Q1 2025 Bitfarms Ltd Earnings Call

Okay.

Operator: Thank you for standing by and welcome to Bitfarms first quarter 2025 earnings conference call. At this time, all participants are in a listen only mode.

Speaker Change: Thank you for standing by and welcome to pit farms first quarter 'twenty 25 earnings conference call. At this time, all participants arent able to lessen the only mode.

Operator: After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. To remove yourself from the queue, you may press star 11 again.

Speaker Change: After the speaker presentation, there will be a question and answer session.

Speaker Change: To ask a question during the session you will need to press star one one on your telephone to remove yourself from the queue. You May press Star one one again.

Tracy Krumme: I would now like to hand the call over to Tracy Krumme, SVP, Investor Relations and Corporate Communications. Please go ahead.

Tracy: I would now like to hand, the call over to Tracy for me SVP Investor Relations and corporate Communications. Please go ahead.

Tracy Krumme: Thank you and welcome to Bitfarms first quarter 2025 conference call.

Tracy: Thank you and welcome to that pharma first quarter 2025 conference call.

Tracy Krumme: With me on the call today is Ben Gagnon, Chief Executive Officer and Director, and Jeff Lucas, Chief Financial Officer. Before we begin, please note this call is being webcast with an accompanying slide presentation. Today's press release and our presentation can be accessed on our website, bitfarms.com, under the investor section.

Brendon Young: On the call today, Brendon Young Chief Executive Officer, and director and Jeff <unk>, Chief Financial Officer.

Brendon Young: Before we begin please note this call is being webcast with an accompanying slide presentation.

Brendon Young: Today's press release, and our presentation can be accessed on our website the farmers dot com under the investors section.

Tracy Krumme: Turning to slide two, I'd like to remind everyone that certain forward-looking statements will be made during the call and that future results could differ from those implied in the statement. forward-looking information is based on certain assumptions and is subject to risks and uncertainties, and I invite you to consult Bitfarms' MD&A for a complete list. Please note that references will be made to certain measures not recognized under IFRS and therefore may not be comparable to similar measures presented by other companies. We invite listeners to refer to today's press release and our MD&A for definitions of the aforementioned non-IFRS measures and their reconciliations to IFRS.

Turning to slide two.

Brendon Young: I'd like to remind everyone that certain forward looking statements will be made during the call and that future results could differ from those implied in the statements.

Brendon Young: The forward looking information is based on certain assumptions and are subject to risks and uncertainty and I invite you to consult the farm and DNA are complete list.

Brendon Young: Please note that references will be made to certain measure not recognized under ifr and therefore, it may not be comparable to similar measures presented by other companies.

Brendon Young: Listeners to refer to today's press release, and our MD&A for definition of the aforementioned non ifr measure and a reconciliation to <unk> measures.

Tracy Krumme: Please note that all financial references are denominated in U.S. dollars unless otherwise noted.

Brendon Young: Please note that all financial references are denominated in U S dollars unless otherwise noted.

Tracy Krumme: I'd also like to remind everyone that we will be at the following upcoming conference. Consensus 25, which takes place today through May 16th in Toronto. The AIMS Summit in London from May 19th to 20th. Bitcoin 2025 conference in Las Vegas from May 27 to May 29. HPE Discover in Las Vegas from June 23rd to June 26th. and Northland's Virtual Growth Conference on June 25. There will be opportunities for in-person one-on-one investor meetings around these conferences, so if interested, please reach out to investors at bitfarms.com.

Brendon Young: I'd also like to remind everyone that we will be at the following upcoming conferences.

Brendon Young: <unk> 25, which takes place today through may 16th in Toronto.

Brendon Young: The <unk> summit in London from May 19th to 20th.

Brendon Young: The point in 2025 conference in Las Vegas from May 27th of May 29.

Brendon Young: H P E discover in Las Vegas from June 20, <unk> to June 26th.

Brendon Young: And Northland virtual growth conference on June 25.

Brendon Young: There will be opportunity for in person one on one investor meetings around these conferences.

Brendon Young: What's interesting please reach out to investors at the farms Dot com.

Ben Gagnon: And now turning to slide three, it is my pleasure to turn the call over to Ben Gagnon, Chief Executive Officer and Director. Ben, please go ahead. Thanks, Tracy. Good morning and welcome to Bitfarms Q1 2025 earnings presentation. I'm thrilled to address our esteemed audience of investors, analysts and stakeholders who have joined us Your support and engagement are invaluable as we navigate one of the most transformative periods in Bitfarms. Turning to slide four. The global demand for compute power is surging, driven by AI innovation, cloud computing and data intensive applications. Bitfarms is fully equipped to meet this insatiable demand with our robust North American energy portfolio and operational For more information visit www.bitfarms.com A recent McKinsey report cited that by 2030, companies across the compute value chain need to invest a staggering $5.2 trillion into data centers to meet worldwide demand for AI.

Speaker Change: And now turning to slide three it is my pleasure to turn the call over to abandon Yang Chief Executive Officer and director.

Brendon Young: Please go ahead.

Brendon Young: Thanks, Tracy good morning, and welcome to the farms Q1 2025 earnings presentation.

Brendon Young: Thrilled to address our esteemed audience of investors analysts and stakeholders, who have joined US today your support and engagement are invaluable as we navigate one of the most transformative period in the firm's history.

Brendon Young: Turning to slide four.

Brendon Young: The global demand for coffee powered surging driven by AI innovation cloud computing and data intensive applications at farms is fully equipped to meet this insatiable demand with our robust North American energy portfolio and operational expertise.

Brendon Young: Recent Mckinsey report stated that by 2030 companies across the value chain.

You need to invest a staggering five two trillion into data centers to meet worldwide demand for AI alone.

Ben Gagnon: This is based off of a projected 156 gigawatts of AI-related data center capacity demand by 2030, 125 of which will be added the next five years. Five years, the power needs for HPC and AI will be almost 10 times the power needs. bottleneck on the growth is not chips, but power. And this is where Bitfarms comes into play. We are no longer solely a Bitcoin. We are evolving into a leading North American energy and compute infrastructure. This strategic pivot leverages our core competencies and energy portfolio, positioning us at the forefront of the exciting hygro sector.

Brendon Young: This is based off of the projected 156 Gigawatts of AI related data center capacity demand by 2030, or 125 of which will be added in the next five years.

Brendon Young: Five years, the power needs for HBC NII will be almost 10 times the power needs of bitcoin today.

Brendon Young: The bottleneck on the growth is not chips, a tower and this is where <unk> comes into play.

Brendon Young: We are no longer solely a bitcoin mining company we.

Brendon Young: We're evolving into a leading north American energy and compute infrastructure company.

Brendon Young: The strategic pivot Leverages, our core competencies in energy portfolio positioning us at the forefront of the exciting high growth sectors and high performance computing artificial intelligence and energy infrastructure, while maintaining cost effective and efficient upside to rising bitcoin prices.

Ben Gagnon: Computing, Artificial Intelligence. while maintaining cost effective and efficient upside to rising Today, we'll guide you through our solid progress in Q1 with a focus on two key priorities for 2025. Continued U.S. Expansion and Advancing RHPC By focusing on these priorities, we aim to drive long term shareholder and Establish Bitfarms as a leader in powering tomorrow.

Brendon Young: Today, We will guide you through our solid progress in Q1 with a focus on two key priorities for 2025.

Brendon Young: <unk> U S expansion and advancing our HBC business.

Brendon Young: By focusing on these priorities, we aim to drive long term shareholder value capitalize on macro tailwind in energy and concrete markets and establishment farms as a leader empowering tomorrow's economy.

Ben Gagnon: Turning to slide five. In Q1, we made extraordinary progress in rebalancing our portfolio towards the United States and HPC and AI infrastructure. executing two transformative transactions that set the stage for our future growth. First, we acquired strategic U.S. energy campuses and power generation facilities, giving us immediate HPC development opportunities and a robust multi-year growth pipeline. With these two flagship campuses, each boasting a multi-year pathway to nearly 500 megawatts of power capacity in prime locations, we are attracting interest from institutions with a robust appetite for power and computing. Second, we strategically divested our Iguazu Paraguay Bitcoin This site was purpose built for Bitcoin mining and lacked the fiber and market demand for HPC and AI conversion, making it misaligned with our new HPC and US centric strategy.

Brendon Young: Turning to slide five.

Brendon Young: In Q1, we made extraordinary progress in rebalancing our portfolio towards the United States, and HBC and AI infrastructure executing two transformative transactions that set the stage for our future growth.

Brendon Young: First we acquired strategic U S energy campuses.

Brendon Young: Our generation facilities, giving us immediate HBC development opportunities and a robust multiyear growth pipeline in Pennsylvania.

Brendon Young: With these two flagship campuses each boasting a multiyear pathway to nearly 500 megawatts of power capacity in prime locations. We are attracting interest from institutions with a robust appetite for power and compute infrastructure.

Brendon Young: Second we strategically divested our Iguazu, Paraguay Bitcoin mining site. The site was purpose built for bitcoin mining and lack the fiber end market demand for <unk> conversion.

Brendon Young: Misaligned with our new HBC and U S centric strategy.

Ben Gagnon: The strategic site divestiture was profitable and brought in significant cash proceeds for reinvestment in our US growth. More importantly, it allowed us to avoid hundreds of millions of dollars in capital expenditures needed to complete and equip the site for Bitcoin. Preserving our balance sheet strength for higher value opportunities and keeping our capital, time, and efforts focused on the U.S. demonstrates Bitfarms agility and forward thinking approach towards managing and developing our energy and compute infrastructure portfolio. are not just planning for the future, we're building. Support this pivot. We've restructured our organization. Streamlining Operations and Aligning Teams for HPC and AI We've onboarded top-tier executives with expertise in HPC, AI, and construction management.

Brendon Young: Strategic site divestiture was profitable and brought in a significant cash proceeds for reinvestment in our U S growth initiatives.

Brendon Young: Importantly, it allows us to avoid hundreds of millions of dollars in capital expenditures needed to complete and equip the site for bitcoin mining.

Brendon Young: Reserving our balance sheet strength for higher value opportunities and keeping our capital time and efforts focus on the U S and HBC.

Brendon Young: The rapid and simultaneous execution of these transactions demonstrates bit farms agility and forward thinking approach towards managing and developing our energy and compute infrastructure portfolio.

Brendon Young: We're not just planning for the future we're building it.

Brendon Young: To support this pivot we've restructured our organization streamlining operations and aligning teams for HBC in AI development in the U S with onboard at top tier executives with expertise in HBC, AI and construction management, enabling us to collaborate at an accelerated pace with our world class advisers.

Ben Gagnon: enabling us to collaborate at an accelerated pace with our world-class advisors. These advisors have brought extensive helping us assess, design and co-market our HPC assets to prospective clients, significantly collapsing development timelines and ensuring better Lastly, on the Bitcoin mining front, we grew our ExaHash under management over 50% in first quarter to 19.5%. We are now incredibly well positioned to take advantage of rising Bitcoin prices with almost no planned Bitcoin mining. Importantly, with fewer than 300 miners left to clear U.S. Customs, and those 300 scheduled to clear this week, we have practically no foreseeable tariff risk.

Brendon Young: WT and ESG. These.

