TeraWulf Inc saw its shares plunge 32% today after announcing a fund raising alongside a restructured purchase agreement with Bitmain, under which it will add 8,200 new mining machines to its fleet at no extra cost.
The Maryland-based bitcoin mining company has raised $10 million via a $6.7 million registered direct offering of common stock and $3.4 million of convertible promissory notes to some of its largest shareholders.
With the incremental delivery of 8,200 miners, the company is increasing its estimated 1Q 2023 self-mining target to 44,450 owned miners deployed (5.0 EH/s) from its prior estimate of 36,250 owned miners (4.3 EH/s), TeraWulf said in a statement.
The company added the deal allows it to significantly expand its self-mining capacity and fully utilize 160 megawatts of its available mining capacity expected in the first quarter of 2023.
TeraWulf and Bitmain have agreed to cancel TeraWulf's December batch of 3,000 S19 XP Pro bitcoin mining machines and, together with the application of remaining unused deposits with Bitmain, replace that batch with 14,000 S19j Pro miners for delivery in the first quarter of 2023 at no additional cost to TeraWulf.
“By virtue of our cooperative working relationship with Bitmain, we have optimized our miner deliveries to significantly increase TeraWulf’s self-mining hash rate target,” stated Nazar Khan, co-founder and chief operating officer of TeraWulf.
“With this recent agreement, the company’s self-mining hash rate will increase by 23% and produce Bitcoin at an all-in cost to mine of approximately $6,300 per coin.” Khan added.
"With our targeted average power cost of $0.035/kWh, which is 30% below the sector average of $0.050/kWh2 for the 160+ MW of mining capability across our two sites, we firmly believe that TeraWulf will be one of the few bitcoin miners that can sustainably and profitably operate in a low Bitcoin price environment,” he continued.