Argo Seeks $27M Stock Deal to Acquire GEM Mining

Argo Blockchain has proposed acquiring GEM Mining for $27 million and raising $10 million from GEM’s institutional investors as part of its latest effort to resume growth in its Bitcoin mining operations.
In a release on Wednesday, Argo announced it had signed non-binding term sheets outlining two potential agreements, subject to further negotiation and approval. The proposal comes as Argo continues to explore growth strategies, which are currently constrained by its reliance on older-generation equipment and a lack of substantial proprietary infrastructure capacity.
The first agreement involves acquiring substantially all of GEM Mining LLC’s assets and those of its affiliates for up to $21.7 million, which would be completed on a debt-free basis and satisfied by the issuance of new ordinary shares in Argo to GEM shareholders.
The second agreement relates to a proposed investment from GEM’s institutional investors, including a $7 million secured convertible note and a $3 million equity investment, totaling $10 million in financing.
The financing consists of a secured convertible loan with an 8% annual interest rate. The loan can be converted into ordinary shares at a 25% discount to the share price, with a one-year maturity. The deal also includes an equity investment at a similar discount to the share price.
According to the release, GEM currently owns 2.4 EH/s of ASIC miners and offers hosting arrangements that Argo could leverage to expand with improved efficiencies.
The transaction is subject to shareholder approval and the publication of a prospectus. Additionally, GEM will be entitled to appoint two directors to Argo’s board upon completion of the deal.
While the term sheets outline potential terms, no final agreements have been reached, and discussions may still fail to materialize into a formal transaction. Argo has granted GEM a 30-day exclusivity period to finalize negotiations, with extensions possible depending on progress. This new proposal follows the failure of Argo’s previous effort to issue $40 million in convertible bonds.
Earlier this week, Argo announced the appointment of Justine Nolad as its new CEO as the company works to secure enough power capacity to host its idle miner inventory.