Thank you for standing by. Welcome to the Iris Energy Investor update. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. If you wish to ask a question, you will need to press the star key followed by the one on your telephone keypad. I would now like to hand the conference over to Lincoln Tan. Please go ahead. Thank you. Good afternoon for those of you in North America, and good morning for those of you in Australia, welcome to the Iris Energy Investor update. I am Lincoln Tan, Senior Manager of Investor Relations, and with me on the call today are Daniel Roberts, Co-founder and Co-CEO, and Lindsay Ward, President. Before we begin, please note that this call is being webcast live with an accompanying presentation. For those that have dialed in by phone, you can elect to ask a question by the moderator after our presentation. I would also like to remind you that certain statements that we make during this call may constitute forward-looking statements, 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 should not place undue reliance on forward-looking information or statements. Please refer to the disclaimer on slide two within the accompanying presentation. Thank you. I will now turn the call over to Dan Roberts. Thanks, Lincoln. Good morning, good afternoon, everyone, wherever in the world you might be. Someone said to me the other day, "Happy anniversary." I had to do a double take and looked at them a little bit oddly. They said, "12 months since you listed." I was like, "Wow." It feels like we're operating dog years or something because, gee whiz, a lot has happened in that 12-month time period. We're delighted to provide this update and talk to you all today. It's nice to get out of the slightly dry 6-K's and legal releases we make to the market and actually give you a bit more of an insight into how we're thinking about the industry, the business, the platform. We're still here, we're still excited, and yeah, really, really pleased to walk through this with you today. To start off with, why don't we just step back? Well, that's the disclaimer, which Lincoln's already covered. If we go to a bit about the industry. Where are we? I appreciate it's new for a lot of people. People say that history tends to rhyme or it doesn't repeat, it tends to rhyme. I don't know. It feels like this industry just repeats itself. I think I've told a number of you, Will and I bought our first Bitcoin late 2013. A few months later, and this was on a run up to $1,000 at the time. A few months later, Mt. Gox, one of the early centralized exchanges, controlled 70%, I understand, of the industry trade volume, went under. Bitcoin crashed down $5,300. I sold them all, thought, "Silly magic internet coin." It just seems like every cycle we see the same thing play out. We see these unregulated, centralized exchanges with low regulatory oversight. Don't know how to say it. Blindly misusing customer money, not making good decisions, blowing themselves up, rug pulling customer funds every single time. Hopefully this time is the straw that breaks the camel's back and we see regulation step in, a little bit more oversight, but equally the market will hopefully learn that trusting your assets with offshore unregulated entities may not be the best idea, and promised yields may have some more risk attached to them than you may think. The other thing that we see every cycle is the latest shiny bauble. You know, someone launches an ICO, NFTs, DeFi. Like, every cycle there is a narrative. Every cycle there is a reason for people to pile in, you know, punt on these random coins, these random narratives. I think there's something like 25,000 coins. Every time so far, the rug gets pulled again and people... the tide goes out and people realize the lack of substance underpinning the majority of these use cases. That's not to be too negative on the asset class. I still believe there is something in crypto more broadly. But in terms of the value proposition, I struggle with it, and a lot of you know that. In terms of Bitcoin, it's fundamentally different. Nothing has changed in 13 years. It is the same asset for 13 years. Every 10 minutes there is another block. There will only be 21 million coins. You can't stop it. You can't kill it. It is here to stay. Yes, the volatility persists. It goes up, it goes down. When it goes up 10x-20x, it has these 80% drawdowns. Markets tend to overshoot on the way up, undershoot on the way down. We've seen that volatility. In our minds, nothing has changed. When you look at the underlying fundamentals of what Bitcoin offers to the world, our conviction is only strengthened. In a world of currency debasement, in a world of censorship, the ability to self-custody a monetary asset is extraordinarily powerful, and we don't believe that that is likely to change. The other thing that people often comment is, "Oh, how is it meant to be a store of value if it's so volatile?" I don't understand what trajectory people are hoping to see with an emergent organic monetary asset literally worth a $0.01, 13 years ago to $300 billion today. You look at the trajectory on that chart on that slide. I don't understand what people expect to see. There's going to be volatility along the way. We then go to the next slide and say, well, where is Bitcoin? What is it hoping to be? It's really hard to explain Bitcoin to people if they haven't taken the time to read monetary history. I'm one of the first to admit, I've never been a student of history. Five, six years ago, I did sit down, read a number of books and papers, and I'm happy to share details. Go through the history of monetary assets, necklaces, beads, rhinestones, whale teeth, the bimetallic era that persisted for thousands of years. You work through the gold, but demonetizing silver around 1870, the emergence of World War I, the pitfalls of gold, why we ended up with paper money. You map it through today and through that lens, you really start seeing what Bitcoin is here to do. That challenges a lot of perceived views of the world, and it can be hard for people to wrap their heads around. Even if we just step back, let's just call it Gold 2.0. It's better at being gold than gold is. It's easy to transfer, it's more divisible, it's more durable, it's scarcer. Hard cap of 21 million. In comparison, over the long term, Bitcoin, sorry, gold supply is going parabolic. 