Hut 8 Streamlines Operations with Closure of Drumheller Site

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 2024	Actual	Pro forma1	% change
Deployed self-mining hashrate	7.24 EH/s	6.45 EH/s
Bitcoin mined	292 BTC	288 BTC
Bitcoin mined per EH	40.33 BTC/EH/s	44.65 BTC/EH/s	11%
(1) Reflects February results excluding Drumheller.