The publicly-listed cryptocurrency mining company Argo Blockchain (NASDAQ: ARBK), has entered into an agreement to sell its data center located in Mirabel, Quebec for $6.1 million.
It also disclosed its monthly mining output numbers, showing a decreased daily Bitcoin (BTC) production that fell 21% on a monthly bassi.
The sale of the Mirabel facility, which has 5 megawatts of electrical capacity, represents a price of $1.2 million per megawatt. Argo expects the net proceeds from the transaction to first repay the outstanding mortgage on the Mirabel site, with the remaining funds used to reduce debt owed to Galaxy Digital Holdings Ltd.
According to pro forma figures provided by Argo, the divestiture is expected to decrease the company’s overall debt burden by $5.4 million to $55.2 million. This includes lowering the Galaxy debt balance to $14 million – a 60% reduction from
the original $35 million loan.
Argo CEO
Thomas Chippas hailed the deal as demonstrating the firm’s “continued
commitment to strengthening the balance sheet” through debt reduction and
lowering expenses outside of cryptocurrency mining.
🚨New RNS🚨
Argo announces the upcoming sale of its data center in Mirabel, QC. Key highlights:
🔸$6.1m purchase price ($1.2m / MW)
🔸Streamlines Quebec operations & lowers operating expenses
🔸Net proceeds used for debt reductionFull RNS: https://t.co/sPpRBKp7yx#ARB $ARBK
— Argo (@ArgoBlockchain) March 5, 2024
Crucially,
Argo states it will maintain ownership of all mining machines currently
installed at the Mirabel location. The company plans to relocate the equipment
to its facility in Baie Comeau and anticipates selling certain older-generation
miners representing around 140 petahashes per second (PH/s) of hashing power.
After these moves, Argo’s total hashrate capacity is projected to be 2.7
exahashes per second (EH/s).
“We are
able to exit the Mirabel Facility with a high multiple on its power capacity,
and we also realize a premium on this real estate asset while maintaining a
strong hashrate capacity of 2.7 EH/s,” Chippas added.
The
divestiture provides operational benefits by consolidating all of Argo’s
self-mining activities at its Baie Comeau site. It is also expected to reduce
the company’s annual non-mining operating expenses by $700,000.
The
transaction is anticipated to close by the end of March 2024, subject to
customary closing conditions and regulatory approvals.
February Production Down
on Maintenance Outage
In other
news, Argo disclosed that it mined 92 Bitcoins in February at a rate of 3.2 BTC
per day – a 21% decrease in daily production compared to January.
The company
attributed the lower output primarily to a 77-hour maintenance outage earlier
in the month at the Cottonwood electrical substation owned by a third party.
Higher average Bitcoin network difficulty in February versus January also
impacted production levels.
“Despite
the decrease in Bitcoin production due to maintenance on the Cottonwood
substation, we expect that our realized power prices at Helios for February
will be significantly lower than normal due to favorable power market
conditions,” said Chippas. “Lower power prices will have a beneficial impact on
our mining profit, mining margin, and operating cash flow for the month.”
Argo
reported earning $4.5 million in mining revenue during February, down 15% from
$5.3 million in January. As of February 29th, the company held digital assets
equivalent to 14 bitcoin on its balance sheet.
Argo Blockchain Undergoes
C-Level Changes
Argo
Blockchain has undergone notable changes within its leadership ranks. Seif
El-Bakly has stepped down from his role as Chief Operating Officer, after
serving as the Interim Chief Executive Officer from February to November 2023.
Following
El-Bakly’s departure, the operations team will continue under the stewardship
of Chief Strategy Officer Sebastien Chalus, who has been spearheading
operations since February 2023. As part of a separation agreement, Argo
Blockchain issued 1,973,892 new ordinary shares to El-Bakly.
In a
separate move to bolster its financial position, Argo Blockchain has
successfully secured £7.8 million ($9.9 million) through a share placement with
institutional investors. The company issued 38,064,000 new ordinary shares
priced at £0.205 per share, representing a slight discount to the 30-day
average price.
The raised
funds will provide working capital, facilitate debt repayment, and support
general corporate purposes. This capital injection positions Argo Blockchain
for continued operational stability and future growth prospects.
