TIDMARB
RNS Number : 9086N
Argo Blockchain PLC
07 June 2022
Press Release
7 June 2022
Argo Blockchain PLC
("Argo" or "the Company")
May 2022 Operational Update
Operational Update
Argo Blockchain plc, a global leader in cryptocurrency mining
(LSE: ARB; NASDAQ: ARBK), is pleased to provide the following
operational update for May 2022.
During the month of May, Argo mined 124 Bitcoin or Bitcoin
Equivalents (together, BTC) compared to 166 BTC in April 2022. The
reduction in BTC mined is attributable to several factors:
-- The Bitcoin network experienced an increase in difficulty,
leading to fewer BTC mined.
-- The Company's hashrate on Terra Pool produced substantially
lower Bitcoin than in previous months, primarily due to short-term
probabilistic outcomes. The Company continues to explore all
options to optimize its hashrate across alternative pools.
-- High temperatures in Texas led to increased energy demand and
higher electricity prices, to which the Company responded by
voluntarily curtailing mining operations and reducing its energy
usage at Helios.
-- The Company faced some limited instances of unplanned
downtime at Helios while bringing the new facility online.
Based on daily foreign exchange rates and cryptocurrency prices
during the month, mining revenue in May amounted to GBP3.07 million
[$3.89 million*] (April 2022: to GBP5.52 million [$6.83
million*]).
Argo generated this income at a Bitcoin and Bitcoin Equivalent
Mining Margin of 62% for the month of May (April 2022: 75%). This
reduction in mining margin was driven primarily by lower Bitcoin
price and fewer BTC mined.
As of May 31 2022, the Company held 2,379 Bitcoin, of which 187
were BTC Equivalents.
Helios Update
May 2022 marked the official commencement of mining operations
at Helios. During this month, the Company installed 2,500 S19J Pro
machines received as part of the machine swap agreement with Core
Scientific which was announced in March 2022. Additionally, the
Company began receiving and installing the S19J Pro machines that
it purchased from Bitmain, as announced in September 2021, which
increases the Company's mining fleet by approximately 3,000
machines per month. By the end of May, the Company had increased
its hashrate capacity by 300 PH/s to 1.9 EH/s. Argo Blockchain is
pleased to confirm that the installation of the 20,000 miners
purchased from Bitmain is anticipated to be completed by October
2022.
ePIC Blockchain Technologies Partnership Update
The Company is also pleased to provide the following update on
its collaboration with ePIC. Argo has executed a purchase agreement
for 6,600 custom mining machines, with a right to place additional
orders for up to 23,400 machines. The machines will utilize the
Intel ASIC Blockscale chips, for which the Company previously
signed a supply agreement with Intel (as announced in the Company's
February 2022 Monthly Operational Update). The custom machines will
be designed to Argo's specifications to optimize mining performance
and efficiency for use at the Helios facility, which uses immersion
cooling to seek to prolong the life of the machines and increase
operating performance.
"We have officially commenced mining at our new facility,
Helios, ahead of schedule, bringing to fruition months of hard work
and planning," said Peter Wall, Chief Executive Officer of Argo.
"The team expected minor issues and downtime as we brought systems
online, but we've completed 25% of the machine swap with Core
Scientific and installed an additional 300 PH/s, increasing our
total hashrate capacity to 1.9 EH/s. Moreover, we're delighted to
continue working with ePIC to develop custom rigs for use at
Helios. We share their passion for innovation and are always
looking at how we can better improve our operational performance
for the benefit of our shareholders. In making use of the most
advanced mining equipment, Argo continues to cement its position as
one of the most innovative, ambitious, and sustainable
cryptocurrency miners."
"We are proud of our collaboration with Argo," said Jim Seto,
CEO of ePIC Blockchain. "We have worked closely with Argo's
technical team on their innovative immersion solution and with
Intel engineers to design an advanced customized Bitcoin miner with
an eye to performance and efficient management of the mining
fleet."
Non-IFRS Measures
Bitcoin and Bitcoin Equivalent Mining Margin is a financial
measure not defined by IFRS. We believe Bitcoin and Bitcoin
Equivalent Mining Margin has limitations as an analytical tool. In
particular, Bitcoin and Bitcoin Equivalent Mining Margin excludes
the depreciation of mining equipment and so does not reflect the
full cost of our mining operations, and it also excludes the
effects of fluctuations in the value of digital currencies and
realized losses on the sale of digital assets, which affect our
IFRS gross profit. This measure should not be considered as an
alternative to gross margin determined in accordance with IFRS, or
other IFRS measures. This measure is not necessarily comparable to
similarly titled measures used by other companies. As a result, you
should not consider this measure in isolation from, or as a
substitute analysis for, our gross margin as determined in
accordance with IFRS.