Brendon Young: These advisors have brought extensive resources and expertise, helping us SaaS design and co market, our HBC assets to prospective clients.

Can only collapsing development timelines and ensuring better outcomes.

Brendon Young: Lastly on the Bitcoin mining front, we grew our Axa has under management over 50% in first quarter to $19 five ex ash. We are now incredibly well positioned to take advantage of rising bitcoin prices with almost no planned bitcoin mining capex remaining.

Brendon Young: Importantly, with fewer than 300 miners left to clear U S customs and those 300 scheduled declare this week, we have practically no foreseeable tariff risks on our miners.

Ben Gagnon: over 94% of our purchased miners are now installed. And with the final install of remaining miners occurring this quarter, we've effectively completed our planned Bitcoin mining growth initiative. Through this fleet upgrade, we have gained market share and reduced our operating costs per terahertz dramatically. Importantly, with no material CapEx planned for Bitcoin mining, the majority of our current 2025 CapEx investments will focus on electrical infrastructure, namely substations, transmission lines, and civil.

Brendon Young: Over 94% of our purchase miners are now installed and what the final install of remaining miners occurring this quarter, we've effectively completed our planned bitcoin mining growth initiatives.

Brendon Young: Through this fleet upgrade we have gained market share and reduce our operating costs per taro has dramatically importantly, with no material capex planned for bitcoin mining the majority of our current 2025, Capex investments will focus on electrical infrastructure, namely substation transmission lines and civil works.

Ben Gagnon: The capstone of our Q1 achievements actually occurred on April 1st, when we secured up to $300 million from a division of Macquarie Group, one of the world's largest infrastructure . The deal validates our HPC and AI development thesis and provides the capital to begin development of our Panther Creek campus, which I'll discuss shortly. The initial $50 million tranche is secured by Bitfarms assets, with an additional $250 million that will become available as we achieve specific. This partnership not only strengthens our but also open stores to other top tier collaborators, enhancing our credibility and outcomes in the HPC.

Brendon Young: The capstone of our Q1 achievements actually occurred on April one when we secured up to $300 million from a division of Macquarie Group, one of the worlds largest infrastructure investors.

Brendon Young: The deal validates our HBC and AI development thesis and provides the capital to begin development of our Panther could campus, which I'll discuss shortly.

Brendon Young: The initial $50 million tranche is secured by <unk> assets with an additional $250 million that will become available as we achieve specific development milestones.

Brendon Young: This partnership not only strengthens our financial position, but also open stores to other top tier collaborators enhancing our credibility and outcomes and the HBC and A&D market.

Ben Gagnon: Turning to slide. The foundation we built in Q1 was what we needed to do as a company to facilitate our pivot to HPC. I'm proud to say that we accomplished in Q1 exactly what we sought out. Now with this foundation complete and with the right people, advisors and assets in place, we are focused on developing our HPC business. static, and scalable. Our HPC and AI business is being built on a structured, repeatable process designed for scalability and efficiency across our portfolio of data. For every site, we will seek to convert into HPC. We will develop the master plans while pursuing site-specific strategic financing partners or structures to finance the infrastructure development in an accretive fashion to our shareholders.

Brendon Young: Turning to slide six.

Brendon Young: The foundation, we built in Q1 was what we needed to do as a company to facilitate our pivot to HPT in the U S.

Brendon Young: I'll, just say that we accomplished in Q1 exactly what we sought out to get done now.

Brendon Young: Now with this foundation complete and with the right people advisors and assets in place. We are focused on developing our HBC business in a systematic and scalable fashion.

Brendon Young: Our <unk> business has been built on a structured repeatable process designed for scalability and efficiency across our portfolio of data centers for every site, we will seek to convert and HBC, we'll develop the master plans, while pursuing site specific strategic financing partners or structures to finance the infrastructure.

Brendon Young: Development in an accretive fashion to our shareholders.

Ben Gagnon: Afterwards, construction of infrastructure and the customer acquisition process will both ramp simultaneously in order to This repeatable approach ensures we can streamline workflows and replicate our success and learnings at Panther Creek across other sites in our portfolio, while maintaining consistency, optimizing resources, and wherever possible, collapsing time. I would now like to take a moment to zoom in on Panther Creek, where we have secured initial financing and are making great progress on the master site plan.

Brendon Young: Afterwards construction of infrastructure and the customer acquisition process will both ramp simultaneously in order to accelerate timelines.

Brendon Young: This repeatable approach ensures we can streamline workflows and replicate our success and learnings at Panther Creek across other sites in our portfolio, while maintaining consistency optimizing resources and wherever possible collapsing timelines.

Brendon Young: I would now like to take a moment to zoom in on Panther Creek, where we have secured initial financing and are making great progress on the master site planning.

Ben Gagnon: Turning to slide seven. With a potential capacity of nearly 500 megawatts, supported by multiple power sources, ample fiber access, and strategically located near major metropolitan areas and existing data center clusters. Panther Creek is going to be our first HPC. We've made significant progress on Pants Creek's development since we secured the site in March. On this slide, we have some renders of one of the conceptual data center plans for Panther Creek that are coming out of the design and engineering of the site master plan. So far, we've created preliminary sitemap plans, 3D models, and test fits for various data center designs.

Brendon Young: Turning to slide seven.

Brendon Young: With a potential capacity of nearly 500 megawatts supported by multiple power sources ample fiber access and strategically located near major metropolitan areas and existing data center clusters.

Brendon Young: Anther Creek is going to be our first HBC campus.

Brendon Young: We've made significant progress on pants creek's development since we secured the site in March.

Brendon Young: On this slide we have some lenders of one of the conceptual data center plans for Panther Creek that are coming out of the design and engineering of the site Master plan. So.

Brendon Young: Far we've created preliminary site plans three D models and test that for various data center designs.

Ben Gagnon: allowing us to optimize the campus layout across numerous phases of development and design. Phase 1 and Phase 2 substation design and engineering are nearly complete. We've also conducted site visits with leading manufacturers and suppliers of modular data center infrastructure. Exploring Innovative Solutions to Accelerate Deployment. Costs as we build for the HPC needs of the future. Further engineering, design and planning are underway with the goal of finalizing the master plan for Panther Creek in the second quarter. Once complete, we'll break ground in the second half of 2025, initiating construction of transmission lines, securing key substation equipment, and beginning civil works to prepare the land for active construction.

Brendon Young: <unk> is to optimize the campus lay out across numerous stages of development and design.

Brendon Young: As one in phase II substation design and engineering are nearly complete and we have also conducted site visits with leading manufacturers and suppliers of modular data center infrastructure exploring innovative solutions to accelerate deployment can reduce costs as we build for the HBC needs of the future.

Brendon Young: Further engineering design and planning are underway with the goal of finalizing the Masterplan for Panther Creek in the second quarter.

Brendon Young: Once complete we will break ground in the second half of 2025, initiating construction of transmission lines, securing key substation equipment and beginning civil works to prepare the land for active construction.

Operator: Transcripts provided by Transcription Outsourcing, LLC. This dual track approach ensures we're building a market ready facility that maximizes value without wasting any time.

Brendon Young: Simultaneously, we'll be ramping up customer acquisition efforts engaging prospective clients to refining infrastructure based on their specific needs. This dual track approach ensures we're building a market ready facility that maximizes value without wasting any time.

Ben Gagnon: Turning to slide 8. I'm excited to share that the feasibility assessments from WWT and ASG have validated the suitability of all of our U.S. sites. at the Creek, ScrubRask, Sharon in Washington State. University. NAACP Conversation. These sites boast the critical attributes needed for high performance data. Transcripts provided by Transcription Outsourcing, LLC. For example, Panther Creek, Scrubgrass, and Sharon in Pennsylvania benefit from their location in the PJM interconnection, one of the largest and most reliable power markets in the U.S. with access to multiple power sources for enhanced reliability. Washington, our site is strategically positioned in a region known for its stable, low cost hydropower below 3 cents per kilowatt hour, and the existing data center cluster that is developed around it, making it an ideal location for HPC and AI development.

Brendon Young: Turning to slide eight.

Brendon Young: I'm excited to share that the feasibility assessments from WWE <unk> and ESG have validated the suitability of all of our U S sites Panther Creek scrap brass, Sharon and Washington State PERC, HBC and AD conversion.

Brendon Young: These sites both the critical attributes needed for high performance data centers immediate power capacity ample land robust fiber networks proximity to major metropolitan areas and positioning and high demand content markets. For example, Panther Creek scrap brass in Sharon, Pennsylvania Bennett.

Brendon Young: From their location in the PJM interconnection, one of the largest and most reliable power markets in the U S with access to multiple power sources for enhanced reliability and.

Brendon Young: In Washington, our site is strategically positioned in a region known for its stable low cost hydropower below three per kilowatt hour and the existing data center cluster that is developed around it.

Brendon Young: Looking at an ideal location for HBC and AI development.

Ben Gagnon: These assessments confirm that our US portfolio is not just viable, but exceptionally well suited. Each site is ready to support the infrastructure demand today I workloads from power intensive GPU clusters to high speed data Our ultimate objective will be to convert all U.S. sites to HPC in a starting with Panther Creek as our flag. This validation strengthens our confidence in our strategy and positions Bitfarms to capture a significant share of the rapidly growing HPC market. Importantly, the work at Panther Creek also serves as a blueprint for our broader U.S. We're undertaking similar planning and engineering across all our US sites, creating a scalable pipeline of HPC and AI data centers to bring.

Brendon Young: These assessments confirm that our U S portfolio is not just viable, but exceptionally well suited for conversion.

Brendon Young: Each site is ready to support the infrastructure demand today I workloads from power intensive GPU clusters to high speed data connectivity.

Brendon Young: Our ultimate objective will be to convert all U S sites to HBC NII over time, starting with Panther Creek as our flagship campus.

Brendon Young: Validation strengthens our confidence in our strategy and positions did farms to capture a significant share of the rapidly growing HBC and end market.

Brendon Young: Importantly, the work at Panther Creek also serves as a blueprint for our broader U S portfolio.

Brendon Young: We're undertaking similar planning and engineering across all of our U S sites, creating a scalable pipeline of HBC in AI data centers to bring to market.

Ben Gagnon: campus and site will benefit from the lessons learned. Improving Efficiency and Reducing Development Timelines as we Expand Development across our U.S. Portfolio.

Brendon Young: Campus and site will benefit from the lessons learned at Panther Creek, improving efficiency and reducing development timelines as we expand development across our U S portfolio.

Ben Gagnon: turning to slide As we look to the future, Bitfarms is poised for extraordinary growth in 2025. Building off of our strong Bitcoin mining experience and foundation, our strategic pivot to HPC and AI infrastructure aligns us with the rampant demand for computation. driven by AI innovation, cloud computing and data intensive. With a clear path to 1.4 gigawatts of power capacity, we're building an exciting energy and compute portfolio to power tomorrow. Our energy portfolio has been rebalanced to 70% North American. all US sites validated for HPC and AI conversion. We are now well positioned to maximize the value of our power portfolio through HPC conversion and of the structured development processes, world-class team, and advisors to do so rapidly and efficiently.

Brendon Young: Turning to slide nine.

Brendon Young: As we look to the future. The farms is poised for extraordinary growth in 2025 and beyond building.

