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So for 2023 they mined on average 4.8 bitcoin per day, for the 1st qtr 2024 they mined on average 3.5 bitcoin per day, thats a drop off of 25% albeit sold at a much higher average price. this is BEFORE the having, that will drop to around 2 bitcoin per day. with the best will in the world revenues will be $70 mill for the year. will it break even on the year I doubt it
I don't know what that table is at the end but the earlier (!) note 10 gives 30 as the number of employees.
If $31k really is their pre-halving cost of electricity/hosting only per BTC then heaven help them.
The $18m quoted falls due between now and June 25, rather than this year, not that that makes everything hunky dory - far from it!
I see they've finally had to mention the Emergent write off, hidden pretty deep into the results considering the company raised money from shareholders for this.
More weirdness with altcoin reporting, like-for-like looks very different as they've grouped most of them together now including NFTs. Given a value of $500k+ which is a lot of shtcoins to hold for a company that has material uncertainty over it's ability to continue. And how can 31.7k USDC be worth $55k? Are auditors asleep?
I don't think the 31 includes depreciation Hexam, but like you this is out of line with previous reports and unclear on some items, and as I said it seems to be truncated.
"Something that stood out for me was the sky high direct bitcoin costs in Q1, $31k direct mining costs in Q1, that's a huge jump and would suggest that cash break even is actually more like $100k post halving right, Hexam?"
I'm struggling to make sense of some of their numbers including this one. $31k direct mining cost is ridiculously high for Q1, and before halving, and much higher than last year (it was less than $12k in the last reported figures). One possibility is that this includes depreciation which some companies include in 'direct' costs but ARB hasn't before - but their description of costs in the financials of 'power and hosting costs' instead of 'direct costs' suggests they do now?
In addition their Q4 numbers seem inconsistent with end Q3 with depreciation of mining hardware only going from $18.2m to $18.7m but their cost of mining has shot up from $24m YTD Q3 to $36m full year. This implies virtually no depreciation for Q4 and a 50% uplift in mining costs. I can't see any notes though of a change in treatment/methodology.
My best guess is that the $31k DOES include depreciation and that this change of approach has somehow screwed up the presentation in the financials (hopefully it is just presentation/me missing something and not an actual mistake)!
So I think the $60-70k still holds but if the direct cost does only includes electricity and hosting then it doesn't and they are in big trouble - especially as they say they have $18m of further debt service obligations to be met before the end of June.
In the meantime if anybody can make more sense on what on earth is going on with their numbers then please shout - hopefully I've just missed something or messed up somewhere?!
The report seems to be truncated stopping at note 6, which suggests only 6 employees - which doesn't sound right. Anyone got the full report?
The question is what's the cash burn now from May onwards, with BTC at $65k and hash rate at all time highs - $2m? That would mean runway only until Q4.
Hopefully Thomas answers that and a few other testing questions I've put forward for the Investor Meet
No end game here.....onwards $ upwards !....
A very clean (easy to understand) set of results. Better than most would have expected, still doesn’t make them sustainable post halving……….
Hash rate at all time highs, but going to be a while before these companies admit the inevitable and switch off rigs.
Yes end game is coming. Everyone knows that, at least that is those with more than half a brain cell.
Positive RNS...debt been reduced , BTC production stable , cash in bank...profit on BTC....done well considering all the turmoil..!
Quick glance makes me think they are losing money mining now HC.
Fees back down below 1. Think end game is coming.
Cash position solid at $12.4m as of end of March and pre halving, buys them time one would think.
Something that stood out for me was the sky high direct bitcoin costs in Q1, $31k direct mining costs in Q1, that's a huge jump and would suggest that cash break even is actually more like $100k post halving right, Hexam? Or do the non mining cost reductions counteract that enough?
Good work Kpa1, you're within a stone's throw now!
From my four miners you could tell from early on today that, despite them all taking a hit, one of them was falling the least.
So I am now all in on Mara.
