Q4 2023 Argo Blockchain plc Earnings Call
Operator: The company may not be in a position to answer every question it receives during the meeting itself; however, the company can review all questions submitted to date and will publish those responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll, and I'd now like to hand you over to the management team from Argo Blockchain PLC. Tom, good afternoon, sir.
Sufficient to answer every question I received during the meeting itself. However, the company camera. If you have questions later today and will publish responses back to appropriate today before I begin I'd like Schmidt flowing poll and now not a lot contrary to management team from Orca blockchain Pinochet, Tom Good afternoon.
Operator: Before we begin, I'd like to remind everyone that today's presentation and remarks may contain forward-looking statements. Please see our Form 20-F filed with the Securities and Exchange Commission for our full risk disclosure. With us today for our discussion of Q4 and full year 2023 results are Thomas Chippis, Argo's Chief Executive Officer, and Jim MacCallum, Argo's Chief Financial Officer. Now I'll turn it over to Thomas for some introductory remarks.
Tom: Thanks, Louis before we begin I'd like to remind everyone that today's presentation and remarks may contain forward looking statements. Please see our form 20-F filed with the Securities and Exchange Commission for a full risk disclosures.
Operator: With us today for our discussion of Q4 and full year 2023 results are Thomas Chip as Argos, Chief Executive Officer, and Jim Mccallum, Argos Chief Financial Officer.
Thomas Chippis: And now I'll turn it over to Thomas for some introductory remarks.
Thomas Chippis: Thanks, Tom, and thank you to everyone for joining us today. I'm excited to be speaking with you.
Thomas Chippis: Thanks, Tom and thank you to everyone for joining us today I'm excited to be speaking with you. It's certainly it's been a busy few months since I started and I'm eager to fill you in on what we've been working on.
Thomas Chippis: It certainly has been a busy few months since I started, and I'm eager to fill you in on what we've been working on. This is my first earnings call since joining Argo back in November. And as I'm sure everyone is aware, we just went through the fourth Bitcoin halving at the end of last week. It's an exciting time to be in the Bitcoin mining space. During 2023 and so far in 2024, we at Argo have had three priorities that guide us on a daily basis.
Thomas Chippis: This is my first earnings call since joining our go back in November and as I'm sure. Everyone is aware, we just went through the fourth bitcoin having at the end of last week. This is an exciting time to be in the bitcoin mining space.
Thomas Chippis: During 2023, and so far in 2024, we at Argo have had three priorities that guide us on the daily basis.
Thomas Chippis: We focus on financial discipline and leveraging, operational excellence, growth, and strategic partnerships for the sustainable future of this company. By concentrating on these goals, I believe that we have put ourselves in a strong position going into the halving, and I'm excited to continue with the great work that the team is doing. A few comments on the macro environment.
Thomas Chippis: We focus on financial discipline, and deleveraging operational excellence and growth in strategic partnerships for the sustainable future of this company.
Thomas Chippis: By concentrating on these goals I believe that we put ourselves in a strong position going into the having and I'm excited to continue with the great work that the team is doing.
Thomas Chippis: A few comments on the macro environment.
Thomas Chippis: It goes without saying that the most significant event of late for miners was last week's halving. Block rewards were reduced from 6.25 to 3.125 BTC, and we saw substantially higher fees being paid in the blocks initially produced post-halving. Although fees have retreated from those initial post-having peaks, they were generally outperforming previous years' post-having environments until today's retreat. This halving is different from previous halving events in several ways. The change in the number of new Bitcoin entering circulation is reduced by half as compared to the previous halving event per normal, but with 94% of the Bitcoin supply already released, one could interpret this reduction as likely less impactful on supply than the previous halving. The presence of Bitcoin ETFs is driving demand that appears to be supporting Bitcoin prices.
Thomas Chippis: It goes without saying that the most significant event of late for minors was last week's having.
Thomas Chippis: Block rewards were reduced from 625 to three 1% to five big coin and we saw substantially higher fees being paid in the blocks initially produced post having.
Thomas Chippis: Although fees have retreated from those initial post having peaks they were generally outperforming previous years' post having environments until today's retreat in Nash price.
Thomas Chippis: This having is different to previous having events in several ways.
Thomas Chippis: The change in the number of new bitcoin entering circulation is reduced by half as compared to the previous having event per normal, but with 94% of the bitcoin supply already released one could interpret this reduction is likely less impactful on supply than previous having events.
Thomas Chippis: The presence of the Bitcoin Etfs is driving demand that appears to be supporting bitcoin prices. Moreover, such new demand is coming at a time when the new supply is reduced.
