| 1 Investor PresentationDecember 2022An Infrastructure-Focused Mining Company |
| SAFE HARBOR STATEMENT Thispresentationisforinformationalpurposesonlyandcontainsforward-lookingstatementswithinthemeaningofthe"safeharbor"provisionsofthePrivateSecuritiesLitigationReformActof1995,asamended.Suchforward-lookingstatementsincludestatementsconcerninganticipatedfutureeventsandexpectationsthatarenothistoricalfacts.Allstatements,otherthanstatementsofhistoricalfact,arestatementsthatcouldbedeemedforward-lookingstatements.Inaddition,forward-lookingstatementsaretypicallyidentifiedbywordssuchas"plan,""believe,""goal,""target,""aim,""expect,""anticipate,""intend,""outlook,""estimate,""forecast,""project,""continue,""could,""may,""might,""possible,""potential,""predict,""should,""would"andothersimilarwordsandexpressions,althoughtheabsenceofthesewordsorexpressionsdoesnotmeanthatastatementisnotforward-looking.Forward-lookingstatementsarebasedonthecurrentexpectationsandbeliefsofTeraWulf'smanagementandareinherentlysubjecttoanumberoffactors,risks,uncertaintiesandassumptionsandtheirpotentialeffects.Therecanbenoassurancethatfuturedevelopmentswillbethosethathavebeenanticipated.Actualresultsmayvarymateriallyfromthoseexpressedorimpliedbyforward-lookingstatementsbasedonanumberoffactors,risks,uncertaintiesandassumptions,including,amongothers:(1)conditionsinthecryptocurrencyminingindustry,includingfluctuationinthemarketpricingofbitcoinandothercryptocurrencies,andtheeconomicsofcryptocurrencymining,includingastovariablesorfactorsaffectingthecost,efficiencyandprofitabilityofcryptocurrencymining;(2)competitionamongthevariousprovidersofdataminingservices;(3)changesinapplicablelaws,regulationsand/orpermitsaffectingTeraWulf'soperationsortheindustriesinwhichitoperates,includingregulationregardingpowergeneration,cryptocurrencyusageand/orcryptocurrencymining;(4)theabilitytoimplementcertainbusinessobjectivesandtotimelyandcost-effectivelyexecuteintegratedprojects;(5)failuretoobtainadequatefinancingonatimelybasisand/oronacceptabletermswithregardtogrowthstrategiesoroperations;(6)lossofpublicconfidenceinbitcoinorothercryptocurrenciesandthepotentialforcryptocurrencymarketmanipulation;(7)thepotentialofcybercrime,money-laundering,malwareinfectionsandphishingand/orlossandinterferenceasaresultofequipmentmalfunctionorbreak-down,physicaldisaster,datasecuritybreach,computermalfunctionorsabotage(andthe costsassociatedwithanyoftheforegoing);(8)theavailability,deliveryscheduleandcostofequipmentnecessarytomaintainandgrowthebusinessandoperationsofTeraWulf,includingminingequipmentandequipmentmeetingthetechnicalorotherspecificationsrequiredtoachieveitsgrowthstrategy;(9)employmentworkforcefactors,includingthelossofkeyemployees;(10)litigationrelatingtoTeraWulf,RM101f/k/aIKONICSCorporationand/orthebusinesscombination;(11)theabilitytorecognizetheanticipatedobjectivesandbenefitsofthebusinesscombination;and(12)otherrisksanduncertaintiesdetailedfromtimetotimeintheCompany'sfilingswiththeSecuritiesandExchangeCommission("SEC").Potentialinvestors,stockholdersandotherreadersarecautionednottoplaceunduerelianceontheseforward-lookingstatements,whichspeakonlyasofthedateonwhichtheyweremade.TeraWulfdoesnotassumeanyobligationtopubliclyupdateanyforward-lookingstatementafteritwasmade,whetherasaresultofnewinformation,futureeventsorotherwise,exceptasrequiredbylaworregulation.Investorsarereferredtothefulldiscussionofrisksanduncertaintiesassociatedwithforward-lookingstatementsandthediscussionofriskfactorscontainedintheCompany'sfilingswiththeSEC,whichareavailableatwww.sec.gov. |
| TeraWulf at a Glance 3•Current hash rate of 2.0 EH/s with ~17,500 miners deployed–~11,000 self miners (1.3 EH/s) and ~6,500 (0.7 EH/s) hosted miners–Short-term hosting leverages available plugs pending Q1 2023 miner deliveries•160 MW of mining infrastructure expected to be fully utilized in Q1 2023–Capacity of 49,000 miners (5.54 EH/s), including 44,000 self miners (5 EH/s)–All miners fully procured with no additional payment obligations–Recently added 8,200 S19j Pro miners at no additional cost to the Company•Industry leading power cost averaging $0.035/kWh across two sites–50 MW of fixed priced power at $0.020/kWh for five years at the Nautilus facility–Average market cost of $0.045/kWh at the Lake Mariner facility–Translates into an all-in power cost per coin mined of ~$6,000 / Bitcoin•Ability to expand by an incremental 130 MW at existing sites –Lake Mariner: 80 MW with new Building 3 (50 MW) and warehouse (30 MW)–Nautilus: 50 MW optional expansion retained by WULF Key MetricsQ3 ‘22Oct. ‘22Nov. ‘22Bitcoin (Self Mined)117119134Revenue (Self-Mined)$2.4 M$2.3 M$2.4 MRevenue per Bitcoin$20,657$19,646$17,617Power Cost per Bitcoin$20,732$11,060$6,151Self-mined Bitcoin produced in October and November 2022 was more than double amount self-mined in Q3 2022 |
