UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM 6-K
_____________________
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of August, 2022
Commission File Number: 001-40816
_____________________
Argo Blockchain plc
(Translation of registrant’s name into English)
_____________________
9th Floor
16 Great Queen Street
London WC2B 5DG
England
(Address of principal executive office)
_____________________
Indicate
by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒
Form 40-F
☐
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(7): ☐
EXHIBIT INDEX
Exhibit No.
1
|
Description
Interim
Half Year Results 2022 dated 24 August 2022
|
Press Release
24 August 2022
Argo Blockchain plc
("Argo" or "the Group")
Interim Half Year Results 2022
Argo Blockchain plc, a global leader in cryptocurrency mining (LSE:
ARB; NASDAQ: ARBK), is pleased to announce its results for the six
months to 30 June 2022.
Financial Highlights
●
Total
number of Bitcoin and Bitcoin Equivalent ("BTC") mined during H1
2022 was 939, a 6% increase over the BTC mined in H1
2021
●
Revenues
of £26.7 million ($32.5 million), a decrease of 14% from H1
2021, driven primarily by a decrease in Bitcoin price and an
increase in the global hashrate and associated network difficulty
level
●
Adjusted
EBITDA of £17.1 million ($20.9 million), a decrease of 28%
from H1 2021
●
Mining
margin of 71%, down from 81% in H1 2021. Similar to revenue, this
decrease is largely attributable to the decrease in Bitcoin price
and an increase in network difficulty
●
Pre-tax
loss of £36.9 million ($44.9 million), driven primarily by a
non-cash reduction in the fair value of digital currencies held on
the balance sheet
●
Total
number of BTC held at 30 June 2022 was 1,953, a 54% increase from
1,268 BTC held at 30 June 2021
Operational Highlights
●
Energized
Phase 1 of the Helios facility in Dickens County, Texas and
commenced mining operations on 5 May 2022
●
Increased
hashrate capacity by 38% from 1.6 EH/s at the end of 2021 to 2.2
EH/s at the end of July 2022
●
Obtained
$26.7 million (£20.2 million) of financing from NYDIG secured
by certain electrical infrastructure equipment at
Helios
●
Obtained
up to $70.6 million (£56.3 million) of additional financing
from NYDIG secured by certain Bitmain S19J Pro machines at
Helios
●
Executed
an agreement with ePIC Blockchain Technologies to purchase custom
mining machines for use with Intel's Blockscale ASIC
chip
Post Period End
●
Strengthened balance sheet by reducing exposure on
BTC-backed loan with Galaxy Digital to £5.5 million ($6.7 million)
●
Completed
swap agreement with Core Scientific for approximately 10,000 S19J
Pro machines, which completes the strategic pivot to a self-hosted
business model in which Argo owns and operates its own machines and
infrastructure
●
Released
the Group's 2021 Sustainability Report and maintained climate
positive status by producing no Scope 1 emissions and offsetting
all Scope 2 and Scope 3 emissions through renewable energy credits
and verifiable emissions reductions
Update to Mining Capacity Guidance
In response to current market conditions and to reduce near-term
capital intensity, the Group is updating its year end guidance for
hashrate capacity. The Group expects to achieve 3.2 EH/s of total
hashrate capacity by the end of 2022 and to increase capacity in Q1
2023 to 4.1 EH/s.
Peter Wall, CEO of Argo, said: "The delivery and installation of
the approximately 20,000 S19J Pro machines from Bitmain continues
to progress on schedule, and we still expect to have all of these
machines installed by October 2022. 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 ("ePIC") that utilize the Intel®
Blockscale™ ASIC chips. We have worked closely with ePIC and
Intel to modify the machine design to increase total mining
efficiency, which has delayed our expected deployment schedule.
Further, we are preserving our optionality by reducing our overall
capital spending on these machines as market conditions remain
volatile. We remain confident in the performance of the custom
machines and are excited to deploy them starting in Q1
2023."
Non-IFRS Measures
The following table shows a reconciliation of gross margin to
Bitcoin and Bitcoin Equivalent Mining Margin, the most
directly comparable IFRS measure, for the periods ended 30 June
2022 and 30 June 2021.
|
Period ended
|
Period ended
|
|
30 June 2022
|
30 June 2021
|
|
(unaudited)
|
(unaudited)
|
|
£'000
|
£'000
|
|
|
|
Gross (loss)/profit
|
(34,413)
|
14,533
|
Gross margin
|
(129%)
|
47%
|
Depreciation
of mining equipment
|
10,852
|
4,758
|
Change
in fair value of digital currencies
|
36,025
|
6,407
|
Realised
loss/(gain) on sale of digital currencies
|
6,372
|
(219)
|
Non
mining revenue
|
-
|
(1,148)
|
|
|
|
Mining Profit
|
18,836
|
24,331
|
Bitcoin and Bitcoin Equivalent Mining Margin
|
71%
|
81%
|
The following table shows a reconciliation of Adjusted EBITDA to
net income, the most directly comparable IFRS measure, for the
periods ended 30 June 2022 and 30 June 2021.
|
Period ended
|
Period ended
|
|
30 June 2022
|
30 June 2021
|
|
(unaudited)
|
(unaudited)
|
|
£'000
|
£'000
|
|
|
|
(Loss) / Profit after taxation
|
(30,504)
|
7,214
|
Interest
expense
|
3,477
|
411
|
Income
tax (credit)/expense
|
(6,386)
|
3,484
|
Depreciation/Amortisation
|
11,718
|
4,870
|
Share
based payment
|
2,816
|
1,568
|
Change
in fair value of digital currencies
|
36,025
|
6,407
|
|
|
|
Adjusted EBITDA
|
17,146
|
23,954
|
Inside Information and Forward-Looking
Statements
This announcement contains inside information and includes
forward-looking statements which reflect the Company's or, as
appropriate, the Directors' current views, interpretations, beliefs
or expectations with respect to the Company's financial
performance, business strategy and plans and objectives of
management for future operations. These statements include
forward-looking statements both with respect to the Company and the
sector and industry in which the Company operates. Statements which
include the words "expects", "intends", "plans", "believes",
"projects", "anticipates", "will", "targets", "aims", "may",
"would", "could", "continue", "estimate", "future", "opportunity",
"potential" or, in each case, their negatives, and similar
statements of a future or forward-looking nature identify
forward-looking statements. All forward-looking statements address
matters that involve risks and uncertainties because they relate to
events that may or may not occur in the future. Forward-looking
statements are not guarantees of future performance. Accordingly,
there are or will be important factors that could cause the
Company's actual results, prospects and performance to differ
materially from those indicated in these statements. In addition,
even if the Company's actual results, prospects and performance are
consistent with the forward-looking statements contained in this
document, those results may not be indicative of results in
subsequent periods. These forward-looking statements speak only as
of the date of this announcement. Subject to any obligations under
the Prospectus Regulation Rules, the Market Abuse Regulation, the
Listing Rules and the Disclosure and Transparency Rules and except
as required by the FCA, the London Stock Exchange, the City Code or
applicable law and regulations, the Company undertakes no
obligation publicly to update or review any forward-looking
statement, whether as a result of new information, future
developments or otherwise. For a more complete discussion of
factors that could cause our actual results to differ from those
described in this announcement, please refer to the filings that
Company makes from time to time with the United States Securities
and Exchange Commission and the United Kingdom Financial Conduct
Authority, including the section entitled "Risk Factors" in the
Company's Registration Statement on Form F-1.
