Stronghold Announces Bitcoin Mining Update and Frontier Managed Services Agreement
13 Ottobre 2023 - 10:30PM
Stronghold Digital Mining, Inc. (NASDAQ:
SDIG) (“Stronghold”, or the “Company”) today provided the
following updates regarding its operations and financial
performance:
Bitcoin Mining Update
Stronghold mined 196 Bitcoin in September 2023
and generated approximately $0.2 million in energy revenue, which
represents the equivalent of approximately 7 additional Bitcoin
based on the average price of Bitcoin during the month of
September. This equates to approximately 203 of Bitcoin-equivalent
production in September 2023 compared to approximately 235 in
August 2023. The Company experienced an unplanned outage during
September 2023 at its Scrubgrass power plant (the “Scrubgrass
Plant”) that affected both its plant operations and data center
operations. The Company elected to extend the outage at the
Scrubgrass Plant due to low power prices in an effort to conduct
additional maintenance. The data center located at the Scrubgrass
Plant returned to full operations after seven days, importing power
from the PJM Interconnection LLC (“PJM”) grid. Once the data center
at the Scrubgrass Plant resumed operations, hash rate finished the
month at approximately 3.5 exahash per second (“EH/s”), the
Company’s all-time-high hash rate, up approximately 15% versus the
August 2023 exit hash rate. As the outage at the Scrubgrass Plant
continues, PJM recently requested that the Company reduce its
imports to 10 to 20 megawatts for an estimated 10-day period
starting on October 11, 2023, in order to perform transmission line
work in the area. Stronghold intends to cooperate with the PJM
import directive. Stronghold plans to start the Scrubgrass Plant
imminently in order to resume full data center output while
minimizing the impact of the PJM directive. Stronghold expects
October 2023 Bitcoin production to be in the range of 205 to 215
Bitcoin, excluding any electricity sales, and the Company continues
to expect over 20% average hash rate growth in the fourth quarter
of 2023 when compared to the third quarter of 2023.
Frontier Managed Services
Agreement
Stronghold has been focused on the optimization
of its data centers following the receipt of the Bitcoin miners to
reach its previously announced 4 EH/s target. This has included
working with Frontier Mining, an industry-leading Bitcoin mining
data center management company, in a temporary consulting capacity
regarding a thorough assessment of the opportunity to maximize data
center revenue opportunities. On October 13, 2023, Stronghold
Digital Mining LLC (“Stronghold LLC”), a wholly owned subsidiary of
the Company, and Frontier Outpost 8, LLC (“Frontier”) entered into
a Managed Services Agreement (the “MSA”) pursuant to which Frontier
is to provide certain services, including monitoring, operating,
and maintaining the Company’s wholly owned data centers located at
each of the Panther Creek power plant (the “Panther Creek Plant”)
and the Scrubgrass Plant.
“We are excited to partner with Frontier to
enhance all aspects of our data centers and optimize Bitcoin
production,” said Greg Beard, the chairman and chief executive
officer of Stronghold. “We have known the Frontier team for years
and admire their mining expertise, management team, and hands-on
approach to operations, and we expect to move closer toward
industry-leading uptime in the near term. Part of Frontier’s
compensation under the MSA is equity in Stronghold, which we
believe aligns Stronghold and Frontier for the foreseeable future
while also signaling Frontier’s confidence in our vertically
integrated business model, as we head into the Bitcoin halving that
is projected to take place in April 2024.”
About Stronghold Digital Mining,
Inc.
Stronghold is a vertically integrated Bitcoin
mining company with an emphasis on environmentally beneficial
operations. Stronghold houses its miners at its wholly owned and
operated Scrubgrass Plant and Panther Creek Plant, both of which
are low-cost, environmentally beneficial coal refuse power
generation facilities in Pennsylvania.
Investor Contact:Matt Glover or
Alex KovtunGateway Group,
Inc.SDIG@gateway-grp.com1-949-574-3860
Media
Contactcontact@strongholddigitalmining.com
Cautionary Statement Concerning
Forward-Looking Statements:
Certain statements contained in this press release,
including guidance, constitute “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. You can identify forward-looking statements because they
contain words such as “believes,” “expects,” “may,” “will,”
“should,” “seeks,” “approximately,” “intends,” “plans,” “estimates”
or “anticipates” or the negative of these words and phrases or
similar words or phrases which are predictions of or indicate
future events or trends and which do not relate solely to
historical matters. Forward-looking statements and the business
prospects of Stronghold are subject to a number of risks and
uncertainties that may cause Stronghold’s actual results in future
periods to differ materially from the forward-looking statements.
These risks and uncertainties include, among other things: the
recent restructuring of the Company’s debt and the performance and
satisfaction of various obligations under the agreements entered
into in order to effect such restructuring of debt; the hybrid
nature of our business model, which is highly dependent on the
price of Bitcoin; our dependence on the level of demand and
financial performance of the crypto asset industry; our ability to
manage growth, business, financial results and results of
operations; uncertainty regarding our evolving business model; our
ability to retain management and key personnel and the integration
of new management; our ability to raise capital to fund business
growth; our ability to maintain sufficient liquidity to fund
operations, growth and acquisitions; our substantial indebtedness
and its effect on our results of operations and our financial
condition; uncertainty regarding the outcomes of any investigations
or proceedings; our ability to enter into purchase agreements,
acquisitions and financing transactions; public health crises,
epidemics, and pandemics such as the coronavirus pandemic; our
ability to procure and install crypto asset mining equipment,
including from foreign-based suppliers; our ability to maintain our
relationships with our third party brokers and our dependence on
their performance; developments and changes in laws and
regulations, including increased regulation of the crypto asset
industry through legislative action and revised rules and standards
applied by The Financial Crimes Enforcement Network under the
authority of the U.S. Bank Secrecy Act and the Investment Company
Act; the future acceptance and/or widespread use of, and demand
for, Bitcoin and other crypto assets; our ability to respond to
price fluctuations and rapidly changing technology; our ability to
operate our coal refuse power generation facilities as planned; our
ability to remain listed on a stock exchange and maintain an active
trading market; our ability to avail ourselves of tax credits for
the clean-up of coal refuse piles; and legislative or regulatory
changes, and liability under, or any future inability to comply
with, existing or future energy regulations or requirements. More
information on these risks and other potential factors that could
affect our financial results is included in our filings with the
Securities and Exchange Commission, including in the “Risk Factors”
and “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” sections of our Annual Report on Form
10-K filed on April 3, 2023 and in our subsequently filed Quarterly
Reports on Form 10-Q. Any forward-looking statement or guidance
speaks only as of the date as of which such statement is made, and,
except as required by law, we undertake no obligation to update or
revise publicly any forward-looking statements or guidance, whether
because of new information, future events, or otherwise.
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