Thomas Chippis: Moreover, such new demand is coming at a time when new supply is reduced. Hash price, which spiked right after halving, showed resilience for most of this week as we got through the first post-halving week. It remains to be seen whether or not there will be sustained changes in total network hashrate now that we are through the first difficulty adjustment post-halving. In short, there are countervailing factors at play, and how taken together they impact miners remains to be seen.
Thomas Chippis: Price was spiked right after having showed resilience for most of this week as we got through the first post having weak.
Thomas Chippis: It remains to be seen whether or not there will be sustained changes in total network hash rate now that we're through the first difficulty adjustment post having in short there are countervailing factors at play and how taken together the impact miners remains to be seen we continued to observe all of this as the market evolves and what the benefit of more information over the.
Thomas Chippis: We continue to observe all of this as the market evolves, and with the benefit of more information over the coming weeks, I expect we will offer additional commentary on our Q1 2024 earnings. Now, let's turn to our key highlights for the full year of 2023. Argo mined 1,760 Bitcoin during the year, and we generated more than $50 million of revenue. 2023 revenue was down by 14% from 2012, primarily due to the significant increase in global hash rate and associated increase in network difficulty.
Thomas Chippis: The coming weeks I expect we will offer additional commentary on our Q1 2024 earnings call.
Thomas Chippis: Now, let's turn to our key highlights for the full year of 2023.
Thomas Chippis: <unk> mined 1760 big claim during the year and we generated more than $50 million of revenue two.
Thomas Chippis: 2023.
Thomas Chippis: Revenue was down by 14% from 2022, primarily due to the significant increase in global hatch rates and associated increase in network difficulty.
Thomas Chippis: A compelling aspect of our operations at Helios is the ability of the facility to curtail operations during periods of high power. For most of 2023, at Helios, we procured electricity through a fixed-price power purchase, meaning that the price of power was fixed at a set price. However, when the market price of electricity is high enough, it makes economic sense to shut down operations and sell that electricity on the open market. This is called economic curtailment, and we generated $7.2 million of power credits during the year, which directly reduced our cost of mining.
Thomas Chippis: The compelling aspect of our operations at Helios is the ability of the facility to curtail operations during periods of high power prices for.
Thomas Chippis: For most of 2023 at Helios, we procured electricity through a fixed price power purchase agreement, meaning that the price of power was fixed at a set price. However, when the market price of electricity is high enough that makes economic sense to shut down operations and sell that electricity on the open market. This is called economic curtailment.
Thomas Chippis: And we generated $7 $2 million of power credits during the year, which directly reduce our cost of mining.
Thomas Chippis: This curtailment helped us achieve a mining margin of 43%, with an average direct cost per Bitcoin mined of $16,363. Our average all-in power and hosting costs across all three sites for 2023 were just under $0.05 per kilowatt hour.
Thomas Chippis: This curtailment helped us achieve a mining margin of 43% with an average direct cost per gig per bitcoin mind of $16363.
Thomas Chippis: Our average all in power and hosting costs across all three sites for 2023 was just under five per kilowatt hour.
Thomas Chippis: Our adjusted debentures were $8.3 million, which is a tremendous improvement from 2022, which was negative $47 million. As I mentioned on the previous slide, we have a strong focus on financial discipline, both in terms of reducing debt and maximizing cash. During the year, we reduced our Galaxy debt by $12 million, and we ended the year with $7.4 million of cash. We also had some significant balance sheet events occur in Q1 2024 that I wish to mention.
Thomas Chippis: Our adjusted EBITDA was $8 $3 million, which is a tremendous improvement from 2022, which was a negative $47 million.
Thomas Chippis: As I mentioned on the previous slide we had a strong focus on financial discipline, both in terms of reducing debt and maximizing cash.
Thomas Chippis: During the year, we reduced our galaxy debt by $12 million and we ended the year with $7.4 million of cash on hand.
Thomas Chippis: We also had some significant balance sheet events occur in Q1, 2024 that I wished dimension.
Thomas Chippis: In January, we opportunistically entered the equity markets and raised nearly $10 million through a share placing with institutional investors. Additionally, we streamlined our Quebec operations by selling our Mirabel facility for $6.1 million. We'll take a look at the next slide and talk a bit more about debt reduction in detail. Debt reduction has been a focus for us since we sold Helios and restructured our debt at the end of 2022. As a reminder, following the Helios sale, we had $79 million of debt outstanding, including $35 million of secured debt owed to Galaxy and $40 million of unsecured notes, or baby. During the year, we paid down $12 million of Galaxy debt through monthly amortization payments, as well as with cash generated through non-core asset sales and our July.
Thomas Chippis: In January we Opportunistically entered the equity markets and raised nearly $10 million through a share placing with institutional investors.
Thomas Chippis: Additionally, we streamlined our Quebec operations by selling our mirabel facility for $6 $1 million.
Thomas Chippis: We'll take a look on the next slide and talk about more about that reduction in detail.
Thomas Chippis: Debt reduction has been a focus for us since we sold Helios and restructured our debt at the end of 2022 as a reminder, following the helio sale, we had $79 million of debt outstanding including $35 million of secured debt owed to galaxy.
Thomas Chippis: And $40 million of unsecured notes or baby bonds.
Thomas Chippis: During the year, we paid down $12 million of galaxy debt through monthly amortization payments as well as with cash generated through noncore asset sales and our July equity rates.
Thomas Chippis: In the first quarter of 2024, we paid down an additional $12 million of debt through our January equity raise and with cash generated from the sale of MirrorBelt. The Mirabelle sale was a great transaction for Argo for a number of reasons. First, we were able to realize an attractive exit on that asset with a $6.1 million sale price, which was used to repay debt. Secondly, we consolidated our Quebec fleet at Baycomo, allowing us to streamline our operations and achieve annualized cost savings of $700,000. Now, I turn it over to Jim for a deeper dive into our financial results for the fourth quarter and the full year.
Thomas Chippis: In the first quarter of 'twenty 'twenty, four we paid down an additional $12 million of debt through our January equity raise and with cash generated from the sale of the Mirabel facility.
Jim: The Mirabel sale was a great transaction for Argo for a number of reasons first we were able to realize an attractive exit on that asset with a $6 $1 million sale price, which was used to repay debt secondly, we consolidated our Quebec fleet at Bay, Como, allowing us to streamline our operations and achieve annualized cost savings of 700000.
Thomas Chippis: Yeah.
Thomas Chippis: Now, let me turn it over to Jim for a deeper dive into our financial results for the fourth quarter and the full year over to you Jim.
Jim: Thanks, Tom.
James Mckenzie MacCallum: During the fourth quarter, we mined 443 Bitcoin, which was a 20% increase over the prior quarter. This was largely driven by lower levels of economic curtailment in the fourth quarter, as weather in Texas was fairly moderate compared to the heat waves we saw in Q3.
Jim: During the fourth quarter, we mined 443, bitcoin, which was a 20% increase over the prior quarter.
Jim: This was largely driven by lower levels of economic curtailment in the fourth quarter as weather in Texas was fairly moderate compared to the heat wave we saw in Q3.
James Mckenzie MacCallum: This also increased our net direct costs and reduced our mining margin percentage when compared to Q3. Our revenue in Q4 was also significantly higher than the third quarter, primarily due to the higher price of Bitcoin. Our realized Bitcoin price in Q4 was approximately $36,500, which was 30% higher than the roughly $28,100 Bitcoin price that we realized in Q3. As Tom mentioned in his remarks, we continue to focus on financial discipline.
Jim: This also increased our direct costs and reduced our mining margin percentage when compared to Q3.
James Mckenzie MacCallum: Our revenue in Q4 was also significantly higher than the third quarter, primarily due to the higher price of bitcoin.
James Mckenzie MacCallum: Our realized bitcoin price in Q4 was approximately 36500, which was 30% higher than the roughly 28100 bitcoin price that we realized in Q3.
James Mckenzie MacCallum: As Tom mentioned in his remarks, we continue to focus on financial discipline.
James Mckenzie MacCallum: In the fourth quarter, we reduced our non-mining operating expenses by 12% to $3.1 million. We also recorded a nonrecurring expense of $2 million for the quarter, which included a legal settlement, some other legal costs, and transaction expenses. We generated Adjusted EBITDA of $3.6 million in the fourth quarter, which continues our pattern of growing Adjusted EBITDA sequentially each quarter during 2023. At the end of the year, we had $7.4 million of cash in hand.
James Mckenzie MacCallum: In the fourth quarter, we reduced our non mining operating expenses by 12% to $3 1 million.
James Mckenzie MacCallum: We also recorded a nonrecurring expense of $2 million for the quarter, which included a legal settlement some other legal costs and transaction expenses.
James Mckenzie MacCallum: We generated adjusted EBITDA of $3 6 million in the fourth quarter, which continues our pattern of growing adjusted EBITDA sequentially each quarter during 2023.
James Mckenzie MacCallum: At the end of the year, we had $7 4 million of cash in hand.
