Keel Infrastructure Corp. (BITF) Earnings Call Transcript & Summary

Good morning and welcome to Second Annual Bitfarms Analyst Day. My name is Geoff Morphy, and I'm President and CEO. As most of you already know me, I will dispense with the detailed version of my background. But I've been with Bitfarms for over 3 years now. Prior to joining Bitfarms, I've had considerable experience at the senior level in finance and operations, helping public and private companies in many industries to execute their business plans. Before going further, I'm required to refer you to our safe harbor statement, and I'll try to be really quick with this. I'll remind everyone that certain forward-looking statements will be made during today's presentation that future results could differ from those implied in these statements. The forward-looking information is based on certain assumptions and is subject to risks and uncertainties, and I invite you to consult Bitfarm's MD&A for a complete list of these. Also, during today's presentation, reference will be made to supporting slides, and you can find the presentation on our website at bitfarms.com under the Investor Relations section. The company will also refer to certain measures not recognized under IFRS 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 participants to refer to the company's most recent MD&A for definitions of the aforementioned non-IFR measures and their reconciliations to IFR measures. Please note that all financial references are denominated in U.S. dollars unless otherwise noted. With the safe harbor statement dispensed with, let's get into it. The upcoming having is very much on everybody's mind. What is interesting is that there are many similarities with the situation that prevailed 4 years ago and, in fact, the having before that. Please indulge me while I take you back to April 2020. This is when I was considering the opportunity to join Bitfarms. I assess the company and saw considerable potential, but I also saw a number of challenges including upcoming debt maturities, older miners, low liquidity. It needed many management and board changes and upgrades. While Bitfarms was listed on the TSXP, it had never done a capital markets transaction. And akin to the high interest rate and inflationary environment now back in 2020 at that point, there is absolute uncertainty because of COVID. As you remember, March, the world had pretty much shut down, and we didn't know what was going to happen. And on top of that, the having was right around the corner in May. I joined Bitfarms a few days after the having, knowing that I had considerable work to do. Fast forward 3 years, a little over 3 years, Bitfarms is now operating in 4 countries, has 11 operations and continue to experience high growth. We have grown by a factor of 10x since then, and the Bitfarms team is now 150 members strong. We are listed on the TSX and NASDAQ and we are one of the largest publicly traded Bitcoin miners that continues to achieve the best production metrics across the industry. Our company now benefits from seniority. We are one of the -- having almost been around for 6 years now and a Bitcoin miner for that entire period, means we have longevity, and we have years of operating experience that few others can match. Vertical integration. We have designed, built and operated all our sites since our inception. We also have a proprietary software system, several in-house repair labs and electrical services subsidiary that provides us with dozens of electricians that optimizes our sites in terms of maintenance and construction every day of the week. We have built a cohesive and experienced management team that is scalable as we continue to grow, many of which you will meet today. We are decentralized, and we have a strong balance sheet and the best and liquidity and the best and most transparent financial and operational disclosures in the industry. So here we are again, deja vu. As mentioned, the industry is facing many of the same challenges that confronted us in late in 2019 and early 2020. But this time, we're far better positioned and prepared. At last year's Analyst Day, many of you traveled to Quebec and met some of the management team, received some presentations and toured some of our facilities. This year, we came to you. We made the conscious decision to take many of our key management personnel out of their normal day-to-day jobs and bring them to New York to speak openly to you about what they do. These folks represent our secret sauce. For many of them, they have never done this before. Also, you're going to see some nerves. You're going to see, but you're also going to see some vision, experience and some incredible talent. In fact, yesterday, everybody shortened their respective presentations so that we could extend the question-and-answer period so that we can encourage you to ask questions to get to know them better. And just as a bit of an aside here, we do business, as I said, in 4 countries. Three different prominent languages going on. And today, we're asking many people that are in the management ranks, in which English is not their first language. And they're coming here to present to you in English. So they are going to do their best. And at times, there might be accents and things like that. Bear with them, they are doing their best, and I'm sure you'll be able to get the messages and certainly do the follow-ups. In a relatively homogenous industry, Bitfarms is unique and special. It also possesses many underappreciated value drivers that gives us strong advantages. You will see why we are not only well positioned to weather the having, but also to be able to capitalize on the next bull run. Today, we want to give you an under the covers view of Bitfarms and what makes us unique, special and why we are poised to take full advantage of the next 7 months leading up to having and then describe how we plan to take full advantage on a post having basis to be opportunistic. While these are challenging times, we believe Bitfarms represents an excellent investment opportunity. I will return later to provide some final remarks. I will now turn the presentation over to Jeff Lucas.

Good morning, everybody. It's good to see all of you here, and thank you for joining us both in person and virtually as well. Earlier in my career, I was giving a piece of advice, and I was told, you want to find and work with people smarter than yourself. My kids tell me that shouldn't be a problem. Maybe they're right. But I've never experienced that in the company until I joined this one. You're going to find the exact same thing. Our people truly are our secret sauce or as [indiscernible] would say our sustainable advantage, not just today, not just what they're having, but given the dynamic state of our industry and how it's changing so rapidly, where we're going to be a year from now, 2 years from now, even 5 years from now, it rests in our people. And I think you're going to find that. So during today's session, I strongly really encourage you to take time, talk to the folks, ask the questions during the 2 panels that we have here. And during lunch and during the breaks, ask them as well get to know them. I think you'll find that these folks are some of the most intelligent, technically knowledgeable, committed and passionate folks in the business. And you will see that for truth when you begin interacting with them directly. So we can go to the agenda for just a second here, please. Well, that makes it easier, hang on. So we're going to cover a lot of territory today. We're going to move at a pretty fast clip here. We're going to move at a pretty fast clip here. Being in Bitcoin mining is sort of like dog years. And we're going to have that pace in here as well here. So as Geoff pointed out here, our goal, not only for you to get to know the management team here, but you sort of see the progression from how we identify and pursue growth and expansion opportunities, how we actually design and execute the build-out of our farms, how we optimize the operation of those farms and even how we address a lot of the compliance and other jurisdictional issues that we have as being part of a global company. And then finally, how we even handle some of the reporting, both the internal reporting to help us manage the business, but also very importantly, how we do that as a public company as well. So with that, again, we're going to encourage you to ask a lot of questions. We'll have time for the panels and time of lunch to get to know the folks pretty well here. So on that note, let me now turn this over to Philippe Fortier, our Senior Vice President at Corporate Development. Philippe?

Good morning, everyone. I'm Philippe Fortier, Senior Vice President of Corporate Development in Bitfarms where I've been involved with corporate development and strategic initiatives for better part of the last 2 years. I'm quite excited to be with you today and give you an overview of what drives us forward every day, how we implement our growth strategy in our everyday lives. So main takeaway I would like you to take from my presentation is that our approach to growth and strategic development is anchored around improving our operational excellence and maintaining flexibility, especially around the upcoming having. Geoff Morphy has already described what makes us so special. My colleagues today in their presentation will describe how this comes into play in our everyday lives pushing Bitfarms to be the best operator in the industry. But let me just get to the fact we are an infrastructure first vertically integrated company. That means that we design, we build and operate our sites. And we're pretty proud to say that we're able to do that in a very cost competitive. And to give you an example, we build our site with CapEx of roughly under $200,000 per megawatt, it will be quite meaningful to you, I suppose, and maintain -- you will be -- very proud to say that we maintain a utilization rate of our miners above 97%. That is 200 bps above our best peer. So we're really proud and think this is a key differentiator of us. We're also geographically diversified. We chase the best power wherever it is on the face of this -- that and we don't shy away from engaging in a challenging jurisdiction. If there's an opportunity for us, we also think it levels the risk for our investors of having this diversified portfolio. We're also self minor. We utilize 100% of our capacity for ourselves. And this provides our investors with the best exposure to Bitcoin mining depending on the cycle. So this is something that we continually assess depending on market cycles. Regarding the market, our view is one where reaction of the industry to evolving Bitcoin prices is ever more rational and predictable meaning that we see hash price going forward as rather stable. This is our main driver when we're trying to forecast the market. We hold the very firm view that Bitcoin price, will rally and go up in the long term due to ever growing adoption of the protocol. We, therefore, imply a continuously growing network hash rate or difficulty in the face of that, Bitfarms is incredibly well positioned to remain successful. We've got a really strong balance sheet, an extremely resilient operation. And we're quite excited about the opportunity that may arise in the upcome and having, we will remain opportunistic and ready to strike should there be any opportunity regarding distressed assets and miners that coming up. Just wanted to share with you quickly some of the key value drivers that we consider when we evaluate and assess strategic initiatives or opportunities. I will start on the middle right of this flywheel here with electricity mix and electricity costs, assessing the energy profile of an opportunity is key for us. On the electricity mix, I would just comment that whenever you look at the profile of the energy supply. What we want to further our operational excellence is 100% uptime ideally of our miners and certain types of energy will provide that very stable baseload. We especially like hydro. As you probably know, it provides 100% reliability and very easy to forecast cost curve. We wouldn't shy away from renewables. I will just comment on that. However, capacity factor of solar and wind definitely involves some further CapEx or operational challenges. So it's really on an opportunity basis. When it comes to location, we're interested in seeing how we're going to interact with the grid. Are we going to be interconnected, what are the curtailment programs and restriction in place. Also access to talent and resources is key in keeping such uptime as we post month after month. Bitcoin mining is pretty labor-intensive activity. So we need to make sure that whenever a miners fell, we're able to put it back in place. Mining in the middle of the desert is a challenge to that effect. So we prefer being closer to the center. We designed our data center around these criteria. We select the equipment, we will mine around that as well. And of course, we're conscious of the environment we're in and try to be on the cutting edge of new technology innovator as I'll discuss a bit later. I'll skip that slide. On a day-to-day basis, we implement these value drivers around kind of 2 verticals, the tuck-ins are more organic growth and M&A external. On the tuck-in side, our view is really to grow our footprint, our existing hubs we've already vetted 4 jurisdictions. We're quite bullish on these. We think the power supply is going to take us forward on a very assured way, we would take more. We remain, although very diligent and selective in those opportunities. On the M&A front, same thing, same approach, diligent and discipline. However, the objective there is to improve the allocation. What I present here is just where Bitfarms will be once we have further developed Paraguay and Quebec. And adding in hypothetical 100 megawatts of capacity in the U.S. would present a pretty interesting plan for the future of Bitfarms. I'll conclude with just 2 examples of what we've acted on lately. Baie-Comeau is the acquisition we've announced in April of this year. This is a strategic location for us located in our Quebec hub, but also at the crossroads of 2 major high-voltage lines in Quebec. This site sits on the territory of 5 gigawatts of generation and pretty much half of the energy that's generated in Quebec on its way to more urban centers. We were also able to secure great deal economics. So we've got 22 megawatts for $1.8 million, 60% of which was paid in shares, further protecting our balance sheet ahead of the having and our ability to realize some of the equipment we had decommissioned from the de la Pointe facility at the end of 2022, is going to make this site one of our lowest cost built of our portfolio. So quite exciting. I also want to touch on the acquisition of the 2 PPAs we disclosed further in July this year for up to 150 megawatts. The first deployment will be at the site we call Paso Pe in Paraguay. This is going to be a 50-megawatt deployment, again, very strategic location, further developing our Paraguay hub. What we really like about Paraguay and Damian is going to further develop on our [indiscernible] in Paraguay, but I'll just comment. This is one of the only jurisdiction in the world, to our knowledge, that post a positive outlook on price of energy. That being said, where we see price of energy long term going down for 100% hydro, try and beat that. So it was also an ideal location for a speedy deployment of the new cutting-edge technology we're deploying there, hydro miners which we've contracted with MicroBT. So we're quite excited about this new innovative step in our deployment. And finally, I'll just comment that looking at our ability to use credits with MicroBT, so basically offsetting the cost of building the site, the time line that's going to bring this site operating before the having and also the type of power, make that a unique opportunity. We're really, really excited to bring to our portfolio. So with that, I'll be available for Q&A. Look forward to interacting with you, and we will pass it on to my colleague, Ben, who is joining from his office today. Thank you.

