Q3 2022 Iris Energy Ltd Earnings Call

Thank you for standing by and welcome to the Iris Energy Limited March quarter earnings Conference call.

All participants are in a listen only mode there'll be a presentation followed by a question and answer session.

If you wish to ask a question you will need to press the star key sorry, but the number one on your telephone keypad.

To hand, the conference over to <expletive> Hayne Doyle Senior manager Investor Relations. Please go ahead.

Good afternoon for those of you in North America, and good morning to those of you in Australia and welcome to the Ares Energy earnings Conference call for the third quarter ended March 31 2022.

Kind Doyle senior manager Investor Relations and with me on the call today is Daniel Roberts co.

Okay.

They are really the wood, president and Ian Hi, interim Vice President of Finance.

Before we begin. Please note this call is being webcast live with an accompanying presentation and includes the ability to spin off a question about the law chat box.

Cause I was an adult and boss Orange you can elect to ask a question on the motor right on Oct representation.

I'd like to remind you that certain statements we make during the conference call may constitute forward looking statements and RF energy cautions listeners that forward looking information and statements are based on certain assumptions and risk factors that could cause actual results to differ materially from the expectations of the company.

Listeners should not place undue reliance on forward looking international statements. Please refer to the disclaimer on slide two within the accompanying presentation. Thank you and I'll now turn the call over to Dan Robert then.

Thanks Cai.

Hi, everybody. Thank you for joining us on.

On our earnings call, a what would die to have an earnings call.

Generally they are interesting out there over the last few days to a week.

In terms of where I'd like to start he's just discussing where we're at in terms of the right people to ask as you'll be aware, we conducted our IPO on the NASDAQ.

And I've been in the last year and spoke about the execution and expected operational ramp up.

And it's another opportunity today to reach rights that we are delivering against what we said we would deliver them. If we see that bottom left hand side.

Our first thoughts are now flat.

We forecast that to be completed by December last year. It was completed around September .

The original forecast capacity for that thought with 700 pit of hash. It's now operating today at around 850 at Ash.

If we then look to the next bar, we've now sheets operational commencement at a second thought as of April the 12th Ian Mackenzie British Columbia.

Non megawatts was energized.

April again ahead of schedule.

In terms of the look forward Lindsay will go into a little bit more detail around the specific saw nice to see the ramp up profile, but again, we reiterate our previous guidance around the expected construction ramp up and installation all that chips.

<unk> by early next year and then.

<unk> has deployed in accordance we'd deliveries under the contract.

If we move onto the next slide.

In terms of a little bit more about the team. Many of you would've seen a slide like this all similar yes, it's about $1 billion U S of capex required to deliver apps each day next ash, but that should be looked at.

Also in the context, not I leave that track record with Eaton IRS, but the team's track record outside of virus collectively.

We have over 100 people globally now are under the or a spin off.

And the leadership and management team has delivered over $25 billion of energy and infrastructure projects are not just in Australia, and the Asia Pacific region, but globally as well David Bartholomew, who many of you have met our previously obviously a decade of experience running at least at energy.

And infrastructure business.

These strange stock exchange.

And as you would a president who will talk next about the operations and more thought.

Level information, he's obviously got decades of experience building, managing and operating our infrastructure businesses. So yes, it's a task in the in the context of the industry that we operate thin bitcoin mining data centers, but ultimately we're just building hard assets.

Data centers are infrastructure energy infrastructure.

And it's not overly forum.

The team having done it many times before it didn't seem like ours is.

In terms of what we're building again just to recap we're building for a long time.

We believe in Bitcoin, we believe it's here to stay yes, it's volatile as we continue to see our.

Willie and al ethane in the sector. Since 2013, so we've seen it go up we've seen it go down but it tends to go up over up over an extended.

In that period of time.

At the end of the day, it's it's very difficult to see happy coin doesn't continue to thrive.

Beyond the knee die to die.

Volatility and we are building a platform.

With a multi decade lanes to monetize that.

We've spoken a lot previously around the proprietary design the power data centers, we don't do shipping containers, we don't do warehouses, we use industrial transformers.

And retrofitting.

Programs, we build aren't enough right right data centers with their own proprietary insulation and airflow design and we're seeing that come through the benefits in terms of operational performance.

And importantly for US is also asset loss.

Computers, the ethics, they're extremely valuable as we all know.

And looking after them for a long time to get the most economic asset loss out of them as possible.

Is a really important focus for us.

Recapping, where we're at we're financing them.

As we've mentioned before we conducted an IPO on the NASDAQ last November .

J P. Morgan Canaccord C. D led that RPI with a number of other players mentioned on that screen system. We continue to have a good relationship with all of those parties.

And they've been very supportive of the last six months.

In terms of waiver at all.

Funding to deliver if you've de next cash as I mentioned previously it's about $1 billion of Capex in totality. So that's from start to finish 1 billion in title.

We've secured through equity a little bit of debt and reinvesting some operational cash flow. We're looking at around 750 of that billion already accounted for.

And the balance are underway in terms of seeking additional debt and funding to complete it.

We're not immune to the current market and what's happening there they die to die at the moment.

But we can say that we have multiple so that process is underway.

We haven't seen them impacted by the volatility of the last week or two that's not decided that they won't be at some point, we're realistic that C. D. He rocky right now.

The strength of that balance sheet, our operational performance the daily cash flows that we're generating.

We're feeling pretty good about it.

And maybe just to recap the debt that we have today.

That is all on a nonrecourse ring fenced spices are secured against that some of the computers that we procured the.

Balance is all equity.

So it's a very clean balance sheet, it's a strong balance sheet. It was down very deliberately now is the time to layer in a debt funding on top of that.

Recognizing that we've now demonstrated track record beauty at multiple sites generating daily cash flow as we said, we would and now looking to use that cash flow to service our debt products. So stay tuned.

Obviously focused very heavily on at the moment, but very pleased with where it's at you here Tonight.

And in terms of where we're at as a listed company.

It's been an interesting journey to say the least we do have a large hash rate ramp is as I've alluded to earlier in this presentation and as many of you on these COVID-19 would already be aware, we are delivering we're doing what we said we would do at the Oct here and that's our intention we will endeavor to continue.

<unk>.

What we say, we'll do we publish detailed monthly reports are not just with their monthly operating metrics.

But also in terms of individual site by site updates on the status of construction late autumn procurement and expected operational commencement date as you can see from the chart. We are trading at a discount to the comps are never seek to our guests with an equity market does die to die.

