But what I would say is overall, I’m sure at our next quarterly update, we will have a lot more specifics around timelines and maybe even in the interim. But right now it’s just early other than that, generalized target, and we think we can easily line up the timelines to be ready for that.
Gregory Lewis: Super helpful. Thank you very much.
Tyler Page: Yep.
Operator: One moment for our next question. And our next question will be coming from Chase White of Compass Point Research and Trading. Chase, your lines open.
Chase White: Thanks. Good morning, guys. Thanks for taking my questions. So, first of all, could you guys give us a sense of what the JV EBITDA was in total?
Ed Farrell: Hi Chase. That’s a bit of a challenge there. I mean, if you look at our loss that we have there, it was about $2 million or so. So keep in mind, we were from a GAAP perspective, we’re 49% of that. I don’t have in front of me at this point in time the exact, all the data they have on the JVs, but it’s something that we could look into.
Chase White: Got it.
Tyler Page: One thing to add to that, Chase, just keep in mind we do have the last few bits of a BlockFi rig loan at Alborz that will be rolling off in the first quarter of the new year. So that is at least a payment that will go away on a monthly basis.
Ed Farrell: Yes, and I would just add to that the results of that all the JVs and our share of those results will be much better than that they have been in previous quarters because of that.
Chase White: Thanks. That’s helpful. And then given you’re swapping out rigs for the S21s, how should we think about your net total hash rate when all said and done in 2024? I think presumably it’s not going to be 8.4 exahash at this point, right? Or am I not thinking about that correctly?
Ed Farrell: I think it’s tough to forecast, because the answer is it depends. I think there’s a lot of moving parts. But you’re right, met-net. It depends exactly on how we deploy the 1.2 exahash of rigs. If we were to completely swap it out, we would probably be swapping it out for the least efficient rigs at Odessa, which are MicroBT M30s and I think average about 38 joules a terahash. So I haven’t done the math to give you a forecast, but you can probably piece it together if we plug in 1.2 and unplug an equivalent power draw of 38 joules per terahash machine.
Tyler Page: I think also keep in mind, Chase that like again at this scale, it’s no joke that repairs can vary wildly and we could have 1000 machines in the shop. So I think having an extra fleet probably generates more production all the time. Like you can imagine a world where we’ve swapped out M30s but they’re sitting there and if something comes in for a repair, we immediately plug something in rather than have it out of commission.
Chase White: Got it. But there’s not like extra capacity somewhere out there that you’re going to be able to plug in above and beyond. You have the ability basically 70,000 rigs to operate.
Tyler Page: Not currently. There’s a lot for sale out there.
Chase White: Got it. Helpful. Thank you guys.
Operator: And one moment for our next question. Our next question will come from Josh Siegler of Cantor Fitzgerald. Your line is open.
Josh Siegler: Yes, hi guys, thanks for taking my question today. Nice to see the announcement on the Black Pearl. I’m curious if you can engage in a hedging strategy on power at the Black Pearl site to smooth out the energy cost over time.
Tyler Page: Let me speak at a real high level about. And I know, Josh, you know this from a lot of folks that have large scale front of the meter setups. You can think of hedging in a couple different buckets. The simplest might be in a different pricing regime for power we could effectively put in a financial hedge that would, even though we’re paying market prices at the site, could fix our price at a lower level. We wouldn’t do that in the current pricing regime, because power prices are generally elevated right now and at the higher part of the cycle. So in the same way that we have a fixed price at Odessa, and a big part of that, in addition to the unique elements of the contract was a different pricing regime for power.
We probably wouldn’t lock that in. But over time, there will be cycles, there may be times when we do that. I think the other way to think about hedging is, if you’re participating in ancillary services, there will be things like day ahead capacity markets. If we get another hot summer like we had this past summer, and you’re breaking demands for power, we can think about hedging in the sense of seeing the prices a day ahead being high and selling the capacity forward effectively, or offering the capacity up. I think a better way to say it, instead of planning to mine and netting that out as a way of effectively hedging our power price. Does that make sense?
Josh Siegler: Yes. Very helpful. Thank you. And for my follow up, obviously, there are many different funding sources to use as you ramp up Black Pearl, I was curious kind of, if you would embrace potentially tapping the hoddle [ph] to help pay for it.
Tyler Page: Yes, absolutely. I mean, I think, look, we’re always being a – if you think about all the levers we can pull, we have a bitcoin inventory and the price bounces around. We can tap equity markets or we can tap debt markets. We constantly think about the returns on all of those. Again, I think if you’ve got a truly great opportunity to lock in a price for something at a cyclical low in the market, it’s easy to draw down on some of the treasury balance in bitcoin. If you know that our production is coming in every day, and you see the strong production numbers every day, you can replace that. So absolutely, we would think about spending it. We’re not religious. Our goal is to optimize our dollar based return for shareholders.
So it’s not impossible. It is our goal to build that inventory over time. So we’re always going to weigh the costs of the different ways we can raise capital. I would say in general, and I indicated this in my earlier remarks, but I would say as the enthusiasm seems to build around bitcoin price, maybe an ETF, there’s institutional interest, I would say in general, there are the early stages of big investor conversations coming back to miners. I think our story around power optimization puts us in a unique category where we’ve got some investors talking to us that may not be talking to other bitcoin miners, and we’ll just have to see how that develops. But I view over the long term, Cipher is part of a disruptive technology to power generation.
And I think power generators started to think this way before all the kind of broader crypto market shenanigans of 2022. If we see a bull market for bitcoin, it would not surprise me for them to come back to be very interested in this space. And I do think there’s a lot of pools of capital, much larger pools of capital invest in that space than invest in bitcoin mining. And so we’ll see. I think we’re always going to look at what all the options are, but it’s really this flexibility at Black Pearl that enables us to find the most opportunistic way and timing to build out the full data center.
Josh Siegler: Great. Thank you, Tyler. Appreciate the update. I’m looking forward to hearing more about Black Pearl.
Tyler Page: Thanks, Josh.
Operator: [Operator Instructions] Our next question will come from Mike Colonnese of H.C. Wainwright and Company. Your line’s open, Mike.
