AMC Theaters (AMC) is getting into the gold mining business. The theater chain announced it bought a stake in Hycroft Mining Holdings (HYMC), a precious metals company.
AMC's CEO Adam Aron wrote on Twitter, "AMC is playing on offense again with a bold diversification move. We just purchased 22% of Hycroft Mining (NASDAQ: HYMC) of northern Nevada."
AMC is playing on offense again with a bold diversification move. We just purchased 22% of Hycroft Mining (NASDAQ: HYMC) of northern Nevada. It has 15 million ounces of gold resources! And 600 million ounces of silver resources! Our expertise to help them bolster their liquidity. pic.twitter.com/LihqZguwnd
— Adam Aron (@CEOAdam) March 15, 2022
Canadian billionaire Eric Sprott, a gold and silver investor, is also making an investment in Hycroft equal to AMC.
"Combined, AMC and Mr. Sprott are investing $56 million, which will help Hycroft considerably lengthen its financial runway. With its investment, AMC has been granted the right to appoint a representative to the Hycroft Board of Directors," AMC wrote in a press release.
"In addition, AMC will receive an additional 23.4 million warrants in Hycroft at $1.07 per share," said the statement.
The move surprised investors given the different businesses. Yet AMC's Adam Aron sees similarities between his company and Hycroft Mining.
"Our strategic investment being announced today is the result of our having identified a company in an unrelated industry that appears to be just like AMC of a year ago. It, too, has rock-solid assets, but for a variety of reasons, it has been facing a severe and immediate liquidity issue. Its share price has been knocked low as a result. We are confident that our involvement can greatly help it to surmount its challenges — to its benefit, and to ours," said Aron in a press release.
AMC became a retail trade favorite last year during the 'meme' stock phenomenon. The theater chain's stock is down 48% year-to-date and down 80% from its 52-week intraday high of $72.
Commodities like precious metals have been on the rise lately amid red hot inflation and the Ukraine-Russia war. Investors have been buying up gold, sending it above $2,000 an ounce last week, its highest level since 2020.
On Tuesday, Gold (GC=F) futures were trading lower at around $1,930 per ounce. AMC stock was up more than 3.5% in pre-market.
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