Welcome to Bitfarms' third quarter of 2022 financial results call. All participants will be in listen-only mode. If you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be opportunity to ask questions. Please note that this event is being recorded. Now I'd like to turn the conference over to Mr. David Barnard, LHA Investor Relations. Please go ahead.
Thank you, Nick. Good morning, everyone, and welcome to Bitfarms' conference call for the third quarter of 2022. With me on the call today is Geoff Morphy, President and Chief Operating Officer, and Jeff Lucas, Chief Financial Officer. Before we begin, please note this call is being webcast live with an accompanying presentation. To watch along with the slides, you can log on to our website at www.bitfarms.com under the investors presentation section. If you prefer to listen to the call on your smartphone, you can download the presentation from there as well. I would like to remind you this morning Bitfarms has issued a press release announcing its third quarter 2022 financial results. Turning to slide two, I'll remind everyone that certain forward-looking statements will be made during the call and that future results could differ from those implied in this statement.
The forward-looking information is based on certain assumptions and is subject to risks and uncertainties, and I invite you to consult Bitfarms MD&A for a complete list of these. Also during the call, reference will be made to supporting slides, and again, you can find the presentation on our website under the investor relations section. The company will also refer to certain measures not recognized under IFRS and that do not have a standardized meaning prescribed by IFRS, and therefore may not be comparable to similar measures presented by other companies. We invite listeners to refer to today's earnings release and the company's third quarter 2022 MD&A for definitions of the aforementioned non-IFRS measures and their reconciliations to IFRS measures.
Please note that all financial references are denominated in U.S. dollars unless otherwise noted. During today's call, President and COO, Geoffrey Morphy, will review our operations for the quarter. CFO Jeff Lucas will follow with a detailed financial review, and Geoff Morphy will return for some closing remarks after the Q&A. With that, it's now my pleasure to turn the call over to Geoff Morphy .
Good morning. Thank you for joining us today, as we are excited to talk to you about our recent successes and why Bitfarms is well positioned to manage this crypto winter and thrive in the long run. No one can control or predict the price of Bitcoin. It's a reality of this business. All miners' margins have been compressed. However, Bitfarms continues to differentiate itself operationally and financially with its low-cost structure, efficient operations and fleet, along with stable energy pricing resulting in superior mining profitability. We have worked hard to establish a consistent track record of execution against our stated goals and growth plan. In fact, we have doubled our hash rate to 4.4 exahash per second year to date.
However, to be direct, in Argentina, while the construction of our farm in Rio Cuarto has moved along on plan and on budget, there are macro developments within the country that impedes importation of all foreign equipment, including our miners. We are working to resolve these issues, and I'll provide more details in a moment. Turning to our highlights of our results. In Q3 2022, Bitfarms mined 1,515 Bitcoin, up 21% from Q2 2022, and we mined an additional 486 Bitcoin in October. Although the growth in Q3 2022 production was offset by weaker Bitcoin prices, we continued to deliver solid performance metrics and reduced both our direct costs and total cash costs of production. As a result, we generated Adjusted EBITDA of $10 million.
In addition to consistently being one of the largest producers of Bitcoin, Bitfarms remains one of the lowest cost producers. For the last two years, we have kept our direct cost of production under $10,000 per Bitcoin, and in fact lowered these costs by $500 in the most recent quarter. Our costs have remained relatively stable as we benefit from a portfolio of geographically diverse hydropower contracts providing low cost energy. As new production came online in both Canada and Argentina, we increased our corporate hash rate 17% from the end of Q2 to 4.2 exahash per second at the end of the third quarter.
During the month of October, we were mining 15.7 Bitcoin per day in daily production and slightly over 115 Bitcoin per average exahash per second, which is the highest industry percentile in efficiency and performance. While the industry is facing challenges due to the sharp decline in the price of Bitcoin, we benefit from experience in managing through past industry cycles, and we further benefit from stable electricity costs while rising energy prices have an outsized impact on those peers that rely on fossil fuel-generated electricity. We continue to take decisive actions to maintain our financial flexibility and increase our liquidity. Jeff Lucas will cover details in a few moments. Slide four summarizes the overall status of our farms.
