- HIVE Blockchain (TSXV:HIVE) is about to undertake a 20 per cent expansion of its Ethereum mining facility in Sweden
- The 20 per cent capacity increase may result in only a 10 per cent increase in facility size
- HIVE plans to leverage its existing relationships with local suppliers and facility operator Blockbase Mining Group to complete the work
- Hive Blockchain Shares are currently up 3.23 per cent to $0.32, with a market cap of $104.65 million
HIVE Blockchain (TSXV:HIVE) is about to undertake a 20 per cent capacity expansion of its Ethereum mining facility in Sweden.
Operations at the site first began in January 2018. HIVE apparently chose the location for its crypto-forward political system, and easy access to renewable forms of energy.
HIVE expects to improve its gross margin profile by leveraging the existing fixed-cost base at the facility.
Interim Executive Chairman, Frank Holmes, said that it is an opportune time to expand the site’s mining capacity.
“We have full visibility into our Sweden facility build-out costs after we assumed 100 per cent 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,” he added.
Despite the 20 per cent capacity increase, the overall size of the facility may only increase by 10 per cent. With no additional staff required, completion of the upgrade is due within the next six months.
“Mining market conditions for Ethereum have improved significantly since mid-December, with coin prices and block rewards up and mining hash rates stable,” continued Holmes.
The Swedish facility currently operates using GPU mining rigs powered through renewable hydroelectricity.
Capital expenditure, which includes additional GPU hardware, is likely to cost roughly C$200,000 for every additional megawatt. HIVE will pay this amount from its existing cash deposits.
Holmes went on to say that the company’s decision to use GPUs, as opposed to ASICs, is two-fold.
“It is anticipated the Ethereum network will implement Progressive Proof of Work this year, which would effectively eliminate ASIC mining on the network, increasing the relative efficiency of GPU mining facilities.
“Additionally, GPUs provide us with flexibility to identify and focus these computing resources on other existing and new cryptocurrencies if they become more profitable to mine, or for other high efficiency computing applications,” he concluded.
HIVE will use existing relationships with local suppliers, and the facility’s operator Blockbase Mining Group, to complete the expansion.
Company shares are currently up 3.23 per cent to $0.32, with a market cap of $104.65 million at 3:37pm EST.