Crypto Miner Sells Data Center for $6.1M as Its Shares Plunge 55%

Crypto Miner Sells Data Center for $6.1M as Its Shares Plunge 55%

Time Stamp: March 28, 2024 4:33 AM
Crypto Miner Sells Data Center for $6.1M as Its Shares Plunge 55% PlatoBlockchain Data Intelligence. Vertical Search. Ai.

Although
Bitcoin (BTC) has already gained nearly 70% in 2024, shares of Argo Blockchain,
a cryptocurrency mining company publicly listed in London and the USA, are
scraping the bottom, falling 55%.

The
company’s solution to some of its problems and shareholder discontent is selling its data center in Mirabel, Canada. The company’s London branch (LSE: ARB) announced the finalization of this move on Thursday. At the
same time, the miner issued over 460,000 new ordinary shares.

The plan to sell a data center in the Quebec region was first announced almost two months ago. The transaction, which yielded a total consideration of $6.1 million, has
enabled the company to reduce its debt and streamline its operations significantly.

The net
proceeds from the sale were used to repay the Mirabel Facility’s outstanding
mortgage of $1.4 million, with the remainder being allocated to repay debt owed
to Galaxy Digital Holdings, Ltd.

As of 28
March 2024, Argo’s debt balance with Galaxy is $12.8 million,
representing a reduction of 63% from the original balance of $35 million.

“The
Company continues to execute on its strategy of strengthening the balance sheet
and reducing non-mining operating expenses. The Company reduced its debt by
$12.4 million in Q1 2024,” Thomas Chippas, the Chief Executive Officer at Argo,
commented on the transaction.

In addition
to the debt reduction, Argo has relocated and deployed mining machines from the Mirabel Facility to its facility in Baie Comeau,
Quebec. This consolidation is expected to reduce the company’s non-mining
operating expenses by $0.7 million per year, allowing for more efficient use of
the facility and onsite team. Argo
Blockchain also announced the issuance of 460,477 new ordinary shares.

Bitcoin Winter Hits Argo

As
mentioned at the very beginning, the price of Bitcoin is dynamically growing in
2024. Initially, Argo Blockchain’s shares rose along with it, but
weaker-than-expected BTC production in the first months of the year caused
shareholders to lose confidence in the company. As a result, the cryptocurrency
spring in the broad market turned into an extended winter for the digital asset
miner.

In the
meantime, Argo Blockchain underwent significant changes in its management
ranks. Seif El-Bakly stepped down as Chief Operating Officer after serving as
interim Chief Executive Officer from February to November 2023.

Whether we look at Argo’s shares listed in London or the USA, the charts
show the same picture: a decline of about 55% since the beginning of the year.

Bitcoin price (blue) goes up, while Argo (orange) falls. Source: Tradingview.com

At the same time, Marathon Digital Holdings, the largest publicly traded cryptocurrency miner, is losing only 6%, and Phoenix Group is gaining around 2%.

Although
Bitcoin (BTC) has already gained nearly 70% in 2024, shares of Argo Blockchain,
a cryptocurrency mining company publicly listed in London and the USA, are
scraping the bottom, falling 55%.

The
company’s solution to some of its problems and shareholder discontent is selling its data center in Mirabel, Canada. The company’s London branch (LSE: ARB) announced the finalization of this move on Thursday. At the
same time, the miner issued over 460,000 new ordinary shares.

The plan to sell a data center in the Quebec region was first announced almost two months ago. The transaction, which yielded a total consideration of $6.1 million, has
enabled the company to reduce its debt and streamline its operations significantly.

The net
proceeds from the sale were used to repay the Mirabel Facility’s outstanding
mortgage of $1.4 million, with the remainder being allocated to repay debt owed
to Galaxy Digital Holdings, Ltd.

As of 28
March 2024, Argo’s debt balance with Galaxy is $12.8 million,
representing a reduction of 63% from the original balance of $35 million.

“The
Company continues to execute on its strategy of strengthening the balance sheet
and reducing non-mining operating expenses. The Company reduced its debt by
$12.4 million in Q1 2024,” Thomas Chippas, the Chief Executive Officer at Argo,
commented on the transaction.

In addition
to the debt reduction, Argo has relocated and deployed mining machines from the Mirabel Facility to its facility in Baie Comeau,
Quebec. This consolidation is expected to reduce the company’s non-mining
operating expenses by $0.7 million per year, allowing for more efficient use of
the facility and onsite team. Argo
Blockchain also announced the issuance of 460,477 new ordinary shares.

Bitcoin Winter Hits Argo

As
mentioned at the very beginning, the price of Bitcoin is dynamically growing in
2024. Initially, Argo Blockchain’s shares rose along with it, but
weaker-than-expected BTC production in the first months of the year caused
shareholders to lose confidence in the company. As a result, the cryptocurrency
spring in the broad market turned into an extended winter for the digital asset
miner.

In the
meantime, Argo Blockchain underwent significant changes in its management
ranks. Seif El-Bakly stepped down as Chief Operating Officer after serving as
interim Chief Executive Officer from February to November 2023.

Whether we look at Argo’s shares listed in London or the USA, the charts
show the same picture: a decline of about 55% since the beginning of the year.

Bitcoin price (blue) goes up, while Argo (orange) falls. Source: Tradingview.com

At the same time, Marathon Digital Holdings, the largest publicly traded cryptocurrency miner, is losing only 6%, and Phoenix Group is gaining around 2%.

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