We ended the quarter with 10 locations and 176 MW in capacity, an increase of 39 MW from nine locations and 137 MW in capacity as at June 30th, 2022. In October, we increased our total corporate capacity by 6 MW, bringing the total current capacity to 182 MW. Now I'll take a moment to detail the operations, plans, and recent progress at some of these locations. Turning to slide five. We have power supply commitments with Hydro-Sherbrooke for a total of 96 MW. The three facilities in our Sherbrooke campus are located in close proximity, which affords numerous efficiency advantages, and we are in the final stages of completing our 2022 expansion plan.
Leger continues to operate smoothly at its 30 MW capacity, delivering 740 PH/s from 7,400 miners. On November 10th, we energized our first 6 MW in the 18,000 sq ft Garlock farm, with the full 18 MW expected to be in production in early December. Phase III of the bunker is progressing as planned, with 6 MW energized in late October and the remaining 6 MW expected to be online also in early December. The bunker, first activated in March 2022, is currently drawing 42 MW and running 9,400 miners. In December, at full build-out, the bunker will be a 48 MW farm housing 12,400 latest generation miners and contributing over 1.2 EH/s.
We expect to retire our De la Pointe farm by the end of this month and anticipate completing its sale by the end of December, which results in cash proceeds of $3.5 million to fund growth. The permanent closure of this facility and replacement and full build-out of our Sherbrooke campus in an industrial area is running three months ahead of schedule. When completed shortly at 96 MW, up from 30 MW in 2021, the local community benefits from increased tax and other revenues as well as higher employment. As we stated in our press release on November fourth, our hydroelectric energy agreements in Québec remain in place and we are excited about continuing to partner with local communities for future growth. Please turn to slide six.
In Río Cuarto, Argentina, as we announced on November first, we have adjusted our plans for our Argentina build-out. We completed construction of warehouse number one during the past week, and we are continuing the process of commissioning. More specifically, the initial 10 MW module of the first 50 MW warehouse was completed in September, and the final four 10 MW modules were completed in October and early November. At present, we are operating almost 9 MW capacity with 2,300 miners delivering 237 petahash. Earlier this month, we adjusted our year-end guidance from six exahash per second to five exahash per second. Argentina's macroeconomic environment has impacted our ability to import miners. We are working with the regulatory authorities and our logistics providers to remedy this matter.
The country is wrestling with high inflation, currency devaluation, and a significant debt burden. Importation approval for mining and IT equipment has been delayed, which has adversely affected our ability to bring in the additional 12,000 miners we need to operate the first warehouse at its full capacity. In addition, our private power producer in Río Cuarto is still awaiting approval of its final operating permit to provide power to us. In the meantime, our farm is drawing power during the start-up and commissioning phase from the provincial electrical utility at a higher cost than our agreement with the power producer. We continue to evaluate operations and these higher than anticipated energy costs on a daily basis. At around 4% of total production, this temporary variance has limited impact on our total direct cost of production.
While the power producer expects the necessary permit to be forthcoming before the end of 2022, we expect higher cost production at that facility until we can draw at least 26 MW. Please move on to slide seven. Since launching in January, Paraguay operations continue to run smoothly, consistently contributing about 125 petahash. With its extensive hydropower infrastructure, we continue to look for new opportunities in the country. Turning to slide eight. In summary, at the end of the quarter, we had 10 farms in production in four countries and are predominantly drawing power from three hydroelectric utilities that are geographically diverse.
