Bitfarms Ltd (BITF) 2020 Q4 法說會逐字稿

Good morning, everyone. Welcome to our Q4 and full-year 2020 financial results of Bitfarms Limited webcast. Presenting today will be Emiliano Grodsky, our Chief Executive Officer; and myself, Mauro Ferrara, the interim CFO and Corporate Secretary of Bitfarms. Geoff Murphy, our President, is also present and will be available to answer questions at the end of the presentation.

I'd like to advise everyone that certain information discussed on this call and presented in this semi presentation may constitute forward-looking information, and therefore point you to the cautionary statement found on slide two. In addition, on slide three, we note the use of non-IFRS performance measures that will be referred to in this presentation. These measures are not recognized under IFRS and do not have any standardized meaning prescribed by IFRS and include EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, gross mining profit, and gross mining margin. Finally, note that all financial figures are presented in US dollars, unless otherwise noted, and references to Bitfarms include all of its consolidated entities, unless otherwise stated.

I will now turn the call over to Emiliano.

Thank you, Mauro.

On slide six, we've summarized our Bitcoin mining production in Q4, and for the 2020 fiscal year we mined 557 BTC in Q4 2020, compared to 1,219 Bitcoin in Q4 2019. This represents a reduction by 53%.

For the full year, we mined and 3,014 BTC during 2020, compared to 3,865 in 2019 a decrease of 22%. The decrease in production were preliminary due to the BTC halving event in May 2020, resulting in block reward to miners dropping from 12.5 to 6.25 per block, as well as the substantial increase in network difficulty.

The Bitcoin halving event is prescribed by the BTC protocols, and take place after every 2,000, 10,000 blocks, or every four years around. Bitcoin halving in the history of BTC took place in May 2020. When holding take place, the block reward decreased by half, which means the revenue generated from mining activities of which on all other miners decreased by one-half, as was the case following the previous halving, mining economics normalizing over the following six to eight months with higher price of Bitcoins. This trend has continued in Q1 2021, and we'll continue to enjoy the benefit of higher Bitcoin price.

On the right of this slide, we summarized the period and hashrates for the company for the past five quarters. The company's hashrate at the end of 2020 stood at 965 Petahash a 23.7% increase, compared to 780 Petahash at the end of 2019. The significant increase in hashrate was primarily a result of Bitcoins adding a significant number of best-in-class miner to our mining operation.

Moving to slide seven, approximately 97% of all electricity consumed by the company was used for crypto mining computing power. The charts of the right of the slide showed the power use efficiency of each of the company's farms, as well as the total company. When compared to an external benchmark study on data center power efficiency, it can be seen that each of the company's farms continues to operate well above the benchmark efficiency for top tiers data center which is approximately 91%. Our power user proficiency is driven by the efficient design of our facility, and it's one of the reasons we remain a leader in terms of breakeven cost of production per BTC amongst all publicly-traded miners.

I'll now turn the call back to Mauro.

Thank you, Emiliano.

On slide eight, we see that the company generated revenues of $11.3 million in Q4 2020, compared to $10.5 million in Q4 2019. The increase in revenues was primarily due to the significant upswing in Bitcoin price, partially offset by the impact of the aforementioned 2020 Bitcoin halving event and an increase in excess of average network difficulty. For context, the average price of Bitcoin in Q4 2020 was approximately $16,800, compared to approximately $8,200 in Q4 of 2019.

The company's Q4 2020 EBITDA was negative $0.5 million resulting in a negative EBITDA margin of 4%, compared to an EBITDA of $2.3 million and EBITDA margin of 22% in Q4 2019. The company's adjusted EBITDA in Q4 2020 stood at $3.6 million with an adjusted EBITDA margin of 31%, compared to an adjusted EBITDA of $3 million with an adjusted EBITDA margin of 28% in Q4 2019.

The company attained a gross mining margin of 53% in Q4 2020, compared to 56% in Q4 2019. The slight decrease was mainly as a result of an increase in network difficulty in Q4 of 2020 versus Q4 of 2019. As described in our note on non-IFRS measures, gross mining margin is calculated as mining revenues less mining energy and infrastructure costs, divided by mining revenues.

