REG - Argo Blockchain PLC - February 2022 Operational Update

Argo BlockchainAnnouncement

07/03/2022 07:00

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RNS Number : 7607D  Argo Blockchain PLC  07 March 2022

Press Release

07 March 2022

 

Argo Blockchain PLC

("Argo" or "the Company")

February 2022 Operational Update

 

Operational Update

Argo Blockchain plc, a global leader in cryptocurrency mining (LSE: ARB;
NASDAQ: ARBK), is pleased to provide the following operational update for
February 2022.

During the month of February, Argo mined 135 Bitcoin or Bitcoin Equivalent
(together, BTC) compared to 172 BTC in January 2022. This reduction of BTC
mined during February is primarily due to record high global hashrate and
subsequent network difficulty increase. Additionally, the Company's facilities
in Mirabel and Baie Comeau, Quebec were subject to significant curtailment due
to cold winter conditions, as were the Company's hosted machines at Core
Scientific's facility in North Dakota. This curtailment exemplifies how
cryptocurrency mining facilities can be used to stabilise North America's
electrical grid by reducing energy consumption during times of peak demand.
Argo, like other crypto miners, has agreements to access lower electricity
prices with suppliers in return for limiting usage in periods of peak demand.

Based on daily foreign exchange rates and cryptocurrency prices during the
month, mining revenue in February amounted to £4.15 million  $5.58m* 
(January 2022: £5.26 million [$7.10 million*]).

Argo generated this income at a Bitcoin and Bitcoin Equivalent Mining Margin
of approximately 71% for the month of February (January 2022: 74%).

At the end of February, the Company owned 2,685 Bitcoin, of which 246 were BTC
equivalents.

Intel Supply Agreement

The Company is also pleased to announce it has signed a supply agreement with
Intel Corporation to purchase Intel's new blockchain accelerator. The Company
has pro-rata allocation rights to purchase a supply of the Intel units, with
delivery anticipated to begin in the second half of 2022.

The Company expects to announce more details in the coming months, including
the anticipated future increase in the Company's hashrate from this supply
agreement.

Helios Mining Facility Update

The Company is also pleased to provide the following update on the
construction of its 200 MW flagship cryptocurrency mining facility, Helios, in
Dickens County, Texas. The Company announces that it has placed an order with
PA Transformer for four additional Main Power Transformers which will provide
an additional 600 MW of total power to Argo's Helios facility. They are
identical in specification to the initial order of transformers the Company is
currently installing on site, and will be delivered in Q1 and Q2, 2023.

Peter Wall, Chief Executive of Argo and interim Chairman, said: "During
February, we have experienced exceptional weather conditions and are hopeful
that these are behind us. Regardless of this, we have continued to ensure that
Argo is set to grow and deliver on its intended objectives for the forthcoming
year. The Company's recent appointment of Raghav Chopra as an independent
non-executive director, continued progress with construction of the Helios
facility, and the supply agreement we have signed with Intel are testaments to
the fact that we are on the right track to achieving our goals for the year."

Non-IFRS Measures

Bitcoin and Bitcoin Equivalent Mining Margin is a financial measure not
defined by IFRS. We believe Bitcoin and Bitcoin Equivalent Mining Margin has
limitations as an analytical tool. In particular, Bitcoin and Bitcoin
Equivalent Mining Margin excludes the depreciation of mining equipment and so
does not reflect the full cost of our mining operations, and it also excludes
the effects of fluctuations in the value of digital currencies and realized
losses on the sale of digital assets, which affect our IFRS gross profit. This
measure should not be considered as an alternative to gross margin determined
in accordance with IFRS, or other IFRS measures. This measure is not
necessarily comparable to similarly titled measures used by other companies.
As a result, you should not consider this measure in isolation from, or as a
substitute analysis for, our gross margin as determined in accordance with
IFRS.

The following table shows a reconciliation of gross margin to Bitcoin and
Bitcoin Equivalent Mining Margin, the most directly comparable IFRS measure,
for the months of January 2022 and February 2022.

