Q1 2024 Argo Blockchain PLC Earnings Call
Thank you Paul.
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-X filed with the Securities and Exchange Commission for our full disclosure. With us today for our discussion of Q1 2024 results are Thomas Chippas, Argo's Chief Executive Officer, and Jim MacCallum, Argo's Chief Financial Officer, and now I'll turn it over to Thomas for some introductory remarks.
Speaker Change: 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 reach closure.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: With us today for our discussion of Q1 2024 result on Polish cheapest farmers, Chief Executive Officer, and Jim Mccallum, Argos, Chief Financial Officer, and now I'll turn now over to Thomas for some introductory remarks.
Speaker Change: Sure.
Thomas Joseph Chippas: Thank you, Markella, and thank you to everyone for joining us today. We recently shared our 2023 full-year results, and I'm excited to update you on our progress since then for this quarter. As everyone's aware, the fourth Bitcoin halving occurred just over a month ago, and Argo exited the halving with a stronger balance sheet and leaner operations. As seen here, financial discipline, including leveraging, operational excellence, and growth and strategic partnerships are our three priorities, and they guide us on a daily basis for the sustainable future of Argo.
Thomas: Thank you Marcelo and thank you to everyone for joining us today.
Thomas: We recently shared our 2023 full year results and I'm excited to update you on our progress since then for this quarter.
Speaker Change: As everyone's aware the fourth bitcoin, having occurred just over a month ago, and Argo exited having with a stronger balance sheet and leaner operations.
Speaker Change: As seen here financial discipline.
Speaker Change: <unk> deleveraging operational excellence, and certainly growth and strategic partnerships are our three priorities and they guide us on a daily basis.
For the sustainable future of Argo.
Thomas Joseph Chippas: By concentrating on these goals, we're optimistic about the ongoing growth and development opportunities for Argo, and we have a clear objective of delivering shareholder value, so I'm certainly excited to continue with the great work the team is doing and tell you more about what we've been up to. A few comments first on the macro front.
Speaker Change: Concentrating on these goals, we're optimistic about the ongoing growth and development opportunities for Argo and we have a clear objective of delivering shareholder value. So I'm certainly excited to continue with the great work. The team is doing to tell you more about what we've been up to.
Speaker Change: A few comments first on the macro front.
Thomas Joseph Chippas: With the 2024 halving complete, the block subsidy that miners collect now stands at three and an eighth Bitcoin, down from six and a quarter. The launch of spot ETFs for Bitcoin was certainly a big driver of the price from $40,000 to $75,000. But after the halving, ETF holders began selling, and it actually resulted in about seven days of net outflows, a reversal of day after day of net inflows for those ETFs. Although initially there was a spike in transaction fees post-halving, it was short-lived, and fees declined in the subsequent weeks.
Speaker Change: With the 'twenty 'twenty four having complete the block subsidy that miners collect now stands at 308, the clean down from six in quarter.
Speaker Change: The launch of spot Etfs or bitcoin.
Speaker Change: We're certainly big drivers of price from 40000 to $75000, but after the having ETF holders began selling and it actually resulted in about seven days of net outflows. The reversal of a day after day of net inflows for those Etfs.
Speaker Change: Although initially there was a spike in transaction fees post having it was short lived and fees declined in the subsequent weeks runes on the drivers of fees. The initial period post having are now generating far lower fees than regular transactions compared to the weeks succeeding having.
Thomas Joseph Chippas: Rooms, one of the drivers of fees in the initial period post-halving, are now generating far lower fees than regular transactions compared to the weeks succeeding the halving. As a result, fees per day have dropped below the first quarter's average of 64.39 BTC, and hash price is coming down from its post having runes driven high. Concurrently, the network hash rate hit an all-time high of 654 exahash before the halving, but it dropped to 580 over the following three weeks.
Speaker Change: As a result yesterday have dropped below the first quarter's average of 64 spot three nine bitcoin and hatch price is coming down for I, suppose having runes driven high.
Speaker Change: Concurrently the network hash rate hit an all time high of 650 Forex of hash before the having but dropped to 580 over the following three weeks. This reduction can be attributed to miners.
Thomas Joseph Chippas: This reduction can be attributed to miners adjusting efficiency settings on their machines and some shutting down temporarily. This might appear significant, but such a decline is not out of the ordinary, and this happened on two occasions earlier this year. Going forward, the hash rate is likely to oscillate as the hash price changes, but for the near term, due to highly compressed mining margins and the upcoming summer months here in the U.S., hash rate growth will likely be restrained.
