iris energy

Iris Energy to double hash rate in 2024 with $22M Bitmain T21 mining rig order

Iris Energy will receive mining hardware orders from Bitmain in the first six months of 2024, taking its operational mining capacity above 10 EH/s.

Renewable Bitcoin (BTC) mining firm Iris Energy is set to increase its total hash rate to 10 exahashes per second (EH/s) in 2024 by acquiring new Bitmain T21 mining rigs.

The company announced it had acquired an additional 1.6 EH/s of Bitmain T21 miners, set for delivery in the second quarter of 2024. The company currently has 5.6 EH/s of operational capacity as of December 2023.

The newest generation of Chinese manufacturer Bitmain’s mining hardware will also improve the efficiency of Iris’ operations from 29.5 joules per terahash (J/TH) to 24.8 J/TH. Iris invested $22.3 million in the latest order from Bitmain, pricing the hardware at $14 per terahash.

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Iris Energy to nearly triple hash rate with estimated 44,000 new BTC miners

With the tough conditions that faced Bitcoin miners last year, Iris’ co-founder said the purchase was a “significant milestone” for the company.

Australia-based Bitcoin (BTC) mining company Iris Energy has revealed it will nearly triple its mining capacity with the addition of thousands of mining rigs.

On Feb. 13 the firm said it purchased an additional 4.4 exahashes per second (EH/s) worth of Bitmain Antminer S19j Pro ASIC miners, bringing its self-mining capacity to 5.5 EH/s from 2.0 EH/s.

Based on the S19j Pro’s maximum hash rate of 100 terahashes per second (TH/s), the purchase adds an estimated 44,000 miners to its fleet, according to Cointelegraph’s calculations.

Daniel Roberts, Iris’ co-founder and co-CEO, said the purchase “is a significant milestone” for the company, adding it has been a “challenging period for both the industry and markets more generally.”

Iris said the new miners will be installed in the company’s centers but did not mention in which locations. The firm operates three facilities in various locations in British Columbia, Canada and one in Texas in the United States.

Iris’ flagship site in Mackenzie, British Columbia. Source: Iris Energy

The company used $67 million of remaining prepayments to ASIC miner manufacturer Bitmain to fund the purchase of the rigs “without any additional cash outlay.”

Iris had a 10 EH/s contract with Bitmain which it says “have been fully resolved, with no remaining commitments.” It stated it remains debt free.

The firm said it’s also considering options to sell surplus miners above its 5.5 EH/s of mining capacity to re-invest the funds.

Related: Core Scientific to hand over 27K rigs to pay $38M debt

Last November the company was forced to unplug miners used as collateral on a $107.8 million loan, as the units were producing “insufficient cash flow to service their respective debt financing obligations.”

Over the past few months, cryptocurrency miners have been squeezed from multiple directions, having to confront low Bitcoin prices amid high hash rates, high mining difficulty and high energy prices.

The pressure caused publicly listed Bitcoin mining companies to sell off almost all of the BTC mined throughout 2022 with data from blockchain research firm Messari showing Iris sold around 100% of the nearly 2,500 BTC it mined that year.

 A February analysis from Hashrate Index shows that publicly listed miners increased their production in January with better weather and stable electricity prices helping the production surge. Iris’ January production resulted in 172 BTC, compared to 123 BTC in December.

Iris Energy to cut mining hardware after defaulting on $108M loan

The Australian mining firm has had to unplug hardware that was producing “insufficient cash flow” to service its “debt financing obligations.”

Australian Bitcoin mining firm Iris Energy is the latest to suffer from the squeeze of the crypto bear market, losing a significant chunk of its mining power after defaulting on a loan.

A filing by the firm to the U.S. Securities and Exchange Commission on Nov. 21 revealed that it has unplugged its hardware used as collateral in a $107.8 million loan as of Nov. 18.

The units “produce insufficient cash flow to service their respective debt financing obligations,” the firm noted. The operation generates around $2 million in Bitcoin (BTC) gross profit per month but cannot cover the $7 million in debt obligations.

Iris has now reduced its capacity by around 3.6 EH/s (exahashes per second) of mining power. It stated that capacity remains at around 2.4 EH/s which includes 1.1 EH/s of hardware in operation and 1.4 EH/s of rigs in transit or pending deployment.

The company stated that its “data center capacity and development pipeline are unaffected by the recent events,” and it will continue to explore opportunities to utilize its capacity. Iris is also looking at the prospect of “utilizing $75 million of prepayments already made to Bitmain in respect of an additional 7.5 EH/s of contracted miners for further self-mining.”

Earlier this month, the firm was served with a default notice for $103 million. Iris Energy primarily operates Canadian BTC mining centers that run on fully renewable energy. In early August, the firm doubled its hash rate after energizing facilities in Canada.

Iris Energy stock slumped 18% on the day to trade at $1.65 in after-hours trading. It hit an all-time low on Nov. 21, down 94% from its all-time high of $24.8 when it first traded in November 2021.

Related: Bitcoin miners rethink business strategies to survive long-term

Bitcoin miners are currently suffering a triple whammy of high hash rates and difficulty, high energy prices, and low Bitcoin prices.

This is causing a lot of them to either power down their hardware or start selling the asset. On Nov. 21, Capriole Fund founder Charles Edwards observed that the current rates of miner selling had been the most aggressive in almost seven years.

“If price doesn’t go up soon, we are going to see a lot of Bitcoin miners out of business,” he added.