But even on the basis of just the Phoenix Ash in early 2023.

Let alone the six days that we have under contract for delivery by September next year, we're obviously sitting in a fairly interesting position sitting here today.

But we'll continue to keep our head down keep doing what we said, we'd do and execute and deliver these projects.

We've shown this slide a couple of times over the journey.

And I would encourage everyone to spend a little bit of time units at.

At the end of the day, we have Tracy this is a cash flow business today as you're all aware, we're liquidating the bitcoin.

Daily in some ways that decision continues to be vindicated with others now considering selling the bitcoin on their balance sheets are we've been selling at 60 Grand the coin ceiling at 50 granted coin we will continue to sell here 30 granted coin.

We are reinvesting that cash flow in building out the Phoenix Ash, we have under contract and if we zoom out ignore the noise in the day to day gyrations in the market and pricing at the end of the day the cash flow.

This will be producing at Phoenix Ash later line 15 extra hash is extremely exciting for us and they've grown involved with the business. There is a link to a calculator in the notes there, but you can even put your own assumptions around bitcoin prices global hashed right how costs are.

Et cetera, again, that's essentially the essence of the bitcoin mining business model strongly encourage everyone to understand it and digest it.

On that note I'm pleased to now pass to Lindsay Ward, President who go through the individual sites and a little bit more about the operations.

Okay. Thanks, Dan and Oh my role today is just to give a fairly detailed either via the operating sites.

Managing this supply chain challenges are a little bit of a focus on ESG and also just to talk about our execution strategy.

Not that long a guy that we started out first saw that can have slots in British Columbia, but when you fast forward to today, we've quickly advancing the construction of about three three additional sites, which has spread geographically across North America. We've got 1.1 X a hash of computing power Albrightsville at the moment.

And as Dan talked about we are working diligently and proactively towards deploying another full day next a hashed by Q3 of 2020 straight calendar year.

It might be a business is pretty simple that it really comes down to how well we execute on that strategy and deployment schedule, how we execute on our construction and then how we perform as upright is critical to our success is the internal construction and operating teams that we've now assembled we continuing to grow.

Dice teams, we are welcoming senior executives and support staff engineers and all points in between 12 business so not on a regular basis.

And I think it's a great mix of people that we've we've assembled a good mix of gray hair, but mix of views us caught quite a diverse workforce and the great thing is that we we enjoy working with each other we're having a bit of fun along the way and we really focusing on building out of three songs.

So now go on to talk a little bit more detail about al Al All Friday, and construction starts starting with canal flats.

It's our first Oh, and the old girl site and there's a picture there of the canal flips facility. It's a 30 megawatt sought.

It's predominantly by hydro electricity.

And we've consistently running at about <unk> 5.87 eggs hash, which exceeds what we'd previously expected to get which is 0.7 access and that's really just focusing on the ones the centers and really trying to optimize how we operate that facility and that's really net DNI and so you see we've gone from 0.7.

2.5 eggs hatched, which we're really proud of.

It is a highly efficient proprietary data center, we've invested a lot of time and effort into optimizing that design and we have been consistently ranked as one of the top efficient mine is in terms of bitcoin mine to exit hatch parts of independent analysts and we're really pleased to see that same.

<unk> saw particularly at canal flat just getting that recognition.

In terms of that data center design, we are continuing to optimize it.

Lots of improvements that we're looking at on a regular basis Canal flats is a center of excellence.

Finally, R&D facility and we put a lot of time in the Knesset to Trialing things and looking at different things and seeing how we can prove how we operate one of the big advantages is that we that simply rely on out fans and their computers to keep that chips cool you can see in that pitch the big fans on top of the routes the large exhaust.

<unk> bands that they adjust the speed to the ambient temperature, so they ramp up and down optimize moniker four minutes and optimize ancillary power consumption and that's really key to our success is the design of that integrated system.

I'm honest performed exceptionally well in the extremes of where the bus in winter and summer.

And one of our innovations is the way in which we reset July the holiday coming from the miners re inject that big vacuum seen lately and that gives us a concise consistent temperatures throw out of data centers, particularly in winter and that has a great impact on life and also optimization of the chips themselves.

We're now taking out canal flat standardize design and the improvements that we've trialed in an investor guided and starting to roll those out to Prince George Mackenzie pipes in British Columbia, and then down into children.

Another key point, which is they used a little bit different for us is that we've got quite extensive.

Facility in Canal flats.

<unk> facility, it's contributing a lot of the materials.

And they know how to the facilities themselves and that really does give us confidence in delivering schedule delivering quality outcomes and at a really effective price. So that's a game one about competitive advantages for British Columbia by facilities.

So moving onto a mckinsey it's also in British Columbia, and Dan mentioned that we successfully commissioned the first 0.3 extra hash up capacity in April . This was well ahead of schedule, it's run exceptionally well since our operation started its set around that 0.3 eggs hash.

Diana Diana we haven't had a hiccup I don't think that's that says a lot to the team who have really spent a lot of time getting the control systems and the design right and the implementation Rod and you can say.

Three of our key operators there on sort those so our cofounder will Roberts was there and sort of couple of months ago inspecting the operations before we went live.

Construction Mackenzie continues we are progressing to schedule will add to the balance of the initial 1.5 X a hash that'll come along come on in Q3 of this calendar year and then the remaining <unk> will come on in 2023.

So when we finished at a Mckinsey will have 2.422 0.4 ex ash and lockout Canal flats facility. It's it's it's powered by BC hydro separate dominantly hydro energy as Perry all they have facilities in British Columbia.

So its efforts at is is Prince George.

It's it's moving along quite nicely you can see in the picture there that we've erected steel it out first data center.

Foundation works are progressing to plan for a second and third data center buildings will soon start fitting out the data center itself. We moved very quickly once we've got steel up and then we'll move quickly onto the other data centers. So we're confident that we'll deliver this in Q3 2022.

And that'll be around about that 1415 X a hash and Theres a third the onex a hashed it will deliver in 2023, so again Prince Georges active thought.

Pleasingly, it's within a couple of hours drive of Mckinsey. So we're getting quite a lot of synergies in terms of labor supervision and now have we're bringing a lot about keep people from now flat kind of in the Mackenzie and then they're coming down into Prince George So we're getting a very consistent.

Consistency in delivery and a lot of comfort as in how we're putting things together and equally when we when we do have issues. The guys. It really knowledgeable they've seen it before and know how to troubleshoot it fairly effectively.

So we have a full sought is in Texas in Childress. It's a it's a it's a amazing facility up and down there this week after.

