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Hut 8 Q2 2023 Report: $19.1 Million Revenue with 9,136 Self-Mined Bitcoin in Custody

On August 14, 2023, Hut 8 Mining Corp, one of North America’s major pioneers in the mining of digital assets, released its financial results for the second quarter of 2023. The report offers a thorough look at the business’ performance, including both successes and problems encountered throughout the quarter.

Financial Highlights

Quarterly Revenue: Hut 8 reported a revenue of CAD $19.1 million for Q2 2023, including CAD $4.2 million from its high-performance computing (HPC) business. This marks a decrease of CAD $24.6 million compared to the CAD $43.8 million revenue in Q2 2022.

Bitcoin Mining: The company mined 399 Bitcoin during the quarter, a 58% decrease compared to the same period in 2022. This decrease was attributed to increased Bitcoin network difficulty, suspension of operations at the North Bay Facility, and ongoing electrical issues at the Drumheller facility.

Bitcoin Holdings: As of June 30, 2023, Hut 8 possessed 9,136 Bitcoins that they mined themselves, either held in custody or used as collateral, valued at CAD $368.7 million.

Financial Downturn: For Q2 2023, Hut 8 reported a net deficit of CAD $16.7 million, translating to a loss of CAD $0.08 per share. This is in contrast to the previous year’s Q2 loss of CAD $88.1 million or CAD $0.49 per share.

Profit from Mining: The company’s mining-related earnings for the quarter stood at CAD $3.2 million, a decline from CAD $14.9 million in the same quarter of 2022.

EBITDA Adjustments: The EBITDA, after adjustments, showed a negative CAD $2.7 million. This is an improvement from the negative CAD $98.1 million recorded in the second quarter of the previous year.

Strategic Developments

Merger with USBTC: Hut 8 continued to progress towards closing its transaction with USBTC, aiming to improve post-merger self-mining capacity to 7.5 EH/s. The merger is expected to expand into more stable energy markets and increase exposure to capex-light, scalable, fiat-based revenue streams.

Challenges at Drumheller: The company faced mining challenges at its Drumheller site, reflecting decreased revenue and fewer Bitcoin mined. However, the team implemented new custom firmware and procured new hardware to expedite repairs.

Five-Year Contract in HPC Business: Hut 8’s high-performance computing business signed a significant five-year contract, with revenue realization expected later in the year.

Future Outlook

Hut 8’s CEO, Jaime Leverton, emphasized the company’s unique approach to growing its business primarily through inorganic means, focusing on an infrastructure-first mindset. The acquisition of the HPC business and the merger with USBTC are seen as strategic moves to position the company on a path to growth.

The company also announced its intention to potentially acquire certain assets of Validus Power Corp, a previous energy supplier to Hut 8’s mining facility in North Bay, Ontario. This move is expected to resolve all litigation claims and counterclaims between Hut 8 and certain Validus Entities.

Conclusion

The decrease in revenue and Bitcoin mining is balanced by the company’s efforts to diversify its business and invest in long-term opportunities. The upcoming merger with USBTC and the potential acquisition of Validus Power Corp’s assets are key developments that reflect Hut 8’s commitment to innovation and expansion in the digital asset mining space.

Bitcoin Mining Giant Hut 8 Set to Merge with USBTC

Hut 8 Mining Corp. (Nasdaq: HUT) (TSX: HUT), one of North America’s leading digital asset and bitcoin mining pioneers, has announced further developments regarding its proposed all-stock merger with U.S. Data Mining Group, Inc., also known as US Bitcoin Corp (USBTC). The resulting entity from this merger will be christened “Hut 8 Corp.” and will be based in the U.S.

The primary objective of this merger is to establish Hut 8 Corp. as a major publicly traded Bitcoin miner with a focus on economical mining, diversified revenue avenues, and adherence to top-tier environmental, social, and governance (ESG) practices.

In line with this development, Hut 8 Corp. has made amendments to its Form S-4 Registration Statement, which has been filed with the U.S. Securities and Exchange Commission (SEC). Jaime Leverton, CEO of Hut 8, commented on the progress, stating, “We look forward to securing SEC clearance for New Hut’s registration statement in the very near term while we work to complete this merger of equals.” Leverton further emphasized the potential of the merged entity, highlighting its anticipated strengths in both Bitcoin and fiat revenues, stemming from a robust infrastructure across North America.

However, the completion of this transaction is contingent upon several factors, including regulatory approvals, shareholder and court consents, and other standard closing conditions.

Hut 8’s legacy in the industry is notable, with a portfolio that includes five high-performance computing data centers spread across British Columbia and Ontario. These centers offer a range of services from cloud computing to AI and machine learning solutions. Additionally, Hut 8 operates two Bitcoin mining sites located in Southern Alberta and boasts one of the highest inventories of self-mined Bitcoin among publicly-traded companies worldwide.

While this press release provides a positive outlook on the merger, it also contains forward-looking statements. These are based on current expectations and projections about future events but are subject to various risks and uncertainties. Factors such as regulatory approvals, market demand, and geopolitical events, among others, could influence the final outcome of this merger.

For a detailed understanding and further information about the merger, interested parties are advised to refer to the Form S-4 Registration Statement and other relevant documents filed with the SEC.

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