Argo Blockchain in debt, sells flagship Dickens County bitcoin facility to Canadian group
Despite much fanfare and excitement in May, the company behind a Dickens County cryptocurrency facility has sold the months-old flagship.
Argo Blockchain completed a sale of their Helios facility, stationed in Dickens County, Texas, to Canada-based Galaxy Digital Holdings for $65 million. They also struck a deal to refinance "asset-backed loans, and entered into a hosting agreement with Galaxy to maintain Argo’s mining machine at the Helios facility," according to a company news release. The refinancing included a $35 million loan from Galaxy.
The funds from the sale will "be used to repay all existing indebtedness, prepayment interest, and other fees of approximately $84 million (£70 million) and $1 million (£1 million), owed to NYDIG ABL LLC and North Mill Commercial Finance, LLC, respectively," a release stated.
This reduced Argo's debt by $41 million.
"It ... provides us with a stronger balance sheet and enhanced liquidity to help ensure continued operations through the ongoing bear market," said Peter Wall, Argo CEO, of the sale. "It also allows us to focus on optimizing our operations with significantly lower capex and opex requirements."
Rising costs, summer energy and market struggles attributed to decision
On Wednesday, Dec. 28, Argo Blockchain CEO Wall released a video explaining what was going on with their Texas facility which opened in May.
"It was not an easy decision to sell Helios," Wall said. "But, given the state of the market, the position we've been in as a company, we feel like this allows us to live to fight another day."
Two of the biggest issues Wall named were the company's debt to NYDIG and the expensive costs of Texas power in the summer. Those, paired with a tumultuous cryptocurrency market, factored into Argo's struggles.
"It's kind of a perfect storm for Bitcoin mining, with high energy costs and low prices of Bitcoin," he said. "We opened our facility right as that storm began."
Additional changes to technology, the war in Ukraine and rising costs impacted the amount of Bitcoin Argo could put out.
"We saw this situation we were in, and it became clear that we needed to explore various financing and restructuring options," he said. One option, negotiating their debt, fell through.
Though the facility sold, Argo will continue running the mining machines. Wall also left the video on a reassuring note.
"We've been through (tough) markets before as a company ... there are cycles, you go through them," Wall said. "The key is to do well when things are good, and make sure that you're able to continue through the hard ones. I do feel like we're in a better place now than we were a month ago. As always, onwards and upwards."
The release issued on Dec. 28 also indicated that Argo would focus more on their Canadian facilities.
This article originally appeared on Lubbock Avalanche-Journal: Dickens County crypto-mining facility sold to Canadian company
