REG - Argo Blockchain PLC - September Operational Update

Argo BlockchainAnnouncement

11/10/2022 07:16

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RNS Number : 4092C  Argo Blockchain PLC  11 October 2022

Press Release

11 October 2022

Argo Blockchain plc

("Argo" or "the Company")

September 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
September 2022.

During the month of September, Argo mined 215 Bitcoin or Bitcoin Equivalents
(together, BTC) compared to 235 BTC in August 2022. The decrease in BTC mined
is primarily due to a 12% increase in average network difficulty during
September. Additionally, the Company is continuing to curtail operations at
its Helios facility in Dickens County, Texas during periods of high
electricity prices.

As of 30 September 2022, the Company held 512 Bitcoin, of which 167 were BTC
Equivalents. The Company closely monitors market conditions and is actively
using a variety of derivatives to manage BTC holdings and mitigate risk
exposure.

Based on daily foreign exchange rates and cryptocurrency prices during the
month, mining revenue in September amounted to £3.78 million [$4.27 million*]
(August 2022: £4.39 million [$5.23 million*]). Argo generated this income at
a Bitcoin and Bitcoin Equivalent Mining Margin (Mining Margin) of 25% for the
month of September (an increase from 20% in August 2022).

The Company currently has 2.5 EH/s of total hashrate capacity and expects to
complete the installation of its Bitmain S19J Pro machines by the end of
October 2022. After accounting for the sale of 3,400 mining machines to a
third party that was reported on 7 October 2022, the Company now expects to
achieve a total hashrate capacity of 2.9 EH/s once the installation is
complete.

Organisational Changes

Effective October 15, Perry Hothi is stepping down from his role as Chief
Technology Officer at Argo and will serve as a transitional advisor to the
Company. The technology function will be led by Jean Esquier, who currently
serves as Vice President of Technology and Development.

In addition, the Company is excited to welcome Jason Zaluski to the team as
Vice President of Mining. In this role. Jason will strengthen the Company's
core team and focus on optimising operations of Argo's mining fleet. Jason
brings tremendous experience in blockchain technology and Bitcoin mining,
having previously worked at Hut 8 Mining as Vice President of Strategic
Technologies.

Management Commentary

Peter Wall, Chief Executive Officer at Argo, said: "As another month of high
energy prices and uncertain market conditions ended, Argo continues to execute
on its plans to grow operations at Helios. We are nearing completion of the
installation of our new Bitmain S19J Pro machines, which will increase our
total hashrate capacity to 2.9 EH/s by the end of the month. This will
represent a 81% increase in total hashrate capacity since Q1 2022. I continue
to be proud of our team for its efforts to deliver long-term growth in the
interest of our shareholders."

"Additionally, I'd like to thank Perry Hothi for his long years of service and
great contribution to Argo," Wall continued. "Perry has been with us from the
very beginning, and I wish him well as he moves on."

Perry Hothi, Chief Technology Officer at Argo, said, "I've decided to leave
Argo because I believe the technology team is ready. I have accomplished
everything I set out to do at Argo. Working with Jean and the rest of the
technology team these last few years has been a once in a lifetime experience.
I'm deeply grateful for their skill, heart, and friendship. It is their time
now."

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 July 2022 and August 2022.

                                                                                            Month Ended 31 August 2022                                Mont
                                                                                                                                                      h
                                                                                                                                                      Ende
                                                                                                                                                      d 30
                                                                                                                                                      Sept
                                                                                                                                                      embe
                                                                                                                                                      r
                                                                                                                                                      2022
                                                         £(000s)                      $ (000s)                     £(000s)                      $ (000s)
 Gross (loss)                                  (4,471)                         (5,334)                   (5,807)                         (6,560)
 Gross Margin                                  (110%)                          (110%)                    (154%)                          (154%)
 Depreciation of mining equipment              1,644                           1,961                     1,723                           1,947
 Change in fair value of digital currencies    2,944                           3,512                     4,967                           5,611
 Realised loss on sale of digital currencies   765                             913                       55                              62

 Mining Profit                                 882                             1,052                     938                             1,060
 Bitcoin and Bitcoin Equivalent Mining Margin  20%                             20%                       25%                             25%

(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 August 2022 and September
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 www.argoblockchain.com
(http://www.argoblockchain.com/) .

 

 

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