My second visit in the last couple of months, we are making good progress with the access routing and further the bulk of which will start later this month or early June and so that's looking incredibly exciting and certainly really embraced by the local community and I'll touch on that a little bit more.

In the next couple of slides.

Just to elaborate and go back on a little bit of your children. So it is a transformational opportunity.

We.

Put a contract together with IEP, the Texas transmission company. The 600 megawatts, we locked in full it brings out global capacity up to 795 megawatts, which is pretty exciting construction.

Construction is well under why it is a big facility will have it completed by Q3 calendar year next year. It will be housing, 60% to about contracted stay nixer hasher miners, but it has the expansion capability to push us up to 23 ex ash when you combine childress with the British Columbia.

So again, its pretty exciting what do we got a Texas wire other bitcoin mine is looking at Texas as well it really is abundant.

And excess renewable energy in Texas, It's the numbers are mindboggling and summarized is around about 32 gigawatts of renewables in the Panhandle region. The line there.

Just not the transmission capacity to moves that lie down into Dallas and Houston.

So you you you've got very cheap available power.

The renewable generators state they really liked flexible lives they want those lots to be needed with a generating so they're not relying on the transmission lines to move it all the way down into dialysis as I've mentioned before and so there really is a great synergy between the renewable energy generators and the bitcoin modest coming into that Texas area.

And there's equally for the renewables being designed being permitted and they're just waiting for the right price signals to really come to market and so that's going to keep a cap on energy prices in Texas for the long term, which is again, a great opportunity for us to take advantage of.

The next couple of thoughts really go to al no risk.

<unk>.

Execution of and I know, there's lots been talked about supply chain constraints.

And.

Many construction companies or projects not just in the bitcoin spice not delivering to schedule.

I think one of our real competitive strengths is allies, the focus on execution excellence and supply chain management, we've got a very experienced team of engineers operators real do as from the construction and the operating.

A lot of infrastructure projects from across the world and that puts us in a great position to manage risk understand risk and come up with strategies to implement.

Implement strategies that I'll come those risks.

We've got lots of engineers, we've got asset managers, we've got operators maintenance personnel finances safety professionals support staff. They have all got industry experienced broad industry experience not just in data centers, but across mining energy infrastructure renewables is that collective knowledge.

That really does go towards us having a competitive advantage when it comes to.

Operational and execution excellence.

Hand in hand with that is supply chain management. There are challenges out there you know we don't walk away from that but our experience has taught us to have multiple suppliers of critical items don't rely on just one supplier you've got to have really capable internal personnel.

Supply China expertise, they know what theyre doing it could work with supplies drive supplies instead of our supplies to meet delivery schedules and the one thing I know ive learned over the years has done leave supply chain management to others.

Not good business, you've got to do it internally you've got to have your own people driving because they are the ones that are really incentivized to look for innovation to look for different ways of doing things and to ensure that we laid out at time fronts.

Equally for US we always getting early.

We have a standardized design, we know what we're actually looking for we know what we need to order and in order to.

Ensure we made at timelines, we booking slots early we're incentivizing supplies them and making sure we're meeting yet timelines and we've got a great relationship with a number of our suppliers because you've got a consistent delivery of projects in that we've gone from canal flats to Mackenzie to Prince George and.

They're down into Childress, we've got a consistent supply requirement for common equipment and so we're able to lock in long term supply deals with our suppliers, who knows who neither is going to be a consistency of orders. So were getting competitive pricing were getting very committed.

Tom primes, and Thats really helping us to get ahead of schedule and manage our supply chain risks.

And then finally before I hand over to Anne to talk about the quarter finances.

We are very serious about our social license to operate we done all right. If we don't have one and I think yeah that flows through into ESG. It is fundamental to our business and I think when you look at the background of Oh, Yeah, Dan and will and myself and the broader team we will come out of funds management and I think we're all.

Aware in Australia, and all around the World ESG initiatives are just becoming.

Fundamental to fund managers and so is JJ now is it.

Just natural to us it's just part of how we operate it's not different to working safely looking after the environment trading company money as if it were on focusing on cost driving performance. ESG is just part of one of the things you have to do to run really good businesses and so we love. It we just how does the commute.

We love engaging with the community.

And in children. This week talking to many community groups chat.

Chatting to people outside the office that just come up to say goodbye and just talking to a number of the supplies and potential contribute to square project and we are really enjoying gaijin wisdom and so it's been great.

We're rolling out community grants programs across our last thoughts where are we in in.

And guys with community groups.

And provide grant funding for things that you wouldn't ordinarily get grant funding so its sometimes the unhedged.

Unheralded projects the unsung projects that don't have the fire power to get money from government, So local county, and the like and we seek them out and actively help them to put grant funding package, sorry programs together and come to US and then we transport.

It really again is something that we enjoy.

In terms of risk management it is fundamental to what we do.

Again part of our die to die assessed.

Assessment of each day's activities are ordering now infrastructure.

All aspects of our business it looked at it in terms of what is the risk how do we manage that risk the board Hasnt deed child.

Program of audit and risk committees, they support the business actively and theres various policies and procedures in place pertaining to risk management. So again <unk> key to us it's about the community. It's about risk management, it's about our people and we really do.

Provided great work culture, and a great work environment for our people and some of them have been with us since the beginning but that is joining us as soon jumping into our culture really enjoying what's happening within that business. So that's the operational and construction up that little bit around supply chain management and they as Jay and so on.

I'll hand over to Anne <unk>, Vice President of finance to talk about out financial performance. Thanks very much.

Thanks, Lindsay and hi, everyone.

I'm going to talk through the financial performance for Iris as you've heard from both Dan and latency that's insignificant crashed in the organization over the last year and on this slide obviously that showed us that I'm in the period the quota for March.

We mined 357 bitcoin.

Which is a 449% increase.

Our headline this time last year and that's on the back of the 686% increase in our operating cash right.

Recurring revenue of $15 2 million and adjusted EBITDA.

Seven point trainer in Paris.

Significant increases from the prior year and gave us in the quarter of 48% EBITDA adjusted EBIT to EBITDA margin.

Yeah.

And this is why this I'm sorry, the Ti reconciliation adjusted.

This is for the management team is to manage our underlying exploration you are underlying performance allows us to eliminate some of the one off and noncash items.

Our P&L account.

So on this metric.

But looking at the nine months against the data if you get into the garage at the organization that the PMA for the full nine months, it's much better way to look at how we're calling them. So we generated $45 6 million in revenue, which is almost 10 times that in the first nine months in our financials.