For further information, please contact:
Argo
Blockchain
|
|
Peter
Wall
Chief
Executive
|
via Tancredi +44 203 434 2334
|
finnCap Ltd
|
|
Corporate
Finance
Jonny Franklin-Adams
Tim Harper
Joint
Corporate Broker
Sunila
de Silva
|
+44
207 220 0500
|
Tennyson Securities
|
|
Joint
Corporate Broker
Peter Krens
|
+44
207 186 9030
|
OTC Markets
|
|
Jonathan
Dickson
jonathan@otcmarkets.com
|
+44
204 526 4581
+44
7731 815 896
|
Tancredi Intelligent Communication
UK
& Europe Media Relations
|
|
Emma Valgimigli
Fabio Galloni-Roversi Monaco
Nasser Al-Sayed
argoblock@tancredigroup.com
|
+44 7727 180 873
+44 7888 672 701
+44 7915 033 739
|
About Argo:
Argo Blockchain plc is a dual-listed (LSE: ARB; NASDAQ: ARBK)
blockchain technology company focused on large-scale cryptocurrency
mining. With its flagship mining facility in Texas, and offices in
the US, Canada, and the UK, Argo's global, sustainable operations
are predominantly powered by renewable energy. In 2021, Argo became
the first climate positive cryptocurrency mining company, and a
signatory to the Crypto Climate Accord. Argo also participates in
several Web 3.0, DeFi and GameFi projects through its Argo Labs
division, further contributing to its business operations, as well
as the development of the cryptocurrency markets. For more
information, visit www.argoblockchain.com.
Interim Management Report
Argo entered 2022 with two clear goals: to complete Phase 1 of the
Group's Helios facility in Dickens County, Texas while continuing
to optimise the performance of its existing mining
fleet.
Argo is making significant progress towards the completion of Phase
1 of Helios; on 5 May 2022, the Group energized the facility and
commenced mining operations. Argo commemorated this important
milestone with an inauguration ceremony attended by local, state,
and federal elected officials, as well as members of the local
community. Since then, the Group has continued to install new
machines and is on track to complete the installation of its order
of 20,000 S19 J Pro machines from Bitmain by October 2022.
Additionally, in July 2022, Argo completed its machine swap
agreement with Core Scientific, which included the installation of
an additional approximately 10,000 machines at Helios.
Upon completion of the machine swap agreement, the Group now
operates 100% of its owned machines and has no third-party hosting
arrangements. This is the culmination of the strategic pivot away
from hosting to a fully vertically-integrated business model that
began with the acquisition of two data centres in Quebec in early
2021. Being vertically-integrated will allow Argo's management to
have more operational control over its mining machines and drive
increased performance. Additionally, controlling operational
expenses will be critical as the next Bitcoin halving cycle takes
place in May 2024 and the Bitcoin block reward is reduced by
50%.
On the second goal, Argo is operating with a mining margin
of 70% over the period, which is among the highest
of the Group's peers.
As the Group's fleet is upgraded to the newer and more efficient
S19J Pro machines, it continues to review the profitability and
performance of the older machines in its fleet. Post period end,
the Group completed a comprehensive review of its mining fleet and
removed 460 PH/s of non-operational mining capacity from its total
hashrate. This primarily comprises S17 and T17 machines, which
despite a higher rate of failure, have been profitable for the
Group with a total aggregate ROI in excess of 260%.
Argo is also making progress on the custom mining machine it is
developing in collaboration with ePIC Blockchain that is
specifically designed to utilize the Intel Blockscale ASIC chip.
Delivery and deployment of these machines is expected to take place
in the fourth quarter of 2022.
In January, the Group formally launched Argo Labs, its in-house
innovation arm established to identify opportunities within the
broader Web3 and blockchain ecosystem while supporting the
decentralization of various blockchain protocols. Argo allocated
approximately 10% of the Group's crypto assets in its "HODL" to
Argo Labs. Argo Labs is primarily focused on two key areas: network
participation and strategic diversification through the efficient
deployment of the Group's crypto treasury assets. Network
participation consists of providing infrastructure support, running
nodes and validators, and staking innovative projects. Efficient
deployment of the Group's crypto treasury assets includes, among
other things, supporting early-stage projects and participating in
decentralized finance (DeFi), as well as the NFT & metaverse
ecosystem, in each case in furtherance of the Group's general
business operations. By gaining exposure to the broader digital
asset ecosystem, Argo Labs will allow the Group to participate in
disruptive technologies and provide long-term value to its
shareholders.
Despite the overall market drawdown and the decrease in Bitcoin
price, the Group has been able to raise significant capital via
secured debt financing. In March 2022, Argo obtained £20.2
million ($26.7 million) of debt financing from NYDIG, the proceeds
of which were used to continue the build out of Helios. These
borrowings are secured by certain electrical infrastructure
equipment at the Helios facility. Additionally, in May 2022, Argo
announced another debt financing agreement with NYDIG for up to
£56.3 million ($70.6 million); these borrowings are secured by
certain S19J Pro mining machines located at Helios.
The Group is mindful of its carbon footprint and maintains a strong
focus on environmental sustainability. The Group's mining
facilities in Quebec are powered by hydroelectricity, and
operations in Texas are located in the Texas Panhandle where 85% of
the generation capacity comes from wind power. In 2021, the Group
signed the Crypto Climate Accord, committing to achieve net-zero
carbon emissions by 2030. In 2021, Argo reached this goal,
releasing a full climate strategy and becoming the first Bitcoin
mining company to announce climate positive status through its use
of renewable energy to power mining operations, and by offsetting
more scope 2 and 3 greenhouse gas emissions than it emitted in both
2020 and 2021. Additionally, Argo was a founding member of the
Bitcoin Mining Council, which educates the public on the increasing
amount of renewable energy used for Bitcoin mining. It also seeks
to improve reporting and increase the amount of data available on
the use of renewable energy within the sector.
Argo's operations in Quebec and Texas also promote sustainability
by helping to stabilize the electrical grid. In Quebec, Argo
participates in curtailment programs to lower electricity usage
during periods of extreme weather. In Texas, the Helios facility
will participate in demand response programs, whereby it can reduce
its electricity usage and increase availability of power to the
grid in times of peak demand. This flexibility in electricity load
has profound benefits for grid stability and helps to ensure
equilibrium between supply and demand. This was demonstrated in
July 2022 when Argo, along with most large-scale Bitcoin miners in
Texas, voluntarily shut down operations in response to a
conservation alert from ERCOT. Bitcoin miners collectively
curtailed over 1,000 MW of electricity demand, which was then
available during a time of intense heat and peak electricity
demand. This action enabled ERCOT to avoid implementing rolling
blackouts, which would have negatively impacted residential and
commercial electricity users across the state.