Despite the challenges presented by the halving, our competitive hydroelectricity rate and operating efficiency enabled us to attain an average of breakeven cost of production per Bitcoin of approximately $7,500 for the most recent fiscal quarter. This compares to the average of realized sales price per Bitcoin obtained by the company of approximately $16,800.

On slide nine, we summarized the financial results for 2020 compared to 2019. The company generated revenues of $34.7 million in 2020, compared to $32.4 million in 2019 an increase of $2.3 million or 7%.

The company's EBITDA stood at $1.5 million or an EBITDA margin of 4%, compared to an EBITDA of $9.6 million or 30% EBITDA margin for 2019. Adjusted EBITDA and adjusted EBITDA margin were $8 million or 23% in 2020, compared to $10.6 million or 33%, respectively in 2019.

Finally, the company's average breakeven cost of production per Bitcoin for the year ended 2020 was approximately $5,600. This compares to the average realized price per Bitcoin obtained by the company of approximately $11,000 during the same period.

Overall, despite the difficult market conditions as a result of the COVID-19 pandemic and the Bitcoin halving event, Bitfarms continued to generate positive cash flows from operations. We're pleased with our 53% gross mining margin achieved by the company in Q4 and with the significant 2021 run up in Bitcoin price to date, this metric should prove even better in Q1 2021.

Slide 10 summarizes the financial position and ownership structure of the company as at the end of 2020. The company ended the year with $5.9 million in cash, and total assets of approximately $52 million.

Significant notable events have taken place since the end of 2020 as summarized on slide 11. From a liquidity aspect, we raised CAD80 million via private placements with US institutional investors, which allowed us to institute several transformative changes to our company. Operationally, during the first quarter of 2021, we have increased our hashrates to approximately 1.2 Exahash and started executing on infrastructure expansion plans at a number of locations.

The proceeds from the private placements provided us the flexibility to put into place a Bitcoin pilot retention program to repay and retire all of our term indebtedness, to purchase and install 4,500 miners so far during Q1 2021, and placed orders for 48,000 miners with our supplier of choice of MicroBT in order to secure a reliable supply of new miners and to keep growing the business well into 2022.

I'll now turn the presentation back to Emiliano.

Thanks, Mauro. Moving to our growth strategy on slide 13, we have summarized our infrastructure expansion in 2020, as well as our infrastructure expansion plan for 2021, some of which are already underway. Our 2021 infrastructure to expansion plans when completed will provide for an outpower to attain our 2021 3.0 Exahash target.

With access to a skilled workforce along with abundant and environmentally friendly hydroelectric power, Quebec remains one of the leading jurisdictions for ongoing investment by being signed 2021 and beyond. We are excited to continue our collaboration with Hydro‐Québec and municipal energy distributors. We also continue to evaluate opportunities for expansions, which satisfy our criteria and policies competitively priced electricity.

2020 was an eventful year with many challenges. Post-halving event, we took delivery and installed thousands of new miners. These new miners not only generated higher output and consumed at less electricity, but [were actually acquired] substantially less than the price currently providing in 2021.

Bitfarms made great progress during the year, and we remain excited and optimistic about the future as we carry out our growth plans.

This concludes today's webcast, I will now open the line for questions. Thank you.

Yes, good morning to all. This is the Mauro Ferrara here, the interim CFO. We have received a list of questions which I will read out, and then ask -- my colleagues or myself will provide an answer.

So first question we have here is, how is Bitfarms thinking about continuing to scale as your [ASIC] production has largely already been accounted for through 2022? Emiliano, would you like to take that question?

Yes. Well, thank you, Mauro. Well, all we know about the short of production of chips and this matter impacting all the industries involved in the technology, especially in the producer of miners, in this case, we deal this situation so far and we anticipate these matters, and we was in this industrial space since almost five years. And we reached an agreement with MicroBT for people in the inventory, 48,000 miners, around 5.0 Exahash for 2022.