Speaker Change: <unk> efficiency settings, and their machines in some shutting down temporarily.
Speaker Change: This might appear significant but such a decline it's not out of the ordinary and this happened on two occasions previously this year.
Speaker Change: Going forward the hash rate is likely to oscillate as has price changes.
Speaker Change: But for the near term due to highly compressed mining margins and the upcoming summer months here in the U S. A hash rate growth will likely be restrained.
Thomas Joseph Chippas: And then just looking beyond Bitcoin for a moment, for the long term, you know, the head of the U.S. Federal Reserve has suggested that the central bank might have hit its peak rate cycle height, which is promising for Bitcoin mining because it suggests a more favorable environment with potential for increasing. [inaudible] So with that, we can talk a little bit about our 2024 results. So we generated approximately $17 million of revenue in Q1, which was an increase of 4% from the last quarter of 2023, really due to elevated hash.
Speaker Change: And then just looking beyond bitcoin for a moment for the long term is the head of U S. Federal Reserve has suggested that the central bank might have hit its peak rate cycle height, which is promising for bitcoin mining because it suggests a more favorable environment with potential for increasing the claim prices.
Speaker Change: So with that we can talk a little bit about our 'twenty 'twenty four results.
Speaker Change: So where we generated approximately $17 million of revenue in Q1, which was an increase of 4% from the last quarter of 2023 are really due to elevated half price.
Thomas Joseph Chippas: At the end of the first quarter, our cash in hand stood at $12.4 million, which is an increase from the $7.4 million at the end of 2022. As mentioned previously, we had some significant balance sheet events occur in Q1 2024, including an equity raise of nearly $10 million in January and the sale of our Mirabelle facility in Quebec in March. The proceeds were used to repay the facility's existing mortgage and pay down some of the debt owed to Gallagher. Now, let's move on to the next slide.
Speaker Change: The end of the first quarter, our cash on hand stood at $12 $4 million, which is an increase from the $7.4 million at the end of 2023.
Speaker Change: As mentioned previously we had some significant balance sheet events occur in Q1, 2024, including an equity raise of nearly $10 million in January and the sale of our Mirabel facility in Quebec in March.
Speaker Change: The proceeds were used to repay the facilities existing mortgage and pay down some of the debt owed to galaxy.
Speaker Change: So let's move on to the next slide we can talk a little bit more about that reduction in further detail.
Thomas Joseph Chippas: We can talk a little bit more about debt reduction and further. As discussed on the previous call, debt reduction has been a focus for us since we sold Helios and restructured our debt at the end of 2022. As noted, we executed two significant transactions in the first quarter of 24, bolstering our cash position in addition to reducing our debt, that being the equity raise and the Mirabelle sale. The Mirabelle sale was a great transaction for a number of reasons.
Speaker Change: So as discussed on the previous call a debt reduction has been a focus for us since we sold Helios and restructured our debt at the end of 2022.
Speaker Change: As noted we executed two significant transactions in the first quarter of 'twenty four bolstering our cash position in addition to reducing our debt.
Speaker Change: That being the equity raise and the mirabel sell the Mirabel sale was a great transaction for a number of reasons first we realized an attractive exit on the asset with the $6 $1 million sale price.
Thomas Joseph Chippas: First, we realized an attractive exit on the asset with a $6.1 million sale price. And secondly, consolidating our Quebec fleet to Baycomo allowed us to streamline operations with minimal impact on revenue. We were able to execute the move quickly, and we realized an annualized reduction in OPEX of about $700,000. Now, I will turn it over to Jim for a deeper dive into Q1 financial results.
Speaker Change: And secondly, consolidating our Quebec fleet to bake Homo allowed us to streamline operations with minimal impact to revenue, we were able to execute the move quickly.
And we realized an annualized reduction in opex of about $700000 per annum.
James Mckenzie MacCallum: Now, let me turn it over to Jim for a deeper dive into Q1 financial results over to you Jim.
James Mckenzie MacCallum: Thank you Tom.
James Mckenzie MacCallum: During the first quarter, we mined 319 Bitcoin, and our mining margin percentage for the quarter was 38%, which is an increase from the 34% achieved in Q4 2023. We generated revenue of $16.8 million and $0.6 million in power credits from economic curtailment in Texas. As mentioned, this curtailment helped us to achieve a mining margin of 38% in this quarter, with an average direct cost per Bitcoin mined of approximately $32,000.
