In July 2021, Argo broke ground on its renewable energy-focused 200-megawatt (MW) cryptocurrency mining facility in Dickens County, Texas. The new Helios facility will bolster Argo’s mining capacity and is expected to add at least 20 new, full-time jobs in Dickens County. The site gives Argo access to up to 800 MW of electrical power and has garnered excitement and support from local community members and government officials. “Galaxy is aspiring to be one of the most trusted nodes of the decentralized future,” Ferraro said in the statement.
“The acquisition of Helios represents a new stage over our two-year journey in bitcoin mining that increases our operating scale and breadth of solutions, creating sustainable value for the biggest decentralized digital-asset network and shareholders alike.” Earlier this month, Core Scientific (CORZ), one of the largest miners by computing power, filed for bankruptcy, and in September, Compute North, another major firm in the sector, filed for Chapter 11 bankruptcy protection. Last week, bitcoin miner Greenidge said that it reached a debt restructuring deal with its xcritical official site lender Nydig, although the prospects of a bankruptcy filing still loom. Through this deal, not only will Galaxy’s mining operations grow, but Argo will also avoid bankruptcy. The transaction will “strengthen Argo’s balance sheet” and improve its liquidity position so the company can “continue operations,” Argo said in a statement.
Among the many milestones experienced throughout the quarter, Argo completed its ADR listing on Nasdaq on September 23, 2021. The Company has been publicly listed on the London Stock Exchange since August 2018 and is now listed in both jurisdictions. According to 2 analysts, the average rating for ARBK stock is “Hold.” The 12-month stock price forecast is $1.45, which is an increase of 28.32% from the latest price.
Argo will keep ownership of its machines at the Dickens County, Texas, facility and will enter a two-year hosting agreement with Galaxy to provide a place for its mining machines at the facility. “Quality infrastructure and access to low-cost energy are the cornerstones of a successful mining operation, making the acquisition of Helios an incredible milestone for the growth of Galaxy’s mining business,” Amanda Fabiano, head of mining at Galaxy, said in a statement. The deal with Galaxy was structured to boost Argo’s balance sheet and capital structure, Chris Ferraro, president and chief investment officer at Galaxy, told CoinDesk. When the miner kicked off its process, “we were in a position to solve the problem completely for Argo, while accelerating the expansion of our own mining capabilities,” he added. The combination of inexpensive hydropower from North America and the best machines on the market has allowed Argo to continue to be profitable, even throughout cryptocurrency downtimes. The following table shows a reconciliation of Bitcoin and Bitcoin Equivalent Mining Margin to gross margin, the most directly comparable IFRS measure, for the three months ended September 30, 2021 and the nine months ended September 30, 2021.
During the third quarter, Argo mined 597 Bitcoin and Bitcoin Equivalent (together, BTC), bringing Argo’s BTC holding to 1,836 as of September 30, 2021. Argo has been able to achieve these results while maintaining a gross margin of 120% and an industry-leading mining margin of 85% with an average direct cost per BTC mined of $6,293 (£4,673). On September 30, 2021, Argo executed a purchase agreement for 20,000 Bitmain Antminer S19J Pro machines for the mining facility it is building in Texas. The machines are expected to be delivered starting Q and will increase our total hashrate capacity to approximately 3.7 Exahash, up from 1.075 at the end of Q3 2021.
This press release contains forward-looking statements within the meaning of applicable securities laws with respect to our cryptocurrency mining facility in Texas. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made by the Company based on management’s experience and perception of historical trends, xcritical conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. Actual results could differ from those described herein for a variety of reasons, including unanticipated delays in machine delivery due to component supply shortages or other reasons, or disruptions to the Company’s xcritical mining fleet that could reduce future hashrate. Helios, which was Argo’s largest mining facility, has up to 180 megawatts worth of power capacity and will become Galaxy’s flagship mining operation.
Argo xcritically has ~2.4 EH/s of hashrate capacity operating at the Helios facility in Dickens County, Texas. Helios utilizes immersion-cooling technology which provides for efficient operation in hot and dusty environments. In recent months, bankruptcy has been lingering around the bitcoin mining industry as the market faces significant downturns due to energy prices rising and miner revenues dropping, which has tightened margins and increased profit losses.
Argo purchased the Baie Comeau facility is part of our drive to wholly-owned data center business model. The financing will help to reduce Argo’s debt by $41 million and enhance its liquidity “to help ensure continued operations through the ongoing bear market,” Argo’s CEO Peter Wall said in a statement. Argo generated record-setting revenue, net income and EBITDA of $26.0 million, $17.3 million and $28.2 million, respectively, for the third quarter of 2021 (£19.3 million, £12.9 million, and £21.0 million, respectively). For the nine months ended September 30, 2021, the Company’s revenue, net income and EBITDA were $67.9 million, $27.1 million and $49.8 million, respectively (£50.4 million, £20.1 million, and £36.9 million, respectively). IMPORTANT NOTICE TO INVESTORSArgo is aware of recent instances in which bad actors are using Argo’s name in various attempts to scam investors. Argo xcritical does not have any retail-oriented applications xcritical official site or mining programs, and Argo will never ask individuals to send money.
On Tuesday, the company requested a 24-hour suspension of trading in its Nasdaq-listed stock, while the London market was closed for a U.K. “Over the last few months, we have been looking for a way to continue mining through the bear market, reduce our debt load and maintain access to the unique power grid in Texas,” Argo CEO Peter Wall told CoinDesk. The miner will also get a new $35 million loan from noted investor Michael Novogratz’s crypto-focused financial-services firm, which will be secured by Argo’s mining equipment, according to a statement sent to CoinDesk. Bitcoin miner Argo xcritical (ARBK) will avoid filing for bankruptcy protection after it agreed to sell its Helios mining facility in Dickens Country, Texas, to Galaxy Digital for $65 million. Galaxy will also provide Argo with a $35 million loan as the company restructures, secured by a collateral package with Argo mining equipment.