CASTLE ROCK, Colo.,
Dec. 4, 2019 /PRNewswire/ -- Riot
Blockchain, Inc. (NASDAQ: RIOT) ("Riot" or the "Company"), one of
the few Nasdaq listed public cryptocurrency mining companies in
the United States, announced the
purchase of 3,000 next generation Bitmain S17 Pro Antminers for
approximately USD $5 million from
BitmainTech PTE. LTD. ("Bitmain"). This upgrade was funded from
Riot's available cash on hand.
The latest generation of Bitcoin ("BTC") Application-Specific
Integrated Circuit ("ASIC") miners from Bitmain are markedly more
cost efficient, estimated from product specifications at
approximately a 50% improvement in hardware power efficiency,
compared to the S9 miners currently in use by Riot. As
previously reported Riot's gross margin percent, computed as mining
revenues in excess of cost of revenues (exclusive of depreciation
and amortization), was 14% in the three-month period ended
September 30, 2019. The new
generation miners are anticipated to generate approximately 440% of
the S9's hashrate while only consuming an estimated 220% of an S9's
electricity usage. This will allow Riot to significantly increase
its operating hashrate at the Oklahoma
City mining facility with fewer total miners using the same
or less total electricity.
Riot estimates aggregate operating hashrate at the Oklahoma City mining facility, assuming full
utilization of the facility's current total 12 megawatt ("MW")
available electric supply and deployment of the 3,000 next
generation miners supplemented with the balance of S9s continuing
to run using remaining available power, would be approximately 225
petahash per second ("PH/s"). This would represent an estimated
200%+ increase over Riot's present average mining hashrate. Riot
anticipates that the 3,000 new miners, will represent approximately
70% of the total current mine capacity, and are expected to be
fully deployed early first quarter 2020. Pending future actual
power costs and Bitcoin network economic conditions, it is expected
that a portion of the existing S9 miners will continue to be
operational in order to maximize capacity until, and if, additional
next generation miners may be acquired to replace them.
Riot's 107,600 square foot Oklahoma
City mining facility has been in operation since early 2018.
Riot has mined over 1,820 newly minted Bitcoin through the quarter
ended September 30, 2019, in addition
to lesser quantities of Litecoin and Bitcoin Cash. With this
acquisition, Riot has reinforced its confidence and focus in
Bitcoin.
Riot's Oklahoma City mining
facility's current electric costs are variable based upon peak
demand. Riot is notified of hourly demand billing rates in advance
and in order to be strategic with its operational costs, Riot
curtails mining activities to reduce electric consumption if there
are periods when incremental electricity charges would exceed
estimated revenue production. For the billing month of October 2019, direct electricity costs incurred
averaged $0.0275 kWh with an
approximate range of $0.01 to
$0.07.
The Board of Directors and Management of Riot are very pleased
to be in a position from a financial point of view to take
advantage of this exciting new technology at a time when the
manufacturer has recently significantly reduced the cost of the
miners. While cryptocurrency mining continues to have challenges,
including price volatility of Bitcoin, the opportunity to acquire
significant additional net hashrate capacity on a very
cost-effective basis was determined to be compelling. The decision
was further enhanced given Riot's recent funding from its 2019 ATM
Offering of common shares with no warrants or other rights and at
prices appreciably higher than the current market. As
previously reported, the Company's cash and digital asset balance
as of September 30, 2019 totaled
$18.3 million, with no long or
short-term secured debt.
About Riot Blockchain
Riot Blockchain is focused on building, operating, and
supporting blockchain technologies. Its primary operations consist
of cryptocurrency mining, targeted development of a cryptocurrency
exchange, and the identification and support of innovations within
the sector. For more information, visit
http://www.RiotBlockchain.com/.
Investor Notice
Investing in our securities involves a high degree of risk.
Before making an investment decision, you should carefully consider
the risks, uncertainties and forward-looking statements described
under "Risk Factors" in Item 1A of our most recent Form 10-K for
the fiscal year ended December 31,
2018 filed with the Securities and Exchange Commission (the
"SEC") on April 2, 2019, as amended
by Amendment No. 1 on Form 10-K/A on April
23, 2019, as well as those risk factors disclosed in any
periodic reports we file with the SEC. If any of these risks were
to occur, our business, financial condition or results of
operations would likely suffer. In that event, the value of our
securities could decline, and you could lose part or all of your
investment. The risks and uncertainties we describe are not the
only ones facing us.
Additional risks not presently known to us or that we currently
deem immaterial may also impair our business operations. In
addition, our past financial performance may not be a reliable
indicator of future performance, and historical trends should not
be used to anticipate results in the future. See "Safe Harbor"
below.
Safe Harbor
The information provided in this press release may include
forward-looking statements relating to future events or the future
financial performance of the Company. Because such statements are
subject to risks and uncertainties, actual results may differ
materially from those expressed or implied by such forward-looking
statements. Words such as "anticipates," "plans," "expects,"
"intends," "will," "potential," "hope" and similar expressions are
intended to identify forward-looking statements. These
forward-looking statements are based upon current expectations of
the Company and involve assumptions that may never materialize or
may prove to be incorrect. Actual results and the timing of events
could differ materially from those anticipated in such
forward-looking statements as a result of various risks and
uncertainties. Detailed information regarding factors that may
cause actual results to differ materially from the results
expressed or implied by statements in this press release relating
to the Company may be found in the Company's periodic filings with
the Securities and Exchange Commission, including the factors
described in the sections entitled "Risk Factors," copies of which
may be obtained from the SEC's website at www.sec.gov. The Company
does not undertake any obligation to update forward-looking
statements contained in this press release.
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SOURCE Riot Blockchain, Inc.