1.8% supply increase year-on-year goes vertical. It's better at being gold than gold is in a world where all these digital social networks are disrupting their physical equivalents. Whether it's the likes of YouTube and Netflix versus Blockbuster, whether it's Amazon versus retail, like all these social networks, and you've got Bitcoin sitting here, which is $17,000 today to only reach gold parity, is $600,000 a coin. If we fast forward five, 10, 15 years, do we think that it's unrealistic for Bitcoin to hit gold? Not really. That's why we're still excited at the industry. Our conviction is unfazed and we're building. What we are very accustomed to, having been in this sector for nine years, is volatility. It goes up, it goes down, and it goes up further than you think, and it tends to go down further than you think. Every decision we have made in this business is through that lens. If we move to the next slide, this is where we start migrating towards an update on our business. We have always made decisions through the lens of protecting the downside, maximize optionality on the upside, because we fundamentally believe in the asset class. Don't get ahead of yourself. Don't get over your skis. Don't take unnecessary risks. Don't assume that the sun's always gonna shine, the sky is always gonna be blue because things do go wrong. We've seen a bit of a perfect storm over the last 12 months. As a business, we've had to adjust to that. If we look at this slide and it positions everything almost in the lens of past, present, future in a way. If we start with the left-hand side and the risk-focused approach that I've alluded to. Yes, we've been hit by a number of exogenous events over the last 12 months that we've had to react to, but we've structured the business, whether it's capital structure, whether it's construction contracts, in a way to minimize risk and exposure for our shareholders and the underlying business. As we've said before, our management team, our board, their collective experience in delivering over $25 billion of energy and infrastructure projects. Collectively, they've seen everything that can go wrong, go wrong. We're not unaccustomed to challenges. It's how you deal with those challenges and come out the other side. If we separate each of those line items individually, the limited recourse equipment financing. Again, as I've said to many of you, we are the only company in the industry that I'm aware of that didn't give a parent company guarantee on this hardware equipment financing structures. We ring-fenced it in specific special purpose vehicles with collateral limited to the individual computers themselves. Yes, it was a fantastic deal when we signed it. You know, we signed three facilities totaling $110 million. Non-dilutive financing got access to these assets, the call option on the upside of Bitcoin, but ultimately the market went against us and we were able to withdraw from those assets without any impact on the rest of the business and the platform. Would we have preferred it to play out differently? Absolutely. Given the cards we were dealt, we made optimal decisions along the way to handle that situation. The Bitmain and Childress CapEx. Again, like rewind 12 months ago, we're IPO-ing at $1.5 billion. We're building out 15 exahash, 500 MW of capacity at a $1 billion construction program. We've mobilized global construction contractors. We've signed, at the time, what was the biggest hardware supply contract with Bitmain in the history of the industry. We fast forward month- by- month, week- by- week, the market deteriorates. Access to additional funding became challenging. Again, it was available. We consciously turned it down. We didn't want to sign us up to security arrangements, plus that could really turn against us if the market went south. As the market continued to go south, that decision was vindicated. We had to stop making payments under the Bitmain contract. We had to terminate a number of the global contracts relating to Childress. Again, we structured those contracts, we structured those relationships in a way that minimized the fallouts. There was no recourse back to the broader business. There was no massive expense that we had to fill. We pivoted, we managed the relationships, we structured the contracts the right way, and we carried on doing what we're doing. Being vertically integrated again has assisted us. We've never missed a construction milestone. We have built everything on time. We've built 106 MW over the course of our history, with that 30 MW at Mackenzie due to come online in the next couple of weeks. 100 MW in the last 12 months alone, and we haven't missed a deadline. This goes to control of everything we do. We own the land, we own the infrastructure, we own the grid connections, the transformers, the substations. We self-deliver the majority of our projects. We control our own destiny. We limit exposure and risk to counterparties to control our own destiny and make sure that we are in control of as much as we can. Low-cost renewable energy. You know, we still remember vividly, you know, two, three, four years ago, when we're running around talking to people in the industry, talking to investors, people saying, "How are you ever going to compete with people co-locating with coal-fired power at $0.025 a kilowatt-hour?" Fast-forward, again, validation that targeting low-cost excess renewable energy is fundamentally the lowest cost power you can secure. Almost by definition, there is no feedstock. That's not to say that we forecasted Putin invading Ukraine. It's not to say we forecasted commodity price inflation, but we understood there was a risk factor there. We understood that targeting marginal cost renewables was going to be the safest, lowest cost, most stable opportunity to secure power, and it has proven out to be so. In a world where power prices and commodities are skyrocketing, our power price has been unchanged. Zero effect. Every year in BC, around April, there is a regulatory price adjustment where the price goes up or down 1% or 2%. That is it. We have been completely unaffected, and as a result, our position in the global cost curve has only sought to fall further and further. Finally, the non-HODL approach. Look, I'm as bullish on Bitcoin as anyone. If you haven't been able to tell that before this presentation, this presentation should really highlight that. Personally, I hold Bitcoin. I don't store a lot of my savings in US dollars or Australian dollars. As a business, it doesn't make sense from a risk perspective. We liquidate each day. Our core expertise is delivering industry-leading data centers and operational cash flows, and we will continue to prosecute that. That's a bit of a