We now have capacity of 182 MW, which is operating at 4.4 exahash per second, and we have a clear path to ending the year at 188 MW running at five exahash per second with considerable future upside from Argentina. At Bitfarms, we pride ourselves on our efficient operations, which is measured in a few ways. First, uptime. We consistently achieve uptimes of 98%-99% in our farms. This high utilization rate is a key revenue driver as Bitcoin miners are not paid for downtime. Second, Bitcoin per average exahash. This is a measure of operating and production efficiency. In October, we recorded 115.7 Bitcoin mined per average exahash, which several analysts have noted being market-leading and a figure in which we consistently rank high.
Third, joules per terahash, which is the measure of energy efficiency for Bitcoin miners, and our corporate average continues to show steady improvements. For Q3 2022, we had an average of 40, improving 12% compared to 45.5 during Q3 2021. For more information on our mining fleet, I encourage you to visit our website, bitfarms.com, to learn more about the miners we operate and how they are deployed. Please turn to slide 9. Moving on from metrics to financials, I will now hand the call over to Jeff Lucas.
Thank you, Geoff. We're very pleased to report we continued our profitable growth during the third quarter of 2022, and maintained our financial strength and flexibility to execute on our growth plan. Here are some highlights. We ended the third quarter with cash of $36 million in 2,064 Bitcoin, valued as of September 30th at $40 million, for total liquidity of $76 million. We mined 1,515 Bitcoin, up from 1,257 Bitcoin in the second quarter, an increase of over 20%. Our quarterly revenue was $33 million compared to $42 million in the second quarter of 2022, reflecting a 21% increase in the Bitcoin mined, offset by the 35% decline in the average Bitcoin price quarter- over- quarter.
We achieved Adjusted EBITDA for the third quarter of $10.3 million, representing a 31% margin as compared to Adjusted EBITDA of $18.7 million for a 45% margin in the second quarter of 2022. More on that in a moment. Let's first focus on mining economics. As illustrated in slide 10, Bitfarms' direct cost of production per Bitcoin in the third quarter averaged $9,400, and as Jeff noted, is among the lowest reported in the industry. This is a $500 or 5% decrease in production costs from $9,900 per BTC in the second quarter.
It was driven by a combination of slightly lower average network difficulty, an approximate 2%-3% improvement in our mining efficiency as measured by joules per terahash, and the beneficial impact of a stronger U.S. dollar versus Canadian dollar on our Canadian electricity costs. The direct cost of production in the quarter includes the additional electricity costs associated with the start-up and commissioning phase in Argentina and a full accrual for potential Canadian value-added tax or VAT legislation that affects the VAT rate, which has not yet been passed into law. Excluding the accrual for this potential legislation, our direct cost of production during the quarter would have been $8,300 per Bitcoin. This proposed legislation is being actively challenged by a coalition of Canadian miners with whom we are actively involved, and we're just seeing early indications of success to date.
It's worth emphasizing that among the benefits of sitting over 95% hydroelectric energy, we enjoy very stable electricity costs. Over the past two years, our quarterly direct cost to mine Bitcoin has remained in the narrow range of $6,900-$9,900 per Bitcoin. While many of our industry peers wrestle with the impact of rising fossil fuel costs, our electricity costs have remained relatively impervious to that impact. The total cash cost of production during the quarter was $14,300 per Bitcoin. This includes the direct mining costs, fixed cost of sales, including rent, technician salaries, et cetera, as well as cash, general, and administrative expenses, otherwise referred to as G&A.
The $14,300 per Bitcoin total cost of production represents a $2,700 decrease or 16% from $17,000 per Bitcoin in the second quarter, as well and well below the current price of Bitcoin. The drivers of the lower total cost of production with a lower direct mining cost and a 15% decrease in cash G&A expense, or $1.1 million, reflecting management actions expressly taken to reduce discretionary spending, including professional services, travel, and other overhead costs. Our overall gross mining profit for the quarter was $17 million, compared to $27 million in the second quarter. This represents a 52% gross mining margin for the quarter in comparison to 66% in the prior quarter.
