Mr. Jaime Leverton reports

HUT 8 RECEIVES COURT APPROVAL FOR A STALKING HORSE BID FOR FOUR NATURAL GAS POWER PLANTS AND THE NORTH BAY BITCOIN MINE

The Ontario Superior Court of Justice (commercial list) has approved a stalking horse bid as part of Hut 8 Mining Corp.'s previously announced support agreement with Macquarie Equipment Finance Ltd., a subsidiary of Macquarie Group Ltd., a global financial services group.

In connection with the stalking horse bid, the court has also approved the implementation of a sale and investment solicitation process (SISP) to be carried out by KSV Restructuring Inc. The SISP is being conducted in respect of the sale of certain assets of Validus Power Corp. and the assets and operations of certain Validus subsidiaries.

If the stalking horse bid is ultimately declared the successful bid in the SISP, as further approved by the court, and completed in accordance with its terms, a new Ontario subsidiary of the company (BidCo) will become the owner of the assets of certain Validus entities. Macquarie will receive a minority equity interest in BidCo of approximately 20 per cent and a subsidiary of Hut 8 will be the majority owner with the remaining approximately 80 per cent. On completion of the stalking horse bid in accordance with the SISP, BidCo would acquire, free and clear of any encumbrances (excluding certain permitted encumbrances), four natural gas power plants located in Ontario:

• 40-megawatt facility in Kapuskasing;
• 110 MW facility in Kingston;
• 120 MW facility in Iroquois Falls;
• 40 MW facility and bitcoin mine in North Bay.

A transaction agreement in respect of the stalking horse bid will be made available under the company's corporate profile on SEDAR+.

Completion of the stalking horse bid would also include a new secured financing arrangement with Macquarie and BidCo in the form of an operating lease facility. The completion of the stalking horse bid is also expected to result in the full and final resolution of all litigation claims and counterclaims currently pending between Hut 8 and certain Validus entities.

"If our bid to acquire four natural gas facilities in Ontario totalling 310 MW from Validus is successful, we anticipate that the strategic addition of these assets would position Hut 8 as a vertically integrated mining operation, allow us to utilize idle infrastructure and machinery, and provide access to energy pricing certainty," said Hut 8 chief executive officer Jaime Leverton. "The facilities are also expected to give us the optionality to pursue revenue-generating activity, including selling energy to the market, mining bitcoin and powering high-demand HPC applications like AI [artificial intelligence], which is not only in keeping with our infrastructure-first strategy, but also affords us very compelling flexibility ahead of the halving."

Completion of the stalking horse bid is conditional on a number of factors, including: (i) the stalking horse bid being declared the successful bid in the SISP; (ii) the court issuing an approval and vesting order in respect of the stalking horse bid; and (iii) the satisfaction of standard conditions to closing. In limited circumstances under the SISP, the court may approve an alternative restructuring proposal, in which case a portion of any break fee and expense reimbursement will be paid to BidCo. Subject to the conditions outlined above, and the terms and conditions of the SISP, completion of the stalking horse bid is expected to occur in the fourth quarter of 2023.

About Hut 8 Mining Corp.

Through innovation, imagination and passion, Hut 8's seasoned executive team is bullish on building and operating computing infrastructure that powers bitcoin mining, traditional data centres and emerging technologies, like artificial intelligence and machine learning. Hut 8's infrastructure portfolio includes seven sites: five high-performance computing data centres across British Columbia and Ontario that offer cloud, co-location, managed services, AI, machine learning and VFX (visual effects) rendering computing solutions, and two bitcoin mining sites located in Southern Alberta. 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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