recap of where we've been. If there are really two purposes of the next columns. One is survival, liquidity. Are we here to stay? Is there an existential risk? What's the opportunity? Are we able to grow during the next cycle? If we step through liquidity, we've got $47 million of cash in the bank as at 30 November, and about $21 million of net CapEx to spend. That'll finish off a full 180 MW of infrastructure. That involves 160 MW of data centers and electrical infrastructure at British Columbia across three sites, the first 20 MW at Childress in Texas as part of a 600 MW site. We've got $75 million of prepayments we've made to Bitmain, pertaining to 7.5 exahash of that original 10 exahash contract I mentioned earlier. Roughly $10 a terahash of prepayments, where we're seeking to make the co-payment in terms of topping up to market price and release those deposits over time. We've previously announced the equity facility that we expect to go effective in the near term. Finally, we've released some additional liquidity, or in the process of doing so, by selling about 0.4 exahash of miners to bring in near-term liquidity and really bolster that cash position and make sure that we're well set from a working capital perspective going into the next period. In terms of the opportunity, to get back up to 5.4 exahash of self-mining requires $31 million. That's it. Plus shipping and taxes on that. But on the basis that we've got $10 a terahash deposits with Bitmain, we make an additional payment of $9 based on current market pricing of $19. That will give us access to 3.4 exahash and fill up the entire data centers. That's the priority, as we'll get onto. In addition, we've expended all the CapEx and the time building out the high voltage infrastructure for 600 megawatts at Childress. We've got around 18 exahash of relatively short-term expansion potential heading into the next cycle. We're building the first 20 MW data center, as I've mentioned and we've communicated previously. Leaves 580 MW of electrons sitting there waiting on-site, with all the land ready for us just to build the data centers, connect it into the grid, and plug in the computers. In addition, we've mentioned this previously, we've got over a gigawatt of development projects globally, where we've continued to move the ball along. Different jurisdictions where we've selected very carefully based on market conditions, penetration of renewables, the volatility in the market, stability of law, number of factors, and we've continued to sign up land options for REST connection agreements. In terms of megawatts, and we often speak about the Triple M, Money, Miners, and Megawatts. Megawatts, I don't expect we're ever gonna be short based on the development work the team has done over the last few years. On that note, I'll pass over to Lindsay, who will give you a quick update and overview of that real asset base and the 180 MW of capacity that we've got. Over to you, Lindsay. Okay. Thank you, Dan. I'll just take the opportunity now to give a bit of a detailed overview of our operating sites. As Dan has said, it's been a pretty big 12 months for us. It's less than 12 months ago, we actually only had one operating site in Canal Flats in British Columbia, Canada. Fast-forward to today, we've now got three operating sites in Prince George, Mackenzie, and also Canal Flats. We're building out an additional site in Childress in Texas. We are building out a material significant real asset platform across North America. We're really comfortable with the approach that we're taking. We've got 130 MW operating at the moment. We've just energized the 30 MW additional build at Mackenzie, which brings us to 160 MW of operating capacity. There's still some commissioning to do there, but we're very close to bringing the miners on there as well in the next week. We've got, as Dan talked about, we've got another 20 MW at Childress. Very soon, we'll have 180 MW of capacity available and an additional 580 MW capacity at Childress. It does give us a great platform for growth as market conditions allow. The important aspect of Childress is that we have built a 600 MW connection to the 345 kV transmission line. This substantially reduces the cost risk in delivery of future expansion. Importantly, we continue to grow our team both here in Australia, in Texas, and also in Vancouver and British Columbia, because we're moving into a significantly sized operating business, and we need to have the people to support that and position ourselves for future growth. I'll now talk about our operating sites themselves. In Canal Flats, it is our normal site. It's a 30 MW site. It runs on a 100% hydroelectricity. The great thing about Canal Flats is it was established to run around about 0.7 exahash. It's been consistently running at about 0.87, I think that's just testament to our team, our focus on productivity, our focus on efficiency. It's all about finding those one percenters and bringing them to the table and looking at how can we expand on our operations and make them just that much more efficient. We've consistently been ranked one of the most efficient data centers in terms of Bitcoin mined per exahash, and that's by independent industry and our analysts. I say we continue to improve across all our sites. Importantly, we don't just sit there and rely on the air cooling coming from the fans of the computers themselves. You can see in the picture there, the large fans sitting on the roof, and they automatically adjust their speeds in accordance with the ambient temperature, so they ramp up and down to optimize our miner performance to increase, decrease the airflow in all extremes. We've been operating really efficiently across all our BC sites in winter and in summer and not really impacting our efficiency at all. It's been a great, again, a great credit to our internal design teams that are able to optimize our performance across different regions. We also have a fabrication facility at Canal Flats. We've got an in-house design and engineering team as well. They support all our sites. It's our center of excellence, and this allows us to ensure our projects are being brought in on time and at a lower cost. In terms of our second site at Mackenzie, it's an 80 MW site, approximately 2.4 exahash of total capacity. We successfully commissioned the first phase, 9 MW, ahead of schedule in April of this year. We followed that up with a further 41 MW in August. As of today, we just went live energizing our second transformer at the Mackenzie site. Again, that's