Hut 8 Operations Update for March 2024
- Hut 8 executed strategic measures at Drumheller, relocating efficient miners to Medicine Hat and retiring inefficient miners.
- Construction at the Salt Creek site is on schedule, with plans to energize miners in April.
- Miners from Kearney and Granbury were moved to Salt Creek and Alpha in preparation for energization.
- Site-level operations at Kearney and Granbury transitioned to new owners, with ongoing ownership transitions.
- Ionic Digital's Cedarvale site construction completed, preparing for energization.
- None.
Insights
The update from Hut 8 Corp. detailing the closure of the Drumheller site and the progress at the Salt Creek site is significant for investors. The reported increase in total energy capacity under management from 926 MW to 884 MW indicates a substantial expansion of operations. The company's strategic move to close inefficient mining operations and focus on more efficient sites suggests a drive towards optimizing profitability. The early termination fee of $13.5 million from the Kearney and Granbury sites provides an immediate cash inflow but also indicates a shift in operational strategy.
Investors should note the increase in Bitcoin on the balance sheet, which positions the company favorably for potential future appreciation of the asset. However, the decrease in deployed hashrate and Bitcoin production during the transition period could impact short-term earnings. The long-term implications of these strategic moves need to be assessed in the context of the upcoming Bitcoin halving event, which historically impacts mining profitability. It's important to monitor how Hut 8's operational efficiency post-restructuring will fare against the industry standard during such market conditions.
Hut 8's management of a significantly higher total energy capacity is a critical factor in the cryptocurrency mining industry, where energy consumption is a central concern. The company's vertical integration and control over energy infrastructure are strategic advantages in managing costs. The transition to owned sites like Salt Creek and Alpha for miner deployment reflects a focus on long-term energy cost reduction, which is a vital consideration for investors looking at sustainability and cost-efficiency in the crypto mining sector.
Moreover, Hut 8's partnership in the King Mountain JV and the development of the Cedarvale site demonstrate an expansion into renewable energy, which could mitigate regulatory risks associated with non-renewable energy sources. The energization of the Salt Creek site represents a pivotal development that could enhance the company's competitive edge in the industry. Stakeholders should evaluate these developments for their potential to reduce operational risks and contribute to a more sustainable business model.
The operational update from Hut 8 is reflective of broader trends in the cryptocurrency mining industry. As the Bitcoin halving approaches—an event that reduces the reward for mining new blocks and can affect miners' profitability—the company's decision to invest in operational efficiency and control over its mining infrastructure could be a strategic hedge against the halving's impact. The company's balance sheet strength, with a substantial holding of Bitcoin, provides a buffer against market volatility and positions it to potentially capitalize on future price increases in the cryptocurrency market.
However, the transition of miners and the associated short-term decrease in hashrate and production underscore the challenges mining companies face in balancing growth and operational efficiency. Investors should consider the company's ability to quickly return to full production capacity and the potential impact of the Bitcoin halving on Hut 8's revenue and profitability. The company's strategic measures, such as site closures and miner relocations, alongside its balance sheet holdings, are pivotal factors that could influence its market position in the volatile cryptocurrency sector.
25.5 EH/s and 884 MW under management as Hut 8 executes closure of Drumheller site and prepares to energize Salt Creek site
9,102 Bitcoin on balance sheet positions Hut 8 to invest in growth as the halving approaches
MIAMI, April 05, 2024 (GLOBE NEWSWIRE) -- Hut 8 Corp. (Nasdaq | TSX: HUT), (“Hut 8” or the “Company”) a leading, vertically integrated operator of large-scale energy infrastructure and one of North America’s largest Bitcoin miners today released its operations update for March 2024.
“March was another productive month in our post-merger restructuring program,” said Asher Genoot, CEO of Hut 8. “We continue to make the changes required for profitable, long-term growth.”
“On March 6, we announced the closure of Drumheller. Our team relocated efficient miners to Medicine Hat and retired inefficient miners. We expect to see the impact of these changes on our operating efficiency moving forward.”
“We also made significant progress on our new Salt Creek site and expect to fully energize the site in April, less than three months after breaking ground. We removed our miners from Kearney and Granbury and are relocating them to our owned sites, Salt Creek and Alpha, to be energized. While this decreased our deployed hashrate and Bitcoin production during the month, it gives us the crucial ability to maintain full control of our fleet and drive down our energy costs going into the halving.”