Having successfully energized the Helios facility and commenced
mining operations, the Group's strategic focus for the remainder of
2022 is to complete the build out of Phase 1 and lay the groundwork
for the development of future phases at Helios.
Outlook
While the first half of 2022 presented many challenges, I am
delighted with the progress that we have made in developing Helios
and positioning ourselves as a leader in the Bitcoin mining
industry. We designed and built a world-class Bitcoin mining
facility from the ground up, balancing prudent growth with a
volatile market. Furthermore, we continue to lead the industry with
our commitment to sustainability, and we were proud to publish the
Group's 2021 sustainability report which explains our climate
positive status.
As operations at Helios continue to ramp up, there are certain
milestones which will enable us to optimise our operations and
achieve greater efficiency. We are evaluating several opportunities
to execute a long-term, fixed price power purchase agreement (PPA),
which will lock in our electricity prices and reduce our exposure
to short term price fluctuations. Once the fixed price PPA is in
place, Helios will have more optionality to participate in the
demand response programs offered by ERCOT, which will further
reduce its overall electricity cost.
During the period, there has been a global macroeconomic pullback
as investors and central bankers grapple with inflation, the war in
Ukraine, and rising interest rates. These headwinds have impacted
all financial assets, including Bitcoin and the equity of publicly
traded Bitcoin miners.
Argo is well positioned to weather the current downturn with its
large and highly efficient mining infrastructure, runway for
growth, and experienced management team, which has successfully
navigated the Group through previous crypto winters. In response to
the challenging market environment, we have adjusted our treasury
management strategy. Throughout the period, we have been steadily
selling Bitcoin, utilizing derivatives to obtain a higher realized
price than simply selling into the market. In Q2 2022, we sold
Bitcoin at an average realized price of
approximately $28,500, realizing hedge gains in excess of $1,500
per Bitcoin. Proceeds from these sales have been used for operating
expenses, capital expenditures, and to reduce exposure on our
Bitcoin-backed loan.
Despite the challenging economic environment in 2022, we continue
to focus on our strategic priority of completing Phase 1 of Helios
and laying the groundwork to further scale operations.
On behalf of the Board, I would like to thank all shareholders and
staff who share in Argo's mission of powering the world's most
innovative and sustainable blockchain infrastructure.
Onwards and upwards!
Peter Wall
CEO & Interim Executive Chairman
Responsibility Statement
We confirm that to the best of our knowledge:
●
the
Interim Report has been prepared in accordance with International
Accounting Standards 34, Interim Financial Reporting;
and
●
gives
a true and fair view of the assets, liabilities, financial position
and profit/loss of the Group; and
●
the
Interim Report includes a fair review of the information required
by DTR 4.2.7R of the Disclosure and Transparency Rules, being an
indication of important events that have occurred during the first
six months of the financial year and their impact on the set of
interim financial statements; and a description of the principal
risks and uncertainties for the remaining six months of the
year.
●
the
Interim Report includes a fair review of the information required
by DTR 4.2.8R of the Disclosure and Transparency Rules, being the
information required on related party transactions.
The Interim Report was approved by the Board of Directors and
the above responsibility statement was signed on its behalf
by:
Peter Wall
CEO & Interim Executive Chairman
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
|
|
Period ended
|
Period ended
|
|
|
30 June 2022
|
30 June 2021
|
|
|
(unaudited)
|
(unaudited)
|
|
Note
|
£'000
|
£'000
|
|
|
|
|
Revenues
|
5
|
26,700
|
31,086
|
Direct
costs
|
|
(18,716)
|
(10,365)
|
Change
in fair value of digital currencies
|
12
|
(42,397)
|
(6,188)
|
|
|
|
|
Gross (loss) / profit
|
|
(34,413)
|
14,533
|
|
|
|
|
Operating
costs and expenses
|
|
(9,846)
|
(2,293)
|
Share
based payment
|
|
(2,816)
|
(1,568)
|
Foreign
exchange
|
|
10,265
|
437
|
Operating (loss) / profit
|
|
(36,810)
|
11,109
|
|
|
|
|
Gain on
settlement of contingent consideration
|
|
4,038
|
-
|
Gain on
sale of investment
|
|
133
|
-
|
Fair
value (loss) of investments
|
|
(284)
|
-
|
Finance
cost
|
|
(3,477)
|
(411)
|
Equity
accounted loss from associate
|
|
(490)
|
-
|
|
|
|
|
(Loss) / profit before taxation
|
|
(36,890)
|
10,698
|
|
|
|
|
Income
tax credit / (expense)
|
7
|
6,386
|
(3,484)
|
|
|
|
|
(Loss) / Profit after taxation
|
|
(30,504)
|
7,214
|
Other comprehensive income
|
|
|
|
Items
which may be subsequently reclassified to profit or
loss:
|
|
|
|
- Currency translation
reserve
- Equity
accounted OCI from associate
|
|
(4,413)
(8,318)
|
(361)
-
|
-
Fair value loss on intangible digital assets
|
|
(414)
|
-
|
|
|
|
|
Total other comprehensive income, net of tax
|
|
(13,145)
|
(361)
|
|
|
|
|
Total comprehensive income attributable to the equity holders of
the Company
|
|
(43,649)
|
6,853
|
|
|
|
|
Earnings per share attributable to equity owners
(pence)
|
|
|
|
Basic
earnings per share
|
6
|
(6.5p)
|
1.9p
|
Diluted
earnings per share - restricted
|
6
|
(6.5p)
|
1.8p
|
The income statement has been prepared on the basis that all
operations are continuing operations.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
|
|
As at
|
As at
|
|
|
30 June 2022
|
31 December 2021
|
|
|
(unaudited)
|
(audited)
|
|
Note
|
£'000
|
£'000
|
|
|
|
|
ASSETS
|
|
|
|
Non-current assets
|
|
|
|
Investments
at fair value through income and loss
|
|
135
|
403
|
Investments
accounted for using the equity method
|
8
|
5,009
|
13,817
|
Intangible
fixed assets
|
9
|
3,602
|
5,604
|
Property,
plant and equipment
|
10
|
157,795
|
111,604
|
Right
of use assets
|
10
|
374
|
350
|
Total non-current assets
|
|
166,915
|
131,778
|
|
|
|
|
Current assets
|
|
|
|
Trade
and other receivables
|
11
|
99,448
|
63,359
|
Digital
assets
|
12
|
28,092
|
80,759
|
Cash
and cash equivalents
|
|
9,210
|
11,803
|
Total current assets
|
|
136,750
|
155,921
