Argo Blockchain PLC takes first steps to buy Canadian data centres

() said it has entered into a conditional Letter of Intent (LOI) with Canadian data centre provider GPU.one to potentially acquire two data centres in Quebec.

The preliminary LOI sets out the material terms and conditions on which the company would make a strategic purchase of the centres, owned and operated by GPU.one which currently house Argo’s cryptocurrency mining equipment.

READ: Argo Blockchain reports earnings and revenue surge in first half as Bitcoin mining capacity expands

The data centres have a combined total of 20MW of power capacity, and if completed, the acquisition would provide the tech firm with long term stability and direct control over the facilities in which its mining machines are housed.

Subject to entering into definitive agreements and the satisfaction of a number of conditions, Argo said the purchase will be funded out of the company’s existing deposits with GPU.one, and cash. 

During September, Argo said it mined 127 Bitcoin or Bitcoin Equivalent (BTC) compared to 166 in August, taking the year-to-date total to 2,128 BTC.

The lower number of coins mined in September compared to August can be attributed to the significant rise in mining difficulty throughout September although other factors, the company said, also impacted production.

Based on daily foreign exchange rates and cryptocurrency prices during the month, mining revenue in September amounted to £1.1mln, from £1.4mln in August.

Argo generated this income at an average monthly mining margin of approximately 37% for September, from 44% in August, mostly due to rise in difficulty, as well as the lower price for both Bitcoin and Zcash in September compared to August.

At the end of September, the company held 126 BTC in Bitcoin and BTC equivalent, in accordance with its asset management strategy.

Argo’s total mining capacity remains at 18,000 machines, with 730 Petahash of SHA-256 hash power, and 280 Megasols of equihash mining capacity.

The cryptocurrency miner said mining in September was impacted by a contractual dispute between its hosting provider and their subcontractor, to which the company was not a party. 

As a result of the dispute, a portion of the company’s overall hashrate was offline for four days which reduced the cryptoassets mined by this hardware during the month.

The firm said it has taken steps to secure greater control over all of its mining machines by entering into direct discussions with the subcontractor, and does not anticipate any further interruptions arising from the dispute between the host and its subcontractor, and in doing so, the company considers it has taken the appropriate and necessary steps to protect its interests.

“Subject to completion of the potential transaction with GPU.one, the acquisition of these data centres represents a significant opportunity for us to take better control of our production and to improve our complement of assets,” Argo chief executive Peter Wall said in a statement.

“Furthermore, directly owning the facilities in which our mining assets are installed, which we believe will lower our mining cost base, will provide long term advantages.”