Mar 06, 2024 12:25
Thepublicly-listed cryptocurrency mining company Argo Blockchain (NASDAQ: ARBK), has entered into an agreement to sell its data center located inMirabel, Quebec for $6.1 million.
It further disclosed its monthly mining output numbers, showing a decreased daily Bitcoin (BTC)production that fell 21% on a monthly basis.
Argo Blockchain SellsQuebec Data Center for $6.1 Million
The sale ofthe Mirabel facility, which has 5 megawatts of electrical capacity, representsa price of $1.2 million per megawatt. Argo expects the net proceeds from thetransaction to first repay the outstanding mortgage on the Mirabel site, withthe remaining funds used to reduce debt owed to Galaxy Digital Holdings Ltd.
Accordingto pro forma figures provided by Argo, the divestiture is expected to decreasethe company's overall debt burden $5.4 million to $55.2 million. Thisincludes lowering the Galaxy debt balance to $14 million, a 60% reduction fromthe original $35 million loan.
Argo's CEO, Thomas Chippas, hailed the deal as demonstrating the firm's "continuedcommitment to strengthening the balance sheet" through debt reduction andlowering expenses outside of cryptocurrency mining.
New RNSArgo 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 expensesNet proceeds used for debt reductionFull RNS: https://t.co/sPpRBKp7yx#ARB $ARBK
Argo (@ArgoBlockchain)
March 5, 2024Argo states it will maintain ownership of all mining machines currentlyinstalled at the Mirabel location. The company plans to relocate the equipmentto its facility in Baie Comeau and anticipates selling certain older-generationminers representing around 140 petahashes per second of hashing power.After these moves, Argo's total hashrate capacity is projected to be 2.7exahashes per second (EH/s).
We areable 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 astrong hashrate capacity of 2.7 EH/s, Chippas added.
Thedivestiture provides operational benefits by consolidating all of Argo'sself-mining activities at its Baie Comeau site. It is also expected to reducethe company's annual non-mining operating expenses by $700,000.
Thetransaction is anticipated to close by the end of March 2024, subject tocustomary closing conditions and regulatory approvals.
February Production Downon Maintenance Outage
In othernews, Argo disclosed that it mined 92 Bitcoins in February at a rate of 3.2 BTCper day, a decrease of 21% in daily production compared to January.
The companyattributed the lower output primarily to a 77-hour maintenance outage earlierin the month at the Cottonwood electrical substation owned by a third party.Higher average Bitcoin network difficulty in February versus January alsoimpacted production levels.
Despitethe decrease in Bitcoin production due to maintenance on the Cottonwoodsubstation, we expect that our realized power prices at Helios for Februarywill be significantly lower than normal due to favorable power marketconditions, said Chippas. Lower power prices will have a beneficial impact onour mining profit, mining margin, and operating cash flow for the month.
Argoreported earning $4.5 million in mining revenue during February, a drop of 15% from$5.3 million in January. As of February 29th, the company held digital assetsequivalent to 14 bitcoin on its balance sheet.
Argo Blockchain UndergoesC-Level Changes
ArgoBlockchain has undergone notable changes within its leadership ranks. SeifEl-Bakly has stepped down from his role as Chief Operating Officer, afterserving as the Interim Chief Executive Officer from February to November 2023.
FollowingEl-Bakly's departure, the operations team will continue under the stewardshipof Chief Strategy Officer Sebastien Chalus, who has been spearheadingoperations since February 2023. As part of a separation agreement, ArgoBlockchain issued 1,973,892 new ordinary shares to El-Bakly.
In aseparate move to bolster its financial position, Argo Blockchain hassuccessfully secured £7.8 million ($9.9 million) through a share placement withinstitutional investors. The company issued 38,064,000 new ordinary sharespriced at £0.205 per share, representing a slight discount to the 30-dayaverage price.
The raisedfunds will provide working capital, facilitate debt repayment, and supportgeneral corporate purposes. This capital injection positions Argo Blockchainfor continued operational stability and future growth prospects.
This article was written by Damian Chmiel at www.financemagnates.com.
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