James Mckenzie MacCallum: We executed two significant transactions in the first quarter of 2024, which has bolstered our cash position, in addition to reducing our debt. We raised $9.9 million of gross proceeds through an equity raise in January, of which we used a portion of that to pay down our Galaxy debt. We also sold our MirrorBell facility in March for $6.1 million.
James Mckenzie MacCallum: We executed two significant transactions in the first quarter of 'twenty 'twenty, four which has bolstered our cash position in addition to reducing our debt.
James Mckenzie MacCallum: We raised $9 9 million of gross proceeds through an equity raise in January of which we used a portion of that to pay down our galaxy debt.
James Mckenzie MacCallum: We also sold our Mirabel facility in March for $6 1 million we.
James Mckenzie MacCallum: We used all of the net proceeds from that transaction to reduce our Galaxy debt down to less than $13 million at the end of March 31st, with a total debt balance of $54 million. Now, let's look at a comparison between 2022 and 2023. In 2023, we mined 1760 Bitcoin, which was an 18% decrease from our production in 2022. The primary driver for this was the large increase in network difficulty.
James Mckenzie MacCallum: We use all of the net proceeds from that transaction to reduce our galaxy that down to less than 13 million at the end of March 31, with a total debt balance of $54 million.
James Mckenzie MacCallum: Yeah.
James Mckenzie MacCallum: Now, let's look at a comparison between 2022 and 2023.
James Mckenzie MacCallum: In 2023, we mined 1760, bitcoin, which was an 18% decrease from our production in 2022.
James Mckenzie MacCallum: The primary driver for this was the large increase in network difficulty.
James Mckenzie MacCallum: On average, network difficulty in 2023 was 71% higher than in 2022, and the network difficulty at the end of 2023 was more than double the network difficulty at the beginning of the year. However, revenue in 2023 of 50.6 million was 14% lower than our revenue in 2022, driven primarily by lower Bitcoin production. Mining profit for 2023 was 43%, which is lower than the 54% we achieved in 2022. The primary driver for this decrease is the increased difficulty level and lower Bitcoin production.
James Mckenzie MacCallum: On average network difficulty in 'twenty to 'twenty, three with 71% higher than in 2022.
James Mckenzie MacCallum: And the network difficulty at the end of 2023 with more than double the network difficulty at the beginning of the year.
James Mckenzie MacCallum: Oh.
James Mckenzie MacCallum: Our revenue in 2023 of $56 million was 14% lower than our revenue in 2022, driven primarily by the lower bitcoin production.
James Mckenzie MacCallum: Mining profit for 2023, with 43%, which is lower than the 54% we achieved in 2022.
James Mckenzie MacCallum: The primary driver for this decrease is the increased difficulty level and the lower bitcoin production.
James Mckenzie MacCallum: Our non-mining operating expenses for 2023 were nearly 60% lower than 2022. This resulted from the sale of our Helios facility, and it's also a testament to the team who scrutinized every line item and found ways to reduce our operating costs.
James Mckenzie MacCallum: Our non mining operating expenses for 2023, where nearly 60% lower than 2022. This resulted from the sale of our Helios facility and it's also a testament to the team is scrutinized every line item and found ways to reduce our operating costs.
James Mckenzie MacCallum: Our adjusted EBITDA for 2023 was $8.3 million, a significant improvement over the prior year. Now, let's take a look at our cash generation for the fourth quarter, as well as the first quarter of 2024. This slide shows our cash from September 30th, 2023 to March 31st, 2024. As we've been saying throughout the year, we've had a strong focus on cash flow generation and strengthening the balance sheet, and Key4 is cash flow from operations, including working capital changes of $7.1 million.
James Mckenzie MacCallum: Our adjusted EBITDA for 2023 was $8 3 million a significant improvement over the prior year.
James Mckenzie MacCallum: Now, let's take a look at our cash generation for the fourth quarter as well as the first quarter of 2024.
James Mckenzie MacCallum: This slide shows our cash from September 30th 2023, eight to March 31 2024.
James Mckenzie MacCallum: As we've been saying throughout the year, we've had a strong focus on cash flow generation and strengthening the balance sheet.
James Mckenzie MacCallum: In Q4, our cash flow from operations, including working capital changes was $7 1 million.
James Mckenzie MacCallum: We used $5 million of cash for debt reduction. We paid $2.6 million of interest expense during the period. At the end of the year, we had $7.4 million of cash on hand. As we mentioned earlier, in the first quarter of 2024, we also benefited from the equity raise and the sale of our Mirabelle facility. Through these two transactions, we were able to pay down an incremental $9 million of debt over and above the monthly amortization payments to Galaxy.