Brendon Young: Building off of our strong bitcoin mining experiencing foundation, our strategic pivot to HBC and AI infrastructure aligns us with the ramp in demand for coffee power driven by AI innovation cloud computing and data intensive applications with a clear path to one four gigawatts of power capacity, We're building Unexciting Energy Inc.

Brendon Young: <unk> portfolio to power Tomorrow's economy.

Brendon Young: Our energy portfolio has been rebalanced to 70% in North America with all U S site validated for HBC and AI conversion.

Brendon Young: We are now well positioned to maximize the value of our power portfolio through HBC conversion and as the structured development processes World class team and advisers to do so rapidly and efficiently.

Ben Gagnon: Bitcoin mining operations produce free cash flow to support the business and our HPC development. And our Bitcoin One program builds off the success we achieved in 2024, delivering cost-effective exposure to rising Bitcoin prices and seeking to amplify returns. Lastly, we are doing this with a financial foundation that is stronger than with up to $300 million in financing from a division of PCORI group, coupled with strong liquidity. We have the capital to execute our vision creatively with minimal dilution. Bitfarms is not just adapting.

Brendon Young: Our bitcoin mining operations produced free cash flow to support the business and our HBC development and our <unk>. One program built off the success, we achieved in 2020 for delivering cost effective exposure to rising bitcoin prices and seeking to amplify returns.

Brendon Young: Lastly, we are doing this with the financial foundation that is stronger than ever with up to $300 million in financing from a division of Macquarie group, coupled with strong liquidity, we have the capital to execute our vision accretively with minimal dilution.

Brendon Young: The farms is not just adapting to the future.

Ben Gagnon: For shareholders, this represents an unparalleled opportunity to invest in a company at the forefront of a transformative industry with significant upside potential that we believe has yet to be recognized by the market. Thank you for joining us on this exciting journey. I'm confident that our strategic vision, discipline execution and strong financial position will deliver exceptional value in the quarters and years ahead.

Brendon Young: Building it for our shareholders. This represents an unparalleled opportunity to invest in a company at the forefront of a transformative industry with significant upside potential that we believe has yet to be recognized by the market.

Brendon Young: Thank you for joining us on this exciting journey I'm confident that our strategic vision disciplined execution and strong financial position will deliver et cetera value in the quarters and years ahead.

Jeffrey Lucas: And with that, I will turn the call over to Jeff for the signing-off. Thanks, Ben. And thanks, everyone, for joining us this morning. Before we dive into the first quarter numbers, I'd like to highlight a few key elements about our financial We are well capitalized for 2025 and beyond. And our financing model as we focus on HPC and AI is straightforward. Our Bitcoin mining business remains solid, achieving steady mining margins and providing a consistent cash flow stream to fund our G&A and debt service as we build out Panther Creek. With our minor upgrades substantially complete, we have no plans nor the need for any substantial minor purchase program.

Brendon Young: Turning to slide 10, and with that I will turn the call over to Jeff for the financial update.

Jeff: Thanks, Ben and thanks, everyone for joining us this morning.

Speaker Change: Before we dive into the first quarter numbers I'd like to highlight a few key elements about our financial position.

Speaker Change: We are well capitalized with 2025 and beyond and our financing model as we focus on HBC and AI is straightforward.

Speaker Change: Our big claim mining business remains solid achieving steady mining margins and providing a consistent cash flow stream, that's under G&A and debt service as they build out Panther Creek.

Speaker Change: With our minor upgrades substantially complete we have no planned northern need for any substantial minor purchase programs.

Jeffrey Lucas: Our low capex mining business is largely de-risked and is well positioned to benefit from any potential Bitcoin And importantly, the CapEx requirements to grow our HPC and AI business in the near term are funded with the recent finance and security from Macquarie Group. In short, with steady mining economics, no plans for additional large mine Minimal Impact Expected from Potential Tariffs, and the remainder of this year's capital expenditures funded or with financing in place, we are confident that our financial position will enable us to efficiently and cost-effectively grow our U.S. HBC in AIDS.

Speaker Change: So capex money business is largely de risked and is well positioned to benefit from any potential big client upside and importantly, the capex requirement to grow our HBC and AI business in the near term our content with the recent financing secured from Macquarie group.

Speaker Change: In short with steady bonding with steady mining economics, no plans for additional large amount of purchases minimal impact expected from potential tariffs and remainder of this year's capital expenditures funded with financing in place. We are confident that our financial position will enable us to efficiently and cost effectively grow our U S. HBC.

Speaker Change: In the AG business.

Jeffrey Lucas: Turning now to slide. We are excited to join forces with Macquarie to finance our HPC and AI business cost effectively with minimal dilution. In addition to funding the initial phase of our build-out at Panther Creek, their expertise and their vast experience in HPC and AI infrastructure financing will be integral as we look to further scale the project and expand to other sites within our portfolio. are highly valued and appreciating North American assets, combined with a higher margin and predictable earning stream characteristics of HPC and AI enabled us to secure this attractive debt facility. These funds are dedicated to financing the HPC data center development at our Panta curriculum.

Speaker Change: Turning now to slide 11.

Speaker Change: We're excited to joined forces with Macquarie to finance, our HBC and AI business cost effectively with minimal dilution in.

Speaker Change: In addition to funding the initial phase of our build out of Panther Creek their expertise and their vast experience in HBC and AI infrastructure financing will be.

Speaker Change: Integral as we look to further scale of the project and to expand to other sites within our portfolio.

Speaker Change: Our highly valued and appreciated north American assets combined with a higher margin and predictable earnings stream characteristics HBC and AI enabled us to secure this attractive debt facility.

Speaker Change: These funds are dedicated to financing the HCC data center development at our Panther Creek location.

Jeffrey Lucas: Announced in April, the initial tranche of $50 million will cover the soft cost development, with the $250 million project financing tranche available for drawing as we achieve specific development milestones.

Speaker Change: Also in April the initial tranche of $50 million will cover the soft cost development with a $250 million project financing tranche at bell for drawing as we achieve specific development milestones.

Jeffrey Lucas: Turning to slide 12, our first quarter financial performance. With the acquisition of Stronghold, our operations expanded to encompass power generation and hosting. In the first quarter, we've earned and received 699 Bitcoin for total revenues of $67 million, up 33% year over year. Revenue from our mining activities was $65 million, with a balance of about $2 million from our volatile electrical services subsidiary and from Stronghold's Bitcoin hosting and electricity generation businesses, following our March 14th acquisition. Our gross mining profit was $28 million, representing a direct mining margin of 43% and an average of $40,100 per Bitcoin mined.

Speaker Change: Turning to slide 12, our first quarter financial performance with the acquisition of stronghold, our operations expanded to encompass power generation in hosting and the first quarter. We earned and received 699 bitcoin for total revenues of $67 million.

Speaker Change: 33% year over year revs.

Revenue from our mining activities was $65 million.

Speaker Change: With a balance of about $2 million from our volt electrical services subsidiary and from strong hold bitcoin hosting electricity generation businesses. Following our March 14th acquisition date.

Speaker Change: Our growth mining profit was $28 million.

Speaker Change: Representing a direct mining margin of 43% and an average of $40100 per bitcoin mining <unk>.

Jeffrey Lucas: Cash G&A was $20 million and included unusual and non-recurring professional services of about $2 million in the quarter, primarily for expenses incurred in connection with a stronghold acquisition and a sailor-bred iguazu facility to hire digital athletes. Operating loss was $32 million in the quarter and included $17 million in impairment charges attributed largely to our Argentine operation and the impact there of higher energy prices and unfavorable foreign exchange rates movement. As a result, net loss for the first quarter was $36 million or $0.07 per share.

Speaker Change: Cash G&A was $20 million and included unusual and nonrecurring professional service fees of about $2 million in the quarter, primarily for expenses incurred in connection with the stronghold acquisition and our celebrate iguazu facility to high digital assets.

Speaker Change: Operating loss was $32 million in the quarter and included $17 million of impairment charges attributable largely to our Argentina operation any impact there of higher energy prices and unfavorable foreign exchange rate movements.

Speaker Change: As a result net loss for the first quarter was $36 million or <unk> <unk> per share.

Jeffrey Lucas: Turning to slide 13. For the first quarter, our adjusted EBITDA was $15 million, or 23% of revenue. This encompasses primarily our self-mining revenue supplemented by income earned on our hosting activities and our electricity generation. focusing on first quarter operating performance and per Bitcoin metrics, gross mining profit was $28 million of 43% of mining revenue. Our direct mining cost for Bitcoin in the first quarter was $47,800, with our all-in cash cost to mine a Bitcoin at $72,300, compared to revenue per Bitcoin earned of $92,500, resulting in profit per Bitcoin of just over $20,000, for a cash profit contribution from our mining activities of about $14 million.

Speaker Change: Turning to slide 13 for the first quarter, our adjusted EBITDA was $15 million or 23% of revenue. This encompasses primarily yourself money revenue supplemented by income earned on our hosting activities and our electricity generation.

Speaker Change: Focusing on first quarter operating performance and privileged cloud metrics gross mining profit was $28 million up 43% of mining revenue.

Speaker Change: Mining cost with bitcoin in the first quarter was $47800 with our all in cash cost to mine, a bitcoin at $72300 compared to revenue per bitcoin and up $92500, resulting in profit per big point of just over $20000 for a cash profit contribution from our mining.

Speaker Change: Activities of about $14 million.

Jeffrey Lucas: I wish to note that as we continue to prioritize growing our HPC and AI business, we no longer plan to publish monthly production reports. Instead, we'll be providing regular updates and progress with our HPC and AI initiatives.

Speaker Change: I wish to note that as we continue to prioritize growing at HBC and AI business, we no longer plan to publish monthly production reports instead, we will be providing regular updates on progress with our HBC and AI initiatives. We believe this aligns more closely with the strategic direction of our business.

Jeffrey Lucas: We believe this aligns more closely with the strategic direction of our Turning to slide 14. I'll now speak to our liquidity and our anticipated capital needs. As of May 13, we had total liquidity of approximately $150 million, comprised of cash and unencumbered BTC. In addition, under the Iguazu sale agreement, we expect to receive from Hibe $26 million rateably over the next five remaining months, and we project generating on average about $8 million per month of free cash flow from our mining We anticipate this to be sufficient to meet our remaining CapEx needs for 2025, which we project to be under $100 million.

Speaker Change: Turning to slide 14 announced.

Speaker Change: I'll now speak to our liquidity and our anticipated capital needs.

Speaker Change: As of May 13th we had total liquidity of approximately $150 million comprised of cash and unencumbered BTC. In addition, under the glasses sale agreement, we expect to receive from high $26 million Ratably over the next five remaining months and we project generating on average about $8 million per month of free cash.

Speaker Change: Cash flow from our mining operations.

Speaker Change: We anticipate this to be sufficient to meet our remaining capex needs for 2025, which we projected the under $100 million.

Jeffrey Lucas: Importantly, this number does not include any near term HPC and AI capital needs, which are planned to be funded by Macquarie.

Speaker Change: Importantly, this number does not include any near term <unk> AI capital needs, which are planned to be funded by Macquarie.