All right. Good morning, everyone. My name is Ben Gagnon, and I'm the Chief Mining Officer of Bitfarms. Sorry, I cannot be there in person today, but I'm glad I could join you remotely. To tell you about how we manage our diversified mining portfolio with a really strong focus on capital and operating efficiencies in order to maximize our potential returns and yields. As the miners make up the vast majority of our revenue and are the largest single expense for any growth, it is really crucial that we make data-driven decisions to optimize capital allocation and performance whenever we invest in miners. Today, I will give you a glimpse on how we do just that. The easiest way to think of a miner is as a cash flow. There's a cost to acquire this cash flow in the form of the minor purchase price, logistics, duties and infrastructure needed to run it. There's a cost to maintain this cash flow, namely the energy consumption as well as labor, rent and other costs that make up direct operating expenses. Finally, there is a value in the yield that cash flow generates every day. Similar to how we calculate the present value of any other cash flow, we can estimate minor value by multiplying the estimated minor profit forward by 16 months and then applying a multiplier that will either apply out a premium to the newest high-efficiency machines or apply discount to the oldest and least efficient machines. What we can see here is the estimated value of some common minor models over the last 3 years with varying efficiencies. Will they all follow the same pattern, the higher the efficiency, the bigger the expected future cash flows and premiums. As a result, the highest efficiency miners also experienced the largest depreciation in value as mining economics pull back. This also means that the least efficient miners with the greatest discounts already priced in, should have more upside to rising mining economics than hiring efficiency miners that have not been discounted. We can use this same framework to look at our mining portfolio at many different levels, be it the minor itself, minor model, manufacturer, site, geography or any combination of these attributes, and we utilize this framework to drive decision-making, which is why I now want to address a question we have received a few times, which is why have we not brought the highest efficiency XP miners like most of our peers? And how will we be able to compete without the most efficient equipment available on market? To answer this, we need to take a step back and apply the same formulas and economics against an expanded selection of the most common air-cooled miners manufactured from 2020 through today. On this table here, we show the unit hash rate and energy efficiency of miners, the estimated values like the miner price and the price per terahash, forecasted values in the estimated payback days, pre-having free cash flow and pre-having payback percentages as well as the XP equivalent hash rate. The tables then organized in descending order according to pre-having payback percentage, assuming $0.04 electricity and a purchase and deployment on September 10 when these figures were calculated. I would like to point out the red box at the bottom of the screen highlights the XP miners. A few things to note here. One, the real value of the price or the real value or market price of the XP at $24 a terahash exceeds the estimated value of the XP of $18 a terahash by about 33%, representing a large premium to acquire this cash flow. Two, the pre-having free cash flow the XP is expected to generate will barely cover this premium and a miner that was bought and deployed today may spend the rest of its days before having just trying to recover this premium. Three, the new higher-efficiency minor models like the S21 are going to be released before having and that these new miners should claim this top dog premium, while the XP miners will trade down towards a level consistent with their expected free cash flows. Four, despite them being the most efficient miners available, this premium actually makes them the least likely to see a payback on their investment before having which ironically introduces different risks. Compare that to the S19j Pro Plus that have made up a significant chunk of our recent growth. We identified that through the Pros Plus, we were able to purchase 87% of the hash rate of a XP for less than 50% of the price. Pay a price consistent with their expected free cash flows and still get a high efficiency miner that we can operate at under $0.03 per terahash. With our power prices, we do not need the highest efficiency miners to remain competitive and in fact, purchasing them would result in measurably lower returns and at a higher cost dilution to shareholders. The purchase of these Pro Pluses and set of the XPs is just one example of our focus on being prudent in our growth efforts, focus on capital-efficient growth and maximizing our returns. I would also like to highlight the M31S towards the top. At around 44 watts per terahash these are least efficient miners still operating our fleet today, but having purchased and operated most of these miners in and since 2020, they have paid themselves back multiple times over and are still generating free cash flow. They have a fair value of around $4.5 per terahash, but the real value is probably a little sort of $3.25. So we can see that these miners are actually expected to generate more in free cash flow before they're having than I could sell them for today and we would still have the miner in hand. Also, as I pointed out earlier, when mining economics improve, it is usually these lower-end miners that have already been discounted that will have the most to gain. When we look at miner purchases, sales, upgrades and growth, we are taking all of these variables into account so that we fully understand what it costs us to acquire this marginal unit computation, what it is worth and whether or not it's a good investment. We will not invest in miners and growth that do not meet our strict investment criteria. We applied the same reasoning to our recent Magog upgrade, where we were able to grow the hash rate about 45%, improve energy efficiency 36% and have a better overall return on risk profile for less than 50% of the CapEx had we bought XPs. To expand on this, we can take a look at -- I think I got a little mix up here, in the order, sorry. To expand upon this, we can take a look at a hypothetical 30 megawatts built like the one underway in Paso Pe. You can see that depending on the minor model we could deploy here. We could grow our hash rate from anywhere between 1 and 1.3 exa hash for about $24 million to $38 million. While this does generate a nice cash flow today, the all-in estimated payback is closer to 2 years for all scenarios with current mining economics. We can also compare that to the base case scenario, which is hosting. At the bottom, we calculate how many megawatts of infrastructure we could build for the same amount of capital investment for a full 30 megawatts of self-mining. By not buying the miners and instead, hosting with this hypothetical infrastructure, we would be able to build multiples more megawatts. This capital would be sufficient to fund not only the construction of 30 megawatts, but also an additional 50 to 96 megawatts depending on the scenarios outlined here. While this is true that an estimated $20 a megawatt hour margin, we would be generating much lower margins per megawatt hour, we would actually generate higher overall levels of profitability due to the greater scale that we could build out for the same price. We'd also expect to pay back currently faster than mining and with a different risk profile, not correlated to daily mining economics. This is true across a wide variety of build-out costs and hosting margins. Shown here, we have a quick sensitivity table, which calculates the annualized hosting revenue and what that would yield relative to the cost to build out a megawatt over various budgets and hosting margins. With current market prices for hosting between $0.06 and $0.075, hosting margins of 20 megawatts -- of $20 a megawatt hour could be achievable at many of our sites, assuming market demand. As you will see throughout the presentation today, our strength really is in building and operating infrastructure. And this strength in infrastructure gives us distinct advantages should we look to reintroduce hosting into our mix. So as we look towards the future and we see the network hash rate estimates could be growing anywhere up to about 700 exa hash over the next 18 months if the previous 12 months of hash rate growth were sustained. In order to do that, we'd have to add about 4 to 6 gigawatts of infrastructure to support all of this additional computation. And the megawatts and the infrastructure would likely be the real bottleneck for growth. So as we look to constantly manage our portfolio of mining assets with a miner capital efficiency and returns, we are also evaluating whether or not it's time to reintroduce some hosting back into our portfolio in order to generate those stable, high-yielding cash flows that are much less impacted by Bitcoin price and mining economics and take advantage of our operational strengths as a builder and operator of megawatts. Thank you very much. And with that, I will hand it off to Damian.

Morning, everyone. I'm Damian Polla from Argentina. I joined Bitfarms 2 years ago to work on the LATAM projects prior to Bitfarms, I spent about 20 years in corporate and investment banking, both in New York and LatAm, working on project financings for Latin America. Now before we jump to the specific projects and what we have done, I want to put a little bit into context where we are in LatAm and what it represents for Bitfarms overall. Over the past 2 years, we basically built a strong local team. We consolidated our presence in the region. We have over 30 employees there, and we're the only public miner that we know that has significant presence in LatAm. And why do we do that? Basically, right now, we have as of late August, we had 1 exa hash at the Río Cuarto farm in Argentina and 300-peta hash at a Villarrica farm. And we want to grow and we have 3 projects that have been announced, and we also have a pipeline of future projects that we want to bring to the attention of our management team. Of course, we need to decide what we do in light of the having, coming and all the valid concerns that the investor community has, we need to prioritize projects especially over the next 12 months. The 3 pipeline projects that we have announced are basically the 2 PPAs that we bought in Paraguay, 50 megawatts in Paso Pe and 100-megawatt in Yguazu, and we have the potential to expand our Río Cuarto operations. Now Paraguay and Argentina are probably unknown jurisdictions to many of you. So I want to take just a brief moment to talk about what's going on there. Paraguay is a very solid country macro economically. They had economic stability for the past 20 years. It's run basically about one political party for the last 75 years with exception of only 5 years. They have pro market policies. So macro level is fantastic, although they lack in terms of economic equality and public infrastructure buildout. Many of you were there, and you could see the state of the roads and so forth. However, we take benefit from a political point of view. They just had elections in August. Santiago Peña is the new President. He took office and he maintained the status quo. So from a political and economic point of view, there are no issues there. And what happens on the energy side. Paraguay is a pretty much a very straightforward country there. Paraguay basically has one state-owned company that runs all the transmission and distribution assets. It's called ANDE. ANDE buys that electricity from 2 by national dams owned by Paraguay and Argentina and Paraguay and Brazil, respectively, Itaipu and Yacyreta. They have excess electricity because anything that they don't take, they send back either to Argentina and Brazil. So they decided earlier this year to work with crypto miners. They actually allocated in high-voltage 550 megawatts to crypto miners with a special tariff. And there's also PPAs on medium voltage, but only for 6 megawatts at a higher tariff. The tariff on 220 kV which are the ones that we acquired are at $39 per megawatt hour. This is the location of where the projects are. As you can see, much of the projects allocated were in the Itaipu Dam region on the eastern side of Paraguay right next to the Iguazu Falls. We have our Iguazu project there. And then in the central region, where we have our Paso Pe project, which I'll talk a little further in the next slide. We have 50 of the 100 megawatts allocated there. This is our Villarrica farm that you probably know about. We started operating that one since January of last year. All we did there was basically to replace the miners earlier this year. We had T3s. We brought 2900 new M30S Plus and Plus Pluses. The PPA there is with CLYFSA. CLYFSA is the only tiny distribution local utility outside of Andes World. We cannot grow with CLYFSA anymore. They have 50 megawatts. We're taking 10. They need the rest for other PPAs that they have and to provide residential electricity there. Although the tariff there is better than the one we're getting from ANDE's $36. Here's the location of our Paso Pe project. You see our Villarrica farm on the upper left-hand side, Villarrica farm to our Paso Pe's 1 kilometer away. So we can take the team that we have there and continue working like that. Paso Pe substation that's the ANDE existing substation, that's where we're going to connect from. We're building a 500-meter transmission line to our location, where we are building an 80-megawatt substation. Why are we doing that? Because even though the PPA is 50, we believe there is room in the near term to increase that to 80 megawatts. Philippe already talked about, we're using 30 megawatts air-cooled miners and 20 megawatts of hydro coal miners, which is a first for us. That's where Benoit, I think will cover that and the rest of the team, how we're going to do that technology. I already talked about the PPA price and the COD expectation right by the holding. Now Argentina is a completely different story. It's all over the news. It's economic instability especially over the past 12 months, triple-digit inflation and devaluation undergoing elections as we speak with basically 3 parties completely tied up. So there's a lot of uncertainty. So we believe that Argentina has very good long-term potential. However, there's going to be hiccups in the short term. This is what our facility looks like. What you see there is basically behind our warehouse, that's the existing Central Maranzana, it's a 350-megawatt power plant owned by a group called Albanesi. Albanesi has about 2 gigawatts in several projects in Argentina, and they were actually expanding another 125. What we built was a transmission line to the back of the property, and you see there on the left-hand side, our substation. The substation, as you can see, cannot only fit our initial warehouse, but a potential expansion to the second one. The warehouse is about 60,000 square feet dividing into 5-, 10-megawatt modules. We have office space there and a repair lab. Some of you that I see here visited our site and could see the quality of it. Benoit would actually show you some more pictures later. Finally, we highlighted the strategic importance of LatAm already from a geographic and diversification point of view. But I want to highlight also that these 2 countries have strong fundamentals. Paraguay has abundant hydro energy. The government made a case by awarding these PPAs recently. And Argentina sits on the second largest shale gas reserves in the world. They need to monetize that in the next few years. So although we believe short term, there's going to be hiccups, we are bullish on Argentina going forward. We have a lot of new projects that come our way in the region. I look at Jeff Lucas and Geoff and they tell me hold on right now because the having is coming. So there's going to be more from us in the coming years, hopefully. So with that, I leave it to Benoit, who will talk about the operational aspects of our company. And I'm available, of course, for Q&A. Thank you.

Thanks, Damian. Hi, everyone. I'm Benoit Gobeil, Master electrician of Formation. My English is not so good, but my electricity expertise is great and the founder of Volta Electrique, which was acquired by Bitfarms in January 2018. Then I became Director of Operations in charge of designing and building all the infrastructure of Bitfarms. Over the course of nearly 6 years, Bitfarms has demonstrated a continuous commitment to refining our facility and design strategy. With the construction of 13 farm and the seventh generation improve each build-out has been informed by a lease and learn from previous projects. As a result of this respective process, we know that the building and design of practice are one of the simplest, more cost-effective, easily adaptable and inexpensive in this industry. With my background of master electrician, I'm dedicated to developing the most straightforward plan to the mining facility. Our current design incorporates highly linear configuration meticulously engineered to eliminate potential point of failure. This deliberating approach has reduced the length and among the wire we use. As a result, we mitigate electrical resistance may over by minimizing the number of voltage step down with drastically curtail transformer quantity, mitigating potential failure occurrence and largely lowered over construction expense, were a result in replicating this effective methodology across all next projects. It's exceptional, expandable and efficiency stem as pivotal factor enabling us to expedite construction time line and maintain cost effective in comparison to industry counterpart. We believe this facet of our operation furnish us with a distinct competitive advantage. Our facility adhered to straightforward, highlight effective and design. The design includes 2 primary sections, the intake, the coal side and the extraction, the outside. This ingeniously sample and well-engineered cooling approach not only aligned with our commitment to operational efficiency but also resonate with our overreaching main objective. It highlights our capacity to easily leverage the natural [ enrollment ] to optimize our mining process while decreasing the need of energy and cooling system. That underscore our dedication to both economic and ecological sensibility serving as a key factor in our continued operational success. In addition, we can reuse the hot air to heat the farm during the winter period. And even in some case, heat our neighbors providing a significant heat for all the winters. As Bitfarms being well organized and it's how we work is a top priority. We became expert in this area. Our skilled team include member with vast knowledge, also play a role in training new technician and IT specialists who joined us. Significant part of our fleet uptime involve the network operation center, the NOC. They work 24/7 to quickly identify and dispatch any issue on our mining site. They monitor the performance of our equipment, the temperature and the site intrusion. When the problem come up, they send the right people to address it promptly. Our globally dispersed team technician are crucial to maintaining site cleanness and ensuring smooth miner operation. They received comprehensive in-house training, giving them with the skills and diagnose and fix a variety of miner related issue, except for hash board failure. When issue involved this miners component, the site technician caliber with our repair lab, this expert have received training for respected company like Bitmain, Innosilicon and MicroBT. This collaboration approach, help maintain excellent equipment performance and extend its lifetime. We repair -- the repair lab performance has recently increased to over 50 hash board a week, and we try to improve that every week. Our systematic approach to labeling our miner also contribute to faster issue resolution, each piece of equipment has a unique name or number, making a sample for our site team to report problems and resolve them quickly. Even if it involved team from other department or other company like Bitfarms -- like Volta, sorry. Thank you.

