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Any Helios consultancy fees should be capitalised as part of the construction project so should sat on the balance sheet in the acquisition cost.
3 more sheds coming.?
I think those consultancy fees continue and probably rise.
Were the consulting fees for the Navier consultancy for desiging helios maybe or do they relate to something else? Theyre not going to need consulting fees going forward for that are they?
AIG - Don't agree - in the gloomy scenario you are proposing - how are upstarts going to justify and fund huge expansion??? The incumbents are likely to have a compentitive advantage in that they will have paid down infrastructure and some machines will be fully or partially depreciated as it's reasonable to assume they can be sweated for longer than their depreciation timeframes and again this is where ARB's prudent approach with their 3 year time frame could benefit. Not that I really want to think about it, but in a real armageddon crypto scenario, I know which of the miners assets have the most potential to have some residual value in relation to their debt.
Again I'm hoping that Bitcoin movements render the above theoretical period! $40k would be much less surprising than $20k IMO. Bouncing off $30k to propely break $31K would be a good start. Fingers crossed.
I see the bear market impacting 2 or 3 of the main miners, resulting in mergers or even insolvencies, so yes who ever gets through the bear market will be in a strong position
But also consider that there are new players also coming on board, who wernt scaling up during the bull market and diluting massively or hiking up huge debts in order to buy machines which are now considerably cheaper
So yep, Argo will be in a good position compared to say DGHI, but how will they compete with say Square who are going into mining or Cleanspark who themselves could become a monster
AIG, if I agreed with your views on bitcoin you wouldn't see me for dust here. Can’t throw numbers at you just now, but well controlled variable costs, pertinent use of debt (partially by funding past expansion through dilution) and my perception of the hodl to fixed cost ratio in the worst case scenario that ARB have to self fund existence for a period of time. Obviously in this theoretical scenario every miner would have a huge cost cutting exercise, but l do believe ARBs fundamental starting position is better. Open to challenge. Good luck.
@jamesy - "ARB are better placed than most miners to weather an extended period of depressed crypto prices and arguably could benefit through increased market share in the long time"
Can I ask what fundamentals brings you to the conclusion that ARB are 'better place' [compared to other miners(?)]
An extended Bear run brings the likeliness that BTC will be low 20s, probable teens in terms of value - BTC monthly charts there is ZERO support to $13k from $35k, so if monthly charts go it is Goblin Town for Bitcoin and, at a cost base of $33k per bitcoin (even if ease increases in terms of mining, the volume wont necessarily increase sufficiently to cover the cost base).
So just like to understand overall positive sentiment - because if I have missed something fair enough and will re-assess my sit & wait
Take any stock or asset that has appreciated nicely and look back to it’s recent lows. Why didn’t I buy an XJ220 when they were £50k? A dozen buy to let properties in 2009? Fifty bitcoins early 2019? Tesla shares in 2019? Answer is always the same sentiment was cr4p. Who is it that fortune favours again?
James, I like your optimism a lot of which I share. But "they" say the war could last ten years and a fine whisky could be a better store of value.
ARB are better placed than most miners to weather an extended period of depressed crypto prices and arguably could benefit through increased market share in the long time. Whilst it has been cr4p for investors their timing for the nasdaq listing and financing helios have been decent for the company. Not sure why so many crypto detractors feel the need to hang here. I’m counting on a strong crypto rebound through the summer, Putin to croak it and fuel prices to start normalising sooner than projected. Buying cheap takes big kahoonas but the potential is significant. GLA
I get what you are saying but this is a relatively small company so will have a small board at least for now until it reaches scale. It’s basically a couple of data centres and some employees of which I can’t remember how many there are but it’s not many.
I’d forgotten that at it’s only a main listing it doesn’t actually have to follow the governance code like a premium listing would.
@wolfofwarks - ""However a good chairman oversees the ceo not vice versa, unless a founder and PW isn’t. PW is inexperienced a wise chairman overseeing this all would be wise imho."
I wouldn't say the chairmen oversees the CEO, they are two high powered offices who should be working together. Yes the chairmen and NEDs should hold the CEO to account on strategy but this is more for scrutiny rather than a reporting line."
Chairman = Eyes on, Hands Off
CEO = Hands On, Eyes On
The Chairman's job is essential, as he/she will be looking for things the CEO has not seen, as an independent, since the CEO can be to engranded with the culture and people to be totally impartial
But, PW is both, and PW has also hand chosen the board, so there is limited, if any independence - do remember one Director even named her boat after Argo and publicly praised PW for this, hardly independent? (she was later hand chosen to be a director, despite questionable credentials and, amazingly, PW 3 months later put to shareholders a new remuneration package for himself, which directors had approved)
If not a red flag unsure what is
Wolf,
Some miners are paying 50k plus all in btc costs, Im not being extreme. These true current costs give a far truer picture of the crypto mining game. I hope Helios reduces costs but id be surprised if we see these costs fall below 25k USD per btc all in. Capex is huge and continuous as is Opex .
