Argo Blockchain Plc current report, Q4 FY2021

Argo Blockchain plc: November 2021 Operational Update

Business context and reporting period

Argo Blockchain plc, a cryptocurrency mining company listed on the London Stock Exchange and Nasdaq, filed a Form 6-K on 7 December 2021 covering operations for November 2021.

Key financial and operating metrics

MetricNovember 2021October 2021
Bitcoin and Bitcoin Equivalent mined185 BTC167 BTC
Mining revenue£8.29 million ($11.20 million)£7.24 million ($9.75 million)
Bitcoin and Bitcoin Equivalent mining margin86%86%
Mining profit£7.13 million ($9.63 million)£6.23 million ($8.39 million)
Bitcoin and Bitcoin Equivalent held at month-end2,317 BTCNot stated
Total mining capacity1.605 EH/sNot stated

Year-to-date production reached 1,831 BTC. The company added 310 PH/s of capacity during November. November IFRS gross loss was £1.11 million ($1.50 million), compared with October gross profit of £33.06 million ($44.53 million), reflecting significant fair-value effects from digital currencies. November gross margin was negative 13%, compared with 422% in October.

November depreciation of mining equipment was £1.20 million ($1.62 million), the charge in fair value of digital currencies was £7.37 million ($9.95 million), realised loss on sale of digital currencies was £8,364 ($11,296), and cryptocurrency management fees were £340,561 ($459,925).

The filing does not provide cash flow, debt, liquidity, total expenses, net income, or balance-sheet information.

Material changes versus the prior comparable period

  • Bitcoin production increased to 185 BTC from 167 BTC, an increase of approximately 11%.
  • Mining revenue increased to £8.29 million from £7.24 million, an increase of approximately 15%.
  • Mining profit increased to £7.13 million from £6.23 million, while the mining margin remained 86%.
  • IFRS results deteriorated materially from October because November included a digital-currency fair-value charge and realised loss, whereas October benefited from favourable fair-value changes.
  • Mining capacity increased by 310 PH/s to 1.605 EH/s at 30 November.

Guidance, outlook, risks, and unusual items

Management commentary was limited to the statement “Execute. Build. Smart Growth. Onwards and Upwards.” The filing provides no quantitative production, revenue, capacity, financing, or earnings guidance.

The reported mining margin is a non-IFRS measure. It excludes depreciation of mining equipment, fluctuations in digital-currency values, realised losses on digital-asset sales, and other items affecting IFRS gross profit; it should not be treated as a substitute for IFRS gross margin.

Results remain exposed to cryptocurrency prices, foreign-exchange rates, digital-asset fair-value movements, mining difficulty, equipment deployment, energy costs, and regulatory or financing conditions. The announcement states that it contains inside information.

Investor verification points

  • Reconcile the operational mining figures with the company’s subsequent IFRS financial statements.
  • Verify the composition and valuation of the 2,317 BTC and Bitcoin Equivalent holdings.
  • Assess the impact of digital-currency fair-value movements and realised losses on reported earnings and equity.
  • Confirm the cost, financing, timing, and operational status of the additional 310 PH/s capacity.
  • Review cash, debt, liquidity, and capital requirements, which are not provided in this filing.