ARBK

Good afternoon, ladies and gentlemen, and welcome to the Argo Blockchain plc Q3 Results Investor Presentation. Throughout this recorded presentation, investors will be in listen-only mode. [Operator Instructions] I'd now like to hand over to Markella, Financial Communications Representative of Argo Blockchain.

Thank you, Mark. Before we begin, I would like to remind everyone that today's presentation and remarks may contain forward-looking statements. Please see our Form 20-F filed with the Securities and Exchange Commission for our full risk disclosures. And with us today for our discussion of Q3 2024 results are Thomas Chippas, Argo's Chief Executive Officer and Jim MacCallum, Argo's Chief Financial Officer. And now I'll turn it over to Thomas for some introductory remarks.

Thank you, Markela, and thank you to everyone for joining us today as we talk about our progress so far this quarter and this year. Argo remains focused on our three key pillars, financial discipline, operational excellence and growth through strategic partnerships. By maintaining this focus, we're steadily positioning the company to seize new opportunities for growth and development as well as whether some of the sector headwinds we'll talk about. We're committed to creating long-term shareholder value and we continue to make positive steps both for debt repayment and growth. First a few comments on the macro environment. In Q3 2024, the macroeconomic environment impacted the Bitcoin mining sector presenting third quarter challenges that have been felt across the sector, including by Argo. The industry continues to grapple with the lasting impact of the Block Reward Halving in April 2024. The decrease in block issuance revenue strain mining profit margins sector wide. Argo has shown resilience in this post-halving environment where the average cost to produce 1 Bitcoin increased due to mining difficulty and fluctuating hash prices. Our primary challenge facing miners in Q3 was the increasing cost of production as mining difficulty rose and hash prices declined. The network's daily profitability dropped to around 50% of pre-halving levels. Elsewhere, the Bitcoin network difficulty metric reached historically high levels in September. Monetary policy in Q3 has also played a role in shaping the sector's trajectory. The Fed lowered interest rates for the first time in four years in September by 50 basis points, the first touch reduction since the central bank began increasing rates in an effort to attain decades high inflation following the global pandemic. The pause in interest rate hikes previously provided a reprieve to risk assets like Bitcoin and recent moves increase the attractiveness of alternative investments like Bitcoin. This shift in policy has likewise created a more stable environment for miners as borrowing costs for infrastructure expansion and energy pricing become less volatile. While inflation pressures have eased in some areas, they do remain a significant concern. Bitcoin miners have been forced to adapt their strategies to sustain profitability amid fluctuating costs. Elsewhere the peaks of the US Spot Bitcoin ETF's Q1 rally did not repeat in Q3 despite this ETF purchases rebounded at the beginning of the quarter. In July, total net BTC inflows to ETFs spiked from 250,000 to 300,000 Bitcoin. After dipping below the 300,000 mark, demand strength was also seen in late September and of course in the days and weeks post the US elections, we have seen strong demand for Bitcoin and ETFs. Recent political developments have raised expectations for more favorable regulatory changes that could further support the industry, notwithstanding energy market volatility and mining difficulty, remaining key factors influencing the sector's trajectory into Q4 of key future theme is set to be innovation and diversification. Now let's turn to our highlights for the third quarter of 2024. In Q3, we mined 123 Bitcoin or approximately 1.3 Bitcoin per day and generated $7.5 million in revenue. For the nine months ended September 30, we generated $36.7 million in revenue. Our mining margin for the quarter was 8% compared to 58% in the same period last year, reflecting the impact of lower Bitcoin prices and higher energy costs. For the nine months ended September 30, 2024, the mining margin was 33% compared to 47% for the prior year period. The prior year benefited from significant power credits due to economic curtailments. We reported a net loss of $6.3 million for the quarter and $39.2 million for the nine months ended September 30, 2024. Adjusted EBITDA was negative $2.1 million for Q3 and positive $3.9 million for the nine months compared to positive $2.4 million and $5.2 million respectively in the prior year periods. During the quarter, we reduced our debt by $12.4 million including the full repayment of the Galaxy loan, further deleveraging our balance sheet. We ended the quarter with $2.5 million in cash and four Bitcoin equivalents held. Post-quarter on the 11th of October 2024, we were pleased to announce the dismissal of the class action lawsuit, Murphy versus Argo Blockchain, which was dismissed with prejudice and without leave to amend. We entered into a non-binding letter of intent with the BE Group to explore a High Performance Computing Expansion at Baie-Comeau and commence discussions with our lender regarding expansion of the Baie-Comeau mortgage facility. Finally, we received notice from Galaxy that they will not be renewing the hosting agreement at Helios beyond December 2024. While this marks a change for a hosted fleet of 23,000 S19J Pro Miners, we are actively exploring alternative arrangements to maximize the value of these rigs. Let's now move to the next slide and Jim will discuss the comparison of our quarterly results and capital structure. Jim?

Thank you, Tom. Our revenue for Q3 was $7.5 million, a decrease compared to $12.4 million in Q2 2024 and $10.4 million in Q3 2023. This decrease was primarily driven by lower Bitcoin production and the lower hash price achieved during the quarter. Despite the Q3 headwinds, our revenue for the nine months ended September 30, 2024 reached $36.7 million reflecting growth compared to the $34.4 million achieved in the same period last year. Our mining margin for Q3 was 8%, reflecting the challenging hash price environment and higher power costs, which resulted in higher costs per Bitcoin mine. The margin decreased from 41% in Q2. Our overall mining profit decreased to $0.6 million from $5.1 million in Q2. However, we remain confident in our operational strategy and continue to optimize our fleet for maximum efficiency. As indicated in our October operational update RNS, we saw improved results in October and November is also strong. Non-mining operating expenses continued to trend lower reflecting our focus on cost discipline and operational streamlining. Total non-mining operating expenses decreased by approximately 12% year-over-year. As Tom mentioned, adjusted EBITDA for the quarter was negative $2.1 million compared to $2.6 million in Q2 2024, reflecting the challenging mining conditions during Q3. For the nine months adjusted EBITDA is positive $4.0 million compared to $5.2 million for the prior year. We fully repaid the $12.4 million Galaxy loan during the quarter and we ended the quarter with $2.5 million in cash and held four Bitcoin. Looking ahead, we are optimistic about our recent initiatives, including the non-binding LOI with the BE Group to explore a significant HPC expansion at Baie-Comeau, which will help diversify our revenue streams. Let's now move to the next slide where we will review our capital structure in more detail. As we discussed during our Q2 earnings call, we fully repaid the Galaxy loan in August. This achievement was made possible through a combination of non-core asset sales like the Mirabel site, operational cash flows, and the 8.3 million equity raise completed in July. The early repayment came four months ahead of schedule and nearly 18 months ahead of the original plan. This repayment reduces our financial liabilities eliminates $1.1 million in monthly amortization payments and improves our cash flow. Most importantly, it strengthens our balance sheet and provides the financial flexibility to focus the future growth initiatives, including our HPC expansion at Baie-Comeau. Repaying the Galaxy loan marks a key milestone for Argo. Successfully paying off $35 million in high interest debt ahead of schedule highlights Argo's strong financial discipline. With the Galaxy loan fully repaid, our remaining debt obligations include $40 million in unsecured notes, which mature in November 2026 and a $1 million mortgage on our Baie-Comeau facility. With that I'll pass it back to Tom.

Thanks, Jim. So regarding Helios, our hosting agreement concludes at the end of December 2024. This marks a significant transition for the fleet of 23,000 S19J Pro Miners and we're exploring various options, including finding alternative hosting solutions or selling the machines. We're actively engaging with the market as well as reviewing hosting proposals to determine the most cost effective and strategic path forward. Our priority is to ensure operational continuity while aligning with our long-term goals. With respect to Baie-Comeau and HPC let's discuss our progress with High Performance Computing. We recently signed a non-binding letter of intent with the BE Group, a specialist in HPC solutions to explore a significant expansion at Baie-Comeau. The recently completed feasibility study confirms that we can adapt 12 megawatts of our existing infrastructure to support AI servers with the potential to expand by an additional 11 megawatts, bringing the total potential capacity there to 23 megawatts. Our immediate focus is on finalizing the project planning and design, securing definitive agreements with BE and acquiring customers. We're also working on funding for the project CapEx and based upon what we know today aiming for a go-live in April of 2025. This initiative is a key step in diversifying our revenue streams and tapping into high growth markets such as AI and related data processing. Furthering our conversation around growth and partnerships as demand from hyperscalers grows, HPC facilities are crucial for supporting sectors like AI and data analytics. Bitcoin miners are uniquely positioned to meet this demand, leveraging their access to scalable power and extensive experience in data center operations. These strengths position Argo to support hyperscalers and drive growth in this rapidly expanding market. We're also focused on securing low cost reliable power to maintain sustainable growth and ensure competitive operations. In this context, our commitment to operational flexibility will be vital as we navigate evolving market conditions and energy dynamics. For the remainder of 2024, the company will remain focused on its three core pillars financial discipline, operational excellence, growth and strategic partnerships. On behalf of everyone at Argo, I would like to extend our gratitude to all shareholders, stakeholders and the incredible Argo team. We remain committed to optimizing our capital structure and delivering value for our shareholders. With that I'll now pass it back to Investor Meet to Markella for any questions. Thank you.

That's great. Thomas, Jim, thank you very much indeed for updating Investor Day. [Operator Instructions] Markella, as you can see, you've had a number of questions from investors today. So thank you to everybody for your engagement this afternoon. If I may just hand back to you just to review those questions and moderate us through the Q&A session and I'll pick up from you at the end.

Thank you, Mark, and thank you, everyone. The first question comes from Kevin Dede from H.C. Wainwright. Have you made any further decisions regarding the 2.4 exahash fleets at Helios after year-end? Additionally, how should you think of Argo's hash rate trajectory heading into next year? And that should be directed to Thomas.

Thanks, Markella, and thanks, Kevin, following up with this. As noted previously, we're actively exploring options for the 2.4 exahash fleet currently at Helios. Since Galaxy notified us that they will not renew the hosting agreement beyond December of '24, we've been evaluating various pathways to ensure the continued operation of fleet, including alternative hosting arrangements, strategic opportunities or potential asset sale. At this stage we have not made a final decision, but our focus remains on identifying the option that provides the best balance of operational efficiency and financial flexibility. As we move forward we will certainly keep shareholders and stakeholders updated on our plans. Regarding the second part of your question, hash rate outlook for next year, it will largely depend on the chosen path for the Helios fleet and our broader growth initiatives including the potential HPC expansion just discussed. These initiatives aim to diversify and strengthen our operations which we think will support you know shareholder value. But thanks Kevin. Appreciate the question.

And thank you Thomas. The next question again from Kevin Dede, it's this time directed to Jim. The big issue is always capital allocation. What are Argo's priorities in this regard? Quebec site development, alternative site acquisitions, ring purchases. What are the company's priorities? And what progress has been made securing inroads in the HPC ecosystem with JPU's customer financing? What is the timeline of execution investors might set as milestones in monitoring Argo's performance here?

Yeah. Thanks, Kevin. Yeah, our capital allocation focuses on initiatives that we've mentioned that will drive sustainable growth and diversification. We signed this non-binding LOI with the BE Group, which outlines, our plans to repurpose, 12 megawatts of our existing infrastructure for HPC and also the possible expansion for an additional 11 megawatts. This aligns with our strategy to leverage current assets while capitalizing on the growing demand for HPC services. In parallel, we are advancing our position in each HPC ecosystem with the goal of bringing operations online in the first half of 2025. Regarding our Bitcoin mining operations, decisions around redeploying or potentially selling the 2.4 exahash fleet from Helios will be guided by market dynamics and long-term value consideration. We're committed to keeping investors informed on our progress as we achieve key milestones across both HPC and Bitcoin mining. Thank you.

Thank you. Thank you, Jim. Next question comes from Bill Papanastasiou from Stifel and would be directed to Thomas. What plans are in store for the fleet that was at Helios? Are there any short-term hosting options available? What could the process look like?

Thanks, Bill. I don't want to repeat everything I said in response to Kevin's question, but our hosting agreement is set to conclude the end of December '24. As I stated in the presentation, this will be a big transition for that fleet. We are careful evaluating all the options and we want to make sure that we prioritize the choice and strategy that best aligns with our long-term objectives and delivers maximum value. So we're trying to be flexible as we explore all those and we'll keep our focus on ensuring you know the continuity and best positioning for our future growth opportunities.

Thank you, Thomas. Next question again from Bill Papanastasiou. This time directed to Jim. When may we expect a definitive agreement and what's the timeline to bringing the HPC operations online? What are you able to discuss the CapEx, financing, and economics of the deal?

Thanks, Bill. We're excited about the potential HPC expansion at Baie-Comeau. While still in the early stages, significant progress has been made, including the signing of a non-binding letter of intent, with the BE Group and -- which they're an HPC specialist to explore a substantial deployment infrastructure at the site. Discussions are now in the advanced stages as we continue with due diligence and financing evaluations working toward a definitive agreement. Based on current timelines, we anticipate bringing HPC capabilities online by approximately April 2025. Although it is too early to pinpoint specific revenue contributions, we expect this expansion to begin adding value relatively quickly once operational. This initiative represents a pivotal step in our strategy to diversify and strengthen our revenue streams, providing a balanced and resilient foundation alongside our Bitcoin mining operations. Thank you.

