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Hut 8 Becomes Largest Mining Company With New BlockBoxes Addition

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Hut 8 acquires 16 BlockBoxes.

World’s leading cryptocurrency mining firm, Hut 8 Mining Corp, has acquired additional 16 BlockBoxes, which are high-performing data centers. In a press statement, Hut 8 also disclosed that they have been installed at its mining facility in Alberta, Canada.

New Mining Capacity

With the installation of the 16 BlockBoxes, it now increases the virtual currency mining firm’s capacity to 19.2MW. Not to mention that BlockBoxes will effectively add 144PHs-1 (Petahashes per second) to the mining rig. Well, the addition of these BlockBoxes will leave the mining rig with a total operating capacity of 85.9MWs. Indeed, that power represents about 632PHs-1 of operating capacity.

Officials Speak on the Acquisition

We look forward to ramping up to 16 BlockBoxes“, says Andrew Kiguel, President and CEO of Hut 8. In fact, they are liaising with Medicine Hat city officials to see how they can achieve it soon. CEO Kiguel says that they hope to see that happen in a matter of weeks. “Without interrupting the residents’ power, we are committed to increasing our capacity.“, the chief executive says.

Of the development, the City of Medicine Hat mayor, Ted Clugston, expresses his excitement.  Mayor Clugston says that his team will continue to tightly cooperate with the interest of the city in mind. He says that he is excited that Hut 8 is keying into that drive. “By employing two scores of locals and engaging 30 local contracts, it shows they value the city“, the Mayor added.

How to Finance the BlockBoxes

The BlockBoxes cost $950,000 USD per BlockBox. Merchant bank Galaxy Digital Lending has issued a loan to the tune of $16M USD to finance it. That’s not all; Hut 8 also agreed to a vendor-take-back condition from Bitcoin blockchain infrastructure provider Bitfury. Agreement documents show that Bitfury accepted a 40% of the selling price at $3.75 USD per Hut 8 shares.

More Details

Also, the loan financing terms show LIBOR + 9%, and its coupon payable in Bitcoin (BTC) or US dollar. While the loan financing ended on September 7th, the loan coupon indicates a 30-month condition with bullet repayment. In addition, Galaxy will get 2.2 million purchase warrants from Hut 8 as part of the loan financing. This can lead to the acquisition of more shares at $4.5 USD. Essentially, Alberta-based stock exchange TSX Venture Exchange has role to play in all this. Indeed, it has the authority to approve or reject the loan financing and warrants issuance.

What this Means for Hut 8

What it means is that the loan will enable Hut 8 to attain its planned growth capacity of 28%. Furthermore, this becomes feasible when its shares are issued at 3%. With this landmark achievement, Hut 8 is now the world’s largest public cryptocurrency mining company, Kiguel says. He also appreciated the commitment of their “strategic partners” at Galaxy and Bitfury.

 

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