Argo Blockchain plc: June 2023 Operational Update
Business context and reporting period
Argo Blockchain plc, a dual-listed cryptocurrency mining company (LSE: ARB; NASDAQ: ARBK), filed a Form 6-K for July 2023 containing its June operational update, dated July 12, 2023. The company operates mining facilities in Quebec and Texas and states that its operations are predominantly powered by renewable energy.
Key operating and financial metrics
| Metric | June 2023 | Prior comparable period |
|---|---|---|
| Bitcoin and Bitcoin equivalents mined | 139 BTC, or 4.6 BTC per day | 5.6 BTC per day in May 2023 |
| Mining revenue | $3.84 million | $4.75 million in May 2023 |
| BTC held at period-end | 44 BTC as of June 30, 2023 | Not provided |
| Total hashrate capacity | 2.5 EH/s | Unchanged from the prior period |
| Expected hashrate after BlockMiner deployment | Approximately 2.8 EH/s | Approximately 12% increase from current capacity |
The filing does not provide June net income, margins, operating cash flow, free cash flow, total debt, cash balance, liquidity, or other balance-sheet metrics.
Material changes versus the prior comparable period
- BTC production per day decreased 17% from 5.6 BTC in May to 4.6 BTC in June.
- Mining revenue decreased 19% from $4.75 million in May to $3.84 million in June.
- The production decline was attributed to higher average network difficulty and increased curtailment at the Helios facility in Texas.
- Argo began receiving and installing new BlockMiner machines at its Quebec facilities. Full deployment is expected to increase total hashrate capacity by approximately 12%.
Outlook, commentary, risks, and unusual items
Although curtailment reduced BTC production, Argo expects to receive additional cash proceeds from certain power-trading activities undertaken by the Helios operator. The filing does not quantify the expected proceeds or provide timing for receipt.
Management’s forward-looking statements are subject to risks including failure to receive expected benefits from transactions with Galaxy, inability to secure sufficient additional financing, and insufficient working capital to fund operations for the next twelve months. The company also cautions that cryptocurrency mining performance is affected by network difficulty, operating curtailments, market conditions, and other factors.
Investor verification points
- Verify the timing, deployment progress, and realized performance of the BlockMiner machines.
- Assess the amount and timing of cash proceeds from Helios power-trading activities.
- Review subsequent filings for cash, debt, liquidity, financing requirements, and working-capital adequacy.
- Monitor network difficulty, BTC prices, mining production, and further curtailment at Helios.
- Review the company’s Form 20-F risk factors and disclosures regarding its transactions with Galaxy.