The cryptocurrency mining firm brought 1,000 Bitmain Z11 mining units into production on 2 May and expected these to contribute to “an improving gross margin” in its second quarter
PLC () shares surged on Wednesday after it forecast breakeven earnings (EBITDA) in the second half of the year and brought new units online to boost its cryptocurrency mining capacity.
The company, which focuses on the accumulation of cryptocurrency assets, said trading had continued in line with expectations since an update on 18 April, adding that it had brought 1,000 Bitmain Z11 mining units into production on 2 May and expected these to contribute to “an improving gross margin” in its second quarter.
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The company also predicted that it would have the equivalent of around 400 Bitcoins in cryptoassets by the end of the quarter, equivalent to around £1.81mln based on the Bitcoin price of £4,532 on 7 May, while mining costs were expected to rise to £300,000.
Going forward, Argo said it would be operating cash breakeven during May and continue a “phased expansion” of its mining infrastructure given what it said was a “material reduction” in mining hardware prices with the purchase of 1,000 S17 mining units for £1.7mln, which would come into production in early July.
Jonathan Bixby, the group’s executive chairman, added that the group was expected to “turn EBITDA break-even” in the second half and that the “correct strategy” was to continue investments in mining infrastructure with cryptoassets at their current prices.
In early deals, Argo’s shares were up 6.2% at 3.5p.