Mr. Jaime Leverton of Hut 8 reports

HUT 8 ANNOUNCES ACQUISITION OF TERAGO'S DATA CENTER BUSINESS

Hut 8 Mining Corp. has entered into a definitive agreement to purchase the cloud and co-location data centre business from TeraGo Inc. Once complete, the acquisition will establish Hut 8 as a leading high-performance computing platform, providing unique positioning for the company within the digital asset ecosystem.

About the data centre business

The acquisition consists of five data centres across Canada with a comprehensive information technology offering that includes a complete selection of scalable cloud services. The data centre business spans from Toronto to Vancouver with over 36,000 square feet of geo-diverse data centre space. Existing saleable power capacity totals 4.1 megawatts (MW), with a further 1.5 MW of expansion capacity available within existing shelf space in the Kelowna location. Hut 8 is acquiring customers, employees and a diverse product offering as part of the acquisition.

Transaction rationale

This acquisition constitutes a pivotal moment in Hut 8's positioning as an innovative and diversified player in the digital asset and high-performance computing sectors, serving to set Hut 8 apart from its peers. The transaction provides the following benefits to Hut 8:

• Enhances diversification profile by establishing a broad high-performance computing platform with recurring revenues and a stable cash flow profile;
• Establishes a platform with approximately 400 commercial customers, across a variety of industry verticals, including gaming, visual effects and government agencies, enabling Hut 8 to become the only digital asset miner with enterprise-grade data centre capabilities;
• Provides exposure to secular tailwinds supporting the growth of the resilient data centre sector and capitalizes on the acceleration of existing digitalization trends;
• Creates a platform for the development of applications and services to underserved markets and customers in the growing digital asset, blockchain, gaming and Web 3.0 industries;
• Accelerates Hut 8's ability to address the need for HPC (high-performance computing) and GPU (graphics processing unit) compute;
• Addition of more than 30 experienced data centre professionals with enterprise-grade data centre expertise, to enhance the company's existing core mining operations and team;
• Provides access to operating sites which are connected to electrical grids powered by significant renewables and emissions-free resources.

"As a team of bitcoin and blockchain bulls, we are thrilled with the transformative growth opportunity this investment provides Hut 8," said Jaime Leverton, chief executive officer of the company. "The acquisition of this complementary business diversifies Hut 8's operations with a discrete, steady cash flow that is uncorrelated to digital asset mining. This acquisition also puts us at the forefront of the accelerated digitization of industry, establishing us as the bridge between traditional and nascent iterations of high-performance computing. Our unconventional approach to revolutionizing conventional assets serves to drive Hut 8's growth, innovation and market share in the high-performance computing, blockchain and Web 3.0 industries."

Transaction details

Under the terms of the agreement, consideration payable to TeraGo will consist of $30-million, to be financed from existing cash on the company's balance sheet. Hut 8 will retain substantially all current data centre business employees. The transaction has been approved by the board of directors of Hut 8 and TeraGo and is expected to close in the first quarter of 2022.

Advisers and counsel

Stifel GMP acted as financial adviser to Hut 8 and Fasken Martineau DuMoulin LLP acted as its legal advisers.

About Hut 8 Mining Corp.

Hut 8 is one of North America's largest innovation-focused digital asset miners, supporting open and decentralized systems since 2018. With two sites located in energy-rich Alberta and a third site in North Bay, Ont., Canada, Hut 8 has one of the highest installed capacity rates in the industry and holds more self-mined bitcoin than any crypto miner or publicly traded company globally. Hut 8 is executing on its commitment to mining and holding bitcoin and has a diversified business and revenue strategy to grow and protect shareholder value regardless of bitcoin's market direction. The company's multipronged business strategy includes profitable digital asset mining and white-label high-performance compute hosting, as well as yield and income programs leveraging its bitcoin held in reserve. Having demonstrated rapid growth and a stellar balance sheet, Hut 8 was the first publicly traded miner on the Toronto Stock Exchange and the first Canadian miner to be listed on the Nasdaq Global Select Market. Hut 8's team of business building technologists are believers in decentralized systems, stewards of powerful industry-leading solutions, and drivers of innovation in digital asset mining and high-performance computing, with a focus on ESG (environmental, social and governance) alignment. Through innovation, imagination and passion, Hut 8 is helping to define the digital asset revolution to create value and positive impacts for its shareholders and generations to come.

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