Cryptocurrency miner Argo Blockchain plc (LON:ARB) has entered into an agreement for the sale of its data center located in Mirabel, Quebec for total consideration of $6.1 million.
(All references to $ are to USD, being derived from the Canadian dollar amounts at an exchange rate of 0.74.)
The Mirabel Facility has five megawatts of electrical capacity, implying a $1.2 million per megawatt sales price for the Transaction. The net proceeds from the Transaction are expected to first repay the Mirabel Facility’s outstanding mortgage in full, with the remainder expected to be used to repay debt owed to Galaxy Digital Holdings, Ltd.
The Transaction is expected to strengthen Argo’s balance sheet, reducing outstanding debt by $5.4 million. The Galaxy debt balance as of 29 February 2024, with pro forma adjustments for the Transaction and subsequent debt repayment, is $14.0 million, a 60% reduction from the original Galaxy debt balance of $35.0 million.
Importantly, the Transaction enables the Company to delever the balance sheet with minimal impact to the Company’s revenue. Following the Transaction, Argo will maintain ownership of all mining machines currently located at the Mirabel Facility.
The Company is in the process of relocating the machines to its Baie Comeau facility and anticipates selling certain prior generation machines representing approximately 140 PH/s. Going forward, the Company’s total hashrate capacity is expected to be 2.7 EH/s.
The Transaction reduces the Company’s non-mining operating expenses by $0.7 million annually.
The Transaction is expected to close by the end of March 2024 upon the successful completion of customary closing conditions, including entry into a definitive share purchase agreement and certain regulatory approvals.
