TORONTO, May 13, 2021 /CNW/ - Hut 8 Mining Corp. (TSX:
HUT) ("Hut 8" or the "Company"), one of North America's oldest, largest and most
innovative Bitcoin miners, today announces its financial results
for the quarter ending March 31, 2021
("Q1-2021"). Hut 8 reports all amounts in Canadian Dollars
unless otherwise stated.
Bitcoin Inventory and Value
Hut 8 continues to strategically emphasize its "Hodl" strategy,
taking active steps to generate Canadian and US dollars to help
fund operating expenses, so as to avoid selling Bitcoin. As
of March 31, 2021 the Company had a
total Bitcoin balance of 3,271 with a market value of $242.4 million. Our current Bitcoin
balance, including 1,000 Bitcoin loaned as part of the Company's
fiat yield strategy, is approximately 3,522 Bitcoin.
Q1-2021 Highlights:
- Record level quarterly revenue of $32.5
million in Q1-2021, compared to $12.7
million in the quarter ended March
31, 2020 ("Q1-2020"). $30.6
million of Q1-2021 revenue related to Bitcoin mining,
$1.4 million from Hut 8's
institutional grade hosting client and the balance consisting of
interest income of $0.5 million from
the Company's Bitcoin yield arrangement with Genesis Global
Capital, LLC ("Genesis").
- The Company closed a $77.5
million private placement, which served to significantly
strengthen Hut 8's capitalization and allow several strategic
actions to be taken.
- Hut 8 fully repaid its US$20
million Genesis loan with all Bitcoin collateral returned to
Hut 8, resulting in annualized interest savings of US$1.6 million, while reducing the Company's
credit risk exposure.
- Ordered 5,400 units of Whatsminer M30S Bitcoin mining machines
from MicroBT, which is expected to add 475 PH/s to its Bitcoin
mining capacity following anticipated installation by the of
July 2021.
- Ordered 10,000 NVIDIA CMP cards with full deployment expected
to be completed this summer. Hut 8 and NVIDIA entered into an
agreement for an enterprise-class product that is not available on
the open market. Hut 8 will use the NVIDIA CMPs initially to mine
the Ethereum network and expand its mining business while
maintaining the benefit of payouts in Bitcoin, via Luxor pool. The
addition of the NVIDIA CMPs is expected to increase Hut 8's
aggregate operating rate by approximately 1600 Gigahash. The total
amount of power this new fleet of equipment will use is expected to
be less than 4 MW. Given current network dynamics, this would
equate to approximately an incremental 3.35 Bitcoins per day.
- The Company entered into a power purchase agreement ("PPA")
with Validus to support Hut 8's Alberta operations. This agreement will enable
Hut 8 to initially secure up to 100MW of new power from the project
on a physical off-take basis at a power rate of $0.0274/kWh, subject to an annual adjustment
mechanism for the five-year term of the PPA. The PPA includes a
$25 million rate paydown investment
by Hut 8, the first milestone of which was reached in April 2021, resulting in a preliminary payment of
$15 million.
- Hut 8 established a yield account with Genesis where it is
earning 4% in interest per annum on 1,000 Bitcoin and announced a
similar program with Galaxy Digital, earning 4% per annum.
"I joined Hut 8 in December with a bold vision," said
Jaime Leverton, Chief Executive
Officer of Hut 8. "First, I would build a remarkable team of
leaders in their disciplines who would be capable of building out
the Company's story of excellence. Then I would build lasting
partnerships to expand and diversify our business models. And
third, I would introduce ESG and sustainability priorities to
ensure we laid the groundwork for our communities and planet to
thrive. The Q1 2021 results are in and I could not be happier
as we continue to strengthen and refine the Hut 8 story while
creating and maintaining long-term value."
Operating and Financial Overview:
Revenue growth reflects improvement in the price of Bitcoin,
which averaged approximately US$45,300 in the first quarter of 2021, versus
approximately US$8,300 in the prior
year period.
- Total Bitcoin balance of 3,271 had a market value of
$242.4 million as of March 31, 2021, consisting of 2,271 Bitcoin held
in custody and 1,000 Bitcoin loaned to Genesis.
- Based on the strength of Bitcoin price appreciation, the gain
on digital assets held in custody and digital asset loan
receivables was $110.9 million in
Q1-2021:
-
- Unrealized gain on digital assets held as at March 31, 2021 of $66.8
million net of tax ($88.0
million before tax), which flows through other comprehensive
income on the Company's balance sheet, plus
- Revaluation of digital asset loan receivable of $22.9 million, which flows through the income
statement.
