75 MW of power confirmed, contractors and connectivity lining up, and a realistic look at timing.
Yesterday DMG Blockchain Solutions (TSX-V: DMGI | OTCQB: DMGGF | FRA: 6AX) issued a progress update on the conversion of our Christina Lake, British Columbia facility to AI colocation services. As a valued stakeholder, we wanted to walk you through the highlights directly.
The headline is that we continue to work toward a definitive agreement on our letter of intent for 50 megawatts of critical IT load AI colocation services. Much of the recent work has been on the execution side of the project, which is what confirms the construction timeline and operational commitments that form part of that agreement. If and when the definitive agreement is executed, we will issue a comprehensive news release with full details.
Power: 75 megawatts confirmed
We have completed the contract for an additional 10 megawatts of non-firm power, bringing Christina Lake to 60 MW of non-firm power alongside 15 MW of firm power, for a total of 75 MW. Our DMG-owned substation already supports the full 75 MW load, and we are now investigating twinning the main transformer for future expansion and redundancy.
Two things flow from this. First, we believe we may be able to support more than 50 MW of critical IT load. Our 75 MW of total power allows for a worst-case PUE of 1.5, and Christina Lake's climate, a new generation of servers, and the ability to use alternative energy sources for chillers all give us room to raise that figure. Second, our previously disclosed application for up to 150 MW of firm power remains in process. We expect to move that forward after the definitive agreement is executed, and depending on our utility's transmission capacity, we may be able to combine it with our 60 MW of non-firm power.
Site progress: design-build and contractors
We have accelerated our design-build effort and are in the latter stages of selecting a general contractor with data center experience. On engineering, we plan to work with the electrical engineering firm we have partnered with for the past decade, we have already selected an architectural firm (which supported our building extension permit), and we are choosing among several BC-based mechanical engineering candidates with deep cooling systems expertise.
The lower interior of British Columbia has a good supply of trades, and we have secured a few electrical firms as a start, knowing we will need more. We are also working through the balance between prefabricated assemblies and on-site construction to optimize lead time, assembly time and cost.
Connectivity has been one of our bigger long-lead-time concerns given the remoteness of the site, and it is an area where we committed material capital ahead of a definitive agreement. We have now contracted with two telecom providers for two diverse paths of 100 Gbps fiber to the facility, are evaluating a possible third, and expect these lines can be upgraded to 400 Gbps in future.
Site location: permitting, zoning and community
We have applied for a permit to construct an addition to our current building that would roughly double its capacity, supporting as much as 60 MW of critical IT load. DMG has operated for many years in an approved data center-zoned location. We have encountered opposition from a few members of the local community, some of whom also opposed DMG in the past as a crypto miner, and we have remained open and cooperative throughout. We have emphasized that the project will not negatively impact utility rates, and that it will use less water and generate less noise than Bitcoin mining.
Timeline
Our goal of having tenant servers operating by the end of this year was always communicated on a commercially reasonable efforts basis and depended in part on quickly reaching a definitive agreement. With September now upon us, we are realistically looking toward a 2027 energization schedule for tenant servers.
Financing
We are in discussions with multiple financial institutions on a range of instruments, including rated bonds, lines of credit and equity or convertible debt. Our objective is to optimize for cost of capital, flexibility and speed while minimizing dilution. We will update the market if and when terms are finalized.
From our CEO
"We are pleased with our continued progress towards our goal of converting our Christina Lake facility to an AI data center to offer colocation services to a long-term tenant. Concurrently, we are laying the track for future sites, as we believe DMG can become a leader in Canada for offering AI data center colocation services, given our experience working with utilities and connecting to large amounts of power as well as our early position to build a major AI data center site."
— Sheldon Bennett, CEO
Meet us in New York
DMG management is presenting at the H.C. Wainwright 28th Annual Global Investment Conference at the Lotte New York Palace, September 14–16. Our presentation was scheduled for Tuesday, September 15 at 9:00 AM ET. If you are attending and would like to meet with management, please reply to this email.
Thank you for your continued support as we build toward this milestone..
Learn more about our company
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DMG’s mission is to lead the digital asset industry by meeting the most stringent compliance requirements while focused on environmental requirements.
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