Good afternoon, ladies and gentlemen. Welcome to the Argo Blockchain plc Full-Year Results for 2022 Investor Presentation. Throughout this recorded presentation, investors will be in a listen-only mode. Questions are encouraged – going to be submitted at any time using the Q&A tab situated on the right hand corner of your screen. Just simply type in your questions at any time and press send. The company may not be in position given the attendance on today's call to answer every question it received in the meeting itself. However, the company can review your questions and we'll look at those responses and publish them where it's appropriate to do so. Before we begin, we would like to submit the following poll, and if you could give that your kind attention, I am sure the company would be most grateful. I'd now like to hand over to Vice President of Investor Relations, Tom Divine. Good afternoon.

Thanks, Mark. Before we begin, I want to remind everyone that today's presentation and remarks may contain forward-looking statements. With us today for our discussion of FY2022 results are Seif El-Bakly, Argo's Interim CEO; and Jim MacCallum, Argo's Chief Financial Officer. And now, I'll turn it over to Seif.

Thanks, Tom. Thanks, Mark. Hi, everyone. Seif here with my colleague Jim, who Tom has mentioned our new CFO. It's great to be virtually presenting to everybody today, so thanks for tuning in. Just want to start off by saying we appreciate everyone's patience. I know we've been a little quieter than usual since the Galaxy deal. It's mainly because we've been working really hard to clean up house and establish a new solid foundation for Argo and its future success. So again, really appreciate everyone's patience here. I look forward to traveling in the coming months and meeting so many of our stakeholders. So that being said, let's jump right into it. Perfect. So if you've been following the Bitcoin mining space over the past two years, you know that 2022 was a very challenging year for all miners, including Argo. The price of Bitcoin decreased significantly from its highs in late 2021. We saw the digital asset market was already starting to soften in Q1 and then the collapse of Luna, Terra, Three Arrows Capital, Celsius, and eventually FTX last year created even more headwinds for the space and ended up forcing a ton of liquidations and overall deleveraging. Hashprice, the primary measure of profitability for hashrate saw an even bigger decrease and hit all-time lows in Q4. And that was largely due to the increase in network hashrate despite Bitcoins price increase and despite the broader macroeconomic environment. We also saw a ton of disruption in the energy markets, given the geopolitical environment and the U.S. natural gas spike much higher than its historical average and that resulted in higher electricity prices as well. So all this to say it was really a perfect storm of headwinds faced by all miners and hopefully that will provide some context for our 2022 performance and future strategic positioning. So for the first half of 2022, we were really focused on completing the construction of Helios and growing our hashrate. We ended up energizing Helios in May and started taking delivery of our new Bitmain S19J Pro machines. Between May and September, we increased our total hashrate capacity by 55% from 1.6 EH/s to 2.5 EH/s. So that was reflected in our overall output. And then for our financial results, I'll hand it over to Jim, who can give you guys a quick – a brief recap.

Great. Thank you, Seif. My first three weeks at Argo have primarily focused on the 2022 accounts, assessing the opportunities and meeting the Argo team. I'm looking forward to serving Argo, working with Seif and the management team to grow the business and strengthening our balance sheet. In terms of financial highlights for 2022, we mined 2,156 Bitcoin at an average mining margin of 54%. This translates to an average cost per Bitcoin mined of $12,118 for the year. We generated revenue of $58 million in 2022, which was down 36% from $90 million in 2021. We incurred a net loss of $240 million for 2022. Our net loss was largely driven by some significant non-recurring items, such as Helios sale transaction loss of $56 million, the $54 million realized loss on previously lined Bitcoin and $61 million of asset impairments. After adjusting for the non-recurring items, we generated EBITDA of $1 million compared to $68 million in 2021. Like Seif, I look forward to meeting many of you in the coming weeks and months. And with that, I'll pass it back to Seif.