Thank you, Jim. The next question was presubmitted ahead of the earnings call and would be directed again for you. Could you share an update on Argo's current debt position and any steps being taken to strengthen the balance sheet?

Yeah. Thanks for the question. As noted previously, we have retired the Galaxy debt, leaving the unsecured notes as our primary outstanding debt, which are non-amortizing and mature in November 2026. Our debt service costs are greatly reduced as the bonds which mature in late '26 are interest-only. We have a small mortgage remaining on the Baie-Comeau facility that we are looking to expand to help finance a potential HPC expansion at Baie-Comeau. Strengthening our balance sheet remains a priority and we'll keep shareholders updated as we progress.

Thank you, Jim. Next question is directed to Thomas. Again a pre-submitted one in the chat. With both Bitcoin mining and High Performance Computing now part of Argo strategy, how is the company planning to allocate resources between the two segments to maximize shareholder value?

Thanks, Markella. Our capital allocation strategy is focused on generating long-term shareholder returns, while balancing the dynamics of Bitcoin mining and HPC. We see Bitcoin mining remaining part of our operations and as we build out HPC capabilities, we're going to leverage our infrastructure to access additional revenue streams. This diversification should enhance our ability to generate returns across different market conditions. Our approach is to allocate capital where it creates the greatest value and aligns with our strengths and energy and infrastructure management, which should position us to thrive in both segments as opportunities evolve.

Thank you, Thomas. Next question is pre-submitted one ahead of the earnings call and directed to Jim. How does Argo plan to manage the potential volatility of Bitcoin price in relation to its broader business model particularly with the added HPC component?

Thanks, Markella, for the question. The Bitcoin market does have inherent volatility, which impacts miners' earnings, but our approach to managing this includes building a more resilient business model. By exploring HPC at Baie-Comeau, we're positioning Argo to benefit from diversified revenue streams beyond Bitcoin. The HPC expansion would complement our mining operations by enabling us to leverage our infrastructure for high growth computational markets such as AI and data processing, which offer more predictable income. This diversification reduces our exposure to Bitcoin price fluctuations and enhances our ability to generate value across multiple sectors. As a result, the addition of HPC helps balance our portfolio, creating a stronger foundation to support growth regardless of cryptocurrency market conditions.

Thank you, Jim. Another presubmitted question directed for you. Are there any plans to start paying dividend?

Yeah. Thanks. Currently, we have no plans to initiate a dividend. Excess cash will be directed towards strengthening our balance sheet and supporting strategic growth initiatives to drive future growth.

Thank you, Jim. Another presubmitted question for you again. Could you provide an update on the recent status of the class action lawsuit?

Yeah. As Tom mentioned as we -- and as we RNSed previously, we're pleased to report that the class action lawsuit was dismissed in early October by the Southern District of New York, both without prejudice and without leave to amend. So we're we were very pleased with this resolution.

Thank you, Jim. Next question is directed to Thomas and another pre-submitted one. Could you speak on fleet efficiency and current hash rate environment?

Certainly. So our current fleet efficiency is about 30 joules per terahash across the two sites with flexibility to downclock those machines for even greater efficiency when necessary. Certainly, this adaptability allows us to optimize the performance of the fleet in response to new changes in hash rate, hash rate energy environments, ensuring that the current fleet remains cost effective.

Thank you, Thomas. Next question also pre-submitted and addressing you is exploring the switch to HPC hinting a shift in the company's corporations.

Thanks, Markela. So as noted, Argo continues to evaluate strategic opportunities and market conditions and we are open minded and committed to exploring all options. We see significant potential in High Performance Computing as the demand for computational power continues to grow and we see it as an opportunity to diversify our revenue streams. So as we look ahead we're keeping open mind about what the appropriate mix of HPC and mining might be and will certainly firm up our opinion in this regard as we further our conversations with BE and as more data becomes available.

Thank you, Thomas. The next question also pre-submitted and directed to Jim. Is Argo considering the possibility of raising capital in the future, and how would such a move impact shareholders?

Thanks, Markella. Yeah. Raising capital, whether through debt or equity is always a strategic decision aimed at driving sustainable growth. While issuing new shares can result in dilution, it's important to consider the long-term value such funding can deliver. Many of our peers in the industry have successfully raised capital to expand operations, enhance infrastructure and enter high growth markets like HPC and AI. Similarly, any capital we raise in the future would be carefully targeted to accelerate growth and ensure Argo remains competitive. By balancing short-term impacts with long-term opportunities, we aim to create sustainable value for our shareholders.

Thank you, Jim. I believe we have time for one more question, which is, also one of the pre-submitted ones and directed to Thomas. How is Argo approaching the evolving regulatory landscape for Bitcoin mining in the US, particularly in light of the recent political changes?

Thanks, Markella. The political landscape surrounding Bitcoin mining remains complex but the recent post-election post-US election environment has certainly brought renewed optimism, we can see that with the Bitcoin having hit some record price highs. The incoming administration is anticipated to be crypto friendly and that could foster a more stable regulatory environment, which would with Argo and a broader industry. It's kind of early to predict specific regulatory changes and there's no lack of proposals that have been floating around but we're closely monitoring those developments. Ultimately, we believe Bitcoin mining with this capacity to support grid stability and renewable energy projects will continue to present significant opportunities and appeal. The potential addition of HPC to our portfolio further diversifies our revenue streams, giving us flexibility under whatever political or regulatory shifts may come in the future. And I think, Markella, you said that was the last question, so I'll just take a moment and say thank you for everyone who submitted questions today. We appreciate it.

That's great. Thank you, Thomas, Markella, and Jim for updating investors. Could I please ask investors, therefore, not to close this session as we'll now automatically redirect you for the opportunity to provide your feedback in order that the company can better understand your views and expectations. So it may take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of Argo Blockchain plc, we'd like to thank you for attending today's presentation.

Argo Blockchain plc Investor Presentation. Throughout this recorded meeting, investors will be in a listen-only mode. Questions are encouraged and can be submitted at any time by the Q&A tab situated on the 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 received during the meeting itself, however, the Company can review all questions submitted today. Before we begin, I'd like to submit the following poll. I'd now like to hand to the management team from Argo Blockchain plc. Markella, good afternoon.

Good afternoon, Lily. Thank you very much. Before we begin, I would like to remind everyone that today's presentation remarks may contain forward looking statements. Please see our Form 20-F filed with the Securities and Exchange Commission for our full risk disclosures. With us today for our discussion of Q2 2024 results are Thomas Chippas, Argo's Chief Executive Officer; and Jim MacCallum, Argo's Chief Financial Officer. And now, I'll turn now over to Thomas for some introductory remarks.

Thanks, Markella. And thank you to everyone for joining us today. I'm excited to update you on our progress so far this quarter and over the first half of the year. Financial discipline and to leveraging operational excellence and growth continue to remain Argo's three priorities and guide us on a daily basis for the sustainable future of this company, while concentrating on these goals, we are increasingly positioning the Company to take advantage of opportunities for growth and development. Our clear objective is delivering enhanced shareholder value, and I'm thrilled to continue the great work that the team has been doing and tell you more about what we have accomplished. First, a few comments on the macro environment. In second quarter of 2024, the macroeconomic environment significantly influenced the Bitcoin mining sector. Central banks, particularly, the U.S. Federal Reserve have until recently, indicated a potential pause in interest rate hikes, providing some respite to risk assets like Bitcoin. The shift in policy created a more stable environment for miners as borrowing costs for infrastructure expansion and energy pricing became less volatile. Inflation pressures, although moderating in certain regions remain a concern. Energy prices driven by both geopolitical instability and lingering supply chain disruptions continue to affect operational costs for Bitcoin miners. In regions like North America and Europe where energy costs make up a substantial portion of mining expenses, miners have had to adjust their strategies to maintain profitability amidst fluctuating electricity rates. Bitcoin's post-ETF surge in the first half of the year did provide short-term relief to miners. However, as market conditions corrected and the price settled, miners faced narrow profit margins. Despite these pressures, we've observed growth in total network cash rate as the industry continues to deploy new, more efficient rigs, leading to lower post having hash prices. Network hash rate and difficulty both rebounded from the post having dropped, while hash price continued to trend lower even hitting record lows. Overall, the Q2 mining and macroeconomic conditions have introduced both opportunities and headwinds for Bitcoin miners with energy markets and monetary policy playing critical roles in shaping the sector's trajectory for the rest of the year. Now let's turn to our key highlights for the second quarter of 2024. In Q2, we mined 188 Bitcoin or about 2 Bitcoin per day and generate a revenue of $12.4 million and $0.8 million in power credits from economic curtailment in Texas. Our mining profit this quarter was $5 million with a margin mining margin of 41% and an average direct cost per Bitcoin mine of $38,989. Additionally, we reduced our debt by $7.2 million and fully repaid Galaxy during our post quarter period. We ended the quarter with $4 million in cash and completed an $8.3 million equity raise post quarter. Let's now move to the next slide, and Jim can discuss the comparison of our quarterly results and lend some comments on our capital structure. Over to you, Jim.

Thank you, Tom. Our revenue for Q2 was $12.4 million, a decrease compared to $16.8 million in Q1 2024, and consistent with the $12.6 million achieved in Q2 2023. The main driver compared to Q1 was the Bitcoin having, which occurred in April 2024. This resulted in 41% lower Bitcoin production. Offsetting this lower production was higher realized Bitcoin prices resulting in an overall revenue decline in Q2 of 26% compared to Q1. Despite the revenue decrease, we were able to realize a higher mining margin percentage in Q2 versus Q1 as a result of lower power prices in the quarter primarily at the Helios facility. Our mining margin was 41% in Q2 compared to 38% in Q1. Because of the lower revenue in Q2, our overall mining profit decreased from $6.4 million in Q1 2024 to $5.1 million in Q2 2024. We are expecting lower mining profits and a lower mining margin percentage in Q3 as a result of the lower hash price realized so far in the quarter. Mining economics continue to be challenging for Bitcoin miners, and as a result, the Company recorded a $22 million non-cash impairment charge on its mining machines, and updated its going concern disclosure and its financial statements to reflect current conditions. Our non-mining operating expense trended lower in Q2 as compared to Q1. This 14% reduction was a result of our focus on reducing costs and streamlining operations. For the quarter, our adjusted EBITDA was $2.6 million as compared to $3.8 million in Q1 2024, and $1.6 million in Q2 of 2023. As Tom mentioned, we ended the quarter with $4.0 million in cash, and we will dive into more detail on our Galaxy debt in the following slide. Since I joined Argo in April 2023, we've had a strong focus on repaying our Galaxy debt. We were proud to announce a full repayment of this $35 million loan earlier this month. This was achieved primarily through a combination of non-core asset sales, including our Mirabel site in Q1 of this year. Equity raises and cash flow from operations. Repayment of this loan reduces our interest expense and the $1.1 million of monthly amortization payments. We completed the repayment of the Galaxy loan ahead of schedule and with no reduction in our overall hash rate.

I'd like to add a few comments regarding the Galaxy debt as well. The focus for Argo in 2023 in the first half of ‘24 has been to reduce this debt obligations and strengthen its balance sheet. The $35 million debt owed to Galaxy began amortizing, as Jim said, at $1.1 million per month in May of ‘23. As Jim noted, I am pleased to report that Argo has repaid the full amount of this loan to Galaxy as announced by the Company on August 12th. The Galaxy debt was repaid over four months ahead of the current schedule, and nearly 18 months ahead of the original repayment schedule. The early repayment reflects Argo's focus on strengthening the balance sheet, reducing our financial liabilities and freeing up capacity to focus on operational excellence. Repayment was made possible by using cash flow generated from operations, cash generated from equity raises and cash generated through the sale of non-core assets without any meaningful impact to Argo's hash rate. Repaying the Galaxy loan is a significant milestone for Argo, and I cannot emphasize enough how well the Argo team executed this feat. They have my thanks for all their efforts and I couldn't be more pleased with the outcome. Back to you, Jim.

Thank you, Tom. Our cash balance at end of Q2 2024 was $4 million. This was supplemented by the $8.3 million equity raise in July of 2024, a large portion of which went to repay the Galaxy loan. Remaining debt obligations for Argo include the $40 million baby bonds, which mature in November, 2026 and the $1 million mortgage on our bank home loan facility. With the Galaxy debt behind us, we have a number of growth opportunities that we can turn our attention to. As discussed on our Q1 call, the sale of the Mirabel facility was completed with no meaningful loss to Argo's hash rate. The significant reduction in operating expenses in the first half of 2024 compared to 2022 and 2023 and the strong mining margin percentage, despite the Bitcoin halving are indications of Argo's strong performance. The Mirabel sale enabled the Company to de-lever the balance sheet with minimal impact to the Company's hash rate. Following the sale, Argo relocated the majority of the mining machines at Mirabel to its Baie-Comeau facility and sold certain prior generation machines representing approximately 140 petahash. The sale allowed the Company to streamline its operations by locating all self-binding machines at its Baie-Comeau facility. Additionally, the sale of Mirabel reduces the Company's non-mining operating expenses by $700,000 annually. Argo has taken aggressive action on its cost structure and non-mining operating expenses. As compared to the second half of fiscal ’22, the Company has reduced its operating expenses by over 70% to 5.8 million. As compared to the first half of 2023 the Company has reduced its operating expenses by over 25%. With that, I'll pass it back to Tom.

