Mr. Andrew Kiguel reports

HUT 8 MINING CORP. REPORTS FINANCIAL RESULTS FOR SECOND QUARTER 2018

Hut 8 Mining Corp. has provided its financial results for the second quarter ended June 30, 2018.

                                              Three months ended  Six months ended
                                                   June 30, 2018     June 30, 2018   
                                                                                      
Revenue                                             $  7,800,370    $   18,789,319    
Project costs                                         (2,843,831)       (5,009,130)
Mining profit                                          4,956,539        13,780,189    
Mining profit margin                                         64%               73%           
Depreciation                                          (5,900,495)      (11,540,964)
Gross profit                                       $    (943,956)   $    2,239,225     
Gross profit margin                                         -12%               12%           
Expenses                                              (2,227,665)       (5,192,143)
Net operating (loss)                                  (3,171,621)       (2,952,918)
Fair value (loss) on remeasurement of digital assets  (1,755,962)       (5,829,272)
Foreign exchange (loss)                                   (8,960)           (2,450)
Interest income                                                -            32,315        
Net (loss)                                            (4,936,543)       (8,752,325)
Adjusted EBITDA                                    $   3,860,052    $   11,034,861    
Adjusted EBITDA margin                                       49%               59%           
Net (loss) per share -- basic and diluted          $       (0.06)   $        (0.11)
Bitcoin mined                                                786             1,614         
Cost per bitcoin (CAD)                             $       3,618           $ 3,104         
Cost per bitcoin (USD)                             $       2,721           $ 2,334         

As of June 30, 2018, Hut 8 had 82,808,400 shares outstanding, 595,000 stock options and 945,600 warrants.

With a mining profit margin of 64 per cent, the cost of mining bitcoin in Q2 2018 was $3,618 ($2,721 (U.S.)) per bitcoin. Hut 8 believes it is amongst the lowest cost miners of bitcoin in the world. The company anticipates the cost per bitcoin to remain competitive, based on the increasing difficulty rate, offset by the facility in the city of medicine, which operates more efficient, next-generation BlockBoxes.

"Hut 8 continued to produce a positive mining operating margin and adjusted EBITDA in Q2 2018, despite the price of bitcoin declining by 15 per cent over the quarter and mining difficulty increasing by 69 per cent. In our Q3 2018, we will see the positive impact of our CMH facility, which was completed on July 11, 2018, and represents a 350-per-cent increase in our operating capacity resulting in 360 PH/s increase in output," said Andrew Kiguel, president and chief executive officer of Hut 8.

Due to the decrease in the price of bitcoin in Q2 2018, Hut 8 incurred a $1.8-million non-cash loss on the remeasurement of the value of bitcoin in inventory, and consequently finished the quarter with a net loss of about $4.9-million. In future quarters, when revenue is recorded, the company would expect to see unrealized gains or losses based on the price of bitcoin on the corresponding reporting date, relative to the price on the day mined.

"We are optimistic about the long-term direction of the price of bitcoin. We continue to hold our bitcoin, after paying for expenses," said Mr. Kiguel.

"With 66.7 MW of operating capacity that is fully paid for from proceeds of previous fund raising, Hut 8 is Canada's largest publicly traded crypto miner. We are currently exploring several new sites in North America that would have aggregate capacity in excess of 300 MW for future developments," said Mr. Kiguel.

A conference call has been scheduled to discuss the company's second quarter financial results, hosted by Mr. Kiguel and chief financial officer Jimmy Vaiopoulos, starting at 10 a.m. ET.

Date:  Thursday, Aug. 16, 2018

Time:  10 a.m. ET

Dial-in:  1-888-465-5079, Canada 1-888-424-8151, United States

Passcode:  7934 356 (pound sign)

Master agreement amendments

In addition, Hut 8 has made amendments to its master services agreement (MSA) and master purchase agreement (MPA) with Bitfury.

With respect of the MSA, Hut 8 will move from paying Bitfury a monthly service fee of costs plus 10 per cent to paying a $2,500 monthly management fee per BlockBox, plus costs associated with operating the BlockBoxes (with no markup). Hut 8 management believes this fee schedule will result in a monthly cost reduction and incentivize Bitfury to reduce expenses associated with servicing the BlockBoxes.

With respect of the MPA, amendments were made in two categories: (1) confirmation of the ability by Bitfury to deploy its own BlockBoxes for the purposes of self-mining in North America; and (2) granting Hut 8 an irrevocable and unconditional purchase right with respect to any BlockBoxes deployed by Bitfury in connection with its self-mining right, in each case subject to certain terms and conditions as specified in the amendment to the MPA. Hut 8 will also have a purchase right in respect of any Bitfury joint venture interests or self-mining sites. Bitfury will otherwise continue to be subject to its exclusivity arrangements with Hut 8 for the supply and servicing of BlockBoxes in North America. Hut 8 management believes these amendments represent a strategic benefit for Hut 8 as well as its shareholders, including Bitfury. In times when Hut 8 is unable to finance the purchase of additional BlockBoxes, Bitfury will now have the ability to develop and warehouse sites for Hut 8's benefit.

Amendments to both the MSA and MPA have been approved by the board and will be filed on SEDAR.

This earnings release should be read in conjunction with the company's management discussion and analysis, financial statements, and notes to financial statements for Q2 2018, which have been posted under the company's profile on SEDAR and are also available on the company's website.

Since beginning its mining operations in December, 2017, Hut 8 has mined more than 2,600 bitcoin.

About Hut 8 Mining Corp.

Hut 8 Mining, headquartered in Toronto, Canada, is a cryptocurrency mining and blockchain infrastructure company established through an exclusive arrangement with the Bitfury Group, the world's leading full-service blockchain technology company. Through the Bitfury Group, Hut 8 has access to a world-leading proprietary mix of hardware, software and operational expertise to construct, optimize and manage data centres in low-cost and attractive jurisdictions. Hut 8 is led by a team of industry experts and intends to provide investors with exposure to blockchain processing infrastructure and technology along with underlying cryptocurrency rewards and transaction fees.

We seek Safe Harbor.