Stronghold Announces Bitcoin Mining Update and Frontier Managed Services Agreement

NEW YORK, Oct. 13, 2023 (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 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.