Good afternoon and welcome to the Argo Blockchain Full Year Results Investor Presentation. Throughout this recorded presentation, investors will be in listen-only mode. [Operator instructions] The company may not be in a position to answer every question it receives in the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, we would like to submit the following poll, and I'm sure if you could give that your kind attention, the company would be most grateful. Without any further do, would like to hand over to Peter Wall, CEO. Good afternoon.

Thank you, Mark. Thanks everyone for joining us. Welcome to our 2021 full year results call. As Mark said, I'm Peter, I'm the CEO of Argo Blockchain. With me today is Alex Appleton, our CFO; and Tom Divine, our head of Investor Relations -- our VP of investor relations. Tom is going to pop up a little bit later, and is curating some of the questions as they come in. So great, great to have you with us. Thank you for joining. It's been a busy morning for us so far with the results coming out. Done a little bit of media. Hopefully some of you that have followed the company closely have had a chance to see some of those interviews we've done. And if not, we'll share them on our social media soon. All right. So, let's jump into the presentation. Normal legal disclaimer off the top. The next slide for those of you that have seen a lot of our presentations before, will look familiar with a little, little bit of changes to it. Most importantly, the 2.6 Exahash. So, that is our mining capacity that is contracted and existing. We're adding the two 2.6 Exahash from Bitmain from the Bitmain order that we have. The 20,000 machines that we ordered following the IPO back in September, those are starting to be installed at Helios next month, month of May, which is just a few days away. And the plan is still in progress, and still looking good to have those installed by the end of October. So, we're confident that that to two Exahash is going to be reached by the end of October, given all of the all the pieces that we have in place currently. That Exahash of 3.6 translates to about 44,000 mining…

Thanks, Peter. So, it's really been a great year. I know Peter's touched on a lot of these figures already, but I think it's worth going through them in a little bit more detail. Revenue is up to $100 million, £74 million. That's been driven by both the increase in the bitcoin price, which Peter's mentioned, and also our increased capacity, most of which, in this year actually came on toward the end of the year. So that additional 500 Petahash the FDA, so we'll see the full impact of that as we go into 2022, and then also, of course, with the expansion of Helios. Mining margin remained very strong. Again, Peter's already said this, among the market leading of bitcoin miners. And we intend to stay there. And that's why we're moving into what's Helios where we have access directly to that low cost of power. And so, margins you've seen from our operational updates, margins have tightened a little bit, but still well into the 70s, which is enviable across most industries. And we're going to stay at the very in that TAA of miners by having access to low cost power, and also the machines that we're building out and the immersion element of that as well. So that's meant for gross profit, very strong, very strong for the year. That's through $70 million to £50 million at 70%. In terms of operating costs and expenses, yes, they have increased. With Peter's gone through how we've strengthened the executive team, we strengthened the management team within the business. And also, as we've grown and we moved to the owned and operating model, we'll also -- we take it on more staff in terms of employee costs, et cetera. So, you have seen an increase in the…

All right. Thank you, Alex. I'm now going to invite Tom Divine, our VP of Investor Relations, to come on. Tom has been gathering questions both from before the presentation, and from during the presentation in the chat group on the side, or the Q&A section on the side. And he's going to read out some questions and then Alex and I will answer.

Yeah. Thanks, Peter. We've been getting a lot of questions from folks who are listening in, as well as some of the sell side research analysts. So I'm going to go through some of those. So our first question comes from Jason B. His question is, is immersion uplift included in the 5.5 Exahash target that we've announced for the end of 2022?

All right. Thanks, Jason. So the answer is no. Again, we're trying to make sure that we are conservative with our projections, under-promise, over deliver. So the 5.5 Exahash does not include an uplift from emerging.

Okay. Great. Thanks, Peter. Our next question comes from Darren Aftahi at Roth Capital Partners. What sort of advantage do you think the supply agreement with Intel can give you versus other miners?

Thanks for the question, Darren. In terms of the supply agreement with Intel, the advantage for us is that, we will have a better access to a stable source of chips, which in turn will mean cheaper hash rate growth, ability to customize our mining rigs. That's a really important factor when you're using immersion cooling. And I think, as you know, Darren, we like to be very granular, very much in control, very much optimize our machines and our mining. We run a very kind of custom mining shop. This is not a plug-and-play or a plug-and-pray kind of a company. So the more we can get granular with our machines and the more we can have access to chips that we can build our own custom rigs, and we can do so cheaper and we can put those into an immersion environment. And that allows us to really get the most out of our mining operations.

Great. Our next question comes from Thanassis S. Could you explain what the equipment financing agreement with NYDIG entailed? Is it for electrical equipment preorders needed for the 600 megawatts?

Sure. Alex, you want to take that one? You want me to take that one.

Yes. Absolutely. I'll take it. It's for electrical infrastructure that we have on the ground at the moment. We're really pleased with that NYDIG. NYDIG is a great partner to have in this space. And again, back to the interest rate, 8.25% is very competitive when compared with the traditional sector. So it’s a really a good deal for us. And it's something that will provide an opportunity going forward for as we build out Helios that will give us further collateral to be able to use for further debt initiatives.

Great. Our next question comes from Joe Vafi at Canaccord. Could you go into a bit more detail on the ASICs you're purchasing from Intel? I believe they are not putting full systems together. Do you have a design partner at this point?

Sure. Thanks, Joe. So those -- I'll give you a little bit of a background on how he came to work with Intel, and then a little bit about the custom mining rigs. So Intel reached out to a number of folks in the space back in around Q4 of last year and said, "Hey, we're going to be developing a mining chip. Are you all interested in working with us?", and of course, we said, "Absolutely, we'd be very interested." And they said, "Listen, we're only going to work with miners that fit that kind of a line with our values on the ESG side of things in particular." So we walked through what we're doing -- what we've been doing, and what we are doing on the ESG side of things. And they said, "That sounds great. You guys sound like a good fit." And then, through that relationship, by the way, they found that we have a very strong technology team led by our CTO, Perry. And so there's been lots of collaboration and lots of conversation with Intel about what they're doing. And there's been lots of education back and forth on both sides. So it's been a really good relationship so far, and we're excited to be working with them, in terms of what that final system is going to look like. Yes, you're right, Joe. They are not putting a full system together. They're developing chips. That's what they do. That's what they're really good at. And then, just like they sell chips to competing computer manufacturers like Dell, they're going to sell chips to certain miners that can then put them to work in their own machines. So there is an opportunity to either go with a supplier from Intel or to go with a supplier of our choice, the third party of our choice. So we haven't announced that yet what we're doing, but we will be working with the third-party to develop these custom mining rigs. And as soon as that relationship is ready to announce to the market, we will. But it's something that we're really excited about and something that we think is a key differentiator for us at this point.

Great. Thanks, Peter. Our next question was pre-submitted and it has to do with ERCOT. To what extent do the new Texas ERCOT rules for mining companies limit the power available at Helios?

Yes. It's another good question. So this is not something that we think is going to affect us. We have our interconnection agreement in place for the full 800 megawatts of capacity. We also have a really solid relationship with ERCOT. We were actually just at a meeting with them this week in Texas. We also have a relationship as a client of Priority Power. Priority Power is an industry leader in mining energy services. They manage interconnection agreements, they manage PPAs, they manage power load flexibility, they're really the key folks in Texas that you want to be working with. So because of those relationships, because we already have our pieces in place, we're not worried about any changes to ERCOT, and we encourage ERCOT to make sure that, that folks in Texas are getting the power that they need, and miners are getting the power that they need. And I think that, that's exactly what's going on. I think probably most importantly for us, we've also chosen to be in a particular region that has a very high generation capacity, but a very low local load, which means there's very little demand for power, but lots of power being made. And this makes our flexible load really important for that region, and really important for grid stability. So I think ERCOT, the first time I said to Brad Jones, who's the head of ERCOT, "Hey, we're setting up a 200 megawatt facility in Dickens County, Texas, in the West load zone." He looked at me and said, "We need load in that area. That's amazing. That's great." So I'm very pleased with where we've chosen to set up. And I don't see any issues in Texas with the grid for us.

Our next question comes from Darren Aftahi at ROTH Capital Partners. On the core machine swap, how do you mitigate downtime during that? And is that your initial way of filling Helios?

Yes. So I covered this a little bit in the presentation, Darren. The swap is structured, so that we avoid downtime. So as the machines from Core are arriving, we're installing them and then we'll be swapping out for the machines that are already at Core. Our machines are already at Core. So we're not anticipating any downtime. We've kind of taken that into consideration. That's part of why -- we've structured the deal as we have. We have a good relationship with Core. We've worked with them for many years. We're friends with those guys. But ultimately, we want to be the captains of our own ship and be able to run our own facility. So the relationship is coming to an end in an amicable way. By the end of July this year, we'll have all of those machines that are -- all of that capacity at that Core will be at our facility. And what I can tell you is that, those machines from Core have already started arriving to a significant degree in Texas. So that process is already underway. And that process will take place at the same time as the -- in parallel with the installation of the Bitmain machines that are also starting to arrive at Helios right now.

Great. Our next question is from Suthan Sukumar at Stifel. On the incremental capital needs for phase one, what will this money be spent on? Is this infrastructure or rig procurement?

Yes. It's a good question. Thanks, Suthan. So if you think about kind of our three main buckets of CapEx for the rest of this year, there's infrastructure, there's Bitmain machines, and then there's Intel machines. The infrastructure, the vast majority that is already paid for, obviously, we've built it. If you work with construction folks, you need to pay them as you're building. So that's pretty much already done and paid for. Tiny bit of infrastructure cost left, but not a whole lot. The second, on the Bitmain machines, we've paid the 20,000 machines, Bitmain order. We have paid for north of two-thirds of those. So the majority of those machines are already paid for. And then, the last piece is the Intel machines. We have a deposit with Intel. We've -- we've started that relationship, but the majority of that capital will be for machines, and the majority of the machine capital will be for the Intel side. Alex, do you want to add anything to that?

No. I think you've pretty much covered it, Peter. As you say, the majority left is machines, a significant majority of machines. As Peter said, with two thirds of the way through as we stand today, we're over two thirds of the way through the Bitmain payments and looking forward, its Intel that is the cost, main cost for them, not 1 million to 5 million.

Great. Our next question, we've gotten a few times from Kevin [indiscernible] and some others in the chat. Do you intend on looking at the option of building our own solar fields and wind farms at Helios?

Thanks for the question, Kevin. So the short answer is, yes. In the long-term, it's something that we're looking at as an option. Obviously, Texas is a great spot for both solar and for wind. That's why there's so much renewable development there. In terms of the short-term, we're really focused on this 200 megawatts using grid power. And then, the next phase is that, the remaining 600 megawatts which we have the interconnection agreement with. But obviously, as we develop as miners in this space, as the industry develops, you're seeing two key, well, really three key developments. And that is getting closer to -- rigs you're seeing now with our Intel deal. You're getting closer to power. You're going to start to see miners get closer and closer to power because that is a key, key piece of mining. And then, -- the last one getting closer to capital and you see more and more capital providers coming into the space, and as we've mentioned in this presentation on, the debt side. So, all of those things are happening, because those are the three key pieces to be a successful miner. And so obviously, generating your own power from renewables is something that, as a miner you need to be thinking about in the future.

Our next question comes from Jon Petersen. Can you talk a little bit more about your Intel mining rigs? Is all of the expansion in fourth quarter 2022 likely to come from the Intel chips? And can you give us any indication of the cost per terahash on these intel mining machines?

Thank you, Jon. Jon from Jefferies, JJ. So in short, yes, the increase in the fourth quarter of this year will be coming from Intel, as you saw in our chart. That's really where the growth in hash rate is going to be coming from -- at Helios. In terms of cost per terahash, we don't have a cost per terahash that we're able to share yet. We are very optimistic that the cost per terahash will be lower then -- then off the shelf -- off the shelf options right now. And so that's a key piece of it, as well as the ability to have control over the design of the machines and the software, etc., etc., to be able to optimize in an emerging environment.

Great. Our next submitted question from the chat is from Thanassis. Are you actively staking or earning APY in any way on your 10% HODL at Argo Labs such as Ethereum, Solana, Atom, et cetera?

Thanks, Thanassis, again. So yes, a significant portion of our HODL is in validators, and nodes is staked and is deployed in DeFi, in a way that guides us an ability to earn a good APY.

Next question is from Ramsey El-Assal at Barclays. How you -- how are you thinking about the impact of sanctions on mining in Russia, where we see the global hashrate drop if miners in Russia are crippled by sanctions?

