CleanSpark to Acquire 75 MW of Bitcoin Mining Sites in Wyoming for $18.75 Million

Rhea-AI Summary

CleanSpark Inc. (Nasdaq: CLSK) is set to acquire two bitcoin mining sites in Wyoming with 75 MW of available power for $18.75 million, expected to add over four exahashes per second once fully operational. The agreement includes the potential to expand the sites by an additional 55 MW, marking Wyoming as the third state in the Company's portfolio of bitcoin mining facilities. CleanSpark aims to deploy the most powerful and efficient bitcoin mining machines for this expansion, continuing its growth strategy towards 50 EH/s.

Positive

• CleanSpark's acquisition of two bitcoin mining sites in Wyoming with significant power capacity will significantly increase the Company's hashrate, positioning it for further growth in the bitcoin mining sector.

• The potential to expand the acquired sites by an additional 55 MW provides CleanSpark with the opportunity for future scalability and increased mining capacity.

• The strategic diversification of CleanSpark's portfolio with the addition of the Wyoming sites demonstrates the Company's commitment to expansion and leveraging opportunities in the bitcoin mining industry.

Negative

• The cash payment of $18.75 million for the acquisition may impact CleanSpark's short-term liquidity and financial position, depending on its cash reserves and available capital.

• The competitive nature of the bitcoin mining sector and potential regulatory changes could present challenges for CleanSpark in maintaining profitability and market share amid industry dynamics.

Financial Analyst

The acquisition by CleanSpark of 75 MW of Bitcoin mining sites, with the potential to expand to an additional 55 MW, represents a strategic move in an ever-evolving market. This purchase at $18.75 million, factoring in the industry's capacity for rapid growth and fluctuating Bitcoin values, appears to be a considerable investment towards scaling operations. The expected hashrate increase of over four exahashes per second (EH/s) could substantially enhance CleanSpark's mining capacity, which is key given the competitive nature of Bitcoin mining. However, investors should assess the risk of such capital-intensive ventures within the context of Bitcoin's price volatility. The company's plan to reach 50 EH/s could signify a bullish outlook on the cryptocurrency sector, yet the timing post-Bitcoin halving – an event typically reducing miner rewards – could impact profitability. The market might react positively to this news in the short term due to the expansion's potential to increase CleanSpark's revenue. However, the long-term success hinges on Bitcoin's market performance and the efficiency of these new sites. Given these factors, I would rate this news as a 1, indicating a positive outlook.

Energy Sector Analyst

CleanSpark's commitment to expanding its Bitcoin mining operations into Wyoming is noteworthy, particularly given the state's welcoming regulatory environment for cryptocurrency endeavors. Currently, the energy cost is a critical factor for mining operations and Wyoming offers competitive rates, which might be a factor in CleanSpark's site selection. The technical detail of deploying S21 and S21 pros mining machines, known for their efficiency, underscores the company's focus on optimizing energy consumption. Investors should note the importance of energy efficiency in mining operations as it directly affects the bottom line, especially amid rising global concerns about the energy consumption of Bitcoin mining. However, potential changes in energy regulations and prices could sway the operation's profitability. Observing CleanSpark's approach to managing energy use and costs could provide investors with insight into the company's long-term sustainability. Therefore, this development has a positive implication, meriting a 1 rating, but it's critical to monitor energy policies and prices that may affect future outcomes.

The agreement includes the potential to expand the sites by an additional 55 MW

Wyoming now third state in Company's portfolio of owned-and-operated bitcoin mining facilities

LAS VEGAS, May 9, 2024 /PRNewswire/ -- CleanSpark Inc. (Nasdaq: CLSK), America's Bitcoin Miner^™, today announced it has entered into definitive agreements to acquire two bitcoin mining locations in Wyoming, with 75 MW of available power, for a cash payment of $18.75 million. The agreement is anticipated to close in 45 days and the sites are expected to add over four exahashes per second (EH/s) once fully operational. The company plans to break ground on the new facilities shortly after closing.