Good morning, everyone. My name is Guillaume Reeves. I have about 15 years of experience in the IT domain. I started at Bitfarms in 2017 as a programmer when the company first started. Today, I'd like to present a bit of our in-house built management software that we call MGMT. Back in 2017, recognizing the depth of expertise we had in-house notably one of our founder as well as some skilled employees. We decided to build our own tailor-made solution to help us operate and manage our miners. Our objectives were pretty straightforward. It was to seamlessly manage different minor manufacturers within a single software. It was to optimize our operations so that we could achieve the best of time possible, and to simplify the task of on-site technician, making their role more efficient and effective. Today, we're proud to announce that we're on our fourth iteration of the software. It remains in constant evolution as we collaborate with the operational team to develop new features that will enhance their operational efficacy. Our journey was of continuous learning adaptation and innovation. And now as we look to the horizon, we're more committed than ever to pushing the boundaries and setting new industry standards. At its core, MGMT is a sophisticated command center that effortlessly collects data from our expensive fleet of miners. It's our eyes and ears across a staggering 60,000 individual miners all orchestrated from a single unified location. Regardless of where our miners are stationed globally, we have the capability to delve into both live feed and historical archive tracking each miners, every metrics and movement. This unparalleled visibility gives us an eagle eye view from a global scale right down to the specific miners of a single miners operation. Something we like seeing is if you can't measure it, you can't manage it. Every scan of MGMT, the data retrieved from all miners is analyzed and generating alerts profound issues like misconfigured miners, high temperature, down miners, low hash rate and more. So as we can see on the current slide, that's what we call our rack view page. Looking at this page, we can quickly identify anomalies with the miners, and it's real easy to pinpoint exact location within the rack. MGMT is more than just a tool. It's the core of our operations, ensuring that everyone of our 60,000 miners is functioning at its peak every second of the day. At the art of MGMT lies a blend of precision and insight. We utilize unique identifiers such as MAC address, serial number or IP address to achieve tracking capabilities for each miner. With the integrated repair system, we're able to calculate repair and maintenance costs at various granular level from individual miners right down to our global operation. With this information, we can measure the return on investment for every miner in our fleet. These metrics help us -- these metrics guide us in making informed decisions, ensuring each miners are functional and optimized for maximum ROI. And as we talk about ROI, there's another pivotal facet to our operational strategy extending the lifespan of our miners. With the information derived from MGMT, we've been able to strategically redeploy or older models to maximize their utility. A prime example of this is when we relocated our T3 models into Paraguay, ensuring they remain productive and cost efficient in a different operational environment. Moving to infrastructure. So uniformity and IT infrastructure across our operations is not just a strategy. It's a philosophy that underscore our commitment to operational efficiency. By adopting the same IT design for all our sites, we ensure a seamless replicable environment. Central to this approach is our IT infrastructure and MGMT software synchronized, they operate in tandem each complementing the other. This relationship ensures that our management tools are always effective irrespective of their deployment location. But there's more. With our automatic site deployment configuration generation, we're able to expedite the launch of new site. The preparation and configuration of hardware for new sites are executed remotely and once configured this hardware system can be shipped out ready for immediate deployment. So in summary, MGMT stands at the core of our operation monitoring and managing our vast fleet of approximately 60,000 miners on an individual minor basis. MGMT offers insight into the financial implication of our operation, shedding light on our expense and optimizing our bottom line. And as the world in technology evolves, so does MGMT. It remains in constant evolution. Thanks, everyone. I guess it's time for break. Thank you. Panel? Okay. [Break]

Okay. We're going to carry on here. We're going to have a panel on growth operating principles and practices. And this is where really we invite questions from you about what you just heard or some of the other things. Stephanie?

You guys can ask your questions [indiscernible].

Okay. This chair is for virtual bank. Are we waiting for Ben right now, just go ahead. Okay. Well then, there he is. Ben, you got a chair right here.

Okay. Let's get to started. Stephanie, you can also feed in some questions as well from the audience that's online, but invite questions maybe from here to start with. Oh, we've got one over here. Should I -- you going to move the mic over?

I'm just curious, in the commodity-based Bitcoin world, I'm trying to -- each one of you guys trying to understand the edge you have in the marketplace for what you do. Can you tell us how you can get ahead of the group that everybody is trying to be a low-cost producer with energy and other things along those lines. So how do you stand out from your competitors and getting the growth that you have?

Every single person on this panel has already contributes this much and this much and this much, which aggregates to a significant difference over top, and that's how we really generate top quartile results every month. But let's start with Ben to provide a little more detail with that. And Benoit, maybe you can highlight some of your operational things that you add in. Ben?

Sure. Yes. I think the key thing for us here as a company is that when we approach Bitcoin mining investments, we do so very prudently. And we do so with a strong eye for long-term cash flows and long-term predictability. So we're not buying into or investing into any miners that are just here for a short-term objective. And we're not investing in growth just for growth's sake. When we make investment decisions and growth, we expect them to generate good returns and positive yield, which is why we're making those investments in the first place. How we separate ourselves out from the peer, I think, is being a little bit more prudent in our growth approach. We are like I said, we're not buying the most expensive, highest efficiency miners out there on market even though that's the standard. But by doing a lower efficiency miner at a lower price, we're actually able to drive better returns for our shareholders at a lower cost. And these are just some of the different ways that we think about how we approach the capital investment decisions. And then Benoit can tie in about the strength of our operations, which if you see our facilities and if you've seen some of our photos or videos, you can see that our operations are top-notch. We've got a solid reputation in the industry that we've earned over 5 years here, building, operating and delivering consistent results month after month. And I think that's really what that breaks us apart.

I will repeat a bit what Ben just said. But for sure, for us to have like facility and be able to build something that will stand there for a long time for us is very important. The cleanliness and everything that all the technician, yes, we have like a big management like good group, but we have technicians and people in the farm that they are like big family for us, that work altogether for all the country that we have. I think for me, cleanliness and after that, be able to maintain all the miner up like we're able to do already and that we prove it is very important, and we are able to do it. So...

Philippe big picture, anything to add?

Yes. Just to answer your question in a commodity-based environment like that, you need to be focused on your cost and what your competitive advantage is, I think Ben and Benoit have contributed their views to that. But I think the real question is, does a miner provides a competitive advantage to compete in that industry. I think it's questionable what we have are Greypower contract diversified worldwide and the best industry ability to monetize that energy with best-in-class uptime. And I think this is really what makes Bitfarms stand in the industry.

Thank you. Any follow-up, was that good. Good. Okay.

Josh Siegler, Cantor. Thank you for the presentation today. It's been great. I wanted to follow up on your discussion on hosting specifically. You went into understanding the cash flow benefits of hosting and the profit related to it. I believe in Philippe's section, you also outlined a path of Bitcoin to $100,000 by the beginning of January 2025. So I'm curious how you're thinking about the difference between self-mining and hosting and kind of blood Bitcoin price you're assuming when putting that calculation together.

Josh, I figured somebody would pick up on that. This isn't new to us, right? This is something that we did in the past and then because of economics, we decided -- we had a number of machines in Quebec that were hosted out to Foundry, and we bought it back, I think, in April of '21 just because of the age of the machines and the economics at that point. It was really that last ball run. But it's always are part of our DNA to do that type of thing. And Ben, why don't you expand on sort of where some of the numbers are right now with some of the economics and why that's still sort of in our sort of horizon and focus right now as an option.

Yes, absolutely. I think the most important thing here is that we need to be making comparative choices with our investments, right? There's a lot of different miners that we can invest in. They generate a lot of different cash flows and operating efficiencies. And we always need to compare that to the base case scenario of just hosting. When we look at how we're going to generate the best returns and how we're going to manage our profile here to deliver capital efficiency and good returns, now really we need to look at where the miner prices are priced today. And relative to their expected free cash flows without a dramatic increase in Bitcoin price, $200,000. There is really a strong scenario in favor of hosting. And so we have to balance out the expectation and probabilities that Bitcoin price is going to go up. With the probability that it does not go up and it does not meet those expectations. We, as a company, are not going to be making investments that are entirely reliant on a Bitcoin price going up. It's not a prudent way to approach capital allocation decisions. And when we look at what is our strength, really, our strength is not in buying the miners, even though I think we do have a more systematic and thoughtful approach to that than many of our peers, but the miners are a commodity. And they trade freely at virtually the same price for every peer. It's hard to get an advantage in that. Where we can get an advantage and where we do have an advantage is in our operations. We've got very stable low-cost operating power. We've got incredibly reliable facilities. We've got great uptime and great utilization of assets. All of these features are -- features that are also very, very attractive for hosting clients and could probably drive a premium. So when we go back and we look at what is the relative yield for investment, hey, we can put a bunch of money into XPs, but we're relying on the price of Bitcoin to go up in order to make that a good investment because with a 2-year estimated payback right now, that is not a super attractive investment for us whereas if we tap into our infrastructure strengths and we look at how we grow prudently with the capital that we have and the capital that we plan to raise, we can just build a lot more megawatts. We have a more stable baseline on the bottom of the company that gives us a strong foundation of cash flow generation activities, independent of mining economics. And so this gives investors a more stable baseline. It gives the company more predictability and better cash flow management. And these are the different elements that you have to balance. But right now, mining is a better return than -- sorry, hosting is a better return than mining. And in order for mining to be a better return than hosting, we're going to have to see dramatically higher, higher prices in Bitcoin. And that's something we're not going to be 100% in either basket. This is still something that we're evaluating right now. But I would like to point out that part of our prudent approach here towards growth and part of our slower approach to growth than some of our peers is because we're evaluating these questions a little bit more thoroughly and a little bit more deeply, taking a look at the bigger picture and not focus on objectives that are not going to be driving better returns for our shareholders.

All good. Followup. Okay. Bill?

Good morning, guys. Thank you for hosting this Analyst Day. It's been great so far, and all the discussions have been really good. My first question is with respect to forecast on the hash rate and hash price as we go into the having and post having. Can you just provide a little bit more detail in terms of where you think that's going and how that's getting baked into your analysis?

I think Ben touched on that in some of his presentation. So why don't you start and then maybe Philippe follow-up there impressions and estimates.

Yes. My current estimate right now for going into having is that network hash rate is going to be somewhere between 400 and 445 exa hash. And if we continue extending out the growth rates that we've seen over the last 12 months and roll that forward a further 18 months, we're going to be closer to 700 exa hash at the end of 18 months, if you sustain those growth rates. Right now, we are at revenue per terahash was about $0.06. And if we're going to go up to 440 and we're going to have the having, we're going to be a lot closer to $0.03 per terahash. I think that is more or less the short-term floor around having, and we can kind of back test that by looking at the operating cost of different miner efficiencies at different electricity prices. And we can see that an XP miner, which is the best miner out there right now, even at $0.06, it has an operating cost of $0.032 per terahash, not including things like labor, rents, insurance, depreciation, all those other factors that add into the cost of the miner. And so anywhere close to $0.03, I think we're going to be seeing large sections of the network turn off. I think it will probably start happening around 4 or 4.5. We start seeing pullback in network hash rate, either through under clocking or turning off of less efficient miners or higher cost operating miners. But really, we're looking at somewhere around $0.03 is the ultimate floor for my estimates in the short term around having, I expect it to be a little bit higher than that, but I do not believe the market can take anywhere below $0.03.

Just tying in also Josh comments that we forecast like a much higher Bitcoin price. Of course, what drives the Bitcoin mining economics is hash price, the mixture of Bitcoin price and the difficulty, this is something that we prudently model as flat. And if you hold a view that Bitcoin price is going to rally network hash rate needs to keep increasing, as Ben just disclosed. I think there is a ton of evidence in the market that there's miners oversupply everywhere. And we've been testing this $0.06 per terahash per day level for the better part of this year. It seems pretty reasonable to say that whenever Bitcoin price increases, there's a whole lot more hash that comes online, and we've seen some pullback in the last difficulty adjustment with lower. So yes, having is definitely going to bring a shock, but over the following 5 to probably 9 months should fall back to where it is.

