Mr. Aydin Kilic reports

HIVE DIGITAL PROVIDES NOVEMBER 2023 PRODUCTION UPDATE AND COMPLETES ACQUISITION OF DATA CENTER FACILITY LOCATED IN SWEDEN TO EXPAND OUR SOURCING OF CLEAN HYDRO ELECTRICITY

Hive Digital Technologies Ltd. has released the unaudited production figures from the company's global bitcoin operations for the month of November, 2023, with 276.3 bitcoin produced in November. Further to its announcement on Nov. 27, 2023, it has completed its acquisition from Turis AB of a data centre and the real property on which it is situated, located in the city of Boden, Sweden (all amounts are in U.S. dollars, unless otherwise indicated).

Summary overview:

• Hive produced 276.3 bitcoin in the month of November, from ASIC and GPU mining operations, representing an average of 66.7 bitcoin per exahash.
• Hive produced an average of 9.2 BTC per day in November, 2023.
• Hive ended the month with 4.18 EH per second of mining capacity, including ASIC and GPU BTC hash rate, a 5.4-per-cent month-over-month increase as it continues to increase both its efficiency and growth plans;
• Hive had a November monthly average hash rate of 4.14 EH/s, which is a 5.2-per-cent increase from October, which was 3.94 EH/s.

The company's hodl position at the end of November, 2023, was 1,627 BTC. Its hodl position is down from the past quarter because Hive has been investing in new ASIC chips for its future growth and efficiency.

Investing in the future with recap of its ASIC capital expenditures for the past 12 months toward 6.0 exahashes

The company notes that it has recently purchased a total of 9,800 Bitmain S19k Pro miners, which have a machine efficiency of 23 joules per terahash.

Since the collapse of FTX in November, 2022, which marked bitcoin heading into a year-long bear market, Hive has used the opportunity to acquire new-generation ASICs at attractive dollar-per-terahash prices.

Notably, in this period, Hive has purchased approximately 3.35 exahashes of new-generation bitcoin mining ASICs, with an average fleet efficiency of approximately 26 joules per terahash. This is represented by the acquisition of approximately 29,000 ASICs, totalling approximately 88 megawatts, which has allowed Hive to upgrade its 50 J/TH and 42 J/TH machines. In addition, the company has upgraded many of the 38 J/TH machines that were operating. Upon installation of its latest purchase of 9,800 S19k Pro miners, of which 5,300 are expected to ship in the next day, with the balance expected to ship within a week, its installed fleet efficiency globally at Hive will be approximately 28.9 J/TH with an expected operating hash rate of 4.8 EH/s by the end of December. This puts Hive in an advantageous position for the halving as its fleet is optimized for efficiency, best return on invested capital, with its goal to stay cash flow positive after the halving.

The company notes that in its strategy to acquire ASICs for best cash flow ROI, some of its purchases in the last year, notably its S19j Pro purchases from December, 2022, have already paid themselves off (over 100-per-cent ROI approximately) after accounting for electrical operating costs. The company maintains that by opportunistically purchasing machines with immediate delivery, and at low dollar-per-terahash prices, Hive can realize returns on its investments; thus, it aims to expand accretively, where its ASIC investments pay themselves off.

The approximately 29,000 ASICs were purchased at an average price of approximately $13.70 per TH, which the company believes is a very attractive acquisition price for machines with an average fleet efficiency of 26 J/TH.

Artificial intelligence and HPC strategy

Hive continues to build out its HPC strategy with its Nvidia chips, and its beta test has achieved a new milestone of monthly revenue as it has discussed in its last quarterly webcast.

Bitcoin global network mining difficulty is volatile

Network difficulty factors are a significant variable in the company's gross profit margins. The bitcoin network difficulty was 55.62 T as of Nov. 1 and increased to an all-time high of 57.12 T as of Nov. 30. Accordingly, bitcoin mining difficulty ended the month about 3 per cent higher than the beginning of the month.

The bitcoin network difficulty is a publicly available statistic, which reflects the total number of bitcoin miners on-line and is important in analyzing a company's gross profit margins and number of bitcoin produced. These data are available on many websites.

As more people mine bitcoin (difficulty increases), the daily bitcoin block reward, which currently is fixed at 900 bitcoin per day, gets split amongst more miners; thus, each miner receives a smaller portion of the block reward. Conversely, as bitcoin prices fall, many miners may lose money, and power down, taking their hash rate off the network, causing network difficulty to decrease.

Those miners with the lowest costs of production, by virtue of having more efficient machines and/or lower energy costs, are able to continue their production during these volatile cycles. Not all miners will continuously mine during the month. As a result, some miners will produce less bitcoin than expected, relative to their advertised hash rate. For the foregoing reasons, Hive will self-curtail part of its operations if the unhedged spot energy prices are uneconomical, thereby leaving part of its total gross hash rate unutilized.

All bitcoin miners are striving to use the most efficient bitcoin ASIC chips, and Hive is happy that it has been able to upgrade its global fleet during this crypto market downturn.

Swedish data centre

This strategic investment aligns with Hive's commitment to build long-term value for its investors through the acquisition and development of substantial assets to be added to its balance sheet. Moreover, this investment further supports Hive's sustainable growth and reinforces its position as a key player in the digital technology sector.

Located in Boden, Sweden, in close vicinity of its existing data centre, it is looking forward to further developing this facility within its global portfolio and utilizing it to plug its incoming new-generation ASIC servers and increasing its bitcoin production.

Aydin Kilic, chief executive officer, said: "This strategic data centre acquisition furthers our commitment to putting hard assets on our balance sheet. The addition of this six megawatts of capacity for shares and cash is expected to add around 250 petahashes per second to Hive's hash rate growth plans."

Johanna Thornblad, Hive's country president, Sweden, added, "I am proud of the hard work and commitment of the global Hive team to see this process through to completion, and this new data centre is only 200 metres from our existing data centre."

In consideration for the acquisition of the property, Hive has paid to the vendor: (i) $750,000 in cash; and (ii) 345,566 common shares in the capital of the company at a price of $2.8938 ($3.93 (Canadian)) per common share. A second payment of up to 172,783 common shares at a price of $2.8938 ($3.93) per common share shall be paid by Hive to the vendor at the later of: (i) May 29, 2024; and (ii) the date on which any claims made by Hive prior to May 29, 2024, relating to a breach of warranty under the property transfer agreement, have been finally settled. In the event of any such claims, the settled value of such claim shall be deducted from the second payment. The vendor, its insiders, associates and affiliates acted at arm's length to the company.

Completion of the acquisition is subject to certain conditions and the receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange. All securities issued pursuant to the property transfer agreement shall be subject to a statutory hold period of four months and one day from the date of issuance.

About Hive Digital Technologies Ltd.

Hive went public in 2017 as the first cryptocurrency mining company listed for trading on the TSX Venture Exchange with a sustainable green energy focus.

Hive is a growth-oriented technology stock in the emergent blockchain industry. As a company whose shares trade on a major stock exchange, it is building a bridge between the digital currency and blockchain sector and traditional capital markets. Hive owns state-of-the-art, green-energy-powered data centre facilities in Canada, Sweden and Iceland, where it endeavours to source green energy to mine digital assets such as bitcoin on the cloud. Since the beginning of 2021, Hive has held in secure storage the majority of its treasury of ETH and BTC derived from mining rewards. Its shares provide investors with exposure to the operating margins of digital currency mining, as well as a portfolio of bitcoin. Because Hive also owns hard assets such as data centres and advanced multiuse servers, it believes its shares offer investors an attractive way to gain exposure to the cryptocurrency space.

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