This is a very interesting thing. We believe that will be very difficult for [this] huge quantity of miners the next year. And we are happy for foresee all the situation in advance, and address in the proper way with the Bitcoin management.

Hi, it's Geoff Murphy, I'm the President of Bitfarms. And maybe I can add a little more to that. The chip shortages is severe and acute, and it's not just in our industry, it's happening in all industries. It's a global problem. And we're fortunate in that we made the big order for next year with the 48,000 miners, as Emiliano had mentioned, that helped safeguard our supply and our growth plans for 2022.

But this year, we've already taken deliveries and we are taking more deliveries this year. Because of our size and because of our history, our suppliers have comfort with us. And that comfort has allowed us, when new machines become available, well, because other people have not been able to take them because of their infrastructure builds, they offer them up to us first. So we're able to opportunistically take them.

They know that we have the capital and the balance sheet to be able to execute on those miners quickly. And that because of our past performance record, they know when we say yes to those miners, we execute on. So we are getting a supply of miners this year, and we have safeguarded next year. So we're feeling quite comfortable about it even though the situation is very acute.

Thank you, Geoff. Next question -- actually two questions that pertain to the same topic here, basically asking about how much of Bitcoin are we planning to hold? And also, if we are planning to acquire any Bitcoin? Geoff, do you want to start us off on that one?

Sure. Let me start with the second part of that question first. We have no plans to acquire Bitcoin. Frankly, our capital is best deployed to our growth strategy. And the fact that right now, we are effectively taking all the Bitcoin that we mined and add them to our balance sheet, and the cost of our mining of Bitcoin is far less than what's available at market prices.

So it makes a lot more sense for us to use our capital to mining our Bitcoin, and then putting them on the balance sheet. There's so much more margin associated with that than in any other format. And we have considerable expansion plans for this year, moving our production capacity up to 3.0 Exahash is the plan, and then 8.0 Exahash by the end of the following year. So our capital -- and you have to treat capital as precious, is only going to the areas in which we can derive the best returns from.

And sorry, Geoff, in terms of how much Bitcoin are we planning to hold this year?

Sure. We've disclosed in the press releases today and yesterday that for the first quarter, we will end the quarter with over 500 Bitcoin, and we started adding them to our balance sheet at the end of the first week of January. So that pretty much tells you our run rate at the current time.

We expect that run rate to continue. We're going to be adding more production capacity, but we also expect as the year goes on, the difficulty factor to increase, which will put pressure on us. So I think if you take the run rate now and you monitor our press releases in terms of the new miners coming onstream and our production capacity, you'll be able to make estimates going forward. But we don't offer the full guidance on our forecaster on our Bitcoin for the full year.

All right, thanks, Geoff. Next question is, can you share pro forma forecast for 2021?

I'll start us off on this one. You know, there's a reason why we were -- at this point we're still not providing pro-forma financial. And one of the big elements has to do with the price of Bitcoin. It does drive our top line in terms of revenue, and there could be some significant swings there as we saw in Q1 of this year going from [20] to [60] in the first quarter.

However, as just mentioned, as we progress through the year, we'll be putting out press releases to explain additions to our Petahash. And with the data that is out there, I believe some estimates could be made by individual investors by themselves. But as of right now, our plan for this year at least is not to provide any guidance more than what we provide during the year in our press releases.

I'm not sure if Geoff or Emiliano -- do want to add anything else to that?

That's a good answer. Thanks, Mauro.

Thank you. Next question. Do you have any news on your uplisting to NASDAQ? Geoff, do you want to start us off on that one?

Sure. That's probably the most popular question that we've been getting over the last three months -- four months, five months, actually. We have been hearing from shareholders about that, encouraging us to move to the NASDAQ for months now. And we've listened, we agree it's an exciting project, we embarked on it; our listing in the United States in January.

