Cryptocurrency mining company Argo Blockchain has made the difficult decision to sell its flagship mining facility Helios in order to survive the current bear market.
Argo Blockchain CEO Peter Wall officially announced on Dec. 28 a deal with Mike Novogratz’s cryptocurrency investment firm Galaxy Digital to sell the Helios facility for around $65 million. Argo has already been selling its mined Bitcoin (BTC) to reduce the loan to Galaxy.
Besides, Galaxy will also provide Argo with a new $35 million equipment financing loan to help the struggling miner reduce its debt. “We’ve used the proceeds from that sale on a new Galaxy loan to pay off the debt we had with NYDIG and a little bit with another secured lender,” Wall said.
The new transactions are intended to reduce Argo’s total debt by USD 41 million and improve liquidity and operating structure, which will allow the company to continue its mining operations, the CEO stated.
Wall noted that the agreement was the “only viable way to survive” to the bear market amid the pressure of high energy costs coupled with the low price of Bitcoin.
The executive also stressed that, Although Argo has sold Helios, the company has not sold any of its mining equipment. “They are going to continue mining at the Helios facility,” Wall said, adding that Argo has also signed an agreement to continue operating its mining machines at Helios. he stated:
“Staying at Helios will also allow us to continue to access power through the Texas grid and participate in ancillary services, which are provided by Ercot.”
The deal comes just six months after Argo officially opened Helios in May 2022. Located in Dickens County, Helios is Argo’s largest mining facility, with 200 megawatts (MW) of electricity. By comparison, another Argo facility, Baie Comeau, operates around 15 MW.
The news comes amid Argo’s struggle for funding, after failing to raise $27 million by subscribing for common shares. In October, Argo declared that it was at risk of closure by failing to get more funding. In mid-December, Argo announced that it was negotiating the sale of its assets and trying to “participate in an equipment financing transaction” to avoid filing for bankruptcy.
Argo did not immediately respond to Cointelegraph’s request for comment.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Keep reading:
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.