Thanks, Jim. So, I'm excited to talk about some growth opportunity, specifically at our Baie-Comeau site in Quebec. So, this slide shows our potential growth opportunity at Baie-Comeau and its impact on our -- potential impact on our overall hash rate. Baie-Comeau currently has 15 megawatts of power, but there's an opportunity to expand that to 23 megawatts. This would increase the hash rate capacity of Baie-Comeau by up to 0.7 exahash. And should we energize the new 8 megawatts with the latest generation of miners, Baie-Comeau’s fleet efficiency would improve to 24 joules per terahash. Alternatively, should we choose to refresh the entire fleet and energize the new 8 megawatts at Baie-Comeau with the latest generation of miners, that would increase the hash rate capacity at Baie-Comeau to 1.4 exahash and improve its fleet efficiency to about 15 joules per terahash. This is an exciting opportunity that we're analyzing, and to be clear, we're analyzing it right now. We'll have additional updates on it in the future, but obviously it's exciting to have something like this in hand at a facility that we own, that we operate, and a facility that has shown good performance over time. So, looking forward to digging into this and sharing more as information becomes available. Turning to other thoughts on growth. The strength and balance sheet and repayment of the Galaxy debt gives Argo more flexibility to pursue strategic opportunities moving forward. We continue to explore opportunities where mining can be paired with stranded or wasted energy. There's tremendous potential for energy generators to utilize mining as a balancing and optimization tool, particularly in the energy transition, where limitations currently exist in the ability to store or transmit renewable energy. We're evaluating some novel opportunities with power generators and utilities to really help capture the full economic value of surrounded energy. Overall, our focus remains on access to low cost and reliable power. The ongoing transition to clean energy requires substantial investment in the power grid as well as demand response technology. Bitcoin mining as I'm sure many people listening know, plays a crucial role in this shift. Miners are exceptionally agile, making them ideal for grid low balancing, and what's more mining operations can be seamlessly integrated generation and grid operations. For the remainder of ‘24, Argo will continue to focus on our three pillars, financial discipline, operational excellence, and growth and strategic partnerships. On behalf of our goal, I truly would like to thank all of our shareholders and stakeholders and the team. We remain committed to optimizing our capital structure and driving long-term value for our shareholders. With that, I'll pass it back to Markella for any questions. Thank you.

Thomas, Jim, thank you very much for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions. Just suppose in the Q&A tab, situated on the top right-hand corner of your screen, as you can see if we have received a number of questions throughout today's presentation. Markella, if I could just hand over to you to share the Q&A and I'll pick up from you at the end.

Thank you, Lily. I will start with a question from Kevin Dede from H.C. Wainwright for Jim. Argo still has debt overhang, so curious about an update there and fleet expansion given the network cost rate continues to scale up as much as it has?

Thank you, Kevin. Regarding our debt situation, as we mentioned on the call here, we've paid off the Galaxy debt and now our main outstanding debt is the baby bonds, which are non-amortizing and mature in November 2026. We're committed to improving our balance sheet and we'll continue to provide to updates as we have them. As for fleet expansion, you're right that the network cash rate continues to grow despite the current hash price. We're focused on efficiency rather than raw growth and are engaged in testing on the more energy efficient models at the moment. Thank you.

Thank you, Jim. Another question by Kevin Dede at H.C. Wainwright, and this is directed to Thomas. Obviously, you guys should have great things to talk about with regard to operations in Q2 on staying on point. But for investors, it's always what have you done for me lately? Anything you can add about expanding operations in Quebec, new site selection, partnerships, perhaps with private companies that no longer have access to capital. Anything that offers a view to the future of the Company. Maybe there's something Argo can do that's a unique derivative of Thomas's vast experience in trading.

Thanks for that question, Kevin. Look, we're always looking for opportunities to grow and improve. Certainly, we just shared some of the possibilities and what they are at Bake Homo. We're still considering how we might go about doing that and there'll be more to say on that later. But we recognize that investors want to see growth. Hopefully with the Galaxy debt in the rear-view mirror, it sets us up for growth and that's why we share the big home opportunity today. We're confident that our approach will continue to deliver value to investors even as the mining landscape evolves. And I think that I appreciate the kudos on my previous experiences. We're open-minded about where growth can come from and we'll continue to share information as I want. It makes sense to do so.

This is a pre-submitted question directed to Jim. Please, can you elaborate on the impairment charge that you have reported?

Sure. Yes, the main factors here are the decreases in the fair market values of the mining equipment, and also the changes in the mining economics, especially since the Bitcoin having in April 2024. When we assessed the value of our mining and computer equipment, we looked at estimated future cash flows over the machines useful life using a pre-tax discount rate of approximately 14% for our calculations. And so based on this analysis, we came up with an impairment charge of 22 million. This reflects the current market conditions and their impact on our equipment's value. It's part of our regular process to ensure our financial statements accurately represent our assets value.

Another pre-submitted question, again directed to Jim. Congratulations on paying off the Galaxy debt. When can we expect to get some more caller on when this financial discipline will begin to contribute to revenue and earnings?

We're pleased about paying off the Galaxy debt obviously. The strength and balance sheet and repayment of the Galaxy debt gives Argo more flexibility to pursue strategic opportunities moving forward and start contributing to our revenue and earnings in the coming quarters. As we continue to optimize our operations and improve our cost structure, those gains flow through to the bottom line as we see in our EBITDA, reduce debt service, cost to Galaxy, are important for our ongoing cash flow. We remain focused on balancing near term profitability with strategic investments for long-term growth.

Another pre-submitted question this time directed to Thomas. A number of your peers are talking about kind of using gigawatts megawatts to host GPUs. What does Argo think about this?

Yes, most certainly. Many of our peers are looking to leverage their large-scale power and infrastructure capabilities to host GPU-based workloads and utilize that power for things beyond just Bitcoin mining. At Argo, we're closely evaluating these opportunities. Obviously, our priority is to ensure we're maximizing the efficiency and profitability of our core Bitcoin mining operations first. I think it's important that we want to be sure that we have the right foundation in place before exploring additional diversification, but certainly this will continue to be an area of interest in the industry and Argo.

Another pre-submitted question again directed to you. Do you have a view on energy pricing going into Q3?

Looking ahead to the third quarter with respect to Bake Homo, just given where it's located, temperatures will be cooling down. So, we expect good uptime coupled with stable power at Bake Homo that's powered by hydroelectric power. As far as at Helios, as people know, Helios is located in Load Zone West in ERCOT. And if you look at the power prices over the period we're discussing, I think you'll see we've seen much lower average power prices than in previous years. So hard to extrapolate ahead and determine whether or not that trend would continue, but certainly it's been positive over this period we've been looking at on the call. So hopefully that trend continues into Q3.

Thank you, Thomas. Another pre-submitted question. This time directed to Jim. Congratulations on the recent Galaxy debt payoff. I was just hoping you'd be able to share your outlook for Bitcoin mining economics over the near to medium term.

Thank you. Yes, the recent payoff of our $35 million Galaxy debt obligation is an important milestone for the Company. It strengthens our balance sheet and as mentioned gives us financial flexibility. In terms of Bitcoin mining and economics. Yes, we remain cautiously optimistic about Bitcoin mining economics as we believe the fundamentals of the network and the asset itself remains strong. Thank you.

Thank you, Jim. Another pre-submitted question directed to Thomas. Can you speak about M&A pipeline or existing growth opportunities?

Sure. I think we've been asked this question before and in the latest quarter there certainly has been quite a lot of activity in the mining space with respect to M&A, driven both by the search for power assets to fuel HPC growth desires and by firms that find themselves challenged one way or another, and are looking to link up with other firms and grow in size. Argo continues to keep an open mind in these regards and we engage in conversations that make sense. And then as far as other growth, we talked about Baie-Comeau and we do have our eyes on some other opportunities that are very early right now. But certainly, I would expect that M&A continues to be an active discussion in the mining sector in the coming months.

Thank you, Thomas. And another pre-submitted question directed to you. Do you see a world where the HPC AI stuff starts to become a competitive pressure to Bitcoin mining?

Well, the competition is probably really more about energy and energy resources. So, what we're seeing in the market is that, those who are providing HPC services are willing to pay top dollar for access to energy. Now whether this economic opportunity is attractive to miners, depends on their cost and their views on where the hash price might be heading long term. For Bitcoin miners, this is actually an opportunity to diversify their revenue streams. They can choose between sticking with traditional mining and to the extent their energy and facilities are appropriate, selling their energy access or compute power to these HPC providers, or perhaps as we're seeing in some instances a mixture of both. So again, this'll be an ongoing thread of conversation for the entire industry and we're certainly analyzing opportunities in the space as well.

Thank you, Thomas. The pre-submitted question, but from the chat and this time directed to Jim. Are there any plans to start paying a dividend?

No. We have no plans at this time to start paying a dividend. Any excess cash will be used either to pay down debt or to invest in future growth of the Company.

Thank you, Jim. And I think with the next question, we'll be drawing the Q&A to a close. So, another pre-submitted question directed to Jim as a final. Could you give an update on the lawsuit?

Sure. Regarding the shareholder lawsuit, we filed our motion to dismiss back in March of this year, and we are currently awaiting a ruling from the court on this.

Thank you for answering all those questions. Just before we close this session, Thomas, could I please ask you for a few closing comments?

Certainly, so appreciate everyone's interests and ongoing interest in Argo, and all that we've been doing. We appreciate your questions and look forward to updating everyone on our next call.

Thank you once again for updating investors today. Can I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete and I'm sure be greatly valued by the Company. On behalf of the management team of Argo Blockchain plc, we'd like to thank you for attending today's presentation and good afternoon to you all.

Good afternoon, and welcome to the Argo Blockchain plc Q1 update. Throughout this recorded meeting, investors will be in listen-only mode. [Operator Instructions] The company may not be in a position to answer every question received during the meeting itself, though the company can view all questions submitted today and publish responses where it's appropriate to do so. Before we go, we'd like to submit the following poll. I'd now like to hand over to Markella Zarifi, Argo's Financial Communications Representative. Good afternoon.

Thank you, Paul. Before we begin, I'd like to remind everyone that today's presentation and remarks may contain forward-looking statements. Please see our Form 20-F filed with the Securities and Exchange Commission for our full risk disclosures. With us today for our discussion of Q1 2024 results are Thomas Chippas, Argo's Chief Executive Officer; and Jim MacCallum, Argo's Chief Financial Officer. And now I'll turn now over to Thomas for some introductory remarks.

Thank you, Markella, and thank you, everyone, for joining us today. We recently shared our 2023 full year results, and I'm excited to update you on our progress since then for this quarter. As everyone is aware, the fourth bitcoin halving occurred just over a month ago, and Argo exited halving with a stronger balance sheet and leaner operations. As seen here, financial discipline, including deleveraging; operational excellence; and certainly, growth and strategic partnerships, are our three priorities. And they guide us on a daily basis for the sustainable future of Argo. By concentrating on these goals, we're optimistic about the ongoing growth and development opportunities for Argo. And we have a clear objective of delivering shareholder value. So I'm certainly excited to continue with the great work the team is doing and tell you more about what we've been up to. A few comments first on the macro front. With the 2024 halving complete, the block subsidy that miners collect now stands at 3.125 bitcoin, down from 6.25. The launch of spot ETFs for bitcoin were certainly big drivers of price from $40,000 to $75,000. But after the halving, ETF holders began selling and it actually resulted in about 7 days of net outflows, a reversal of day after day of net inflows for those ETFs. Although initially, there was a spike in transaction fees post-halving, it was short-lived and fees declined in the subsequent weeks. Runes, one of the drivers of fees in the initial period post-halving, are now generating far lower fees than regular transactions compared to the weeks succeeding the halving. As a result, fees per day have dropped below the first quarter's average of [64 spot 39] bitcoin. And hash price is coming down for us post-halving, Runes driven high. Concurrently, the network hash rate at an all-time high of 654 exahash before the halving, but dropped to 580 over the following 3 weeks. This reduction can be attributed to miners adjusting efficiency settings in their machines and some shutting down temporarily. This might appear significant, but such a decline, it's not out of the ordinary, and this happened on two occasions previously this year. Going forward, the hash rate is likely to oscillate as hash price changes. However, for the near term, due to highly compressed mining margins and the upcoming summer months here in the U.S., hash rate growth will likely be restrained. And then just looking beyond bitcoin for a moment. For the long term, the head of the U.S. Federal Reserve has suggested that the Central Bank might have hit its peak rate cycle height, which is promising for bitcoin mining because it suggests a more favorable environment with potential for increasing bitcoin prices. So with that, we can talk a little bit about our 2024 results. So we generated approximately $17 million of revenue in Q1, which was an increase of 4% from the last quarter of 2023, really due to elevated hash price. At the end of the first quarter, our cash in hand stood at $12.4 million, which is an increase from the $7.4 million at the end of 2023. As mentioned previously, we had some significant balance sheet events occur in Q1 2024, including an equity raise of nearly $10 million in January and the sale of our Mirabel facility in Quebec in March. The proceeds were used to repay the facility's existing mortgage and pay down some of the debt owed to Galaxy. So let's move on to the next slide, we can talk a little bit more about debt reduction in further detail. So as discussed on the previous call, debt reduction has been a focus for us since we sold Helios and restructured our debt at the end of 2022. As noted, we executed 2 significant transactions in the first quarter of '24, bolstering our cash position in addition to reducing our debt, that being the equity raise and the Mirabel sale. The Mirabel sale was a great transaction for a number of reasons. First, we realized an attractive exit on the asset with a $6.1 million sale price. And secondly, consolidating our Quebec fleet to Baie-Comeau allowed us to streamline operations with minimal impact to revenue. We were able to execute the move quickly, and we realized an annualized reduction in OpEx of about $700,000 per annum. Now let me turn it over to Jim for a deeper dive into Q1 financial results. Over to you, Jim.

