Argo Blockchain plc: October 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 for November 2021 containing its October 2021 operational update, dated 8 November 2021.
Key financial and operating metrics
| Metric | October 2021 | September 2021 | Change |
|---|---|---|---|
| Bitcoin and Bitcoin Equivalent mined | 167 BTC | 165 BTC | +2 BTC |
| Mining revenue | £7.24 million ($9.75 million) | £5.50 million ($7.59 million) | Higher |
| Bitcoin and Bitcoin Equivalent Mining Margin | Approximately 86% | 84% | +2 percentage points |
| Total BTC and Bitcoin Equivalent holdings at month-end | 2,128 BTC | Not stated | Not determinable |
| Mining capacity at month-end | 1.295 EH/s | Not stated | Not determinable |
Year-to-date Bitcoin and Bitcoin Equivalent production reached 1,646 BTC. The company added 220 PH/s of capacity during October.
The filing's reconciliation shows October mining profit of £6.23 million ($8.39 million), compared with £4.64 million ($6.40 million) in September. Reported October gross profit was £33.06 million, substantially affected by a £27.45 million charge in fair value of digital currencies as presented in the reconciliation; the filing notes that favorable changes in digital-asset fair values caused gross profit to exceed revenue. The reported October gross margin was 422%, compared with 2% in September, and is not representative of underlying mining economics.
The filing does not provide clear October figures for operating profit, net income, operating cash flow, free cash flow, debt, cash balances, or liquidity.
Material changes versus the prior comparable period
- Monthly production increased from 165 BTC to 167 BTC.
- Mining revenue increased from £5.50 million to £7.24 million.
- Mining margin improved from 84% to approximately 86%.
- Mining capacity increased by 220 PH/s to 1.295 EH/s at 31 October 2021.
- Colleen Sullivan resigned as a non-executive director effective 8 November 2021 to focus on other professional duties. The company stated that the resignation did not result from disagreement with management or the board.
Outlook, risks, contingencies, and unusual items
No formal financial guidance or forward-looking production target is provided in the filing. Results remain exposed to cryptocurrency prices, foreign-exchange movements, network conditions, and the value of digital assets.
The company emphasizes that Bitcoin and Bitcoin Equivalent Mining Margin is a non-IFRS measure. It excludes depreciation of mining equipment, fluctuations in digital-asset values, and realized losses on digital-asset sales, and therefore does not represent the full cost of mining or substitute for IFRS gross margin.
The unusual October gross-profit and gross-margin figures were materially influenced by digital-currency fair-value movements. The filing does not identify any debt, liquidity contingency, or other material contractual obligation.
Important facts for investors to verify
- Confirm the reported October production of 167 BTC and year-to-date production of 1,646 BTC.
- Reconcile the £7.24 million mining revenue with the reported £6.23 million mining profit and the unusual IFRS gross-profit presentation.
- Assess the effect of digital-asset fair-value accounting, depreciation, and realized gains or losses on IFRS results.
- Verify the operational status and financing implications of the 1.295 EH/s mining capacity.
- Review subsequent filings for cash, debt, liquidity, and the impact of the board change.