James Mckenzie MacCallum: We used $5 million of cash for debt reduction, we paid $2 6 million of interest expense during the during the period.
James Mckenzie MacCallum: At the end of the year, we had $7 4 million of cash on hand.
James Mckenzie MacCallum: As we've mentioned earlier in the first quarter of 2024, we also benefited from the equity raise and the sale of our Mirabel facility.
James Mckenzie MacCallum: Through these two transactions, we were able to pay down an incremental $9 million of debt over and above the monthly amortization payments to galaxy.
James Mckenzie MacCallum: Due to the paydown of debt, we have reduced our interest payments by nearly $1 million compared to the fourth quarter. In summary, during the first quarter of 2024, we improved our cash position by $5 million to over $12 million, while simultaneously paying down our debt by over $12 million. With that, I'll turn it back over to Tom.
James Mckenzie MacCallum: Due to the Paydown of debt, we have reduced our interest payments by nearly $1 million compared to the fourth quarter.
James Mckenzie MacCallum: In summary during the first quarter of 2024, we improved our cash position by $5 million to over $12 billion, while simultaneously paying down our debt by over $12 million.
James Mckenzie MacCallum: With that I'll turn it back over to Tom.
Tom: Thanks, Tim.
Thomas Chippis: In Quebec, we've streamed... operations by consolidating our fleet at our Baycomal facility, post-assail America. I want to take this opportunity to recognize the herculean efforts of a Quebec operation. They were able to relocate the Mirabal miners to Bay Como in a matter of days with minimal impact on our operation. As part of the fleet consolidation, we took the opportunity to decommission and sell some older generation machines, which reduced our total hash rate capacity from 2.8x a hash to 2.7. We still have the majority of our fleet, roughly 2.4x the hash rate of total hash rate capacity, located at Helios in Texas.
Tom: In Quebec, We've street.
Thomas Chippis: Operations by consolidating our fleet at our <unk> facility post the sale of Mirabel.
Thomas Chippis: I want to take this opportunity to recognize the herculean efforts of our Quebec operations team they were able to relocate the mirror ball miners to bake Homo in a matter of days with minimal impact to our operations.
Thomas Chippis: As part of the fleet consolidation, we took the opportunity to decommission and sell some older generation machines, which reduced our total hash rate capacity from two <unk> to $2 seven.
Thomas Chippis: We still have the majority of our fleet roughly two point Forex a hash of total hash rate capacity located at Helios and Texas.
Thomas Chippis: As we think about strategic growth, we're focused on working with energy generators to utilize Bitcoin mining's inherent flexibility. We talked about economic curtailment in Texas, but that's just one example of how Bitcoin mining can integrate with power. Demand response is a critical component of transitioning to the power grid of the future, and we believe that Bitcoin miners can play an important role in that transition. We're having discussions focused on ways to integrate our operations with those of energy companies, and we look forward to updating everyone on those discussions in due course. With that, back to Lily and Tom for any questions. Thomas, Jim, thank you.
Thomas Chippis: As we think about strategic growth, we're focused on working with energy generators to utilize bitcoin mining's inherent flexibility.
Thomas Chippis: We talked about economic curtailment in Texas, but that's just one example of how bitcoin mining can integrate with power grids.
Thomas Chippis: Demand response is a critical component of transitioning to the power grid of the future and we believe that they claim miners can play an important role in that transition.
Thomas Chippis: We're having discussions focused on ways to integrate our operations with those of energy companies and we look forward to updating everyone on those discussions in due course.
Thomas Chippis: With that back to Lilly and Tom for any questions.
Thomas Chippis: Okay.
Operator: Thomas and Jim, thank you very much for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the Q&A tab situated on the top right-hand corner of your screen. Just while the company takes a few moments to review those questions submitted today, I'd like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can be accessed via Investor Dashboard. As you can see, we've received a number of questions throughout today's presentation. Can I please ask you to read out the questions and give responses where appropriate to do so, and I'll pick up from you.
Speaker Change: Thomas Jim. Thank you very much for your presentation. This afternoon, ladies and gentlemen, please continue to submit your questions and just buy the Q&A tab situated on the top right hand corner. That's great. Just one other comment he take to mine as Trygve those questions today I'd like to remind you that recording of this presentation along with a copy of the slides on the published Q&A come to access far invested I suppose.
Operator: As you can see if you ever see a number of questions about today's presentation. Please ask you to read out the questions and good response to appropriate to do so and I'll pick up where are you at the end.
Tom: Thanks, Lily our first question for Tom is from Bill <unk> from Stifel as well as lack S through the Q&A chat can you speak to the current appetite.
