According to an October 31 press release from Bitcoin miner Argo Blockchain, a key source of investment funding has fallen through for the firm which maintains a major processing plant in northern Dickens County, Texas, leading to a rapid devaluation in the company’s stock value.
Dickens County Judge Kevin Brendle, who visited in person with Argo leadership on Monday onsite at the flagship Helios plant, was assured that the company would stay in touch with county leaders through what it described as “a transitional period.”
At this time, none of the approximately 30 Dickens and Motley County jobs have been affected, Brendle said. The company spokesperson, who did not authorize release of their name, spoke favorably of the entire Helios staff and operation, he said.
While Dickens County hasnotaxabatementagreement in place with Argo or the Helios plant, the county did secure a pledge from the firm last year to employ a minimum of 20 local jobs. Since fourth quarter of 2021 Argo has tapped the local employment base in areas from construction and installation to public relations, security, transportation and more.
As The Texas Spur has reported on numerous occasions since Argo’s public unveiling event last October, the firm has also been generous in sourcing contractor services locally for a wide variety of purchases and has sponsored community events and initiatives. The most visible of these is the rebuilding of the community swimming pool in the city of Spur, which remained uncompleted at sum mer’s
The cryptocurrency market has cooled throughout 2022, but Argo’s Monday announcement caused financial news leader Bloomberg to state, “Bitcoin miner Argo Blockchain Plc warned that it could be forced to shut down after a $27 million share sale appeared to have collapsed, sending the stock plummeting the most since its 2018 initial public offering.”
For Forbes.com, cryptobeat journalist Rose Marie Miller posted Monday that the letter-of-intent deal Argo had announced Oct. 7 “would have given the investor, who was not identified, 87 million shares, accounting for 15.5% of the London-based company’s
equity.”
Miller went on to note that “the company, which has operations in Texas and Quebec, did not respond to requests for comment. The company’s American depositary shares skidded 44% to $1.10 in afternoon trading on Nasdaq. They began the year at $12.16, while bitcoin has skidded about
56% to $20,433.”
DICKENSCOUNTYOUTLOOK.
The county remains “very hopeful that they (Argo) have a Plan B and are having to undergo some formalities,” he said.
Argo’s chief technology officer, Perry Hothi, who was on hand in May 2022 for the Helios facility’s grand opening, resigned his post earlier in October and last week took a top post with Block Inc., known to most for its Square payments processing technology.
The Texas Spur also reached out Monday to Argo representatives for comment on local impacts.
“All corporate news and updates must be deployed via RNS (press release) at this time,” said corporate spokesperson Sarah Miller in response. Miller directed inquires to today’s RNS for details at https://argoblockchain. com/news-room/2022-october- operational-update The corporate communication from the London Stock Exchange news service reads, “Argo Blockchain plc, a global leader in cryptocurrency mining (LSE: ARB; NASDAQ: ARBK), provides the following announcement regarding certain strategic actions that were announced on 7 October
2022.
“As previously disclosed, the Company signed a non-binding LOI with a strategic investor to raise approximately £24 million ($27 million) via a subscription for ordinary shares. The Company no longer believes that this subscription will be consummated under the previously announced terms. Argo is continuing to explore other financing opportunities. “The Company has also taken steps to further maximize liquidity and preserve cash. The Company sold 3,843 newin- box Bitmain S19J Pro machines, representing ~384 PH/s of total hashrate capacity, for cash proceeds of ~£4.8 million ($5.6 million). These machines are the last batch of the original Bitmain order scheduled for installation in October 2022. As a result, the Company's total hashrate capacity remains at 2.5 EH/s. Miller reported that according to Argo’s statement, without further financing “it would become cash-flow negative in the near term and would need to curtail or cease operations” and also reported, “The company said it has sold 3,853 brand new Bitmain S19j Pro machines used in crypto mining, for
$5.6
million.” Dickens County Judge Brendle said that he was not aware whether any of these machines were already located at the Helios facilty, or whether they were equipment still on order.
MORE FROM ARGO STATEMENT.
“While Argo is exploring other financing opportunities,” Argo’s press release read, “there can be no assurance that any definitive agreements will be signed or that any transactions will be consummated. Should Argo be unsuccessful in completing any further financing, Argo would become cash flow negative in the near term and would need to curtail or cease operations. The Company is endeavoring to complete such financing transactions to provide the Company with working capital sufficient for its present requirements, that is for at least the next twelve months from the date of this announcement.”
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