REG - Argo Blockchain PLC - Argo Enters into Term Sheets with Gem Mining

Argo BlockchainAnnouncement

26/03/2025 07:16

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RNS Number : 1692C  Argo Blockchain PLC  26 March 2025

Press Release

26 March 2025

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION
IN THE UNITED STATES.

Argo Blockchain plc

("Argo" or "the Company")

Argo Blockchain Enters into Term Sheets for Convertible Loan and to Acquire
GEM Mining LLC Assets

Would Double Argo's Hashrate and Provide for Growth Capital

Argo Blockchain plc (LSE: ARB; NASDAQ: ARBK) is pleased to announce that it
has entered into non-binding term sheets to:

1.    acquire substantially all of the assets of GEM Mining LLC and its
affiliates (collectively, "GEM") on a debt free basis from the existing
unitholders of GEM ("GEM Investors") for total consideration of up to $21.7
million ("Acquisition") to be satisfied by the issue to the GEM Investors of
new ordinary shares in the capital of Argo ("Ordinary Shares"); and

2.    for certain GEM Institutional Investors to provide the Company with
$10 million investment consisting of a $7.0 million secured convertible note
("Convertible Loan") and $3.0 million equity investment into the Company (the
"Equity Investment" and together with the Convertible Loan, the "Financing")
on the same terms as the conversion of the Convertible Loan (together with the
Acquisition, the "Transaction").

 

Acquisition

 

·    GEM owns 2.4 exahash (EH) of mining machines which, following
completion of the Acquisition, is expected to more than double the Company's
hashrate and provide the Company with access to the GEM's hosting
arrangements. The acquisition is also expected to drive efficiencies and
increase overall Bitcoin production.

·   GEM has strong institutional backing which is important to the Company
as it continues to grow and look for expansion opportunities.

·    The consideration for the Acquisition is to be satisfied by the
issue of new Ordinary Shares and comprises $11.7 million in initial
consideration (the "Initial Consideration") and up to $10.0 million in
contingent consideration (the "Contingent Consideration"), based on the
realized hashprice in the 12 months following completion of the Transaction,
to be paid out on a quarterly basis.

·     The Company share price to be used in connection with the Initial
Consideration is 3.4 pence, which is the 20 trading day VWAP as of 25 March
2025 ("Closing Share Price") and the share price to be used in connection with
the Contingent Consideration shall be equal to the 20 trading day VWAP
immediately preceding each Contingent Consideration payment.

 

Financing

 

·   The secured, Convertible Loan will carry an interest rate of 8% per
annum to be paid-in-kind or in cash at the Company's option and will be
convertible at the option of the noteholders into Ordinary Shares at a price
per Ordinary Share equal to a 25% discount to the Closing Share Price. The
Convertible Loan will mature one year from the date of issuance thereof.

·    The Convertible Loan shall be secured with a first priority security
interest against all of the assets of the Company and its subsidiaries,
however, will be subordinated to any existing mortgages or liens on the
Company's real property.

·     The $3.0 Equity Investment will be made at a 25% discount to the
Closing Share Price.

·     GEM will be entitled to appoint two directors to the Company's
board upon completion of the Transaction.

The Company has granted GEM a 30-day exclusivity period (extensions to be
considered in good faith depending on progress made). Completion of the
Transaction is conditional on, among other things, shareholder approval, the
granting of a Rule 9 waiver by the UK Takeover Panel and the publication of a
prospectus by the Company.

Chairman of the Board, Matt Shaw commented: "We believe this transaction
represents a significant step toward profitable growth for Argo and
strengthens our capital structure. The Argo and Gem teams are working
collaboratively to complete due diligence and finalize definitive
documentation. We look forward to updating shareholders in due course."

Stifel is serving as financial advisor to Argo. Compass Point is serving as
financial advisor to GEM.

This announcement does not constitute an offer to sell or a solicitation of an
offer to buy any securities in the United States. The securities offered
hereby have not been and will not be registered under the United States
Securities Act of 1933, as amended (the "1933 Act") or any state securities
laws and may not be offered or sold in the United States or to U.S. persons
(as defined in Regulation S under the 1933 Act) unless the securities have
been registered under the 1933 Act and all applicable state securities laws,
or are otherwise exempt from such registration.

No Assurance of Definitive Agreements

There can be no assurance that any definitive agreements for the Transaction
will be signed or that the Transaction will be consummated. Should Argo be
unsuccessful in completing the Transaction, Argo may need to explore other
financing opportunities. The Company is endeavoring to complete such
Transaction to provide the Company with working capital sufficient for its
present requirements, that is for at least the next twelve months from the
date of this announcement.

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
(http://www.argoblockchain.com/) 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, including closing of the Transaction and effects
thereof, the use of proceeds of the Financing, expected hashrate of the
Company are 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 2023, and our Interim Report as of 30 September 2024.

 

 

 

 

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