TORONTO, ON, May 29, 2019 – Hut 8 Mining Corp. (“Hut 8” or the “Company”) (TSXV: HUT) (OTCQX: HUTMF), (“Hut 8” or the “Company”) (TSXV: HUT) (OTCQX: HUTMF), one of the world’s largest public cryptocurrency mining companies by operating capacity and market capitalization, today announces its financial results for the first quarter ended March 31, 2019 (“Q1-2019”). Hut 8 reports all amounts in Canadian Dollars unless otherwise stated.
● Revenue of $12.1 million for Q1-2019
● Adjusted EBITDA of negative $1.3 million for Q1-2019
● 2,405 bitcoin mined in Q1-2019
● Fair value gain on re-measurement of digital assets of $789,678
“While bitcoin mining economics significantly improved in April 2019 with an increase in the price of bitcoin, our first quarter was negatively impacted by bitcoin prices consistently trading below US$4,000 and the network difficulty increasing by 14%. In addition, record cold weather in Alberta resulted in higher electricity pricing.” said Andrew Kiguel, Chief Executive Officer of Hut 8. “In March and continuing into the second quarter, we have experienced lower electricity prices and a much improved bitcoin price. This has significantly improved our margins in the second quarter thus far.”
Alberta had a record cold winter, which led to higher electricity prices at our operations that are not under a power contract. Despite having higher than normal electricity prices in January and February, Hut 8’s cost per bitcoin decreased slightly from US$3,995 in Q4-2018 to US$3,950 in Q1-2019. The impact of management’s cost reduction initiatives and electricity optimization in Q1-2019 were successful in offsetting the higher energy prices. In addition, Hut 8’s management was successful in reducing corporate overhead excluding non-cash share-based compensation from $994k in Q4-2018 to $747k in Q1-2019.
For Q1-2019, fair value gain on re-measurement of digital assets of $789,678 represented the gain on adjusting the value of the digital assets held in inventory to the market value on the reporting date. This was the first gain on re-measurement of digital assets in Hut 8’s history and marks a turn in the bitcoin prices. In future quarters, the Company would expect to see gains or losses based on the price of bitcoin on the reporting date, relative to the price on the day mined, when revenue is recorded.
Hut 8 recognized negative $1.3 million in Adjusted EBITDA, the first quarter of negative Adjusted EBITDA operations for the Company. A net loss was recorded for the quarter was $6,065,495. Both losses were largely as a result of bitcoin prices remaining at approximately a 52-week lows during Q1-2019, hash rates increasing, and volatile natural gas prices which all negatively impacted operations for the quarter.
“Hut 8 remains committed to solely mining bitcoin and to retain as much as possible. Despite harsh operating conditions, Hut 8 retained 2,615 bitcoin at the end of Q1-2019. Management underwent significant cost saving measures at the end of 2018 to ensure we maintain a lean cost structure and are in a position to capitalize on the recent upswing. Our operations are stronger than ever, and we are poised for improved financial performance going forward given the recent appreciation in the price of bitcoin that began in April 2019,” said Kiguel.
A conference call has been scheduled to discuss the Company’s first quarter 2019 financial results, hosted by Andrew Kiguel, Chief Executive Officer, and Jimmy Vaiopoulos, Chief Financial Officer with further details below:
Date: Wednesday, May 29, 2019
Time: 10:00 a.m. ET
Dial-In: 1 (888) 465-5079, Canada
1 (888) 424-8151, USA
Passcode: 5498 622#
This earnings release should be read in conjunction with the Company’s Management Discussion & Analysis, Financial Statements and Notes to the Financial Statements for Q1-2019, which has been posted under the Company’s profile on SEDAR at www.sedar.com and are also available on the Company’s website at www.hut8mining.com.
Since beginning its mining operations in December 2017, Hut 8 has mined over 9,950 bitcoins. Hut 8’s current capital structure consists of 90,234,921 common shares outstanding, 2,882,222 warrants and 965,000 options. In total, Hut 8 owns and operates two sites in Alberta, Canada utilizing 85 BlockBox AC data centers with current operating capacity of 95.2 MW and 784 PH/s.
ABOUT HUT 8 MINING CORP.
Hut 8 is a cryptocurrency mining company with industrial scale bitcoin mining operations in Canada. Hut 8 has an exclusive North American partnership with the Bitfury Group Limited, inclusive of Bitfury Holding BV, (“Bitfury”), one of the world’s leading full-service hardware and software blockchain technology companies.
Hut 8 provides investors with direct exposure to bitcoin, without the technical complexity or constraints of purchasing the underlying cryptocurrency. Investors avoid the need to create online wallets, wire money offshore, and safely store their bitcoin.
Key investment highlights and FAQ’s: http://hut8mining.com/investors.
Hut 8 Corporate Contact:
Chief Executive Officer
Tel: (647) 256-1992
Chief Financial Officer
Tel: (647) 256-1992
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 the Filing Statement dated March 1, 2018 relating to the Qualifying Transaction of Oriana Resources Corporation and Hut 8, 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 Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.