B.C. Bitcoin Miner DMG Revenue Falls 45% as It Pivots Flagship Site Toward AI Data Centre

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For years, DMG Blockchain Solutions’ Christina Lake operation was built around a straightforward equation: secure power, run specialized machines and turn computing capacity into Bitcoin. That equation is now changing.

The British Columbia company reported fiscal third-quarter revenue of C$6.4 million for the three months ended June 30, 2026, a 45% decline from a year earlier, as Bitcoin production and realized hashrate weakened. At the same time, DMG is directing increasing attention toward a much larger bet—transforming Christina Lake into infrastructure capable of hosting artificial-intelligence workloads. The strategy potentially gives an existing power-intensive facility a second life in one of technology’s fastest-growing markets, but DMG is still negotiating its cornerstone AI agreement and must navigate financing, construction, permitting and community considerations before that transformation becomes a dependable new source of revenue.

A 45% Revenue Drop Shows How Quickly Mining Economics Can Shift

DMG generated C$6.4 million in revenue during its fiscal third quarter of 2026, down from C$11.6 million in the same period a year earlier. The decline was also visible sequentially: revenue fell 13% from C$7.3 million in the fiscal second quarter. Management attributed the year-over-year decrease principally to a C$5.2-million reduction in digital-currency mining revenue, reflecting both fewer coins mined and a lower average price realized for digital currency. For a company whose physical infrastructure was historically designed around Bitcoin production, a change of that size can quickly reshape quarterly results.

The numbers illustrate why DMG’s strategic transition matters beyond simply adding another business line. Bitcoin mining revenue can move sharply when production, network conditions, cryptocurrency prices and power economics change simultaneously. DMG entered fiscal 2026 with C$11.2 million of first-quarter revenue, meaning its C$6.4-million third-quarter result represents a substantial deterioration within only six months. Christina Lake remains primarily a Bitcoin mining facility for now, but management is increasingly treating its electrical and data-centre infrastructure as an asset that may ultimately generate revenue through longer-duration AI colocation contracts rather than relying as heavily on the economics of mining each incremental Bitcoin.

DMG Mined Fewer Bitcoin as Its Realized Hashrate Declined

The operational figures behind the revenue decline are equally important. DMG received 61.9 Bitcoin from mining during the third quarter, compared with 68.8 Bitcoin in the previous quarter and 84.3 Bitcoin a year earlier. That represents a 10% quarter-over-quarter reduction and a 27% year-over-year decline. The company’s realized hashrate averaged 1.47 exahashes per second during the quarter, 14% below the previous quarter. Its fleet efficiency was reported at 21.9 joules per terahash, about 3% lower than in the second quarter.

Those figures contrast with the beginning of the fiscal year, when DMG reported a first-quarter hashrate of 1.76 EH/s and 69 Bitcoin mined. The company has also been retiring less-efficient mining machines rather than committing capital to maintaining every unit indefinitely. That decision can reduce electricity consumption and operating expenses, but it also means the mining fleet is no longer being treated as the unquestioned centrepiece of Christina Lake’s future. Mining has not disappeared from DMG’s strategy—the company has explicitly said it expects Bitcoin mining to remain part of the business—but management’s capital and development priorities are increasingly shifting toward infrastructure that can accommodate high-density AI computing.

Lower Power Costs Helped, but DMG’s Net Loss Still Widened

There was one notable counterweight to falling revenue: DMG spent considerably less operating the business. Operating and maintenance expenses declined to C$4.4 million in the third quarter from C$6.5 million a year earlier. The company attributed much of that improvement to approximately C$2 million of lower utility expenses, helped by favourable non-firm electricity rates and the retirement of inefficient miners. General and administrative costs also declined, falling to approximately C$1.5 million from C$1.9 million. Depreciation dropped to C$2.6 million from C$4.5 million.

Those savings were not enough to offset the deterioration elsewhere in the income statement. DMG recorded a C$3.9-million quarterly net loss, or C$0.02 per share, compared with a loss of roughly C$0.4 million in the comparable 2025 quarter. Capital deployment has also slowed sharply: additions to property and equipment totalled only C$1.6 million during the first nine months of fiscal 2026, versus C$19.5 million during all of fiscal 2025 and C$21.9 million in fiscal 2024. That creates an important tension. DMG is containing spending in its existing operation while preparing for an AI project that could ultimately require significantly greater financing and construction activity.

