TeraWulf (WULF) Issues December 2023 Production and Operations Updates

TeraWulf Inc. (Nasdaq: WULF) today provided an unaudited monthly production and operations update for December 2023.

December 2023 Highlights

• Self-mined 334 bitcoin in December with an average production rate of over 10 bitcoin per day.
• Power cost averaged $11,212 per bitcoin self-mined, or approximately $0.038/kWh in December.
• Building 3 at the Lake Mariner facility is operationally ready with energization of additional 18,500 S19j XP miners expected in February 2024. Construction of Building 4 is underway.
• Expansion of existing high-performance computing (“HPC”) project supporting generative AI and large language model applications at the Lake Mariner facility, planned for 2024.
• Expect to repay approximately $14 million of debt with cash generated in Q4 2023, with an $11 million expected repayment in January 2024, thereby reducing the Company’s future interest payments.

Management Commentary

“During December, the Company mined 334 bitcoin, a slight increase from November’s bitcoin production, due to continued improvement leveraging lower winter temperatures across both the Lake Mariner and Nautilus facilities, along with streamlined miner maintenance and healthy transaction fees,” said Sean Farrell, SVP of Operations at TeraWulf.

“The Lake Mariner team also performed routine maintenance in December on the primary transformer that feeds approximately 4,700 miners. The 15-day outage included replacement of the tertiary bushings on the unit as a preventative measure to ensure long term reliability,” added Farrell.

“The fourth quarter of 2023 demonstrated strong financial performance across our portfolio and generated meaningful free cash flow, which will be applied to reduce indebtedness,” said Patrick Fleury, Chief Financial Officer of TeraWulf.

Production and Operations Update

As previously announced, the Company completed substantial construction of Building 3 at the Lake Mariner facility in December, which houses an incremental 45 MW of capacity and brings operational infrastructure capacity at the Lake Mariner site to approximately 160 MW. The infrastructure expansion and pending deployment of the new 18,500 S19j XP bitcoin mining machines, anticipated in February 2024, is expected to increase the Company’s total self-mining hashrate by approximately 58% (from 5.0 EH/s to 7.9 EH/s).

Planning is underway for additional growth at Lake Mariner with the construction of Building 4 underway. Upon planned completion in mid-2024, Building 4 is expected to bring TeraWulf’s total operational capacity to approximately 10 EH/s. Additionally, at the nuclear-powered Nautilus Cryptomine facility, TeraWulf has the option to add an additional 50 MW of bitcoin mining capacity, bringing the Company’s total capacity at the Nautilus facility to 100 MW.

During December, the Company also announced that following the successful pilot of a compact (NVIDIA A100) GPU system to support generative AI and large language model applications, the Company has initially committed a 2 MW block of power at the Lake Mariner facility, capable of deploying thousands of latest generation GPUs, to support a larger HPC project expected in 2024. This project is aimed at diversifying the Company’s revenue streams by capitalizing on its infrastructure expertise to address the rapidly growing demand for GPU compute in the generative AI market. TeraWulf intends to continue leveraging its existing infrastructure to further push into the HPC and AI markets on a larger scale with compelling returns on capital.

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