Argo Blockchain cuts 2022 debt by half, down to $75M

August 29, 2023 Coin Telegraph

Argo

Cryptocurrency mining firm Argo Blockchain has reduced its debts to $75 million through the first half of 2023.

The Argo Blockchain mining company, which has been one of a number of firms to struggle amid negative market conditions and a highly competitive mining ecosystem, reported half year net losses of $18.8 million in 2023, down over 50% from a net loss of $39.6 million in H1 2022.

Argo also notes that it has reduced its debt by $4 million in 2023, taking its total debt to $75 million. The company has cut its debt by $68 million, having owed $143 million in June 2022.

Revenues were down by 31% in comparison to H1 2022, with Argo netting $24 million midway through 2023, which it linked to a decrease in the value of Bitcoin (BTC) and an increase global hash rate and the associated network difficulty.

Argo reports that it mined a total of 947 BTC through the first half of the year, an increase of just 1% of the BTC mined during the same period in 2022. It is worth noting that 2023 has seen a 78% increase in global hash rate.

As of June 2023, Argo’s balance sheets reflect $9.1 million of cash holdings and 46 BTC. Argo began the second half of the year by raising $7.5 million in gross proceeds through a share placement in July 2022 offered to institutional and retail investors.

While the company had warned that it faced the reality of bankruptcy in late 2022, its 2023 interim half year results indicate that it plans to increase its total hash rate capacity to 2.8 exahases per second (EH/s) by deploying some 1,628 BlockMiners to its Quebec-based mining facilities.

Argo also reported that it was in advanced discussions to sell “certain non-core assets” and was exploring other options to reduce its overall debt.

Argo board chairman Matthew Shaw highlighted a “transformational series of transactions” with Galaxy Digital in which it sold its Helios mining facility and property for $65 million in December 2022. Argo then refinanced a new $35-million, three-year asset backed loan with Galaxy.

“The transactions reduced total indebtedness by $41 million and allowed Argo to simplify its operating structure.”

Shaw added that Argo’s ability to maintain a fleet of more than 27,000 miners was crucial to its ongoing operations, with some 23,600 Bitmain S19J Pro operating at the Helios site through an ongoing hosting agreement with Galaxy.

Argo had previously warned that it was facing dire financial circumstances in late 2022 before it struck a deal with Galaxy for its Helios facility. In the months following the closure of the deal, former Argo CEO Peter Wall announced his resignation from the company.

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Marathon Digital attributes 21% decline in Bitcoin mined to adverse weather conditions

July 9, 2023 Coin Telegraph

Argo Blockchain

Marathon Digital also noted that the decrease in transaction fees for June was not a cause for concern, highlighting that Bitcoin Ordinals had provided a boost in the previous month.

Bitcoin mining company Marathon Digital has linked the recent slump in its total amount of Bitcoin's (BTC) mined in June to the weather conditions in Texas and a drop in transaction fees.

According to a July 5 statement, Marathon Digital experienced a “21%" decline in June for the total amount of Bitcoin mined compared to the previous month of May.

The primary reason cited for the decline of production in June – which saw 979 Bitcoin produced throughout the month – was the impact of the weather conditions in Texas, where Marathon's main operations are located.

It's worth noting that June marks the transition from spring to summer in Texas.

“The decreased production relative to last month was due to weather-related curtailment in Texas and a significant decrease in transaction fees.”

*Marathon Digital's Operational Highlights and Updates. Source: Marathon GlobeNewsWire*

Cointelegraph previously reported on Feb 6 that crypto mining firm Riot Platforms saw 17,040 rigs go offline at its operations in Texas due to “severe winter weather” in the state.

It was further explained that Marathon Digital’s transaction fees fell to approximately “5.1%” of the total Bitcoin earned in June, compared to “11.8%” earned in May.

It was noted that the “emergence” of Bitcoin Ordinals significantly increased transaction fees in May, adding that while network congestion eased in June, the company still has a positive outlook for the “future of mining economics.”

