Winter storms hit Argo Blockchain PLC’s December bitcoin inflows, but company upbeat on ‘beginning of a new chapter’

Argo Blockchain PLC (LSE:ARB, OTCQX:ARBKF, NASDAQ:ARBK, ETR:0XP) mined 147 bitcoin (BTC) or bitcoin equivalents in December compared to 198 the month prior, according to the group’s latest operational update.

The month-on-month reduction was due to the curtailment of mining operations at the Helios facility in Texas in response to a winter storm that impacted much of the US.

As of the end of 2022, Argo held 141 BTC, of which 116 were BTC equivalents, and total company hashrate remained at 2.5 EH/s.

Based on daily foreign exchange rates and cryptocurrency prices during the month, mining revenue in December amounted to US$2.49mln (£2.07mln based on exchange rates at the time) with an income margin of 48%).

The company closed on a series of agreements with Galaxy Digital (TSX-V:GLXY) Holdings to sell its Helios facility for US$65mln, refinance existing equipment financing loans with a new US$35mln asset-backed loan from Galaxy, and host Argo’s mining machines at Helios.

These deals improved Argo’s balance sheet and liquidity by reducing total indebtedness by US$41mln, plus increasing its cash position.

In connection with the sale of Helios and shifting priorities for the company, chief growth officer Justin Nolan and data centre operations vice president Theodore Papadakis have left Argo.

Chief executive Peter Wall said: “While our mining results for December were lower than anticipated, the primary driver was the winter storm which led us to curtail operations at Helios. 

“We made this decision in order to not only reduce power usage on the grid, but also to prioritise the needs of the local community and safety of our Helios employees.”

Commenting on the Galaxy transaction, Wall said: “These agreements with Galaxy mark the beginning of a new chapter for Argo. We built a world-class mining facility at Helios, and I believe that Galaxy has the right team and resources to build upon the foundation that Argo established. 

“This deal also allows Argo to continue our mining operations, both at Helios as a hosted customer, as well as at our owned-and-operated facilities in Quebec. I look forward to sharing more details on our growth strategy for 2023 and beyond in due course.”

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