Thank you for standing by and welcome to the Iris Energy Limited March Quarter Earnings Conference Call. All participants are in a listen-only mode. There will be a presentation followed by question-and-answer session. [Operator Instructions] I'd now like to hand the conference over to Mr. Kane Doyle, Senior Manager, Investor Relations. Please go ahead.

Thank you. Good afternoon for those of you in North America and good morning for those of you in Australia and welcome to the Iris Energy earnings conference call for the third quarter ended March 31, 2022. I am Kane Doyle, Senior Manager, Investor Relations and with me on the call today is Daniel Roberts, Co-Founder and Co-CEO; Lindsay Ward, President; and Anne Hayes, our Interim Vice President of Finance. Before we begin, please note this call is being webcast live with an accompanying presentation and includes ability for participants to ask a question via the live chat box. For those that have dialed in by phone, you can elect to ask a question via the moderator after our presentation. I'd like to remind you that certain statements that we make during the conference call may constitute forward-looking statements and Iris Energy cautions listeners that forward-looking information and statements are based on certain assumptions and risk factors that could cause actual results to differ materially from the expectations of the company. Listeners are not place undue reliance on forward-looking information or statements. Please refer to the disclaimer on slide two within the accompanying presentation. Thank you and I'll now turn the call over to Dan Roberts. Dan.

Thanks Kane. Hi everybody. Thank you for joining us on our earnings call. What a day to have an earnings call. It's certainly been interesting out there over the last few days or week. In terms of where I'd like to start is just discussing where we're at in terms of the hash rate build-out. As you'll be aware we conducted our IPO on the NASDAQ November last year and spoke about the execution and expected operational ramp-up. And it's another opportunity today to reiterate that we are delivering against what we said we would deliver. If we see the bottom left-hand side, our first site at Canal Flats. We forecast that to be completed by December last year. It was completed around mid-September, ahead of schedule. The original forecast capacity for that site was 700 peta-hash. It's now operating today at around 850 peta-hash. If we then look to the next bar, we've now hit operational commitment at our second site as of April 12th in Mackenzie, British Columbia. The first nine megawatts was energized in mid-April, again ahead of schedule. In terms of the look forward, Lindsay will go into a little bit more detail around the specific sites and their specific ramp-up profile, but again we reiterate previous guidance around the expected construction ramp-up and installation of our chips. 10 exa-hash by early next year and then the full 15 exa-hash deployed in accordance with deliveries under the Bitmain contract. If we move on to the next slide. In terms of -- a little bit more about the team, many of you would have seen a slide like this or similar. Yes, it's about $1 billion of CapEx required to deliver our 15 exa-hash, but that should be looked at also in the context not only of…

Okay. Thanks, Dan. And my role today is just to give a fairly detailed overview of our operating sites, how we're managing the supply chain challenges, a little bit of a focus on ESG, and also just to talk about our execution strategy. It's not that long ago that we started our first site at Canal Flats in British Columbia. When you fast-forward to today, we're quickly advancing the construction of our three sites -- three additional sites, which is spread geographically across North America. We've got 1.1 exahash of computing power operational at the moment. And as Dan has talked about, we're working diligently and proactively towards deploying another 14 exahash by Q3 of 2023 for the year. In my view, our business is pretty simple. It really comes down to how well we execute on our strategy, our deployment schedule, how we execute on our construction and then how we perform as operators. Critical to our success is the internal construction and operating teams that we've now assembled. We're continuing to grow those teams. We're welcoming senior executives, support staff engineers and all pointing between to our business on a regular basis. And I think it's a great mix of people that we've assembled, a good mix of gray hair, a good mix of youth, quite a diverse workforce. And the great thing is that we enjoy working with each other. We're having a bit of fun along the way, and we're really focusing on building out our three sites. So I'll now go on to talk to you in a little bit more detail about our operating and construction sites, starting with Canal Flats. That was -- it's our first -- our in the aural site, and there's a picture there of the Canal Flats facility. It's…

