Stronghold Digital Mining & WhiteHawk Finance LLC Agree to New Credit Agreement
• Stronghold Digital Mining and WhiteHawk Finance LLC have agreed to ratifications of their original credit agreement.
• Stronghold has also entered a new two year contract with Foundry Digital, replacing their previous temporary contract.
• The changes to the credit agreement are “designed to provide Stronghold with significantly enhanced liquidity and financial flexibility” according to the announcement.
Changes to Credit Agreement
The terms of the amended credit agreement include no mandatory principal amortization payments until July 2024, principal repayment through cash sweep, option to pay interest in kind for up to six months, elimination of all leverage covenants before Q3 2024, reduced minimum liquidity covenants and no dilution as “no equity will be issued in relation to the Amendment to the Credit Agreement” according to the announcement.
New Two Year Agreement with Foundry Digital
The new two year contract applies to approximately 4,500 miners with total hash rate capacity of approximately 420 PH/s and average efficiency of approximately 35 J/TH. The applicable hosting fee is calculated as the realized net cost of power at Stronghold’s Panther Creek Plant plus 10%, calculated on a monthly basis. Additionally, Foundry will participate in profit generated from selling power back into the grid when miners are curtailed.
Reaction From Co-Chairman & CEO
Greg Beard, co-chairman and chief executive officer of Stronghold expressed appreciation for WhiteHawk’s partnership: “We are appreciative of WhiteHawk’s continued partnership as we manage through the volatility in Bitcoin and power markets”. He also showed excitement for partnering with Foundry for a long-term agreement stating that “it offers certainty around keeping miners installed” validating their differentiated strategy.
Overall this article discussed how Stronghold Digital Mining and WhiteHawk Finance LLC have agreed on changes made towards their original credit agreement as well as entering a new two year contract with Foundry Digital. These changes offer increased liquidity and financial flexibility while providing certainty around keeping miners installed creating an opportunity for profit generation when miners are curtailed.