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- State-of-the-art blockchain infrastructure facility produces, Ether and other alternative cryptocurrencies (e.g. Bitcoin)
- Genesis Mining, the world's leading hashpower provider with over 700,000 customers, has entered into an exclusive partnership with HIVE to provide and operate up to five blockchain Data Centres
- Up to $15 million private placement financing
- New Board and Harry Pokrandt appointed Interim CEO
Vancouver, British Columbia – Leeta Gold Corp. (TSXV: LTA.H) (the "Company" or "HIVE") (being renamed HIVE Blockchain Technologies Ltd.) has entered into an arm's length legally binding letter of intent dated June 8, 2017 with Genesis Mining Ltd. ("Genesis") under which the Company will acquire and maintain certain cyrptocurrency mining data centres ("Data Centres") currently operated by Genesis in Reykjanes, Iceland. The first Data Centre, which has been operational for just a few weeks and utilizes cutting edge computing components and infrastructure design, will be acquired from Genesis at a cost of US$9 million. Concurrent with closing ("Closing") of this acquisition, the parties will partner under a Master Service Agreement under which Genesis will be issued such number of shares of the Company as will constitute 30% of the issued and outstanding common shares following completion of the equity financing. At Closing, Genesis will become the Company's largest shareholder. Closing is subject to receipt of TSXV approval, completion of definitive documentation, and completion of the equity financing.
Based on the computational capacity of the first Data Centre, the historical prices, and required hash rates, and using a mine and immediately sell strategy, the trailing 12 month EBITDA would have been approximately US$7 million.
Genesis is one of the world's leading blockchain technology firms. Genesis is a tightly held private company controlled by Jakov Dolic. The Company and Genesis have partnered with the common goal of developing the leading listed blockchain company through the development of mining infrastructure and other related blockchain businesses. In addition to the rights the Company is acquiring to the initial revenue producing Data Centre in Iceland, the Company and Genesis have agreed upon the closing of future financings for HIVE to acquire up to four additional Data Centres in Iceland and/or Sweden from Genesis rendering various cloud computing services including, e.g., the mining of certain cryptocurrencies.
"The blockchain has the power to change payments and internet infrastructure," commented Harry Pokrandt, Interim CEO at HIVE. "As cryptocurrencies and applications for the blockchain grow, the greater the need for the computational power provided by miners. This transaction positions HIVE as a leading cryptocurrency miner in an attractive jurisdiction, Iceland, with low energy costs. The mining opportunity with Genesis is scalable and HIVE looks forward to being among the fastest moving companies in this exciting industry."
"Genesis is proud to partner with HIVE in building a unique public company with immediate exposure to blockchain and cryptocurrencies," commented Marco Streng, co-founder of Genesis. "With the backing of Fiore Group and Genesis, HIVE is well positioned to take advantage of opportunities in the blockchain sector through the public markets. Mining has been an incredible business for Genesis and we look forward to continue to expand in this area in partnership with HIVE."
The Data Centre being acquired by HIVE has been optimized for cryptocurrency mining and utilizes Genesis Hive, a proprietary monitoring tool for large-scale mining. The Data Centre has the flexibility to switch between cryptocurrencies to focus computing resources on new and more profitable coins as they arise.
With over 700,000 customers, Genesis has developed industry-leading hardware and software tools to validate blockchain transactions in exchange for digital currency rewards (mining) and to identify up-and-coming new blockchains. Their proprietary tools and expertise have enabled them to become the leading miners and owners of Ether, the crypto-fuel for the distributed application platform Ethereum, which is now the world's second largest cryptocurrency market after Bitcoin, with a market value of roughly US$35 billion. HIVE will use its hardware to mine Ether and other alternative cryptocurrencies (e.g. Bitcoin).
The market for cryptographic currencies has increased to over U$110 billion as of June 11, 2017 and continues to grow, but there are limited ways for investors to gain access. HIVE intends to provide investors with profitable, de-risked exposure to leading mining infrastructure and the mined cryptographic currencies themselves.
The Company intends to appoint an experienced management team on closing consisting of management from Genesis and HIVE.
The Company will complete a private placement financing of up to 50 million common shares at a price of $0.30 per share, for aggregate proceeds of up to $15,000,000, subject to the approval of the TSX Venture Exchange. Proceeds from the financing will be used for the acquisition of the first Data Centre and for general working capital. US Global Investors, an innovative and award winning asset management firm, has indicated they will provide a lead order for the financing.
HIVE is pleased to announce that at Closing, Olivier Francois, one appointee nominated by HIVE and two senior managers from Genesis will be appointed to the Company's board of directors and Harry Pokrandt will be appointed Interim CEO. At the Company's next AGM the board size will be increased to five and Harry Pokrandt is expected to be appointed to the board.
Trading in the common shares of the Company has been halted in accordance with the policies of the TSX Venture Exchange (the "Exchange") and will remain halted until such time as all required documentation has been filed with and accepted by the Exchange and permission to resume trading has been obtained from the Exchange. The Company will then operate within the technology sector. Since the common shares of the Company are listed on the NEX market of the Exchange, and the acquisition does not constitute a Related Party Transaction under the policies of the Exchange, the Company is not required to seek shareholder approval for the acquisition.
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Completion of the acquisition is subject to a number of conditions, including but not limited to acceptance by the Exchange and if applicable pursuant to the Exchange requirements, majority of the minority shareholder approval. Where applicable, the acquisition cannot close until the required shareholder approval is obtained. There can be no assurance that the acquisition will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the acquisition, any information released or received with respect to the acquisition may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly speculative. The Exchange has in no way passed upon the merits of the acquisition and has neither approved nor disapproved the contents of this news release. Neither the Exchange nor its Regulation Services Provider (as that term is defined in policies of the Exchange) accepts responsibility for the adequacy or accuracy of this news release.
On Behalf Of Leeta Gold Corp. (to be renamed HIVE BLOCKCHAIN TECHNOLOGIES LTD.)
CEO and Director
For further information please contact:
Tel: (604) 609-6110
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. The information in this news release about the completion of the acquisition of the first Data Centre, as well as additional Data Centres, and the closing of financings related thereto, 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, risks related to the Company's or Genesis Mining's inability to satisfy a condition precedent to the completion of the Data Centre acquisitions (including obtaining necessary regulatory approvals and completion of the financings thereon), other risks related to completion of the completion of the Data Centre acquisitions and risks related to the inability of either of the Company or Genesis Mining to perform its respective obligations under the contemplated Data Centre acquisitions. 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 and Genesis Mining's ability to complete the Data Centre acquisitions and related financings. 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.