GLA
Fwiw Galaxy loan had an amortization schedule of 32 months beginning Dec 22. Assuming that schedule remains unchanged final payment would be around Aug 25. Interest on that variable based on overnight fed + 11% - putting it at over 16% annually.
HC - i'd agree on that. Lot's of credit must go to Jim in the finance seat i think. Overall, they kept the ship sailing which is about all that could be hoped for during the bear. I'm interested to hear from Mr Chippas to see if he gives any indication on future strategy though.
Thanks, I think we can all agree like you say that this management have done an excellent job of surviving up until this point and in buying themselves time - I imagine they'll attempt one more placing in 2024 and that will guarantee survival until at least the hosting agreement comes to an end.
"Are you clued up on when their debt matures?"
I'm afraid not but they only have (just under) $13m left of the Galaxy Debt now so I wouldn't imagine this is nearly as pressing as it could have been. It's still a lot obviously in relation to their cash position but even if a fair chunk of it was due soon they may still be ok especially (as I think) they are still generating cash at the moment (so Galaxy may not be as hardball as they overwise might)?
"I'm sure a while ago you said Argo's cash break even was around $35k so i'm surprised you still think $60k-$70k post halving with how much difficulty has adjusted upwards since"
I probably did because it was (or pretty close to it). To be fair to the new management though they've done a decent job of controlling costs especially on overheads and better terms on electricity (via Galaxy). That said it is hard looking at one quarter as it can fluctuate a lot (fees, curtailments/rebates etc.) but the trend suggests $60-$70k) and you're right it could easily be higher, especially as Q3 was over 6 months ago.
For reference the cash breakeven in Q3 2023 was $27k (which was much lower than the $33k in Q2) so my range still assumes quite an uplift from this - partly difficulty, partly as Q3 benefitted from some handy rebates more than offsetting coins lost through curtailment).
Q4 should tell us more (especially on further overhead savings) although that quarter had the benefit of high fees and they actually mined 20% more than in Q3.
Are you clued up on when their debt matures? Is any of the remaining $55.2m due within the next couple of quarters? If so that'll be the next big hurdle before the end of the year when the hosting agreement ends. I know the senior notes aren't due til 2026 but I wasn't sure about the other $15.2m.
I'm sure a while ago you said Argo's cash break even was around $35k so i'm surprised you still think $60k-$70k post halving with how much difficulty has adjusted upwards since (ignoring temporary inflated fees), I'd have thought new break even would be more more like $80k-$90k but like you say, there's no room for growth and realistically any modest cash that is generated will need to pay off what's left of the Galaxy loan.
It was quite telling Mara finally had its first 10%+ day in ages only once it mined 9 blocks or so in previous 24hr period. Despite the madness of this sector, it's true market is behaving pretty rationally in lots of ways, with tangible progress being rewarded rather than just promises, or rampy words from execs that like to put out a lot of videos.
Overall things feel much more mature now than 2021, bit more cynical too, understandably so given the 2022 aftermath, nobody wants to be left holding the next Argo.
I think ARB's cash breakeven is around $60k to $70k (should get a better idea tomorrow) so $100k would give a comfortable margin though still not a lot to play with in terms of manufacturing any growth. That assumes a more normal level of fees and so at the moment they should be generating cash because of the current high fees instead.
So they look to have some breathing space at the moment but that's probably all it is. With fees likely to come back down and difficulty still rising they need to find some way to grow but that looks very challenging with the debt still high, poor prospects as far as raising goes and uncertainty over the Galaxy deal.
I can't see it either but it's also true for many mcaps that make no sense to me. When the market goes irrational anything can happen - why you would choose Argo over another miner who knows.
I agree with all that, I just don't think Argo will be one of those miners that does 3X to 5X i.e £210m to £350m even with BTC over $100k. Argo won't benefit from the higher price in terms of BTC held and will lose out on the difficulty front as it increases and they fail to grow to keep up with it. Argo probably won't even be generating cash at that BTC price if fees have come back down.
There's big moves to be had with some of the heavyweight miners though, that's for sure.
Lol.