Argo Blockchain PLC has come to a decision to stall its discussion with Hive Blockchain Technologies Ltd., a Canadian blockchain infrastructure group, over a proposed partnership. Argo has said that it had implemented a 16 million US Dollar investment program since it had signed heads of terms for its collaboration with Hive. This investment was primarily meant to augment the mining capacity of the crypto miner, and the plan was apparently more favorable towards the interests of the shareholders than the proposed partnership.
Argo Blockchain PLC is a global data centre business that mainly offers a “purpose built and flexible platform” for mining of major cryptocurrencies. This is undertaken for the enterprise-scale and institutional sectors situated across the globe from operational centers in Canada. The headquarters of the company is located in London, UK and it has its shares listed on the main market of the London Stock Exchange. Cryptocurrency mining or crypto mining is a process in which transactions for a variety of cryptocurrencies are verified and added to the blockchain digital ledger.
Argo, having signed the conditional heads of terms for this collaboration, had plans to double its internal mining infrastructure to 505 peta-hash by the end of the current year. The production capacity is also expected to be raised for the coming year in order to turn Argo into one of the largest “publicly quoted cryptominer” worldwide. This announcement was made on Aug. 20 this year, and the recent move to end all discussions with Hive over the partnership becomes clear in the aforesaid context.
The move may be seen in the light of the fact that Argo’s board thinks that the Company has already built a strong platform and that the scale of the platform is such that it is now capable of delivering long term growth on its own. In other words, it can organically yield long term growth and fulfill its own targets. Further the interests of the shareholders will be served best if it goes ahead with the execution of its own plans than getting along with the persuasion of the partnership. The primary reason behind this being that the partnership involved a transaction which would lead to “dilution of equity” currently.
This “strategic” partnership was announced on May 2019, when Argo by entering into conditional heads of terms, that is a non-binding document focusing on issues that are relevant to tentative scale, partnership or another kind of agreements, wanted to establish the largest “purpose-built business to business mining service provider.” The then-new partnership allowed miners to reap benefits from the existing mining capacity of both the groups individually or in combination. However recently since Argo has plans to enhance its infrastructure and mining capacity, and therefore wants to execute its own plans than going ahead with the collaboration.
Mike Edwards, chairman, and co-founder of the Argo group has said:
We established a great rapport with the Hive team over the past several months, but both companies have agreed to pursue the many opportunities now opening up in the industry separately.