ZUG, SWITZERLAND and VANCOUVER , Dec. 31, 2018 /CNW/ - Amid recent regulatory changes proposed by the Norwegian Parliament, HIVE Blockchain Technologies Ltd. (HIVE.V) (HVBTF) (the "Company" or "HIVE") is providing an update to shareholders and debt holders regarding the Company's Kolos Norway AS ("Kolos") asset located in Norway . In early December 2018 the Norwegian Parliament approved a legislative bill that cryptocurrency miners will no longer be subject to tax relief on power consumption at the same rate as other power-intensive industries. This change, which is included in the state budget for 2019, is expected to take effect in March 2019 .
HIVE is deeply disappointed and frustrated by the proposed changes to the government framework conditions without discussion, consultation, or dialog with the industry. The Company believes that such changes represent a significant impediment to attracting long-term foreign investment to the region and creates uncertainty for other global investors. It is the Company's view that such changes represent a risk not only for cryptocurrency miners but for all energy intensive industries that are considering long-term capital investments as political forces appear willing to unilaterally propose changes to established frameworks that have attracted investment to the region. This is particularly concerning with regards to the development of data centres which require long-term capital investment, an option which prior to the proposed changes to electricity costs appeared to be a potentially attractive use for the Kolos asset. As a result of sudden and unexpected government actions, HIVE is undertaking an assessment of the impact of upcoming legislative changes on the business case of the Norway facility and to determine the economics of the data centre. From a first estimation HIVE assumes a crucial impact on the economics and will need to react to the Norwegian government's recent changes to the laws which effect the project in the community of Ballangen, Norway .
"I am extremely disappointed by the proposed changes to the regulatory framework in Norway ." said Frank Holmes , Interim Executive Chairman. "In my view, unilateral decisions by governments without industry consultation and discussion represent a significant risk to stability and long-term investment decisions. My experience as a global Chief Investment Officer is that regulatory uncertainty is a significant barrier to attracting long-term foreign capital and governments that unexpectedly move the goal posts create an unfavorable investment environment. These abrupt regulatory changes have forced us to reassess the value of our asset in Norway which, prior to the proposed change, represented an attractive green-field opportunity to develop data centres to serve the global technology community as well as the potential to erect cryptocurrency mining infrastructure given the access to more than 1,000 megawatts of power on the property. We have already communicated proposed changes to debt holders due to the proposed increase in power costs in the region. HIVE will assess the viability of our presence in Norway as cash management remains a priority that we consider to be in the best interests of HIVE's equity holders."
On December 20, 2018 , in a letter sent to debt holders associated with the Kolos acquisition, the Company proposed changes to the Loan Agreement. At this time, the Company has proposed extending the term of the convertible loan of NOR 20,885,000, approximately US$2.4 million by one year as management assesses the impact that the Norwegian parliament's proposed changes could have on future development plans and on the value of HIVE's sole Norwegian asset. The Company is committed to working with debt holders to reach an agreement that is in the best interests of all HIVE stakeholders. The Company intends to complete its assessment of the damages inflicted by the policy change upon the value of assets prior to the close of the fiscal year end on March 31, 2019 .
About HIVE Blockchain Technologies Ltd.
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 produce 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.
On Behalf of HIVE Blockchain Technologies Ltd.
Interim Executive Chairman
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
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. "Forward-looking information" in this news release includes information about the impact of Norwegian regulatory changes proposed by the Norwegian Parliament; the development of the Company's asset in Norway ; the Company's proposed extension of the convertible loan related to the Norway asset; the quantum of electricity consumption capacity in Norway ; long term growth of the Company; the business goals and objectives of the Company, 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, the Company may not advance or complete the development of the data centre in Norway on terms favourable to the Company, or at all; loan holders may not agree to the proposed extension of the convertible loan related to the Norway asset; the digital currency market; the Company's ability to successfully mine digital currency; the Company may not be able to profitably liquidate its current digital currency inventory, or at all; a decline in digital currency prices may have a significant negative impact on the Company's operations; the volatility of digital currency prices; and other related risks as more fully set out in the Filing Statement of the Company dated September 13, 2017 and other documents disclosed under the Company's filings at www.sedar.com.
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 ability to develop digital currency operations in Norway on terms favourable to the Company; the Company will be able to profitably liquidate its digital currency inventory as required; the Company's ongoing partnership with Genesis; historical prices of digital currencies and the ability of the Company to mine digital currencies will be consistent with historical prices; and there will be no regulation or law that will prevent the Company from operating its business. 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.
SOURCE HIVE Blockchain Technologies Ltd.
View original content to download multimedia: http://www.newswire.ca/en/releases/archive/December2018/31/c7294.html