And now with what we’re accomplishing, Corsicana and the results we’re seeing — we’re starting to see there, we’re growing into that newer size. So as far as what SG&A can look like going forward, I think you can expect $22 million to $25 million a quarter in cash expenses. I think that’s a good estimate that we can give right now. And legal and litigation expenses that are not ongoing continuous fall off, you know, hopefully we will be able to improve that number.
Martin Toner: Great. Thank you very much. Can you talk a little bit about the curtailment revenue in the quarter, any puts and takes that are noteworthy, and then have there been any changes to the power strategy since [Indiscernible] a few, less than a month ago?
Jason Les: So most of the power strategy results are really Q3 weighted. We see some every quarter, but most of them really come in the third quarter in the summer months. And of course, at the end of the second quarter, we get some of that in June. So the 5 — approximately $5 million do you see from the first quarter? That’s us really taking advantage of just limited opportunities that have come up in that quarter — during that quarter and the employee services revenue that we always participate in. So how it plays out in this summer in mainly Q3 coming up here, it is hard to predict. It’s going to be based on external factors, like weather and generation performance, that we cannot control. However, because we have this 345 megawatts of fixed price power, because we have these blocks 24/7, and because of what we’ve learned from the power strategy that we’ve developed we are in a really good position to act on the opportunities when they occur here.
So that 345 megawatts that is at Rockdale. So we’ll be executing our power strategy at Rockdale, selling power when that spot price of power is exceeding Bitcoin mining revenue. And then over at Corsicana, we are beginning unhedged and we’ll just be responding to the spot prices of power as they occur there, which also gives us the benefit of capturing those very low priced or negative priced hours when they occur as well.
Martin Toner: That’s great. Thank you very much and that’s all for me.
Jason Les: All right. Thank you.
Phil McPherson: Great. Our next question comes from Regi Smith at JP Morgan. Regi?
Regi Smith: Hey, good morning, and thanks for taking the question. I appreciate the disclosure on slide nine. I’m still not all the way clear on, I guess, the drivers of the sequential increase in your cost to mine. I’m looking at the network difficulty component. And it seems rather large in relation to the 4P network. Maybe a little color on those two components, that and the other cost, and how much of that you think is kind of recurring versus one-time-ish? Any color you could provide there to just kind of bridge that increase in cost and mine would be helpful. And then I have one follow-up question. Thank you.
Jason Les: Sure, thanks, Regi. So first, as you noted, there is about a 20% increase in network difficulty quarter-over-quarter. So that accounted for about $4,400 on a cost per coin basis increase in our cost per coin. Other costs increased by about $5,000 per coin for the quarter. So what is driving that is going to be the elimination of the data center hosting business, and therefore the consolidation of some of those expenses that were previously in that segment, now in the Bitcoin mining segment. So some examples of these costs include things like miner repair. Miner repair is slightly elevated at this time. So we hope especially when we are replacing all our problematic miners, that this cost is going to go down and not continue, at least at this quantity.
So what I would say is when you look at on slide nine our cost per coin, including $6,300 per coin and other costs. I think the best we can do at this time is guide that approximately continuing. Of course, the halving has an impact on that, but that notwithstanding, other costs, which should probably continue at the same rate, but we are going to hope to decrease those by having a lot less minor repairs going forward.
Regi Smith: Got it. And you say minor repairs. You’re not repairing the equipment from your hosting partners now, are you?
Jason Les: No, sorry, let me clarify…
Regi Smith: I guess the comments were blended there. I’m trying to figure out how much of it was kind of the overhead drag from the hosting business versus some of the other things?
Jason Les: Yes, so let me clarify. Minor repair costs have always been in cost of goods for self-mining. So that is not a new expense. I would say that the minor repair costs have been elevated in both Q4 and then now in Q1 of 2024, sorry, Q4 of 2023 and Q1 of 2024. And we expect that those are going to go now going forward. And these are third-party repair costs. These are the costs that we are paying to third-party vendors for repairing our miners. The other cost increase quarter-over-quarter by approximately $5,000 per coin, that’s largely these other expenses that were previously included in data center hosting cost of revenue that is now in Bitcoin mining cost of revenue. So some examples of this would be some direct labor expenses, some land lease and property taxes, and then network costs and other utility expenses that we incurred.
Regi Smith: Yes, that makes sense. And then I guess one big picture question for you. I appreciate the disclosure on kind of the 100 exahash. As you think about growth beyond Corsicana, does that look different in terms of the size of facility? Like is Corsicana like the last final big facility? Do you think there’ll be smaller ones going forward? And I asked that just in light of all of the AI interest and power assets and things like that? How are you thinking about that net 40 exahash of capacity beyond Corsicana? What does that look like?
Jason Les: Yes, I think that what we have at Corsicana is very valuable because it is probably the last 1 gigawatt site, probably the only 1 gigawatt site that exists and probably the last one that’ll ever be approved. Access to power is going to be a critical constraint for Bitcoin miners and these other industries scaling up going forward. So I think what you should expect to see from us is capturing smaller size opportunities. We are not opposed to doing smaller sites. We’ve merely been acting on the most frictionless growth path that’s been in front of us, which has been these two sites with a large capacity. We’re open to new sites and new opportunities of all size. And we’re working on that quite a bit right now. So we look forward to sharing more results as those ideas become more actionable going forward.
Regi Smith: And I guess that could be outside of Texas or maybe even the United States, or are you still trying to think about staying in Texas?
