Argo Blockchain sold the Helios mining facility in Texas

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Argo Blockchain, based in the United Kingdom, has sold its Helios mining facility in Texas to crypto investment firm Galaxy Digital for $65 million. The miner will also receive a new $35 million loan secured by Argo’s mining equipment from noted investor Michael Novogratz’s crypto-focused financial-services firm. Argo CEO Peter Wall said,

“Over the last few months, we have been looking for a way to continue mining through the bear market, reduce our debt load, and maintain access to the unique power grid in Texas…This deal with Galaxy achieves all of these goals, and it lets us live to fight another day.”

Galaxy has also agreed to host the Bitmain S19J Pro fleet at Helios, while Argo retains ownership of all machines. They will be used as collateral for the new loan. Argo went on to say that it had agreed with its other subsidiaries “to guarantee the provision of certain additional collateral for the financing.”

In recent months, bankruptcy has lingered in the Bitcoin mining industry as the market experiences significant downturns due to rising energy prices and declining miner revenues, which has tightened margins and increased profit losses. Argo had been dealing with cost increases and squeezed margins as Bitcoin prices fell and power costs rose at Helios. Wall further stated,

“This transaction with Galaxy is a transformational one for Argo and benefits the Company in several ways. It reduces our debt by $41 million and provides us with a stronger balance sheet and enhanced liquidity to help ensure continued operations through the ongoing bear market.”

Argo Blockchain’s stock has dropped more than 90 percent this year due to rising energy costs and falling Bitcoin prices. To address its financial difficulties, the company began selling off its Bitcoin reserves in June, with the proceeds going toward operating expenses. Argo also planned a $27 million fundraise earlier this year, but it fell through in October. Galaxy Digital plans to enter into ’a fixed-price power purchasing agreement with a licensed retail provider for the required electricity.’ Argo, in turn, will have access to the power at a predetermined rate and will pay Galaxy a hosting fee.

Shashank is founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash