Argo Blockchain PLC announces operations update in September

Operational update September 2022

LONDON, UK / ACCESSWIRE / October 11, 2022 / Argo Blockchain plc(“Argo” or the “Company”), a global leader in cryptocurrency mining (LSE:ARB)(NASDAQ:ARBK), is pleased to provide the following operations update for September 2022.

During the month of September, Argo mined 215 Bitcoin or Bitcoin Equivalents (collectively, BTC) compared to 235 BTC in August 2022. The decrease in BTC mined is primarily due to a 12% increase in average network difficulty during September. In addition, the company continues to curtail operations at its Helios facility in Dickens County, Texas during periods of high electricity prices.

As of September 30, 2022, the company held 512 Bitcoins, of which 167 were BTC equivalents. The company closely monitors market conditions and actively uses a variety of derivatives to manage BTC holdings and reduce risk exposure.

Based on daily exchange rates and cryptocurrency prices during the month, mining revenue in September amounted to £3.78 million. [$4.27 million*] (August 2022: £4.39 million [$5.23 million*]). Argo generated this income with a Bitcoin and Bitcoin Equivalent Mining Margin (Mining Margin) of 25% for the month of September (an increase from 20% in August 2022).

The company currently has 2.5 EH/s of total hashrate capacity and expects to complete the installation of Bitmain S19J Pro machines by the end of October 2022. After accounting for the sale of 3,400 mining machines to a third party that was reported on October 7, I By 2022, the company now expects to achieve a total hash rate capacity of 2.9 EH/s when the installation is complete.

Organizational changes

Effective October 15, Perry Hothi will step down from his role as Chief Technology Officer at Argo and will act as a transition advisor to the company. The technology function will be led by Jean Esquier, who currently serves as vice president of technology and development.

In addition, the company is pleased to welcome Jason Zaluski to the team as Vice President of Mining. In this role. Jason will strengthen the company’s core team and focus on optimizing the operation of Argo’s mining fleet. Jason brings vast experience in blockchain technology and Bitcoin mining, having worked at Hut 8 Mining as Vice President of Strategic Technology.

Management commentary

Peter Wall, CEO of Argo, said: “As another month of high energy prices and uncertain market conditions came to an end, Argo continues to execute on its plans to grow its business at Helios. We are nearing completion of the installation of our new Bitmain S19J Pro- machines, which will increase our total hashrate capacity to 2.9 EH/s by the end of the month.This will represent an 81% increase in total hashrate capacity since Q1 2022. I continue to be proud of our team for their efforts to deliver long-term growth in the interest of our shareholders.”

“Additionally, I want to thank Perry Hothi for his long years of service and great contributions to Argo,” Wall continued. “Perry has been with us from the very beginning and I wish him well as he moves forward.”

Perry Hothi, Chief Technology Officer at Argo, said: “I have decided to leave Argo because I believe the technology team is ready. I have achieved everything I set out to do at Argo. Working with Jean and the rest of the technology team over the last few years has been a once in a lifetime experience. I am deeply grateful for your skill, heart and friendship. Your time is now.”

Non-IFRS measures

Bitcoin and Bitcoin Equivalent Mining Margin is a financial measure that is not defined by IFRS. We believe Bitcoin and Bitcoin Equivalent Mining Margin have limitations as an analytical tool. In particular, Bitcoin and Bitcoin Equivalent Mining Margin excludes impairment of mining equipment and therefore does not reflect the full cost of our mining operations, and it also excludes the effect 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 similar titles used by other companies. As a result, you should not consider this measure in isolation from, or as a replacement analysis for, our gross margin as determined under IFRS.

The table below shows a reconciliation of Bitcoin Gross Margin and Bitcoin Equivalent Mining Margin, the most directly comparable IFRS measure, for the months of July 2022 and August 2022.

(1) Due to unfavorable changes in fair value of BTC, there was a loss on the change in fair value of digital currencies in August 2022 and September 2022.

* Dollar values ​​translated from pounds sterling to US dollars using the noon buying rate of the Federal Reserve Bank of New York on current dates

Inside information and forward-looking statements

This announcement contains inside information and includes forward-looking statements that reflect the current views, interpretations, beliefs or expectations of the Company or, as applicable, the Board of Directors with respect to the Company’s financial results, business strategy and management’s plans and objectives 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 that include the words “expects”, “intends”, “plans”, “believes”, “projects”, “anticipates”, “will”, “goals”, “goals”, “may”, “would”, “could”, “continue”, “estimate”, “future”, “possibility”, “potential” or, in each case, their negative and similar statements of a future or forward-looking nature identify forward-looking statements. All forward-looking statements deal with matters that involve risk and uncertainty because they relate to events that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. Consequently, there are or will be important factors that may lead to the company’s actual results, prospects and results deviating significantly from those stated 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, these 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, 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 laws and regulations, the Company undertakes no public obligation 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 the Company files 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.

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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 powered primarily by renewable energy. In 2021, Argo became the first climate-positive cryptocurrency mining company, signing 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.

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SOURCE: Argo Blockchain PLC