CASTLE ROCK, Colo.,
Dec. 12, 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 an additional 1,000 next
generation Bitmain S17 Pro Antminers for approximately USD
$1.35 million from BitmainTech PTE.
LTD. ("Bitmain"). On December 4,
2019, Riot announced that it had purchased 3,000 S17 Pro
miners. Once these total 4,000 miners are received and operational,
Riot's Oklahoma City mining
facility will utilize its 12 megawatt ("MW") available electric
power supply mining with the newest generation of S17 Pro miners.
This purchase 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, as
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 hashrate while only consuming an estimated 220% of the
electricity usage, as compared to the S9 miners currently in use by
Riot. This upgrade 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 total 4,000 next
generation miners is estimated to be approximately 248 petahash per
second ("PH/s"). This would represent an estimated 240% over Riot's
present average mining hashrate. Riot anticipates that the 4,000
new miners will be deployed early in the first quarter of 2020 and
are expected to represent over 90% of the Oklahoma City's mining facilities total
current capacity. Pending future actual power costs and Bitcoin
network economic conditions, it is expected that a portion of the
existing S9 miners may also continue to be operational, especially
during periods of low-cost electricity.
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
upgrade of its Oklahoma City
mining facility, 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 strategically manage its operational costs; during
periods when incremental electricity charges would exceed estimated
revenue production, Riot curtails mining activities to reduce
electric consumption. 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.