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- Argo has been exploring ways to continue its operation, reduce its rising debts, and continue having access to the power grid in Texas.
- The troubled miner sounded the alarm about its potential collapse early in the month after it revealed that it was at risk of not having enough cash to support business operations in January.
Struggling Bitcoin mining firm, Argo Blockchain is about to get some relief from the threat of bankruptcy after it reached an agreement with Galaxy Digital to sell its Texas-based Helios mining facility. According to reports, Argo will get a new $35 million loan from Mike Novogratz’s crypto trading company, with the loan collateralized by the firm’s mining facility.
The deal will see Argo Blockchain sell its Helios mining facility in Dickens County, Texas, to Galaxy for $65 million to pay off its growing debts. Peter Wall, Argo’s CEO, stated that over the past few weeks, Argo has been exploring ways to continue its operation, reduce its rising debts, and continue having access to the power grid in Texas as the crypto winter worsens.
Wall added that the agreement with Galaxy is exciting for the struggling miner, as it provides Argo with a stronger balance sheet and enough liquidity to ensure optimum operations. Meanwhile, Argo released the announcement for the deal on December 28, stating that it intends to refinance its asset-backed loans with a new one. With the sale of Helios, the mining firm noted that this would significantly reduce its total debt by $41 million.
Argo’s Issues
The miner’s trouble was already in the making at the start of the market bear trend in early 2022 when mining firms had to sell more BTC tokens than they mined to cover the rising operational costs. Apart from this, the increasing hash rate and mining difficulty worsen the already challenging conditions for miners.
Accordingly, Argo Blockchain was among the mining companies badly hit by these factors, with its stock price dropping by more than 50% after announcing a negative cash inflow in some of its earnings reports this year. The troubled miner sounded the alarm about its potential collapse early in the month after it revealed that it was at risk of not having enough cash to support business operations in January.
The London-based miner also failed to release a Q4 report in its statement due to the UK’s Financial Conduct Authority’s (FCA) requirement of half-annual reportage. Additionally, the US Securities and Exchange Commission (SEC) has labeled the firm a foreign private issuer and is mandated to comply with regulatory filing requirements in the country.
Letting go of Helios
The Helios mining facility is the largest mining infrastructure of Argo Blockchain, with nearly 180 megawatts of power capacity. Helios began its operation in May 2022 under Argo, seeking to add 800 megawatts of energy consumption and 20 exahashes of computing power in the future. Due to the liquidity issue, the equipment will now become Galaxy Digital’s flagship mining facility.
After its acquisition, and if Galaxy expanded its capacity, Helios would make it one of the largest Bitcoin miners in the industry. According to the agreement statement, Argo will pen a two-year deal with Galaxy to allow it to utilize the Helios facility to keep mining using its computers. Despite this positive news, BTC’s price is down 1.3 percent in the last 24 hours and trades at $16,663 according to current Coingecko data.
