HIVE Blockchain Announces Major Expansion in Sweden, Including New Bitcoin Mining Facility, and up to $100 Million Financing

HIVE Blockchain Technologies Ltd. (TSX VENTURE:HIVE) (the “Company” or “HIVE”), the leading publicly listed blockchain infrastructure company, is pleased to announce that it has entered into binding letter agreements dated December 13, 2017 with its strategic partner and major shareholder, Genesis Mining Ltd. (“Genesis”), the largest digital currency mining hashpower provider, to significantly expand the Company’s digital currency mining operations in Sweden in 2018, including the addition of a large-scale Bitcoin mining facility.
This major expansion will increase HIVE’s energy consumption dedicated to digital currency mining from a targeted 17.4 megawatts (“MW”) in March 2018 to 24.2 MW in April 2018, escalating to an expected 44.2 MW by September 2018, and will include:

• a new ASIC-based data centre in Sweden, with hardware procured and assembled by Genesis on behalf of HIVE for consideration of an estimated US$34 million and expected to come online in September 2018. The hardware will consist of the latest generation of Bitcoin mining rigs and will operate at an estimated rate of 200 petahashes per second (“PH/s”) and support an approximate consumption of 20 MW of electricity; and

• a third phase (additional 6.8 MW) of the Company’s previously-announced GPU-based data centre in Sweden, customized for mining GPU-based digital currencies (e.g., Ethereum), for consideration of an estimated US$22 million and expected completion in April 2018.

