Argo Blockchain plc — Form 6-K Summary
Filing date: June 7, 2022. Reporting period: May 2022 operational update, with April 2022 comparisons. Argo is a cryptocurrency mining company listed on the London Stock Exchange and Nasdaq.
Key Financial and Operating Metrics
| Metric | May 2022 | April 2022 | Change |
|---|---|---|---|
| Bitcoin and Bitcoin Equivalents mined | 124 BTC | 166 BTC | Down 25% |
| Mining revenue | £3.07 million ($3.89 million) | £5.52 million ($6.83 million) | Down approximately 44% |
| Bitcoin and Bitcoin Equivalent Mining Margin | 62% | 75% | Down 13 percentage points |
| Mining profit | £1.93 million ($2.41 million) | £3.79 million ($5.12 million) | Down approximately 49% |
| Gross loss | £11.72 million ($14.65 million) | £12.81 million ($17.30 million) | Loss narrowed in pounds |
| Reported gross margin | (377%) | (253%) | Worsened by 124 percentage points |
| Bitcoin and Bitcoin Equivalents held at month-end | 2,379 BTC, including 187 BTC Equivalents | Not stated | Not comparable from the filing |
The reported gross loss and gross margin were materially affected by unfavorable changes in the fair value of digital currencies, depreciation of mining equipment, and realized losses on the sale of digital currencies. The filing provides no clear May debt, cash balance, liquidity, operating cash flow, or net income figures.
Material Changes and Operations
- Bitcoin production declined primarily because of higher Bitcoin network difficulty, lower-than-usual production from Terra Pool, voluntary curtailment at Helios during periods of high Texas temperatures and electricity prices, and limited unplanned downtime during Helios commissioning.
- Helios officially commenced mining operations in May. Argo installed 2,500 S19J Pro machines under its Core Scientific machine-swap agreement and began installing Bitmain-purchased machines.
- Hashrate capacity increased by 300 PH/s to 1.9 EH/s. Completion of the 20,000 Bitmain miners was anticipated by October 2022.
- Argo executed a purchase agreement with ePIC Blockchain Technologies for 6,600 custom mining machines, with rights to order up to an additional 23,400 machines. The machines are intended to use Intel ASIC Blockscale chips and Argo’s immersion-cooling design at Helios.
Outlook, Risks, and Unusual Items
- Management described Helios commissioning as ahead of schedule but expected minor issues and downtime while systems were brought online.
- Production and margins remain exposed to Bitcoin price volatility, network difficulty, pool performance, electricity prices, extreme temperatures, equipment installation, and facility downtime.
- The 62% Bitcoin and Bitcoin Equivalent Mining Margin is a non-IFRS measure. It excludes mining-equipment depreciation, digital-currency fair-value movements, and realized losses on digital-asset sales; it should not be treated as an IFRS gross margin substitute.
- The filing contains forward-looking statements regarding facility expansion, miner installations, custom equipment, operational performance, and future results. Actual outcomes may differ materially, and Argo assumes no general obligation to update these statements.
Investor Verification Points
- Verify subsequent Helios commissioning, miner installation, hashrate, and production results against the October 2022 completion expectation.
- Assess the effect of Bitcoin prices, network difficulty, Texas power costs, curtailment, and pool allocation on future revenue and mining margins.
- Review later financial statements for cash liquidity, debt and financing obligations, capital expenditures, digital-asset balances, and IFRS profitability.
- Confirm the timing, funding, delivery, and performance of the ePIC custom-machine order and the Core Scientific machine-swap agreement.
- Reconcile the filing’s non-IFRS mining margin with IFRS gross profit and digital-asset fair-value losses. The reconciliation heading refers to March and April, although the displayed columns compare April and May; investors should verify the original filing presentation.