If it right, a bit make sense but still isn't decrease the risk and possibility that your friend was scammed because everyone can say whatever he wants, such as I have a big mining farm with free electricity, do you believe me? I don't think so. Except, your (new) friend already know who the farm owner, how they operated, moreover he knows for sure the farm's location and knows another solid proof. (if) Maybe we were missing this part?

And how the deal, is that money will be used to purchase new mining tools? How long will the contract go?

I didn't say that your (new) friend was scammed, but who knows?