Yes, it's a good question, Ramsey. I think the last kind of number I saw Russia was roughly 10% of global hash rate. Obviously, the recent events with BitRiver having to shut down and they're, if not the biggest, one of the biggest players in Russia will have an impact. I don't think it's going to have the same kind of impact on global hash rate the way that the mining ban in China happened or did. I think it might have a – might slow things down a little bit in terms of growth, but I don't think it will be that significant. I think the place to watch hash rate growth right now is the United States. And lots of miners, lots of publicly traded miners have put numbers out and said we're going to be at X-ex of hash by this particular date, and we'll have to see if they hit those numbers that they've put out. For us, this is the year of execution. 2021 was the year of growth. 2022 is the year of execution. So, we've been really focusing on, as I said, a couple of times in this call, under promising and over delivering and making sure that if we put a number out, we're 100% confident that we can meet it.

Our next question comes from Abey R [ph]. What impact have supply chain issues had on the business?

Yes. Thanks, Abey. Listen, global supply chains are tough around the world. Definitely, it's been a little bit more challenging to meet our deadlines, but we are still able to stay on schedule with Healios. We have someone who works full time with us right now at Argo that we’ve hired recently as part of that team of 100 that we're building out, who is working on logistics and supply chain pieces. She's an expert in that world. So that's been very helpful. And it's something we take seriously and put a lot of effort into. We saw an increase for sure in shipping costs for miners. It's approximately 50% to 100% more expensive now -- than it was two years ago to shift miners. So that's something that we need to be cognizant of when we're building out our budgets, etcetera. But while they've had an impact for sure, we feel like we've been able to weather them because of our – the efforts of our team.

Great. Our next question comes from Alan Howard at Tennyson. How are you thinking about the build-out at Helios for future phases? Will it be less expensive than Phase 1 and will it be spread out evenly over the next three years?

Hey Alan, thank you for the question. So yes, listen, we have a significant runway at Helios. As I said its 600 megawatt, it's a big chunk to fill. We are going to focus our CapEx costs there first on the infrastructure and the building and then second on the rates. In terms of the infrastructure side of things, our expectation is, yes, it will be less expensive. We've learned, as we've grown. We've also done a lot of the groundwork in Texas to make sure that we're getting – have the right relationships, the right relationships in place with the right suppliers. We've already put some of the long lead items in as I mentioned for the big transformer pieces. I know some of those pieces are already prepaid. So yes, in terms of the infrastructure side, our expectation is that, it will be less expensive than Phase 1. In terms of the rig side, again, thanks to this relationship with Intel, our cost per terahash is expected to be lower than it is -- than it will have been for the first 200 megawatts.

Our next question comes from Luke P. Are you concerned with countries and cities getting involved in mining or do you think you have a competitive advantage with your infrastructure?

Thanks, Luke. Good question. I think you're probably referring to what happened recently with the news, I think, from Fort Worth. And so overall, we're not concerned about cities and countries getting involved. In general, we see this as a positive thing. We believe in decentralization. That's the whole point of the bitcoin network. We have a clear competitive advantage with our mining experience, with our current infrastructure, with our future infrastructure. So, listen, we're excited about the space in general growing and all of the incredible momentum that the space has. Even though the equity markets have slowed down a lot, it feels to me like the crypto markets, while they're under a little bit of pressure, are really charging ahead. And I'm excited about this year and the years to come.

Our next question comes from Chris Brendler at D.A. Davidson. Can you speak more about the expanding debt financing options and the improving terms that you mentioned? We've also heard that traditional banks have become more interested in the sector. Can you give your perspective on that?

Sure. I'll start this one and then I'll hand it over to Alex. Thanks for the question, Chris. Just in terms of relationships with lenders, there's just more of them that are -- that are out there now than there was -- 12 months ago -- I mean 18 months ago, there was basically no debt financing options. Now you've got a number of very established companies. You've got new folks looking to get into the space. And as Alex said earlier, terms are getting better. So, our market conditions impacting the financing options, I'd say that lenders are going to be more selective about who they're lending to. I think if you are a new minor, you came out and you said, hey, I'm opening a 50 megawatt facility in, name your place and you went to a lender. I think without a track record, you'd have a hard time getting financing. I think miners that have track records, that have existing teams in place, that have relationships in place, I think those are the miners that are going to be able to grow. So I think scale matters and reputation matters. Relationships matter. And yes, we've heard from traditional banks, but they're dipping their toes. I think it's still -- we're not there yet, I think those relationships are still -- those are there's a big shift. They take a long time to turn, and they need a lot of effort to turn. And so they're not quite ready to get there yet. But they're on their way.

