Texas is the focus of a global cryptocurrency mining company that wants to build a new 200-megawatt (mw) data center that will be powered primarily by renewable sources.
London-based Argo Blockchain (LSE: ARB) (OTCQB: ARBKF) on Feb. 10 announced that it has entered into a Letter of Intent (LOI) with DPN LLC of New York, initiating the acquisition of 320 acres of land in West Texas with access to 800mw of electrical power where Argo intends to build a new 200mw mining facility in the next 12 months.
When completed, the facility will provide Argo with electricity at some of the lowest rates in the world, with the majority of its power coming from renewable sources.
“We are incredibly excited about this agreement,” said Argo Blockchain CEO Peter Wall. “It gives Argo tremendous control over our mining operations, as well as significant capacity for expansion. In addition, we have been able to secure access to some of the cheapest renewable energy worldwide in a location where innovation in new technologies is encouraged and incentivised.”
Once finalized, the overall price of the acquisition will be $17.5 million to be satisfied by the issue and allotment to DPN LLC of new ordinary shares in Argo. Upon completion of the definitive agreement, $5 million worth of new ordinary shares will be issued to DPN LLC. The balance of $12.5 million will be made as milestones related to the project are fulfilled.
In addition, Argo will gain access to a pre-negotiated $100 million credit facility at competitive rates, providing the company with sufficient debt capital to build out the facility and further expand its mining fleet to upscale the company’s operations and capacity.
In connection with the proposed acquisition, Argo plans to issue a circular to shareholders to convene a general meeting where they will be asked to approve the allotment and issue of both the new shares to be issued to DPN LLC as well as the issue of further new shares to raise equity to fund the down payment (or deposit) on the credit facility.
XMS Capital Partners LLC acted as a financial advisor to Argo Blockchain in connection with the transaction.
Several cryptocurrency mining companies have come to Texas to build data centers. Layer1 Technologies, the first U.S. based vertically-integrated and renewable energy Bitcoin mining and factory development company, announced in early 2020 it has started mining at its Bitcoin factory in West Texas. With multiple 2.5-megawatt liquid-cooled containers now online, Layer1 is on track to deliver on its mission to pioneer Bitcoin mining’s use of renewable energy.