HIVE Digital Technologies Releases August 2023 Production Update

HIVE Digital Technologies Ltd. (HIVE) has announced its unaudited production figures for global Bitcoin operations for August 2023, reporting the production of 274 Bitcoin. Throughout the month, the company maintained an average Bitcoin mining capacity of over 3.67 Exahash (EH/s), encompassing both ASIC and GPU operations.

Summary Overview:

• HIVE produced 274 Bitcoin in August through ASIC and GPU mining, achieving an average of 74.7 Bitcoin per Exahash and an average hashrate of 3.67 EH/s.
• The company generated an average of 8.8 BTC per day during this month.
• As of the end of August, HIVE’s mining capacity stood at 3.69 EH/s, inclusive of both ASIC and GPU hashrate.

AI and HPC Update
Aydin Kilic, President & CEO of HIVE, expressed excitement about the order of high-performance SuperMicro servers, which will expand the company’s AI compute infrastructure by over 2.5 times. This development follows the company’s recent announcement that its AI and HPC capacity had tripled. Once operational, these new servers will enable 2,400 Nvidia GPUs to handle AI and HPC tasks, building on the success of 400 Nvidia GPUs used in a beta test earlier this year that generated an annual run rate revenue of $1 million. HIVE aims to have these servers operational by the end of October 2023, contributing toward a target of $15 million annual run rate revenue.

Moreover, HIVE is expanding its AI and HPC infrastructure into North America, with an initial base in Canada. The first servers are expected to be operational in September. The company is also receiving enterprise-grade networking equipment to enhance its existing infrastructure in Sweden, allowing for high-speed interconnects that cater to high-demand AI and HPC applications. Similar equipment for the Canadian operations is anticipated soon after.

HIVE’s leadership, drawing on a wealth of experience from managing approximately 150,000 GPUs during the Ethereum mining era, aims to leverage this expertise to implement 38,000 Nvidia GPUs for HPC and AI workloads.

August 2023 Production Figures
Mr. Kilic reiterated the company’s commitment to upgrading its fleet of ASIC miners and identifying new-generation ASICs for immediate deployment to optimize cash flow.

Luke Rossy, VP of Operations, noted plans for an additional 1,700 BuzzMiners installation in New Brunswick, with 300 already installed. Although delays in power distribution unit upgrades have postponed the remaining installations, HIVE successfully deployed all 2,000 Bitmain S19 XP Antminers at its Lachute facility in Quebec, with the acquisition announced less than a month prior.

The company’s total Bitcoin production for August 2023 was as follows:

• 260 BTC produced from ASICs with an average hashrate of 3.5 EH/s.
• An average of 8.4 BTC per day from ASICs, achieving 74.7 BTC/EH from ASIC mining.
• The month-end hashrate as of August 31 was 3.69 EH/s, comprised of 3.531 EH/s from ASICs and 0.163 EH/s from GPUs.
• This signifies a 1% increase in BTC ASIC hashrate month-over-month from 3.64 EH/s at the end of July.
• The monthly average for August was 3.67 EH/s, with 3.485 EH/s allocated to ASIC mining and 186 PH/s to GPU mining, denoting a 6% increase in overall hashrate from July’s average of 3.46 EH/s.

Bitcoin Network Mining Difficulty Volatility
The company’s gross profit margins are significantly impacted by network difficulty, which rose from 52.33 T on August 1 to an all-time high of 55.62 T by August 31—indicating a 6% increase in mining difficulty for the month.

Increases in mining difficulty affect production; as more miners participate, the daily Bitcoin block reward of 900 Bitcoin is divided among more participants, resulting in smaller individual rewards. Conversely, falling Bitcoin prices may lead to some miners exiting the market, potentially lowering difficulty levels.

Miners with stringent operational costs, driven by efficient machinery or low energy prices, can sustain production amid these fluctuations. HIVE intends to self-curtail mining operations if energy costs become economically unfeasible, ensuring not all of its total hashrate is utilized during such times. The company remains committed to upgrading its fleet to optimize efficiency during the ongoing crypto market downturn.

Clarification on August 11, 2023, Release
In a press release dated August 11, 2023, HIVE clarified that, under the at-the-market equity program established in May 2023, it issued 534,400 common shares on the TSX Venture Exchange from May 10, 2023, to June 30, 2023, at an average price of C$4.92, while paying commissions of $60,901. The company confirmed that the average share price issued during this period was C$5.02, with total commissions amounting to $60,808.53.