Thank you, Tom. During the first quarter, we mined 319 bitcoin, and our mining margin percentage for the quarter was 38%, which is an increase from the 34% achieved in Q4 of 2023. We generated revenue of $16.8 million and $0.6 million in power credits from economic curtailment in Texas. As mentioned, this curtailment helped us to achieve a mining margin of 38% this quarter with an average direct cost per bitcoin mined of approximately $32,000. We raised $9.9 million of gross proceeds through an equity raise in January, of which we used a portion to pay down our Galaxy debt. As Tom mentioned previously, we also sold our Mirabel facility in March for $6.1 million. The accounting gain net of tax for this transaction was $3 million. Our adjusted EBITDA has increased almost twofold over the last year and was $3.8 million during Q1 2024. This slide shows our cash flow from December 31, 2023, to March 31, 2024. We continue to have a strong focus on cash flow generation and strengthening the balance sheet. In Q1, our cash flow from operations, including working capital changes, was $3.7 million. We used that for debt reduction, and we paid $1.7 million of interest during the period. During the first quarter of 2024, we improved our cash position by $5 million to over $12 million while simultaneously paying down our debt by over $12 million. With that, I'll turn it back over to Tom.

Thanks, Jim. So in the period since our last -- since our full year results, we have maintained our streamlined operations in Quebec through the consolidation of the fleet to Baie-Comeau, post Mirabel, as I mentioned. As part of that fleet consolidation, we did not take the opportunity to decommission -- I'm sorry. We did take the opportunity to decommission and sell some older-generation machines, which reduced our total hash rate from 2.8 to 2.7 exahash. We still have the majority of our fleet, roughly 2.4 exahash of total hash rate capacity, located at Helios in Texas. Now as we think about growth. The sector is focused on, of course, transitioning to clean energy, which has always been a focus for Argo. And it requires investment in the power grid and certainly in demand response technology. As we've stated, as have others in the industry, we believe bitcoin miners can play a very important role in that transition. Bitcoin miners are exceptionally agile and well suited for load-balancing programs. And by acting as a flexible load, bitcoin mining can help balance the grid by spinning up and spinning down quickly when required. Argo is having discussions focused on ways to integrate our operational capabilities with those of energy companies, and we certainly look forward to updating everyone on those discussions in due course. So as we continue in our mission of powering an innovative and sustainable blockchain infrastructure, these three pillars will continue to be our focus. With that, back to [Markella] for any questions. Thank you.

Thank you, Thomas. Thank you, everyone. The first question is from Kevin Dede from H.C. Wainwright, and it's directed to Thomas. Can you elaborate on the Galaxy relationship, their plans for the Helios site, and how you expect mining to progress through the hot summer months, including the potential for curtailing? Additionally, are we given the opportunity to overclock? And if so, have you taken advantage of it?

Thanks for your question, Kevin. So a compelling aspect of our operations at Helios is of course the facility's ability to curtail during periods of high power prices. For most of 2023, we procured electricity through fixed price power purchase agreements which ensured a stable cost of power. However, when market prices are high, of course, we can curtail or shut down operations and sell electricity back on the open market, a process known as economic curtailment. And as we discussed in the previous call, it generated about $7.2 million in power credits, directly reducing our cost of mining. The curtailment helped us achieve a mining margin of about 38% this quarter with an average direct cost per bitcoin mined of about $31,000. During the hot summer months, we expect to continue practicing economic curtailment when necessary. Additionally, we do have the opportunity to overclock our rigs to optimize for performance, and we'll do so when conditions are favorable. So thank you for that, Kevin.

Thank you, Thomas. The next question was pre-submitted in the chat and it's directed to Jim. Will Argo invest into infrastructure again, or only focus on machines?

Yes. Thanks for the question. Yes, currently, we have both hosted machines at Helios in Texas and owned machines at our Baie-Comeau site in Quebec, where we can also expand our capacity. As market evolves, we think there will be opportunities in both the hosted space and doing our own investing in infrastructure, and we'll evaluate these decisions on a case-by-case basis.

Thank you, Jim. Next question was again, pre-submitted, and it's directed to Thomas. What can you say about the growth opportunities you are seeking out for Argo? Any details on the size, type, timing?

Thank you for that. So we cannot get into details right now, but given Argo's size and market position, we believe that smaller sites with unique power cost and availability characteristics could fit well into our portfolio. Look, there are certainly many groups on the hunt for power resources right now, not just bitcoin miners. But we think our size may be an advantage here as we flesh out opportunities. And certainly, we'll have more to say when we can about those.

Thank you, Thomas. The next question is from Kevin Dede at H.C. Wainwright once more, and it's directed to Jim. How do you plan to return to growth while balancing debt obligations?

Yes. Thanks, Kevin. Yes, we've had a strong focus on costs over the past year and feel the heavy lifting has been successfully completed here. Our run rate, as we said, for non-mining operating expenses has trended to approximately $1 million per month, and we believe that's a reasonable outlook for the balance of the year. Our new vision centers on optimizing operational efficiency, strengthening the balance sheet and reducing debt. We aim to leverage strategic partnerships and explore sustainable growth projects while maintaining our commitment to renewable energy sources. Given that we exited the bitcoin halving with cash of just over $12 million and reduced our debt by over $12 million during the first quarter, Argo is in a strong position, and the company is in a growth mindset now. And we'll continue to focus on fiscal responsibility.

Thank you. Our next question is pre-submitted, and it's directed to Jim. Can you speak to power prices for the second quarter?

Yes. I mean, we can't go into too much detail here, but power prices during the second quarter, which include obviously the early part of the summer, are subject to significant volatility which we certainly saw last year. This period often sees heightened uncertainty due to the potential for heat waves which can drive up demand and consequently prices. To navigate these fluctuations, we have to remain agile and capitalize on any economic curtailment programs that may arise. We can give some color. April was clearly a strong month for bitcoin economics. For May, despite the bitcoin halving, through lower power prices and optimization of our fleet's efficiency settings, we have seen mining margins in the 30% range, albeit on the lower revenue resulting from the halving. We will closely monitor market trends and price movements, and this proactive approach will enable us to adjust our strategies in real time and optimize our mining profitability while mitigating the risks of hash price and energy cost volatility.

Thank you, Jim. Next question was submitted in the chat, directed to Thomas. Does Argo have any plans to branch into AI data centers?

Thank you for that. With respect to AI and HPC, this is certainly a very topical area amongst miners. We understand the demand for HPC processing in the market. But I think it's a different business than operating a bitcoin mining facility. We have explored the possibility and we're certainly not ruling it out for the future. However, our current strategy remains centered on bitcoin mining operations.

Thank you, Thomas. Next question is submitted by Bill Papanastasiou of Stifel and it's directed to Thomas. We have seen mining economics weaken following the halving event. How is management approaching the capital allocation strategy of balancing expense management with growing, upgrading the fleet? Is there any near-term path of a shift towards growth in the future?

Thanks for that, Bill. So Argo's fleet operates flexibly, which allows us to adjust power consumption through over- or under-clocking like a dimmer switch allows you to control the brightness of a light. And I think Jim referenced that in his comments about Q2 power. In the current market and recognizing the weaker mining economics, this adaptability is essential. So we fully appreciate the capabilities of newer generation machines and the efficiency they bring. Our growth strategy when it comes to fleet, we'll always consider hash price, rig availability and energy costs, amongst other factors. As I've said, we're shifting back to a growth mindset. We want to leverage our size to target sites that may be less appealing to larger miners and explore what opportunities we can there. And we'll find the right fleet for those opportunities when they present themselves. Our capital allocation strategy is going to balance expense management with fleet upgrades and ensure that we can remain competitive and ready for future opportunities as they arise in the industry.

Thank you, Thomas. Next question was also pre-submitted and directed to Jim. How does Argo plan to manage its debt, and what are the prospects for refinancing?

Yes. Thanks for that question. Yes, we're pleased with how we've managed our Galaxy debt. Over the past year, we paid it down. It started at $35 million. We paid it down $23 million or approximately 2/3 of the total balance over the last 12 months. At March 31, we reported cash of over $12 million, and our Galaxy debt has been substantially reduced to $12.8 million. We exited the halving in a strong fiscal position and continue to focus on paying down this debt and strengthening the balance sheet.

Thank you, Jim. Another pre-submitted question for Thomas this time. What are your plans for increasing efficiency and reducing the recent downtime at several bitcoin mining facilities?

Thank you for that question. So with the relocation to Baie-Comeau, as I noted, we consolidated our infrastructure. And as discussed in the previous quarter's call, the downtime was minimal and had minimal impact to revenue. In response to the downtime that we saw in February, as we also noted on the previous call, there was some maintenance upstream by power providers that was beyond our control. I think when you look at our operations team, they're doing a very good job of maintaining uptime across the fleet, and they continually work to improve operational efficiency. And you can observe that when looking at the 5% increase in daily bitcoin production in March of '24 compared to February of '24. So we'll continue to look for ways to enhance efficiency and reduce our susceptibility to downtime events on an ongoing basis.

Thank you, Thomas. Another pre-submitted question directed to Thomas once more. Can you give an update on where hash rate currently stands across all facilities? Additionally, assuming hash prices normalize post-halving, what strategies can you implement to lower your direct and all-in cost per BTC mined to mitigate losses?

Thank you for that. So our hash rate capacity at Baie-Comeau was about 300 petahash. And that's the ePIC BlockMiners. And the efficiency on the nameplate for those machines is anywhere from 30 to 35 joules per terahash. At Helios, where we have about 2.4 exahash, we're running the S19j Pros. And the nameplate efficiency is about the same in the 30 to 35 range. So to lower our direct and all-in cost per bitcoin mined, we're going to continue to optimize the fleet for operational efficiency and leverage economic curtailment during high power prices. I think going forward, we're open-minded about strategic opportunities for equipment acquisition and site acquisition and what have you. And we'll continue to focus in the interim on maintaining cost-effective operations to ensure that we're getting the best out of the fleet that we can.

Thanks, Thomas. I think we have time for one last question. So with this one, let's wrap that up. Last question, pre-submitted, directed to Jim. What was the thought process around selling the Mirabel facility?

Yes. So there were clearly a number of factors that went into the sales decision. Firstly, we were very happy with the price. We think the sale price of $6.1 million, which equates to approximately $1.2 million per megawatt for that site, was significantly more than what would -- what it would cost to develop a facility in North America. So we're pleased with the price, first of all. Secondly, the sale provided an opportunity, as Tom mentioned, to consolidate our operations into the Baie-Comeau facility. So going from 2 facilities in Quebec to 1, allowing us to reduce our overhead and operational expenses, contributing to greater overall efficiency for Argo. And then lastly, the consolidation, as we've mentioned, has had minimal impact on our overall hash rate and revenue generation from relocating the machines. We're able to maintain our hash rate capacity while at the same time streamlining our Quebec operations, which allows us to focus the resources and management efforts more effectively. And additionally, the net proceeds from the sale strengthened our financial position, support our growth initiatives and reduces our interest expense going forward, which is important. So these were the primary factors in deciding to sell the Mirabel facility.

Okay. Well, thank you, everyone, for joining us today. It goes without saying that it’s certainly an exciting time in the mining space and we think an exciting time for Argo. We look forward to speaking with everyone again in a few weeks at our Annual General Meeting on June 6. Thank you very much for your time.

Fantastic. Thank you very much, indeed, for updating investors today. [Operator Instructions] On behalf of the management team of Argo Blockchain plc, we would like to thank you for attending today's presentation. That concludes today's session, and good afternoon to you all.

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 by the Q&A tab situated on the 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 questioner received during the meeting itself. However, the company can review all questions submitted today and will publish those responses where it's appropriate to do so. Before we begin, I would like to submit the following poll. I'd now like to hand you over to management team from Argo Blockchain plc. Tom, good afternoon, sir.