Hi Wolf,
I sort of agree with you as the answer/approach depends on what you are using it for. It really started as a view of breakeven on a accounting basis i.e. do you make a profit or not hence why all the costs are in and it was just an actual cost per BTC so it is fairly straightforward to work out (though even then I excluded some things which arguably should have been included).
I agree that projecting it forward is difficult for all sorts of reasons but the business is quite simple and the line detail wouldn't really help too much as there are just a few big ticket items that make up most of the costs.
It is still fraught with difficulty though as there are lots of variables and guesses involved - hence when asked to have a go I made this clear, gave the answer as a range and stated my assumptions.
The question was NOT about at what point is it not viable to keep the machines running. If that's the question then you only need to look at the direct operating costs (that would stop if you stopped production) and this is much closer to the $9k or so figure quoted by ARB.
"All costs have to be factored in surely? This was my problem for some time, rampers would say 50k btc Argo 40k profit. This has gone on for a while
Miners exclude many parts from the all in price, I think if this all in price was known across the mining sector they’d be a large reluctance for people to invest. The miners know this and it’s why the figure is opaque"
Calculating a break even point is forward looking and you're basing your extreme calculation on historic costs on a summary report with no line detail.
In a real world situation you would factor in the relevant costs - at the end of the day you are trying to work at at which point it's not viable to keep the machines running. Paying consultants and lawyers $Xk to list on the NASDAQ doesn't have a bearing on this decision.
"However a good chairman oversees the ceo not vice versa, unless a founder and PW isn’t. PW is inexperienced a wise chairman overseeing this all would be wise imho."
I wouldn't say the chairmen oversees the CEO, they are two high powered offices who should be working together. Yes the chairmen and NEDs should hold the CEO to account on strategy but this is more for scrutiny rather than a reporting line.
Watched it yet?
Ab, But those movies, like the accounts are subject to change.
No dilution, dilution.
No hosting, hosting
Hodl, no hodl
So can’t be trusted what’s said in these movies as so many flip flop
La I’m in Canberra, business sweet cheeks x;)
Wolf,
All costs have to be factored in surely? This was my problem for some time, rampers would say 50k btc Argo 40k profit. This has gone on for a while
Miners exclude many parts from the all in price, I think if this all in price was known across the mining sector they’d be a large reluctance for people to invest. The miners know this and it’s why the figure is opaque
Lol was covered in the investor meeting that you refused to watch.
Wolf of Warks.
You’re right, but to me it seems no Chairman is being sought, nor is PW a founder, no information to the best of my knowledge shows a desire to find a chairman, if Argo go down the route of focusing on us markets in the future, fine, fair enough.
However a good chairman oversees the ceo not vice versa, unless a founder and PW isn’t. PW is inexperienced a wise chairman overseeing this all would be wise imho.
This is a really interesting debate and in my view there is no simple answer. If you are looking at it from a pure cash perspective then sales less direct costs is a decent starting point. In then get a bit woolly when you start factoring in items like depreciation, a non cash cost, when you are then calculating a accounting breakeven rather than a cash break even. I'd factor in lease commitments instead.
Looking down the trading statement I would exclude or want further information on various items like consulting/professional costs - are these in relation to listing on the Nasdaq and legal fees which are a corporate expense, which I wouldn't include, or are they for high level tech consulting and therefore should be included.
I'd also discount any one off costs or costs that are excessive or frothy and could be easily cut if break even was coming under serious threat. Companies tend to overspend when cash isn't a problem for example expanding HR to include people directors, executive coaches, etc, etc.
I would include general and administration costs although in reality these probably could be trimmed down if needed. Share based based payments presumably have at least an element of performance attached to them - again if the brown stuff hits the fan may fall away at least in part.
I would probably use the direct costs and the admin costs as a base (around $16k per btc) and build up from there.
Wow, you’ve stayed up until 0340 to comment on a day when the US market most decidedly not open.
Spent most of my life here, have an apartment here you to$$er. Come to S.Barbara, I’ll show you around if they’ll let you in the country freakshow.
Hahaha LA,
Get yourself down ‘Skid row’
It’s like 1 big bag holders club, you’ll fit right in x;) they’re howling at the moon too x;)
Imagine, I arrive in LAX for 4 days and sPaGBOl Jimmy still round the clock posting! I’ll have to look through the library of lunacy for some more maniacal spew. #fraud, #doesnotliveinThailand.