Bitfarms Ltd. (BITF) CEO Emiliano Grodzki on Q3 2021 Results - Earnings Call Transcript
Nov. 15, 2021 9:35 PM ETBitfarms Ltd. (BITF)
Bitfarms Ltd. (NASDAQ:BITF) Q3 2021 Earnings Conference Call November 15, 2021 5:30 PM ET
Company Participants
David Barnard - LHA Investor Relations
Geoff Morphy - President
Jeff Lucas - Chief Financial Officer
Emiliano Grodzki - Chief Executive Officer
Conference Call Participants
Operator
Good day. Thank you for standing by and welcome to the Bitfarms Third Quarter 2021 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note, this event is being recorded.
I would now like to turn the conference over to David Barnard of LHA Investor Relations. Please go ahead.
David Barnard
Thank you. Good afternoon, everyone. And welcome to the Bitfarms conference call for the third quarter 2021. With me on the call today is Emiliano Grodzki, Chief Executive Officer of Bitfarms, Geoff Morphy, President 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 under investors on your presentations. 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 that shortly after the market closed today, momentarily Bitfarms, press release announcing its third quarter 2021 financial results.
Turning to Slide 2, I'd like to remind you that certain statements that we make during the conference call may constitute forward-looking statements, and these statements include Bitfarms cautions and listeners to that forward-looking information and statements are based on certain assumptions and risk factors that could cause actual results to differ materially from the expectations of the company.
Listeners should not place undue reliance on forward-looking information or statements. Please see today's press release and refer to those risks set out in Bitfarms public documents filed on www.sedar.com and www.sec.gov/edgar. The company undertakes no obligation to revise or update any forward-looking information or statements other than as required by applicable securities laws.
During this call, the Company will refer to certain matters not recognized under IFRS and do not have a standardized meaning prescribed by IFRS and therefore may be comparable to – not be comparable to similar measures presented by other companies.
The Company uses the following non-IFRS measures: gross mining profit; gross mining margin; EBITDA, EBITDA margin; adjusted EBITDA and adjusted EBITDA margin as additional information to complement IFRS measures to provide a further understanding of the Company’s results of operations from management’s perspective.
Gross mining profit is defined as gross profit, excluding depreciation and amortization and other minor items included in cost of sales for the mining segment of the company. Gross mining margin is defined as a percentage obtained when dividing gross mining profit by revenues for the mining segment of the company. Direct cost of production represents the direct cost of Bitcoin based on the total electricity costs and hosting costs related to the mining of Bitcoin, divided by the total Bitcoin mined.
We invite listeners to refer today’s earnings release and the Company’s Q3 2021 Management’s Discussion & Analysis for definitions of the aforementioned non-IFRS measures and reconciliations to IFRS measures. Please note that all financial references are denominated in U.S. dollars, unless otherwise noted.
Today, Geoff Morphy will review our operations for the quarter. CFO, Jeff Lucas will follow the details of financial review, and CEO, Emiliano Grodzki will close with a review of our vision and expectations. We have requested investors to send questions in advance, which I will read to management after we open the call to analysts interested in live Q&A.
And now turning to Slide 3, it's my pleasure to turn the call over to Geoff Morphy. Geoff, over to you.
Geoff Morphy
Thank you, David. I'd like to extend a warm welcome to everyone on today's call. The third quarter of 2021 was a resounding success for Bitfarms, as demonstrated by growth in our operational and financial metrics, many of which were at record levels.
We increased production across many of our facilities, which in turn increased our hash rate, and I'm excited to announce that we have now exceeded 2 exahash per second.
During the third quarter, we made 1,051 Bitcoin, a 38% sequential increase over the second quarter of 2021. And we lowered our average cost of production to approximately $6,900 per Bitcoin from $9,000 per Bitcoin in the second quarter of 2021.
Well, on the topic of costs, just last week, we acquired a new facility in Washington state, that has an even lower cost of production and is currently averaging about $4,000 per Bitcoin.
These metrics are a true testament to our investment and growth and the dedication of the Bitfarms team. This acquisition brings us to six farms in operation, five in Quebec, and one in the United States, with another four farms under construction in Canada, Paraguay and Argentina.
As of today, we have created capacity of 106 megawatts, up from 69 megawatts on June 30. We have also an additional 298 megawatts under development that are expected to come online in 2022. With our 10 farms operational and development, our total plant capacity has reached 404 megawatts.
Combined with our aggressive miner purchases and installations, we have increased our hash rate to over 2 exahash per second or about 2.4 times more than where it was 12 months ago, and increased our daily Bitcoin production to almost 12 Bitcoin per day.
Jeff Lucas will provide more financial details in a moment. First, I’ll review some important highlights. During the third quarter, we grew our total revenues to a record $44.8 million, up 22% sequentially from the second quarter of 2021 and over 550% year-over-year, from $6.8 million in the third quarter of 2020. Gross mining profit reached $35.4 million, another record. Our total liquidity, which includes cash and our Bitcoin inventory, rose $244.5 million.
Please turn to slide 4. Bitfarms continues to attract many new investors. As a reminder to new investors, Bitfarms is one of the largest and most profitable Bitcoin miners in the world. Since our beginning in 2017, we have been vertically integrated, decentralized, global self mining operation.
Our strong in-house capabilities and infrastructure, including our repair center and our wholly owned electrical contractor subsidiary, with over 30 licensed electricians, help ensure that we remain is one of the lowest cost miners in the industry.
Our strategy continues to be to diversify our money portfolio by prioritizing locations with cost effective electricity. Our decentralized farms reduce the risk of interruption while enabled -- while enabling further growth.
We will take advantage of our investment and knowledge of these geographies to take to seize upon additional opportunities. As was the case late last year, and this year, we continue to aggressively seek out attractive opportunities to expand our business in multiple geographies.
Turning to slide five. As mentioned, we recently acquired a fully operational facility in Washington State. This means we now have our first wholly-owned operation in the United States, the largest country for Bitcoin mining.
This highly accretive transaction builds upon and terminates our only hosting agreement, which had been for 12 megawatts. This turnkey operation has 24 megawatts of capacity, 620 petahash and 3.7 in daily Bitcoin production, as well as contracts for hydropower with rates of just $0.026 to $0.031 per kilowatt, or 25% less than our Quebec farms.
Prior to the change of control, we had already installed a number of new S19j Pro miners. Now, as we are working with our previous hosting partner, the integration has been quite smooth. Also, as part of this transaction, we entered into a Memorandum of Understanding to co-develop an expansion of a 75 megawatt substation. If completed, this will increase the total Washington State operation's capacity to as much as 99 megawatts.
I am proud that development efforts in multiple geographies continue on track and we have made significant strides in all facets of operations. I will now summarize some other recent activities.
Please turn to slide six. In Collinsville Quebec, we completely rebuilt our original farm. We leveraged all our latest site development and design expertise from building five farms over the last four years. Some advantages we incorporated include adjusting the transformer placement to reduce wiring, improving the intake and exhaust airflow, and substantially reducing sound emissions. During the rebuild process, we took advantage of our contractual -- of our contractual opportunity to boost our capacity from our original four megawatts to 17 megawatts.
Turning the slide seven in the City of Sherbrooke, Quebec, we reached an agreement with the city to cooperatively develop three new farms and as part of our cooperation agreement, signed in early September, we agreed to eventually retire the original farm located there.
In doing so, we plan to increase our capacity by 78 megawatts to a total of 96 megawatts and in addition, we utilized expertise using the latest and sound mitigation design and technology to update the original farm and substantially reduce its operating decibel levels, and to apply the same expertise to reduce sound propagation at our other farms where residents are in close proximity.
During the past 60 days, we initiated work on two new farms, which refer to as Leger and The Bunker. During the past two weeks, I visited both sites. At the Leger site, the concrete for the footing has been poured. We expect the construction of this 30 megawatt farm to progress over the remainder of 2021 and operations to commence in the first and second quarters of 2022.
The Bunker, a substantial building, is being built in three phases. We expect to turn on 18 megawatts in the first quarter 2022, another 18 megawatts in the second quarter of 2022, another 18 megawatts in the second quarter of 2022 and the final 12 megawatts in the second half of 2022.