Financial year 2021, alright.

Our adjusted EBITDA for the nine months period was $27 3 million and that was obviously greater than the prior year at just under a million.

In 2021, and we had over the nine months. So I mentioned, we had 48% EBITDA margin.

The quarter, and then I'll take it.

Yeah, that's a 16% adjusted EBIT to EBITDA margin.

Obviously significantly increased on the prior year.

Our financial performance now this slide this is our statutory financial profit and loss account.

And we showed this to you Nick.

What is contained in our financial statements.

I want to flag on the floor.

And we didn't discuss it at Q2.

I'm just flagging the noncash items that are sitting in a constant lost account and obviously have a very significant impact on the bottom line.

And that relates to our expansion of our amortization of share based payments expense at all so the conversion of our convertible notes with a mark to market. When the IPR was undertaken and that has a very significant impact in our bottom line.

Finally onto our balance sheet.

We ended the period with $158 million worth of cash and cash equivalents and total assets of $557 million.

In quarter, three our property plant and equipment increased by $113 million and mining high brand prepayments increased by $15 million from the end of quarter two.

This increase in the assets was funded from our cash reserves that we had at the beginning of the quarter as well as an additional 71 million in asset financing deal done with 90.

Our current and non current borrowings also increased as a result of that deal.

And that's a quick snapshot of our financial results and thank you all for attending I'll now turn you back to Dan for closing remarks. Thanks.

Thanks, and just dropping off mute.

Everyone for dialing in that's the end of the formal presentation from myself Lindsey and then again once again. Thanks for all your ongoing support were placed as I put it up to live Q&A.

Okay.

Thank you if you wish to ask a question. Please press star one on your telephone and wait for your name to be announced.

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Your first question comes from Paul Golding from Macquarie Capital. Please go ahead.

Alright, thanks, so much.

I had a question around power as we get closer to.

Prince George being fully energized and children.

What's the sort of power market out there right now in these respective locations in terms of our Ppas.

Timing associated with that and I'm, just trying to understand how the market may be getting crowded with.

Entrants in terms of looking for for some of its power and then I have a follow up thanks, so much.

Yeah.

So there's two key markets are the projects that we've announced the three projects in British Columbia Canal flats, which has been operating for the last few years, Mckinsey which was energized.

Last month, the first phase and then Prince George.

As you mentioned cold that is expected.

Expected to be commissioned Q3.

This year and then the full size in Texas in children County.

Lindsay is at the moment.

There's two separate market say in British Columbia, It's a very stable energy market, it's a regulated market, which means we pay the same process every kilowatt hour of energy we can Jim.

24, seven 365 days of the it's 98% renewable the underlying market. We then take that to a 100% renewable through the purchase of some renewable energy certificates, but that is an extremely predictable market by virtue of its regulated nature.

In Texas, probably more familiar market for many on the KOL in the sector, it's a deregulated market, which means that market crossing each subject to market forces supply and demand and as many of Youre aware out sought in childress easy in West, Texas up in the Panhandle.

Where there is a an enormous amount of renewables built as Lindsey mentioned earlier, something like 32, gigawatts of capacity and transmission line capacity Friday like 12 Gigawatts.

To export that down to the load centers in the southeast So there's a massive oversupply power renewable energy up in the region in which we have specifically located.

In terms of the specifics around Pap Ross, what we've said to the market and what effect you can see that average power prices on a baseload basis in Texas is around three to three and a half cents a kilowatt hour with the opportunity to drive that substantially law through operational leave us.

The ability to participate in demand response programs Theres, a number of them available the ability to throttle dam of frequency. These chips are dynamically in response to market cross events with a power cross might take.

For a few hours or a day a year.

There's a lot of operational leaders, we can pull to drive that even lower and again. This is partly why we own and control the full stack of our infrastructure not only do we are in our control that proprietary data centers. The computers within that we are in the land, but importantly, we are in all the electrical infrastructure not just the low voltage trench.

Walnuts that we build the high voltage substations that connect directly into these networks.

What this does in terms of prepaying those.

Those expenses, albeit a an expense on an ongoing basis, but importantly give us direct access into the market, where we can control our interface with that market.

Does the specifics as to where we contract for that power. Our we've just conducted a detailed RFP process and we've had a number of pilots for proposals we're now in negotiations.

We'd a shortlist of those parties expect to lock that in over the coming months.

But again, given where we're at with the children construction, we have a little bit of time to work through exactly how we got into many Jeff how cross in the Texas market.

Thanks for that Daniel.

Yes.

Based on your comments it sounds like the market is a holding in a favorable place for you. Despite.

All the interest in this renewable in West, Texas right in terms of your your conversations are with.

With with a power providers you feel that the dynamics are holding its own.

This sort of favorable spot that you were describing in terms of the Texas rates.

I think that's right Paul I think if we zoom out Texas is a really big market. If we focus there and because it's still a really small market globally and.

And if you look at the context bitcoins got what it's anyone's guess, Rob because it's all anecdotal and estimates.

Yeah.

I may be 10, gigawatts globally of power.

The amount that's being built out in Texas to diet and even forecast in terms of you who track the listed miners and a couple of the product. It's just a really really small fraction.

We're not saying any impact we're not seeing any impact of forecast.

You mentioned before like this suddenly got 40 gigawatts of renewables in permitting stage that are looking to be built.

So there's no shortage of power, Texas is obviously, a very market based economy, where they respond to any price signals not that I believe that we are seeing evidence that process are likely to go up.

It's not it's not really a focus of concern at the moment Paul.

Great and if I could sneak one more in I was wondering if you could give some color on what your thoughts are in terms of.

Where the network hash rate may be going.

We've talked about how locking in low cost power is as leverage in and a volatile bitcoin price environment and we're sort of there. So I just wanted to get your thoughts on what you are what your what you expect what your your predictions projections are in.

Terms of global network cash rate at these levels. Thanks.

No problem, Luke we Havent published forecast about global cash right.

We have views on on some of the upward pressures in the downward pressures, which I'm happy to share, but as a business. We focus on what we can do and what we can control.

That's execute on our construction plan and operate what we believe to be one of the most efficient.

Data center, becoming mining businesses in the industry.

We can't control the hash stripe account can control to be claim process that we can control our operations in terms of the way, we think about the global hash right.

Think purely and simply I'm not aware of many hardware orders that are being placed in the last six months.

From memory the lost funds may have vein.

