HIVE Blockchain Technologies Ltd (HIVE)

[hobowilly]

HIVE Announces Sale of Norwegian Subsidiary with Associated Debt and HODL Update


This news release constitutes a “designated news release” for the purposes of the Company’s prospectus supplement dated February 2, 2021 to its short form base shelf prospectus dated January 27, 2021.


Vancouver, Canada – HIVE Blockchain Technologies Ltd. (TSX.V:HIVE) (OTCQX:HVBTF) (FSE:HBF) (the “Company” or “HIVE”) is pleased to announce that, it has sold its Norwegian subsidiary Kolos Norway AS (“Kolos”) to the local municipality Narvik under a share purchase agreement. Under the agreement the Company transferred all of the shares of Kolos to the municipality of Narvik, along with a US $200,000 payment. This allows the Company to focus on its datacentres located in Sweden and Iceland which mine Ethereum continuously on the cloud.

As previously announced, in early December 2018 the Norwegian Parliament approved a legislative bill that cryptocurrency miners will no longer be subject to the relief on power consumption at the same rate as other power-intensive industries, this change was included in the state budget for 2019. As a result of this legislative change and the uncertainty around the development of this greenfield project management concluded that it was no longer probable that the Company will be able to meet the development conditions. As a result, the land development rights were impaired and were written down to $nil from $15 million as at March 31, 2019.

“HIVE would like to express our appreciation to the local community of Narvik, who has been supportive of the challenging position that the Company was facing” said Executive Chairman, Frank Holmes. Mr. Holmes further stated “we are unfortunate that it has come to this, but glad that the property has been retained by the local community so that the community can focus on developing this greenfield property for many uses. This deal was made before myself or our CFO had assumed executive duties. We are pleased that our management team can now continue to focus on more immediate needs like upgrading our current facilities while expanding existing operations in Sweden, Iceland and Canada.”

As a result of this transaction, HIVE has extinguished loans which were assumed as part of the original transaction in May 2018, with a balance of USD $3.1 million based on our most recently filed financial statements for the period ended December 31, 2020. Original warrants granted for milestones associated with the Kolos land development that have not been met will naturally be cancelled.

Coin Inventory (HODL)

Throughout calendar 2021 HIVE has continued to be a Holder of mined Bitcoin and Ethereum coins and has been banking them in cold wallets. Our strategy is one to continue holding coins, as we feel that it will benefit our shareholders. The current dollar value of our crypto assets is approximately US $109 million (based on US $3,900 Ethereum and US $59,000 Bitcoin) and cash is US $33 million.

This HODL strategy has led to the strengthening of our balance sheet and liquidity which is a substantial improvement from where we were a year ago.