I have a question on the operations in Argentina. Just looking economically, if you're looking just at dollars and cents, not about projections of how the country is going to be, say, 5 years from now. So just economically, has it been -- or if the political and economic issues in Argentina, has it been -- how has it affected you in dollars and cents, positively, negatively neutral? Can you quantify it?

Sure. Damian?

Well, the challenge that we had was basically delaying the build-out, mostly associated with the fact that we struggled to import miners into Argentina, especially last year. The government changed the rules. We ended -- I think Patricia will talk about it later, but basically, we had to apply for a self import permit that took longer and then getting the miners there, that was basically the main delay. It wasn't on building the infrastructure on challenges on that. Now I think right now, we're very well positioned. I had it in my slides, but since we had to cut it short to 5 minutes, I was talking about how we -- what we're doing this month that actually Jeff announced a few weeks ago, how we were deploying miners there. We have right now underground, I believe, 14,000 miners. We have 2 more trucks coming to Río Cuarto tomorrow. So I think we're in pretty good shape to finalize the full deployment of that first warehouse. And we're also thinking about ways of within that same warehouse has to grow marginally in that, right? And we're not going to go to 70, maybe 63, 64 -- 53, 54, I'm sorry. So right now, that location is our lowest cost producer from the energy price that we're paying. But as we stated, I think we needed to wait the pros and cons of where we grow in the next 12 months. And thinking about what Philippe said in terms of geographical diversification, we don't want to be too big on any specific geography, in Paso Pe, in Paraguay provides the perfect place right now for us to grow. So Argentina is profitable, will continue to be profitable. I think there's going to be bumps, I'm not sure what you've seen on the news about Javier Melei, who basically came in first in the primaries, he has a quite disruptive agenda. So that's why we're keeping our options open there and growing in Paraguay short term, but we think long term Argentina, not only in Río Cuarto, but there are many other opportunities that are very interesting.

Argentina, is quite an incredible place with the second largest shale gas reserves in the world. But unlike other places, they don't really have the waiting to monetize that efficiently except in country. There's no LNG port. The pipelines aren't all that big take it outside of the country. So it's self-consumed. So -- and one of the constraints we had for our Río Cuarto site was the fact that it was a single pipeline. In July, they completed a second pipeline through there. So the gas was a little more expensive because it was constrained because of the pipeline issue. That's now been solved. So our Río Cuarto site, there's substantial expansion opportunity there. The contracts were 210 megawatts. As Damian said, sort of 50, 50 plus should be there. It's part of our guidance for the end of September, 2 more trucks to arrive like today, tomorrow, like it's happening. It will be a nice relief to get that facility only up and running finally. And with that, we can optimize the power delivery from the 2 turbines that we've got at that facility, which brings down the cost. We've announced publicly that it's an average of $0.03 per kilowatt hour, $30 per megawatt hour around the year there. We're in the winter period because of the Southern Hemisphere. So it's about 3.5 -- $0.036 right now. Summer is around the corner in October, and we have about 7, 8 months where we fingers crossed, we might see $0.025, maybe a bit better than that in the winter period, and that's sort of where we come around with a $0.03 average estimate for the year. There's other opportunities in Argentina, too, but politically, wait and see, but there's opportunities to actually bring down cost in other locations there even more. So it's an interesting jurisdiction for future.

If I can just add on to that really quickly, Geoff?

Ben, one more?

Yes. Just one more point. With $0.03 per kilowatt hour electricity rates, our operating cost per terahash is going to range anywhere between $0.028 per terahash on our lowest efficiency miners in Argentina and at M30s to $0.021 per terahash for our highest efficiency miners on the Pro Pluses. And so given that low cost of electricity there, all of these miners are generating computation at a very competitive rate and at a rate well below what we think is the expected floor next having.

That was quite a question. You managed to get prospectus from everyone of the technical people up here and the way they focus on things. Thank you.

Ben, obviously, you've been involved in a bit going through multiple cycles. And clearly now, you're laying out the capital allocation case versus for infrastructure versus rigs. I guess what I would say is it seems like in a lower price, Bitcoin mining more or all infrastructure is the better investment, but that probably flips at a certain point and rig pricing is tight. The Bitcoin price so, it is a little bit circular, but I guess two things. One is, is there kind of a level where you think it makes sense to look at acquiring rigs? And then just if we were to start moving towards a infrastructure hosting framework in kind of the next near term. Do we maintain some optionality at our infrastructure locations so that we can actually deploy our own equipment. I think we set up the contract structure or believe open capacity to do that?

Yes. It's a good question. When we're looking at capital allocation decisions, I think with minor purchases, Obviously, it's a commodity and we don't have too much of an advantage here purchasing with anybody else. Timing really is the largest determinant of any miner purchase here. if you're buying a miner at the wrong time in the cycle, there's really no power cost, which is going to save you from that depreciation and value. You have to buy the miner at the right time. And where we are right now with having roughly half a year away, current mining economics at $0.06 per terahash. It's not very attractive to us to be investing in mining infrastructure to deploy today. What we are looking forward to is actually that crunch around having and what that's going to do and what kind of a supply shock that's going to have around mining hardware because we expect that hardware prices, if less bit Bitcoin price really rallies, hardware prices should fall. And that would enable us to -- if we wanted to pick up more hash rate at that time for significantly less capital than we could do so today and generate higher levels of profitability and return by doing so. When we look at how we're approaching our new infrastructure projects, Absolutely, we can approach this flexibly. There is no saying that we have to have, hey, this entire substation or this entire warehouse dedicated to self-mining or dedicated to hosting. There could always be a scenario where we actively put 30 megawatts of hosting, 20 megawatts worth of self mining. And as time changes and the mining conditions change, we're going to adjust and rebalance that portfolio as well. Really, what we're looking at here is the timing of things right now going into the having and the current miner prices relative to their expected cash flows. And we think that our capital could potentially be better allocated towards more megawatts, which are not subject to those same economic constraints around having which are just right around the corner.

[indiscernible] I had a question. Thank you for your presentation earlier. I guess a couple of things. One is you called out those sites, the site in Quebec, you alluded to more power availability. As you think and approach the infrastructure development, how important is it when you look at a site that there is expansion opportunities?

Yes, it's really key. And I mentioned that in all the hubs we're involved, and we welcome the opportunity to grow. Now Quebec was the cradle of Bitfarms it kind of allowed us to grow into what we are now because of the stability of the power, the quality of the power and the relatively low price of it. At this point, Quebec is a moratorium on more growth. So anything that will come from there will have to be through M&A. And this past cycle have been a bit daunting on that with price expectations. I think a lot of operators have kept extremely high expectation of value on the [indiscernible] run. So it's been challenging to see ITI on what megawatt is worth if you were to acquire it. I think we did a fantastic job in Baie-Comeau but to answer your question, both in the U.S., where we are in the Pacific Northwest, should there be more sites available and same thing in London, America, we would look at it. When we deploy keep flexibility to grow in the future, and that's key as well even for a new geography or jurisdiction we would look at.

Things might change a little bit in Quebec going forward, too. When the provincial government changed last October, it brought about discussions with Hydro-Quebec with some of the players, how to bring more value added to the [ province ] and how that gets measured. They put a think tank together during the summer, 50 experts. They all started talking about they're making those recommendations to government now. Look, I think we collectively see a positive momentum towards sort of where the province is going. Where it seemed to be pretty stalled for a while in terms of closed mindedness. So I think with that more open-mindedness approach and we are starting to engage with Hydro-Quebec and with the government. And being able to bring some of these advantages of finding out where they need jobs, finding out where their surplus electricity and having that 2-way street where we can go to the power versus them just sort of saying, historically, go here, go here, go here. Now I think there's some more open dialogue or it seems like that's starting to happen, so there could be some new avenues starting to open up, but we'll see.

Geoff, if I may just add a concluding comment on Quebec. In that particular jurisdiction, it's pretty easy to map out all the megawatts that are available because there's a moratorium. We're by far the largest miner in the country and in the province and phone has been ringing. People call us up, given just how well we post measure and they see us as a potential good partner for us. So whenever there is an ability to strike a deal, I think we're pretty eye up on some of the other operators in the province call list for that. And that's just a testimony to what we've been doing for the past 6 years there, I think.

Where we do business. We have mayors that talk to other mayors, and we have mayors that want us to come to their communities to bring jobs and alternative employment and to help monetize help their economies. So within the problem, the municipalities are saying, come to our areas. And provincially, they've said, stop. But like there are these forces going on. So we're right in the middle of it. Okay. We good? Okay. I think we're good now. So we're going to go for a 10-minute break. We'll come back in 10 minutes. [Break]

Thank you very much, and welcome back. I encourage people in the room to take their seats. And first of all, just one housekeeping item. Our break took a little longer than expected because we had some technical difficulties with the HDMI cables and things with some of the internal monitors. So we apologize for that, but we seem to be fixed and up and running. So we're going to carry on with the second part of today's presentation. I'm going to give it over to Nicolas Vilchez, here he comes, who is going to introduce himself, and then we're going to go into pretty much the same way we did the first one with pretty much rapid fire with other specialists. So the way we go.

Okay. Thank you. Okay. So good morning, everybody. Welcome back. My name is Nicolas Vilchez, I'm from Argentina as well. And I am LatAm operations manager, and I have been working in lean methodologies for the last 14 years in different companies. So through the day, we have talked about the strategy of putting more efficient miners and doing fast deployments. We have talked about operational excellence through the simplicity of our facilities and the cost efficiency and through the 24/7 control. And we have talked about data management through MGMT, our own system that we have developed within the company. We know we have grown. We are growing and we work every day to continue to grow. So this is why we decided to create our own Bitfarms Operating Way. So this system, as we call it, BOW, is our own high-performance system and is based on the principles of lean manufacturing. So with this, we will develop a standardization system for the whole company based on the most important principles of lean manufacturing. We will develop management and leadership competencies to make sure that all our leaders in all the levels of the company have the right competencies to apply to their job. And we will develop a powerful continuous improvement system that would lead us to go a small step every day and make sure we give big improvements every day. So I will give just a quick basis on what is lean manufacturing. Most of these methodologies were born in Japan, more than 60 years ago. And we can see that here, we deploy the total productive maintenance that is going to -- well, to take to maximize the uptime by going to the zero breakdowns in all the facilities. We'll talk about total quality management that is going to assure the process control and the process definition so everybody knows exactly what to do in our facilities. We will talk about just in time that is going to put the right thing in the right place in the right moment. So we have a service level optimization. And we talk about total industrial engineering that is going to do first day documentation of our facilities, so we can improve them every day. Of course, this is not new. Many companies have used it in the past. Many of you have already heard about it, but it's really good stuff to apply it to the company. We have to just [indiscernible] result, this is only for manufacturing companies. We can see examples in the technology industry and also in the service industry. So I would like to share with you why we want to deploy this system within Bitfarms. And the most important thing and the first reason is that we need to guarantee that our managers and leaders of any level of the company have the right competencies to achieve these 3 main important things. The commitment of the whole team in each one of our farms; to manage properly the objectives through defining KPIs and following them to improve every day; and to manage the skill of each one of the employees we have of each one of the team members so we can have the right person in the right place. Andrea is going to go deeper about that in the next presentation. So what we're building here is a system to develop the standards that will be built on a strong management and leadership foundation, as I said, and we will use worldwide known and proven tools and methodologies, and we are going to apply specifically to our company. On these 9 pillars, we are going to be developing the standard for health, safety and wellness, cost management, logistics, supply chains and organization, maintenance, quality management, improvement and research and development, equipment management, people development and environment. Of course, maybe you have seen or will see a system like this in many other industries. This is not new. This is our own way to apply to our company. Each one of these pillars or these verticals are going to help us to create most efficiency and more cost improvement, sorry. So just to talk about some examples, by developing the cost management vertical, we are going to set the standards to properly track each one of the costs we have in each one of the lower level of our facilities. But that we are going to be able to identify non-value-added activities and eliminate them or minimize them. Or for example, in the maintenance pillar that we are going to be developing the standards to kill the breakdowns or to put the breakdowns in the lower level possible. So what we can continue to optimize the uptime, so we know we are already excellent. We know that we are one of the best performers in the industry, but we want to continue evolving. That is what motivates us to develop this. So some examples of the early application. Here, we can see how we're applying a basic tool that is called 5 "S" of the Japanese origin. We will organize each one of the workplaces we have that is going to assure people to work safely and to know exactly what to do and have most more efficient workflows or for example, we are building our own quality management system and all the procedures that we're going to be -- you know we are already in 4 countries, and we are deploying the same miners in new facilities with new people. So this is going to set the basis so we can trade them as fast as we can. So this is the principle we are in the beginning of this Bitfarm's operations way or both, and we are going to continue to develop it. Now thank you very much for letting me be here. And I'm going to pass the word to Andrea.

