Bitcoin Miner Argo Blockchain Sells Texas Facility to Galaxy Digital for $65 Million

Bitcoin mining company Argo Blockchain announced that it has entered into definitive agreements with Galaxy Digital Holdings that will see the miner sell its Helios facility in Dickens County, Texas.

The deal, which will also see Galaxy host Argo’s mining machines on Helios, is worth $65m (£54m), Argo Blockchain said in a press release on Wednesday.

Additionally, Galaxy will provide Argo with a new asset-backed loan for an aggregate principal amount of $35m (£29m) with an initial term of 36 months, using the 23,619 Bitmain S19J Pro mining machines currently operating on Helios and certain machines that located at Argos data centers in Canada as security.

Argo Blockchain has seen its stock plunge over 90% over the year due to rising energy costs and falling Bitcoin prices.

To address its financial challenges, the firm began selling off its Bitcoin reserves back in June, earmarking the capital to fund operating expenses. Earlier this year, Argo also saw a $27 million fundraiser, which fell through in October.

On Tuesday, the firm requested a suspension of trading in its shares and unsecured notes on the NASDAQ stock exchange until Wednesday.

Argo to repay existing debts

In today’s announcement, the firm said the cash proceeds from the sale of the Texas facility, along with a portion of the borrowings under the asset-backed loan, will be used to repay existing debt, prepayment interest and other charges of approximately $84m (£70m) and $1m (£1 million), owed to NYDIG and North Mill Commercial Finance respectively.

“This transaction with Galaxy is a transformational transaction for Argo and benefits the company in several ways,” Argo CEO Peter Wall said in a statement. “It reduces our debt by $41m (£34m) and gives us a stronger balance sheet and improved liquidity to ensure continued operations through the ongoing bear market.”

According to Argo, the firm will now look to shift focus to growing and optimizing operations at its two data centers in Quebec, fully powered by low-cost hydropower.

The company said it currently has approximately 140 PH/s hash rate capacity at its Baie-Comeau and Mirabel facilities, with 15 MW and 5 MW of power capacity respectively.

The announced agreement also means that Argo will not report earnings results for Q3 2022 at this time.

The company explained that it has been designated by the SEC as a foreign private issuer and is required to comply with regulatory requirements for registration in the domestic market, with the UK Treasury requiring half-yearly reporting of financial results.