It's one of the reasons why we did the private placements to start our exposure into the United States and developing our relationships in the US and as we reported yesterday, we have made application to the NASDAQ in February. It's a costly and laborious effort to get listed on the NASDAQ. But because we have such a strong foundation in that we already are public, we already have a prospectus approved by the Ontario Securities Commission a year and a half ago, because we are audited by PwC, we have an incredible foundation to work from because our governance and our controls and just our whole operating philosophy is already in place. So we are proceeding forward.

In the press released yesterday, we mentioned that we filed for the first time our annual information form, which is a substantial document. We will be updating that document with the full-year results shortly. A prospectus is required as part of this, we are working on that. And we are pursuing the listing with the NASDAQ as quickly as we possibly can.

I can't tell you the exact timing because there is multiple approval processes that are going on but we're involved in each of those right now. So stay tuned, we'll provide more updates in a short little while as to how we are how we are succeeding.

Thanks, Geoff. Next question. Would you be able to provide guidance on margin for 2021, and at the same time provide your view how do our BTC may stand pricewise?

Well, again, in terms of margin, we know we've indicated what our gross mining margin was in Q4. It would be with the prices that you see right now, and we've indicated also in the presentation that we do anticipate Q1 to be better simply from a Bitcoin price, that will definitely help drivers there. With regards to the rest of the year, there's too many factors to point to here.

Obviously, you know how much coins we'll be able to mine. Yes, we do have new issues coming in, but we also have the difficulty to contend with. So that will be -- it's very difficult to speak to that for the rest of the year.

Technically, our costs of electricity and in our main cost for position in Bitcoin should remain relatively stable, again, depending on the difficulty in mining the Bitcoin for the rest of the year, but hopefully, that should remain stable. So that is as much as we can actually provide in terms of the margin.

Then in terms of where do we see the BTC price going, again, it's very difficult to tell but I'll let, maybe, Emiliano speak to this because I know this is one of his great passions, BTC. So, Emiliano, I'm not sure if you want to maybe just briefly chime in on what you think on BTC --?

For sure. Mauro, thank you. We really believe in this industry and the BTC structure. And it's very important to understand what's happening right now in the market that the ramp on and the institutions start to invest in our industry. And I believe that the scarcity of the design, of the protocol, will allow to increase the price along the time. And I believe that we will see higher price of BTC during this year, but it's more important for potential investor and explain that we are proficient in this industry.

We created the standards of these large-scale data centers, and our industry is all about scale and efficiency. And we are working on daily basis with our professional team for improved efficiency, the quality of the energy, because our [quarry] is concerned, green electricity and take care of the environment. And I believe that Bitfarms is the best company on all the American market. We saw this industry potential five years ago, and we are fully committed for the long term and the future.

Thank you, Emiliano. We have a whole bunch of questions here, which I'll turn to group all into one. So basically, indicating what our, I guess, expansion plans outside of Quebec.

As we mentioned during the presentation, we do have -- we've already implemented plans to grow in Quebec in 2021. But in terms of growing to areas outside of, Canada and possibly North America, whether it's South America, or even -- I got some questions here about growing in Asia, Geoff, do you want to get us started on that one, please?

Sure. First and foremost, we're very much committed to the province of Quebec. We have five facilities in operation there. We have a skilled workforce that's been with us for years. There's abundant supply of hydroelectricity. So as Mauro mentioned, we are taking advantage of our existing contracts and building them out, but we're not stopping there.

We are in discussions with Hydro-Québec, with [Le Régie], which is the regulatory body in the province. We are we're in discussions with the province themselves, and we are looking for additional sites in Quebec. We might as well take advantage of the green power and our human resources to fully take advantage of what's there.

But with that said, we're also looking for other opportunities there. There is some splendid opportunities in Western Canada, some splendid opportunities in the Northeastern US, and as we previously press released, we are researching and endeavoring to see whether a situation in South America is going to work for us.

And we are dealing with all of these situations very carefully, we are putting them through our matrix to make sure that they fit, and we can assure shareholders and prospective shareholders that these -- our expansion is important to us, but we don't want to overstep or do something prematurely. So the operating metrics and discipline that we've employed in the past, we're going to do in the future. So I'll leave it there.