|
|
|
|
|
Total assets
|
|
303,665
|
287,699
|
|
|
|
|
EQUITY AND LIABILITIES
|
|
|
|
Equity
|
|
|
|
Share
capital
|
13
|
478
|
468
|
Share
premium
|
13
|
143,752
|
139,581
|
Share
based payment reserve
|
14
|
4,689
|
1,905
|
Currency
translation reserve
|
14
|
(4,380)
|
33
|
Fair
value reserve
|
|
-
|
414
|
Other
comprehensive (loss)/income of equity accounted
associate
|
|
(1,747)
|
6,571
|
Accumulated
surplus
|
14
|
22,366
|
52,838
|
Total equity
|
|
165,158
|
201,810
|
|
|
|
|
Current liabilities
|
|
|
|
Trade
and other payables
|
15
|
17,633
|
15,245
|
Contingent
consideration
|
|
-
|
8,071
|
Loans
and borrowings
|
16
|
44,716
|
23,391
|
Income
tax
|
|
2,439
|
7,679
|
Deferred
tax
|
|
-
|
286
|
Lease
liability
|
|
11
|
7
|
Total current liabilities
|
|
64,799
|
54,679
|
Non-current liabilities
|
|
|
|
Deferred
tax
|
|
442
|
541
|
Issued
debt - bond
|
16
|
32,892
|
26,908
|
Loans
and borrowings
|
16
|
39,989
|
3,391
|
Lease
liability
|
|
385
|
370
|
Total liabilities
|
|
138,507
|
85,889
|
|
|
|
|
Total equity and liabilities
|
|
303,665
|
287,699
|
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
|
Share capital
|
Share premium
|
Currency translation reserve
|
Share based payment reserve
|
Fair value reserve
|
Other comprehensive income of associates
|
Accumulated surplus/
(deficit)
|
Total
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
Balance at 1 January 2022
|
468
|
139,581
|
33
|
1,905
|
414
|
6,571
|
52,838
|
201,810
|
Total comprehensive profit for the period:
|
|
|
|
|
|
|
|
|
Loss
for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
(30,504)
|
(30,504)
|
Other
comprehensive income
|
-
|
-
|
(4,413)
|
-
|
(414)
|
(8,318)
|
-
|
(13,145)
|
Total
comprehensive income for the period
|
-
|
-
|
(4,413)
|
-
|
(414)
|
(8,318)
|
(30,504)
|
(43,649)
|
Transactions with equity owners:
|
|
|
|
|
|
|
|
|
Stock
based compensation charge
|
-
|
-
|
-
|
2,816
|
-
|
-
|
-
|
2,816
|
Common
stock options/warrants exercised
|
10
|
4,171
|
-
|
(32)
|
-
|
-
|
32
|
4,181
|
Balance at 30 June 2022
|
478
|
143,752
|
(4,380)
|
4,689
|
-
|
(1,747)
|
22,366
|
165,158
|
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
|
Share capital
|
Share premium
|
Currency translation reserve
|
Share based payment reserve
|
Accumulated surplus/
(deficit)
|
Total
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
Balance at 1 January 2021
|
304
|
1,540
|
443
|
75
|
21,965
|
24,327
|
Total comprehensive income for the period:
|
|
|
|
|
|
|
Profit
for the period
|
-
|
-
|
-
|
-
|
7,214
|
7,214
|
Other
comprehensive income
|
-
|
-
|
(361)
|
-
|
-
|
(361)
|
Total
comprehensive income for the period
|
-
|
-
|
(361)
|
-
|
7,214
|
6,853
|
Transactions with equity owners:
|
|
|
|
|
|
|
Common
stock to be issued*
|
-
|
11
|
-
|
-
|
-
|
11
|
Issue
of common stock net of issue costs
|
78
|
53,766
|
-
|
-
|
-
|
53,844
|
Stock
based compensation charge
|
-
|
-
|
-
|
1,568
|
-
|
1,568
|
Common
stock options/warrants exercised
|
-
|
-
|
-
|
(568)
|
568
|
-
|
Common
stock options/warrants lapsed/expired
|
-
|
-
|
-
|
(83)
|
83
|
-
|
Total
transactions with equity owners
|
78
|
53,777
|
-
|
917
|
651
|
55,423
|
|
|
|
|
|
|
|
Balance at 30 June 2021
|
382
|
55,317
|
82
|
992
|
29,830
|
86,603
|
*Shares to be issued relate to share options exercised and paid up
pre period end, however the shares were formally issued post period
end.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
Period ended
|
Period ended
|
|
|
30 June 2022
|
30 June 2021
|
|
|
(unaudited)
|
(unaudited)
|
|
Note
|
£'000
|
£'000
|
Cash flows from operating activities
|
|
|
|
(Loss)
/ profit before taxation
|
|
(36,890)
|
10,698
|
Adjustments for:
|
|
|
|
Depreciation/Amortisation
|
|
11,718
|
4,870
|
Foreign
exchange movements
|
|
(10,266)
|
25
|
Finance
cost
|
|
3,477
|
411
|
Fair
value change in digital assets through profit or loss
|
|
36,025
|
-
|
Investment
fair value movement
|
|
284
|
-
|
Gain on
investment
|
|
(133)
|
-
|
Impairment
of intangible digital assets
|
|
3,009
|
-
|
Share
of loss from associate
|
|
490
|
-
|
Gain on
settlement of contingent consideration
|
|
(4,038)
|
-
|
Share
based payment expense
|
|
2,816
|
1,568
|
Working capital changes:
|
|
|
|
(Increase)
in trade and other receivables
|
11
|
(928)
|
(2,095)
|
Increase
in trade and other payables
|
15
|
2,388
|
15,246
|
Decrease/(increase)
in digital assets
|
12
|
16,642
|
(28,351)
|
Net cash flow from operating activities
|
|
24,594
|
2,372
|
|
|
|
|
Investing activities
|
|
|
|
Acquisition
of subsidiaries, net of cash acquired
|
|
-
|
(272)
|
Proceeds
from sale of investment
|
|
133
|
-
|
Investment
in associate
|
8
|
-
|
(7,353)
|
Other
investments
|
|
-
|
(219)
|
Purchase
of tangible fixed assets*
|
9
|
(49,243)
|
(6,883)
|
Mining
equipment prepayments
|
|
(35,431)
|
(35,471)
|
Net cash used in investing activities
|
|
(84,541)
|
(50,198)
|
|
|
|
|
Financing activities
|
|
|
|
Proceeds
from borrowings
|
16
|
66,331
|
14,375
|
Lease
payments
|
|
(13)
|
(1,734)
|
Loan
repayments
|
|
(8,393)
|
-
|
Interest
paid
|
|
(3,477)
|
(411)
|
Proceeds
from shares issued
|
|
116
|
49,593
|
Net cash generated from financing activities
|
|
54,564
|
61,823
|
Net (decrease)/increase in cash and cash equivalents
|
|
(5,383)
|
13,997
|
Effect
of foreign exchange changes in cash
|
|
2,790
|
-
|
Cash
and cash equivalents at beginning of period
|
|
11,803
|
2,051
|
Cash
and cash equivalents at end of period
|
|
9,210
|
16,048
|
|
|
|
|
|
|
|
|
|
|
|
|
Material non-cash movements:
*£7,277k of the machine additions were funded by the sale of
machines, as part of the Core Scientific swap deal
arrangement
£1,648k purchase of intangible assets were acquired using
Bitcoin
£4,362k payment to Bitmain in respect of machine prepayments
paid in Bitcoin
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
1. COMPANY
INFORMATION
Argo Blockchain PLC ("the company") is a public company, limited by
shares, and incorporated in England and Wales. The registered
office is 9th Floor, 16th Great Queen Street, London, England, WC2B
5DG. The company was incorporated on 5 December 2017 as GoSun
Blockchain Limited and changed its name to Argo Blockchain Limited
on 21 December 2017. Also on 21 December 2017, the company
re-registered as a public company, Argo Blockchain plc. Argo
Blockchain plc acquired a 100% subsidiary, Argo Innovation Labs
Inc. (together "the Group"), incorporated in Canada, on 12 January
2018.
