Member Info for Hexam

At the moment Argo's all-in costs are around $40k per BTC mined broken down:

$15k electricity
$10k depreciation
$15k other costs (staff, interest etc.)

So they need $40k BTC to be profitable but obviously less if they can get electricity prices down (or production/efficiency up).

Even free electricity though wouldn't make them profitable at the moment but remember some costs (notably depreciation) are not cash costs. They need less than $30k BTC to breakeven on a cash basis - but of course that would leave them nothing to invest in growth.

Thanks Chae - I'm very familiar with sharebel (and others of his type) from other boards already so not at all bothered by them - just bored. This whole business with the placing is bizarre and will be interesting to see how it ends and maybe we'll get some clues as to why it was announced in the way that it was. It could have been for a very logical reason, it may have been forced or it may just be madness. I'm leaning towards the last of these but I live in hope!

@somepikey - they are in the RNS, though only in respect of mining. Other things like overhead costs are excluded.

Also Pearls has made a mess of reading the numbers (as usual).

The loss for September alone is £5.8m/$6.6m (before overheads) but most of this is simply down to the fall in the value of BTC on HODL, plus the machine depreciation is not a cash cost. That said they are still losing around $2m in total a month cash wise hence the need for new funds. If they don't get anything then they probably have a few months.
If they do get the full $40m though it will keep them going a good while longer (depending on what BTC does next).

Stxx - My losses I suspect are small compared to some as arb is less than 10% of my holdings. I lost faith in argo some time ago and posted as much at the time saying I was looking to exit. I only took some out though as I was greedy and was hoping for a spike in BTC price to lessen the loss before I took the rest out. My mistake.

So it’s certainly not a coping strategy and my reasoning for exiting has been proven sound - just my execution of it has sucked.

Just as I felt though that the sp was too high at around 35-40p, I think it is now too low where it is now.

All any of us can do is buy shares we feel are cheap and sell the ones we have that we feel are expensive - and just hope we get it right now and again. And in my case act more decisively on what we believe - lesson learned.

Calamari - fair enough and I agree it would be naive to think an investor won’t always be looking to get a better deal. Much depends though what is in the LOI, who the investor is, what value they’ve place on the company etc etc.

So I agree there may be some ‘interesting’ negotiations going on but still feel it will go ahead if the investor still believes the future prospects justify the investment - especially if they can get better terms for it.

Cheers Calamari - I don’t think I am being naive, as the logic does makes sense to me, but of course fully accept that I may be wrong.

stxx - I would never advise anybody what to do with their money and also try not to deal in certainties when they are by no means certain.

I have never said the placing would definitely go ahead just pointing out the reasons why a fall in share price below the placing price doesn’t mean it definitely won’t.

If I gave any other impression then I regret that but for clarity I still think even at this sp that the placing will go ahead but of course it may not and there is growing chance it won’t the further the sp falls.

Cheers Darren. I’m not confident it will turnaround long term as growth looks screwed for now but there are certainly trading opportunities at the moment - risky as they are.

A lot depends on the next RNS, particularly of course what happens with the placing.

I wish I did have that kind of money to throw around!

I’m not sure though what the point was of sharebel reposting my thoughts on the placing as if I’m being duplicitous or something. I stand by them and have said nothing to contradict them. I still think it will go ahead and is why I put some more in this morning as if it does the price will surely shoot up? Of course I realise with the sp falling so much it puts it more at risk but I’m just trying to recover my losses any which way I can and this seemed to present an opportunity to help do that. Could be wrong though. Again.

"Hexam you ain’t invested nope and you do this all the time"

Another piece of false information. You certainly are racking them up today :)

"Why are you here Hexam do tell us?"

To share information two ways on a company I'm interested and invested in.

Btw - I just bought some more, as a trade, as I do think the reaction is overdone as even if the $27m funding doesn't take place the other actions and existing holding should mean they are in no immediate danger of going bust. If the funding is confirmed though then I imagine there will be a healthy spike.

I still don't like ARB's long-term prospects though as the opportunity for growth now looks so bleak but for the sake of all genuine and suffering LTHs I hope I am wrong.

In the meantime though your misleading and OTT ramping posts may be of comfort to some underwater LTHs but I suspect many like me just find them offensive.

I think you're breaking those rules more today sharebel than the rest of the posters put together. False information, giving financial advice etc. etc. Please give it a rest with your irresponsible, clueless and tiresome posts.

Finishing price is the UT - 21.5p

Stxx - to an extent I agree but it is not as simple as that for the reasons I gave.

The investor would certainly have been astute enough to realise the announcement would send the sp down towards the placing price and probably below so can’t imagine they are too fazed that the predictable has indeed happened.

The key as HC suggests is the discount before the announcement - not after.

But buying on the open market doesn’t come with a seat on the board and as HH suggests they couldn’t just buy $27m at this sp.

Key thing though is that buying on the open market means no new funds for the company and so it’s probably screwed (unless they can find a different white knight).

A placing though gives the company the funds it desperately needs and the influence the investor clearly wants. So unless the sp crumbles completely I don’t see why they would pull out as they want some control (maybe in time total control) of a company that will survive. The proposed placing gives these things, buying on the open market doesn’t.

Wouldn’t blame them for having some second thoughts though!

"most predictions are for btc to be $35000 or above by the end of the year which I’m guessing would be above break even for us with expansion plans in place to take advantage of another bill run"

Guess again I'm afraid. At the moment BTC at $35k is still below break-even level on a fully costed basis although should be sufficient to produce a positive cash flow. That cash flow won't be enough though on its own to fund any significant growth so not sure what plans you are talking about here. The last RNS had them contracting, not expanding.

Krauty - let’s hope so, money for a PPA would explain why they are raising quite a bit more than they probably need just to stay afloat - assuming the intel rigs are dead in the water so don’t need any of this cash.

I haven't seen this kind of situation either but the dilution itself doesn't mean it goes from 27p to 22p as the extra money 'should' offset the impact of the extra shares.

For similar reasons the investor is probably not going to change their mind simply because the sp has fallen. They are buying in at 27.6p and this extra money (with the other measures highlighted) should guarantee survival for at least a year albeit in a weakened position.

The argument that they could just choose to buy instead on the open market at a similar or cheaper price doesn't hold water as buying that amount would be tricky and would push the price up making it more expensive probably to complete (as others have mentioned). Also though doing this does not provide extra funds so does not help the company at all so they would be getting a 15% stake in a company that will probably not survive 12 months rather than 15% in a company that probably will. I know which I'd rather choose.

In short the investor is putting up $27m of extra funds because at that price (27.6p) they think it is worth it - what the sp does in the meantime shouldn't really change that, though of course plenty of other things might (like a BTC crash etc.).

Chae - I can't work it out either. In fact none of the actions appear to be a done deal. Maybe they just feel they have a leaky organisation?

AB - agree. The language in the video was quite different. It seems things are indeed changing and wouldn't be surprised if the 15% is just the first step.

"I’m still unclear on why the couldn’t have reduced the equity raise through a one off sale from HODL"

Because they've already been selling every month recently and are running out. Although they still had over 1,000 at the end of last month most of that is either tied up with or argo labs or with backing what remains of the Galaxy Loan.

They only had about 350 BTC spare to play with which is just $7m - very small in comparison to the $40m or so they are proposing to generate from the actions in the RNS.