Turning to slide 11 and focusing on IFRS reported results, we recorded an operating loss of $98 million during the quarter, which included a $44 million realized loss in disposition of digital assets, a $46 million change in unrealized gain on revaluation of digital assets, and an $84 million impairment charge to our property, plant, and equipment. This compares to a second quarter 2022 operating loss of $173 million, including a $78 million realized loss in disposition of digital assets, a $70 million change in unrealized loss in revaluation of digital assets, and an $18 million impairment from goodwill. Let me take a moment here to drill down on the impairment charge. $79 million of the charge pertained to our Argentinian activities.
While the current low price of BTC gave rise to the need for an impairment analysis, the impairment charge is driven in large part by the mechanism to convert U.S. dollars to Argentinian pesos to fund our expansion. We convert U.S. dollars into Argentinian pesos at an attractive commercial exchange rate to acquire construction assets and pay for construction costs. For reporting purposes under IFRS, however, we translate the value of those assets on our books into U.S. Dollars at a lower official exchange rate. This multi-exchange rate mechanism results in our recording a foreign exchange gain in reporting of our Argentinian assets at a correspondingly higher value than the U.S. dollars that were actually outlaid to fund them. The impairment charge effectively brings the reported value more in line with the amount of U.S. dollars that we use to fund them.
This multi exchange rate mechanism acts as a governmental incentive to bring hard currencies such as the U.S. Dollar into Argentina's monetary reserve. The difference between these two exchange rates can be quite significant. Currently, the commercial rate is about 305 pesos to the U.S. dollar, and the official rate is about 167 pesos to the U.S. Dollar, almost half. Since we began funding the Argentinian build out, we have recorded related foreign exchange gains on our income statement of about $50 million. An additional expected $20 million of future gain here for a total of about $70 million, with a corresponding increase in the reported value of our Argentinian assets in our impairment assessment. Returning now to our reported results.
Net loss for the quarter was $85 million, or $0.40 per basic and diluted share, compared to a second quarter 2022 net loss of $142 million, or $0.70 per basic and diluted share. Most importantly, we continue to generate cash from mining operations during the quarter and achieve Adjusted EBITDA of $10.3 million. In reference to Adjusted EBITDA, we comment tongue in cheek that there are approximately 15 publicly traded miners out there and about 17 different definitions of Adjusted EBITDA. We view Adjusted EBITDA as the truest measure of our operating performance.
As such, Adjusted EBITDA includes only our operating performance during the period being reported, and does not include the impact of any changes in the value of our balance sheet assets or liabilities, including the impact of changing prices on BTC in our treasury and foreign currency translation gains and losses. In summary, despite a 35% lower average BTC price for the third quarter compared to the second quarter, we continued during the quarter to report positive cash flow from operations with an Adjusted EBITDA of $10.3 million, or 31% of revenue. Turning to slide 12 in our financing strategy. Balance sheet strength and flexibility continue to be our highest priority. Our strategy is centered on protecting shareholders' investment while supporting our key goals of funding financial commitments, planned growth, and selective opportunities at a relatively low overall cost of capital.
As such, our approach to financial management is straightforward. We look to utilize the proceeds from the sale of our daily BTC production to fund our operating expenses and contribute to our debt service requirements. We use our at-the-market or ATM program very judiciously to fund our growth investments so as to minimize shareholder dilution. We apply our BTC holdings in treasury to reduce our leverage and provide the financial flexibility to enable us to continue our growth activities even amidst the current BTC price volatility. During the quarter, we executed the following. We sold a total of 2,595 Bitcoin, comprised of 1,515 Bitcoin from production and 1,080 Bitcoin from treasury, generating proceeds of $56 million, reducing indebtedness, further deleveraging our balance sheet, and lowering our interest expense.