<unk> pays about five or six months ago at $80, a terror hashed not for enormous volume.

Yes, there is some capacity that was built.

Sorry procured 612.

Even more months a guard.

The source of the capital procure the mine is for whatever reason they havent been installed yet.

Maybe that hits the market in the short term and hatch right.

Floats higher but that's then foresee I guess, a dynamic where we havent seen hardware orders new.

New ones for quite some time I'm not so sure. The current environment is conducive to many people ordering additional hardware.

Given what's happening with the state of the market today at least again that can change if you if the market responds.

And potentially people, who procure additional hardware.

But again, you've also then got to overlay a couple of other risks you know the fact that a large portion of the industry.

Still uses.

Older facilities, so shifting in China's warehouses, where you see a degradation in the hash rate coming out of those facilities due to the conditions in which their operator dust humidity.

H et cetera, and then of course, there's still geopolitical risk.

Anecdotally, we hear that there's still a substantial portion of the Hess shredding, China. We understand there is a large portion in Kazakhstan, where it's got its own challenges.

As these ongoing dynamic intention I think between the hash rate wanting to fly at higher as a result of historical hardware purchases and people were looking to try and install them.

Combined with the downward pressure of reality in the real world and the World, We all Friday.

Great color. Thanks, so much Jim.

Yeah.

Thank you. Your next question comes from Stephen Kwai Polo with Cowen. Please go ahead.

Thanks for the question Dan.

I just want to unpack some comments earlier you made so far.

$250 million capital needed to fund our expansion just given the current market conditions could you discuss how lenders are responding.

Or any incremental equipment financing transactions youre looking at and do you still feel confident and non dilutive and the non dilutive financing options that you see in general a to fund growth.

Thanks.

Thanks, David.

Look we can only act on the information we've got in front of US which is really positive.

In terms of direct interface with lenders.

<unk> is via the debt processes, we are running but I have to temper that like we're not immune we're looking at the market, we're seeing what's happening.

We were not.

The environment in which we operate.

But in terms of the direct interface with the lenders.

Throughout the last couple of months.

And into this week, we're not seen any direct impact on those processes at the end of the day.

I think the way, although the market starting to look at that business.

Green Dot is centered business thats mining bitcoin, rather than a bitcoin creeped out focus business thats looking to leverage and take substantial exposure to the underlying commodity.

And when we're selling the bitcoin daily there is substantial cash flow and it's very difficult to argue with that and for Linda.

What are they being asked to belief intensive provider, providing sonnets they've been off to believe that the claims going to hang around and they've been after believes that bitcoin easing going to go below a relatively low floor number to get in and out and get a really good rate of return.

So they are investors. So it is a very different type of lanes that lenders apply to the sector I believe compared to equity markets, where you do have a lot of volatility you do have a lot more exogenous factors mark to market.

But again I don't want to be overly optimistic and presenting feature of the recent reality like we are aware of where the markets are at I think one why I tend to think about it is we still got <unk> hash unencumbered with no hardware financing.

We just closed another $71 million with Nordic.

We incumbent 1.98, <unk> of our computers, sorry round it to $35 a tear ash you extrapolate that to obtain eggs hash that's $350 million just in the hardware financing capacity and then if you look at the Comparables in the sector, you'll see hardware financing deal.

Spain, Donna $50 $60, plus a tear at ash, we only paid 40.

So theres a lot of latent capacity in that I think the reality of hardware financing.

And not really large checks known as doing $350 million.

The typical check size.

Sweet spot for lenders in this sector is more around the $30 million to $50 million Mark.

And it's also a case that without delivery schedule over the next 12 15 months.

Lenders are looking to allocate capital for units that are being delivered March next year today unlock that capital up so it's more likely a financing pathway that makes sense over time closer to the delivery dates of the individual.

But we're not waiting for that which is why we've got these about multiple that processes underway looking up and down the capital structure hardware and as we've mentioned asset finance.

Top card debt facilities.

Various niches so sitting here today, we feel like we've got a very strong balance sheet almost half a billion dollars of equity seeking there no corporate debt the arlie disease ring fenced to some of the computers in SP base.

We've proven the business model, we're generating operating profit today, we've got almost $150 million of cash in the bank. We feel like we're in a really good position, but again, we're out we're aware of the market and understand one of the questions that come in.

Thank you.

Question comes from Joseph <unk> from Canaccord Genuity.

Genuity. Please go ahead.

Hey, guys. Good morning, nice to see the good progress here I, just thought we'd start and kind of revisit some of your comments Stan on the size of the team which is great building it out.

It feels like a size.

<unk> seen that big may be focused on continued business model expansion kind of just beyond where we are I didn't hear any commentary on how you're looking at the medium term and the C.

<unk> of your team at this point and then I'll have a follow up thanks.

Yeah.

Maybe I'll answer part of that Josh.

Right.

[laughter], sorry, it's slight lag sorry about that Dan I might add to just a part of that question then hand back to you just to put in context that hundred.

Currently involves also all saw it teams where we are.

Actively constructing prince George and Mckinsey.

We self delivering by size projects, we're not doing it through an intermediary and so when you look at that 100, you need to put it in the context of we've got an operating facility at canal flats with an operating facility at Mackenzie, We've got construction at Mckinsey and controls and there. We're also opening up.

The.

Opportunity down in Texas with construction, there, where we are working closely with the wood group as our APC in contract there because we didn't have the abundant lie but to just self deliver that ourselves, but it's really a partnership with.

We are starting to grow AD out, Texas team and we've got an Australian gentlemen, John Walsh is.

Started on site, there and we study and we weren't always in children. We employed USAA employee number two and we'll start to build out that team, but just so it was worth given the context that hundred not only covers corporate operational but also the contract.

Instructions people that we need to deliver those projects in BC.

Sure that makes a lot of time, maybe just to add a couple of comments to that.

Sorry, this will be the lag as Lindsey mentioned I know I think if you look at what's required to operate.

58, <unk> once it's installed that's one set of operational re sourcing.

And that's one phase of corporate Resourcing, but given the stage.

Where we're at as a business going through a very large construction program, which means you've spoken about and B. We've also resource to a lot of development.

People in the culprits, because as I've said before we're not here to deliver 15 ex cash our ambitions.

Our future outlook is five Bryce huh.

And we've got the Resourcing with substantial experience in infrastructure renewable energy development looking globally at new thoughts new growth opportunities et cetera, and that's you know corporate cost line to die in a function of the growth ambitions that we have.

Thanks, that's great color guys I appreciate that.