three weeks ahead of schedule. We were thinking that was gonna be more towards the end of December than the front of December. We have brought each stage of the construction process there at Mackenzie in ahead of schedule, and it's really a function of our internal construction team supported by key subcontractors that work together in a seamless team to just really drive great outcomes. That's been driven by an attitude where if we set a deadline, we just have to hit it. Likewise, at Canal, from Canal Flats, Mackenzie also operates on 100% renewable energy. Our third site is in Prince George in British Columbia. It's a 50 MW site, and you can see the pictures there. We had a bare paddock in September of 2020, and now we've got a 50 MW operational facility operating there in Prince George. It's a great site. We've brought a new operational team together, and the really pleasing thing is we're starting to see them looking for opportunities to improve, bringing innovative ideas to the table, and we're able to implement them and maximize our efficiency. Again, with Prince George being based in British Columbia, it's running a 100% renewable power from BC Hydro. In terms of our fourth site in Texas, I'd like to spend a little bit more time on Texas because it is such a transformational site for our business. You can see the air photo there, the size of that site. That's just all the infrastructure being established to get a connection to the 345 kV line. We're building a bulk substation, which is our 600 MW connection, and then we step that down to a primary substation, which is 100 MW, and that allows us to build five buildings per primary substation. We've got a connection agreement. We signed that with AEP in January of this year. It brings our total power capacity available to 795 MW of capacity. Childress is near a number of facilities, so it's a relatively low risk connection site. I think you've seen with the 20 MW that will be coming on in early 2023. The building's well advanced. I'm actually at Childress at the moment. I've been spending some time on site. We've really got a focused team here that is driving really good outcomes and bringing that project to a conclusion. The data center design, it's our proven data center design. We brought it down to Texas. We've tweaked it for local conditions, and we're really looking forward to seeing that in action in early 2023. Dan touched a little bit on why Texas. I'd just like to reiterate, it's a great jurisdiction for us. It gives us geographic diversity from BC. There's a massive renewable opportunity in Texas. The renewable generators desperately need load out near where they're operating, that allows them to be generating at much higher capacity factors. We're able to come on and come off to meet those demand peaks and work with the ERCOT and regulators to make sure there's available power when it's needed. The other pleasing thing about Texas is there's a massive amount of renewables that have been permitted that are just waiting for the right price signals to come on board. That's gonna ensure that there's a long-term low-cost energy available for our operation in Childress. I think just in closing, it's been a really big year for Iris. I really would like to thank the Iris team. You know, we've got a team that comprises world-class engineers, asset managers, safety professionals, financiers, support staff, all with an extensive background in infrastructure, energy, traditional mining, data centers, and Bitcoin. We've brought that team together very quickly across three countries in Australia, Canada, and the U.S., and that's not an easy task. They've gelled incredibly well and have worked incredibly hard over the last 12 months. We do have a laser focus on execution excellence, supply chain management, and our team's got decades of experience in delivering projects on time and generally under or under budget. I think our team's capability and knowledge is certainly one of our competitive advantages. Thank you for the opportunity to give you update on the operations today, and I'll now hand over to Lincoln. Thanks, Lindy. This slide just really outlines monetization pathways for the 180 MW of data center infrastructure that we've built. I think more importantly, it highlights the strategic value that we see in that infrastructure. Before we step through this table and illustrative economics, I think it's just very instructive to briefly touch on the two main pathways where we can monetize our infrastructure. The first pathway is around self-mining. That's obviously been our focus since inception and remains our focus going forward. This really just involves deploying our own mining hardware into our own facilities to mine on our own account. Effectively, we are retaining 100% exposure to the Bitcoin price in this self-mining scenario. The alternative monetization pathway is hosting, where effectively we host mining hardware on behalf of third-party external clients, in exchange for a margin. Effectively, this delivers us a more stable revenue line compared to self-mining. Because all of the infrastructure is effectively built, there's no additional CapEx for us to host third-party clients. From a capital perspective, it's actually quite typical for incoming customers to actually fund a two or three-month deposit. From a market perspective, I think it's important to highlight as well that we are seeing and experiencing quite favorable market conditions at the moment around hosting, and we're seeing a lot of demand for high-quality infrastructure from a range of different counterparties. Just turning now to the table and the illustrative economics. Really, this is just stepping through two scenarios across a range of different Bitcoin prices. In terms of what the business looks like, post the 20 MW energization at Childress. You know, total capacity is 180 MW, and we effectively have 2 exahash of hardware for self-mining, which basically leaves a residual 110 MW of capacity to be monetized through either hosting or self-mining. The first scenario at the top of the page outlines a blended scenario where we self-mine 2 exahash, and then we host the residual 110 MW at an indicative $0.02 hosting margin. Under the scenario, no additional capital is required. As you can see at a $15,000 Bitcoin price, the self-mining component contributes about $14 million of mining profit, and then the residual hosting contributes an additional $19 million in margin. If you skip down the page to the green shaded row, that outlines the scenario