Bitcoin mining company Argo Blockchain announced Friday that it is on track to secure $40 million to combat its rising liquidity pressures.
To achieve this, Argo seeks to unlock $6 million from its creditor, sell 10% of its mining equipment for $7 million, and raise $27 million from “a strategic investor.”
Argo Unlocks $6M from NYDIG
Peter Wall, the CEO of Argo Blockchain, shared details on the development via a video published on YouTube, where he noted that the company has been impacted by the rising cost of electricity and the lowered price of Bitcoin, which has hovered around the $20k mark.
Argo amended the terms of its $84 million loan with Bitcoin lending company, NYDIG. Part of the amendment plans entails that Argo will “unlock” around $6 million “that was previously restricted in a reserve account with NYDIG.”
3400 Mining Machines Sold for $7M
To keep the company’s liquidity in check, Wall confirmed the sale of 3,400 pieces of Argo’s mining equipment, Antminer S19J Pro. The sale generated about $7 million in cash for the company.
The Argo boss noted that the equipment sold represented “roughly 10% of the machines” at the company’s mining facility, Helios. It is noteworthy that this move will reduce the hash rate capacity of the company from 3.2EH/s which it had in Q2 to 2.9EH/s by month end, as the company now has a lesser number of mining machines.
Argo to Raise $27M from “Strategic Investor”
Wall further stated that the company is set to issue 87 million shares to “a strategic investor” which represents 15% of the entire company. Even though the deal was carried out at a 20% discount, it will raise $27 million for Argo. The deal is expected to be completed within 30 days.
Wall believes the move will help the company scale through the next 12 months.
“We’re confident that we have the liquidity and the balance sheet necessary to get us through the next 12 months,” he said.
Meanwhile, several other companies offering Bitcoin mining services have been impacted by the soaring cost of energy and the crypto bear market. In June, Bitfarms, a bitcoin mining firm, confirmed the sale of 3,000 BTC which was worth about $62 million at the time. A month earlier, some bitcoin miners had sold their accumulated BTC to offset liquidity pressure.
