Company: ARBK
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001104659-25-049311
Chunk: 99

Company: Argo Blockchain Plc
Filing Date: 2025-05-15
Form: 20-F
Item: Item 5
Chunk 99
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 define Mining Profit Margin as the difference between cryptocurrency mining revenue and our direct costs (excluding depreciation of mining equipment), divided by cryptocurrency mining revenue, expressed as a percentage. Mining Profit Margin includes power credits and excludes changes in cryptocurrency. We use this measure, and believe it is meaningful to investors, because it is reflective of the return on marginal investment of mining Bitcoin. In addition, because we have generally recovered the original cost of our mining machines in advance of their thirty-six to forty-eight month accounting depreciation curve, once machines are installed and operating we internally monitor Mining Profit to obtain what we believe to be an accurate reflection of the profitability of our core mining operations. Mining Profit Margin is a supplemental measure of our performance that is not required by, or presented in accordance with, IFRS. This measure should not be considered as an alternative to gross margin determined in accordance with IFRS. The decrease in mining margin from 2022 was driven primarily by the 71% increase in average network difficulty in 2023. The decease in mining margin from 2023 to 2024 was driven by the halving that occurred in April 2024. The table below reconciles Mining Profit to gross profit, the most directly comparable IFRS measure:

               ​                   ​      ​       ​       ​       ​       ​      ​
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​                                  ​                    YEAR ENDED DECEMBER 31    
​                                  2024                   2023   2022             
(in $’000’s)                       ​                                         ​    
Gross profit                             1,457           3,101          11,355   ​
Gross margin                       3                %        6   %          19   %
Depreciation of mining equipment        14,171          18,656          20,469   ​
Non-mining revenue                           —               —           (119)   ​
Mining Profit                           15,628          21,757          31,705   ​
Mining Profit Margin               33               %       43   %          54   %
​
Average Direct Cost per Bitcoin Mined.
We define the Average Direct Cost per Bitcoin Mined as the total direct costs of mining at both our owned facilities and hosted facilities (excluding depreciation of mining equipment), divided by total Bitcoin Mined over a given period. For mining at owned facilities, direct mining expenses are inclusive of power costs. For mining at hosted facilities, direct mining expenses are inclusive of the all-in hosting fee that is