HIVE Blockchain Technologies, an owner and operator of cryptocurrency mining facilities, announced today that it has initiated an expansion of its flagship GPU-based mining facility in Sweden.
This expansion is anticipated to result in a more than 20% increase in the facility’s Ethereum mining production capabilities while improving the gross mining margin by leveraging its existing fixed cost base.
The company’s facility in northern Sweden currently operates GPU mining rigs powered entirely by green energy via renewable hydroelectricity. HIVE will leverage 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.
Expenditures
Capital expenditures, including additional GPU hardware, are expected to cost approximately $200,000 per additional megawatt (MW) of capacity, and is anticipated to be paid from existing cash on the company’s balance sheet. This is much less than the approximate $3.2 million per MW the company paid for the original development of the Sweden facility two years ago to its original service provider.
“This is an opportune time for us to expand our Ethereum mining capacity and gross mining margin profile at a relatively low capital investment. 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. Additionally, we strongly believe in the future of Ethereum mining and are therefore strengthening and maximizing our core operation with this project. Mining market conditions for Ethereum have improved significantly since mid-December, with coin prices and block rewards up and mining hash rate stable. Our decision to utilize GPUs as opposed to ASICs to mine Ethereum is for two reasons. It is anticipated the Ethereum network will implement Progressive Proof of Work this year, which would effectively eliminate ASIC mining on the network thereby 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.”
– HIVE’s Interim Executive Chairman Frank Holmes