Thanks, Lindsay and hi, everyone. I'm going to talk through the financial performance for Iris. As you've heard from both Dan and Lindsay, there's been significant growth in the organization over the last year. And on this slide, obviously that shows that. In the period the quarter, for March, we mined 357 bitcoin, which is a 449% increase over what we had mined this time last year. And that's on the back of a 686% increase in our operating hash rate. We returned revenue of $15.2 million and adjusted EBITDA of $7.3 million, both again significant increases on the prior year and it gave us in the quarter a 48% EBITDA -- adjusted EBITDA margin. In this slide, this is our EBITDA reconciliation adjusted. This is what the management team uses to manage our underlying or review our underlying performance. It allows us to eliminate some of the one-off and non-cash items that are sitting in our P&L account. So, on this metric, we're looking at the nine months, which gives a better view -- given the growth of the organization the period for the full nine months is a much better way to look at how we're going. So we generated $45.6 million in revenue, which is almost 10 times that of the first nine months in our financial year 2021. Our adjusted EBITDA for the nine-month period was $27.3 million and that was obviously, greater than the prior year at just under $1 million in 2021. And we had over the nine months, so I mentioned we had 48% EBITDA margin in the quarter but over the year that's a 60% adjusted EBITDA margin. And it's obviously significantly increased on the prior year. Our financial performance. Now this slide, this is our statutory financial profit and loss account…

Thanks Anne. Just dropping off mute. So thanks everyone for dialing in. That's the end of the formal presentation from myself, Lindsay and Anne. Again, once again thanks for all your ongoing support. We're pleased now to open it up to live Q&

Thank you. [Operator Instructions] Your first question comes from Paul Golding from Macquarie Capital. Please go ahead.

Great. Thanks so much. I had a question around – power as we get closer to Prince George being fully energized and Childress, what's the sort of power market out there right now in these respective locations in terms of PPAs timing associated with that. And just trying to understand how market maybe getting crowded with entrants in terms of looking for some of this power? And then I have a follow-up. Thanks so much.

So there's two key markets for projects that we've announced, the three projects in British Colombia, Canal Flats, which has been operating for the last few years; Mackenzie, which was energized last month the first phase; and then Prince George. As you mentioned Paul, but that is expected to be commissioned Q3 this year. And then the fourth site in Texas in Childress Country where Lindsay is at the moment. There's two separate markets there. In British Columbia, it's a very stable energy market. It's a regulated market which means we pay the same price for every kilowatt hour of energy we consume 24/7, 365 days of the year. It's 98% renewable. The underlying market we then take that to 100% renewable through the purchase of some renewable energy certificates. But that is an extremely predictable market by virtue of its regulated nature. In Texas, probably a more familiar market for many on the call in the sector, it's a deregulated market which means that market pricing is subject to market forces supply and demand. And as many of you are aware our site in Childress is in West Texas up in the Panhandle, where there's an enormous amount of renewables built as Lindsay mentioned earlier. Something like 32 gigawatts of capacity and transmission line capacity for only like 12 gigawatts to export that down to the load centers in the Southeast. So there's a massive oversupply of power renewable energy up in the region in which we're specifically located. In terms of the specifics around power price, what we've said to the market and we expect you can see that average power prices on a baseload basis in Texas is around $0.03 to $0.035 per kilowatt hour with the opportunity to drive that substantially lower through operational levers. So…

Thanks for that Daniel. And so I guess just based on your comments, it sounds like the market is holding in a favorable place for you despite all the interest in this renewable in West Texas, right? In terms of your conversations with the power providers, you feel that the dynamics are holding still in this sort of favorable spot that you were describing in terms of the Texas rates?

I think that's right Paul. I think we zoom out Texas is a really big market, if we focus there. And Bitcoin's still a really small market globally. And if you look at the context, bitcoin's got what -- it's anyone's guess right because it's all anecdotal and estimates, but 6, 8 maybe 10 gigawatts globally of power. The amount that's being built out in Texas to date and even forecast in terms of if you track the listed miners and a couple of private, it's just a really, really small fraction. We're not seeing any impact. We're not seeing any impact to forecasts. As Lindsay mentioned before like there's something like 40 gigawatts of renewables in permitting stage that are looking to be built. So there's no shortage of power. Texas is obviously a very market-based economy where they respond to any price signals. Not that I believe that we're seeing evidence that prices are likely to go up. It's not really a focus of concern at the moment Paul.

Great. And if I could sneak one more in. I was wondering if you could give some color on what your thoughts are in terms of where the network hash rate may be going. We've talked about how locking in low-cost power is leveraged in a volatile bitcoin price environment or sort of there. So I just wanted to get your thoughts on what you expect, what your predictions, projections are in terms of global network cash rate at these levels? Thanks.

