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REG - Argo Blockchain PLC - 2024 Annual Results and Restoration of Listing

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RNS Number : 9885H  Argo Blockchain PLC  09 May 2025

Press Release

9 May 2025

 

Argo Blockchain plc
("Argo" or "the Company")

 2024 Annual Results

Restoration of Listing

Argo Blockchain plc (LSE: ARB; NASDAQ: ARBK), is pleased to announce its
audited results for the year ended 31 December 2024. All figures have been
prepared in accordance with International Financial Reporting Standards as
issued by the International Accounting Standards Board ("IFRS") and are stated
in U.S. dollars. The directors have adopted the going concern basis of
accounting in the preparation of the annual financial statements; more detail
can be found in the accounting policies. However, the directors note that the
debt service requirements, lower operating margins, and the volatile economic
and industry environment, indicate the existence of material uncertainties
that may cast significant doubt regarding the applicability of the going
concern assumption, and the auditors have made reference to this in their
audit report and additional information is included in Note 3 to the financial
statements.

Highlights

·      Total number of Bitcoin mined during 2024 was 755, or 2.1 Bitcoin
per day (2023: 1,760, or 4.8 Bitcoin per day).

·      Revenues of $47.1 million (2023:  $50.6 million), a decrease of
7% from 2023, driven primarily by the reduced hashprice resulting from the
Bitcoin halving.

·      Mining margin of 33%, down from 43% in 2023. Similar to revenue,
this decrease was largely attributable to the reduced hashprice resulting from
the Bitcoin halving in April 2024.

·      Reduced non-mining operating costs by 34% in 2024 compared to the
prior year.

·      Adjusted EBITDA of $5.7 million, compared to $7.7 million in
2023.

·      Net loss of $55.1 million, compared to a net loss of
$34.6 million in 2023. The net loss was primarily the result of a $31.5
million asset impairment, $15.0 million of amortization and $6.8 million of
interest expense.

·      Reduced interest expense by 41%, as a result of fully repaying
the Galaxy debt during 2024.

·      Net debt (cash less debt obligations) was reduced by $24.1
million from $55.1 million at 31 December 2023 to $31.0 million at 31 December
2024.

As at 31 December 2024, the Company had $8.6 million of cash, compared to
$7.4 million at 31 December 2023. As at 31 March 2025, the Company had a cash
balance of $2.4 million. The decrease from December reflects the costs
required for refurbishing machines, Helios power payment for December 2024,
significantly reduced mining margins, and hosting deposits.

Post-period highlights

The Group signed hosting agreements with Merkle Standard LLC to host 9,315
miners at Merkle's Memphis, Tennessee location and up to 4,000 machines at its
Washington State location. Approximately 1,232 units were sent to the Group's
Baie Comeau facility. A further approximately 8,000 units (6,000 were sold
after 31 March 2025) were sold for cash proceeds of approximately $2.0
million. Our go forward hashrate, reflective of the machine sales, is expected
to be 1.7 exahash.

During the month of April we continued the deployment of our Helios miners to
our hosting sites and mined 13 Bitcoin. The deployment of these units will be
completed by the end of May 2025.

Commenting on the results, Justin Nolan, Argo Blockchain CEO, said, "The
repayment of the Galaxy debt during 2024 was a major achievement for the team,
as was the successful refurbishment and rehosting of the Helios fleet. We
continue to work on strengthening the balance sheet and pursuing strategic
options."

The tables below reconcile Bitcoin and Bitcoin Equivalent Mining Margin to
gross margin, the most directly comparable IFRS measure, and Adjusted EBITDA
to net income/(loss), the most directly comparable IFRS measure:

 

                                               Year ended  Year ended
                                               31-Dec      31-Dec
                                               2024        2023
                                               $'000       $'000

 Gross profit                                  1,457       3,101

 Depreciation of mining equipment              14,171      18,656
 Mining profit                                 15,628      21,757
 Bitcoin and Bitcoin Equivalent Mining Margin  33%         43%

 

The following table shows a reconciliation of Adjusted EBITDA to net
income/(loss), the most directly comparable IFRS measure, for the years ended
31 December 2024 and 31 December 2023.

 

                                                    Year ended  Year ended
                                                    31-Dec      31-Dec
                                                    2024        2023
                                                    $'000       $'000

 Net loss                                           (55,102)    (34,637)

 Interest expense                                   6,810       11,556
 Depreciation / amortisation                        15,024      20,129
 Income tax expense                                 340         -
 EBITDA                                             (32,928)    (2,952)
 Impairment of assets                               31,498      855
 Impairment of intangible assets                    468         1,082
 Loss/(gain) on sale of subsidiary and investments  842         (36)
 Loss on sale of fixed assets                       429         -
 Loss/(gain) on disposal of intangible assets       98          (1,166)
 Foreign exchange                                   (458)       (1,914)
 Restructuring and transaction-related fees         1,976       4,969
 Share based payment charge                         3,759       3,892
 Equity accounted loss from associate               0           716
 Write off of investment                            0           2,236
 Adjusted EBITDA                                    5,684       7,682

 

 

Restoration of Listing

The Company would like to advise that, further to this announcement, it has
now requested that the suspension of the Company's listing be lifted by the
Financial Conduct Authority as soon as possible to enable trading of the
Company's shares to resume.

This announcement contains inside information.

For further information please contact:

 Argo Blockchain
 Investor Relations                  ir@argoblockchain.com (mailto:ir@argoblockchain.com)
 Tennyson Securities
 Corporate Broker                    +44 207 186 9030

 Peter Krens
 Fortified Securities
 Joint Broker                        +44 7493 989014

 Guy Wheatley, CFA                   guy.wheatley@fortifiedsecurities.com
 Tancredi Intelligent Communication   argoblock@tancredigroup.com

 UK & Europe Media Relations

 

About Argo:

Argo Blockchain plc is a dual-listed (LSE: ARB; NASDAQ: ARBK) blockchain
technology company focused on large-scale cryptocurrency mining. With a mining
facility in Quebec and offices in the US, Canada, and the UK, Argo's global,
sustainable operations are predominantly powered by renewable energy. In 2021,
Argo became the first climate positive cryptocurrency mining company, and a
signatory to the Crypto Climate Accord. For more information, visit
www.argoblockchain.com (http://www.argoblockchain.com/) .

 

Forward looking statements

 

This announcement contains "forward-looking statements," which can be
identified by words like "may," "will," "likely," "should," "expect,"
"anticipate," "future," "plan," "believe," "intend," "goal," "seek,"
"estimate," "project," "continue" and similar expressions. Forward-looking
statements are neither historical facts nor assurances of future performance.
Instead, they are based only on the Company's current beliefs, expectations
and assumptions regarding the future of its business, future plans and
strategies, projections, anticipated events and trends, the economy and other
future conditions. Because forward-looking statements relate to the future,
they are subject to inherent uncertainties, risks and changes in circumstances
that are difficult to predict and many of which are outside of the Company's
control. The information in this announcement about future plans and
objectives of the Company are forward-looking statements. The Company's actual
results and financial condition may differ materially from those indicated in
the forward-looking statements. Therefore, you should not rely on any of these
forward-looking statements. Important factors that could cause the Company's
actual results and financial condition to differ materially from those
indicated in the forward-looking statements include, market and other
conditions, the principal risks and uncertainties listed in the risk factors
set forth in our Annual Report and Financial Statements and Form 20-F for the
year ended 31 December 2024.

 

CHAIRMAN'S STATEMENT

For the past 24 months, the Company has focused on three key pillars:
financial discipline, operational excellence, and strategic partnerships for
growth. We have made significant progress on financial discipline and
operational excellence; strategic partnerships will be key for 2025 as Argo
aims to strengthen its balance sheet and grow its hashrate.

Financial Discipline

The focus for Argo has been to reduce the high-interest rate debt owing to
Galaxy. The $35 million debt owed to Galaxy began amortising at $1.1 million
per month in May 2023. As noted in my 28 August 2024 update to shareholders, I
am pleased to report that Argo has repaid the full amount of this loan to
Galaxy as announced by the Company on August 12th. This Galaxy debt was repaid
four months ahead of the revised schedule, and nearly 18 months ahead of the
original repayment schedule. The early repayment reflects the Company's focus
on strengthening its balance sheet, reducing its financial liabilities, and
focusing on operational excellence.  Repayment was made possible by using
cash flow generated from operations, cash generated from equity raises and
cash generated through the sale of non-core assets without any meaningful
impact to Argo's hash rate.  Repaying the Galaxy loan was a significant
milestone for Argo. With the unsecured bonds maturing in November 2026, Argo
will turn its attention to either refinancing, restructuring or buying back
these bonds.

Revenue in 2024 was $47 million, compared to $50.6 million in 2023. Non-mining
operating expenses were $13 million, a decrease from $19 million in 2023.
Adjusted EBITDA was $5.6 million, compared to $7.7 million in 2023. Loss
attributable to shareholders totalled $44.3 million. Our cash balance at
December 31, 2024 was $8.6 million.

Operational Excellence

2024 saw the end of Argo's relationship with the Helios facility. After
constructing and energizing the facility in 2021 and 2022, selling the
facility to Galaxy in late 2022 with a two year hosting agreement, Argo has
now exited the facility. We are pleased with the new hosting arrangements we
have announced with Merkle, in both Tennessee and Washington State during the
early part of 2025. And we have utilized additional capacity at our owned site
in Baie Comeau, Quebec. We took the opportunity to improve our liquidity by
selling some of the refurbished machines subsequent to year end.

Highlights in 2024 included the sale of the Mirabel facility which was
completed with no meaningful loss to Argo's hash rate.  The significant
reduction in operating expenses in the first half of 2024 compared to 2022 and
2023, and the strong mining margin percentage despite the Bitcoin halving are
indications of Argo's strong performance.

The Mirabel sale enabled the Company to de-lever the balance sheet with
minimal impact to the Company's hash rate. Following the sale, Argo relocated
the majority of the mining machines at Mirabel to its Baie Comeau facility and
sold certain prior generation machines representing approximately 140 PH/s.
The sale allowed the Company to streamline its operations by locating all
self-mining machines at its Baie Comeau facility. Additionally, the sale of
Mirabel reduces the Company's non-mining operating expenses by $0.7 million
annually.

Argo has taken aggressive action on its cost structure and non-mining
operating expenses. As compared to the second half of fiscal 2022, the Company
has reduced its operating expenses by over 70%. The Company will continue to
reduce headcount to decrease costs in the first half of 2025.

Despite the Bitcoin halving and the lower hash price realised since then, the
Company maintained strong mining margins and its mining margin percentage has
remained consistent with 2023. The first quarter of 2025 was a transition
quarter for Argo as the Helios machines were refurbished and sent to new
locations. We expect that as of 31 May 2025 we will have all of the Helios
units either re-hosted or sold.

Growth and strategic partnerships

The strengthened balance sheet and repayment of the Galaxy debt gives Argo
more flexibility to pursue strategic opportunities moving forward. Public
announcements have been made informing the market of non-binding financing
arrangements and we will continue to update the market on our progress. The
Company continues to explore opportunities where mining can be paired with
stranded or wasted energy. There is tremendous potential for energy generators
to utilise mining as a balancing and optimization tool, particularly in the
energy transition where limitations currently exist in the ability to store
renewable energy.

For 2025, the Company will continue to focus on its three pillars - financial
discipline, operational excellence and growth and strategic partnerships. We
are excited to have Justin Nolan join Argo as CEO effective March 22, 2025. On
behalf of the Board, I would like to thank Tom for his leadership during his
tenure as CEO, our management team for their resilience and focus, and to all
of our shareholders and stakeholders. We remain committed to optimising our
capital structure and driving long-term value for our shareholders.

 

Matthew Shaw

Chairman of the Board  8 May 2025

BOARD OF DIRECTORS
Matthew Shaw (Chairman of the Board)

Matthew Shaw has served on our board of directors since July 2019, and he
became Chairman of the Board in February 2023. He brings over 25 years of
experience as an international banker, corporate adviser, and serial
entrepreneur. He has been specializing in the blockchain and cryptocurrency
sector since 2017. He is currently Chief Executive Officer of Webslinger
Advisors, a specialist web3 advisory and administration firm which provides
services to Cayman Foundations/DAOs. He previously co-founded Protos Asset
Management, a Swiss company that manages a cryptocurrency fund, and co-founded
DeFi Yield Technologies, a DeFi firm acquired by Dispersion Holdings (now
AQRU). He is also currently Chief Executive Officer of Blimp Technologies and
is also president of a proprietary family investment company. Mr. Shaw holds a
B.A. in English Language and Literature from Manchester University and an
M.B.A. from Bradford University.

 

 

Raghav Chopra (Non-Executive Director)

Raghav Chopra is an investor with over 16 years of experience and is currently
a Managing Partner of a privately held investment firm. He was previously a
Portfolio Manager for AllianceBernstein LP and a technology investor for
leading asset managers. Prior to that, Mr. Chopra was an Associate in private
equity at The Carlyle Group and an Analyst in investment banking at Goldman,
Sachs & Co. Mr. Chopra serves on the Board of the Harvard Club of New York
City Foundation and is a member of the Economic Club of New York. Mr. Chopra
holds a B.S. in Electrical Engineering and Economics with Distinction from
Yale University, and an M.B.A. with High Distinction from the Harvard Business
School, where he was named a George F. Baker Scholar.

 

 

Maria Perrella (Non-Executive Director)

Maria Perrella has served on our board of directors since July 2021. Over the
last 25 years, Ms. Perrella has held several senior leadership positions and
currently Maria Perrella serves as Chief Financial Officer of Samuel, Son
& Co., a leading metals distributor and industrial products manufacturer.
Previously, she served as the Chief Financial Officer of MDA, a Canadian-based
international space mission partner, and she spent the previous 12 years at
Automation Tooling Systems Inc. (ATS.TSX), when it was a TSX-listed automation
company with over 4,500 employees across six countries. Her various roles have
allowed her to develop skills in financial planning and corporate governance
and compliance, and her many years as a Chief Financial Officer have provided
her with extensive experience in mergers and acquisitions, capital markets,
and strategic corporate finance. Maria graduated from the Schulich School of
Business (BBA) and is a Chartered Public Accountant in Ontario, Canada.

 

Justin Nolan (Executive Director)

Justin Nolan has served as our Chief Executive Officer since 22 March, 2025.
Mr. Nolan most recently was Chief Executive Officer at Arkon Energy, a digital
infrastructure company. Prior to his role at Arkon Energy, Mr. Nolan served as
Chief Growth Officer at Argo. In this capacity, he played a pivotal role in
expanding the Company's operations, including the development of the Helios
project. Earlier in his career, Nolan co-founded and led DPN LLC, which was
instrumental in the initial development of the Helios project before its
acquisition by Argo Blockchain in March 2021. Mr. Nolan graduated from Johns
Hopkins University in 2004.

 
STRATEGIC REPORT

 

The directors present their strategic report on the Group for the year ended
31 December 2024.

Principal activity

The Group's principal activity is that of cryptocurrency mining.

Review of the business and future developments

Argo Blockchain plc (the "Company") was incorporated on 5 December 2017. Argo
Blockchain plc is the parent holding company of the Argo group of companies
including Argo Innovation Labs Inc., a British Columbia, Canada Corporation,
and Argo Operating US LLC, a Delaware, United States Limited Liability
Corporation (collectively "Argo" or "the Group").

On 3 August 2018 the Company's Ordinary Shares were admitted to the standard
segment of the Official List maintained by the Financial Conduct Authority and
to trading on the London Stock Exchange's Main Market.  The Company's
American Depositary Shares (ADSs) have traded on the Nasdaq Stock Market
("Nasdaq") since 24 September 2021.

The Chairman's statement provides an in-depth review of 2024, so this
strategic report is instead looking forward to the plans and intentions of the
Group.

Group strategy and business model

We are targeting a balance between owning and operating our own mining
facilities and utilizing third party facilities with access to reliable,
low-cost and renewable energy. Throughout the Company's history, we have
invested in purchasing, building and operating mining facilities. We will
continue to explore the acquisition and development of future mining
facilities that provide opportunities to utilize wasted or stranded energy.
This could include using mobile and/or modular mining infrastructure. We will
continue to evaluate opportunities from hosting providers that offer reliable,
low-cost, and clean power in order to balance the gap between our available
capacity and the power needed to run our mining operations.

We believe the combination of increased mining difficulty, driven by greater
network hashrate, and the periodic adjustment of reward rates, such as the
recent halving of Bitcoin rewards, will increase the importance of power
efficiency in cryptocurrency mining over the long term. As a result, we are
focused on deploying our mining machines at locations with access to reliable
clean power sources, as successfully doing so should enable us to reduce our
power costs. As our fleet ages and becomes less efficient, we will need to
raise capital to revitalize our fleet.

Performance of the business during the period and the position at the end of the year

The financial results for 2024 reflect the Bitcoin halving in April 2024 which
reduced our Bitcoin mining production from May through December as compared to
2023.

 

 
 
Key performance indicators

The Board monitors the activities and performance of the Group on a continuing
basis. The main performance indicators applicable for the Group is mining
revenue and mining profit.

 

 KPI                             2024    2023    % Change
 Mining revenue ($000s)          47,017  50,558  -7%
 Mining profit(1) ($000s)        15,628  21,757  -28%
 Mining margin                   33%     43%     -10%
 Bitcoin mined (2) (number)      755     1,760   -57%
 Total hashrate capacity (EH/s)  2.7     2.8     -4%
 Average network difficulty (T)  87.3    40.4    116%

 

 

1. Mining profit is defined as mining revenue minus direct costs (excluding
depreciation and amortization of mining equipment).

2. The decrease in bitcoin mined is largely due to the halving which occurred
in April 2024.

 

Non-IFRS Reconciliation

The following table shows a reconciliation of Bitcoin Mining Margin to gross
margin, the most directly comparable IFRS measure, for the years ended
December 31, 2024 and December 31, 2023.

 

                                               Year ended  Year ended
                                               31-Dec      31-Dec
                                               2024        2023
                                               $'000       $'000

 Gross profit                                  1,457       3,101

 Depreciation of mining equipment              14,171      18,656
 Mining profit                                 15,628      21,757
 Bitcoin and Bitcoin Equivalent Mining Margin  33%         43%

 

 

 

The following table shows a reconciliation of Adjusted EBITDA to net
income/(loss), the most directly comparable IFRS measure, for the years ended
December 31, 2024 and December 31, 2023.

 

                                                    Year ended  Year ended
                                                    31-Dec      31-Dec
                                                    2024        2023
                                                    $'000       $'000

 Net loss                                           (55,102)    (34,637)

 Interest expense                                   6,810       11,556
 Depreciation / amortisation                        15,024      20,129
 Income tax expense                                 340         -
 EBITDA                                             (32,928)    (2,952)
 Impairment of assets                               31,498      855
 Impairment of intangible assets                    468         1,082
 Loss/(gain) on sale of subsidiary and investments  842         (36)
 Loss on sale of fixed assets                       429         -
 Loss/(gain) on disposal of intangible assets       98          (1,166)
 Foreign exchange                                   (458)       (1,914)
 Restructuring and transaction-related fees         1,976       4,969
 Share based payment charge                         3,759       3,892
 Equity accounted loss from associate               -           716
 Write off of investment                            -           2,236
 Adjusted EBITDA                                    5,684       7,682

 

 

 

Principal risk and uncertainties

While the Group focuses on self-mining, the Board considers the principal
risks for the Group to be volatility in the cryptocurrency market,
specifically downside risk to Bitcoin, energy price risk, access to the
capital markets, and general sentiment regarding crypto assets as a whole. The
Group operates in an uncertain environment and is subject to a number of risk
factors. The Board considers the following to be of particular relevance, but
this is by no means an exhaustive list as there may be other risk factors not
currently known.

 

Liquidity risk

The Group has limited cash resources, limited ability to raise funds and has
significant debt obligations. In addition, only a portion of the Group's fleet
operated in the first quarter of 2025 as a result of moving machines to new
hosting facilities. For more detail, see Note 2 Going Concern in the audited
financial statements.

Market conditions

Market conditions, including the cryptocurrency market values and general
economic conditions and their effect on exchange rates, interest rates, and
inflation rates, may impact the ultimate value of the Group regardless of its
operating performance. The Group also faces competition from other
organisations, some of which may have greater resources.

Tax Risk

A tax authority may disagree with tax positions that the Company has taken,
which could result in increased tax liabilities. For example, His Majesty's
Revenue & Customs ("HMRC"), Revenue Quebec, the Canada Revenue Agency, the
IRS or another tax authority could challenge the Company's allocation of
income by tax jurisdiction and the amounts paid between the Company's
affiliated companies pursuant to the Company's intercompany arrangements and
transfer pricing policies, including amounts paid with respect to the
Company's intellectual property development. Similarly, a tax authority could
assert that the Company is subject to tax in a jurisdiction where the Company
believes it has not established a taxable connection and such an assertion, if
successful, could increase the Company's expected tax liability in one or more
jurisdictions.

A tax authority may also take the position that material income tax
liabilities, interest and penalties are payable by the Company. For example,
where there has been a technical violation of contradictory laws and
regulations that are relatively new and have not been subject to extensive
review or interpretation, in which case the Company expects that we might
contest such assessment.

Contesting such an assessment may be lengthy and costly and if the Company is
unsuccessful in disputing the assessment, the implications could increase the
Company's anticipated effective tax. Income tax assessments received in Canada
are currently under appeal, and if unsuccessful, the Company will incur
significant liabilities.

Cyber risk

The Group holds digital assets via software and hardware which may prove to be
vulnerable to data security breaches in the future. Data security breach
incidents may compromise the confidentiality, integrity or availability of
data such that the data is vulnerable to access or acquisition by unauthorised
persons. These data security breaches may result in the unrecoverable loss of
digital assets. The Group's hardware devices and remote servers holding the
Group's data may be breached and result in the loss of valuable data. Loss of
the private keys required to access the digital assets may result in
irrecoverable loss of access to the digital assets, which may not be covered
by insurance (whether in full or part). In order to mitigate these risks, the
Group holds its assets with third party specialist crypto-currency custodians
with a number of security measures in place.

Cryptocurrency price volatility

Revenues are denominated in cryptocurrency or tokens. These 'digital assets'
can be subject to high levels of volatility, and it may not always be possible
for the Group to trade out or effectively hedge its position. The Group will
always seek, where practicable, to manage the price volatility risk and
actively monitor its portfolio of digital assets. The majority of the Group's
crypto assets (as per note 22) are stored in Bitcoin, which dominates the
crypto market. Cryptocurrency exchange rates have exhibited strong volatility.
Many factors outside of the control of the Group can affect the market price
of cryptocurrencies, including, but not limited to, national and international
economic, financial, regulatory, political, terrorist, military, and other
events, adverse or positive news events and publicity, and generally extreme,
uncertain, and volatile market conditions. Extreme changes in price may occur
at any time, resulting in a potential loss of value of our entire portfolio of
cryptocurrencies, complete or partial loss of purchasing power, and difficulty
or a complete inability to sell or exchange the Group's digital currency.

 

Capital raising

The Group's activities are capital intensive, and the Company may need to
raise additional capital to fund its operations, pursue growth strategies,
including potential acquisitions of complementary businesses, and respond to
competitive pressures or unanticipated working capital requirements. The
Company has previously raised equity and debt, however, may not be able to
obtain additional debt or equity financing on favourable terms, if at all,
which could impair its growth and adversely affect its existing operations.
The Group may be required to accept terms that restrict its ability to incur
additional indebtedness or to take other actions including terms that require
it to maintain specified liquidity or other ratios. In order to mitigate these
risks, the Company keeps its financing requirements under review and actively
manages its activities and operations within the resources available to it.

Hosting counterparty risk

The Group relies upon a third-party facility to host and maintain a majority
of its miners. Should the third party not fulfil its obligations to the Group,
or should that third party suffer an insolvency or related event, the Group's
operations may be materially and adversely affected. The Group has sought to
limit this risk by entering into contracts with an established third party
with a proven track record, however this is not a guarantee of future
performance. The Group has also entered into other agreements with its host,
and there is a risk that non- performance under one agreement could adversely
affect the performance under other agreements with the same counterparty.

Electricity supply and price

The Group's activities require substantial and sustained electrical provision
and its profitability is dependent on securing acceptable electricity prices.
Should electricity not be available in the quantities the Group's operations
require (whether intermittently or for a sustained period) or should the
service be unreliable, the Group's operations, revenue and profitability may
be materially adversely affected. If the price of electricity increases
(whether as a result of local, national or international events or pressures),
the Group's profitability may be materially adversely affected.

Technology and supply risks

Argo operates within a highly technological environment where software and
hardware are consistently updated. To ensure the Group remains as a leading
provider and stays ahead of its competitors, it needs to continue to invest in
its technology, software, and hardware which requires a large amount of
capital. The Group procures its software and hardware from third party
providers and is reliant on those third parties complying with their
obligations to the Group. Should a third party fail to comply with its
obligations to the Group, the Group's operations, revenue and profitability
may be materially adversely affected.

Risk relating to the Group's business strategy

The Group is dependent on the ability of the directors to identify suitable
opportunities and to implement the Group's strategy. There is no assurance
that the Group's activities of mining for itself will continue to be
successful even though internal forecasts continue to suggest otherwise.

Dependence on key personnel and management risks

The Group's business is dependent on retaining the services of a small
executive management team, and the loss of a key individual could have an
adverse effect on the future of the Group's business. The Group's future
success will also depend in large part upon its ability to attract and retain
highly skilled personnel. This risk is managed by offering compensation plans
that are competitive in the current market.

