September Operational Update + LOI Signing

Press Release

07 October 2020

Argo Blockchain PLC

('Argo' or 'The Company') 

September Operational Update + LOI Signing

Argo, the leading cryptocurrency miner based in the UK (LSE:ARB), is pleased to provide the following operational update for September 2020.

During the month of September, Argo mined 127 Bitcoin or Bitcoin Equivalent (BTC) compared to 166 in August. This takes the total amount mined year-to-date to 2,128 BTC.  The lower number of coins mined in September compared to August can be attributed to the significant rise in mining difficulty throughout September although other factors, as detailed below, also impacted production. 

Based on daily foreign exchange rates and cryptocurrency prices during the month, mining revenue in September amounted to £1.1 million (August 2020: £1.49 million). Argo generated this income at an average monthly mining margin of approximately 37% for September (August 2020: 44%). The change in margin is largely attributable to the aforementioned rise in difficulty, as well as the lower price for both Bitcoin and Zcash in September compared to August. 

At the end of September, the company held 126 BTC in Bitcoin and BTC equivalent, in accordance with the Company's asset management strategy. Argo's total mining capacity remains at 18,000 machines, with 730 Petahash of SHA-256 hash power, and 280 Megasols of equihash mining capacity. 

In addition to the increased difficulty, mining in September was impacted by a contractual dispute between the Company's hosting provider and their subcontractor, to which the Company was not a party.  As a result of the dispute, a portion of the company's overall hashrate was offline for four days which reduced the cryptoassets mined by this hardware during the month. The Company has taken steps to secure greater control over all of its mining machines by entering into direct discussions with the subcontractor, and does not anticipate any further interruptions arising from the dispute between the host and its subcontractor, and in doing so, the Company considers it has taken the appropriate and necessary steps to protect its interests. 

The Company is also pleased to announce it has entered into a conditional Letter of Intent (LOI) with GPU.one, the Canadian data centre provider, setting out the material terms and conditions on which the Company would make a strategic purchase of the two data centres in Quebec owned and operated by GPU.one which currently house Argo's cryptocurrency mining equipment. The data centres have a combined total of 20MW of power capacity, and if completed, the acquisition would provide the Company with long term stability and direct control over the facilities in which its mining machines are housed. Subject to entry into definitive agreements and satisfaction of a number of conditions, the Company envisages that the purchase will be funded out of the company's existing deposits with GPU.one, and cash.  

Peter Wall, Chief Executive of Argo, said: "Subject to completion of the potential transaction with GPU.one, the acquisition of these data centres represents a significant opportunity for us to take better control of our production and to improve our complement of assets. Furthermore, directly owning the facilities in which our mining assets are installed, which we believe will lower our mining cost base, will provide long term advantages. We look to the future with much confidence."

This announcement contains inside information.

For further information please visit www.argoblockchain.com or contact: