Hut 8 is moving efficient miners to Medicine Hat. (Hut 8)

By Eli J. Ridder | @EliRidder

Hut 8 closes Drumheller site over high energy costs

Mar 7, 2024 | 12:31 PM

Hut 8 will close its Drumheller site due to high energy costs and move its most efficient miners to its larger Medicine Hat operation.

The Canadian mining firm will keep the lease to its Drumheller property in case market conditions improve and it can reopen operations there.

Retiring ineffective miners as it boosts its Medicine Hat complement is expected to enhance Hut 8’s cash flow, reduce its cost to mine a Bitcoin and drive a pro forma increase in Bitcoin mined per EH of approximately 11 per cent, according to the company.

The move is part of broader restructuring following a record-breaking merger with U.S. Bitcoin in December.

Hut 8 chief executive Asher Gernoot said in a news release profits were low in Drumheller.

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“Following a comprehensive analysis, we have determined that the profitability of Drumheller has been impacted significantly by various factors, including elevated energy costs and underlying voltage issues,” Gernoot said.

“Our restructuring plan aims to drive maximum value from our assets and position the company for profitable growth,” Gernoot added.

“With the nominal lease expense, we will also have a low-cost option to re-energize the site if energy rates in the AESO grid decrease or hashprice increases.”

Hut 8 is shielded from volatile energy rates impacting its Medicine Hat operation through a 10-year agreement it signed with the city’s power company.

The cryptocurrency firm first came to Medicine Hat in 2018.