Mr. Frank Holmes reports
HIVE BLOCKCHAIN COMPLETES ACQUISITION OF GREEN ENERGY 50 MW DATA CENTRE IN NEW BRUNSWICK WITH POTENTIAL TO GROW TO 80 MW
Hive Blockchain Technologies Ltd. has completed its previously announced acquisition of a 50-megawatt data centre campus in New Brunswick from GPU.One Holding Inc. to expand Hive's Canadian footprint. This acquisition will build long-term assets on the company's balance sheet and complements the company's ESG (environmental, social and corporate governance) strategy to only mine coins on the cloud from sources of low-cost surplus green energy. Further, GPU.One key management with many years of deep data centre experiences will be joining the Hive team.
Ethereum continues to be very strong in price with many demand drivers like the growth in stable coins, decentralized finance (DeFi) and non-fungible tokens (NFTs). The bonus, or additional transaction, fees earned were exceptional last quarter like last summer. The company continues to upgrade its memory cards from four-gigabyte to eight-gigabyte memory cards and has experienced delays in receiving equipment from China as expected. It has been using the four-gigabyte cards to mine Ethereum Classic, which is very profitable.
Data centre acquisition
With this acquisition, Hive, through its subsidiary Hive Atlantic Datacentres Ltd. (formerly GPU Atlantic Inc.), is the owner of a 50-megawatt substation and a data centre campus in Grand Falls, N.B., with a dedicated cryptocurrency mining operation with access to 50 megawatts of low-cost green power, for a total purchase price of approximately $25.0-million. Pursuant to the agreement, Hive is satisfying the purchase price through the issuance of 4.6 million common shares to GPU.One and 400,000 Hive shares to GPU.One's minority partner at a deemed price of $5 per Hive share. Of the 4.6 million Hive shares to be issued to GPU.One pursuant to the acquisition, one million Hive shares will be allocated to a holdback and earnout to GPU.One upon delivery of certain earnout conditions.
The acquisition will again more than double Hive's total available power capacity globally to approximately 100 megawatts, placing it among the largest of any publicly listed cryptocurrency miners, and provide significant diversification to the company's business both geographically and by blockchain network.
The fully operational, state-of-the-art facility features a 50-megawatt substation, two fully operational data centre buildings offering a combined 30 megawatts of ready-to-plug space, electrical infrastructure that is unique to cryptocurrency mining, and a highly skilled technical team of executive and operational staff. Due to the facility's low electricity prices, miners are expected to generate positive gross mining margins under current market conditions.
Hive is currently one of the world's largest public miners on the Ethereum blockchain, and this acquisition places Hive among the world's larger publicly listed miners of Bitcoin. The newly acquired Bitcoin mining facility in New Brunswick diversifies the company's existing portfolio, which includes a facility in Quebec, and Ethereum-focused GPU mining operations in Sweden and Iceland.
Hodl is growing
The company has continued to mine and bank both Bitcoin and Ethereum, and its inventory has expanded to $75-million (U.S.) as of close on Friday, the majority of the crypto assets being Ethereum.
The company stated mining Ethereum Classic before the prices surged from $20 (U.S.) to $40 (U.S.) is very profitable with a short payback. The size is small but very profitable. The company has chosen to mine and sell these coins to assist in covering electricity and basic general and administrative costs while saving in cold wallets its Bitcoin and Ethereum production.
Cash and coin assets are approximately $105-million (U.S.)
About Hive Blockchain Technologies Ltd.
Hive Blockchain is a growth-oriented, TSX Venture Exchange-listed 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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