Thank you very much, Nicolas. And good morning, everyone. Thanks for the opportunity to be here. My name is Andrea Keen. I joined Bitfarms last January 2022 as Vice President of Human Resources. So it's my pleasure this morning to take a little bit of time to share some of the stories and a little bit about what we're doing to support the development of what we consider to be our most critical asset, which is our people. Nicolas shared with you some of the framework of BOW, the Bitfarms Operating Way that we're currently putting into place. So I kind of want to laser focus a little bit really on the work we're doing around people development. Specifically, Nicolas also mentioned the criticality of management and leadership competencies, right? This is the base. This is the foundation of really being able to build a strong people development plan. So we have done a lot of work, particularly this year, focusing on our management, on our leadership, setting up really what the expectations are of those leaders. We've created our own 3-day leadership development program. It was custom designed for us with a local university, all of our people leaders participated and it really kind of set some of the foundations of core competencies we consider around leadership like communication, feedback, delegation, engagement and coaching. But of course, we understand what goes on in the classroom has to be applicable to the real world. It has to be applicable in all of the work that we do across all of our operations. We do base our culture on high performance. We really want to drive performance throughout the organization. And we really base ourselves and kind of ground ourselves on these 3 pillars. So our values, which you can see right here communication and measurement. On the communication piece, just like we create transparency with the market, coming here today as one example. We want to do the same internally. So we recently, about a year ago, implemented town halls, which are kind of like quarterly all hands calls. Employees are all invited to join. We give some kind of key pertinent presentations to the team and then open the floor to Q&A. So this really gives the opportunity for employees to ask their questions. The entire management team is available to them to answer really, any of the burning questions they have, whether it's about their roles, whether it's about the market, we're really there to provide that clarity. From a communications standpoint as well, we also focus on the individual level. So we've implemented a process this year called contribution management, which is a continuous feedback cycle with employees. It's a one-on-one between a leader as well as their employees where they have the opportunity to talk about their role specifically, and any development opportunities that they can identify for themselves. From a measurement perspective, you've seen kind of some of the great things we do from a technology standpoint. So now we're looking to link those. MGMT is one example to the work that our employees do in the workplace. So we're able to kind of create some key performance indicators, work that our employees are doing and are able to measure that against how they're performing and able to really quickly come in and put in place some easy improvements. Right. Then just like the BOW talks about kind of a continuous improvement loop. We kind of see the same thing happening from an employment perspective, from a people development perspective, right? So it's very important for us to have skilled teams, very clear roles, very clear role profiles and understanding of what everybody does in a detailed manner. Through BOW, we've also created a skills map. So we're able to identify really what are the key skills, competencies required to do a job, and we're able to evaluate each employee against that so that we can determine really some company-wide areas of focus for larger and broader training programs. We've also recently started to enrich some of our roles. So taking as an example, a diagnostics technician, giving him some IT or some cabling responsibilities. So we're giving him the opportunity to learn new skills and it's enriching his role. It's kind of giving people a broader perspective within the organization. This also helps us reduce our head count or minimize the need for new headcount. And it also keeps us lean, right, and making sure that those jobs are enriched. Examples like this is something that really helps us scale as we grow globally. One example of this would be as we started to power up Argentina a few months ago, we identified the need to have one of our repair labs locally in Argentina. We found an employee who was kind of a skilled microelectronics technician. So we brought him over to our lab facility in Quebec, gave him a couple of weeks of training and then send them back to Argentina to kind of apply it over there. So obviously, this gave him a good professional and personal experience, but also it set us up for a lab there locally in Argentina. Now once we start to power up Paraguay, we've already got the skill set there and we can kind of easily scale that very quickly locally, right? So we do believe that these types of opportunities really enrich the roles, give people opportunities helps retain employees. Obviously, our best retained employees create the next generation of leaders in the organization. And so this loop kind of continues to go around and around, right? You've got skilled people who are with the company a long time learning the management skills that we're teaching them and then they're kind of applying that to the next generation. So very important initiatives for us. And we really feel this is something that sets us apart. So I'll pass it over to Paul. Thank you very much.

Thank you, Andrea, and hello, everyone. My name is Paul Magrath, and I am the Vice President for Tax Sustainability at Bitfarms. I'm pleased to brief you on our ESG mandate and where we are to date. As a Canadian CPA with 30 years of experience in corporate tax and over 20 years working with governments on tax policy and administration in Canada, the U.S. and with OECD, I think I'm uniquely positioned to lead this effort. At Bitfarms, and we were planning to launch our ESG in 2022, and I raise my hand to get involved and helped drive our strategy forward, and I'm excited for the opportunity to bring my experience to lead Bitfarms in this important endeavor and have the support and guidance from the Board and from senior management to take our existing strengths and apply those as we embed ESG principles in our culture, integrate feedback from all levels of the company and take that forward. ESG has and always will be a part of our DNA. What is sustainability. Sustainability consists of fulfilling the needs of current generations without compromising the needs of future generations while ensuring a balance between profitable economic growth, environmental stewardship and social well-being. This sounds a bit like motherhood and apple pie. But at the same time, we have seen many calamities over the years from climate change and the mortgage crisis and Ron, the mining of Cobalt with child labor for pennies a day, and human rights violations in a company's supply chain. This ethos is necessarily moving from the media front page to the balance sheet and the annual report. Additionally, the explosion of ESG standards across the investment community has done more to confuse investors than to inform them. However, with the recent push from the ISSB, IFRS, the SEC and the EU regarding mandatory disclosures, the fog is beginning to clear and we should see a greater consistency and comparability in the ESG information provided to investors, giving them the ability to look at companies across industries and determine how each of them are doing at identifying, reporting and mitigating the risks within their business. As I said, ESG is in our DNA. We remain committed to sourcing economical renewable power to supply our farms wherever we operate and will consider when and how to mitigate the greenhouse gas impact of our operations as and when those regulations are put in place. We were first and continue to be the only publicly traded Bitcoin mining company to be audited by a Big Four audit firm, and we continuously work and review our internal controls with external advisers to improve upon those as well. As you've heard through our various programs, including [ BLIMP ] and Bow, we are working to build the principles of excellence, collaboration, fairness and compassion into our people. which, together with open communications, will help keep us nimble and responsive in meeting the changing needs of all of our stakeholders. The journey in late 2022, we formally created an environmental and social responsibility committee at the Board level, led by Ed Hoffmeister, a seasoned executive with a depth of experience in governance and ESG. That followed in April 2023 with my appointment to lead Bitfarm's team and ESG effort. And shortly thereafter, I stuck steering committee represented by employees from all key areas of the business, including corporate governance, human resources, IT, finance, Latin American operations and marketing communications. In June, we conducted an internal materiality assessment and received responses from employees from all areas of the business and across our geographical footprint. The results were very informative and included highlights on our energy use, intensity, energy mix, general quality and supply chain concerns as well as continue to find ways to support the broader communities in which we operate. We will continue to seek feedback internally and externally as we develop our ESG strategy. In August, we licensed a SaaS platform from [indiscernible] ESG out of Toronto, which will be implemented over the next 2 quarters with the plan to create our baseline reporting well in advance of the disclosure requirements under IFRS and the SEC. So in closing, and before I hand over to my colleague, Patricia, Bitfarms is starting from a strong base on ESG, and we are committed to ensuring we create a sustainable business for all stakeholders. Thank you. I think it's a couple of slides behind. That's all right.

Thank you, Paul. Good morning, everybody. I'm happy to be here have an opportunity to present something that not many companies release about. My name is Patricia Osorio, and I am Vice President and Corporate Secretary at Bitfarms. My experience, I bring to Bitfarms 18 years of experience in corporate governance roles, basically Canadian companies, publicly listed companies. My previous role was with a Canadian company based in Montreal. I dedicated to the development of environmental-friendly technologies for the mining industry. So we faced a lot of -- similarities as we do in the Bitcoin mining industry. So as such, I am not a stranger to navigating to disrupt initiatives and the efforts of educating others about the benefits of conventional ideas. As Corporate Secretary at Bitfarms, I am responsible for managing corporate governance and compliance on a global basis. I support global business development and integration from a perspective of balancing the respect to local laws and the North American-based practices. Corporate governance in a global company as Bitfarms presents a myriad of complexity of compliance in multiple jurisdictions that affect all aspects of our business. It is like playing tridimensional chess every day. My job is to work through these complexities. And as I've been told in the company, I am the fixer. When a problem arises or an issue comes up, I need to find a solution or I need to put together the right people who needs to get together, analyze the situation and find the best way of moving forward. Each territory brings its own challenges from a legal and regulatory perspective, but also from a cultural point of view. This is based on the users and customers of each place where we work with. We need to work with that complexity of how people are used to do business as opposed to how is the righting of way to do in business. As an example of the specific challenges we have faced in Latin America, it has been already mentioned by Damian, and I think it came up in a question. It is the complexity of importation in Argentina. So basically, what we did is taking a step-by-step approach. So we needed to put in place a system to import initially through third-party brokers because we could not qualify as direct importers. Then after a few months of dealing with situation, we finally qualify as self-importers. In the meantime, we were faced with restriction in importations imposed by the government. So each of these step-by-step approach has allowed us to say now that we are successfully accomplishing that task of having in Argentina, all the miners we need to operate to fully operate the first 50 megawatts warehouse in Argentina. It took a lot of patients per severance and a lot of teamwork to understand the process and to pass through every stone in the road. Another example and a more recent one, we have been as a challenge, it relates to Paraguay. What happened Paraguay with the new Paso Pe project is that the main pieces of equipment for the super station, we have to purchase them from unknown vendors located in China and other countries. These bring to us the risk of counterparty risk. As a way to mitigate that risk, we have put together myself and Paul, Jeff and [indiscernible]. So we put together that team and we created a vendor KYC due diligence process. This is a way of applying scrutiny of potential new third-party vendors and reduce or mitigate better party risk. As a global company and one that takes pride in doing things correctly and transparently at Bitfarms, we take this responsibility very seriously, and we are committed to keep doing it that way. I will say that my role I have the important task of making sure that the Board of Directors sleeps well at night, knowing that we at the management level, we do have processes, and we have practices, the best practices we can apply to mitigate our global risk operations. And that is basically my presentation. I will hand over to Jeff Lucas, I believe. I didn't mention this, but this is just to show you how we operate. We are in 4 countries, and we have like 12 different subsidiaries and does the complexity. Thank you.

So following on the heels here of the fixer, I guess, I better behave. But 1 point just to make here quickly, for a company of our size to have a global footprint, the challenges are immense, particularly from a compliance standpoint. And quite frankly, Patricia does an outstanding job of ensuring that we are indeed compliant and then we're moving ahead in these various problems and the complexities that we have in every country in which we operate. So I'm Jeff Lucas, I'm the CFO. I joined about 2 years ago, during -- right around the time we were listed on NASDAQ. I've been in CFO and COO roles with public companies on NASDAQ and New York Stock Exchange and LBO companies as well for the past 20 years. Previously, I actually began my career on the buy side. I picked up my CFA along the way. I spent 6 long torturous years getting my CPA at PwC, which I really don't recommend to others. And then I also worked on Wall Street high-yield finance and special situations analysis here. And Jeff and I go on the road a lot and speak to many of you folks here, we talk about operational excellence. That rolls off the lips very, rolled off a tongue very easily. But when it comes to putting in practice, it's a very, very complicated process here. And our goal here is to provide transparency, pull back the curtain a bit. You can meet some of the folks who make that operational excellence possible. These are the folks who drive, giving us some of the best metrics industry. It doesn't just happen. It's a huge effort, and it's a learning process as we continue to go along the way here. So my goal actually right now is to talk a little bit about our overall finance strategy, not just our capital-raising strategy, but our finance strategy and some of the other elements that you might otherwise normally know about and how that plays a role here. So we're talking about operational excellence, really, from a finance standpoint, there are really 5 elements to it. The keystone of it naturally is our capital raising strategy. We're in such a capital-intensive business here. We want to be sure that we have the availability of capital and that we can do it as cheaply as possible. What comes into play in those areas and some of my colleagues are going to talk about that, are some of the elements here that you see to my right here. So very, very important to us is to have our transparent accounting and reporting going on. That's key. Not only do we have very effective reporting internally, I think we're -- said it very well, if you can't measure it, you can't manage it. But also to make sure that we are also very effective in terms of what we report publicly. You've heard again and again in our sector, some of the challenges about restatements, delays and filings. We have to stay very much on top of our game to make sure that does not happen to us, that we're ahead of the curve. We understand the accounting changes that are going on, let's keep behind it. Another point here, and you'll hear more about this by Marc-Andre, particularly they're having right around the corner, controls and information about what our exact costs are. What are the discretionary spending we can save money? What are the areas we can't? As we go into the having here, we know what the impact is going to be for energy costs. But we also know we have a lot of fixed costs as well. How do you manage and minimize those fixed costs going forward given the uncertainties and the challenges we're going to have, particularly with the hash price and [indiscernible] as they go into the having here. The other point here is to make sure we have prudent banking and treasury management, counterparty risk. How many times do we hear that as you've talked about companies? And how many problems do we hear about companies having with counterparty risk? We work assiduously to make sure that we're protected about that and careful. Patricia talked about this vendor KYC [indiscernible] we have in place here. It's a pain in neck. It really is. But we also have a lot better at night knowing that we have that in place. That is key. I can't overstate the importance of that. It's not appealing. It's not sexy from the standpoint of growing the business, but you got to make sure you have those building blocks in place here. And lastly, Global Risk Management. We have to look at our operation overall from sample the risk and exposures here. But not that, but we're actually doing some very forward-thinking work that Jeff Gao is going to share with you right after me in terms of where the opportunities are with hedging. Part of the challenges here is that it can be very, very compelling applications of hedging. But is the street ready for that yet. And that's some of the wade things that Jeff, Morphy I have to weigh as we're sort of moving forward with some of the terrific ideas and advances that Jeff Gao has made here. So just going on, I'm going to be a little quick here. And going on to what is our capital strategy? What are some of the elements that really drive it? Well, you know what I'm going to go right down to the bottom here. We have a pretty simple thesis, and that is if you're in a highly volatile industry, mandating an aggressive growth strategy, you need to have a conservative financial strategy to prosper over the long term. Pretty simple concept, but that's what dictates what our actions are every day here. And it really makes a lot of sense. If you're going to have an aggressive operating strategy dictated by the industry or otherwise, you need to have a conservative financial position. And we all know of many of our peers who are struggling for reasons by not observing that really the key principle here. But in terms of the financial prudence and conservatism, that's key to us here. Ben made the comments and others have as well about accretive intelligent growth. It sounds pretty simple. But we are very, very disciplined in how to go about that. One thing we do here is that we really have a very highly disciplined practice here, fact-based analytical rigor decision-making. Ben gave you a great example of there. As we're looking at our current situation, we're assessing opportunities for self-mining, potential opportunities for hosting. We look at some of the economics in the same fashion that Ben outlined this morning. That's part of the thinking as you determine and assess what our next steps are given the environment that we see ahead of us here overall here. That, in turn, this requires a lower cost of capital going forward. A key part of what we're doing here naturally is to minimize shareholder dilution. We are obviously -- our goal here is to increase shareholder value here. And again and again, we look at making sure that the projects in which we're involved in makes sense and make a special return far more and far in excess of the cost directly that we and the rest of our industry faces overall here. The other point is we are actually generating positive cash flow from operations here, well above our actual debt service requirements. We are actually going to be paying down in full our debt in advance of the having. So we're going to see very well positioned for that, and I'll talk about that just in a minute. And in so doing, we're able to use our ATM in truly accretive fashion. We have to be sure before we spend money in the ATM that, that money is going to -- generate a return well in excess of our cost of equity here. And then lastly, again, just a comment about the appropriate financial leverage. A year ago, we had $165 million of debt. Today, we're down to $11 million. In February, we're going to have none. We're going to be very well positioned for the having on 2 fronts: one, we'll have more than ample liquidity, so that as long as it takes the process takes to work its way through in the having, we'll be well positioned. But even more importantly, as opportunities present themselves, we can bring our operational expertise to make those businesses profitable better than others can hear. And we're going to have the financial resources to take advantage of that. So on that note, let me now ask you to turn this over to Jeff Gao.

