Good morning, ladies and gentlemen. Welcome to Hut 8’s Second Quarter 2023 Financial Results Analyst and Investor Call. In addition to the media release issued earlier today, you can find Hut 8’s financial statements and MD&A on the Company’s website at www.hut8.io under the Company’s SEDAR profile at www.sedar.com, and under the Company’s EDGAR profile at www.sec.gov. Unless noted otherwise, all amounts referred to during this call are denominated in Canadian dollars. Any comments made during this call may include forward-looking statements within the meaning of applicable securities legislation regarding the future performance of Hut 8 Mining Corp. and its subsidiaries. The statements made reflect current expectations and as such, are subject to a variety of risks and uncertainties that could cause actual results to differ materially from current expectations. These risks and uncertainties include, but are not limited to, the factors discussed in the Hut 8’s Annual Information Form for the year ended December 31, 2022, and the Company’s other continuous disclosure documents. Except as required by applicable law, Hut 8 undertakes no obligation to publicly update or review any forward-looking statements. During the call, management may also make reference to certain non-IFRS measures that are not separately defined under IFRS, such as adjusted EBITDA and mining profit. Management believes that non-IFRS financial information taken in conjunction with IFRS financial measures provide useful information for both management and investors. Reconciliations between IFRS and non-IFRS results are presented in the tables accompanying our press release, which can be viewed on our website. I would now like to turn the call over to Hut 8 CEO, Jaime Leverton. Please go ahead.

Thank you, Michelle. Good morning, everyone. Welcome to today’s call where we will discuss Hut 8’s results for the second quarter of 2023. The second quarter was a challenging one on the mining side. While our Medicine Hat site operations continued relatively smoothly throughout the period, we continued to work to remediate the issues at Drumheller. As mentioned in last week’s production update, we continue to see issues at the site, primarily stemming from high energy input levels that have been causing miners to fail. As a result, operations are currently at approximately 20% of our installed hash rate in Drumheller. The team has implemented new custom firmware across all miner models designed to lower the power supply’s maximum output voltage, ensuring our equipment operates within safe limits, increased repair staff, added an additional repair center shift and procured new hardware to expedite repairs and accelerate the speed at which we bring miners back online. The electrical issues have been compounded by high energy rates, which further increased curtailment at the site. In addition to the significant remediation efforts that are underway in Drumheller, in late July, the team utilized mutually beneficial terms in the electric service agreement covering our Medicine Hat site, which provides the opportunities for both parties to benefit from high prices in the Alberta power market. In our HPC business, we created some momentum in Q2 as we signed an agreement with Interior Health, one of British Columbia’s health authorities to provide them with co-location services at our flagship data center in Kelowna over the next five years. We will begin to see that revenue reflected on our financial statements in Q4. We continue to see demand increasing for high-performance computing solutions that will support AI, machine learning, visual effects and rendering workloads. We are prepared…

Thanks, Jaime, and good morning, everyone. Q2 was a challenging quarter from an operational perspective as we continued to work through the electrical issues at Drumheller and continued our suspension of mining activity at North Bay. Both of these had an impact on our Q2 results. We achieved revenue of $19.2 million for Q2 2023, a $24.6 million decrease relative to the same quarter prior year of $43.8 million. This year-over-year decrease was driven by a combination of lower Bitcoin mined and a reduction in the price of Bitcoin. Revenue from digital asset mining activities was $15 million as we mined 399 new Bitcoin. This compares with $39.1 million of digital asset mining revenue in Q2 2022 when we mined 946 Bitcoin. This year-over-year reduction in new Bitcoin mined was driven by a combination of an increase in network difficulty, impacts of electrical issues at Drum Heller’s site resulting in less mining activities, the completion of GPU Ethereum mining, which we were doing in Q2, 2022, and the impact of the suspension of mining activity at North Bay. Revenue was also negatively impacted by the price of Bitcoin with the daily average closing Bitcoin price of approximately $37,600 in the current quarter compared to approximately $41,400 in the prior year quarter. Our high-performance computing business contributed an additional $4.2 million of revenue in Q2 2023 compared to $4.7 million in Q2 2022. The Q2 2022 results included revenue from low margin products and services that have been discontinued since the end of Q2 2022. Q2 2023 was also impacted by client churn, which was anticipated to occur in the second quarter. As Jaime mentioned, we will see the revenue from the Interior Health contract starting in Q4. Cost of revenue for Q2 2023 was $23.8 million, lower than the prior…

Thank you. [Operator Instructions] Your first question will come from Mike Colonnese at H.C. Wainwright. Please go ahead.

