Hut 8 Mining Corp. Announces Electricity Supply Agreement with City of Medicine Hat
Vancouver, British Columbia, March 19, 2018 – Hut 8 Mining Corp. (TSXV: HUT) (“Hut 8” or the “Company”), is pleased to announce today that it has entered into definitive agreements with the City of Medicine Hat (“CMH”) for the supply of 42 MW of electric energy and the lease of land upon which Hut 8 will construct and operate its mining facilities near the City of Medicine Hat’s new Unit 16 power plant. The expansion marks Hut 8’s commitment of a $100 million construction investment in the community, all of which is fully funded.
Under the terms of an electricity supply agreement, CMH will provide electric energy capacity of approximately 42 megawatts to the new Hut 8 facilities, which in conjunction with the Company’s existing 18.7 MW in operation in Drumheller, will allow Hut 8 to meet 60.7 MW of a fully funded 62.7MW of power capacity by September 2018. The electricity supply agreement and the land lease both have a concurrent term of 10 years. The delivery of electric energy under the electricity supply agreement will commence upon the receipt of certain regulatory approvals and the commissioning of Hut 8’s BlockBox Data Centres, which are slated for delivery in Q2 2018.
Through its partnership with the Bitfury Group, the world’s leading full-service blockchain technology company, Hut 8 has secured world-leading technology and operational expertise. This partnership, together with the success of Hut 8’s recent capital raising efforts and the provision of land and electricity through CMH, will enable the Company to service the full complement of 57 BlockBox Data Centers with an aggregate power capacity of approximately 60.7 MW. As of March 16, 2018, Hut 8 has mined 750 bitcoins through its mining facilities in Drumheller, Alberta.
Bill Tai, Chair of the Board of Directors of Hut 8, stated, “The signing of the electricity supply agreement and the land lease represents a key component in achieving our business plan for the roll-out of our BlockBox Data Centers in low-cost energy jurisdictions. CMH offers stable cost-competitive utility rates and has been very welcoming and supportive of Hut 8’s fast paced growth plans. We’re excited to work with the City of Medicine Hat to introduce a new industry, with new revenue channels for the City and its residents.”
Hut 8’s partnership with CMH will serve as an economic stimulator for the region and will include a construction investment by Hut 8 of approximately $100 million. Site construction activity, which will commence now and is to be completed in Q3 2018, is expected to peak at about 100 well-paid jobs. Thereafter, more than 42 direct operational roles will continue on site, with some advance training at Hut 8’s existing mining facility in Drumheller, Alberta, which currently operates at 18.7 MW. These roles will include electricians, general labourers, systems technicians and security staff. In line with its corporate governance mandate, Hut 8 will seek to recruit from the local community in filling these roles.
Hut 8 resources will also be used to improve infrastructure to the area surrounding the data centre site and in the funding of technology programs and grants in local educational institutions to ensure that the local job force has the skills needed to participate in this new industry.
Ted Clugston, Mayor of the City of Medicine Hat, stated, “As a utility owner, City of Medicine Hat provides a sustainable, competitive advantage with low cost and reliable service that is attractive to our customers. We’re committed to growing and diversifying our economy and welcome Hut 8 and the Bitfury Group as a new customer and business in our community.”