Арго Блокчейн (LSE:ARB), one of the leading Bitcoin (BTC/USD) miners in the world, has показал, its facing a potential negative cash flow if it doesn’t secure fresh financing in the short term to provide a financial buffer for its operations.
In early September, Invezz переправу on Argo’s mining margin dropping to 20% amid the crypto price crash and higher electricity costs.
Argo Blockchain might have to cease operations
Publicly-traded Argo Blockchain said in its latest update that its previously-announced financing deal is highly unlikely to be consummated within the circumstances envisioned at the beginning of October.
On 7 October 2022, Argo revealed it had signed a letter of intent with a strategic investor as it looked to raise £24 million ($27 million). The financing would have been via a subscription deal for miner’s ordinary shares. However, Argo now believes the plan has fallen through, a scenario that sees it currently exploring new financing opportunities.
Argo needs to secure working capital that should see it navigate the next twelve months.
If the plans to get new financing deals do not go through, then Argo faces a bleak near-term. The Bitcoin miner could be forced to curtail operations, Monday’s update read.
«Хотя Argo изучает другие возможности финансирования, нет никакой гарантии, что какие-либо окончательные соглашения будут подписаны или какие-либо транзакции будут завершены. Если «Арго» не удастся завершить какое-либо дальнейшее финансирование, в ближайшем будущем ее денежный поток станет отрицательным, и ей придется сократить или прекратить свою деятельность».
The company’s update also includes confirmation of the sale of 3,843 Bitmain S19J Pro mining machines for approximately £4.8 million ($5.6 million) as it looked to acquire more cash. The sale means the cryptocurrency miner’s total hashrate capacity will not increase as projected, but rather remain at 2.5 EH/s.
The latest news comes as Argo shares fell sharply on Monday, with prices down by more than 45% at the time of writing. The miner’s stock has lost nearly 90% of its value year-to-date.