The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Just found the RNS reference the miner updates…
https://www.lse.co.uk/rns/ARB/may-update-mining-capacity-defi-investment-fcfxdsx64m5hu2b.html
It costs between $30-40m per EH and that’s if the prices are still low since the China Exodus! MARA paid $120m for 30000 miners recently and that will provide 3.0 EH. Smaller orders will probably cost more per miner. There’s still the cost of the facility and immersion cooling (alone could add $10m). So it’s understandable that Argo may consider buying 3.0 EH and host 3 EH to bring in the much needed revenues to cover operational costs and avoid selling Bitcoin.
I’m hoping, though, that PW comes out and informs shareholders that they’re fill 6.0 EH with miners to keep up with its ‘peer’ miners.
It should be noted that the 80 PH of miners in July have yet to be installed and that 530 PW are due to be installed by mid Oct according to a recent RNS.
Chuz,
You’d be closer if you said $250m to fill 6.0 EH with miners. That’s 60k at about $4k per miner, similar to what Mara recently paid for their 30,000 miners, and that was with an 8 month lead time for delivery.
50% is usually paid on order with the balance on delivery.
I would expect Argo to order 30000 miners and Host 30000 miners in a profit share agreement, provide much needed revenues to cover operational expenditure.
I would love an announcement post listing from PW to say 200 mw will be filled with Argo machines!!!
K3,
Try not to take this the wrong way, but you really are the biggest **** on this BB. Everyone entitled to their opinion but you take it to another level trying to be clever, in belittling them, if it doesn’t quite fit in with your ideals. In all your 10 million posts, I’ve yet to read anything remotely adding value to the discussion.
Sometimes, it’s best to read, think and engage your brain, before responding.
Have a great day
That extra 610 PH would have been nice at the original delivery date. Would have provided the opportunity to earn additional $15m gross profit.
Onwards and upwards….quarters and years!
Hexam, your £50m sounds a little ambitious. They achieved a little under £7m net profit after tax for the first six months, on revenues of £30m. Even if they maintain the level of mining for the remainder of the year, and understanding the difficulty is rising 4-5% every two weeks with China slowly coming back online, revenue could be £50m in the last six months. However, net profit after tax would be closer to £20m giving a total net profit for the year closer do £25-28m.
Today’s decent H1 results were spoilt by the news of Epic orders. Considering that many other miners have taken advantage of the recent price reductions, disappointing that Argo haven’t indicated any buy orders.
Great interview and challenging questions from Michael.
Does anyone consider that Argo may become a host miner in Texas? Peter made some positive comments about the shortage of sites close to cheap renewable energy and that hosting is really profitable now.
He was questioned about the size and miner capacity of Texas, and he reluctantly said, which most would have anticipated, that 6.0 EH would be achievable with 200MW of power. To fill that with miners could cost somewhere between $250 - 300m. Financially that’s going to be a challenge without further share placings (dilution) or more debt.
Thoughts?
Today’s Bitcoin mining operation update via RNS was good……but not great!
Firstly, there were two mining difficulty reductions in the month of July, giving the company an opportunity to benefit from an additional 40% in mining rewards.
Secondly, Bitfarms released an operational update in July stating that it had mined 155 Bitcoin in the first 12 days of the month and was on projection to achieve 400 Bitcoin for the month, with an mining hash rate of 1.42 EH.
Finally, Mara has also released its update today for July, where it mined 442 Bitcoin over the month, with a hash rate of 2.09 EH. This total was achieved even though they had to cease mining for 5 days during the month!
I’m sure there was also an expectation that some additional miners, providing 80-90 PH would be installed, but if no RNS update maybe that’s been delayed.
All my opinion DYOR
Can you buy ARB shares on etoro?
Nice bump in the Argo Blockchain SP in Stuggart (0TP).
K3VMC,
You’re misinterpreting my post. The response to the previous post is that you can’t compare Share Prices alone. Just because Mara or Riot are $20+ it doesn’t necessarily mean Argo should be.
Your analysis in comparing margins is flawed.
Firstly, Mara paid $170m for 70,000 miners, that works out at less than $2,500 for each miner…… not a bad price, but probably expected when you’re buying 70,000. Do you know what Argo are paying for their miners arriving in the next few months?
Mara don’t own their sites, they pay a hosting fee equivalent to about 0.5c per Kw, so GP not comparable. O.5c represents about 20% of the electricity cost, 2.8c.