The following table shows a reconciliation of gross margin to
Bitcoin and Bitcoin Equivalent Mining Margin, the most directly
comparable IFRS measure, for the months of March 2022 and April
2022.
Month Ended 30 April Month Ended 31 May
2022 2022
---------------------------- ------------------------------
GBP $ GBP $
Gross (loss) (1) (12,810,339) (17,300,281) (11,719,569) (14,650,191)
Gross Margin (253%) (253%) (377%) (377%)
Depreciation of mining
equipment 1,295,290 1,749,281 2,012,575 2,515,844
Charge in fair value
of digital currencies 14,649,214 19,783,670 11,031,576 13,790,157
Realized loss/(gain)
on sale of digital
currencies 657,423 887,846 601,801 752,289
Mining Profit 3,791,588 5,120,517 1,926,383 2,408,099
Bitcoin and Bitcoin
Equivalent Mining
Margin 75% 75% 62% 62%
------------------------ ------------- ------------- ------------- -------------
(1) Due to unfavourable changes in the fair value of Bitcoin and
Bitcoin Equivalents in April 2022 and May 2022 there was a loss on
change in fair value of digital currencies.
* Dollar values translated from pound sterling into U.S. dollars
using the noon buying rate of the Federal Reserve Bank of New York
as at the applicable dates.
Inside Information and Forward-Looking Statements
This announcement contains inside information and includes
forward-looking statements which reflect the Company's or, as
appropriate, the Directors' current views, interpretations, beliefs
or expectations with respect to the Company's financial
performance, business strategy and plans and objectives of
management for future operations. These statements include
forward-looking statements both with respect to the Company and the
sector and industry in which the Company operates. Statements which
include the words "expects", "intends", "plans", "believes",
"projects", "anticipates", "will", "targets", "aims", "may",
"would", "could", "continue", "estimate", "future", "opportunity",
"potential" or, in each case, their negatives, and similar
statements of a future or forward-looking nature identify
forward-looking statements. All forward-looking statements address
matters that involve risks and uncertainties because they relate to
events that may or may not occur in the future. Forward-looking
statements are not guarantees of future performance. Accordingly,
there are or will be important factors that could cause the
Company's actual results, prospects and performance to differ
materially from those indicated in these statements. In addition,
even if the Company's actual results, prospects and performance are
consistent with the forward-looking statements contained in this
document, those results may not be indicative of results in
subsequent periods. These forward-looking statements speak only as
of the date of this announcement. Subject to any obligations under
the Prospectus Regulation Rules, the Market Abuse Regulation, the
Listing Rules and the Disclosure and Transparency Rules and except
as required by the FCA, the London Stock Exchange, the City Code or
applicable law and regulations, the Company undertakes no
obligation publicly to update or review any forward-looking
statement, whether as a result of new information, future
developments or otherwise. For a more complete discussion of
factors that could cause our actual results to differ from those
described in this announcement, please refer to the filings that
Company makes from time to time with the United States Securities
and Exchange Commission and the United Kingdom Financial Conduct
Authority, including the section entitled "Risk Factors" in the
Company's Registration Statement on Form F-1.
For further information please contact:
Argo Blockchain
Peter Wall via Tancredi +44 203 434
Chief Executive 2334
--------------------------
finnCap Ltd
--------------------------
Corporate Finance
Jonny Franklin-Adams
Tim Harper
Joint Corporate Broker
Sunila de Silva +44 207 220 0500
--------------------------
Tennyson Securities
--------------------------
Joint Corporate Broker
Peter Krens +44 207 186 9030
--------------------------
OTC Markets
--------------------------
Jonathan Dickson +44 204 526 4581
jonathan@otcmarkets.com +44 7731 815 896
--------------------------
Tancredi Intelligent Communication
UK & Europe Media Relations
--------------------------
Emma Valgimigli
Fabio Galloni-Roversi Monaco +44 7727 180 873
Nasser Al-Sayed +44 7888 672 701
argoblock@tancredigroup.com +44 7915 033 739
--------------------------
About Argo:
Argo Blockchain plc is a global leader in cryptocurrency mining
with one of the largest and most efficient operations powered by
clean energy. The Company is headquartered in London, UK and its
shares are listed on the Main Market of the London Stock Exchange
under the ticker: ARB and on the Nasdaq Global Select Market in the
United States under the ticker: ARBK.
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