Prior to joining Bitfarms, the most Spanish I had ever had exposure to was Narcos: Mexico. And as you know, most of that Spanish cannot be [ repeated ] in polite company. So it inspired me to give Duolingo another try. I speak Australian, and they tell me it's close enough to American that it doesn't need any translation. So hello, everyone. My name is Jeff Gao. I'm the VP of Global Risk Management at Bitfarms. My background is in pensions, insurance and investments and retirement systems. Prior to joining Bitfarms, I was developing portfolio allocation strategies to manage our company's Bitcoin reserves. And those ideas and conversations bought Jeff Morphy and I together and lay the foundation for my joining Bitfarms family. My responsibilities at Bitfarms are multifaceted, but they're essentially to support the company in evaluating risks and opportunities. That includes developing new products and strategies to optimize how the company provides investors with smart sectorial exposure to crypto and to do so in ways, the control for excessive counterparty and execution risks that we see too often in our industry. Bitfarms is a very purposeful investment thesis backed by a methodical approach towards strategy development, and execution with active and continuous risk management. That investment thesis involves -- informs how we manage our mining activities, doing so in ways that support our Bitcoin exposure. What is problematic for crypto miners is that we are a high beta asset class. And that makes us even more volatile than Bitcoin. That's a problem we need to solve, and I think we have a solution for it. We're going to solve that problem using a concept called Synthetic HODL, which has 3 essential characteristics: one, we want to give our investors leverage to the upside. We want exponential growth when the market takes off. Two, raising capital is costly. So we want to be responsible fiduciaries in the management and deployment of our scarce capital. And three, when the market turns against us, we want to limit our losses and to do so without giving up that leveraged upside. Synthetic HODL is an innovative hybrid strategy towards Bitcoin accumulation that takes into consideration Bitcoin volatility and capital scarcity. To provide investors with effective exposure to Bitcoin, simply maintaining a Bitcoin reserve is necessary, but not sufficient. Adding long-dated call options into the mix changes that dynamic dramatically. The call option brings 3 desirable characteristics into the portfolio mix: one, we cannot lose more than the premiums pay for the call. Two, we can tailor the structure to create nonlinear upside relative to owning a Bitcoin. And three, the cost of the structure relative to owning Bitcoin is efficient use of scarce capital, which minimizes dilution to the company. To give everyone an idea of the returns we can expect from Synthetic HODL, let's look at a Bitcoin call option that expires on the 28th of June 2024. That's approximately 300 days from today, 288 days to be exact. This call option costs $3,500 and gives Bitfarms the right, but not the obligation to buy 1 Bitcoin for $30,000. You can go ahead and now look at the risk-to-return ratio. This is the payoff profile for the call option introduced on the previous slide. If Bitcoin rises from $30,000 to $40,000, that is a 33% increase in price, but the value of the option has doubled. It's up 100%. And if Bitcoin was to rise from $30,000 to $60,000, that's a doubling in price, but the payoff from the option is eightfold. If we are bullish Bitcoin, but also concerned about a possible market downturn, then the call option is a great instrument for staying in the long game but also knowing exactly how much we will lose if our thesis is wrong and the market turns against us. Here's how the Risk Committee pulls all of these parts together to optimize the portfolio mix under Synthetic HODL. The red dotted line shows the payoff profile for 2 Bitcoins. We assume that we pay $26,000 for each Bitcoin, which is roughly the current market price. And in that case, a Bitcoin goes to 0, we lose $52,000. If Bitcoin goes to 80,000, we make $180,000. Question is, can we do better than this? Let's suppose we sell 1 of our Bitcoin and use $26,000, and we use part of the proceeds we used $7,000 to purchase 2 call options. The payoff for the Synthetic HODL portfolio now with 1 Bitcoin and 2 Bitcoin call options is the solid green line. If Bitcoin goes to 0, we lose $33,000, not $52,000. If Bitcoin goes to 80,000, we make $147,000, not $108,000. So we lose less on the downside. We gain more on the upside, and we spent less cash constructing this position relative to straight Bitcoin HODL. Another way to look at the capital efficiency of Synthetic HODL is the extent to which alleviates our need to tap into our ATM program. Going to the [indiscernible] and beyond, for every Bitcoin we replace with a Bitcoin call option, we would spend around $0.15 in the dollar for the upside and free up the other $0.85 for reallocation. We can either use that to fund growth capital expenditure or to strengthen our cash reserves. When Bitfarms looks at mining versus Bitcoin versus Synthetic HODL, we are essentially reducing our capital allocation decision to one of portfolio optimization with the goal of optimizing that risk-adjusted compounding growth rate for shareholders. And the investment ethos we adopt, we're making these strategic choices is informed by 3 canonical characteristics: risk mitigation, capital efficiency and leveraged upside. To recap Bitfarms' fundamental rationale for developing Synthetic HODL. The diagram on the left illustrates the performance of a high beta asset against Bitcoin. The downside is amplified and the potential losses are uncapped. The diagram on the right illustrates the performance of the Bitcoin call option which gives Bitfarms the right but not the obligation to buy 1 Bitcoin. The risk to reward is asymmetric to the upside as the losses are limited. There's a lot of information to take in, but I certainly look forward to everyone's questions during the Q&A. And with that, allow me to hand over to my colleague, Marc-Andre.

Thank you, Jeff. Hi, everyone. I'm glad to be here today to speak about what makes Bitfarms different from an accounting and finance perspective. First of all, let me introduce myself, I am Marc-Andre Ammann, VP Finance and Accounting at Bitfarms. I've joined the company in May 2022. I am a CPA in Canada, and started my career as an auditor with PwC in Montreal and here in New York City. So then I spend the next 18 years in big public companies, including 10 years at Canadian National Railway. So with the -- having around the corner, let's have a look at what the finance team is bringing to our shareholders and what makes us different from the others. One place where we differentiate ourselves from the others is with our accounting and reporting. Company-wide, we are 11 CPAs with deep knowledge of accounting, obviously, and a great experience with public companies and the crypto industry. Accounting-wise, we really -- we focus on the strict application of the IFRS principle because it's really important for us to do what is right, no matter what the result is. We are the only public miners that has financial statements audited by a Big Four. We started -- and that has been the case since incorporation 5 years ago. We started with EY, and it's been a couple of years that our auditors is PwC, which we have a great partnership, by the way. With the level of scrutiny, the market is -- the industry is getting from the market, from the government agency from the PCAOB, the Public Company Accounting Oversight Board, our accounting and financial statement has to be very accurate, if not almost perfect. So that's why PwC does not cut any corners in their audit and work with us. So we use a strict and conservative safe application of IFRS principle. In addition to providing financial reporting that meet IFRS requirement, we may -- it also reflect and represent and faithfully reflect our operational performance and a clear, transparent and straightforward manners. Guys know every month, we release our monthly projection report on the first business day of the following month and we provide a lot of relevant information. Then we have cost management. With the halving coming, cost control will be the name of the game. It's really important that we set accurate expectation and that we monitor them closely. As you know, we are such compliant, and we make sure to have a good handle on our costs with strong internal control. Something else we put it in place, it's a dynamic budget process. What you want to avoid when you make a budget is that there are so many market turbulence that after 2 months, your budget is irrelevant and completely useless. For example, the [indiscernible] BTC price of $25,000 for the entire year. After 2 months, I'm at $40,000. Of course, I'll beat my budget, but it won't be because I'm performing better than my expectation. So we made the dynamic, so we can update the market data that we have no control with in order to review and monitor the result that we can control and improve. So with the processes, the control and [indiscernible] in place, we have, like I said, a good handle on our costs and we'll make sure to remain as much efficient at the lowest cost possible. Counterparty risk, obviously, you can never eliminate fully your counterparty risk, but you can certainly mitigate them by working with strong reliable partners, having safety nets and continuously monitoring them. In terms of banking relationship, our main bank is Bank of Montreal. We have built a strong partnership with them since 2019. The Bank of Montreal is the 10th largest bank in North America by asset size. We also have a bank account with RBC, Royal Bank of Canada, which is the fifth largest bank in North America by asset size. I have to say, I think a great relationship with this bank in the crypto industry is really hard. Just opening a bank account with banks is really complicated with the fact that we're working with cryptocurrencies. It took us 1.5 years to put in place all the banking solution and get being fully operational with [ BMO ]. So that's our reality. Also since this year, we started to work with Export Development Canada, EDC, which is a Crown corporation helping a Canadian company for -- of all size, performing on -- succeeding on the world stage. Basically, we're using government capabilities to give us an advantage that others don't have. On the Bitcoin management side, we only deal with recognized custodian. Coinbase is our main custodian. We have also wallet with [indiscernible]. And soon enough, we'll have a wallet with Fidelity. So only the most secure and the most recognized custodian. We even have a self wallet solution, self-wallet, where if there's anything coming up with this third party, we can easily transfer this in our self-wallet without affecting operation. On the revenue side, we sell our hashrate to a Foundry U.S.A., one of the biggest mining pool in the world. And we sell our BTC to secured and recognized exchange like Coinbase. So by exclusively and dealing with strong and reliable partners, we make sure to minimize as much as possible our counterparty risk and provide a peace of mind to our shareholders. So yes, that was it for me. Thank you very much for your time.

Okay. We have allocated about half an hour here. I don't know whether we'll need all that, but we encourage your questions. Quiz these people. They're used to it. I know I do it often. And get the tap into their minds and how they think, I think they like that. And then I'm going to follow up with my closing remarks, and then we can go and have some lunch and mingle and do things more on a one-on-one basis. Just that's the way the rest of the day looks. So let's get underway. First question.

Thanks again for having us here today. I'm [indiscernible] from Northland Capital Markets. And I have a question for Jeff Gao. I know there's a lot of Jeffs up there.

There're 3 Jeffs. Yes.

Three Jeffs. Jeff, on the Synthetic HODL, do you ever consider writing calls against the reserves in periods of when you feel Bitcoin is in a sort of a trading range or will it go lower?

So call writing is a monetization strategy. We can write it against reserves. We can use it as part of a structure for hedging. So if we go back to the heady days of Bitcoin when it was 67,000. At that point, with the benefit of hindsight would have been really good to write calls at 80,000 strike and sell put [indiscernible] at 60,000, 50,000 strike. So it is a tool within a structure that you can use for hedging purposes. You can use it in call overwriting structures through monetization purposes against reserve or against future online Bitcoin. It really depends on the strategic intent at that point in time or it can be selling a call that we bought back into the market as well. So a range of different options in which we can employ that too, depending on the context in which it is employed.

