Stronghold Provides June 2024 Bitcoin Mining and Operational Update

Rhea-AI Summary

Stronghold Digital Mining (NASDAQ: SDIG) released its June 2024 operational update, revealing the mining of 61 Bitcoin and generating $0.1 million in energy revenue, equivalent to around 63 Bitcoin-equivalent production. Despite this, the company saw a 24% decline in revenue from May 2024, totaling approximately $4.0 million. The decrease was mainly due to a lower average daily hash rate caused by three temporary factors: voluntary curtailment due to record heat in Pennsylvania, a planned outage at Panther Creek for maintenance, and a storm-related outage affecting the Panther Creek plant's data center. The average hash price in June increased to $0.055 per TH/s per day, influenced by a slight rise in Bitcoin price, higher transaction fees, and a marginal decline in network hash rate.

Positive

• Stronghold mined 61 Bitcoin in June 2024.
• Generated approximately $0.1 million in energy revenue.
• Panther Creek resumed Bitcoin mining operations after planned maintenance.

Negative

• Revenue declined by 24% compared to May 2024.
• Average daily hash rate was lower by 0.9 EH/s in June.
• Three temporary factors: voluntary curtailment, planned outage, and storm-related outage impacted operations.

Insights

Financial Analyst

Stronghold Digital Mining's June update reveals a significant decrease of 24% in revenue compared to May. This drop is attributed to both planned and unplanned disruptions at their Panther Creek plant. The temporary curtailment due to heat, maintenance and a storm highlight the vulnerability of Bitcoin mining operations to external factors. Despite these setbacks, the company managed to produce an equivalent of 63 Bitcoins, thanks to energy revenue.

From a financial perspective, the decreasing revenue trend is worrying, especially given the volatile nature of the cryptocurrency market. However, the slight increase in hash price and transaction fees indicates some positive market conditions. Investors should closely monitor the company's ability to manage operational risks and maintain consistent production levels.

Technical Analyst

The operational challenges faced by Stronghold, such as high temperatures and storm-related outages, are not uncommon in the Bitcoin mining industry. The company's hash rate decline of 0.9 EH/s is a substantial hit, directly impacting their revenue. However, their ability to resume mining quickly post-maintenance is a positive sign of operational resilience.

From a technical standpoint, the increase in average hash price to $0.055 per TH/s per day, driven by a slight uptick in Bitcoin prices and higher transaction fees, suggests favorable mining economics in the current market. The decrease in network hash rate also implies reduced competition, which could benefit Stronghold if they manage to stabilize their operations.

NEW YORK, July 05, 2024 (GLOBE NEWSWIRE) -- 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 61 Bitcoin in June 2024 and generated approximately $0.1mm in energy revenue, which represents the equivalent of approximately 2 additional Bitcoin based on the average price of Bitcoin during the month. This equates to approximately 63 of Bitcoin-equivalent production in June 2024.

The Company generated an estimated $4.0 million of revenue during June, a decrease of 24% compared to May 2024. The primary driver of the revenue decline in June was an approximately 0.9 EH/s lower average daily hash rate that was the result of three temporary factors: 1) voluntary curtailment due to the record June heat in Pennsylvania between June 17^th through June 23^rd, during which time the Company avoided importing electricity at unprofitable prices, 2) the planned outage at the Panther Creek plant that included some maintenance on electrical infrastructure to support the Bitcoin mining operations, and 3) a storm that affected the Panther Creek plant transmission line on June 27^th and caused the data center to be down for four days to end the month. Panther Creek has since resumed Bitcoin mining operations, and the plant completed its planned maintenance outage. Average hash price in June was $0.055 per TH/s per day compared to $0.052 in April, due to a slight increase in Bitcoin price of 0.9%, increased transaction fees, which averaged 11.4% in June compared to 7.4% in May, and a decline in network hash rate of 1.2%.

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.

Forward Looking Statements of Stronghold:

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 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 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; our ability to procure crypto asset mining equipment; 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 develop and monetize our carbon capture project to generate meaningful revenue, on a timely basis or at all; 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 March 8, 2024 and in our subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. 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.

Contacts:

Stronghold Digital Mining, Inc.
Investor Contact:
Matt Glover
Gateway Group, Inc.
SDIG@gateway-grp.com
1-949-574-3860

Media Contact:
contact@strongholddigitalmining.com

FAQ

How much Bitcoin did Stronghold mine in June 2024?

Stronghold mined 61 Bitcoin in June 2024.

What was Stronghold's revenue in June 2024?

Stronghold generated approximately $4.0 million in revenue in June 2024.

Why did Stronghold's revenue decline in June 2024?

The revenue decline was due to a 0.9 EH/s lower average daily hash rate caused by voluntary curtailment, planned maintenance, and a storm-related outage.

What was Stronghold's average hash price in June 2024?

The average hash price in June 2024 was $0.055 per TH/s per day.

What factors contributed to the average hash price increase in June 2024 for Stronghold?

The increase was due to a 0.9% rise in Bitcoin price, higher transaction fees, and a 1.2% decline in network hash rate.