No problems. Look we haven't published forecasts about global hash rate. We have views on some of the upward pressures and the downward pressures, which I'm happy to share. But as a business, we focus on what we can do and what we can control and that's execute on our construction plan and operate what we believe to be one of the most efficient data center bitcoin mining businesses in the industry. We can't control the hashrate, we can't control the Bitcoin price but we can control our operations. In terms of the way we think about the global hashrate, I think purely and simply I'm not aware of many hardware orders that have been placed in the last six months from memory. The last ones may have been the Bitmain XPs about five, six months ago at $80 per terahash not for enormous volume. Yes, there's some capacity that was built -- sorry procured six, 12 even more months go where people source the capital procured the miners for whatever reason they haven't been installed yet. Maybe that hits the market in the short-term and hashrate floats higher. But that's then fighting I guess a dynamic where we haven't seen hardware orders new ones for quite some time. I'm not so sure the current environment is conducive for many people ordering additional hardware given what's happening with the state of the market today at least. Again that can change if the market responds then potentially people will procure additional hardware. But again you've also then got to overlay a couple of other risks. The fact that a large portion of the industry still uses older facilities, so shipping containers, warehouses where you see a degradation in the hashrate coming out of those facilities due to the conditions in which they're operating, dust, humidity, heat, et cetera. And then of course there's still geopolitical risk. Anecdotally we hear that there's still a substantial portion of the hashrate in China. We understand there's a large portion in Kazakhstan where it's got its own challenges. So there's this ongoing dynamic and tension I think between the hashrate wanting to float higher as a result of historical hardware purchases and people looking to try and install them combined with the downwards pressure of reality in the real world and what we operate in.

Great color. Thanks so much, Dan.

Thank you. Your next question comes from Stephen Glagola with Cowen. Please go ahead.

Thanks for the question. Dan, I just want to unpack some comments earlier you made. So for the $250 million capital needed to fund your expansion just given the current market conditions, can you discuss how lenders are responding for any incremental equipment financing transactions you're looking at? And do you still feel confident in the non-dilutive financing options that you see in general to fund growth? Thanks.

Thanks Stephen. Look we can only act on the information we've got in front of us, which is really positive in terms of direct interface with lenders and finances via the debt processes we are running. But I have to temper that like we're not immune. We're looking at the market, we're seeing what's happening, we're not naïve to the environment in which we operate. But in terms of the direct interface with the lenders throughout the last couple of months and into this week we're not seeing any direct impact on those processes. At the end of the day, I think the way a lot of the market is starting to look at our business is a green data center business that's mining Bitcoin rather than a Bitcoin crypto-focused business that's looking to leverage and take substantial exposure to the underlying commodity. And when we're selling the Bitcoin daily there is substantial cash flow very difficult to argue with that. And for a lender, what have they been asked to believe in terms of providing finance. They've been asked to believe that bitcoin is going to hang around and they've been asked to believe that bitcoin isn't going to go below a relatively low floor number to get in and out and get a really good rate of return for their investors. So it is a very different type of lens that lenders apply to the sector I believe, compared to equity markets where you do have a lot of volatility, do have a lot more exogenous factors mark-to-market et cetera. But again, like I don't want to be overly optimistic and present a picture that isn't reality like we are aware of where the markets are at. I think one way I tend to think about it is,…

Thank you. Your next question comes from Joe Vafi from Canaccord Genuity. Please go ahead.

Hey guys. Good morning. Nice to see the good progress here, I just thought, we'd start and kind of revisit some of your comments Dan on, the size of the team which is great building it out. It feels like the size of a team that big may be focused on continued business model expansion kind of just beyond where we are. I didn't know if you had any commentary on how you're looking at the medium term and the size of your team at this point? And then, I'll have a follow-up. Thanks.

Maybe I'll, answer part of that.

Hi Joe, sorry go ahead.

Sorry, there's a slight lag, sorry about that. Dan, I might add to just a part of that question and then hand back to you. Just to put in context that 100 currently involves also our site teams where we are actively constructing Prince George and Mackenzie. So, we're self-delivering both those projects. We're not doing it through an intermediary. And so when you look at that 100, you need to put it in the context of we've got an operating facility at Canal Flats, we've got an operating facility at Mackenzie. We've got construction at Mackenzie and Prince George. And then we're also opening up the opportunity down in Texas with construction there where we are working closely with the Wood Group as our EPCM contract there because we didn't have the abundant labor to self-deliver that ourselves, but it's really a partnership where we're starting to grow out our Texas team. And we've got an Australian gentleman Giles Walsh has started on site there and we're starting -- when I was in Childress, we employed USA employee number two and we'll start to build out that team. But I just saw it was worth giving the context that that 100 not only covers corporate operational, but also the contract construction people that we need to self-deliver those projects in BC.