Great. Thanks, Jim. I did want to – and thanks, Mark. We can go to the next slide. Thank you, sir. I did want to spend a few minutes to give you the high points of the Galaxy transaction that we completed in December 2022. Earlier in my remarks, I addressed some of the challenges we faced in 2022, and that obviously impacted our profitability and ability to generate cash flow. So after evaluating several strategic options, we made the decision to sell Helios facility to Galaxy, who we've known and had a very productive relationship with for some time. And we sold that facility for US$65 million. That allowed us to pay down our debt by $41 million, which significantly improved our liquidity position. The transaction also enabled us to streamline our operations and reduce our headcount by more than half. Most of these employees were Helios employees who went over to Galaxy. We also secured a two-year hosting agreement at Helios, where Galaxy hosts our fleet of S19J Pro machines. And that's 23,619 machines to be exact. Galaxy is the operator of Helios, manages power procurement and we pay them a fixed hosting fee based on our machines' actual power usage. Also, under the hosting agreement, we get access to Galaxy's PPA power rate as a pass-through cost, and we share proceeds from participating in demand response programs and economic curtailment. Next slide, please. As I mentioned, the Galaxy transaction allowed us to pay down debt by $41 million, which enabled us to completely pay down our loans with NYDIG and with the lower debt balance, our interest expense is now 24% lower, which translated to roughly $3 million in cash flow savings per year. On top of that, with the reduced headcount, our G&A expenses are now…

That's great. Seif, Jim, thank you very much indeed for updating investors and I will just bring your cameras back up as well. Ladies and gentlemen, please do continue to submit your questions using the Q&A tab situated on the right hand corner of your screen, but just while the company just take a few moments to look at those questions submitted already. I'd like to remind you that the recording of this presentation, along with the copy of the slides and the published Q&A, can be accessed via your Investor Meet Company dashboard. Tom, if I may, if I could just hand back to you to manage the Q&A process, if I could ask you to read out the questions and then of course, let the guys give their responses and then I'll pick up from you at the end. :

Great. Thanks, Mark. Our first question comes from Chase White at Compass Point. Can you give us some more details on the Helios hosting agreement and the hosting fee you're paying Galaxy?

Sure. Thanks, Chase. So we have a two-year hosting agreement with Galaxy and we essentially pay them a pass-through power cost plus hosting fee. So essentially, as I mentioned, we share the economics of demand response and economic curtailment. And as I've mentioned is we've – for our Q1 so far, we've paid an all-in cost, including sales tax, power and hosting of around $0.05 a kilowatt hour. That's all I can say regarding that. Galaxy is a publicly traded company on their own and they have their own sort of restrictions. But what I can say is that we're absolutely aligned and we've been working with Galaxy very closely and we love how they're operating the space. They've been doing a great job and we're very much aligned with them.

Great. Next question comes from Alan Howard at Tennyson Securities. Does the cost of power implicit in Q1 reflect a long-term PPA under which Galaxy operates? Or is that also likely to change in the near-term?

Yes. So thanks, Alan. I think Galaxy on their call has talked a little bit about their power strategy on their earnings call. And so they've publicly said that they hedge their power costs at Helios, so under the hosting agreement and pass-through cost structure that we have, we basically benefit from what they do. So again, we're very much aligned on that front.

Great. The next question comes from Darren Aftahi at ROTH MKM. What are Argo's growth and development plans for 2023?

So I think – thanks, Darren. I think for us, we're really thinking number one about the foundation of the company and financial discipline. I think that's very critical for us and it's top of mind. We want to delever, we want to have a healthier balance sheet, and that's why we had brought in Jim and some more strategic hires on the finance team. And obviously we're also thinking about growth opportunities as well. We've had a lot of different discussions, like the fact, building and selling Helios was bittersweet. It was obviously bitter for the obvious reasons, but it was sweet because we had a ton of experience in terms of building a world-class immersion system. And we have mostly the same people who have built it within the company. It's part of the reason why I was so bullish on the company and why it took the position when the Board tapped me on the shoulder. And we have a lot of relationships within the space and we have a lot of different types of people and potential partners that are coming to us and talking to us about opportunities of stranded power and opportunities in terms of how we can potentially partner up with utilities and power generators that can give us low cost opportunities. So I think we're open-minded, we're thinking about growth, but we're also thinking about our foundation and cleaning up our balance sheet.

