Good morning, everyone. Welcome here. My name is Nicolas Bonta. I'm the Executive Chairman and Co-Founder of Bitfarms, together with Emiliano, CEO and Co-Founder as well. We started this company in 2016. We started mining Ethereum in Argentina in a garage when Ethereum was $3 and Bitcoin was $600. When we thought of growing the company, we came to Canada and we started here in Canada what we know now Bitfarms.
Good morning to everybody. Welcome. As Nico mentioned, we are Argentinian, and we grow up there with plenty of inflations and devaluation. When we discover Bitcoin in 2016, we believe immediately that this protocol could help to improve the hope of the people in the entire world, especially in the emerging countries. When after six years of hard work and commitment, we build up this company, and we believe that the industry is just in the beginning, in early stage. Thank you for coming, and I'm glad to present our team that we believe that is our best asset. Jeff, please come in.
Thank you, Emiliano. Thank you, Nicolas. Good morning and welcome to Bitfarms' first Analyst and Institutional Investor Day. My name is Geoffrey Morphy. I'm the President and CEO. Whether you're here in person or virtually.
Nice to meet you.
We're excited that you could join us. You can look forward to getting to know some of the department heads today as they offer you a deeper look into how they contribute to Bitfarms being a world l eader in Bitcoin mining. For those of you here in person, you get the added benefit of being able to meet other department heads, some of the directors that are here today, and get a tour of three of our mining facilities, some of our latest mining facilities. Before we get underway with the presentations, I would like to remind you that certain statements that we make during this presentation and throughout the day may constitute forward-looking information and statements.
Please refer to the safe harbor statement being displayed behind me and posted on the slide deck for more information. During the presentations and throughout the day, we hope to leave you with five takeaways. Bitfarms is a low-cost miner of Bitcoin. Two, with five years of operational experience and our vertically integrated self-mining business model, we produce results. Three, led by experienced entrepreneurs, we are nimble and flexible. Four, we are uniquely diversified with people and operations in four countries. Five, we have a strong foundation, capable of looking and to seize upon opportunities brought about by current market conditions. Some background before we get going.
When we first started planning this day, we asked a few of you, sort of what you wanted to see out of today's session, and what we heard back was you didn't wanna hear from the two Jeffs anymore. You wanted to meet more of the team members. We've constructed an agenda today where you're gonna hear primarily from some of the team members and have opportunity to meet some of the other team members and see our facilities. My part's gonna be pretty minimal. Jeff will be speaking, but trying to play that down so that you can really get to know how we evaluate situations. Bitfarms has always been a leader in providing timely and accurate information, and today will be no different. We will be as transparent as possible without breaking any securities disclosure laws.
When the day is finished, it is our hope that you have a far deeper understanding of Bitfarms, a much clearer understanding of how we are different, and different from the other publicly traded companies. Today's agenda will be as follows. Our first presentation is entitled Miner Procurement and Operational Advantages, and it will be given by Ben Gagnon. Ben is our Chief Mining Officer and is well-known in the industry given his years of involvement and public speaking. Before joining Bitfarms in December 2019, Ben had set up mining operations in the United States, Canada, and Mainland China. Ben speaks at many conferences and quoted often in the media given his years of experience. Following Ben's presentation, Benoît Gobeil will give a presentation entitled How We Optimize the Design and Build Out of Our Facilities.
Benoît is a master electrician and was one of the founders of Volta Electric, which Bitfarms acquired a few years ago. As well as overseeing the operations of Volta, Benoît is responsible for construction of all of our farms in all four countries and the infrastructure therein. Our third presentation will be given by Damian Polla. Damian is a native of Buenos Aires and worked for many years in New York. Damian is our General Manager of our South American operations. As no other publicly traded Bitcoin mining companies have multiple developments underway in LATAM, I think you will find Damian's overview and presentation entitled LATAM to be very interesting. Philippe Fortier, our Vice President Special Projects, was an investment banker and has been involved in launching, growing, and financing many companies.
He will present strategic growth and development and will give you an inside look at the way we evaluate acquisitions and new growth opportunities. The last presentation will be given by Jeff Lucas, our CFO. His presentation will be financing strategy, and which is very topical given the current market conditions. When Jeff is finished, which should be shortly after about 9:00 A.M., we will open the floor to about 10 to 15 minutes of questions. I will then provide a brief wrap-up, and for those of you attending in person, we'll then grab our bags and head to our deluxe transportation, and departure is at 9:30 A.M. sharp. It is now my privilege to turn the floor over to Ben Gagnon.
Thanks, Jeff. All right. Hi, everyone. My name is Ben Gagnon, and I'm the Chief Mining Officer for Bitfarms. Today we're gonna go over a little bit of our Miner Procurement Strategies and Practices. We're first gonna start off with the current status of our mining fleet, where we stand in terms of our purchase commitments and our anticipated deployments, a little bit about the performance advantages of MicroBT and the Bitmain equipment which make up the majority of our fleet. We're also gonna go into a little bit about our planning rationale and methodology, and then finally, how we manage our operations and our miners. To begin, here is our active mining fleet.
What you can see here is that we currently have approximately 40,000 miners deployed with an average terahash of 89 and an average watt per terahash efficiency of 40 W/TH . This is a huge improvement from where we started the company five years ago with S9s. It's about a 630% improvement in terahash per unit and about a 60% improvement in the watt per terahash energy efficiency. Huge improvement. We were still even operating some of those S9s, you know, right through a little bit of Q3 last year. This is a process where these miners last significantly longer than most people expect.
Usually, we are expecting 5+ years of profitable cash flows, and that's exactly what we got with the S9s, and this is exactly what we expect to get with the new equipment that we're deploying now. At this point, our fleet is almost entirely the latest and greatest from the two main Bitcoin mining manufacturers, Bitmain and MicroBT. I am going to talk about one thing here beyond this energy efficiency that you might not expect. There's more to efficiency than just that watt per terahash number. It's about capital and cash flows. Surprisingly, I'm gonna focus on our Innosilicon T3s here for a moment. Our T3s here are our oldest miners that we still employ. We purchased these in 2019 and have long since ROI'd but still generate positive cash flows.
When we were looking to deploy our new site in Villarrica in Paraguay, we were looking at how do we best utilize this equipment that we have on hand? The reality is that while these miners are still profitable and still very reliable units, after the China mining ban, the emphasis has switched from miners to infrastructure. These miners started trading at a value significantly below the cash flows that they generate because miners were incentivized to utilize their infrastructure with the most efficient and the most throughput miners possible. However, because they trade at such a discount, it didn't really make sense to sell those miners. What we did was the most capital-effective strategy that we could do. We redeployed those miners in Villarrica. This had three huge benefits.
