Bitcoin miner Gryphon Digital Mining announced on Tuesday that it has entered into an agreement to acquire up to 2.9 MW (megawatts) of $BTC mining operations powered by ultra-low-cost electricity in the range of $0.01/kWh, marking the first step in the company’s plans to build a pipeline of low-cost power generation.

Cost-effective electricity with the necessary resources

Under the agreement, Gryphon Digital will acquire electricity mining operations averaging approximately 1 cent per kilowatt hour. The operations will feature fully equipped facilities including containers, gas generators and 59 PH/s Bitcoin miners.

The acquisition costs $1.5 million, which Gryphon Digital says can be funded through existing working capital. The acquisition will be immediately accretive as it is expected to generate free cash flow from day one. While appreciation will depend on usage, the company expects the acquired low-cost power assets to generate annual revenue of approximately $1 million.

First step to thrive, not just survive

“We believe this acquisition of ultra-low-cost power is our first step on an identified path of over 500 MW of similarly low-cost power generation opportunities. The current post-halving world requires Bitcoin miners to secure low-cost power to succeed in an environment of increasing global hashrate. With the acquisition of this ~1 cent power asset and future power generation assets with similar costs, we believe Gryphon will strengthen its position as a leading low-cost operator with a competitive advantage in a key cost aspect of the Bitcoin mining business,” Gryphon CEO Rob Chang said in a statement.

Since the halving on April 20, more and more cryptocurrency miners have been running into trouble as profit margins shrink, the cost of generating electricity skyrockets, and Bitcoin’s hash price collapses.

According to well-known $BTC analyst Willy Woo, in July, “many miners were still bleeding and writhing in pain.” For Gryphon Digital, acquiring low-cost power mining operations will provide the company with more flexibility to pursue various opportunities, including machine hosting and high-performance computing.

“We expect that low-cost electricity will enable higher profit margins by using cutting-edge mining equipment or provide a return on investment for cheaper machinery that is not viable in a more expensive operation,” Chang said.

Leader in cost-effective operation, leader in environmental protection

With the acquisition of the flare gas operation, Gryphon is well on its way to extending its environmental leadership position. The company has been independently certified as 100% renewable and set a new company record for quarterly hashrate of 899 PH/s (petahash per second) in the second quarter – a 20% increase year over year.

Flare gas, which is usually a byproduct of oil production, is usually flared to prevent direct release into the atmosphere. Gryphon expects to continue to contribute to meeting carbon emissions targets through its flare gas activities and mitigate the environmental impacts of Bitcoin mining as it converts waste products into an energy source.