This is not the first time that weather this time of year in Texas has had a major impact on crypto miners.

In July 2022, Peter Wall, CEO of crypto mining company Argo Blockchain, which operates a data center in West Texas, told Cointelegraph that the company curtails mining operations when ERCOT sends out a conservation alert.

In more recent news, a report released on July 5 by cryptocurrency analytics platform Coin Metrics revealed that Bitcoin miners made a $184 million from transaction fees in the second quarter of 2023, which is more than they made throughout the entire year of 2022.

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Argo Blockchain accused of misleading investors in class action lawsuit

January 27, 2023 Coin Telegraph

Argo Blockchain

After a torrid 2022 that saw it sell off its flagship mining facility, Argo Blockchain's woes are worsening after a recent class action suit.

Investors of crypto mining firm Argo Blockchain have filed a class action lawsuit accusing the miner of making untrue statements and omitting key information during its initial public offering (IPO) in 2021.

A newly filed lawsuit on Jan. 26 is aimed at Argo and several of its executives and board members. It claims the firm failed to disclose how susceptible it was to capital constraints, electricity costs and network difficulties.

"The Offering Documents were negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading," the lawsuit read.

As a result, the investors claim the business was “less sustainable” than they had been led to believe which led to an overstatement of the miner’s financial prospects. The complaint noted:

“Had [the investors] known the truth, they would not have purchased or otherwise acquired said securities, or would not have purchased or otherwise acquired them at the inflated prices that were paid.”

Argo released the information in question on Sep. 23, 2021, when the firm filed documents with the United States Securities and Exchange Commission (SEC) relating to its IPO.

7.5 million shares were issued to the public on the same date at an offering price of $15 resulting in proceeds of $105 million before expenses.

Since then, the miner’s share price has taken a beating and is currently trading at $1.96 per share after having fallen as low as $0.36.

*The share price decline of Argo Blockchain from Sep. 2021 to present. Source:* *Yahoo! Finance*

Cointelegraph requested comment from Argo but did not immediately receive a response.

The recent lawsuit comes just days after Argo regained compliance with Nasdaq’s listing rule on Jan. 23, which requires a company to maintain a minimum closing bid price of $1 for 10 consecutive trading days.

Argo has had to make some difficult decisions to weather the ongoing bear market and tough conditions facing crypto miners. It announced on Dec. 28 that it would be selling its flagship mining facility, Helios, to digital asset investment manager Galaxy Digital for $65 million.

The Helios mining facility during its grand opening. Source: YouTube

Crypto miners in general had a torrid year in 2022 — with high electricity prices, falling crypto prices and increased mining difficulty all eating into their bottom line.

Mike Novogratz calls Helios a ‘transformative acquisition’ for Galaxy

December 30, 2022 Coin Telegraph

Argo Blockchain

The Galaxy CEO seems unfazed by the carnage in the BTC mining sector this year, and outlined that the firm is looking to significantly ramp up its mining initiatives.

Galaxy Digital Holdings CEO Mike Novogratz has called the Helios mining deal a “transformative acquisition” for the firm as it works to increase its exposure to the Bitcoin mining sector.

The crypto investment firm’s $65 million acquisition of Argo Blockchain’s flagship mining facility was announced on Dec. 28 as part of Argo’s drastic action to stave off bankruptcy.

Tweeting about the deal on Dec. 29, Novogratz emphasized that Galaxy is a “strong believer” in the long-term future of Bitcoin (BTC) and the company will continue to ramp up its mining initiatives:

“Bear markets are for building. We’re long-term believers in BTC and expect the lowest-cost miners to win over time. Helios is a transformative acquisition that will expand our mining capabilities and services as we continue to build for the decentralized future.”

Since we started mining bitcoin in Q1 2021, we outsourced our miners to hosting providers. But we always had the idea that we would vertically integrate our mining capabilities.
— Mike Novogratz (@novogratz) December 28, 2022

Explaining the deal in further detail, the Galaxy CEO outlined that the firm has a specific “thesis” on how to approach the mining sector:“low-cost electricity, a very efficient team” and “buying ASIC miners cheap.”

