Hut 8 Commences Construction of New Digital Asset Mining Site in Culberson County, Announces New Treasury Strategy
- Commencement of construction for a new digital asset mining site in Culberson County, Texas.
- Expected self-mining capacity of up to approximately 3.6 EH/s at the new site.
- Anticipated cost to mine a Bitcoin to be 30% lower compared to current sites in Granbury, Texas and Kearney, Nebraska.
- Introduction of a new treasury strategy utilizing Bitcoin reserves for financing growth initiatives.
- Cost-effective development with savings of more than 40% in upfront development costs per every 100 MW of expansion.
- None.
Insights
The construction of Hut 8's new digital asset mining site in Culberson County, Texas, represents a significant capital investment with potential long-term benefits for the company. The projected cost savings in development and mining operations underscore the company's commitment to cost efficiency and operational excellence. The anticipated 30% reduction in the cost to mine a Bitcoin could substantially improve Hut 8's profit margins, particularly in the volatile cryptocurrency market where cost control is a critical success factor.
Furthermore, the implementation of a new treasury strategy utilizing Bitcoin reserves to finance growth initiatives is a notable development. This approach could mitigate the need for external financing, which often dilutes shareholder value and instead leverage the company's digital asset holdings to support expansion. This strategic use of Bitcoin reserves may also provide Hut 8 with the agility to capitalize on distressed assets, especially as the industry approaches the Bitcoin halving event, which historically impacts miner revenues by reducing block rewards.
The decision by Hut 8 to strategically deploy its Bitcoin stack indicates a proactive approach to treasury management within the digital asset industry. By comparing the cost per MW for the Culberson County site to recent acquisitions in the area, Hut 8 positions itself as a cost leader, which could provide a competitive advantage. The market should note the company's ability to execute capital projects at significantly lower costs than industry benchmarks, a factor that can attract investment and potentially increase market share.
Investors should also consider the broader implications of Hut 8's strategic moves. The company's growth initiatives, supported by a robust treasury strategy, could set a precedent for how digital asset firms navigate financing and capital allocation amidst market cycles. The strategic use of Bitcoin reserves for capital expenditures reflects an innovative approach to balance sheet management that other companies in the sector may emulate.
The focus on energy cost optimization for Hut 8's new mining operation is particularly relevant in the context of the energy-intensive nature of digital asset mining. The expected energy cost reduction at the Culberson County site is a critical aspect of the company's strategy, as energy costs are a major determinant of profitability in the mining sector. Hut 8's ability to reduce these costs could provide resilience against market fluctuations in both energy prices and Bitcoin value.
The company's emphasis on building and operating its own mining facilities could also reflect a trend towards vertical integration in the digital asset mining industry. By controlling more aspects of the mining process, Hut 8 may be able to achieve greater operational control and efficiency, which is important for long-term sustainability, especially in regions like Texas where energy prices and availability can be volatile.
63 MW site, planned to be energized in Q2, will be Hut 8’s newest North American mining operation
Site expected to have up to approximately 3.6 EH/s of self-mining capacity
Hut 8 to utilize its Bitcoin stack strategically to finance growth initiatives
MIAMI, Feb. 27, 2024 (GLOBE NEWSWIRE) -- Hut 8 Corp. (Nasdaq | TSX: HUT) (“Hut 8” or the “Company”), one of North America’s largest, innovation-focused digital asset mining pioneers and high-performance computing infrastructure provider, is pleased to announce that it has commenced construction of its newest digital asset mining site in Culberson County, Texas. With construction underway, the Company expects to bring miners online at the site in Q2 2024.
The Culberson County site creates the optionality for the Company to expand its self-mining fleet or to transition existing self-mining activity from Granbury, Texas and Kearney, Nebraska to the site. The site is expected to have up to approximately 3.6 EH/s of self-mining capacity if current generation miners are deployed. Based on current energy price forecasts, the Company expects that its cost to mine a Bitcoin at the Culberson County site will be approximately
“The Culberson County project exemplifies Hut 8’s focus on operating excellence,” said Hut 8 CEO Asher Genoot. “Our in-house development team enables us to build quickly and cost-effectively. Compared to the benchmark of approximately
The Company has also formally enacted a new treasury strategy that provides for the use of Bitcoin held in reserve to build balance sheet value and finance growth initiatives. Bitcoin held in reserve may be deployed through direct sales, option strategies, or other approaches. The strategy is designed to enhance the Company’s ability to execute strategic initiatives, increase its operating scale, and optimize metrics such as energy cost and cost to mine a Bitcoin. Decisions to utilize Bitcoin held in reserve will be made on a case-by-case basis. The Company will use this strategy to fund capital expenditures for the Culberson County site.
“Breaking ground at the Culberson County site marks the introduction of Hut 8’s new treasury strategy, which focuses on deploying our stack strategically to grow the business, create shareholder value, and minimize dilution,” said Genoot. “As we head into the halving, we anticipate that distressed assets will become available at favorable valuations and create opportunities for further growth. A core principle of our new strategy is to deploy capital thoughtfully and strategically to maintain a strong balance sheet and position ourselves to evaluate these opportunities as they arise.”
About Hut 8
Through innovation, imagination, and passion, Hut 8 Corp.’s seasoned executive team is bullish on creating value at the intersection of infrastructure and energy through Bitcoin mining and hosting, groundbreaking managed services, energy arbitrage, operating traditional data centers, and capitalizing on emerging technologies like AI and machine learning. Headquartered in Miami, Florida, Hut 8 Corp.’s infrastructure portfolio includes eleven sites: five high performance computing data centers across British Columbia and Ontario that offer cloud, co-location, AI, machine learning, and VFX rendering computing solutions, and six Bitcoin mining, hosting, and managed services sites located in Alberta, New York, Nebraska, and Texas. Long-distinguished for its unique treasury strategy, Hut 8 Corp. has one of the highest inventories of self-mined Bitcoin of any publicly-traded company globally. 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 the Company’s new treasury strategy, the build out and capacity of the Company’s site in Culberson County, Texas, including the expected cost to mine a Bitcoin at the site, and the Company’s future vision, objectives, and success, including its ability to capture future upside and create 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
Caption: Hut 8 is building a new site in Culberson County, Texas for
Caption: Grading is underway at Hut 8’s 63 MW site in Culberson County, Texas
Photos accompanying this announcement are available at
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FAQ
What is the location of Hut 8's newest digital asset mining site?
When does Hut 8 plan to bring miners online at the Culberson County site?
What is the expected self-mining capacity at the Culberson County site?
How does the cost to mine a Bitcoin at the Culberson County site compare to the current sites in Granbury, Texas and Kearney, Nebraska?
What is the new treasury strategy introduced by Hut 8?
