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Bitcoin company mum on its plans for its newly acquired northeast power plants

Hut 8 places natural gas plants in North Bay, Iroquois Falls and Kapuskasing under Far North Power flag
Former Validus power plant in North Bay. (Supplied)

The new owner of three natural gas power plants in northeastern Ontario is guarded about its immediate and future plans for these facilities.

Bitcoin producer Hut 8 Corp. announced Feb. 15 it has officially acquired the former Validus Power assets, obtained in an insolvency sale process last fall and winter.

The company now owns plants in North Bay, Iroquois Falls, Kapuskasing and Kingston, a combined 310 megawatts worth of infrastructure, plus a North Bay bitcoin mining operation where Hut 8 once operated. Only the Kingston and Iroquois Falls plants are operational. 

The bitcoin operation was shuttered in early 2023 following a legal dispute involving a power purchase agreement between Validus Power and Hut 8.

In the recent news release, Hut 8 said it’s “evaluating a range of strategic options for these assets” through a new joint venture energy company, Far North Power Corp., a partnership with Macquarie Equipment Finance.

Hut 8 is not sharing any plans on whether the North Bay bitcoin operation would be restarted at some point.

“Our focus is on generating a return on the investment we’ve made which includes evaluating a range of strategic options for the assets we’ve just closed on,” a Hut 8 spokesperson responded by email.

“With that in mind, we do not have immediate mining plans to share, but look forward to providing updates on how we intend to utilize these assets going forward as soon as we’re able to.

“We are actively working with Macquarie on a plan to generate a return on our ownership interest in these assets in the near term and look forward to sharing additional updates as they materialize.”

In a recent web interview with McNallie Money, Hut 8's Sue Ennis, vice-president of corporate development, revealed their strategy is to grow its portfolio of “owned power.” She referenced the purchase of a 63-megawatt substation in Texas and the upcoming acquisition of the Ontario plants.

When it comes to bitcoin production, “machines are incredibly important but power is the new oil,” she said in the interview.

Hut 8 and Macquarie formed an alliance during the CCAA process and put together a stalking horse bid to acquire the plants.

Macquarie, a global financial services group, was an aggrieved lender in pursuing Validus. 

Hut 8 said in the release that the completion of this transaction has resolved all litigation claims and counterclaims made between Hut 8 and the former Validus.

In this Far North Power joint venture, Hut 8 is the majority partner at 80 per cent.

Hut 8 CEO Asher Genoot and Chris Vickery, the company’s vice president of energy, stated they've “developed a deep partnership with Macquarie” through the CCAA process and are working with them to develop a “commercial strategy” for the plants.

Hut 8 has grown considerably in size with an announcement last November of a significant merger with U.S. Bitcoin Corp that’s expanded the company’s reach across North America toward becoming a market leader.

That transaction has sparked a class action lawsuit against Hut 8 based on a damning report by a hedge fund that questioned the legality and ethics of the merger. The report's authors allege it resulted in a precipitous drop on the company’s share price. 

Hut 8 responded that the report by J Capital Research is filled with “inaccuracies, misrepresented data, speculative claims, and unfounded character attacks,” and is an attempt to “spread misinformation” about Hut 8’s operations, finances, practices and executives.