We paid down $15 million of our revolving Bitcoin-backed credit facility, reducing borrowings under this facility to $23 million, and freeing up about $5.5 million of Bitcoin that was otherwise collateralized in the loan. We paid down $12 million in equipment debt financing, ending the quarter with a total of $55 million in equipment indebtedness. During the quarter, we paid off in full two of our oldest highest interest rate facilities. We raised $13 million in net proceeds from our ATM program that we launched over a year ago. Since commencement of the ATM program on August 16th, 2021, we have issued approximately 45 million shares with gross proceeds of $200 million, or $4.48 per share. Excuse me.
To repeat, we ended the third quarter with total liquidity of $76 million, comprised of $36 million of cash and 2,064 Bitcoin valued at $40 million. Fast forward to the quarter, we've paid down a further $3.2 million on our equipment-backed facilities and paid off in full our most expensive loans. Secondly, we raised another $1.9 million net of expenses under our ATM. Third, we reached an agreement to sell a De la Pointe property for $3.6 million, of which we expect to receive net proceeds of about $3.5 million to supplement our cash balance, that being during the fourth quarter. I'll wrap up my portion of today's remarks with two additional highlights.
First, when we amended our BTC-backed facility to extend the maturity to December 29th, 2022, we were able to improve the terms, including reducing the collateral coverage requirements from 143% of the loan value to 135% of the loan value without any change in the stated interest rate, despite the increase in general level of interest rates. This is a testimony to Bitfarms's credit quality in the eyes of our lenders. Second, it's worth noting that we grow and manage our business with a 2024 halving in our sights. All of our current indebtedness is scheduled to be mature on or before February 2024 in advance of the expected halving date.
Before turning the call back over to Geoff Morphy , I would like to mention that we have a number of investor conferences coming up, including the Ladenburg Thalmann Virtual Crypto Expo 2022 conference in December and the Needham 25th Annual Growth Conference in early January. Turning now to slide 13. I'll now turn the call back over to Geoff.
Thank you, Jeff. Before we take your questions, I'll summarize our strong market position and our growth strategy. As of today, we are operating with 182 MW and 4.4 exahash per second, a doubling in just the past 11 months. We are diversified. We have mining production in four countries, Canada, the United States, Paraguay, and Argentina. We are sustainable. Currently 95% of our fleet is powered by hydroelectricity. We are transparent. We have continuously led the industry in transparency from establishing the monthly production report standard to our corporate website, which provides unparalleled information about our mining operations. We are proud of the fact that we have been audited by a Big Four firm since becoming public. We have maintained consistently low direct cost production. Our Q3 2022 direct mining cost of $9,400 is among the lowest in the industry.
As these direct mining costs consistently consist mostly of electricity, this goes to our preferred strategy of finding and securing PPAs in areas of surplus and stable hydroelectricity. In fact, since our inception over five years ago, our gross mining cost per Bitcoin has never exceeded $10,000. Keeping our costs down on a consistent basis is a testimonial to our experienced team and our contracts. Our performance metrics are consistently industry leading. In October, we recorded 115.7 Bitcoin mined per average exahash, placing us at the top of the industry performance from our assets. Even at recent Bitcoin price levels, we continue to generate positive cash from mining operations. We have decreased our financial leverage and maintain a flexible balance sheet and financing resources while continuing to meet our financing obligations and have done so since inception.
The experienced internationally based management team at Bitfarms has demonstrated they are highly capable of finding and building new farms in a cost-effective manner and capable of generating sector-leading results. With Bitcoin prices down, this is indeed impressive performance and positions the company very well for future growth to jump on distressed and underperforming companies or to consolidate on a larger scale. Looking at where we are today, we have a strong balance sheet and financing resources, non-dilutive and otherwise, including positive cash flow from operations to fund our continued growth. We're following a path of growth with discipline, as evidenced by our track record of operating excellence. We are truly well positioned to take advantage of emerging opportunities and be a consolidator in the industry. Operator, we can now open up the call for questions. Please go ahead.