Jeffrey Lucas: In closing, we believe our financial position provides a solid foundation to execute on the HPC and AI initiatives that Ben laid out this morning, and we look forward to keeping you updated as we continue to scale our U.S. operations.

Speaker Change: In closing, we believe our financial position provides a solid foundation to execute on the HBC and AI initiatives that Ben laid out this morning, and we look forward to keeping you updated as we continue to scale our U S operations.

Operator: With that, I'll turn the call back to the operator for questions and answers. Thank you. As a reminder, to ask a question, you will need to press star 11 on your telephone. To remove yourself from the queue, you may press star 11 again. Please stand by while we compile the Q&A roster.

Speaker Change: With that I'll turn the call back to the operator for questions and answers.

Speaker Change: Sure.

Speaker Change: Thank you.

Speaker Change: Yes.

Speaker Change: As a reminder to ask a question you will need to press star one on your telephone.

Speaker Change: Yourself into the queue you May press Star one again, please standby, while we compile the Q&A roster.

Michael Colonnese: Our first question comes from the line of Mike Colonnese of H.C. Wainwright & Company. Please go ahead, Mike. Hi, good morning, guys, and thank you for taking my questions. First one for me is on the HPC AI side. Jeff, you highlighted 100 million or so of CapEx.

Speaker Change: Our first question comes from the line of Mike economies of HC Wainwright <unk> Company. Please go ahead Mike.

Mike Economies: Hi, Good morning, guys and thank you for taking my questions first one for me is on the <unk> side Jeff.

Mike Economies: Jeff you highlighted 100 million or so of Capex, that's not including any additional development of the HBC datacenters, but if you could provide maybe some more specifics as to what the.

Jeffrey Lucas: That's not including any additional development of the HPC data centers, but if you could provide maybe some more specifics as to what the, you know, infrastructure development to continue to build out the 500 megawatts of total expected capacity that would entail that total number. And then, you know, from an infrastructure development standpoint, you know, what would need to happen thereafter in terms of client discussions for you guys to bring the site to the next stage?

Mike Economies: Infrastructure development to continue to build out the 500 megawatts of total expected capacity.

Mike Economies: That would entail.

Mike Economies: Total number and then.

Mike Economies: Infrastructure development standpoint, what would need to happen thereafter.

Mike Economies: In terms of client discussions for you guys to bring the site to the next stage.

Ben Gagnon: So let me start off initially here by just commenting here that we're actually working now in the final stages of our master development plan for what we're gonna do with Panda Creek. So we're actually gonna have a lot more information forthcoming shortly here in terms of what those expenditures are gonna be. But right now we're still in the process of putting together the expectations there. But Ben, maybe you wanna add about some of the timelines and expectations that we have. Yeah, happy to. And thanks for the question, Mike. So first thing is, as Jeff said, we're completing our master site plan, supposed to be done this quarter.

Mike Economies: Yes.

Mike Economies: So let me start off initially here, but just commenting here that we are actually working now in the final stages of our Master development plan, but we're going to do with Panther Creek. So we're actually going to have a lot more information forthcoming shortly here in terms of what those expenditures are going to be but right now we're still in the process of putting together the expectations here, but then maybe you want to add about some of the Thailand timelines.

Mike Economies: The expectations that we have there.

Mike Economies: Yes, happy to and thanks for the question Mike.

Mike Economies: So first thing is I would just add we're completing our master site plan is supposed to be done this quarter.

Ben Gagnon: And that's one of the next key development milestones in order to access the full $300 million facility with Macquarie. Just to give you a ballpark of, you know, what that $300 million can accomplish for us at that Panther Creek site. Effectively, we can build out all of the, like, powered land infrastructure for the full 500 megawatts there at the Panther Creek location, or we can build out the initial substation and the first building of HPC for the power campus.

Mike Economies: What are the next key development milestones in order to access the full $300 million facility with Macquarie.

Mike Economies: Just give you a ballpark.

Mike Economies: What that $300 million can accomplish for us at that Panther Creek site.

Mike Economies: Effectively we can build out.

Mike Economies: All of the like powered land infrastructure that for the full 500 Meg.

Mike Economies: Megawatts there at the Panther Creek location or we can build out the initial substation and the first building.

Michael Colonnese: And we need further financing to finish out the remaining five or six buildings. Got it. That's very helpful, Ben. Appreciate that.

Mike Economies: The HBC for the power campus, we need further financing to finish out the remaining five or six buildings there.

Speaker Change: Got it that's very helpful. But I appreciate that and then on the Bitcoin mining side you guys have obviously improved the.

Ben Gagnon: And then on the Bitcoin mining side, you guys have obviously improved the fleet efficiency quite a bit through the transfer, transforming the fleet upgrade here to 19 joules in tera hash. But curious, is there any further room to optimize or improve your overall power costs on the Bitcoin mining side? So we have two different things there. I mean, first, we have about 6% of the miners still remaining to be installed. All of those miners that are waiting to be installed have efficiency higher than the 19, so there's going to be a marginal improvement there on the energy efficiency side.

Speaker Change: So your efficiency quite a bit through the transfer transform their fleet upgrade here 19, Jordan Tara asked but curious is there any further room to optimize or improve your overall power costs on the mining side.

Speaker Change: So we have.

Speaker Change: Two different things there I mean first we had the we have about 6% of the minor still remaining to be installed all of those miners that are waiting to be installed has efficiency higher than the 19, so theres going to be marginal improvement there.

Ben Gagnon: And I think the big part of this here is that with the PJM facilities that we've secured and the active mining that we're doing throughout Pennsylvania, we now have a lot of energy trading opportunities in our portfolio. So, for the first time, we have a lot more control and flexibility of our power prices, but what this means is that, you know, we're not seeking to achieve a certain dollar per megawatt hour figure or seeking to do is optimize free cash flow out of those mining operations on a daily basis. And so, some days it might make sense to pay a higher price and flex a little bit more hash rate.

On the energy efficiency side, and I think the big part of this year is that with the PJM.

Speaker Change: Facilities that we have secured and the active mining that we're doing throughout Pennsylvania, we now have a lot of energy trading.

Speaker Change: Opportunities in our portfolio. So for the first time, we have a lot more control and flexibility of our power prices, but what this means is that.

Speaker Change: We're not seeking to achieve a certain dollar per megawatt hour figure or seeking to do is optimize free cash flow out of those mining operations on a daily basis, and so some days it might make sense to pay a higher price and flex a little bit more hatch rate somebody makes sense too.

Michael Colonnese: Some days it may make sense to run less and target a lower price. So, with those PJM facilities, we have a lot more control over energy, and that gives us a lot more downside protection, a lot more optimization here on the free cash flow. And that's our big way here of managing hash costs rolling forward. Thanks, thanks, Mike. Thank you.

Speaker Change: Run less than target a lower price.

Speaker Change: With those PJM facilities, we have a lot more control over energy.

Speaker Change: And that gives us a lot more downside protection a lot more optimization here on the free cash flow.

Speaker Change: That's a big way here of managing cash costs rolling forward.

Pat: Thanks Pat.

Speaker Change: Thanks, Mike.

Thomas Shinsky: Our next question comes from the line of Thomas Shinsky of Cancer. Please go ahead, Thomas. Hi, Ben and Jeff. This is Thomas on for Brett. Thank you for taking my question.

Pat: Thank you.

Pat: Our next question.

Speaker Change: It comes from the line of Thomas <unk> of cancer. Please go ahead Thomas.

And Jeff This is Thomas on for Brett. Thank you for taking my question I.

Jeffrey Lucas: I guess you just mentioned the master plan as part of the additional milestones for the additional 250 million secondary trons from Macquarie. I guess, what specific other development milestones must be met to access the additional 250 million?

Speaker Change: I guess you just mentioned the Masterplan is part of the additional milestones for the additional 250 million.

Speaker Change: Second secondary tranche from Macquarie I guess.

Speaker Change: What specific other development milestones must be met to access the additional $250 million.

Jeffrey Lucas: Jeff, do you want to take that? Yeah. Actually, the milestones are pretty straightforward here, going forward here. The way it works here is that as we put together the master development plan, we've identified what the anticipated capital expenditures are going to be along the way. Once we have the, really the approval from Macquarie for the master development plan, we can begin drawing upon that facility here to take advantage of each of the various, you know, tranches as the capital requirements arise. So it's actually a pretty straightforward mechanism.

Jeff: Jeff do you want to take that.

Jeff: The milestones are pretty pretty straightforward here going forward here the way. It works here is that as you put together the master development plan, we've identified what the anticipated capital expenditure is going to be a long way. Once we have the really the approval from Macquarie for the Master development plan, we can begin drawing upon that facility here.

Jeff: To take advantage of each of the various tranches of the capital requirements arise. So it's actually a pretty straightforward mechanism here.

Thomas Shinsky: Awesome, thanks. And then just one more, if I may, Ben, you mentioned, as we enter the second half of 2025, you will look to start securing, you know, some critical substation infrastructure. I was just wondering if you've already put, you know, yourself in the queue for some of the long lead items here, given the high demand for this infrastructure. Awesome. Thanks, guys. Thanks, Tom. Thank you.

Speaker Change: Awesome. Thanks, and then just one more if I may.

Ben: Ben you mentioned.

Ben: Enter the second half of 2025, Youll look to start securing.

Ben: Some critical substation infrastructure I was just wondering if you've already put.

Ben: Yourself into the queue for some of the long lead items here given the high demand for this type of structure.

Tom: Thanks, Tom.

We're still working on the Master plans, we haven't placed deposits on any of the any of the equipment yet.

Tom: There are timelines here, so that we should expect to have.

Tom: The first tranches of additional power probably in 12 months to 18 months from today at the Panther Creek location and that includes our anticipation that we'd be putting orders down for substation equipment in the second half of this year.

Tom: Yeah.

Tom: Awesome. Thanks, guys.

Tom: Thanks, Tom.

Michael Grondahl: Our next question comes from the line of Mike Grondahl of Northland Capital Markets. Please go ahead, Mike. Hey guys, thanks. Um, it seems like you're off to a nice start with Panther Creek.

Tom: Thank you our next question comes.

Speaker Change: From the line of Mike Grondahl of Northland Capital markets. Please go ahead Mike.

Mike Grondahl: Hey, guys. Thanks, It seems like you're off to a nice start with Panther Creek.

Ben Gagnon: How would you rank Scrubgrass, Sharon, and Washington State? Did you guys have an internal ranking or will it be customer demand that drives what's Just kind of like your thoughts. Thanks, Mike. It's a great question. You know, we've had a lot of initial conversations with with potential customers and Panther Creek stands out as the best opportunity site that we have in our portfolio. That's due to a couple of reasons. One, it's got the the most amount of immediate power over the next 12 to 18 months. And it also has a very clear runway here for the next three years to scale up to several hundred megawatts.

Speaker Change: How would you rank scrub grass Sharon in Washington State.

Speaker Change: Do you guys have an internal ranking or will it be customer demand that drives what's next just kind of like your thoughts there.

Speaker Change: Yeah. Thanks, Mike It's a great question.

Speaker Change: We've had a lot of initial conversations with with potential customers and Panther Creek stands out as.

Speaker Change: The best opportunity to site that we have in our portfolio. That's due to a couple of reasons.

