Business Context and Reporting Period
Argo Blockchain plc, a UK-based cryptocurrency mining company listed on the London Stock Exchange and Nasdaq, filed this Form 6-K for November 2021. The filing, dated 5 November 2021, discloses and clarifies information inadvertently shared during a 4 November meeting with an external individual and subsequently published on Twitter.
Financial and Operating Metrics
- Immersion cooling: Argo stated that it does not have sufficient data to support a claim of a 25% hash-rate increase. It reiterated that immersion cooling may support higher sustained processing speeds and extend the useful lives of older mining machines, potentially improving profitability and return on investment.
- Alternative cryptocurrency revenue: Argo indicated that revenue from cryptocurrencies other than Bitcoin comprising up to 20% of total revenue could be acceptable as part of its diversification strategy. This was directional information, not a forecast.
- Equihash machine investment: Argo cited a particularly favorable 500% return on investment for certain machines purchased in June 2020. The purchase cost was approximately US$474,000, and the company stated that this investment was not material to its business.
- Texas facility cost: The estimated total cost to build and equip an 800-megawatt mining facility in Texas could be US$1.5 billion to US$2.0 billion. The estimate is subject to substantial assumptions and uncertainties.
- Other metrics: The filing does not provide revenue, profit, cash flow, margin, debt, liquidity, or balance-sheet values for the reporting period.
Material Changes Versus Prior Comparable Period
The filing does not present comparative financial statements or quantify changes versus a prior comparable period. It primarily corrects or contextualizes information disclosed during the 4 November meeting.
Guidance, Outlook, Risks, and Unusual Items
- The US$1.5 billion–US$2.0 billion Texas facility estimate is forward-looking and depends on machine types, the mix of owned and hosted machines, construction inputs, labor, power costs, construction timing, machine purchases, and the extent to which Argo develops the Helios property. Argo has not determined whether it will fully develop the property.
- Argo disclaimed or characterized as unsupported certain statements attributed to its representatives regarding a 25% hash-rate uplift, future Bitcoin prices, mining profitability, cryptocurrency business cycles, and the company’s ability to remain profitable through those cycles.
- Principal risks include cryptocurrency price volatility, regulatory changes, power costs and availability, resource constraints, supply-chain disruptions, and the assumptions underlying facility construction and mining economics.
- The filing identifies the disclosure as inside information arising from the inadvertent communication of potentially material non-public information.
Facts Investors Should Verify
- Whether Argo ultimately develops the Helios facility and the scope, timing, funding, and actual cost of any build-out.
- Actual performance benefits and return on investment from immersion cooling and other mining technologies.
- The proportion of revenue generated by non-Bitcoin cryptocurrencies and whether diversification affects profitability or risk.
- Argo’s current cryptocurrency production, realized prices, power costs, liquidity, debt obligations, and funding requirements, none of which are quantified in this filing.
- Subsequent filings for updates on regulatory developments, cryptocurrency prices, mining economics, supply-chain availability, and facility development plans.