ZUG, SWITZERLAND and VANCOUVER, BRITISH COLUMBIA--(Marketwired - Dec. 13, 2017) -
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED
STATES
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: http://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.