One, we reduced the overall capital cost of setting up that facility dramatically because miners make up the lion's share of any new mining facility that we deploy. Secondly, because we moved those miners to a lower cost jurisdiction, we're able to extend the economic useful lifespan and extend the positive cash flows that those miners will generate far beyond the value that the market would ascribe to those miners were we to sell them. Third, we freed up space in Québec for our new miners coming in, a space where or a jurisdiction where we're able to finance those miners, like the NYDIG financing that we announced last week. All of these things combined make this the most capital efficient strategy that we can have when we're deploying our equipment.
Of course, Bitfarms is still growing rapidly, and that's mostly based on our miner purchase commitments that we have for this year. The majority of those are the 48,000 miners from MicroBT, which we have at one of the lowest prices announced by anybody in the industry, $38.50 per terahash. We also have a smaller contract for 1,200 of the XP Pros, which are the most efficient miners available on the market today. That brings us to where we expect to be at the end of the year. At the end of the year, we expect to have approximately 62,000 miners deployed with an average terahash of 93 per unit and an improved efficiency of 39 W/TH .
Now, this is gonna be deployed across all 10 sites in four different countries, and this is showing how our improvements in efficiency are changing over time. This improvement in efficiency is incredibly important. On the right here, there's a table that shows the estimated direct cost to mine a Bitcoin for various Bitcoin miners at various electricity prices. I've highlighted the green area at $0.04 , which is our average electricity rate at Bitfarms. On the left, you have the S19J Pros, which are the most efficient equipment that we have. Going towards the right, you have less efficient equipment. Now, we don't have S9s running, but I did put the S9 up there for a comparative measure.
You can see that the S19s and the M30s that we're running are consistently generating Bitcoin at a direct cost well below $10K. Our less efficient miners, the M20S and the T3s, are still producing Bitcoin at an estimated direct cost in the low teens, significantly below even the $20K level and the $21K level that we're at now. Were we not to make those improvements from our S9s that we had in 2017 all the way through last year, we would basically be break even on a cash flow basis now, showing how important these upgrades and efficiency are over time. This is just thinking about our mining fleet. Now we actually have to think about, you know, why is our mining fleet so heavily on MicroBT?
This is a unique thing for Bitfarms because most of the other public companies are primarily Bitmain. While Bitmain does produce the most efficient units that we have in our fleet, there are a number of reasons why we choose MicroBT. First and foremost, we've been running different miners for over five years, over a dozen models from four different mining manufacturers. We know that Bitmain makes the best product. It consistently has the lowest hardware failure rates and is consistently the easiest miner to operate. We know that when we buy these miners and we deploy these miners, we're gonna be able to rely on them for the five-plus years of cash flows that we wanna draw down on them from. The second thing here is negotiating power. Bitmain has a very, very strong monopoly in this industry.
With their massive market share, they are enabled to enforce consistent market prices and terms across all of their customers. When we go to MicroBT, the second largest manufacturer, we're able to negotiate better terms and better pricing. This is something that's very, very unique for us, and something that we've done because of our years of experience operating this business that new players simply don't understand yet. The next thing, that price per terahash is huge. By having that price per terahash, that means lower capital requirements for that growth. It means easier ability to finance those miners on better terms. It also, of course, means a faster ROI. You might also notice that the form factor is different.
These miners are significantly smaller, which means that they're easier to service, they're lighter to carry, they require less physical square footage, less racks, and that also means less wires, overall saving us lots of costs, both in the CapEx to deploy them and also our operational costs in keeping them running, which combined leads to faster ROIs and longer lifespans. Which as a miner, what we're trying to do is get the best cash flows for the lowest price and maintain them for the longest periods of time. That's how we think about our miners. How do we actually think about the industry and our place in them? To do that, we use sensitivity tables. This sensitivity table helps us understand the full range of possible economic mining scenarios that we can expect in the future based in USD.
The two variables you see up here are the only two variables that we as a company cannot control, and that's the network hash rate and the Bitcoin price. Combined, you can use these two to derive our USD per terahash revenue. On the X-axis, you can see the network increases from the left to the right, and on the Y-axis, you can see the Bitcoin price increasing as you go from top to bottom. Now, of course, anything can happen in Bitcoin. What we would expect is that over time, you would be trending downwards to the right with a rising Bitcoin price and a rising network hash rate.
In the current environment right now, you're seeing a trend to the upper left corner, a reduction in price, but also a reduction in the network hash rate that's helping to reduce that reduction in Bitcoin price. Right now, we have the green area highlighted, which is where we stand now at 214 EH, as well as the price between $20,000-$25,000. This shows why it's important to be such a low-cost producer.
If we can position ourselves as such a low-cost producer operating this equipment, regardless of whatever economic scenarios happen, other miners who are operating less efficient equipment and/or at higher electricity prices and costs are going to have to turn off their miners, ceding their market share and their daily share of the Bitcoins mined to companies like Bitfarms, helping us to remain profitable and survive virtually any economic situation. We make this a little bit more clearly by colorizing the chart. On the right here, we've got our direct cost to operate the terahash for some of our mining equipment. On the left, we have our S19 pros, and on the right we have our T3s. This is all modeled out at our $0.04 average cost.
In the chart here behind me on the colors here, you can see that the levels that we'd have to fall to for Bitcoin to be unprofitable on a direct cash flow basis are the purple areas here. These areas are pretty hard to fathom. You'd have to have a pullback to between $5,000 and $10,000 with the same network hash rate that we have now at 20,000. This is a very, very unrealistic scenario. Alternatively, you could also have a fall to $10,000, a 50% reduction in price, and you'd have to grow the network hash rate from here. Also a very unrealistic scenario. Anything beyond that is upside for us in terms of a cash flow basis. We are currently right now in the light green area, highlighted by those white dotted lines.
You can see here that even with the pullback in price, we still enjoy relatively healthy and profitable direct cash margins. Anything beyond these levels is all upside. In the worst case scenario, we do have a couple of different strategies beyond just being a low-cost producer that help us to manage the storm. In March 2020, when Bitcoin price fell to $4,000, we did something called underclocking. Underclocking does reduce our overall hash rate, but it dramatically improves our energy efficiency. That means that we can provide that same unit of terahash for a lower cost. Were the market to pull back to these purple areas here, we still have another tool in our bucket to further reduce our costs, improve our margins, and remain cash flow positive. Now we talked about how we think about the economics.
How do we actually run this equipment? I'm gonna walk you through really quickly how one of our technicians would actually see the mining software that we have here, our MGMT- 2, and run through the problems. Highlighted here at the top, we have our company performance for all of our different sites aggregated across, you know, nine sites, three countries. You can see our total hash rate, our local hash rate at the pool, what we should be hashing at, our total amount of miners online, and our offline rate, which is just under 99%. Down here, we have all of our different sites broken down with the site specifics. How many miners do we have? What's their hash rate? How close are they to what they should be hashing, and what's our offline rate?
To drill down into this further like a technician would, I'm gonna focus on Farnham, which is my favorite site in Québec because it has our lowest electricity prices. Here we see Farnham. In Farnham, all the racks are broken down and organized according to their offline rate, so the technician knows exactly which racks they should be focusing on in order to improve the uptime as quickly as possible and restore that profitability. We can see here rack 19 has one miner offline. The technician would drill down into that and see the entire rack visually within the software. We can see almost every miner is operating fully in green in real time, and we also see there's one miner here in the red. This red miner indicates exactly what downed miner that technician needs to access in the rack physically for servicing.
We can also drill into the miner and see what's wrong with it. We can see the miner's currently operating at zero hash rate and has a number of error codes. Based on these error codes, we know exactly what's wrong with the miner, and because of those error codes, I know that this miner doesn't need something like a simple reboot. It actually needs to go to our in-house repair lab. Our in-house repair lab based in Cowansville is a beautiful facility that helps us to repair our miners quickly, at lower cost, and without sending our miners overseas, waiting weeks, possibly months, for those miners to come back and start generating cash flows again. Something that we're able to do in-house quickly and is part of why we are such an efficient mining company. That's what's going on with MGMT and our operations right now.
Now I'll just give you a little preview about what we're going to be building in MGMT in the future. First, economics integration. Right now, all of our miners are kind of looking at an even level footing. You look at what miners are offline, and we go and fix those miners. What we're working on now is economics integration so that we can prioritize the most economic repairs first, making sure that we are focusing on cash flows. Second, variable load and hash rate control. We don't generally adjust our mining performance on a regular basis, so this is something we currently do manually. The features I'm talking about, like underclocking, this is something that will be baked into MGMT-2 in the future for us to do quickly and easily. Finally, markets and grid integration.
In addition to pulling in the Bitcoin mining economics, we'll also be integrating things like grid integration and market pricing so that we can variably control all of our miners according to the economic inputs and according to things like curtailment programs to make sure that we're balancing the grid and we're making use of the miners in the most cost-effective way possible. That's our software. That's our operations. That's our miners. Now I'm gonna bring up Benoît and Stephanie to help me talk a little bit about our operations.
Good morning, everyone. Thanks for joining us again. I'm Stephanie Wargo, head of marketing here at Bitfarms, and the next part of our discussion's gonna be a panel discussion between Benoît and Ben. Ben, you've spent a lot of time talking about our miners and how we deploy them, but how do we look at our actual facilities when it comes to the efficiency and profitability of Bitfarms?
Yeah. I think the two biggest factors that we look at, the two biggest metrics, are a metric called PUE, and uptime. You know, uptime is pretty clear. The more uptime we have, the more revenues we're generating. You know, we're not gonna get paid for a miner that's not plugged in and not operating, right? We've gotta keep that number incredibly high, and it's a number we consistently keep around 98%-99%, which is one of the highest numbers in the industry. The second number is PUE. We have a PUE of 1.04. What that means is that 96% of the electricity that we consume as a company goes directly to revenue-generating activities, mining.
Only 4% of the electricity that we consume as a company goes to overhead, the lights, the bathrooms, that sort of stuff that's not directly generating revenues. By minimizing all of that electricity consumption, we're minimizing our costs and making sure that we have the highest levels of profitability. That's just those numbers. Benoît can talk a bit about the operations.
Yeah. For me, it's all the strength about our teams that work well together, and they are able to do, like, all the maintenance. We have, like, tools like MGMT. MGMT will be able to find a problem very easily. After that, we'll have the NOC, that is a security system work, like, 24/7. They are able to tell the problem to the guys, and after that, the people of OPS will be able to repair the miner very, very quickly to be able to have the hash rate, like you said, and have the better PUE that we can.
Now, is that across every farm? Is it the exact same?
Yeah, the exact same. We have, like, a wiki. We name it, like, the wiki in the Bitfarms, but we have a big chart of everything that we already have, like some problem or something like that, and the guy can rely on this, like paper that we make five years, all issues and all the stuff we can have very easy after that for everybody to go in and.
Yes
Be able to repair it.
The wikis are a documented set of operating procedures. Over the last five years, whenever we've encountered a problem and we've responded to it, we've documented that process. When we bring on new people, we set up new sites, they haven't had that same experience, they're able to automatically transfer that knowledge to that new site and those new employees, so they know exactly what to do in any situation that we've already experienced, which is basically everything at this point.
Thanks, man.
All right. Benoît, you're a master electrician, and, you know, we, everyone today is gonna be able to walk the farms and see the difference in some of our older farms versus the brand-new farms that are being built. Can you talk a little bit about the design and how we have improved that over the past five years?
Yeah, sure. I've been in the construction for, like, since 2000. I've been, like, a master electrician for 15 years with my own company, who knows the people of Volta Electric. I create it. Like, it's a big thing. It was like the next move was, like, very intelligent to go, like, somewhere that I will be able to use, like, all my knowledge and be able to maximize what I learned in the past. We can see, like, the old farm of Cowansville and the new one that normally we were using, like, PDU.
Yep. PDU.
PDU. After that it was, like, already banned by China or something like that. But now we use, like, our own PDU that we design internally to be able to maximize all the voltage, watts, and other cell. We have on this photo too, that we see like the smallest transfo. Now it's, like, bigger transfo. We are able to enter with high voltage and until, like, decreasing the voltage and go, like, further and further and last, like, some amps everywhere in the site. We're able to maximize everything like Ben was talking about, the PUE, and we're able to have, like, all the power in the miners and be able to react, like, fastly, equally. Everything is, like, the same way. The other important thing is, like, you can change the slide too.
The airflow.
Yeah.
Here you can see. Just point out before we go to the next slide.
Oh, yeah.
You can see the difference here between our old farms in 2017 and our new farms now. Back then, we had this kind of pod structure. The airflow had to make a bunch of different bends and turns in order to meet the miners. That was very inefficient and, you know, wasn't good for the miners in the long term. Now, we have much more simplified designs in this kind of straight rack, which is better illustrated here.
Yeah. You will see, because we'll visit The Bunker now, which will be a building over there, but airflow goes cold air, hot air, naturally go up, and after that it's very simple and the more efficient that we can have.
One of the things you'll notice when we get to Bunker, which is our last site, is that this is all now closed in. We really want show you in the construction about how it was designed from the beginning to maximize this airflow. With that, what other aspects are we unique versus our competitors in this space when it comes to design, besides just the airflow?
Yeah. For me, I think that the good thinking of, like, Emiliano Grodzki and Nicolas Bonta to bring a company, Volta Electric inside the Bitfarms was a very good idea because the OPS people need to be there and react for the miners, but electricity is, like, 75%-85% of our business. If we're able to have, like, the transfo and everything power up and be able to react very fast, I think it was, like the most important thing. We manage Volta. Like, it's very easy to have someone in the field.
Yeah. Having those electrical contractors with Volta Electric is a huge advantage, and something that I don't know any other public miner has done on the vertical integration side. You know, when other miners are looking to set up a new site or even maintain their sites, if there's an issue, they gotta call a third party, they gotta bring them in. Maybe they're not familiar with the equipment, maybe they're not responding at 3:00 A.M. when the equipment goes down. With Volta Electric, all the electricians have been doing this for five years. They know exactly how to fix everything. They know exactly where to go, what to repair. We constantly have electricians standing by to respond to things, even in the middle of the night.
Doesn't matter what time it is, doesn't matter if it's Christmas, they're there to respond to the site and restore that functionality.
All right. One of the other things, we're obviously here in Canada, we're gonna see three sites in Canada. How does this transfer to our sites in North America and South America?
For sure, for me, it will be to recreate the team that we have here that will be, like creating five years. Now we know how to do it, and we'll try to do it, like, everywhere we go. Find people, good professional to work with, and for sure use all the tool that we create. About little mistake, we make sometime, but now that we are able to manage, we'll try and do, like, our best over there without doing, like, those little mistake. With the wiki, the NOC, and the MGMT tool, that will help, like, a lot.
We also send our people around, right? The people from Québec travel out to Washington. Our Manager in Washington, you know, has been operating in Québec for a long time, and now he has built up and trained all the local staff there. Benoît and, you know, pretty much the entire team in this room has been down to Argentina and to Paraguay to help coordinate on those facilities and train the people that we have there too. It's not just the systems, but it's the actual involvement of the people going out there and training people and transferring that knowledge abroad.
Wonderful. Well, thank you both so much. We really appreciate it. With that, I'm gonna turn it over to Damian, and you're gonna hear a lot more about LATAM.
Thanks, Stephanie. Is this working? Hello. Morning, everyone. I'm Damian Polla. I joined Bitfarms about a year ago to develop the first project that we have in the region in Argentina, and also identify new opportunities. I wanna show you where we're located. We have our headquarters in Buenos Aires. The first project in the province of Río Cuarto, which is about in the center of Argentina, and the project in Paraguay in Villarrica. Villarrica is about three hours south of Asunción. What has been our strategy in LATAM? Basically, first of all, to establish a solid team. We started building the team in July of last year. Right now we have already 15 people on the team, and we're putting together the OPS team for Río Cuarto.
We also have about 15 people in Villarrica. Number two, we've been identifying opportunities, not only in Argentina, but also to do something else in Paraguay. In Paraguay, we have a small operation, 10 MW, but we want to do more. We started developing local suppliers and adapting some of the farm design. For instance, in Villarrica, we have a wet wall that we don't have here. The design of Río Cuarto we'll look into further detail later. The strategy has been to do a risk-managed gradual growth. We did a test project in Villarrica, 10 MW. In Río Cuarto, we're doing the first farm of 50 MW by the end of this year and the second 50 MW by the first quarter of next year. That's our team.
We put together a team basically of professionals coming from different industries. We have people that came from the automotive industry, from the construction industry and so forth, and we have Emiliano Grodzki and Nicolas Bonta in our office as well. Now I'm gonna show you a little bit about the energy matrix in both Paraguay and Argentina for those of you who are not aware of how the energy sector works there. I'm gonna talk into further detail about the specific things that we're doing in both Río Cuarto and Villarrica. In Paraguay, the energy sector is basically controlled by ANDE, and this is state-owned utility. They own all the transmission and distribution assets.
They buy power primarily from two hydro dams, Itaipu, that is a binational dam between Brazil and Paraguay, and Yacyretá, which is binational between Argentina and Paraguay. ANDE basically acquires the energy from these dams, and they own all the transmission and distribution assets, and they basically have a tariff for the industrial tariff or residential tariff. The only private distribution company that is in Paraguay, it's called CLYFSA, and it actually serves a small population of about 17,000 people. They have 60 MW, and the first project that we did there was with CLYFSA. Going forward, anything else that we will do, most likely we'll be doing directly with ANDE. The Villarrica operation, we basically started investing in the fourth quarter of last year.
We put it up and running in January. We're fully operational right now. We have 2,900 T3s working there, about 144 petahash. The energy price is $36. As I said, we have several opportunities under analysis, over 130 MW of opportunities. There are a few things that are happening in the market that are interesting to talk about. Number one, the Itaipu Treaty is being renegotiated. That may result in tariffs. There is an expectation that tariff will be coming down in Paraguay. The second, and very important, is that crypto law is very likely to be passed in the next couple of months. It was debated in the lower house a month ago. It had been approved in the Senate.
It was approved in the lower house with some changes, so most likely will be implemented in the next couple of months. The most interesting feature about that law is that it sets a ceiling on energy prices for crypto mining relative to industrial tariff. Right now, what the law says is that crypto mining tariff cannot be 15% higher than any industrial tariff. That's very interesting for future projects. Now, turning to Argentina. The Argentine energy sector, you're probably aware Argentina is very rich in energy resources. On the one side, it holds the second-largest shale gas reserves in the world. There is a strong renewable energy potential, solar and wind. The installed capacity of Argentina is about 42 GW.
As you can see in the chart there, more than half of that is thermal gas-fired. Actually, what you see there, thermal. The maximum consumption of electricity in Argentina took place, I think, in December of last year. It consumed about 27 GW. As you can see, there is excess capacity. Typically, the marginal cost is determined by natural gas. Our project in Argentina, we did inside the fence, so we're basically not buying electricity from the market. We have a private PPA with an established industrial. It's a company called Albanesi. We're behind the meter with an eight-year private PPA, the first 4 years, with a fairly large fixed price component. We're offtaking from their Maranzana.
Grupo Albanesi has about 1.5 GW of installed capacity in Argentina in different locations. The Maranzana power plant, the one in Río Cuarto, has 350, and they're actually under construction. They have another 120. This is a layout of our project. You will see on the bottom side, we are. It's a quite interesting project because we're off taking electricity in high voltage here. We're doing a quite large investment in terms of infrastructure. We are doing the enlargement of the bars. You can see that on the bottom side. We're building a high voltage 132 KV line that takes basically the energy to the back of the property where we will have our own substation. What you see drawn there is the first warehouse.
Each warehouse of 50 MW is about 5,200 square meters, about 56,000 sq ft. It has five modules plus a service area. Here are some of the latest pictures on what it looks like. Actually, this week, we're almost finalizing the roofing and working already on the flooring for the first warehouse and made significant progress in the transmission line. Here are some 3D Designs of what it will look like in a couple of months. The project is being developed in stages. As we discussed, the first warehouse finalized by the end of this year in the fourth quarter, the second one in the first quarter of 2023.
I mean, the key takeaway, I think, for LATAM, for the region, is really the opportunity of energy availability in different jurisdictions, not only Argentina and Paraguay. I think if the market gets better, we will definitely be able to pursue some of these opportunities. We do have already a local team that we have been putting in place, and we're working very well with our Canadian colleagues. We have Benoît and Ben coming to the region every month or so. We think that having this geographic diversification makes a lot of sense, because this is an industry that you never know when things will change, regulation will change either in Canada, in the U.S., in LATAM.
Having three, four, five geographies make a lot of sense for a crypto miner. With that, I leave it to Philippe. Well, hopefully next year we do the tour of the facilities in Argentina and Paraguay. If you're willing to take the trip, we'll wait for you guys there. Philippe.
Thank you, Damian. Good morning, everyone, joining us here in Brossard and online. My name is Philippe Fortier, and I'm the Vice President of Special Project here at Bitfarms, mostly working alongside the rest of the team you'll see here today, trying to grow our footprint globally and also consolidate our leading position as a Bitcoin miner, out here. Today, I just wanna touch upon the characteristic and element of the opportunities and growth and acquisition opportunities we look at. To state the obvious, any opportunities we will review needs to fit within the broader Bitfarms strategy. One of the first criteria we'll look at if we're looking at a global opportunity is whether the jurisdiction we're looking at is investable or not.
For that purpose, we look at a variety of macro, market-driven and regulatory indicators, and I'll show you an example of that in just a few moments. Next, critical to us is the ability of Bitfarms to sustain adding value to the opportunities. Is the alignment of that opportunity fitted with Bitfarms' core operational capability? We look at the long-term value creation potential of an opportunity, and that means, are we able to see a long-term future of value creation for that opportunity? In that context, ESG criteria and indicators are key, considering not only environmental impact, but also a positive contribution to communities in which we seek to invest.
On the operational side, operational fit is key. Here we're trying really to align with our core capabilities that we've built and refresh over the last six years of our existence. Basically looking for opportunities where we can mine on grid and centralize at scale warehouses, and ideally in proximity, in the vicinity to pools of talent and vendors. On the electricity market side, it's not only the price of electricity that matters, but also what makes the market a sustainable one we look at, the market dynamic. Is the market an oversupply of electricity or shortages? Is the long-term outlook positive? What type of power is part of the grid we seek to mine in? That ultimately will derive in a positive price outlook for that market.
On the regulation side, we also seek positive support of governments, and taxation for those purposes. As I mentioned, here's an example how we would address screening in or out a jurisdiction for a potential investment. You'll see on the top left corner an example of a proprietary tool, basically a data analytics tool that we've developed internally. It's cross-referencing certain databases provided by the World Bank, CIA, Capital IQ, and the like, where we're able to derive indicators of a jurisdiction. On the growth trajectory of a jurisdiction, we will be looking at GDP per capita, GDP growth.
On the monetary side, indicators such as inflation, unemployment, and, very important as well on the ease of doing business in a jurisdiction, we'll be looking at foreign direct investment, corruption index, HDI, and the likes. This example right here shows, for instance, Paraguay and why it's such a great mining jurisdiction. When we look at the energy matrix, the energy market relative price in Paraguay is extremely attractive, and this is definitely sustained by the fact that 100% of the grid is hydro, that there is a tremendous surplus of energy production in that jurisdiction, also supported by a low consumption by the people and by the community in Paraguay, and overall a low carbon footprint for what is there. Definitely a great mining jurisdiction.
Just to give you a few other examples of opportunities we've looked at, and we're often solicited or proactively seeking, opportunities in the Nordic environment to have a great investability score. We like the regulatory framework there. However, their general exposure to global energy market is a serious consideration for the long-term outlook of a mining operation in Europe. Middle East, on the contrary, is flush with abundant and cheap energy. However, the regulatory framework there, access to talent, and the overall ability of Bitfarms to add value there is sometimes a mitigating factor. When we look at Central America, the Caribbean, and Mexico, return on investment tends to be great. Cost to build in this region is really cheap.
However, concession needs to be made when you look at the energy matrix. There tends to be an offset between the seasonality of power and its carbon footprint. When it comes to numbers and actually factoring in opportunities, cost per megawatt or per hash is key. We look at other measures on an equity or shareholder base, such as accretion, so either dollars or Bitcoin per share, and overall return on investment capital. Stakeholder values is key, and ESG component not only includes environmental. The fact that we retrofit often abandoned warehouses contributes positively to the communities we're involved in, but we also bring good paying jobs to those communities, and we access pool of talents when we're able to mine close to those communities.
Access to financing for those projects is key, and is part of our cash flow management strategy as well as it integrates with strategic growth. Just concluding, here is a case study of our first operation acquisition, our Washington site that we acquired last November. This today is our most efficient and most profitable site. It is a market that's flush with hydropower. It is among the cheapest electricity rate in the country, and it is also. It has embedded a limited inflationary pressure within its grid since all the hydro dam have been paid for a long time. This opportunity also optimized our time to hash as we were able to deploy a miner there very rapidly. That's it for me.
Thank you, and I'll pass it on to Jeff for his comments on our finances.
