Argo Blockchain divests mining facility Helios for $65 million as it battles bankruptcy concerns

• Argo Blockchain Plc (NASDAQ: ARBK) subsidiary agreed to sell its Helios facility and real estate in Dickens County, Texas, and related assets to Galaxy Digital Holdings, Ltd for $65m (£54m) and refinance its asset-backed loans.

• Galaxy agreed to host Argos mining machines located on Helios.

• Galaxy will provide Argo with a new asset-backed loan of $35 million (£29 million) secured by a security package that includes 23,619 Bitmain S19J Pro mining machines currently operating at Helios and specific machines located at Argo’s Canadian data centers.

• The cash proceeds received from the sale of Helios, together with a portion of the loans under the asset-backed loan, will help repay all existing debt, prepayment interest and other fees.

• In December, Argo warned it may have to file for Chapter 11 bankruptcy protection due to insufficient cash, Reuters reports.

• Argo said the agreements would allow the company to continue its operations.

• Helios will likely provide Galaxy with up to 800 MW of capacity, allowing the company to grow its proprietary and hosted bitcoin mining infrastructure beyond its previously stated goals.

• Located on a 160-acre campus, Helios began operations in May 2022 and is currently staffed by 40 employees who manage day-to-day operations.

• In light of the transaction with Galaxy, the company will not report earnings results for Q3 2022.

• Galaxy plans to use Helios as its flagship proprietary mining facility and retain the entire operations team.

• Galaxy will also begin hosting third-party bitcoin miners at Helios, creating a new revenue stream for the company.

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

• The report added that this year has been challenging for crypto miners, with shares of Marathon Digital Holdings, Inc (NASDAQ: MARA), Riot Blockchain, Inc (NASDAQ: RIOT), and Valkyrie Bitcoin Miners ETF (NASDAQ: WGMI ) is down 80-90% as it struggles with cash and debt.

• Price action: ARBK shares traded 52% higher at $0.8188 in the premarket at last check on Wednesday.

• Photo Via Company

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