Marathon Digital Holdings, Inc.
(NASDAQ:MARA) ("Marathon"
or "Company"), one of the largest enterprise Bitcoin
self-mining companies in North America, today published unaudited
bitcoin (“BTC”) production and miner installation updates for May
2022.
Management Commentary“Although we continue to
install miners at the Texas facilities, we have experienced delays
in energization as Compute North’s energy provider awaits federal
agency confirmation of its exempt status for tax purposes based
upon its arrangements with Compute North,” said Fred Thiel,
Marathon’s chairman and CEO. “While these delays have been
disappointing, our current understanding is that miners should
start to come online this month. We continue to work closely and
actively engage with Compute North to gain more insight into the
energy provider’s timeline and to ensure that these delays, once
resolved, will not impact our future deployments.
“In the meantime, installations of our miners have progressed
irrespective of the energization schedule. Currently, in addition
to our active fleet, we now have 19,000 miners, representing
approximately 1.9 EH/s, that have been installed and ready for
energization. Over 9,000 of these units, representing 0.9 EH/s, are
at Compute North’s first major facility in West Texas. The
remainder are installed at other locations. This first major
facility is being completed in four stages. Stage one is already
complete. It is our understanding that the entire facility, which
will house approximately 68,000 of our miners, will be fully
constructed with all miners in installed by the end of the third
quarter of 2022.
“These energization delays in Texas, coupled with ongoing
maintenance issues at the power generating station in Hardin, MT,
negatively impacted our bitcoin production last month. In May,
maintenance issues at the power generation station in Montana
caused us to produce approximately 47% less bitcoin than what would
have been expected based on the network’s hash rate during the
month. However, we believe that our production results will improve
over time as we move forward with our deployment plan and energize
our miners installed in Texas.
“We remain confident that Marathon is well positioned to achieve
its performance goals, and we will continue to provide updates as
they materialize. We have a strong foundation from which to build,
we have a solid pipeline of potential hosting and power
arrangements that exceeds our needs and allows us to diversify our
operations, and we have a strong balance sheet to support our
growth plans. We look forward to continuing to execute on our
strategy of achieving carbon neutrality by the end of this year and
growing to 23.3 EH/s in early 2023.”
Highlights as of June 1, 2022
- Total number of miners installed and awaiting energization
increased to 19,000 miners (c. 1.9 EH/s across all facilities.
- Current operating mining fleet consists of 36,830 active miners
producing approximately 3.9 EH/s.
- Increased total bitcoin holdings to 9,941 BTC with a fair
market value of $315.1 million.
- Produced 268 self-mined bitcoin during May 2022. Production was
lower than expected due to ongoing maintenance and downtime at the
power plant in Hardin, MT. These issues, which included problems
between the induced draft and forced draft fans, the buildup of
particulate matter that required cleaning, and GSU transformer
testing, in aggregate reduced Marathon’s potential bitcoin
production by approximately 47% during the month.
- As previously announced, Marathon plans to transition out of
Hardin, MT to more sustainable sources of power during the third
quarter of 2022.
- Cash on hand was approximately $59.6 million and total
liquidity, now defined as unrestricted cash and available credit
facilities, was approximately $86 million.
Miner Energization, Installations, and Hash Rate
GrowthMarathon was originally informed by Compute North
that energization of the Company’s miners in Texas would commence
on April 17, 2022. Marathon was then informed that energization was
rescheduled to May 2022. As of June 8, 2022, the energy provider
for Compute North’s first major site in West Texas has yet to
energize Marathon’s installed miners. Although miners continue to
be installed at the Texas facilities, Marathon has experienced
delays in energization as Compute North’s energy provider awaits
federal agency confirmation of its exempt status for tax purposes
based upon its arrangements with Compute North. It is Marathon’s
understanding that this matter is likely to be resolved this
month.
Despite changes to the energization schedule, installation of
Marathon’s miners at Compute North’s facilities in Texas have
proceeded on pace. 19,000 of Marathon’s miners (c. 1.9 EH/s) have
already been installed at various locations in Texas.
Compute North’s first major facility consists of four
substations. These substations are being constructed in phases, and
in aggregate, they represent 280 MW of capacity for bitcoin mining.