Thank you, Philippe. Good morning. I'm Jeff Lucas. I'm the Chief Financial Officer at Bitfarms. Our goal this morning was to help you understand and appreciate our operational capabilities, our growth opportunities, and our low-cost structure. Ben went into detail here in terms of our miner economics, and hopefully gave you an understanding of the rigor and discipline that we bring as we make analyses of how we allocate and utilize our capital. My goal in the 3.5 minutes I've been allocated here is to just give you a sort of a sense of how our financing strategy really supports the achievement and the maintenance of these sustainable competitive advantages that we enjoy in the marketplace here. Really, you know, the pillars of our financing strategy are very, very straightforward. They're really pretty much just what you see here in the left here.
In particular, in the environment we're in now, we're looking to maintain and ensuring our financial security and stability going forward. These are indeed interesting times, whereas we could argue we're treading areas that we haven't had a lot of exposure or that the industry hasn't had a lot of exposure to previously. We wanna obviously do that very, very deftly, careful, with a keen eye towards preserving, obviously, our shareholder value through this whole process here. Secondly, we wanna make sure that we're positioned to finance the growth initiatives, whether it's improvements in our operating capabilities and efficiency, or whether it's finding and capitalizing on some of the opportunities that Philippe just spoke about a few minutes ago. Thirdly, of course, we wanna do all this with an eye towards how do we minimize our cost of capital, going forward, particularly in environments like today.
We've got four really pretty straightforward means of achieving that. No surprises here, really. The first one we have is our operating cash flows. We generate currently about 14.5 Bitcoin a day. As maybe Ben helped you appreciate, and Benoît as well, we have a very high level of uptime, very consistent flow of Bitcoin and cash. That makes it very easy for us as we made the very difficult decision recently to adapt our holding process, holding strategy that we put in place back in January of last year, where we accumulated over 5,600 Bitcoin, that given the alternative cost of capital out there now for different financing sources, to begin utilizing some of our actual Bitcoin that we mine every day to meet some of our operating and debt service cash requirements.
Secondly here, we have, of course, equipment-backed borrowings. Now, the beauty that we have in being such a profitable business is that we have a very, very quick payback on our assets, and that makes them ideal candidates for financing purposes. One of the measures that we have that Ben sort of just touched on and that, you know, Philippe and I work closely with is financing capacity, and we do that on a project-by-project basis. When we assess a project, as Ben mentioned, what we're doing in Canada, where we have, we can readily borrow against, you know, some of those miner assets, that gets applied a wholly different ROI than what we use actually when we consider opportunities in Latin America, where needless to say, financing is a little more of a challenge here. That all comes into play.
As we assess our ROI, we of course look at period of time, we look at some of the risk elements to which Philippe spoke to, and also the financing capacity or the opportunity that exists there with those particular investments. That again sort of goes side by side with some of the rigor that Ben spoke to in terms of how we look at and assess the economics of the miners here. Thirdly, we of course have the opportunity to borrow against our Bitcoin, which we've taken advantage of. The beauty of that, of course, is that we get to maintain the upside of holding the Bitcoin while also be able to fund our operations and debt service at a relatively low cost of capital. Last here, of course, we have, being a public company, the benefits of equity funding going in the marketplace.
In August 18th of last year, we put in place an at-the-market financing program for $500 million. We've raised about $175 million through that program. The vast majority of that done in the fourth quarter of last year and the beginning of the first quarter this year, when obviously Bitcoin prices and our share price is higher. Now, if we were to use that or as we use that, we do so very, very judiciously going forward. Those are the elements really that sort of make up our financing strategy overall. Naturally, in terms of what's been happening over the past couple weeks, I'm sure you are asking, you know, what's happening and what's the company's financial position overall?
Again, with the two slides I've been allocated, I squeezed a lot in this one to try to get my point across, and hopefully I can do that effectively. I do wanna give you a sense of what our financial overview and our financial position is currently. We are actually very, very strong financially capable at this point in time. We again wanna be positioned not only to deal with the uncertainties that we're all experiencing in the market now, but to be positioned to make continued operating enhancements and improvements to our business going forward, and to still be able to take advantage of a lot of opportunities that Philippe identifies that are now being present in the marketplace, that our operational strengths can allow us to take advantage of and run more profitably and successfully than a lot of our peer companies.
We wanna be positioned that we can actually do that. What you see here actually is over the past 2 weeks, we did make the decision that we were gonna sell a portion of our bitcoin, use that proceeds to pay down our BTC-backed facility. We reduced that from about $100 million down to about $38 million. That gives us much greater flexibility. Like any BTC-backed facility, it of course has margin calls. What we've done with this action here is 2 benefits, one of which is even if we see the bitcoin price very, very dramatically lower, well below where we are today. That would trigger a margin call. Secondly, though, it also frees up additional liquidity, additional BTC for us. It gives us more of a war chest to take advantage of those opportunities as they unfold.
Overall, our capital, our liquidity position is very strong right now, both in terms of the cash that we have on hand, supplemented in part by financing that we closed on for $37 million that we announced with NYDIG and Equipment Leasing last week. We did that in very favorable terms actually going forward. Then secondly, you know, with the BTC that we have in hand here. If you take a look here quickly at the chart to the right, you will see actually what our commitments are going forward. Our commitments are really in two forms. One, repayment of the debt that we have outstanding here. Then secondly, of course, financing, paying for the MicroBT miners and the other miners that Ben spoke to that we have as part of our purchase commitments.
These are actually very, very manageable and meaningful going forward, and we feel we're very well positioned to address those and of course to meet and address any of the other opportunities that present themselves going forward. What allows us to do all this are the overall economics for our business in general, and that's best exemplified by the chart here on the lower left, and that shows what our quarterly break-even BTC price, the direct cost for us to mine BTC. Two elements of what you see here. One, that's one of the lowest costs in the industry. Secondly, and very important, look how consistent that cost is. What you see here is it's been ranging for the past seven quarters, as an example here, and even before that, if you back out the halving impact, of anywhere from roughly $6,900- $9,000.
The fact that it's been so consistently in that range makes life a heck of a lot easier for all of us, whether it's Philippe as he's putting together the rigors of his analyses, and whether it's how we manage our cash and our allocations going forward. That puts us in a very strong position. How does all this unfold? Ben gave you, showed you the sort of revenue sensitivity table. Let me take that just sort of one step further and speak how it affects us overall. This table here called Operational Flexibility, typos and all, kind of gives you a sense of how profitable we can be even with those two variables that are beyond our control, network hash rate and the BTC price.