Thanks, Geoff. Next question. We've gotten a few of these questions, actually the last couple of quarters on indicating, is there anything that you can do as a company to avoid your stocks being shorted so much?

I guess I'll start us off. I mean, as far as the market is concerned, there's only so much that we can do. What we're focused on is executing on our plan and if we're able to do that, we think that our financial results will speak for themselves, and show what this company is worth, and where it's going in the future.

As you know, if there's market players there that don't want to short us or do whatever that they want to do, we cannot really comment or focus on those things. It's not something that count that's in our purview. The best thing we can do is just keep -- as I say, put your head down and execute on your plan. And if you believe in your plan, and we do, the results will show.

The thing is, it takes time. This year is a year where we'll be mostly building on infrastructure to accommodate new miners. It takes time. I would like to get these new miners tomorrow morning, but it doesn't work that way.

So -- I said, we're focused on executing our plans to get us to where we think we should get to. And as far as margin is concerned, we will have to let that play itself. Now again, if we do end up on an additional exchange, hopefully that will help stabilize things, but again, these are things that are out of our control.

I'm not sure, Geoff, if you want to add any --

Yeah. the one thing I might add is, we think our company is undervalued. So I'm not sure why people are feeling compelled to short us. But as Mauro mentioned, we're going to just keep focusing on what we're doing best with an operation, and growing this company, and making it as valuable as possible. And I guess the only way to really combat shorts is by growing the share price and their valuations. So that's what we're going to do.

Okay. Thank you very much, Geoff. So next question here. Are there any plans to integrate ship production, and also in [mortars], are we are we planning to mine anything else but Bitcoin, whether it's Ethereum or Litecoin, or anything else? Emiliano, would you like to start us off on that one, please?

Yes. Right now, as we started the company five years ago, mining is very good. And we feel pretty well with how it was, this technology. For the moment, we only mine BTC and with our pipelines, we only have BTC mining that we have a very interesting laboratory inside our company, and we set and try all the technologies at the same time. Maybe in the future we'll add Ethereum mining.

Okay. Thank you, Emiliano. A few -- I guess there are few financial questions that I'll take on. Can you explain the $5 million in net financial expenses in Q4 of this year?

Yes -- that one's -- it's relatively easy one. Most of that charge of $4 million or $3.9 million, I believe, to be exact, had to do with the revaluation of certain warrants. It is a non-cash expense, but something that needs to be reevaluated, reason being for the valuation is the price of the warrants versus the significant increase in our stock price at the end of the year and going forward. So that explains why we have that large expense on our P&L financial expenses.

Can you touch up on the Dominion loan situation?

Again, yes, this one's a simple one. Obviously, with the funds that we received in early January and February from our equity raises, we fully repaid the Dominion loan. And hence mid-February, we've been basically debt-free. Obviously, this will be more apparent when we issue our Q1 numbers.

Has the team made any considerations to scaling it through M&A? Geoff, maybe I'll let you start on that one.

Okay. Thank you, Mauro. We're not averse to growing through acquisition as well. We've got substantial organic plans to grow, as we've let the market know. But over the last little while, we have looked at three situations. At this point, discussions continue.

We do not want to be distracted by an acquisition and get away from our organic growth plans or our plans to get to NASDAQ. But if an opportunity arises with the right price and the right components to it and the right additional management type of personnel, we think it could be a tremendous addition for us. So we're not averse to it. We're looking at them, but we're not feeling obligated to do anything. Thank you.

Okay. Next question. How would a mining ban in China affect the company? Emiliano, I think I'll let you start on that one.

I'll let these questions to Geoffrey.

Okay, sure.

Mauro, do you mind asking the question again? I just missed it. (multiple speakers)

Sure. How would a mining ban in China affect the company?

I don't want to get too excited here, but, my goodness, if -- like, currently in the marketplace, the market share for all mining being done is primarily in China. There's certainly a growing presence in North America. But if there was a mine -- a ban in China and the difficulty was the drop, and Bitcoin prices were to remain as solid as they are now, that would be resulting in an incredibly accretive results for all the miners outside of China. But -- I suppose we can dare to dream, but that's not the case right now.