| Why WULF Wins: The Four “P’s” Experienced Energy EntrepreneursPower & InfrastructureExpertsESG Principled and PracticedDriving the Future of Bitcoin Mining4 PeoplePrioritiesDigital Asset Infrastructure FirstFoundation to Scale Plugs Sustainable, Scalable FacilitiesKey Relationships & Site ControlPower |
| Plugs: Sustainable and Scalable Sites130 MWAdditional capacity option in 2023> 91%Zero-carbon power supply today, with goal of achieving 100%3.5 ¢ Per kilowatt hour targeted average power cost5 91%+ Zero Carbon (1)110 MW Online in Q1 2023500+ MW Hydro, Solar 100% Zero Carbon50 MW Online in Q1 2023100+ MW (2)Nuclear (1)Source: NYISO Power Trends 2022 report (https://www.nyiso.com/power-trends).(2)Reflects TeraWulf’s current 50-MW interest in the Nautilus Cryptomine facility and option to expand by 50 MW. 160 MWAnticipated fully developed capacity in Q1 2023 |
| Power: Industry-Leading Cost ProfileNote: future estimates are based on current expectations and market conditions and are subject to change.* 2022 data includes January through September. $0.032 $0.025 $0.017 $0.031 $0.061 $0.076 $0.089 $0.045 $0.039 0.000.01 0.020.030.04 0.05 0.060.070.080.090.1020182019202020212022*2Q223Q222023E2024E Lake Mariner Power Cost $/kWh NYISO - Zone A LMD LMD Projected Power CostTargeted average power cost of 3.5 cents per kilowatt hour6 11050Capacity (MW) LMD Nautilus $0.045 $0.02 Power Cost ($/kWh) LMD Nautilus $0.035 per kWhBlended Power Cost •NYISO Zone A prices unusually high during Q2 and Q3 2022•Adversely impacted by elevated gas prices, regional transmission outages, weather events, and supply constraints due to pandemic and war in Ukraine•Lake Mariner transitioned to NYPA’s HLF-1tariff in August 2022, which includes a meaningful discount on transmission charges•Future power prices expected to be in line with historical averageLake Mariner Avg Power Cost = $0.045 per kWh |
| People: Best-in-Class Management TeamLed by an accomplished, diverse management team with 30+ years of experience in developing and managing energy infrastructureand disruptive technology N A Z A R K H A NCo-Founder, Chief Operating Officer & Chief Technology Officer20+ years in energy infrastructure and cryptocurrency mining. Previously at Evercore. K E R R I L A N G L A I S Chief Strategy Officer20+ years of M&A, financing, strategy, and power sector experience. Previously at Goldman Sachs.S E A N F A R RE L LVP, Operations12+ years of energy experience in renewables, grid optimization, digitalization, and storage solutions. Previously at Siemens Energy.P A U L P R A G E RCo-Founder, Chairman & Chief Executive Officer30+ year energy infrastructure entrepreneur. USNA Foundation Investment Committee Trustee.P A T R I C K F L E U R Y Chief Financial Officer20+ years of financial experience in the energy, power, and commodity sectors. Previously at Platinum Equity and Blackstone.S T E F A N I E F L E I S C H M A N NGeneral CounselGeneral Counsel for 15+ years overseeing all legal and compliance matters. Previously at Paul, Weiss.7 |
| MissionTo be the premier U.S. based, large-scale, zero-carbonbitcoin miner,generating attractive investorreturnswhile providingsustainable benefits forourcommunities. Experienced Energy EntrepreneursInfrastructure FirstScalable and FlexibleTransparent Governance Business IntegrityResponsible Energy SourcingZero-Carbon EnergyFlexible BaseloadEnvironmental StewardshipCore ValuesESG is at the core of TeraWulf's corporate strategy and ties directly to its business success, risk mitigation, and reputational value.8 WULF’sPriorities: |
| Total CapacitySelf-MiningOperationalSelf-MiningProcured (3)Short-TermHosting (4)OpenCapacityLake Mariner (1)(110 MW)34,000 miners11,000 miners1.3 EH/s18,000 miners2.0 EH/s5,000 miners0.5 EH/sN/ANautilus (2)(50 MW)15,000 minersN/A15,000 miners1.6 EH/sN/AN/A49,000 miners11,0001.3 EH/s33,000 miners3.7 EH/s5,000 miners0.5 EH/sN/A Efficiently Scaling Self-Mining Operations(1)Includes hashing capacity of Building 2 (50 MW) at the Lake Mariner Facility, which is expected to be energized in Q1 2023.(2)Reflects TeraWulf’s25% interest in the Nautilus Cryptominefacility, which is expected to be energized in Q1 2023.(3)Includes miners that have been delivered to site and those pending delivery in Q1 2023.(4)Includes 5,000-miner hosting agreement that terminates in Q4 2023. Excludes 1,500-miner hosting agreement which terminates in February 2023.9Fully utilizing 160 MW of mining infrastructure capacity available in Q1 2023 |