Operator: Thanks, Lily. Our first question for Tom is from Bill Papanastasiou from Stiefel, as well as Lac S from the Q&A chat. Can you speak to the current appetite for a fleet upgrade and the growth strategy in the post-halving environment?
Operator: For our fleet upgrade and the growth strategy in the post having environment.
Speaker Change: Thanks, Tom.
Thomas Chippis: Look, Argo has a strong fleet. It's important to remember that these rigs do not operate with the toggle switch but instead with the dimmer switch, allowing us to vary the amount of power consumed through over or underclocking.
Tom: Look Argo as a strong fleet it's important.
Thomas Chippis: Remember that these rigs do not operate with a toggle switch, but instead with the derma switch, allowing us to vary the amount of power consumed through over under clocking. We are of course aware of the capabilities of newer generation machines as we think about opportunities for growth, we will look at half price.
Thomas Chippis: We are, of course, aware of the capabilities of newer generation machines. As we think about opportunities for growth, we will look at hash price, the availability of rigs and the nature of any opportunities, and energy costs to determine the right approach for each machine. We also look to use our size as an advantage and target sites and opportunities, the scale of which might not be appealing to substantially larger miners but is to Argo. Knowing that everyone is likely familiar with Argo's history, shifting the company back to a growth mindset is new for this year, and the team is digging in on several opportunities.
Thomas Chippis: Availability of rigs and the nature of any opportunities energy cost.
Thomas Chippis: To determine the right approach on machines.
Thomas Chippis: We also look to use our size is an advantage and target sites and opportunities of the scale of which might not be appealing to substantially larger miners, but are the argo.
Thomas Chippis: Knowing that everyone is likely familiar with Argos history shifting the company back to a growth mindset is new for this year and the team is digging in on several opportunities.
Tom: Back to you Tom.
Operator: Thanks, Thomas. The next question comes from Joe Flynn at Compass Point, as well as Chris H. from the Q&A chat. This one's for Jim. From a capital allocation standpoint, can you walk us through your ongoing strategy to pay down the remaining 54 million in debt following the sale of the Quebec data center?
Speaker Change: Thanks, Thomas next question.
Thomas Chippis: <unk> comes from Joe Flynn at Compass point, as well as Chris H from the Q&A chat just one for Jim from a capital allocation standpoint can you walk us through your ongoing strategy to pay down the remaining $54 million of debt following the sale of the Quebec datacenter.
James Mckenzie MacCallum: Hey, thanks. Thanks, Joe and Chris, for the question.
Jim: Hey, Thanks, Thanks, Joe and Chris for the question, Yeah, We think we've done a pretty good job.
James Mckenzie MacCallum: Yeah, we think we've done a pretty good job in the last 18 months paying down our debt. We currently have cash on hand of $12 million, and our Galaxy debt is a similar balance to this. We enter the halving in a strong financial position, and obviously, we continue to focus on our debt reduction and strengthening the balance sheet.
James Mckenzie MacCallum: In the last 18 months paying down our debt. We currently have cash on hand of $12 million and our galaxy that as a as a similar balance to this.
James Mckenzie MacCallum: We entered the having in strong financial position and obviously continue we continue to focus on our debt reduction and strengthening the balance sheet.
Operator: Thanks, Jim. Our next question comes from Kevin Dede at H.C. Wainwright for Thomas. Can you give an update on where Hashrate is currently in Quebec after the sale of Mirabel?
Speaker Change: Thanks, Jim Our next question comes from Kevin Dede H C Wainwright for Thomas.
Kevin Dede: Can you give an update on warehouse rate currently is in Quebec after the sale of Mirabel.
Thomas Chippis: For sure so post the sale of Mirabel as I noted very quickly moved to the Mirabel fleet.
Thomas Chippis: For sure. So, post the sale of Mirabel, as I noted, we very quickly moved the Mirabel fleet to Baycomo. So, now, there are approximately 300 peta.
Thomas Chippis: To make homeowners, so now up and running at <unk> was approximately 300 potash.
Thomas Chippis: Thanks, Thomas. Next question for Jim. This comes from Jason B. In the chat, does the Q1 31,000 direct cost per Bitcoin include depreciation?
Jason: Thanks, Thomas next question for John.
Thomas Chippis: Jim This comes from Jason would be in the chat is the Q1 31000 direct cost per bit quaint include depreciation.
James Mckenzie MacCallum: Yeah, good question, Jason. Yeah, this figure only includes our power and hosting costs paid at Helios and our QVEC sites. It does not include any depreciation.
