Bitcoin Miner Argo Raises $8.35M via Stock Offerings

London-listed bitcoin mining firm Argo Blockchain is raising £6.5 million through a private placement as part of its ongoing efforts to deleverage its financial positions.

In a release on Tuesday, Argo announced that it had entered into a securities purchase agreement with an unnamed institutional investor for its ordinary shares and accompanying warrants.

Argo expects to receive gross proceeds of £6.5 million, or $8.35 million, after issuing 57.8 million ordinary shares to the investor at £0.1125 per share. This price is higher than the 90-day weighted average of Argo’s shares listed in the U.K. but represents a 10% discount to the closing price on Monday.

Argo stated that the net proceeds from the raise will be used for working capital and general corporate purposes, including the repayment of debt. The company previously extended the maturity date of its loan with Galaxy Digital by six months after reducing the debt by an additional $7 million.

Meanwhile, bitcoin’s hashprice appears to be putting pressure on Argo’s mining operations. According to its Q1 earnings report, Argo’s fleet hashcost was estimated at $57/PH/s, which is on the higher end among its publicly listed mining peers and has not yet included corporate and financial hashcosts.

Following bitcoin’s fourth halving, the network’s hashprice has mostly remained below $60/PH/s, hitting an all-time low of around $44/PH/s earlier this month before recovering to above $50/PH/s.

While Argo is also listed on the Nasdaq, the stocks offered in the new private placement have not been and will not be registered in the U.S., the company added. Argo’s stock price on the Nasdaq spiked by 18% on Monday, rising from $1.68 to $1.99 before pulling back to $1.60.