Core lays out bankruptcy exit plan
Less hosting, more hashrate and profit sharing
As previously reported, Core Scientific (OTCMKTS: CORZQ), the largest public mining operation by production, aims to emerge from bankruptcy proceedings by the end of September. Much-recovered company liquidity and the broader mining economics are among the main drivers helping with the bankruptcy exit.
Last week, CORZQ submitted a reorganization proposal and a presentation deck to the bankruptcy court where it laid out a post-emergence business plan that expects to boost its market share in bitcoin mining.
Since the Chapter 11 filing in November 2022, CORZQ’s operational capacity has declined from 812 to 724 megawatts (MW). As a result, its market share by monthly production has dropped from more than 5% in November to less than 4% in May.
With the assumed Sept. 30 bankruptcy exit, Core aims to grow mainly in the following ways:
Expand the two facilities in Texas (Denton and Cottonwood) at an implied cost of ~$205,000/MW which will bring total operating capacity to 896 and 1,096 MW by the end of 2024 and 2025.
Purchase new miners to fill in currently vacant and future capacities primarily in Texas. Target to install additional 18.3k, 55.5k, and 64.5k units of miners in the remaining of 2023, 2024, and 2025, respectively.
Hosted miners will remain constant at 65k units after October. But the composition by December 2024 will be ~41k units belonging to existing clients at a hosting rate of $0.07/kWh and ~24k units in new contracts that transition to a profit-sharing model.
No new equipment sales; Continue to sell all mined bitcoin soon after production, anticipating $213 million and $35 million in miner and infrastructure CapEx, respectively, by the end of 2024.
With new miner purchases, the company also plans to replace older equipment with models in the 21J/TH efficiency league as the halving is due six months after its assumed bankruptcy exit date. Here’s the link to the full deck.
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