Jim: Yeah. Good question, Jason Yeah. This is the figure only includes our power and hosting costs are paid at Helios Center, our Quebec sites. It does not include any any depreciation.
James Mckenzie MacCallum: Thanks, Jim. Another one for you from Bill Papanastasiou at Stiefel. Can you please provide some color as to how expense management is progressing in Q1 and Q2.
James Mckenzie MacCallum: Yeah.
Speaker Change: Thanks, Jim another one for you from Bill Popper Distasio at Stifel can you. Please provide some color as to how expense management is progressing in Q1 and Q2.
James Mckenzie MacCallum: Thanks, Bill. Yeah, we continue to focus on cost. We feel that most of the heavy lifting has been successfully completed here. Our run rate for non-mining OPEX has trended to approximately a million dollars per month over the last few quarters. We believe that's a reasonable outlook for the balance of the year.
Speaker Change: Yes, Thanks Bill.
Speaker Change: Yeah, we continue to focus on costs.
James Mckenzie MacCallum: We feel that most of the heavy lifting has has been successfully completed here our run rate for non mining Opex has trended to approximately a $1 million per month over the last few quarters and we believe that's a reasonable outlook for the balance of the year.
Operator: Great, thanks. The next question for Thomas comes from Shigar S. in the chat. Could you give an update on the shareholder lawsuit?
Speaker Change: Great. Thanks next question for Thomas It comes from <unk> and the chat, but can you give an update on the shareholder lawsuits.
Thomas Chippis: Again, thanks for the question on the shareholder suit, we filed the motion to dismiss a few months ago and.
Thomas Chippis: On the shareholder suit, we filed a motion to dismiss a few months ago, and we're awaiting a ruling from the judge on that motion. Once there's an update, I would expect we'll send out an R&S to reach a resolution.
Thomas Chippis: And we are awaiting a ruling from the judge on that motion once once there's an update I would expect we'll send out our rns to make everyone aware.
Operator: Thanks, Thomas. The next question was pre-submitted ahead of the earnings call. Will Argo invest in infrastructure again or only focus on investing in machines?
Operator: Thanks. Thomas next question that was pre submitted ahead of the earnings call Argo invest into infrastructure again, our only focus on investing in machines.
Thomas Chippis: Sure, so today, obviously, we have both hosted and self-operated machines, Helios and Baycomo. As the market evolves, we think there will be opportunities where it makes sense to be hosted and some where it makes sense to own everything vertically. So we'll continue to evaluate those decisions on an individual basis.
Speaker Change: Sure. So today, obviously, we have both hosted and self operated machines.
Thomas Chippis: Helios and Docomo as the market evolves, we think there'll be opportunities, where it makes sense to be hosted and some where it makes sense to own everything vertically. So we will continue to evaluate those decisions on an individual basis.
Thomas Chippis: Yeah.
Thomas Chippis: Thanks, Thomas. Another pre-submitted question. Does Argo have any plans to branch into AI or HPC data?
Speaker Change: Thanks, Thomas another pre submitted question is are going to have any plans to branch into AI or HTC data centers.
Thomas Chippis: Sure, so look, we most definitely understand the demand for AI and HPC processing in the market, but from our perspective, that is a substantially different business than operating a Bitcoin mining facility. We've certainly looked at it, but it's not an area where we're currently active.
Speaker Change: Sure. So look we most definitely understand the demand for AI and HBC processing in the market.
Thomas Chippis: But.
Thomas Chippis: From our perspective that is a substantially different business than operating a bitcoin mining facility. We've certainly looked at it but it's not an area where we're currently focused.
Operator: Great, thanks, Thomas. Here's another question that was pre-submitted. We got this a couple of times, and we seem to get this every quarter. This is for Jim. Are there any plans to start paying a dividend?
Speaker Change: Great. Thanks Thomas.
Speaker Change: Here's another question that was pre submitted when we got this a couple of times and we seem to get this every quarter. This is for Jim are there any plans to start paying a dividend.
Operator: Okay.
James Mckenzie MacCallum: No, we do not have any current plans to start paying a dividend. At the moment, any excess cash that we generate is being used to pay down debt and also to invest in future growth for the company. So yeah, no plans at this point to pay a dividend. Thank you.
Operator: No.
Jim: Do not have any any current plans to start paying a dividend at the moment any excess cash that we generate is being used to pay down debt.
James Mckenzie MacCallum: And also to invest in future growth for the company. So yeah no no no plans at this point to to pay dividend. Thank you.
Operator: Great, thanks, Jim. Next question from Jeff R in the chat for Tom: what do you think about M&A in the post-having environment?
Speaker Change: Great. Thanks, Tim.