Thanks, Lilly. Before we begin, I'd like to remind everyone that today's presentation and remarks may contain forward-looking statements. Please see our Form 20-F 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 MacCallum, 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 am excited to be speaking with you and certainly it's been a busy few months since I stated 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 year's 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 hash 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 1,760 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 Mirabel 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 Mirabel facility. The Mirabel 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 Baie Comeau, 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.

Thanks, Tom. During the fourth quarter, we mined 443 Bitcoin, which was a 20% increase over the prior quarter. This was largely driven by lower levels of economic curtailment in the fourth quarter, as weather in Texas was fairly moderate compared to the heat waves we saw in Q3. This also increased our net direct costs and reduced our mining margin percentage when compared to Q3. Our revenue in Q4 was also significantly higher than the third quarter, primarily due to the higher price of Bitcoin. Our realized Bitcoin price in Q4 was approximately 36,500, which was 30% higher than the roughly 28,100 Bitcoin price that we realized in Q3. As Tom mentioned in his remarks, we continue to focus on financial discipline. In the fourth quarter, we reduced our non-mining operating expenses by 12% to $3.1 million. We also recorded a non-recurring expense of $2 million for the quarter, which included a legal settlement, some other legal costs, and transaction expenses. We generated adjusted EBITDA of $3.6 million in the fourth quarter, which continues our pattern of growing adjusted EBITDA sequentially each quarter during 2023. At the end of the year, we had $7.4 million of cash in hand. We executed two significant transactions in the first quarter of 2024, which has bolstered our cash position in addition to reducing our debt. We raised $9.9 million of gross proceeds through an equity raise in January, of which we used a portion of that to pay down our Galaxy debt. We also sold our Mirabel facility in March for $6.1 million. We used all of the net proceeds from that transaction to reduce our Galaxy debt down to less than $13 million at the end of March 31st, with a total debt balance of $54 million. Now let's look at a comparison between 2022 and 2023. In 2023, we mined 1,760 Bitcoin, which was an 18% decrease from our production in 2022. The primary driver for this was the large increase in network difficulty. On average, network difficulty in 2023 was 71% higher than in 2022. And the network difficulty at the end of 2023 was more than double the network difficulty at the beginning of the year. Our revenue in 2023 of $50.6 million was 14% lower than our revenue in 2022, driven primarily by the lower Bitcoin production. Mining profit for 2023 was 43%, which is lower than the 54% we achieved in 2022. The primary driver for this decrease is the increased difficulty level and the lower Bitcoin production. Our non-mining operating expenses for 2023 were nearly 60% lower than 2022. This resulted from the sale of our Helios facility, and it's also a testament to the team who scrutinized every line item and found ways to reduce our operating costs. Our adjusted EBITDA for 2023 was $8.3 million, a significant improvement over the prior year. Now let's take a look at our cash generation for the fourth quarter, as well as the first quarter of 2024. This slide shows our cash from September 30th, 2023 to March 31st, 2024. As we've been saying throughout the year, we've had a strong focus on cash flow generation and strengthening the balance sheet. In Q4, our cash flow from operations, including working capital changes, was $7.1 million. We used $5 million of cash for debt reduction, and we paid $2.6 million of interest expense during the period. At the end of the year, we had $7.4 million of cash on hand. As we've mentioned earlier, in the first quarter of 2024, we also benefited from the equity raise and the sale of our Mirabel facility. Through these two transactions, we were able to pay down an incremental $9 million of debt over and above the monthly amortization payments to Galaxy. Due to the pay down of debt, we have reduced our interest payments by nearly $1 million compared to the fourth quarter. In summary, during the first quarter of 2024, we improved our cash position by $5 million to over $12 million, while simultaneously paying down our debt by over $12 million. With that, I'll turn it back over to Tom.

Thanks, Jim. In Quebec, we've strengthened our operations by consolidating our fleet at our Baie Comeau facility post the sale of Mirabel. I want to take this opportunity to recognize the herculean efforts of our Quebec operations team. They were able to relocate the Mirabel miners to Baie Comeau in a matter of days with minimal impact to our operations. As part of the fleet consolidation, we took the opportunity to decommission and sell some older generation machines, which reduced our total hashrate capacity from 2.8EH to 2.7EH. We still have the majority of our fleet, roughly 2.4 EH of total hashrate capacity located at Helios in Texas. As we think about strategic growth, we're focused on working with energy generators to utilize Bitcoin mining's inherent flexibility. We talked about economic curtailment in Texas, but that's just one example of how Bitcoin mining can integrate with power grids. Demand response is a critical component of transitioning to the power grid of the future, and we believe that Bitcoin miners can play an important role in that transition. We are having discussions focused on ways to integrate our operations with those of energy companies, and we look forward to updating everyone on those discussions in due course. With that, back to Lilly and Tom for any questions.

Thomas, Jim, thank you very much for your presentation this afternoon. [Operator Instructions]

Thanks, Lilly. Our first question for Tom is from Bill Papanastasiou from Stifel, as well as [indiscernible] from the Q&A chat. Can you speak to the current appetite for a fleet upgrade and the growth strategy in the post-halving environment?

Thanks, Tom. Look, Argo has a strong fleet. It's important to remember that these rigs do not operate with the toggle switch, but instead with the dimmer switch, allowing us to vary the amount of power consumed through over underclocking. We are, of course, aware of the capabilities of newer generation machines. As we think about opportunities for growth, we will look at hash price, the availability of rigs, and the nature of any opportunities energy cost to determine the right approach on machines. We also look to use our size as an advantage and target sites and opportunities, the scale of which might not be appealing to substantially larger miners, but are to Argo. Look, knowing that everyone is likely familiar with Argo's history, shifting the company back to a growth mindset is new for this year. And the team is digging in on several opportunities. Back to you, Tom.

Thanks, Thomas. Next question comes from Joe Flynn at Compass Point, as well as Chris H. from the Q&A chat. And this one is for Jim. From a capital allocation standpoint, can you walk us through your ongoing strategy to pay down the remaining $54 million of debt following the sale of the Quebec data center?

Hey, thanks. Thanks, Joe and Chris for the question. Yeah, we think we've done a pretty good job in the last 18 months paying down our debt. We currently have cash on hand of $12 million, and our Galaxy debt is a similar balance to this. We enter the halving in strong financial position, and obviously, we continue to focus on our debt reduction and strengthening the balance sheet.

Thanks, Jim. Our next question comes from Kevin Dede at H.C. Wainwright. This is for Thomas, can you give an update on where hashrate currently is in Quebec after the sale of Mirabel?

For sure. So post the sale of Mirabel, as I noted, we very quickly moved the Mirabel fleet to Baie Comeau. So now up and running at Baie Comeau is approximately 300 petahash.

Thanks, Thomas. Next question for Jim this comes from Jason B. in the chat. Does the Q1 31,000 direct cost per Bitcoin include depreciation?

Yes, good question, Jason. Yes, this figure only includes our power and hosting costs paid at Helios and our Quebec sites. It does not include any depreciation. Thank you.

Thanks, Jim. Another one for you from Bill Papanastasiou at Stifel. Can you please provide some color as to how expense management is progressing in Q1 and Q2?

Yes, thanks, Bill. Yes, we continue to focus on costs. We feel that most of the heavy lifting has been successfully completed here. Our run rate for non-mining OpEx has trended to approximately a $1 million per month over the last few quarters. And we believe that's a reasonable outlook for the balance of the year.

Great, thanks. Next question for Thomas. This comes from [indiscernible] in the chat. Could you give an update on the shareholder lawsuit?

I can. Thanks, [indiscernible], for the question. On the shareholder suit, we filed a motion to dismiss a few months ago and we're awaiting a ruling from the judge on that motion. Once there is an update, I would expect we'll send out an RNS to make everyone aware.

Thanks, Thomas. Next question was pre-submitted ahead of the earnings call. Will Argo invest into infrastructure again or only focus on investing in machines?

Sure. So today, obviously, we have both hosted and self-operated machines, Helios and Baie Comeau. As the market evolves, we think there will be opportunities where it makes sense to be hosted and somewhere it makes sense to own everything vertically. So we'll continue to evaluate those decisions on an individual basis.

Thanks, Thomas. Another pre-submitted question. Does Argo have any plans to branch into AI or HPC data centers?

Sure. So look, we most definitely understand the demand for AI and HPC processing in the market. But from our perspective, that is a substantially different business than operating a Bitcoin mining facility. We've certainly looked at it, but it's not an area where we're currently focused.

Great. Thanks, Thomas. Here is another question that was pre-submitted. We got this a couple of times and we seem to get this every quarter. This is for Jim. Are there any plans to start paying a dividend?

No, we do not have any current plans to start paying a dividend at the moment. Any excess cash that we generate is being used to pay down debt and also to invest in future growth for the company. So yes, no plans at this point to pay a dividend. Thank you.

Great. Thanks, Jim. Next question from Jeff R. [ph] in the chat for Tom. How do you think about M&A in the post-halving environment?

Thank you, Jeff. Look, the market may present opportunities for inorganic growth. We're evaluating many projects and would certainly consider opportunities that make sense and ultimately create value for shareholders.

Thanks, Tom. Next question from the chat. What was the thought process around selling the Mirabel facility?

Sure. So the sale of Mirabel achieved a great sales price, as we mentioned, $6.1 million. That works out to $1.2 million per megawatt, which is much more than the development costs for facilities anywhere in North America. The opportunity to consolidate our operations to Baie Comeau and achieve some cost-saving synergies, were obviously a driver. And ultimately, being able to do this with minimal impact to our hash rate or revenue generation from consolidating the machines also made it an appealing option for us.

Great, thanks. Next question, can you talk a little bit more about the power price you achieved in Texas?

Sure, I'll take that. So as we noted in the presentation, our power costs across all sites for 2023 was just under $0.05 per kilowatt hour. And in Texas, we benefited from $7.2 million in economic curtailment revenue from demand response programs. That obviously played a very important part in driving down our net electricity costs for the year.

Great. Okay. Thanks, Thomas. Lily, back to you.

Thomas, Jim, thank you for answering all those questions you got from investors. And of course, the company can review all questions submitted today and we'll publish those responses on the Investor Meet Company platform. Just before redirecting investors to provide you with their feedback, which I know is particularly important to the company, Thomas, can I please just ask you for a few closing comments?

Certainly, Lily. Thank you. Thanks everyone for joining us today. It's an exciting time in mining space, as I said, and certainly very exciting time for Argo. We look forward to speaking with everyone in a few weeks to discuss our Q1 results in more detail. Thank you for your time today.

Thomas, Jim, thanks for updating investors today. Can I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can best understand your views and expectations. This will only take a few moments to complete and I'm sure will be greatly valued by the company. On behalf of the management team of Argo Blockchain plc, we would like to thank you for attending today's presentation. And good afternoon to you all.

Good afternoon, and welcome to the Argo Blockchain plc Q3 Update Investor Presentation. Throughout this recorded presentation investors will be in listen-only mode. Questions are encouraged, can be submitted at any time by the Q&A tab situated on the right-hand corner of your screen, click Q&A scroll to the bottom type your question and press send. Given the large attendance on today's call, the Company will not be in a position to answer every question received during the meeting itself. However, the Company will review all questions submitted today, will publish responses where it's appropriate to do so. Before we begin, I would like to submit the following poll. I'd now like to hand you over to Tom Divine, Vice President of Investor Relations. Good afternoon.

Thank you, Paul. Before we begin, I'd like to remind everyone that today's presentation and remarks may contain forward-looking statements. For our full risk factors, please see our Form 20-F filed with the Securities and Exchange Commission for the year 2022. With us today for our discussion of Q3 2023 results are Seif El-Bakly, Argo's Interim Chief Executive Officer; and Jim MacCallum, Argo's Chief Financial Officer. And now I'll turn it over to Seif.

