Mr. Asher Genoot reports

HUT 8 COMMENCES CONSTRUCTION OF NEW DIGITAL ASSET MINING SITE IN CULBERSON COUNTY, ANNOUNCES NEW TREASURY STRATEGY

Hut 8 Corp. has commenced construction of its newest digital asset mining site in Culberson county, Texas. With construction under way, the company expects to bring miners on-line at the site in Q2 2024.

The Culberson county site creates the optionality for the company to expand its self-mining fleet or to transition existing self-mining activity from Granbury, Tex., and Kearney, Neb., to the site. The site is expected to have up to approximately 3.6 EH/s (exahashes per second) of self-mining capacity if current-generation miners are deployed. Based on current energy price forecasts, the company expects that its cost to mine a bitcoin at the Culberson county site will be approximately 30 per cent lower than its cost to mine a bitcoin through its hosted miners at Granbury, Tex., and Kearney, Neb.

"The Culberson county project exemplifies Hut 8's focus on operating excellence," said Asher Genoot, Hut 8 chief executive officer. "Our in-house development team enables us to build quickly and cost-effectively. Compared to the benchmark of approximately $460,000 per MW [megawatt] set by recent acquisitions in the area, our all-in cost to design and build the Culberson county site is expected to be less than $275,000 per MW. This represents a savings of more than 40 per cent, or approximately $18.5-million in upfront development costs per every 100 MW of expansion. For the Culberson county site specifically, this means that we expect to build the site for $17.3-million, or less, instead of approximately $29-million."

The company has also formally enacted a new treasury strategy that provides for the use of bitcoin held in reserve to build balance sheet value and finance growth initiatives. Bitcoin held in reserve may be deployed through direct sales, option strategies or other approaches. The strategy is designed to enhance the company's ability to execute strategic initiatives, increase its operating scale, and optimize metrics such as energy cost and cost to mine a bitcoin. Decisions to utilize bitcoin held in reserve will be made on a case-by-case basis. The company will use this strategy to finance capital expenditures for the Culberson county site.

"Breaking ground at the Culberson county site marks the introduction of Hut 8's new treasury strategy, which focuses on deploying our stack strategically to grow the business, create shareholder value and minimize dilution," said Mr. Genoot. "As we head into the halving, we anticipate that distressed assets will become available at favourable valuations and create opportunities for further growth. A core principle of our new strategy is to deploy capital thoughtfully and strategically to maintain a strong balance sheet and position ourselves to evaluate these opportunities as they arise."

About Hut 8 Corp.

Through innovation, imagination and passion, Hut 8's seasoned executive team is bullish on creating value at the intersection of infrastructure and energy through bitcoin mining and hosting, groundbreaking managed services, energy arbitrage, operating traditional data centres, and capitalizing on emerging technologies such as AI (artificial intelligence) and machine learning. Headquartered in Miami, Fla., Hut 8's infrastructure portfolio includes 11 sites: five high performance computing data centres across British Columbia and Ontario that offer cloud, co-location, AI, machine learning and VFX (visual effects) rendering computing solutions; and six bitcoin mining, hosting and managed services sites located in Alberta, New York, Nebraska and Texas. Long distinguished for its unique treasury strategy, Hut 8 has one of the highest inventories of self-mined bitcoin of any publicly traded company globally.

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