hope for next year. I am not yet in a position to announce anything because it is not firm. And then we also announced that, for the first time, we would be moving to a site that we acquired as part of the deal and doing an emergent cooling. for the first time later this year. Orders are in progress on the hardware. And I hope we can provide news about this in a little more detail in a short period of time.
Kevin Dédé
Good. So what is the – what is your production there? And how many megawatts does it have now?
Geoff Morphy
We have 17 megawatts in operation now, which will go to 24, and then more.
Kevin Dédé
Well. Heard. What do you to explore the immersion of this place?
Geoff Morphy
Well, it’s more site-specific. It’s a smaller site. There are advertisements and residential buildings around it. The site is smart for. . . just in terms of size, location and sound, and just to be able to put our first tanks there and get started. start slowly with immersion.
Fortunately, we have positions in the world that don’t want to dive because of the colder weather, some of the systems we’ve put in position to keep miners cool, so we don’t want to move on to additional immersion capital, we still know that miners’ profits are higher. And the sound that comes out is quieter and more controllable. Therefore, we made the decision, given our commitment to Washington, to install our first immersion cooling there.
Operator
The next one will come from Chris Brendler with D. A Davidson.
Chris Brendler
Congratulations on the effects here. I’d just like to dig a little deeper into the existing market situations and how Bitfarms can potentially take credit for what’s happening in the market. I think the costs of the platforms are going down. and it turns out that it has some flexibility. So maybe you’re talking about what could potentially be positive in. . . as the market resets here? And Jeff, I’d like to hear your feedback on the network’s overall currency rate and how things have replaced there as well.
Jeff Lucas
Well, as I look at my crystal ball, yes, there are a lot of forces going on that I think constitute strategic opportunities for Bitfarms. A number of battery IPOs that we heard of expired last year and earlier this year did not happen. I think they probably depended on the abundant capital of public capital markets to finance their growth. We see Bitcoin falling in the 20s, which actually leads us all to look very seriously at our operations and the effect of that and what we can do with it. We actually did.
We have delved a lot into this and perceive our position. Fortunately, we also have a very low production cost. So it positions us well. And since we use hydroelectric power in its entirety, we should have no surprises. We won’t get carbon taxes and we won’t get increases in commodity prices.
Therefore, we are sure of this. We also have a control team that we’ve created over the last year that has a number of highly qualified people, and we can take credit for that. If those, if some of those kinds of opportunities, M&A opportunities, personal and public or that came up last year, we would have a hard time being able to do that and safely.
I think we’ve been positioning ourselves for this kind of consolidation and market opportunity for many months. And I think we’re in a very smart position to pursue those opportunities. I think the operational experience that we have, I think when we look around at other people who haven’t had five years of fun in this field, but maybe just a few months or just try it for the first time, I think, it’s going to be challenged. We have a deteriorating chain of sources. We have other people who probably ordered miners last year and this year at higher prices. This will restrict your margins.
So I think we’re very well positioned to look for opportunities. And as I already detailed in Washington, Paraguay, Argentina, we are looking for very attractive and profitable opportunities, some of the same duration and to implement our expansion plans for the rest of this year and next.
And that’s why our recommendation was more detailed. I think we have a clue towards 6 exahash. The miners who arrive will take us to 7. 2 exhash, but we still have a target of 8 exhash, which they deserve to recommend to everyone that we believe there will be new opportunities this year that we can capitalize on and put online and more next year. And if the market opportunity allows us to take some strategic assets out of others or trades, we would like to see them.
Geoff Morphy
If I can climb a point here, the strength of our. . . Yes, the strength of our consistent operations team can’t really be overstated. There is a very competent group of people. And just to give an example, in the last 3 months we have the highest: among the main industrial-scale farms, we have the highest BTC of all. functionality that those guys have achieved to help our returns.
Chris Brendler
I guess in that sense, I think the percentage of capital is incredibly expensive here. So everyone is looking for debt. And I think those opportunities have been reduced and some other people are a little more nervous about the environment. But I guess if you’re an experienced trader with the entrepreneur because Bitfarms says you can still have access to that loan capital. And I guess, the difference between your 6. 0 and your 7. 2 is just to locate a little extra funding?