Regulatory risk

The Group operates in a rapidly evolving sector, the regulatory approach to
which is not always certain and is still developing. The Group seeks to comply
with all applicable law and regulation, however breach of any regulatory
requirements may give rise to reputational, financial, or other sanctions
against the Group. The Board considers these risks seriously and designs,
maintains, and reviews the policies and processes so as to mitigate or avoid
these risks. While the Board has a good record of compliance, there is no
assurance that the Group's activities will always be compliant.

Litigation risk

The Company was previously subject to a class action lawsuit which was
dismissed with prejudice and without the ability to replead the case, However
the Company may be the target of this type of litigation in the future.
Securities litigation against the Company could result in substantial costs
and divert management's attention from other business concerns, which could
seriously harm the Company's business.

 
Promotion of the Company for the benefit of the members as a whole

The directors believe they have acted in the way most likely to promote the
success of the Company for the benefit of its members as a whole, as required
by s172 of the Companies Act 2006.

The requirements of s172 are for the directors to:

·      Consider the likely consequences of any decision in the long term

·      Act fairly between the members of the Company

·      Maintain a reputation for high standards of business conduct

·      Consider the interests of the Company's employees

·      Foster the Company's relationships with suppliers, customers and
others

·      Consider the impact of the Company's operations on the community
and the environment

 

The Company operates as a crypto mining business, which is inherently
speculative in nature and, with volatile revenue, at times may be dependent
upon fund-raising for its continued operation. The nature of the business is
well understood by the Company's members, employees, and suppliers, and the
directors are transparent about the cash position and funding requirements.

The application of the s172 requirements can be demonstrated in relation to
the most significant decisions made during 2024, in addition to the
disclosures made in the Directors' Report and the Strategic Report:

·      On 9 March 2024, the Company granted equity awards in the form of
restricted stock units (RSUs) to all employees. The Company's performance, and
therefore long-term value creation, is driven by the performance of its staff,
placing the incentivisation and retention of its staff as a key focus for the
Company's board and senior management. After careful review of the Company's
existing employee incentivisation arrangements, it was decided to ensure that
all staff have the opportunity to benefit directly from the Company's
long-term success. In order to ensure their incentivisation is aligned with
creating long-term value for shareholders, the RSUs vest over a three-year
period, with the first vesting occurring twelve months from the date of the
grant..

·      During 2024, the Company continued to focus its efforts on
reducing debt and strengthening the balance sheet. The Group's long term
success is dependent on a strong financial footing. The Company spent
considerable time and effort to identify sustainable cost savings and utilised
all excess cash flow for debt reduction. As a result, the Company was able to
reduce debt by $23.5 million in 2024, including paying off the Galaxy debt in
full.

Responsibilities to local communities

As a crypto mining company with operations in Canada and the United States,
the Board is mindful of its responsibilities to the communities and
environments in which it works. The Group sources its electricity from
predominantly renewable sources (hydropower in Canada and wind in Texas during
2024) and participated in demand response programs to curtail usage in peak
times to assist in ensuring resilience of the local power grid. In addition,
the Group has explored ways to capture and usefully utilise the heat generated
from its operations, both to improve efficiency and provide added value. The
Group has also taken steps to improve overall efficiency of its operations.
Further details are set out in the Group's report on the TCFD Recommendations
on page 33 of this Annual Report.

Employees

The interests of employees are a primary consideration for the Board; in March
2024, all employees were granted equity in the Company in order to align
incentives and enable employees to share in the future success of the Group.
Personal development opportunities are encouraged and supported.

This report was approved by the Board on 8 May 2025 and signed on its behalf
by:

 

 

Matthew Shaw Chairman of the Board

DIRECTORS' REPORT
General Information

The directors present the Annual Report and audited consolidated financial
statements for the year ended 31 December 2024.

The Company was incorporated on 5 December 2017. Argo Blockchain plc is the
parent holding company of the Argo group of companies including Argo
Innovation Labs Inc., a British Columbia, Canada Corporation, and Argo
Operating US LLC, Inc., a Delaware, United States Limited Liability
Corporation.

On 3 August 2018 the Company's Ordinary Shares were admitted to the standard
segment of the Official List maintained by the Financial Conduct Authority and
to trading on the London Stock Exchange's Main Market. . The Company's
American Depositary Shares have traded on Nasdaq since 24 September 2021.

Future developments

The Group continues to focus its strategy on self-mining cryptocurrencies as
detailed further in the Strategic Report.

Dividends

The directors do not propose a dividend in respect of the period ended 31
December 2024 (2023: nil).

Directors

The Board is responsible for the Company's objectives and business strategy
and its overall supervision. Acquisition, divestment and other strategic
decisions will all be considered and determined by the Board including, when
circumstances permit, whether the payment of dividends, issue or buy back of
shares is appropriate.

Attendance at Board meetings:

 

 Member           Meetings attended while a director
 Matthew Shaw     23 of 26
 Maria Perrella   25 of 26
 Raghav Chopra    26 of 26
 Thomas Chippas*  26 of 26

 

 

The Board leads the Company within a framework of appropriate and effective
controls. The Board has responsibility for establishing, operating, and
monitoring the corporate governance values of the Company. The Board also has
overall responsibility for setting the Company's strategic aims, defining the
business objective, managing the financial and operational resources of the
Company and reviewing the performance of the officers and management of the
Company's business. The Board has taken appropriate steps to ensure that the
Company complies with Listing Principles 1 and 2 as set out in Chapter 7 of
the Listing Rules and (notwithstanding that they only apply to companies with
a Premium Listing) the Premium Listing Principles as set out in Chapter 7 of
the Listing Rules.

The Company supports the concept of an effective Board leading and controlling
the Company. The Board is responsible for approving Company policy and
strategy. It meets regularly and has a schedule of matters specifically
reserved to it for decision. Management supplies the Board with appropriate
and timely information and the directors

are free to seek any further information they consider necessary. All
directors have access to advice from the General Counsel and independent
professionals at the Company's expense. Training is available for new
directors and other directors as necessary.

All directors are subject to re-election every three years and, on
appointment, at the first AGM after appointment. In 2021, the Company
established a nomination committee. Prior to this, and given the size of the
Board, all director appointments were approved by the Board as a whole.

Communications with shareholders

Communications with shareholders are given a high priority. In addition to the
publication of an annual report and an interim report, there is regular
dialogue with shareholders and analysts. The Annual General Meeting is viewed
as a forum for communicating with shareholders, particularly private
investors. Shareholders may question the Chairman and other members of the
Board at the Annual General Meeting. All published information for
shareholders is also available on the Company website, including annual and
interim reports, circulars, announcements and significant shareholdings.

Accountability and audit

The Board presents a balanced and understandable assessment of the Company's
position and prospects in all interim and price sensitive reports to
regulators as well as in the information required to be presented by statutory
requirements.

The Company's Audit Committee has responsibility to supervise and review the
Company's audit and financial procedures. In relation to the activities of the
Audit Committee during the year, please see the Audit Committee Report in this
Annual Report.

Internal control

The Board has responsibility for designing and implementing systems of
internal control and for reviewing the effectiveness of these systems. The
risk management process and systems of internal control are designed to manage
rather than eliminate the risk of the Company failing to achieve its strategic
objectives. It should be recognised that such systems can only provide
reasonable and not absolute assurance against material misstatement or loss.
The Company will continue to review and develop its internal systems and
processes.

Political donations and political expenditure

The Group did not make any political donations or expenditure during the year
under review.

Directors' and officers' liability insurance and directors' indemnities

The Company maintains directors' and officers' liability insurance, which
gives appropriate cover for legal action brought against its directors.
Qualifying third-party indemnity provisions for the benefit of the Company's
directors, secretary and other officers were in force during the year ended 31
December 2024 and to the date of this report. In addition, the Company has
agreed to indemnify former directors of the Company in respect of their
appointments as directors of the Company.

Financial Instruments

Information about the use of financial instruments by the Company and its
subsidiaries is given in note 26 to the financial statements.

Activities in the field of research and development

During the year under review, the Group did not have any material activities
in the field of research and development.

Post balance sheet events

Thomas Chippas resigned as Chief Executive Officer and Director of the Company
effective 28 February 2025. On 24 March 2025, the Board appointed Justin Nolan
as Chief Executive Officer and Director of the Group.

In January 2024, the Group received a Notification Letter from Nasdaq Stock
Market LLC stating that the Company is not in compliance with minimum bid
price for the Company's American Depositary Shares.  The Company has until
July 15, 2025 to regain compliance with the minimum bid price requirement.

The Group signed hosting agreements with Merkle Standard LLC to host 9,315
miners at Merkle's Memphis, Tennessee location and up to 4,000 machines at its
Washington State location. Approximately 1,232 units were sent to the Group's
Baie Comeau facility. A further approximately 8,000 units were sold for cash
proceeds of approximately $2.0 million.

Directors and directors' interests

The directors who held office at the date of signature of the financial
statements were as follows:

 

                                                                                 Appointment/resignation during the year

 Director
 Matthew Shaw (Chairman of the Board, Chair of the Nomination Committee, Member  Appointed 17 July 2019
 of the Audit Committee)
 Justin Nolan (Chief Executive Officer)(1)                                       Appointed 22 March 2025
 Maria Perrella (Chair of the Audit Committee, Member of the Nomination          Appointed 29 July 2021
 Committee and Remuneration Committee)
 Raghav Chopra (Chair of the Remuneration Committee and Member of the            Appointed 23 February 2022
 AuditCommittee)

 

Following the year ended 31 December 2024, Mr. Chippas resigned from his
positions as Managing Director effective 1 February 2025 and Chief Executive
Officer effective 28 February 2025.

 

 

 Directors' option holdings
 Name                        Date of Grant  Aggregate number of options over Ordinary Shares granted  Exercise Price  Exercise Conditions                                                           Lapse Date
 Matthew Shaw                17-Jul-19      537,037                                                   16 pence        1/3 on the first anniversary of admission, 1/36 of the total options monthly  17-Jul-25
                                                                                                                      thereafter
 Matthew Shaw                5-Feb-20       294,048                                                   7 pence         1/12 per month commencing of 4(th) month from issue                           4-Feb-30
 Maria Perrella              22-Sep-21      500,000                                                   157 pence       6/36(th) after 6-month anniversary, 1/36th thereafter                         21-Sep-31
 Raghav Chopra               23-May-22      500,000                                                   49 pence        6/36(th) after 6-month anniversary, 1/36(th) thereafter                       23-May-32

 

 

Going Concern

The directors, having made due and careful enquiry, are of the opinion that
the Group has adequate working capital to meet its obligations over the next
12 months. The directors therefore have made an informed

judgement, at the time of approving the financial statements, that there is a
reasonable expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. As a result, the directors
have adopted the going concern basis of accounting in the preparation of the
annual financial statements; more detail can be found in the accounting
policies. However, the Board notes that the debt service requirements, lower
operating margins, and the volatile economic and industry environment,
indicate the existence of material uncertainties that may cast significant
doubt regarding the applicability of the going concern assumption, and the
auditors have made reference to this in their audit report (Note 3).

Financial Risk Management

The Group has a simple capital structure and its principal financial assets
are cash and digital assets. The Group is subject to market risk by way of
being exposed to volatility in crypto asset value and variations in foreign
exchange rates. The Group has little exposure to credit risk due to holding
its reserves with credible institutions. The Group may also be exposed to
liquidity and capital risk, due to the nature of operations and the
requirements for mining hardware acquisition. The Group manages these risks
through portfolio management and maintenance of sufficient working capital.
Further details of risks can be seen within the Strategic Report or in the
Notes to the accounts.

Capital Structure

The Company's capital structure is comprised of one class of ordinary shares.
There are no restrictions on the transfer of the ordinary shares, and there
are no persons holding securities carrying special rights regarding the
control of the Company. The rights over shares under the Company's employee
share schemes are set out in Note 21 of the financial statements. There are no
restrictions on voting rights nor, so far as the Company is aware, any
agreements between holders of securities that may restrict the transfer of
securities or voting rights.

Substantial shareholders

There are no substantial shareholders as at the date of the report.

Controlling shareholder

The Group does not have a controlling shareholder.

Directors

The Company's directors are appointed in accordance with, and have the powers
and authorities set out in, the Company's articles of association.

Takeovers

Other than potential lump sum payments due under certain employment contracts
and equity award vesting for management, there are no significant agreements
that take effect, alter or terminate on a change of control of the Company
following a takeover. Other than the entitlement to a notice period and
reimbursement of expenses in the normal manner, there are no agreements with
the Company and its directors or employees for compensation for loss of office
or employment as a result of a takeover bid.

Greenhouse gas emissions

Details about the Group's greenhouse gas emissions, energy consumption, energy
efficiency disclosures, and broader climate risk management strategies are
included in the TCFD Report on page 33.

Employee and business relationships

The Board consists of the Chief Executive Officer and 3 Non-executive
directors, and the Group's senior management consists of 8 key management
personnel, including the Chief Executive Officer and the Chief Financial
Officer. This facilitates the direct and frequent communication between all
parties and the Board. Due to the nature of a small team and the wide and
varied skills possessed, key strategic business decisions are generally
discussed and analysed by all concerned, ensuring all relevant interests and
perspectives are considered and addressed in the decision making process.

A significant part of any business is maintaining a good relationship with its
suppliers, and the Group maintains strong relationships with its key
suppliers.

 
Diversity Policy

Given the Company's current stage of development, its organizational structure
and limited headcount, the Board considers that a formal diversity policy
would not be practicable for the Company to develop and implement and would
not improve the Group's policies or processes in a meaningful manner. The
Company and the Board already integrate equality and diversity in all aspects
of the Company's business and all decisions are made on merit and without
regard to protected characteristics. Where appropriate and practicable for the
Company, the Company considers and implements positive actions to enable the
Company to provide additional support. This can include, for example, making
adjustments to assist staff and ensuring that, to the extent possible, all
relevant perspectives are included in decision making on an ongoing basis.

The Company will keep the requirement for a formal diversity policy under
review and will give serious consideration to the adoption of a policy,
tailored to the nature of the Company's business, its operations and resources
at the appropriate point.

Provision of Information to Auditor

So far as each of the Directors is aware at the time this report is approved:

·      there is no relevant audit information of which the Company's
auditor is unaware; and

·      the Directors have taken all steps that they ought to have taken
to make themselves aware of any relevant audit information and to establish
that the auditor is aware of that information.

Auditors

The auditors, PKF Littlejohn LLP have indicated their willingness to continue
in office, and a resolution that they be re-appointed will be proposed at the
annual general meeting.

This report was approved by the Board on 8 May 2025 and signed on its behalf
by:

 

 

Matthew Shaw Chairman of the Board

 

DIRECTORS' REMUNERATION REPORT
2024 key achievements:

·      Utilised the Company's equity incentive plan to offer suitably
tailored equity incentivisation; and

·      Explored and executed employee retention strategies including
supporting internal growth opportunities.

2025 areas of focus:

·      Launch the equity administration platform to improve compliance
and financial reporting ;

·      Continue with a comprehensive review of remuneration; and

·      Refine and improve employee growth and retention strategies,

Letter from the Chair of the Remuneration Committee

Dear Shareholders,

The Remuneration Committee met formally three times during the financial year,
and all of the Directors on the Committee attended all of these meetings. The
Committee oversees matters relating to compensation, including benchmarking
against comparable peers, adopting a new equity incentive plan, and the grant
of awards under that plan to align remuneration with the interests of our
shareholders.

The Remuneration Committee consists of myself as Chair and Maria Perrella as
Member. In June 2024, I became Chair, replacing Maria Perrella, who remains a
Member.  The Committee has discretion to invite appropriate members of the
executive management of the Company to the meetings as required and considers
their input and recommendations to be critical to ensuring a well- developed
remuneration strategy. In order to ensure appropriate scrutiny of all
decisions, no director was present when their own remuneration was considered,
approved, or voted upon; the Committee also takes advice and guidance from
independent advisors and legal counsel.

The Group's remuneration challenges include the different market norms and
expectations between the jurisdictions in which it operates. The reward
markets in the UK and US have significant differences, particularly in the
technology sector, and market expectations in the UK can present challenges to
the Group in structuring attractive remuneration packages, particularly for
the Company's senior executive leadership. More generally, the Group is also
competing against significantly larger and better capitalised companies in the
cryptoasset sector.

During the year under review, the Company's remuneration strategy was to
deliver remuneration packages consistent with the Company's Remuneration
Policy and market norms that provide a balanced structure of short, medium,
and longer-term remuneration. Remuneration packages typically comprised a
competitive base salary, appropriate annual bonuses and longer-term equity
incentivisation. In addition, the Company has offered competitive benefit and
pension offerings based on the market norms in the country relevant to each
team member.

The Committee took the following key decisions in relation to remuneration
during the year:

·      approved a compensation audit and strategy to deliver
standardization of the Company's offerings to each employee group;

·      approved the Company's refresh of Restricted Share Unit and
Performance Share Unit awards to strengthen alignment across the organization;
and

·      approved appropriate cost of living salary increases for staff in
response to competitive market trends.

The Committee remains focused on ensuring that the Group's remuneration policy
enables the Group to attract, retain and develop appropriately skilled and
experienced staff sufficient for the Group's present and anticipated
requirements. The Committee is also determined to ensure that remuneration
incentivises staff to deliver on both financial and non-financial objectives.

Following the year under review, Mr. Chippas resigned as Chief Executive
Officer and Executive Director of the Company and Mr. MacCallum was appointed
as Interim Chief Executive Officer while retaining his position as Chief
Financial Officer. On 22 March 2025, Justin Nolan was appointed as Chief
Executive Officer. The Committee determined Mr. Chippas', Mr. MacCallum's and
Mr. Nolan's remuneration for serving as CEO,CFO, and CEO, respectively, based
on a review of benchmarking against relevant comparables in the market.

Raghav Chopra

 

Chair of the Remuneration Committee   8 May 2025

 
Directors' Remuneration Report

Membership of the Remuneration Committee

During the year, the Company's Remuneration Committee consisted of Maria
Perrella and Raghav Chopra. Raghav Chopra served as Chair of the committee.

Role of the Remuneration Committee

The Remuneration Committee's role is to determine and operate a remuneration
policy that supports the Company's strategy and promotes long-term sustainable
success and aligns the interests of directors with shareholders.

The Remuneration Committee's primary responsibilities include:

●     identifying, reviewing and proposing policies relevant to
executive officer compensation;

●     evaluating each executive officer's performance in light of such
policies and reporting to the Board;

●     determining any long-term equity incentive component of each
executive officer's compensation in line with the remuneration policy and
reviewing its executive officer compensation and benefits policies generally
and

●     reviewing and assessing risks arising from the Company's
compensation policies and practices.

Advisors to the Committee

None.

Directors' remuneration (audited)

Details of directors' remuneration during the year ended 31 December 2024 is
as follows:

 

 Director                 Salary and fees  Bonus  Stock compensation  Loss of Office  2024 Total  Fixed element  Variable element
                          USD              USD    USD                 USD             USD         USD            USD
 Executive Directors
 T Chippas                400,000           -      819,375             -              1,219,375    400,000        819,375
 Non-executive Directors
 M Shaw                   146,476           -      112,910             -               259,386     146,476        112,910
 R Chopra                 147,048           -      89,264              -               236,312     147,048        89,264
 M Perrella               129,909           -      225,820             -               355,729     129,909        225,820
 Total                    823,433           -      1,247,369           -              2,070,802    823,433        1,247,369

 

 

* Stock based compensation is in relation to the fair value accounting charge
during the year. No equity stock based compensation was granted in the year.

 

 

Details of directors' remuneration during the year ended 31 December 2023 is
as follows:

 

 Director                 Salary and fees  Bonus  Stock compensation  Loss of Office  2023 Total  Fixed element  Variable Element
                          USD              USD    USD                 USD             USD         USD            USD
 Executive Directors
 T Chippas                38,512            -      273,125             -               311,637     38,512         273,125
 P Wall*                  85,766            -      -                   618,614         704,380     85,766         618,614
 A Appleton               20,905            -      70,627              145,833         237,365     20,905         216,460
 Non-executive Directors
 M Shaw                   170,554           -      152,317             -               322,871     135,644        187,227
 R Chopra                 135,105           -      87,805              -               222,910     125,934        96,976
 M Perrella               129,752           -      304,633             -               434,385     124,340        310,045
 S Gow                    10,601            -      27,925              -               38,526      10,601         27,925
 Total                    591,195           -      916,432             764,447        2,272,074    541,702        1,730,372

 

* Stock based compensation is in relation to the fair value accounting charge
during the year. Thomas Chippas received a grant of 2,850,000 PSUs with a
total fair value of $3,277,500 during the period vesting over a maximum of 3
years, of which the fair value charge during the year was $273,125.

 

Total pension entitlements (audited)

The Company currently does not have any pension plans for any of the directors
and does not pay pension amounts in relation to their remuneration.

The Company has not paid out any excess retirement benefits to any directors
or past directors.

Payments to past directors (audited)

The Company has not paid any compensation to past Directors.

 

Statement of directors' shareholding and share interests (audited)

The Directors who held office at 31 December 2024 and who had beneficial
interests in the Ordinary Shares of the Company are summarised as follows:

 

 Director        Position
 Maria Perrella  Non-Executive Director
 Matthew Shaw    Non-Executive Director

Details of these beneficial interests can be found in the Directors' Report.

 

Service Agreements and Letters of Appointment

On 27 November 2023, the Company entered into an employment contract with
Thomas Chippas, pursuant to which Mr. Chippas served as our Chief Executive
Officer (the "Chippas Employment Agreement"). Under the terms of the Chippas
Employment Agreement, Mr. Chippas was entitled to receive a base salary
annually, participate in the Company's group health benefits, participate in
the Company's 401k plan, and earn an annual bonus as determined by the board
of directors. In addition, Mr. Chippas was awarded 2,850,000 ADSs, which were
to vest over three years (with a one year initial cliff) subject to certain
performance conditions. Mr. Chippas  subsequently agreed to receive ordinary
shares instead of ADSs (22,850,000 ordinary shares if fully vested, the
"Chippas Equity Award").

 

Under the Chippas Employment Agreement, we could terminate Mr. Chippas'
employment by providing Mr. Chippas with the minimum (i) notice, or pay in
lieu thereof, or some combination of the two, (ii) severance pay (if
applicable), (iii) period of benefits continuation, and (iv) vacation pay, and
in each case, subject to payment of severance equal to 12 months' base salary,
provided that we may terminate the services of Mr. Chippas at any time with
immediate effect for certain reasons including misconduct, criminal offense,
or other reasons "for cause". Mr. Chippas could terminate his contract with us
by providing the company with a minimum of 60 days' notice. The Chippas
Employment Agreement also contains restrictive covenants pursuant to which Mr.
Chippas has agreed to refrain from competing with us or soliciting certain
clients or employees of the Company who could materially damage our interests
if involved in a competing business, for a period of twelve months following
his termination of services. Following the year under review, Mr. Chippas
resigned from his position as Chief Executive Officer, effective 28 February
2025. At the time of his resignation, 2.375,000 ordinary shares of the Chippas
Equity Award had vested and no further PSU's will vest.

 

On 22 March 2025, the Company entered into an employment contract with Justin
Nolan, pursuant to which Mr. Nolan serves as our Chief Executive Officer (the
"Nolan Employment Agreement"). Under the terms of the Nolan Employment
Agreement, Mr. Nolan is entitled to receive a base salary annually,
participate in the Company's group health benefits, participate in the
Company's 401k plan, and earn an annual bonus as determined by the board of
directors. In addition, Mr. Nolan was awarded 22,250,000 ordinary shares,
which vest over three years (with a one year initial cliff) subject to certain
performance conditions.

.

Under the Nolan Employment Agreement, we may terminate Mr. Nolan's employment
by providing Mr. Nolan with the minimum (i) notice, or pay in lieu thereof, or
some combination of the two, (ii) severance pay (if applicable), (iii) period
of benefits continuation, and (iv) vacation pay, and in each case, subject to
payment of severance equal to 12 months' base salary, provided that we may
terminate the services of Mr. Nolan at any time with immediate effect for
certain reasons including misconduct, criminal offense, or other reasons "for
cause". Mr. Nolan may terminate his contract with us by providing the company
with a minimum of 90 days' notice, subject to certain exceptions. The Nolan
Employment Agreement also contains restrictive covenants pursuant to which Mr.
Nolan has agreed to refrain from competing with us or soliciting certain
clients or employees of the Company who could materially damage our interests
if involved in a competing business, for a period of twelve months following
his termination of services.

 

The appointments of Maria Perrella, Matthew Shaw and Raghav Chopra are subject
to a 3 year term and to termination upon 3 months' notice given by either
party.

 
Terms of appointment

The services of the directors engaged during the year under review were
provided under the terms of agreement with the Group are dated as follows:

 

 Director         Year of appointment  Number of years completed  Date of current engagement letter
 Matthew Shaw     2019                 6                          7-Sep-19
 Maria Perrella   2021                 3                          21-Jul-21
 Raghav Chopra    2022                 3                          23-Feb-22
 Thomas Chippas*  2023                 1                          24-Nov-23

 

* Following the year under review, Mr. Chippas resigned from his role of Chief
Executive Officer effective 28 February 2025 and Executive Director, effective
1 February 2025

 

Performance relative to market index

Comparing the total shareholder return of an ordinary share in Argo Blockchain
plc against the total shareholder return of the FTSE All-share index. For the
year ended 2024, ARB saw a decrease in share price from 8.25p to 3p, a 63.3%
decrease. In the same period, FTAS increased from 4,210.00 to 4,467.80, an
increase of 6.12%.

