Mr. Frank Holmes reports
HIVE BLOCKCHAIN PROVIDES RESULTS FROM SHAREHOLDER MEETING AND CORPORATE UPDATE
All resolutions considered at Hive Blockchain Technologies Ltd.'s 2020 annual meeting of shareholders on Dec. 22, 2020, were approved overwhelmingly by its shareholders. The company has also provided a corporate update for its third quarter ending Dec. 31, 2020, of its fiscal year.
Shareholders approve resolutions
The resolutions approved by the shareholders present in person or represented by proxy at the meeting were:
- All director nominees were duly elected or re-elected to Hive's board of directors. Hive's board of directors consists of Tobias Ebel, Frank Holmes, Marcus New, Dave Perrill and Ian Mann. Each director will serve until Hive's next annual meeting of shareholders, or until their respective successors are elected or appointed, or they otherwise cease to hold office.
- Davidson & Company LLP was reappointed as independent, external auditor of Hive for the ensuing year or until its successor is appointed, and the board was authorized to fix its remuneration.
- The company's stock option plan and restricted share unit plan were reapproved.
"On behalf of the board I would like to thank one of our founding directors, Olivier Roussy Newton, a visionary who conceived of the original idea to create the first publicly traded mining company. He will remain as a strategic adviser to Hive Blockchain Technologies," said Mr. Holmes, interim executive chairman of Hive.
The resolutions voted on at the meeting are described in more detail in Hive's management information circular dated Nov. 12, 2020, which was mailed to shareholders and is available on SEDAR.
The company has, thus far in its fiscal third quarter, from Oct. 1 to Dec. 21, 2020, mined more than 19,000 ether and 140 bitcoin on the cloud, based on the company's preliminary unaudited results.
Ethereum production slowed
The third-quarter-to-date mining of ether represents a decrease from the approximately 32,800 ethereum mined in Hive's second fiscal quarter ended Sept. 30, 2020. Due to new participants' entry into the ethereum ecosystem, which was validated by the rise in the hash-rate difficulty, the average difficulty increased by of over 27 per cent compared with the prior quarter, including the highest difficulty ever experienced on Dec. 10, 2020. While the difficulty increased, DeFi-related transaction fees modestly reduced the ether received from cloud mining.
Bitcoin production increased
The company has experienced an increase in the number of bitcoin mined thus far in its fiscal third quarter of approximately 140 bitcoins compared with 88 bitcoins for prior quarter. This increase has been driven by the previously announced investments that have been made into new-generation miners and the ability to turn on previously unprofitable old-generation miners, which, due to the rapid rise in bitcoin prices during this third quarter, have made them profitable.
This drop in the production of ether in the current quarter compared with the prior quarter will be offset partially by the average price of ethereum increasing by 37 per cent, and also the higher bitcoin mined in this quarter boosted by the increase in the price of bitcoin in the quarter of over 45 per cent.
As mentioned before, Hive has continued to be aggressively spending money on upgrading the efficiencies of its GPU (graphics processing unit) chips to mine ethereum in the cloud.
Sweden energy hedging
The company started a hedging strategy last year to lock in low green-energy costs. Hive has locked in 50 per cent of next year's electricity costs at 1.6 U.S. cents per kilowatt-hour, which Hive believes is the lowest amongst its peers.
"We're pleased to, for the second year in a row, 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, 2019," said Mr. Holmes, interim executive chairman of Hive. "This continues to provide 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 2021."
Hive has been aggressively upgrading its GPU memory chips from four-gigabyte memory cards to eight-gigabyte memory cards. Hive believes its upgrade will be finished by the end of January, 2021. Hive has spent over $12-million (U.S.) from internal cash flow and coin inventory sales, which had appreciated.
The company has continued to experience logistical challenges in the movement of new equipment and personnel to install any new equipment due to COVID-19. The company feels that, if this was a year ago, Hive's facilities and associated infrastructure upgrades would have been completed by now. This is a global industry phenomenon that everyone is experiencing.
Ether and bitcoin inventory
Hive still has a healthy coin inventory of both ether and bitcoin, and has a strategy to build its inventory through calendar 2021. Hive is no longer selling coins, but banking them through the new year, to have more inventory than is reported today.
After Hive's refurbishing has been completed, it will then work on plans to expand its ethereum and bitcoin footprint.
About Hive Blockchain Technologies Ltd.
Hive Blockchain is a growth oriented company building a bridge from the blockchain sector to traditional capital markets. Hive owns state-of-the-art, green-energy-powered data centre facilities in Canada, Sweden and Iceland, which produce newly minted digital currencies like bitcoin and ethereum continuously on the cloud. Its deployments provide shareholders with exposure to the operating margins of digital currency mining as well as a portfolio of crypto coins.
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