Vancouver, British Columbia; May 2, 2019 – Squire Mining Ltd. (CSE:SQR | FWB:9SQ | OTCQB:SQRMF)
(“Squire”) announced that it has completed the acquisition of all of the outstanding securities of Freschette Limited (“OpCo”), which owns and operates a fleet of cloud computing assets in Kazakhstan representing 276 petahash/second (PH/s) of computing power. Pursuant to the share purchase agreement among Squire, OpCo and Mr. Calvin Ayre dated March 22, 2019 (the “Share Purchase Agreement”) Squire purchased OpCo for a purchase price of C$24.1 million (inclusive of operational prepayments and subject to post‐closing adjustments) satisfied by issuance of an unsecured convertible debenture accruing interest at 15% per annum and due May 1, 2020. The debenture may be satisfied on maturity (or at any time after the date that is nine months following closing) in whole or in part, at the option of the holder, by common shares of Squire at a valuation of C$0.45 per share or, at the option of Squire (at any time after March 27, 2020), pursuant to a formula based on its then current
trading price and subject to a floor of C$0.30.
At the time the Share Purchase Agreement was executed, the OpCo assets were cash positive after operational expenses (at then current market prices). The price of bitcoin has increased significantly since that time and management expects that OpCo operations will remain proportionately cash positive. Financial data with respect to cloud computing operations is expected to be made available in Squire’s second quarter financial statements.
The parties remain committed to completing the remainder of the acquisitions announced by way of Squire’s press release of November 30, 2018, as updated on March 25, 2018, in connection with an extension of exclusivity in respect of such negotiations until June 30, 2019. Canaccord Genuity Corp. acted as financial advisor to Squire in connection with the transaction.
A copy of the Share Purchase Agreement will be filed under Squire’s profile on SEDAR (www.sedar.com).
In addition, Squire has entered into a perpetual license agreement for custom cloud computing management and pooling software and source code (together referred to as the “Software”) from a private development group based in the United Kingdom (“Licensor”). In consideration of the license of the Software, Squire shall pay to Licensor the sum of £1,500,000, payable in four installments with the first payment due upon signing with the remaining installments payable every six months following.