Turning to slide 8. In Paraguay, we initiated construction of a 10 megawatt facility. This project is moving quickly. And as previously reported, we expect the complete -- we expected to complete the build-out within the next month and start initial production on scheduled by year end. In the slides you can see the process -- the progress on the building located in [indiscernible], the largest city in Paraguay.
Turning to slide 9. In Argentina, the engineering, design and development work are complete and site preparation is underway. The 210 megawatt facility will consist of four megawatt style buildings inside the gates of a part -- of a private power company, which will utilize available and otherwise stranded power.
As previously reported, we have contracted power at attractive rates of just 2.2 US cents per kilowatt hour, which will substantially reduce our already low cost of mining Bitcoin. In October, we signed engineering contracts and commenced construction. The farm is expected to accommodate over 55,000 miners, including many of the 48,000 latest generation MicroBT miners that Bitfarms purchased in early 2021.
Talking about miners, please turn to slide 10. This summer after the Chinese government's announcement to curtail Bitcoin mining, we took advantage of uncertain market conditions to renegotiate some of the terms of these purchase orders. We were able to fix the average purchase price of the 48,000 Miners at about $38.50 per terahash, which is a considerable reduction from previous market prices and current prices of around $80 per terahash to $100 per terahash.
In so doing, you reduce the overall cost disorder by an estimated $200 million to $250 million. Based on current economics and gross costs, these miners have an expected ROI of approximately 125 days and have an economic and useful life which ships surpass five years. This was a substantial accomplishment brought about by swift action during an unexpected market dynamics.
The 48,000 miners we ordered are still scheduled to be delivered on an equal monthly basis for 2022. The initial monthly deliveries will all be deployed at our existing facilities and facilities currently under construction in Quebec.
Regarding our 2021 minor deliveries, 1,290 were delivered prior to the end of the third quarter. So far in the fourth quarter of 2021, 3,670 miners have been delivered. They help boost their hash rate to over 2 exahash per second this past weekend. Over the remaining two weeks in November, we're supposed to receive almost 3,200 additional miners.
The flexible deployment of our mining assets is a key part of our ongoing fleet optimization strategy. We monitor and move miners to where they will be most efficient. Older miners, even those that are fully depreciated can make economic sense to continue production when located in farms utilizing low cost energy. Shortly, we will start to relocate a substantial number of older and less efficient miners to our new farm in Paraguay.
And last, our average daily production now stands at about 12 Bitcoin per day, which based on recent prices of about $63,500 per Bitcoin equates to approximately $762,000 per day in daily revenue. As construction of our new farms progresses, in the next few months, we will increase capacity, install new miners and continue to grow our hash rate. Towards that end, we remain confident in achieving our goals of 3 exahash per second by March 31, 2022 and 8 exahash per second by December 31, 2022.
Please turn to slide 11. I will now hand the call over to Jeff Lucas.
Jeff Lucas
Thank you, Geoff. On to detailed review of our third quarter. Please note that approximately 97% of our revenue and approximately 99% of our gross profits are contributed by aligning with the remainder from Volta Electrique, 100% wholly-owned electrical contractor subsidiaries.
Today, I will discuss our mining method. In the third quarter of 2021, we joined and generated record mining revenues of $43.5 million, seven times greater than the $6.1 million in the third quarter of 2020, reflecting us exceed in rapidly expanding our footprint, the increase in the average price of Bitcoin, an increase in Bitfarms' hash rate combined with a decrease in overall network difficulty.
During that time, we increase the company's hash rate by 142 petahash per second from 11% to 1,490 petahash per second at September 30. Today, we reported that our hash rate exceeded 2 exahash, a 35% increase since the end of the quarter.
Turning to gross mining profit. In the third quarter of 2021, we reached a record $35.4 million, up sequentially from $28.1 million for the second quarter of 2021. Our gross mining margin expanded to 82% to 79% in the second quarter, or an increase of over three percentage points. This improvement is attributable to several factors including the fact that we are actively purchasing more efficient miners that are beginning to yield more Bitcoin from miner, and we plan to continue to do so in the future. And the fact that we've benefited from the ban of mining in China that reduce the average network competition difficulty for a period of time.
For these reasons our average third quarter 2021 direct costs of production per Bitcoin decrease to about $6,900 from $9,000 in the second quarter of 2021. Furthermore, with the Washington acquisition, we have eliminated all the hosting agreements, which we expect will further improve our margins.
