TeraWulf Announces Continued Industry-Leading Cash Production and $30 Million Debt Repayment

Rhea-AI Summary

TeraWulf Inc. announces further debt reduction by repaying $30.1 million of its Term Loan, bringing the debt balance down to $75.9 million. The company aims to leverage its efficient Bitcoin mining operations to accelerate debt repayment and plans to allocate profits towards organic growth, dividends, or share buybacks.

Insights

Financial Analyst

Examining TeraWulf Inc.'s recent announcement regarding its debt reduction, it's pertinent to dissect the financial implications. The repayment of an additional $30.1 million in term loan is a significant move, reducing the company's debt balance to $75.9 million. This action suggests a robust cash flow position, which can be attributed to the company's operational efficiencies and the current favorable Bitcoin prices. It's important to note that a company's ability to rapidly reduce debt can lead to improved credit ratings, potentially lower future borrowing costs and an enhanced perception among investors.

The management's commentary on the cost to mine a Bitcoin post-halving being $37,000—when juxtaposed with the current Bitcoin price of approximately $70,000—indicates a healthy margin. This margin is critical as it provides the company with a buffer to manage volatility in cryptocurrency markets. Moreover, the announcement of potential dividends or share buybacks post-debt settlement signals a shareholder-friendly capital allocation strategy, which could positively influence the stock price in the medium to long term.

Market Research Analyst

From a market perspective, TeraWulf Inc.'s strategic focus on zero-carbon energy to power its Bitcoin mining operations positions it advantageously within the ESG (Environmental, Social and Governance) investment trend. Investors are increasingly seeking companies with sustainable practices and TeraWulf's commitment to over 95% zero-carbon energy usage aligns with these values. This positioning could attract a broader investor base, particularly those focused on sustainability.

Additionally, the company's transparency in providing a proprietary cost-to-mine calculator enhances investor trust by allowing them to verify operational efficiency claims. As the cryptocurrency sector is known for its opacity, such transparency is a differentiator that can strengthen investor relations and potentially boost the company's market valuation.

Cryptocurrency Analyst

The cryptocurrency market is notoriously volatile, with prices fluctuating wildly. TeraWulf's ability to maintain a low cost of production for Bitcoin post-halving is a testament to their operational efficiency. The halving event, which occurs approximately every four years, reduces the reward for mining new blocks by half, thereby decreasing the rate at which new Bitcoins are generated. A mining operation that can sustain profitability post-halving is well-positioned to capitalize on price surges and withstand downturns.

However, it's important for stakeholders to consider the inherent risks associated with the cryptocurrency industry, such as regulatory changes, market sentiment shifts and technological advancements. While the current scenario appears favorable for TeraWulf, these factors could dramatically alter the landscape. Investors should monitor these variables closely, as they can have a significant impact on TeraWulf's profitability and, consequently, its ability to continue reducing debt and rewarding shareholders.

Demonstrates Continued Progress in Debt Reduction

EASTON, Md., April 08, 2024 (GLOBE NEWSWIRE) -- TeraWulf Inc. (Nasdaq: WULF) (“TeraWulf” or the “Company”), which owns and operates vertically integrated, domestic Bitcoin mining facilities powered by more than 95% zero-carbon energy, today announced it has repaid an additional $30.1 million of its Term Loan, thereby reducing the debt balance to $75.9 million.

Management Commentary

Patrick Fleury, Chief Financial Officer, remarked, “This $30 million payment follows our repayment of approximately $40 million over the past six months. And there is more to come."

Fleury also stated, “At today's approximate $70,000 bitcoin price, we expect our industry leading economics, resulting in a fully loaded cost to mine a bitcoin of just $37,000 post halving, to allow for continued rapid debt extinguishment. All of the inputs used to determine our cost to mine a bitcoin can be found on our recently updated cost-to-mine calculator on our website. As previously indicated, once we've settled our outstanding debt, we plan to allocate profits towards organic growth, potential dividends or share buybacks to benefit our shareholders.”