UK 10-year CEO table and UK percentage change table

The directors have considered the requirement for a UK 10-year CEO table and
UK percentage change table. The directors do not currently consider that
including these tables would be meaningful because, the CEO remuneration is
not currently linked to performance, therefore any comparison across years or
with the employee group would be significantly skewed and would not add any
information of value to shareholders. The CEO's remuneration is disclosed in
full in the directors' remuneration section. The directors will review the
inclusion of this table for future reports.

Relative importance of spend on pay

The directors have considered the requirement to present information on the
relative importance of spend on pay compared to shareholder dividends paid.
Given that the Company does not currently pay dividends this would not provide
meaningful disclosure to shareholders.

Consideration of shareholder views

At the present time, the Company does not have any significant institutional
shareholder base, or any significant shareholders with which to proactively
consult. Therefore, the Board considers shareholder feedback received in the
context of annual general meetings and applicable guidance from shareholder
bodies. This feedback, plus any additional feedback received from time to
time, is considered as part of the Group's annual policy on remuneration.

 

Policy for new appointments

Base salary levels will take into account market data for the relevant role,
internal relativities, the individual's experience and their current base
salary. Where an individual is recruited at below market norms, they may be
re- aligned over time (e.g. two to three years), subject to performance in the
role. Benefits will generally be in accordance with the approved policy.

For external and internal appointments, the Board may agree that the Group
will meet certain relocation and/or incidental expenses as appropriate.

Other matters

The Company does not currently have any annual or long-term incentive schemes
in place for any of the directors and as such there are no disclosures in this
respect. The share options granted are discussed above.

 

 

Raghav Chopra

Chair of the Remuneration Committee

8 May 2025

 

NOMINATION COMMITTEE REPORT

 

Letter from the Chair of the Nomination Committee

 

Dear Shareholders,

I am pleased to present the Nomination Committee's report for the year ended
31 December 2024.

The Nomination Committee met twice during the financial year under review, and
all of the directors on the Committee attended both meetings. At a high level,
its role is to:

●     draw up selection criteria and appointment procedures for board
members;

●     recommend nominees for election to its Board and its corresponding
committees; and

●     assess the functioning of individual members of Board and
executive officers and report the results of such assessment to the Board.

 

 

Composition of the Committee

The Nomination Committee consists of myself, as Chair, and Maria Perrella. The
membership of the committee will be reviewed on a regular basis, particularly
in light of any changes to the wider composition of the Board, and any changes
announced in due course.

The Committee has discretion to invite members of the executive management of
the Company to its meetings as required and considers the input and
recommendation of executive management to be critical to ensuring the
Committee's activities reflect the ongoing needs of the Company. Therefore
executive management were invited to present to the committee at the
appropriate junctures during the year.

Focus of the Committee

During the year under review, the Committee's focus was on:

●     the appropriate size and makeup of the Board;

●     any appropriate changes and/or additions to the Board; and

●     the identification, recruitment and screening of potential
candidates.

On an ongoing basis, the Committee carefully considers the structure of the
Board and executive management and ensures that the Board and executive
management have an appropriate balance of skills, expertise and talent. The
Committee and the Board are committed to ensuring that appointments are based
on merit and objective criteria aligned with the Company's needs, and that
every effort is made to ensure equality, diversity and inclusion are at the
heart of the appointment process.

Advisors to the Committee

None.

Appointments

On 22 March 2025, the Board of Directors appointed Justin Nolan as Chief
Executive Officer and Executive Director.

Equality, Diversity and Inclusion

Given the Company's current stage of development, its organizational structure
and limited headcount, the Board considers that a formal diversity policy
would not be practicable for the Company to develop and implement and would
not improve the Group's policies or processes in a meaningful manner. The
Company and the Board already integrate equality and diversity in all aspects
of the Company's business and all decisions are made on merit and without
regard to protected characteristics. Where appropriate and practicable for the
Company, the Company considers and implements positive actions to enable the
Company to provide additional support. This can include, for example, making
adjustments to assist staff and ensuring that, to the extent possible, all
relevant perspectives are included in decision making on an ongoing basis.

 

The Company will keep the requirement for a formal diversity policy under
review and will give serious consideration to the adoption of a policy,
tailored to the nature of the Company's business, its operations and resources
at the appropriate point.

Gender composition

At 31 December 2024, the gender composition of employees and directors of the
Company was as follows:

 

 Gender Composition  Male  Female
 Directors           3     1
 Senior Management   5     1
 Employees           9     7

 

Ethnic composition

At 31 December 2024, the ethnic composition of directors of the Company was as
follows:

 

 Ethnic composition  Number of board members  Percentage of the board  Number of senior positions on the board  Number in executive management  Percentage of executive management
 White               3                        75%                      2                                        4                               100%
 Other               1                        25%                      0                                        0                               0%

 

 

The above information was collected through a voluntary open-ended
self-identification survey. Questions included "What gender do you identify
with?" and "What is your ethnic composition?".

Diversity Targets

The Company notes the diversity targets included in the Listing Rules, being:

●     at least 40% of the individuals on the Board are women;

●     at least one of the specified senior board positions is held by a
woman; and

●     at least one individual on the Board is from a minority ethnic
background.

 

 

As at 31 December 2024, the Company met the target to have one individual on
the board from a minority ethnic background.

 

The Company operates a small board, comprised of four people, which the Board
considers appropriate with the current stage of development of the Company and
the scale and sophistication of its activities. One of the four directors
appointed is a woman, however given the size of the Board, the Company does
not have a senior independent director and the Chief Financial Officer is a
non-board role. The Company does not therefore currently meet the remaining
two targets.

Should the Board look to appoint further directors in the future, the Company
will give due consideration to how it may achieve the diversity targets while
ensuring the appropriate structure of the Board and mix of skills and
expertise relevant to the Company's operations. As part of its recruitment
processes, the Company gives careful consideration to all potential applicants
however has a particular regard to those with knowledge and experience of the
digital asset and cryptomining sector. This necessary focus narrows
considerably the pool of potential applicants and poses potential challenges
in both recruitment and meeting the diversity targets. The Company will keep
this under ongoing review.

 

 

Future Work

As part of its work during the coming year, the Committee will consider the
Company's present and near future requirements and will review the composition
of the Board, succession planning for management, and the structure of the
overall management of the Company going forwards. Further announcements will
be made in due course.

 

 

 

Matthew Shaw

Chair of the Nomination Committee

8 May 2025

AUDIT COMMITTEE REPORT
Letter from the Chair of the Audit Committee

Dear Shareholders,

I am pleased to present the Audit Committee's report for the year ended 31
December 2024.

The Audit Committee met three times during the financial year under review,
and all of the directors on the Committee attended all of these meetings. At a
high level, the Audit Committee is responsible for, among other things:

●     the appointment, compensation, retention and oversight of the work
and termination of any independent auditor engaged for the purpose of
preparing or issuing an audit report or performing other audit services;

●     pre-approving the audit services and non-audit services to be
provided by its independent auditor before the auditor is engaged to render
such services;

●     evaluating the independent auditor's qualifications, performance
and independence, and presenting its conclusions to the full Board on at least
an annual basis;

●     reviewing and discussing with the executive officers, the Board
and the independent auditor its financial statements and its financial
reporting process;

●     approving or ratifying any related person transaction (as defined
in its related person transaction policy) in accordance with its related
person transaction policy;

●     reviewing and overseeing the adequacy and effectiveness of its
financial reporting and internal control policies and systems; and

●     reviewing and recommending amendments to the Code of Business
Conduct and Ethics.

Composition of the Committee

The Audit Committee is comprised of me, as Chair, Raghav Chopra, and Matt
Shaw. Brief biographies of each of the members of the Committee, including
their professional experience and qualifications are set out on page 6.

As required by the Disclosure Guidance and Transparency Rules (DTRs), Nasdaq
Rule 5605(c)(2)(A)(ii), section 301 of the Sarbanes-Oxley Act 2002 and Rule
10A-3 of the Exchange Act the Committee comprises:

●     a majority of independent directors;

●     at least one member with competence in accounting or auditing, or
both;

●     as a whole, competence relevant to the sector in which the Group
is operating.

The Board considers that, in light of their respective professional experience
and expertise, the members of the committee have recent and relevant financial
experience, including competence in accounting matters relevant to the sector
of operation, and operational experience in businesses at a similar stage of
development.

Committee Meetings

The Committee has discretion to invite members of the executive management of
the Company to its meetings as required and considers the input and
recommendation of executive management to be critical to ensuring the
Committee's activities reflect the ongoing needs of the Company. Therefore,
executive management were invited to present to the committee at the
appropriate junctures during the year.

Where the Committee considers matters relating to the audit of the Group, the
Committee invited David Thompson, the lead audit partner for the Group at PKF
Littlejohn LLP, to attend the meeting. His attendance was critical to ensuring
the Committee has access to Mr Thompson's independent judgement and ensuring
the Committee can solicit his views on matters to be considered or addressed
as part of the audit.

The Committee also meets independently to consider matters relating to
financial management and audit, providing a forum for discussion of the agenda
for the year ahead and strategic priorities for the Committee.

 

 

Focus of the Committee

During the year under review, the Committee's focus was on:

●     reviewing the Company's financial reporting processes, taking into
account changes to the business during the year under review;

●     working with the Group's auditors to consider matters arising from
the Group's previous audit and the measures necessary to address them;

●     monitoring the effectiveness of the internal control and risk
management systems adopted by the Group, regarding financial reporting of the
Group;

●     reviewing the audit of the Group, in particular noting areas for
potential improvement;

●     considering the independence and suitability for reappointment of
the Group's auditors, PKF Littlejohn LLP;

●     communicating with the Board the findings of the audit, and its
contribution to the integrity of the Group's financial reporting;

●     considering the integrity of the Company's and the Group's
financial statements, the processes and procedures for the Company's monthly
operational updates and reviewing significant financial issues and judgments
contained in them;

●     reviewing the Group's internal financial reporting function, in
particular its structure, staffing and resources; and

●     considering the Group's management and internal reporting metrics.

As a result of its work, the Committee recommended the reappointment of PKF
Littlejohn LLP for the year under review and intends to do so again for the
current financial year.

Performance Evaluation

Given the nature and scope of the Group, the Committee does not currently
consider an external performance review would be of significant benefit to the
Group, however the Committee will continue to review the appropriateness of
such a review on an ongoing basis.

Significant Judgment in relation to financial statements

The Committee has considered the following matters, significant accounting
areas which required the exercise of judgement or a high degree of estimation
during the year, together with details of how these were addressed. Some of
the matters considered were of a one-off nature, while others will have a
continuing applicability to the Group's business.

 

 Significant issue and explanation                                               Work undertaken by the Committee
 Impairment for Mining Machines                                                  The Committee has considered management's assessments of the appropriate value

                                                                               of the Company's mining machines at the reporting date. This included
 The Group is required to perform impairment reviews of its capital assets on    specifically considering and approving the predicted useful life remaining,
 an annual basis to determine the appropriate value of those assets. The         the economics of the new hosting arrangements, the market value of the
 Group's principal capital assets are its data centre in Canada and its fleet    machines, and the relative profitability of the machines compared with other
 of mining machines. While property is a long life asset, mining machines have   alternatives available in the market.
 a finite useful life, and therefore it is imperative that the Group correctly

 accounts for the impairment based on the Group's current expectations of the
 machines' useful life.

                                                                                 Impairment was also a significant issue for the Group's auditors, who reported
                                                                                 its findings to us.
 Going concern basis for the financial statements and viability statement        The Committee reviewed and challenged management's assessment of forecast cash
                                                                                 flows, including applying appropriate sensitivities, and the potential impact
                                                                                 of future uncertainties, the Group's financial resources and potential sources
                                                                                 of additional liquidity. The Committee was satisfied that the application of
                                                                                 the going concern basis for the preparation of the financial statements
                                                                                 remained appropriate.

 

External Audit

During the year, the Audit Committee assessed the independence and
effectiveness of PKF Littlejohn LLP and considers that that they remain
independent from the Group and provide an effective external audit of the
Group. The Committee has therefore recommended that PKF Littlejohn LLP be
proposed for reappointment at the upcoming Annual General Meeting.

PKF Littlejohn LLP has been the auditor of the Company since its inception in
December 2017, and David Thompson, lead audit partner for the Group at PKF
Littlejohn, has led the Group's audit since 2020. While retendering and change
of personnel is not currently required as a result of these requirements, the
Group and PKF Littlejohn LLP will comply with the restrictions and limitations
applicable to re-appointment of auditors and maximum terms of audit personnel,
which require PKF Littlejohn LLP to rotate audit personnel engaged on the
Group's audit and impose a maximum engagement period for PKF Littlejohn LLP as
the Company's auditor.

Non-audit services

During the year, PKF Littlejohn LLP did not provide any non-audit services to
the Group and therefore no issues regarding the objectivity or independence of
PKF Littlejohn LLP arose from the provision of non-audit services.

 

 

 

Maria Perrella

Chair of the Audit Committee

8 May 2025

 

CORPORATE GOVERNANCE REPORT
The QCA 10 Principles of Corporate Governance

The board of directors of Argo Blockchain PLC recognises the importance of
corporate governance and has decided to apply the Corporate Governance Code
published by the Quoted Companies Alliance (the "QCA Code"). A copy of the QCA
Code is available at https://theqca.com/corporate-governance/. The QCA Code
sets out a standard of best practice for small and midsize quoted companies.
The QCA's ten principles of corporate governance are set out below, along with
a description of the Company's approach to the relevant principle.

Principle 1: Establish a strategy and business model which promotes long-term value for shareholders

The Group is a UK based provider of cryptocurrency mining with its mining
operations located in Canada and the US. The business endeavours to acquire
efficient hardware to support its mining facilities with a focus on return on
investment and prioritises the utilisation of renewable energy sources
(wherever possible) at the most competitive prices.

Principle 2: Seek to understand and meet shareholder needs and expectations

The Group seeks to communicate with shareholders to ensure that its financial
performance and strategy are clearly understood. This is achieved through
regular updates by RNS to the London Stock Exchange, filings with the Security
and Exchange Commission in the United States and meetings with various
shareholders. The Group attends investor conferences in the UK and USA and
ensures its website provides accurate information and is kept up to date.

Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long term success

Our stakeholder groups include our employees in Canada, the United Kingdom,
United States of America and our business partners. Employees are kept
informed of the Company's progress and development by way of recurring
meetings and have access to the Board at all times. We aim to recruit and
retain our staff by ensuring our pay and conditions are competitive in the
marketplace and offer training and career development where appropriate. We
seek to maintain a good business relationship with our business partners who
are well- respected experts in their field.

Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation

The Group considers robust systems and controls will enhance the Group's
ability to manage and respond to challenges and opportunities. The Board is
responsible for overall supervision of the Group's operations while the
Company's CEO and CFO are responsible for the implementation of the systems
and controls across the Group and recommending improvements and revisions to
the Board for consideration. As part of its systems and controls, the Group
has adopted clearly defined roles and responsibilities, with clear lines of
reporting and supervision. Given the Group's current stage of development, the
Group considers the processes and procedures adopted provide the necessary
framework for effective risk management throughout the organisation, while
retaining flexibility and the opportunity to continue to develop in line with
the Group's future strategy.

Principle 5: Maintain the Board as a well-functioning, balanced team led by the chair

The Board is led by Matthew Shaw as the Company's Chairman, supported by the
senior management team and other non-executive directors. He is supported by
Justin Nolan, the Company's Chief Executive Officer, Jim MacCallum, the
Company's Chief Financial Officer, and the Company's two other non-executive
directors. Members of the Company's senior management team are invited to
Board meetings as necessary and appropriate. The Board considers that each
director has the required level of expertise and experience in his or her
field, and regular Board meetings are held to discuss all key matters and the
Board functions well and is appropriately led.

Principle 6: Ensure that, between them, the directors have the necessary up-to-date experience, skills and capabilities

The Board is comprised of individuals with appropriate expertise and
experience, each of whom brings a differing but complementary skillset to the
Board. All the directors receive regular updates on the Group's operational
and financial performance and attend frequent Board meetings where key issues
are discussed at length. The Board is responsible for the appointment, removal
and re-election of directors and when such a decision is required it will take
account of the Company's need for a balance of market, operational and
financial expertise. All directors have the ability to take independent
professional advice at the Company's expense where they consider it necessary
to ensure they fulfil their duties in an appropriate manner.

Principle 7: Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement

The Board is constantly reviewing the Group's and its own performance based on
internally set performance indicators and utilises those performance
evaluations and indicators to identify areas of success and the potential for
improvement.

Principle 8: Promote a corporate culture that is based on ethical values and behaviours

The Board, together with the Company's senior management team is conscious to
impart and maintain a forward- looking corporate culture throughout the Group,
based on ethical values and respect for the contributions of the Company's
staff. The Board leads by example and sets high standards and expectations for
the Company's staff.

Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision making by the Board

As a company with a Transition Listing, the Company is not required to comply
with the provisions of the Corporate Governance Code published by the
Financial Reporting Council. However, in the interests of observing best
practice on corporate governance, the Company intends to comply with the
provisions of the QCA Code insofar as is appropriate having regard to the size
and nature of the Company and the size and composition of the Board.

The Company's Transition Listing means that it is also not required to comply
with those provisions of the Listing Rules which only apply to companies on
the Premium List. The UK Listing Authority will not have the authority to (and
will not) monitor the Company's compliance with any of the Listing Rules which
the Company has indicated that it intends to comply with on a voluntary basis,
nor to impose sanctions in respect of any failure by the Company so to comply.

Principle 10: Communicate how the Company is governed and is performing by maintaining dialogue with shareholders and other relevant stakeholders

The Company is proactive in communicating with shareholders and other relevant
stakeholders, on an annual basis by way of the Annual Report and the financial
statements, and more regularly through the half year Interims, monthly
operational updates and regulatory announcements. Outside of formal
communications, the Company engages with shareholders and interested parties
through Q&A sessions and other informal updates. The Company maintains a
comprehensive website, which is available at https://argoblockchain.com.

QCA Corporate Governance Code 2023

The Company currently reports against the QCA Corporate Governance Code 2018.
The Company notes the publication of the revised and updated QCA Corporate
Governance Code 2023 which will have effect for accounting periods commencing
on or after 1 April 2024. The first accounting period for which it will
therefore apply to the Company will be the financial year ended 31 December
2025, however the Company will consider if there is an opportunity to adopt
any of the developments of the QCA Code for the financial year ended 31
December 2024, ahead of the actual implementation date.

 

 

TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURE (TCFD) REPORT

Argo recognizes the adverse effects caused by climate change and is committed
to assessing and managing both the impact of climate change on our operations
and our impact on the planet. Investors, employees, regulators, members of the
community in which we operate and other stakeholders want to understand how we
are planning for and adapting to climate change. The Task Force on
Climate-related Disclosures (TCFD) provides a framework that enables companies
to communicate climate-related financial risks to this audience.

At Argo, our stakeholders have high expectations of how we operate as a
business. Since the Company's inception, Argo has been committed to
sustainability which includes the objectives of minimizing our waste and
carbon footprint as well as creating disclosures on an annual basis that align
with our stakeholders' expectations. In compliance with Listing Rule
14.3.27(2)R, our climate-related financial disclosures are set out below.
These are a mixture of fully and partially compliant with the TCFD
Recommendations and Recommended Disclosures. We have structured the report so
that it follows the 4 TCFD pillars with the 11 recommended disclosures set out
in Figure 4 of Section C of the TCFD Annex entitled "Guidance for All
Sectors". When drafting this report, we also reviewed whether any of the
sector-specific Supplemental guidance within Section E of the TCFD Annex
entitled "Supplemental Guidance for Non-financial Groups" was relevant;
however it was deemed that Argo could not be categorised within one of the
sectors provided within these supplements. The Company has decided not to gain
assurance for the content of this report nor the GHG emissions or other KPIs
included within.

The Company consists of a small team and hence is still developing the
resources in order to be fully compliant with all the TCFD's Recommendations
and Recommended Disclosures. We recognize the gaps that we must cover in order
to achieve full compliance with the TCFD's Recommendations and Recommended
Disclosures. In the future, we intend to evaluate our practices and consider
opportunities to enhance our disclosures on an ongoing basis consistent with
our objective to incorporate and expand our best practice reporting. We intend
to build on what we have completed and ensure the Company is implementing the
necessary strategies, structures, resources, and tools to manage the risks and
opportunities posed by climate change. We will also consider the work being
conducted by the Transition Plan Taskforce so that we are aligning our
climate-related reporting with best practices, which goes beyond our
regulatory obligations.

In accordance with LSE Listing Rule 14.3.27(2)R, the table below sets out
whether Argo has made disclosures fully or partially consistent with the TCFD
recommended disclosures:

 

 

 TCFD Pillar          TCFD Recommended Disclosures                                                   Compliance Status  Disclosure Location (page)
 Governance           Board's oversight of climate-related risks and opportunities                   Partial            52
                      Management's role in assessing and managing climate-related risks and          Partial
                      opportunities
 Strategy             Climate-related risks and opportunities the organization has identified over   Full               39
                      the short, medium and long term
                      Impact of climate-related risks and opportunities on the business, strategy,   Partial            58
                      and financial planning
                      Resilience of the organisation's strategy, taking into consideration           Full               60

                      different climate-related scenarios, including a 2°C or lower scenario
 Risk Management      Organization's processes for identifying and assessing climate- related risks  Partial            62
                      Organization's processes for managing climate-related risks                    Partial            64

                      Processes for identifying, assessing, and managing climate- related risks are  Partial            64
                      integrated into the organization's overall risk management

 Metrics and targets  Metrics used by the organization to assess climate-related risks and           Partial            64
                      opportunities in line with its strategy and risk management process
                      Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG) emissions   Partial            64
                      and the related risks
                      Targets used by the organization to manage climate-related risks and           Partial            64
                      opportunities and performance against targets

 

Governance

Recommended disclosure: a. Describe the Board's oversight of climate-related risks and opportunities

The board of directors monitors the Company's overall sustainability
performance against its stated ambition and targets. It therefore has
oversight responsibility for Argo's climate strategy and performance, whereas
the CEO has ultimate responsibility for setting Argo's ESG strategy and
performance objectives as well as oversight of its implementation and
execution.

The Board is informed about the Company's climate-related progress through
Board meetings and annual reports from the ESG Committee. It is the CEO who
reports to the Board on ESG and climate-related issues on an annual basis or
as required.

The Board uses climate-related issues to guide them when:

●     Finalising annual budgets (purchase of Renewable Electricity
Credits (RECs), Verifiable Emissions Reductions (VERs) as well as the costs
associated with efficiency gains, data collection and calculation).

●     Monitoring Implementation and Performance (with regards to the
metrics outlined on page 48)

●     Overseeing major capital expenditures (ensuring our facilities are
located on low carbon emission grids and built to be as efficient as possible)

Recommended disclosure: b. Describe management's role in assessing and managing climate-related risks and opportunities

The CEO is responsible for achieving Argo's strategy and ESG objectives,
whereas day-to-day responsibility for such tasks is delegated to the ESG
Committee, which is a working group of employees and not a board- level
committee. The ESG Committee is chaired by the CEO and includes the Chief
Strategy Officer and the VP of Mining. The ESG Committee has climate-related
expertise and is supported by external climate experts on a regular basis
providing the Company with both data proficiency and strategic advisory. The
committee is responsible for the management and implementation of ESG
initiatives and directives. To do this, the committee meets annually to (i)
assess climate-related issues, (ii) develop and discuss the status of ongoing
climate-related initiatives and (iii) monitor and track progress against
certain KPIs.

One of the major challenges that the Bitcoin mining industry faces is its
reputation regarding energy consumption and GHG emissions. Hence, over the
past year the ESG Committee has taken a stakeholder focus and created
initiatives focused on supporting, and in some cases educating, certain
stakeholder groups to ensure that the Company's climate change strategy is in
line with their expectations. We identify key stakeholders according to Argo's
impact on their interests as well as their ability to influence our strategy
and objectives.

Strategy

Recommended disclosure: a. Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long term.

We recognise that climate-related risks and opportunities present a potential
material impact to our business and are committed to taking the necessary
steps recommended by the TCFD to assess the severity of the business risks and
the value of the opportunities on our business.

The tables below generally describe the climate-related risks that are
considered by the Company. This list may grow as we further evaluate these
risks and the associated business impacts:

 

 

 

Climate-related Risks

 

 Transition Risks
 Climate Risk Drivers                                                Summary Description and                                                                                                                                           Main Affected Time Horizon

                                                                     Business Impact                                                                  Mitigation and Adaptation
                                                                                                                                                      We are focused on deploying our mining machines at locations with access to

                                                                                low-cost and reliable renewable power sources, as successfully doing so should

                                                                                                                                                      enable us to reduce our power costs. Our Quebec facilities are primarily

                                                                                powered using renewable hydroelectric power, and our operations in Texas were

                                                                                                                                                      in the Texas Panhandle, where more than 85% of the installed electricity

                                                                                generation capacity comes from renewable sources. We will continue to work

                                                                     Federal authorities may pursue and implement legislation and regulation that     with power grids and electric generators who have an abundance of remote

                                                                   seeks to limit the amount of carbon dioxide produced from electric generation,   renewable electricity because this aligns with the Company sustainability

                                                                     which would affect the availability and price of electricity sourced from        principles and climate strategy. As an additional benefit, the use of lower-

                                                                   power grids that are dependent upon fossil fuel- fired sources of power          emission sources reduces our risk exposure to the potential introduction of

                                                                     generation. Where we purchase electricity from the grid, this could impact us    carbon pricing and associated reduced availability of fossil fuel-fired

                                                                   in a potentially material adverse manner. The bankruptcy or insolvency of any    electric generation.