And maybe just one follow up.

You know clearly I I know, you're still selling big coin here.

These prices and it's been the right call to sell out I think on the way down instead of up hold it.

Kind of just looking at your business model in totality here.

Given relationships with lender balancing that again.

<unk> price of bitcoin.

Would there be a level, where you think that maybe you would hold it at least for a while or something like that once again nice progress. Thanks guys.

Thanks, Joe.

Look we've always said, we're open to it but.

But every decision we make we want to be a good use of capital.

And sitting here today.

Lock it necessarily being described as a great KOL to be selling bitcoin hi.

We're not really in the business of speculating on bitcoin, we're in the business of building R&D in all pricing really efficient data centers to mine bitcoin and generate operational performance.

From that asset base.

We believe in Bitcoin, we've spent four or five years of our life building a business that he has nothing but dedicated to bitcoin and personally we've got a lot of conviction with bitcoin as an asset outside.

Outside the platform, but as we sit here today.

The competitive advantage, we have as a business is not speculating die to die on the price of Bitcoin. We're not tried as a competitive advantage is the substantial experience and capability of our team in delivering our operating infrastructure and data centers monetize.

Emerging exponential.

<unk>.

Do we hope be coin at some point in the future sure like we're certainly open to it as part of a treasury management policy, but to die when we can reinvest every bitcoin mining to die to generate whatever it is 678 multi coin every 12 months.

From this point, the compounding strategy and the shareholder value, we believe with <unk> delivering over the medium let alone long term and continuing to scale. This business by reinvesting those bitcoin revenue line.

We've laid out a really sound strategy.

Okay.

Thank you. Your next question comes from Reggie Smith with Jpmorgan. Please go ahead.

Yeah.

Good morning, gentlemen.

We see all of the one problem I was hoping to dig in a little bit on the fly.

Right I appreciate the color there and show off a billion of total spend.

Im curious how much have you guys Hum.

Thus far that would include all the capex.

Capex as well as deposit.

I'm just trying to get a sense of where you are it wont be a gap.

Yeah.

Okay.

Type deal.

Yeah no problems.

So to date we've spent.

A little bit over $400 million E in capex.

Thank God.

Close to 150, <unk> hundred $40 million today of cash on balance sheet.

We then got some undrawn.

Debt under the <unk> facility that will be drawn down over the next few months.

20 or.

So there's a substantial amount of capital.

And Tonight, but also a substantial amount. That's currently you know control in the bank accounts in being allocated on a week to week basis towards.

Scaling up to that 15.

<unk> and what that leaves these around $400 million to hit that $1 billion of Capex I mentioned earlier.

All of which a portion will be funded through ongoing operational cash flow again, we're profitable we've been profitable for a wall that profitability is likely to scale up substantially as Mckinsey and Prince George come online over the next few months.

Then the ability to reinvest that to.

Plug a substantial portion of that $400 million in remaining capex above what we've spent in above our cash and undrawn debt facilities.

Puts us in a really good position, particularly in the context again, <unk> ash if hardware unencumbered.

At $35, a tear ash is $350 million, if you do it at $50, a tear ash, where we've seen a lot of recent deals that's $500 million.

So we believe the strategy of raising a lot of equity early.

And carrying that dilution early as founders and its management to nearly shareholders.

Both as part of the pre IPO and RPI has set us up in a really strong.

<unk> to weather these markets and to look to layer that solution.

Talking about capital structure.

Yeah.

Thank you.

Next question comes from Chase White with Compass point. Please go ahead.

Thanks, guys.

So on your.

In Texas have you guys experienced any issues or delays with permitting.

And more broadly have any regulatory issues service for any of your site locations at this point.

Okay.

In terms of our children location no we've been engaging with IEP full.

Number of months now certainly well before Christmas.

Our studies have been submitted.

<unk> reviewed them and we don't see it.

Any.

Hold up to that.

Current plan of delivering the first 100 megawatts of buildings by December this year.

The general and the.

<unk> occurring early in the first quarter of 2023. So all that studies are in we got in ahead of the game, we didn't wait till the connection agreement was all signed and so we don't see that is going to be any impact from from a cogs.

Gotcha.

And then.

You have spoken about all of the excess renewable capacity in the Panhandle of Texas.

Are there any plans to build transmission lines to export that are energy out of the Panhandle and it sounds like there's you know a lot of of capacity waiting to come on line potentially seems like a lot of capacity to not be able to go anywhere. So I'm just curious kind of your view of the plans there.

I mean, it's like this lindsay.

Look at the there has been discussion as far as I'm aware about potentially building additional transmission lung capacity I'm not on the top of whether that's likely to occur.

In the near term, but the numbers that sit there today are obviously dwarfed.

And to me in the context of any new transmission long capacity to extend that 12 or so gigawatts in the context of 32, Gigawatts operating and another 40 bank permitted.

Obviously, there's a substantial amount of power that may wish to be explored a dam to the load centers part of the benefits of this business model and people often use the analogy of modern day aluminium smelting where that industry in many aspects was built off going to the source of low cost energy.

But the difference there was supply chain and logistics of exporting the product the commodity we'd be coin mining, it's truly geographically flexible because youll just broadcasting digital asset.

Over the Internet. So it's staying up in the Panhandle staying up in other areas globally, where there is an abundance of low cost access renewables, where we can go into that market provide that support.

When the wind blows in the Sunshine and there is abundance of cheap power that's negatively priced bank titled we can mop that power.

But then being able to turn down our operations and give that power back to the market when the market needs and allow those electrons to fly through transmission line and electrical.

Capacity down to large centers, where other industries.

<unk> needs it.

It is essentially the essence of our business model.

Got you. Thank you for that and one last one if I may.

Are you guys looking in the spot market for minors, given that you have optionality on additional capacity in Texas and if so.

Or where are the prices coming in for top tier type top tier miners at this point and what would drive kind of a decision to purchase more.

At this stage and since we started this business the answer to that question is basically not intense secondhand units were just really reluctant to engage and procure units that are being used in the sector.

We're very happy taking new units, particularly from beat mine and the other manufacturers we've used to date.

Knowing that we've got the warranty knowing that we've got the direct contracts. It's also worth stating that we don't go through intermediaries and brokers, we don't rely on third parties.

To go and procure those units, which again is a little bit counter to have a lot of businesses operate in the sector as I mentioned earlier and the coal.

No one seems to be volume chips at the moment and again my understanding is the last person to buy chips.

Two large players in the sector.

Titan $80 of Terra hash thought six months ago for some mine units.

