Argo Blockchain Plc 6-K, filed Sep 9, 2022
Argo Blockchain Plc (ARBK)
6-K
2022-09-09
For: 2022-09-09
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Added on
April 05, 2026
About this 6-K
Argo Blockchain Plc filed this 6-K on September 9, 2022.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM 6-K
_____________________
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of September, 2022
Commission File Number: 001-40816
_____________________
Argo Blockchain plc
(Translation of registrant’s name into English)
_____________________
9th Floor
16 Great Queen Street
London WC2B 5DG
England
(Address of principal executive office)
_____________________
Indicate
by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F
☒
Form
40-F ☐
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(7): ☐
EXHIBIT INDEX
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Exhibit
No.
1
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Description
August
2022 Operational Update dated 9 September 2022
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Press Release
9 September 2022
Argo Blockchain plc
("Argo" or "the Company")
August 2022 Operational Update
Helios Hosting Agreement
Strategic Hosting Agreement
Argo
Blockchain plc, a global leader in cryptocurrency mining (LSE: ARB;
NASDAQ: ARBK), is pleased to announce that it has entered into a
strategic hosting services agreement (the "Hosting Agreement") with
an undisclosed third party.
As part of the Hosting Agreement, Argo will host and operate mining
machines owned by the said third party at its Helios facility in
Dickens County, Texas. Argo has committed to providing the
undisclosed third party with up to 32 MW of power capacity, which
is enough electricity to power more than 10,000 mining machines.
The Hosting Agreement includes a profit-sharing arrangement whereby
Argo receives 25% of the net profits generated from the Bitcoin
mined by the hosted mining machines. This arrangement ensures the
alignment of both parties.
Operational Update
During
the month of August, Argo mined 235 Bitcoin or Bitcoin Equivalents
(together, BTC) compared to 219 BTC in July 2022. The increase in
BTC mined is primarily due to an increase in total hashrate
capacity at the Helios facility compared to the previous month. The
Company is continuing to install the new Bitmain S19J Pro machines
at Helios, having achieved a total hashrate capacity of 2.5 EH/s by
the end of August. Argo remains on track to complete the
installation of the Bitmain machines by October 2022, which will
increase its total hashrate capacity to 3.2 EH/s.
As of 31 August 2022, the Company
held 1,098 Bitcoin, of
which 244 were BTC Equivalents.
The Company closely monitors market conditions and is actively
using a variety of derivatives to manage BTC holdings and mitigate
risk exposure.
Based
on daily foreign exchange rates and cryptocurrency prices during
the month, mining revenue in August amounted to £4.39 million
[$5.23 million*] (July 2022: £3.89 million [$4.73
million*]).
Argo
generated this income at a Bitcoin and Bitcoin Equivalent Mining
Margin of 20% for the month of August (July 2022: 37%). This
reduction in mining margin was driven by two factors: an 11%
decrease in the price of Bitcoin and high power costs at Helios. As
discussed on the Company's recent earnings call, Argo's power
purchase agreement (PPA) at Helios provides for electricity at spot
power prices, which are significantly higher than in previous
years. In August 2022, spot power prices in West Texas averaged
nearly $0.09 per kWh, which is nearly three times the average price
during the month of August in prior years.
While
many factors determine the spot power price in Texas, one of the
primary factors is the price of natural gas. During the month of
August 2022, natural gas prices were 204% higher than the average
price during the month of August in 2018 - 2021. The higher natural
gas prices can be attributed to several factors, including the war
in Ukraine and low natural gas storage levels in the US.
Peter
Wall, Chief Executive at Argo Blockchain, said, "The increase in
BTC mined this month reflects the hard work put in by our
operations team. The new Bitmain SJ19 Pros are already showing
great promise, and we look forward to unlocking their full
potential in the coming months as we complete their installation.
Additionally, we are excited about our strategic hosting agreement,
which enables us to utilize excess capacity at Helios and further
increase our hashrate."
"While our mining margin is lower than expected, the recent high
natural gas and electricity prices are a temporary reflection of
broader market dislocations, and we are confident that electricity
prices will align with historical trends in the near future.
Further, electricity prices are seasonal, and we expect prices to
decrease as temperatures come down through the cooler months. We
will continue to monitor the market and evaluate our options for
securing a long-term fixed price PPA."
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 realized 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 July 2022 and August
2022.
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Month Ended 31 July
2022
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Month Ended 31 August 2022
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||
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£
(000s)
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$ (000s)
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£(000s)
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$ (000s)
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Gross
profit/(loss)
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3,643
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4,433
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(4,471)
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(5,334)
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Gross Margin
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94%
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94%
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(110%)
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(110%)
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Depreciation of mining equipment
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1,201
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1,461
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1,644
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1,961
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Change in fair value of digital
currencies
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(1,886)
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(2,295)
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2,944
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3,512
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Realised (profit)/loss on sale of digital currencies
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(1,500)
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(1,826)
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765
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913
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Mining Profit
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1,458
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1,773
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882
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1,052
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Bitcoin and Bitcoin Equivalent Mining Margin
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37%
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37%
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20%
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20%
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(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 August 2022.
In July 2022, there was a favourable change in fair value of BTC
and a gain on the change in fair value of digital
currencies.
*
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:
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Argo
Blockchain
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Peter
Wall
Chief
Executive
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via
Tancredi +44 203 434 2334
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finnCap
Ltd
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|
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Corporate
Finance
Jonny
Franklin-Adams
Tim
Harper
Joint
Corporate Broker
Sunila
de Silva
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+44
207 220 0500
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Tennyson
Securities
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Joint
Corporate Broker
Peter
Krens
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+44
207 186 9030
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OTC
Markets
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Jonathan
Dickson
jonathan@otcmarkets.com
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+44
204 526 4581
+44
7731 815 896
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Tancredi
Intelligent Communication
UK
& Europe Media Relations
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|
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Emma
Valgimigli
Fabio
Galloni-Roversi Monaco
Nasser
Al-Sayed
argoblock@tancredigroup.com
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+44
7727 180 873
+44
7888 672 701
+44
7915 033 739
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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.
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
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Date: 9
September, 2022
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ARGO BLOCKCHAIN PLC
By:
Name:
Peter Wall
Title:
Chief Executive Officer
Name:
David Zapffe
Title:
General Counsel
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