Wall Street (NASDAQ: ARBK) and City (LSE: ARB) publicly traded cryptocurrency mining company Argo Blockchain plc today (Monday) announced that it has fully repaid its $35 million loan from Galaxy Digital Holdings, paying off the debt four months ahead of schedule and almost 18 months before the original repayment deadline.

Argo Blockchain Gets $35 Million Galaxy Loan Ahead of Schedule

The crypto mining company began repaying the loan in May 2023, with the balance reduced to approximately $5.7 million as of June 30, 2024. Argo repaid $11.5 million of principal in 2023, with the remaining $23.5 million settled in 2024.

“Successfully repaying $35 million of high-interest debt ahead of schedule is a testament to Argo’s financial discipline,” said Argo Chief Executive Officer Thomas Chippas. “We remain committed to optimizing our capital structure and creating long-term value for our shareholders.”

The loan dates back to late 2022, when Mike Novogratz’s Galaxy rescued a cryptocurrency miner from bankruptcy at a time when digital asset prices were low and mining companies were struggling to become profitable. As part of a strategic deal, Argo sold its Texas-based cryptocurrency mine, Helios, for $65 million and benefited from loan refinancing.

The last debt reduction news came in March, when the company cut its debt by 60% as part of a new deal worth more than $6 million. Now, Argo has managed to pay down its remaining obligations in full.

The early repayment strategy aligns with Argo’s focus on strengthening its balance sheet and reducing financial liabilities. The company used a combination of operating cash flow, proceeds from capital raisings and sales of non-core assets to facilitate repayment without significantly impacting its hash rate.

This move is expected to result in tangible savings in interest expense. In 2023, Argo incurred $4.6 million in interest on the Galaxy debt, compared to $1.4 million through the August 9, 2024 repayment date.

Less losses but lower production

In the first quarter of 2024, Argo Blockchain reported notable financial improvements. The company’s revenue increased to $16.8 million, which represents a 4% increase from the previous quarter and a substantial 50% growth from the same period last year. Furthermore, Argo significantly reduced its net loss to $3.2 million, which marked a threefold increase. The mining margin also increased from $5.2 million to $6.4 million, resulting in a gross profit of $1.9 million, a recovery from a loss reported in the first quarter of 2023.

Despite these financial gains, the company’s latest production results show a downturn. In its recent monthly report for July, Argo mined just 48 Bitcoins, a decline of over 60% compared to last year’s production, although a slight improvement over recent months.

In a separate development towards the end of last month, Argo announced a private placement agreement with an institutional investor, which will see it issue 57,800,000 ordinary shares at £0.1125 each on the LSE. The agreement also includes warrants for a further 57,800,000 shares at the same price, strengthening the company’s financial position amid volatile production results.

This article was written by Damian Chmiel on www.financemagnates.com.