James Mckenzie MacCallum: Next question from Jeff are in the chat.
Operator: For Tom how do you think about M&A.
Thomas Chippis: Thank you, Jeff. Look, the market may present opportunities for inorganic growth. We're evaluating many projects and would certainly consider opportunities that make sense and ultimately create value for shareholders.
Operator: In the post having environment.
Speaker Change: Thank you Jeff.
Thomas Chippis: The market may present opportunities for inorganic growth.
Thomas Chippis: We're evaluating many projects and would certainly consider opportunities that makes sense and ultimately create value for shareholders.
Operator: Thanks Tom. Next question from the chat: What was the thought process around selling the Mirabelle facility?
Speaker Change: Thanks, Tom next question from the chat.
Operator: Is the thought process around selling the mirador facilities.
Tom: Sure. So the sale of Mirabel achieved a great sales prices, we mentioned the $6 $1 million.
Thomas Chippis: Sure, so the sale of Mirabel achieved a great sales price, as we mentioned, $6.1 million. That works out to $1.2 million per megawatt, which is much more than the development costs for facilities anywhere in North America. The opportunity to consolidate our operations to Baycomo and achieve some cost-saving synergies was obviously a driver. And ultimately, being able to do this with minimal impact on our hash rate or revenue generation from consolidating the machines also made it an appealing option.
Thomas Chippis: That works out to a $1.2 million per megawatt, which is much more than the development costs for facilities anywhere in North America.
Thomas Chippis: The opportunity to consolidate our operations to make Homo and achieve some cost saving synergies were obviously, a driver and ultimately being able to do this with minimal impact to our hash rate of revenue generation from consolidated in our machines also made it an appealing option for us.
Operator: Great, thanks. Next question. Can you talk a little bit more about the power price you achieved in Texas? Sure, I'll take it.
Speaker Change: Great. Thanks.
Speaker Change: Next question can you talk a little bit more about the power price you achieved in Texas.
Operator: Yeah.
Speaker Change: Sure I'll take that so.
Thomas Chippis: Sure, I'll take that. As we noted in the presentation, our power costs across all sites for 2023 were just under $0.05 per kilowatt hour. And in Texas, we benefited from $7.2 million in economic curtailment revenue from demand response programs. That obviously played a very important part in driving down our net electricity costs for the year.
Speaker Change: As we noted in the presentation.
Thomas Chippis: Our power costs across all sites for 2023 was just under five cents per kilowatt hour and in Texas, We benefited from $7.2 million in economic curtailment revenue from demand response programs that obviously played a very important part of driving down our net electricity costs for the year.
Thomas Chippis: Thanks, Thomas. Lily, back to you.
Speaker Change: Great Okay.
Speaker Change: Thanks, Thanks, Thomas Lilly.
Operator: Thomas, Jim, thank you for answering all those questions you brought from investors, and, of course, the company can review all questions submitted today, and we'll publish those responses on the InvestorMeet company platform. Just before redirecting investors to provide you with their feedback, which I know is particularly important to the company, Thomas, could I please just ask you for a few closing comments?
Lily: Back to you.
Thomas Chippis: Thomas Chen. Thank you last question is your car from investors and of course, the company congregate all questions submitted today and well publicized just don't anticipate that any company platform just the full redirecting investment to provide user feedback quick.
Speaker Change: Reported to the company Thomas could I. Please ask you for a few closing comments.
Thomas Chippis: Certainly, Lily. Thank you. Thank you everyone for joining us today. It's an exciting time in the mining space, as I said, and certainly a very exciting time for Argo. We look forward to speaking with everyone in a few weeks to discuss our Q1 results in more detail. Thank you for your time today.
Thomas Chippis: Let me. Thank you thanks, everyone for joining us today, it's an exciting time in mining space as I said and certainly very exciting time for Argo. We look forward to speaking with everyone. In a few weeks to discuss our Q1 results in more detail. Thank you for your time today.
Operator: Thomas, Jim, thanks for updating investors today. Can I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can best understand your views and expectations? This will only take a few moments to complete and I'm sure will be greatly valued by the company. On behalf of the management team of Argo Blockchain PLC, we'd like to thank you for attending today's presentation and good afternoon to you all.
Speaker Change: Thomas Jim Thanks for updating investors today, Okay. That's just not to close this session and I shall not be automatically re directed to provide your feedback and noted that the management team can better understand and yoki isn't expectations, it's going to take two minutes to complete and I'm sure will be greatly valued by the company on behalf of the management team of Buckeye blockchain POC I'd like to thank you for attending today's presentation.
Operator: Hello.