TIDMARB
RNS Number : 5992F
Argo Blockchain PLC
08 November 2022
Press Release
8 November 2022
Argo Blockchain plc
("Argo" or "the Company")
October 2022 Operational Update
Argo Blockchain plc, a global leader in cryptocurrency mining
(LSE: ARB; NASDAQ: ARBK), is pleased to provide the following
operational update for October 2022.
During the month of October, Argo mined 204 Bitcoin or Bitcoin
Equivalents (together, BTC) compared to 215 BTC in September 2022.
The decrease in BTC mined was primarily due to a significant
increase in the Bitcoin network difficulty in October compared to
September.
As previously announced, the Company sold 3,843 new-in-box
Bitmain S19J Pro machines which represented the last batch of the
original Bitmain order scheduled for installation in October 2022.
Consequently, the Company's total hashrate capacity continues to be
2.5 EH/s.
As of 31 October 2022, the Company held 138 Bitcoin, of which
119 were BTC Equivalents.
Based on daily foreign exchange rates and cryptocurrency prices
during the month, mining revenue in October amounted to GBP3.55
million [$4.00 million*] (September 2022 GBP3.78 million [$4.27
million*]).
Argo generated this income at a Bitcoin and Bitcoin Equivalent
Mining Margin of 32% for the month of October (September 2022:
25%).
Additionally, the Company repaid the $6.7 million that was
previously outstanding under the BTC-backed loan with Galaxy
Digital. This is consistent with the Company's risk management
strategy and reduces balance sheet exposure to downside BTC price
risk.
The Company also wishes to respond to media reports falsely
claiming that Hydro-Québec, the public utility for power in Quebec,
has proposed to stop providing electricity to existing mining
operations. The Company has spoken with representatives from
Hydro-Québec and the City of Baie-Comeau, and is confident that its
current access to power at its two Quebec facilities will continue
for the foreseeable future.
Argo is continuing to engage in financing discussions, as
announced on 31 October 2022, and will update investors in due
course.
Non-IFRS Measures
Bitcoin and Bitcoin Equivalent Mining Margin is a financial
measure not defined by IFRS. We believe Bitcoin and Bitcoin
Equivalent Mining Margin has limitations as an analytical tool. In
particular, Bitcoin and Bitcoin Equivalent Mining Margin excludes
the depreciation of mining equipment and so does not reflect the
full cost of our mining operations, and it also excludes the
effects of fluctuations in the value of digital currencies and
realised losses on the sale of digital assets, which affect our
IFRS gross profit. This measure should not be considered as an
alternative to gross margin determined in accordance with IFRS, or
other IFRS measures. This measure is not necessarily comparable to
similarly titled measures used by other companies. As a result, you
should not consider this measure in isolation from, or as a
substitute analysis for, our gross margin as determined in
accordance with IFRS.
The following table shows a reconciliation of gross margin to
Bitcoin and Bitcoin Equivalent Mining Margin, the most directly
comparable IFRS measure, for the months of September 2022 and
October 2022.
Month Ended 30 September Month Ended 31 October
2022 2022
----------------------------- -----------------------------------------
GBP(000s) $(000s) GBP(000s) $(000s)
Gross profit/(loss) (5,807) (6,560) (1,486) (1,673)
Gross Margin (154%) (154%) (42%) (42%)
Non mining revenue - - (41) (47)
Depreciation of mining
equipment 1,723 1,947 1,934 2,177
Change in fair value of
digital currencies(1) 4,967 5,611 658 741
Realised (profit)/loss
on sale of digital currencies 55 62 64 72
Mining Profit 938 1,060 1,129 1,271
Bitcoin and Bitcoin Equivalent
Mining Margin 25% 25% 32% 32%
-------------------------------- -------------- ------------- --------------------------- ------------
(1) Due to unfavourable changes in the fair value of BTC there
was a loss on the change in fair value of digital currencies in
September 2022 and October 2022.
* Dollar values translated from pound sterling into U.S. dollars
using the noon buying rate of the Federal Reserve Bank of New York
as at the applicable dates
Inside Information and Forward-Looking Statements
This announcement contains inside information and includes
forward-looking statements which reflect the Company's or, as
appropriate, the Directors' current views, interpretations, beliefs
or expectations with respect to the Company's financial
performance, business strategy and plans and objectives of
management for future operations. These statements include
forward-looking statements both with respect to the Company and the
sector and industry in which the Company operates. Statements which
include the words "expects", "intends", "plans", "believes",
"projects", "anticipates", "will", "targets", "aims", "may",
"would", "could", "continue", "estimate", "future", "opportunity",
"potential" or, in each case, their negatives, and similar
statements of a future or forward-looking nature identify
forward-looking statements. All forward-looking statements address
matters that involve risks and uncertainties because they relate to
events that may or may not occur in the future. Forward-looking
statements are not guarantees of future performance. Accordingly,
there are or will be important factors that could cause the
Company's actual results, prospects and performance to differ
materially from those indicated in these statements. In addition,
even if the Company's actual results, prospects and performance are
consistent with the forward-looking statements contained in this
document, those results may not be indicative of results in
subsequent periods. These forward-looking statements speak only as
of the date of this announcement. Subject to any obligations under
the Prospectus Regulation Rules, the Market Abuse Regulation, the
Listing Rules and the Disclosure and Transparency Rules and except
as required by the FCA, the London Stock Exchange, the City Code or
applicable law and regulations, the Company undertakes no
obligation publicly to update or review any forward-looking
statement, whether as a result of new information, future
developments or otherwise. For a more complete discussion of
factors that could cause our actual results to differ from those
described in this announcement, please refer to the filings that
Company makes from time to time with the United States Securities
and Exchange Commission and the United Kingdom Financial Conduct
Authority, including the section entitled "Risk Factors" in the
Company's Registration Statement on Form F-1.
For further information please contact:
Argo Blockchain
Peter Wall via Tancredi +44 203 434
Chief Executive 2334
--------------------------
finnCap Ltd
--------------------------
Corporate Finance
Jonny Franklin-Adams
Seamus Fricker
Joint Corporate Broker
Sunila de Silva +44 207 220 0500
--------------------------
Tennyson Securities
--------------------------
Joint Corporate Broker
Peter Krens +44 207 186 9030
--------------------------
OTC Markets
--------------------------
Jonathan Dickson +44 204 526 4581
jonathan@otcmarkets.com +44 7731 815 896
--------------------------
Tancredi Intelligent Communication
UK & Europe Media Relations
--------------------------
Emma Valgimigli
Fabio Galloni-Roversi Monaco +44 7727 180 873
Nasser Al-Sayed +44 7888 672 701
argoblock@tancredigroup.com +44 7915 033 739
--------------------------
About Argo:
Argo Blockchain plc is a dual-listed (LSE: ARB; NASDAQ: ARBK)
blockchain technology company focused on large-scale cryptocurrency
mining. With its flagship mining facility in Texas, and offices in
the US, Canada, and the UK, Argo's global, sustainable operations
are predominantly powered by renewable energy. In 2021, Argo became
the first climate positive cryptocurrency mining company, and a
signatory to the Crypto Climate Accord. Argo also participates in
several Web 3.0, DeFi and GameFi projects through its Argo Labs
division, further contributing to its business operations, as well
as the development of the cryptocurrency markets. For more
information, visit www.argoblockchain.com .
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