Speaker Change: One it's got the most amount of immediate power over the next 12 to 18 months.

Speaker Change: And it also has a very clear runway here for the next three years to scale up to several hundred megawatts in <unk>.

Ben Gagnon: And third, that proximity to New York and Philadelphia is probably the best geographical location that we have in our portfolio for HVC, most in demand.

Speaker Change: And third that proximity to New York and Philadelphia is probably the best geographical location that we have in our portfolio for HBC at most in demand.

Ben Gagnon: As we look across our other sites, Washington, Scrubgrass, Sharon, the sites have different qualities and attractiveness to different kinds of customers. Scrubgrass, very, very similar kind of footprint and demand as Panther Creek. But Panther Creek's just a little bit further along in the additional power connections to the grid that we're going to be able to use to scale that up to several hundred megawatts. But it effectively has almost all of the same characteristics as Panther Creek. It's just Panther Creek is a little bit further advanced in its timeline. Sharon is an interesting one as well, because it has 110 megawatts there that should be ready in the back half of next year.

As we look across our other sites, Washington scrub grass.

Speaker Change: Sharon.

Speaker Change: The sites have different qualities and attractiveness of different kinds of customers.

Speaker Change: Scrub grass very very similar kind of.

Speaker Change: Footprint and demand as Panther Creek, but Panther Creek, just a little bit further along in the additional power connections to the grid that we're going to be able to use to scale that up to several hundred megawatts, but effectively has almost all of the same characteristics as Panther Creek issues Panther Creek was a little bit further advancing its timeline.

Speaker Change: Sharon is an interesting one as well because it has 110 megawatts there that should be ready in the back half of next year.

Ben Gagnon: And so that's a very attractive one as well. It's got the size and scale to facilitate a lot of interest to customers. But it's a little bit lower in the priority queue or a little bit. It just doesn't have the further expansion capacity that really makes Panther Creek and scrubgrass, you know, such exciting prospects with that multi-year development ramp up to almost 500 megawatts.

Speaker Change: That's a very attractive one as well, it's got the size and scale to facilitate a lot of interested customers.

Speaker Change: But it's a little bit lower in the priority queue or a little bit.

Speaker Change: So it just doesn't have the further expansion capacity that really makes Panther Creek and scrub grass.

Speaker Change: Such exciting prospects.

Speaker Change: With that multiyear development ramp up to almost 500 megawatts.

Ben Gagnon: Washington is a very different kind of site. You know, it's a much smaller site, so it would be targeting a different kind of customer. But it also has. probably the most cost-effective and reliable power in our portfolio. For HPC in Washington, the expected price is about $26 or $27 a megawatt hour. So that's the the lowest possible cost we have across our entire portfolio. It means that we'd have really, really healthy margins and we'd be going after a different kind of customer, probably something like a government agency who would be interested in taking the whole site and having the data sovereignty and the security also themselves.

Speaker Change: Washington is a very different kind of site. It's a much smaller site. So it would be targeting a different kind of customer.

Speaker Change: But it also has.

Speaker Change: Probably the most cost effective and reliable power in our portfolio for HTC in Washington.

Speaker Change: The expected price is about 26 or $27 a megawatt hour. So thats the lowest possible cost we have across our entire portfolio cleans that we'd have a really really healthy margins.

Speaker Change: We'd be going after a different kind of customer probably something like a government agency.

Speaker Change: Who would be interested in taking the whole site and having the data sovereignty and security also themselves. So the different sites have different.

Ben Gagnon: So the different sites have different, you know, attractive qualities for different potential customers. And, you know, clearly Panther Creek is is our flagship one that we're going to develop.

Speaker Change: Attractive qualities for different potential customers.

Speaker Change: And clearly Panther Creek is our flagship one that we're going to develop but after we have.

Jeffrey Lucas: But after we've completed our master site plans here in this quarter, you know, we're going to be replicating similar efforts across all of those other sites in the US that we have a pipeline here of sites to market to customers simultaneously. got it. That's helpful. Um, and then slide 14 has, you know, capex needs for 2025 less than 100 million. That less than $100 million, what is it going for? Is that a little bit more infrastructure? Just help us where that... Sure, let me start off and Ben can add a little color to that if he wishes.

<unk> completed our master site plans here in this quarter.

Speaker Change: We're going to be replicating similar efforts across all of those other sites in the U S. But we have a pipeline here of sites to market to customers simultaneously.

Speaker Change: Got it that's helpful.

And then slide 14 has capex needs for 2025 less than a $100 million excluding HBC.

Speaker Change: That less than a $100 million what is it going forward is that a little bit more infrastructure.

Speaker Change: Just help us where thats being spent.

Speaker Change: Sure, Let me start off and then bank add little color to that if he wishes first of all we.

Jeffrey Lucas: First of all, we actually have that amount here. It's roughly about $75 million is where we are at this point in time here, which roughly about $5 million actually is logistics costs associated with our miners as they are further deployed in strategic locations. On top of that, the balance of that really is going to be spent primarily on Sharon and to a degree on the Scrubgrass and Panther locations as a sort of building out, as Ben pointed out, the electrical infrastructure. And for that, we have about roughly around $70 million, $65 million for that overall.

Speaker Change: We actually have that amount here is growth of around $75 million it will be.

Speaker Change: At this point in time here at <unk>.

Speaker Change: Roughly about $5 million assets logistics costs associated with our miners is there further deployment strategic locations of these on top of that the balance of that really is going to be spent primarily in Sharon and some degree on its Greg grass and Panther locations.

Speaker Change: Building out as Ben pointed out the electrical infrastructure and for that we have about roughly 170 million $65 million of that overall, so that's kind of where we have an allocated at this point in time.

Jeffrey Lucas: So that's kind of where we have it allocated at this point. got it. Okay. Hey, thanks for that color, Jeff. Thank you.

Speaker Change: Got it okay. Thanks for that color Jeff.

Brian Kinstlinger: Our next question comes from the line of Brian Kinstlinger of Alliance Global Partners. Please go ahead, Brian. Great, thanks so much. Last quarter, you mentioned the hyperscalers would go through a quick assessment initially to see if the location is worth dedicating their time for a more thorough evaluation.

Speaker Change: Thank you. Our next question comes from the line, Brian <unk> of Alliance Global Partners. Please go ahead Brian.

Speaker Change: Great. Thanks, so much.

Speaker Change: Last quarter, you mentioned the hyper scaler would go through a quick assessment initially to see at the location is worth dedicating their time for a more thorough evaluation at what point and what do they need to see.

Ben Gagnon: At what point and what do they need to see to start that initial assessment? So thanks for the question. I mean, we had initial conversations with with potential customers, even before we had closed on the stronghold transaction. And one of the key things for, you know, large scale potential customers like that is the certainty around their investments. And so it's really important for us to first secure the sites before those advance to the next level. And the next, you know, big thing here for us is completing the master site plan, because that includes things like the timeline expectations, the budget estimates, the Gantt charts for how construction builds out over time, what are the phases of development and expected power draws at what points in time.

Speaker Change: Two to start that initial assessment.

Speaker Change: So thanks for the question I mean, we had initial conversations with potential customers even before we had closed on the stronghold transaction one of the key things for.

Speaker Change: Large scale potential customers like that is a certainty around their investments and so it's really important for us to first secure the sites before.

Speaker Change: Those advance to the next level and the next big thing here for US is completing the master site plan because that includes things like the timeline expectations. The budget estimates the gantt charts for how construction builds out over time, what are the phases of development and expected power draws at what points in time.

Ben Gagnon: And that is really the next key thing that we need. With that in place, it's a lot easier to go and have these serious conversations with with potential customers.

Speaker Change: And that is really the next key thing that we need with that in place. It's a lot easier to go.

Speaker Change: And happy serious conversations with potential customers.

Brian Kinstlinger: Great. And my follow up, you've sold 60 to 70% of your bitcoins mined over the last two quarters. With the financing in place for HPC and AI, and your limited capex for Bitcoin mining, how should we think about Bitcoin HODL versus planned sales going forward? So really, for the sales going forward here, you know, we plan to use that to address our operating requirements here, which are roughly about, you know, the fixed costs that we face are roughly about six to $6.2 million a month. So above and beyond that, though, we're going to be looking to accumulating a huddle here, are using it very strategically and tactically for a Bitcoin one program here, as a means of using derivatives and instruments like that, you know, to really enhance the value and the quantity of Great, thank you.

Speaker Change: Great and my follow up.

Speaker Change: You've sold 60% to 70% of your big coins mined over the last two quarters.

Speaker Change: Financing in place for HBC, Nai and Youre limited Capex.

Speaker Change: Coin mining how should we think about.

Speaker Change: Bitcoin hoddle versus planned sales going forward.

Speaker Change: So really proud of sales going forward here, we plan to use that to address our operating requirements here, which you're roughly about the fixed costs that we pay to roughly about 6% to $6 2 million.

Speaker Change: Hi, Mark so above and beyond that though we're going to be looking to accumulating on hurdle here are using a very strategically and tactically for a big Queen one program here as a means of using derivatives and instruments like that to really enhance the value and the quantity of the quantum that we have here.

Speaker Change: Great. Thank you.

Brian Kinstlinger: Thank you.

Speaker Change: Thank you.

Nick Giles: Our next question comes from Nick Giles of B Riley Securities. Please go ahead, Nick. Thank you very much, Operator. And good morning, everyone.

Speaker Change: Our next question comes from Nick Giles B Riley Securities. Please go ahead Nick.

Speaker Change: Thank you very much operator, and good morning, everyone. This is further suddenly on behalf of Nik tails.

Fedor Shabalin: This is Fedor Shabalin on behalf of Nick Chell. Ben and Jeff, my first one is about macro environment. Where were you now in the process of discussion with potential tenants for your HPC capacity? And how would you frame up the interest of the capacity in PGM specifically? Thank you. Thanks for the question. You know, as we said, we've had initial conversations with customers to verify and gauge their interests. But what we really needed to do to take those conversations to, you know, the next stage here is to have the certainty and the timelines for energization and power availability and the construction schedule and associated budgets and costs.

Speaker Change: Ben and Jeff My first one.

Speaker Change: Is about macro environment.

Speaker Change: Environment.

Speaker Change: Where where are you now in the process of discussing with.

Speaker Change: Potential tenants for your HBC capacity, and how would you frame up the <unk>.

Speaker Change: So the capacity in PJM specifically thank you.

Speaker Change: Thanks for the question as we said we've had initial conversations with customers to verify and gauge their interest, but what we really needed to do to take those conversations too.

Speaker Change: The next stage here is to have the certainty and the timelines for <unk> and power availability in the construction schedule and associated budgets and costs.

Ben Gagnon: All of that is is in the planning stages right now in that master site plan development phase, which should be expected to be done this quarter. And then we're going to be ramping up those those efforts quite aggressively here, not just at our Panther Creek location, but replicating the exact same process here. doing the simultaneous master site plan for a site as well as going to secure or seeking out site-specific financing or a site-specific financing partner for that particular conversion or new construction build so that we can also put that into the pipeline of sites that are being marketed out to customers simultaneously.

Speaker Change: All of that is in the planning stages, right now and that Master site plan development phase, which should be expect it to be done this quarter.

