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(Alliance News) – Argo Blockchain PLC shares jumped on Friday after it announced a “strategic hosting services agreement” with an undisclosed third party.
Shares in the London-based blockchain technology company were trading 13% higher at 39.00 pence each in London on Friday midday.
According to the new agreement, Argo will host and operate mining machines owned by the third party at Argo’s Helios facility in Texas.
Included in the agreement is a profit-sharing arrangement whereby Argo receives 25% of the net profits generated from the bitcoin mined by the third party’s mining machines.
Argo also posted an operational update for August. During August, Argo mined 235 bitcoin or bitcoin equivalents compared to 219 in July. This, the company said, was primarily due to an increase in total hashrate capacity at the Helios facility.
The hashrate refers to the total combined computational power that is being used to mine and process transactions.
Based on exchange rates and cryptocurrency rates during the month mining revenue amounted to GBP4.4 million in August compared to GBP3.9 million in July, a rise of 13%.
However, the company reported a mining margin of 20% in August compared to 37% in July.
The reduction in the mining margin was driven by an 11% decrease in the price of bitcoin and higher power costs for the Helios facility.
Chief Executive Officer Peter Wall said: “The increase in bitcoin and bitcoin equivalents mined this month reflects the hard work put in by our operations team. The new Bitmain SJ19 Pros are already showing great promise, and we look forward to unlocking their full potential in the coming months as we complete their installation. Additionally, we are excited about our strategic hosting agreement, which enables us to utilize excess capacity at Helios and further increase our hashrate.
“While our mining margin is lower than expected, the recent high natural gas and electricity prices are a temporary reflection of broader market dislocations, and we are confident that electricity prices will align with historical trends in the near future.”
By Chris Dorrell; [email protected]
Copyright 2022 Alliance News Limited. All Rights Reserved.
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