That price increase is unlikely to come anytime soon. Bitcoin slumped to a new bear cycle low of $15,649 during the early hours of Asian trading on Tuesday, Nov. 22, according to CoinGecko.

Bitcoin miner Iris Energy faces $103M default claim from creditors

The company is facing a cash flow crisis due to tough market conditions.

According to a new filing with the United States Securities and Exchange Commission on Monday, Bitcoin (BTC) miner Iris Energy says it has received a default notice from mining rig manufacturer Bitmain Technologies.

The notice alleged that Iris Energy failed to “engage in good faith restructuring discussions” for certain principal payments due on Nov. 8. Additionally, Iris Energy received a separate notice last week from creditors alleging that it “failed to maintain sufficient insurance” and would constitute a default if not remedied within 10 days. 

Headquartered in Australia, Iris Energy is known for operating mainly Canadian Bitcoin mining centers that fully utilize renewable energy. In October, the company had an average mining hash rate of 3.9 EH/s, representing approximately 1.5% of the Bitcoin network’s mining capacity. 

As told by Iris Energy, the three debt facilities in dispute are $1 million, $32 million and $71 million worth of equipment financing loans secured by 0.2 exahash per second (EH/s), 1.6 EH/s, and 2.0 EH/s of Bitcoin miners. The firm says that 2.4 EH/s of miners and all of its data center capacity and development pipeline are unaffected by the notice:

“The lender to each Non-Recourse SPV has no recourse to, and no cross-collateralization with respect to, assets of the Company or any of its other subsidiaries pursuant to the terms of the Facilities.”

It appears that a combination of high electricity costs, lower Bitcoin prices, and increasing network difficulty has caused the firm to fall on hard times. Despite having $53 million in cash and generating over $8.7 million each month in revenue, the firm disclosed that its gross profit only amounts to $2 million monthly at current conditions, well below the monthly principal and interest payments of $7 million. 

B. Riley may purchase up to $100M stake in Bitcoin miner Iris Energy

Iris Energy’s filing suggested the company planned to use proceeds from the sale to fund growth initiatives including purchasing mining hardware and developing data centers.

Australia-based crypto mining firm Iris Energy has signed a deal with B. Riley giving the capital market company the option to purchase up to 25 million of its shares.

According to a Friday filing with the United States Securities and Exchange Commission, Iris Energy inked an agreement with B. Riley Principal Capital II related to the “potential offer and sale” of up to 25 million of the Bitcoin (BTC) mining firm’s ordinary shares, worth $100 million. The filing states B. Riley has a 24-month timeframe to complete the purchase starting “as soon as practicable” after the effective date of the registration statement.

Because Iris Energy qualifies as a “foreign private issuer” under U.S. securities laws, the firm said it intended to follow “most Nasdaq corporate governance listing standards” while also adhering to Australian law. The company already expected to issue 198,174 shares to B. Riley “as consideration for its irrevocable commitment” to purchase more shares.

According to Iris Energy’s filing, the company planned to use proceeds from the sale to fund growth initiatives including purchasing mining hardware and developing data centers:

“As of the date of this prospectus, we cannot specify with certainty all of the particular uses, and the respective amounts we may allocate to those uses, for any net proceeds we receive. Accordingly, we will have broad discretion in the way we use these proceeds.”

The crypto mining company’s shares were listed on Nasdaq in November 2021 following a $200-million funding round. B. Riley Securities, an affiliate of the capital market firm, also acted as a joint book-running manager with Cowen for Stronghold Digital Mining’s plan to list roughly 6 million shares on the Nasdaq in an initial public offering in October 2021.

Related: Maple Finance launches $300M lending pool for Bitcoin mining firms

Other mining firms based in North America seem to have experienced financial difficulties amid the market downturn. Core Scientific and Bitfarms sold some of their BTC holdings in July, and Compute North filed for Chapter 11 bankruptcy on Thursday. However, crypto mining firm CleanSpark inked a $33-million deal to purchase Mawson’s Bitcoin mining facility in September.

Australia-based crypto miner doubles hash rate after energizing Canadian rigs

Daniel Roberts, Iris Energy co-founder, said the firm had energized the facility on time “despite the current market backdrop and ongoing international supply chain challenges.”

Australian Bitcoin miner Iris Energy said it had increased its hash rate to more than 2.3 exahashes per second following the completion of phase two of its operations in Mackenzie, Canada.

In a Monday announcement, Iris Energy said it had brought 41 megawatts of operating capacity in the British Columbia municipality online roughly two months ahead of schedule, adding 1.5 EH/s to its existing hash rate. In addition, the Bitcoin (BTC) miner expects to bring another 50 MW online in Prince George by the end of the third quarter of 2022, increasing its operating capacity to 3.7 EH/s.

Iris Energy co-founder and co-CEO Daniel Roberts said the firm had energized the facility on schedule “despite the current market backdrop and ongoing international supply chain challenges.” The firm planned to deploy additional miners in August to increase its total hash rate to 6 EH/s.

The mining firm secured $19.5 million in equity funding and $3.9 million in debt during a pre-IPO funding round in December 2020, and shares started trading on the Nasdaq in November 2021. At the time of publication, the price of shares was $5.30, having risen by roughly 12% in the last 24 hours.

Related: Controlling 17% of BTC hash rate: Report on publicly listed mining firms

Iris said it invested in data centers powered by renewable energy amid controversy surrounding the environmental impact of crypto miners. Though many proponents have pointed to examples including crypto miners using the power produced by natural gas that would otherwise be burned, some policymakers in the United States have called mining “problematic” for energy use and emissions.