TeraWulf Pays Off $77.5M Debt to Reduce Bitcoin Mining Costs
Financial expenses made up 31% of Terawulf's Q1 total hashcost
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New York-based bitcoin mining firm TeraWulf has fully repaid its remaining term loans, reducing the financial burden on its mining operations.
The company announced on Tuesday that it made a final payment of $77.5 million, including pre-payment fees and accrued interest, to clear the term loan. Earlier, in April, TeraWulf had repaid $30 million of the term loan ahead of the halving event, reducing the outstanding balance to $76 million at that time.
As of December 31, TeraWulf’s loan payables amounted to $123 million after taking on significant financial leverage since 2022. This was reduced to $99.4 million by March 31 but still accounted for 80% of its total liabilities.
The loan payoff is set to help reduce TeraWulf’s bitcoin mining hashcost by about 30%. According to TheMinerMag’s analysis, TeraWulf’s proprietary mining business incurred a total hashcost of $78/PH/s in Q1, which included $32/PH/s in fleet hashcost, $21.4/PH/s in corporate hashcost, and $24.5/PH/s in financial hashcost.
Following the halving event, bitcoin’s hashprice has fallen to below $50/PH/s, which would cause mounting pressure on operators with a high level of financial hashcost.
TeraWulf did not elaborate on how it raised enough cash to fully repay the outstanding loans. Based on its monthly updates, the company generated a gross mining profit of about $30 million during Q2.
According to its Q1 earnings report, TeraWulf raised $50 million through stock offerings during the first quarter and an additional $10.8 million through May 10.
On May 24, TeraWulf revised a sales agreement with multiple securities agents to raise up to $200 million through stock offerings, following an increase in its authorized outstanding shares from 400 million to 600 million units.
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