TeraWulf (WULF) Updates Mining Operations and Cost-Reduction Initiatives

TeraWulf Inc. (Nasdaq: WULF) (“TeraWulf” or the “Company”), which owns and operates vertically integrated, domestic bitcoin mining facilities powered by more than 91% zero-carbon energy, today provided an operational update and more detail regarding its cost-reduction initiatives that are underway to ensure the Company maintains greater resiliency in a low-priced Bitcoin environment. The Company also reiterated that the Lake Mariner facility is not impacted by the two-year moratorium on new permits for fossil fuel powered proof-of-work mining, which was recently signed into law by the Governor of the State of New York.

Operational Update

• Current online capacity of 60 MW and deployed miner fleet of 17,500 miners with a hash rate of approximately 2.0 EH/s, comprised of 1.34 EH/s of self-mining and 0.65 EH/s hosted at the Lake Mariner facility.
• The Company self-mined 119 Bitcoin in October 2022, a 76% increase over the amount mined in September 2022, and the strong upward trajectory has continued in November.
• Self-mining approximately 4.6 Bitcoin per day, up 28% from 3.6 Bitcoin per day exiting Q3 2022.
• Construction is estimated to be completed on its two sites in Q1 2023 enabling 160 MW and operational capacity of 6.6 EH/s, including 4.2 EH/s of self-mining.
• Recent amendment to Nautilus Cryptomine joint venture agreement with an affiliate of Talen Energy Corp. (the “Nautilus JV”) maximizes TeraWulf’s 50 MW share of five-year contracted power at $0.02/kWh, for an expected average of $0.035/kWh across its two sites.
• Recently announced cost-reduction initiatives targeting 25%+ in run-rate savings in the next 12 months, providing a lower cost structure to provide resiliency and faster path to profitability.

Mining Facilities Update

Following the Q3 2022 energization of Building 1 (50 MW) at the Lake Mariner facility in New York, TeraWulf continues to rapidly expand its self-mining capabilities. Construction activities on Building 2, also 50 MW, are substantially complete and the Company expects to achieve total capacity of 110 MW at the Lake Mariner facility in Q1 2023. Currently, the Company is operating approximately 11,000 proprietary miners and 6,500 hosted miners with plans to deploy an additional 7,000 proprietary miners in Q1 2023 at the Lake Mariner Facility. TeraWulf’s priority is to utilize the open capacity (10,000 – 12,000 slots) at Lake Mariner for self-mining but will continue to evaluate potential hosting arrangements that leverage the Company’s vertical integration and optimize capital efficiency.

The Nautilus Cryptomine facility, which has access to an initial 200 MW of mining capacity from Talen’s 2.3 GW Susquehanna Nuclear Station in Pennsylvania, with an option for an incremental 100 MW, is in the final stages of construction and is projected to begin mining at scale in Q1 2023. Pursuant to the Nautilus JV, TeraWulf owns and is expected to operate 50 MWs of mining capacity at a five-year contracted fixed rate of $0.02 per kilowatt hour, which is among the lowest power pricing in the sector. The Company has received or is awaiting delivery of approximately 15,000 miners (1.7 EH/s) to fill its 50-MW share of the Nautilus Cryptomine facility in Q1 2023. The miners for TeraWulf’s share of the Nautilus Cryptomine have been paid for and the Company does not expect any additional infrastructure related capital expenditures to be required.

TeraWulf continues to target achieving a total of approximately 6.6 EH/s of operational mining capacity across its two mining facilities in Q1 2023.

NY Crypto Moratorium Will Not Impact Lake Mariner Facility

On November 22, 2022, the Governor of the State of New York, Kathy Hochul, signed into law legislation that had been approved earlier this year by the State Assembly, which restricts the issuance of new air permits for proof-of-work mining operations sourcing energy from fossil fueled power plants.

This bill does not impact operations at TeraWulf’s Lake Mariner Facility in New York as the facility does not source energy directly from a fossil fuel power plant, but rather utilizes >91% sustainable, zero-carbon energy from the grid.

TeraWulf will continue to expand its sustainable mining footprint at the Lake Mariner facility and partner with the New York Power Authority (NYPA) and other state entities to participate in programs that provide the State’s grid with a significant demand energy response capability.

Management Commentary

“We are pleased with the ramp in mining operations achieved at Lake Mariner in a brief period of time and despite the difficult market environment. Given our industry leading low cost of power at our two mining facilities, we believe we are going to be one of the few players that can sustainably operate in a prolonged low-price bitcoin environment,” stated Paul Prager, Co-founder and Chief Executive Officer of TeraWulf. “The recent regulatory actions in New York serve to reinforce our belief that a sustainable, zero-carbon power strategy is critical for long-term success in the bitcoin mining industry, particularly at a time when bitcoin mining and crypto in general have come under greater regulatory scrutiny.”

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