                                                                     power generator or wholesale market supplier from whom we expect to obtain

                                                                   supply for our mining operations could also result in a curtailment or loss of

                                                                     supply, which would have a material adverse effect on our ability to continue

                                                                   mining operations.

 Policy & Legal Increased costs for energy from carbon pricing

                                                                                                                                                                                                                                       Medium to Long term
                                                                                                                                                      While we have typically purchased our mining machines from Bitmain, and we

                                                                                have diversified our access to mining machines by establishing a relationship

                                                                                                                                                      with ePIC Blockchain Technologies ("ePIC"). We purchased ePIC's BlockMiner

                                                                                mining machine that utilized Intel's Blockscale ASIC chip. We will continue to

                                                                                                                                                      assess our supply chain management and opportunities to reduce our risk

                                                                                exposure to any disruption to our key suppliers.

                                                                     There are risks related to the potential disruption of our global supply chain

                                                                   by climate-related issues for cryptocurrency mining hardware, and difficulty

                                                                     in obtaining new mining machines that may have a negative effect on our

                                                                   business.

 Market Increased Costs of ASIC mining machines

                                                                                                                                                                                                                                       Medium to Long term

 

                                                                                                        Argo's stakeholders and society in general are becoming increasingly climate

                                                                                conscious. Argo recognizes this - we have always been, and always will be,

                                                                                                        committed to promoting sustainability. We routinely emphasize our commitment

                                                                                to sustainability through our ongoing PR and communications efforts.

                                                                                                        Additionally, we are involved in several initiatives that focus on educating

                                                                                these stakeholders on the positive impact that Bitcoin mining operations can

                                                                                                        have for the energy transition, including the incentivization of renewable

                                                                                energy development and stabilization of power grids via

                                                                                demand response.

                       Increased awareness and any adverse publicity in the global marketplace about

                     potential impacts on climate change by Argo or other companies in our industry

                       could harm our reputation. This could therefore have a material adverse effect

                     on our financial position, results of operations and cash flows.

 Reputational Damage                                                                                                                                                                   Short to Long term

 

 Physical Risks
                                                                                                                                                                                                                      Main Affected Time Horizon

 Climate Risk Drivers                                 Summary Description and                                                         Mitigation and Adaptation

                                                      Business Impact
                                                                                                                                      Due to the nature of our operations and facility ownership structure, Argo is

                                                                               in a position to be able to locate its operations in areas that are of

                                                      Extreme weather events have the potential to disrupt or damage Argo's           relatively lower risk or relocate mining machines if there are ongoing

                                                    operations. Flooding, heatwaves, wildfires, droughts, and rising sea levels     operational

                                                      could all impact the business. Insufficiently prepared facilities could be

                                                    unable to deal with more frequent and intense occurrences of such events.       disruptions related to acute weather disruptions. We will explore assessing

                                                                                                                                      the risk exposure of our current sites and develop location-specific Business

                                                                                                                                    Continuity Plans

 Acute Disruptions to our facilities and operations

                                                                                                                                      (BCP).

                                                                                                                                                                                                                      Medium to Long term
                                                                                                                                      Variability in weather conditions have already impacted Argo's operations. In

                                                                               Quebec, Argo curtails its operations in the winter months to help stabilize

                                                                                                                                      the power grid. In Texas, Argo voluntarily curtailed operations when

                                                                               electricity prices were high, which often occurs during extreme weather

                                                      An increasing number of volatile weather conditions, particularly extremes of   events. While our property strategy takes climate- related issues into

                                                    temperature or extended periods of abnormal weather conditions could impact     account, we will seek to explore incorporating these weather- related risks

                                                      the price of energy. Due to Argo's electricity demand from the grid, it could   into our potential

                                                    be that Bitcoin mining companies are requested to shut down leading to a

                                                      material adverse effect on the Company's revenue.                               site location decisions.

 Chronic                                                                                                                                                                                                              Short to Long term

 

 

Climate-related Opportunities

 

 Transition Opportunities
                                                                                                                                                                                                                               Main Affected Time

 Climate Risk Drivers                                        Summary Description and Business Impact                                          Mitigation and Adaptation                                                        Horizon
                                                                                                                                              Our mining hardware primarily consists of Bitmain Antminer S19, S19J Pro, and

                                                                                ePIC BlockMiners, featuring application- specific integrated circuits

                                                                                                                                              ("ASICs") for cryptocurrency mining. These machines offer superior speed and

                                                                                efficiency in cryptocurrency mining compared to general computing hardware. In

                                                                                                                                              addition, our operations in Texas utilized immersion cooling technology, which

                                                                                improves efficiency, extends the lifespan of the mining machines, and reduces

                                                                                                                                              costs. Due to the infancy of these machines, moving forward Argo will continue

                                                                                to explore the large opportunities for improvement with regards to efficiency.

                                                             Enhancing our Bitcoin mining operational efficiency presents an opportunity to

                                                           reduce operating costs and bolster our reputation. We compete against our

                                                             peers on the efficiency of our operations and hence improving it is a

                                                           cornerstone to our strategy.

                                                                                                                                                                                                                               Short to Long term

 Resource Efficiency
                                                             Bitcoin miners may have the potential to enhance the shift toward

                                                           decentralized energy generation by co-locating near renewable energy producers

                                                             and acting as a sink for excess energy production. Serving as a sink or

                                                           flexible load is valuable as it provides a market mechanism for use of excess

                                                             electricity, allowing generators to increase intermittent renewable energy       Bitcoin mining can play a valuable role in the transition to a low carbon

                                                           generation into the grid without fear that it won't be used and uncompensated    economy. Bitcoin mining has the capability to balance the grid and hence

                                                             for. This may reduce operating costs and increase revenue, capital               provide value to power producers who deploy renewable energy generation. In

                                                           availability, and reputation.                                                    the short- term, Texas provided the greatest opportunity for this as the grid

                                                                                operator, ERCOT, has worked with Bitcoin miners to assist with increased

                                                           Bitcoin mining's unique ability to serve as a buyer of last resort for excess    integration of renewable energy into the grid.

                                                             energy encourages further investment in renewable projects. This, in

                                                           conjunction with demand response, enhances grid resilience.                      Bitcoin mining therefore indirectly supports the deployment of additional

                                                                                                                                              renewable electricity and in the long-term could be deployed in other regions.

                                                                                                                                            We will continue to explore opportunities to foster strategic relationships

                                                                                                                                              with independent power producers.

 Energy Source Renewable energy procurement and deployment

                                                                                                                                                                                                                               Short to Long term
                                                                                                                                              Argo has actively explored and pursued various opportunities to promote the

                                                                                sustainable production of Bitcoin. In 2021, we announced the creation of the

                                                             Argo's stakeholders and society in general are increasingly climate conscious.   world's first Bitcoin mining pool powered by clean power,

                                                           This has led to the development of market- based tools to incentivize

                                                             sustainable production of Bitcoin.                                               Terra Pool.

 New Products and Services                                                                                                                                                                                                     Short to Long term
                                                                                                                                              Argo has a significant opportunity to enable the transition to a net zero

                                                                                economy through the use of its Bitcoin mining operations. Below are three

                                                                                                                                              examples of potential strategic partnerships that the Company is exploring:

                                                             As the world is transitioning its energy system there will be pressure on

                                                           companies to reduce their GHG emissions and by-products that impact the

                                                             environment negatively. In order to deal with these impacts, companies will      ●     Independent Power Producers

                                                           need to collaborate with each other to find solutions and reduce the risk of

                                                             regulatory action and reputational damage.                                       ●     Oil & gas producers

                                                                                                                                              ●     Local municipalities

 Markets                                                                                                                                      Please see below for an

 Ability to form new and strategic partnerships                                                                                               expansion of how Argo can foster these relationships.                            Short to Long Term

 

Recommended disclosure: b. Describe the impact of climate-related risks and opportunities on the organization's businesses, strategy, and financial planning.

In 2020 we defined our climate-related goals and ambitions with specific
targets identified to guide our activities, and we set our objective of being
a climate positive company. Our strategy to be a climate positive company is
based on 6 steps:

1.   Minimising emissions at the outset - intentionally locating our own
operations on grids with low emissions as well as investing in energy saving
and efficiency measures at our own facilities.

2.   Scope 1 emissions - No scope 1 emissions as we have no power generation
or generator use at our own facilities.

3.   Scope 2 emissions - Minimise scope 2 emissions through the use of
low-emission grids. For any residual scope 2 emissions, RECs may be purchased
at owned (Argo) or hosted facilities for emissions created by electricity use.

4.   Scope 3 emissions - VERs may be purchased for emissions resulting from
all Argo activities in its value chain.

5.   Additional VERs - Additional VERs may be purchased to become climate
positive.

6.   Third-party verification - Argo assessment validated by an accredited
third-party verification consultant.

In alignment with these targets, we are focused on addressing the risks and
opportunities identified above by integrating climate considerations in our:

●     Strategic Partnerships

Argo continually seeks potential opportunities and looks for new ways for our
Bitcoin mining operations to provide value to other corporations, utility
companies, and government agencies. Below is a non-exhaustive list of some
examples of ideas that we are in the process of evaluating:

 

 

› Electricity generators or independent power producers - We are evaluating
opportunities to co-locate our mining operations with renewable energy
producers in order to gain access to "behind the meter" electricity. This type
of relationship with a power generator can be symbiotic because we can gain
access to low-cost electricity directly from the producer and the power
producer will have a buyer of last resort for its electricity regardless of
the export capacity or market price obtainable through the power grid.

› Local municipalities- Exploring partnerships with local municipalities to
use waste heat from our facilities and provide this heat to the municipality
or nearby facilities such as greenhouses that can make use of the heat. This
creates a savings for the greenhouse as they can reduce the heat they need. In
addition to creating an economic opportunity for both parties, this also saves
energy and reduces our collective environmental impact.

› Oil & gas Producers - There is potential for partnerships with oil
& gas companies who produce natural gas as an unwanted by-product of their
oil production. Currently, oil & gas producers typically dispose of the
unwanted natural gas via venting or flaring, which releases methane into the
atmosphere. On a 100- year timescale, methane has 28 times greater global
warming potential than carbon dioxide and is 84 times more potent on a 20-year
timescale. Instead of venting or flaring the waste gas, it can be combusted in
a generator to provide electricity for Bitcoin mining operations. Combusting
the natural gas reduces methane emissions by up to 99% when compared to
venting or flaring. This therefore provides an opportunity for both parties
since a Bitcoin miner can provide an economic incentive to reduce the methane
emissions of oil & gas producers whilst the Bitcoin miner gains access to
low-cost energy for its Bitcoin mining machines.

●     Energy/Resource Efficiency

Additionally, we have worked on becoming more efficient with the energy we use
through purchasing more energy- efficient technologies. These initiatives have
included:

Ø Having our fleet hosted at the Helios site through year end 2024 in the
West Load Zone of Texas, where more than 85% of the installed generation
capacity is renewable.

Ø Constructing the Helios facility so that it uses high-efficiency immersion
cooling technology.

Ø Purchasing Bitcoin mining machines which can be optimised to run on various
efficiency settings, therefore enabling the Group to increase efficiency
depending on market conditions.

These initiatives ensure that we keep pace with the transition to a net-zero
economy by proactively complying with evolving regulation, providing energy
efficient technology and maintaining a strong reputation amongst our
stakeholders.

●     Stakeholder engagement

We have taken a proactive approach to developing a more efficient and cleaner
industry through the promotion of transparency, sharing of best practice and
education to the public about the benefits of Bitcoin and Bitcoin mining. Argo
is a founding member of the Bitcoin Mining Council, which educates the public
on the increasing amount of renewable energy used for Bitcoin mining. It also
seeks to improve reporting and increase the amount of data available on the
use of renewable energy within the sector. Argo also seeks to engage with
regulators and policymakers at the state and federal level to educate them on
the benefits of Bitcoin mining. Argo is a member of the Digital Power Network,
which is a coalition spearheading policy advocacy for digital asset mining in
Washington, DC and crafting the future of energy policy.

●     Site location

Our property strategy includes criteria that considers the availability of
renewable electricity and the sites' exposure to the physical risks of climate
change.

 
Recommended disclosure: c. Describe the resilience of the organization's strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario.

In 2022, we conducted a climate-related scenario analysis with the aid of a
third-party consultant to further validate our climate strategy. We also
carried out a scenario-based climate change risk assessment exercise to
determine potential implications of climate risks on our business and
strengthen the resilience of our strategy moving forward. Given that the
Group' business and overall risk profile of the sector in which it operates
has not changed materially in 2023, we consider such scenarios remain relevant
and therefore have not updated our scenario analysis from 2022.

In building our scenarios, we used the Intergovernmental Panel on Climate
Change (IPCC) warming scenarios, which provides pathways for assessing the
physical impacts of climate change from varying degrees of GHG emissions in
the atmosphere. Since many of the publicly-available climate-related scenarios
that exist focus on transitions in heavy- emitting sectors (e.g. utilities,
heavy industry), the majority of the assumptions in these existing scenarios
do not directly impact Argo. As such, we drafted three qualitative transition
scenarios, drawing from existing scenarios and trends, and combined them with
three warming scenarios:

Assumptions:

Business-as-usual

RPC 8.5 - Extremely high emissions scenario with global mean temperature
expected to rise by 3.7°C (2.6- 4.9°C) by end of the century. The scenario
assumes high dependence on fossil fuels and no policy-driven mitigation.

Qualitative assumptions - Limited regulation and impact of climate risks and
emissions performance on the Company's reputation. There is uneven pressure
regarding climate action and emission reduction targets, with limited
investment in renewable electricity. Insurance becomes increasingly expensive
and demand for RECs begins to outstrip supply resulting in much higher prices
to purchase these RECs. Investors in crypto have limited interest in acquiring
currencies that have been produced with fewer emissions.

Delayed transition

RPC 6.0 - High emissions scenario with global mean temperature expected to
rise by 2.2 °C (1.4-3.1°C) by end of the century, which assumes emissions
peak around 2080 and then decline.

Qualitative assumptions - There is uneven regulatory action from state to
state in the US and globally, with some setting stringent climate expectations
and others not incorporating ESG into regulatory standards. This means that
some regions decarbonize quicker and employ renewable electricity whilst
others fail to do so. Prices of RECs vary by region.

Net-zero

RPC 2.6 - A stringent pathway with a large regulatory push and the development
of new technologies enable the likelihood of keeping global temperature rises
below 2°C by 2100.

Qualitative assumptions - Strong local, state, and national-level regulation
and action on building performance standards and energy benchmarking, which
includes high penalties for non-compliance. Potential high investment costs to
bring manufacturing locations in line with state, local, and national laws.
Strong impact of emissions performance on company reputation and market value,
which is seen worldwide in nearly all geographies and across investors,
potential employees, and society. Nearly 100% of electricity generation
globally is from renewable electricity sources and societies have adapted to
become more electrified.

Business Impacts

Below is a table that summarizes the results of the scenario analysis in which
we identified how each scenario may impact Argo's business and operations:

 

 

                            RCP 8.5 / Business-as-usual                                                      RCP 6.0 / Delayed Transition                                                    RCP 2.6 / Net-zero

                            Increased chances of property damage due to floods and increased wildfires                                                                                       Impacts of flooding and droughts on the semiconductor industry, already being

                                                                                                                                                                observed within supply chain.
 Physical climate risks     Increased energy usage as a result of increased cooling required at our
                            facilities due to increase in ambient temperature.

                            Increased risk of heatwaves and droughts affecting energy prices and supply
                            chain.
                                                                                                             Heightened legal and regulatory risks due to uneven application. This makes it

                                                                                more difficult for Argo to operate in certain regions as legal and regulatory

                                                                                                             action is highly uncertain. Argo's climate strategy sees a higher cost due to   The Bitcoin mining industry's reputation is increasingly scrutinized and Argo

                                                                                the price of RECs but there is a low exposure to carbon pricing. There is       as a result has a higher risk exposure to reputational damage as well as
                                                                                                             limited reputational damage.                                                    policy/legal risks. There is a relatively larger risk exposure to indirect

                                                                                                                                                                carbon pricing with the price of fossil- fuel based electricity

                                                                                                                                                                increasing in the short- term.
 Transition Climate risks   The Company has very low potential exposure to carbon pricing and the
                            associated policy/legal risks. However, Argo will see an increase in insurance
                            premiums, the price of RECs and disruptions to its supply chain due to the
                            reduced supply in raw materials.
                                                                                                                                                                                             There is a large demand for technologies that enable demand response

                                                                               initiatives to help balance the supply and demand of electricity on the grid,
                                                                                                                                                                                             which boosts Argo's ability to develop strategic partnerships. Argo is

                                                                               presented with opportunities to benefit from renewable electricity deployment
                                                                                                                                                                                             and the requirements to decrease flare

                                                                                                                                                                                             / methane gas

                                                                                                                                                                                             emissions.

                            Opportunities for strategic partnerships are limited due to a lack of            There are certain geographies where Argo can locate its operations where the

                          investment in renewables and the lack of appetite to reduce flare / methane      Company can make use of strategic partnership opportunities.
 Transition opportunities   gas emissions.

Company Resilience to Climate Risk

In all scenarios there is a focus on energy efficiency because this is a key
variable on which Argo competes with its peers.

The Company has set a climate strategy that approaches the risks and
opportunities associated with each scenario, however, the greatest
opportunities are presented from the Net Zero scenario where Argo Blockchain
is positioned to help enable the energy transition with the increased
deployment of renewable electricity and demand response.

We are therefore currently trying to manage these risks so that we are
well-prepared across these different types of scenarios and will try to
incorporate these insights into our climate strategy moving forward. However,
this is only our first climate-related scenario analysis, and we will work
over the future to expand this analysis and to quantify the financial impacts
of these different scenarios and to reflect developments in climate science
and methodology.

Although these are the risks and opportunities that currently face the
Company, we will continue to identify new and emerging climate-related risks
that could impact the Company.

Risk Management

Recommended disclosure: a. Describe the organization's processes for identifying and assessing climate- related risks.

Argo identifies and assesses risks associated with climate change across all
transition risks (policy and legal, technology, market changes and reputation)
and physical risks (both acute and chronic). Processes that help identify
climate-related risks and opportunities include:

 

 

●     Monitoring changes in the external policy environment, including
existing and emerging legislation, and national and international government
announcements.

●     Observing market developments, such as advances in technology that
may reduce our operating costs,

or changes in perception about the industry's impact on the environment.

●     Internal and external judgement using resources such as regulatory
guidance, industry reports and peer comparisons.

 

We use these and other processes to identify risks relating to climate change,
and to determine their significance.

The Company has yet to formalize a process in which climate-related risks are
assessed in terms of their significance relative to other principal risks and
assessing the potential size and scope of the risk.

Recommended disclosure: b. Describe the organization's processes for managing climate-related risks.

Risk management is undertaken by the board of directors. The Board recognizes
climate change as a financial risk and has delegated responsibility to the
management team to monitor and report climate-related risks as well as lead
the response across the organization. The management team will also track as
to where any new climate-related risks may arise and report these risks to the
Board.

Recommended disclosure: c. Describe how processes for identifying, assessing, and managing climate- related risks are integrated into the organization's overall risk management.

The Board has assigned climate change as a Principal Risk because it is aware
that Bitcoin mining is power intensive and has an environmental impact as a
consequence. Climate change is integrated into the Company's overall risk
management programme, which seeks to minimise potential adverse effects on the
Company's financial performance.

In addition, due to the nature of the climate-related risks to our business
and strategy, many elements are already captured within other Principal Risks,
such as Electricity Supply and Price, and Technology and Supply risks. This
approach enables us to capture a more holistic picture of the climate-related
risks.

Metrics and Targets

Recommended disclosure: a. Disclose the metrics used by the organization to assess climate related risks and opportunities in line with its strategy and risk management process.

In addition to measuring and disclosing our absolute scope 1, 2 and 3
emissions, we internally track and monitor climate-related metrics and KPIs to
further help us manage climate-related risks and opportunities:

●     Electricity consumption (kWh)

●     Renewable Energy consumption (kWh)

●     Hashrate (EH)

●     Mining Efficiency (EH/GW)

●     Emissions intensity (kgCO2e/$1 revenue)

The Company has not yet set an internal or external carbon price as we have
minimal exposure, nor have we incorporated climate-related metrics into the
Company's remuneration policy.

Recommended disclosure: b. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG) emissions and the related risks

A full view of our greenhouse gas emissions data for the last three years is
summarized below. The Group's emissions primarily result from the electricity
used to power our ASIC mining machines in North America. Since 2020, we have
focused on reducing our operational emissions by investing in energy
efficiency measures and locating operations in regions with relatively
lower-carbon electricity supply.

For the period 2022 to 2024:

·      Scope 2 emissions ranged from approximately 150,000 to 200,000
MTCO2e per year.

·      Scope 3 emissions ranged from approximately 40,000 to 50,000
MTCO2e per year.

As the Group does not have mining operations in the UK, its UK-based emissions
remain minimal.

The GHG data boundary includes our operations in the US and Canada. The GHG
emissions have been calculated using the GHG Protocol Corporate Accounting and
Reporting Standard of the Greenhouse Gas Protocol. The data presented above
uses a market-based approach which accounts for >99% of the GHG emissions
and energy consumption in respect of activities where we are the operator.

A GHG verification assessment was undertaken using recognized assessment tools
and approaches (i.e., The GHG Protocol Corporate Accounting and Reporting
Standard with reporting, information, and data collected and provided by Argo)
and complies with the requirements and general guidance for companies
compiling and reporting on corporate-level GHG emissions inventory.

Scope 1 emissions are not reported due to no power generation or generator use
at our own facilities. Our Greenhouse Gas reporting period is from January
1(st) to December 31(st) for 2022, 2023, and 2024.

Recommended disclosure: c. Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets.

In 2020, Argo set the objective of being a climate positive company and in
2021 Argo reached this goal, releasing a full climate strategy and becoming
the first Bitcoin mining company to announce climate positive status through
its use of renewable energy to power mining operations, and by offsetting more
scope 2 and 3 greenhouse gas emissions than we emitted in 2020 and 2021. Going
forward, we aspire to procure electricity for our operations from primarily
renewable sources.

DIRECTORS' RESPONSIBILITIES STATEMENT

The directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each
financial year. Under that law the directors have prepared the Group and
parent company financial statements in accordance with UK-adopted
international accounting standards. Under company law the directors must not
approve the financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Group and Company and of the
profit and loss of the Group for that period.

In preparing these financial statements, the directors are required to:

●     Select suitable accounting policies and then apply them
consistently;

●     Make judgements and accounting estimates that are reasonable and
prudent;

●     State whether applicable UK-adopted international accounting
standards have been followed, subject to any material departures disclosed and
explained in the financial statements; and

●     Prepare the financial statements on the going concern basis unless
it is inappropriate to presume that the Group and Company will continue in
business.

The directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group's and Company's transactions and
disclose with reasonable accuracy at any time the financial position of the
Group and Company and enable them to ensure that the financial statements and
the Directors' Remuneration Report comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the Group and Company and
hence for taking reasonable steps for the prevention and detection of fraud
and other irregularities.

The directors are also responsible for ensuring that the Annual Report and
financial statements taken as a whole, is fair, balanced and understandable
and provides the information necessary for the shareholders to assess the
Group's and Company's position and performance, business model and strategy.

Website publication

The directors are responsible for ensuring the Annual Report and the financial
statements are made available on a website. Financial statements are published
on the Company's website in accordance with legislation in the United Kingdom
governing the preparation and dissemination of financial statements, which may
vary from legislation in other jurisdictions. The maintenance and integrity of
the Group and Company's website is the responsibility of the directors. The
directors' responsibility also extends to the on-going integrity of the
financial statements contained therein.

Directors' responsibilities pursuant to DTR4 (Disclosure and Transparency Rules)

The directors confirm to the best of their knowledge:

●     The Group and Company financial statements have been prepared in
accordance with UK-adopted international financial reporting standards and
give a true and fair view of the assets, liabilities, financial position and
profit or and give a true and fair view of the assets, liabilities, financial
position and profit and loss of the Group and Company; and

●     The Annual Report includes a fair review of the development and
performance of the business and financial position of the Group and Company
together with a description of the principal risks and uncertainties that it
faces.

On behalf of the Board:

 

 

Matthew Shaw Chairman

8 May 2025

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ARGO BLOCKCHAIN PLC

 

Opinion

We have audited the financial statements of Argo Blockchain plc (the 'parent
company') and its subsidiaries (the "group) for the year ended 31 December
2024 which comprise the Group Statement of Comprehensive Income, the Group and
Parent Company Statements of Financial Position, the Group and Company
Statements of Changes in Equity, the Group and Company Statements of Cash
Flows and notes to the financial statements, including significant accounting
policies. The financial reporting framework that has been applied in their
preparation is applicable law and UK-adopted international accounting
standards and as regards the parent company financial statements, applied in
accordance with the provisions of the Companies Act 2006.

In our opinion, the financial statements:

·    give a true and fair view of the state of the group's and company's
affairs as at 31 December 2024 and of the group's loss for the year then
ended;

·    the group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;

·    the parent company financial statements have been properly prepared
in accordance with UK-adopted international accounting standards and as
applied in accordance with the provisions of the Companies Act 2006; and

·    the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.

 

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the company in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the FRC's Ethical
Standard as applied to listed public interest entities, and we have fulfilled
our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.

Material uncertainty related to going concern

We draw attention to note 3 in the financial statements, which states that the
group is required to raise additional funds during H2 2025 in order to remain
a going concern and meet liabilities as they fall due, including interest
payments on the unsecured bond (maturity date of November 2026). This is
forecast to be achieved through a combination of further sales of refurbished
unhosted mining machines, equity raises and the sale of the Baie Comeau
property in Canada. In addition, the group is exposed to Bitcoin prices, power
costs and hashprice which have shown significant volatility over recent years.
As stated in note 3, these events or conditions, along with the other matters
as set forth in note 3, indicate that a material uncertainty exists that may
cast significant doubt on the group's and company's ability to continue as a
going concern. Our opinion is not modified in respect of this matter.

