Bitfarms to Raise Up to CAD$50m to Scale Cryptocurrency Mining Operation

Canada seems to have become the hottest destination for bitcoin miners from all over the world thanks to a combination of cheap renewable hydroelectric energy and hospitable cold weather. One miner, Bitfarms, is set to raise a small fortune to solidify its position in the region and better face the heated competition.

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Bitfarms to Raise $39m

Backbone Hosting Solutions Inc., operating under the commercial brand Bitfarms, has signed a deal with two Canadian investment banks, GMP Securities L.P. and Powerone Capital Markets Limited, for the offering of up to CAD$50,000,000 (about $39 million USD) in debentures. The new debt is meant to finance an expansion of the company’s cryptocurrency mining business following its upcoming merger.

Bitfarms mines bitcoin, bitcoin cash, ethereum, litecoin and dash in four different facilities in Quebec which have 27.5 MW of installed capacity and over 200 Ph/s of installed hash-power. The company’s construction pipeline includes an additional three farms with over 100 MW of power capacity. It is said to have been self-funded since its establishment in 2013 and has over 200 shareholders.

Tel Aviv Stock Exchange listed company Blockchain Mining Ltd. (TASE:BLCM) announced in late 2017 it will be merging with Bitfarms. Prior to this announcement the company was known as Natural Resource Holdings and its investments were mostly in land and mineral assets of gold, silver, zinc, and lead deposits. Its stock price jumped 1,300% after it announced the company was refocusing on bitcoin but has since dropped by over 60%.

Merger On Track

Blockchain Mining Ltd. and Bitfarms’ proposed transaction is said to be continuing to advance through the regulatory process mandated by the TASE. An audit of the company is in the final stages of completion and a trial balance has already been provided by the Bitfarms’ Canadian auditors, and its expected to be completed by March 15, 2018. An extraordinary general shareholders meeting is planned for that same day and, assuming a majority is achieved, the pending merger will be consummated.

Emiliano J. Grodzki Founder and CEO of Bitfarms commented: “Given our ambitious capital expenditure plans for 2018 and institutional investor demand in the sector, we have made a decision along with our investment bankers to raise debt directly into Backbone while the pending transaction works its way through the final stages of the regulatory process in Tel Aviv. The completion of this raise will allow us to scale our operations and continue to maintain our lead as the largest cryptocurrency mining operation in North America. We look forward to updating our existing and future shareholders with the full plan in the coming weeks. I would like to thank GMP Securities, Gene McBurney, and PowerOne for spending the necessary time to learn about the full extent of our operations and competitive position, proposing and leading this offering, and supporting our long-term vision.”

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Images courtesy of Shutterstock, Bitfarms.

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