Bitcoin Miner Argo Blockchain Sells Texas Facility to Galaxy Digital for $65M

28 December 2022

in Mining

Reading Time: 3 mins read

Bitcoin mining company Argo Blockchain announced it has entered into definitive agreements with Galaxy Digital Holdings that will see the miner sell its Helios facility in Dickens County, Texas.

The deal, which will also see Galaxy host Argo’s mining machines located at Helios, is worth $65 million (£54 million), Argo Blockchain said in a press release Wednesday.

In addition, Galaxy will provide Argo with a new asset-backed loan in an aggregate principal amount of $35 million (£29 million) with an initial term of 36 months, using 23,619 Bitmain S19J Pro mining machines currently operating at Helios and certain machines located at Argo’s data centers in Canada as collateral.

Argo Blockchain has seen its stock plummet over 90% over the course of the year amid rising energy costs and falling Bitcoin prices.

To address its financial challenges, the firm began selling off its Bitcoin reserves back in June, earmarking the capital for funding operating expenses. Earlier this year, Argo also eyed a $27 million fundraise, which fell through in October.

On Tuesday, the firm requested the suspension of trading of its shares and unsecured notes on the NASDAQ stock exchange until Wednesday.

Argo to repay existing debts

In today’s announcement, the firm said that cash proceeds from the sale of its Texas facility, along with a portion of the borrowings under the asset-backed loan, will be used to repay its existing debts, prepayment interest, and other fees of approximately $84 million (£70 million) and $1 million (£1 million), owed to NYDIG and North Mill Commercial Finance, respectively.

“This transaction with Galaxy is a transformational one for Argo and benefits the company in several ways,” Argo CEO Peter Wall said in a statement. “It reduces our debt by $41 million (£34 million) and provides us with a stronger balance sheet and enhanced liquidity to help ensure continued operations through the ongoing bear market.”

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According to Argo, the firm will now be looking to shift focus on growing and optimizing operations at its two data centers in Quebec, fully powered by low-cost hydroelectricity.

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The company said it currently has approximately 140 PH/s of hashrate capacity at its Baie-Comeau and Mirabel facilities, with 15 MW and 5 MW of power capacity, respectively.

The announced agreement also means that Argo will not report earnings results for Q3 2022 at this time.

The company explained that it is designated by the SEC as a foreign private issuer and is required to comply with regulatory filing requirements in its home market, with the UK Financial Conduct Authority requiring semi-annual reporting of financial results.