Shares plunged nearly 15 per cent for Argo Blockchain after the cryptocurrency mining giant penned an agreement with an undisclosed party to host and operate mining machines at its Helios facility in Texas.
Up to 32 megawatts of power capacity will be provided by the company, which is roughly enough to power over 10,000 mining machines.
In order to preserve capital, Argo also announced plans to sell 3,400 mining machines for £6m, as well as raise £24m via Proposed Subscription with a strategic investor.
The company has seen headwinds from the price of both natural gas and electricity caused by the geopolitical situation in Europe and low levels of natural gas storage in the US.
These factors, coupled with the decline in the price of Bitcoin since March 2022 and the increased mining difficulty, has reduced profitability and free cash flow generation.
Peter Wall, Chief Executive at Argo Blockchain, said: “We have worked relentlessly to create and execute on a strategy that will support our objective of sustainable growth for the Company.”
“We also understand the importance of maintaining flexibility in our approach in order to respond swiftly to external factors. We are glad to have a strong relationship with our lender NYDIG, who has been working with us to provide flexibility and to help ensure the long term success of the Company.”