Thanks, Tom. Hi, everyone. Thanks for joining us today to discuss our Q3 results. It was a strong quarter for us, and I'm excited to dive into the numbers. Just a quick reminder for everyone of our three key priorities that helped guide us on a daily basis, we continue to focus on financial discipline and deleveraging, operational excellence, growth and strategic partnerships for the sustainable future of this company. I hope you're seeing how these priorities have been manifested in the performance of the business over the last couple of quarters. Before we dive into the Q3 results, I want to take a few minutes to discuss the current macro environment and some recent trends that we're seeing. The network hashrate continues to increase at a fairly rapid pace. The global network started the year at roughly 270 exahash per second, and it has grown approximately 70% over the course of the year. Over the last two years, we've seen some seasonality emerge in hashrate and network difficulty partly due to the large amount of hashrate going online in Texas. During the summer months, we saw instances where hashrate decreased as Texas miners curtailed operations in response to high power prices. This is something we experienced at Helios, which generated significant proceeds in form of power credits. I'll go into more detail on that a little bit later. But that seasonality does have an impact on network difficulty in hash price, so it's something that we monitor closely, especially as we head into winter months where cold weather can also impact grid conditions and power prices. Overall, the third quarter saw hash price trend down, bottoming out at around $60 per petahash per day during August and September, but it's rebounded strongly in late October and so far into November, rising to over $90 per petahash per day. We've historically seen those temporary spikes from ordinal mint before, which drive up transaction fees. We do expect hash price to stabilize as the backlog of transactions is processed. Hash price takes into account the price of Bitcoin, the network difficulty and transaction fees at any given time. It's a metric that we pay close attention to. Every $10 increase in the dollar per petahash per day has the potential to generate approximately an incremental $840,000 of revenue per month or $2.5 million per quarter based on Argo's total hashrate capacity. We're also paying close attention to some upcoming events that we believe will impact our business. For one, if approved by the SEC, we believe that at spot, Bitcoin ETF, will bring large institutional cash inflow into the space and will ultimately increase demand for Bitcoin. And of course, we have the 2024 halving approaching in late April of next year. As everyone knows, the halving is a feature of the Bitcoin protocol, whereby the block reward is reduced by 50%. As we approach the halving, our key focus is on three things: fleet efficiency, cost structure and the strength of our balance sheet. Argo has a strong fleet efficiency of right around 30 joules per terahash, and we've had attractive power and hosting costs at an average of $0.045 per kilowatt hour so far this year. This combination of fleet efficiency, low power costs and hosting costs makes us well positioned for the halving. On the balance sheet front, we said this time and again that one of our main priorities is reducing our debt and interest payments in order to strengthen the balance sheet to be well positioned for that halving. Turning to our third quarter results. We mined 370 Bitcoin and generated revenue of $10.4 million, which is a decrease of 17% compared to our revenue from Q2. This decrease was primarily driven by economic curtailment we experienced at Helios during August and September. However, through this curtailment, we accrued $4.4 million of power credits through power trading activities at Helios, which more than offset our decrease in revenue versus Q2. On the next slide, I'll go into some more details about economic curtailment and how that benefits us since we've gotten a lot of questions from investors pertaining to this source of net revenue. But put simply, the power credits we accrued helped us achieve an overall power and hosting cost of less than $0.04 per kilowatt hour. For the quarter, our mining margin was 58%, translating into an average direct cost per Bitcoin of $11,736. We also continued to focus on cost reduction, and we reduced our non-mining operating expenses by 11%. Our adjusted EBITDA for the quarter was $3.1 million, which is an improvement from the $1.1 million of adjusted EBITDA that we generated in Q2. In July, we strengthened our balance sheet by raising $7.5 million in gross proceeds through an equity raise with primarily institutional investors in the U.K. and also reduced our Galaxy debt by $5 million. And at the end of September, our cash balance was $8 million. Given our strategic decision to mine in Texas, I'd like to give a little more color on economic curtailment there. So on the screen is a slide that came out of an ERCOT presentation during the September meeting of its Large Flexible Load Task Force. That's the group within ERCOT that is tasked with integrating large power demands such as Bitcoin mining into the Texas grid. The slide shows the impact of elevated power prices and the use of power by Bitcoin miners on September 6. If you follow the screen, Bitcoin mining usage is in blue, and the gray line shows the power price throughout the day. So you can see a very strong negative correlation between the price to power and the consumption of power from Bitcoin miners. As power prices increased, it became less profitable to mine, incentivizing miners to curtail their operations. From this chart, it demonstrates how the majority of miners were shut off during peak hours of power price. As power prices came down in the evening, you can see miners ramp up their operations and their consumption increasing again. So this data is important as it demonstrates how flexible Bitcoin miners are and how quickly they can reduce power consumption when demand is high. As soon as prices spike above their breakeven point, miners are turning off. This is what is meant by flexible load. When the market price of power spikes to a maximum amount of $5,000 per megawatt hour, as it did on September 6, miners who are not hedged will simply shut down and stop mining. The miners who have locked in their power prices can make a decision. They can either use that power for their operations and continue to mine or they can sell that power on the open market and make a profit from the difference in the prevailing market price and the price which they've locked in their power. In other words, when the price is high enough, it makes economic sense to sell that power in the open market rather than to use it and mine Bitcoin. In essence, that's what happens at Helios, and through our hosting agreement, we share in those proceeds. And for this quarter, those power credits amounted to $4.4 million. That being said, let me turn it over to Jim to provide some additional comments on our financial results for the quarter. Jim?

Thank you, Seif. As you mentioned, we generated $10.4 million of revenue for the quarter, a decrease of 17% from Q2 resulting from economic curtailment. However, the power credits that we generated from the curtailment reduced our net power costs significantly and increased our mining profit to $6.1 million. Our mining margin percentage was 58% for Q3, an increase over the 36% mining margin we achieved in Q2. During the quarter, we recorded a onetime noncash provision of $1.2 million related to prior year sales tax expected to be received from the Canadian tax authorities. This is the majority of the $1.5 million of nonrecurring expenses that we added back to adjusted EBITDA. We generated adjusted EBITDA of $3.1 million, which is a strong improvement from the second quarter. For the nine-month period ended September 30, we generated $5.3 million of adjusted EBITDA. At the end of the quarter, we had $8 million of cash on hand. As Seif mentioned, we've seen a significant increase in hash price in October and so far into November. With our total hashrate capacity, every $10 increase in hash price results in approximately $2.5 million of incremental revenue per quarter, which dramatically improves our profitability and cash flow. This slide shows our cash flow from the end of June to the end of September. Our cash flow from operations, excluding working capital changes, was $1.5 million. As Seif mentioned, we raised $7.5 million in gross proceeds from the sale of equity, and we paid down $7.8 million in principal and interest on our debt. At the end of the quarter, we had a net power receivable of $2.8 million. Adding that to the $8 million closing cash balance would have given us $10.8 million at September 30 compared to $9.1 million at June 30. We are pleased that we continue to improve our operating cash flow with our focus on operations and cost reduction. As we've shown in prior quarters, we continue to scrutinize all of our non-mining operating expenses and find ways to reduce costs. In Q3, we reduced our recurring non-mining operating expenses by 11% as compared to Q2. Since the second half of 2022, we've cut our non-mining operating expenses by more than 70%. This cost reduction is important because it improves our overall margin and cash flow generation. Again, one of our key priorities is to reduce debt, which is critically important as we approach the halving. In Q3, we reduced our debt owed to Galaxy by $5 million to $27 million, and we ended the quarter with $70 million in debt. We are also in advanced discussions to sell certain noncore assets, which is an important part of our deleveraging strategy. We anticipate announcing further details by the end of the year. With that, I'll pass it back to Seif.

Thanks, Jim. In Quebec, we've now completed the deployment of our ePIC BlockMiners numbering around 2,700. This represents around 300 petahash of additional capacity, bringing our total hashrate capacity to 2.8 exahash as per second. We're seeing really good performance from these machines, and we're excited to have added them to our fleet just in time to take advantage of the recent run-up in hash price. So all in all and in summary, it was a great quarter for Argo. We increased our mining margin, our adjusted EBITDA and our total hashrate capacity, all the while continuing to cut costs and reduce debt. I'm also really optimistic about the trends that we've been seeing in the market with the increases in both Bitcoin and hash price. Argo is well positioned to capitalize on these trends as we move forward into 2024. With that, back to you, Paul and Tom, for any questions. Thanks, everybody.

[Operator Instructions] I'd like to remind you, a recording of the presentation along with the copy of the slides and the published Q&A can be accessed via your Investor dashboard. As you can see, we've had a number of questions submitted both throughout today's presentation and pre-submitted. Tom, if I may just hand back to you just to read out those questions where appropriate to do so, and I'll pick up from you at the end.

Great. Thanks, Paul. Our first question comes from Bill Papanastasiou at Stifel. Hash price has been rebounding lately with the recent appreciation in the Bitcoin spot price. Can you speak to the improvements in Q4 '23 and elaborate on how it is impacting cash flow?

Yes, sure. I'll take. Thanks, Tom. Thanks, Bill. Yes, the hash price is something that obviously we're paying very close attention to. It's come down a bit from its most recent peak at $90, but it's still significantly higher than the Q3 average of $67. So I mentioned this during our remarks, but really, for every $10 increase in hash price, based on our total hash rate capacity of 2.8 exahash, we're generating an additional $2.5 million per quarter. So we did just have a difficulty increase of around 3.5%. So that tempers a little bit with the hashrate, but it's actually smaller than the difficulty adjustment we were actually expecting a year ago -- a week ago, sorry, not a year ago.

Our next question comes from Kevin Dede at H.C. Wainwright, and this is for Jim. Can you remind me how you reduced the debt by $5 million? Did that come from operating cash flow?

Yes. Thanks, Kevin. In July, you'll recall, we raised around $7 million of net proceeds, and immediately, 25% of that went to reduce the debt. Plus, we had another three amortization payments of roughly $1.1 million each, and that came out of our operating cash flow and cash on hand. So that's the three plus the $1.7 billion is $4.8 million or approximately $5 million there.

Thanks, Jim. Our next question comes from Chase White at Compass Point. Seif, now that all your machines are installed and operations are going well, do you have any visibility into future growth options? Is there a time frame for making any decisions?

Yes, absolutely. Thanks, Chase. Look, we're continuing our discussions with some key strategic partners and hope to share some updates with you on our next call. Right now, we're -- in parallel to that, we're focused on reducing our debt and cost structure. So it's really going to allow us to be opportunistic when we're thinking about the halving. So I think we're going to see a lot of opportunities in the market as a lot of unprofitable miners come offline, and we're basically just going to be ready to take advantage of that be it from an operational perspective, financial perspective or a strategic partnership perspective.

Our next question was submitted in the chat. How were the non-mining expenses reduced by 11%? And is that reduction stable going forward?

Yes, I can take that. As I mentioned earlier, we were able to reduce our recurring non-mining OpEx by around 11% from the prior quarter. This was primarily driven by lower insurance costs, lower professional fees and lower salaries as a result of reduced head count. And so yes, we believe this is going to be an ongoing reduction going forward.

Thanks. Our next question for Seif from Kevin Dede again from H.C. Wainwright. Can you speak a little bit about how the ePIC BlockMiner machines are performing in Quebec?

Yes. Thanks, Kevin. Performance is just better than expected. We're seeing really good results, especially when we overclock them to about 130 terahash per unit. Currently, they're averaging about 114 terahash through the fleet. So they're representing about 11% of our overall hashrate capacity right now. Efficiencies on par with the S19J Pros. They're capable of achieving good efficiency when we down clock them. So down clocking them brings them to about 27 joules per terahash. Uptime is outstanding, thanks to Quebec's reliable power. We're entering our curtailment season in Quebec, so minimal downtime still despite that is to be expected. Firmware-wise, it's stable. It's performing as expected. ePIC has been providing us with all the right updates and then the installation process was amazing thanks to our tech. I got to -- kudos to our operations team here. I think the rigs were deployed within 48 hours once they got to the data centers. So all in all, Kevin, I would say that they're performing better than expected.

Thanks, Seif. Our next question is for Jim. This comes from [Jason F.] in the chat. Can you comment on Argo's capital structure and how you plan to continue addressing debt?

Yes. Thanks, [Jason]. Yes, we continue to focus on paying down our debt. We've made significant progress in paying down our Galaxy debt especially, and we are continuing to look for other ways to strengthen the balance sheet. Some of the avenues we're exploring include noncore asset sales and potential refinancing of our existing debt. We have seen, with the improvement in Bitcoin mining economics over the past month, more appetite for debt and equity financing from the capital markets. So we're having lots of conversations on that front as well.

Another question that we've received several times in the chat, how do you plan on -- or do you plan on expanding the mining capabilities in Canada? And do we plan on renewing our contract with Galaxy and continue to mine at Helios once the two-year contract expires?

Yes, I'll take that. So good question. I think having our history or Argo's history beginning in Canada, I mean we know it. We understand it. We love the reliability of the power here. But we're also nimble. We're flexible, and most importantly, we're mobile. So which really makes those geographically agnostic. When we're thinking about growth and opportunity, we're really looking at anywhere from hydropower in Quebec or Texas or the deserts of Oman. So we're really open and having these discussions accordingly and remain opportunistic and again, geographically agnostic.

Thanks, Seif. Another question that we've received several times, including from [Sabir B.], [Sagar S] and [Satish P], when should we expect to hear more about the discussions mentioned on the asset sales?

Yes. Thanks, [Savir, Sagar] and everybody else. I mean I appreciate everybody's patience on this. As Jim mentioned, we're still in advanced discussions with partners. We're genuinely making good progress here, and we anticipate sharing something hopefully by the end of the year.

Our next question comes from Bill Papanastasiou. What are your network hashrate forecasts post halving and how will ARBK remain competitive?

