The changes are designed to better position the company for future endeavours.
Stronghold Digital Mining, along with WhiteHawk Finance LLC, announced the ratification of its initial credit agreement according to a press release sent to Bitcoin Magazine. In addition to this announcement, Stronghold has entered into 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 significantly improved liquidity and financial flexibility,” according to the announcement. The following terms are defined:
- No mandatory principal amortization payments until July 2024.
- Repayment of principal by cash sweep.
- Possibility of paying interest in kind for up to six months.
- Removed all leverage covenants before Q3 2024.
- Reduction of minimum liquidity covenants.
- And no dilution, with the words saying that “no equity will be issued in connection with the amendment to the credit agreement”.
Greg Beard, Co-Chairman and Managing Director of Stronghold, explained, “We appreciate WhiteHawk’s continued partnership as we navigate volatility in the Bitcoin and electricity markets. Our efforts to anticipate and proactively respond to challenges in our markets while prioritizing liquidity have helped us weather this environment.
Regarding the new Foundry agreement, the statement explains that it “applies to the same Bitcoin mining fleet of approximately 4,500 miners with a total hash rate capacity of approximately 420 PH/s and average efficiency of about 35 J/TH”. It has terms similar to the previous one, with the following differences:
- “The duration of the agreement is two years, without the possibility of unilateral early termination.
- The applicable accommodation charge will be the realized net cost of electricity at the Company’s Panther Creek facility plus 10%, calculated on a monthly basis.
- Foundry will participate in the profits generated from the sale of electricity to the grid when the miners are reduced.
Regarding the amended agreement, Beard said the company is “delighted to continue to partner with Foundry with this new long-term agreement, whereby Foundry will fully participate in our vertically integrated business model, validating our differentiated strategy. Additionally, the multi-year nature of the agreement provides certainty in maintaining installed miners and is a natural path to fill a portion of our open miner slots capable of supporting approximately 4 PE/s of miners using our electricity. self-generated.