Thanks, Seif. The next question comes from Jon Petersen at Jefferies. Prior guidance on the ePIC machines was that the Blockscale chips would provide approximately 900 petahash of hashrate and be installed in the first quarter of 2023. What drove the lower hashrate and the delay in installs?

Yes. So thanks for the question, Jon. Yes, we ended up with everything that was going on last year. We ended up – there was certain expenses and related to the delivery of those machines that we had to sort of push back for cash flow reasons. And so I think that delayed us a little bit. We were aiming for 900 petahash. And I think we made the prudent decision that we would cut costs and it would be a little bit lower. So I think that's what sort of drove the delay. And then as for the efficiency of those machines, I think on average we're looking at 29 joules per terahash. We've tested them. They're purring. They're running very, very, very well. Our operations team has been testing them for the last few weeks. ePIC has done a phenomenal job with them so far. We like what we're seeing and so we're really excited about having those machines come online.

Great. Next question also on the subject of the ePIC machines from Kevin Dede at H.C. Wainwright. Argo is expecting delivery of 2,870 units of the ePIC BlockMiner machines. How does Intel discontinuing its production of the Bitcoin mining chips impact Argo's partnership with ePIC?

Thanks, Kevin. So short answer is there's really no impact to our relationship with ePIC. ePIC remains – they have a very smart and innovative team and they continue to do smart things and be innovative. And then as for Intel, I mean, we're still very much in touch with them and they're still providing us with support and service throughout the process.

Great. Our next question was submitted by [indiscernible]. What is the latest update on the Pluto investment?

So yes, we've been speaking with Ian and the team. I think they did a really good thing merging with Maze Theory and establishing their new entity emergent. We're really bullish on their business. I love what they're doing. I still need a little bit of time to get into all the details on what they're doing. But they're building some really, really fun and interesting games, obviously related to VR and XR and Web3 and so forth. So we're bullish on the investment. We're shareholders and we're very supportive of what they're doing. We really like what they're doing and so we're going to continue working with them and supporting them as one of their key shareholders. So yes, that's really liking what they're doing and we wish them an amazing year because they have a lot of stuff in the pipeline for this year.

Great. Our next question, Alan Howard at Tennyson Securities. When will management be able to focus on a long-term plan for increasing hashrate capacity? And what is the likely shape of that thing?

Thanks, Alan. Yes. So I think what we're really focused on is, is currently just perfecting our operations again and our foundation. And I think we've done a lot in the last two months. And so if we can keep the same pace at the same rate, I think our intention is to just get as many things as we can as quickly as possible. And so we are focused on our foundation, we're focused on financial discipline, but we're also planting the seeds and looking at future growth and future production. So I think we're striking a good balance as you can imagine sort of inheriting this business. There was a lot to do and there's a lot to work on. We're in a much better place than we were and I'm really, really happy about that, especially with the team that we have. And so once we have that and we start to delever and we start to get a healthier balance sheet. I think we'll be in a really good position to also continue to grow as well.

Great. The next question submitted from a viewer from [Marson. M]. Can you shed some more light on how you think about hedging?

Sure. Thanks, Marson. It's a good question. Again, we've come out of last year learning a lot of valuable lessons and I think hedging was really a key one. We were hedging last year as well. I think this year, when we're thinking about hedging, we're thinking about a portion of our production. Ultimately, you're trying to strike a balance between over-hedging because people are essentially buying into a Bitcoin mining company and they want the exposure to the underlying commodity. And also we're thinking about how do we do that so we minimize our downside risk in case Bitcoin prices start to fall or hashprice starts to fall, that we still have a good runway in terms of cash flow. And so it's a balancing act between giving investors the exposure that they're essentially buying and minimizing our downside risk and making sure that we have a good enough runway in terms of cash flow. So hopefully that gives you a little bit of insight. I think we've thought about how to strike that balance and that's how we're thinking about hedging.

Great. The next question submitted through the chat from Ilia. Hi, Seif. Great job today and welcome as Interim CEO. How does Argo plan to take advantage of the strength of Bitcoin during this ongoing banking crisis? The crypto bull thesis seems to be taking shape in front of our eyes. Does this instill confidence within the Argo team?

