Argo Blockchain Plc 6-K, filed Aug 5, 2022
Argo Blockchain Plc (ARBK)
6-K
2022-08-05
For: 2022-08-05
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Added on
April 05, 2026
About this 6-K
Argo Blockchain Plc filed this 6-K on August 5, 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 August, 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
July
2022 Operational Update dated 5 August 2022
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Press Release
05 August 2022
Argo Blockchain PLC
("Argo" or "the Company")
July 2022 Operational Update
Grant of Options
Operational Update
Argo Blockchain plc, a global leader in cryptocurrency mining (LSE:
ARB; NASDAQ: ARBK), is pleased to provide the following operational
update for July 2022.
During the month of July, Argo mined 219 Bitcoin or Bitcoin
Equivalents (together, BTC) compared to 179 BTC in June 2022. Based
on daily foreign exchange rates and cryptocurrency prices during
the month, mining revenue in July amounted to £3.89 million
[$4.73 million*] (June 2022 £3.38 million [$4.35 million*]).
Argo generated this income at a Bitcoin and Bitcoin Equivalent
Mining Margin of 37 % for the month of July (June 2022: 50%). As of
31 July 2022, the Company held 1295 Bitcoin, of which 227 were BTC
Equivalents.
Financing Update
During the month of July, the Company sold 887 Bitcoin at an
average price of approximately $22,670. Proceeds were used to
reduce obligations under a BTC-backed loan agreement with Galaxy
Digital, as well as to fund operating expenses and growth
capital. As
of 31 July 2022, the Company had an outstanding balance of $6.72
million under the BTC-backed loan, a significant reduction from the
maximum outstanding balance of $50 million in Q2
2022.
Helios Power Update
During the month of July, Argo's electricity costs at its Helios
facility in Texas continued to be higher than previously
anticipated. Electricity costs have increased around the world,
largely due to higher natural gas prices stemming from the war in
Ukraine, as well as increased demand for electric-powered air
conditioning during an unusually hot and dry summer. The Company
currently has a power purchase agreement (PPA) whereby it pays
index power prices, and is evaluating options for a long-term,
fixed price PPA to sign in the near future. Until then, the Company
will continue to closely monitor real-time and projected prices and
adjust its operations to avoid instances of high electricity
prices.
In the middle of July, ERCOT issued a conservation alert urging all
residential, commercial and industrial electricity users to reduce
electricity consumption during specific afternoon hours when
electricity demand would be at its highest. Argo, along with most
large-scale Bitcoin miners in Texas, proactively shut down
operations and reduced
usage by over 1,000 MW, thereby reducing strain on the grid during
peak demand. In
extraordinary circumstances like that, Argo believes that
electricity should be prioritised for uses that ensure the health
and safety of the public and is proud to be able to reduce its
operations in order to contribute to grid
stability.
Hashrate Update
During the month of July, the Company completed its machine swap of
the approximately 10,000 S19s which were hosted with Core
Scientific, finalising its strategic pivot to a self-hosted
business model. In owning and operating its own infrastructure, the
Company expects to generate better performance from its mining
machines and have greater control of operations, including
operational expenses.
As part of the process of transferring its mining operations out of
third party facilities and into its own data centres, Argo
conducted a comprehensive review of its entire mining fleet, with a
focus on its S17 and T17 miners (collectively, the "17 series
machines"). There have been reports of high failures among the 17
series machines within the crypto mining sector and the Company has
experienced similar results within its own fleet. After carrying
out a review and audit of this portion of its fleet, the Company
has determined that approximately 460 PH/s of its 17 series
machines are not operational and are not suitable for repair.
Despite the operational challenges of the 17 series machines, they
have been profitable for the Company, generating a total ROI in
excess of 260% in aggregate to date.
After removal of the non-operational 17 series machines and those
undergoing maintenance, the Company's total hashrate at the end of
July was approximately 2.23EH/s. This figure takes into account the
continued installation of the S19J Pros ordered from Bitmain and
the conclusion of the Core machine swap. Going forwards, the
Company will remove from its calculations of total hashrate
non-functional 17 series machines and those 17 series machines
undergoing maintenance.
"We would like to thank Core Scientific for acting as an invaluable
and reliable business partner in this transition period which
represents a crucial step for Argo's future development. The
completion of the S19 machines swap marks a further consolidation
of our infrastructure, allowing us to retain further control of our
operations and adjust them in accordance with our needs at any
given time." said Peter Wall, Argo's CEO. "While there have been
some challenges in operating the 17 series machines, we are pleased
with the ROI we have achieved on this portion of our mining
infrastructure."
Grant of Options
On 27 June 2022, the Company granted an aggregate 250,000 options
over ordinary shares of the Company to recently hired
employees.
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 June 2022 and July
2022.
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Month Ended 30 June 2022
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Month Ended 31 July 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 (loss)/profit2
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(14,925)
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(18,657)
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3,643
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4,433
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Gross Margin2
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(429%)
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(429%)
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94%
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94%
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Depreciation of mining equipment1
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2,350
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2,937
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1,201
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1,461
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Charge in fair value of digital currencies
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9,216
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11,521
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(1,886)
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(2,295)
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Realised loss on sale of digital currencies
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5,087
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6,359
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(1,500)
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(1,826)
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|
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Mining Profit2
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1,728
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2,160
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1,458
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1,773
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Bitcoin and Bitcoin Equivalent Mining Margin2
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50%
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50%
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37%
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37%
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(1) Due to a
change in estimation technique of the machine depreciation and as a
result of the Core swap the depreciation has fallen from June 2022
to July 2022.
(2) Due to
favourable changes in fair value of Bitcoin and Bitcoin equivalents
there was a gain on the change in fair value of digital currencies
in July 2022. In June 2022 due to unfavourable changes in fair
value of Bitcoin and Bitcoin Equivalents there was a loss 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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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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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: 5
August, 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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