Argo Blockchain plc, a leader in the cryptocurrency mining industry, is excited to share news of a significant step towards strengthening its financial position. The company has successfully entered an agreement to sell its data center located in Mirabel, Quebec, known as the “Mirabel Facility,” for a total of USD 6.1 million. This transaction underscores Argo’s commitment to optimizing its operations and enhancing its balance sheet.
Strategic Sale and Deleveraging Effort
The sale price of $1.2 million per megawatt, based on the Mirabel Facility’s five megawatts of electrical capacity, reflects a strategic valuation of the asset. Proceeds from this transaction will primarily be allocated towards fully repaying the outstanding mortgage on the Mirabel Facility, with the remaining funds directed to reducing debt owed to Galaxy Digital Holdings, Ltd.
This transaction is expected to significantly reduce Argo’s outstanding debt by $5.4 million, with a subsequent reduction in the Galaxy debt balance to $14.0 million—a 60% decrease from the original $35.0 million balance.
Minimal Impact on Revenue, Enhanced Operational Efficiency
Argo emphasizes that this sale will not adversely affect the company’s revenue. All mining machines currently stationed at the Mirabel Facility are owned by Argo and will be relocated to the Baie Comeau facility. The transition also involves the sale of certain older-generation machines, contributing to a refined operational focus.
Post-transaction, Argo’s total hash rate capacity is projected to remain robust at 2.7 EH/s. This consolidation of mining operations at the Baie Comeau site is expected to streamline processes and reduce non-mining operating expenses by $0.7 million annually.
Expected Transaction Closure and Management Commentary
The completion of this sale is anticipated by the end of March 2024, pending customary closing conditions, including regulatory approvals and the finalization of a definitive share purchase agreement.
Thomas Chippas, CEO of Argo, expressed optimism about the transaction, noting, “This Transaction demonstrates the Company’s continued commitment to strengthening the balance sheet through a focus on aggressive deleveraging and reducing non-mining operating expenses. We can 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 hash rate capacity of 2.7 EH/s.”
February Operational Update
Despite a maintenance-related outage affecting Bitcoin production in February, Argo mined 92 Bitcoin, translating to 3.2 Bitcoin per day. The company anticipates lower power prices for February due to favorable market conditions, positively impacting mining profit, margin, and operating cash flow.
Forward-Looking Statements and Corporate Vision
This announcement contains forward-looking statements, reflecting Argo’s strategic direction and operational forecasts. The company, with its sustainable, global mining operations, remains committed to being at the forefront of the cryptocurrency mining industry, continually seeking ways to enhance financial performance and operational efficiency.
Argo Blockchain plc is dedicated to advancing its mission as a dual-listed, climate-positive cryptocurrency mining company, with a clear focus on leveraging renewable energy sources to power its expanding global operations.
