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On Tuesday, the publicly-listed bitcoin mining company Hut 8 revealed it has initiated construction of its new mining facility in Culberson County, Texas, with plans to have it operational by the second quarter. Hut 8 further unveiled a new treasury strategy that utilizes its bitcoin holdings to fund the company’s growth efforts.
Hut 8 Leverages Bitcoin Holdings for Texas Mining Site Development
Currently, Hut 8 (TSX: HUT) is underway with the development of a 63 megawatt (MW) mining project in Culberson County, Texas. The company shared details on Tuesday, noting the project’s goal is to bolster Hut 8’s self-mining capabilities, complementing its existing operations in Granbury, Texas, and Kearney, Nebraska.
Expected to be operational by the second quarter of 2024, the facility is projected to contribute an additional 3.6 exahash per second (EH/s) to the company’s total self-mining power. Hut 8 elaborated that mining BTC in Culberson County is anticipated to cost 30% less than its operations in Nebraska and its other Texas location.
“Compared to the benchmark of approximately $460,000 per MW set by recent acquisitions in the area, our all-in cost to design and build the Culberson County site is expected to be less than $275,000 per MW,” Hut 8 CEO Asher Genoot said on Tuesday.
“This represents a savings of more than 40%, or approximately $18,500,000 in upfront development costs per every 100 MW of expansion,” Genoot continued. “For the Culberson County site specifically, this means that we expect to build the site for $17,300,000 or less, instead of approximately $29,000,000.”
Hut 8 explained that it also introduced a refined treasury strategy, aiming to utilize its bitcoin (BTC) reserves to grow balance sheet value and support growth projects like the development in Culberson County. The company, on Tuesday, outlined that bitcoin reserves could be leveraged through direct sales, options strategies, or other methods.
Hut 8 plans to allocate resources from this strategy toward the capital requirements of the upcoming Texas facility. Moreover, the company emphasized that decisions regarding the use of bitcoin reserves will be evaluated individually. In the past month, Hut 8 shares have increased by 15% in value compared to the U.S. dollar, yet in the last five days, HUT stock has seen a decrease of 8.5%.
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