Sure. That makes a lot of sense.

Maybe just to add a couple of comments on that.

Much appreciate, yes.

Sorry, there's a bit of a lag as Lindsay mentioned.

Yes, I know.

I think if you look at what's required to operate the 15 exa-hash once it's installed, that's one set of operational resourcing and that's one set of corporate resourcing. But given the stage of where we're at as a business, A, we're going through a very large construction program, which Lindsay spoken about; and B, we've also resourced a lot of development people in the corporate because as I've said before we're not here to deliver 15 exa-hash, our ambitions -- our future outlook is far greater and we've got the resource in with substantial experience in infrastructure renewable energy development looking globally at new sites, new growth opportunities, et cetera. And that's in our corporate cost line today and a function of the growth actions that we have.

Thanks. That's great color guys. I appreciate that. And maybe just one follow-up. Clearly, I know you're still selling Bitcoin here at these prices and it's been the right call to sell it I think on the way down instead of hold it. And kind of just looking at your business model in totality here given relationships with lenders, balancing that against spot price of Bitcoin, would there be a level where you think that maybe you would hold it at least for a while or something like that? Once again, nice to see good progress. Thanks guys.

Thanks Joe. Look we've always said we're open to it. But every decision we make, we want to be a good use of capital. And sitting here today, I don't like it necessarily being described as a great call to be selling Bitcoin high. We're not really in the business of speculating on Bitcoin, we're in the business of building owning and operating really efficient data centers to mine Bitcoin and generate operational performance from that asset base. We believe in bitcoin. We've spent four, five years of our life building a business that is nothing, but dedicated to bitcoin. And personally, we've got a lot of conviction with bitcoin as an asset outside the platform. But as we sit here today, the competitive advantage we have as a business is not speculating day-to-day on the price of bitcoin. We're not traders. Our competitive advantage is the substantial experience and capability of our team in delivering operating infrastructure and data centers monetize its emerging and exponential technology. Do we hold bitcoin at some point in the future? Sure. Like we're certainly open to it as part of a treasury management policy, but today when we can reinvest every bitcoin, we're mining today to generate whatever it is six, seven, eight more bitcoin every 12 months from this point the compounding strategy and the shareholder value we believe we're delivering over the medium let alone long-term in continuing to scale this business by reinvesting those bitcoin revenue line, we believe is a really sound strategy.

Thank you. Your next question comes from Reggie Smith with JPMorgan. Please go ahead.

Good morning gentlemen. I appreciate all of the color. I was hoping to dig in a little bit on the financing update slide. I appreciate the color there you can show us $1 billion in total spend. Curious how much have you guys spent thus far. And that would include the hard CapEx as well as deposits. Just trying to get a sense of where you are and what the gap is there?

Sure. I'm happy to take this. Yes, no problems. So, to-date, we've spent a little bit over $400 million in CapEx. We've then got close to $150 million might be $140 million today of cash on balance sheet. We've then got some undrawn debt under the NYDIG facility that will be drawn down over the next few months of another $20-odd million. So there's a substantial amount of capital that's been spent to-date, but also a substantial amount that's currently in our control in the bank account and being allocated on a week-to-week basis towards scaling up to that 15 exahash. And what that leaves is around $400 million to hit that $1 billion of CapEx, I mentioned earlier of which a portion will be funded through ongoing operational cash flow. Again we're profitable. We've been profitable for a while. That profitability is likely to scale up substantially as Mackenzie and Prince George come online over the next few months. And then the ability to reinvest that to plug a substantial portion of that $400 million in remaining CapEx above what we've spent and above our cash and undrawn debt facilities puts us in a really good position particularly in the context. Again 10 exahash of hardware unencumbered at $35 a terahash is $350 million. If you do it at $50 a terahash like we've seen a lot of recent deals that's $500 million. So we believe the strategy of raising a lot of equity early, incurring that dilution early as founders and as management and early shareholders both as part of the pre-IPO and IPO have set us up in a really strong position to weather these markets and look to layer debt solutions on top of that capital structure.