What would need to happen for us to buy additional units.

I think at this stage, we're very happy just building out the capacity that we've secured at 795 megawatts.

As you're probably alluding to can support 'twenty, two 'twenty three eggs hash and capacity.

Let's focus on delivering the fifth thing current market conditions I believe.

Makes sense for us to be hoarding capital into additional models.

We'd look to prefer to be focused on.

Bundling the card that processes, it's hard enough keeping up with the number of processes. We've got live on that front to be thinking about purchasing more units above that these days, but we know this market. It can move very quickly which.

Which is why we've got a team that's large experienced and ready to pivot as the market pivots.

We could end up buying machines earlier than we expect but equally we're not in a rush to do need today.

Thank you. Your next question is a follow up question from Reggie Smith with Jpmorgan. Please go ahead.

Hey, sorry, guys.

My question.

That's really left to do.

Actual build that Texas facility that you guys outlined a strategy.

Yeah.

To highlight two key.

Our bottlenecks.

Oh hi.

How you are managing metals.

Yeah.

Before.

Okay.

Okay.

I think youre a little bit.

Muscle, but I think you're asking two of the challenges for the build out in Childress.

I see.

And so that's.

A bit of a roundabout, one and start in British Columbia.

Meaning that constant Buildout program from <unk> flat to Mackenzie to Prince George and we've assembled a great deal of knowledge skill and capability and a great team and they really do understand managing design.

<unk> risk and the actual construction side. So we're heavily leveraging that knowledge in everything that we do in childress.

Brought in because of the scale and <unk>.

Graphically.

A reasonable distance away from British Columbia, we brought in the Wood group. They were very experienced contractor of buys AEP say eight bcm.

Design and engineering with continuing to withstand tick.

Since day, one and they have developed a standardized data center designs and so along with our expertise to support from wood in the engineering now.

We're really lucky to have collective knowledge around way to go.

And purchase key long lead equipment, where we actually going to get it here in the timeframe.

So we are leveraging woods context.

And we're leveraging Iran contacts to make sure that we do manage the supply chain issues.

There's no doubt about that.

We remain very comfortable with the delivery dates of al key equipment.

We committed to that sustain.

Mid December .

First hundred ready to watch the buildings delivered we at this stage I don't see anything.

Yes, there'll be challenges will go up to around with a few punches will have to choose.

Change things that could be a bit flexible and nimble, but that's what we did we used to doing that and we continue to do that and I was down in children. This weight with.

<unk> and our vice President of operations going through the program down through the schedule and we were able to identify a number of things that will build fed into the schedule. So at this point.

Challenges of supply chain, but I think we're managing that as we've got people on the ground people.

<unk> is a bit of a challenge, but we've got people on the ground now the word same are starting to ramp up and so I think that would be my two issues and I don't feel fairly comfortable that we've got with managed at this point in time.

Just to clarify like are the long lead time items related primarily to the right.

For something like that or are there also things like construction.

So I understand where the long lead times are.

My assumption is.

I could be totally wrong.

No no you're correct. It is mostly around the electrical equipment.

Transformers Gili.

But we actually order does create bundled design and when that comes back to the knowledge and confidence we have in now and what we're doing so rather than wide to absolute final design.

We went and ordered the.

<unk> in there too.

345 kv principle was a pretty large and all the equipment and control work that you need for that and then you step down into the lower voltage Transformers, we actually yielded that early because.

Because we could see this supply chain constraint coming and so we reacted and we have been able to modify our design to make sure it meets the trends right.

Especially in the case of the Transformers, we boarded.

It certainly is the electrical area, we've worked with IEP and again that was fantastic in that place.

Placing orders.

In advance bookings slots in the knowledge that the contract was about to be executed and so again, because there is such a large player in that Texas market that can get leverage there.

Relationships that might show the gear that they need to get the switch bill.

The orders were placed early so I think the benefit of US is that we win early and we havent widened until final design, but it certainly is the electrical items that are causing grace I think for many other projects.

Yeah.

Understood. Thank you.

Okay.

Thank you. Your next question is a follow up question from Paul Golding with Macquarie Capital. Please go ahead.

Yeah. Thanks, so much for taking the follow up I just wanted to ask.

Yeah.

Relative to Cal flats and Mackenzie in your proprietary.

Data Center design are you considering liquid immersion at all which other miners seem to be considering and if.

If not I'm just curious.

If there's any color you can give around.

Your efficiency, which seems to be.

Outpacing expectations at least for Cal flats.

Just the efficiency of your your model versus what liquid immersion might look like thanks.

Good question. So the short answer is we consider everything.

We consider everything every day eight in terms of options decisions and maintaining that flexibility.

Amongst our focus on also delivering the reality is we have no intention to use it in the short term.

And each vein imation cooling, we've got a fantastic air cooled.

Design, that's been operating in 100 degree Fahrenheit temperatures at Canal flats, where as you say, it's it is outperforming on an operational efficiency basis.

Recall also that we've really built this platform on a basis of risk first the returns in the sector extraordinary we all know that the risk return of the cash flows the return on Capex. Our approach since day, one has been dark kitchen iron go get the best facilities out for the long term generate that operational performance.

The rest takes care of it.

Yourself, we've heard stories of added measures before getting to the concerns about immersion I think the first point to make.

He's sorry, there's a bit of feedback coming through there guys.

Is in theory, it makes sense Rod immersion technology has been around for a long time shielding. These chips.

Transformer oil and immersion fluid protecting them from the elements being able to operate them at a higher frequency of shop. The theory is absolutely sound. The concerns. We have is we've heard that four months into using the capacitors on these chipboard swell often pop off because they weren't manufactured for immersion and early players.

In this space have that to go upstream and work directly with manufacturers to reengineer, the hash forwards and actually make them fit for purpose in immersion.

I am yet to see data that supports its more efficient.

I'll say data that supports the easing over caulk and run the <unk> hot and getting efficiency uplift in the sense that you can run them at a higher hashing right, but you still use more energy and then you've got the longer term consequences or even medium term all running these machines hard opt in which that were manufactured to operate.

And with what the impact that has.

On asset loss, we understand that a number of miners are doing it and they're almost potentially forced to do it if you look at Texas.

There is a clear law and you can go onto Google maps and look at it but there's a clear line down the state where everything kind of western north you're into that area dry.

Is it like climate, but then as he heads south and towards the east you're in a much more humid environment, where the weather as CTO theres a lot more moisture in the air and people in that sector have had a lot of challenges managing air cooled so whether they are using immersion as.

