Bitcoin Miner Argo Has No Choice But to Sell the Facility!
Argo Blockchain sells its Texas company to Galaxy, will use Bitcoin Mining Rigs as collateral for a $35M loan. Bitcoin miner Argo Blockchain is seizing the largest mining facility to prevent it from collapsing, but will retain ownership of its rigs.
Argo is selling its flagship Helios plant in Dickens County, Texas to Galaxy Digital for $65 million, it said in a statement Wednesday. Helios, which covers 135,000 square feet, is the largest cold water mining facility in the world and has a capacity of 800 megawatts (MW) of electricity, according to its website.
Galaxy will host Arggo’s bitcoin platforms under a two-year contract. The transaction is expected to close on Wednesday, December 28. The London-based company says the deal will reduce Argo’s overall debt by $41 million and simplify its operations.
As part of the agreement, Galaxy will provide Argo with a $35 million financing loan. The loan will be secured by a contract that includes 23,619 Bitmain S19J rigs at Helios, as well as other machines at the Argo data center in Canada.
The proceeds from the sale of the Dickens County office will be used to pay off debt, interest and other debt, including $84 million owed to NYDIG. “While we have sold the Helios company, we have not sold any of our machines,” CEO Peter Wall said in a video message. “These people will continue to work in the Helios company.”
Earlier this month, Argo warned investors that it may not have enough money to last until the end of the year. The miner appears to be in advanced negotiations to sell some assets as part of a capital investment transaction and hopes to start a deal without filing for bankruptcy.
The company now says it will shift its efforts to its Canadian operations, which it said were not affected by the Galaxy deal “except for the use of some mining equipment and other assets in Quebec as security for the loan.” asset-backed funds”.
“As a first step, Argo intends to resume its efforts to grow and improve the operation of its two data centers in Quebec, which are fully supported by cheap electric water. »
Argo Farm in Quebec, Canada is small. The one at Base Comeau, in Quebec, covers 40,000 square feet and operates at 15 MW while the one at Mirabel covers 20,000 square feet and 5 MW.
Argo CEO expects to see the other side of the bitcoin bear
Still, the market reacted positively to the news that Argo could avoid a near-term collapse, more than doubling on the London Stock Exchange (LSE). Argo shares were up 50% in early Nasdaq trading, though they are still down more than 90% year-to-date.
Argo had asked to suspend its Nasdaq-listed shares from trading on Tuesday ahead of the announcement. The company’s LSE shares were temporarily suspended earlier this month.
The miner said it would not release third-quarter results this year. This product is overseen by the Financial Conduct Authority in the UK, which forces companies to announce their results only twice a year.
On Argo’s side, high energy costs, low liquidity, and uncontrollable debt have hit bitcoin miners. Core Scientific, one of the largest mining companies in North America, filed for bankruptcy last week.
Argo CEO Wall said the company has dealt with bear markets before and learned that these cycles must be navigated to survive. “The key is to do well when things are going well and make sure you’re able to move on to the strong ones so you can make it on the other side,” he said.