On 4 March 2021 the Group acquired 100% of the share capital of DPN
LLC and was merged into new US entity Argo Innovation Facilities
(US) Inc (also 100% owned by Argo Blockchain plc).
On 11 May 2021 the Group acquired 100% of the share capital of
9377-2556 Quebec Inc and 9366-5230 Quebec Inc. These are held by
Argo Innovation Labs Inc. (Canada).
The principal activities of the group are that of crypto asset
mining and investing in crypto assets and non-fungible
tokens.
The ordinary shares of the Group are listed under the trading
symbol ARB on the London Stock Exchange. The American Depositary
Receipt of the Group are listed under the trading symbol ARBK on
Nasdaq. The Group bond is listed on the Nasdaq Global Select Market
under the trading symbol ARBKL.
2. BASIS OF
PREPARATION
The condensed consolidated interim financial statements for the six
months ended 30 June 2022 have been prepared in accordance with IAS
34 'Interim Financial Reporting' and presented in sterling. They do
not include all of the information required in annual financial
statements in accordance with IFRS, and should be read in
conjunction with the consolidated financial statements for the year
ended 31 December 2021, which have been prepared in accordance
with UK-adopted
international accounting standards and International Financial
Reporting Standards as issued by the IASB. The report of the
auditors on those financial statements was
unqualified.
The financial statements have been prepared under the historical
cost convention, except for the measurement to fair value certain
financial and digital assets and financial
instruments.
Critical accounting judgements and key sources of estimation
uncertainty
The preparation of financial statements in conformity with IFRS
requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates. In preparing these
condensed consolidated interim financial statements, the
significant judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty
were the same as those that applied to the financial statements for
the year ended 31 December 2021.
3. ACCOUNTING
POLICIES
The principal accounting policies applied in the preparation of
these condensed consolidated interim financial statements are
consistent with those of the previous financial year except as set
out below.
Segmental reporting
The directors consider that the Group has only one significant
reporting segment being crypto mining which is fully earned by a
Canadian subsidiary.
Derivative financial instruments
The Group uses derivative financial instruments to hedge its
exposure to commodity risks (namely the price of Bitcoin) arising
from operating, financing and investing activities. The Group does
not hold or issue derivative financial instruments for trading
purposes.
Derivative financial instruments are recognised and stated at fair
value.
4. ADOPTION OF NEW
AND REVISED STANDARDS AND INTERPRETATIONS
The Group has adopted all recognition, measurement and disclosure
requirements of IFRS, including any new and revised standards and
Interpretations of IFRS, in effect for annual periods commencing on
or after 1 January 2022. The adoption of these standards and
amendments did not have any material impact on the financial result
of position of the Group.
Standards which are in issue but not yet effective:
At the date of authorisation of these financial statements, the
following Standards and Interpretation, which have not yet been
applied in these financial statements, were in issue but not yet
effective.
Standard or Interpretation
|
Description
|
Effective date for annual accounting period beginning on or
after
|
IAS
1
|
Amendments
- Presentation and Classification of Liabilities as Current or
Non-current
|
1
January 2023
|
IAS
8
|
Amendments
- Definition of Accounting Estimates
|
1
January 2023
|
The Group has not early adopted any of the above standards and
intends to adopt them when they become effective.
5.
REVENUES
|
Period ended
30 June 2022 (unaudited)
|
Period ended
30 June 2021 (unaudited)
|
|
£'000
|
£'000
|
Crypto currency mining - worldwide
|
26,700
|
29,937
|
Crypto currency management fees - United States
|
-
|
1,148
|
Total revenue
|
26,700
|
31,085
|
|
|
|
|
|
|
|
|
|
|
Due to the nature of Crypto currency mining, it is not possible to
provide a geographical split of the revenue stream.
Crypto currency mining revenues are recognised at a point in
time.
Crypto currency management fees are services recognised over
time.
6. EARNINGS PER
SHARE
The basic earnings per share is calculated by dividing the profit
attributable to equity shareholders by the weighted average number
of shares in issue.
|
Period ended
30 June 2022 (unaudited)
|
Period ended
30 June 2021 (unaudited)
|
Net
(loss)/profit for the period attributable to ordinary equity
holders from continuing operations (£000)
|
(30,504)
|
7,214
|
Weighted
average number of ordinary shares in issue
|
469,182,463
|
381,832,335
|
Basic earnings per share for continuing operations
(pence)
|
(6.5)
|
1.9
|
|
|
|
Net
(loss)/profit for the period attributable to ordinary equity
holders for continuing operations (£000)
|
(30,504)
|
7,214
|
Diluted
number of ordinary shares in issue
|
475,067,159
|
393,091,232
|
Diluted
earnings per share for continuing operations (pence) -
restricted
|
(6.5)
|
1.8
|
The Group has in
issue 18,396,397 warrants and options at 30 June 2022 (2021:
11,258,897).
|
7.
TAXATION
|
|
Period ended
30 June 2022 (unaudited)
|
Period ended
30 June 2021 (unaudited)
|
|
|
£'000
|
£'000
|
Income tax
(credit)/expense - foreign tax |
|
(6,000)
|
3,484
|
Deferred tax (credit)/expense |
|
(386)
|
2,568
|
Taxation charge in the financial statements
|
|
(6,386)
|
3,484
|
No deferred tax asset has been recognised in respect of UK tax
losses carried forward on the basis that there is insufficient
certainty over the level of future profits to utilise against this
amount.