“Lastly, site-level operating responsibilities transitioned to the new owner of Kearney and Granbury and we continue to transition ownership of all other activities at those sites. Under our agreement, we expect to continue generating revenue at these sites until the agreement is terminated at the end of April, at which point we are entitled to receive an early termination fee of
“I look forward to sharing more updates on the impact of our restructuring and growth initiatives in the coming months.”
| March 2024 | February 2024 | |
| Total energy capacity under management1 | 884 MW | 926 MW |
| Total deployed miners under management2,3 | 241.6K | 258.2K |
| Total hashrate under management2,4 | 25.5 EH/s | 27.0 EH/s |
Self-Mining5 | ||
| Deployed miners2,6 | 55.0K | 74.1K |
| Deployed hashrate2,7 | 5.4 EH/s | 7.2 EH/s |
| Bitcoin produced8 | 231 BTC | 292 BTC |
| Bitcoin on balance sheet9 | 9,102 BTC | 9,110 BTC |
| Managed Services10 | ||
| Energy capacity under management | 767 MW | 767 MW |
| Deployed miners under management2,11 | 210.5K | 218.6K |
| Hashrate under management2 | 22.6 EH/s | 23.4 EH/s |
| Hosting | ||
| Deployed miners under management2,11,12 | 76.8K | 76.7K |
| Hashrate under management2,13 | 8.7 EH/s | 8.7 EH/s |
Notes:
(1) Includes all Self-Mining, Managed Services, and Hosting infrastructure, including
(2) Average during the period for March 2024.
(3) Includes all miners that are racked with power and networking, rounded to the nearest 100, in Self-Mining, Managed Services, and Hosting infrastructure with power and networking, including all miners at the King Mountain site.
(4) Includes all Self-Mining, Managed Services, and Hosting hashrate, including
(5) Self-Mining operations for Hut 8 include
(6) Deployed miners are defined as those physically racked with power and networking, rounded to the nearest 100; deployed self-mining miners net of the
(7) Indicates the target hashrate of all deployed miners; deployed self-mining hashrate net of the
(8) Bitcoin produced net of the
(9) As of month-end.
(10) The Managed Services figures reflected in this table include the Self-Mining and Hosting metrics from the sites where Hut 8’s Managed Services business is an additional service layer in the operation of the site (at Charlie, Delta, Echo, and Hotel – site details below). As a result, the sum of the Self-Mining, Managed Services, and Hosting numbers will not add up to the “Total energy capacity under management”, “Total deployed miners under management”, and “Total hashrate under management” figures that are also reflected in the table.
(11) Miners are rounded to the nearest 100.
(12) 42.6K deployed miners under management net of the
(13) 4.7 EH/s under management net of Hut 8’s joint venture partner’s
Highlights:
- Hut 8 executed a series of strategic measures at Drumheller, closing the site, moving efficient miners to Medicine Hat, and retiring inefficient miners.
- Construction of the 63 MW Salt Creek site is progressing on schedule, and the Hut 8 team expects to energize miners in April.
- In preparation for the energization of Salt Creek, the Company removed all miners hosted at Kearney and Granbury and is relocating them to Salt Creek and Alpha
- Site-level operating responsibilities at Kearney and Granbury transitioned to the new owner and Hut 8 continues to transition ownership of all other activities.
- At Ionic Digital’s Cedarvale site in Ward County, Texas, the Hut 8 team completed the initial phase of construction and is preparing to energize the site.
| Owner | Energy Capacity | Self-Mining | Managed Services | Hosting | ||
| Alpha | Niagara Falls, NY | Hut 8 | 50 MW | Yes | Yes | |
| Kearney | Kearney, NB | Managed | 100 MW | Yes | Yes | |
| Granbury | Granbury, TX | Managed | 300 MW | Yes | Yes | |
| King Mountain | McCamey, TX | Joint Venture | 280 MW | Yes | Yes | Yes |
| Medicine Hat | Medicine Hat, AB | Hut 8 | 67 MW | Yes | ||
| Hotel | Midland, TX | Managed | 87 MW | Yes | ||
About Hut 8
Hut 8 Corp. is an energy infrastructure operator and Bitcoin miner with self-mining, hosting, managed services, and traditional data center operations across North America. Headquartered in Miami, Florida, Hut 8 Corp.’s portfolio comprises eighteen sites: nine Bitcoin mining, hosting, and Managed Services sites in Alberta, New York, Nebraska, and Texas, five high performance computing data centers in British Columbia and Ontario, and four power generation assets in 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 and New Hut expect or anticipate 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 statements relating to the Company’s profitable, long-term growth, operating efficiency, relocation of miners, and restructuring and optimization initiatives.
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 mining sites and other risks related to the digital asset mining and data centre business. For a complete list of the factors that could affect Hut 8, please see the “Risk Factors” section of Hut 8’s Transition Report on Form 10-K, 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 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
FAQ
What strategic measures did Hut 8 execute at Drumheller?
What is the status of construction at the Salt Creek site?
Where were the miners from Kearney and Granbury relocated?
What happened to site-level operations at Kearney and Granbury?
What is the status of construction at Ionic Digital's Cedarvale site?
