Marathon Digital Holdings, Inc.
(NASDAQ:MARA) ("Marathon"
or "Company"), a leader in supporting and securing the
Bitcoin ecosystem, today published unaudited bitcoin (“BTC”)
production and miner installation updates for June 2022.
Management Commentary“In the second quarter, we
continued to work through several operational obstacles as we
progressed with installing miners in Texas in preparation of
energization,” said Fred Thiel, Marathon’s chairman and CEO. “In
April and May, our bitcoin production was impacted by ongoing
maintenance issues at the power generating facility in Hardin, MT
that supplies our Hardin-based miners with power. On June 11, the
situation was exacerbated by a severe storm that passed through the
region, damaging the power plant’s cooling towers and leaving our
30,000 miners in the region without power. According to the most
recent reports, these miners, which represent over 75% of our
active fleet, appear to be mostly undamaged by the storm. The
ground crew at Hardin continues to make progress as they work to
bring the power plant and our miners back online in a reduced
capacity.
“In Texas, despite multiple assurances that energization would
occur in June, Compute North’s energy provider is still awaiting
federal agency confirmation of its exempt status for tax purposes
based upon its arrangements with Compute North. In the meantime,
installations of our miners have been progressing on schedule. We
now have 29,640 miners, representing approximately 2.9 exahashes
per second, installed and ready for energization in Texas.
Approximately 20,000 of these miners, representing an estimated 1.9
exahashes per second, have been installed at Compute North’s first
major facility, which is located on a wind farm in West Texas. It
is our understanding that the entirety of this first facility,
which will house approximately 68,000 of our miners, is still on
track to be fully constructed with all miners installed by the end
of the third quarter of 2022. The remaining miners are spread
across other locations.
“Despite the current operational challenges, we are working to
capitalize on hosting opportunities and are actively engaged with
various hosting providers. Ultimately, we look forward to working
through this near-term friction and striving to solidify Marathon’s
position as a leader in our space.”
Recent Highlights:
- The Company produced 707 self-mined bitcoin during Q2 2022, an
8% increase from 654 bitcoin mined in Q2 2021. Q2 2022 bitcoin
production was significantly impacted by:
- The energization delays in Texas
- Maintenance to the power generating facility in Hardin, MT
during April and May
- A severe storm that passed through the Hardin region on June
11, damaging the power generating facility that supplies Marathon’s
miners in the region with power and causing Marathon’s miners in
Montana to go offline
- Due to the storm, current operating mining fleet was reduced to
approximately 6,300 active miners producing approximately 0.7 EH/s
and BTC production was significantly reduced in June with 140
self-mined bitcoin produced during the month.
- Year-to-date through June 30, 2022, the Company produced 1,966
bitcoin, a 132% increase over the same time period in the prior
year.
- The Total number of miners installed and awaiting energization
at Texas facilities increased to 29,640 miners (c. 2.9 EH/s).
- The Company benefitted from a downward market price adjustment
for the 13,000 S19 XPs set to ship in July and expects to see
continued benefits of price adjustments as remaining XPs are
shipped in the August – December timeframe.
- The Company unwound its investment in NYDIG Digital Assets Fund
III, LP (“the Investment Fund”) and transferred approximately 4,769
BTC from the Company’s Investment Fund into the Company’s BTC
wallet.
- Total bitcoin holdings are 10,055 BTC with a fair market value
of $198.9 million. Given the elimination of the Investment Fund,
all of this bitcoin is held directly as Digital Currencies on the
balance sheet.
- The Company repaid $35 million of outstanding revolving credit
line borrowings during June 2022, reducing its outstanding balance
to $35 million.
- Cash on hand was approximately $88.7 million and total
liquidity, defined as unrestricted cash and available credit
facilities, was approximately $153.7 million.
Update to Operations in Hardin, MTAs discussed
in a press release published on June 28, 2022, Marathon’s miners in
Hardin, MT have been offline since a severe storm swept through the
region on June 11, damaging the power generating facility that
supplies power to the Company’s miners. While the most recent
reports indicate that the majority of the Company’s miners were
undamaged, tests are still being conducted and data is still being
aggregated. The ground crew at Hardin continues to make progress as
they work to bring the power plant and Marathon’s miners back
online in a reduced capacity. The Company is continuing to explore
the possibility of expediting its departure from this facility
prior to original schedules.
Miner Energization and InstallationsMarathon’s
expectations around energization of its miners in Texas are based
upon the most recently available information provided to the
Company by its hosting provider, Compute North. Marathon 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, Marathon was informed that energization
would likely occur during the month of June 2022. As of July, 6,
2022, the energy provider for Compute North’s West Texas site has
yet to energize Marathon’s installed miners. The delays in
energization are the result of Compute North’s energy provider
awaiting federal agency confirmation of its exempt status for tax
purposes based upon its arrangements with Compute North. This
matter is ongoing. Marathon continues to work with its hosting
provider to gain further insight into the process and to expedite
energization if possible.
Compute North’s West Texas facility consists of four sections.
These sections are being constructed in phases, and in aggregate,
they represent 280 MW of capacity for bitcoin mining. The first
section is complete and currently awaiting energization.
Construction of the remaining sections is proceeding on schedule
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 current schedules, Compute North
has informed Marathon that 21,000 miners are expected to be
installed at this facility in July with an additional 28,000 miners
expected to be installed in August.
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 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
June 30, 2022, Marathon’s mining fleet has produced 1,966 bitcoin,
a 132% 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. In June 2022, a severe storm in Hardin, MT damaged
the power generating facility that supplies Marathon’s miners with
power, causing Marathon’s miners in the region to go offline.
Total Network Hash Rate Source:
https://www.blockchain.com/charts/hash-rate
As of June 30, 2022, Marathon held
approximately 10,055 BTC, the fair market of
which was approximately $198.9 million. The Company
has not sold any bitcoin since October 2020. However, as production
ramps in the near future, Marathon may sell a portion of its
monthly bitcoin production as needed to fund monthly operating
costs.
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 July 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 focuses on supporting and securing the Bitcoin
ecosystem. The Company is currently in the process of becoming one
of the largest and most sustainably powered Bitcoin mining
operations in North America, while remaining asset light.
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/3665ba8d-bacf-4a7c-8095-8a8e1d7294e2
Marathon Digital (NASDAQ:MARA)
Historical Stock Chart
From Mar 2024 to Apr 2024
Marathon Digital (NASDAQ:MARA)
Historical Stock Chart
From Apr 2023 to Apr 2024