Argo Blockchain inks new agreements, reports higher revenues for October

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Argo Blockchain PLC (LON:ARB) has reported a number of agreements that the crypto miner said will expand its capacity while also improving its margins through lowering hosting costs and generating an additional revenue stream.

The AIM-listed firm said it has signed an equipment lease with Celsius Network, a cryptocurrency lending platform, for 4,500 Bitmain Antminer S19 and S19 pro miners for a term of 24 months. Argo said the lease, which spreads the new equipment cost over 24 monthly payments, will allow it to add capacity, upgrade its mining technology and achieve economies of scale while “fully retiring the capitalised cost of the miners over the term of the lease”.

READ: Argo Blockchain takes first steps to buy Canadian data centres

The mining machines are valued at over US$10mln and are expected to be fully operational by February next year and will add around 430 petahash to the firm’s computing power.

The group also said the newly leased machines will be hosted by Core Scientific, which will provide physical hosting and access to electrical power in the US.

Meanwhile, Argo said it has also partnered with a third party which has purchased a new fleet of 4,378 miners to mine for its own account which are due for delivery between February and March next year.

The company said it has entered a managed cryptocurrency mining services agreement with the third party whereby Argo will manage the mining operations of the machines for an initial term of 24 months in return for a monthly fee.

“We are delighted to partner with Celsius and Core Scientific as we pursue our growth plans. These agreements allow us to secure very competitive terms on both new mining equipment and hosting costs”, Argo chief executive Peter Wall said in a statement.

“Argo continues to successfully expand its mining capacity while simultaneously improving mining margins and is in a strong position to benefit from the amelioration in market conditions”, he added.

Higher revenues and wider margins in October

In a separate announcement, Argo reported increased revenues and wider margins in October from its cryptocurrency mining operations.

In a monthly update, the firm reported revenues of £1.2mln, up from £1.1mln in September, while its average monthly mining margin rose to 40% from 37%. The company also reported that it had mined 126 Bitcoin or Bitcoin equivalent (BTC) in October compared to 127 in the prior month, taking the total amount of BTC mined in the year-to-date to 2,254.

At the end of the month, Argo said it held 137 BTC, while its mining capacity stood at 16,000 machines. The company added that it has worked closely with crypto mining hardware firm Bitmain to find a solution for its underperforming T17 Antminers, and has agreed to retire some of the machines.

 “Argo has produced consistent mining revenue this month at a very healthy margin and continues to be one of the world’s most efficient publicly-listed cryptominers”, Wall said.

“We are delighted to have resolved the issues with some of our underperforming machines and Bitmain remains a valuable partner. Having successfully carried out a significant capital investment programme we are in pole position to benefit from improving industry conditions”, the CEO added.

Argo’s shares were up 11% at 7.9p in late-morning trading on Thursday.

–Adds agreement news and updates share price–

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