Argo Blockchain hails strong 4Q22 performance
Argo Blockchain generated $19.5m - compared with £14.9m in 2020 - of revenue in the 4Q, a 9% increase over the same period in 2021. This increase was primarily driven by Argo's growth in hash rate throughout 2021 and partially offset by lower Bitcoin prices in 1Q22.
The Company, which produced net income of $2.1 million over the period, achieved adjusted EBITDA of $19.1 million (£14.5 million), an increase of 24% over the same period in 2021.
The total number of bitcoin mined during the quarter increased by 21% to 470 Bitcoin and Bitcoin Equivalents (together, "BTC"), compared to 387 BTC mined in the same 2021 period.
The Company's mining margin for the 1Q was 76%, with an average direct cost per BTC mined of $9,779 (£7,448) and Argo ended the quarter with 2,700 BTC in its HODL; this, combined with a cash balance of $11.9m (£9.1m), provides ample liquidity, Argo said.
At the beginning of May 2022, the Helios facility commenced Bitcoin mining activities. Argo expects to increase its hashrate to 5.5 EH/s by the end of 2022, subject to machine deliveries.
Earlier in March 2022, the company signed a deal to swap around 10,000 S19 mining machines hosted at Core Scientific facilities for new S19J Pro mining machines for the Helios facility.
To mitigate any temporary loss of hashrate for Argo, the swap of miners will occur in stages as the machines are delivered, which has already started and will continue through July 2022.
Meanwhile, at the beginning of the year in January 2022, Argo launched Argo Labs, its in-house innovation arm established to identify opportunities within the disruptive and innovative sectors of the cryptocurrency ecosystem while supporting the decentralisation of blockchain protocols.
This is primarily focused on two key areas: network participation and strategic diversification through the efficient deployment of a portion of the Company's crypto treasury assets.
Argo has allocated approximately 10% of the Company's crypto assets in its "HODL" to Argo Labs, which gives the Company the opportunity to integrate cryptocurrencies into existing financial infrastructure and gain exposure to the wider digital asset ecosystem, it outlined.
In March 2022, Argo signed loan agreements to borrow $26.7 million - £20.2 million at the 3 March 2022 exchange rate - with the proceeds to be used for the continued build out of Helios Phase 1. The borrowings are secured against certain electrical infrastructure at Helios.
Earlier this month, Argo Blockchain signed additional loan agreements to borrow up to $70.6m - £56.3 million at the 3 May 2022 exchange rate - subject to customary drawdown conditions, with the proceeds to be used for the continued build out of Helios Phase 1.
Commenting on this morning’s quarterly report, Peter Wall, CEO of Argo highlighted to investors that: "During the first quarter, our team has focused on working towards the completion of Helios Phase 1, while continuing to deliver strong performance from our existing fleet. To be a successful miner you need three components - power, miners, and capital.”
“This quarter, we improved our access to capital by establishing a financing relationship with NYDIG and strengthened our access to miners through our supply agreement with Intel for their new Blockscale ASIC chips. This will allow us to build custom-designed mining machines specifically to Argo's specifications and built for use in immersion-cooling technology.
He added: “As mining operations begin this month at Helios, we are excited to be delivering on our commitment to shareholders to build a best-in-class Bitcoin mining facility."
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