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Hut 8 Streamlines Operations with Closure of Drumheller Site

Hut 8 Corp. 5 mins read

Company to move efficient miners to Medicine Hat site

Plan expected to improve cash flow, decrease cost to mine a Bitcoin, and drive pro forma increase in Bitcoin mined per EH of approximately 11%

Company to maintain lease with option value of re-energizing site under favorable market conditions

MIAMI, March 06, 2024 (GLOBE NEWSWIRE) --  Hut 8 Corp. (Nasdaq | TSX: HUT) (“Hut 8” or the “Company”), one of North America’s largest Bitcoin miners and energy infrastructure operators, today announced the closure of its Drumheller site in Alberta, Canada. In line with ongoing restructuring and optimization initiatives designed to strengthen financial performance, the Company is executing several strategic measures at the site.

Effectively immediately, Drumheller will cease to operate as a Bitcoin mining site. Efficient miners will be relocated to the Medicine Hat site in Alberta, Canada, and old and inefficient miners will be retired from operations. Hut 8 will maintain its lease at the site and the option value of re-energizing the site if market conditions improve.

“Following a comprehensive analysis, we have determined that the profitability of Drumheller has been impacted significantly by various factors, including elevated energy costs and underlying voltage issues,” said Asher Genoot, CEO of Hut 8. “Our restructuring plan aims to drive maximum value from our assets and position the company for profitable growth. With the nominal lease expense, we will also have a low-cost option to re-energize the site if energy rates in the AESO grid decrease or hashprice increases.”

The site’s most efficient miners, representing approximately 130 PH/s of hashrate, will be moved to Medicine Hat and energized in March to leverage the site’s superior infrastructure and economics. Miners at Drumheller with efficiency worse than 38 J/TH will be retired from operations. The relocation of efficient miners and retirement of inefficient miners is expected to enhance Hut 8’s cash flow, reduce its cost to mine a Bitcoin, and drive a pro forma increase in Bitcoin mined per EH of approximately 11%.

February 2024ActualPro forma1% change
Deployed self-mining hashrate7.24 EH/s6.45 EH/s 
Bitcoin mined292 BTC288 BTC 
Bitcoin mined per EH40.33 BTC/EH/s44.65 BTC/EH/s11%
(1) Reflects February results excluding Drumheller.

As previously announced, the Board of Directors of Hut 8 determined, following the completion of the Company’s merger of equals, the time was right to set a new strategic direction for the Company and that a transition of leadership was appropriate. Following the leadership transition, Hut 8 continues to restructure and optimize operations to drive profitable growth and create lasting shareholder value.

About Hut 8 
Hut 8 Corp. is a Bitcoin miner and energy infrastructure operator with self-mining, hosting, managed services, and traditional data center operations spanning eleven sites across North America. Headquartered in Miami, Florida, Hut 8 Corp. manages twelve Bitcoin mining, hosting, and Managed Services sites in Alberta, New York, Nebraska, and Texas and five high performance computing data centers in British Columbia and Ontario. For more information, visit www.hut8.com and follow us on X (formerly known as Twitter) at @Hut8Corp. 
 
Cautionary Note Regarding Forward–Looking Information 
This press release includes "forward-looking information" and "forward-looking statements" within the meaning of Canadian securities laws and United States securities laws, respectively (collectively, "forward-looking information"). All information, other than statements of historical facts, included in this press release that address activities, events or developments that Hut 8 expects or anticipates will or may occur in the future, including such things as future business strategy, competitive strengths, goals, expansion and growth of the business, operations, plans and other such matters is forward-looking information. Forward-looking information is often identified by the words "may", "would", "could", "should", "will", "intend", "plan", "anticipate", "allow", "believe", "estimate", "expect", "predict", "can", "might", "potential", "predict", "is designed to", "likely" or similar expressions. Specifically, such forward-looking information included in this press release includes, but is not limited to, statements relating to (i) the Company’s closing of the Drumheller site, including the expected improved cash flow, decreased cost to mine a Bitcoin, and increased fleet efficiency as a result, (ii) the Company’s plan to relocated efficient miners to the Medicine Hat site in Alberta, Canada, and retire the old and inefficient miners from operations, (iii) the Company’s ability to maintain its lease at the Drumheller site and re-energize the site if market conditions improve, and (iv) the Company's ability to continue restructuring and optimizing operations to drive profitable growth and create lasting shareholder value.

Statements containing forward-looking information are not historical facts, but instead represent management's expectations, estimates and projections regarding future events based on certain material factors and assumptions at the time the statement was made. While considered reasonable by Hut 8 as of the date of this press release, such statements 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, security and cybersecurity threats and hacks, malicious actors or botnet obtaining control of processing power on the Bitcoin network, further development and acceptance of the Bitcoin network, changes to Bitcoin mining difficulty, loss or destruction of private keys, increases in fees for recording transactions in the Blockchain, erroneous transactions, reliance on a limited number of key employees, reliance on third party mining pool service providers, regulatory changes, classification and tax changes, momentum pricing risk, fraud and failure related to digital asset exchanges, difficulty in obtaining banking services and financing, difficulty in obtaining insurance, permits and licenses, internet and power disruptions, geopolitical events, uncertainty in the development of cryptographic and algorithmic protocols, uncertainty about the acceptance or widespread use of digital assets, failure to anticipate technology innovations, the COVID19 pandemic, climate change, currency risk, lending risk and recovery of potential losses, litigation risk, business integration risk, changes in market demand, changes in network and infrastructure, system interruption, changes in leasing arrangements, failure to achieve intended benefits of power purchase agreements, potential for interrupted delivery, or suspension of the delivery, of energy to the Company's mining sites, and other risks related to the digital asset and data center business. For a complete list of the factors that could affect the Company, please see the "Risk Factors" section of the Company's Registration Statement on Form S-4  dated November 7, 2023, available under the Company's EDGAR profile at www.sec.gov, and Hut 8's other continuous disclosure documents which are available under the Company's SEDAR+ profile at www.sedarplus.ca and under the Company's EDGAR profile at www.sec.gov

Hut 8 Corp. Investor Relations 
Sue Ennis 
sue@hut8.io 

Hut 8 Corp. Media Relations 
Erin Dermer 
erin.dermer@hut8.io  


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