The publicly-listed cryptocurrency mining company Argo Blockchain (NASDAQ: ARBK), has entered into an agreement to sell its data center located in Mirabel, Quebec for $6.1 million.

It further disclosed its monthly mining output numbers, showing a decreased daily Bitcoin (BTC) production that fell 21% on a monthly basis.

Argo Blockchain Sells Quebec Data Center for $6.1 Million

The sale of the Mirabel facility, which has 5 megawatts of electrical capacity, represents a price of $1.2 million per megawatt. Argo expects the net proceeds from the transaction to first repay the outstanding mortgage on the Mirabel site, with the remaining funds used to reduce debt owed to Galaxy Digital Holdings Ltd.

According to pro forma figures provided by Argo, the divestiture is expected to decrease the company's overall debt burden $5.4 million to $55.2 million. This includes lowering the Galaxy debt balance to $14 million, a 60% reduction from the original $35 million loan.

Argo's CEO, Thomas Chippas, hailed the deal as demonstrating the firm's "continued commitment to strengthening the balance sheet" through debt reduction and lowering expenses outside of cryptocurrency mining.

Argo states it will maintain ownership of all mining machines currently installed at the Mirabel location. The company plans to relocate the equipment to its facility in Baie Comeau and anticipates selling certain older-generation miners representing around 140 petahashes per second of hashing power. After these moves, Argo's total hashrate capacity is projected to be 2.7 exahashes per second (EH/s).

“We are able to exit the Mirabel Facility with a high multiple on its power capacity, and we also realize a premium on this real estate asset while maintaining a strong hashrate capacity of 2.7 EH/s,” Chippas added.

The divestiture provides operational benefits by consolidating all of Argo's self-mining activities at its Baie Comeau site. It is also expected to reduce the company's annual non-mining operating expenses by $700,000.

The transaction is anticipated to close by the end of March 2024, subject to customary closing conditions and regulatory approvals.

February Production Down on Maintenance Outage

In other news, Argo disclosed that it mined 92 Bitcoins in February at a rate of 3.2 BTC per day, a decrease of 21% in daily production compared to January.

The company attributed the lower output primarily to a 77-hour maintenance outage earlier in the month at the Cottonwood electrical substation owned by a third party. Higher average Bitcoin network difficulty in February versus January also impacted production levels.

“Despite the decrease in Bitcoin production due to maintenance on the Cottonwood substation, we expect that our realized power prices at Helios for February will be significantly lower than normal due to favorable power market conditions,” said Chippas. “Lower power prices will have a beneficial impact on our mining profit, mining margin, and operating cash flow for the month.”

Argo reported earning $4.5 million in mining revenue during February, a drop of 15% from $5.3 million in January. As of February 29th, the company held digital assets equivalent to 14 bitcoin on its balance sheet.

Argo Blockchain Undergoes C-Level Changes

Argo Blockchain has undergone notable changes within its leadership ranks. Seif El-Bakly has stepped down from his role as Chief Operating Officer, after serving as the Interim Chief Executive Officer from February to November 2023.

Following El-Bakly's departure, the operations team will continue under the stewardship of Chief Strategy Officer Sebastien Chalus, who has been spearheading operations since February 2023. As part of a separation agreement, Argo Blockchain issued 1,973,892 new ordinary shares to El-Bakly.

In a separate move to bolster its financial position, Argo Blockchain has successfully secured £7.8 million ($9.9 million) through a share placement with institutional investors. The company issued 38,064,000 new ordinary shares priced at £0.205 per share, representing a slight discount to the 30-day average price.

The raised funds will provide working capital, facilitate debt repayment, and support general corporate purposes. This capital injection positions Argo Blockchain for continued operational stability and future growth prospects.