Argo Blockchai. Share News (ARB)

(Alliance News) - Argo Blockchain PLC on Thursday said its contract with Canadian data centre provider GPU.one has been changed and extended.

Shares in Argo were down 3.2% at 8.47 pence in afternoon trade in London.

The deal replaces cryptocurrency mining services firm Argo's prior three-year deal with GPU.one, which was signed in August 2018 and had a two year extension option.

Argo leased two data centres from GPU.one in 2018 in a contract which included the supply of hydroelectricity at CAD0.038 or USD0.03 per kilowatt hour. The new contract, Argo said, increases its "access to clean power supplies".

The updated agreement is for another three years, starting Tuesday this week, with a further two year extension. It will allow Argo to up its crypto-mining capacity by 47% to 14 megawatts from 9.5 megawatts at its two Quebec data centres.

Further, the new contract also cuts Argo's crypto-mining costs, as it represents a 39% reduction in costs from the initial 9.5 megawatt contract.

Argo's contingent liability is also reduced under the new deal, giving Argo "the right to terminate the agreement at any time, without cause, on four months' notice".

Under the deal, Argo will convert a prior GBP1.4 million deposit "into a strategic investment in GPU.one".

Argo Executive Chair Mike Edwards said: "This deal strengthens our existing strong relationship with GPU.one and is part of our ambitious expansion to take advantage of the continuing industry upturn. The reduction of costs under this agreement, together with the new, more efficient hardware we have purchased means we are now one of the most efficient miners in the market. GPU.one provides the robust infrastructure in an established jurisdiction to support our long-term growth."

Further terms of the deal weren't disclosed.