| Projected Hash GrowthNote: future estimates are based on current expectations and market conditions. (1)Includes1,500-miner hosting agreement which terminates in February 2023 and 5,000-miner hosting agreement that terminates in Q4 2023. (2)Optional Buildout reflects 130 MW expansion at current sites, which is subject to market conditions. Hash rate for Optional Buildout reflects a blend of 100 TH/s and 140 TH/s miners. Opportunity to expand hash rate capacity at existing sites to 10.5 EH/s 1.01.44.85.00.70.70.70.50.02.04.06.0 8.010.0 12.0 Q3 2022Q4 2022Q1 2023FY 2023 Hash Rate Capacity (EH/s) Self-Mining Hosting Optional Buildout101.7 EH/s2.1 EH/s5.5 EH/s10.5 EH/s Opportunity to add 5 EH/s in 2023 at existing sites Projecting 3x hash rate growth within 6 months(1)(2) |
| Illustrative Annual Gross Margin(1)Period Ending Bitcoin Price calculated by linearly decreasing/increasing the starting Bitcoin price of $17,000 on December 31, 2022.(2)Period Ending Network Hash Rate calculated by linearly increasing the starting network hash rate of 250 EH/s on December 31, 2022. Low production cost provides downside protection, while maximizing upside Illustrative Annual Gross Margin ($ millions) Period Ending Bitcoin Price (1)$15,000 $25,000 $35,000 $45,000 $55,000 $65,000 $75,000 Period Ending Network Hash Rate (EH/s) (2) 200$76 $116 $155 $195 $235 $274 $314 225$70 $106 $143 $180 $216 $253 $290 250$64 $98 $132 $167 $201 $235 $269 275$59 $91 $123 $155 $187 $219 $251 300$54 $85 $115 $145 $175 $206 $236 325$51 $79 $108 $136 $165 $193 $222 350$47 $74 $101 $128 $155 $183 $210 $0-$100 M $100-$200 M >$200 MLegend Key AssumptionsStarting Network Hash Rate:250 EH/sStarting Bitcoin Price:$17,000Self-Mining Capacity:44,000 (5.0 EH/s)Hosted-Mining Capacity:5,000 (0.5 EH/s)Miner Availability:98.5%Avg. Realized Power Cost:$0.035 / kWhHost Economics:•Pass through of power cost•$5/MWh service fee•15% profit share |
| Cost Saving Initiative UnderwayTargeting 25%+ in run-rate savings in the next 12 months Corporate OverheadSite CostsInsuranceThird Party Services(1)Targeted Savings Categories(1) Includes suspension of cash compensation to Chief Executive Officer and Chief Operating Officer. 12 Target Annual Fixed CostsOperating Expenses$14 -16 millionSG&A Expenses $21 -29 million |
| Emerging Leader in Digital Asset Infrastructure•Best-in-class Bitcoin mining due to low-cost, sustainable, and domestic bitcoin mining at industrial scale targeting zero-carbon energy leveraging nuclear, hydro, and solar resources•Vertically integrated, infrastructure first strategy ensures ability to create and take advantage of digital asset infrastructure•Experienced team with decades of energy infrastructure experienceand a model for sustainable, large-scale bitcoin mining•Core ESG focusdifferentiates TeraWulf and contributes to the acceleration of the transition to a more resilient, stable energy grid•Peer leading power supply economics with a comprehensive and compelling business outlook13 |
| SITE UPDATES |
| Lake Mariner Data (NY) 15 (1)Includes1,500-miner hosting agreement that terminates in February 2023 and 5,000-miner hosting agreement that terminates in Q4 2023. Location:Barker, NYOwnership:100%Site Control:Long-term leaseInfra. Capacity:500 MW site potentialPower Source:91%+ hydroDeployment:•60 MW operational•50 MW under construction, expected online Q1 2023•80 MW expansion potential in 2023Proprietary Miners:•20,000 BitmainS19 J-Pros•9,000 Bitmain S19 XPsHosted Miners (1):•6,500 BitmainS19 J-Pros |
| Nautilus Cryptomine (PA) 16 Location:Berwick, PAOwnership:25% (JV with Talen)Site Control:Long-term leaseInfra. Capacity(1):•50 MW targeted online Q1 2023•50 MW optional expansionPower Source:Nuclear powerDeployment:Completing construction; anticipated online Q1 2023Proprietary Miners:•7,100 BitmainS19 J-Pros •3,400 Bitmain S19 XPs•4,500 Minerva MV7s (1)Reflects 25% net interest in Nautilus Cryptomine joint venture. |
| NASDAQ: WULFContact:ir@terawulf.comwww.TeraWulf.com/contact |
