ZUG, Switzerland and VANCOUVER, Feb. 10, 2020 /CNW/ - HIVE Blockchain Technologies Ltd. (TSX.V:HIVE) (OTCQX:HVBTF) (the "Company" or "HIVE") is pleased to announce that it now anticipates an approximately 40% reduction in the Company's operating and maintenance costs at its GPU mining facility in Sweden, compared to such costs under its previous service provider agreement which it ended in November, 2019.
The updated cost reduction figure is higher than the approximately 25% that the Company had previously anticipated, as announced in its December 2, 2019 press release. This improvement is the result of locking in a lower than anticipated electricity rate, stemming from an unusually warm winter in Sweden, for a majority of the Company's electricity costs via hedging agreements that will continue through 2020. Electricity, which is provided through green energy, comprises the majority of the Company's operating and maintenance costs.
"We're extremely pleased to have locked in advantageous electricity prices in Sweden through our direct agreements with local suppliers, the result of HIVE assuming full control of its Sweden operations in November," said Frank Holmes, Interim Executive Chairman of HIVE. "This provides cost certainty and allows us to plan for our next stage of growth. It is another successful step in our efforts to increase our underlying mining profitability in 2020."
HIVE is one of the world's largest public miners on the Ethereum blockchain. The Company's Sweden facility comprises the bulk of HIVE's current mining operations, along with a significantly smaller GPU mining facility in Iceland. The Company has previously announced it is reviewing opportunities to improve profitability at its Iceland facility or relocate its GPU mining equipment there to a lower cost jurisdiction.
"For the past two years, HIVE's share price has been relatively correlated to the price of Ethereum, in part due to traders using our publicly listed and relatively liquid shares as a proxy for holding the cryptocurrency," noted Mr. Holmes. "That correlation unfortunately became decoupled last spring following our proxy battle. However, we are pleased that thus far in 2020, our efforts through 2019 to assume control of and improve our mining operations combined with the increasing adoption of the Ethereum blockchain and increasing investor interest in cryptocurrencies and blockchain technology, has resulted in similar investor interest in HIVE."
The Company also announced that the Board of Directors has approved the grant of 3,000,000 incentive stock options; 500,000 options each were granted to the Company's directors and certain officers which vest over 24 months. The options are exercisable into the equivalent amount of common shares of the Company at a price of C$0.29 per share. The grants are subject to the approval and rules of the TSX Venture Exchange and the Company's incentive stock option plan. All options will expire on February 10, 2030. The Company's Board has also approved the grant of an aggregate of 3,100,000 restricted share units ("RSUs"); 500,000 RSUs each were granted to the Company's directors and certain officers, and 100,000 to a consultant to the Company which vest over 24 months. Each vested RSU entitles the holder to receive one common share of the Company.
Prior to the grants, the Company had approximately 327 million issued and outstanding common shares and approximately 18 million stock options.
The Company's Stock Option Plan and Restricted Share Unit Plan were re-approved by shareholders at HIVE's 2019 annual meeting of shareholders on December 18, 2019.
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 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.
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.
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 reduction in the Company's operating and maintenance costs at its GPU mining facility in Sweden, its anticipated beneficial impact on the Company's gross mining profit, the increasing adoption of the Ethereum blockchain and increasing investor interest in blockchain technology and cryptocurrencies; 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, recent upgrades and increased minted Ether coins may not have a positive impact on HIVE's revenues, or gross mining margin; 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