Iris Energy – an Australian crypto-mining company whose core competency is operating BTC mining sites in Canada that run exclusively on renewable energy – recently ceased mining at two subsidiaries.
Nevertheless, the company still maintains that its business continues to be profitable.
Immediate loan repayment required
Subsidiaries operating as Special Purpose Vehicles (SPVs) used Bitmain mining rigs backed by a $107.8 million loan from New York Digital Investment Group (NYDIG), the company’s statement read. society. Unfortunately, the crypto winter has shattered many investors’ confidence in cryptocurrencies, leading to an immediate loan repayment request.
Due to a combination of unfavorable market conditions, an increase in mining difficulties as well as the price of electricity and the decline in the value of BTC itself, the crypto miners in question have saw a much lower return on investment than expected.
Luckily for Iris Energy, the machines purchased with the loan were also written off as collateral, meaning the debt will be cleared simply by handing them over to NYDIG.
Company remains profitable despite falling share price
Iris Energy – a company run by Daniel and Will Roberts – recently suffered a $220 million wipeout in market value due to a 94.5% decline in the price of its stock, IREN. Nonetheless, the brothers said they are still optimistic about the cryptocurrency sector.
They also reiterated that their business model remains profitable, despite some adjustments. Currently, each bitcoin mined at their facilities yields around $6,000 in profit.
While this is enough to drive the business forward, it is suboptimal given the expected operational costs during better days.
“In terms of gross margin, it is clearly still profitable. We just need to determine the level of overhead the business can sustain. (…) We are given the cards that we are and all we can do is anticipate future problems, which we have done around the [SPV] borrowing facilities by confining them. We are still very enthusiastic about the company and the industry.
Due to the closure of the 2 SPVs, the mining capacity of Iris has been reduced by more than half – 3.6 EH/s (exahashes per second) have been lost.
This puts Iris’ total remaining mining capacity at 2.4 E/Hs. Luckily, there’s already a silver lining for the company. $75 million has already been paid to Bitmain to outsource even more mining rigs. Iris is currently in talks with Bitmain regarding the operation of these miners, which could increase Iris’ mining power by a whopping 7.5 E/Hs.
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