Yes. As a follow-up on the Synthetic HODL, have you figured out what percentage you want to maintain in the underlying versus purchasing call options for?

Yes. Yes, I'm going to need a diagram for that. So [indiscernible] documents if you don't mind. Does this thing still work? All right. I'm really going to have to fast forward here. Okay. So I'm going to go to that chart where I showed the example of how to optimize the portfolio mix. And while I'm doing this, there's a -- there's a chart that I was working on my PC, but I've told that I -- there's no technological solution to share today. So I'm going to have to get you to visualize it in your head as I explain it. But we are moving towards halving #4. So yes, if you can just get to that -- with a one key line thing. We're moving towards halving #4. So go back to November 2012, back when only nerds looked at Bitcoin. Go back to July of 2016, halving #2 and halving #3 was 2020 -- middle of that year. But 2020 was special in that you had the Robinhood phone apps, thing taking off and you got middle of COVID as well, where people were just -- bought s*******, really didn't know what else to do. So you've got all these factors mixed in there plus the halving. So the way we want to optimize this is these options bleed time value. And the last thing we want to do is to invest a whole bunch in long-dated call options, 10 months to expiration, that takes us beyond what is expected to be the April 2024 halving, but only for prices to be range-bound and then ripping 2025 because we would then be exposed to none of that upside. So as part of that, it's about continuous and active risk management, which is to say, given the budget that we have, how do we maintain that continuous exposure? And so if you look at this chart here, there is a very specific region where synthetic HODL underperforms traditional HODL as you know it. And it is in that plus or minus 33% range. So we've got 30,000 as the midpoint. You go down to 20,000, you're even with traditional HODL, up to 40,000, you're even. Anything below 20,000, you outperform the market. We outperform a competitor anything above 40,000, we outperform. So the question is, we invest a bunch in long-dated call options alongside physical HODL, and we have a 10-month trajectory. In that 10 months, do we expect Bitcoin to remain range bound? And if so, we probably still want some exposure, but we don't want to put all of our basket into that. We might want to do it in 2 tranches of 10 months and be able to stretch out that optionality budget over a 20-month or a 30-month trajectory. That decision, again, is going to be reliant on the advice that I get from other members of the Risk Committee. So it's a 7-member risk committee that makes this very special decision in terms of that portfolio allocation. Ben Gagnon, who you've heard from, very talented guy, is going to have an opinion as to what that ought to be. But once we figure out the type of exposure that we want us and our investors to have, then we implement it. And that informs as to whether that's a 80-20 or 70-30. It's really hard to answer it at this point in time. But we are going to the halving, and we do know that if we look at the past 3 halvings, there is a delay before prices take off. And that's factored into our decision making.

Every Friday morning at 8 a.m., we get to go through.

If I can just add a comment or 2 to that as well here in terms of how we approach this. So the question was also, what's the magnitude of our involvement in this? And we -- it makes a lot of sense conceptually. We've gone through the math many different iterations in different ways. But we also know that we need to step a little carefully and thoughtfully here. Part of the issue that comes into play is that we do have a retail base of investors that may not fully appreciate some of the economics that we're sharing with you here. And they may say, "What, just -- you're reducing your HODL? Oh, it's not as big as it could have been otherwise?" And we don't want to be in a position where we're penalized that. We want to make sure that our message gets communicated very effectively here. Another point I just want to make here, I think you might have alluded to this in your presentation. We spent 6 months putting the governance and deals and procedures in place here for what we're doing. We want to make sure that we had a very structured, disciplined program that even involves a review by the Board. We won't engage in a single strategy of this nature without the Board's review and approval. So those are some of the steps we have in here to certainly minimize some of the uncertainties and the risks.

It's [ Brian Wheaton ] from Needham. Just one follow-up there. It sounds pretty dynamic, the sort of hedging strategy. I guess what are some of the other inputs that kind of feed into your analysis in those Friday meetings? Halving, timing and traditional cycles, kind of how it played out? But what are some other inputs that might kind of influence your decision-making there week to week?

Well, okay. We probably need to pull a few more people in action here. Philippe, why don't you jump into this one because you and your team do a lot of the modeling of this. If Ben's still on the line, he can jump into this. But I think generally -- I'll start with a general statement. Generally, we're looking at this as a repeat of what we've seen in the last few 4-year cycles. So the halving is going to take place mid-April. There's -- as Ben has talked about and others have talked about, we don't know where Bitcoin price is going to be at that point, but if it's still sort of range-bound where we are now, things are going to get really tight. Even if they go to -- even if Bitcoin price goes to $40,000 for the halving, it's still going to be tight. There's going to be a lot of blood on the street with miners and hosts and energy arrangers, if you will. And as we've seen in the previous halving periods, there's 4, 5, 6 months where there's an adjustment process. And while the Bitcoin price starts to ease up, there's nothing really dramatic. But generally, as we've seen in the past 5 months-ish, and then there's a bull run and like it just takes off. And -- we don't think it's going to change a lot. There's some macroeconomics wins, like with inflation and interest rates that are affecting where we are right now. But generally, that's the overlying premise. Philippe, do you want to jump in next as to sort of your modeling and how you look at that?

And just clarifying whether the question was specifically to the hedging program or to the overall operation?

You're saying it's kind of a weekly process of thinking it through. And I guess just curious, like how bits of news flow might impact that kind of over time?

Philippe, why don't you come up so you can get on the -- on the screen for the people at home?

And I think to that specific point, I'll pass it on to Jeff Gao very rapidly to what we're concerned, but I'll just say that on our -- sorry, on my side, this particular program frees a lot of cash that's non-dilutive for doing growth. When you can preserve the upside of the Bitcoin, which is what we want our investors to be exposed to, yet you can sell a good portion of it, capture the cash and go spend it in some growth. It's -- it's very accretive. So when it comes to market dynamics, Jeff and Ben are a lot more in tune. So Jeff, why don't you comment on what feeds into your analysis?

So in order to optimize that portfolio mix -- by the way, one thing that was very disconcerting that Ben Gagnon said is when it comes to purchasing miners, timing is incredibly important. As much as I take comfort in the expertise that is encaptured within our management team, I don't think we build a business based on timing things correctly. I think -- we cannot control timing. We can control timing, but we can't time it exactly, and we certainly cannot control pricing. The only thing that we truly have control over is capital allocation. So -- and I also deal with the insurance as well on the Canadian side and more recently on the U.S. side. And when I look at the statement of values that add up to 100% for a particular site, I look at what percentage of that is in the miners. And the fact that to get [ Alpha ] out of miners, you really have to time that correctly. That factors into my thinking in terms of you've got 100% of your budget in terms of how you want to invest, how do you want to allocate that portfolio mix between mining, bitcoin and optionality. That influences that decision making.

My question is related to the HODL strategy. What other type of strategies has the team considered? Has Bitfarms previously engaged in lending? I can't recall. And how far are you -- how far are we from the industry partaking in that type of strategy in the future?

Well, I'm the most -- I'm the newest member of Bitfarms in terms of historically what we've done, others are probably more experienced at talking about that. But if you step away from the public miners and look at the crypto hedge funds, the use of derivatives and optionality as an overlay on top of a long-only portfolio, for example, is not uncommon. And if you step out of crypto altogether and you go into broader equities, it is bread and butter. It's been there for decades. It's tried and true. What is special about Bitcoin -- and there was a question previously in the past around about the Bitcoin as a commodity, is that if you look at any other commodity, whether it's gold, silver, copper or what have you, oil or gas, they don't HODL that. There is a special characteristic with Bitcoin where investors attribute value to us simply having Bitcoin on our balance sheets, thinking that we want to apply -- is there a smarter way to have effective exposure that is also continuous and a way that's capital efficient. So that's what goes into that HODL -- Synthetic HODL strategy, and optionality is a tool within that toolkit. And certainly, we want to look at other structures as well. And that's part of our innovation lab that, if you will, we have at this management level.

And then, I guess I probably don't understand the synthetic market as much as I should. Any kind of high level around how deep the market is, i.e., as I sit here today, it looks like our Bitcoin production should really start to ramp as we extend our footprint. What is -- how big is that market? And really, has that been kind of a flattish derivatives market? Has it expanded over the last 12 months? I mean you mentioned financial players, are they coming into the market? Should we be -- and then what about like the counterparties, when we enter into a transaction, do we know who that transaction is with? Just these are some high level -- I'm assuming we're buttoned up here, but I just think some broader comments around that is probably pretty helpful, just given the strategy.

That's a very pointed question, and it's probably one of the biggest risk factors, counterparty risk, who we execute with. And there's a range of, I guess, facilities that we can put in place to partially reduce that risk, but you cannot fully take it off the table. I mean, we would love the fact for someone like an interactive broker to offer these types of instruments or fidelity to be truly too big to fail. But nobody in crypto is too big to fail. And the...

At least not yet.

No, correct. And it might be a while before we get there, but we're ready to go. So the exchange that currently has the deepest liquidity for crypto derivatives, especially options, is Deribit. And Deribit is in exchange where -- I don't know if we're going to get sued for saying this, but I'm not comfortable putting collateral on Deribit. I can put it that way. So there are a range of options that we have available, and we've had very deep discussions, some of which we've already executed, agreements we've executed, others are in the final stages where we can look at triparty custody, where we can look at deferred premiums and deferred settlement, where we can look at bilateral hosting of collateral for unrealized profit. Because look, if we put on Synthetic HODL and it's deep in the money, ultimately, it's about having more Bitcoin on our balance sheet because we're going to sell the calls, and what are we going to do with the cash? We're going to buy more Bitcoin with it, ultimately. And that's how we leap forward and take over our -- be ahead of our competitors. We don't want all of the unrealized profit to evaporate because the counterparty has defaulted and gone out of business. Same thing when we hedge as well. We've got all of that -- it's one thing about Bitcoin in reserve because we can sell it. But unmined Bitcoin, it's very hard to forward sell that unless you use a derivative, which again brings into this counterparty risk. So who we execute is extremely important. And that, I believe, is probably the biggest -- relatively speaking, the biggest vulnerability in this strategy, always comes back to counterparties.

So Jeff, you talked about people you don't want to work with. Who's on your do want to work with list? And then as a second part, talk about what you expect to happen around the ETF approval process.

Yes. I have 0 insight into that. Second question? Regulatorily...

Our mine must be negative, then.

Yes. I'm not waiting for it to happen. All I know is that every time news comes out, it gets faded very quickly. So I'm very careful in terms of how we take that and how we're read to it, especially how we use that information if at all, to position ourselves. On that first question, sorry, are you able to repeat your first question?

Yes. You're not in favor of Deribit. Who are you in favor of?

Yes. We're in favor of executing with counterparties who are risk neutral. So their riskless principles and their business is to intermediate between us and other counterparties. And as part of that intermediation, they have to provide a number of services: exchange default risk insurance, tri-party custody, deferred premiums, bilateral posting of collateral. Prime brokers are one of those, and certain types of OTC exchanges who have a special relationship with Bitfarms are those that we work with as well. But you don't ask, you don't get. So everyone we talk to, we say, these things have to be on the table. If they're not, look, we love what you do, we know that you have a deep market, but we simply can't work with you. That's the way it is.

How many of those firms have sort of met your criteria? And how many have you engaged?

I've lost count how many we've engaged. But what's surprising is when the conversation goes dead and we go elsewhere, eventually, they come back. And very recently, serendipitously, they've come back and say, "Hey, look, we've thought about what you proposed and we do this." In fact, I was on the e-mail just then replying to a certain kind of party that wants to now come on board and entertain some of the suggestions that we've had. So it takes time, but I think people are starting to wake up that. Unless they start doing this, they are not going to become institutional. And I think it's in their interest to work with someone like a Bitfarms to do product development and use that as a flagship and a template for how they want to engage others going forward.

Is there any circumstance where you might actually hold an options contract to its conclusion?

With?

Like your long-term call. Could you hold it to termination? Or would you just look at selling it?

We'll hold it to maturity, that is. Yes, that's certainly on the table. But the thing is, Bitcoin and crypto in general is such an immature, impetuous market that you get rewarded for monetizing things ahead of expiration. So we have -- I mean, we purchased the optionality. We have no issues holding into expiration. But if the opportunity presents itself where returns intermittently are well in excess of what we're expecting, why not take some of the money off the table and buy Bitcoin [indiscernible]. That's the whole point of the game anyway. So we might -- people might drop a gift in front of us prior to expiration, and we'll certainly take advantage of that. And that's why the analytics -- Paul, you mentioned, it's actually run every day. And the risk committee meets on a weekly basis to do positioning assessment.

Thanks so much for indulging me, Jeff. Appreciate it.

Jeff Gao mentioned the tri-party relationship.

That's right.

That's something that's -- we think is valuable. It's not immediately received by everybody. But as Jeff mentioned, they come around to it. And that's been important to us to get that type of relationship for making sure our interests are protected.