                                                     Month Ended 31 January 2022     Month Ended 28 February 2022
                                                     £               $               £                $
 Gross (loss)/profit¹                                (13,204,218)    (17,832,213)    11,383,225       15,372,973
 Gross Margin                                        (251%)          (251%)          276%             276%
 Depreciation of mining equipment                    1,284,142       1,734,226       1,287,252        1,738,426
 Charge in fair value of digital currencies          15,460,310      20,879,051      (9,380,856)      (12,668,786)
 Realised loss/(gain) on sale of digital currencies  331,171         447,244         (377,028)        (509,174)

 Mining Profit                                       3,871,405       5,228,308       2,912,593        3,933,439
 Bitcoin and Bitcoin Equivalent Mining Margin        74%             74%             71%              71%

(1) Due to favourable changes in the fair value of Bitcoin and Bitcoin
Equivalents in February 2022 there was a gross profit. January 2022 resulted
in a gross loss due to unfavourable changes in the fair value of digital
currencies.

* Dollar values translated from pound sterling into U.S. dollars using the
noon buying rate of the Federal Reserve Bank of New York as at the applicable
dates.

Forward-Looking Information

This announcement contains inside information and includes forward-looking
statements which reflect the Company's or, as appropriate, the Directors'
current views, interpretations, beliefs or expectations with respect to the
Company's financial performance, business strategy and plans and objectives of
management for future operations.  These statements include forward-looking
statements both with respect to the Company and the sector and industry in
which the Company operates.  Statements which include the words "expects",
"intends", "plans", "believes", "projects", "anticipates", "will", "targets",
"aims", "may", "would", "could", "continue", "estimate", "future",
"opportunity", "potential" or, in each case, their negatives, and similar
statements of a future or forward-looking nature identify forward-looking
statements. All forward-looking statements address matters that involve risks
and uncertainties because they relate to events that may or may not occur in
the future.  Forward-looking statements are not guarantees of future
performance.  Accordingly, there are or will be important factors that could
cause the Company's actual results, prospects and performance to differ
materially from those indicated in these statements.  In addition, even if
the Company's actual results, prospects and performance are consistent with
the forward-looking statements contained in this document, those results may
not be indicative of results in subsequent periods. These forward-looking
statements speak only as of the date of this announcement.  Subject to any
obligations under the Prospectus Regulation Rules, the Market Abuse
Regulation, the Listing Rules and the Disclosure and Transparency Rules and
except as required by the FCA, the London Stock Exchange, the City Code or
applicable law and regulations, the Company undertakes no obligation publicly
to update or review any forward-looking statement, whether as a result of new
information, future developments or otherwise. For a more complete discussion
of factors that could cause our actual results to differ from those described
in this announcement, please refer to the filings that Company makes from time
to time with the United States Securities and Exchange Commission and the
United Kingdom Financial Conduct Authority, including the section entitled
"Risk Factors" in the Company's Registration Statement on Form F-1.

For further information please contact:

 

 Argo Blockchain
 Peter Wall                          via Tancredi +44 203 434 2334

 Chief Executive
 finnCap Ltd
 Corporate Finance                   +44 207 220 0500

 Jonny Franklin-Adams

 Tim Harper

 Joint Corporate Broker

 Sunila de Silva
 Tennyson Securities
 Joint Corporate Broker              +44 207 186 9030

 Peter Krens
 OTC Markets
 Jonathan Dickson                    +44 204 526 4581

 jonathan@otcmarkets.com             +44 7731 815 896
 Tancredi Intelligent Communication

 UK & Europe Media Relations
 Emma Valgimigli                     +44 7727 180 873

 Emma Hodges                         +44 7861 995 628

 Fabio Galloni-Roversi Monaco        +44 7888 672 701

 Nasser Al-Sayed                     +44 7915 033 739

 argoblock@tancredigroup.com

About Argo:

Argo Blockchain plc is a global leader in cryptocurrency mining with one of
the largest and most efficient operations powered by clean energy. The Company
is headquartered in London, UK and its shares are listed on the Main Market of
the London Stock Exchange under the ticker: ARB and on the Nasdaq Global
Select Market in the United States under the ticker: ARBK.

 

 

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