Income tax expense
The tax on the Group's profit before tax differs from the
theoretical amount that would arise using the weighted average tax
rate applicable to profits of the consolidated entities as
follows:
|
|
Period ended
30 June 2022 (unaudited)
|
Period ended
30 June 2021 (unaudited)
|
|
|
£'000
|
£'000
|
(Loss)/Profit
before taxation
|
|
(36,890)
|
10,698
|
Expected
tax (credit)/charge based on a weighted average of 25% (2020 - 24%)
(UK, US and Canada)
|
|
(16,404)
|
2,568
|
|
|
|
|
Effect
of expenses not deductible in determining taxable
profit
|
|
40
|
32
|
Capital
allowances in excess of depreciation
|
|
(5,589)
|
323
|
Other
tax adjustments
|
|
11,588
|
1,838
|
Losses
utilised re prior years*
|
|
(7,005)
|
(1,790)
|
Origination
and reversal of temporary differences
|
|
3,936
|
256
|
Unutilised
tax losses carried forward
|
|
7,048
|
257
|
Taxation (credit)/charge in the financial statements
|
|
(6,386)
|
3,484
|
*During the period the tax charge in respect of the year ended 31
December 2021 in respect of the taxable charge for Argo Innovation
Labs Inc was finalised and it was agreed losses previously not
accepted as deductible were deductible and as a result the
liability for that year was reduced.
8. INVESTMENTS
ACCOUNTED FOR USING THE EQUITY METHOD
|
Period ended
30 June 2022 (unaudited)
|
Year ended 31 December 2021 (audited)
|
|
£'000
|
£'000
|
Opening balance
|
13,817
|
-
|
Acquired during the period
|
-
|
8,444
|
Share of loss
|
(490)
|
(1,198)
|
Share of fair value (loss)/gain on intangible assets through other
comprehensive income
|
(8,318)
|
6,571
|
Total Associates
|
5,009
|
13,817
|
Set out below are the associates of the Group as at 30 June 2022,
which, in the opinion of the Directors, significant influence is
held. The associate as listed below has share capital consisting
solely of ordinary shares, which are held directly by the Group.
The country of incorporation or registration is also their
principal place of business.
Nature of investment in associates 2022 and 2021:
Name of entity
|
Address of the registered office
|
% of ownership interest
|
Nature of relationship
|
Measurement method
|
Pluto
Digital PLC
|
Hill
Dickinson LLP, 8th Floor The Broadgate Tower, 20 Primrose Street,
London, United Kingdom, EC2A 2EW
|
24.65%
|
Refer
below
|
Equity
|
On 3 February 2021 Argo invested in Pluto Digital PLC ("Pluto"), a
crypto venture capital and technology company. The investment was
satisfied with 75,000 Polkadot with a fair value at that date of
£1,091,850. Further to this in a second round of funding the
Group invested an additional £7,352,970 on 8 March
2021.
Argo owns 24.65% of the total share capital and voting rights of
the business and is entitled to nominate one director to the Pluto
Board of Directors.
Pluto is a crypto technology company that connects Web 3.0
decentralised technologies to the global economy. Pluto identifies
key emerging areas and projects in the crypto sphere, then deploys
its business, networks and technical expertise to create value for
crypto partners, projects and Pluto shareholders.
Pluto incubates and advises digital asset projects based on
decentralised technologies, decentralised finance and networks such
as Ethereum and Polkadot. Additionally, Pluto supports the
operation of proof-of-stake networks by staking and operating
validator nodes. Pluto represents a strategic partnership for the
Group as it diversifies its activities in the crypto
space.
Pluto Digital PLC is an unlisted company and there is no quoted
market price available for its shares.
There are no contingent liabilities relating to the Group's
interest in the associates.
Summarised financial information for associates
Set out below is the summarised financial information for Pluto
Digital plc which is accounted for using the equity
method.
|
|
|
Pluto
Digital plc
|
|
|
|
As
at 30 June
|
|
|
|
2022
£000's
|
Net assets
|
|
|
18,033
|
Summarised Statement of Comprehensive Income, Pluto Digital
plc
|
|
|
Period ended June 2022
£000's
|
Loss
from continuing operations
|
|
|
(3,046)
|
Interest
expense, net of income
|
|
|
(179)
|
Income
tax expense
|
|
|
1,240
|
Post-tax
loss from continuing operations
|
|
|
(1,985)
|
Other
comprehensive loss
|
|
|
(33,736)
|
Total comprehensive Income
|
|
|
(35,721)
|
The information above reflects the amounts presented in the
management accounts of the associate (and not Argo Blockchain Plc's
share of those amounts) adjusted for differences in accounting
policies between the Group and the associate.
9. INTANGIBLE FIXED
ASSETS NOTE
Group
|
|
Goodwill
|
Digital assets
|
Website
|
2022 Total
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
Cost
|
|
|
|
|
|
At 1
January 2022
|
|
80
|
5,424
|
671
|
6,175
|
|
|
|
|
|
|
Additions
|
|
-
|
5,841
|
-
|
5,841
|
Disposals
|
|
-
|
(4,087)
|
-
|
(4,087)
|
At 30
June 2022
|
|
80
|
7,178
|
671
|
7,929
|
|
|
|
|
|
|
Amortisation and impairment
|
|
|
|
|
|
At 1
January
|
|
-
|
121
|
450
|
571
|
Foreign
exchange movement
|
35
|
204
|
23
|
262
|
Impairment
|
|
-
|
3,009
|
-
|
3,009
|
Fair
value loss/(gain)
|
|
-
|
413
|
-
|
413
|
Amortisation
charged during the period
|
-
|
-
|
72
|
72
|
At 30
June 2022
|
|
35
|
3,747
|
545
|
4,327
|
|
|
|
|
|
|
Balance At 30 June 2022
|
45
|
3,431
|
126
|
3,602
|
Digital
assets are cryptocurrencies not mined by the Group. The Group held
crypto assets during the year, which are recorded at cost on the
day of acquisition. Movements in fair value between acquisition
(date mined) and disposal (date sold), and the movement in fair
value in crypto assets held at the year end, impairment of the
intangible assets and any increase in fair value are recorded in
the fair value reserve.
The
digital assets held below are held in Argo Labs (a division of the
Group) as discussed above. The assets are all held in secure
custodian wallets controlled by the Group team and not by
individuals within the Argo Labs team.
The
assets detailed below are all accessible and liquid in nature.
