Fortitude Invests $45M in Zcash Mining Infrastructure to Drive Vertical Integration

DCG’s Fortitude Mining has entered into purchase agreements worth about $45 million for mining hardware and Nebraska infrastructure as it accelerates vertical integration in Zcash mining.

The expansion includes a $31.5 million miner purchase commitment and two acquisitions totaling $13.9 million for power contracts, land, buildings and mining equipment. Together, the transactions are intended to turn Fortitude from a miner reliant partly on third-party infrastructure into a more vertically integrated operator with company-controlled power and data-center capacity.

Fortitude said its controlled data-center capacity has risen to more than 60 megawatts in 2026. The buildout comes ahead of its proposed merger with Nasdaq-listed HeartSciences Inc., which would give the Digital Currency Group (DCG)-owned miner a public listing.

The most recent infrastructure transaction came on July 7, when Fortitude acquired power contracts, land, a building and other mining equipment in Juniata, Nebraska, for $6.25 million, according to its latest proxy statement relating to the merger. About $985,000 of the consideration was satisfied through previously funded deposits and $466,000 through the sale of mining equipment, with the remainder paid in cash.

That followed a $7.65 million acquisition in Aurora, Nebraska, in October 2025. Fortitude allocated $4.5 million of the purchase consideration to a power contract, $2.7 million to mining and computer equipment, $567,000 to a building and $134,000 to land, before transaction costs.

Fortitude said the Aurora acquisition was primarily intended to secure owned and controlled power as part of its vertical-integration strategy. Electricity and hosting are among the highest direct costs in cryptocurrency mining, making access to reliable, competitively priced power central to the profitability of the business.

Fortitude is pairing those acquisitions with a sizable investment in new mining machines. On May 21, it entered into equipment purchase agreements carrying an aggregate commitment of $31.5 million. It had paid $12.6 million when the financial statements were issued, leaving $18.9 million due during the remainder of 2026.

The company plans to finance the remaining purchases with cash on hand, operating cash flow and borrowings from DCG. On June 1, Fortitude entered into a $26 million term-loan facility with its parent. Drawn amounts generally carry an annual interest rate of 11% and mature in June 2028.

Although Fortitude did not specify the type of mining machines in the transaction, the purchase came as Fortitude shifts its focus from Bitcoin to Zcash. According to the proxy statement, Zcash supplied 61% of Fortitude’s mining revenue in the first quarter of 2026, up from 11% a year earlier. Bitcoin’s share fell to 36% from 79%, while other cryptocurrencies accounted for 3%.

In dollar terms, first-quarter Zcash revenue increased almost fivefold to $11.8 million. Bitcoin revenue fell 60% to $6.9 million as Fortitude powered down older bitcoin machines that had become unprofitable and reduced its deployed Bitcoin capacity.

Fortitude hasn’t stopped mining Bitcoin, but management said it is no longer prioritizing Bitcoin hashrate growth at the same pace as the wider network. The average number of online Bitcoin machines fell 45% to 14,370 in the first quarter, and Bitcoin production declined 52% to 89 coins.

Zcash only recently overtook Bitcoin as Fortitude’s main revenue source. Bitcoin generated $58.1 million, or 65%, of the company’s $89.5 million in mining revenue during 2025. Zcash contributed $25.2 million, or 28%, with other digital assets supplying the remaining 7%.

The transition also highlights why Fortitude is investing in newer machines and power infrastructure. Zcash production fell even as the company deployed more capacity.

Fortitude mined 39,062 ZEC during the first quarter, 36% fewer than a year earlier, despite a 23% increase in the average number of online Zcash machines to 9,581. Its average deployed Zcash hash rate increased 6%, but growth in the network’s total computing power and mining difficulty exceeded Fortitude’s expansion. It mined 33,634 ZEC during the second quarter.

Higher Zcash prices offset the lower production. Fortitude reported an average selling price of $272 per ZEC in the first quarter, compared with $40 a year earlier, allowing Zcash revenue to rise sharply despite the reduction in coins mined.

For all of 2025, Fortitude produced 230,124 ZEC, down 40% from 380,723 in 2024. The company attributed the decline primarily to the November 2024 Zcash halving, which cut block rewards by half, as well as higher network difficulty.

Fortitude’s first-quarter direct cost of revenue fell 39% to $10.4 million, while revenue declined 12% to $19.2 million. Revenue less direct costs, before depreciation and other expenses, increased to $8.8 million from $4.8 million.

The company reported a first-quarter net loss of $4.6 million, narrowed from $6.8 million a year earlier. Depreciation and amortization totaled $5.9 million, while general and administrative expenses more than tripled to $5.4 million.

For 2025, the company lost $12.7 million on $89.5 million of revenue, compared with a $14.4 million loss in 2024. Direct revenue costs increased 11% to $60.5 million, slightly faster than revenue, and depreciation and amortization reached $32.6 million.

Fortitude ended March with $8.9 million in cash, $1.9 million of digital assets and $67 million of total assets. Its remaining $18.9 million equipment commitment exceeded its cash balance, increasing the importance of operating cash flow and the DCG credit facility.