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Highlights:
- 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,
June 14, 2017
/CNW/ - 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.
Financing
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.
New Board
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.
For corporate updates, please register to our mailing list
at www.HIVEblockchain.com and follow us on twitter
@HIVEblockchain.
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.)
"John Brydle"
CEO and
Director
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.
SOURCE Leeta Gold Corp.