Frank Giustra, the Canadian mining maverick who amassed a fortune building what would become one of the world’s largest gold companies, is digging for another kind of gold: cryptocurrencies.

The company he’s backed, Vancouver-based Hive Blockchain Technologies Inc., is among the first publicly traded stocks to provide exposure to crypto mining — the vast data crunching needed to verify the blockchain and the volatile currencies they produce like bitcoin and ether.

So far, his decision to dig for data servers has paid off. Hive’s shares have soared about 560 percent, giving it a market value of C$497 million ($398 million), since it took over the listing of Leeta Gold Corp. and began trading on Sept. 18. After only three days, the company raised C$30 million in a share sale led by GMP Securities LP.

“We’re quite lucky to be first out of the gate,” said Hive Chief Executive Officer Harry Pokrandt, a former Macquarie Group investment banker who bought his first bitcoin for $100 in a Vancouver coffee shop on his iPad. Speaking from a makeshift office adjoining Giustra’s Fiore Group, which is listed as an adviser to Hive, he said, “We’re a unique way to get into the space.”

Giustra helped build the company that would become Goldcorp Inc. then founded film studio Lions Gate Entertainment Corp. He counts Bill Clinton and George Soros among his close pals. Those connections may position him to grasp a nascent corner of finance and navigate bitcoin’s uncertain regulatory waters. Giustra didn’t respond to a request for an interview.

Bitcoin Was Cool, But Its Blockchain May Be Useful: QuickTake

Blockchain is the technology used to verify and record transactions on a public, online ledger. “Miners” use computers to solve complex math problems to verify transactions, earning a reward of a newly issued coin, such as bitcoin or ether. Hive paid Hong Kong-based Genesis Mining Ltd., builder of the world’s largest ether mining facility, $9 million and gave it a 30 percent stake to acquire a new data center in Reykjanes, Iceland.

On Sidelines

There, Hive plans to mine different cryptocurrencies, depending on which ones offer the best margins and build an inventory of coins on the expectation they’ll appreciate. Hive said it plans to buy a second Genesis data center next door for $5 million and has the option to buy more in Iceland and Sweden, cold countries which can keep power and cooling costs down.


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