Hey, Ilia. Thanks for the question. I mean, listen, BTC going up is definitely helping and it's definitely good for our momentum. It's good for energy, it's good for the entire sector, it's good for the industry. What's been happening with the banks is also just creating an even better story for BTC and essentially what BTC were, what Bitcoin was fundamentally based on. So we're really happy about what's happening. It's looking more and more like a commodity that is – or an asset class for store value. So I think there's a lot of potential and we're really excited about the momentum. And yes, so appreciate the question, Ilia. Thank you. We are liking the thesis, we're liking where things are heading. It's definitely helping us internally. But again, I mean, if things should turn the other way for whatever reason, we are thinking about hedging and having a hedging strategy as well. So either way, but definitely having that momentum certainly helps us.

Great. The next question comes from Joe Vafi at Canaccord. You mentioned that you were being solicited for some partnership opportunities. Can you elaborate on the kind of opportunities that you'd be open to at this time?

Yes. Thanks, Joe. I think what's amazing about Bitcoin mining is, is it has this very unique ability to monetize energy from anywhere in the world. So as an industry and as a company, we're very agile so we can tap into stranded power that may not have the power lines pushing low downstream. And I think that in itself has some really profound implications for the energy. So when we're looking at opportunities and growth opportunities, we're looking at it from the lens of power innovation and the energy innovation. And I think we've gotten to a point where we're thinking that way and our peers are thinking that way. And if I had to bet, I would definitely bet on that's where the industry is heading as a whole. And those are my expectations and I think the team is aligned as well. So when we're thinking about partnerships, we're thinking about power generators, we're thinking about utility, we're thinking about folks who are naturally within the space and have access to low power costs.

Great. The next question is submitted by [Dermot. B]. Is there a possibility for an equity raise in the future?

Thanks, Dermot. Yes, so right now what – I mentioned that we have some non-core assets that we can tap into in terms of liquidity. I think we're doing a really good job and extracting more yield operationally. So when it comes to operational excellence and bringing that hashrate up, I think it's going to help us with cash flow. I think we're thinking about an equity raise, if it's accretive, if a project basically will give us a higher return than what the cost of our equity is. I think we'd be open to that. I think we would raise equity for very specific reasons. So I think it's important for us as a publicly traded miner to have access to different levers and certainly equity is one of them, but we're careful about doing that for projects that will add value to the company and be accretive to our bottom line.

Great. Thanks, Seif. This will be our last question from Alan Howard at Tennyson. Can you talk more about your HODL strategy or is there now a non-HODL policy in place?

Yes. Thanks, Alan. I think for now we are selling our Bitcoin to make sure that we're covering costs and to continue paying off our debt. I think obviously we have a target in mind and we're going to get to a point and we're hoping to get to a point where we're going to build that HODL strategy up. But for now, it's really dependent on our working capital needs and our growth prospects. And so that's the way we're thinking about our HODL strategy.

That's great. Tom, thank you very much indeed for managing the Q&A. Seif, Jim, thank you also for your engagement this afternoon. I know investor feedback will be particularly important to you Seif and Jim, and I'll shortly redirect those on the call to give you their feedback. But I wondered if I may, Seif, just before sending investors to give their feedback, if I could ask you just for a few closing comments.

Sure. Thanks, Mark. So thanks everyone for tuning in to discuss our 2022 results and our path forward. We're looking – we're all working very, very, very hard to execute on the plans that we've laid out. And we absolutely look forward to updating you along the way. So really excited to meet many of you, and thank you, again, for your patience. Just know that you have an amazing team that's working very, very hard to make sure that we execute on everything that we've spoken about today. So thank you, and have a great long weekend to our friends in the UK.

That's great. Seif, Jim, thank you very much indeed for updating investors this afternoon. Can I please ask investors on the call not to close this session as we'll now automatically redirect you for the opportunity to provide your feedback in order the company can better understand your views and expectations. This may take a few moments to complete, but I'm sure 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.