ZUG, Switzerland and VANCOUVER, March 6, 2020 /CNW/ - HIVE Blockchain Technologies Ltd. (TSX.V:HIVE) (OTCQX:HVBTF) (the "Company" or "HIVE") is pleased to announce that it has initiated an expansion of its flagship GPU-based digital currency mining facility in Sweden. The expansion is anticipated to result in a more than 20% increase in the facility's Ethereum mining production capabilities while improving its gross mining margin profile by leveraging the existing fixed cost base at the facility.
HIVE's facility in northern Sweden currently operates GPU mining rigs powered entirely by green energy via renewable hydro electricity, consistent with the Company's green energy strategy. The expansion will see the Sweden facility's mining capacity increase by more than 20% in two phases, expected to be completed within the next six months. The Company will leverage its existing relationships with local suppliers, including energy suppliers and facility operator Blockbase Mining Group, with no anticipated increase in staffing and only a 10% expansion in its facility size required.
Capital expenditures, including additional GPU hardware, are expected to cost approximately $200,000 per additional megawatt (MW) of capacity, and is anticipated to be paid from existing cash on the Company's balance sheet. This is significantly less than the approximate $3.2 million per MW the Company paid for the original development of the Sweden facility two years ago to its original service provider.
"This is an opportune time for us to expand our Ethereum mining capacity and gross mining margin profile at a relatively low capital investment," said HIVE's Interim Executive Chairman Frank Holmes. "We have full visibility into our Sweden facility build out costs after we assumed 100% control of our operations last year and entered into direct agreements with suppliers and service providers. Since that point, we have improved the efficiency of our mining rigs and significantly lowered our operating and maintenance expenses in Sweden.
"Additionally, we strongly believe in the future of Ethereum mining and are therefore strengthening and maximizing our core operation with this project. Mining market conditions for Ethereum have improved significantly since mid-December, with coin prices and block rewards up and mining hash rate stable.
"Our decision to utilize GPUs as opposed to ASICs to mine Ethereum is for two reasons," concluded Mr. Holmes. "It is anticipated the Ethereum network will implement Progressive Proof of Work this year, which would effectively eliminate ASIC mining on the network thereby increasing the relative efficiency of GPU mining facilities. Additionally, GPUs provide us with flexibility to identify and focus these computing resources on other existing and new cryptocurrencies if they become more profitable to mine, or for other high efficiency computing applications."
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 as well as access to cloud-based ASIC-based capacity which produces newly minted digital currencies like Bitcoin. Our deployments provide shareholders with exposure to the operating margins of digital currency mining as well as a growing portfolio of crypto-coins.
On Behalf of HIVE Blockchain Technologies Ltd.
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.
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. "Forward-looking information" in this news release includes, but is not limited to, statements regarding the anticipated expansion of the Company's ethereum mining facility in Sweden, including anticipated quantum increase in MW capacity and related ethereum mining production capabilities and gross mining margin, anticipated timing of this expansion within six months, the expectation of no significant increase in staffing and only 10% expansion in facility size, quantum of capital expenditures required; the future of ethereum mining; the anticipated ethereum network implementation of Progressive Proof of Work this year, and the anticipated elimination of ASIC mining on the network thereby increasing the relative efficiency of GPU mining facilities; the potential use of the Company's GPUs on other existing and new cryptocurrencies or for other high efficiency computing applications; the anticipated reduction in the Company's operating and maintenance costs in Sweden; and, the Company's future plans and opportunities.
Factors that could cause actual results to differ materially from those described in such forward-looking information include, but are not limited to, the Company may not complete its planned expansion of its ethereum mining facility in Sweden as currently anticipated, or at all; the Company may not realize anticipated benefits from the expanded mining facility in Sweden in the quantum anticipated, or at all; the expansion may required capital expenditures significantly in excess of the amounts currently anticipated; Progressive Proof of Work may not be implemented or lead to any advantages (elimination of ASIC mining on the network) as currently anticipated, or at all; the facilities in Sweden may never be used to mine new cryptocurrencies or for other high efficiency computing applications; the Company may never realize more efficient operations, a lower cost structure, or greater flexibility in operations; and other related risks as more fully set out in the Filing Statement of the Company dated September 13, 2017 and other documents disclosed under the Company's filings at www.sedar.com.
The forward-looking information in this news release reflects the current expectations, assumptions and/or beliefs of the Company based on information currently available to the Company. In connection with the forward-looking information contained in this news release, the Company has made assumptions about the positive effects of recent upgrades and increased minted Ether coins. The Company has also assumed that no significant events occur outside of the Company's normal course of business. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.
SOURCE HIVE Blockchain Technologies Ltd.
For further information: Frank Holmes, Tel: (604) 664-1078