Speaker Change: And then we're going to be ramping up those efforts quite aggressively here not just at our Panther Creek location, but replicating the exact same.

Speaker Change: <unk> see here.

Speaker Change: Doing the simultaneous master site plan for a site as well as go into secure or seeking out.

Speaker Change: Site specific financing and our site specific financing partner for that particular conversion or new construction build so that we can also put that into the pipeline of sites that are being marketed out to customers simultaneously.

Ben Gagnon: Thank you for this call. My next one is You already finished the assessment of potential HPC size. So and what what would be the CAPEX needs per one megawatt of growth capacity? And what are you looking for in terms of your prospective customer or customers for this HPC capacity? And are you expecting kind of CAPEX split for development, these HPC megawatts between you and potential tenants? Any color here would be. would be helpful. Yeah, it's a good question. You know, the big thing here for us as a business, you know, when you're looking at how we're driving shareholder value, kind of look at where we as a business are priced and valued, I think most of the Bitcoin miners are maybe somewhere in kind of like a three to five multiple of a JSDBDA.

Speaker Change: Thank you for the color.

Speaker Change: My next one is.

Speaker Change: You already finished.

Speaker Change: Assessment of potential HBC at site.

Speaker Change: So what what was the Capex capex needs.

Speaker Change: One megawatts of.

Speaker Change: Capacity.

Speaker Change: What are you looking for in terms of your prospective customer on customers. So vintage particular party.

Speaker Change: And are you expecting kind of Capex split for development.

Speaker Change: HBC megawatts between you and potential tenants, but any color here would be.

Speaker Change: Would be helpful.

Speaker Change: Yes, it's a good question.

Speaker Change: The big thing here for us as a business. When you are looking at how we're driving shareholder value.

Speaker Change: Kind of look at where we as a business are priced and valued I think most of the day coin miners are maybe somewhere in kind of like a three to five multiple of adjusted EBITDA.

Ben Gagnon: We're a bit lower, we're roughly, you know, two times a JSDBDA. And, you know, when you look at what the data center REITs are doing, it's 20 to 30x. So the big unlock here in shareholder value comes from the long term, contracted revenues themselves, as opposed to, you know, any particular facet of the development in itself. And so there's a variety of different business structures and models that we could use in order to secure those contracted revenues. And there's a balancing act between capex associated with the model, the revenues that are possible per unit of megawatt hours sold, and the margins that you'd get on each unit of energy sold as well.

Speaker Change: Lower were roughly.

Speaker Change: Two times adjusted EBITDA.

And when you look at what the data center Reits are doing it's 20% to 30 acts.

So the big unlock here in shareholder value comes from the long term contracted revenues themselves.

Speaker Change: As opposed to any particular.

Speaker Change: Facet of the development.

Speaker Change: In itself and so theres a variety of different business structures and models that we could use in order to secure those contracted revenues and there is a balancing act between capex associated with the model.

Speaker Change: The revenues that are possible per unit of megawatt hours sold and the margins that you would get on each unit of energy sold as well you kind of think of it as a spectrum.

Ben Gagnon: And kind of think of it as a spectrum with the lowest cost being on the powered land. That would be in the few hundreds of thousands of dollars a megawatt. Once you get up to the powered shell, we're probably in the low $2 to $4 million a megawatt range. And to move up the stack further to have a completed building ready to throw in racks, it's going to be closer to maybe $8 to $10 million a megawatt. We think the sweeter spot here, at least for Panther Creek, is probably going to be on the powered shell range.

Speaker Change: With the lowest cost being on the powered land.

Speaker Change: That would be in the few hundreds of thousands of dollars a megawatt.

Speaker Change: Once you get up to the powered shell, we would probably be.

Speaker Change: Hello, $2 million to $4 million, a megawatt range and to move up the stack further to have a complete with a completed building ready to throw in racks.

Speaker Change: Closer to maybe $8 million to $10 million a megawatt we think the sweeter spot here at least for Panther Creek is probably going to be on.

Ben Gagnon: That seems to be in most of our conversations where the sweet spot is between capex investment, total revenue per megawatt hour, and margin is trying to focus on not the most amount of revenue per unit of megawatt hours sold, but how do we convert over the most amount of megawatts for the least amount of capex with a focus on our return on invested cap. So that gives you kind of a sense of kind of what are the relative costs and the way that we're looking at the various business structures. I'd also say that across our portfolio of sites, you know, different models are going to make sense for the different sites and the different potential customers.

Speaker Change: The powered shell range that thinks that seems to be in most of our conversations where the sweet spot is between Capex investment total revenue per megawatt hour and margin is trying to focus on.

Speaker Change: Not the most amount of revenue per unit of megawatt hours sold but how do we convert over the most amount of megawatts for the least amount of capex with a focus on our return on invested capital.

Speaker Change: So that gives you kind of a sense of kind of what are the relative cost in the way that we're looking at the various business structures I'd also say that occur.

Speaker Change: Across our portfolio of sites different models are going to make sense for the different sites in the different potential customers could very well be that in these conversations with potential hyperscale customers.

Ben Gagnon: It could very well be that, you know, in these conversations with with potential hyperscaler customers, you know, they want to take over and control more of the build and more of the operations. And with things like government agencies, maybe in Washington, you know, they're more keen to just have a site turnkey ready to plug in computers, or maybe even want to have those computers, you know, on site already. So there's there's a variety of different business models that we're approaching.

Speaker Change: I want to take over and control more of the build in more of the operations and with things like government agencies, maybe in Washington.

Speaker Change: They are more keen to just have a site turnkey ready to plug in computers, where maybe even want to have those computers on site already.

Speaker Change: So there's a variety of different business models that we're approaching.

Ben Gagnon: But really, the primary next steps here are the master site plans and the financing in place to begin construction and conversion across all those sites. Thank you, Ben. That's, that's extremely helpful.

Speaker Change: But really the primary next steps here are the master site plans and the financing in place to begin construction and conversion across all of those sites.

Speaker Change: Thank you Ben.

Ben Gagnon: And I promise the last one, it's a quick follow up on on max financing. So I know someone already asked it, but want to understand it a little bit better. 50 million is initial draw and 250 is conditional. Again, could you clarify what milestones should be achieved to be able to draw the next tranches, and what is the size of these tranches? Just want to understand the timeline here. Thank you. So, we have a fair amount of, I'm sorry, Ben, did you want to comment? Yeah, I mean, just maybe I can just sum up the question really quickly.

Speaker Change: Extremely helpful.

Speaker Change: And the last one it's a quick follow up on the Max financing.

Speaker Change: So I.

Speaker Change: I know someone already asked it but wanted to understand a little bit by the $50 million initial draw and to 50 is conditional.

Speaker Change: Could you clarify what milestones should be achieved to be able to drill the next tranches and what is the size of these tranches just want to understand the timeline here. Thank you.

Speaker Change: So we have a fair amount of I am sorry, Ben did you want to comment.

Speaker Change: Yes.

Maybe I can just ask the question really quickly.

Ben Gagnon: You know, there's only two tranches here. There's the 50, and then there's the 250 for the total of 300. You know, there's one key development milestone here for the 250, as Jeff said to earlier, which is the completion of the master site planning. That includes, you know, all of the engineering schematics, the designs, the site maps, the budgets, the Gantt charts for construction. So, it's a very comprehensive multi-year development plan that we need to that we need to have in place in order for us to convert over and access the full 300 million under that facility.

Speaker Change: There's only two tranches here, there's the 50 and then there is the $2 50 for the total of 300.

Speaker Change: Theres one key development milestones here for the $2 50, as Jess said to earlier, which is the completion of the master site planning that includes.

Speaker Change: All the engineering schematics the designs the site maps the budgets the gantt charts for construction so.

Speaker Change: It's a very comprehensive multi year development plan.

Speaker Change: We need to.

Speaker Change: So we need to have in place in order for us to convert over and access the full $300 million under that facility, but theres just the two tranches there the 50 and the 250.

Ben Gagnon: But there's just the two tranches there, the 50 and the 250. And a reference, by the way, to when we specifically draw it, that's as the needs arise. So, once we have that master plan development plan in place here, we're going to proceed to get, you know, we have a particular project or an investment, then we actually can just present that and work with Macquarie on that and get that financed as the payment stream Thank you, Ben and Jeff.

Speaker Change: And Ah referenced by the way when we specifically dry that doesn't need arrive. So once we have them planned development plan in place here, we again and proceed to get we have a particular project and investments.

We actually can just present that and work with Macquarie on that and get that financed as the payment stream unfolds.

Ben Gagnon: I appreciate all the call and continue. Best of luck. Thank you.

Speaker Change: Thank you Ben and Jeff I appreciate all the color a continued best of luck.

Speaker Change: Thank you.

Martin Toner: Our next question comes from the line of Martin Toner of ATB Capital Markets. Please go ahead, Martin. Good morning, everyone. Thanks so much for taking my question. I believe the Macquarie financing is for two years. Just wondering where you think you'll be in terms of development at that time?

Speaker Change: Thank you. Our next question come from the line of Martin Toner of ATB capital markets. Please go ahead Martin.

Speaker Change: Sure.

Martin Toner: Good morning, everyone. Thanks, so much for taking my question I believe the Macquarie financing is four two years.

Martin Toner: Just wondering where you think youll be in terms of development at that time, and or I guess slightly before that and how you.

Jeffrey Lucas: And or I guess slightly before that, and how you what options do you think there will be to refinance and increase financing from there? Happy to jump in there. It's a good question, Martin. So the facility, as I said, would be enough in our calculations right now to either do the first HPC data center building completely, and a bit of infrastructure beyond that for the electrical, or it's enough for us to do all of the powered land infrastructure for the entire site. You know, as we continue to develop and as we continue to make progress on the HPC site, we should expect that, you know, opportunities for raising further capital at increasingly lower costs are going to be available.

Martin Toner: What options do you think there will be to refinance and decreased financing from there.

Martin Toner: So happy to jump in there.

Martin Toner: And so good question Martin so the the facility as I said would be enough.

Martin Toner: Our calculations right now to either do the first HBC datacenter building completely.

Martin Toner: Bit of infrastructure beyond that to be electrical or it's enough for us to do all of the powered land infrastructure for the entire site.

Martin Toner: As we continue to.

Develop and as we continue to make progress on the HBC site, we should expect that opportunities for raising further capital at increasingly lower costs are going to be available and so as we've made progress and want to expand the development process beyond that first building on to the next several buildings will be.

Ben Gagnon: And so as we've made progress and, you know, want to expand the development process beyond, you know, the first building on to the next several buildings, we'll be seeking. you know more financing at that time and we expect to have increasingly lower cost capital as we get further through the project and we get closer to contracted revenues and free flow or free cash flow on the site.

Martin Toner: Seeking.

Martin Toner: More financing at that time, and we expect to have.

Martin Toner: Increasingly lower cost of capital as we get further through the projects that we get closer to.

Martin Toner: Contracted revenues and free flow free cash flow on the site.

Martin Toner: Super, thank you.

Martin Toner: Super Thank you.