TeraWulf’s proprietary cost-to-mine calculator can be found on the Company’s website here: https://investors.terawulf.com/financial-information/cost-to-mine-calculator.

About TeraWulf

TeraWulf owns and operates vertically integrated, environmentally clean bitcoin mining facilities in the United States. Led by an experienced group of energy entrepreneurs, the Company currently has two Bitcoin mining facilities: the wholly owned Lake Mariner facility in New York, and Nautilus Cryptomine facility in Pennsylvania, a joint venture with Cumulus Coin, LLC. TeraWulf generates domestically produced Bitcoin powered by 95% zero carbon energy resources including nuclear, hydro, and solar with a goal of utilizing 100% zero-carbon energy. With a core focus on ESG that ties directly to its business success, TeraWulf expects to provide industry leading mining economics at an industrial scale.

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 concerning anticipated future events and expectations that are not historical facts. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements. In addition, forward-looking statements are typically identified by words such as “plan,” “believe,” “goal,” “target,” “aim,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “should,” “would” and other similar words and expressions, although the absence of these words or expressions does not mean that a statement is not forward-looking. Forward-looking statements are based on the current expectations and beliefs of TeraWulf’s 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 those that have been anticipated. Actual results may vary materially from those expressed or implied by forward-looking statements based on a number of factors, risks, uncertainties and assumptions, including, among others: (1) conditions in the cryptocurrency mining industry, including fluctuation in the market pricing of bitcoin and other cryptocurrencies, and the economics of cryptocurrency mining, including as to variables or factors affecting the cost, efficiency and profitability of cryptocurrency mining; (2) competition among the various providers of cryptocurrency mining services; (3) changes in applicable laws, regulations and/or permits affecting TeraWulf’s operations or the industries in which it operates, including regulation regarding power generation, cryptocurrency usage and/or cryptocurrency mining, and/or regulation regarding safety, health, environmental and other matters, which could require significant expenditures; (4) the ability to implement certain business objectives and to timely and cost-effectively execute integrated projects; (5) failure to obtain adequate financing on a timely basis and/or on acceptable terms with regard to growth strategies or operations; (6) loss of public confidence in bitcoin or other cryptocurrencies and the potential for cryptocurrency market manipulation; (7) adverse geopolitical or economic conditions, including a high inflationary environment; (8) the potential of cybercrime, money-laundering, malware infections and phishing and/or loss and interference as a result of equipment malfunction or break-down, physical disaster, data security breach, computer malfunction or sabotage (and the costs associated with any of the foregoing); (9) the availability, delivery schedule and cost of equipment necessary to maintain and grow the business and operations of TeraWulf, including mining equipment and infrastructure equipment meeting the technical or other specifications required to achieve its growth strategy; (10) employment workforce factors, including the loss of key employees; (11) litigation relating to TeraWulf and/or its business; and (12) other risks and uncertainties detailed from time to time in the Company’s filings with the Securities and Exchange Commission (“SEC”). Potential investors, stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they were made. TeraWulf does not assume any obligation to publicly update any forward-looking statement after it was 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 associated with forward-looking statements and the discussion of risk factors contained in the Company’s filings with the SEC, which are available at www.sec.gov.

Company Contact:
Jason Assad
Director of Corporate Communications
assad@terawulf.com
(678) 570-6791

FAQ

How much debt did TeraWulf Inc. repay?

TeraWulf Inc. repaid $30.1 million of its Term Loan, reducing the debt balance to $75.9 million.

What is TeraWulf Inc.'s fully loaded cost to mine a bitcoin post halving?

TeraWulf Inc. expects a fully loaded cost to mine a bitcoin of just $37,000 post halving, with an approximate $70,000 bitcoin price.

Where can TeraWulf Inc.'s cost-to-mine calculator be found?

TeraWulf Inc.'s proprietary cost-to-mine calculator can be found on the Company’s website at https://investors.terawulf.com/financial-information/cost-to-mine-calculator.