Hut 8 Mining Corp. has announced a partnership with financial services firm Foundry Digital to secure $11.8 million in financing, which it will put toward 5,400 new MicroBT Whatsminer M30S mining rigs, adding 475 petahashes per second (PH/s) to its mining capacity over the next six months.
The financing is structured as a 12-month term with an annual interest rate of 16.5 percent.
In the recently-published announcement, Hut 8 CEO Jaime Leverton acknowledged that securing new mining equipment is a big challenge for everyone in the business right now.
“This partnership builds on Hut 8’s ongoing commitment to shareholders by mitigating supply constraints and reducing our capital expenditure with a proactive fleet management strategy,” said Leverton.
Once the new equipment is installed, the total hash power coming from Hut 8 (named after Hut 8 in London’s Bletchley Park, where Alan Turing broke the Nazi’s enigma code) is expected to rise from 825 PH/s before the agreement to 1,300 PH/s. Hut 8 has two mining farms in Alberta, Canada, in Medicine Hat and Drumheller. Most of its energy supply comes from natural gas, which is often vented as a byproduct of oil production.
New York State-based Foundry Digital, a subsidiary of Digital Currency Group, partnered with MicroBT in September 2020 to secure access to its mining equipment. As a result, despite a worldwide shortage in new mining equipment that can include months-long waiting times, the parties involved are hopeful that the first of Hut 8’s new machines will arrive by the end of January.
North American Listing Is Good For Business
Hut 8 is one of only two Bitcoin companies and the only bitcoin mining company listed on the Toronto Stock Exchange (TSX) “senior board.” (Financial services firm Galaxy Digital is also listed on the TSX senior board).
Bitcoin mining company Bitfarms is listed on the Canadtian Venture Exchange (CVE), while NASDAQ lists Riot Blockchain, Marathon Patent Group and HIVE Blockchain Technologies.
Hut 8 cofounder and former CEO Andrew Kiguel told Bitcoin Magazine in a phone interview that going public had helped the company in securing capital funding, such as this recent partnership with Foundry.
“Hut 8 is well positioned to attract new investors as a result of its listing on the Toronto Stock Exchange, Canada’s largest senior exchange and that it has cleared the ability to file a prospectus with the Ontario Securities Commission,” Kiguel said. “Hut 8 was the first blockchain entity to obtain a listing on the senior exchange and to use a short-form prospectus to raise capital.”
CoinDesk reported that Hut 8 shares have gained over 190 percent in the past year, but are currently down over 40 percent from their peak near $8.50 in early January. Foundry Digital also recently partnered with another mining leader, Compute North, to help them secure 14,000 new M30Ss through its partnership with MicroBT.