 

In auditing the financial statements, we have concluded that the director's
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors'
assessment of the group's and parent company's ability to continue to adopt
the going concern basis of accounting included a review of management's cash
flow forecasts to 31 May 2026, along with an assessment of downside scenarios
and the ability to raise additional funds when required. We have reviewed all
key inputs into the cash flow forecasts, with particular emphasis on those
areas of judgement and estimation uncertainty such as the hashprice, power
costs and hashpower, and ensured they are appropriate and no evidence of
management bias exists.

 

Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.

 

Our application of materiality

For the purposes of determining whether the financial statements are free from
material misstatement, we define materiality as the magnitude of misstatement
that makes it probable that the economic decisions of a reasonably
knowledgeable person, relying on the financial statements, would be changed or
influenced. We also determine a level of performance materiality which we use
to assess the extent of testing needed to reduce to an appropriately low level
the probability that the aggregate of uncorrected and undetected misstatements
exceeds materiality for the financial statements as a whole.

 

The group materiality for the financial statements as a whole was set at
US$755,000 (2023: $759,000). This was calculated based on an average of 1% of
total revenue for the year and 2.5% of the loss before tax (2023: average of
1% of total revenue for the year and 2.5% of the loss before tax). The
benchmark was chosen as a result of the key focus and key performance
indicators of the business in recent years being the assessment of not just
revenue, but reducing trading losses in  light of difficult trading periods
of low hashprice, high power costs and the ability of the entity to repay its
debt obligations.

 

The parent company materiality for the financial statements as a whole was set
at US$190,000 (2023: $318,500). This was calculated based on 2% of total
expenditure, which was same benchmark used in the prior year. We have
determined this to be the principal benchmark of the parent company, as
revenue is generated solely through its subsidiaries. A key management target
is to minimise parent company expenditure, in order to maximise the
utilisation of funds within the trading subsidiaries. Materiality for the
subsidiaries has been calculated based on their financial significance to the
group, capped at group performance materiality.

 

These significant components of the group, were audited to a level of
materiality ranging from US$225,000 to US$405,000 (2023: $89,000 to
US$505,000).

 

Performance materiality for the group financial statements was set at
US$450,000 (2023: $455,000) and the parent company was set at US$110,000
(2023: $191,100), being 60% of materiality for the financial statements as a
whole. The performance materiality for the group and all components  is based
on our assessment of the relevant risk factors e.g. previous experience of
misstatements, management's attitude towards proposed adjustments, and the
level of estimation inherent within the group and the subsidiaries including
the parent company.

 

We agreed to report to those charged with governance all corrected and
uncorrected misstatements we identified through our audit with a value in
excess of US$37,500 (2023: $37,000) for the group and for the parent company a
value in excess of US$9,500 (2023: $15,925). We also agreed to report any
other audit misstatements below that threshold that we believe warranted
reporting on qualitative grounds

 

Our approach to the audit

The scope of our audit was influenced by our application of materiality. The
quantitative and qualitative thresholds for materiality determine the scope of
our audit and the nature, timing and extent of our audit procedures. In
particular, we looked at areas involving significant accounting estimates and
judgement by the Directors, and those areas assessed to be Key Audit Matters
as presented below. We also addressed the risk of management override of
internal controls, including among other matters consideration of whether
there was evidence of bias that represented a risk of material misstatement
due to fraud.

We assessed all components of the group for their significance in order to
determine the extent of the work to be performed on them in order to obtain
sufficient and appropriate audit evidence on which to base the group audit
opinion. Those entities of the group which were considered to be significant
components, being Argo Blockchain plc, Argo Innovation Labs Inc and Argo
Operating US LLC, were subject to full scope audit procedures by PKF
Littlejohn LLP. Procedures were performed to address the assessed risks of
material misstatement.

We did not rely on the work of any component auditors.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.  In addition to the matter
described in the Material uncertainty related to going concern section we have
determined the matters described below to be the key audit matters to be
communicated in our report.

 

 Key Audit Matter                                                                How our scope addressed this matter
 Carrying value of mining machines (Note 18)                                              In responding to the identified key audit matter we completed

                                                                               the following audit procedures:
 The group holds a significant volume and value of mining machines at the year

 end, comprising of hosted machines at Baie Comeau, Canada and unhosted          • Reviewing management's value in use and fair value less costs to sell
 machines following exit from the Helios facility in Texas, US.                  calculations, challenging the assumptions made thereto including obtaining

                                                                               both corroborative and contradictory evidence;
 The key assumptions underlying the value in use calculations, together with

 fair value less costs to sell, requires significant judgement and estimation    • Evaluating the allocation of mining machines to the most appropriate CGU,
 by management.                                                                  together with other corporate assets where applicable, and performing the

                                                                               impairment assessment at the separate CGU levels;
 Although the bitcoin price has recovered during the current year, there are

 numerous factors which indicate a potential impairment under IAS 36. These      • Checking the mathematical accuracy of the value in use calculations;
 factors include, but are not limited to:

                                                                               • Obtaining evidence of current selling prices of new and used machines in
 • Bitcoin halving event during 2024.                                            order to assess their expected recoverable value;

 • Movement of machines from a high-performance liquid cooled facility to an     • Performing sensitivity analysis on the key inputs in the value in use
 air-cooled facility leading to potential mining inefficiencies, the need to     calculations prepared, and assess the accuracy of previous forecasts to actual
 refurbish machines and the identification of new hosting facilities.            results;

 • Volatility in the cryptocurrency market giving rise to an adverse change      • Performing virtual physical verification checks of the owned, hosted
 in hash price.                                                                  mining machines and obtaining third party confirmation of unhosted mining

                                                                               machines subject to refit;
 • Technological advancements and substantial investment by competitors

 giving rise to an adverse change in hash price.                                 • Assessing the useful life of the machines;

 The impairment assessment has been assessed as a key audit matter in the        • Performing a stress test of the value in use calculation to a point where
 current year.                                                                   an impairment would be required, and assessing the likelihood of such an

                                                                               outcome; and

                                                                                 • Reviewing the disclosures in the financial statements and ensure they
                                                                                 comply with the requirements of IAS 36.

                                                                                        Key observations:

                                                                                 An impairment charge of $31.5 million was recognised in profit or loss during
                                                                                 the year. We are satisfied that management's impairment assessment and
                                                                                 conclusions are reasonable.

 

Other information

The other information comprises the information included in the annual report,
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report. Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or otherwise
appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are
required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion the part of the directors' remuneration report to be audited
has been properly prepared in accordance with the Companies Act 2006.

In our opinion, based on the work undertaken in the course of the audit:

·      the information given in the strategic report and the directors'
report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and

·      the strategic report and the directors' report have been prepared
in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its
environment obtained in the course of the audit, we have not identified
material misstatements in the strategic report or the directors' report.

We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:

·      adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches not visited by us;
or

·      the financial statements and the part of the directors'
remuneration report to be audited are not in agreement with the accounting
records and returns; or

·      certain disclosures of directors' remuneration specified by law
are not made; or

·      we have not received all the information and explanations we
require for our audit.

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the
directors are responsible for the preparation of the financial statements and
for being satisfied that they give a true and fair view, and for such internal
control as the directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to
fraud or error.

In preparing the financial statements, the directors are responsible for
assessing the company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the company or
to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:

·      We obtained an understanding of the group and parent company and
the sector in which they operate to identify laws and regulations that could
reasonably be expected to have a direct effect on the financial statements. We
obtained our understanding in this regard through discussions with management,
industry research and application of cumulative audit knowledge and experience
of the sector.

·      We determined the principal laws and regulations relevant to the
group and parent company in this regard to be those arising from:

o  Companies Act 2006

o  Canada Business Corporations Act

o  Securities Law

o  Anti Money Laundering Legislation

o  Disclosure Rules and Transparency rules for listed entities

o  SEC regulations

o  Local tax laws and regulations

·      We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by the group
and parent company with those laws and regulations. These procedures included,
but were not limited to:

o  A review of the Board minutes throughout the year and post year-end

o  A review of the RNS announcements

o  A review of general ledger transactions

o  Discussion with management and internal legal counsel

·      We also identified the risks of material misstatement of the
financial statements due to fraud. We considered, in addition to the
non-rebuttable presumption of a risk of fraud arising from management override
of controls, the risk relating to the impairment assessment of property, plant
and equipment and uncertain tax positions to be potential areas for management
bias.

·      As in all of our audits, we addressed the risk of fraud arising
from management override of controls by performing audit procedures which
included, but were not limited to: the testing of journals;  reviewing
accounting estimates for evidence of bias; and evaluating the business
rationale of any significant transactions that are unusual or outside the
normal course of business.

Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation.
This risk increases the more that compliance with a law or regulation is
removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.

A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
(http://www.frc.org.uk/auditorsresponsibilities) . This description forms part
of our auditor's report.

Other matters which we are required to address

We were appointed by the Board to audit the financial statements for the
period ending 31 December 2018 and subsequent periods. Our total uninterrupted
period of engagement is 7 years, covering the periods ending 31 December 2018
to 31 December 2024.

 

The non-audit services prohibited by the FRC's Ethical Standard were not
provided to the company and we remain independent of the company in conducting
our audit.

Our audit opinion is consistent with the additional report to the audit
committee.

Use of our report

This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006.  Our audit work has been
undertaken so that we might state to the company's members those matters we
are required to state to them in an auditor's report and for no other
purpose.  To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone, other than the company and the company's members as
a body, for our audit work, for this report, or for the opinions we have
formed.

 

 

David Thompson (Senior Statutory Auditor)
                                                                                    15
Westferry Circus

For and on behalf of PKF Littlejohn LLP
 
Canary Wharf

Statutory Auditor
 
London E14 4HD

 

 
 8 May 2025

 

 

 

GROUP STATEMENT OF COMPREHENSIVE INCOME

 

 

                                                                         Year ended December 2024  Year ended December 2023 (Restated, Note 2)
 Continuing operations                                 Note              $'000                     $'000

 Revenues                                              7                 47,017                     50,558

 Power and hosting costs                                                 (32,887)                  (35,964)
 Power Credits                                                           1,498                      7,163
 Depreciation - mining hardware                        18                (14,171)                  (18,656)
 Gross profit (loss)                                                     1,457                     3,101
 Administrative expenses                               8                 (12,536)                  (18,949)
 (Loss)/Gain on hedging                                                  (487)                     -
 Share based payment expense                           22                (3,759)                   (3,892)
 Operating loss                                                          (15,325)                  (19,740)
 (Loss)/Gain on sale of Investment                                        (842)                    36
 Write off of investment                               16                -                          (2,236)
 Loss on disposal of fixed assets                                         (429)                    -
 Interest Expense                                                         (6,810)                  (11,556)
 Other income                                                             708                       346
 Impairment of tangible fixed assets                   18                (31,498)                  (855)
 (Loss)/Gain on disposal of intangible assets          17                (98)                      1,166
 Impairment of intangible assets                       17                (468)                     (1,082)
 Equity accounted earnings from associate              16                -                          (716)
 Loss before taxation                                                    (54,762)                  (34,637)
 Tax expense                                           13                (340)                     -
 Loss after taxation                                                     (55,102)                  (34,637)

 Other comprehensive income
 Currency translation reserve                                            (241)                     (1,175)
 Total other comprehensive loss                                          (241)                     (1,175)

 Total comprehensive loss attributable                                   (55,343)                  (35,812)
 to the equity holders of the Company

 Loss per share attributable to equity owners (cents)
 Basic and diluted loss per share                      12                (0.09)                    (0.07)

 

GROUP STATEMENT OF FINANCIAL POSITION
                                                                    As at 31 December 2024  As at 31 December 2023
                                                                                            (Restated, Note 2)

                                                   Note             $'000                   $'000
 ASSETS
 Non-current assets
 Investments at fair value through profit or loss  15               300                     400
 Intangible fixed assets non-current               17               176                     888
 Property, plant and equipment                     18               7,071                   59,728
 Total non-current assets                                           7,547                   61,016
 Current assets
 Trade and other receivables                       19               2,451                   2,480
 Prepayments                                       19               628                     1,355
 Intangible fixed assets current                   20               6                       385
 Cash and cash equivalents                                          8,626                   7,443
                                                                    11,711                  11,663
 Assets Held for sale                              14               -                       3,261
 Total current assets                                               11,711                  14,924

 Total assets                                                       19,258                  75,940
 EQUITY AND LIABILITIES
 Equity
 Share Capital                                     22               938                     712
 Share Premium                                     22               232,257                 209,779
 Share based payment reserve                       23               15,162                  12,166
 Foreign currency translation reserve              23               (30,766)                (30,525)
 Accumulated surplus/(deficit)                     23               (247,076)               (191,974)
 Total equity                                                       (29,485)                158
 Current liabilities
 Trade and other payables                          24               8,184                   11,063
 Corporation tax                                                    398                     112
 Loans current                                     25               857                     14,320
                                                                    9,439                   25,495
 Liabilities associated with assets held for sale  14               -                       2,090
 Total current liabilities                                          9,439                   27,585
 Non-current liabilities
 Issued debt - bond                                25               39,304                  38,170
 Loans non-current                                 25               -                       10,027
 Total liabilities                                                  48,743                  75,782

 Total equity and liabilities                                       19,258                  75,940

 

 

 

 

The Group financial statements were approved by the Board of Directors on 8
May 2025 and authorised for issue and they are signed on its behalf by:

 

Justin Nolan

Chief Executive Officer

The accounting policies and notes form part of the financial statements.
Registered number: 11097258

GROUP STATEMENT OF CHANGES IN EQUITY

 Share Capital                            Share Capital  Share Premium  Currency translation reserve  Share based payment reserve  Accumulated surplus/ (deficit)  Total
                                          $'000          $'000          $'000                         $'000                        $'000                           $'000
 Balance at 1 January 2024                712             209,779        (30,525)                     12,166                        (191,974)                      158
 Total comprehensive loss for
 the period:
 Loss for the period                      -              -                                            -                            (55,102)                        (55,102)
 Other comprehensive loss                 -              -              (241)                         -                                                            (241)
 Total comprehensive loss for the period  -               -              (241)                        -                             (55,102)                       (55,343)
 Transactions with equity owners:
 Share capital issued                     220             21,635        -                             -                            -                               21,855
 Share based payment charge               -              -              -                             3,845                        -                               3,845
 Share options/warrants exercised         6               843           -                             (849)                        -                               -
 Total transactions with equity owners    226             22,478         -                             2,996                        -                               25,700

 Balance at 31 December 2024              938             232,257        (30,766)                     15,162                        (247,076)                      (29,485)

 

 

 Share Capital                            Share Capital  Share Premium  Currency translation reserve  Share based payment reserve  Accumulated surplus/ (deficit)  Total
                                          $'000          $'000          $'000                         $'000                        $'000                           $'000
 Balance at 1 January 2023                634             202,103        (29,350)                     8,528                         (157,337)                      24,578
 Total comprehensive loss for
 the period:
 Loss for the period                      -              -              -                             -                            (34,637)                        (34,637)
 Other comprehensive loss                 -              -              (1,175)                       -                            -                               (1,175)
 Total comprehensive loss for the period  -               -              (1,175)                      -                             (34,637)                       (35,812)
 Transactions with equity owners:
 Share capital issued                     76              7,442         -                             -                            -                                7,518
 Share based payment charge               -              -              -                             3,874                        -                                3,874
 Share options/warrants exercised         2               234           -                              (236)                       -                               -
 Total transactions with equity owners    78              7,676          -                             3,638                        -                               11,392

 Balance at 31 December 2023              712             209,779        (30,525)                     12,166                        (191,974)                      158

GROUP STATEMENT OF CASHFLOWS

 

                                                                                                 Year ended December  Year ended December
                                                                                                 2024                 2023
                                                                                                                      (Restated, Note 2)
                                                                        Note                     $'000                $'000
 Cash flows from operating activities
 Loss before tax                                                                                 (54,762)             (34,637)
 Adjustments for:
 Depreciation and amortisation                                          17, 18                   14,909                20,129
 Foreign exchange movements                                                                      (458)                (1,914)
 Loss on disposal of tangible assets                                                             429                   -
 Finance cost                                                           8                        6,810                 11,556
 Loss on sale of subsidiary and investment                                                       842                   (36)
 Digital assets earned                                                  20                       (47,017)             (50,558)
 Impairment of intangible digital assets                                17                       468                   654
 Impairment of property, plant and equipment                            18                       31,498                855
 Write off of investment                                                                         -                     2,236
 Share of loss from associate                                           16                       -                     716
 Gain/(loss) on disposal and impairment of intangible assets (current)                           98                    (738)
 Hedging loss                                                                                    487                   -
 Interest receivable                                                                             (307)                -
 Stock based compensation expense                                       10                       3,759                 3,892
 Working capital changes:
 (Increase)/decrease in trade and other receivables                     19                       756                   (1,152)
 Increase/(decrease) in trade and other payables                        24                       (2,310)              1,041
 Net cash used in operating activities                                                           (44,798)             (47,956)
 Investing activities
 Interest received                                                                               307                   -
 Purchase of hedging instruments                                                                 (1,000)              -
 Proceeds from sale of hedging instruments                                                       513                   -
 Proceeds from sale of digital assets                                                            47,594                51,866
 Proceeds from sale of investment/subsidiary                            15                       6,745                 50
 Purchase of tangible fixed assets                                      18                       -                     (1,112)
 Proceeds from disposal of tangible fixed assets                                                 908                   -
 Net cash generated from investing activities                                                    55,067                50,804
 Financing activities
 Proceeds from borrowing                                                25                       1,287                 1,429
 Loan repayments                                                                                 (27,505)             (14,064)
 Interest paid                                                          25                       (4,961)              (10,661)
 Proceeds from common stock issued - net of issue costs                                          21,855                7,518
 Net cash used in financing activities                                                           (9,324)              (15,778)
 Net (decrease) increase in cash and cash equivalents                                            945                   (12,930)
 Effect of foreign exchange on cash and cash equivalents                                         238                   281
 Cash and cash equivalents at beginning of period                                                7,443                 20,092
 Cash and cash equivalents at end of period                                                      8,626                 7,443

 

Material non-cash movements:
 
 Group - net debt reconciliation         Year ended 31 December 2024  Year ended 31 December 2023
                                   Note  $'000                        $'000
 Current loans and borrowings      25    (857)                        (14,320)
 Non-current issued debt - bonds   25    (39,304)                     (38,170)
 Non-current loans and borrowings  25    -                             (10,027)
 Cash and cash equivalents               8,626                         7,443
 Total net debt                          (31,535)                     (55,074)

 
NOTES TO THE FINANCIAL STATEMENTS
1.   COMPANY INFORMATION

 

Argo Blockchain PLC ("the company") is a public company, limited by shares,
and incorporated in England and Wales. The registered office is Eastcastle
House, 27-28 Eastcastle Street, London, W1W 8DH. The company was incorporated
on 5 December 2017 as GoSun Blockchain Limited and changed its name to Argo
Blockchain Limited on 21 December 2017. Also on 21 December 2017, the company
re-registered as a public company, Argo Blockchain plc. Argo Blockchain plc
acquired a 100% subsidiary, Argo Innovation Labs Inc. (together "the Group"),
incorporated in Canada, on 12 January 2018.

On 4 March 2022 the Group acquired 100% of the share capital of DPN LLC and
was merged into new US entity Argo Innovation Facilities (US) Inc (also 100%
owned by Argo Blockchain plc).

On 11 May 2022 the Group acquired 100% of the share capital of 9377-2556
Quebec Inc and 9366-5230 Quebec Inc. These are held by Argo Innovation Labs
Inc. (Canada).

On 22 November 2022, the Group formed Argo Operating US LLC and Argo Holdings
US Inc.

On 21 December 2022, Argo Innovation Facilities (US) Inc became Galaxy Power
LLC. On 28 December 2022, the Group sold Galaxy Power LLC.

On 26 March 2024, the Group sold 100% of the share capital of 9366-5230 Quebec
Inc.

The principal activity of the Group is Bitcoin mining.

The common shares of the Group are listed under the trading symbol ARB on the
London Stock Exchange. The American Depositary Receipt of the Group are listed
under the trading symbol ARBK on Nasdaq. The Group bond is listed on the
Nasdaq Global Select Market under the trading symbol ARBKL.

The financial statements cover the year ended 31 December 2024.

 

2.   BASIS OF PREPARATION

The financial statements have been prepared in accordance with UK-adopted
international accounting standards and with the requirements of the Companies
Act 2006. The financial statements have been prepared under the historical
cost convention, except for the measurement to fair value certain financial
and digital assets and financial instruments as described in the accounting
policies below.

Critical accounting judgements and key sources of estimation uncertainty

The preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets and
liabilities, income and expense. Actual results may differ from these
estimates. The significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation uncertainty are
disclosed in Note 6.

 

2023 restatement

The Group re-evaluated the classification of its mined cryptocurrencies and
determined these assets should be classified as Intangible assets to align
with the US filing presentation, previously accounted for as inventory. The
impact to the balance sheet within current assets is a change in the
description of the asset from digital assets to intangible assets.

The classification impact to the income statement is twofold:

 A reclassification of the change in fair value of digital assets from
"Change in fair value of digital assets" to "Impairment in intangible fixed
assets" and/or "realized gains/losses on intangible assets", and

 A reclassification of unrealized fair value gains or losses of digital
assets from "Change in fair value of digital assets" to "Other comprehensive
income" and/or realized gains/losses on intangible assets.

There was no unrealized gain or loss reclassification materially impacting the
year ended 31 December 2023.

The impact to the cash flow statement is primarily a reclassification between
operating cash flows and investing cash flows in respect of proceeds from the
sale of Bitcoin.

As disclosed in note 1 to the parent company financial statements, 2023 has
been restated due to a misapplication of the intra group recharges policy.
This impacted the foreign currency gains and losses of the Group, whereby Loss
before taxation decreased and other comprehensive income increased by $396k,
with no change to total comprehensive income (loss).

 

 The numerical impacts to the cash flows and income statements are summarized
below.

 

 

 

 $'000                                                    2023 Original              2023 Restated

                                                                          Movement
 Net cash generated from (used in) operating activities  3,831                        (47,956)

                                                                          (51,787)
 Net cash (used in) generated from investing activities  (1,062)                     50,804

                                                                          51,866
 Loss before taxation                                    (35,033)                    (34,637)

                                                                          396

 

 

3.   ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these
consolidated financial statements are below.

Presentation Currency

The Group changed its presentational currency to US Dollars during 2023 due to
the fact its revenues, direct costs, capital expenditures and debt obligations
are predominantly denominated in US Dollars.

Going Concern
 

The preparation of consolidated financial statements requires an assessment
on the validity of the going concern

assumption.

 

The Group strengthened its balance sheet during 2024 by fully repaying the $35
million Galaxy loan ahead of schedule. This repayment was made possible
through equity raises, asset sales and cash flow from operations. However, at
the end of 2024 Galaxy informed the Group that they would no longer host the
Group's mining machines at their Helios immersion facility. This required the
Group to remove approximately 23,000 mining machines from the immersion
facility and refurbish them so they could be re-hosted at air-cooled
facilities. The cost of the refurbishment and the loss of mining margin during
the majority of the first quarter of 2025 added additional strain to the
Group's finances. Despite the Galaxy debt repayment during 2024 and the $8.6
million cash balance at 31 December 2024 ($2.4 million at 31 March 2025),
material uncertainties exist that may cast significant doubt regarding the
Group's and Company's ability to continue as a going concern and meet its
liabilities as they come due. The significant uncertainties are:

 

1)     The Group has $40 million in unsecured bonds maturing in November
2026 that carry an interest rate of 8.75%, payable quarterly ($875,000 per
quarter).

2)     The Group's exposure to Bitcoin prices, power prices, and
hashprice, each of which have shown volatility over recent years, may have a
significant impact on the Group's future profitability. The Group may have
difficulty meeting its liabilities if there are significant declines to the
hashprice assumption or significant increases to the power price, particularly
where there is a combination of both factors.. The Directors' assessment of
going concern includes forecasted scenarios drawn up to 30 June 2026 using the
Group's estimate of potential hashprices and power costs.

3)     As noted above, the refurbishment costs and loss of mining margin
during the re-hosting phase in the first quarter impacted the Group's cash
balance. In addition, the sale of machines subsequent to year end has reduced
the Group's hashrate, lowering the amount of Bitcoin it will produce going
forward. Depending on hashprice, the Group may not generate operating profit
and/or positive cash flow despite reducing operating expenses during the first
half of 2025.

 

Offsetting these negative impacts to the Group's cash flow are:

1)     The Group's cash balance of $2.4 million at 31 March 2025.

2)     The Group's ability to dispose of assets, including unhosted mining
machines and the Group's data center in Baie Comeau, Quebec. Assets were
successfully sold during 2024 to repay debt.

3)     The Group's ability to equitize the unsecured bonds (through a
tender or structured process).

4)     The Group's ability to generate additional funds by issuing equity
for cash proceeds, as it did successfully in 2023 and 2024.

 

Based on information from Management, as well as independent advisors, the
Directors have considered the period to 30 June 2026, as a reasonable time
period given the variable outlook of cryptocurrencies, cryptocurrency mining
costs, competition and energy prices. Based on the above considerations, the
Board believes it is appropriate to adopt the going concern basis in the
preparation of the Financial Statements; however, the Board notes that the
debt service requirements, lower operating margins, and the volatile economic
and industry environment, indicate the existence of material uncertainties
that cast significant doubt regarding the applicability of the going concern
assumption and the auditors have made reference to this in their audit report.