where we are at 100% self-mining operation, where effectively we deploy approximately $31 million of capital to acquire an additional 3.4 exahash of mining capacity. That $31 million assumes that we are continuing to utilize and unlock the Bitmain prepayments that we have made. As you can see, moving from left to right across the page, there is significantly more upside exposure to higher Bitcoin prices in the self-mining scenario. Just an example, at a $25,000 Bitcoin price, self-mining 5.4 exahash generates, you know, an illustrative $114 million in mining profits. Finally, just at the bottom of the page, in terms of our cost base, we are targeting approximately $2 million per month in site and corporate costs. These non-electricity expenses primarily comprise payroll, insurance, site expenses, and professional fees. I think ultimately the takeaway here is, you know, with the substantial asset base that we have built, irrespective of whether it's a self-mining plus hosting capacity or whether it's a 100% self-mining operating model, you know, we are able to cover our costs across a range of Bitcoin prices. Ultimately, it comes down to all of this real infrastructure that we've built that actually provides us with the optionality to consider these two pathways in detail and ultimately make decisions around how we monetize that infrastructure to maximize long-term value for all of our stakeholders. I'm just gonna hand over now to Dan to talk to some of the pathways in which we can achieve 5.4 exahash. Over to you, Dan. Thanks, Lincoln. That's great. Maybe just backtracking on that slide, just to add a couple of comments. Whoa. Sorry, we've got two people working on the slide. Thank you. I think if you rewind to the decision around the NYDIG facilities and the decision that Iris Energy made not to financially support and bail out those special purpose vehicles, there was a lot that went behind that decision, as you can imagine. Again, I'll reiterate, it's not always reflected in these relatively dry and legalistic 6-K that come out to market. I think this slide really should help people understand the decision-making process there. First of all, there is a glut of machines in this industry. There are so many ASICs that can't get plugged in because people haven't been able to build out the infrastructure. The hosting market is buoyant. Hosting margins are positive. We are feeling really good about the ability to fill up our data centers with hosting if we want to, and I'm not sure that we want to, and I'll come back to that a little bit later on. You look at the $31 million of additional funding to basically get back up to 5.4 exahash. Now contrast that to over $100 million of debt obligations and $7 million a month in principal and interest that was due on those facilities. That takes our corporate overheads from $2 million a month to $9 million a month. Like, for us, the decision was really straightforward, really clean. Doesn't mean that it's easy. It hurts. Like you sign, you hope for the best, you really want things to play out differently. as that situation evolved, the numbers really told a very clear story. as a result, we've had a period of consolidation. We're feeling really positive. We've got $47 million of cash in the bank. We've got $21 million of net spend to finish off the full 180 MW of data center and electrical capacity. We've got strong cash flows coming off the 2 exahash of capacity that we do have. we've got enormous optionality to optimize decision-making around self-mining versus hosting. to be clear, there is no silver bullet. I cannot give you a clear answer on where we'll be in the next week or even month or three months, because like we have done the entire first 12 months, the entire four years we've operated this business, we are gonna optimize decision-making. Every day, let alone week or month in this industry, is a new adventure. The facts change, the environment changes. You need to be dynamic, flexible. We like to think that we have. We've got a number of levers at our disposal to try and get to that 5.4 exahash of self-mining without having to host. Hosting is a backstop. If we need to do it, if we need to do it to survive, we need to do it because the market's deteriorated further. The data centers are there. They're ready. Come up with your computer, plug it in, pay us a margin, you know, life goes on. It's not who we want to be. We're gonna take our time. We ask you to be patient with us. We've got the $75 million of Bitmain remaining prepayments, which we can seek to monetize, either for our own use or perhaps on selling units, as we've done previously. We've got the committed equity facility with B. Riley, which we may use over time, subject to market conditions. Funding initiatives, we're still receiving term sheets. There's a lot of interest in this sector still in funding good businesses with good business plans. The issue for us is that we've got to make sure that the right funding products are taken on. We can't come this far, navigate all these risks, all these headwinds, you know, the dynamic market that we have, only to sign up another silly debt product now and put ourselves right behind and subject to some really unfavorable outcomes if the market goes further south. We believe we're really well positioned to ride out the current downturn in Bitcoin. We're ready, you know, for the market to turn. We're excited about the next wave up, whether that takes place in the next three months, six months, 12 months. We know the macro environment is volatile. Bitcoin is a volatile play on that volatile environment. Things can change really, really quickly. We believe we're really well-positioned. Again, we're aligned. Will, myself, the management team and board, we own 25% of the business collectively. We're here to protect the downside. We're gonna take out insurance contracts by minimizing downside risk, but preserve as much of that upside as we can to benefit of all shareholders. Again, thank you, Lindsay and Lincoln for your overview. Thank you to reiterate what Lindsay said to the broader team. It's been, frankly, an extraordinary 12-month period. The level of commitment, enthusiasm, and passion from this team, you know, I just don't believe has been replicated very often in other industries or businesses. So it's a testament to their resilience, their hard work, and bring on 2023. On that note, I believe we've got some time for some Q&A, and I'll hand back to Lincoln. Thanks, Dan. Let's just open up the lines for some Q&A through the conference call. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. We ask that you please limit your questions to two per person, and if you have more, please rejoin the queue. Your first question comes from Josh Siegler from Cantor. Please go ahead. Yes. Hi. Thanks for taking my question today. My first question, I was wondering if you have a sense of timing on when the 0.9 exahash of miners that's either in transit or pending deployment can be up and running. Of course, I understand, 0.4 of that could theoretically be sold, but just curious on the timing of that. Thank you. I'm happy to grab this one. Those miners are in transit at the moment or in warehouse. Josh, we originally shipped a number of units to Childress when the plan, because the plan keeps changing, was to build out 40 MW. We're in the process of selling some of those units which are already in country in Texas, as well as move some of those units up to the facilities in British Columbia. The delay. There has been a delay over the last couple of weeks. It's been around optimizing for liquidity and decision-making around how many units of those we wanted to sell to top up our working capital and how many we wanted to plug in in BC. In terms of specific guidance on the date, I can't give that to you right this second, but we've got empty data centers. To the extent we've got idle hardware, we're gonna get it up there pretty quickly, and we're motivated to plug them in. Understood. Thank you. If I can ask a follow-up. I'm curious, you know, if you could dive a little deeper into the decision-making process around pursuing self-mining or hosting. I mean, you guys presented a really good analysis of the costs and potential revenue upside. Are there any other factors you're considering when thinking about the direction to take the company? Thank you. Yeah, it's a good question, Josh. Look, I must say a few weeks ago, we were like, "We've just got to host. Like, let's batten down the hatches. Let's get a revenue line. Let's fill up the data centers, make sure we ride out this bear market and make it into the next bull market and worry about it then." As is our nature, that felt like the easy way out and a bit of a cop-out, and feels like we're giving up a lot of the upside just by defaulting to that position. We'd like to take our time. We've got, you know, $47 million of cash in the bank, less the $21 million of expected CapEx. The money left over is almost equivalent to a full year of corporate overheads before you've got a dollar of operating revenue. We're not feeling the pressure to make suboptimal decisions. We do have a slide in the appendix, which people are free to peruse in their own time that compares hosting to self-mining. Our priority is self-mining. If market conditions deteriorate or we're unable to secure that self-mining on terms and under conditions that we're happy with, and that goes to both risk and return, then hosting is absolutely there as a backstop. We don't believe it's the optimal use of our infrastructure base for the long term for our shareholders. All right. Understood. Thanks for hosting the call, and thanks for taking my question. Thanks, Josh. Thank you. The next question is from Reginald Smith from JP Morgan. Please go ahead. Hey, this is Charlie Pierce on for Reggie. Thanks for taking the question. Thinking about that $31 million total you mentioned to getting to that 5.4 exahash of self-mining, what are you thinking about access to debt going forward? You've mentioned the term sheets are still coming in, do you anticipate that SPV bailout impacting cost of capital moving forward? Of course, it was great that you were able to only use those miners as collateral in the past, do you anticipate future debt requiring a corporate guarantee? Thanks. Thanks, Charlie. I appreciate the question. look, it wasn't lost on us the fact that if we were to default or not. We shouldn't use the word default because at the end of the day, we didn't default. It was the SPVs and these special purpose vehicles that couldn't service their own obligations. We just happened to own the shares in those SPVs. The only proactive decision we made as a business was not to use shareholder money to bail out a lender that was underwater. As you say, it was structured to protect Iris shareholders very deliberately. It wasn't lost on us that the existence of how that process played out could affect our access to funding going forward, ultimately, we have to make the right decision and deal with the consequences. It's really hard to quantify whether it will have an effect in the long term. All I can say is we have received term sheets during and subsequent to that process, and other financiers actually asking us why we would even entertain restructuring the loans, when the lenders were underwater. Yes, the market, particularly in this sector, is probably becoming accustomed to different capital structures and ways of financing. I think in mainstream institutional financing, as you've alluded to, people are a little bit more rational, see the numbers, see the different deals people do and understand, well, that's not Iris's fault, that's the market's fault, that's the product we've signed. At the end of the day, we can hold our head high knowing that we approached the lenders months and months before, you know, the issue kind of manifested itself in a, in a default and really tried to work with them to see whether there was a win-win outcome. Unfortunately, there wasn't in this circumstance. Great. Understood. Then digging in a little bit more on hosting, how long do you think it would take to get the hosting partners' machines in facility once you decided to go down that path? Then just kind of as a follow-up to that, given Iris' efficiency and I guess operational excellence, could that demand a premium above that $0.02 per kilowatt hour that you are baking into those forecasts right now? Thanks. Look, it's how long's a piece of string to some extent, with how quickly you can fill the facilities up. You'd probably go out tomorrow and let some crypto bro into your data centers, put his machines in and mine his Bitcoin. It's not who we are, it's not how we want to operate. We've been having conversations with potential counterparties for months now, but we're only going to do it if it makes sense for us, it makes sense for them, and is in the long-term interests of our business. Again, stepping back to where we are today, I think we've got time. Let's really try to get that self-mining capacity back despite it being a bear