Christina Lake Is Being Repositioned Around a Potential 50-MW AI Tenant

The centrepiece of DMG’s new direction emerged in June, when the company signed a letter of intent with an undisclosed prospective customer for as much as 50 megawatts of critical IT load at Christina Lake. The proposed arrangement would involve AI colocation rather than Bitcoin mining. Under the contemplated structure, the initial contract would run for 12 years, with three additional five-year renewal options. DMG said it and the customer were targeting delivery of the first phase by December 31, 2026, although the timetable depends on the parties reaching a definitive agreement and completing the required development work.

That distinction matters. The 50-MW proposal is not yet the same as a fully executed long-term customer contract. DMG has repeatedly stated that negotiations remain underway and there is no assurance a definitive agreement will be completed. In its August earnings update, chief executive Sheldon Bennett said the company was working on contractor and engineering selections, vendor relationships, permitting, financing and local community concerns. Bitcoin mining will therefore continue at Christina Lake during the transition period. The potential prize is substantial, however: replacing a portion of volatile mining economics with monthly recurring colocation charges under a long-term agreement could materially change the revenue profile of the site.

DMG Already Has Some of the Infrastructure an AI Conversion Would Need

Christina Lake’s appeal as an AI site begins with power. Earlier in 2026, DMG said it had received verbal utility approval for another 10 MW of non-firm electricity, bringing total available capacity to 75 MW. That consisted of 15 MW of firm power and 60 MW of non-firm, or curtailable, capacity. Non-firm electricity can be interrupted when grid conditions require it, making the distinction important for workloads that demand consistently high availability. DMG has also explored additional generation options while developing plans for the site’s longer-term energy requirements.

The transition is already producing smaller commercial projects. In April, DMG announced delivery of 2 MW of prefabricated data-centre units designed to meet Sensitive Compartmented Information Facility, or SCIF, security requirements for sensitive computing applications. In June, it announced its first colocation contract suited to those prefabricated units, worth approximately C$670,000 over slightly more than two years. The unnamed customer is expected to operate AI computing workloads and has an option for additional secure services. A C$670,000 contract is small beside DMG’s proposed 50-MW development, but it provides a tangible example of Christina Lake infrastructure being monetized for something other than cryptocurrency mining.

Permits, Financing and the Balance Sheet Remain Critical Hurdles

Physical power capacity alone does not create a functioning AI campus. The Regional District of Kootenay Boundary says the Christina Lake property at 795 Highway 395 is zoned in a manner that permits data-warehouse use, but new buildings and structures still require applicable development and building approvals. As of June 16, 2026, the regional district said it had neither issued the required development or building permits for an AI data centre at the site nor received the necessary applications. By August 27, DMG said it was applying for required permits as part of its project-execution work, showing that the process was moving forward but remained incomplete.

Financing is another major variable. DMG has previously said it expects debt to be the primary financing method if the proposed 50-MW agreement becomes definitive. At June 30, the company reported C$41.6 million in combined cash, short-term investments and digital assets, down 12% from C$47.4 million at the end of the previous quarter. Total assets declined to C$102.3 million. Those resources give DMG a financial base, but a large AI data-centre development involves considerably more than installing servers. Electrical upgrades, cooling, buildings, connectivity and other infrastructure can make execution capital-intensive, leaving the terms of any eventual financing just as important as the headline size of the tenant commitment.

AI Demand Explains the Strategy, but Execution Will Determine Its Value

DMG is attempting its transition at a moment when electricity-hungry AI infrastructure is becoming a significant global investment theme. The International Energy Agency projects worldwide data-centre electricity consumption could roughly double to around 945 terawatt-hours by 2030 in its base case. The agency expects electricity use from accelerated servers—the category most closely associated with AI computing—to grow about 30% annually through the end of the decade. Existing sites with large electrical connections therefore have strategic characteristics that are increasingly difficult and time-consuming to reproduce from scratch.

Canada is also deliberately trying to expand domestic computing capacity. The federal government established a C$2-billion Canadian Sovereign AI Compute Strategy, including support for Canadian data centres, compute access and large-scale sovereign infrastructure. In 2026, Ottawa launched another application process for major sovereign AI supercomputing capacity, reinforcing the policy push toward Canadian-hosted computing. That backdrop makes DMG’s direction understandable, particularly because Christina Lake already operates as energy-intensive digital infrastructure. Yet growing AI demand does not guarantee DMG’s success. The clearest milestones now are practical ones: completing the 50-MW definitive agreement, obtaining permits, securing financing, constructing the required infrastructure and proving that long-term AI revenue can eventually outweigh the shrinking contribution from the facility’s original Bitcoin-mining model.

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