Thank you. We'll now begin the question- and- answer session. To ask a question, press star one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the key. To withdraw your question, please press star then two. This time, we will pause momentarily to assemble the roster. Again, if you have a question. All right. The first question comes from Alexandre Schmidt of CoinShares. Please go ahead.
Hi, everyone. Thanks very much for your time and congratulations on the good results. I just would like to understand a little bit more about your financial flexibility on your commitments. First, are the agreements in Québec take or pay? I mean, the electricity agreements, and do you have the ability to downscale your operations if needed? Also the flexibility. Could you talk about how flexible your CapEx bills are, whether you have to honor your machine deals or your site building contracts as well? Thank you very much.
Okay. Let's start with Quebec. Quebec, we have eight contracts within the province, and we have the rights to receive power. There's electricity, capacity and demand charges each month, but on a monthly basis, we can reset those accordingly. I think you're probably really digging in is if we were to shut down miners or to underclock them if circumstances were more severe, could we adjust down our electricity charges and our associated costs? The answer is yes. But I will also say that, like, we've already reported on our efficiencies. We have a fleet of modern, current generation miners in that province that are operating very, very well. It's air-cooled, so the capital costs are down in that province. These are some of the most efficient mining operations in the world.
We're generating positive cash flow, and this might be different for others, but for us, the Bitcoin price would have to drop not a lot further, but further before, like, we'd have to even consider something like that. Jeff Lucas, do you have something more? Do you wanna add on that before we go?
Sure.
Onto CapEx builds and miner deals?
No, I think I'm more than glad to talk to some of the CapEx that we do have in place for the miners. Let me start there, if I may. Chase White, in response to your question, we enjoy a very good relationship, you know, with the miners, with the miner manufacturers here. Actually, we announced about two months ago that we worked out an arrangement with the manufacturer, where we could actually better align both the timing and delivery and also the payments for the miners here to be more in alignment with as our infrastructure gets online and becomes available. We've had that flexibility.
You know, we continue to have ongoing discussions with the manufacturer going forward to continue to refine and make sure that we are indeed aligned between our infrastructure spend and what our miners spend as well. That's actually moving along pretty well. On your note, I'll add, if you were to look at our financial statements, you will see what the projected commitments are for the next three quarters. That as it stands currently, and I do want to point out that with that flexibility that we do enjoy, you know, with the manufacturer, there may be some variability there. We can actually work towards fine-tuning that very closely to what our actual needs are as the infrastructure becomes available to deploy those miners.
Thank you. Our next question will be from Kevin Dede, H.C. Wainwright. Please go ahead.
Good morning, gents. Thanks for taking my question. Geoff Morphy, can we peel the onion back a little bit more on the Argentina situation? I know Mr. Lucas gave us great insight on what was going on the currency side. I was just kind of wondering how you think we should look at things going forward. Maybe, you know, dig in a little bit on how you see the import side resolving itself and some sort of timeline on that.
Good morning, Kevin. Yes, Argentina's a fabulous place for our growth opportunity. We enjoy a great contract down there at some of the lowest prices. It's just taken us a little longer to really see the benefits really unfold there. We could not have forecast that the government was going to go through some of the economic turmoil that it is with some of the IMF issues, debt and inflation. They've had to pull in their reins. You know, we can control what we control, and we can't control what we can't control. Argentina is a situation where they are protecting their economy right now, and they've made moves. We have to follow the government's lead on this, and we're watching it very closely.
We've just had to adjust our operations for the first warehouse and then the second warehouse accordingly. When the door is open, which we are very hopeful will take place in the near future, but we don't know that, then we will act and move forward. We're spending our money very prudently there, and we are getting output. We think this is temporary, and it really represents, because of the work we've done on the Rio Cuarto site, an opportunity when the door opens, probably more so next year, to really ramp up very efficiently and quickly there.
I think you mentioned, what, 26 MW before you can realize the power from the power station that's close by. I mean, essentially, that means switching from grid to, you know, your behind-the-meter sorta situation there.
That's correct.
