Theater operator AMC, fund manager Eric Sprott to invest $56 million in Hycroft Mining

(Reuters) - AMC Entertainment said on Tuesday it would invest $56 million in gold and silver producer Hycroft Mining Holding Corp along with Canadian fund manager Eric Sprott, a move the theater

March 15, 2022

(Reuters) – AMC Entertainment said on Tuesday it would invest $56 million in gold and silver producer Hycroft Mining Holding Corp along with Canadian fund manager Eric Sprott, a move the theater operator’s CEO said would help the company diversify.

Shares of U.S.-based Hycroft, which owns the 71,000 acre Hycroft Mine in northern Nevada, jumped nearly 89% in premarket trading.

“AMC is playing on offense again with a bold diversification move,” AMC chairman and chief executive officer Adam Aron said in a tweet on Tuesday, noting that AMC would help Hycroft bolster its liquidity.

The company did not immediately respond to Reuters request for comment regarding the reasons for its investment in Hycroft

Sprott and AMC are investing $56 million in Hycroft and will become the company’s second-largest stockholders, each holding nearly 21.8% of the outstanding common shares of Hycroft after the closing of the deal.

Investment firm Mudrick Capital Management is currently the largest shareholder, holding a 40.38% stake, according to Refinitiv data.

AMC, which was at the heart of the 2021 meme stocks saga, has also increased investments in NFT programs and accepted cryptocurrency, along with its initiative to enter the industry of retail popcorn sales. Its shares have gained nearly 22% in last 12 months.

AMC said the strength from the release of blockbusters such as “Spider-Man: No Way Home” and “The Batman” has helped the company to recover from the pandemic-driven fall.

AMC will also receive an additional 23.4 million warrants in Hycroft at $1.07 per share and has been granted the right to appoint a representative to the Hycroft’s board.

(Reporting by Tiyashi Datta in Bengaluru; Editing by Amy Caren Daniel)