Overall, we continue to focus on being a low cost producer, and we actively drive efficiencies towards this objective in all of our operations, and as we pursue growth opportunities. As Geoff mentioned earlier, our recent acquisition in Washington State comes with the direct costs and production of just $4,000 per Bitcoin, which is well-below our production cost period for third quarter.
Turning now to review of our bottom line improvement, including a gain of $13.9 million for the revaluation of our Bitcoin holdings at September 30, 2021 and $1.9 million pickup on the reversal of impairment charges on early generation miners and existing infrastructure, net income rose to a record $23.7 million in the quarter are $0.13 per fully diluted share. This compares to net loss in the third quarter of 2020 of $4.8 million, which including a $557,000 loss and disposition of miners equates to a net loss of basic share of $0.06.
In the third quarter of 2021, adjusted EBITDA was $31.9 million, up to $23.8 million in the second quarter of 2021, an increase from breakeven in the prior year period. As a result, our adjusted EBITDA margin was 71% in third quarter, up from 65% in the second quarter of 2021.
Turning to slide 12, I will now review the balance sheet. We ended the third quarter with cash of approximately $43.3 million and $101.2 million in Bitcoin for total liquidity of $144.5 million, upfront total liquidity of $5.9 million, consisting of cash only at December 31st 2020.
A cash position reflects a solid financing activity, totaling just under $200 million for the nine months ended September 30th 2021, and in $14.5 million net proceeds from private placements included in the first half of 2021, $60.4 million from the exercise of warrants to stock options $35.2 million, the net proceeds from the sale of 6.3 million shares under an ATM program launched on August 16th 2021, and an average share price of approximately $5.75.
And financing is at $10.5 million excuse me $10.9 million and new long-term debt offset by repayments of $21.4 million to retire existing long-term debt, repay lease liabilities and for other financing costs.
During the nine months, the financing proceeds were mainly used to invest $57.4 million mining and infrastructure equipment, as well as to make prepayments totally $75 million in future mine delivery.
In addition to the financing use of spend our existing Bitcoin retention program. That's the end of the quarter from November 12th we added additional 12.4 million shares under the ATM program, at an average price of $6.06 per share for net proceeds of $72.6 million.
Since the inception of the ATM program, in August 2021 total shares issued under the program were $18.7 million, contributing net proceeds of approximately $108 million. The average price per share sold in the ATM program was $5.96 overall.
This brings us to a discussion of our financing strategy. Our key goals are to fund a plan rapid growth and to maintain sufficient flexibility to enable us to act quickly or an opportunity to be identified, all in a relatively low overall cost of capital.
The ATM program remains one of our financing options. But it is not the only one. We use the ATM judiciously, as a source of funding to pursue a business plan and growth opportunities.
It supported our recent acquisition of Washington State, Payments for mining deliveries in the third and fourth quarters of this year, and the options to purchase of mining. During the third quarter, we continue to grow our asset base, both in Bitcoin and Mines.
We intend to leverage these assets for non-dilutive financing at relatively attractive rates. We are personally evaluating Bitcoin back facilities as well as equipment financing programs.
And, while we have already raised $108 million with the ATM program this flexible financing facility making place and its 22 months outstanding on his term. In addition, with approximately 12 BTC mine daily, the number of Bitcoin in our balance sheet continues to grow adding to overall liquidity and funding capabilities.
We operate in a capital intensive business with strong margins. Our payback period for investing in new mine is quite short it's just seven to nine months, although these assets generally have a useful life of five years or longer.
Given this capital intensity in the short payback periods, one of the goals of our financing strategy has been and continues to be, ensuring the necessary financial flexibility and liquidity for plans and opportunistic purchases and miners in full support of our growth strategy. Being able to move quickly and decisively in this regard continues to be a key advantage for Bitfarms.
Turning to slide 13. I'll now turn the call over to Emi who will close our prepared remarks before opening the call out for Q&A. Emi?
Emiliano Grodzki
Thank you Geoff. As Geoff noted, we recently exceed it 2 Exahash per Second and delivered many financial records this quarter. We are continuing to execute on our growth strategy. Our presence is truly global. With our footprint now expanded to four countries, Canada and the United States are in production. We are expected to begin operation in Paraguay by year end.
