In a strategy update released this morning, Argo Blockchain [LON: ARB] has informed the market that the previously disclosed parameters of a non-binding agreement to fund £24 million will not be actualized.
The Crypto Miner Searching for Alternative Funding Forms
The AIM-quoted firm stated that it is actively looking into further financing alternatives while taking measures to “further maximize liquidity and preserve capital.”
It also stated that the sale of 3,843 brand-new, in-box Bitmain S19J Pro machines—the final batch of the initial Bitmain order scheduled for installation in October 2022—raised almost £4.8 million (US$ 5.5 million).
The business said that, as a result, its overall hash rate capacity remained at 2.5 EH/s.
There Is No Assurance of Final Agreements
There are no promises that it will sign any definitive agreements. Moreover, any agreed transactions have been left to question. These developments come even though Argo is looking into additional financing options.
If Argo cannot secure more funding, the Company will soon experience negative cash flow and have to scale back or stop operations.
The Company seeks to consummate such financing arrangements to provide it with operating capital adequate to meet its present needs for at least 12 months following the date hereof.
Highlighting Previously Revealed Strategic Plans
As previously stated, on October 7, 2022, the Company entered into a non-binding letter of intent (LOI) with a strategic investor to fund about $27 million ($24 million) through the subscription of ordinary shares. The Company, however, no longer thinks that it will meet the previously disclosed terms for this subscription to complete. Argo was still looking at more funding sources.
Compared to August 2022’s mining output of 235 BTC, Argo mined 215 Bitcoin or Bitcoin Equivalents in September. A 12% rise in the average network difficulty during September is mostly to blame for the drop in BTC mined.
In addition, the Company was keeping its policy of limiting operations at its Helios facility in Dickens County, Texas, during times of high electricity rates.
A total of 167 of the 512 bitcoin the Company possessed as of September 30, 2022, were BTC Equivalents. To manage its BTC holdings and reduce risk exposure, the Company actively employs a range of derivatives and regularly analyzes market circumstances.
Based on daily exchange rates and crypto prices, mining income for September came to £3.78 million {$4.27 million*}, and in August 2022 £4.39 {$5.23 million}respectively.
For September, Argo generated this money at a mining margin of 25% for bitcoin and bitcoin equivalents (up from 20% in August 2022).
However, By the end of October 2022, the Company hoped to have installed all of its Bitmain S19J Pro machines, which will give it a total hashrate capacity of 2.5 EH/s.
The Company anticipates achieving an entire hashrate degree of 2.9 EH/s once the installation is complete, after accounting for the sale of 3,400 mining machines to a third party reported on October 7, 2022.
Source: https://crypto.news/argo-blockchain-plc-release-update-on-strategy-business-and-operations/