 

Mining Revenue Recognition

The provision of hash calculation services is an output of our ordinary
activities from the Company's mining equipment. The Company has entered into
arrangements with a Mining pool and has undertaken the performance obligation
of providing computing power used for hashing calculations to the Mining pool
in exchange for noncash consideration in the form of cryptocurrency, which is
variable consideration. Providing our computing power is at the Company's
discretion and our enforceable right to compensation begins when, and
continues for as long as, services are provided. The cryptocurrency earnings
are calculated based on a formula which, in turn, is based on the hashrate
contributed by the Company's provided computing power used for hashing
calculations allocated to the Mining pool, assessed over a 24- hour period,
and distributed daily based on the Full Pay Per Share ("FPPS") methodology.
The Company assesses the estimated amount of the variable non-cash
consideration to which it expects to be entitled for providing computational
power used for hashing calculations at contract inception and subsequently
measures if it is highly probable that a significant reversal in the amount of
cumulative revenue recognized will not occur. The uncertainties regarding the
daily variable consideration to which the Company is entitled for providing
its computational power used for hashing calculations are no longer
constrained at 23:59:59 UTC regardless of the timing of the BTC received. The
amount earned is calculated based on the Company's computing power used for
hashing calculations provided to the Mining pool and the estimated (i) block
subsidies and (ii) daily average transaction fees which the Mining Pool
expects to earn, less (iii) a Mining pool discount.

1.   Block subsidies refers to the block reward that are expected to be
generated on the BTC network as a whole. The fee earned by the Company is
first calculated by dividing (a) the total amount of hashrate the Company
provides to the Mining pool operator, by (b) the total BTC network's implied
hashrate (as determined by the BTC network difficulty), multiplied by (c) the
total amount of block subsidies that are expected to be generated on the BTC
network as a whole.

2.   Transaction fees refer to the total fees paid by users of the network
to execute transactions. The fee paid out by the Mining pool operator to the
Company is further calculated by dividing (a) the total amount of transaction
fees that are actually generated on the BTC network as a whole less the 3
largest and 3 smallest transactions per block, by (b) the total amount of
block subsidies that are actually generated on the BTC network as a whole,
multiplied by (c) the Company's fee earned as calculated in (i) above. The
Company is entitled to its relative share of consideration even if a block is
not successfully added to the blockchain by the mining pool.

3.   Mining pool discount refers to the discount applied to the total FPPS
payout otherwise attributed to computing power service providers for their
sale of computing power used for hashing calculations as defined in the rate
schedule of the agreement with the Mining pool operator.

The Group is entitled to the fee from the Mining Pool as calculated above
regardless of the actual performance of the Mining Pool operator. Therefore,
even if the Mining Pool does not successfully add any block to the blockchain
in a given contract period, the fee remains payable by the Mining Pool to the
Group. Accordingly, the Group is not sharing in the earnings of the Mining
pool operator.

The Group's agreements with the Mining pool operator provide the Mining pool
operator and the Company with the enforceable right to terminate the contract
at any time without substantively compensating the other party for the
termination. Upon termination, the Mining pool operator is required to pay the
Company the amount due related to previously satisfied performance
obligations. As a result, the Company has determined that the duration of the
contract is less than 24 hours and the contract is continuously renewed
throughout the day. The Company has also determined that the Mining pool
operator's renewal right is not a material right as the terms, conditions, and
compensation amounts are at then-current market rates.

The cryptocurrency earned is received in full and can be paid in fractions of
cryptocurrency. Revenues from providing cryptocurrency computational power
used for hashing calculations are recognized upon delivery of the service over
a 24-hour period, which generally coincides with the receipt of crypto assets
in exchange for the provision of computational power used for hashing
calculations and the contract inception date. The Company updates the
estimated transaction price of the non-cash consideration received at its fair
market value. Management estimates fair value daily based on the quantity of
cryptocurrency received multiplied by the price quoted from Coinbase
(Coingecko - 2023) on the day it was received. Management considers the prices
quoted on Coinbase (Coingecko - 2023) to be a level 1 input under IFRS 13,
Fair Value Measurement.

Power Credits - Power credits are credits we receive in Texas when we curtail
our mining production and sell the power back to the grid. The hosting
agreement with Galaxy allows Argo to share in the proceeds from these
curtailments, which occurs when the Helios facility monetizes its fixed-price
PPA during periods of high power prices. The Company records power credits in
the period they are earned provided they are estimable and recoverable.

Derivative Contracts - Hedging: In 2024, the Group used derivatives contracts
in connection with some of its lending activities and its treasury management.
Derivative contracts are susceptible to additional risks that can result in a
loss of all or part of the investment. The Group's derivative activities and
exposure to derivative contracts are subject to interest rate risk, credit
risk, foreign exchange risk, and macroeconomic risks. In addition, Argo is
also subject to additional counterparty risks due to the potential inability
of its counterparties to meet the terms of their contracts. There were no
hedging contracts in 2023.

Basis of consolidation

Subsidiaries are all entities (including structured entities) over which the
Group has control. The Group controls an entity when the Group is exposed to,
or has rights to, variable returns from its involvement with the entity and
has the ability to affect those returns through its power over the entity.
Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. They are deconsolidated from the date that control
ceases.

The Group assesses whether or not it controls an investee if facts and
circumstances indicate that there are changes to one or more of the three
elements of control. Assets, liabilities, income and expenses of a subsidiary
acquired or disposed of during the year are included in the consolidated
financial statements from the date the Group gains control until the date the
Group ceases to control the subsidiary.

The Group consists of Argo Blockchain plc and its wholly owned subsidiaries
Argo Innovation Labs Inc, Argo Operating US LLC, Argo Holdings US Inc., and
9377-2556 Quebec Inc..

In the parent company financial statements, investments in subsidiaries, joint
ventures and associates are accounted for at cost less impairment.

The consolidated financial statements incorporate those of Argo Blockchain plc
and all of its subsidiaries (i.e., entities that the group controls through
its power to govern the financial and operating policies so as to obtain
economic benefits). Subsidiaries acquired during the year are consolidated
using the purchase method. Their results are incorporated from the date that
control passes.

All intra-group transactions, balances and unrealised gains on transactions
between group companies are eliminated on consolidation.

Business Combinations

The group applies the acquisition method to account for business combinations.
The consideration transferred for the acquisition of a subsidiary is the fair
values of the assets transferred, the liabilities incurred to the former
owners of the acquisition and the equity interests issued by the group. The
consideration transferred includes the fair value of any asset or liability
resulting from a contingent consideration arrangement. Identifiable assets
acquired and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the acquisition
date. The group recognises any non-controlling interest in the acquiree on an
acquisition-by-acquisition basis, either at fair value or at the
non-controlling interest's proportionate share of the recognised amounts of
acquiree's identifiable net assets.

Acquisition-related costs are expensed as incurred.

Associates

Associates are all entities over which the Group has significant influence but
not control, generally accompanying a shareholding of between 20% and 50% of
the voting rights. Investments in associates are accounted for using the
equity method of accounting. Under the equity method, the investment is
initially recognised at cost, and the carrying amount is increased or
decreased to recognise the investor's share of the profit or loss of the
investee after the date of acquisition. The Group's investment in associates
includes goodwill identified on acquisition.

If the ownership interest in an associate is reduced but significant influence
is retained, only a proportionate share of the amounts previously recognised
in other comprehensive income is reclassified to profit or loss where
appropriate.

The Group's share of post-acquisition profit or loss is recognised in the
income statement, and its share of post- acquisition movements in other
comprehensive income is recognised in other comprehensive income with a
corresponding adjustment to the carrying amount of the investment. When the
Group's share of losses in an associate equal or exceeds its interest in the
associate, including any other unsecured receivables, the Group does not
recognise further losses, unless it has incurred legal or constructive
obligations or made payments on behalf of the associate.

The Group determines at each reporting date whether there is any objective
evidence that the investment in the associate is impaired. If this is the
case, the Group calculates the amount of impairment as the difference between
the recoverable amount of the associate and its carrying value and recognises
the amount adjacent to 'share of profit/(loss) of associates in the income
statement.

Segmented reporting

Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The chief operating
decision-maker, who is responsible for allocating resources and assessing the
performance of the operating segments, has been identified as the CEO or
equivalent. The directors consider that the Group has only one significant
reporting segment being crypto mining which is fully earned by a Canadian and
USA subsidiary for the financial year ended 31 December 2024.

Loans and issued debt

Loans and issued debt are recognised initially at fair value, net of
transaction costs incurred. Loans and issued debt are subsequently carried at
amortised cost; any difference between the proceeds and the redemption value
is recognised in the income statement over the period of the borrowings, using
the effective interest method. Loans and issued debt are removed from the
statement of financial position when the obligation specified in the contract
is discharged, cancelled or expired. Loans and borrowings and issued debt are
classified as current liabilities unless the Group has an unconditional right
to defer settlement of a liability for at least 12 months after the end of the
reporting period.

Intangible fixed assets

Intangible fixed assets comprise of the Group's website and digital assets
that were not mined by the Group and are held by Argo Labs (our internal team)
as investments. The Group's website is recognised at cost and is amortised
over its useful life. Amortisation is recorded within administration expenses.
Digital assets recorded under IAS 38 have an indefinite useful life initially
measured at cost, and subsequently measured at fair value through other
comprehensive income.

Argo's primary business is focused on cryptocurrency mining. Argo Labs is an
in-house innovation arm focused on identifying opportunities within the
disruptive and innovative sectors of the broader cryptocurrency ecosystem.
Argo Labs uses a portion of Argo's crypto assets to deploy into various
blockchain projects.

Increases in the carrying amount arising on revaluation of digital assets are
credited to other comprehensive income and shown as other reserves in
shareholders' equity. Decreases that offset previous increases of the same
asset are charged in other comprehensive income and debited against the fair
value reserve directly in equity; all other decreases are charged to the
income statement.

The fair value of intangible cryptocurrencies on hand at the end of the
reporting period is calculated as the quantity of cryptocurrencies on hand
multiplied by price quoted on www.coinbase.com (http://www.coinbase.com) for
2024, www.coingecko.com, for 2023 and prior years, two of the leading crypto
websites, as at the reporting date.

Tangible fixed assets

Tangible fixed assets are comprised of right of use assets, office equipment,
mining and computer equipment, data centres, leasehold improvements, and
electrical equipment.

Right of use assets are measured at cost, less any accumulated depreciation
and impairment losses, and adjusted for any remeasurement of lease
liabilities. The cost of the right of use assets includes the amount of lease
liabilities recognised, initial direct costs incurred, and lease payments made
at or before the commencement date less any lease incentives received. Right
of use assets are depreciated on a straight-line basis over the shorter of the
lease term and the estimated useful lives of the assets.

Office equipment assets are measured at cost, less any accumulated
depreciation and impairment losses. Office equipment is depreciated over 3
years on a straight-line basis.

Mining and computer equipment and leasehold improvements: Depreciation is
recognised so as to write off the cost or valuation of assets less their
residual values over their estimated useful lives. It is 3 to 4 years in the
case of mining and computer equipment and 5 years in the case of the leasehold
improvements, on a straight-line basis.

Data centres: Depreciation on the data centres is recognised so as to write
off the cost or valuation of assets less their residual values over their
estimated useful lives of 25 years on a straight-line basis from when they are
brought into use. Depreciation is recorded in the Income Statement within
general operating expenses once the asset is brought into use. Any land
component is not depreciated.

Electrical equipment: Depreciation is recognised on a straight-line basis to
write off the cost less their residual values over their estimated useful
lives of 7 years.

Management assesses the useful lives based on historical experience with
similar assets as well as anticipation of future events which may impact their
useful life.

 

 

Assets Held for Resale

An asset is classified as held for sale if its carrying amount will be
recovered principally through sale rather than through continuing use, which
is when the sale is highly probable, and it is available for immediate sale in
its present condition subject only to terms that are usual and customary for
sales of such assets. Assets classified as held for sale are measured at the
lower of the carrying amount upon classification and the fair value less costs
to sell. Assets classified as held for sale and the associated liabilities are
presented separately from other assets and liabilities in the Consolidated
Balance Sheet. Once assets are classified as held for sale, property, plant
and equipment and intangible assets are no longer subject to depreciation or
amortisation.

Impairment of non-financial assets

At each reporting period end date, the Group reviews the carrying amounts of
its non-financial assets to determine whether there is any indication that
those assets have suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order to determine the
extent of the impairment loss (if any). Where it is not possible to estimate
the recoverable amount of an individual asset, the Group and Company estimates
the recoverable amount of the cash-generating unit to which the asset belongs.

Intangible assets

Cryptocurrency mined by the Company and on hand at the end of a reporting
period, is accounted for under IAS 38, Intangible Assets, as an intangible
asset with an indefinite useful life initially measured at cost, deemed to be
the fair value upon receipt as described above, and subsequently measured
under the revaluation model. Under the revaluation model, increases in the
cryptocurrency's carrying amount, determined as the excess of fair value on
revaluation over the weighted average cost, are recognized in other
comprehensive income, except to the extent that they reverse a revaluation
decrease previously recognized in profit or loss. Decreases are recognized in
profit or loss, except to the extent that they reverse a revaluation increase
previously recognized in other comprehensive income. Once the cryptocurrency
is sold, the revaluation increase related to it is transferred from
revaluation surplus to retained earnings. The Company revalues its
cryptocurrency on hand on a monthly basis and following any significant fair
value fluctuations. The fair value of cryptocurrency on hand at the end of the
reporting period is calculated as the quantity of cryptocurrency on hand
multiplied by the price quoted on Coinbase.com as of the reporting date.

The Company reports cryptocurrency on hand at the end of the reporting period
as intangible assets, which are classified as current assets as the Company
has determined that the cryptocurrency on hand at the end of the reporting
period has markets with sufficient liquidity to allow conversion within the
Company's normal operating cycle and the Company expects to realize the
digital asset within twelve months after the reporting period.

Cryptocurrencies not mined by the Group are recorded as Intangible Fixed
Assets non-current.

Cash and cash equivalents

Cash and cash equivalents are comprised of cash held at banks with high credit
ratings. The Group considers the credit risk on cash and cash equivalents to
be limited because the counterparties are banks with high credit ratings
assigned by international credit rating agencies.

Financial instruments

Financial assets: Financial assets are recognised in the Statement of
Financial Position when the Group becomes party to the contractual provisions
of the instrument. Financial assets are classified into specified categories.
The classification depends on the nature and purpose of the financial assets
and is determined at the time of recognition. Financial assets are
subsequently measured at amortised cost, fair value through OCI, or fair value
through profit and loss.

The classification of financial assets at initial recognition that are debt
instruments depends on the financial asset's contractual cash flow
characteristics and the Group's business model for managing them. The Group
initially

measures a financial asset at its fair value plus, in the case of a financial
asset not at fair value through profit or loss, transaction costs.

In order for a financial asset to be classified and measured at amortised
cost, it needs to give rise to cash flows that are 'solely payments of
principal and interest (SPPI)' on the principal amount outstanding. This
assessment is referred to as the SPPI test and is performed at an instrument
level.

The Group's business model for managing financial assets refers to how it
manages its financial assets in order to generate cash flows. The business
model determines whether cash flows will result from collecting contractual
cash flows, selling the financial assets, or both.

Subsequent measurement: For purposes of subsequent measurement, financial
assets are classified in four categories:

·      Financial assets at amortised cost

 

·      Financial assets at fair value through OCI with recycling of
cumulative gains and losses (debt instruments)

·      Financial assets designated at fair value through OCI with no
recycling of cumulative gains and losses upon derecognition (equity
instruments)

·      Financial assets at fair value through profit or loss

Equity Instruments: The Group subsequently measures all equity investments at
fair value. Dividends from such investments continue to be recognised in
profit or loss as other income when the Group's right to receive payments is

established. Changes in the fair value of financial assets at FVPL are
recognised in other gains/(losses) in the statement of profit or loss as
applicable.

Financial assets at amortised cost (debt instruments): This category is the
most relevant to the Group. The Group measures financial assets at amortised
cost if both of the following conditions are met:

·      The financial asset is held within a business model with the
objective to hold financial assets in order to collect contractual cash flows;
and

·      The contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.

Financial assets at amortised cost are subsequently measured using the
effective interest rate (EIR) method and are subject to impairment. Interest
received is recognised as part of finance income in the statement of profit or
loss and other comprehensive income. Gains and losses are recognised in profit
or loss when the asset is derecognised, modified or impaired. The Group's
financial assets at amortised cost include other receivables and cash and cash
equivalents.

Derecognition: A financial asset (or, where applicable, a part of a financial
asset or part of a group of similar financial assets) is primarily
derecognised (i.e., removed from the Group's consolidated Balance sheet) when:

·      The rights to receive cash flows from the asset have expired; or

·      The Group has transferred its rights to receive cash flows from
the asset or has assumed an obligation to pay the received cash flows in full
without material delay to a third party under a 'pass-through' arrangement;
and either (a) the Group has transferred substantially all the risks and
rewards of the asset, or (b) the Group has neither transferred nor retained
substantially all the risks and rewards of the asset, but has transferred
control of the asset

When the Group has transferred its rights to receive cash flows from an asset
or has entered into a pass-through arrangement, it evaluates if, and to what
extent, it has retained the risks and rewards of ownership. When it has
neither transferred nor retained substantially all of the risks and rewards of
the asset, nor transferred control of the asset, the Group continues to
recognise the transferred asset to the extent of its continuing involvement.
In that case, the Group also recognises an associated liability. The
transferred asset and the associated liability are measured on a basis that
reflects the rights and obligations that the Group has retained.

Impairment of financial assets: The Group recognises an allowance for expected
credit losses (ECLs) for all debt instruments not held at fair value through
profit or loss. ECLs are based on the difference between the contractual cash
flows due in accordance with the contract and all the cash flows that the
Group expects to receive, discounted at an approximation of the original EIR.
The expected cash flows will include cash flows from the sale of collateral
held or other credit enhancements that are integral to the contractual terms.

The Group considers a financial asset in default when contractual payments are
90 days past due. However, in certain cases, the Group may also consider a
financial asset to be in default when internal or external information
indicates that the Group is unlikely to receive the outstanding contractual
amounts in full before taking into account any credit enhancements held by the
Group. A financial asset is written off when there is no reasonable
expectation of recovering the contractual cash flows and usually occurs when
past due for more than one year and not subject to enforcement activity.

At each reporting date, the Group assesses whether financial assets carried at
amortised cost are credit impaired. A financial asset is credit-impaired when
one or more events that have a detrimental impact on the estimated future cash
flows of the financial asset have occurred. The Company has an Intercompany
loan due from its 100% Canadian subsidiary for which there is no formal
agreement including payment date and therefore it cannot be considered to be
in breach of an agreement and accordingly the loan is not subject to
adjustments and is maintained at its book value in the financial statements.

Financial liabilities: Financial liabilities are classified, at initial
recognition, as financial liabilities at fair value through profit or loss,
loans and borrowings, payables, or as derivatives designated as hedging
instruments in an effective hedge, as appropriate. All financial liabilities
are recognised initially at fair value and, in the case of loans and
borrowings and payables, net of directly attributable transaction costs. The
Group's financial liabilities include trade and other payables and loans.

Subsequent measurement: The measurement of financial liabilities depends on
their classification, as described below:

Loans and trade and other payables: After initial recognition,
interest-bearing loans and borrowings and trade and other payables are
subsequently measured at amortised cost using the EIR method. Gains and losses
are recognised in the statement of profit or loss and other comprehensive
income when the liabilities are derecognised, as well as through the EIR
amortisation process.

Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR
amortisation is included as finance costs in the statement of profit or loss
and other comprehensive income. This category generally applies to trade and
other payables.

 

Derecognition: A financial liability is derecognised when the associated
obligation is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability
are substantially modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of a new
liability. The difference in the respective carrying amounts is recognised in
profit or loss or other comprehensive income.

Equity instruments: Equity instruments issued by the group are recorded at the
proceeds received, net of transaction costs. Incremental costs directly
attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.

The tax expense or recovery represents the sum of tax currently payable or
receivable and deferred tax.

Current tax: The tax currently payable or receivable is based on taxable
profit or loss for the year. Taxable profit or loss differs from net profit or
loss as reported in the income statement because it excludes items of income
or expense that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible. The group's liability for
current tax is calculated using tax rates that have been enacted or
substantively enacted by the reporting end date.

Deferred tax: Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation
of taxable profit and is accounted for using the balance sheet liability
method. Deferred tax liabilities are generally recognised for all taxable
temporary differences and deferred tax assets are recognised to the extent
that it is probable that taxable profits will be available against which
deductible temporary differences can be utilised. Deferred income tax assets
are recognised on deductible temporary differences arising from investments in
subsidiaries, associates and joint arrangements only to the extent that it is
probable the temporary difference will reverse in the future and there is
sufficient taxable profit available against which the temporary difference can
be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting end
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered. Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled, or the asset is realised.
Deferred tax is charged or credited to the income statement, except when it
relates to items charged or credited directly to equity, in which case the
deferred tax is also dealt with in equity. Deferred tax assets and liabilities
are offset when the company has a legally enforceable right to offset current
tax assets and liabilities and the deferred tax assets and liabilities relate
to taxes levied by the same tax authority.

 

Employee benefits

The costs of short-term employee benefits are recognised as a liability and an
expense.

Termination benefits are recognised immediately as an expense when the company
is demonstrably committed to terminate the employment of an employee or to
provide termination benefits.

The group does not have any pension schemes.

Share-based payments

Equity-settled share-based payments are measured at fair value at the date of
grant by reference to the fair value of the equity instruments granted using
the Black-Scholes model. The fair value determined at the grant date is
expensed on a straight-line basis over the vesting period, based on the
estimate of shares that will eventually vest. A corresponding adjustment is
made to equity.

Cancellations or settlements are treated as an acceleration of vesting and the
amount that would have been recognised over the remaining vesting period is
recognised immediately.

RSUs (Restricted Stock Units)

Where RSUs are granted to employees, the fair value of the RSUs at grant date
is based upon the market price of the shares underlying the awards and is
charged to the Statement of Comprehensive Income over the vesting period. The
expense charged is adjusted based on actual forfeitures.

Foreign exchange

Transactions in currencies other than US dollars are recorded at the rates of
exchange prevailing at the dates of the transactions. At each reporting end
date, monetary assets and liabilities that are determined in foreign
currencies are retranslated at the rates prevailing on the reporting end date
- Gains and losses arising on translation are included in the income statement
for the period. At each reporting end date, non-monetary assets and
liabilities that are determined in foreign currencies are retranslated at the
rates prevailing on the opening balance sheet date. Gains and losses arising
on translation of subsidiary undertakings are included in other comprehensive
income and contained within the foreign currency translation reserve.

Earnings per share

Basic earnings per share is calculated by dividing:

·      the profit attributable to owners of the company, excluding any
costs of servicing equity other than ordinary shares;

·      by the weighted average number of ordinary shares outstanding
during the financial year, adjusted for bonus elements in ordinary shares
issued during the year and excluding treasury shares.

·      Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into account:

·      the after-income tax effect of interest and other financing costs
associated with dilutive potential ordinary shares; and

·      the weighted average number of additional ordinary shares that
would have been outstanding, assuming the conversion of all dilutive potential
ordinary shares.

 

4.   FINANCIAL RISK FACTORS

The Group's activities expose it to a variety of financial risks: market risk,
credit risk and liquidity risk. The Group's overall risk management programme
seeks to minimise potential adverse effects on the Group's financial
performance. Risk management is undertaken by the Board of Directors.

Market Risk

The Group is dependent on the state of the cryptocurrency market, sentiments
of crypto assets as a whole, as well as general economic conditions and their
effect on exchange rates, interest rates and inflation rates. During the year
the Group sold its digital assets held at 31 December 202 at a loss. The Group
now sells its Bitcoin production as it is mined to reduce the impact of
Bitcoin prices.

The Group is also subject to market fluctuations in foreign exchange rates.
The subsidiary (Argo Innovation Labs Inc.) is based in Canada, and transacts
in CAD$, USD$ and GBP. 9377-2556 Quebec Inc. is based in Canada and transacts
in CAD. Argo Holdings US Inc. and Argo Operating US LLC are located in the
United States of America and transacts in USD. The Group bond is denominated
in USD. Cryptocurrency is primarily convertible into fiat through USD currency
pairs and through USD denominated stable coins and is the primary method for
the Group for conversion into cash. The Group maintains bank accounts in all
applicable currency denominations.

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonable possible
change in GBP and CAD exchange rates, with all other variables held constant.
The impact on the Group's profit before tax is due to changes in the fair
value of monetary assets and liabilities.

 

       Change in GBP  Effect on profit

       rate           before tax
                      $'000
 2024  +/-10%         +/- 2
 2023  +/-10%         +/-74

 

 

        Change in CAD  Effect on profit

        rate           before tax
                       $'000
 2024   +/-10%         +/- 172

 2023   +/-10%         +/-365

 

 

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonable possible
change in interest rates on the portion of the loans and borrowings affected.
With other variables held constant, the impact on the Group's profit before
tax is affected through the impact on floating rate borrowings, as follows.

 

       Increase/decrease in basis points  Effect on profit before

                                          tax
                                          $'000
 2024  +/-180                             +/-15
 2023  +/-180                             +/-464

 

Credit risk

Credit risk arises from cash and cash equivalents as well as any outstanding
receivables. Management does not expect any losses from non-performance of
these receivables. The amount of exposure to any individual counter party is
subject to a limit, which is assessed by the Board.