market, despite it being hard at work and, you know, the chips stacked against us from a macro perspective. Let's try. We've got the time, we're very confident that we can fill up the data centers. In terms of upside to that $0.02 margin. Look, it's again, it's not all about the margin, it's about risk, terms of the contract, level of prepayment, security. Again, we're gonna be focused just as much on the downside and the risk. You know, what if a customer defaults? What if they don't make their electricity payment? What if there's a dispute, et cetera? The margin is an important part of that commercial decision-making. Look, anecdotally, it feels like hosting rates have been around $0.07-$0.08, a kilowatt hour in the last cycle. $0.02 margin on our circa $0.045 cost of power would be $0.065. It may not surprise you that the presentation has erred on the side of conservatism in that regard. Again, anecdotally, I heard someone say Core Scientific have recently increased their hosting rates to $0.099, a kilowatt hour. Don't quote me on that, I'd wanna fact-check that. At the end of the day, there's an abundance of hardware, there's a surplus of units that need a home. We've got the home, which is the strategic advantage and what we've really sought to protect. In terms of a premium per se on efficiency and uptime and reliability, yeah, very possibly. We had one prospective customer do a site visit earlier this week, and, you know, like most people that come to our facilities, they are blown away with the quality, the cleanliness, the professionalism, et cetera. I don't think it'll hurt us. Great. Thanks for that. Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. There are no further questions on the phones. I'll now hand over for webcast questions. Thank you. Just turning now to some questions that are coming through the webcast. One question, just an observation that there hasn't really been a return on cash throughout the Bitcoin lifecycle, and the entire mining sector is trading at liquidation value. How should we value Iris's intrinsic business value and IP? How should we value Iris and Bitcoin mining? It's a question that's perplexed me at times over the last 12 months, I must admit. Look, I think in terms of a real rate of return on cash throughout the Bitcoin cycle, I'm not really sure about that comment. If you go back over the last four or five years and map out data points for each purchase of hardware and what the implied yield on that hardware was at any point in time, it averages out to about 124% cash on cash return, and this is on the ASICs themselves. By the time you amortize the cost of the data center infrastructure, the land, the capital involved in electricals, et cetera, that 124% drops to around 60%-80% cash on cash return. To suggest that there hasn't been a real rate of return, I'm not sure I necessarily agree with that when you can build long-term infrastructure that's gonna be here for decades, then you're buying chips on, you know, a sub-12-month payback and then exposed to upside in the hash rate lag during bull markets. You're exposed, if the market comes off, it's gonna be harder to get that yield in that period of time. I think the risk-return of the underlying cash flows is still super attractive. This industry is very unique as compared to other commodity industries for multiple reasons. The one I'll call out here is there's a CapEx hedge. People say, when Bitcoin's up, hardware prices go up because again, the manufacturers tend to back solve the price of these chips to deliver that average 124% annualized return. When Bitcoin mine profitability is low, the chips are low. You can see 12 months ago people are paying $55-$65 a terahash for chips. We signed our 10 exahash contract at $40, which again was a great deal at the time. Today it's $19, and the secondary market is even lower than that. The funny thing is, the implied yield at $19 is actually only around 80%-90% similar year as of this morning. In a market that's got a bit of a glut of hardware, I don't feel like the asset market is running away from us anytime soon. We can be patient, we can optimize, we can wait, see if the macro turns, see if the Bitcoin market turns, see if we can monetize some of those prepayments and access that self-mining to fill it up. In terms of the liquidation value of the business, I don't think about that. Like, we're not liquidating the business. We're feeling good, we're here for the long term to generate some pretty good profits out of this infrastructure and keep growing. Thanks, Dan. The next question is around spot energy prices and, you know, observation from a, from a listener that energy prices are trending higher around the world. How are we gonna manage that risk? Interested in your thoughts on that one. If you wanna do this one, Lindsay or Lincoln, I'm happy to talk as always, but don't wanna hold the microphone. Sure. Happy to talk through this one. In terms of, you know, the infrastructure that we've built, the 160 MW of that is in British Columbia, which as Dan mentioned earlier, it's a regulated market. There's a price reset every April. We typically receive the energy price, you know, go up or down 1% or 2%. Extremely stable jurisdiction. It's, you know, strategically located in areas where there's excess renewables. From a British Columbia perspective, you know, we're very much insulated from that volatility we're seeing in other parts of the world. In terms of our shortest project, where we are building an initial 20 MW, you know, we'll release further details around the details of how we will procure power, et cetera. I think it's really important to highlight that the project's located in the Panhandle region of Texas, where it's an abundance of renewables there versus transmission capacity. There are significant parts of the day where energy prices are extremely low or negative. There are mechanisms we would look to participate in around, you know, demand response programs, load curtailment, potentially hedging out some of that power price exposure. Basically, all of these various tools will allow us to manage our power price exposure in Texas when the projects become operational. There's another question coming through about the Bitmain deposits. This is about, you know, the mechanics of that conversion and whether final resolution needs to be had with respect to the lending facilities. Finally, in terms of how much capital is required to unlock some of the deposits into rigs. I'll have a crack at this one. You know, I think important