The
publicly-listed cryptocurrency mining company Argo Blockchain (NASDAQ: ARBK), has entered into an agreement to sell its data center located in
Mirabel, Quebec for $6.1 million.
It also
disclosed its monthly mining output numbers, showing a decreased daily Bitcoin (BTC)
production that fell 21% on a monthly bassi.
The sale of
the Mirabel facility, which has 5 megawatts of electrical capacity, represents
a price of $1.2 million per megawatt. Argo expects the net proceeds from the
transaction to first repay the outstanding mortgage on the Mirabel site, with
the remaining funds used to reduce debt owed to Galaxy Digital Holdings Ltd.
According
to pro forma figures provided by Argo, the divestiture is expected to decrease
the company’s overall debt burden by $5.4 million to $55.2 million. This
includes lowering the Galaxy debt balance to $14 million – a 60% reduction from
the original $35 million loan.
Argo CEO
Thomas Chippas hailed the deal as demonstrating the firm’s “continued
commitment to strengthening the balance sheet” through debt reduction and
lowering expenses outside of cryptocurrency mining.
🚨New RNS🚨
Argo announces the upcoming sale of its data center in Mirabel, QC. Key highlights:
🔸$6.1m purchase price ($1.2m / MW)
🔸Streamlines Quebec operations & lowers operating expenses
🔸Net proceeds used for debt reductionFull RNS: https://t.co/sPpRBKp7yx#ARB $ARBK
— Argo (@ArgoBlockchain) March 5, 2024
Crucially,
Argo states it will maintain ownership of all mining machines currently
installed at the Mirabel location. The company plans to relocate the equipment
to its facility in Baie Comeau and anticipates selling certain older-generation
miners representing around 140 petahashes per second (PH/s) of hashing power.
After these moves, Argo’s total hashrate capacity is projected to be 2.7
exahashes per second (EH/s).
“We are
able to exit the Mirabel Facility with a high multiple on its power capacity,
and we also realize a premium on this real estate asset while maintaining a
strong hashrate capacity of 2.7 EH/s,” Chippas added.
The
divestiture provides operational benefits by consolidating all of Argo’s
self-mining activities at its Baie Comeau site. It is also expected to reduce
the company’s annual non-mining operating expenses by $700,000.
The
transaction is anticipated to close by the end of March 2024, subject to
customary closing conditions and regulatory approvals.
February Production Down
on Maintenance Outage
In other
news, Argo disclosed that it mined 92 Bitcoins in February at a rate of 3.2 BTC
per day – a 21% decrease in daily production compared to January.
The company
attributed the lower output primarily to a 77-hour maintenance outage earlier
in the month at the Cottonwood electrical substation owned by a third party.
Higher average Bitcoin network difficulty in February versus January also
impacted production levels.
“Despite
the decrease in Bitcoin production due to maintenance on the Cottonwood
substation, we expect that our realized power prices at Helios for February
will be significantly lower than normal due to favorable power market
conditions,” said Chippas. “Lower power prices will have a beneficial impact on
our mining profit, mining margin, and operating cash flow for the month.”
Argo
reported earning $4.5 million in mining revenue during February, down 15% from
$5.3 million in January. As of February 29th, the company held digital assets
equivalent to 14 bitcoin on its balance sheet.
Argo Blockchain Undergoes
C-Level Changes
Argo
Blockchain has undergone notable changes within its leadership ranks. Seif
El-Bakly has stepped down from his role as Chief Operating Officer, after
serving as the Interim Chief Executive Officer from February to November 2023.
Following
El-Bakly’s departure, the operations team will continue under the stewardship
of Chief Strategy Officer Sebastien Chalus, who has been spearheading
operations since February 2023. As part of a separation agreement, Argo
Blockchain issued 1,973,892 new ordinary shares to El-Bakly.
In a
separate move to bolster its financial position, Argo Blockchain has
successfully secured £7.8 million ($9.9 million) through a share placement with
institutional investors. The company issued 38,064,000 new ordinary shares
priced at £0.205 per share, representing a slight discount to the 30-day
average price.
The raised
funds will provide working capital, facilitate debt repayment, and support
general corporate purposes. This capital injection positions Argo Blockchain
for continued operational stability and future growth prospects.