Key takeaways:
- Galaxy Digital purchases the top mining facility from Argo Blockchain.
- Argo Blockchain used the funds raised from that transaction to settle their indebtedness to NYDIG.
Argo Blockchain, a cryptocurrency mining startup, made the painful decision to sell Helios, its flagship mining facility, in order to survive the present bear market.
CEO of Argo Blockchain, Peter Wall, publicly announced a deal on December 28 to sell the Helios facility to Mike Novogratz’s cryptocurrency investment firm Galaxy Digital for $65 million. Argo has already begun paying out the Bitcoin it has mined to Galaxy to pay off the debt.
A new $35 million equipment financing loan will also be given to Argo by Galaxy to help the struggling miner pay down its debt. “We’ve utilized the revenues of that deal to pay off the debt that we owed to NYDIG and a little bit to another secured lender,” Peter added in reference to the new Galaxy loan.
According to the CEO, the new acquisitions would enable Argo to continue its mining activities by reducing its overall debt by $41 million, boosting liquidity, and improving the operational structure.
Peter stated that the deal was the “only feasible route ahead” amid the bear market under pressure from rising energy prices and the low price of bitcoin.
The company’s CEO further emphasized that despite Argo selling Helios, none of its mining equipment has yet to be sold. Peter declared that mining would continue at the Helios site and that Argo had a contract in place to continue using their mining equipment there. He proclaimed:
“Staying at Helios will also allow us to continue to access power through the Texas grid and participate in the ancillary services, which are provided by ERCOT.”
The agreement is finalized around six months after Argo’s formal May 2022 launch of Helios. The Helios plant, the largest Argo mining facility, is located in Dickens County and has a 200 MW capacity. Comparatively, another Argo facility, Baie Comeau, operates at roughly 15 MW.
Argo needs assistance obtaining finance after failing to get $27 million through the subscription for ordinary shares; thus, the information is being made public. Argo issued a warning that it will have to shut down in October because it has been unable to get more money.
Midway through December, Argo said that it was negotiating the sale of its assets and “engaged in an instrument financial intermediary” in an effort to avoid filing for bankruptcy.
