These changes are designed to better position the company for future endeavors.
Stronghold Digital Mining, with WhiteHawk Finance LLC, has announced the ratification of the original credit agreement according to a press release sent to Bitcoin Magazine. In addition to this announcement, Stronghold has signed a new two-year contract with Foundry Digital, replacing its previous temporary contract.
The changes to the credit agreement are “designed to provide Stronghold with greater liquidity and financial flexibility,” according to the announcement. The following terms are defined:
- There are no mandatory principal amortization payments until July 2024.
- Principal payment via cash swipe.
- Option to pay interest in kind up to six months.
- Eliminate all leverage agreements before Q3 2024.
- Reduced minimum liquidity covenants.
- And there is no dilution, with the term saying that “no equity will be issued in connection with the Credit Agreement Amendment.”
Greg Beard, co-chairman and chief executive officer of Stronghold explained, “We are appreciative of WhiteHawk’s continued partnership as we manage through volatility in Bitcoin and power markets. Our efforts to anticipate and respond proactively to challenges in the market while prioritizing liquidity have helped us endure through this environment.
Regarding the new Foundry agreement, the release explains that it “is applied to the same Bitcoin mining fleet of about 4,500 miners with a total hash capacity of about 420 PH/s and an average efficiency of about 35 J/TH.” It has the same terms as before, with the following differences:
- “The term of the agreement is two years, there is no unilateral early termination option.
- The applicable hosting fee will be the net power cost realized at the Company’s Panther Creek Plant plus 10%, calculated monthly.
- The foundry will participate in the profits generated from selling power to the network when the miners are reduced.
Regarding the revised agreement, Beard said that the company is “pleased to continue working with Foundry with this new long-term agreement, in which Foundry will fully participate in a vertically integrated business model, validating different strategies. Furthermore, the multi-year agreement it gives certainty about keeping the miners installed and is a natural way to fill part of the open miner slots that can support about 4 EH/s miners using their own generated power.