Hut 8 Mining p(HUT) - 2021 Q2 - Quarterly Report

Hut 8 Mining Corporate Update Hashrate Capacity Expansion Hut 8 acquired MicroBT miners for $44.373 million, projected to boost total hashrate capacity to 2.5 E/H by late 2021 for a new 100 MW facility MicroBT Miner Purchase Agreement Details | Metric | Value | | :--- | :--- | | Seller | SuperAcme Technology (Hong Kong) Limited | | Purchase Price | $44.373 million USD | | Equipment | MicroBT M30S, M30S+ and M31S miners | | Cost per Terahash | ~$44/Terahash | | Expected Delivery | Starting October 2021 | | Full Deployment | Anticipated by December 2021 | - The total anticipated production capacity increase from this and another recent purchase is 1.081 E/H, which will bring Hut 8's total installed capacity to approximately 2.5 E/H[3] - This new fleet of miners is expected to be the first to operate in the company's planned 100 MW facility, which is being developed in partnership with Validus Power[3] Impact on Production and Future Outlook Expansion to 2.5 E/H and 1,600 Gigahash from NVIDIA CMPs is projected to more than double daily Bitcoin production to 14–16 Bitcoin Projected Daily Bitcoin Production Increase (Pre-Difficulty Adjustment) | Metric | Current Production | Projected Production (Post-Expansion) | | :--- | :--- | :--- | | Average Bitcoin per Day | 6.5 – 7.5 | 14 – 16 | - The CEO, Jaime Leverton, stated the purchase is a unique opportunity to almost double the company's hashrate before the end of the year[4] - The 2.5 E/H capacity is in addition to the 1,600 Gigahash anticipated from NVIDIA cryptocurrency mining processors (CMPs)[5] Bitcoin Network Difficulty Update Anticipated 24-26% Bitcoin network difficulty reduction by July 2, 2021, combined with hashrate expansion, is projected to increase daily self-mined Bitcoin to 20–22 - A sharp reduction in network difficulty, estimated between 24% and 26%, is expected on July 2, 2021[6] Estimated Daily Bitcoin Production Scenarios | Scenario | Average Bitcoin per Day | | :--- | :--- | | Current Production | 6.5 – 7.5 | | Post-Difficulty Reduction Only | 8.5 – 9.5 | | Post-Expansion & Difficulty Reduction | 20 – 22 | About Hut 8 Hut 8 is a leading North American digital asset miner, holding significant self-mined Bitcoin and pursuing diversified strategies including mining, hosting, and yield programs - Key company attributes include: - One of North America's largest digital asset miners, located in Alberta, Canada - Holds more self-mined Bitcoin than any crypto miner or publicly traded company globally - First publicly traded miner on the TSX and first Canadian miner on The Nasdaq Global Select Market[7] - The company has a multi-pronged business strategy: profitable digital asset mining, white-label high-performance compute hosting, and yield & income programs using its Bitcoin reserves[7] Cautionary Note Regarding Forward-Looking Information This press release contains forward-looking statements on future performance, subject to risks and uncertainties, with no obligation to update unless legally required - The press release includes forward-looking information concerning future business strategy, expansion, and operational plans[8] - These statements are subject to risks and uncertainties that could cause actual results to differ materially[9]