Argo Blockchain hit by 28% drop in mining revenue
Argo Blockchain mined 25% less bitcoin than anticipated in December due to the firm’s decision to curtail mining operations at Helios amid a Texas storm.
Argo Blockchain saw a drastic fall in mining activity in December 2022 as a result of the winter storm that hit Texas.
On January 11, Argo issued its first operational update since selling its premier mining facility, Helios, to Mike Novogratz’s Galaxy Digital. The company reported that it mined 147 Bitcoin or BTC equivalents in December, down from 198 BTC in November 2022.
The company reported that as of December 31, Argo held 141 BTC, with December mining revenue totaling $2.49 million. Argo had a total debt of around $79 million and a bank balance of around $20 million.
Bitcoin miners cut power by 1,500 MW amid the storm
According to the announcement, the decrease in BTC mined was primarily due to Argo reducing mining activities at Helios in response to a major winter storm in Texas.
The US Department of Energy declared a power emergency in Texas in late December, citing an electricity shortage caused by the effects of harsh winter weather. Amid a huge drop in temperature and strong winds, the demand on the Texas power grid reached its all-time winter high of more than 74,000 megawatts (MW).
Argo CEO Peter Wall noted that the firm’s mining results fell short of expectations because the company had to reduce its power consumption on the grid as a result of the severe weather.
During the winter storm, Argo and other Texas Bitcoin miners cut their power use by an estimated 1,500 MW, Wall said, adding:
“After the winter storm and associated freezing temperatures had subsided, we safely brought Helios back online and resumed operations.”
The cutback caused Argo’s mining revenue to drop from $3.46 million in November to $2.49 million last month, a 28% decline. Its Bitcoin and Bitcoin Equivalent Mining Margin, on the other hand, increased to 48% in December from 29% in November.
Wall noted that Argo eventually planned to sell its Helios facility to Galaxy Digital, announcing the $65 million deal on December 28. The transaction aimed to reduce Argo’s total debt by $41 million in addition to improving the firm’s liquidity and business structure.
Regardless of the sale, Argo will continue to mine at the Galaxy-owned Helios facility. According to Argo, the miner’s total hash rate capacity remains unchanged at 2.5 EH/s.