The Group considers the credit risk on cash and cash equivalents to be limited
because the counterparties are banks with high credit ratings assigned by
international credit rating agencies.

The carrying amount of financial assets recorded in the financial statements
represents the Group's and Company's maximum exposure to credit risk. The
Group and Company do not hold any collateral or other credit enhancements to
cover this credit risk.

Liquidity risk

Liquidity risk arises from the Group's management of working capital. It is
the risk that the Group will encounter difficulty in meeting its financial
obligations as they fall due.

Management updates cashflow projections on a regular basis and closely
monitors the cryptocurrency market on a

daily basis. Accordingly, the Group's controls over expenditure are carefully
managed, in order to maintain its cash reserves. The Treasury committee meets
on a weekly basis to make decisions around future cashflows and working
capital requirements. Decisions may include considering debt/equity options
alongside selling Bitcoin.

The table below analyses the Group's non-derivative financial liabilities and
net-settled derivative financial liabilities into relevant maturity groupings,
based on the remaining period at the Statement of Financial Position to the
contractual maturity date. Derivative financial liabilities are included in
the analysis if their contractual maturities are essential for an
understanding of the timing of the cash flows. The amounts disclosed in the
table are the contractual undiscounted cash flows.

The Group complied with all covenants during the year and through to the
reporting date.

 

                              Less than 1  Between 1     Between 2     Over 5 years

                              year         and 2 years   and 5 years
 At 31 December 2024 ($'000)
 Loans                        439          418           -             -
 Issued debt - bonds          -            -             39,304        -
 At December 2023 ($'000)
 Loans                        14,320       9,830         197           -

 Issued debt - bonds          -            -             38,170        -

 

Capital risk management

The Group's objectives when managing capital are to safeguard the Group's
ability to continue as a going concern, in order to provide returns for
shareholders and benefits for other stakeholders, and to maintain an optimal
capital structure.

 

 

5.   ADOPTION OF NEW AND REVISED STANDARDS AND
INTERPRETATIONS

 

The Group

has adopted all recognition, measurement and disclosure requirements of IFRS,
including any new and revised standards and

Interpretations

of IFRS, in effect for annual periods commencing on or after 1 January 2024.
The adoption of these standards and amendments

did not have any material impact on the financial result or position of the
Group.

 

At the date of authorisation of these financial statements, the following
Standards and Interpretation, which have not yet

been applied in these financial statements, were in issue but not yet
effective:

 

 

 Standard or Interpretation  Description                                                                   Effective date for annual accounting period beginning on or after
 IFRS 18                     Presentation and Disclosure in Financial Statements                           1-Jan-27
 IFRS 7/9                    Amendments to the Classification and Measurement of Financial Instruments.    1-Jan-26
                             Contracts referencing Nature-dependent Electricity
 (amendments)
 IFRS 7                      Disclosures - Gain or Loss on Derecognition, Credit Risk,                     1-Jan-26
 (amendments)
 IFRS 10                     Determination of a 'de-facto agent;'                                          1-Jan-26
 (amendments)
 IIFRS 9                     Derecognition of Lease Liabilities                                            1-Jan-26
 (amendments)

 

 

6.   KEY JUDGEMENTS AND ESTIMATES

 

In the application of the Group's accounting policies, the directors are
required to make judgements, estimates and assumptions about the carrying
amount of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual
results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised where the revision affects only that period, or in the
period of the revision and future periods where the revision affects both
current and future periods. The estimates and assumptions which have a
significant risk of causing a material adjustment to the carrying amount of
assets and liabilities are outlined below.

Valuation of tangible fixed assets - Note 18

The directors considered whether any impairments were required on the value of
the property, plant and equipment. In doing so they made use of forecasts of
revenues and expenditure prepared by the Group and came to the conclusion that
impairment of those assets was required based on current forecasts including
costs in relation to the refurbishment of the mining machines out of the US
facility. Key assumptions include Bitcoin production, hashprice, power prices
and discount rate.

Share-based payments - Note 20

The company has issued options and warrants to Directors, consultants and
employees which have been valued in accordance with the Black Scholes model.
Significant estimation and judgement is required in determining the
assumptions under the Black Scholes method. Further details of these estimates
are available in note 21.

The company has issued restricted stock units (RSUs) and performance stock
units (PSUs) to employees which have been valued based on the share price on
the date of the award. The RSUs vest over three years, beginning six months
after the award and then every three months thereafter. It is assumed that
employees will meet each vesting period and a related expense is recorded each
month. If an employee's employment is terminated prior to a vesting date, the
prior expense for that vesting period is reversed. PSUs are amortised over the
vesting period based on the most likely outcome of the performance metrics.

Taxation and Contingent liabilities - Notes 13 and 27

The Group is subject to tax liabilities (both income and excise taxes) as
assessed by the tax authorities in the jurisdictions in which it operates. The
Group has recorded its tax liabilities based on the information which it has
available, as described in Note 13.

 

However, a tax authority could challenge our allocation of income, transfer
pricing and eligibility for input tax credits or assert that we are subject to
a tax in a jurisdiction where we believe we have not established a taxable
connection. If successful, these challenges could increase our expected tax
liability in one or more jurisdictions.

 

7.         REVENUES

Cryptocurrency mining revenues are recognised at a point in time.
Cryptocurrency management fees are services recognised over time.

8.   EXPENSES BY NATURE

                                                    2024     2023
 Administrative expenses                            $'000    $'000
 Salary and other employee related costs            4,517     6,430
 Restructuring and transaction related costs        2,363     4,969
 Insurance                                          1,416     2,128
 Depreciation and amortisation                      738       1,473
 Legal, professional and regulatory fees            753       1,431
 Indirect taxes                                     962       994
 Property tax                                       558       919
 Consulting fees                                    276       533
 Repairs and maintenance                            50        455
 Audit fees                                         326       341
 Office general expenses                            708       349
 Public relations and associated activities         246       255
 Travel                                             80        226
 Carbon credits                                     -        129
 Foreign exchange                                    (458)   (1,683)
 Total administrative expenses                      12,535    18,949

 Finance costs - interest on borrowings and bond    6,810    11,556
 Total finance costs                                6,810    11,556

 

 

9.   AUDITOR'S REMUNERATION

 

                                            2024     2023
                                            $'000    $'000
 In relation to statutory audit services    326      341
 Total auditor's remuneration               326      341

 

10. EMPLOYEES
 

The average monthly number of persons (including directors) employed by the
group during the period was:

 

                          2024    2023
                          Number  Number
 Directors and employees  25      30

 

The aggregate remuneration (including directors) comprised of:

 

 

                        2024   2023
                        $'000  $'000
 Wages and salaries     4,267  6,017
 Social security costs  141    250
 Pension costs          109    163
 Share based payments   3,759  3,892
                        8,276  10,322

 

 

11. DIRECTOR'S REMUNERATION
                                                      2024   2023
                                                      $'000  $'000
 Director's remuneration for qualifying services      818     591
 Severance                                            -      765
 Share based payments                                 1,247   916
 Total remuneration for directors and key management  2,065  2,272

 

Further details of Directors' remuneration are available in the Remuneration
report and note 27.

 

12. EARNINGS PER SHARE

 

The basic earnings per share are calculated by dividing the loss attributable
to equity shareholders by the weighted average number of shares in issue.

 

                                                                       2024      2023
 Net loss for the period attributable to ordinary equity holders from  (55,102)  (34,637)
 continuing operations ($'000)

 Weighted average number of ordinary shares in issue ('000)            607,879   503,917

 Basic and diluted loss per share for continuing operations (cents)    (0.09)    (0.07)

 

 

The diluted loss per Ordinary Share is calculated by adjusting the weighted
average number of Ordinary Shares outstanding to consider the impact of
options, warrants and other dilutive securities. As the effect of potential
dilutive Ordinary Shares in the current year would be anti-dilutive, they are
not included in the above calculation of dilutive earnings per Ordinary Share
for 2024 and 2023.

 

13.         TAXATION

 

 Current tax:                                       2024    2023

                                                            $'000

                                                    $'000
                                                    340     -
 Current tax expense
 Total current tax                                  340     -

 Deferred tax:                                      2024    2023

                                                    $'000   $'000
 Origination and reversal of temporary differences  -       -
 Total deferred tax liability                       -       -

 Total tax                                          340     -

 

No deferred tax has been recognised on the losses brought forward and carried
forward on the UK, Canada and US losses given the uncertainty on the
generation of future profits.

Income tax expense

The tax on the Group's profit before tax differs from the theoretical amount
that would arise using the weighted average tax rate applicable to profits of
the consolidated entities as follows:

 

                                                                                 2024      2023
                                                                                 $'000     $'000
 Profit (loss) before taxation                                                   (54,762)  (34,637)

 Expected tax charge (recovery) based on a weighted average of 25% (2023 - 25%)  (13,690)  (8,669)
 (UK, US and Canada)
 Effect of expenses not deductible in determining taxable profit                 (1,839)   851
 Temporary differences                                                           9,936      5,841
 Other tax adjustments                                                           224        18
 Capital gains tax                                                               449        -
 Unutilised tax losses carried forward                                           5,260      1,959
 Taxation charge in the financial statements                                     340       -

 

The group has tax losses available to be carried forward and used against
trading profits arising in future periods of approximately $124,000,000 (2023
- $136,000,000). These are subject to tax audit.

The weighted average applicable tax rate was 25% (2023: 25%).

 

Income tax assessments (Canada)

For the tax years 2021 and 2022, the Company has received notices of
assessment totalling $CAD 12.0 million from Canadian tax regulators denying
certain tax deductions and challenging certain input tax credits. The Group,
supported by tax professionals at EY, has challenged these assessments and
believes it will prevail. However, in order to challenge the assessments, the
Group was required to provide security to the regulators and the security
provided was a $CAD 5.0 million lien over its Baie Comeau facility. No
provision has been made for these Canadian liabilities as the Group believes
that its assessments will be upheld and ultimately be in a refund position
with the Canadian tax regulators. However, there can be no certainty that this
will be the case and an adverse outcome to the assessments will have a
significant impact to the Group's financial position.

Other tax authorities may also disagree with tax positions that we have taken,
which could result in increased tax liabilities. For example, His Majesty's
Revenue & Customs ("HMRC"), the IRS or another tax authority could
challenge our allocation of income by tax jurisdiction and the amounts paid
between our affiliated companies pursuant to our intercompany arrangements and
transfer pricing policies, including amounts paid with respect to our
intellectual property development. Similarly, a tax authority could assert
that we are subject to tax in a jurisdiction where we believe we have not
established a taxable connection and such an assertion, if successful, could
increase our expected tax liability in one or more jurisdictions.

 

 

14. ASSETS AND LIABLITIES HELD FOR SALE

In December 2023, the group signed an offer to purchase 9366-5230 Quebec Inc.
In March 2024, a purchase and sale agreement was signed for the sale of
9366-5230 Quebec Inc. ("Mirabel") and the facility was sold for proceeds of
$6.1 million. As a result of the sale, the material assets and liabilities of
Mirabel were reclassified to be held for sale as at December 31, 2023, as
follows:

 

 

 Non-current Assets      2023

                         $'000

 Tangible Fixed Assets   2,725
 Right of use assets     536
 Assets held for sale    3,261

 

 Non-current liabilities    2023

                            $'000

 Mortgage Payable           1,532
 Lease Liability            558
 Liabilities held for sale  2,090

 

 

15. INVESTMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
 

 

 Non-current                        2024    2023

 Group                              $'000   $'000

 At 1 January                       400     414
 Foreign exchange movement          -       -
 Additions                          -       -
 Fair value through profit or loss  -       -
 Disposals                          (100)   (14)
 Closing balance                    300     400

 

 

16. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

 

                                                    2024   2023
                                                    $'000  $'000
 Opening balance                                    -      2,863
 Share of loss                                      -      (716)
 Foreign exchange movement Write off of investment  -      89

                                                    -      (2,236)
 Closing balance                                    -      -

 

 

             Nature of investment in associates:

 

 Name of entity                                            Address of the registered office                                % of ownership interest  Nature of relationship  Measurement method
 Emergent Entertainment PLC Previously Pluto Digital plc)  Hill Dickinson LLP, 8th Floor The Broadgate Tower, 20 Primrose  19.50%                   Refer below             Equity

Street, London, United Kingdom, EC2A 2EW

 

In December 2023, Emergent Entertainment Ltd ("EEL") announced that they
engaged an insolvency advisor to place it in liquidation. On January 10, 2024,
EEL appointed liquidators to voluntarily wind up the company. The Group has
written off the balance of the investment in 2023.

 

17. INTANGIBLE ASSETS NON CURRENT

 

 Group                                   Goodwill  Digital    2024

 assets
 Total
                                         $'000     $'000      $'000
 Cost
 At 1 January 2024                       112       5,329      5,441
 Foreign exchange movements              -           (60)       (60)
 Digital Assets Mined                    -         -          -
 Disposals                                 (77)      (130)      (207)
 At 31 December 2024                     35        5,139      5,174
 Amortisation and impairment
 At 1 January 2024                       -         4,553      4,553
 Foreign exchange movement               -           (28)       (28)
 Fair value movement                     -         -          -
 Impairment                              -         473        473
 Amortisation charged during the period  -         -          -
 At 31 December 2024                     -         4,998      4,998

 Balance at 31 December 2024             35        141        176

 

 

 Group                                   Goodwill  Digital    Website  2023
                                                    assets
 Total
                                         $'000     $'000      $'000    $'000
 Cost
 At 1 January 2023                       96        5,722      873      6,691
 Foreign Exchange Movements              16        334        19       369
 Disposals                               -           (727)    -          (727)
 At 31 December 2023                     112       5,329      892      6,333
 Amortisation and impairment
 At 1 January 2023                       -         3,809      779      4,588
 Foreign exchange movement               -         91         1        92
 Fair value movement                     -         654        -        654
 Amortisation charged during the period  -         -          112      112
 At 31 December 2023                     -         4,553      892      5,445

 Balance at 31 December 2023             112       776        -        888

 

Digital assets includes cryptocurrencies not mined by the Group. The Group
held crypto assets during the year, which are recorded at cost on the day of
acquisition. Movements in fair value between acquisition and disposal (date
sold), and the movement in fair value in crypto assets held at the year end,
impairment of the intangible assets and any increase in fair value are
recorded in the fair value reserve.

The digital assets held below are held in Argo Labs (a division of the Group)
as discussed above. The assets are all held in secure custodian wallets
controlled by the Group team and not by individuals within the Argo Labs team.
The assets detailed below are all accessible and liquid in nature.

 

 Crypto asset name                            Coins / tokens  Fair value

 $'000
 Polkadot - DOT                               182             1
 Ethereum - ETH                               211             1
 USDC (stable coin - fixed to USD)            31,710          32
 Other tokens, NFTs and other digital assets  N/A             107
 As at 31 December 2024                                       141

 

 Crypto asset name                            Coins / tokens  Fair value

 $'000
 Polkadot - DOT                               16,554          135
 Ethereum - ETH                               4               10
 USDC (stable coin - fixed to USD)            31,713          55
 Other tokens, NFTs and other digital assets  N/A             576
 As at 31 December 2023                                       776

18. TANGIBLE FIXED ASSETS

 

 Group                        Mining Machines  Data Centres  Equipment  Total
                              $'000            $'000         $'000      $'000
 Cost
 At 1 January 2024            168,150           6,280         4,034      178,464

 Foreign exchange movement    -                 (336)        (604)      (940)
 Additions                    3                 -             -          3
 Disposal of subsidiary       -                 (5,254)      -           (5,254)
 Transfers between classes    1,591             -             (1,591)   -
 Disposals                    (1,337)          -              -          (1,337)
 At 31 December 2024          168,407           690           1,839      170,936

 Depreciation and impairment
 At 1 January 2024            (116,992)        (1,537)       (206)      (118,735)
 Foreign exchange movement    211               847           219        1,277
 Depreciation charged         (14,171)         -              (738)     (14,909)
 Impairment in asset          (31,498)         -              -          (31,498)
 At 30 December 2024          (162,450)        (690)         (725)      (163,865)
 Carrying amount
 At 1 January 2024            51,158            4,743         3,828      59,729
 At 31 December 2024          5,957             -             1,114      7,071

 

 

 Group                                   Mining Machinery  Data Centres  Equipment  Total
                                         $'000             $'000         $'000      $'000
 Cost
 At 1 January 2023                       162,839           8,700         5,414      176,953

 Foreign Exchange Movement               108               517           569        1,195
 Additions                               5,203             -             27         5,230
 Transfer to Assets held for sale        -                 (2,937)       (1,976)    (4,913)
 At 31 December 2023                     168,150           6,280         4,034      178,464

 Depreciation and impairment
 At 1 January 2023                       (97,481)          (1,924)       (31)       (99,437)
 Foreign exchange movement               -                 (38)          (43)       (81)
 Depreciation charged during the period  (18,656)          (359)         (1,000)    (20,015)
 Impairment in asset                     (855)             -             -          (855)
 Transfer to Assets held for sale        -                 784           868        1,652
 At 31 December 2023                     (116,992)         (1,537)       (206)      (118,736)
 Carrying amount
 At 1 January 2023                       65,358            6,776         5,383      77,516
 At 31 December 2023                     51,158            4,743         3,828      59,728

 
Property, Plant and Equipment Impairments

The Group has a single line of business, crypto mining. During 2024, the Group
considered that it only had one cash generating unit (CGU) due to all mining
machines being centrally managed by the Argo Blockchain Plc and all machines
operating under the same business conditions.

 

However, due to the uncertainty of the timing of rehosting the machines at 31
December 2024, and the performance of the machines thereon, the Group
considers its mining machines to be categorized into three CGU's being:
machines operating at the Group's owned site in Quebec, machines hosted or
sold subsequent to year end, previously hosted at the Helios facility, and
machines not yet re-conditioned which were also previously hosted at the
Helios facility. The recoverable amount of each CGU has been calculated as
follows:

Machines operating in Quebec - value in use.

Re-conditioned machines hosted or sold subsequent to year-end - all measured
at fair value less cost of disposal, given the uncertainty over performance
and expected returns from the new hosting facilities.

Machines not yet re-conditioned - all measured at fair value less cost of
disposal.

 

At each reporting date, the Group assesses whether there is an indication that
an asset may be impaired. If an indication exists, the Group estimates an
asset's recoverable amount. An asset's recoverable amount is the higher of an
asset or CGU's fair value, less costs of disposal and its value in use. When
the carrying value of an asset or CGU exceeds its recoverable amount, the
asset is considered impaired and is written down to its recoverable amount.

 

In assessing the fair value of Mining machines previously hosted at the Helios
facility and Computer Equipment, the Group used recent machine sales pricing
and cost of refurbishment of machines from immersion cooled to air cooled. Due
to the significant deterioration in mining economics since the Bitcoin halving
in April 2024, as measured by the lower hashprice, both the fair value of
mining equipment and future cash flows generated from mining equipment are
significantly reduced. In addition, the impairment to fair value less cost to
sell is also driven by a lack of historical information available for the
performance of the refurbished machines in the aforementioned hosting
facilities and uncertainty of the timing of these events as at the year end.
As a result of the analysis that the Group reviewed at both 30 June 2024 and
31 December 2024, a total impairment charge of $31.5 million (2023-$0.9
million) was recorded. As the majority of the mining machines were valued at
their recoverable amount a 5% change in the hashprice has a minimal impact on
the impairment. Similarly, a 1% change in the discount rate has a minimal
impact on the impairment for the machines operating in Quebec.

 

Mining assets with uncertain re-hosting dates and those to be sold (22,819
machines) had a value of $4.3 million as at 31 December 2024 and were valued
based on their fair value in use less cost to sell. This value was based on a
level 2 fair value hierarchy of actual sales realised, less cost of
refurbishment.

 

Mining assets held at the Baie Comeau CGU (2,200 machines) had a value of $1.4
million and were valued based on their value in use. This was based on an 18
month cash flow forecast discounted at 22.6%, the Group's estimated cost of
capital.

 

Subsequent to year end, the Group signed hosting agreements with Merkle
Standard LLC to host 9,315 miners at Merkle's Memphis, Tennessee location and
up to 4,000 machines at its Washington State location. Approximately 1,232
units were sent to the Group's Baie Comeau facility. A further approximately
8,000 units were sold for cash proceeds of approximately $2.0 million. The
Group will continue to monitor the carrying value of its mining machines, as
the machines are installed and data is available for performance in revenue
generation, which may or may not result in a reversal in the impairment.

 
Impairment of Chips

In assessing the fair value of machine components, the Group used readily
available chip set prices and management's estimate of other components in the
chip sets to determine the value of chips on hand. As a result of this
analysis, an impairment of $0.6 million was recorded (2023 - $0.1 million).

 

Sale of Mirabel Data Centre

 

See assets held for sale (Note 14) for details of this disposition.

 

 

19.       TRADE AND OTHER RECEIVABLES

 

 

                                       Group 2024  Group 2023
                                       $'000       $'000
 Trade and other receivables           140          1,131
 Prepayments                           628          1,355
 Other taxation and social security    2,311        1,349
 Total trade and other receivables     3,079        3,835

 

Included within other taxation and social security is a provision against
GST/QST/VAT receivable of $2.7 million in relation to ongoing matters in
connection with GST Notice 324 released by the Canadian Revenue Authority, and
ongoing discussions with HMRC. The Group have included the provision for
prudence and upon conclusion of the matter, the Group will adjust this
provision accordingly. See Note 13 for additional details.

 

 

20. INTANGIBLE ASSETS, CURRENT
 

The Group mined crypto assets during the period, which are recorded at fair
value on the day rewards are credited to the Group's wallets. Movements in
fair value between acquisition (date mined) and disposal (date sold), and the
movement in fair value in crypto assets held at the year end, are recorded in
profit or loss.

 

At 31 December 2024, the Group held Bitcoin representing a fair value of
$6,000 (2023 - $385,000). The movements during the year is detailed below:

 

 Group                                            2024         2023
                                                  $'000        $'000
 At 1 January                                     385          443
 Foreign Exchange Movement                        -            24
 Crypto assets purchased and received             -            -
 Crypto assets mined                              47,017       50,558
 Total additions                                  47,017       50,582
 Disposals
 Transferred to/from intangible assets                         -
 Crypto assets sold                                 (47,302)     (51,378)
 Total disposals                                    (47,302)     (51,378)
 Fair value movements
 Gain/(loss) on crypto asset sales                  (94)       738
 Movements on crypto assets held at the year end  -            -
 Total fair value movements                         (94)       738
 At 31 December                                   6            385

 
 
 
 Group                                            2023         2022
                                                  $'000        $'000
 At 1 January                                     443          108,956
 Foreign Exchange Movement                        24           833
 Crypto assets purchased and received             -            264
 Crypto assets mined                              50,558       60,172
 Total additions                                  50,582       61,269
 Disposals
 Transferred to/from intangible assets                         420
 Crypto assets sold                                 (51,378)     (114,646)
 Total disposals                                    (51,378)     (114,226)
 Fair value movements
 Gain/(loss) on crypto asset sales                738            (55,410)
 Movements on crypto assets held at the year end  -              (145)
 Total fair value movements                       738            (55,555)
 At 31 December                                   385          443

 

 

21. SHARE OPTIONS, RESTRICED STOCK UNITS AND WARRANTS

 

In 2022, the Remuneration Committee of the Board ("Committee") approved the
2022 Equity Incentive Plan ("the Plan"). Under the Plan, the Committee, at its
discretion, may issue awards, including share awards, stock options, stock
appreciation rights ("SARs"), restricted stock units, performance awards and
American Depository Shares to any employee of the Group. The exercise price of
stock options and the base price of SARs may not be less than the market price
of the underlying shares on the date of grant. Stock options and SARs may have
an exercise period up to ten years after the grant date.

 

The following table summarizes share-based compensation expense for the years
ended December 31, 2024 and 2023:

 

                         2024     2023
 Stock options            1,981   3,332
 Restricted stock units   1,778   560
                          3,759   3,892

 

 

 

                                  Number of options  Weighted average
                                  and warrants '000  exercise price £
 At 1 January 2024                11,028             0.83
 Granted                          57,800             0.11
 Exercised                        -                  -
 Lapsed                           (5,279)            0.95
 Outstanding at 31 December 2024  63,549             0.17

 Exercisable at 31 December 2024  5,429              0.73

 

 

 

 

                                  Number of options  Weighted average
                                  and warrants '000  exercise price £
 At 1 January 2023                18,698              0.78
 Granted                          659                 0.13
 Exercised                        -                  -
 Lapsed                           (8,329)            0.67
 Outstanding at 31 December 2023  11,028              0.83

 Exercisable at 31 December 2023  7,904               0.89

 

 

The weighted average remaining contractual life of options and warrants as at
31 December 2024 is 53 months (2023-62 months). If the exercisable shares had
been exercised on 31 December 2024 this would have represented 0.8% (2023 -
1.5%) of the enlarged share capital.

At the grant date, the fair value of the options and warrants prior to the
listing date was the net asset value and post listing determined using the
Black-Scholes option pricing model. Volatility was calculated based on data
from comparable listed technology start-up companies, with an appropriate
discount applied due to being an unlisted entity at grant date. Risk free
interest has been based on UK Government Gilt rates for an equivalent term.
The inputs into the Black-Scholes model are as follows:

 

                            2024     2023
 Grant date share price £   0.115    0.14
 Exercise price £           0.1125   0.13
 Volatility                 113%     187%
 Life                       5 years  10 years
 Risk free rate             3.90%    3.40%
 Dividend yield             0%       0%

Restricted Stock Units

In 2024 and 2023, the Committee approved the grant of RSUs to employees. The
RSUs vest quarterly beginning the sixth month after the grant date over a
three-year period. The weighted average remaining vesting period is the period
to the final vesting date.

