Argo Blockchain shares sank on Friday as the Bitcoin miner released ‘strategic actions’ to strengthen the balance sheet as the company faced the challenges of higher power costs and low crypocurrency prices.
In a broad range of measures, Argo Blockchain appeared to be trying to raise capital in anyway they could, including selling off their mining machines, while continuing to host them at their Helios facility in Dickens County, Texas. Argo had previously announced a hosting agreement in August that gave Argo 25% of the net profits generated from the Bitcoin mined by the hosted mining machines.
Argo said they had also received a letter of intent from a strategic partners for a share subscription totalling £24m to help fund working capital and general corporate activities. The partner will have the right to appoint two non-exec directors to the board.
The subscription is limited to the partner meaning no other party will be involved in the capital raise.
Argo Blockchain shares sank 14% on the news to trade at 29p and lowest intraday levels since 2020.
“We have worked relentlessly to create and execute on a strategy that will support our objective of sustainable growth for the Company,” said Peter Wall, Chief Executive at Argo Blockchain.
“We also understand the importance of maintaining flexibility in our approach in order to respond swiftly to external factors. We are glad to have a strong relationship with our lender NYDIG, who has been working with us to provide flexibility and to help ensure the long term success of the Company.”
Argo Blockchain mined 235 Bitcoin or Bitcoin Equivalents in August and held 1,098 Bitcoin.