Hi. Good morning, guys. And thank you for taking my questions today. First one for me, I know you guys are actively working to bring miners back online at Drum Heller, with your efforts there. If you could just give us a timeline as to when you think the electrical issues will be fully resolved and all miners back online in hashing at the facility?

It’s really difficult to give a timeline. We do expect full resolution within the calendar year. But it’s difficult to get more specific than that, Mike.

Got it, got it. Fair enough. And, second one for me, if you could just provide a little more color on the transaction support agreement you recently entered into here. What needs to happen for that transaction to actually go through to potentially acquire the assets from Validus, and what specific assets would you be acquiring and the approximate cost of those assets there?

Right. It’s too soon to disclose more than we already have in the press release. But rest assured Mike, as soon as updated information’s publicly available, we’ll press release accordingly.

Got it. Well, thank you for taking the questions and best of luck with completing the merger here.

Thanks so much, Mike.

Your next question will come from Bill Papanastasiou at Stifel. Please go ahead.

Hi. Good morning, Jaime and Shenif. Look, there’s a lot of, in the hopper. I just wanted to gain your outlook, Jaime, on how the mining industry is going to evolve beyond having -- Hut 8 was one of the first public miners to obviously diversify into more stable recurring business segments. And I’m curious to hear whether you believe we could see more of this type of activity follow suit. How do you look at the way that miners will kind of be positioned in the future? Will we gradually move away from a complete self pure-play mining model?

Look, I think it’s really difficult to predict at an industry level. Certainly, I think, we’ll see more diversification among the miners, which has started to play out more significantly in the last quarter, in particular. But I think certainly for the -- as we go into the having and this next cycle, I think we’ll continue to see some miners remain as pure-play self-miners. As you mentioned, we diversified early into the HPC space. And one of the things we really, really like about the USBTC business are their fiat based revenue lines with their hosting business as well as their managed infrastructure operation. So, for us, we’re very much -- we’re bullish on a diversified strategy. But, I think across our space, you’re going to just continue to see miners evolve their businesses in different ways. And I think it’s really important that when people look at this space, they look at really the differences that are starting to emerge and becoming increasingly significant within the names of our space.

Thanks for that detail. And for my last question, we’re just hoping to get a little bit more color on the newly signed five-year agreement with Interior Health. How should we look at modeling contribution from this contract? And how much co-location capacity remains pro forma of this contract at the TeraGo facilities?

Yes. So, the -- that revenue, as we mentioned, we’ll start to see in Q4. And it is a five-year contract, so you’ll get more detail in our Q4 financials with respect to that contract specifically. And we did -- we did press release that deal when it was signed a number of weeks ago. As far as the broader capacity within the HPC business, we do obviously believe there’s a lot of opportunity in this market. We have just over a megawatt of readily available capacity and infrastructure within our HPC suite. And if you’re kind of thinking about the market, we see across the North American industry, more than 2 gigawatts of data center leases have been signed in the past 90 days. And we believe that providers who have large wholesale capacity online in less than 24 months will be able to charge a premium given how much demand we’re seeing in this space, and we believe that operators with access to economical and zero emission and renewable energy, such as our Kelowna and British Columbia sites is a distinct advantage for us.

Thanks, Jaime. Look forward to hearing more details of the transaction support agreement and hopefully seeing Hut 8 being one of the truly vertically integrated miners. Thank you.

My pleasure. Anytime. Thank you.

Your next question will come from Joseph Vafi at Canaccord. Please go ahead.

Good morning, Joe.

Hey Jaime. Good morning. Hey everybody. Just on the USBTC merger, I know you mentioned Jaime that you’re going to distribute the management circular, I guess maybe coming up here soon. Just wondering if you have confidence on getting that S-1 effective and that’s why you’re moving forward with getting the circular ready to distribute?

As I mentioned, we continue to make good progress and feel confident that we could send out the circular, schedule the vote for September -- September 12th, and we continued to target having it closed by the end of September.

Okay, great. Good luck with that, Jaime. And then secondly, I know you said you bumped up the expected, exahash output in that document up to I think about 7.4. Was just curious where that exahash may have come from here, and perhaps where the capital came from to maybe be acquiring more miners there relative to what’s in that document?

Yes. So, that came from the USBTC side. They had already ordered miners that were just being delivered and coming online. And so, that’s where that incremental exahash came from at their existing self mining facilities. And yes, we did reference that in one of our updated S-4 registration statements.

[Operator Instructions] There are no further questions at this time. I will turn the conference back to your hosts for any closing remarks.

Thank you so much, everyone, again for joining today. And we look forward to continuing to update you as things progress over the coming weeks and months. Back to you, Michelle.

Thank you. Ladies and gentlemen, this does conclude your conference call for this morning. We would like to thank you all for participating and ask you to please disconnect your lines.