Why because they believe it's more efficient today and the risk return of pursuing.

That strategy makes sense or whether it's more running away from an air cooled design in our markets and climatic environment, where it doesn't work or that that's a decision and.

Considerations as opposed individual players and Nike, but if I bring it back we put an Ecu design, it's outperforming it works perfectly.

Why take the additional risk we are doing R&D on the site. We are looking at different types of immersion setups, but like everything in this business will be very measured it'll be risk focused FES diet jeopardize the chipboard theyre expensive, they're going to last a long time don't take exists you've risked just lock it down and build out a long term sustained.

New business.

Alright. Thanks.

Thank you there are no further.

The phone questions at this time I'll now hand back to Mr. Roberts, the pre submitted questions.

Wonderful.

So I'm just having a look at the pre submitted questions. This is our first quarterly earnings with pre submitted.

So we might go through some of them.

Lindsey some of them will be more directed at you.

Happy to pass over to that so the first one I can save EBITDA and cash flow what is the breakeven Bitcoin cross both now and when all the miners deployed.

Short answer is it depends but Thats noted I believe helpful and so the longer answer is today April monthly cost.

Cost of production was around 8800 <unk>.

The quake.

That's it.

A 5% U S kilowatt hour power price in British Columbia, which again is 98% renewable energy and 100 after the purchase of bricks.

As we're all aware as we enter Texas, where over half have machines are expected to be located in children is a very different market.

If you look at a weighted average of <unk> across the portfolio it back down towards an average price of $7000, but the key thing to really reiterate is again.

We own and control all the electrical infrastructure little lie on the land and the data centers and the computers by directly interfacing with the market in Texas, We've got the ability to really optimize that power price based on market conditions. So one of the questions that many of the lenders are asking at the Miami's.

How do we play this out during a downside scenario, if we say bitcoin really have a temporary drawdown juice volatility.

And that's not where we're at today is that if you look at the cash flows we generate a navy Mccarthy coin crossed their extraordinary right. We're talking about much much law is to downside protections that <unk>. One is the global harsh REIT stops dropping as high cost modest comp high that tabula Rasa people, who cant make money are forced to switch off.

And we see this throughout history.

In the data and one of the good things about this industry is we've now got 12 years, although mutual daughter on these public blockchain, where you can go and back test different environments and how it.

It played out so as we get closer to a breakeven <unk> price at breakeven <unk> price will go down because it's a low cost miner.

Waste survive as other people switch off driving up the percentage share of the bitcoin. We are receiving every 10 minutes. So you've got this downside protection in the hedge where as the price of the commodity he goes down versus other mining industries. The volume demand goes up.

Thereby lowering your cost per Bitcoin mine and then the second point to circle back to the power market is even brighter.

Breakeven price of power.

These lowered we can just thoughtful down the chips for more of those high across time intervals.

Cut out 2% of the cutout part cut out 10% of the allergy if you need to and just switch off when the market power price is above your marginal cost of production. So theres a lot of leave us and again, it's all being very deliberate to iron and control everything and have those operational levers to ensure that.

It sets up to thrive in all environments.

In terms of energy cost and when we say they use going in the short and longer term as the second question I believe we've addressed this.

Number three regarding the infrastructure build and Lindsay I'll pass to you on this what are the challenges in the present environment supply chain challenges.

Set trough, we'd probably answered it but I'll pass to you for any additional comments.

Look I think that's it.

<unk> said that I don't really stepped up a lot more to add.

No problems and then there's two residual questions.

Which I'll read out, but I believe have been asset one from one hey, Lee the bitcoin price falls below your marginal cost of production will you keep running at a loss to weed out high higher cost producers or throttle back your production.

Look there'll be claimed cross falling below our module cost of production.

Is not a real plausible scenario to be Frank when you look at the numbers in the call.

Triage just.

Provided.

The levers we have to pull to drive lowest cost power in this sector.

To survive any environment of Oct, Inc, a really compelling.

If we ever got to that point, then we can make that decision, but it's it's not something like that.

Demand as much head space to be Frank at this stage.

And then the last question was a follow up question from Stephen Google rollout.

Question for Lindsay on your children, Texas saw it we saw at the end of March our coffee is now requiring transmission service providers to submit interconnection studies for new loans.

Suddenly you have to do at your Texas sought and do you expect these to cause any delays in your ability to get online in calendar Q1 2023.

Okay.

Out of that.

Just to confirm.

The.

Large studies with submitted a long time ago.

Closely with IEP on some of the other studies.

Claude but we got sizing ahead of the latest changes.

Caught and we're very comfortable that we don't see anything.

Coming out of the studies that have been done and viewed buyer that would impact that.

In <unk> I shouldn't either that first quarter of 2023.

Wonderful.

The other point I'll, just add to some of the power pricing. These remember theres a lot of negative Prost power in some of these markets. We saved in South East Asia Asia Pac, where we've got development thoughts we see it in Texas. They were actually plausible scenarios in some markets, where you can operate with two profit centers and <unk>.

Call Center, one you get tight tight negative power to get paid to monetize that power into be coin. So again this strategy of targeting low cost access renewables in these markets that frankly overbuilt.

<unk> and then controlling their own platform the ability to monetize those markets.

Is exactly why we pursued that strategy.

On that note, we will have to call it Tom thank.

Thank you for everyone dialing in to recap.

The next 12 months or so are going to be simply transformational for our company.

To be claimed crosses corrected recently with a lot of the rest of the market, but our business remains profitable. It has been profitable that profitability will scale substantially as the right remainder of Mckinsey and Prince George comes along in the next few months, we remain focused on doing what we said we'd do at the <unk>.

Before the IPO.

We control the delivery, we're working hard we will deliver and that's been a focused.

We've had a focus on risk.

We look to really manage that first we know the returns are there we don't rely on hosting we don't rely on Wheeling agreements to get access to transformers behind the meta where we're putting our destiny in other people's hands and control our own destiny and manage risk. We're in this for the long run we're looking at building and we continue to be able to.

Institutional grade data center platform and monetize that platform over time through the highest and best use.

<unk> locations. Thanks for everyone again for dialing in thank you for your ongoing support it certainly an exciting time for our business. If it meets a market that has its day to day challenges, but when you zoom out where we're really excited about what lies ahead both for the industry and also how business more specific.

So once again, thank you for dialing in and look forward to catching up with many of you in the niche feature.

That does conclude our conference for today. Thank you for participating you may now disconnect.

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