Bitcoin (BTC) miner Argo Blockchain (ARBK) looks to raise $25 million to $35 million to fund expansion and reach its target of 4.1 exahash/second (EH/s) hashrate, a measure of computing power on the Bitcoin network, by the first quarter of next year, CEO Peter Wall said during a investor call on Thursday.
On Wednesday, Argo lowered its 2022 hashrate expectations from 5.5 EH/s to 3.2 EH/s. In the half year earnings press release Wall said “the revision to our hashrate guidance reflects our current expectations for delivery and deployment of the custom machines we are developing with ePIC Blockchain Technologies that utilize the Intel Blockscale ASIC chips.”
Explaining further during its earnings conference call, Wall said that delays in the delivery and deployment of Intel's (INTC) Blockscale ASIC chips are due to redesigning of the rigs and current market conditions. He added that Argo decided to push back the delivery of the machines to increase their efficiency, close to Bitmain's Antminer S19 XP, whereas before they were geared towards higher hashrate.
The CEO also disclosed that the firm has cut back its order from Intel. The machines, designed in collaboration with ePIC Blockchain, will arrive in the first quarter of next year, he said during conference call.
The funds the company wants to raise is now lower than the $50 million it had mentioned in the first quarter, in line with Argo's decreased hashrate guidance, Wall said on Thursday. There are some good "non-traditional" opportunities for raising capital, but shareholders will be "taken care of" as far as share dilution is concerned, he added.
Argo is also looking to sign a fixed-price purchasing power agreement some time in the next few months, once power prices have decreased. This would grant it a stable price for electricity, a major cost for miners.
Argo has so far been paying spot market prices, which have been high due to macroeconomic factors, the company said in its results. This has also meant it can't participate in demand response in Texas, under which miners can sell back their power to the grid at times of high demand, Wall said in the call.
UPDATE (Sept. 1, 16:40 p.m. UTC): Adds quote from CEO in second paragraph, adds more details of the redesign process.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.