Argo Blockchain to sell Helios mining facility to Galaxy Digital

Bitcoin miner Argo Blockchain agreed to sell its Helios mining facility to Galaxy Digital for $65 million. 

The company has been trying to avoid bankruptcy as it struggles with cash flow issues alongside a good part of the industry. High energy costs combined with lower bitcoin prices and increasing difficulty have contributed to a loss of profit and squeezed margins.

Galaxy will also provide Argo with a $35 million loan. The miner will keep ownership of all its machines at the Texas facility and enter into a two-year hosting agreement with Galaxy.

The financing deal will allow Argo to reduce debt by $41 million and simplify its operating structure, the company said in a statement.

"This transaction with Galaxy is a transformational one for Argo and benefits the Company in several ways," said CEO Peter Wall. "It reduces our debt by $41 million (£34 million) and provides us with a stronger balance sheet and enhanced liquidity to help ensure continued operations through the ongoing bear market."

Galaxy is looking to sign a fixed-price power purchase agreement, which would in turn give Argo, as a hosting client, access to a likely more favorable rate. Analyst firm D.A. Davidson downgraded Argo in October to neutral precisely over a lack of fixed power purchase agreements.

At the same time, the miner said it now plans to refocus its efforts on mining operations in Canada, where it has a hashrate of 0.14 EH/s, compared to 2.36 EH/s at Helios.

Argo warned investors in October that it would need extra capital to keep operations going for the next few months after a deal fell through.

The miner was temporarily suspended from trading on the London Stock Exchange earlier this month after accidentally posting it had filed for bankruptcy protection. Trading was again suspended on Nasdaq Tuesday in anticipation of the announcement. 

The bitcoin mining industry has seen profit margins shrink over the past few months. In September, bitcoin mining hosting company Compute North filed for bankruptcy. Last week, giant Core Scientific also filed for Chapter 11 bankruptcy protection. 

This story has been updated with additional information.