Good morning. Thank you for standing by, and welcome to Cipher Mining's Third Quarter 2022 Business Update Conference Call. Please be advised, today's conference is being recorded and a replay will be available on Cipher Mining's Investor Relations website. I would now like to hand the conference over to Lori Barker, Investor Relations.

Good morning, ladies and gentlemen, thank you for joining us on this conference call to discuss Cipher Mining's third quarter 2022 business update. Joining me on the call today are Tyler Page, Chief Executive Officer; and Ed Farrel, Chief Financial Officer. Please note that you may also review our press release and presentation, which can be found on the Investor Relations section of the website at investors @ciphermining.com. Please note that this call will be simultaneously webcast on the Investor Relations section of the company's corporate website. This conference call is the property of Cipher Mining and any taping or other reproduction is expressly prohibited without prior written consent. Before we start, I'd like to remind you that the following discussion as well as our press release and presentation contains forward-looking statements, including but not limited to Cipher's financial outlook, business plans and objectives. And other future events and developments, including statements about the market potential of our business operations, potential competition and our goals and strategies. The forward-looking statements and risks in this conference call including responses to your questions are based on current expectations as of today and Cipher assumes no obligation to update or revise them whether as a result of new developments or otherwise, except as required by law. Additionally, the following discussion may contain non-GAAP financial measures. We may use non-GAAP measures to describe the way in which we manage and operate our business. We reconcile non-GAAP measures to the most directly comparable GAAP measures and you are encouraged to examine these reconciliations which are found at the end of our earnings release issued earlier this morning. I will now turn the call over to Tyler. Tyler?

Hi. This is Tyler Page, CEO of Cipher Mining. Thank you very much for joining our third quarter business update call. Let me start with some key developments since our last call. Today, we are announcing quarterly earnings of $0.24 per share, which validate Cipher's resilient position as a low cost producer in Bitcoin mining. We have always said that our low cost fixed price power contracts are some of our strongest assets and we can now quantify the value of our Odessa power contract as being valued at roughly $78.9 million at the end of the third quarter. Our contractual arrangement at Odessa allows us the flexibility to mine bitcoin or resell power to the market, which potentially provides benefits when bitcoin mining margins are low. As power prices have moved higher since we executed the contract, it is substantially in the money. Since our last business update, when we announced the completion of our Alborz data center. I am happy to report that we have now completed construction and are operating two new data centers we call Bear and Chief. The Alborz data center is 100% powered by wind and produced a total of 196 bitcoin during the quarter. Bear and Chief are now up and running and between the two of them can produce roughly two bitcoin per day at their current sites. Our team has also made tremendous progress at our largest data center at Odessa since our last update. The infrastructure in rig installation is complete for the first phase of miners, which are capable of generating about 2.3 exahash per second. We are currently executing the final necessary steps to begin mining and we expect that hash rate will be coming online this month. We have additional mining rigs capable of producing roughly 2.6…

Thank you, Tyler, and hello to everyone on the call. In Tyler's remarks, he highlighted a couple of key financial metrics for the company in the third quarter, which I will also touch on in my remarks. He stated we completed our Bear and Chief facilities and have made significant progress in the build out of our Odessa site. In the third quarter, we spent $43 million on CapEx primarily related to that site, which we expect will contribute to our operations commencing in the current quarter. This period, we recorded a $78.9 million derivative asset on our balance sheet related to the Luminant Power agreement. This was the primary driver to the $0.24 net income per share that we recorded. This contract is recorded as a derivative asset in two line items on the balance sheet, $30.4 million as a current asset and $48.5 million (ph) as a non-current asset. For this quarter and future periods, the change in fair value of this contract will flow through our GAAP earnings and we will exclude it the impact from non GAAP reporting. Other significant assets include cash of $28.1 million. Bitcoin of $2.3 million. Deposits on equipment of $200 million. Property and equipment of $41.1 million and our equity investment and our JV of $31.7 million. We had working capital of $50.1 million and we continue to fund investments in our operations with the cash on hand. As Tyler mentioned earlier, as of November 9, we had cash balance of $25.1 million and held 161 bitcoin. I'd like to mention that in accordance with the Luminant Power agreement, we will soon fund the remaining half of the required independent collateral of $6.3 million. As Tyler noted, as a matter of good corporate housekeeping, we now have a $250 million ATM…

The floor is now open for your questions. [Operator Instructions] Your first question comes from the line of Mike Colonnese from H. C. Wainwright. Your line is open.

Great. Thank you. Hi. Good morning, guys, and thank you for taking my questions this morning. And congratulations on all the progress you're making at each of your sites. It's really exciting to see that. To start, I guess, how should we think about your strategy for purchasing additional mining rigs to fill out the remaining 44 megs of infrastructure at Odessa once that site is fully built out. And would you guys consider hosting equipment at all at the facility?

Hey, Mike. It's Tyler. Thanks for the question. Yeah. I think of it this way, given the market conditions, we're trying to maximize for opportunistic flexibility. So rig prices continue to drop. They've certainly gotten extremely cheap compared to historical prices. We actually executed a purchase this past quarter of 500 new S19j Pro that we're going to purchase entirely with sort of accumulated coupons and deposits with Bitmain. We will continue to opportunistically look to fill those slots at Odessa. I think the thing for us is that if you look at the powering up schedule, we've already acquired the miners for about the first 163 megawatts or so. So it's really that last leg that will be towards the end of the first quarter in the New Year, where we'll have slots available. So when I think about flexibility, our options there are go shopping in a distressed market for really cheap machines, potentially think about strategically working with someone that may be repossessing machines or looking for hosting opportunities. I don't think that's our primary goal, but lots of interesting things are happening in the space and there are machines being repoed by lenders that are going to look for a home. So if we find something that we think is the most favorable for shareholders, we'd be willing to do that. I think also we'll be weighing the opportunity set versus selling power in the market. So what I'd say is solving for flexibility, but we're pretty confident we're going to find either historically cheap prices for the rigs that we would just go purchase or potentially interesting business opportunities.

That's great. So definitely some optionality there. And as a follow-up to the Odessa facility, can you just confirm the remaining infrastructure CapEx you have to complete the build out there?

Yeah. Let me give a picture, so we pay via monthly invoices that will stretch out four or five months into the New Year. It's roughly about $20 million I think of expected remaining infrastructure CapEx there, but they come due month by month as progress is made.

Got it. And last one for me, can appreciate the electricity cost for bitcoin on Alborz at under 5,000 per bitcoin, which is really strong. How should we think about your all indirect cost to mine a bitcoin when all of your sites are fully up in hashing, as we look out over the next quarter or two?

Yeah. I think that it would likely be -- the blended electricity price is likely to be slightly higher than that, but ballpark, Alborz is -- our cheapest power in the portfolio generally, unless we get really cheap front of the meter prices at Bear and Chief. But I think that's ballpark. So probably slightly more expensive electricity prices as we scale up.

Got it. Thank you for taking my questions, Tyler. Appreciate it.

Thanks, Mike.

Again, the floor is open for your questions. [Operator Instructions] That does conclude today's questions. I would now like to turn the call over to Tyler Page, CEO for closing remarks.

Thank you. Thank you to all of our investors for participating in the call. We look forward to continuing to update you on our progress as we move forward. Have a great day.

Thank you, ladies and gentlemen. This does conclude today's call. Thank you for your participation. You may now disconnect.