Thank you. Your next question comes from Chase White with Compass Point. Please, go ahead.

Thanks, guys. So on your -- in Texas have you guys experienced any issues or delays with permitting and more broadly have any regulatory issues service for any of your site locations at this point?

In terms of our Childress location, no. We've been engaging with AEP for a number of months now, certainly, well before Christmas. All our studies have been submitted -- reviewed them and we don't see any hold up to our current plan of delivering the first 100 megawatts of buildings by December this year, with the energization occurring early in the first quarter of 2023. So all our studies are in. We got in ahead of the game. We didn't wait until the connection agreement was all signed. And so, we don't see there is going to be any impact from our part.

Got you. And then you’ve spoken about all of the excess renewable capacity in the Panhandle of Texas. Are there any plans to build transmission lines to export that energy out of the Panhandle, sounds like there's a lot of capacity waiting to come online potentially. It seems like a lot of capacity to not be able to go anywhere. So I'm just curious kind of your view of plans there.

I'm happy to take this, Lindsay. Look there has been discussion as far as I'm aware about potentially building additional transmission line capacity. I'm not on top of weather that's likely to occur in the near term, but the numbers that sit there today are obviously dwarfed in the context of any new transmission line capacity to extend that 12 or so gigawatts in the context of 32 gigawatts operation and another 40 being permitted, obviously, there's a substantial amount of power that may wish to be exported down to the load centers. Part of the benefits of this business -- and people often use the analogy of modern day aluminum smelting, where that industry, in many aspects, was built off going to the source of low cost energy. But the difference there was supply chain and logistics of exporting the end product, the commodity. With bitcoin mining, it's truly geographically flexible, because you're just broadcasting a digital asset over the Internet. So it's staying up in the Panhandle or staying up in other areas, globally, where there's an abundance of low-cost excess renewables, where we can go into that market, provide that firming support. So when the wind blows and the sun shines and there's abundance of cheap power, that's negatively priced, being curtailed, we can mop up that power. But then being able to turn down our operations and give that power back to the market, when the market needs, and allow those electrons to flow through transmission line and electrical capacity down to load centers where other industries retail, et cetera, needs it, is essentially the essence of our business model.

Got you. Thank you for that. And one last one, if I may. Are you guys looking in the spot market for miners, given that you have optionality on additional capacity in Texas? And if so, where are the prices coming in for top-tier miners at this point? And what would drive kind of the decision to purchase more.

At this stage, and since we started this business, the answer to that question is basically, no. Like in terms of, secondhand units, we're just really reluctant to engage and procure units that have been used in this sector. We're very happy taking new units particularly from Bitmain and the other manufacturers we've used to date, knowing that we've got the warranty, knowing that we've got the direct contracts. It's also worth stating, that we don't go through intermediaries and brokers. We don't rely on third parties, to go and procure those units, which again is a little bit counter to how a lot of businesses operate in this sector. As I mentioned earlier in the call, no one seems to be buying chips at the moment. And again like my understanding, is the last person to buy chips, the two large players in this sector paid $80 a terahash, five six months ago for some Bitmain units. What would need to happen for us to buy additional units? Look I think at this stage, we're very happy just building out the capacity that we've secured, that 795 megawatts as you're probably alluding to can support 22 23 exahash of capacity. Let's focus on, delivering the 15. Current market conditions, I don't believe makes sense for us to be line capital into additional miners. We'd look to prefer to be focused on funding the current debt processes. It's hard enough keeping up with the number of processes, we've got live on that front to be thinking about purchasing more units above that 15%. But we know, this market it can move very quickly, which is why we've got a team that's large, experience and ready to pivot as the market pivots and we could end up buying machines earlier than we expect particularly, we're not in sitting here today.

Thank you. Your next question is a follow-up question from Reggie Smith with JPMorgan. Please go ahead.

My question this really has to do with the actual build-out of the sector facility. I think you guys outlined your strategy. I was hoping, you could highlight two or three key bottlenecks potentially or how you -- and how you are managing those kind of bottlenecks related to the build out of that facility just for broader applications.

I think -- you're a little bit muffled, but I think you're asking two of the challenges for the build-out in Childress. I think just answer, a bit of roundabout way and studying British Columbia, we've been in that constant build-out program from Canal Flats, to Mackenzie, to Prince George and we've assembled a great deal of knowledge, skill and capability and a great team and they really do understand managing, design risk, by chain risk and the actual construction side. We're heavily leveraging that knowledge in everything that we do in Childress. We've brought in -- because of the scale and geographically, a reasonable distance away from British Columbia, we've brought in the Wood Group. They're a very experienced contractor of both EPC, EPCM design and engineering. We're continuing to work with Stantec, [ph] who we've worked with since day one and they've developed our standardized data center designs. And so along with our expertise the support from Board and the engineering now Stantec own tech we're really lucky to have collective knowledge around where to go and purchase key long-lead equipment, where we're actually going to get it here in a time frame. And so we're leveraging Woods contacts we live Stantec and we're leveraging our own contacts to make sure that we do manage the supply chain issues. And they're there. There's no doubt about that. But we remain very comfortable with the delivery dates of our key equipment. We're very committed to that 15 – or mid-December, first 100 megawatts of buildings delivered at this stage I don't see anything impacting that. There'll be challenges we'll have to roll with a few punches. We'll have to change things we have to be a bit flexible and nimble but that's what we do. We're used to doing that and we continue to do that. And I was down in Childress this week with our COO and our Vice President of Operations going through the program, going through the schedule and we're able to identify a number of things that will build fat into the schedule. So at this point the challenges are supply chain but I think we're managing those. We've got people on the ground so people typically is a bit of a challenge but we've got people on the ground now the wood team are starting to ramp up. And so I think that would be my two issues. And I feel fairly comfortable that we've got them managed at this point in time. Q –Reggie Smith: On the – just to clarify like are the lead – the long lead time items related primarily to the energizing of the site whether it's a transform or something like that or are there also things related to structure as well? I'm just trying to understand where the long lead times are. – it's in more power related but I can be totally wrong or trying to understand.

Yes. No, no you're correct. It is mostly around the electrical equipment, the transformers particularly and we actually ordered those pre final design. And when that comes back to the knowledge and comfort we have in knowing what we're doing. So rather than wait till absolute final design we went and ordered the transformers and the two 345-KV transforms a pretty large and all the equipment and control works that you need for that. And then you step down into the lower-voltage transformers. We actually ordered that early because we could see this supply chain constraint coming. And so we reacted and we've been able to modify our design to make sure it meets the specification of the transformers that we've ordered. So it certainly is in the electrical area. We've worked with AEP. And again they were fantastic and that they were placing orders in advance, booking slots in the knowledge that the contract was about to be executed and so again because they are such a large player in that Texas market they can get the leverage their relationships to make sure the gear that they need to get the switchyard built, the orders were placed early. So I think the benefit of us is that we went early and we haven't waited until final design but it certainly is the electrical items that are causing grief I think for many other projects. Q –Reggie Smith: Understood. Thank you.

Thank you. Your next question is a follow-up question from Paul Golding with Macquarie Capital. Please go ahead.

Yes. Thanks so much for taking my follow-up. I just wanted to ask relative to Canal Flats and Mackenzie and your proprietary data center design, are you considering liquid immersion at all which other miners seem to be considering? And if not just curious to know if there's any color you can give around your efficiency which seems to be outpacing expectations at least it can all flat. Just the efficiency of your model versus what liquid immersion might look like? Thanks.

Good question. So the short answer is we consider everything. We consider everything every day in terms of options, decisions and maintaining that flexibility amongst a focus on also delivering. The reality is we have no intention to use it in the short-term and it's been immersion cooling. We've got a fantastic air-cool design that's been operating in a 100-degree Fahrenheit temperatures at Canal Flats where as you say it is outperforming on an operational efficiency basis. Recall also that we've really built this platform on a basis of risk first. The returns in this sector are extraordinary. We all know that the risk return of the cash flows the return on CapEx our approach since day one has been don't kick in our own goal. Get the best facilities up for the long term generate that operational performance and the rest takes care of it yourself. We've heard war stories about immersion. So before I get into the concerns about immersion, I think the first point to make is -- sorry there's a bit of feedback coming through there it goes is in very it makes sense right? Immersion technology has been around for a long time. Shield in these chip transformer oil and immersion fluid protecting them from the elements being able to operate them at a higher frequency. So the theory is absolutely sound. The concerns we have is we've heard that four months into using the capacitors on these chipboards swell up and pop off because they weren't manufactured for immersion and early players in this space have an upstream and work directly with manufacturers to reengineer the hashboards, and actually make them fit for purpose in immersion. I'm yet to see data that supports it's more efficient. I see data that supports that you can…

Thank you. There are no further phone question at this time. I'll now hand back to Mr. Roberts for pre-submitted questions.