“That’s a recipe for success in mining, even when the hash rate rises,” he said.

Recent data from Hashrate Index found that Bitcoin ASIC miner prices are hovering at lows not seen since at least 2021, with the most efficient ASIC miners seeing their prices fall 86.8% from their peak in May 2021.

Galaxy has five business lines across trading, asset management, crypto mining, venture investments and investment banking. According to its website, it currently has $1.9 billion worth of assets under management.

As it stands, Galaxy has mainly utilized hosting services for its mining operations. However, Novogratz notes that owning 200 megawatt (MW) capacity Helios will not only let the company run miners on its own site but host for others as well.

Helios potentially has a lot of scaling ability to make it one of the biggest miners on the market. Argo Blockchain previously outlined in May this year that it had plans to increase electrical capacity to 800MW in “the coming years.”

At the time, the firm also said it expected Helios to reach a BTC mining capacity of 5.5 exahashes per second by the end of the year, with the potential to eventually hit 20 EH/s.

It appears that Galaxy has some cash to splash amid the 2022 bear market, considering that it also gave Argo Blockchain a $35 million equipment finance loan alongside the acquisition.

The move also adds another coup from earlier this month, when Galaxy snapped up crypto self-custody platform GK8 for an undisclosed fee.

GK8 was being auctioned off as part of the Celsius bankruptcy process, after the defunct crypto lender snapped up the firm for $115 million in 2021.

Novogratz called the acquisition a “crucial cornerstone in our effort to create a truly full-service financial platform for digital assets.”

Bitcoin Miner Argo Blockchain Sells Helios Facility to Galaxy Digital for $65 Million, Galaxy to Host Argo’s ASIC Fleet in Texas

December 29, 2022 Bitcoin.com

Publicly-Listed Bitcoin Miner Argo Blockchain Suspends Nasdaq Trading

December 27, 2022 Bitcoin.com

Bitcoin Miner Greenidge Enters Non-Binding Debt Restructuring Deal With NYDIG

December 20, 2022 Bitcoin.com

Argo Blockchain reports insufficient funds, ‘no assurance’ it can avoid Chapter 11 bankruptcy

December 12, 2022 Coin Telegraph

Argo Blockchain

According to the mining firm, “inadvertently published materials” led to the suspension of trading of Argo Blockchain on the London Stock Exchange and Nasdaq on Dec. 9.

Crypto mining firm Argo Blockchain has reported it had been negotiating to sell assets and “engage in an equipment financing transaction” in an effort to avoid filing for bankruptcy.

In a Dec. 12 announcement, Argo Blockchain said it was at risk of having insufficient funds to continue operating within a month, and was in the middle of “advanced negotiations” to sell certain assets. Though the mining firm said it had not filed for Chapter 11 bankruptcy in the United States, “inadvertently published materials” related to the company’s financial situation led to the suspension of trading on the London Stock Exchange, or LSE, and Nasdaq on Dec. 9.

Argo reported it had resumed trading on the London Stock Exchange as of Dec. 12, but there was no data recorded with the LSE at the time of publication. Shares of the mining firm closed at $0.69 on the Nasdaq on Dec. 8, and 6.70 pounds on the LSE.

“The Company is hopeful that it will be able to consummate the transaction outside of a voluntary Chapter 11 bankruptcy filing in the United States, although there is no assurance that the Company can avoid such a filing,” said Argo. “The Company has requested that the UK Financial Conduct Authority restore the listing of its ordinary shares and that is expected to happen as soon as practicable.”