The first substation, which houses over 9,000 of Marathon’s miners
(c. 0.9 EH/s), is complete and currently awaiting energization. The
remaining substations are expected to be completed in phases with
the entire 280 MW facility expected to be constructed by the end of
the third quarter 2022. Once fully constructed, this facility will
house approximately 68,000 of Marathon’s miners, representing 6.8
EH/s. Based on construction schedules, Compute North has informed
Marathon that miners are expected to be installed at this facility
as follows:
- June 2022: 19,000 miners (includes the 9,000 miners already
installed)
- July 2022: 21,000 miners
- August 2022: 28,000 miners
Given the current construction and installation schedules
coupled with the Company’s pipeline of potential new hosting and
power arrangements, Marathon continues to expect all 199,000
miners, producing approximately 23.3 EH/s, to be installed and
energized by early 2023. Additionally, the Company continues to
expect its mining operations to be 100% carbon neutral by the end
of 2022.
Bitcoin Production UpdateYear-to-date through
May 31, 2022, Marathon’s mining fleet has produced 1,826 bitcoin, a
214% increase over the same time period in the prior year. By
month, the Company’s bitcoin production was as follows:
*Note: Upgrades and maintenance to the power generating station
in Hardin, MT caused Marathon’s bitcoin mining operations in
Hardin, MT to operate at substantially reduced capacity in November
2021, negatively impacting the Company’s bitcoin production for the
month. In April and May 2022, the Company’s bitcoin production was
similarly impacted by maintenance to the power generating station
in Hardin, MT.
Total Network Hash Rate Source:
https://www.blockchain.com/charts/hash-rate
The Company been accumulating or “hodling” its bitcoin and has
not sold bitcoin since October 2020. As of June 1, 2022, Marathon
held approximately 9,941 BTC, including the bitcoin purchased in
January 2021 for an average price of $31,168 per BTC. On June 1,
2022, the fair market value of one bitcoin was approximately
$31,641, implying that the approximate fair market value of
Marathon’s current bitcoin holdings is approximately $315.1
million.
Investor Notice Investing in our
securities involves a high degree of risk. Before making an
investment decision, you should carefully consider the risks,
uncertainties and forward-looking statements described under "Risk
Factors" in Item 1A of our most recent Annual Report on Form 10-K
for the fiscal year ended December 31, 2021, filed with the
SEC on March 10, 2022 and Quarterly Report on Form 10-Q for the
fiscal quarter ended March 31, 2022, filed with the SEC on May 5,
2022. If any of these risks were to occur, our business, financial
condition or results of operations would likely suffer. In that
event, the value of our securities could decline, and you
could lose part or all of your investment. The risks and
uncertainties we describe are not the only ones facing us.
Additional risks not presently known to us or that we currently
deem immaterial may also impair our business operations. In
addition, our past financial performance may not be a reliable
indicator of future performance, and historical trends should not
be used to anticipate results in the future. Future changes in the
network-wide mining difficulty rate or Bitcoin hash
rate may also materially affect the future performance of
Marathon's production of bitcoin. Additionally, all discussions of
financial metrics assume mining difficulty rates as of June 2022.
The total network’s hash rate data is calculated from a third-party
source, which is available here:
https://www.blockchain.com/charts/hash-rate. Data from third-party
sources has not been independently verified. See "Forward-Looking
Statements" below.
Forward-Looking Statements Statements made
in this press release include forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements can be identified by the use of words
such as “may,” “will,” “plan,” “should,” “expect,” “anticipate,”
“estimate,” “continue,” or comparable terminology. Such
forward-looking statements are inherently subject to certain risks,
trends and uncertainties, many of which the Company cannot predict
with accuracy and some of which the Company might not even
anticipate and involve factors that may cause actual results to
differ materially from those projected or suggested. Readers are
cautioned not to place undue reliance on these forward-looking
statements and are advised to consider the factors listed above
together with the additional factors under the heading “Risk
Factors” in the Company's Annual Reports on Form 10-K, as may be
supplemented or amended by the Company's Quarterly Reports on Form
10-Q. The Company assumes no obligation to update or supplement
forward-looking statements that become untrue because of subsequent
events, new information or otherwise.
About Marathon Digital Holdings Marathon
is a digital asset technology company that mines bitcoin with a
focus on the blockchain ecosystem and the generation of digital
assets.
Marathon Digital
Holdings Company Contact: Telephone:
800-804-1690Email: ir@marathondh.com
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/d623ed18-d878-446d-bc15-a37b2a94c0aa
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