Argo Blockchain PLC (LON:ARB) had extended a multi-year agreement with GPU.one, a Canadian data centre provider, that will allow it to expand its cryptocurrency mining capacity and cut costs.
The new agreement, which will run for three years from 25 June 2019, will allow Argo to expand its mining capacity by 47% to 14 megawatts (MW) at its two existing data centres in Quebec, while also reducing its mining costs by 39% compared to a previous agreement with GPU.one for 9.5MW signed in August 2018.
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Argo also said that that the new deal reduced its contingent liability and allowed it the right to terminate the agreement at any time on four months’ notice.
As part of the agreement Argo had agreed to convert a previously paid deposit of around £1.4mln into a strategic investment in GPU.one.
Mike Edwards, executive chairman of Argo, said the new 14MW capacity was expected to be filled by September, adding that the reduction in costs together with new hardware meant they were one of the “most efficient” crypto miners in the market.
Cryptocurrency mining is when large amounts of computing power is used to solve complex mathematical problems to validate transactions on a blockchain, with the miner being rewarded in cryptos such as Bitcoin for successful validations.