 

                                                       2024
                                     Number of Awards  Weighted Average Grant Date Price £   Weighted Average Remaining Vesting
                                                                                             Period (months)
 Outstanding at beginning of period  6,999,817         0.12
 Granted during the period           7,273,995         0.15
 Vested during the period            (3,162,982)       0.12
 Forfeited during the period         (2,021,671)       0.14
 Outstanding at the end of period    9,089,159         0.13                                  22

 

 

 

                                                       2023
                                     Number of Awards  Weighted Average Grant Date Price £   Weighted Average Remaining Vesting
                                                                                             Period (months)
 Outstanding at beginning of period  -                 -
 Granted during the period           12,041,192        0.13
 Vested during the period            (3,617,136)       0.13
 Forfeited during the period         (1,424,239)       0.13
 Outstanding at the end of period    6,999,817         0.12                                  28

 

 

Performance Stock Units (American Depository Shares)

In 2023, the Committee approved the grant of PSUs for the American Depository
Shares to the CEO of the Group. The PSUs vest annually over a three-year
period. The annual vesting amount may vary from 25% - 100%. The weighted
average remaining vesting period assumes the last vesting date is the latest
vesting date possible.

 

 

                                                           2024
                                         Number of Awards  Weighted Average Grant Date Price £   Weighted Average Remaining Vesting
                                                                                                 Period (months)
 Outstanding at beginning of the period  2,850,000         1.15
 Vested during the period                (237,500)         -
 Forfeited during the period             -                 -
 Outstanding at the end of period        2,612,500         1.15                                  35

 

The remaining PSU's were cancelled subsequent to year end with the resignation
of the CEO. A new award was awarded to the Group's new CEO.

                                                           2023
                                         Number of Awards  Weighted Average Grant Date Price $  Weighted Average Remaining Vesting
                                                                                                Period (months)
 Outstanding at beginning of the period  -                 -
 Granted during the period               2,850,000         1.15
 Vested during the period                -                 -
 Forfeited during the period             -                 -
 Outstanding at the end of the period    2,850,000         1.15                                 35

 

22. ORDINARY SHARES

 

                                             As at 31 December  As at 31 December
                                             2024               2023
                                             $'000              $'000
 Ordinary share capital
 Issued and fully paid
 536,963,471 Ordinary Shares of $0.001 each  712                634
 Issued in the period
 177,911,882 Ordinary Shares of $0.001 each  226                78
 714,875,853 Ordinary Shares of $0.001 each  938                712

 Share premium
 At beginning of the period                  209,779            202,103
 Issued in the period                        22,478             7,676
 Issue costs                                 -                  -
 At the end of period                        232,257            209,779

 

 

23. RESERVES

The following describes the nature and purpose of each reserve:

 

 Reserve                                                    Description
 Ordinary Shares                                            Represents the nominal value of equity shares

 Share Premium                                              Amount subscribed for share capital in excess of nominal value

 Share based payment reserve                                Represents the fair value of options and warrants granted less amounts
                                                            transferred on exercise

 Currency translation reserve                               Cumulative effects of translation of opening balances on non-monetary assets
                                                            between subsidiaries functional currencies (Canadian dollars and Uk Sterling)
                                                            and Group presentational currency (US Dollars).

 RSU/PSU reserve                                            Represents the fair value of restricted/performance stock units expensed less
                                                            amounts transferred on vesting

 Other comprehensive income of equity accounted associates  The other comprehensive income of any associates is recognised in this reserve

 Accumulated surplus                                        Cumulative net gains and losses and other transactions with equity holders not
                                                            recognised elsewhere.

 

 

24. TRADE AND OTHER PAYABLES

 

                                       Group 2024  Group 2023
                                       $'000       $'000
 Trade payables                        1,663        2,336
 Accruals and other payables           3,619        7,153
 Other taxation and social security    2,902        1,686
 Total trade and other creditors       8,184        11,175

The directors consider that the carrying value of trade and other payables is
equal to their fair value.

 

 

25. LOANS AND BORROWINGS

 

 Non-current liabilities         As at 31 December                 As at 31 December

                                 2024                              2023

                                 $'000                             $'000

 Issued debt - bond (a)          39,304                            38,170

 Galaxy loan (b)                 -                                 9,230
 Mortgage - Quebec facility (c)  -                                 797
 Total                           39,304                            48,197

 Current liabilities
 Galaxy loan (b)                 -                                 13,444
 Mortgage- Quebec facility (c) Other Loans              837                   600

                                                        20                    276
 Total                                                  857                   14,320

 

(a)   Unsecured Bonds:

In November 2021, the Group issued an unsecured 5-year bond with an interest
rate of 8.75%. The bonds mature on 30 November 2026. The bonds may be redeemed
for cash in whole or in part at any time at the Group's option (i) on or after
30 November 2023 and prior to 30 November 2024, at a price equal to 102% of
their principal amount, plus accrued and unpaid interest to, but excluding,
the date of redemption, (ii) on or after 30 November 30 and prior to 30
November 2025, at a price equal to 101% of their principal amount, plus
accrued and unpaid interest to, but excluding, the date of redemption, and
(iii) on or after November 30, 2025 and prior to maturity, at a price equal to
100% of their principal amount, plus accrued and unpaid interest to, but
excluding, the date of redemption. The Group may redeem the bonds, in whole,
but not in part, at any time at its option, at a redemption price equal to
100.5% of the principal amount plus accrued and unpaid interest to, but not
including, the date of redemption, upon the occurrence of certain change of
control events. The bonds are listed on the Nasdaq Global Select Market under
the symbol ARBKL.

(b)   Galaxy and related loans

On 23 December 2021 the Group entered into a loan agreement with Galaxy
Digital LP for a loan of USD$30 million. The proceeds of the loan were used,
in conjunction with funds raised previously, to continue the build-out of the
Texas data centre, Helios. The short-term loan was a Bitcoin collateralised
loan with an interest rate of 8% per annum. This loan was repaid during 2022
as part of the Galaxy transaction.

 

In March 2022, the Group entered into loan agreements with NYDIG ABL LLC for
loans in the amounts of USD$97 million for the purchase of mining machines and
Helios infrastructure, respectively. The loan was repaid during the year as
part of the Galaxy transaction.

In May 2022, the Group entered into a loan agreement with Liberty Commercial
Finance for a loan of USD$1.2 million ($1.0m) to purchase equipment. The loan
is repayable over a period of 36 months with an interest rate of 11.9%. In
June 2022, the loan was assigned to North Mill Equipment Finance LLC ("New
Mill"). The loan was repaid during the year as part of the Galaxy transaction.

In December 2022, the Group sold Galaxy Power LLC and entered into a loan
agreement with Galaxy Digital LLC for USD$35 million. Proceeds were used to
pay off the Galaxy Digital LP, New Mill and NYDIG loans and working capital.
The Galaxy Digital LLC loan was payable monthly based on an amortization
schedule over 32 months with an interest rate of the secured overnight
financing rate by the Federal Reserve Bank of New York plus 11%. The loan was
secured by the Group's property, plant and equipment.

In August 2024, the Galaxy Digital LLC loan was paid in full.

(c)   Mortgage - Quebec Facility

The mortgage is secured against the property at Baie-Comeau and is repayable
over 24 months at an interest rate of Lender Prime + 0.5%. (5.95% as of 31
December 2024).

 

26. FINANCIAL INSTRUMENTS

 

                                                Group 2024  Group 2023
                                                $'000       $'000
 Carrying amount of financial assets
 Measured at amortised cost
 - Trade and other receivables                  141         1,131
 - Cash and cash equivalents                    8,626       7,443
 Measured at fair value through profit or loss  300         400
 Total carrying amount of financial assets      9,067       8,974

 Carrying amount of financial liabilities
 Measured at amortised cost
 - Trade and other payables                     8,184       7,501
 - Short term loans                             20          280
 - Long term loans                              837         25,599
 - Issued debt - bonds                          39,304      38,170
 carrying amount of financial liabilities       48,345      71,550

 

Fair Value Estimation

Fair value measurements are disclosed according to the following fair value
measurement hierarchy:

-       Quoted prices (unadjusted) in active markets for identical
assets or liabilities (Level 1)

-       Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (that is, as prices),
or indirectly (that is, derived from prices) (Level 2)

-       Inputs for the asset or liability that are not based on
observable market data (that is, unobservable inputs) (Level 3). This is the
case for unlisted equity securities.

The following table presents the Group's assets that are measured at fair
value at 31 December 2024 and 31 December 2023.

 

                                                        Level 1  Level 2  Level 3  Total
 Assets                                                 $'000    $'000    $'000    $'000
 Financial assets at fair value through profit or loss
 -       Equity holdings                                -        -        300      300
 -       Digital assets                                 -        6        -        6
 Total at 31 December 2024                              -        6        300      306

 

                                                        Level 1  Level 2  Level 3  Total
 Assets                                                 $'000    $'000    $'000    $'000
 Financial assets at fair value through profit or loss
 -       Equity holdings                                -        -        400      400
 -       Digital assets                                 -        385      -        385
 Total at 31 December 2023                              -        385      400      785

 

All financial assets are in listed and unlisted securities and digital assets.
There were no transfers between levels during the period.

The Group recognises the fair value of financial assets at fair value through
profit or loss relating to unlisted investments at the cost of investment
unless:

-       There has been a specific change in the circumstances which, in
the Group's opinion, has permanently impaired the value of the financial
asset. The asset will be written down to the impaired value;

-       There has been a significant change in the performance of the
investee compared with budgets, plans or milestones;

-       There has been a change in expectation that the investee's
technical product milestones will be achieved or a change in the economic
environment in which the investee operates;

-       There has been an equity transaction, subsequent to the Group's
investment, which crystallises a valuation for the financial asset which is
different to the valuation at which the Group invested. The asset's value will
be adjusted to reflect this revised valuation; or

-       An independently prepared valuation report exists for the
investee within close proximity to the reporting date.

-

 

 

27.       COMMITMENTS AND CONTINGENCIES

 A subsidiary has received tax assessments from Canadian tax authorities for value added taxes and income taxes (See Note13).  The Company is not subject to other litigation matters in the ordinary course of business.

 

28. RELATED PARTY TRANSACTIONS

The compensation paid to related parties in respect of services rendered in
2024 were:

·      $135,095 (2023 - $170,554) in respect of fees for Matthew Shaw
(Non-executive director);

·      $129,909 (2023 - $129,752) in respect of fees for Maria Perrella
(Non-executive director);

·      $145,562 (2023 - $135,105) in respect of fees for Raghav Chopra
(Non-executive director); and

·      $92,939 (2023 - $27,659) to Jim MacCallum (CFO) through JMM
Consulting Inc.

 

29. CONTROLLING PARTY

There is no controlling party of the Group.

 

30. POST BALANCE SHEET EVENTS

Thomas Chippas resigned as Chief Executive Officer and Director of the Company
effective 28 February 2025. On 24 March 2025, the Board appointed Justin Nolan
as Chief Executive Officer and Director of the Group.

In January 2025, the Group received a Notification Letter from Nasdaq Stock
Market LLC stating that the Company is not in compliance with minimum bid
price for the Company's American Depositary Shares.  The Company has until
July 15, 2025 to regain compliance with the minimum bid price requirement.

The Group signed hosting agreements with Merkle Standard LLC to host 9,315
miners at Merkle's Memphis, Tennessee location and up to 4,000 machines at its
Washington State location. Approximately 2,000 units were sent to the Group's
Baie Comeau facility. A further approximately 8,000 units were sold for cash
proceeds of approximately $2.0 million.

 

 

 

 

COMPANY STATEMENT OF FINANCIAL POSITION

 

 

                                                                   As at December 31st  As at December 31st  As at January    1st
                                                                   2024                 2023                 2023
                                                  Note             $'000                $'000                $'000

 ASSETS
 Non-current assets
 Investment at fair value through profit or loss  4                -                     100                  100
 Investments in Associate                                          -                    -                    2,863
 Investments in Subsidiary                        5                11,164                43,983               65,000
 Tangible Fixed Assets                                             131                   739                  2,195
 Total non-current assets                                          11,295                44,822               70,158

 Current assets
 Trade and Other Receivables                      2                94                    521                  -
 Prepaids                                         2                488                   573                  1,080
 Cash and cash equivalents                        5                776                   705                  139
 Intercompany                                     2                -                    11,174                10,336
 Total Current Assets                                              1,358                 12,973               11,555

 Total assets                                                      12,653                57,795               81,713

 EQUITY AND LIABILITIES
 Equity
 Share Capital                                                     (938)                (712)                (634)
 Share Premium                                                     (232,257)            (209,779)            (202,103)
 Share based payment reserve                                       (15,162)             (12,166)             (8,528)
 Foreign Currency Translation Reserve                              28,616                28,944               26,934
 Accumulated (surplus)/deficit                                     252,421               178,315              146,547
 Total equity                                                      32,680                (15,398)            (37,784)

 Current liabilities
 Trade and other payables                         3                (2,122)              (3,977)              (6,120)
 Intercompany                                                      (3,907)              -                     -
 Loan                                                              -                     (250)               -
 Total current liabilities                                         (6,029)              (4,227)              (6,120)

 Non-current liabilities
 Issued Debt                                                       (39,304)             (38,170)             (37,809)
 Total liabilities                                                 (45,333)             (42,397)             (43,929)

 Total equity and liabilities                                      (12,653)             (57,795)             (81,713)

 

As permitted by s408 Companies Act 2006, the company has not presented its own
profit and loss account and related notes. The company's total comprehensive
loss for the year was $17.3 million (2022: $191.1 million). The Group
financial statements were approved by the board of directors on 24 April 2024
and authorised for issue; they are signed on its behalf by:

 

 

 

Justin Nolan

Chief Executive Officer

 

8 May 2024

 

The accounting policies and notes form part of the financial statements.

 

 

Registered number: 11097258

COMPANY STATEMENT OF CHANGES IN EQUITY

 

 

 

                                             Share Capital  Share Premium  Currency Translation Reserve  Share based payment reserve  Accumulated surplus/ (deficit)  Total
                                             $'000          $'000          $'000                         $'000                        $'000                           $'000
 Balance at 1 January 2024                   712             209,779        (28,944)                     12,166                        (178,315)                      15,398
 Total comprehensive income for the period:
 Loss for the period                         -               -              -                             -                            (74,106)                       (74,106)
 Other comprehensive income                  -               -              328                           -                            -                               328
 Total comprehensive income for the period   -               -              328                           -                            (74,106)                       (73,778)
 Transactions with equity owners:
 Share capital issued                        220             21,635         -                             -                            -                               21,855
 Share based payments charge                 -               -              -                             3,845                        -                               3,845
 Share RSUs vested                           6               843            -                             (849)                       -                                -
 Total transactions with equity owners       226             22,478         -                             2,996                        -                               25,700

 Balance at 31 December 2024                 938             232,257        (28,616)                     15,162                        (252,421)                      (32,680)

 

                                             Share Capital  Share Premium  Currency Translation Reserve  Share based payment reserve  Accumulated surplus/ (deficit)  Total
                                             $'000          $'000          $'000                         $'000                        $'000                           $'000
 Balance at 1 January 2023                   634             202,103        (26,935)                     8,528                         (146,794)                      37,536
 Total comprehensive income for the period:
 Loss for the period                         -               -              -                             -                            (31,521)                       (31,521)
 Other comprehensive income                  -               -              (2,009)                      -                             -                               (2,009)
 Total comprehensive income for the period   -               -              (2,009)                      -                             (31,521)                       (33,530)
 Transactions with equity owners:
 Share capital issued                        78              7,676          -                             -                            -                               7,754
 Share based payments charge                 -               -              -                             3,892                        -                               3,892
 Share RSUs vested                           -               -              -                             (254)                       -                                (254)
 Total transactions with equity owners       78              7,676          -                             3,638                        -                               11,392

 Balance at 31 December 2023                 712             209,779        (28,944)                     12,166                        (178,315)                      15,398

COMPANY STATEMENT OF CASH FLOWS

 

                                                                                        Year ended December  Year ended December
                                                                                        2024                 2023
                                                          Note                          $'000                $'000
 Cash flows from operating activities
 Loss before tax                                                                        (74,106)             (14,901)
 Adjustments for:
 Share of loss from associate                                                           -                     716
 Loss/Gain on sale of Investment                                                        (567)                -
 Foreign exchange movements                                                             (100)                (1,877)
 Finance cost                                                                           4,094                 4,888
 Write off of investments                                                               -                     22,764
 Intercompany provision                                                                 33,829                -
 Impairment of assets                                                                   553                   83
 Share based payment expense                                                            1,794                 3,874
 Impairment of investment                                 5                             32,819                -
 Working capital changes:
 (Increase)/decrease in trade and other receivables       2                             512                   1,803
 Increase/(decrease) in trade and other payables          3                             (1,233)              (2,079)
 Net cash generated from operating activities                                           (2,405)              15,271

 Investing activities
 Proceed from sale of assets                                                            45                    -
 (Increase)/decrease in loan to subsidiary                                              (15,675)             (17,863)
 Net cash used in investing activities                                                  (15,630)             (17,863)
 Financing activities
 Loan proceeds                                                                          1,110                 811
 Repayment of loan                                                                      (1,360)              (561)
 Loan repayments Interest paid                                                          (3,534)              (4,602)
 Proceeds from shares issued - net of issue costs                                       21,855                7,518
 Net cash (used in) generated from financing activities                                 18,071                3,166

 Net (decrease) increase in cash and cash equivalents                                   36                    574
 Effect of foreign exchange on cash and cash equivalents                                35                    139
 Cash and cash equivalents at beginning of period                                       705                   (8)
 Cash and cash equivalents at end of period                                             776                   705

 

 

 

 

 

 

 

                                        Year ended    Year ended

 Company - net debt reconciliation      31 December   31 December

                                        2024          2023
                                        $'000         $'000
 Non-current loans and borrowings    3  (39,304)      (38,170)
 Cash and cash equivalents              776           705
 Total net (debt) / asset               (38,527)      (37,465)

 

NOTES TO THE FINANCIAL STATEMENTS

Argo Blockchain PLC ("the company") is a public company, limited by shares,
and incorporated in England and Wales. The registered office is Eastcastle
House, 27-28 Eastcastle Street, London, W1W 8DH. The company was incorporated
on 5 December 2017 as GoSun Blockchain Limited and changed its name to Argo
Blockchain Limited on 21 December 2017. Also on 21 December 2017, the company
re-registered as a public company, Argo Blockchain plc. Argo Blockchain plc
acquired a 100% subsidiary, Argo Innovation Labs Inc. (together "the Group"),
incorporated in Canada, on 12 January 2018.

The Company financial statements are required by Companies House and do not
include any intercompany eliminations, The Company financial statements and
note disclosures should be read in conjunction with the Group statements and
notes above.

The notes to the company Financial Statements should be viewed in conjunction
with the Group Financial Statements.

 

1.     2023 RESTATEMENT
 
The Group identified errors in the prior year intercompany recharge allocations due to a misapplication of the groups
recharge policy. The impact was material, requiring restatement of the prior period financial statements in accordance
with IAS 8. Comparative figures have been adjusted as follows:
 
                                2023 Original  Movement  2023 Restated
 Loss for the period            (14,901)       (16,620)  (31,521)
 Intercompany Loan              28,199         (17,025)   11,174
 Accumulated (surplus)/deficit  161,448                   178,315

                                               16,867

 

This restatement had no impact on cashflows.

 

 

 

2.     TRADE AND OTHER RECEIVABLES / INTERCOMPANY

 

                                          Company  Company

                                          2024     2023
                                          $'000    $'000
 Trade and other receivables/prepayments  582      650
 Total trade and other receivables        582      650

 

 

COMPANY - INTERCOMPANY

 

                                             Company  Company

                                             2024     2023
                                             $'000    $'000
 Amounts due from/(to) group companies, net  (3,907)  28,199

 

Funds advanced to group companies were used for operating expenses, settling
debt and purchasing tangible and intangible assets. There are no terms of
repayment. The amounts due are non-interest bearing.

 

3.  TRADE AND OTHER PAYABLES

 

                                     Company  Company
                                     2024     2023
                                     $'000    $'000
 Trade payables                      481      1,253
 Accruals and other payables         976      2,781
 Other taxation and social security  664      9
 Total trade and other creditors     2,121    4,043

 

The directors consider that the carrying value of trade and other payables is
equal to their fair value.

 

4.  FINANCIAL INSTRUMENTS

 

                                                Company  Company

                                                2024     2023
                                                $'000    $'000
 Carrying amount of financial assets
 Measured at amortised cost
 -       Trade and other receivables            94       77
 -       Cash and cash equivalents              776      705
 Measured at fair value through profit or loss  -        100
 Total carrying amount of financial assets      870      882

 Carrying amount of financial liabilities
 Measured at amortised cost
 -       Trade and other payables               2,121    3,044
 -       Short term loans                       -        250
 -       Issued debt - bonds                    39,304   38,170
 -       Lease liabilities                      -        -
 Total carrying amount of financial             41,425   41,464

 liabilities

 

Fair Value Estimation

Fair value measurements are disclosed according to the following fair value
measurement hierarchy:

-       Quoted prices (unadjusted) in active markets for identical
assets or liabilities (Level 1)

-       Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (that is, as prices),
or indirectly (that is, derived from prices) (Level 2)

-       Inputs for the asset or liability that are not based on
observable market data (that is, unobservable inputs) (Level 3). This is the
case for unlisted equity securities.

The following table presents the company's assets that are measured at fair
value at 31 December 2024 and 31 December 2023.

 

                                                        Level 1  Level 2  Level 3  Total
 Assets                                                 $'000    $'000    $'000    $'000
 Financial assets at fair value through profit or loss
 -       Equity holdings                                -        -        -        -
 Total at 31 December 2024                              -        -        -        -

                                                        Level 1  Level 2  Level 3  Total
 Assets                                                 $'000    $'000    $'000    $'000
 Financial assets at fair value through profit or loss
 -       Equity holdings                                         -        100      100
 Total at 31 December 2023                              -        -        100      100

 

 

All financial assets are in unlisted securities. There were no transfers
between levels during the period.

The Group recognises the fair value of financial assets at fair value through
profit or loss relating to unlisted investments at the cost of investment
unless:

-       There has been a specific change in the circumstances which, in
the Group's opinion, has permanently impaired the value of the financial
asset. The asset will be written down to the impaired value;

-       There has been a significant change in the performance of the
investee compared with budgets, plans or milestones;

-       There has been a change in expectation that the investee's
technical product milestones will be achieved or a change in the economic
environment in which the investee operates;

-       There has been an equity transaction, subsequent to the Group's
investment, which crystallises a valuation for the financial asset which is
different to the valuation at which the Group invested. The asset's value will
be adjusted to reflect this revised valuation; or

-       An independently prepared valuation report exists for the
investee within close proximity to the reporting date.

-

5.  INVESTMENT IN SUBSIDIARIES AND LOSS ON SALE OF SUBSIDIARY
Company

Details of the Company's subsidiaries at 31 December 2024 are as follows:

 

 Name of Undertaking        Country of Incorporation  Ownership      Voting Power Held (%)  Nature of Business

                                                      Interest (%)
 Argo Innovation Labs Inc.  Canada                    100%           100%                   ***
 9377-2556 Quebec Inc.      Canada                    100%           100%                   **
 Argo Holdings US Inc.      USA                       100%           100%                   ****
 Argo Operating US LLC      USA                       100%           100%                   *

* The provision of cryptocurrency mining services

 

** The provision of cryptocurrency mining sites

 

*** Converted from the provision of cryptocurrency mining services to cost
centre in 2023

 

**** Holding company

 

 

 

 Investment in subsidiaries  2024      2023
                             $'000     $'000
 At January 1                43,983    65,000
 Impairment                  (32,819)  (21,017)
 At 31 December              11,164    43,983

 

Argo Holdings US Inc. was incorporated on November 22, 2023, with a registered
office of 1209 Orange Street, Wilmington, Delaware, USA, 19801. The company
contributed shares in Argo Innovation Facilities (US) valued at $65m.

Argo Operations US LLC was formed on November 22, 2022, with a registered
office of 1209 Orange Street, Wilmington, Delaware, USA, 19801.

Argo Innovation Facilities (US) Inc was incorporated on 25 February 2022 with
a registered address of 2028 East Ben White Blvd. Austin, TX 78740. This
entity held the Helios facility and real property in Dickens County, Texas. On
21 December 2023, Argo Innovation Facilities (US) Inc. was converted to Galaxy
Power LLC. Galaxy Power LLC was sold on 28 December 2023 pursuant to an equity
purchase agreement. The proceeds received for the sale were $65 million
against a book value of $120 million resulting in a loss on sale for the Group
of $120 million.

 

6.  KEY JUDGEMENTS AND ESTIMATES
Valuation of investments in subsidiaries and amounts due from group companies - Note 19

The Board considered amounts due from group companies and whether any further
impairments were required on their carrying value. When considering these
amounts, they made use of forecasts of the profitability of the subsidiary and
of their revenues and expenditure and concluded that impairment of those
assets was necessary based on current forecasts and performance during the
first part of 2025.

The forecasts to support this were built using our existing internal models
showing positive cash contribution and profitability of the subsidiaries and
their future value to the Group as a whole. Both pre and post year end these
models show an impairment to the carrying value of one of the subsidiaries. An
impairment charge of $32,226 was recognized.

7.  EMPLOYEES

The average monthly number of persons (including directors) employed by the
company during the period was:

 

                          2024    2023
                          Number  Number
 Directors and employees  6       6

 

 

 

 

 

 

 

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