James Mckenzie MacCallum: During the first quarter, we mined 319, bitcoin and our mining margin percentage for the quarter was 38%, which is an increase from the 34% achieved in Q4 of 2023.
James Mckenzie MacCallum: We generated revenue of $16 8 million and <unk> 6 million in power credits from economic curtailment in Texas.
James Mckenzie MacCallum: As mentioned this curtailment and helped us to achieve a mining margin of 38% this quarter with an average direct cost per bitcoin mine of approximately $32000.
James Mckenzie MacCallum: We raised $9.9 million of gross proceeds through an equity raise in January, of which we used a portion to pay down our Galaxy debt. As Tom mentioned previously, we also sold our Mirabel facility in March for $6.1 million. The accounting gain, net of tax, for this transaction was $3 million. Our adjusted EBITDA has increased almost two-fold over the last year and was $3.8 million during Q1 2024. This slide shows our cash flow from December 31st, 2023 to March 31st, 2024.
James Mckenzie MacCallum: We raised $9 9 million in gross proceeds through an equity raise in January of which we used a portion to pay down our galaxy debt.
James Mckenzie MacCallum: As Tom mentioned previously we also sold our Mirabel facility in March for $6 $1 million.
James Mckenzie MacCallum: The accounting gain net of tax for this transaction was $3 million.
Speaker Change: Our adjusted EBITDA has increased almost two four over the last year and was $3 8 million during Q1 'twenty 'twenty four.
Tom: This slide shows our cash flow from December 31, 2023 to March 31 2024.
James Mckenzie MacCallum: We continue to have a strong focus on cashflow generation and strengthening the balance sheet. In Q1, our cash flow from operations, including working capital changes, was $3.7 million. We used that for debt reduction, and we paid $1.7 million of interest during the period. 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.
Tom: We continue to have a strong focus on cash flow generation and strengthening the balance sheet.
Tom: In Q1, our cash flow from operations, including working capital changes was $3 $7 million.
Tom: We use that for debt reduction and we paid $1 $7 million of interest during the period.
Tom: 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.
Speaker Change: With that I'll turn it back over to Tom.
Tom: Thanks, Jim.
Thomas Joseph Chippas: So in the period since our last, since our full-year results, we have maintained our streamlined operations in Quebec through the consolidation of the fleet at Baie-Como, post-Mirabelle, as I mentioned. As part of that fleet consolidation... We did not take the opportunity to decommission, I'm sorry, but we did take the opportunity to decommission and sell some older generation machines, which reduced our total hash rate from 2.8 to We still have the majority of our fleet, roughly 2.4 X a hash of total hash rate capacity located at Helios in Texas.
Tom: So in the period since our last since our full year results. We have maintained our streamlined operations in Quebec City.
The consolidation of a fleet of bake Homo posts Mirabel as I mentioned as part of that fleet consolidation.
Tom: We did not take the opportunity to decommissioning I'm, sorry, we did take the opportunity to decommission and sell some older generation machines, which reduced our total loss rate from two eight to 2.7 Axa has we still have the majority of our fleet roughly two point Forex a hash of total hash rate capacity.
Speaker Change: <unk> at Helios in Texas.
Thomas Joseph Chippas: Now, as we think about growth, the sector is focused on, of course, transitioning to clean energy, which has always been a focus for Argo. And it requires investment in the power grid and, certainly, in demand response technology. As we've stated, as have others in the industry, we believe Bitcoin miners can play a very important role in that transition. Bitcoin miners are exceptionally agile and well-suited for low-balancing programs. And by acting as a flexible load, Bitcoin mining can help balance the grid by spinning up and spinning down quickly when required.
Speaker Change: Now as we think about growth in the sector is focused on of course transitioning into clean energy, which has always been a focus for Argo and it requires investment in the power grid and certainly in demand response technology.
Speaker Change: As we've stated as have others in the industry. We believe bitcoin miners can play a very important role in that transition. The coin miners are exceptionally agile and well suited for low balancing programs and by acting as a flexible load bitcoin mining can help balance the grid by spending up in Sydney down quickly when required.
Thomas Joseph Chippas: Argo is having discussions focused on ways to integrate our operational capabilities with those of energy companies, and we certainly look forward to updating everyone on those discussions in due course. So, as we continue in our mission of powering an innovative and sustainable blockchain infrastructure, these three pillars will continue to be our focus. With that, back to Markella for any questions. Thank you.