Or is there anything else that justifies this kind of base rate compared to what you have in terms of hash rate?
Emiliano Grodski
Well, let me answer first, then Jeff, you can step in. Funding is not what drives what we’ve achieved here in terms of exam hash targets and our targets here. But to answer your question, the first positive, we have not noticed any minimization of investment opportunities. And I think the merit for us is that we have a very low and horny charge design here and other people are still very interested in betting with us. And what I find attractive here, not only are we still interested in our interest in exploring investment resources within our industry, but even more so is that we see other people outside the gates of still being interested in what’s happening in crypto, especially among more sensible acting companies like us. And almost at this point, we still see that the challenge we face in the surrounding area right now is an opportunity for those guys to come in.
Jeff Lucas
So now it’s my turn. Therefore, the relief in our year-end target is largely due to the current warehouse in Argentina, the 50 megawatts. And in the past it was planned to complete and turn it on in December. We have had problems in the supply chain. dealing with Argentina. There is more bureaucracy. There is more time to devote to shipping and other aspects. And we thought we would: our investors would appreciate knowing what we can do rather than proceeding to think it might be possible.
So, instead of being finished in the current part of December, and we’re really talking about that, we feel much more comfortable giving indications that the initial structure and activation of this warehouse for now will take shape in the first quarter of next year. it just happens that it slips at the end of the year. Therefore, it is a question of re-establishing the direction accordingly. But it’s not about finance, it’s more about logistics and the supply chain. We seek to let other people in the market know what we are doing and have no surprises.
That’s what we’re looking for to deliver everything we said we were going to do.
Operator
The next one will come from the hand of Stuart Scar, a personal investor.
unidentified analyst
You’re very, very smart at running when it comes to hash rates. My query is more about capital control and balance sheet control. And I’ve noticed a company like [Hive], for example, that is also very successful, but has diluted its shareholders to oblivion. And what I need to know is what their capital desires are?How much of your money rate is paid this year, how much is paid from the capital expenditure you make for the construction of the knowledge centers?he’s going to have to finish to get to where he needs to be this year.
Geoff Morphy
Of course. So let me answer that question. If you take a look at our financial statements, you will see that the largest commitment we have for the rest of the year is about $93 million for the rest of the 48,000 miners we hire. In the most sensible way, we probably have about $20 million spent. in the construction of more infrastructure. Our plan in terms of funding is actually to be as dilutive as you can imagine here.
And that would surround more equipment financing services in position here. Secondly, we will start using the BTC-backed facility here to a greater extent. And third, selectively, if applicable, and it makes sense for us to sell Bitcoin to fulfill our operational wishes in the future.
We can continue to use the ATM very, very selectively. But it’s whatever we’re tracking on a daily basis to make this assessment very, very careful, because we recognize that it has a diluting effect on those that are worthwhile. degrees you can have. So it corresponds to our desires. We believe we are very well placed for our capital wishes for the remainder of this year and even for 2023.
unidentified analyst
This is wonderful information, and I appreciate it because, as a percentage shareholder, and I’m an investor, I’m not a day trader. Lately, the monthly production of Bitcoin would eliminate 5% of the loose from the table. Therefore, I think it is vital that you pay attention to dilution. I appreciate your reply.
Operator
There are no other questions. This concludes our question and answer session. I would like to return to the convention with Emiliano Grodzki, CEO, for any final comments.
Emiliano Grodski
Thank you all for participating in today’s convention call. We continued our strong expansion in the first quarter and with an existing money rate of 3. 4 exhash consistent with the second, Bitfarms now constitutes approximately 1. 5% of the Bitcoin network. Several projects are underway. And as a successful, low-cost miner, we expect there to be more opportunities for progress. We are now a 5-year-old company with a proven track record of managing various large-scale facilities.
We continue with one of the largest and most successful Bitcoin miners and we are sure that it will grow this year and in the future. We look forward to keeping you informed about our progress. Thanks a lot.
Operator
The convention is over. Thank you for attending today’s presentation. You can now log out.