Those assets (immaterial in total) held longer term are
inaccessible for a period of time have been valued either at cost
or £nil depending upon the information available as at the
year end.
|
|
As at 30 June 2022
|
|
Coins/tokens
|
Fair value
|
|
Crypto asset name
|
|
|
£'000
|
|
Polkadot - DOT
|
|
120,886
|
693
|
|
Ethereum - ETH
|
|
605
|
526
|
|
Solana - SOL
|
|
9,365
|
256
|
|
Cosmos Hub - ATOM
|
|
27,938
|
183
|
|
ASTRA
|
|
-
|
112
|
|
Alternative coins
|
|
-
|
1,661
|
|
At 30 June 2022
|
|
|
3,431
|
|
|
|
|
|
|
|
|
|
|
|
10. TANGIBLE FIXED
ASSETS
Group
|
Right of use Assets
|
Office Equipment
|
Mining and Computer Equipment
|
Assets
Under Construction
|
Leasehold Improvements
|
Data centres
|
Motor vehicles
|
Total
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
Cost
|
|
|
|
|
|
|
|
|
At 1 January 2022
|
358
|
49
|
58,499
|
61,306
|
85
|
10,466
|
-
|
130,763
|
|
|
|
|
|
|
|
|
|
Foreign exchange movement
|
32
|
-
|
2,476
|
6,805
|
8
|
975
|
-
|
10,296
|
Additions
|
-
|
27
|
41,353
|
6,344
|
1
|
8,742
|
53
|
56,520
|
Disposals
|
-
|
-
|
(12,340)
|
-
|
-
|
-
|
-
|
(12,340)
|
Transfer to another class
|
-
|
-
|
-
|
(74,455)
|
-
|
74,455
|
-
|
-
|
At 30 June 2022
|
390
|
76
|
89,988
|
-
|
94
|
94,638
|
53
|
185,239
|
|
|
|
|
|
|
|
|
|
Depreciation and impairment
|
|
|
|
|
|
|
|
|
At 1 January 2022
|
8
|
-
|
18,507
|
-
|
65
|
229
|
|
18,809
|
Foreign exchange movement
|
-
|
-
|
1,612
|
-
|
6
|
59
|
-
|
1,677
|
On disposals
|
-
|
-
|
(5,063)
|
-
|
-
|
-
|
-
|
(5,063)
|
Depreciation charged during the period
|
8
|
5
|
10,839
|
-
|
10
|
782
|
2
|
11,646
|
At 30 June 2022
|
16
|
5
|
25,895
|
-
|
81
|
1,070
|
2
|
27,069
|
|
|
|
|
|
|
|
|
|
Carrying amount
|
|
|
|
|
|
|
|
|
At 1 January 2022
|
350
|
49
|
39,992
|
61,306
|
20
|
10,237
|
|
111,954
|
At 30 June 2022
|
374
|
71
|
64,093
|
-
|
13
|
93,568
|
51
|
158,170
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: on the face of the balance sheet the Right of Use assets are
disclosed as a separate line but have been aggregated with other
fixed assets above.
11. TRADE AND OTHER
RECEIVABLES
|
As at
30 June 2022 (unaudited)
|
As
at
31 December 2021 (audited)
|
|
£'000
|
£'000
|
Mining equipment prepayments
|
82,587
|
47,426
|
Hedging instrument
|
1,608
|
-
|
Prepayments and other receivables
|
12,233
|
13,194
|
Other taxation and social security
|
3,020
|
2,739
|
Total trade and other receivables
|
99,448
|
63,359
|
Mining equipment prepayments consist of payments made and due on
mining equipment due to arrive by the end of 2022. Payments to ePIC
ASIC Asia Limited ("ePIC") comprise £4.1m, Intel of
£15.1m and the balance of £63.4m was paid to Bitmain in
advance of machine purchases to be received after the period
end.
Other taxation and social security consist of purchase tax
recoverable in the UK and Canada. GST and QST debtors are greater
than 90 days as at 30 June 2022.
The directors consider that the carrying amount of trade and other
receivables is equal to their fair value.
12. DIGITAL ASSETS
Group
|
Period ended
30 June 2022
(unaudited)
£'000
|
Year
ended
31 December 2021
(audited)
£'000
|
At 1 January 2022 and 2021
|
80,759
|
4.637
|
|
|
|
Additions
|
|
|
Crypto assets mined
|
26,700
|
70,325
|
Crypto asset purchased and received
|
-
|
16,569
|
Total additions
|
26,700
|
86.894
|
|
|
|
Disposals
|
|
|
Crypto assets sold
|
(34,069)
|
(12,400)
|
Total disposals
|
(34,069)
|
(12,400)
|
|
|
|
Fair value movements
|
|
|
Foreign
exchange
|
(2,901)
|
-
|
Gain/(loss) on
crypto asset sales
|
(6,372)
|
437
|
Movements on crypto assets held at the period end
|
(36,025)
|
1,191
|
Total fair value movements
|
(45,298)
|
1,628
|
|
|
|
At 30 June 2022 & 31 December 2021
|
28,092
|
80,759
|
|
|
|
|
|
|
|
|
|
|
The Group mined crypto assets during the period, which are recorded
at fair value on the day of acquisition. Movements in fair value
between acquisition (date mined) and disposal (date sold), and the
movement in fair value in crypto assets held at the year end, are
recorded in profit or loss. The Group has used 1,178 as at 30 June
2022 and 1,504 Bitcoin as at 31 December 2021 as collateral for a
loan.
As at 30 June 2022 and 31 December 2021 the above digital assets
solely comprised 1,742 and 2,441 Bitcoin respectively.
13. ORDINARY
SHARES
|
|
As at
30 June 2022 (unaudited)
£'000
|
As at
31 December 2021 (audited)
£'000
|
Ordinary share capital
|
|
|
|
Issued and fully paid
|
|
|
|
468,082,335 Ordinary Shares of £0.001 each
|
|
468
|
303
|
Issued in the period
|
|
|
|
9,742,831 Ordinary Shares of £0.001 each
|
|
10
|
165
|
477,825,166 Ordinary Shares of £0.001 each
|
|
478
|
468
|
|
|
|
|
Share premium
|
|
|
|
At beginning of the period
|
|
139,581
|
1,540
|
Issued in the period
|
|
4,171
|
150,977
|
Issue Costs
|
|
-
|
(12,936)
|
At the end of period
|
|
143,752
|
139,581
|
Acquisition of DPN LLC
The
acquisition of DPN LLC, effectively comprising the land acquisition
in west Texas, has been treated as an asset acquisition in these
condensed consolidated financial statements. In June 2022, the
Company settled the contingent consideration by issuing 8,147,831
new Ordinary Shares credited as fully paid at a price per share
of £0.495.
|
|
|
|
|
|
|
14. RESERVES
The following describes the nature and purpose of each
reserve:
Reserve
|
Description
|
Ordinary shares
|
Represents the nominal value of equity shares
|
Share premium
|
Amount subscribed for share capital in excess of nominal
value
|
Share based payment
|
Represents the fair value of options and warrants granted less
amounts transferred on exercise, lapse or expiry
|
Foreign currency translation reserve
|
Cumulative effects of translation of opening balances on
non-monetary assets between subsidiary functional currency
(Canadian dollars) and Group functional and presentational currency
(Sterling).
|
Fair
value reserve
|
Cumulative
net gains on the fair value of intangible assets
|
|
|
Other
comprehensive income of equity accounted associates
|
The
other comprehensive income of any associates is recognised in this
reserve
|
Accumulated surplus
|
Cumulative net gains and losses and other transactions with equity
holders not recognised elsewhere.
|
|
|
|
|
15. TRADE AND OTHER
PAYABLES
|
As at
30 June 2022 (unaudited)
|
As at
31 December 2021 (audited)
|
|
£'000
|
£'000
|
Trade payables
|
12,531
|
10,259
|
Accruals and other payables
|
5,102
|
4,986
|
Total trade and other creditors
|
17,633
|
15,245
|
Within trade payables is £2.2m (2021: £10.8m) for amounts
due for mining machines not yet received.