- Site operating costs for Q1-2021 were $14.6 million, up from the prior year period of
$12.6 million, related to increased
power consumption.
- Net income of $35.5 million,
versus a loss of $10.2 million in
Q1-2020.
- Adjusted EBITDA of $16.0 million
in Q1-2021, versus a loss of $0.6
million in the prior year quarter, driven by the improvement
in Bitcoin mining economics.
"I am impressed by the progress the team at Hut 8 Mining has
made," commented Shane Downey, Chief
Financial Officer of the Company. "I'm excited to have joined
this dynamic team as we work to deliver on our financial, ESG and
sustainability objectives."
COVID-19
COVID-19 has had minimal impact on the ongoing operations of the
Company; however, all staff have taken precautionary measures to
help minimize the spread of the COVID-19 virus.
Forward-Looking Information
Certain information in this press release constitutes
forward-looking information. In some cases, but not necessarily in
all cases, forward-looking information can be identified by the use
of forward looking terminology, such as "plans", "targets",
"expects" or "does not expect", "is expected", "estimates",
"intends", "assumes", "anticipates" or "does not anticipate" or
"believes", or variations of such words and phrases, or state that
certain actions, events or results "may", "could", "would",
"might", "will" or "will be taken", "occur" or "be achieved". In
addition, any statements that refer to expectations, projections or
other characterizations of future events or circumstances contain
forward-looking information. Statements containing forward-looking
information are not historical facts, but instead represent
management's expectations, estimates and projections regarding
future events. Forward-looking information is necessarily based on
a number of opinions, assumptions and estimates that, while
considered reasonable by Hut 8 as of the date of this press
release, 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 the factors described in
greater detail in the "Risk Factors" section of Hut 8's Annual
Information Form dated March 25,
2021, which is available at www.sedar.com. These factors are
not intended to represent a complete list of the factors that could
affect Hut 8; however, these factors should be considered
carefully. There can be no assurance that such estimates and
assumptions will prove to be correct. The forward-looking
statements contained in this press release are made as of the date
of this press release, and Hut 8 expressly disclaims any obligation
to update or alter statements containing any forward-looking
information, or the factors or assumptions underlying them, whether
as a result of new information, future events or otherwise, except
as required by law.
Neither the TSX nor its Regulation Services Provider (as that
term is defined in the policies of the TSX) accepts responsibility
for the adequacy or accuracy of this release.
Non-IFRS Measures
This press release presents certain non-IFRS ("IFRS" refers to
International Financial Reporting Standards) financial measures to
assist readers in understanding Hut 8's performance. These non-IFRS
measures do not have any standardized meaning and therefore are
unlikely to be comparable to similar measures presented by other
issuers and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
IFRS. Management uses these non-IFRS measures to supplement the
analysis and evaluation of operating performance. In this press
release, the following terms are used, which are not found in the
Chartered Professional Accountants of Canada Handbook and do not
have a standardized meaning under IFRS: EBITDA (Earnings before
Interest, Taxes, Depreciation, and Amortization): (a) "EBITDA"
represents net income or loss excluding net finance income or
expense, income tax or recovery, depreciation, and amortization;
and (b) "Adjusted EBITDA" represents EBITDA adjusted to exclude
share-based compensation, fair value loss or gain on revaluation of
digital assets, write-offs, and costs associated with one-time
transactions (such as listing fees).
About Hut 8:
Hut 8 is one of North America's
oldest, largest and most innovative Bitcoin miners. Hut 8 has one
of the highest installed capacity rates in the industry and is #1
globally in held, self-mined Bitcoin of any crypto miner or
publicly traded company. Recently ranked 11th (of 10,000) on the
2021 OTCQX® Best 50, the Hut 8 leadership team is continually
looking for ways to accelerate innovation in high performance
computing, and the blockchain ecosystem. We are stewards of
powerful, industry-leading solutions, and drivers of innovation in
digital asset mining and high-performance computing. Hut 8
applies a growth mindset to our revenue diversification, ESG and
carbon footprint reduction strategy. We are a company committed to
growing shareholder value regardless of #BTC market direction.
#HodltheHut
SOURCE Hut 8 Mining Corp.