#ARB $ARBKF
Been working out a forecast for BTC (equiv) mined, and subsequent mining revenue, margin, and therefore 2021 earnings based on what we know about @ArgoBlockchain plans and some assumptions which I lay out below.
[Long thread, sorry]
1/11

#ARB $ARBKF
I've done 2 versions:
- Scenario 1 (BTC bull run to $96K EOY)
- Scenario 2 ($30K bitcoin)

In Scenario 1 I reach total 2021 mining revenue of $130M, with 79% margin giving earnings of $102.5M. PE of 25 gives a SP of $6.78 (£4.95).
2/11

#ARB $ARBKF
In Scenario 2 I reach total 2021 mining revenue of $64.5M, with 56% margin giving earnings of $35.9M. PE of 25 gives a SP of $2.38 (£1.73).
S1 summary table in the image below - there's a lot more that feeds into it but would be impossible to clearly display.
3/11

#ARB $ARBKF
Scenario 2 summary table below.
4/11

#ARB $ARBKF
In either scenario, with a PE of 25 (the Alpha article used PE of 25-30) Argo is materially undervalued with the current SP of $0.99 - far below the $30K bitcoin SP of $2.38 and Bull run SP of $6.78. TBH I don't think $96K #BTC is the ceiling, look at forecasts!
5/11

#ARB $ARBKF
I'll list my assumptions below, I would appreciate any input or alternative views that would sway this forecast either way:
- #BTC mining forecasts = ARB % share of total #BTC hash power x an "efficiency" value determined by historic performance with improvements
6/11

#ARB $ARBKF
... based on the new machines being much more powerful than the current.
- Total #BTC hash power increasing 4% MoM (227M TH/s Dec 21)
- Mining cost per #BTC increasing 5% MoM (£16.7K Dec 21)
- 30 day avg #BTC price increase by 10% MoM ($96K Dec 21) (Bull)
7/11

#ARB $ARBKF
- or fixed $30K #BTC price on Scenario 2

- Argo increasing Petahash to 1075 for Feb to May, and to 1685 from June onwards (no phasing in)
- Equihash remains at 280ms
- GBP (£) to USD ($) remains at 1.37

- 280ms = 5% total ZEC mining capacity
8/11

#ARB $ARBKF
- 5% MoM ZEC price increase ($146 Dec 21)
- ZEC #BTC equivalent = ZEC mining revenue/ #BTC price

- No #BTC sold in January, and minimum sold for rest of the year to cover mining costs only
9/11

#ARB $ARBKF
I'm concerned that the mining margin is high in the bull run example, however, this is based on LY data - considering the start of Jan 70%+ and the more efficient equipment being installed. I have factored in increased difficulty due to growing total hash power.
10/11

#ARB $ARBKF
Would appreciate your thoughts, but I think both scenarios demonstrate just how undervalued @ArgoBlockchain is - without considering the bubble around the competition!
11/11