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The publicly-listed
cryptocurrency mining company from Wall Street (NASDAQ: ARBK) and the City (LSE:
ARB) Argo Blockchain plc announced today (Monday), that it has fully repaid its
$35 million loan from Galaxy Digital Holdings. This clears the debt four months
ahead of the current schedule and nearly 18 months before the original
repayment deadline.
Argo Blockchain Clears $35
Million Galaxy Loan Ahead of Schedule
The crypto
mining firm began repaying the loan in May 2023, with the balance reduced to
approximately $5.7 million as of June 30, 2024. Argo repaid $11.5 million in
principal during 2023, with the remaining $23.5 million settled in 2024.
Successfully
repaying $35 million of high-interest rate debt ahead of schedule is a
testament to Argo’s financial discipline,” Argo’s Chief Executive Officer,
Thomas Chippas, commented.
“We remain committed to optimizing our capital structure and driving long-term
value for our shareholders.”
The
loan dates back to late 2022, when Mike Novogratz’s Galaxy saved a
cryptocurrency miner from bankruptcy during a period when digital assets’
prices were low and mining companies were struggling to achieve profitability.
As part of a strategic deal, Argo sold its Texas-based cryptocurrency mine,
Helios, for $65 million and benefited from refinancing loans.
The latest
news on debt reduction came
from March, when the company cut its debt by 60% as part of a new deal
worth over $6 million. Now, Argo has managed to fully repay the remaining
obligations.
The early
repayment strategy aligns with Argo’s focus on strengthening its balance sheet
and reducing financial liabilities. The company utilized a combination of
operational cash flow, proceeds from equity raises, and sales of non-core
assets to facilitate the repayment without significantly impacting its hash
rate.
This move
is expected to yield visible savings in interest expenses. In 2023, Argo
incurred $4.6 million in interest on the Galaxy debt, compared to $1.4 million
through the repayment date of August 9, 2024.
Reduced Losses but Lower
Production
In the
first quarter of 2024, Argo Blockchain reported notable financial improvements.
The company’s revenue rose to $16.8 million, marking a 4% increase from the
previous quarter and a substantial 50% growth from the same period last year.
Additionally, Argo significantly reduced its net loss to $3.2 million,
achieving a threefold decrease. The mining margin also increased from $5.2
million to $6.4 million, resulting in a gross profit of $1.9 million, a
recovery from a loss reported in the first quarter of 2023.
Despite
these financial gains, the company’s latest production results reveal a
downturn. In its recent monthly report for July, Argo mined only 48 Bitcoins, a
decline of over 60% compared to last year’s production, albeit a slight
improvement from recent months.
In a
separate development towards the end of the last month, Argo announced a
private placement agreement with an institutional investor, involving the
issuance of 57,800,000 ordinary shares at £0.1125 each on the LSE. This
agreement also includes warrants for an additional 57,800,000 shares at the
same price, bolstering the company’s financial position amidst fluctuating
production outcomes.
This article was written by Damian Chmiel at www.financemagnates.com.
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