UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 6-K
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REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of December, 2022
Commission File Number: 001-40816
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Argo Blockchain plc
(Translation of registrant’s name into English)
_____________________
9th Floor
16 Great Queen Street
London WC2B 5DG
England
(Address of principal executive office)
_____________________
Indicate
by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form
40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(1):
☐
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(7): ☐
EXHIBIT INDEX
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Exhibit
No.
1
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Description
Transformational
Strategic Transaction with Galaxy dated 28 December
2022
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Press Release
28 December 2022
Argo Blockchain plc
("Argo" or "the Company")
Announcement of Transformational Strategic Transactions with Galaxy
Digital Holdings, Ltd.
● Argo's subsidiary to sell its
Helios facility to Galaxy for $65 million (£54 million) and
refinance asset-backed loans with a new $35 million (£29
million) loan with Galaxy
● Transactions will reduce total
indebtedness by $41 million (£34 million) and simplify Argo's
operating structure
● Argo will maintain ownership
of all mining machines, and Galaxy will host Argo's fleet of
Bitmain S19J Pros at Helios
● Transactions will strengthen
Argo's balance sheet, improve Argo's liquidity position, and enable
the Company to continue operations
Argo Blockchain plc (LSE: ARB; NASDAQ: ARBK), a global leader in
cryptocurrency mining, announces that it has entered into
definitive agreements with Galaxy Digital Holdings, Ltd. (TSX:
GLXY) ("Galaxy") under which an Argo subsidiary will sell its
Helios facility in Dickens County, Texas for $65 million (£54
million) and refinance its asset-backed loans. Additionally, Galaxy
has agreed to host Argo's mining machines located at Helios. The
transactions are expected to close on Wednesday, 28 December
2022.
Sale of Helios to Galaxy and New Asset-Backed Loan
Pursuant to an equity purchase agreement, an Argo subsidiary will
sell its Helios facility and real property in Dickens County, Texas
and related assets to Galaxy for $65 million (£54 million),
subject to customary post-closing adjustments. In addition, Galaxy
will provide Argo with a new asset-backed loan in an aggregate
principal amount of $35 million (£29 million) with an initial
term of 36 months. This financing will be secured by a collateral
package that includes 23,619 Bitmain S19J Pro mining machines
currently operating at Helios and certain machines located at
Argo's Canadian data centers. Argo has agreed to guarantee, on an
unsecured basis, its subsidiaries' obligations under the definitive
agreements, and along with its other subsidiaries, has agreed to
guarantee, on an unsecured basis, and provide certain additional
collateral for, the financing. The Company has also committed to
working with Galaxy to ensure a smooth transition at Helios and
minimize any disruption to operations.
The cash proceeds received from the sale of Helios, along with a
portion of the borrowings under the asset-backed loan, will be used
to repay all existing indebtedness, prepayment interest, and other
fees of approximately $84 million (£70 million) and $1 million
(£1 million), owed to NYDIG ABL LLC and North Mill Commercial
Finance, LLC, respectively. Upon this repayment, approximately $6
million (£5 million) will be returned to the Company from a
collateral account controlled by NYDIG ABL LLC.
Hosting Agreement
Under a two-year hosting agreement with Galaxy, Argo's 23,619
Bitmain S19J Pro mining machines currently operating at Helios will
remain in operation at Helios. As the owner of Helios, Galaxy
intends to enter into a fixed-price power purchase agreement
("PPA") with a licensed retail electricity provider to procure
electricity for the facility. The hosting agreement provides that
Argo will have access to this electricity at the PPA rate. Argo
will pay Galaxy a hosting fee and will collaborate on designing a
curtailment strategy in order to participate in certain demand
response programs offered by the Electric Reliability Council of
Texas, which manages the Texas power grid.
The hosting agreement allows Argo to keep its mining machines
operating at Helios and mitigate any mining machine downtime from
the sale of the Helios facility. Furthermore, the Company believes
that the immersion-cooling system it developed and implemented at
Helios provides for a superior operating environment for these
machines, representing approximately 2.36 EH/s.
Renewed Focus on Canadian Operations
The Company's Canadian assets are not affected by the agreements
with Galaxy except for the use of certain mining machines and other
assets located in Quebec as collateral for the asset-backed loan.
Initially, Argo plans to refocus its efforts on growing and
optimizing operations at its two data centers in Quebec, which are
powered fully by low-cost hydroelectricity. The Company currently
has approximately 140 PH/s of hashrate capacity at its Baie-Comeau
and Mirabel facilities, which have 15 MW and 5 MW of power
capacity, respectively.
Third Quarter Earnings Results and Suspension of Trading on
Nasdaq
In light of the transaction with Galaxy, the Company will not
report earnings results for Q3 2022 at this time. The Company is
designated by the SEC as a foreign private issuer and is required
to comply with regulatory filing requirements in its home market.
The UK Financial Conduct Authority requires semi-annual reporting
of financial results.
