Argo Blockchain plc

Good afternoon and welcome to the Argo Blockchain PLC investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged and can be submitted at any time via the Q&A tab situated on the top right-hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted to date and will publish those responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll. And I'd now like to hand you over to the management team from Argo Blockchain PLC. Tom, good afternoon, sir.

Thanks, Lily. Before we begin, I'd like to remind everyone that today's presentation and remarks may contain forward-looking statements. Please see our Form 20F filed with the Securities and Exchange Commission for our full risk disclosures. With us today for our discussion of Q4 and full year 2023 results are Thomas Chippas, Argo's chief executive officer, and Jim McCallum, Argo's chief financial officer. And now I'll turn it over to Thomas for some introductory remarks.

Thanks, Tom. And thank you to everyone for joining us today. I'm excited to be speaking with you. It certainly has been a busy few months since I started, and I'm eager to fill you in on what we've been working on. This is my first earnings call since joining Argo back in November. And as I'm sure everyone is aware, we just went through the fourth Bitcoin halving at the end of last week. It's an exciting time to be in the Bitcoin mining space. During 2023 and so far in 2024, we at Argo have had three priorities that guide us on a daily basis. We focus on financial discipline and deleveraging, operational excellence, and growth and strategic partnerships for the sustainable future of this company. By concentrating on these goals, I believe that we put ourselves in a strong position going into the halving, and I'm excited to continue with the great work that the team is doing. A few comments on the macro environment. It goes without saying that the most significant event of late for miners was last week's halving. Block rewards were reduced from 6.25 to 3.125 Bitcoin, and we saw substantially higher fees being paid in the blocks initially produced post-halving. Although fees have retreated from those initial post halving peaks, they were generally outperforming previous years post halving environments until today's retreat in hash price. This halving is different to previous halving events in several ways. The change in the number of new Bitcoin entering circulation is reduced by half as compared to the previous halving event per normal. But with 94% of the Bitcoin supply already released, one could interpret this reduction as likely less impactful on supply than previous halving events. The presence of the Bitcoin ETFs is driving demand that appears to be supporting Bitcoin prices. Moreover, such new demand is coming at a time when the new supply is reduced. Hash price, which spiked right after halving, showed resilience for most of this week as we got through the first post-halving week. It remains to be seen whether or not there will be sustained changes in total network cash rate now that we are through the first difficulty adjustment post-halving. In short, there are countervailing factors at play, and how, taken together, they impact miners remains to be seen. We continue to observe all of this as the market evolves, and with the benefit of more information over the coming weeks, I expect we will offer additional commentary on our Q1 2024 earnings call. Now let's turn to our key highlights for the full year of 2023. Argo mined 1760 Bitcoin during the year, and we generated more than $50 million of revenue. 2023 revenue was down by 14% from 2022, primarily due to the significant increase in global hash rate and associated increase in network difficulty. A compelling aspect of our operations at Helios is the ability of the facility to curtail operations during periods of high power prices. For most of 2023 at Helios, we procured electricity through a fixed price power purchase agreement, meaning that the price of power was fixed at a set price. However, when the market price of electricity is high enough, it makes economic sense to shut down operations and sell that electricity on the open market. This is called economic curtailment. and we generated $7.2 million of power credits during the year, which directly reduced our cost of mining. This curtailment helped us achieve a mining margin of 43%, with an average direct cost per Bitcoin mined of $16,363. Our average all-in power and hosting costs across all three sites for 2023 was just under $0.05 per kilowatt hour. Our adjusted EBITDA was $8.3 million, which is a tremendous improvement from 2022, which was negative $47 million. As I mentioned on the previous slide, we had a strong focus on financial discipline, both in terms of reducing debt and maximizing cash. During the year, we reduced our Galaxy debt by $12 million, and we ended the year with $7.4 million of cash on hand. We also had some significant balance sheet events occur in Q1 2024 that I wish to mention. In January, we opportunistically entered the equity markets and raised nearly $10 million through a share placing with institutional investors. Additionally, we streamlined our Quebec operations by selling our Mirabelle facility for $6.1 million. We'll take a look on the next slide and talk a bit more about our debt reduction in detail. Debt reduction has been a focus for us since we sold Helios and restructured our debt at the end of 2022. As a reminder, following the Helios sale, we had $79 million of debt outstanding, including $35 million of secured debt owed to Galaxy and $40 million of unsecured notes or baby bonds. During the year, we paid down $12 million of Galaxy debt through monthly amortization payments, as well as with cash generated through non-core asset sales and our July equity rates. In the first quarter of 2024, we paid down an additional $12 million of debt through our January equity raise and with cash generated from the sale of the Mirabelle facility. The Mirabelle sale was a great transaction for Argo for a number of reasons. First, we were able to realize an attractive exit on that asset with a $6.1 million sale price, which was used to repay debt. Secondly, we consolidated our Quebec fleet at Bay Como, allowing us to streamline our operations and achieve annualized cost savings of $700,000. Now, let me turn it over to Jim for a deeper dive into our financial results for the fourth quarter and the full year. Over to you, Jim.