Mr. Frank Holmes reports
HIVE BLOCKCHAIN AND GENESIS MINING ANNOUNCE A SETTLEMENT AND THE REBOOT OF MINING OPERATIONS IN SWEDEN
Hive Blockchain Technologies Ltd. and Genesis Mining Ltd. have reached a settlement agreement, which positively resolves prior misunderstandings and disagreements. The agreement was reached with a focus on initiatives which improve communication, transparency and mutually beneficial co-operation between Genesis and Hive. Operationally, Hive and Genesis will reboot Hive's 20.4-megawatt facility in Sweden with 14,000 GPUs (graphics processing units) mining ethereum. HIVE will continue to receive 300 petahashes (PH) of cloud-based ASIC (application-specific integrated circuit) bitcoin mining capacity from Genesis.
Timing of the settlement agreement coincides with improved economic conditions in the cryptocurrency ecosystem amid a substantial decline in energy prices in Sweden and the significant appreciation of digital assets, including ethereum and bitcoin. Since Hive's April 22, 2019, announcement that its equipment and operations in Sweden had become dormant, ethereum prices have nearly doubled, bitcoin has more than doubled and electricity prices in Sweden are approximately half of the cost experienced in April. These conditions are expected to have a very positive impact on Hive's gross mining margin.
"I am pleased that we have been able to reach a settlement agreement that focuses on peace and prosperity for both companies, and enables management to return to creating value for Hive shareholders," said Frank Holmes, interim executive chairman and interim chief executive officer of Hive. "Hive has a tremendous portfolio of infrastructure assets, and we are benefiting from the dramatic resurgence of cryptocurrencies seen in 2019. We look forward to transitioning our GPU mining assets in Sweden and Iceland to our direct management or to a new service provider, and to our continued partnership with Genesis for the delivery of our cloud-based ASIC mining capacity as bitcoin and ethereum continue to increase in value in what has been a volatile asset class. The blockchain ecosystem continues to evolve, and it is our belief that Hive is well positioned to play a significant role in this ever-changing technology. Further, this agreement better positions Hive for its next phase as Hive 2.0 with improved visibility and control over our global mining operations."
"As a significant shareholder in Hive, Genesis is pleased to have reached a resolution to this issue," said Marco Streng, chief executive officer of Genesis. "We share Hive's vision of accelerating the development of the blockchain sector and look forward to working collaboratively with Hive to enhance value for all shareholders."
The agreement settles outstanding issues associated with the Sweden data centre, and both parties agreed to mutually release each other from all claims arising from the master service and related agreements, and discontinue any legal proceedings and withdraw any demands made. Furthermore, Hive will assume responsibility for the operation of the Sweden and Iceland data centres from Genesis to itself or a third party, and Genesis will provide transitional services to Hive to ensure an orderly transition. Additionally, the board of directors will undergo a restructuring, which will see Mr. Streng and Bjorn Arzt resign as directors of Hive and its subsidiaries. As part of the agreement, for a period of three years, Genesis will be entitled to nominate one director to the Hive board of directors provided it continues to hold no less than 10 per cent of the company's shares.
Since inception, Hive has pursued and innovated as a public company in regulatory compliance and innovation. The transition to Hive 2.0 sees Hive pursuing a strategic agreement with Argo Mining on virgin coin offtake and its mining-as-a-service (MaaS) platform geared toward institutions, which sees continued demand as a result of new FAFT (Financial Action Task Force) regulation passed this week. Hive has also partnered with Amber AI, a crypto trader providing state-of-the-art machine learning to optimize mining margins for Hive's operations.
About Hive Blockchain Technologies Ltd.
Hive Blockchain Technologies is a growth-oriented, TSX Venture Exchange-listed company building a bridge from the blockchain sector to traditional capital markets. Hive is strategically partnered with Genesis Mining to build the next generation of blockchain infrastructure. Hive owns state-of-the-art, GPU-based digital currency mining resources 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.
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