Yeah. I just echo what Peter said that, in terms of, there are a lot of new moves into the market. And what comes with that is a lot more due diligence around -- who they're planning to partner with, who they're planning to lend to. So, the track record is really important to show that we have used that. We've used that wisely. We've been very prudent without that. We think we have more room to take on more debt, and still stay within our prudent internal and EBITDAs, debt ratios, et cetera, et cetera, and all of those good things. But where we stand today, we stand in a very strong position, because we don't -- we've got on our balance sheet a significant amount of bitcoin as well. So we are not wholly reliant on debt. In fact, we could almost self mine -- and use the -- and look at using just parts of debt, et cetera. As we said, that's going to be our process going forward. So we are -- we're in really strong position to move forward on the debt market remains strong. And it's something that we -- we're looking into.

Great. We're getting close to the top of the hour, so we only have a few more questions from King F. Given the volatility of bitcoin price and the unpredictability of the crypto space in general, do you have any plans or opportunities to diversify your mining capacity into different blockchain assets?

Yes. Thanks. Thanks, King, for the question. So Argo Labs is the main point of Argo Labs is diversification. And the team there is always exploring other avenues to look at. Can't share anything at the moment exactly what they're looking at. But, yes, it's something that we're always thinking about. In terms of mining other crypto assets, as we've done in the past with ZCash, and then you go back into 2018, we mined a host of altcoins. We're always opportunistic about other crypto assets. It's hard to get them, King, at scale. Get machines at scale the way you can for bitcoin mining. Once in a while there is opportunities, again, like we had with the Z11s mining ZCash. But for the most part, our focus is on, right now, making sure that Helios is the best immersion mining facility in the world. And the machines that we're focused on right now are our bitcoin machines.

Great. Our last question from Gary C. Are there plans to diversify into hosting other miners at Helios?

So, thanks for the question, Gary. In terms of hosting other miners, for now, we plan on using the available -- power for ourselves. We're always looking at opportunities. We've had lots of conversations. When you've got a big facility coming online, people knock on your door and they say, "Hey, -- can you take some of our machines?", and we feel like with the with the margins that we have, with the team that we have, with our expertise in mining, we're really good at mining. So, so we want to use as much power as we can for ourselves. Moving into the future, is there an opportunity to potentially host some folks at Helios in the next phase? Potentially, and we're having some of those conversations. But nothing significant to report on in any way right now.

That's great. Thank you very much. And Tom, thank you very much indeed for hosting that Q&A. And Alex and Peter, for your engagement. I will shortly redirect investors to provide you with their thoughts and expectations and get their feedback. But Peter, before doing so, I wondered if I may just ask you for a few closing comments to wrap up with.

Sure. Thanks, everyone. Listen, -- one of the great things about being the CEO of this company is that there's so much shareholder engagement. I mean, I don't know how many people we had today on this call, but it's -- there's always lots of people sending us notes, engaging with us on social media, turning up to things like this. We really appreciate it. Hopefully, we were able to answer at least some of the questions that came out. And we've got some big things coming in the next few weeks and months. So we're excited about where we're at. And, I did say going back to the end of last year, quarters and years, and this thing takes time to build. And those of you that are sticking with us and that are believe in us, we really appreciate it. We really do. So, so it's a great time to be an Argonaut, I would say. And onwards and upwards.

That's great. Peter, Alex, Tom, thank you very much indeed for your time this afternoon and for updating investors. Could I please ask investors not to close this session, as will now automatically redirect you for the opportunity to provide your feedback in order the company can really better understand your thoughts and expectations. This might take a few moments to complete, but I'm sure the company will be most grateful on behalf of the team from Argo Blockchain PLC, would like to thank you very much indeed for attending today's presentation. Good morning to you, Peter, over there in the US, and good afternoon to everyone in the UK. Thank you.