Struggling Bitcoin (BTC) miner Argo Blockchain sold its Helios mining facility in Texas to Galaxy Digital for $65 million and also got a $35 million loan from the company as part of the deal, according to a Dec. 28 statement.
Following the news, Google Finance data shows that its London shares were up by over 100% to £7.22 as of press time.
Argo repays old loans using new financing
According to the press statement, Argo used the proceeds from the Helios facility sales and part of the loan to repay its debt, which includes the money it owes crypto lender NYDIG.
In a separate video, CEO Peter Wall confirmed that the firm had repaid its NYDIG debt and another secured lender using the proceeds of its new deal. Wall said:
“This transaction with Galaxy is a transformational one for Argo and benefits the Company in several ways. It reduces our debt by $41 million and provides us with a stronger balance sheet and enhanced liquidity to help ensure continued operations through the ongoing bear market.”
According to Wall, the new deal was the only “only viable path forward” for the company considering Bitcoin’s declining value and the rising energy cost.
Argo maintains equipment ownership
Argo’s mining equipment in the Helios facility would remain operational. The firm said it maintains ownership of all the mining machines in that facility, adding that it has entered into a two-year hosting agreement with Galaxy. Argo will pay Galaxy an undisclosed hosting fee.
Meanwhile, Argo secured its Galaxy loan by using its 23,619 Bitmain S19J Pro mining machines currently operating at Helios and some of its machines located in data centers in Canada as collateral.
The firm added that its focus is growing and optimizing the operations at its two data centers in Quebec, Canada, fully powered by low-cost hydroelectricity.
Argo disclosed that it will not yet report its earnings for the third quarter of 2022. The firm also added that its stock trading would resume on Dec. 28 when both the London Stock Exchange and the Nasdaq are open for trading.