North American bitcoin mining farm operator Hut 8 has said it is borrowing $11.8 million from Digital Currency Group's mining subsidiary Foundry to expand its mining operations.
The Canada-listed firm said in an announcement Friday that it is using the loans to order 5,400 units of MicroBT's WhatsMiner M30S model. Hut8 said the first batch is set to go online by the end of January while the full delivery is expected to arrive over the coming six months, which will boost Hut8's computing power by 475 petahashes per second.
For the equipment financing, Foundry charges an annualized interest rate of 16.5% for a term of 12 months with the mining equipment pledged as collateral.
“This partnership builds on Hut 8's ongoing commitment to shareholders by mitigating supply constraints and reducing our capital expenditure with a proactive fleet management strategy," Jaime Leverton, Hut 8's CEO, said in the announcement.
Earlier this month, Hut 8 raised $60 million via a private stock offering that will be used for working capital as well as "infrastructure expansion, equipment purchases and repayment of debt."
In its Q3 2020 report, Hut8 disclosed it incurred a mining loss of $1.4 million on a revenue of $27 million for the first nine months last year, excluding the depreciation of its equipment and operational overhead.
Hut8's loan deal comes at a time when North American mining farm operators are on a buying sprint of the latest generation of ASIC miners as well as ramping up efforts on developing bitcoin mining pool services.
Foundry recently announced it is colocating 14,000 bitcoin ASIC miners at North American farm operator Compute North and is set to debut its own mining pool in February.
Crypto investment firm Galaxy Digital said last week it's also launching a new branch of financial services and tools for the bitcoin mining space in addition to hosting proprietary hardware at a U.S.-based mining farm.