Under [Indiscernible] onsite development continues to be on track. We expect this effort to continue to contribute to strong gains in our hash rate and market share. In summary, raising the portfolio of funds in multiple geographies under centralized location is part of our strategic plan to rapidly expand and diversify production operations.
Today, we have a combined total of 10 farms in operation and development, with planed capacity of 404 megawatts and 48,000 miners slated for delivery in 2022. With our strengthened balance sheet and flexible capital plan, we are well positioned to reach our targeted exahash rate of 3 by March 31, 2022, and 8 by December 31, 2022.
Operator, we can now open up the call for questions. Please go ahead. Thank you.
Question-and-Answer Session
Operator
We will now begin the live question-and-answer session. [Operator Instructions]
David Barnard
This is David Barnard with LHA Investor Relations. And we have a number of questions that came in from investors and I could start with some of those. Regarding Washington…
Operator
We have nobody queued. So please…
David Barnard
No, no, no. You queue me. Yes. Hello, this is David Barnard with LHA Investor Relations. And I have some questions that came in from investors.
Emiliano Grodzki
Okay, David, go ahead.
David Barnard
Regarding Washington, Jeff, can we expect these types of acquisitions going forward? And are there other acquisitions being pursued or in consideration? And finally, as a follow on to that part of it, what would be considered too big to handle or perhaps too small to be worth the effort?
Emiliano Grodzki
Thanks, David. It’s a good question. Just to give investors some background, we've been actively looking at opportunities, inorganic opportunities to buy companies and assets going back to last December. As you know, as of a week ago, we only closed one of those transactions, and that was Washington for 24 megawatts.
I think in terms of size, we wouldn't be interested in looking at anything less than 10 to 20 megawatts of size, because that's about the size that makes sense to make it worthwhile for us. We certainly are more attracted to the bigger opportunities where there’s scale.
We've seen quite a few private company opportunities with mid-sized companies, but they don't really have a distinctive advantage in terms of electricity contracts, and their miners have been getting old. And it's basically the -- as the story goes, it's -- they don't have access to capital, they can't upgrade their fleet and as a result, without an attractive electricity contract and an aging fleet. It's not very attractive to us. But if there's an opportunity that comes around, whether it's private or public, where there is a good electricity contract, half decent team and a good layout, we'd be very interested in taking a look.
And I expect we'll continue to see opportunities, the lifecycle hypothesis suggests that there will be a consolidation in this industry coming. I think we're just starting to see parts of it now. So our eyes are open. And because of our team and our expertise and deploying new facilities, I think we're an attractive partner for anybody that wants to come to us, particularly given our growing international expertise.
David Barnard
Great. Thanks, Jeff. Got another question here. And this is for Jeff Lucas. What do you plan to do with the additional funds raised with the ATM going forward?
Jeff Lucas
Well, David, I think our intention is really first of all, is to continue funding the growth initiatives and expansion efforts that we have currently going on in Canada, as well as in Paraguay and certainly Argentina. In addition, we are -- as you pointed out, or attempted to point out certainly in in the previous section of this call, is that we are very often opportunistic in terms of finding additional minor opportunity. It's not unusual for us to be approached by nature of manufacturers and an opportunities where we can get very favorable pricing, but we need the position to move quickly. It is our goal to make sure that we have financial flexibility to do so. And lastly, we also want to be capable in a position to support a lot of the opportunities that you have to go to which may arise relatively suddenly.
David Barnard
Okay. And Jeff, while you’re moving some financial questions, maybe I'll put one to you, that investor has -- what -- why you're not getting the full economic benefit of your Bitcoin holdings and what's your plan in the future regarding those Bitcoin holdings?
Jeff Lucas
Well, we do other potential appetite in Bitcoin we are actually taking -- taking actions now to take advantage of that. And I really think it manifests itself in two forms, one of which is engaging into what we call BTC, collateralized loan facility. Those are relatively attractive interest rates for us. And the benefit of that certainly is that this enabled us to continue our homeless strategy with the Bitcoin that we mined and we can agree name and address dropping finances, actually, to the additional borrowings here. And we are not surprisingly very bullish on Bitcoin overall. And we really feel very strongly that the upside potential of Bitcoin is much greater than the incremental cost of capital and anchoring to these facilities. So for us, it makes a great deal of sense to use that in terms of -- and Bitcoin collateralized facility.
