RNS part -25 Mar 2024 08:49
Importantly, the Transaction enables the Company to delever the balance sheet with minimal impact to the Company's revenue. Following the Transaction, Argo will maintain ownership of all mining machines currently located at the Mirabel Facility. The Company is in the process of relocating the machines to its Baie Comeau facility and anticipates selling certain prior generation machines representing approximately 140 PH/s. Going forward, the Company's total hashrate capacity is expected to be 2.7 EH/s.
The Transaction has significant operational benefits for Argo. It allows the Company to streamline its operations by locating all self-mining machines at its Baie Comeau facility. Additionally, the Transaction reduces the Company's non-mining operating expenses by $0.7 million annually.
The Transaction is expected to close by the end of March 2024 upon the successful completion of customary closing conditions, including entry into a definitive share purchase agreement and certain regulatory approvals.
Management Commentary
Argo's Chief Executive Officer, Thomas Chippas, said, "This Transaction demonstrates the Company's continued commitment to strengthening the balance sheet through a focus on aggressive deleveraging and reducing non-mining operating expenses. We are able to exit the Mirabel Facility with a high multiple on its power capacity, and we also realize a premium on this real estate asset while maintaining a strong hashrate capacity of 2.7 EH/s."
February Operational Update
During the month of February, the Company mined 92 Bitcoin, or 3.2 Bitcoin per day. This 21% reduction in daily Bitcoin production compared to the prior month was primarily due to a maintenance-related outage at the Cottonwood substation which is owned and operated by an unaffiliated third party. Total downtime from the outage was approximately 77 hours, or 11% of the month. The maintenance was completed on 21 February 2024, and normal operations have resumed. Additionally, Bitcoin production in February was negatively impacted by a 5% higher average network difficulty compared to the prior month.
Mining revenue in February 2024 amounted to $4.5 million, a decrease of 15% compared to the prior month (January 2024: $5.3 million).
As of 29 February 2024, the Company held digital assets worth the equivalent of 14 Bitcoin.
Argo CEO Thomas Chippas said, "Despite the decrease in Bitcoin production due to maintenance on the Cottonwood substation, we expect that our realized power prices at Helios for February will be significantly lower than normal due to favorable power market conditions. Lower power prices will have a beneficial impact to our mining profit, mining margin, and operating cash flow for the month."
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