The Company is also pleased to announce a private placement financing of up to C$100 million, led by GMP Securities L.P. and Eventus Capital Corp., with a lead indication of C$50 million received.
“The addition of Bitcoin mining capability further establishes HIVE as a leader in digital currency mining and diversifies our revenue with a highly liquid currency,” commented Harry Pokrandt, President, CEO and a Director at HIVE. “Our new Bitcoin facility will be among the most energy-efficient and largest Bitcoin mining farms in Europe. This facility will complement our large-scale GPU-based facilities being built in Sweden and currently operating in Iceland, and allow us to diversify from mining GPU-driven consensus algorithms to also include SHA-256 consensus algorithms. Sweden, like Iceland, is an excellent jurisdiction for HIVE with its abundant cheap electricity, good governance, and cool climate.”
To view Figure 1 please click on the following link: https://media3.marketwire.com/docs/HIVE1213.pdf
Sweden Bitcoin Data Centre
HIVE has rapidly established a portfolio of GPU-based digital currency mining operations in Iceland and Sweden, with assistance from Genesis. The Company’s mining focus to date has been on the Alt-coin market, including Ethereum, Ethereum Classic, and ZCash. In addition to these and other digital currencies, Genesis is one of the leading miners of Bitcoin. HIVE is pleased to enter the Bitcoin mining market through the acquisition of new custom-designed ASIC-based digital currency mining rigs from Genesis on attractive terms, to be deployed at a state-of-the-art facility being constructed by Genesis in Sweden (such portion of the data centre housing HIVE’s rigs, the “Sweden Bitcoin Data Centre”).
The Sweden Bitcoin Data Centre will consist of newly constructed SHA-256 based ASICs for digital currencies such as Bitcoin and Bitcoin Cash mining (the “Equipment”) at an estimated rate of 200 PH/s and supporting an approximate consumption of 20 MW of electricity. The Equipment will be designed for efficiency and scale utilizing Genesis’ expertise, and will be acquired for consideration of an estimated US$34 million. Pursuant to a master services agreement between the Company and Genesis, Genesis will be responsible for hosting, maintenance and related services for the Sweden Bitcoin Data Centre for a monthly fee.
Genesis expects to break ground on the new facility in May 2018 and the Sweden Bitcoin Data Centre is expected to come online by September 2018.
Completion of the Sweden Bitcoin Data Centre is subject to a number of conditions, including but not limited to, approval of the TSX Venture Exchange (the “Exchange”) as required, and completion of the Offering as defined below).
Sweden Expansion Phase 3
In addition to the Sweden Bitcoin Data Centre, HIVE is pleased to announce that it will finance the construction of a third phase of GPU-based digital currency mining rigs (the “Phase 3 Expansion”) at its previously-announced GPU-based data centre in Sweden (the “Sweden GPU Data Centre”). Please refer to the Company’s October 23 and 25, 2017 news releases for more detail on the first and second phases of construction at the Sweden GPU Data Centre.
The Phase 3 Expansion at the Sweden GPU Data Centre will be constructed by Genesis for consideration of an estimated US$22 million and is expected to be completed in April 2018. Pursuant to a master services agreement between the Company and Genesis, Genesis will be responsible for hosting, maintenance and related services for the Phase 3 Expansion for a monthly fee.
The Phase 3 Expansion is expected to add an additional 6.8 MW of energy consumption dedicated to digital currency mining to increase the total energy consumption of the Sweden GPU Data Centre to an estimated 20 MW.
Completion of the Phase 3 Expansion is subject to a number of conditions, including but not limited to, Exchange approval as required, and completion of the Offering (as defined below).
HIVE is already fully financed to complete Phases 1 and 2 of the Sweden GPU Data Centre (aggregate amount of US$44 million consideration), with assembly, configuration and testing on track for rollout of Phase 1 in January 2018 and Phase 2 in March 2018.
$100 Million Financing
The Company is also pleased to announce that it has entered into an agreement with a syndicate of agents led by GMP Securities L.P. and Eventus Capital Corp. (the “Agents”), pursuant to which the Agents have agreed to place, on a best efforts basis, units of the Company (the “Units”) at a price of C$3.15 per Unit (the “Offering Price”), for aggregate gross proceeds of up to C$100,000,000 (the “Offering”). The Agents have confirmed a lead indication of $50 million has been received. Each Unit will consist of one common share and one common share purchase warrant (a “Warrant”), with each Warrant entitling the holder to purchase one common share at a price of C$3.90 until November 14, 2019.
The Offering will take place by way of a private placement to accredited investors in such provinces of Canada as the Agents may designate, and otherwise in those jurisdictions where the Offering can lawfully be made on a private placement basis. The securities issued under the Offering will be subject to a four month and one day hold period from the date of issue in accordance with applicable securities laws in Canada, and potentially additional restrictions under the laws of other jurisdictions in which the Offering may be made.
This news release does not constitute an offer to sell the Units in the United States or to US persons. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended, and they may not be offered or sold in the United States or to a US person unless an exemption from registration is available.
The net proceeds of the Offering are expected to be used to fund the completion of the Sweden Bitcoin Data Centre and the Phase 3 Expansion at the Sweden GPU Data Centre, and for general working capital purposes.
The Offering is expected to close in one or more tranches with the final closing no later than December 29, 2017 (the “Closing Date”). Closing of the Offering is subject to certain conditions typical for a transaction of this nature and the receipt of all necessary regulatory approvals, including the approval of the Exchange.
Appointment of LodeRock Advisors Inc.
HIVE is also pleased to announce that it has retained LodeRock Advisors Inc. (“LodeRock”) for strategic investor relations and capital markets communications services. LodeRock is a group of senior capital markets communications executives who develop and execute communications programs in order to help companies achieve their capital markets objectives. Under the terms of the agreement, HIVE will pay LodeRock a monthly fee of C$10,000 for ongoing strategic communication services. Neither LodeRock nor any of its executives have an ownership interest, directly or indirectly, in HIVE or its securities. The engagement of LodeRock remains subject to the approval of the Exchange.
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 is strategically partnered with Genesis Mining Ltd. to build the next generation of blockchain infrastructure. HIVE owns state-of-the-art GPU-based digital currency mining facilities in Iceland, which produce mined digital currency like Ethereum around the clock, and is in the midst of a major expansion of operations into Sweden.
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.
Harry Pokrandt, President, CEO and Director
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.
Forward-Looking Information
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 information about the expansion of the Company’s digital currency mining operations in Sweden (including into Bitcoin and Bitcoin Cash mining); the proposed Offering; the expected computational power and energy consumption of the Company’s digital currency mining operations; expected start date of proposed operations; the business goals and objectives of the Company, and other forward-looking information includes but is not limited to information concerning the intentions, plans and future actions of the parties to the transactions described herein and the terms thereon.
Factors that could cause actual results to differ materially from those described in such forward-looking information include, but are not limited to, the expansion of digital currency mining operations (including construction of planned facilities) may not occur as currently planned, or at all; the Offering may not close on the terms and timing anticipated, or at all; the quantum of computational power and electrical consumption expected by the Company in Sweden may not materialize as currently anticipated, or at all; the digital currency market; the Company’s ability to successfully mine digital currency; a decline in digital currency prices may have a significant negative impact on the Company’s operations; the volatility of digital currency prices; and other related risks as more fully set out in the Filing Statement of the Company dated September 13, 2017.
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 Company’s ability to complete of its expansion of digital currency operations in Sweden; the Company’s ability to close the Offering, including obtaining Exchange approval ; the Company’s ongoing partnership with Genesis; historical prices of digital currencies and the ability of the Company to mine digital currencies will be consistent with historical prices; and there will be no regulation or law that will prevent the Company from operating its business. 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.
Any forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise.