Hut 8 Mining Corp. has raised $8.3 million from the sale of 6% of its shares to investors. The Canadian bitcoin miner originally intended to raise $7.5 million from the sale, but it was oversubscribed.
Totonto Stock Exchange-listed Hut 8 issued about 5.8 million “units” at a price of $1.45 each. Each unit is comprised of one common share. From this, investors have the option to buy another share for $1.80 between now and December 2021.
The Alberta-based miner said funds from the offering will be used to upgrade its range of mining hardware including Application-Specific Integrated Circuit (ASIC) miners. The upgrade will add up to 275 petahash per second (PH/s) to Hut 8’s existing mining capacity of 952 PH/s.
Once installed, the new machines, which include “more efficient processing chips from Microbt” will also add 12.6 megawatts (MW) of power to the company’s current 107 MW maximum operating capacity.
“Hut 8 has been testing the Microbt equipment for the past three months in preparation of this upgrade… [we] expect to receive equipment between July and November 2020,” said the firm in a press statement.
In recent months, Hut 8 has seen the amount of bitcoin mined at its data centers in Canada decline. During the first quarter of 2020, the company extracted 1,116 BTC, down 54% from 2,405 BTC mined in the comparable year ago period.
The company blamed the decline on “the increasing network difficulty” which “impacted…production negatively with much fewer bitcoin mined.” For the March quarter, Hut 8 reported that its net loss widened to $8.4 million from $6.1 million a year earlier.
The Canadian miner is now hoping that its latest acquisition of more efficient mining equipment will help turnaround company fortunes, already facing a squeeze from the recent bitcoin supply cut event, which reduced the bonus paid to miners by 50% to 6.25 BTC per block.
Shares of Hut 8 are up 2% at CAD$1 (~$0.73) in Toronto trading on Tuesday. Over the last 52 weeks, the stock has reached a low of $0.37 and a high of $1.99.
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