Wonderful. So I'm just having a look at the pre-submitted questions. This is our first quarterly earnings with pre-submitted. So we might go through some of them and Lindsay some of them will be more directed at you and I'm happy to pass over to that. So the first one I can see EBITDA and cash flow, what is the breakeven Bitcoin price both now and when all the miners are deployed? The short answer is it depends but that's not an overly helpful answer. The longer answer is today our April monthly cost of production was around $8,800 Bitcoin. That's at a circa US$0.05 a kilowatt hour power price in British Columbia, which again is 98% renewable energy and 100 after the purchase of REX. As we're all aware as we enter Texas where over half of our machines are expected to be located in Childress, it's a very different market. If you look at a weighted average of $0.04 across the portfolio, we're back down towards an average on Bitcoin price of $7,000. But the key thing to really reiterate is again, we own and control all the electrical infrastructure, let alone the land and the data centers and the computers by directly interfacing with the market. In Texas, we've got the ability to really optimize that power price based on market conditions. So one of the questions that many of the lenders are asking at the moment is how do we play this out during a downside scenario? If we see Bitcoin really have a temporary drawdown due to volatility and that's not where we're at today. Like if you look at the cash flows we're generating even at the current Bitcoin price, they're extraordinary, right? We're talking about much, much lower. There's two downside protections that…

Look, I think we've answered that. I don't really have a lot more to add.

No problems. And then there's two residual questions, which I’ll read out, but I believe have been answered. One from Wang Lee, if the bitcoin price falls below your marginal cost of production, will you keep running at a loss to weed out higher cost producers or throttle back your production? Look, the bitcoin price falling below our marginal cost of production is not a real plausible scenario to be frank. When you look at the numbers and the commentary I've just provided, the levers we have to pull to drive lowest cost power in this sector to survive any environment I think are really compelling. If we ever got to that point then we can on that decision, but it's not something that demands much headspace to be frank at this stage. And then the last question was a follow-up written question from Stephen Glagola. A question for Lindsay on your Childress, Texas site we saw at the end of March ERCOT is now requiring transmission service providers to submit interconnection studies for new loads. Is this something you have to do at your Texas site? And do you expect this to cause any delays in your ability to get online in calendar Q1 2023? Thanks.

…detail to that. I think just to confirm the load studies were submitted a long time ago. We've worked very closely with AEP on some of the other studies that have ERCOT required, but we got those in ahead of the latest changes with ERCOT. And we're very comfortable that we don't see anything coming out of the studies that have been done and viewed by ERCOT that would impact that energization date at that first quarter of 2023.

Wonderful. The other point just to some of the power pricing is, remember there's a lot of negative price power in some of these markets. We see it in Southeast Asia, Asia Pac where we've got development sites. We see it in Texas. There are actually plausible scenarios in some markets where you can operate with two profit centers and no cost center. One you get paid to take negative power, two, you get paid to monetize that power into bitcoin. So again, this strategy of targeting low-cost excess renewables in these markets that frankly have overbuilt renewables and then controlling our own platform the ability to monetize those markets is exactly why we've pursued that strategy.

On that note, we'll have to call it time. Thank you for everyone dialing in to recap. The next 12 months or so are going to be simply transformational for our company. The bitcoin price is corrected recently with a lot of the rest of the market, but our business remains profitable. It has been profitable. That profitability will scale substantially as the remainder of Mackenzie and Prince George comes online in the next few months. We remain focused on doing what we said we'd do at the IPO, before the IPO. We control the delivery. We're working hard. We will deliver and that's been our focus. We've had a focus on risk. We look to really manage that first. We know the returns are there. We don't rely on hosting. We don't rely on wheeling agreements to get access to transformers behind the meter. We're putting our destiny in other people's hands. We own and control our own destiny and manage the risk. We're in this for the long run. We're looking at building and we continue to build an institutional-grade data center platform and monetize that platform over time through the highest and best use applications. Thanks for everyone again for dialing in. Thank you for your ongoing support. It's certainly an exciting time for our business amidst a market that has its day-to-day challenges, but when you zoom out, we're really excited about what lies ahead both for the industry and also our business more specifically. So once again, thank you for dialing in and look forward to catching up with many of you in the near future.