HIVE Blockchain Technologies Ltd (OTCMKTS:HVBTF) just announced that it has initiated an expansion of its flagship GPU-based digital currency mining facility in Sweden. The expansion is anticipated to result in a more than 20% increase in the facility’s Ethereum mining production capabilities while improving its gross mining margin profile by leveraging the existing fixed cost base at the facility.
According to the release, HIVE’s
facility in northern Sweden currently operates GPU mining rigs powered entirely
by green energy via renewable hydroelectricity, consistent with the Company’s
green energy strategy. The expansion will see the Sweden facility’s mining
capacity increase by more than 20% in two phases, expected to be completed
within the next six months. The Company will leverage its existing
relationships with local suppliers, including energy suppliers and facility
operator Blockbase Mining Group, with no anticipated increase in staffing and
only a 10% expansion in its facility size required.
HIVE Blockchain Technologies
Ltd (OTCMKTS:HVBTF) trumpets itself as a company that operates in the
cryptocurrency mining space.
It engages in the mining and
sale of digital currencies, such as Ethereum, Ethereum Classic, and ZCash.
The company was formerly known
as Leeta Gold Corp. and changed its name to HIVE Blockchain Technologies Ltd.
in September 2017. HIVE Blockchain Technologies Ltd. was incorporated in 1987
and is headquartered in Vancouver, Canada.
According to company
materials, “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
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. Our deployments provide shareholders
with exposure to the operating margins of digital currency mining as well as a
growing portfolio of crypto-coins.”
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As noted above, HVBTF just announced that it has initiated an expansion of its flagship GPU-based digital currency mining facility in Sweden.
Even in light of this news,
HVBTF has had a rough past week of trading action, with shares sinking
something like -44% in that time. That said, chart support is nearby and we may
be in the process of constructing a nice setup for some movement back the other
way. In addition, the name has seen interest climb, with an increase in recent
trading volume of just under 130% beyond its prior sustained average level.
“This is an opportune
time for us to expand our Ethereum mining capacity and gross mining margin
profile at a relatively low capital investment,” said HIVE’s Interim
Executive Chairman Frank Holmes. “We have full visibility into our Sweden
facility build out costs after we assumed 100% control of our operations last
year and entered into direct agreements with suppliers and service providers.
Since that point, we have improved the efficiency of our mining rigs and
significantly lowered our operating and maintenance expenses in Sweden.”
Currently trading at a market
capitalization of $44M, HVBTF has
a significant war chest ($12.4M) of cash on the books, which stands against
about $7.4M in total current liabilities. HVBTF is pulling in trailing 12-month
revenues of $42.9M. However, the company is seeing declines on the top-line on
a quarterly y/y basis, with revenues falling at -40.8%. We will update the
story again soon as further details emerge.
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Disclosure: we hold no position in $HVBTF, either long or
short, and we have not been compensated for this article.