Okay.
Because of their size, this is a wholesale utility size generation facility, and we're located in their backyard. Yes, we're having to take grid power until we get to a certain size because these are big turbines that they have. The government here has not given the approval for them to provide power to us. When they do provide power to us, it has to be at an industrial scale. Unfortunately, we don't have the number of miners there to take it at that level. The plant, the warehouse that we've built is capable of taking 50 MW. The five modules are constructed and ready to go. We only have miners in the first module because of the importation restrictions. We have to take this in concert.
We need to get the miners into the country and installed, and we need the approval on the electricity contract. When we get them both done together, we'll be humming. In the meantime, we have to watch things very carefully.
Okay, that helps. Thanks. Mr. Lucas, can you dive in a little bit on the balance sheet? I appreciate the slides that you offer with regard to how debt has changed, but could you give us some insight on what the levels are now?
Sure. At the moment, we have $23 million in our BTC-backed facility, and we have $55 million in our equipment-backed facility, which the two largest components of that really are is the indebtedness that we have and that we entered into this year. February, we entered into a $32 million facility in which we've now paid down a substantial portion of that. We only have about $22 million left. In June, we entered into a $36 million facility with a different lender. These are both, by the way, non-recourse loans. I do wanna point that out here. $36 million, and right now we're down to just over $31 million outstanding.
We have an additional about $1.6 million of indebtedness out there, a little under that, on some smaller loans that entered into about two years ago. Those are the loans that are up around the, you know, anywhere from 17-18 percentage point level. We've actually done quite a, you know, quite a bit in terms of paring down our overall debt. That's where we stand. Again, in summary, we have about $55 million now in equipment-backed loans, all non-recourse, and $23 million outstanding on our BTC-backed facility.
Okay. The equipment loans, you say non-recourse. That means they're not collateralized with equipment?
No, actually, excuse me. It means they are exclusively collateralized by the equipment, that there's no general or corporate guarantee associated with it.
Okay. All right. Sort of a separate financing vehicle.
In essence, yes. It's not done that way from a corporate structuring standpoint. In terms of the loan agreement itself and the way the loan agreement is structured, the only collateral that's pledged, there's a modest amount, you know, of BTC under certain circumstances that can come into play here, but not currently. It is predominantly just the equipment assets itself.
What was the Bitcoin that's collateralized on that $23 million loan?
We commented, what we said there is that the collateral percentage versus loan value went down from 143%- 135%. Today, right now, there's a little over $30 million of Bitcoin that's collateralizing that $23 million facility.
Okay. Right. Got it. Okay. All right. The terms on the equipment loan, you expect to have completely settled by the end or beginning, early part of, say, February 2024? Is that what you said, February 2024?
Yeah, both. The two facilities that we entered into this year, the one in February for $32 million, the one in June for $36 million, both are scheduled to be entirely paid off before then. Paid off by February 2024. That's their maturity date.
Okay.
We have the option to pay them off sooner, if that makes sense. You know, obviously, we'll consider the cost of capital and other factors as we give consideration to that.
Okay. Would you gentlemen mind reviewing your outstanding order on the equipment side? I understand that you have flexibility there, and it's a function of whether or not the infrastructure is available. Could you just remind us what you have and the total exahash it represents?
Well, let me start here.
Do you want me to start into that?
Go ahead.
No, go ahead, Jeff.
Okay. My comments here. I think the predominant point I think you're speaking to is the 48,000 unit order that we entered into in early last year, and once you locked in the prices there at mid-year. In terms of where that stands at this point in time, of the 48,000, we're pretty much in great shape now for about 36,000 of that. There are 12,000 units that we have not yet actually paid for, and those are being discussed, of course, with the manufacturer in terms of the timing of those, because they're in connection with the warehouse number two for Argentina.
Separate from that, for the other 36,000, we paid for roughly 33,000 of those in full, and then there's remaining about 3,000 or so or 4,000 or so, for which we have a balance of around 40%, which is about $6 million. That we have reflected in our payment schedule and our financial statements that you see for the fourth quarter. That is the quarter we're in now. Whether we actually make the payments then or whether it gets pushed off a little bit into the first quarter depends, again, on the timing of the infrastructure, our importation of miners to make sure that we're in alignment, that we're actually, you know, getting those miners and putting them to play concurrent with the availability of the infrastructure.
Okay.
Kevin, because of our size, we maintain direct relationships with the largest miner manufacturers. Because of the size of our orders, that relationship has paid dividends in that they are working with us to make sure that to the best we can, that we build the infrastructure, and then provide the miners at the same time. I guess we have negotiated the deferral of some of these miners because of the situation in Argentina and the second warehouse build out. You know, they're absolutely working with us.
In fact, as they are developing even better machines, miners, like, depending on when we get to activate Argentina further, we may get some of those better miners as a result of our relationship with them because of the time and the development of their new equipment. There could be some real upside in terms of better efficiencies and the cost of miners as we move into the next year and explore the opportunities with them.
Geoff, help us understand how, I guess, how many miners are sitting on the dock in Argentina. I know you can't really give us timing on that, understandably, but I'm just wondering how that relates to the, you know, the 36 units or 36,000 units that you have paid for.
Yeah. It's not as much as they're sitting in the dock in Argentina. Like, this has been a widespread Argentina importation issue. It's not miners, it's not just IT equipment, it's all foreign direct investment coming into the country that are feeling the pain of these measures because they're trying to balance their budgets and their debt and everything else going in there. It's quite the macro effect. There's been some political changes with ministers, and those are now settled, and they're in discussions with the international community in terms of loans and balances and fiscal restraints, and they're gonna get this figured out. It's really just a matter of time. We have miners that we had to slow down.
They are not like all these miners for the first warehouse that we're short with now are actually in China. We just haven't given the shipping instructions to move them across the ocean yet for entry into Argentina.
Okay. As you look at that fleet and you look at your 40 joules per terahash for the entire fleet, is there some thinking internally about, you know, continuing, you know, an upgrade path, and changing out maybe some of the older machines for the ones that you have bought?
Kevin, excellent idea, and we're already there. We had an upgrade fleet program that's been ongoing. Vast majority of our last generation miners have already been retired, some sold. We did move a bunch of them late last year and into January of this year into Paraguay. Like, we're not achieving these type of efficiency records with taking advantage of older machines. In Washington, we've got the latest generation machines. Pretty much all of Québec are latest generation machines. Now what's going into Argentina is latest generation machines. Yes, we have some of these miners, but we're quite confident that the government in Argentina will soon reopen and we'll be back to the plan.
Okay, gentlemen. That's all I can think of at the moment. Thank you so much for taking my questions.
Thanks, Kevin.
Thanks, Jeff.
Thank you. Again, if you have a question, please press star then one. This time we have no further questions. We'll return the call back over to Mr. Geoff Morphy for closing remarks. Please go ahead.
Thank you, Nick. We are living and working in very challenging times. Context and results are paramount when you consider what Bitfarms has achieved this quarter and this year. In an industry where there are many performance metrics and comparisons, I would like to reiterate three points about Bitfarms. Year to date, we've mined 4,219 Bitcoin. This places us third in total production among the public miners, a testament to our ability to scale the business. Two, benefiting from stable, low energy costs, we've maintained profitable mining operations each quarter, as evidenced by our generation of $10 million in positive Adjusted EBITDA in the third quarter of this year.
Third, we've delevered our balance sheet, reducing financial risk and better positioning us to consider the increasing number of opportunities within the industry. Thank you all for attending today's conference call. We look forward to updating you on our monthly production reports as well as other developments, and on our Q4 conference call in March 2023. Thank you very much.
Thank you. Conference is now concluded. Thank you for attending today's presentation. You may now disconnect.