TORONTO, ON, September 9th, 2019 – Hut 8 Mining Corp. (“Hut 8” or “the Company”) (TSXV: HUT) (OTCQX: HUTMF), one of the world’s largest public bitcoin mining companies by operating capacity and market capitalization, is pleased to announce the acquisition of 9 Blockbox ACTM data centers for US$7 million from the Bitfury Group (“Bitfury”) at its facility in Drumheller, Alberta. The acquisition will add approximately 113 petahash per second (PH/s) and 9.9 MW of capacity to Hut 8’s existing operations. This represents an increase of 13.3% to Hut 8’s PH/s output.
The BlockBox ACTM data centers were previously owned by Bitfury. Prior to closing the purchase, the additional 9 data centers will be upgraded to include 12.6 PH/s Bitfury Clarke ASIC chips, manufactured by Bitfury. The upgrades are expected to be completed and operational within 10 weeks of this announcement. Subsequent to the delivery of the BlockBox ACTM data centers, Hut 8 will own 100% of the Drumheller facility. .
This additional PH/s will bring Hut 8’s aggregate operating capacity, across all operations, to approximately 963 PH/s and 109.4 MW at full capacity. Subject to approval by the TSXV, Hut 8 intends to finance the acquisition via cash on hand and the sale of a portion of its bitcoin inventory.
“We are pleased to inform shareholders that between the increase in capacity announced last week in The City of Medicine Hat and the acquisition of 9 additional BlockBox AC™ data centers, that Hut 8 has grown its PH/s output by 19.6% in a short timeline without the need to raise external capital.” said Andrew Kiguel, Chief Executive Officer of Hut 8. “These initiatives will increase our efficiency and decrease our mining cost per bitcoin.”
In addition, Hut 8 intends to reduce its debt by $3.6 million (US$2.75 million) by September 13, 2019. “While still maintaining a significant bitcoin inventory, Hut 8 has made the strategic decision to decrease its financial leverage for a stronger balance sheet and to lower our monthly interest charges.” said Kiguel.
Hut 8 owns and operates two sites in Alberta, Canada utilizing 93 BlockBox ACTM data centers with funded near term capacity of 109.4 MW and 963 petahash per second.
ABOUT HUT 8 MINING CORP.
Hut 8 is a cryptocurrency mining company with industrial scale bitcoin mining operations in Canada. Hut 8 has an exclusive North American partnership with the Bitfury Group Limited, inclusive of Bitfury Holding BV, one of the world’s leading full-service hardware and software blockchain technology companies.
Hut 8 provides investors with direct exposure to bitcoin, without the technical complexity or constraints of purchasing the underlying cryptocurrency. Investors avoid the need to create online wallets, wire money offshore, and safely store their bitcoin.
Key investment highlights and FAQ’s: https://www.hut8mining.com/investors.
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Hut 8 Corporate Contact:
Chief Executive Officer
Tel: (647) 256-1992
Chief Financial Officer
Tel: (647) 256-1992
Certain information in this press release constitutes forward-looking information. In some cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology, such as “plans”, “targets”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “assumes”, “anticipates” or “does not anticipate” or “believes”, or variations of such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “might”, “will” or “will be taken”, “occur” or “be achieved”. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts, but instead represent management’s expectations, estimates and projections regarding future events.
Forward-looking information is necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by Hut 8 as of the date of this press release, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the factors described in greater detail in the “Risk Factors” section of the Filing Statement dated March 1, 2018 relating to the Qualifying Transaction of Oriana Resources Corporation and Hut 8, which is available at www.sedar.com. These factors are not intended to represent a complete list of the factors that could affect Hut 8; however, these factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. The forward-looking statements contained in this press release are made as of the date of this press release, and Hut 8 expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This MD&A presents certain non-GAAP (“GAAP” refers to Generally Accepted Accounting Principles) financial measures to assist readers in understanding the Company’s performance. These non-GAAP measures do not have any standardized meaning and therefore are unlikely to be comparable to similar measures presented by other issuers and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Management uses these non-GAAP measures to supplement the analysis and evaluation of operating performance.
Throughout this MD&A, the following terms are used, which are not found in the Chartered Professional Accountants of Canada Handbook and do not have a standardized meaning under GAAP.
EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization)
● “EBITDA” represents net income or loss excluding net finance income or expense, income tax or recovery, depreciation, and amortization.
● “Adjusted EBITDA” represents EBITDA adjusted to exclude share-based compensation, fair value loss or gain on remeasurement of digital assets, write-offs, and costs associated with one-time transactions (such as listing fees).
● “Adjusted EBITDA margin” represents Adjusted EBITDA as a percentage of revenue.
“Mining Profit” represents gross profit (revenue less cost of revenue), excluding depreciation. “Mining Profit Margin” represents Mining Profit as a percentage of revenue.
“Cost per bitcoin” represents cost of revenue excluding depreciation, divided by the number of bitcoin mined in the period.
“Adjusted Working Capital” represents current assets including digital assets, less current liabilities. The Adjusted Working Capital is not a substitute for the conventional working capital but instead shows the short term liquidity of the company including the available digital assets at the period end.