Bitcoin Miner Terawulf Sells 25% Equity Stake to Fund AI and High-Performance Computing Expansion

TeraWulf Inc. has completed the sale of a 25% equity stake in its Nautilus Cryptomine joint venture for approximately $92 million, a strategic move aimed at funding the company’s growth in artificial intelligence (AI) and high-performance computing (HPC) initiatives.

Short Summary:

• TeraWulf sells a 25% stake in its Nautilus project to Talen Energy for $92 million.
• The sale yields a 3.4x return on investment aimed at enhancing operations at Lake Mariner.
• Construction of the new AI/HPC facility, CB-1, is set to begin, with completion expected by Q1 2025.

EASTON, Md., Oct. 03, 2024 (GLOBE NEWSWIRE) — In a significant move towards advancing its operations in high-performance computing and artificial intelligence, TeraWulf Inc. (Nasdaq: WULF) has completed the sale of a 25% equity stake in the Nautilus Cryptomine joint venture to partner Talen Energy Corporation. The transaction, valued at approximately $92 million, includes $85 million in cash and 30,000 miners worth around $7 million, resulting in a remarkable 3.4x return on TeraWulf’s initial investment.

Through this strategic divestment, TeraWulf aims to allocate the proceeds towards the construction of a new 20 MW facility, designated CB-1, at its Lake Mariner location in New York. This facility will be instrumental in hosting AI and HPC data centers. TeraWulf’s CEO, Paul Prager, emphasized the importance of this transaction, stating,

“This transaction further aligns TeraWulf’s focus and investments with where we have the most operational efficiency, the greatest growth potential, and the best opportunity to drive incremental value for shareholders.”

The Nautilus project, which contributed approximately 20% of TeraWulf’s total bitcoin production, has been critical to the company’s operations thus far. TeraWulf plans to relocate its remaining bitcoin mining efforts to Lake Mariner where it expects to benefit from lower energy costs. The company is targeting an operational capacity of over 13 EH/s by the first quarter of 2025, leveraging the new facility to enhance its overall efficiency.

TeraWulf’s recent transaction aligns closely with its long-term objectives of maximizing operational efficiency and maintaining cost-effective mining practices. The sale of the Nautilus stake strategically occurs ahead of the expiration of an advantageous $0.02/kWh power contract and ground lease in June 2027, enabling the company to secure resources for its growth plans effectively.

The move to invest in HPC and AI signifies a shift in the bitcoin mining industry’s landscape, as TeraWulf joins a growing number of firms exploring diversification beyond traditional mining operations. The construction of the CB-1 facility is anticipated to provide increased power availability for substantial customer demands in the high-performance computing sector.

TeraWulf’s commitment to sustainable energy remains a cornerstone of its business model. The company predominantly utilizes zero-carbon energy sources, such as nuclear and hydroelectric power, affirming its dedication to environmentally responsible operations. This ethos not only appeals to green energy advocates but also positions TeraWulf as a forward-thinking entity in the cryptocurrency space.

After the announcement, TeraWulf’s stock price saw a significant uptick of 8%, closing at $4.71, reflecting growing investor confidence in the firm’s strategic direction. The company’s market capitalization stands at around $1.8 billion, constituting approximately 7.5% of the cryptocurrency mining market.

The CB-1 facility is part of TeraWulf’s broader strategy, which includes ongoing construction of the “MB-5” mining building, with a goal to improve mining fleet efficiency to achieve a performance measure of 18.2 J/TH. These initiatives complement the company’s focus on enhancing operational output while lowering mining costs.

Looking ahead, Prager expressed optimism regarding the company’s position in the industry, stating,

“Together, these actions are expected to enhance our mining fleet’s efficiency, reduce our cost-to-mine, and improve overall profitability, all while maintaining our commitment to utilizing predominantly zero-carbon energy.”

As TeraWulf continues to expand, the firm will hold a conference call on November 12 to discuss its third-quarter financial results.

About TeraWulf: TeraWulf is at the forefront of developing environmentally sustainable, next-generation data center infrastructure within the United States, tailored for bitcoin mining and high-performance computing. With its flagship Lake Mariner facility situated on a site of a retired coal plant in Western New York, TeraWulf generates revenue primarily through bitcoin mining while sustaining its commitment to ethical and sustainable business practices. The firm’s leadership comprises seasoned energy entrepreneurs dedicated to shaping the future of the industry by leveraging zero-carbon energy sources.

Conclusion: TeraWulf’s strategic divestment from the Nautilus Cryptomine joint venture reflects not only a robust financial maneuver but a calculated step towards enhanced growth trajectories in the rapidly evolving landscape of AI and HPC. With significant investment back into its Lake Mariner facility and a commitment to sustainability at its core, TeraWulf is uniquely positioned to capitalize on the increasing demand for innovative and efficient digital infrastructure.

For ongoing updates on TeraWulf’s progress and performance metrics, interested parties are encouraged to join the upcoming conference call or follow the company’s announcements.