REG - Argo Blockchain PLC - October Operational Update

Argo BlockchainAnnouncement

08/11/2022 07:00

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RNS Number : 5992F  Argo Blockchain PLC  08 November 2022

Press Release

8 November 2022

Argo Blockchain plc

("Argo" or "the Company")

October 2022 Operational Update

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

During the month of October, Argo mined 204 Bitcoin or Bitcoin Equivalents
(together, BTC) compared to 215 BTC in September 2022. The decrease in BTC
mined was primarily due to a significant increase in the Bitcoin network
difficulty in October compared to September.

As previously announced, the Company sold 3,843 new-in-box Bitmain S19J Pro
machines which represented the last batch of the original Bitmain order
scheduled for installation in October 2022. Consequently, the Company's total
hashrate capacity continues to be 2.5 EH/s.

As of 31 October 2022, the Company held 138 Bitcoin, of which 119 were BTC
Equivalents.

Based on daily foreign exchange rates and cryptocurrency prices during the
month, mining revenue in October amounted to £3.55 million [$4.00 million*]
(September 2022 £3.78 million [$4.27 million*]).

Argo generated this income at a Bitcoin and Bitcoin Equivalent Mining Margin
of 32% for the month of October (September 2022: 25%).

Additionally, the Company repaid the $6.7 million that was previously
outstanding under the BTC-backed loan with Galaxy Digital. This is consistent
with the Company's risk management strategy and reduces balance sheet exposure
to downside BTC price risk.

The Company also wishes to respond to media reports falsely claiming that
Hydro-Québec, the public utility for power in Quebec, has proposed to stop
providing electricity to existing mining operations. The Company has spoken
with representatives from Hydro-Québec and the City of Baie-Comeau, and is
confident that its current access to power at its two Quebec facilities will
continue for the foreseeable future.

Argo is continuing to engage in financing discussions, as announced on 31
October 2022, and will update investors in due course.

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 realised
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 September 2022 and October 2022.

                                                                                                    Month Ended 30 September 2022                                         Mont
                                                                                                                                                                          h
                                                                                                                                                                          Ende
                                                                                                                                                                          d 31
                                                                                                                                                                          Octo
                                                                                                                                                                          ber
                                                                                                                                                                          2022
                                                                  £(000s)                        $(000s)                           £(000s)                           $(000s)
 Gross profit/(loss)                                   (5,807)                       (6,560)                       (1,486)                                     (1,673)
 Gross Margin                                          (154%)                        (154%)                        (42%)                                       (42%)
 Non mining revenue                                    -                             -                             (41)                                        (47)
 Depreciation of mining equipment                      1,723                         1,947                         1,934                                       2,177
 Change in fair value of digital currencies((1))       4,967                         5,611                         658                                         741
 Realised (profit)/loss on sale of digital currencies  55                            62                            64                                          72

 Mining Profit                                         938                           1,060                         1,129                                       1,271
 Bitcoin and Bitcoin Equivalent Mining Margin          25%                           25%                           32%                                         32%

(1) Due to unfavourable changes in the fair value of BTC there was a loss on
the change in fair value of digital currencies in September 2022 and October
2022.

* 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

 

Inside Information and Forward-Looking Statements

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

 Seamus Fricker

 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

 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 dual-listed (LSE: ARB; NASDAQ: ARBK) blockchain
technology company focused on large-scale cryptocurrency mining. With its
flagship mining facility in Texas, 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. Argo also participates
in several Web 3.0, DeFi and GameFi projects through its Argo Labs division,
further contributing to its business operations, as well as the development of
the cryptocurrency markets. For more information, visit
(http://www.argoblockchain.com/) www.argoblockchain.com
(http://www.argoblockchain.com/) .

 

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