Speaker Change: Argo's, having discussions focused on ways to integrate our operational capabilities with those of energy companies and we certainly look forward to updating everyone on those discussions in due course.
Tamara: So as we continue on our mission of powering an innovative and sustainable blockchain infrastructure. These three pillars will continue to be our focus with that back to Tamara color for any questions. Thank you.
Operator: Thank you, Thomas. Thank you, everyone. The first question is from Kevin Vather from AC Wainwright, and it's directed to Thomas. Can you elaborate on the Galaxy relationship, their plan for the Aetherium site, and how you expect mining to progress through the hot summer months, including the potential for curtailing? Additionally, are you given the opportunity to overclock, and if so, have you taken advantage of it?
Thank you Todd asked me to everyone first question.
Speaker Change: From Kevin Barker from H C Wainwright.
Speaker Change: And so I think the permit and can you elaborate on the galaxy relationship.
Speaker Change: Thank you your site and how do you expect mining program.
Speaker Change: 101, including the potential for routinely.
Speaker Change: For me I've been given the opportunity to offer clock. So have you taken advantage of it.
Thomas Joseph Chippas: Thanks for your question, Kevin. So a compelling aspect of our operations at Helios is, of course, the facility's ability to shut down during periods of high power prices. For most of 2023, we procured electricity through fixed-price power purchase agreements, which ensured a stable cost of power. However, when market prices are high, of course, we can curtail or shut down operations and sell electricity back on the open market, a process known as economic curtailment.
Speaker Change: Thanks for your question Kevin.
Speaker Change: So a compelling aspect of our operations at Helios is of course, the facility's ability to curtail during periods of high power prices.
Speaker Change: For most of 2023, we procured electricity through fixed price power purchase agreements, which ensure the stable cost of power. However.
Kevin Barker: However, when market prices are high of course, we can curtail or shut down operations and sell interest to be back on the open market a process known as economic curtailment and as we discussed in the previous call that generated about $7.2 million in power credits directly reducing our cost of mining.
Thomas Joseph Chippas: And as we discussed in the previous call, it generated about $7.2 million in power credits, directly reducing our cost of mining. The curtailment helped us achieve a mining margin of about 38% this quarter with an average direct cost per Bitcoin mined of about $31,000. During the hot summer months, we expect to continue practicing economic curtailment when necessary. Additionally, we do have the opportunity to overclock our rigs to optimize performance, and we'll do so when conditions are favorable.
Speaker Change: The curtailment helped us achieve a mining margin of about 38% this quarter with an average direct cost per bit quaint mind of about $31000.
Speaker Change: During the hot summer months, we expect to continue practicing economic curtailment when necessary. Additionally, we do have the opportunity to overclock, our rigs to optimize performance.
Speaker Change: And we will do so when conditions are favorable.
Speaker Change: So thank you for that Kevin.
James Mckenzie MacCallum: Thank you, Thomas. The next question was pre-submitted in the chat, and it's directed to Jim. Will Argo invest in infrastructure again or only focus on machines?
Speaker Change: Thank you Thomas next question.
Speaker Change: Many of the top.
James Mckenzie MacCallum: Thank you Jim.
Speaker Change: Investments in infrastructure.
Speaker Change: Mhm.
James Mckenzie MacCallum: Yeah, thanks for the question. Yeah, currently, we have both hosted machines at Helios in Texas and own machines that are baked almost right in Quebec, where we can also expand our capacity. As the market evolves, we think there will be opportunities in both the hosted space and doing our own investing in infrastructure, and we'll evaluate these decisions on a case-by-case basis. Thank you.
Speaker Change: Yeah. Thanks for the question. Yeah. Currently we have both hosted machines at Helios in Texas and one.
Speaker Change: Owned machines that are baked almost eight in Quebec.
Speaker Change: Where we can also extend our capacity as the market evolves, we think there'll be opportunities in both the hosting space and doing our own investing in infrastructure and we will evaluate these decisions on a case by case basis. Thank you.
Thomas Joseph Chippas: Thank you, Jim. The next question was again pre-submitted, and it's directed to Thomas. What can you say about the growth opportunities you are seeking for Argo? Any details on the size, type, and timing?
Speaker Change: Thank you Jim next question please.
Speaker Change: At the time, what can you say about the growth opportunities you're thinking now.
