Argo Blockchain Share Discussion Threads

[mcfly79] 06/4/2020 12:02

I became a shareholder last week.

My thoughts on current profitability are as follows:

Figures I’m using:

*Current capacity is 665 petahash (rising to 730 petahash shortly).
*32 MW of power being used for 665 PH
*All-in power and housing costs of USD 0.055/kWh

The above figures give results for March very similar to those announced this morning.

Based on the current BTC price of $7k and the current mining Difficulty, I think the company will make about $1m per month profit until the halving in May.

After the halving, if nothing changes then the company will be making a very small profit at the current BTC price and mining Difficulty. However, I expect the BTC price to increase substantially or the mining Difficulty to drop substantially, following the halving.

The recent drop in the BTC price to $5000 gives some indication of what we might expect. The Network Hashrate dropped from c.123TH/s to c.94TH/s leading to a 16% reduction in the mining Difficulty at the fortnightly reset.

The halving will effectively be a reduction of 50% in the BTC price for miners and if there is no corresponding increase in the BTC price I think there will be further significant decreases in the Network Hashrate, and therefore the mining Difficulty.


Details


32Mw of power:

I had been trying to calculate total power consumption based on individual machine rates and optimisation by Argo. However, I’ve now noticed that Argo helpfully give the figures on their homepage. They state that they are using 30MW of energy for the 665 petahash of capacity. They also have a chart showing how they are more efficient compared to peers with a petahash per watt ratio of 21 (this actually equates to 31.7MW for the 665 PH capacity). I’ve rounded up to 32 MW for my calculations.


USD 0.055/kWh

This figure was given in the Align Research Note from 8 Aug 2019 and is the only figure I can find. Figures for just the power have been released and are perhaps CAD 0.03/kWh but no figures for housing costs have been given. Therefore the USD 0.055/kWh figure is what I’m using.

[topazfrenzy] 06/4/2020 11:24

I said $50K (USD)

[orm5] 06/4/2020 10:58

Agree, I'm assuming (hoping!) BTC is converted to cash close to when it is mined. But this is the key info we need to see now and what is sitting on the balance sheet

[stoneme] 06/4/2020 10:38

Their fixed costs and overheads continue to rise, as does their depreciation. All fine, they are growing. Their margins continue to be tested. Assuming net margin 33% (very conservative) , assume BTC £5k. and current BTC mining rate. I make Revenue £20m, annual profit 6.6m eps 2.2p (run rate) If these (conservative) cals are right. We applying a modest 4/5x I would say fair value currently 8 - 15p range.If I were topfrenzy. I could easily argue for eps 2021 target 3.7pIf you believe his £50k BTC price eps 20-30p haha

[geheimnis2] 06/4/2020 10:29

It would be helpful to know how many BTC and how much cash they have on the balance sheet

[stoneme] 06/4/2020 10:27

That's a tough one IMOThis last update is the best (in terms of disclosure) we have seen for quite some time. It doesn't leave me feeling 'what are they covering up?'.The only thing missing is either a statement which confirms they have continued to convert BTC to cash as per earlier announcements, or sat on BTC due to the lower cash yield from conversion when the price crashes.They have 100 percent accounted for BTC at the correct currency conversion. It is just a question of whether they actually converted.

[jumpenjim] 06/4/2020 10:23

im guessing results around 16th / 17th this month

jj

[orm5] 06/4/2020 10:08

Thanks for the summary mnomis, will be interesting to see how the next few months go.Full year results to the end of 2019 should be out soon. Would be interesting to hear people's thoughts on the EPS. Im estimating about 1.4p

[parsons4] 06/4/2020 09:59

Overheads were £600k for the first 6 months but now we have DEPRECIATION !!!

[mnomis] 06/4/2020 09:45

Earnings definitely ahead of where 3 commentators here thought:

Est BTC Rev GP %
horneb* 325 1.8 0.49 27%
orm5 336 1.73 0.37 22%
mnomis 346 1.93 0.49 25%
Actual 334 1.80 0.756 42%

Congrats to horneblower on Rev and Orm5 on BTC. Can see GP ahead ... could it be they did not sell when it really got hit and waited?

Re earnings, take off some hopefully small o/head and you have it.

[topazfrenzy] 06/4/2020 09:23

BTC is going to $50K+ by Christmas

[blackrolie00] 06/4/2020 09:22

When's earnings

[stoneme] 06/4/2020 09:20

In your dreams . .Although with BTC strengthening, short term we may see a spike to 6-7p

[topazfrenzy] 06/4/2020 08:53

50p share price by Christmas this one

[plat hunter] 06/4/2020 08:30

Revenue means nothing it's earnings that are important and know one not even the BOD seems to want to talk about earnings.A listed company should never be late with filings

[garth] 06/4/2020 07:17

Market cap currently less than 2x first quarter revenue. With BTC on the rise still.

G.

[garth] 06/4/2020 07:16

Peeps still sleeping?

What do we all make of today's update?

"The Company mined 333.8 Bitcoin or Bitcoin Equivalent (BTC) during the month of March, compared to 337.5 Bitcoin Equivalent in February. This takes the total amount of BTC mined during the first three months of this year to 918 BTC, a record level for the company and more than double the amount mined during the previous three months."


06 April 2020

Argo Blockchain PLC

('Argo' or 'The Company')

March Operational Update

Argo, the leading cryptocurrency miner based in the UK (LSE:ARB), is pleased to provide the following operational update for March 2020.

The Company mined 333.8 Bitcoin or Bitcoin Equivalent (BTC) during the month of March, compared to 337.5 Bitcoin Equivalent in February. This takes the total amount of BTC mined during the first three months of this year to 918 BTC, a record level for the company and more than double the amount mined during the previous three months.

Based on daily foreign exchange rates and cryptocurrency prices during the month, the Company generated mining revenue in March of GBP1.8 million (Feb 2020: GBP2.5 million). Argo generated this income at a mining margin of 42% and the Company continues to consider its operations to be among the most efficient in the market. Mining conditions were harder in March as algorithmic difficulty increased early in the month, and Bitcoin prices then saw a sharp decline in the second week of the month.

Revenues generated in the first quarter of 2020 amounted to GBP6 million (US$7.67 million) based on average currency rates for the period.

As previously announced, the Company's order of 1,000 Bitmain Antminer S17+ machines remains on track. The new hardware is expected to be delivered and installed by the end of April and will bring Argo's total BTC mining capacity to around 730 PH, an increase of approximately 10%.

The Company's mining operations, which are in North America, have not been impacted by Covid-19. Argo's management and staff are working remotely and all mining facilities are running as normal.

Peter Wall, chief executive of Argo, said: "Despite challenging conditions the company continues to deliver some of the best mining margins in the industry. This reflects Argo's high-quality mining infrastructure and expertise."

[scottman72] 03/4/2020 20:46

Roddyb,
Are you sure no-one predicted BTC correctly?

[roddyb] 03/4/2020 16:46

- and again, no-one guessed BTCUSD correctly today. It is what it is, a casino.

[parsons4] 03/4/2020 08:28

Yes just managed to top up again. BTC looking interesting this morning.

[global nomad] 03/4/2020 08:23

also had a small top up...

[parsons4] 03/4/2020 08:19

Trying to top up this morning but finding it difficult. I think the elastic band is just about to snap !!!

[hootza616] 02/4/2020 12:55

Somethings got to give! The elastic band can only stretch so far!

[aidenabettin] 02/4/2020 12:30

hTTps://mises.org/wire/why-world-has-dollar-shortage-despite-massive-fed-action