Stronghold raises $54 million and buys 9,080 Bitcoin miners

The American mining company Stronghold Digital Mining entered into four separate agreements to purchase 9,080 ASIC miners for Bitcoin mining, produced by Bitmain and MicroBT.

The first batch of 4,800 devices with a total hash rate of about 426 PH/s is expected to be delivered by the end of 2021 or in early January 2022. The purchase price was about $35.7 million — roughly $84 per 1 TH/s.

The remaining 4,280 miners were obtained by the company under a profit-sharing agreement with its existing partner, the infrastructure provider Northern Data. Stronghold called the deal’s commercial terms “very favourable”.

According to the press release, the company has purchase agreements for or installed more than 54,000 Bitcoin mining devices with a combined hash rate of about 5.2 EH/s.

In our third-quarter earnings release, we told investors that we would continue to purchase miners from various sources in line with expected profitability of investments and available capacity. That is exactly what we have been doing over the past two weeks,” said Greg Beard, co-chairman and CEO of Stronghold.

Separately on December 15, the company signed a financing agreement with NYDIG for equipment purchases of about $54 million. The firm received an initial advance of $18.6 million. The outstanding debt carries an interest rate of 9.85% and will be repaid over 24 months.

Stronghold noted that the debt was incurred in securing the purchase of 12,000 miners from Bitmain.

Financing the equipment purchase is our preferred source of non-equity capital, given the flexible terms and the non-recourse structure for Stronghold,” added Beard.

On October 20 the company conducted an IPO on Nasdaq, listing 6,687,305 Class A shares at a price of $19 for a total of $127 million. The first day of trading closed at $28.90. As the stock rose in early November to above $33, by the time of writing it was trading at around $11.30 in pre-market trading.

In December, NYDIG closed a record-breaking round of financing for the industry totaling $1 billion.

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