Speaker Change: Any details on the timing.
Speaker Change: Timing.
Speaker Change: Yeah.
Speaker Change: Thank you for that.
Thomas Joseph Chippas: So we cannot get into details right now, but given Argo's size and market position, we believe that smaller sites with unique power cost and availability characteristics could fit well into our portfolio. There are certainly many groups on the hunt for power resources right now, not just Bitcoin miners, but we think our size may be an advantage here as we flesh out opportunities, and certainly, we'll have more to say when we can about that.
Speaker Change: So we cannot get into details right now, but given argo's size and market position, we believe that our smaller sites with unique power cost and availability characteristics could fit well into our portfolio.
Speaker Change: There are certainly many groups on the hunt for power resources right now not just bitcoin miners, but we think our size maybe an advantage here as we flesh out opportunities and certainly we'll have more to say when we can about this.
James Mckenzie MacCallum: Thank you, Thomas. The next question is from Kevin Dede at H.E. Wainwright once more, and it's directed to Jim. How do you plan to return to growth while balancing debt obligations?
Kevin Barker: Thank you. Thomas next question is from Kevin that I think <unk> and <unk>, how do you plan to return to growth balancing debt obligations.
James Mckenzie MacCallum: Yeah, hey, thanks, Kevin. Yeah, we've had a strong focus on costs over the past year and feel the heavy lifting has been successfully completed here. Our run rate, as we said, for non-mining operating expenses has trended to approximately a million dollars a month, and we believe that's a reasonable outlook for the balance of the year. Our new vision centers on optimizing operational efficiency, strengthening the balance sheet, and reducing debt. We aim to leverage strategic partnerships and explore sustainable growth projects while maintaining our commitment to renewable energy sources.
Speaker Change: Yeah, Hey, Thanks, Kevin Yeah, we've had a strong focus on costs over the past year and feel the heavy lifting has been successfully completed here our run rate as we said for non mining operating expenses has trended to approximately $1 million per month, and we believe that's a reasonable outlook for the balance of the year.
Speaker Change: Our new vision centers on optimizing operational efficiency strengthening the balance sheet and reducing debt, we aim to leverage strategic partnerships and explore sustainable growth projects, while maintaining our commitment to renewable energy sources.
James Mckenzie MacCallum: Given that we exited the Bitcoin halving with cash of just over $12 million and reduced our debt by over $12 million during the first quarter, Argo is in a strong position, and the company is in a growth mindset now and will continue to focus on fiscal responsibility.
Argo: Given that we exited the bitcoin, having with cash of just over $12 million and reduced our debt by over $12 million. During the first quarter Argo is in a strong position in the company is in a growth mindset now and will continue to focus on fiscal responsibility.
Speaker Change: Thank you.
James Mckenzie MacCallum: Thank you. Our next question is from Benit, and it's directed to Jim. Can you speak to power prices for the second quarter?
Speaker Change: Our next question.
Can I speak to power prices for the second quarter.
Speaker Change: Yeah, I mean, we can't go into too much detail here, but.
James Mckenzie MacCallum: Yeah, I mean, we can't go into too much detail here, but power prices during the second quarter, which obviously includes the early part of the summer, are subject to significant volatility, which we certainly saw last year. This period often sees heightened uncertainty due to the potential for heat waves, which can drive up demand and, consequently, prices. To navigate these fluctuations, we have to remain agile and capitalize on any economic curtailment programs that may arise. You know, we can't give them any color.
Speaker Change: Power prices during the second quarter, which include obviously the early part of the summer are subject to significant volatility, which we certainly saw last year. This period, often sees heightened uncertainty due to the potential for heat waves, which are which can drive up demand and consequently prices.
Speaker Change: To navigate these fluctuations we have to remain agile and capitalize on any economic curtailed curtailment program set that may arise.
Speaker Change: We can give some color April was clearly a strong month for bitcoin economics.
James Mckenzie MacCallum: April was clearly a strong month for Bitcoin economics. For May, despite the Bitcoin halving, through lower power prices and optimization of our fleet's efficiency settings, we have seen mining margins in the 30% range, albeit on a lower revenue resulting from the halving. We will close; we will closely monitor market trends and price movements, and this proactive approach will enable us to adjust our strategies in real time and optimize our mining profitability while mitigating the risks of hash price and energy cost volatility.
