Argo Blockchain, a cryptocurrency mining company, has made the difficult decision to sell its flagship mining facility, Helios, to weather the ongoing bear market.
Argo Blockchain CEO Peter Wall formally announced an agreement with Mike Novogratz’s crypto investment firm Galaxy Digital on December 28 to sell the Helios facility for $65 million. Argo is cashing mined bitcoin (BTC) to reduce lending to Galaxy.
Additionally, Galaxy will provide Argo with a new $35 million equipment financing loan to help troubled miners reduce their debt. “We used the proceeds from that sale on a new Galaxy loan to pay off debt owed to NYDIG and a small amount of debt to another secured lender,” Wall said.
The new deal aims to reduce Argo’s total debt by $41 million, improve its liquidity and operating structure, and allow the company to continue its mining operations, the CEO said.
Wall said the trade was “the only viable path” through a bear market amid pressure from high energy costs coupled with low Bitcoin prices.
The CEO also emphasized that the company does not sell mining machines, even though Argo sold Helios. “They will continue to be mined by him at the Helios facility,” Wall said, adding that Argo also signed a contract where he will continue to operate the miners at Helios. he said:
“Staying in Helios will also allow us to continue to access power through the Texas grid and participate in ancillary services provided by Ercot.”
The deal comes just six months after Argo officially launched Helios in May 2022. His Helios facility in Dickens County is Argo’s largest mining facility supporting 200 megawatts (MW) of power. By comparison, Argo’s other facility, Becomau, operates at about 15 MW.
Related: 100%: Public Bitcoin miners have sold almost everything they mined in 2022.
The news comes amidst Argo’s funding difficulties after failing to raise $27 million through a common stock offering. In October, Argo said it was in danger of closing after failing to raise new funding. In mid-December, Argo announced it was in talks to sell assets and was looking to “engage in equipment financing transactions” to avoid filing for bankruptcy.
Argo did not immediately respond to Cointelegraph’s request for comment.