Bitcoin miner TeraWulf has signed a deal to sell a stake in its Nautilus Cryptomine joint venture to Talen Energy Corporation.
The deal is currently valued at $92 million and is expected to bring an estimated 3.4x return on investment in Nautilus for TeraWulf.
The crypto miner’s stake sale comes at a time when many in the industry are struggling and the hype of AI has made a lot of people re-focus their interests on the skyrocketing and ever-growing artificial intelligence sector.
TeraWulf is also planning to use the funds from this transaction to refocus on the growth of HPC/AI and bitcoin mining at the company’s fully-owned Lake Mariner plant.
The $92 million consideration comprises of $85 million in cash and around 30,000 Talen-contributed miners and supporting equipment worth around $7 million. With this money, TeraWulf plans to build the 20 MW CB-1 facility near Lake Mariner, which is intended to house HPC/AI data centers.
TeraWulf intends to finish developing Mining developing 5, or “MB-5,” in addition to the CB-1 facility, and to continue operating at a rate above 13 EH/s by Q1 2025. In order to reach 18.2 J/TH, the company also intends to improve the productivity of its mining fleet.
“Monetizing our interest in Nautilus ahead of the 2027 expiration of the highly advantageous 2¢/kWh power contract allows us to capture a significant premium for our investment, provide significant capital to invest into our HPC/AI infrastructure, and capitalize on our favorably structured miner purchase agreement to upgrade our mining fleet at a discount to the current market price,” stated Paul Prager, TeraWulf’s CEO.
TeraWulf’s Stake Sale In Tandem With Grim Global Crypto-Miners
Crypto miners across the globe are having a hard time at present. The Bitcoin halving that was supposed to help propel the entire industry has left the reward rate at a 90% discount at present.
In order to construct the Bitcoin blockchain and receive rewards in the form of fresh BTC, Bitcoin miners compete to solve challenging mathematical riddles.
In an effort to slow down the creation of new Bitcoins, their incentives were cut in half in April to 3.26 Bitcoin per block. This technical change called the Bitcoin Halving happens about every four years.
Because of this, the revenue per transaction for miners had decreased from nearly $192 in March to just $60 in May and has struggled to pick pace ever since.
Even the biggest miners in the world like Marathon Digital are repositioning themselves to now mint the AI revenue in the future, per CNBC.