I will comment though, I know some of our peers in the street, use it as a means of generating yield. And while we are always exploring opportunities, such as that we are very, very careful in terms of the custodian responsibilities in counterparty risk. We want to make sure that we've got that fully addressed, and said before we go venture into that area.
And quite frankly, while there are returns from doing so, the yield has stored up there, maybe what, 2% to 4% or so, we're not in a position quite yet to make the assessment, is that worth the additional risk of being incurred on the part of the counterparty?
David Barnard
Okay, great. Another question, too, regarding your Bitcoin mining production, which, as of right now is about 12 per day. And how do you expect that to change as you're increasing your hash rate in the future?
Geoff Morphy
Thanks, David. Geoff Morphy. I'll take that one. With Washington coming online and miners being delivered last week, we just surpassed the two extra hash mark as I mentioned in my remarks, that means we are generating 11.5, 11.6, 11.7 Bitcoin per day right now, very close to the 12 Bitcoin number. And we have -- as I also mentioned, just under 3200 miners arriving over the next couple of weeks, in fact about 3191 miners and we expect that will take us up to about 14 Bitcoin today once they're installed over the next couple of weeks. I hope that answers the question, David.
David Barnard
Yeah. Great. Speaking of miners, could you well, maybe just a little more color on that one. Can you provide an update on the deployment of the recently purchased miners and kind of year to date with the weeks but to expect in terms of your hash rate going forward and into Q1?
Emiliano Grodzki
Okay. The new miners which had been a combination of the Bitmain, SJ -- S19j Pros, and what's minor M30S series, more of the Bitmain and MicroBT miners. We have in September received 1290 of them. They were split between Washington and our updated Collinsville facility. In October, we shipped most of S19j Pro miners to Washington to upgrade and fill out that facility.
Some of the M30S miners were deployed in Collinsville. So far in November, we've had 5 shipments, they've all been the S19j Pros, they've all gone to Washington. And then the remaining almost 3200 miners, most -- over half of them are going to Washington. Some are going to Collinsville and some are going to Saint Hyacinthe to upgrade that facility and prepare for -- to deploy -- take out some of these, older miners out of that facility and get them ready for Paraguay.
So, right now we're over two exahash, that number will be increasing as these miners are plugged in over the next couple of weeks. And then we're going to turn on Paraguay, get some initial production there before the end of the year. And we expect the bunker -- phase one of the bunker has to start coming on early next year as well. So, it's through those developments that we expect to hit 3 exahash on target by the end of the first quarter of 2022.
David Barnard
Great. One other question, have here gets back to the maybe the economics and looking at your direct cost of Bitcoin went down in Q3 from Q2, and do you see it going down further in the fourth quarter and maybe just a little color on kind of the drivers and in terms of those costs?
Emiliano Grodzki
Jeff Lucas, I think that's a good question for you to handle.
Jeff Lucas
Sure, I'll take that one. So starting off at the easier to respond to initially, the fact that there are macro factors at play here, obviously, during the period the overall difficulty during the quarter was lower than it was in second quarter. That was a significant driver of the lower cost. But it's also very important to recognize some other attributes here as well. One of which is as pointed out, we are getting now -- putting in place, more efficient miners and so therefore, by generating a lot more Terrahash or having a lot more Terrahash per wattage makes a big difference there.
Secondly, we're also getting some of the benefits and the fact that as you pointed out before that the some of the costs of putting the energy costs in Washington are less expensive, we're going to be getting the benefits of those going forward, even though from the low cost that we see a $0.04 per kilowatt hour that we currently have in Canada. So that's some of the drivers behind that.
In addition to that as we have more Bitcoins, we obviously also have the benefits of having a larger base over our fixed costs. Now fixed costs in the mining business, as many of you are aware, it's not a very large portion of the overall cost structure. But still, it does make a contribution. So overall, we've benefited from the macro perspective, in terms of what's happening in China. We've also put in place and effectuate a lot of efficiencies here that have made a difference in our overall cost.