Next question here is, how do you think your auditor will value your BTC on your balance sheet instead of having cash? Could this affect the light of the company?

Well, the BTC on our balance sheet -- I mean, that is a choice that the company has made based on where our funding is coming from. In terms of how we valued, it will be valued at the market value of the BTC at the end of the quarter or the end of the year, whatever that case may be. And instead of having cash, it is -- BTCs are relatively liquid assets. So if ever needed, we could always converted to cash if needed.

What's that one -- will Bitfarms plan to leverage their Bitcoin inventory to earn interest or borrow against the Bitcoin for working capital needs? Geoff, do you want to get us started on that one?

Sure. Sure that's always a possibility. I know other miners are doing that quite actively. There is also some excellent returns that are possible by using our Bitcoin for collateral or core loaning it out. At the moment, we are not engaging in any of those plans.

First, there is controls around doing that that we do not have. We are audited by PwC, we are increasing our internal controls now, which is part of, hopefully a move to NASDAQ, and getting into lending principles and developing an underwriting department and collateral and adding people to be able to do that is something that is distracting right now. We want to stick right with our primary focus.

I won't say that we won't do that in the future. But right now, that's just not a prime opportunity for us, even though there is some half decent returns.

Well, why don't you add a little extra color to that as well?

Well, sure. No problem. Like I said, we -- my view on that is we will assess as we go forward. Like I said, we just initiated our Bitcoin retention program at the end of this year. It's something that we had wanted to do in the past, but for operating reasons was not possible. So we're happy with that.

And we are looking, ourselves, into various possible hedging programs that can help us get the most of keeping Bitcoin on our balance sheet going forward. So these are all things that are relatively new this year. But we are looking at -- as you know, we do have a lot going on right now with the potential uplisting, and so forth. So we're taking it one step at a time, but these are all things that are definitely on our radar.

Okay. So next question here. I'm starting to scrolling down here. What happens to our Canadian shares when/if uplisting happens?

Nothing will happen to your current shares. We'll be -- at that point, at the beginning at least, we'll be traded on two exchanges whether it's the Toronto Stock Exchange Venture or a potential US exchange. So nothing will happen to their investment in that case.

To add a little more to that, it's less about the shares that are traded on the TSXV because they're going to remain as is. But if we are successful, when getting to the NASDAQ, the OTC shares will just transfer right over to the NASDAQ listing. So that should be pretty seamless.

Okay. How does Bitfarms's plan to compete or differentiate itself versus mainland Chinese miners. Emiliano, would you like to take down?

Could you ask again the question, Mauro, please?

Yes, absolutely. How does Bitfarms's plan to compete or differentiate itself versus mainland Chinese miners. Emiliano, would you like to take down?

Well, it's a very interesting question, because right now we saw a whole bunch of Chinese miners trying to get in a public company, NASDAQ. And I believe, in China, they don't have the best efficient energy in the world. This industry is like a race. And as I mentioned before, it's all about efficiency, separated between 80% and 90% of the OpEx. And China has two different seasons, the wet season and the dry season. And the price of their electricity changes significantly. And I believe that Bitfarms will reach better rate of electricity than China soon.

Okay. Thank you. Next question. Is the Quebec government allowing Bitcoin companies to expand? Are there any restrictions? Geoff, would you like to start on that one?

Okay. The Quebec government did put a moratorium on crypto mining situations. We were fortunate that we were able to get in and negotiate our contracts before that moratorium was in place. And as a result, we have contracts that we plan to grow into this year.

Others are less fortunate. But the Quebec government was fearful that there would be such a stampede into the province that their ample supply of electricity for residents and industries would be put in short supply and cause them to actually have to build new facilities, and perhaps increase costs to people in Quebec and to businesses there.

So they safeguarded their supply of electricity by putting the moratorium on. They're going slow and we are continuing to have discussions with them, but they are starting to open the door. When they put the moratorium on, it really curtailed a lot of the interest from going into Quebec and now they are able to do it at a much more metered process.

And I think part of their concern initially was that crypto mining companies could come, take their electricity set up these containers, and then if anything changed they hope the containers up the trucks and cart them away and go somewhere else.

We set up in our five locations, a warehouse style, permanent structures with permanent employees. So they see that we have a permanence in the province and are giving back considerably. And as we grow in Quebec, we'll do more of the same. I think we have become a good corporate citizen to the province, and as a result, they are starting to engage in discussions with us and we'll see where it goes.

Geoffrey, I believe that it's very interesting explanation. Makes sense to explain the difference between Bitfarms and other public company from other BTC, especially in United States or Canada. We are a real company. We have a real team, real infrastructure. We have a laboratory for -- made the area for all of our miners. We have proper research team. We have our Volta subsidiary who designed, build, and gave us maintenance 24/7 in terms of high voltage and medium voltage electricity. We are vertically integrated.

And we have, you know, in our hands, our growth and all the tools for managing our risk. We saw different companies that only buy the equipment in China and send to third-party costing. They do not control nothing, the future that scale other risk. Even -- I believe that the market and the companies need to be more transparent.

And I challenge all of the companies in our space to be transparent in the price of the costing and electricity, and explain, in a clear way, how many BTC mine, which technology they have in the needs of the miners, how many megawatts they consume, how many Terahash per megawatt they have. I believe the investor in this industry make more intelligent and they learn every day about our industry. And I believe that we need to continue speaking infrastructure of the economy of the future.

Okay Thanks, Emilio. And sorry, just to conclude on the Quebec region, currently if you see in our presentation, we have 69 megawatts basically in place. And our plans for 2021 is to add another 80 megawatts in Quebec all within the purview of what we have secured in terms of power. So as you can see, if our plans go accordingly, we'll more than double our size in the province of Quebec by the end of 2020

And next question --

And just to add to that question before you go on, and I've been out in the media and other places absolutely indicating that we are looking for opportunistic situations in Quebec. Like, there are former pulp-and-paper type of facilities in Quebec, there's former mining facilities which are close to towns, close to good workforces that are now abandoned assets.

And because we can move to good power sources and communities and because the environment is so friendly in Quebec -- and I'm talking about moderate weather conditions for keeping our miners cool, we would love to find a facility in the province of 50 to 100 megawatts, maybe even larger, that fit our criteria.. And we can move into a former facility, and renovate it, and invest quite frankly millions of dollars in miners and infrastructure into that facility and bring it back alive again.

That would be an ideal situation for us, and we are very much on the outlook for something like that. If any of this network of people on the call hears an opportunity like that, please let us know.

It's all good, Geoff.

Thank you.

The next question, when will Q1 results be issued?

For right now, the official date has not been set, but it will be sometime in the month of May. And as we did for our results for year end, we will issue a press release a week or two before certain results are to come out.

Next question. What are you doing to improve your social media presence? This is a good one. I think this from this close to heart to Emiliano. So, Emiliano, can you provide some color on that as to what we're doing on the social media presence?

Yes, for sure. We are working on that. And we hire a professional company for -- made all the PR and investor relations with United States. It's one of the markers that we need to continue to professionalize to champion that it makes in United States. And we work even with another agency based in London for the crypto space at the same time. And we have another company who are working hard in the social media.

We believe that this channel is very important to be close to the investor and explain the develop of the company day by day. And we understood that it's very important, and we are working on that to be super close to the investors.

Geoff, would you like to add anything before I move on to the next question?

Just briefly, we know we recognize that our marketing efforts and our abilities to impart information was inadequate. We realized that last year, and we've been making moves to improve that. Emiliano has already mentioned about social media, but we've also contracted with now a few marketing firms to help get the word out, to get ourselves in the media more and to spread the word.

So in December, we contracted with a media firm by the name of YAP Global at London, England, who's been tremendous assistance of getting us into various mainstream media outlets. We have a Quebec media group as well, Ryan Affairs, who are helping us with our Quebec and French language penetrations.

And then we announced just a couple of weeks ago that we've gone with CORE IR for Investor Relations. It's the first time and well over a year that we've had any professional IR support to us. And they are a New York-based firm that is well experienced and full of veterans in investor relations and in media. And it also will help us with our American expansion plans, like from American penetration plans, if you will, and they've just been onboard now for two weeks. And we have big plans with them to really improve everything we're doing.

So I expect this whole situation will go from zero to 60 miles per hour quite quickly over the next couple of months.

Okay. Thanks for that color, Geoff. Next question. There is a significant CapEx spend to come within the next year or two. If BTC experiences a bear market, would it affect growth wise? Geoff, do you want to get us started and then maybe I'll turn some comments at the end

We're fortunate that we have a very low cost of production. And we are also fortunate that we have established a salary level, a G&A level, and very experienced people that allows us to deploy, and that we feel we're pretty scalable right now.

So because of our low costs, because of the margins that we generate, we think we've got an advantage over many, many of our competitors that way. So even if Bitcoin comes down, we're -- I think our cost production is lower than most. So I think if it was to come down, we would probably be one of the benefactors.

As the industry moves downwards in that effect, we would have to scale down as well. We would adjust. We are experienced to being able to do that and we will. But one of the big benefits that we've had is that we managed to buy and put in operation thousands of miners last year, and we're still doing that this year. And those miners have a much higher operating standard than the previous miners that we had.

So we're able to produce more Petahash output using less electricity, and that's helped our load to keep our costs low. There are competitors that have the older machines that have higher cost production, and I think if Bitcoin was default, you would see them suffer a lot quicker and harder than we would, but we would adjust.

Geoffrey, I believe that when we're talking regarding the efficiency and continues trying to find better rate of electricity and the latest gen of miners, we are talking about -- the more interesting thing in this business, we are trying to protect the downside with the efficiency.

Because in this moment, when the profitability part Petahash it's close to $0.36, $0.35, $0.34. We suffered, especially when we're having $0.6 per Petahash. And in this moment, even the most efficient miners, at $0.4 electricity, you'll (inaudible)

In this moment, miners like (inaudible) with four to five years of operation will make money. But we believe that it could be -- we're growing super fast. And the difficulty depend on the price. We'll be in the same way or not. But the more interesting, I believe, when we mention our business with the BTC protocols who protect the efficiency, and we are here a long time, and this is the more important matters. The efficiency and the experimental team, our own facility for control of the operating costs. And I think this is a way that we like to continue to manage the company long term.

Thank you, Emiliano.

Okay, so we now reach the last question that we have here is, would you consider merging with another mining company as the race to hashrate gets more challenging? Geoff, would you like to get us started on this last question? I'll chime in afterwards, if you would -- I'd let you take the lead.

Okay. I already answered the question in terms of M&A opportunities, and I don't see this as different. We will consider a merger, but only if the fundamentals were there. We've looked around, and frankly we're the leader.

You want to emerge when you can really put something together that the sum of the parts is greater than what you start with. And as we look around, we don't see people that are operating at the same level and operating efficiency as we are. It would almost be a step backwards. We think scale is important.

But if somebody had an incredible electricity contract, if somebody had an incredible number of miners that were plugged in and operating well, and that could be really accretive to us, we will definitely look. But there's not many that fit those requirements. So I'll leave my comment there.

Okay. Yeah, Geoff, I'd like to just expand that, yeah, we're looking to see if there's anything out there. But our plan this year is to focus on our own operations to make sure that we get our plan out there and we get the efficiencies we want and we're producing what we want. For some time, we have the money to put into place so that we believe that's going to be -- or at least that's going to be my focus for this year. But obviously, if opportunities do come by, we'll definitely listen.

So I would like to thank everybody for listening to the webcast. Thank you very much for all of your questions. We're excited for the rest of the year. We believe we've gotten off to a very good year with our production in Q1, and price that's staying relatively stable over 50,000 on the Bitcoin.

And we'll join again at the end of the first quarter. Thank you very much.

Operator, if you want to shut it down, please.