Hut 8 completes $11.8M financing for new ASIC mining rigs

Getting your Trinity Audio player ready...

Toronto Stock Exchange-listed company Hut 8 Mining Corp. (TSX: HUT|OTCQX: HUTMF) announced an equipment loan agreement with the financing and advisory services firm Foundry Digital LLC to secure $11.8 million in financing for hardware purchases.

The Canada-based block reward miner will use the funds to provide a US$2.9 million deposit to purchase 5,400 new Whatsminer M30S ASIC mining machines from MicroBT. This addition will add another 475 petahashes per second (PH/s) to Hut 8’s overall mining capacity over the next six months. 

Foundry Digital, a wholly-owned subsidiary of Digital Currency Group (DCG), structured the financing as a 12-month term with an annual interest rate of 16.5%. The loan agreement leverages Foundry’s partnership with MicroBT to bypass long lead times with high initial down payments for bulk order deliveries. Based on this, Hut 8 expects the first batch of machines to arrive and be in operations before the end of January.

Hut 8 CEO Jaime Leverton remarked they were “thrilled to be partnering with Foundry,” and the “partnership builds on Hut 8’s ongoing commitment to shareholders.” He further stated the company hopes to reach a balanced portfolio between new next-generation hardware and still profitable prior generation equipment. 

Mike Colyer, CEO of Foundry, echoed those sentiments stating, “We are delighted to be of service to publicly listed North American companies such as Hut 8.”

Once the new equipment is installed, Hut 8 expects the total hash power it contributes to discovering blocks on the BTC blockchain will reach 1,300 petahashes per second (PH/s). 

The additional financing comes a few days after Hut 8 revealed the closing of a private placement of equity securities. The company secured CAD$77,500,000 from institutional investors by selling 15,500,000 common shares at a purchase price of CAD$5.00. The sale also included warrants to purchase up to 7,750,000 common shares at an exercise price of $6.25 per share.

See also: TAAL’s Jerry Chan presentation at CoinGeek Live, The Shift from Bitcoin “Miners” to “Transaction Processors”