Galaxy Digital To Buy Bitcoin Mining Facility From Argo Blockchain
Bitcoin miners might be losing money under current market conditions, but that’s not stopping Galaxy Digital (TSX: GLXY) from continuing to push to enter the fray. The firm this morning revealed it has acquired a mining facility from that of Argo Blockchain (NASDAQ: ARBK).
Galaxy will pay US$65 million for the Dickens County, Texas-based Helios mining facility, which sits on 160 acres of land. The facility has a current capacity of 180 MW of mining, which is said to be expandable to up to 800 MW upon receipt of the required approvals. Included in the sale is an operating team of 40 employees.
As part of the transaction, a $35 million loan was also provided to Argo Blockchain, which is to be secured by 23,619 Bitmain bitcoin miners that will remain at the facility under a two-year hosting agreement. The arrangement will see Argo pay a fixed-price rate for power, plus a hosting fee, which was not disclosed by either entity.
As part of the arrangement, Argo will also collaborate on a curtailment energy strategy with Galaxy that allows for a demand response program related to managing the power grid of Texas. Such programs currently in place contributed to the hash rate of bitcoin declining 38% over the holiday weekend as a massive storm pushed across North America, leaving homes and businesses across the country without power.
The purchase is being viewed by Galaxy as an opportunity to create additional revenue streams, with hosting services for bitcoin miners to now be offered by the company. Earlier this year the firm broke ground on its first mining site, which is also located in Texas and expected to begin operations in January. The operating segment is off to a rocky start however, posting losses of $34.9 million in the third quarter, which is partially the result of the firms largest third party hosting provided reducing capacity due to market conditions.
“The acquisition of Helios represents a new stage over our two-year journey in bitcoin mining that increases our operating scale and breadth of solutions, creating sustainable value for the biggest decentralized digital asset network and shareholders alike,” commented Galaxy’s President Chris Ferraro.
The transaction is expected to close today.
Galaxy Digital last traded at $3.55 on the TSX.
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