to highlight that the SPVs that relate to the lending arrangements are completely different to the, you know, the separate 10 exahash contract, of which we have $75 million of prepayments against. I would think of them as quite separate and mutually exclusive. As we've demonstrated, over the last few months, we've been able to work constructively with Bitmain to unlock some of those deposits over time. From a just an absolute dollars perspective, the way the commercials of that contract work, you know, there's a cap price of $40 a terahash and a market. As Dan mentioned, the market price for new hardware is like $19 a terahash. You know, given our $10 per terahash deposit, there's a world where we just top up that incremental $9 to unlock capacity. In this presentation we've flagged an indicative $31 million to unlock 3.4 exahash, through a combination of new capital as well as utilizing those prepayments that we've just talked about. Finally, I think we've got time for one last question before we close up. What are our thoughts on the global hash rate? Why have we not seen a drawdown like previous cycles? Is there a global cost curve like we've seen for traditional mining assets, and where does our risk fit into all of this? I'm happy to handle this one, Lincoln. Question without notice, if we happen to have that slide showing hash rate and price over the last couple of years, it'd be really cool to share it. You're a champion. In terms of while that's loading, that is perfect. Absolutely perfect. First of all, there's no global supply cost curve report that you can commission. It's not like aluminum smelting, where you go to a Wood Mackenzie, pay them $50,000, they give you this nice, tidy report that outlines every facility, every cash cost, et cetera. We're dealing with an emerging asset class. It's private. You don't need to log logistics the same way you do with aluminum. The level of transparency is lower. What we have observed, and I think we've said this to people in the past, is during the last cycle, during the depths of the bear market, we saw mining profitability or mining revenues every time they hit around $0.055-$0.06 a kilowatt hour, you saw the hash rate start to drop off and high-cost miners drop out of the cost curve, implying that there was a lot of power at that level, and that was generally around where hosting rates were at that point in time. As I mentioned earlier in the presentation, during the last cycle, that hosting rates have been increased to $0.07-$0.08 a kilowatt hour. A large part of that is because of mining profitability and the inability to build out all this infrastructure in time and at scale to support the computer network. This is part of that whole hash rate lag effect. We've got another slide which we should share in due course, which really underpinned part of Will and I setting this business up, which shows every single Bitcoin cycle and what the hash rate did in parallel to that Bitcoin price cycle. During the early ones, the price ran parabolic. The hash rate moved parabolic in parallel because it was just people on their laptops and computers. Every cycle as Bitcoin got bigger, it got longer and harder to scale the real world externally. You can't click your fingers and come up with gigawatts of electricity, billions of dollars of CapEx, fast-forward years of capital investment programs, manufacturing of chips, transformers, et cetera. I think if we step back and look at this chart on the screen, it really shows what we've seen over the last couple of years. If we go back to around October 2020, we can see around that point, the hash rate and the price was largely in equilibrium, and mining profits were essentially normalized. Bitcoin then runs 5x, 6x, runs up to 60,000. What does the hash rate do? It can't respond. It's inelastic. You can't click your fingers and come up with tens of gigawatts of power and infrastructure. What we've seen over the last two years, it's taken two years for the hash rate to finally catch the price and normalize those returns at around that kind of $0.08 a kilowatt hour revenue line. You can see the price coming down, the hash rate linear escalation left to right. Now that we've seen that normalize, we've seen that downside adjustment. Yesterday we saw the difficulty level go down 7.3%. Those high-cost miners are starting to drop out. A couple of months ago, people were asking me, "Well, why haven't we seen high cost miners switch off when Bitcoin was $20,000?" To my point then, was it was still profitable to mine at $0.08 a kilowatt hour. It was still profitable to mine with less efficient hardware. As we saw Bitcoin drop from $20,000 down to $16,000-$17,000, it's really tipped a number of those high-cost miners off the edge, and you can see that evidenced through the global hash rate now coming down. As I said yesterday, the difficulty went down 7.3%, which was the largest downward adjustment since China banned Bitcoin mining last year. Already this epoch in the first 24 hours, and it's a low sample size, shows that the hash rate may continue to fall. Again, if Bitcoin pops, you expect more of those machines to come on. If Bitcoin drops further from here, that's just gonna put more pressure on the next quartile of the cost curve and people that can't pay their power bill. If you look at our cost per Bitcoin mine, which has been around $8,000-$9,000 a coin over the last three to six months, that is only going down as Bitcoin price goes down and these high-cost miners switch off and essentially give us their coins each day. We're feeling in a really good position from a cost curve in terms of quantifying it and giving you a cost quartile, cost decile, it's really hard given the nature of the industry. I think that's that might be us out of time, Lincoln. I think thank you for everyone dialing in, giving us the opportunity. Really pleased to, as I say, get out of those legalistic and relatively dry 6-Ks and SEC releases and actually show you how we're thinking about the industry, the business. We're still super excited. We appreciate all of your support. It's been a rocky 12 months. Here's to 2023 giving us a few more tailwinds. Please reach out if you've got any questions. We're doing a number of lunches, fireside chats, panels, group presentations, not just on Iris, but also Bitcoin and crypto more generally. We're very happy to help share our experiences, our perspective, so please don't be afraid to reach out. We'd be delighted to engage further. Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.