The directors consider that the carrying value of trade and other
payables is equal to their fair value.
16. LOANS AND
BORROWINGS
|
|
|
Non-current liabilities
|
As at
30 June 2022 (unaudited)
£'000
|
As at
31 December 2021 (audited)
£'000
|
Issued debt - bond
|
32,892
|
26,908
|
Long term loans
|
37,081
|
-
|
Assumed mortgage on acquisition
|
2,908
|
3,391
|
Total
|
72,881
|
30,299
|
Current liabilities
|
|
|
Short term loans
|
43,876
|
22,239
|
Assumed mortgage on acquisition
|
840
|
1,152
|
Total
|
44,716
|
23,391
|
|
|
|
|
|
The mortgages are secured against the two buildings at Mirabel and
Baie Comeau and are repayable over periods from 52 months to 58
months at an interest rate of lender prime + 0.6%.
The Company entered into several loans to acquire mining equipment
for the Helios facility in Texas. The loans are secured by the
financed mining equipment. The loans have terms from 2 years to 4
years and interest rates from 8.25% to 12%.
17. FINANCIAL
INSTRUMENTS
|
As at
30 June 2022 (unaudited)
£'000
|
As at
31 December 2021 (audited)
£'000
|
Carrying amount of financial assets
|
|
|
Measured
at amortised cost
|
|
|
- Mining equipment
prepayments
- Trade
and other receivables
|
82,587
5,496
|
47,426
13,194
|
- Cash
and cash equivalents
|
9,210
|
11,803
|
Measured at fair value through profit or loss
|
1,608
|
403
|
Total carrying amount of financial assets
|
98,901
|
72,826
|
|
|
|
Carrying amount of financial liabilities
|
|
|
Measured at amortised cost
|
|
|
- Trade
and other payables
|
17,633
|
10,259
|
- Short
term loans
|
44,716
|
23,391
|
- Long
term loans
- Issued
Debt - bonds
|
39,989
32,892
|
3,391
26,908
|
- Lease
liabilities
|
398
|
377
|
Measured at fair value through profit or loss
|
-
|
8,071
|
Total carrying amount of financial liabilities
|
135,628
|
72,397
|
Fair Value Estimation
Fair value measurements are disclosed according to the following
fair value measurement hierarchy:
- Quoted
prices (unadjusted) in active markets for identical assets or
liabilities (Level 1)
- Inputs
other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (that is, as
prices), or indirectly (that is, derived from prices) (Level
2)
- Inputs
for the asset or liability that are not based on observable market
data (that is, unobservable inputs) (Level 3). This is the case for
unlisted equity securities.
The following table presents the Group's assets and liabilities
that are measured at fair value at 30 June 2022 and 31 December
2021.
|
Level 1
|
Level 2
|
Level 3
|
Total
|
Assets
|
£'000
|
£'000
|
£'000
|
£'000
|
Financial assets at fair value through profit or loss
|
-
|
-
|
-
|
-
|
Equity holdings
|
60
|
-
|
74
|
134
|
Hedging
instruments
|
1,608
|
-
|
-
|
1,608
|
Intangible
assets - crypto assets
|
-
|
3,431
|
-
|
3,431
|
Digital assets
|
-
|
28,092
|
|
26,092
|
Total at 30 June 2022
|
1,668
|
31,523
|
74
|
33,265
|
|
|
|
|
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
Assets
|
£'000
|
£'000
|
£'000
|
£'000
|
Financial assets at fair value through profit or loss
|
-
|
-
|
-
|
-
|
Equity holdings
|
329
|
-
|
73
|
402
|
Hedging
instruments
|
-
|
-
|
-
|
-
|
Intangible
assets - crypto assets
|
-
|
5,424
|
-
|
5,424
|
Digital assets
|
-
|
80,759
|
|
80,759
|
Total at 31 December 2021
|
329
|
86,183
|
73
|
86,585
|
Liabilities
|
|
|
|
|
Financial
liabilities at fair value through profit or loss
|
|
|
|
|
-Deferred
contingent consideration
|
|
|
8,071
|
8,071
|
Total at 31 December 2021
|
|
|
8,071
|
8,071
|
All financial assets are in listed/unlisted securities and digital
assets.
There were no transfers between levels during the
period.
The Group recognises the fair value of financial assets at fair
value through profit or loss relating to unlisted investments at
the cost of investment unless:
- There
has been a specific change in the circumstances which, in the
Group's opinion, has permanently impaired the value of the
financial asset. The asset will be written down to the impaired
value;
- There
has been a significant change in the performance of the investee
compared with budgets, plans or milestones;
- There
has been a change in expectation that the investee's technical
product milestones will be achieved or a change in the economic
environment in which the investee operates;
- There
has been an equity transaction, subsequent to the Group's
investment, which crystallises a valuation for the financial asset
which is different to the valuation at which the Group invested.
The asset's value will be adjusted to reflect this revised
valuation; or
- An
independently prepared valuation report exists for the investee
within close proximity to the reporting date.
18. COMMITMENTS
The Group's material contractual commitments relate to the master
services agreement with Core Scientific, which provides hosting,
power and support services. This
terminates shortly after the period end once the machine swap deal
is complete.
19. RELATED PARTY
TRANSACTIONS
Key management compensation - all amounts in
£000's
Key management includes Directors (executive and non-executive) and
senior management. The compensation paid to related parties in
respect of key management for employee services during the period
was made only from Argo Innovation Labs Inc, amounting to:
£20k (2021 - £18k) paid to POMA Enterprises Limited in
respect of fees of Matthew Shaw (Non-executive director);
£142k (2021 - £106k) paid to Vernon Blockchain Inc in
respect of fees of Peter Wall (CEO); £nil (2021 - £68k)
paid to Tenuous Holdings Ltd in respect of fees of Ian MacLeod (ex
Executive chairman). During the period, James Savage (ex NED) was
remunerated a gross salary of £nil (2021 - £15k), Marco
D'Attanasio was remunerated gross fees of £nil (2021 -
£15k) and Alex Appleton (CFO) through Appleton Business
Advisors Limited was paid £97k (2021 - £60k) during the
period.
Total director fees and remuneration, paid directly and indirectly,
totalled £313k (2021: £221k).
20. CONTROLLING
PARTY
There is no controlling party of the Group.
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date:
24 August, 2022
|
ARGO BLOCKCHAIN PLC
By:
Name:
Peter Wall
Title:
Chief Executive Officer
Name:
David Zapffe
Title:
General Counsel
|
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