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The Bitmain purchase agreement significantly increases the possibilities of independent mining from 8,200 miners (+23%) to 44,450 owned miners with an expected hashrate capacity of 5.0 EH/s
Fully utilizes the expected 160 MW of mining infrastructure capacity available in Q1 2023 with approximately 34,000 miners in Lake Mariner and 15,000 miners in Nautilus Cryptomine
Raises capital to repay convertible note and terminate SEPA with Yorkville
Easton, MD, December 12, 2022—(BUSINESS WIRE)–TeraWulf Inc. (Nasdaq: VULF) (“TeraWulf” or the “Company”), which today owns and operates vertically integrated, domestic Bitcoin mining facilities powered by more than 91% carbon-free energy, announced that it has successfully restructured its previously announced purchase agreement with Bitmain Technologies Limited (“Bitmain”), enabling the company to significantly expand its standalone mining capacity and fully utilize 160 MW of its available mining capacity expected in Q1 2023. The company also announced that it has raised new capital to repay a convertible note ( “Advance”) with IA II PN, Ltd. (“Yorkville”) in its entirety and expects to simultaneously issue notice to Yorkville to terminate the accompanying Standby Equity Purchase Agreement (“SEPA”).
Increased Miner Shipments
In connection with recent amendments to the company’s purchase agreement with Bitmain, the parties have agreed to cancel TeraWulf’s group of approximately 3,000 S19 XP Pro Bitcoin mining machines from December 2022 and, together with the application of the remaining unused deposits with Bitmain, replace that group with approximately 14,000 S19j Pro miners for delivery in the first quarter of 2023 at no additional cost to the company.
With the incremental delivery of 8,200 miners, the Company increases its estimated standalone mining target in the first quarter of 2023 to 44,450 distributed owned miners (5.0 EH/s) from the previous estimate of 36,250 owned miners (4.3 EH/s ). In addition, the revised Bitmain agreement should allow the company to fully utilize its 110 MW of mining capacity (currently 60 MW is operational) at the Lake Mariner facility and 50 MW of net mining capacity at the Nautilus Cryptomine facility, which are expected to be fully implemented in Q1 2023.
“Based on our cooperative working relationship with Bitmain, we have optimized our miner deliveries to significantly increase TeraWulf’s self-mining hash rate target. With this recent agreement, the hashrate of the standalone mining company will increase by 23% and produce Bitcoin at an all-in cost to mine approximately $6,300 per coin1“, said Nazar Khan, Co-Founder and Chief Operating Officer of TeraWulf.
“There is no doubt that the mining business has been challenging over the past 12 months; however, we are strategically positioned as one of – if not the – lowest cost Bitcoin producers and will continue to strategically and prudently expand our operations while remaining focused on cost savings and profit margins,” Nazar Khan added. “With our target average electricity price of $0.035/kWh, which is 30% below the sector average of $0.050/kWh2for 160+ MV of mining capacity across our two locations, we strongly believe that TeraWulf will be one of the few Bitcoin miners that can sustainably and profitably operate in a low Bitcoin price environment.”
Termination of SEPA
The company also announced today that it has raised approximately $10 million in new capital consisting of a registered direct offering of $6.7 million of common stock, in addition to the prior issuance of $3.4 million of convertible notes to some of its largest shareholders in a transaction that exempt from registration under the Securities Act of 1933, as amended.
The Company intends to use the aggregate net proceeds to repay the advances with Yorkville and at the same time issue notice to Yorkville to terminate the accompanying SEPA entered into on June 2, 2022 and for other general corporate purposes.
About TeraWulf
TeraWulf (Nasdaq: VULF) owns and operates vertically integrated green bitcoin mining facilities in the United States. Led by an experienced group of energy entrepreneurs, the Company is currently operating and building two mining facilities, Lake Mariner in New York and Nautilus Cryptomine in Pennsylvania, with a target of 800 MW of mining capacity to be deployed by 2025. TeraWulf generates domestic bitcoins powered by nuclear, hydro and solar power with with the goal of using 100% carbon-free energy. With a core ESG focus directly linked to its business success, TeraWulf expects to offer attractive economics of industrial-scale mining.
Forward-looking statements
This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements include statements regarding expected future events and expectations that are not historical facts. All statements, other than statements of historical fact, are statements that may be considered forward-looking statements. In addition, forward-looking statements are typically identified by words such as “plan,” “believe,” “goal,” “target,” “target,” “expect,” “anticipate,” “intend,” “prospect “, “estimate”, “forecast”, “project”, “continue”, “could”, “can”, “could”, “possible”, “potential”, “anticipate”, “should”, “would” and other similar words and expressions, although the absence of these words or expressions does not mean that the statement is not forward-looking. Forward-looking statements are based on the current expectations and beliefs of TeraWulf management and are inherently subject to a number of factors, risks, uncertainties and assumptions and their potential effects. There can be no assurance that future developments will be as anticipated. Actual results may differ materially from those expressed or implied by forward-looking statements based on a number of factors, risks, uncertainties and assumptions, including, but not limited to: (1) conditions in the cryptocurrency mining industry, including fluctuations in bitcoin market prices and other cryptocurrencies, and the economics of cryptocurrency mining, including variables or factors that affect the cost, efficiency and profitability of cryptocurrency mining; (2) competition between different cryptocurrency mining service providers; (3) changes in applicable laws, regulations and/or permits affecting TeraWulf’s business or the industries in which it operates, including regulations regarding electricity generation, use of cryptocurrencies and/or mining of cryptocurrencies; (4) ability to realize certain business goals and timely and economical execution of integrated projects; (5) inability to obtain adequate financing on time and/or on acceptable terms in connection with growth strategies or operations; (6) loss of public confidence in Bitcoin or other cryptocurrencies and the potential for manipulation of the cryptocurrency market; (7) the potential for cybercrime, money laundering, malware infections and identity theft and/or loss and disruption as a result of equipment malfunction or failure, physical disaster, data security breach, computer malfunction or sabotage (and costs associated with any of the foregoing (8 ) the availability, delivery schedule and cost of equipment necessary to maintain and develop TeraWulf’s business and operations, including mining equipment and infrastructure equipment that meet the technical or other specifications necessary to achieve the growth strategy; (9) workforce factors, including the loss of key employees ; (10) litigation related to TeraWulf, RM 101 f/k/a IKONICS Corporation and/or the business combination; (11) the ability to recognize the expected objectives and benefits of the business combination; and (12) other risks and uncertainties that from time to time in the Company’s filings with the Securities and Exchange Commission (“SEC”). Prospective investors, shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. TeraWulf undertakes no obligation to publicly update any forward-looking statement after it has been made, whether as a result of new information, future events or otherwise, except as required by law or regulation. Investors are referred to the full discussion of risks and uncertainties related to forward-looking statements and to the discussion of risk factors contained in the Company’s filings with the SEC, which are available at www.sec.gov.
This press release will not constitute an offer to sell or the solicitation of an offer to buy any securities, nor will there be any sale of securities in any state or jurisdiction in which such offer, solicitation or sale would be illegal prior to registration or qualification under the laws on the securities of such state or jurisdiction. The offer of securities will not be made except by means of a prospectus that meets the requirements of the Securities Act of 1933, as amended.
See the original version on businesswire.com: https://www.businessvire.com/nevs/home/20221206005995/en/
Contacts
Company contact:
Sandy Harrison
harrison@terawulf.com
(410) 770-9500
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