Cryptocurrency mining company Argo Blockchain plc (LON:ARB) has entered into an agreement to sell its data center located in Mirabel, Quebec for a total value of $6.1 million.
(All references to $ are in USD, derived from Canadian dollar amounts at an exchange rate of 0.74.)
The Mirabel Facility has five megawatts of electrical capacity, implying a sale price of $1.2 million per megawatt for the Transaction. The net proceeds from the Transaction are expected to first repay in full the outstanding mortgage loan of the Mirabel Facility, with the balance expected to be used to repay debt owed to Galaxy Digital Holdings, Ltd.
The Transaction is expected to strengthen Argo’s balance sheet by reducing outstanding debt by $5.4 million. Galaxy debt outstanding as of February 29, 2024, with pro forma adjustments for the Transaction and subsequent debt repayment, is $14.0 million, a 60% reduction from Galaxy’s original debt balance of $35.0 million.
Importantly, the Transaction allows the Company to de-leverage the balance sheet with minimal impact on the Company’s revenues. Following the Transaction, Argo will retain ownership of all mining machinery currently located at the Mirabel facility.
The Company is in the process of relocating the machinery to its Baie Comeau facility and expects to sell some previous generation machinery 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 the execution of a definitive stock purchase agreement and certain regulatory approvals.