Cipher Mining Announces 60 MW Expansion of its Bear and Chief Joint Venture Data Centers and Purchase of 16,700 New Miners from Canaan Inc.
- None.
- None.
The acquisition of 16,700 units of Canaan A1466 miners by Bear LLC and Chief Mountain LLC, entities partially owned by Cipher Mining Inc., indicates a significant expansion in Cipher's mining operations. The projected increase of approximately 2.5 EH/s (exahash per second) is a substantial boost to the company's self-mining capacity, which is expected to reach around 8.4 EH/s post-installation. This expansion is strategically timed to precede the anticipated 'halving' event in the bitcoin network, where the reward for mining new blocks is halved, effectively increasing competition among miners.
Moreover, the favorable pricing and payment terms reflect Cipher's negotiating leverage and financial planning acumen in a volatile cryptocurrency market. The ability to pay up to 30% of the total consideration within 90 days post-delivery provides Cipher with cash flow flexibility. This expansion and the previous performance of Canaan machines during the Texas summer, as highlighted by Cipher's CEO, suggest an operational efficiency that could provide Cipher with a competitive edge in cost management and reliability of operations.
From a financial perspective, the investment into new mining hardware is a capital-intensive decision that should be weighed against the backdrop of the current crypto market conditions and the future revenue generation potential of the mining operations. Cipher's decision to expand its capacity is indicative of its bullish outlook on the future of bitcoin mining. However, investors should consider the inherent risks of the cryptocurrency market, such as price volatility and regulatory changes, which could impact the return on investment.
The investment in new technology also suggests that Cipher is preparing for increased computational requirements and aiming to maintain its position as a leading developer and operator of bitcoin mining data centers. The financial health of the company post-expansion will depend on the performance of the cryptocurrency market and the operational efficiency of the new miners. As Cipher increases its mining capabilities, it will be imperative to monitor the company's energy costs, hash rate efficiency and the overall sustainability of its mining practices.
Cipher's expansion represents an additional load of approximately 30MW at each facility, which has implications for energy consumption and sustainability within the cryptocurrency mining industry. As an energy sector analyst, the focus would be on the source and cost of the electricity required to power these new miners. The efficiency of the Canaan A1466 miners, especially under high-temperature conditions, is crucial for minimizing the environmental impact and operational costs.
Furthermore, the expansion aligns with industry trends where mining operations are increasingly seeking renewable energy sources or regions with lower electricity costs to enhance profitability and address environmental concerns. The operational efficiency and energy sourcing strategies of Cipher will be critical in determining the long-term viability of this expansion, especially in the face of potential regulatory changes targeting the environmental impact of cryptocurrency mining operations.
Bear LLC and Chief Mountain LLC Purchase ~2.5 EH/s of latest generation Canaan A1466 miners on favorable pricing and payment terms
Cipher expects to install the miners at its Bear and Chief facilities in the second quarter of 2024, representing an expansion of ~30MW, or ~1.25 EH/s, at each facility
Cipher’s total self-mining capacity expected to be ~8.4 EH/s after these new miners are installed
NEW YORK, Jan. 03, 2024 (GLOBE NEWSWIRE) -- Cipher Mining Inc. (NASDAQ: CIFR) (“Cipher”), a leading developer and operator of bitcoin mining data centers, announced today that Bear LLC and Chief Mountain LLC, the joint venture entities in which Cipher holds
Tyler Page, CEO of Cipher, commented, “We are pleased to announce we have finalized and funded the plans for initial 30 MW expansions in the second quarter at each of our Bear and Chief joint venture facilities. These expansions, along with plans for our newly acquired Black Pearl site, position us for strong growth, and I expect Cipher to be one of the industry winners coming out of the halving.”
“We are also very excited to execute our second miner purchase and expand our relationship with Canaan, and happy to have done so at this point in the machine market cycle and on very favorable terms. The Canaan machines we purchased last year are among the best performing miners in our fleet, especially in the Texas summer heat, and we look forward to adding another 2.5 EH/s of their machines to our joint venture data centers in Texas with this purchase,” continued Mr. Page.
About Cipher
Cipher is an emerging technology company focused on the development and operation of bitcoin mining data centers. Cipher is dedicated to expanding and strengthening the Bitcoin network's critical infrastructure. Together with its diversely talented team and strategic partnerships, Cipher aims to be a market leader in bitcoin mining growth and innovation. To learn more about Cipher, please visit https://www.ciphermining.com/
Forward Looking Statements
This press release contains certain forward-looking statements within the meaning of the federal securities laws of the United States. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Any statements made in this press release that are not statements of historical fact, including statements about our beliefs and expectations regarding our future results of operations and financial position, business strategy, timing and likelihood of success, potential expansion of or additional bitcoin mining data centers, expectations regarding the operations of mining centers, and management plans and objectives, are forward-looking statements and should be evaluated as such. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plan and strategies. These forward-looking statements generally are identified by the words “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “seeks,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “strategy,” “future,” “forecasts,” “opportunity,” “predicts,” “potential,” “would,” “will likely result,” “continue,” and similar expressions (including the negative versions of such words or expressions).
These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Cipher and our management, are inherently uncertain. Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by such forward looking statements. New risks and uncertainties may emerge from time to time, and it is not possible to predict all risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to: volatility in the price of Cipher’s securities due to a variety of factors, including changes in the competitive and regulated industry in which Cipher operates, variations in performance across competitors, changes in laws and regulations affecting Cipher’s business, and the ability to implement business plans, forecasts, and other expectations and to identify and realize additional opportunities. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 14, 2023, and in Cipher’s subsequent filings with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Cipher assumes no obligation and, except as required by law, does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.
Contacts:
Investor Contact:
Josh Kane
Head of Investor Relations at Cipher Mining
Media Contact:
Ryan Dicovitsky / Kendal Till
Dukas Linden Public Relations
FAQ
What did Cipher Mining Inc. (NASDAQ: CIFR) announce?
How many units of miners were purchased?
What is the expected expansion at each facility?
What is Cipher's total self-mining capacity expected to be after the new miners are installed?