Speaker Change: For may despite the bitcoin, having through lower power prices and optimization of our fleet's efficiency settings, we have seen mining margins in that 30% range, albeit on the lower revenue, resulting from the having we will close we will closely monitor market trends and price movements.
Speaker Change: And this proactive approach will enable us to adjust our strategies in real time, and optimize our mining profitability, while mitigating the risk of Apache price and energy costs volatility.
Speaker Change: Thank you.
Thomas Joseph Chippas: Next question submitted in the chat directed to Thomas: Does Argo have any plans to branch into AI data centers? Thank you.
Speaker Change: Kim next question is from many of the chat connected to Thomas.
Speaker Change: Don't have any plans.
Speaker Change: Got it.
Thomas Joseph Chippas: Thank you for that. With respect to AI and HPC, this is certainly a very topical area among miners. We understand the demand for HPC processing in the market, but I think it's a different business than operating a Bitcoin mining facility. We have explored the possibility, and we're certainly not ruling it out for the future. However, our current strategy remains centered on Bitcoin mining operations.
Thomas Joseph Chippas: Thank you for that.
Thomas Joseph Chippas: With respect to AI and HBC. This is certainly a very topical area amongst miners.
We understand the demand for H B C processing in the market.
Speaker Change: I think it's a different business and operating a bitcoin mining facility.
Speaker Change: We have explored the possibility and where.
Speaker Change: Certainly not ruling it out for the future.
Speaker Change: However, our current strategy remains centered on bitcoin mining operations.
Thank you.
Speaker Change: Thank you.
Thomas Joseph Chippas: The next question was submitted by Bilco Anastasiou, Seif El, and it's directed to Thomas. We have seen mining economics weak following the halving event. How is management approaching the capital allocation strategy of balancing expense management with growing and upgrading the fleet? Is there any near-term path of a shift towards growth in the future?
Speaker Change: Next question.
Speaker Change: And that's the theme.
Tom: Thank you Tom.
Speaker Change: <unk> economics, we can falling to having in house management approach and the capital allocation side again.
Speaker Change: Grabbing upgrading the fleet.
Speaker Change: Near term comp of a shift towards the cloud in the future.
Speaker Change: Thank you for that Bill.
Thomas Joseph Chippas: Argo's fleet operates flexibly, which allows us to adjust power consumption through over- or underclocking, like a dimmer switch allows you to control the brightness of a light. And I think Jim referenced that in his comments about Q2 power.
Speaker Change: So our Argos fleet operate flexibly.
Speaker Change: Which allows us to adjust power consumption through over under clocking like a dimmer switch allows you to control the brightness of a light and I think Jim referenced that in his comments about our Q2 power.
Thomas Joseph Chippas: In the current market, and recognizing the weaker mining economics, this adaptability is essential. So, we fully appreciate the capabilities of newer generation machines and the efficiency they bring. Our growth strategy when it comes to the fleet will always consider hash price, rig availability, and energy cost amongst other factors. As I said, we're shifting back to a growth mindset. We want to leverage our size to target sites that may be less appealing to larger miners and explore what opportunities we can there.
Speaker Change: In the current market and recognizing the the weaker mining economics. This adaptability is essential.
So we fully appreciate the capabilities of newer generation machines and the efficiency they bring our growth strategy. When it comes to fleet, we'll always consider harsh price rig availability.
Speaker Change: In energy cost amongst other factors.
Speaker Change: As I've said, we're shifting back to a growth mindset, we want to leverage our size to target sites that maybe less appealing to larger miners and explore what opportunities. We can there and we'll find the right fleet for those opportunities when they present themselves our capital allocation strategy is going to balance expense management with fleet upgrades and ensure that.
Thomas Joseph Chippas: We'll find the right fleet for those opportunities when they present themselves. Our capital allocation strategy is going to balance expense management with fleet upgrades and ensure that we can remain competitive and ready for future opportunities as they arise.
Speaker Change: We can remain competitive in and ready for future opportunities as they arise in the industry.
Speaker Change: Thanks Bill.
James Mckenzie MacCallum: Thank you, Thomas. The next question was also pre-submitted and directed to Jim. How does Argo plan to manage its debt, and what are the prospects for refinancing?
Speaker Change: Thank you Thomas next question was also pizza.
Thank you Jim.
Speaker Change: Are there plans to manage.
Speaker Change: What are the prospects for refining.