Martin Toner: You what conditions would motivate you to build out infrastructure for the entire site as opposed to like going for that like first dollar of rental revenue, which seems important for lower cost financing going forward? Yeah, it's a great question. I mean, really, what we're trying to focus on right now is the infrastructure, which is you know, going to service either different kind of work in the road that you want to take. So that's the high level stuff of the substation infrastructure, the transmission line infrastructure, the civil works on the land that prepares the land for construction.

Martin Toner: What conditions.

Martin Toner: Wood.

Martin Toner: <unk> you to build out infrastructure for the entire site as opposed to like going for that like first dollar of rental revenue, which seems important for lower cost financing going forward.

Martin Toner: Yes, it's a great question I mean really what we're trying to focus on right now is the infrastructure which is.

Martin Toner: Going to service either.

Martin Toner: Different kind of a fork in the road that you want to take so thats the high level stuff over the substation infrastructure of the transmission line infrastructure. The civil works on the land that prepares the way and for construction those are the areas that regardless of which final direction.

Ben Gagnon: Those are the areas that regardless of which final direction, you know, is taken, those are the steps that need to be done regardless. And so, you know, as we progress here further with the initial site works, initial infrastructure works and conversations with the potential customers, it's really going to be the potential customers demand and timelines, which are going to ultimately determine, you know, how we're serving. moving forward and what's being prioritized, either the total amount of land or the first building, you know, it's highly likely That the first building will be prioritized over the entire powered land, but really that's going to be dependent on the outcome of the conversations that we're going to be having at a much more accelerated pace in the second building.

Martin Toner: Is taken.

Martin Toner: Those are the steps that need to be done regardless and so as we progress here further with the initial site works initial infrastructure works in conversations with the potential customers, it's really going to be the potential customers demand and timelines, which are going to ultimately determine.

Martin Toner: Howard.

Martin Toner: Moving forward and what's been prioritize either at the total amount of land or the first building.

Martin Toner: It's highly likely.

Martin Toner: The first building will be prioritized over the entire powered land, but really thats going to be dependent on the outcome of the conversations that we're going to be having.

Martin Toner: Much more accelerated pace in the second.

Martin Toner: Super.

Operator: Congrats to the team on the program.

Martin Toner: Super Congrats to the team on the progress that's all for me.

Operator: That's all for me. Thanks, Mark.

Speaker Change: Thanks Mark.

Bill Papanastasiou: Thank you.

Bill Papanastasiou: Our next question comes from the line of Bill Papanastasiou of KBW. Please go ahead, Bill. Yeah, good morning, and thanks for taking my question.

Mark: Thank you.

Speaker Change: Our next question comes from the line of Bill Popper Natasha of K B W. Please go ahead bill.

Bill Popper: Yes, good morning, and thanks for taking my questions.

Ben Gagnon: For the first one here, Ben, perhaps you can take a minute to speak to your outlook for Bitcoin over the medium term and how that could translate to the Bitcoin mining industry. A number of peers, including Bitfarms, have been cooling CapEx spend and dilutive financing recently. Thank you.

Speaker Change: For the first one here, but perhaps.

Speaker Change: Perhaps you can take a minute to speak to your outlook for big coin over the medium term and how that could translate to bitcoin mining industry.

A number of peers, including farms have been cooling capex spend and dilutive financing recently.

Ben Gagnon: Perhaps you can share your thoughts on the prospect for attracting investor dollars here going forward. Hey, Bill. Yeah, absolutely. Happy to speak to that. You know, we actually have the same outlook on Bitcoin mining economics since about mid 2023. So, you know, for the last two years, we've been operating under the same set of assumptions, which was, at the end of 2023, you know, we expect that mining prices or mining hardware prices should be at their lows with kind of fear and uncertainty going into the halving. We should take advantage of that by locking in as much of the mining hardware as possible.

Speaker Change: Perhaps you can share your thoughts on the prospect for attracting investor dollars here going forward. Thanks.

Bill Popper: Hey, Bill, yes, absolutely happy to speak to that.

Speaker Change: I actually had the same outlook on bitcoin mining economics since about mid 2023 so.

Bill Popper: For the last two years, we've been operating under the.

Bill Popper: The same set of assumptions, which was at the end of 2023, we expect that mining prices or mining hardware prices should be at their lows with kind of fear and uncertainty going into the having we should take advantage of that by locking in as much of the mining hardware as possible and we want to get that hardware in place for the 2025 Boe Ron.

Ben Gagnon: And we want to get that hardware in place for the 2025 bull run, which we have done now. And it was always our view that, you know, 2025 bull run was really going to be, you know, the big opportunity here for miners and that we'd want to have that diversification kind of sometime in 2026, so that we have a differing revenue stream if Bitcoin pulls back in 2026, as we kind of forecasted. So when you look at where we are now, middle of the year in 2025, you know, we've done what we sought out to do in order to best position ourselves, where we think that Bitcoin mining, you know, economic cycle is going to play out.

Bill Popper: We have done now.

Bill Popper: And it was always our view that 2025 Bull run was really going to be.

Bill Popper: The big opportunity here for minors and that we'd want to have that diversification.

Bill Popper: Some time in 2026, so that we have.

Bill Popper: A different revenue stream at bitcoin pulse back in 2020, <unk> as we kind of forecast. It. So when you look at where we are now middle of the year in 2025.

Bill Popper: We've done what we sought out to do in order to best position ourselves, where we think the bitcoin mining economic cycle, it's going to play out.

Ben Gagnon: And so far, it's played out, you know, more or less along what we anticipated. You know, last quarter, we actually had a sensitivity table in the in the Q4 deck, which showed what were our expectations for Bitcoin price over time? And what was our expectation for ending network hash rate for each quarter? So what we did there, if you refer back to that slide, there's kind of a sensitivity table and more of a refined area within that sensitivity table, which gives, you know, the reader management's best expectations for where Bitcoin price where network hash rate should be at the end of each fiscal quarter through 2026.

Bill Popper: So far it's played out.

More or less along what we anticipated.

Last quarter, we actually had a sensitivity table in the in the Q4 deck.

Bill Popper: Which showed what were our expectations for bitcoin price over time, and what was our expectation for <unk>.

Bill Popper: And the network cash rate for each quarter. So what we did there if you refer back to that slide there's kind of a sensitivity table and more of a refined area within that sensitivity table, which gifts.

Bill Popper: The reader management's best expectations for where bitcoin price where network cash rate should be at the end of each fiscal quarter through 2026, and what that means for implied cash prices. It also overlays on top of that.

Ben Gagnon: And what that means for implied hash prices. It also overlays on top of that some sensitivity colors there so that you can see what the implied direct mining margins would be across those scenarios. We're pretty confident that the Bitcoin mining infrastructure that we have right now in the Bitcoin mining hardware efficiency and hash costs that we have is going to be generating pretty healthy margins and free cash flow through through 2026. And, you know, that's, that's the view that we've had for at this point, you know, quite some time now, and it really has not changed.

Bill Popper: Simpson sensitivity colors. There so that you can see what the implied direct mining margins would be across those scenarios.

Bill Popper: We're pretty confident that the <unk> mining infrastructure that we have right now and the bitcoin mining hardware efficiency and hash costs that we have is.

Bill Popper: Is going to be generating pretty healthy margins and free cash flow through through 2026.

Bill Popper: And that's the view that we've had for.

Bill Popper: At this point quite some time now.

Ben Gagnon: I think our focus here is really making sure that we had that. that that Bitcoin mining infrastructure in place. So we had that upside exposure to Bitcoin prices.

Bill Popper: And it really has not changed I think our focus here is <unk>.

Bill Popper: Really making sure that we had that.

Bill Popper: That bitcoin mining infrastructure in place. So we have that upside exposure to pick point prices, but where we stand now and middle of 2025, we think the best opportunity for us to invest capital is not and further bitcoin mining right now, but it's actually in electrical infrastructure specifically for <unk>.

Ben Gagnon: But where we stand now in middle of 2025, we think the best opportunity for us to invest capital is not in further Bitcoin mining right now, but it's actually in, you know, electrical infrastructure specifically for HBC and Awesome. Always appreciate your color on Bitcoin mining, Ben. And now just taking a step back and running through all the progress. The Transition From. you know, some of your Bitcoin mining plans to bringing AIHPC capacity online and securing a long term partner.

Speaker Change: Awesome I always appreciate your color on quite mining done.

Bill Popper: And now just taking a step back and running through our progress with the transition from.

Bill Popper: Some of your breakpoint mining plans to bring in AI, which proceed capacity online in securing a long term partner.

Ben Gagnon: What would you say are the biggest lessons learned over the past year or so? Yeah, that's a that's an interesting question, Bill. You know, we started off on this with great expertise in energy infrastructure and development. I think some of the areas that, you know, were new to us and things that we didn't understand were just the different levels of requirements and quality controls around HPC, which has never really been prevalent in our business before, which is why we engage with, you know, to help us bring in those resources and really get caught up to speed really quickly in terms of what the differences are between the two businesses and the infrastructure that we're building.

Bill Popper: What would you say are the biggest lessons learned over the past year or so thanks.

Bill Popper: Yes, that's an interesting question bill.

Speaker Change: We started off on this with great expertise in energy infrastructure.

Bill Popper: And development.

Bill Popper: I think some of the areas that were new to us and things that we didn't understand where just.

Bill Popper: The different levels of requirements and quality controls around HTC, which have never really been prevalent in our business before which is why we engage with.

Bill Popper: Specific advisors to help us bring in those resources and really get caught up to speed really quickly in terms of what the differences are between the two businesses and the infrastructure that we're building.

Ben Gagnon: You know, hard to say, you know, what's the biggest lessons, but I can give you like one example. We have a site in in Quebec, for instance, that you know, is next to a former industrial plant with a big coal chimney. And you know, coal chimney has been there for decades. It's been untouched for decades, but it raised concerns for the structural integrity of the adjacent property to ours on our on our property for HPC development. It was things like that, trying to think beyond even not only what our facility is capable of, but what are the implications for, you know, the significant amount of capex that goes into an HPC site for, you know, even the adjacent properties, which might impact us.

Speaker Change: Hard to say.

Speaker Change: What's the biggest lessons, but I can give you like one example.

Speaker Change: We have a site in.

Speaker Change: In Quebec for instance.

Speaker Change: That is next to a.

Speaker Change: Pro forma industrial plant with a big coal chimney.

Speaker Change: And <unk> has been there for decades.

Speaker Change: Been untouched for decades.

Speaker Change: But it raised concerns for the structural integrity of the adjacent property to ours on our on our property for HBC development. It was things like that trying to think beyond EBIT not only what our facility is capable of but what are the implications for the significant amount of capex that goes into it.

Speaker Change: HBC site for even the adjacent properties, which might impact us and that Hasnt really been a consideration for us before in the past on BTC.

Ben Gagnon: And that hasn't really been a consideration for us before in the past on BP. But with our, you know, our advisors at WWT and ASG, we've really learned a lot very, very quickly. We've done the full assessments of all of our sites across the US and Canada. We've got the site priority list. We understand what are the areas to focus on. What are the areas to address? What are the areas of concern? You know, what are the areas that are strategic value add and are really, really strong marketing points? We've learned all of that through our advisors from the last couple of months.

Speaker Change: But with our.

Speaker Change: Our advisors have WWE <unk> really learned a lot very very quickly.

Speaker Change: We've done a full assessment of all of our sites across the U S and Canada. We've got the site priority list, we understand what ought to be.