Yes. Good question, Bill. Thanks. I mean we're expecting to see a lot of hashrate come offline as miners with older-generation machines and an older fleet, mining -- as mining gets more expensive and power contracts or good power contracts, it's just more difficult to find and to mine profitably. So as we've seen in past halving cycles, I think the difficulty adjustment will fluctuate back and forth as the network flushes out the miners that are just right on margin or below. And I'm going to say this again. I mean, really, our focus is what we can control, and it's why, in my initial comments, I say that we're so focused on efficiency and costs. So relative to the entire network, we have an efficient fleet. We're competitive from a power and hosting cost perspective. Year-to-date, our power hosting has been all in at around $0.045 per kilowatt hour. So we're looking at, again, efficiency in operations, and we're also looking at potential hedging opportunities using derivatives, which I think everyone in this space should be looking into. And so I think those factors, the ones at least that are in our control, should enable us to remain competitive and continue to mine profitably after the halving. So thanks for the question, Bill. It's a good one, and we're conscious of all of that.

And then this will be our last question from Kevin Dede at H.C. Wainwright. Seif, can you clarify, when you reached 2.8 exahash, did that come from the BlockMiner machines?

Yes. So thanks, Kev. In our September monthly operational update, we announced that we had completed the deployment of our ePIC blockchain machines. So -- and they represent around 300 petahash of hashrate capacity. So that essentially enabled us to grow from 2.5 to 2.8 exahash. So the BlockMiners have been online and hashing since the end of September.

Great. Thank you, Seif. Paul?

Fantastic. Thank you very much indeed for addressing those questions. And of course, the Company will review all questions submitted today and will publish responses on the Investor Meet Company platform. Before redirecting investors to provide you with their feedback, which is particularly important to the Company, Seif, if I could just ask you just for a few closing comments, please.

Yes. Thank you, Paul. I just want to thank everyone around the world for tuning into our earnings call today. Again, it was a great quarter for Argo with improvements in mining margin, adjusted EBITDA and hashrates. So we really continue to focus on deleveraging and reducing costs and looking forward to our next call to give everybody some more updates. So thank you, everybody. Be well. Thank you, Paul. Thank you, Tom. Thank you, Jim. Thanks, team.

Thank you all for updating investors today. Could I please ask investors not to close the session as you'll be automatically redirected to provide your feedback in order the team can better understand your views and expectations? This will only take a few moments to complete and is greatly valued by the Company. On behalf of the management team of our Argo Blockchain plc, we'd like to thank you for attending today's presentation, and good afternoon to you all.

Thanks Alex. Before we begin, I’d like to remind everyone that today’s presentation and remarks may contain forward-looking statements. For our full risk factors, please see our Form 20-F filed with the Securities and Exchange Commission for the year 2022. With us today for our discussion of Q2 and first half 2023 results are Seif El-Bakly, Argo’s Interim Chief Executive Officer; and Jim MacCallum, Argo’s Chief Financial Officer. And now, I’ll turn it over to Seif.

Thanks, Tom. Good morning everyone and good afternoon to our shareholders in the UK. It’s great to have you with us today to discuss our Q2 earnings and first half of 2023 results. As mentioned in previous calls, ever since Jim and I took the helm at Argo, we focused on three key priorities, which are financial discipline and deleveraging, operational excellence and growth, and strategic partnerships for the sustainable future of the Company. In my comments, I’ll provide updates on our progress as they relate to these key pillars. With that, let’s look at how Q2 shaped up. In the second quarter, we mined 456 Bitcoin and generated revenue of $12.6 million, which is an increase of 10% over a revenue from Q1 of this year. Our mining margin percentage came in at 36%, which is down from the 49% mining margin we achieved in Q1. There are a couple of drivers for this. So, I’ll take some time to address that now. Helios now has a fixed price PPA for a significant portion of the facility’s power load. Because we get access to this fixed power price on a pass-through basis, it provides us with greater certainty over power costs going forward, and it also allows us to participate in economic curtailment. This means that during periods of the day when power prices are really high, Helios can curtail operations and sell that power back to the grid in real time. This generates power credits for us, which ultimately reduces our power bills. In Q2 alone, we generated $1.1 million worth of power credits. This is equivalent to mining an additional 38 Bitcoin. In certain instances where power prices spike, it can be more profitable to curtail and monetize that fixed price PPA than it is to mine, and that’s something we’re closely monitoring. And with the ongoing heat wave in Texas, we are expecting significantly more power credits in Q3. For those of you who live in North America, you know that the summer has been exceptionally hot. Texas especially, it has several weeks -- it has had several weeks of temperatures over a 100 degrees. So, that led to very high power prices at certain times. And although we were hedged for the majority of our load, we were still exposed to those prices for the portion of the load that is not covered by the fixed PPA. But the fixed PPA is ultimately a good hedge and it’s proving itself to be very valuable so far for the third quarter. All-in, our average power and hosting cost for the first half of the year was slightly over $0.05 per kilowatt hour. For the second quarter, we generated an adjusted EBITDA of $1.1 million, bringing our half-year adjusted EBITDA to $2.3 million. As I said on the last call, cash generation is top of mind for us. We ended the second quarter with just over $9 million of cash on the balance sheet. So now, I’ll let Jim provide some additional comments on our financial results for the quarter.

Thank you, Seif. We generated $12.6 million of revenue for the quarter with $4.5 million of mining profit for a mining margin percentage of 36%. As Seif said, we faced higher power costs in the second quarter relative to the first quarter, but the fixed price PPA at Helios provides us with greater certainty over our power costs going forward. We expect significant power credits from economic curtailment in the third quarter. Our core business operations remain profitable and we generated adjusted EBITDA of $1.1 million. In comparison to Q1, we saw higher revenues and lowered non-mining operating expenses. We reduced our non-mining operating expenses by 21% over the first quarter. At the end of June, we had $9.1 million of cash on hand. As you can see on this chart, our operating cash flow remained positive in Q2. Debt service makes up a sizable portion of our cash outflows, which is why we are continuing to focus on deleveraging the balance sheet. In May, we sold roughly $1 million worth of Ethereum at an average price of $1,900, and we used those proceeds to pay down debt. In July, subsequent to the period end, we completed the share placement and raised $7.5 million of gross proceeds, of this $1.8 million was used to pay down the Galaxy loan. On a pro forma basis, after the equity raise and the Galaxy debt pay-down, our June 30th cash position would have been $14.5 million and our Galaxy debt deposition was $30 million. Moving to the next slide, we continue to scrutinize all of our non-mining operating expenses and find ways to reduce costs. In Q2, we reduced these non-mining operating expenses by 21%. This means that since the second half of 2022, we’ve cut our non-mining operating expenses by 75%. This cost reduction is important because it improves cash flow generation and allows us to continue deleveraging. One of the key themes that Seif and I have been emphasizing is deleveraging. In Q2, we reduced our debt by $3 million, and in Q3 we expect a further reduction of approximately $5 million. In addition to that, we’ve also discussed the possibility of selling non-core assets. We are in advanced discussions regarding the sale of certain of these non-core assets, and we anticipate providing more details in due course. With that, I’ll pass it back to Seif.

[Technical Difficulty] Quebec, we continue the installation of our ePIC BlockMiners. In July ‘23, we deployed 1,242 BlockMiners, representing about 130 petahash of additional hashrate capacity. We expect to deploy the remaining BlockMiners by the end of the year. Additionally, our operations team has been collaborating very closely with Galaxy on ways to improve the operational efficiency of the fleet at Helios. So, we expect to see the results of that work in the coming months. And finally, we continue to explore some interesting growth opportunities to maintain our market share. As the hashrate network continues to grow. We continue to engage with energy and power providers looking for opportunities to pair Bitcoin mining with underutilized or excess energy. We’re thinking about ways that we can partner with energy companies in an asset light manner and bring our expertise in Bitcoin mining to a strategic partnership. So, that’s it for now. Jim and I are open to take your questions. Alex and Mark -- actually not Mark, but Alex, back to you.

Seif, Jim, thank you very much indeed for your presentation. [Operator Instructions] Seif, Jim, Tom, as you can see, we have received a number of questions throughout today’s presentation. And Tom, if I may hand over to you to read out the questions where appropriate to do so, and I’ll pick you at the end.

Great. Thank you, Alex. Seif, our first question comes from Chase White at Compass Point. Can you give us some color on the details of your arrangement with Galaxy in terms of the size of the markup on the pass-through cost of power and how you go about sharing the economics of curtailment?

So, under the current hosting agreement that we have with Galaxy, there is no markup on the power cost. So basically what we have is a pass through power agreement on a -- so it’s a -- there’s a fixed power price and then there’s a pass through agreement and a hosting charge on top of that. And in regards to curtailment, we essentially split the proceeds from any economic curtailment that we get from Galaxy and we split that evenly. So, hopefully that answers your question.

Great. Our next question comes from Darren Aftahi at ROTH MKM. Seif, how is management positioning itself ahead of the halving next year?

Good question. I mean, look, like all of our peers, what we’re trying to do is we’re trying to essentially have the least amount of fixed costs as possible. We’re trying to reduce our OpEx as much as possible. We’re trying to delver. We’re thinking about growth opportunities. We’re thinking about sort of continuing to take advantage of the fixed price PPA that we have with Galaxy. We’re thinking about positioning and really we’re just thinking about the health of our balance sheet and the market share that we have from a hashrate perspective. And so, I think the less obligations that you have the better off you’re going to be. So that’s really how we’re thinking about the halving.

Seif, the next question comes, we’ve got this from a couple of folks, including Bill Papanastasiou at Stifel, as well as Matthew R from the webcast. Can you give an update on the asset divestitures that you mentioned?

Yes. So, in the past we’ve mentioned excess inventory and real estate as examples of non-core assets that we can potentially monetize to generate additional cash. And Bill, we’re currently in advanced discussions with some of those as well. So, I think we’re in a good place, we’re in a good position. And back to sort of Darren’s question, we’re thinking about, using that cash flow to delever some more and reduce our obligations. Balance sheet’s been top of mind for Jim and I. And so, we’re happy with where we are. We’re happy with the discussions that we’re having. They’re advanced and, I’m confident that we’ll get something going in the near future.

Our next question is for Jim, and this comes from [indiscernible]. Can you talk a little bit more about your plans for debt reduction?

Payments on the Galaxy debt, we’ve used the proceeds of our Ethereum sale as well as a portion of the equity raise that we just completed. There’s additional levers that we continue to look at, including the sale of non-core assets to further reduce the debt. It’s a key focus for Seif and I, and we’ve done a -- had a big reduction since June 30th of last year in our debt reduction goals. Thank you.

Thanks Jim. The next question comes from someone in the chat for Seif. What impact does the hot temperatures have on mining Bitcoin in Texas?

Yes. It’s a good question. So, a lot of people have asked us, this is probably the best time for Bitcoin prices to be depressed for us. Like obviously Bitcoin prices being depressed is not a good thing, but generally, if there was a good time for Bitcoin prices to be depressed, it would really be now. And the reason is, is because when you essentially have a fixed PPA or where you’re dealing with a counterparty that has a fixed PPA, you can pretty much use those power blocks and sell it back to the grid. So essentially when it gets really hot there, we curtail, meaning we just shut down our machines and the power that we’re essentially not using, we can sell that power back to the grid. And so, when Bitcoin prices are high, sometimes when prices spike and it gets really hot in Texas and prices start spiking, we essentially turn off our machines. But the higher the Bitcoin prices are, the more of an opportunity cost it is for us not to mine. And at times it’s actually more beneficial for us not to mine and sell that power back to the grid rather than keep mining. And so, in those -- in the last weeks and in the coming sort of weeks when temperatures are really hot and Bitcoin prices are low, it lowers our opportunity costs and it gives us the opportunity to sell our power back to the grid. So ultimately that’s the impact it’s been having that we are curtailing, but we are getting rewarded for curtailing at a low opportunity cost.

Next question comes from Jeff H, and this is for Jim. Can you give some more color on our current cash balance and liquidity?

Thanks, Jeff. As I mentioned on the call at the end of June, our cash balance was $9.1 million. We completed the equity raise in July for $7.5 million through the share placement in the UK, so that strengthened our cash and balance sheet. Of that $7.5 million that we raised, approximately 25% of that proceeds went to pay down the Galaxy debt. So, our pro forma cash balance at June 30th would’ve been $14.5 million or was $14.5 million, if you take the $9.1 and then the net cash after the debt pay-down.

Another one for you, this came from a couple of folks in the chat. Can you give an update on Argo’s investment in Pluto/Emergent?

No, we are taking a more active role in our investment in Emergent. We’ve recently joined the board. We’ve taken a position on the board. So we’re just -- we’re being more active and we’ll give updates as we have them moving forward.

I think our last question is going to be from Chase White at Compass Point, it’s for Seif. You mentioned getting to 2.8 exahash by the end of the year. Could this come earlier? What sort of time range are you targeting internally?

The team has been doing a really, really good job at installing -- our teams in Quebec and Baie Comeau have been doing -- our ops team, just the entire ops team have been doing a really good job at installing those miners at a really good pace and good rate. Right now our total capacity is around 2.6 exahash. And so we are confident that by the end of the year, all of the nearly 2,900 machines will be deployed, which should bring us back around the 2.8 exahash target that we have. Given the current deployment rate, I’m confident that we can likely deploy them before Q4 of 2023.

Seif, Jim and Tom, thank you for that. And I think you have addressed those questions that came from investors today. And of course the Company will review all questions submitted today and we’ll publish those responses on the Invest Company Platform. But before redirecting investors to provide you with their feedback, which is particularly important to the company, Seif could I please ask you for a few closing comments?