New RNS just out with an update on the restoration of trading on the LSE:https://t.co/6vH9PX8SET #ARB $ARBK #BTC pic.twitter.com/Oqu7oZ9sSH
— Argo (@ArgoBlockchain) December 12, 2022

The mining firm reported in October that it was at risk of becoming cash flow negative “in the near term” should it fail to raise needed capital to continue operations. Amid the bear market, Argo reported selling some of its mined Bitcoin (BTC) holdings to pay down a loan from Galaxy Digital, from which it secured crypto-backed loan agreements in 2021.

As of Nov. 30, Argo reported holding 126 BTC and Bitcoin equivalents. The price of the cryptocurrency was $17,033 at the time of publication.

Should Argo file for Chapter 11, it would be the latest in a string of crypto firms reporting financial difficulties amid a bear market. Many global regulators and lawmakers have pointed to the collapse of Terraform Labs, Celsius Network, Voyager Digital, BlockFi, and most recently FTX in criticisms of the crypto market.

Publicly-Listed Bitcoin Miner Argo Blockchain’s Stock Gets Downgraded, Firm Offloads Close to 4,000 Bitmain Miners

November 2, 2022 Bitcoin.com

BTC miner CleanSpark scoops up thousands of miners amid ‘distressed markets’

November 2, 2022 Coin Telegraph

Antminer S19J Pro Bitcoin Mining Machines

CleanSpark bought over 3,800 mining machines at $15.50 per terahash – far below the current market price of $22.94 and an 85.4% discount from the all-time high costs of $106.62 in Dec. 2021.

Sustainability-focused Bitcoin (BTC) mining company CleanSpark has snapped up another 3,843 cryptocurrency miners amid a backdrop of mining industry consolidation.

The $5.9 million purchase of the Antminer S19J Pro Bitcoin miners announced by the company on Nov. 1 came at a price of $15.50 per terahash — far cheaper than the current market price of $22.94 for a machine with the same efficiency according to data from Hashrate Index.

The purchase has brought its total number of machines to around 50,000 according to the company.

CleanSpark said it's purchased 26,500 miners since the start of the "bear market conditions" — a time when many mining firms have been forced to sell off mining equipment or even consider filing for bankruptcy.

There is a possibility that the miners were purchased from competitor Argo Blockchain as an Oct. 31 update from Argo shows it sold 3,843 Bitmain S19J Pro machines, the exact amount and miner model that CleanSpark purchased.

Cointelegraph contacted CleanSpark and Argo Blockchain to confirm if a transaction took place between the companies but did not immediately hear back.

While other Bitcoin miners are struggling in the prevailing market conditions, CEO Zach Bradford said an “unwavering focus” on sustainability, a strong balance sheet, and its operating strategy has enabled CleanSpark to “acquire machines at incredible prices, grow our hashrate, and increase our daily Bitcoin production.”

In an earlier interview with Cointelegraph Matthew Schultz, executive chairman of CleanSpark, said one of CleanSpark’s operating strategies has been to view Bitcoin mining as a “potential solution for creating more opportunities for energy development.”

For example, CleanSpark partners with various city councils in the United States to buy excess energy in order to improve the efficiency of its mining operations – but it also cuts down energy costs for those communities too, Schultz explained:

“These cities essentially become our utility provider. They make a margin on every kilowatt hour we buy to conduct our mining operations. Yet, we are buying such high quantities of energy that it brings down energy costs for the communities we work with.”

But with Bitcoin mining difficulty increasing and profitability decreasing, mining companies will need to look for new ways to diversify their revenue streams in order to stay afloat, while some companies may have no option but to consolidate to stay in the game.

That was the case with Colorado-based Bitcoin miner Crusoe Energy Systems, who bought the operating assets of portable BTC mining operator Great American Mining (GAM).

CleanSpark also bought a 36MW facility in Washington, Georgia in Aug. 2022, and recently acquired an 80MW facility in Sandersville, Georgia in Oct. 2022 to go alongside its two existing mining facilities.

Despite CleanSpark’s recent success, its stock price dropped 6.32% to $3.26 on Nov. 1 according to Yahoo Finance — however, the fall was representative of the broader Bitcoin mining sector.

Argo Blockchain

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