Speaker Change: The areas to focus on what are the areas to address what are the areas of concern what are the areas that are strategic value add and really really strong marketing points.

Speaker Change: Leonard all of that through through our advisors over the last couple of months. So we're in a really strong place right now in the development.

Ben Gagnon: So we're in a really strong place right now in the development process. We've basically laid a very strong foundation here.

Speaker Change: <unk> process.

Speaker Change: Basically laid a very strong foundation here and now we have a very clear identified.

Ben Gagnon: And now we have a very clear, identified, you know, structured and repeatable process that we're going to be implementing across all of our US sites in our portfolio. Thank you.

Speaker Change: Structured and repeatable process that we're going to be implementing across all of our U S sites in our portfolio.

Brian Dobson: Our next question comes from the line of Brian Dobson of Clear Street LLC. Please go ahead, Brian. Yeah, you know, the demand here for HPC data centers is, is really insatiable. I know there's been, you know, obviously, a lot of market news around DeepSeek and around Microsoft over the last several months. But really, that doesn't come up in most of the conversations that we've had with potential customers. Everyone is moving at full speed. And I think, you know, the key thing here is that those are really short term kind of market reactions to headlines.

Speaker Change: Thank you.

Speaker Change: Next question comes from the line, Brian Dobson of clear Street LLC. Please go ahead Brian.

Brian Dobson: Yes, thanks very much for taking my question.

Speaker Change: And can you speak to consultants and potential clients do you think just from a very high level you could characterize the willingness to devote resources.

Speaker Change: Enterprises, and hyper scaler for call. It near term data center expansion, there's been there's been some pain for immediately industry that.

Speaker Change: This type of spending slowing down do you think you could just address that.

Speaker Change: Yes, the demand here for <unk>.

Speaker Change: HBC data centers is it's really insatiable I know theres been obviously a lot of market news around deep sea can around Microsoft over the last several months.

Speaker Change: But really that doesn't come up in most of the conversations that we've had with potential customers.

Speaker Change: Everyone is moving at full speed and I think the key thing here is that those are really short term kind of market reactions to headlines, but when youre looking at the investments that are taking place in the kind of development timelines associated with HBC hundreds of millions if not billions of dollars going into these sites multiple year timelines.

Ben Gagnon: But when you're looking at the investments that are taking place in the kind of development timelines associated with HPC, you know, hundreds of millions, if not billions of dollars, going into these sites, multiple year timelines, you can't get distracted in that process with a headline, you have to keep moving forward, or you'll never get the site completed. And so, you know, for I think most of the customers out there, DeepSeek, the Microsoft news did not impact them at all, their demand is still rampant. And when you look at kind of the expected, you know, growth in this demand over time, it matches the same kind of dynamics that we have in Bitcoin as a compute market.

Speaker Change: You can't get distracted in that process with a headline.

Speaker Change: You have to keep moving forward or Youll never get the site completed and so for.

Speaker Change: I think most of the customers out there.

Speaker Change: Deep sea the Microsoft News did not impact them at all of their demand is still rampant and when you look at.

Speaker Change: Kind of the expected.

Speaker Change: Growth in this demand over time and matches the same kind of dynamics that we have in bitcoin as a compute market.

Ben Gagnon: You know, there's really only been one time in Bitcoin's history where the bottleneck on growth has been chips, and that was the 2021 silicon shortage. Throughout the rest of Bitcoin's history, in that compute market, the growth, the bottleneck on growth has always been power. And that's the exact same situation that's playing out in HPC. You know, I cited that McKenzie report at the beginning of the presentation, which outlined 156 gigawatts of expected demand for HPC. You know, the Bitcoin network right now is about 15 to 20 gigawatts. And so it's almost a 10 times increase in total demand compared to where Bitcoin is today.

Speaker Change: There is.

Speaker Change: Really only been one time in <unk> history, where the bottleneck on growth has been chips analysis of 2021 silicon shortage.

Speaker Change: Throughout the rest of <unk> history, and a copy of market growth or the bottleneck on growth has always been power and thats. The exact same situation that's playing out in HBC.

Speaker Change: Did that Mackenzie report at the beginning of the presentation, which outlined 156 gigawatts of expected demand for HBC.

Speaker Change: The <unk> network right now is about 15 to 20.

<unk> and so it's almost a 10 times increase in total total demand compared to where bitcoin is today.

Ben Gagnon: And, you know, most of that does not exist. So we don't see any slowing down in the demand. We don't see any slowing down in the investment.

Speaker Change: And most of that does not exist.

Speaker Change: So.

Speaker Change: We don't see any slowing down and the demand we don't see any slowing down in the investment.

Ben Gagnon: You know, we are still very much in what seems like kind of. 1990s internet kind of stage, where people are just getting their first websites, people are just kind of understanding how this technology works, they're just getting their first exposure here. But we haven't even really started to dig beneath the surface on what AI is going to do, and what the levels of energy consumption and compute are going to be required to unlock that that next phase of this industrial revolution. Yeah, very good. Thanks very much. Thank you.

Speaker Change: We are still very much in what seems like kind of.

Speaker Change: 19, nineties internet kind of stage, where people are just getting their first websites people are just kind of understanding how this technology works there just getting their first exposure here.

Speaker Change: But we haven't even really started to dig beneath the surface on what.

Speaker Change: It's going to do and what the levels of energy consumption of coffee it are going to be required to unlock.

Speaker Change: That next phase of this industrial Revolution.

Speaker Change: Yeah very good thanks very much.

Speaker Change: Thank you.

Joe Flynn: My next question comes from the line of Joe Flynn of Compass Point. Please go ahead, Joe. I wonder, you know...

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Joe Flynn.

Speaker Change: Compass point. Please go ahead Joe.

Speaker Change: Yes.

Speaker Change: I wanted to.

Joe Flynn: go into more detail on the comment you made in regard to of, you know, Panther Creek being best suited for a powered shell approach. You know, just wondering, you know, what else like, you know, how you came to that decision. And if you see opportunities, you know, maybe to bypass some of the you know, due diligence process we've seen the market for you know, more of the You know, more of the fully built outsides. And then in that regard, How would you think about, is the goal to ultimately pre-lease the site, which then the required capital would become, you know, the equity component of the financing?

Go into more detail on the comment you made with regard to.

Speaker Change: Patrick <unk> been best suited for our powered shell approach.

Speaker Change: Just wondering what ultimately.

Speaker Change: How you came to that decision.

Speaker Change: And if you see opportunities maybe to bypass some of the.

Speaker Change: Due diligence process, we have seen in the market for.

Speaker Change: More of the.

Speaker Change: Yes.

Speaker Change: More of the full adult upsides and then in that regard.

Speaker Change: How would you think about.

Speaker Change: Is the goal to ultimately really subsided.

Speaker Change: <unk> done the required capital would become the equity component of the financing.

Ben Gagnon: Or how do you, you know, think about next steps in that regard? Thanks. Thanks, Joe. You know, our primary goal here is unlocking shareholder value through long term, high margin contracted revenues. That is the big driver of shareholder value for us that we're trying to tap into. And, you know, we always have had a focus in this company of return on invested capital. And that means that oftentimes we're doing things like, we don't want to buy the most efficient and most expensive miner, because we believe that we can get a better ROIC by going kind of one tier down in the mining stack, saving a lot of capex and getting a better ROIC.

Or how do you think about next steps in that regard.

Speaker Change: Yeah. Thanks, Joe.

Speaker Change: Our primary goal here is unlocking shareholder value through long term high margin contracted revenues.

Speaker Change: That is the big driver of shareholder value for us. So we are trying to tap into and we always have had a focus in this company of.

Speaker Change: Return on invested capital and that means that oftentimes, we're doing things like we don't want to buy the most efficient and most expensive miner.

Speaker Change: Because we believe that we can get a better ROI see by going kind of one tier down and the mining stack saving a lot of capex and getting a better ROIC.

Ben Gagnon: You know, we're still very much in the, you decision and planning stage here with the various customer conversations that are happening, and we'll be ramping up in the second half of this year. So, you know, it's really going to be determined by what are the demands of the potential customers? And what would that mean in terms of CapEx, timeline and expected ROIC? You know, we expect that, you know, the further you go along the stack, and the more CapEx involved, yes, you're going to get higher revenues, yes, you're going to get higher margins. But we think that there might be a trade off there on the return on the invested capital bit.

Speaker Change: We're still very much in the.

Speaker Change: Decision in planning stage here with the various customer conversations that are happening and we'll be ramping up in the second half of this year. So it's really going to be determined by what are the demands of the potential customers and what would that mean in terms of capex timeline and expected ROIC.

Speaker Change: We expect that.

Speaker Change: The further you go along the stack and the more Capex involved yes, youre going to get higher revenues, yes, youre going to get higher margins, but we think that there might be a trade off there on the return on the invested capital debt.

Ben Gagnon: And that those marginal increases in extra capex may not be justified by the actual margins that you get and may actually result in a worse ROIC or lower ROIC than kind of going lower in the stack as we've always done with with Bitcoin mining.

Speaker Change: And that those.

Speaker Change: Marginal increases in extra Capex may not be justified by.

Speaker Change: The actual margins that you get in May actually result in.

Speaker Change: <unk>.

Speaker Change: Worst ROIC or lower ROIC, and then kind of going lower in the stack as we've always done with with bitcoin mining.

Joe Flynn: But again, this is very preliminary. We're going to do whatever makes the most sense in terms of unlocking shareholder value through those long term contracted revenues for those high margins, with that emphasis on how do we balance out the capex and the ROIC in order to deliver that best return for shareholders. And that's ultimately going to be driven by the customer demand and the customer conversations that we're continuing to have. Great, thanks. Thank you.

Speaker Change: But again this is very preliminary.

Speaker Change: We're going to do whatever makes the most sense in terms of unlocking shareholder value through those long term contracted revenues of those high margins with that emphasis on how do we balance out the capex and the ROIC in order to deliver that best return for shareholders.

Speaker Change: And that's ultimately going to be driven by.

Speaker Change: The customer demand and the customer conversations that we're continuing to have.

Speaker Change: Great. Thanks.

Ben Gagnon: I would now like to turn the conference back to Ben Gagnon for closing remarks, sir.

Speaker Change: Thank you I would now like to turn the conference back to <unk> for closing remarks, Sir.

Ben Gagnon: Thank you, everyone, for joining today. Just like to reiterate our recent strategic moves to rapidly transform this company. We've quickly become a US focused energy and compute company. And we have a strong underlying Bitcoin mining business with a lot of exciting potential. We really look forward to keeping you up to date on our progress.

Speaker Change: Thank you everyone for joining today, just like to reiterate our recent strategic moves to rapidly transform this company. We've quickly become a U S focused energy and come to your company and we have a strong underlying decline mining business with a lot of exciting potential so to speak in AI we are.

Speaker Change: We look forward to keeping you up to date on our progress and thank you very much for attending the call.

Operator: And thank you very much for attending This concludes today's conference call. Thank you for participating. You may now disconnect.

Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.

Speaker Change: Okay.

Speaker Change: [music].

Operator: Thanks for watching!

Okay.

Good.

Speaker Change: Yes.

Speaker Change: [music].