Marathon Digital (MARA), alongside disappointing Q2 results, said it's finally begun energizing its fleet at a Compute North facility in west Texas.

"Energization delays, maintenance and weather issues in Montana, and an approximately 56% decline in the price of bitcoin during the quarter, severely impacted our bitcoin production and financial results," CEO Fred Thiel said in the company's Q2 earnings report, released Monday.

On the earnings call, Thiel spoke of the challenging conditions both for the mining industry in general and specifically for Marathon.

Among those challenges for Marathon have been about 40,000 mining rigs previously installed in a Compute North facility in Texas that have been sitting idly as the hosting firm was waiting for its energy provider to receive tax-exempt approval status.

Compute North has now energized 40 megawatts (MW) of a 280MW wind-powered facility in Upton County in West Texas, according to the Monday earnings release. Marathon will be the exclusive client of this site, which is Compute North’s fifth TIER 0™ site, said the statement. The rest of the 280MW will be coming online in phases, with "full energization autumn 2022," Dave Perrill, CEO and co-founder of Compute North told CoinDesk.

There are currently 40,000 mining rigs at the Compute North facility, which will be coming online in 20MW chunks, with all expected to be energized by the end of September, Thiel said on Monday's call.

Mining at the TIER 0™ facility will be behind-the-meter, meaning the energy will not be transmitted through the grid, but the site will curtail its energy consumption when demand is peaking throughout the grid, Perrill added.

In June, a Montana storm and related power outage led to about 30,000 of Marathon’s miners, or 75% of its fleet, going offline.

Marathon reported mining revenue in Q2 of $24.9 million, which fell by 15% compared with the same period last year and missed the average analyst estimate of $38.8 million, according to FactSet data.

While operational issues in Texas and Montana took a bite out of revenues, the fall in the price of bitcoin led to a $127.6 million impairment charge on company holdings, which now stand at 10,055 bitcoin after production of 707 in Q2.

The firm noted a net loss of $191.6 million in the quarter, up from $108.9 million in the same period last year, mainly due to the decline in bitcoin prices and costs associated with exiting from Montana. The loss was mitigated by the sale of $87 million in equipment, Marathon Chief Financial Officer Hugh Gallagher said in the earnings call.

The miner reiterated guidance that it will reach 23.3EH/s (exahashes per second) in computing power by mid-2023, noting that it has signed enough hosting agreements to help reach that goal.

Shares were down modestly in after-hours action, and remain lower by about 60% year-to-date, in line with most bitcoin mining peers.

In December 2021, Compute North agreed to host 100,000 of Marathon’s mining rigs. MARA also signed a 200MW hosting agreement with Applied Blockchain in July.

Given these hosting deals and the state of the related facilities, deliveries of new machines will be a bigger determinant of growth rather than construction and energization, Thiel said on the call.

UPDATE (Aug. 9, 22:10): Adds Thiel comments as well as details on net loss.