The company plans to deploy a combination of S21 and S21 pros, the most powerful and efficient generation of bitcoin mining machines, from orders placed and fully funded earlier this year. The agreement includes the potential to expand the sites by an additional 55 MW. Combined, the two facilities would add over 7 EH/s to CleanSpark's hashrate as the Company continues its path of sustained progress toward 50 EH/s.

"Just three short months ago, we took a leap and expanded into Mississippi," said Zach Bradford, CEO. "Today, I'm pleased to share that we are continuing our journey with our westward expansion into Wyoming. Diversifying our portfolio is integral to our strategy and we are well positioned to take advantage of similar acquisitions in the wake of the halving."

CleanSpark owns and operates eight different data centers across the American south, with nearly 400 MW currently under management. It co-locates about 50 MW of machines at a data center in upstate New York. The Company previously announced the purchase of three bitcoin mining sites in Mississippi with a hashrate of 2.4 EH/s. CleanSpark has one of the largest owned-and-operated bitcoin mining fleets in North America.

About CleanSpark
CleanSpark (Nasdaq: CLSK) is America's Bitcoin Miner^™. We own and operate data centers that primarily run on low-carbon power. Our infrastructure responsibly supports Bitcoin, the world's most important digital commodity and an essential tool for financial independence and inclusion. We cultivate trust and transparency among our employees and the communities we operate in. Visit our website at www.cleanspark.com.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In this press release, forward-looking statements include, but may not be limited to, statements regarding the Company's expectations, beliefs, plans, intentions, and strategies. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "targets," "projects," "contemplates," "believes," "estimates," "forecasts," "predicts," "potential" or "continue" or the negative of these terms or other similar expressions. The forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to: the timing and closing of the transaction; obtaining the additional 55 MW in Wyoming; anticipated additions to CleanSpark's hashrate and the timing thereof; the risk that the electrical power available to our facilities does not increase as expected; the success of its digital currency mining activities; the volatile and unpredictable cycles in the emerging and evolving industries in which we operate; increasing difficulty rates for bitcoin mining; bitcoin halving; new or additional governmental regulation; the anticipated delivery dates of new miners; the ability to successfully deploy new miners; the dependency on utility rate structures and government incentive programs; dependency on third-party power providers for expansion efforts; the expectations of future revenue growth may not be realized; and other risks described in the Company's prior press releases and in its filings with the Securities and Exchange Commission (SEC), including under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2023, and any subsequent filings with the SEC. Forward-looking statements contained herein are made only as to the date of this press release, and we assume no obligation to update or revise any forward-looking statements as a result of any new information, changed circumstances or future events or otherwise, except as required by applicable law.

Investor Relations Contact
Brittany Moore
702-989-7693
ir@cleanspark.com

Media Contact
Eleni Stylianou
702-989-7694
pr@cleanspark.com

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SOURCE CleanSpark, Inc.

FAQ

What is CleanSpark acquiring in Wyoming?

CleanSpark is acquiring two bitcoin mining locations in Wyoming with 75 MW of available power for $18.75 million.

How much additional power capacity can CleanSpark potentially expand the sites by?

CleanSpark has the potential to expand the acquired sites by an additional 55 MW.

What is CleanSpark's current hashrate after the Wyoming acquisition?

CleanSpark's hashrate is expected to increase by over four exahashes per second (EH/s) once the Wyoming sites are fully operational.

Where is CleanSpark's westward expansion taking place?

CleanSpark's westward expansion is into Wyoming, marking the third state in the Company's portfolio of bitcoin mining facilities.

What type of bitcoin mining machines does CleanSpark plan to deploy for the Wyoming expansion?

CleanSpark plans to deploy a combination of S21 and S21 pros, the most powerful and efficient generation of bitcoin mining machines, for the Wyoming expansion.