James Mckenzie MacCallum: Yeah, thanks for that question. Yeah, we're pleased with how we've managed our Galaxy debt. Over the past year, we've paid it down. You know, it started at $35 million. We've paid it down $23 million, or approximately two-thirds of the total balance over the last 12 months. On March 31st, we reported cash over $12 million, and our Galaxy debt has been substantially reduced to $12.8 million. We exited the halving in a strong fiscal position and continue to focus on paying down this debt and strengthening the balance sheet. Thank you.
Speaker Change: Yeah. Thanks for that question, yes.
Speaker Change: Yeah, we're pleased with how we've managed our galaxy debt over the past year, we've paid it down it started at $35 million, we paid it down $23 million.
Speaker Change: Approximately two thirds of the total balance over the last 12 months at March 31, we reported cash of over $12 million in our galaxy that has been substantially reduced to $12 8 million.
Speaker Change: We exited the having an a strong fiscal position and continue to focus on paying down this debt and strengthening the balance sheet.
Thank you.
Speaker Change: Yeah.
Speaker Change: Hey, Joe.
Thomas Joseph Chippas: Another pre-submitted question for Thomas this time: What are your plans for increasing efficiency and reducing the recent downtime at several Bitcoin mining facilities?
Speaker Change: Another pre submitted question for Thomas This time, what are your plans for increasing efficiency and reducing downtime and some will be claiming already.
Speaker Change: Thank you for that question.
Thomas Joseph Chippas: Thank you for that question. So with the relocation to Bay Como, as I noted, we consolidated our infrastructure. And, as discussed on the previous quarter's call, the downtime was minimal and had minimal impact on revenue. In response to the downtime that we saw in February, as we also noted on the previous call, there was some maintenance upstream by power providers that was beyond our control. I think when you look at our operations team, they're doing a very good job of maintaining uptime across the fleet, and they continually work to improve operational efficiency, and you can see that when looking at the 5% increase in daily Bitcoin production in March 24 compared to February 24. So we'll continue to look for ways to enhance efficiency and reduce our susceptibility to downtime events on an ongoing basis.
Thomas: So with the relocation to beg Como as I noted, we consolidated our infrastructure and as discussed in the previous quarters call. The downtime was minimal and had minimal impact to revenue.
Thomas: In response to downtime that we saw in February as we also noted on the previous call. There was some maintenance upstream by power providers that was beyond our control I think when you look at our operations team is doing a very good job of maintaining uptime across the fleet and they continually work to improve operational efficiency and you can observe.
Speaker Change: That when looking at the 5% increase in daily Bitcoin production in March 24, compared to February 24.
Speaker Change: We'll continue to look for ways to enhance efficiency.
Speaker Change: And reduce our susceptibility to downtime events on an ongoing basis.
Speaker Change: Thank you.
Thomas Joseph Chippas: Thank you, Thomas. Another pre-submitted question directed to Thomas once more. Can you give an update on where Hashrate currently stands across all facilities? Additionally, assuming hash prices normalize post-paling, what strategies can you implement to lower your direct and all-in costs for B2C mines to mitigate losses?
Thomas: Thank you Thomas.
Speaker Change: <unk> submitted a question going back to two times from Tomorrow, and we'll give an update on warehousing and currently stands.
Speaker Change: Additionally, as soon as prices normalize post having what strategy can you implement to lower your diverse and all in cost per Btu mine to mitigate losses.
Thomas Joseph Chippas: Thank you for that. So, our hash rate capacity at Baycomo was about 300 petahash. And that's the Epic Block Miners, and the efficiency on the nameplate for those machines is anywhere from 30 to 35 joules per terahat at Helios, where we have about 2.4 exahash for running the S19 J-PROs, and the nameplate efficiency is about the same in the 30 to 35 range. So to lower our direct and all-in cost per Bitcoin mine, we're gonna continue to optimize the fleet for operational efficiency and leverage economic attainment during high power prices.
Speaker Change: Thank you for that.
Speaker Change: So our hatchery capacity ebay Como it was about 300 potash.
Speaker Change: And that's the epic block miners and the efficiency on the nameplate for those machines is anywhere from 30% to 35 dual for Terra hash.
Speaker Change: At Helios, where we have about $2 four extra hash for running the S 19, J pros and the nameplate efficiencies about the same in the 30 to 35 range.
Speaker Change: To lower our direct and all in cost per Bitcoin mine, we're going to continue to optimize the the fleet for operational efficiency and leverage economic curtailment during high power prices.