Sure. Thanks Alex. Just want to thank everyone for tuning into our earnings call today. Again, just to reiterate, we’re really focused on deleveraging and strengthening our balance sheet, and we’re focused on reducing costs and being opportunistic with financing and focusing on operational excellence and yield. So, until next time, thank everyone for being here and we will be in touch soon. Thank you.

That’s great. Seif, Jim and Tom, thank you once again for updating investors today. Could I please ask investors not to close this session as you’ll now be automatically redirected to provide your feedback in order that the board can better understand your views and expectations? This will only take a few moments to complete and I’m sure will be greatly valued by the Company. On behalf of the management team of Argo Blockchain Plc, we’d like to thank you for attending today’s presentation, and good afternoon to you.

Good afternoon and welcome to the Argo Blockchain plc Q1 2023 Results Investor Presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged and can be submitted at any time by the Q&A tab situated on the right hand corner of your screen. Just simply type in your questions and press send. The company may not be in position to answer every question it received in the meeting itself. However, the company will review your questions later today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. I would now like to hand you over to Tom Divine, Vice President of Investor Relations. Good afternoon, sir.

Thanks Alexandro. Before we begin, I would like to remind everyone that today's presentation and remarks may contain forward-looking statements. For our full risk factors, please see our Form 20-F filed with the Securities and Exchange Commission for the year 2022. I'd also like to point out that in our Q1 earnings and going forward, we will be reporting our financial results in U.S. dollars. With us today for our discussion of Q1 2023 results are Seif El-Bakly, Argo's Interim Chief Executive Officer; and Jim MacCallum, Argo's Chief Financial Officer. And now, I'll turn it over to Seif.

Thanks, Tom. Hi, everyone and good morning, good afternoon. Seif here with my colleague Jim. Thanks for tuning in today for our Q1 2023 results. It was just a few weeks ago that we provided you with our 2022 year end results and a preview of our Q1 2023. Going forward we will provide timely quarterly updates along with these earning calls. Before moving to Q1 I just wanted to remind everyone of our top priorities for the next couple of quarters. These priorities include financial discipline and deleveraging, which is top of mind, operational excellence, which is optimizing and growing our hashrate and lastly, growth and strategic partnerships for the sustainable future of this company. We'll touch on these key pillars throughout the presentation as we discuss our results and our current projects. With that, let's look at how Q1 shaped up. As I mentioned on the previous slide, financial discipline remains a priority and one of our key pillars. As part of this we're laser focused on cash flow generation and preserving cash. At the end of March, we had around $14 million of cash on the balance sheet. In the first quarter, we mined 491 Bitcoin and generated revenue of $11.4 million, which is an increase of 15% over our revenue from Q4 2022. Our mining margin percentage came in at 49%, which is a significant increase quarter-over-quarter, up from 35% in the fourth quarter of 2022, and that translated into an average cost per Bitcoin mined of 11,811. Aside from the price of Bitcoin and global hashrate, the other key variable that drives mining margin is our cost of power and hosting. For the first quarter, our average all-in power price and hosting rate came in lower than $0.05 per kilowatt hour across all our operations. And that was lower than the previous guidance we had given on our year end call of five to five and a half cents per kilowatt hour. As we'll discuss in more details in later slides, we are extremely focused on reducing non-mining operating expenses. Compared to the quarterly average in the second half of 2022 we were able to lower these operating expenses by 70%. And lastly, for the quarter, we generated an adjusted EBITDA of $1.6 million. I also wanted to briefly mention the spike in hash price that we experienced in May. This was due to higher transaction fees spawned by increased interest in Ordinals. That was obviously beneficial for us and you'll see the impact when we release our May operational update later this week. Now I'll let Jim provide some additional comments and also results for the quarter. Jim?

Thank you, Seif and hello everyone. As Tom mentioned, we are reporting our financial results in U.S. dollars. The majority of our revenues, mining expenses and debt are denominated in U.S. dollars, so it is appropriate for Argo to report in USD. We generated $11.4 million of revenue for the quarter with $5.6 million of mining profit, for a mining margin percentage of 49%. Our core business operations were profitable and we generated adjusted EBITDA of $1.6 million. In comparison to Q4 2022, we achieved higher revenues and lower expenses. We were able to reduce our non-mining operational expenses by 70%. At the end of the quarter, we had 14 million of cash on hand, which when combined with our operating cash flow, leaves us in a good position. Moving to the next slide, since closing the Galaxy transaction, we've been laser focused on reducing our non-mining operating expenses and we have reduced these expenses by 70%. Our core non-mining operating expenses for Q1 were $4 million and we have had further reduction since then. We're currently operating at just over $1 million per month in non-mining operating expenses. Turning to cash, as I mentioned, we ended Q1 with $14 million of cash on the balance sheet, a reduction of $6 million from December 31st. From an operating perspective, we generated $1.6 million of cash flow. Our core mining business is profitable, and this operating cash flow was offset by three main outflows during the quarter. Firstly, we had restructuring costs of $800,000 associated with reductions in headcount. Second, we had a reduction in working capital of $3.7 million, primarily related to the payment of invoices associated with the Galaxy transaction. And third, we had debt service and capital expenditures of $3.4 million. Excluding the restructuring and the working capital payments, our cash would have been approximately $4 million higher at March 31st, 2023. Moving to the next slide, the Galaxy transaction allowed us to significantly reduce our debt. However, we still have $79 million at March 31st, 2023 consistent with December 31st levels. Our goal is to reduce debt and we expect to do so using cash from operations and through the sale of non-core assets. Non-core assets include real estate, digital assets, certain parts inventory, and other investments. We look forward to reporting our progress on debt reduction in future news releases. With that, I'll pass it back to Seif.

Regarding our Quebec expansion project, we recently signed and finalized the agreement with the City of Baie Comeau, which gives us access to an additional 8 megawatts of power via Baie Comeau facility still sourced from hydroelectricity. We expect to be able to take advantage of this increased capacity in mid-to-late 2024. And finally, as mentioned on our 2022 earnings call, our primary focus in the near-term is really about building and maintaining a solid foundation for the company. But having said that, we continue to explore some interesting growth opportunities to maintain our market share as the hashrate network continues to grow. We've been talking to different energy companies about opportunities to utilize wasted or stranded energy. This helps them because it allows them to monetize otherwise wasted energy and we in turn benefit from access to low cost and secure power. And so when we're thinking about growth opportunities, we're really thinking about innovative strategic partnerships with some key players within the power and energy spaces. That's it for now. Jim and I are open to taking your questions. Tom and Mark off to you.

Regarding our Quebec expansion project, we recently signed and finalized the agreement with the City of Baie Comeau, which gives us access to an additional 8 megawatts of power via Baie Comeau facility still sourced from hydroelectricity. We expect to be able to take advantage of this increased capacity in mid-to-late 2024. And finally, as mentioned on our 2022 earnings call, our primary focus in the near-term is really about building and maintaining a solid foundation for the company. But having said that, we continue to explore some interesting growth opportunities to maintain our market share as the hashrate network continues to grow. We've been talking to different energy companies about opportunities to utilize wasted or stranded energy. This helps them because it allows them to monetize otherwise wasted energy and we in turn benefit from access to low cost and secure power. And so when we're thinking about growth opportunities, we're really thinking about innovative strategic partnerships with some key players within the power and energy spaces. That's it for now. Jim and I are open to taking your questions. Tom and Mark off to you.

Seif, Jim, thank you very much for the presentation. Ladies and gentlemen, please do continue to make your questions just by using the Q&A tab, which is situated on the top right hand corner your screen. But just let the company take a few minutes to review the questions submitted today. I'd like to remind you the recording of this presentation, along with a copy of the slides and the published Q&A can be accessed via your investor dashboard. As you can see, we received a number of questions at the start of today's presentation. And Tom, if I may at this this point, hand over to you to read out the questions where it's appropriate to do so. I'll pick up from you at the end.

Great, thank you. Our first question comes from Kevin Dede at H.C. Wainwright.

Darren Aftahi at ROTH MKM.

What was your cost to mine a Bitcoin in Q1 and what's driving the increase in mining margin from Q4 to Q1 and how do you think Q2 will turn out?

Hey, Darren, thanks for the questions. So the margin -- the mining margin for the quarter was 49% and that was up from 35% in our Q4 2022 and that translated into Bitcoin mined of about $11,800. Mining margins really driven by three factors; Bitcoin price network, hashrate, and power cost. I think in Q1 the average Bitcoin price was somewhere around $22,800 and that was 26% higher than the average. In Q4 that was closer to about $18,000. The network hashrate obviously continued to grow, and the average hashrate in Q1 was about 16% or 17% higher than Q4. And then power in Texas, I mean, that got cheaper. We saw in 2022 gas prices got really high, power prices got really high, whereas in 2023 they fell more than 50%. So obviously if you combine all those three factors, net-net it's been better. We've had better margins because of that. And I think in Q2 Bitcoin prices have been even higher and gas prices have been a little bit lower. So I think our expectations for Q2 are positive.

Thanks Seif. Our next submitted question comes from Jake.

Can you talk a little bit more about the impact to the business from Ordinals?

Sure. So transaction fees for miners typically represent and thanks for the question, by the way Jake. Yes, so transaction fees for miners typically yield about or are about 2% or 3% of our revenues. In May that really shot up to about 13%. And some days was even much higher than that, but for certain blocks obviously. So it really means that we ended up mining more blocks than we otherwise would have. And basically we're going to be releasing our May operational update later this week and you guys will be able to see the impact that it has had. But obviously the Ordinals worked out well for the industry and for us.

Thanks. Our next submitted question comes from [indiscernible] and this is for Jim.

How do you plan on improving your cash flow?

Yes, thanks for that. We generated $1.6 million in cash during the quarter, and we'll continue to generate cash through Q2. Ways we can in improve our cash flow are continuing to focus and on our operating expenses and through the sale of non-core assets, and as we pay down our debt naturally our debt service costs will decrease and that will -- that's also another important lever in improving our cash flows.

Great, thanks. Our next question comes from Chase White at Compass Point for Seif.

Are you able to disclose the cost breakdown of the hosting agreement with Galaxy?

Absolutely. Hey, Chase, thanks for the question. So, I mean, the cost breakdown is pretty simple. We get access to power on a pass through basis, and then there's a fixed dollar amount per megawatt hour as a hosting fee based on our electricity usage. And so for Q1, the all-in price for both power and hosting fee came in sub $0.05 at Helios.

Thanks, Seif. Our next question, this is for Jim submitted from Tom S.

How are you planning on getting rid of your debt?

Yes, thanks for that. Yes, so beginning in May this year, we began our principle repayments on the Galaxy loan, so we'll be paying that down every month. We're also, as I mentioned, exploring the sale of certain non-core assets and using those proceeds to also pay down our debt.

Thanks, Jim. Our next question is for Seif.

Our next question comes from Kevin Dede again at H.C. Wainwright.

What specifically changed to reduce OpEx by 70%, was this headcount, how much of this change was realized by shifting operations of Helios to Galaxy? And this is for Jim.

Yes, thanks. Thanks Kevin. A large portion of the reduction was headcount which reduced from over 90 to approximately 40 as of March 31, 2023. While most of this shift was related to Helios and the Galaxy transaction, we did also reduce corporate staff. We also had some significant OpEx savings in insurance, for example now that we don't operate the Helios facility. We've also implemented a robust internal process where we are scrutinizing our vendors in order to realize additional cost savings. So we're really looking at it all encompassing in order to reduce our costs.

Great, thanks Jim. Our next question submitted comes from DS, it is for Seif.

How is the relationship with Galaxy these days?

Hey, thanks for the question. So, I mean, Galaxy's been a great -- our relationship with Galaxy has been great. It continues to be a very, very positive one. They have a great team. They're really smart. We're working very well together. We've been working very hard together on optimizing our machines and our performance in Texas or at Helios. And I think the skillset has been very complimentary, so really happy to have them working with us and it's been a very positive relationship. So…

Thanks Seif. Our next question comes, and this will likely be our last question. This comes from Bill at Stifel.

Seif, Jim, Tom, thank you very much for that and for answering those questions for investors. Of course the company will review your questions submitted today and we'll publish those responses on the investor meet company platform perhaps, but perhaps just before redirecting investors provide you with their feedback, which is particularly important to the company. Seif, could I just ask you for a few closing comments?

Yes, of course. I really just wanted to thank everyone for their continued engagement with Argo. We're really encouraged by some of the improvements we're seeing in our operational and financial results. Our core business is cash flow positive and the team continues to focus really on maximizing cash flow and reducing debt. So we'll keep updating you through our progress and providing you with our quarterly financial releases with our earnings calls. So again, thanks everybody. Really appreciate everybody's engagements and we'll talk to everybody soon.

Perfect. And thank you very much for updating investors today. Could I please ask investors not to close the session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations? This will only take a few minutes to complete and I'm sure be greatly valued by the company. On behalf of the management team of Argo Blockchain plc, we'd like to thank you for attending today's presentation and good afternoon to you.