VANCOUVER, April 8, 2020 /CNW/ - HIVE Blockchain
Technologies Ltd. (TSX.V:HIVE) (OTCQX:HVBTF) (the "Company" or
"HIVE") is pleased to announce that it has completed its previously
announced acquisition (the "Acquisition") of a dedicated
cryptocurrency mining operation with access to 30 megawatts ("MW")
of low cost green power at a leased facility located in
Lachute, Quebec (the "Facility")
from Cryptologic Corp. ("Cryptologic").
The purchase price of approximately C$4.0
million was satisfied through C$1,000,000 in cash, being the cash portion of
the purchase price, C$956,230.60
representing the estimated closing working capital comprised
substantially of prepaid and deposits less a holdback amount and
the issuance of 15,000,000 common shares ("HIVE Shares") to
Cryptologic at a deemed price of C$0.20 per HIVE Share. In addition, HIVE will
invest at least C$3.0 million in new
cryptocurrency mining equipment for the Facility. Cryptologic now
owns approximately 4% of HIVE's basic common shares, with the HIVE
Shares subject to customary resale and transfer restrictions.
"We're extremely pleased to have completed the acquisition of
this Facility," said Frank Holmes,
Interim Executive Chairman of HIVE. "Multiple factors make
Quebec a very attractive location
for us including geographic diversification and competitive costs
for green energy, skilled labour and taxes.
"The acquisition provides us direct control of our destiny,
including significant capacity for expansion and flexibility for
our future operations. To that end, we have exercised an option to
extend the term of the Facility lease to November 2025, and we plan to invest in next
generation SHA-256 miners to increase the operating efficiency of
the Facility and prepare it for the upcoming halving of Bitcoin
rewards. Additionally, we are currently investigating the potential
to host third-party miners to maximize utilization of the
Facility's power capacity.
"We also want to extend our appreciation to the Board of
Cryptologic, who have expressed confidence in the vision and
direction of HIVE by becoming a significant shareholder.
Additionally, we also appreciate the cooperation of Cryptologic's
Chief Operating Officer, Paul
Leggett and VP Finance, Joshua
Lebovic, who have helped facilitate a smooth transition
during the challenging period that the world is experiencing
related to COVID-19."
The fully operational Facility features electricity costs
of approximately US$0.04/kWh and its
primary assets include 30 MW of HVAC and electrical infrastructure
that is unique to cryptocurrency mining, triple redundancy systems
for power and internet connectivity, operational staff, and
approximately 14,000 Bitmain S9 miners that are currently
installed, which provide about 173 Petahashes of SHA 256 Bitcoin
mining computing power and utilize a portion of the Facility's
power capacity. Due to the Facility's low electricity costs, these
miners generate positive gross mining margins under current
market conditions. However, the value of the Acquisition is based
primarily on the Facility's power capacity and cryptocurrency
mining assets. The Acquisition will more than double HIVE's total
available power capacity globally to approximately 50 MW, placing
it among the largest of any publicly-listed cryptocurrency miner,
and provide significant diversification to the Company's business
both geographically and by blockchain network.
HIVE is currently one of the world's largest public miners on
the Ethereum blockchain and this acquisition places HIVE among the
world's larger publicly-listed miners of Bitcoin. The newly
acquired Bitcoin mining facility in Quebec diversifies the Company's existing
portfolio, which includes a facility in Sweden that comprises the bulk of HIVE's
Ethereum-focused GPU mining operations and a smaller
Ethereum-focused mining facility in Iceland. As announced recently, HIVE is
planning to expand its operation in Sweden to increase its mining capacity by
approximately 20% over the next two quarters.
About HIVE Blockchain Technologies Ltd.
HIVE Blockchain Technologies Ltd. is a growth oriented,
TSX.V-listed company building a bridge from the blockchain sector
to traditional capital markets. HIVE owns state-of-the-art
GPU-based digital currency mining facilities in Iceland and Sweden, which produce newly minted digital
currencies like Ethereum continuously. Our deployments provide
shareholders with exposure to the operating margins of digital
currency mining as well as a growing portfolio of crypto-coins.
For more information and to register to HIVE's mailing list,
please visit www.HIVEblockchain.com. Follow @HIVEblockchain on
Twitter and subscribe to HIVE's YouTube channel.
On Behalf of HIVE Blockchain Technologies Ltd.
"Frank Holmes"
Interim Executive Chairman
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this news release.
Forward-Looking Information
Except for the statements of historical fact, this news
release contains "forward-looking information" within the meaning
of the applicable Canadian securities legislation that is based on
expectations, estimates and projections as at the date of this news
release. The information in this news
release about future plans and objectives of the Company,
are forward-looking information, including the benefits of the
Acquisition, the lease extension, the planned acquisition of
SHA-256 miners and the potential hosting of third party miners; and
the intentions, plans and future actions of the Company, as well as
the Company's ability to successfully mine digital currency, the
construction and operation of expanded blockchain infrastructure,
and the regulatory environment of cryptocurrency in the United States and other jurisdictions
where the Company may operate.
This forward-looking information is based on reasonable
assumptions and estimates of management of the Company at the time
it was made, and involves known and unknown risks, uncertainties
and other factors which may cause the actual results, performance
or achievements of the Company to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking information. Such factors include, among
others: the COVID 19 crisis; the Acquisition may not have a
positive impact on HIVE's revenues, or gross mining margin; the
operation of the acquired assets may not occur as currently
planned, or at all; expansion may not materialize as currently
anticipated, or at all; the digital currency market; the ability to
successfully mine digital currency; revenue may not increase as
currently anticipated, or at all; it may not be possible to
profitably liquidate the current digital currency inventory, or at
all; a decline in digital currency prices may have a significant
negative impact on operations; the volatility of digital currency
prices; the Company may never realize more efficient operations, a
lower cost structure, or greater flexibility in
operation; risks relating to the global economic climate;
dilution; and other related risks as more fully set out in
the Management's Discussion and Analysis of Financial Condition and
Results of Operations for the year ended March 31, 2019, and other documents disclosed
under the Company's filings at www.sedar.com. The Company
has also assumed that no significant events occur outside of
the Company's normal course of business.
Although the Company has attempted to identify important
factors that could cause actual results to differ materially, there
may be other factors that cause results not to be as anticipated,
estimated or intended. There can be no assurance that such
statements will prove to be accurate as actual results and future
events could differ materially from those anticipated in such
statements. Accordingly, readers should not place undue reliance
on forward-looking information. The Company
undertakes no obligation to revise or update any forward
-looking information other than as required by
law.
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i Gross mining margin equates to income from
digital mining less operating and maintenance costs and is a
non-IFRS measure
SOURCE HIVE Blockchain Technologies Ltd.