MARA will probably be earning $50 - $100m per month next year once their expansion is completed and dependant on what share of hash rate that will represent, mining difficulty, and that’s based on the current Bitcoin price!
My biggest holding is Argo and I want the SP to grow as much as everyone in this site.
Happy to see your full analysis to prove me wrong.
You need to consider a couple of things when you compare Share Prices:
MARA has 99m shares in issue
RIOT has 84m shares in issue
ARGO has 382m shares in issue
Then there is the future earnings to consider. MARA and RIOT will probably produce 500 Bitcoin this month, whereas ARGO will be closer to 250 Bitcoin.
ARGO will receive more miners in Q3 that will take its hash rate to 1.675 EH, with further additional miners coming online (unknown number) in Q1 2022 in Texas.
MARA a have already purchased 103,000 miners that will provide 10.3 EH by end Q1
RIOT has informed the market that it will be achieving 7.0 EH by end Q1
MARA also have $200m in cash and over 5500 Bitcoin available.
Argo has the ability to do well, but will need to carefully plan how pay for their expansion in Texas by either further dilution, selling Bitcoin or borrowing considerable sums.
I expect, like many on here, Argo to grow and achieve increased share price and MCAP but it’s going to take time.
Patience is required.
@Desmond45, I bought DGHI last week as the SP took a massive dive after a $25m offer placing. This money, like the ARGO placing will probably be used for miners and infrastructure which will enhance the companies revenue and profitability. I also own shares in Mara, Hut8, Bitfarms, Hive, Argo and KR1. The wife has Riot in her portfolio, so we’ve pretty much covered the crypto mining bases.
Joker99, I believe that ALL the mining stocks are cheap at the moment and are all considerably off their recent highs. When you consider Bitcoin is less than 20% from its high, some of these miners are more than 50% from highs.
RIOT and MARA spent 2020 getting it their orders in fir significant numbers of ‘miners’ and this will pay off in 2021 onwards. I just don’t believe investors fully realise the change in Revenues and Margins achievable in 2021 compared with previous FY2019 and FY2020.
To be honest I was day trading Argo in January and doing quite nicely from the swings, but I haven’t sold any stocks in 5 weeks and have just added to the portfolio over the last few days.
The growth and profitability in Bitcoin related stocks, makes me wonder why there hasn’t been any merger or acquisitions. With miners continually looking for cheaper utility costs, the real savings only occur in overheads....
I’ve also a position in KR1 which looks extremely good due to the amount of coins held on the Balance Sheet which are effectively now valued more than the market cap.
All in all 2021 is going to be a great year for Argo and all the other miners.
The first mining stock I bought, in January ‘21 was MARA at $5 a share. I was immediately hooked and now have holdings in ARGO, RIOT, HIVE, HUT8, BITFARMS and KR1. Largest holding in Argo.
I use HL Apo for Argo and KR1 purchases, Trading 212 App for RIOT and MARA and Degiro App for HUT8 and Bitfarms.
Just filtered my first naysayer! Bye teofore.......
I think you’ll find that the vast majority of Bitcoin is mined in China. It would be interesting to see what % is currently mined in N America. Both great complimentary stocks to have if you don’t want to dip directly into crypto. Great finishes in the US on Friday and with BTC achieving all time high today, it’s looking very promising fir both stocks this week.
https://twitter.com/petergwall/status/1356344842398412803?s=21
Peter Wall, CEO Argo Blockchain will be attending the conference hosted by Michael Saylor, CEO Micro Strategy, on Wednesday.
The company performance should also impact the share price. The issue with mining stocks is that their intrinsically linked to the value of Bitcoin, and because it’s value can be erratic changing 10% on a daily basis, the share price will also change. Moving forward, if the value of Bitcoin remains constantly over $30k, larger profits will be achieved, providing incentive for more shares to be bought with a low P/E ratio. Just a matter of time before this is realised.......
I’m with HL and trading 212. Got to be honest I was a little to think that cheap or zero trading fees are a positive. These companies clearly make their money via the margin. I pay £8.95 a trade with HL and probably actually save quite a bit! Trading 212 good for US stocks and the ‘pie’ option for using a basket of shares.
Trading 212 customer service is poor. The servers have been down 5/6 times in January. I would never buy ARB.L on that website. It leaves your order pending and then when it’s traded you regret it after seeing the price achieved.
If something sounds too good to be true....... it generally is!