And it's taken us a while to get those in place and work out all the details here. And I want to just add a comment, sort of response to your statement, [ Greg. ] One sort of simplistic way, maybe overly simplistic, but look at what we're doing here with Synthetic HODL is -- what it does is we are, in essence, you could argue you are selling a -- you're selling one of your Bitcoin. You're paying 15% of that as the premium for the options. So you still maintain the upside and the opportunity there. And then in theory, that 85% of the balance can be used for your CapEx. So you're doing that rather than incurring an ATM with a 30%-plus cost of equity here. So when you think of some of those underlying economics, that can be very compelling, it's maintaining the upside. So if you do go beyond that 30% range that you spoke to, obviously, you benefit from that. If it doesn't happen, if you don't have that level of movement there, yes, you will lose your 15% premium. But you'll have used the 85% of that money here, not at a 30% cost of equity.

You have an online question?

I've got 2 questions online. So we'll do the first because -- then [ Philippe ] can sit down. But it will kind of -- how is visibility around power cost in South America compared to that of North America? And what do CapEx start-up costs look like in South America versus North America?

The question was for CapEx and power price of energy?

Yes. So Jeff and Marc can do CapEx and you can do cost.

If you will, we're pretty transparent about our cost structure in both hemisphere. We've got great power costs in Argentina that's fueled by -- what Damian's explained, the second largest shale gas, and we've got a very positive view. Same in Paraguay, where our power contract long term are fixed at $0.039 plus VAT. That's great. So it compares favorably to what we have in North America. I think something that I'd like to mention or highlight about South America is just how resource abundant the region is. Now there are some challenges to go tap into that, and I think we've got one of the best team to execute on it. When it comes to CapEx, we also present a -- like we can show actual stats about it. We have built now 60 megs in Paraguay and Argentina, and our cost to build is really similar to what we've built in Argentina -- in North America. Of course, we had to build a substation in Argentina. That's a different set. But when you look at medium voltage, low-voltage, [ rack space ], distribution and transmission of electricity, it's also very, very competitive.

Paraguay was turned out to be an example where we experimented with the 10 megawatts. Maybe not experimented, but certainly, we were careful going into that region. And it turned out we could build that new warehouse structure in 3 to 3.5 months, and it was our lowest-cost build anywhere. So highly attractive, and that gave us the confidence and the deeper relationships within the country to allow us to buy these new power purchase agreements and now executing on the first 50 megawatts of those contracts. And [indiscernible] is quite literally going in the ground like this week, civil work next week, and we fully plan to be 50 megawatts operating late February, March and at a cost factor that really can't be beat in really any of our other geographies.

Yes, the numbers are pretty stunning. And they're public. It cost us just over $1 billion to build 10 megawatts within -- I think it was a 6 months' lead time from breaking ground to decommissioning. So one of the fastest, lowest-cost build we've seen in the history, really. And that was South America. So further enhancing our [indiscernible] on the region.

And there's others out there that would probably comment on -- it's not a cold place like Canada. They've got quite warm temperatures. And there's others that might be saying, "Oh, we need to do immersion and fancy systems." But using the wet wall, using the swamp wall, it works. We've been able to keep cost down there, and we just haven't really seen a retardation of a hash rate in that geography because of heat because of the way we manage our air systems, our filtration. It works beautifully. And we're just going to use more of that going ahead and augment it with the new hydro miners as well, which will be hydro miners and hydro containers on that site. And that's 20 megawatts in the Paso Pe site. And then the 30 megawatts, we really haven't talked about that a lot, but that will -- the expectation will be a warehouse, and we still have to announce sort of what's going into the warehouse.

Okay. Second question from online. How has your treasury and growth strategy changed since the purchase of the 1,000 BTC from last year?

Much more disciplined. Jeff?

Absolutely. Yes. You hit the nail on the head, actually. I think we were -- I think there was a feeling among the executive leadership and the Board that there was an opportunity here about 1.5 years ago. I don't think there was a more emotional, than it was actually more fact-based analytical and rigorous. And I think clearly, since then, as you see with Jeff and Philippe and others here, we're a whole different organization. We have a whole different way of looking at that right now. And quite frankly, I don't think in the current environment with our management team, would we have made that same decision.

That's right. And we heard it loud and clear from investors. They do not want us speculating in Bitcoin. They want us using our infrastructure and our cost of electricity to mine Bitcoin. And the message was heard loud and clear.

How should investors think about the electricity assets in Paraguay and Argentina being jointly owned by another country? Is that something that investors should think about at all?

It's not much different from our other geographies. In Argentina, like -- our power right now with our arrangement is from a private power producer. And as mentioned, Damian over there, I think they have substantial power that they -- it's all utility-grade. And -- you can come up and talk about it, but I think they've got 7 different sites. We are on one of them. And yes, they are very much government-controlled in how they do operations. But they produce the power, and we buy it. And opportunities in the future will be similar. I had one aside where other opportunities that we're not ready to operate on, but could really drive low-cost power is going out to the desert where some of that shale gas is directly and go to the source of the natural gas, maybe partner with a drilling company. We'll only be too happy to drill the holes. And then whether we do it, whether somebody else does it in terms of generating the power rate from there with the gen sets. And we've set up right there. And that could be exceedingly low power in the future. But given the geography -- not the geography, but the politics at the moment, we're not ready to do that. We've learned our lessons from the first episode that doing things in Argentina takes longer, and we have to take that into account. Paraguay on the other hand, we now have 2 counterparties. The first one for the 10 megawatts is with CLYFSA. It's that 50-megawatt pocket. We take 10 megawatts. Our relationship with them is great. That's privately owned. And they buy power wholesale basis from ANDE, which is the state-owned distributor. And what really excites me about Paraguay is our discussions with ANDE itself. And -- it's -- we have discussions right at the top of that company, and it's a state-owned company, but right at the top. And there's a real partnership that it's developing there that's exciting. Because when we first started getting into that country, some of our concerns was that they really didn't have the capital for transformers and how to provide us with the power on a consistent basis. That's been overcome for CLYFSA now. But we saw a country that had electrical system that was described to me as being almost bankrupt. Whereas now on the back of these contracts and their long-term plan -- and they've laid it out, like each year through -- I think I've seen 2031, where they are upgrading their high-voltage corridors. They are upgrading their transformers. And they're all doing it on the back of these crypto contracts that they've awarded, and their forecast is that they will be able to basically take themselves from almost bankrupt to a very viable provider of power with a strong grid for decades to come, which is going to help their population. They're excited about it. So we're excited about building this 50 megawatts and actually having some joint sort of announcements, how we're doing this in partnership, and you heard the whole Bitcoin narrative of how we can improve grids and security. We're doing that in Paraguay. So this is a real 2-way street. And this is going to benefit the whole country, and we're excited about it. Okay. Any other questions? Kevin?

Could you give us a little insight on how you're working with ANDE after your commentary there on curtailment and the -- Bitfarms' ability to not only help them build the grid but also support other enterprise?

It's still a bit of a work in art. I think it's still in process. But when they carved out the capacity for the crypto currency, it's because they already had it there, it's reliable. And -- like the discussions that we've had is they've had to look at the hydrology of those hydro dams and find out sort of -- I think it's lower hydrology in the summer and more in the winter when they get more rain. But they know from 50-, 100-year modeling on that -- the Yguazú, Itaipú area that sort of -- they know how much power they have minimum. So they have been very conservative in saying we can provide this power on a consistent basis. There is room sort of seasonally corrected for this going into that stretch area. They're not ready to go there yet. And if they go into that stretch area, maybe they can do sort of different combinations of -- sort of maybe a lower cost, but you need to curtail more. This is all firm. Damian, do you want to come up and talk about a little more -- talk about a little more?

Yes. And when you look at that because we had, as Geoff said, several conversations with them. I think there's definitely an opportunity on potential curtail electricity in Paraguay. The 550 that they have on high voltage, that's 100% secured, no curtailment. But then they have pockets going forward with a certain degree of conviction that it's going to be there. And then we may get curtail, but very little and bring the cost down significantly. So I think that's -- I mean, we didn't run our model assuming that, but that's part of the upside that I think Philippe also talked about going forward. And that's why we're excited about Paraguay also.

But the PPAs really talk about very little curtailment unless there's an emergency situation.

However, it doesn't you to go beyond the 150.

I think the optionality is in additional contracts. Now we don't want to bite off more than we can chew here. We got enough with 150 megawatts over the next 12 to 18 months. And it's high voltage and there's cost and it's $0.039 right now, which -- we're always striving for lower cost, but they've been -- those have been awarded. There will be other cryptocurrency companies developing some of that. And so far, we haven't seen a lot of that action. And when the halving happens, as I've said before, opportunities will arise. And we bought that -- the 2 contracts right now very cost effectively. Next summer, we might be able to do some more if we so choose.

And I think a follow-up to when we were talking about opportunities in Argentina, and I think this is more costly, but long-term stranded gas there, it's a fantastic opportunity. It requires, as Geoff said, investing CapEx into generation assets. So we're dealing with limited resources right now. But I think that play going forward is very interesting as well.

All right. We've got one more question, and then we'll wrap it up.

[indiscernible] were talking a little bit about this earlier and we got cut off, but I think there are projections that the U.S.A. will grow from a 10% proportion to 30%. Just wondering what markets look interesting today. Would you guys be tapping into grid or behind-the-meter-type power? What have you guys been considering?

That's in the U.S., right?

Oops. You threw me right off the stage there. We'd like to have a bigger footprint in the U.S. That was always our intention. Texas was an attractive place, but I think the best contracts have already gone out of there. We like some of the deregulated states, but developing ourselves versus acquisition, we're constantly looking at opportunities, and we haven't found something that really fits our disciplined approach yet in our criteria. But we're looking. We think our investors would be more comfortable with our company if we had more there. We're in various discussions all the time, like we've looked at a lot of situations, both assets and companies. And I think as we get closer to halving, we will see more -- after the halving, we will see more. That is one of the things which, opportunistically, we really like to do.

And maybe to add on just a little bit to that in some context. We've seen a lot of assets in the States developing in the past 2.5, 3 years. We've seen a lot of assets fail in the U.S. I think it's fair to say that principal assets that we've seen failing were kind of less efficient. I think you can derive a view that there is probably too many assets or too many sites that have been developed, and that makes for some site just not worthy of being operated going forward. So we need to remain disciplined in principle in the sites that we look. But as Geoff mentioned, growing our footprint in markets that are deregulated that offer economic demand response that is particularly strong here in the U.S. is incredibly attractive. And the brand drop in the U.S. despite a lot of noise is an exciting one. There's a good mixture of blue states, red states. It's just open for business and a really good backdrop for an innovative industry and growing industry like ours. So yes, we're actively looking for anything that would make sense for us to grow. And as we've described, operationally and also in screening sites, it's got to be made of the right ingredients.

And really a perfect fit for that would be a good power purchase agreement with the characteristics that Philippe outlined. But somebody has already gone at it and really sort of foolishly went at it and really did a crappy job at it, just to be fair. And then we use Benoit wanted some of this team to go in there and fix it and make it really work. That would be a perfect situation for us. Okay. I'm going to just wrap up with a few -- with a final remark and then we can get to lunch. And then you can ask more questions individually to all this, but the panel can go and relax now, and... Okay. Well, thank you for staying with us through the balance of the presentation. As I mentioned, shortly, we can go for lunch and offer more discussion. And you can get some one-on-one time with some of these special people. Some takeaways. As you can see, we have an excellent and deep management team, and we continue to look for novel and new ways to enhance what we're doing. We continue to deliver the most transparent, honest and timely production of financial and operational information to investors. We have an excellent balance sheet and liquidity, allowing us to take advantage opportunistically of new situations. We have a low-cost structure, allowing for superior returns, cash flow and scalability. We are geographically diversified and poised for more domestic and international expansion. We have built mechanisms to better mitigate and control risk and volatility. We have incredibly high standards in terms of controls, governance, ethics and foresight. We plan to be a leader in ESG and remain predominantly green-powered. We are shareholder- and value-focused, with a very disciplined approach to raising and deploying capital. Discussion about our hosting option illustrates our core strength, flexibility and how to ensure we're always looking to our business options, flexibility and addressing opportunity costs. We are exceedingly well prepared for the halving and plan to take full advantage of the industry upheaval. We plan to deliver high levels of growth and productivity -- productivity and profitability in 2024 and beyond. We will deliver asymmetrical upside to investors, both before and after the halving. Before we depart, I want to leave you with one final impression. Even though it seems like ages ago, 2021 was an incredibly exciting time for Bitcoin and the participants in the industry. We fully expect history to repeat itself. As such, starting in late 2024 and continuing well into 2025 and hopefully beyond, we will be in a bull run, fingers crossed. As we said to investors and prospective investors at the time, do not try to time the market. You need to be invested. Thinking back, there were many times that I would get a call from market regulator asking why your stock had advanced 10%, 15%, 20% in a single day? I like those days. There were many days when the circuit breakers would trigger and our stock would be temporarily halted due to the 10% growth in the span of a few hours. There was a few days, 2 or 3, where that happened twice in a day. I like those days. The bottom line here, there are a few other industries that are this new, novel and can deliver this type of explosive results. We have already delivered strong year-to-date performance, and we expect this performance to continue in '24 and accelerate significantly in 2025. Bitfarms is built to deliver. Thank you for coming.