The proposed transaction includes the acquisition of GEM Mining's assets for up to $21.7 million in Argo shares, as well as a $10 million investment from GEM's institutional investors.
Publicly listed London and Wall Street Bitcoin (BTC) miner Argo Blockchain (LSE: ARB) announced that it has entered into non-binding term sheets to acquire assets from GEM Mining and secure additional financing, a move that could potentially double its mining capacity.
The proposed transaction involves the acquisition of GEM Mining's assets for up to $21.7 million in Argo shares, as well as a $10 million investment from GEM's institutional investors. If completed, the deal would add 2.4 exahash of mining power to Argo's operations, significantly boosting its Bitcoin production capabilities.
"We believe this transaction represents a significant step toward profitable growth for Argo and strengthens our capital structure," said Matthew Shaw, Chairman of Argo's Board. "The Argo and Gem teams are working collaboratively to complete due diligence and finalize definitive documentation."
The asset acquisition would be satisfied through the issuance of new Argo ordinary shares, with an initial consideration of $11.7 million and up to $10 million in contingent consideration based on hashrate performance over the following year. The share price for the initial consideration is set at 3.4 pence, based on the 20-day volume-weighted average price as of March 25, 2025.
The financing component of the deal includes a $7 million secured convertible note with an 8% annual interest rate and a $3 million equity investment. Both elements would be priced at a 25% discount to Argo's closing share price. Upon completion of the transaction, GEM would be entitled to appoint two directors to Argo's board.
Argo Blockchain, known for its focus on sustainable cryptocurrency mining, operates primarily with renewable energy sources. The company has mining facilities in Quebec and offices across North America and the UK.
Stifel is acting as financial advisor to Argo, while Compass Point is advising GEM on the transaction.
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