TeraWulf Sells Nautilus Stake to Talen Energy Subsidiary for $92M, Plans to Expand Lake Mariner Facility

Bitcoin mining firm TeraWulf has sold its 25% stake in the Nautilus Cryptomine joint venture to its partner, a subsidiary of Talen Energy

Bitcoin mining firm TeraWulf (NASDAQ:TERA) has sold its 25% stake in the Nautilus Cryptomine joint venture to its partner, a subsidiary of Talen Energy (NYSE:TLN), in a deal valued at around $92 million.

The company will use the proceeds to expand its operations at the Lake Mariner facility, which includes building a 20 MW CB-1 operation to host artificial intelligence (AI) and high-performance computing (HPC) data centers. Separately, TeraWulf said it is working to complete its fifth mining building, MB-5, and aims to reach a capacity of over 13 EH/s by early 2025 while bringing down its mining efficiency to 18.2 J/TH.

TeraWulf is making strategic preparations for the future by monetizing its interest in a power contract and ground lease set to expire in June 2027, the official press release said. The move will enable it to concentrate its efforts on its Lake Mariner facility in New York, where it can take advantage of lower power costs.

Selling its minority stake in Nautilus will also simplify its financial statements, making things clearer for shareholders. Recently, TeraWulf completed a 2 MW proof-of-concept project for AI and HPC that supports current and next-generation GPU technologies.

The company is also constructing a 20 MW colocation facility, CB-1, at Lake Mariner, which will be able to support a critical IT load of 16 MW and have advanced cooling and redundancy capabilities.

The proceeds from the sale will be reinvested to keep CB-1 on track to begin operations in Q1 2025. A second building, CB-2, is planned for completion in Q2 2025 and will target a gross capacity of 50 MW.

Commenting on the latest development, Paul Prager, Chief Executive Officer of TeraWulf, said:

“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.”

TeraWulf's Mixed Q2 2024 Results

TeraWulf's second-quarter earnings report, which was released in August, showed mixed results. As reported earlier, the company mined 699 BTC, which was 21% less than the previous year, but its revenue reached $35.6 million, which was slightly higher than the anticipated $35.4 million.

The company did, however, record a loss of $0.03 per share, which was greater than the anticipated loss of $0.02. Furthermore, due to the higher network difficulty and the effects of April's Bitcoin halving, mining costs increased by 243%.

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