As previously disclosed, the Company requested a suspension of
trading of its ADSs and unsecured notes on Nasdaq on Tuesday, 27
December 2022. Trading on Nasdaq is expected to resume on
Wednesday, 28 December 2022 when both the London Stock Exchange and
the Nasdaq are open for trading.
Management Commentary
Peter Wall, Argo's Chief Executive, said, "This transaction with
Galaxy is a transformational one for Argo and benefits the Company
in several ways. It reduces our debt by $41 million (£34
million) and provides us with a stronger balance sheet and enhanced
liquidity to help ensure continued operations through the ongoing
bear market. It also allows us to focus on optimizing our
operations with significantly lower capex and opex
requirements."
Wall continued, "Argo will maintain ownership of its fleet of
Bitcoin mining machines, which represents approximately 2.5 EH/s of
total hashrate capacity. Our miners currently operating at Helios
will continue to be hosted there by Galaxy, which is a
high-quality, institutional participant in the Bitcoin mining
space."
Company Advisors
McDermott Will & Emery LLP and Fladgate LLP acted as legal
advisers to Argo. Stifel GMP acted as a financial adviser, and
Berkeley Research Group, LLC provided secondary independent
financial advice to the Company. Houlihan Lokey acted as the
financial adviser to Argo's Board of Directors.
Inside Information and Forward-Looking Statements
This announcement contains inside information and includes
forward-looking statements which reflect the Company's or, as
appropriate, the Directors' current views, interpretations, beliefs
or expectations with respect to the Company's financial
performance, business strategy and plans and objectives of
management for future operations. These statements include
forward-looking statements both with respect to the Company and the
sector and industry in which the Company operates. Statements which
include the words "remains confident", "expects", "intends",
"plans", "believes", "projects", "anticipates", "will", "targets",
"aims", "may", "would", "could", "continue", "estimate", "future",
"opportunity", "potential" or, in each case, their negatives, and
similar statements of a future or forward-looking nature identify
forward-looking statements. All forward-looking statements address
matters that involve risks and uncertainties because they relate to
events that may or may not occur in the future, including the risk
that the Company may receive the benefits contemplated by its
transactions with Galaxy, the Company may be unable to secure
sufficient additional financing to meet its operating needs, and
the Company may not generate sufficient working capital to fund its
operations for the next twelve months as contemplated.
Forward-looking statements are not guarantees of future
performance. Accordingly, there are or will be important factors
that could cause the Company's actual results, prospects and
performance to differ materially from those indicated in these
statements. In addition, even if the Company's actual results,
prospects and performance are consistent with the forward-looking
statements contained in this document, those results may not be
indicative of results in subsequent periods. These forward-looking
statements speak only as of the date of this announcement. Subject
to any obligations under the Prospectus Regulation Rules, the
Market Abuse Regulation, the Listing Rules and the Disclosure and
Transparency Rules and except as required by the FCA, the London
Stock Exchange, the City Code or applicable law and regulations,
the Company undertakes no obligation publicly to update or review
any forward-looking statement, whether as a result of new
information, future developments or otherwise. For a more complete
discussion of factors that could cause our actual results to differ
from those described in this announcement, please refer to the
filings that Company makes from time to time with the United States
Securities and Exchange Commission and the United Kingdom Financial
Conduct Authority, including the section entitled "Risk Factors" in
the Company's Registration Statement on Form F-1.
For further information please contact:
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Argo
Blockchain
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Peter
Wall
Chief
Executive
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ir@argoblockchain.com
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finnCap Ltd
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Corporate
Finance
Jonny Franklin-Adams
Seamus Fricker
Joint
Corporate Broker
Sunila
de Silva
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+44
207 220 0500
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Tennyson Securities
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Joint
Corporate Broker
Peter Krens
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+44
207 186 9030
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Tancredi Intelligent Communication
UK
& Europe Media Relations
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Salamander Davoudi
Emma Valgimigli
Fabio Galloni-Roversi Monaco
Nasser Al-Sayed
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argoblock@tancredigroup.com
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About Argo:
Argo Blockchain plc is a dual-listed (LSE: ARB; NASDAQ: ARBK)
blockchain technology company focused on large-scale cryptocurrency
mining. With mining facilities in Quebec, mining operations in
Texas, and offices in the US, Canada, and the UK, Argo's global,
sustainable operations are predominantly powered by renewable
energy. In 2021, Argo became the first climate positive
cryptocurrency mining company, and a signatory to the Crypto
Climate Accord. Argo also participates in several Web 3.0, DeFi and
GameFi projects through its Argo Labs division, further
contributing to its business operations, as well as the development
of the cryptocurrency markets. For more information,
visit www.argoblockchain.com.
This information is provided by RNS, the news service of the London
Stock Exchange. RNS is approved by the Financial Conduct Authority
to act as a Primary Information Provider in the United Kingdom.
Terms and conditions relating to the use and distribution of this
information may apply. For further information, please
contact rns@lseg.com or
visit www.rns.com.
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
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Date:
28 December, 2022
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ARGO BLOCKCHAIN PLC
By:
Name:
Peter Wall
Title:
Chief Executive Officer
Name:
David Zapffe
Title:
General Counsel
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