Just to give an example, today you could say we're approximately a network hash rate of 210. If you were to assume a BTC price of $20,000, we actually get more than a 50% margin on the Bitcoin that we mine. 52.6% to be precise. The beauty of that is that you can see here that, you know, as let's say we get down to 200 or maybe even lower network hash rate as the BTC price comes down, even down to $10,000, we are still profitable. We are still achieving, you know, returns here of anywhere from 1% to up to 14.5%, depending again what the network hash rate is at $10,000. So we feel overall that we're pretty strong economically and pretty well-positioned going forward.
With that, I'll now turn it over to Stephanie, I think, who'll be leading, or Jeff, leading the Q&A here.
Yeah. Can the presenters come back up, please?
There you go.
Okay. Thank you. Well, we're a little ahead of schedule.
Come on, Benoît.
Okay. Well, as promised, we have about 10, 15 minutes to take some questions, both from people in the room and through Stephanie and David from the virtual audience. Let's open it up. I'm sure there's a fair bit of content there, so probably there's a few questions to be asked and flush out a few points. Who wants to go first?
Ben, relative to the move to MGMT 2.5, can you just talk about incrementally what that might mean for your key outputs?
Yeah. I mean, right now, like I said, everything's kind of on an uneven footing. You know, an S19 is gonna be producing more hash rate than an M20S or an M30. But the older equipment is what's gonna go offline first, right? Right now, everything's leveled equally. But what we should be doing is we should prioritizing the most efficient miners to repair first, right? Integrating all those economics into MGMT-2 is gonna give us that real-time actionable information. We're not just trying to, you know, keep up the uptime, but we're prioritizing our actions so that they have the most economic impact.
Secondly, when we integrate all of that, economics calculations as well as the variable control of the equipment and the external market pricing, stuff like, external market prices for electricity, or maybe even signals from Hydro-Québec or another utility provider for curtailment, you know, that's going to enable us to, in real time, maximize the economic productivity of every miner at every site. These aren't things that are going to dramatically change our business, but it's about you know, absorbing every possible dollar and cent of revenue that we can out of our operating assets.
Next question.
Thank you for the presentation. Very helpful. My first question is on your plans for this year. After you know, once you execute on the contracted miners, where do you expect to be in terms of your production capacity by the end of the year? How are you thinking about your plans for next year given the market dynamics and, you know, if you can speak to, like, the pricing dynamics right now given the macro environment? And then I have a follow-up.
Yeah, sure. I can start on that.
You start-
Maybe Jeff can jump in.
Yeah.
You know, we've had our announced targets of 8 EH, and we've had our contracted amount of equipment at 7.2 EH for a long time. There is a gap there that we're going to look to opportunistically take advantage of, you know, market conditions to fill out that remaining. As prices have changed, you know, we are not going to grow exponentially, you know, at greater and greater levels of cost. What we've done is we said, "How do we actually manage this business, keep growing the business, but focus on our most economical sources of growth?" That's why we've scaled back down to the 6 EH.
That 6 EH target now gives us, you know, lower capital requirements, but it also gives us a buffer of 1.2 EH worth of equipment that we can use flexibly going forward. That 1.2 EH equipment, like I said, is contracted at a very low price, given, you know, all the other prices announced by our competitors and other miners out there. We can do, you know, a lot of different things with that. We can use that for growth next year. We can use it for growth, you know, as market conditions improve. We could even look to, you know, trade off some of that equipment and improve our balance sheet and capital position, if that growth is, you know, too expensive for us, given the current market environment.
We're taking that flexibly, and we're able to, you know, respond appropriately to changing market dynamics accordingly.
Sure. Let me jump in as well. Like, the 6 EH that is targeted for this year is baked in on track, on budget, on schedule, a considerable amount, and you'll see some of this today at The Bunker and Léger built, but Garlock site. Like, we're building that in Québec right now. We have some more that's going to go into Washington. Like, that's set. We've got the 50 MW in Río Cuarto. That's set for this year for coming online in October. We have another 50 MW that are in first quarter of next year. Originally, as part of the 8 EH, that second 50 was this year.
Because it was really scheduled to come in within weeks of the end of the year and people take such pride in their year-end targets, with supply chain issues, we knew that was gonna be really challenged and we didn't wanna let down the market. We shifted that into the first quarter just to basically play it safe, because there's gonna be slowdowns. We have that 50 MW, and we have another over 100 MW on that site if natural gas prices come down. We think with the situation with Ukraine and natural gas prices, it's not gonna come down. We, as you saw the economic analysis that was given today, we're a low-cost producer. We didn't wanna challenge that by completing projects that were going to be medium to higher cost.
We slowed that down and we focused more on the areas with reliable hydroelectricity that really aren't prone to those commodity price increases. Washington, like the vendor that sold us the assets in Washington we redeveloped, he's also got a 75 MW substation development there. Indications are that, you know, next year we might be able to make some progress on developing that out. A great opportunity. There's a 300 MW RFP that was launched about a year and a half ago in Québec . That's been delayed apparently, but we had hoped to be awarded 50, 100, 150 MW in Québec . Now we'll see what happens. Like, right now, given profitability and prices and capital, like, all those things are. We're watching it closely. We've got a lot of opportunities.
Right now, given the distressed nature of the markets, given what we've heard here in terms of strong foundations, I think we're keeping our eyes open for opportunities that fit that we can really jump on and really expand out the market. Anybody else on the team that wanna add or are we good there?
Yeah. I just wanted to comment on what Jeff just said. In this downturn, there might be opportunities. We have a strong balance sheet and one of the most synergistic operation for potential external growth. We're keeping our eyes open in this downturn for additional opportunity, for sure.
Good.
Thank you. You actually answered my follow-up which was on the Washington facility. Okay, great. Maybe I can follow up with a question on your HODL Strategy. Is that something that you may wanna revisit at some point in the future? Or that's kind of the plan for now?
The answer is yes.
It's absolutely, we do plan to revisit. We do it actually on a real-time basis, you know, 'cause given the circumstances here and as the markets and environments change. Right now, we feel that given the alternative, the cost of capital for alternative sources actually, as you do the economics and run them through our models, it actually makes a little more sense now to begin, you know, selling some of the BTC that we actually, you know, that we mine on a daily basis.
Yeah. We did call that an adjustment.
Any other questions in the room? Do we have any online?
Hi. Thank you all for presenting. This is very helpful. Just a couple of quick questions. At a high level, you have a number of development projects underway. I'm just trying to get a high level sense of where your electrical capacity is now versus where you expect it to be at the end of the year, and what your utilization will be with that 6 EH target.
Yeah.
Um-
Benoît?
You wanna take care of the electrical past capacity?
I don't know if Philippe will be like willing me to answer about. Because now we are at like 137, and we'll be able to go over another 18 in Bunker. Sorry, I just go in my head to be sure that I have the good number. After that, we'll continue to grow in Washington too. That will be able to achieve the 24, that we are now at 17. Maybe it will be.
Plus 50 or 20.
plus 50.
And-
It will be like a 80 MW increasing until the end of the year.
Okay. You'll expect to have plenty of room to plug in miners, I guess, is what I'm getting at. You'll have extra capacity.
All the megawatts that we need to reach the 6 EH are already spoken for and contracted.
Yeah. That's firm. We actually have right now miners that'll allow us to go up to 7.2 EH. If we really wanted to, if the economics in the marketplace were to get better and we were to bring one of these opportunities online and we're able to do it this year, we'd have to get some more miners. Miners right now isn't a problem.
Oh, yeah. I'm sure. Yeah, so as I know you've talked about exploring opportunities in this market. Is there a world in which you would potentially begin hosting for other Bitcoin miners if there's appetite for that? 'Cause you guys seem to have a pretty strong operational
Yeah, I'm happy to take that question. Hosting's something that we have done in the past for various strategic clients. You know, at the beginning of the bull market rally, and actually a little bit in anticipation of the bull market rally in 2020, as the price was rising up to $20K, we quickly realized that, you know, the most economic use of our infrastructure was gonna be our own self-mining operations. So, we canceled all the contracts that we could accordingly, and, you know, made all of that space and infrastructure available to us. You know, the advantages on hosting are obviously most apparent in, you know, a pullback like we're experiencing today. I do think there is, you know, some opportunity there in the future for us to integrate that.
I think we're still very long-term believers in Bitcoin and Bitcoin price. You know, optimistically, the best thing that we can do with our infrastructure and the simplest thing we can do with our operations is just run all of our own mining operations for ourselves. That gives us the highest ROI on any deployment.
Most control as well.
Yeah
Because we control so many variables, and that's what, as a self-mining model, that makes us really superior, I believe, in terms of our model. As we look at some of these opportunities and some of the bigger ones, which represent hundreds of megawatts and the type of capital that goes into this when 85%, 90% is miners, if we did decide to seize on one of those larger opportunities, with our experience in being able to build out high voltage and substations and doing it at that size, and depending on capital and availability, setting up a joint venture or something like that, it's all possible.
Yeah
for the hosting. That's what I'm talking about.
One more quick one if I might. Sorry. Still familiarizing myself with the energy markets in Québec and LATAM. I'm just wondering, so for those contracts, are you locking in long-term power rates, or those are kind of floating market, or is it mixed?
It's mixed.
I can-
Why don't you start with LATAM?
Yeah, I'll start with LATAM. Basically, in the Río Cuarto operation, we have an eight-year contract. First four years substantially fixed and the rest merchant. The last four years is according to a formula that, of course, follows gas prices.
Mm-hmm.
In Paraguay, the tariff is set by ANDE, the state-owned entity, on an annual basis. Therefore, I mean, we have the expectations that tariffs in Paraguay will likely come down more than up, going forward, especially in high voltage. I think there might be a bump at some point in time in low voltage. In high voltage, I think we're very optimistic about where tariff will be heading there.
Well, you're familiar with
I can speak quickly on.
Québec and Washington.
Yeah, Québec and Washington. You know, and kind of our hydro strategy here is to tap into markets that have extreme levels of excess hydro production capacity. We do that very strategically for a reason, because you expect that in an inflationary environment, you know, the hydropower has the least amount of inflationary inputs. There's really nothing to inflate in terms of the hydropower other than the labor and some basic maintenance parts. This is very different than, you know, the Texas situation, where there's so much inflation that's gonna happen throughout the entire supply chain. Gas producers, labor, transportation, distribution, refinement, regulatory, all of that stuff has inflationary prices. The markets that we target have so much excess capacity that it's either largely, you know, transmitted outside of that region, and wasted in huge quantities.
For example, Hydro-Québec, they waste, just in terms of spillage, approximately 40 TWh a year. That's 4.5 GW consistently every single day is just not even being run through the dams and the turbines because there's no market for it. That's in addition to the power that they generate that they cannot sell. That doesn't even include the power that they transmit down to the United States and sell at half the price than we pay for it in Québec. You know, by targeting these areas. Washington is very similar. Huge amount of excess hydro capacity. All the industry has left. That power is exported to Oregon, California, Idaho, Montana, even the Dakotas.
By targeting those areas with that excess, we should have not only, you know, the least pressure on our costs because there's so much excess capacity that we're tapping into and helping improve their profitability, but we should also have the greatest, you know, ability to scale in those regions because we're tapping into all of that that power that's just waiting to be monetized.
Thank you.
Stephanie, how are we doing for time?
We have time for one more question. Anybody have
Thanks, everybody. Mr. Lucas, could you give us some more detail on the debt covenants as they stand now?
Actually, the equipment debt covenants are very straightforward in terms of just more of a reporting basis. There's no other covenants associated with the equipment financing. For the BTC-backed facility, you know, the covenant that comes into play here is that we have to maintain collateral 143% of the value of the loan itself, or that equates conversely a loan-to-value about 70%. If that gets below 133%, that's when we get a margin call into which we have about 24 hours in which to respond. Currently, right now, we're looking at around a little north of a $16,000 margin call price. If that were to occur at that point in time, we have more than enough unencumbered collateral, BTC, to meet that requirement.
All right. With that, I think we're good with our panel discussion. Thanks, everybody. I'll give it back to Jeff to close us out.
Thank you to the presenters for their presentations, and thank you for your attention and your questions. Before concluding the presentation portion of the day, I wanted to reiterate the five key takeaways. First, Bitfarms's business is structured to be a low-cost producer. We are maintaining positive cash mining margins and cash generation despite the soft market conditions for Bitcoin. Two, our results are driven by strong operational execution and the benefits of vertical integration with our self-mining business model. Three, we are nimble and positioned for today's challenges given our flexible financial strategy, including access to both debt and equity markets. Four, we are well underway to grow production to 6 EH in 2022. We are on schedule and on budget.
We have considerable number of opportunities for further expansion in each of our geographies in 2022, 2023, and beyond. Fifth, you saw the management team today, their strong, proven expertise, and solid foundation. We are ready to seize upon strategic and likely distressed opportunities that are bound to arise as a result of these challenging market conditions. With that, let's wrap up this part of the day. Head to the executive bus for the tour of our Cowansville Bunker and Léger farms, and thank you very much.