Thomas Joseph Chippas: I think going forward, you know, we're open-minded about strategic opportunities for equipment acquisition and site acquisition and what have you. And we'll continue to focus in the interim on maintaining cost-effective operations to ensure that we're getting the best out of the fleet.
I think going forward, we're open minded.
Speaker Change: About <unk>.
Strategic opportunities for equipment acquisition and site acquisition and what have you will.
Speaker Change: We will continue to focus in the interim while maintaining cost effective operations to ensure that we're getting the best out of the fleet that we can.
Speaker Change: Thank you.
James Mckenzie MacCallum: Thomas, I think we have time for one last question, so with this one, let's wrap that up. Last question pre-submitted, directed to Jim: what was the thought process around selling the Mirabal facility? Yeah, so there were clearly a number of factors.
Speaker Change: So Thomas I think we have time for one last question. So we take from that.
Speaker Change: Last question. Please submit it directed to Jim what was the thought process around selling December I'm sorry.
James Mckenzie MacCallum: Yeah, so there were clearly a number of factors that went into this sale decision. Firstly, we were very happy with the price. We think the sale price is $6.1 million, which equates to approximately $1.2 million per megawatt for that site, which is significantly more than what it would cost to develop a facility in North America.
Speaker Change: Yes. So there were clearly a number of factors that went into the sales sales decision.
James Mckenzie MacCallum: Firstly, we were very happy with the price, we think the sale price of $6 1 million, which equates to approximately $1 2 million per megawatt for that site with significantly more than the than what would what it would cost to develop a facility in North America. So we were pleased with the price first of all.
James Mckenzie MacCallum: So, we were pleased with the price, first of all. Secondly, the sale provided an opportunity, as Tom mentioned, to consolidate our operations into the Bay Como facility. So, going from two facilities in Quebec to one allows us to reduce our overhead and operational expenses, contributing to greater overall efficiency for Argo. And then lastly, the consolidation, as we've mentioned, has had a minimal impact on our overall hash rate and revenue generation from relocating the machines.
Secondly.
James Mckenzie MacCallum: The sale provided an opportunity as Tom mentioned to consolidate our operations and into the Bay Como facility. So going from two facilities in Quebec to one, allowing us to reduce our overhead and operational expenses.
Contributing to a greater overall efficiency for Argo.
Tom: And then lastly, the consolidation as we've mentioned has had minimal impact on our overall hash rate and revenue generation from relocating the machines.
James Mckenzie MacCallum: We're able to maintain our hash rate capacity while at the same time streamlining our QBAC operations, which allows us to focus the resources and management efforts more effectively. And additionally, the net proceeds from the sale strengthen our financial position, support our growth initiatives, and reduce our interest expense going forward, which is important. So these were the primary factors in deciding to sell the Mirabelle facility.
Tom: We're able to maintain our hatch rate capacity.
Speaker Change: At the same time, streamlining, our Quebec operations, which allows us to focus our resources and management efforts more effectively.
Speaker Change: And Additionally, the net proceeds from the sale strengthen our financial position support our growth initiatives and reduces our interest expense going forward, which is important. So these were the primary primary factors in deciding to sell the mirabel facility.
Speaker Change: Thank you.
Speaker Change: Okay, well. Thank you everyone for joining us today, it goes without saying that it's certainly an exciting time in the mining space and we think an exciting time for Argo.
Operator: Okay. Well, thank you everyone for joining us today. It goes without saying that it's certainly an exciting time in the mining space, and we think it's an exciting time for Argo. We look forward to speaking with everyone again in a few weeks at our annual general meeting on June 6. Thank you very much.
Speaker Change: We look forward to speaking with everyone again in a few weeks at our annual General meeting on June six.
Speaker Change: Thank you very much for your time.
Speaker Change: That's I say, thank you very much indeed for updating investors today can I. Please ask investors not to close the session.
Operator: Very much indeed for updating investors today. Can I please ask investors not to close the session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, but it's greatly valued by the company. On behalf of the management team of Argo Blockchain Peelsey, we'd like to thank you for attending today's presentation. That concludes today's session, and good afternoon to you all. Good afternoon to you all.
Speaker Change: They automatically redirect it to provide your feedback and all the management team can better understand your views and expectations. This might take a few minutes complete that nice great compounded by the company.
Speaker Change: Half of the management team of AGA brought chimpanzee, we'd like to thank you for attending today's presentation and that concludes today's session and good afternoon to you all get afternoon to you all.