The last thing that comes into play here that I do want to add here is that, during the second and third quarters, a portion of our Bitcoin was generated facilities where we'd like hosting services. And as many of you are aware, there was a profit sharing arrangement with that, which can have a very material impact on the cost of that Bitcoin. And so, I will tell you that, what we indicate here in terms of our Bitcoin costs for the second and third quarters, that's about $400 to $600 per Bitcoin more in terms of the cars, and without having that going in now in the fourth quarter here, that's certainly going to help our overall Bitcoin costs going forward.
David Barnard
Great. And maybe just I have one more that you can take from the investors out there and kind of sum up with kind of a long term corporate plan and corporate strategy is really, what are Bitfarms plans beyond 2022. And maybe just to get some highlights what you're looking at in 2022. And then after that, what do you think the strategy is going?
Geoff Morphy
David, let me start with the question then Emi or Jeff jump in after me. 2022 is going to be such an exciting year for us as we go from two exahash, where we are now to three exahash in the first quarter to eight exahash by the end of next year. And that will bringing on the full production from our new facilities in Quebec, bringing on the full capabilities in Argentina, as well as Paraguay. I expect there's probably other opportunities in Washington, and hopefully Quebec to even go beyond that.
But 2022 is a year in which we need to execute. We've told investors since March, that it's time to really lay it down. And that's what we plan to do. But we have been building on the team in Canada and the United States. We've been building on a team in South America. And we were structured for success. The team is expanding, and we've got some great talent. And we're going to be adding some more in the next little while to make sure that we do this efficiently and have the team to distort this company into the future.
But beyond 2022, I think we've been strategic about this. We've said that, we're going to look for additional opportunities in Canada. Quebec is a wonderful province with a lot of hydroelectricity. There's other places in Canada that we were in discussions as well. The United States, Washington hydroelectric power, the Columbia provides a lot of hydroelectric power in that area. There's opportunities there both for organic and inorganic expansion and down in South America.
As people have started understand what we do, we're getting interest from a lot of different quarters and a lot of different countries. So, I expect we will carry on and find additional opportunities in Argentina, in Paraguay, and perhaps some of the other countries in South America as well. Plus, we have some other early stage discussions elsewhere in the world as well. So, I think the type of investment that we've done in our team and our know-how is really going to pay dividends and I'm excited about taking that forward in 2022 and beyond. Jeff, anything to add?
Jeff Lucas
Well, this is Jeff here. I want to come to make it. One thing that we're very, very excited about is we've got a very, very talented team at both operators and developers. And as Jeff pointed out earlier on this call here, we get approached by a number of folks who either have maybe a power contract in hand or have some property that many an ideal location in their mind. And we are well positioned to be the ones to really test to make that assessment and evaluation to develop very, very effective plan, and then to operate that.
We are on our sixth iteration of farm design. We've learned an awful lot over these past four years here. And we are in a position to build a team very, very quickly and efficiently and have a very, very effective operation for that. That's one of our greatest grants. And that's where there's a huge amount of leverage recipe exists going forward.
Emiliano Grodzki
Thank you Geoff. As Geoff and Jeff mentioned, I believe that the best asset that we have is the team technologists. We are really operators. We understand pretty well how work our industry is all about efficiency dimension. We have a -- I believe that we have a very clear vision for where this industry is going. And we have a solid plan on place. I'm sure that we will see plenty of new opportunities during the next year for continuous tuning more efficient and efficient our company for prepare the company for the next holding. I’m very glad to have this team are growing day-by-day and continuous learning and deploying all of our power.
David Barnard
Great. Thanks. Thanks Emi. I don't see operator, I don't see any further questions. Maybe we will just hand it back to Geoff Morphy for a couple of closing remarks.
Geoff Morphy
Okay, David, thank you. Well, thank you all for attending today's conference call. We are focused on being one of the largest, most profitable Bitcoin miners. And we look forward to updating you our progress in the future.
Please note, we will be presenting at the Ladenburg Thalmann Virtual Tech Expo on November 18th, and the B. Riley Crypto Conference on December 8. So with that, I thank you for coming to our call and listening to us and have a good evening. Thank you.
Emiliano Grodzki
Thank you all.
Operator
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
