AMC Entertainment Buys Stake in Hycroft Mining Holding Corporation
Posted on 03/15/2022
AMC Entertainment Holdings Inc. (AMC Theatres) (NYSE:AMC), the largest theatrical exhibitor in the United States, in Europe & the Middle East, and in the world, announced it is buying 22% of Hycroft Mining Holding Corporation (NASDAQ:HYMC) which holds the 71,000 acre Hycroft Mine in northern Nevada. Independent third-party studies confirm that the Hycroft Mine has some 15 million ounces of gold resources and some 600 million ounces of silver resources. In addition, AMC will receive an additional 23.4 million warrants in Hycroft at US$ 1.07 per share. Making an investment equal to AMC is Eric Sprott. Combined, AMC and Eric Sprott are investing US$ 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 and Eric Sprott will each invest US$ 27.9 million in cash in Hycroft in exchange for 23,408,240 units, with each unit consisting of one common share of Hycroft and one common share purchase warrant. The Units are priced at $1.193, which complies with the minimum bid price required by Nasdaq for an at-the-market purchase. Each purchase warrant is exercisable for one common share of Hycroft at a price of $1.068 per share and will carry a five-year term from the date of issuance. The closing of the Private Placement is expected to occur on or about March 15, 2022.
Commenting on the investment in Hycroft, Adam Aron, chairman and CEO of AMC Entertainment said in a press release, “The strength of SPIDER-MAN: NO WAY HOME and THE BATMAN, as well as 2022’s promising industry box office, heighten AMC Entertainment’s conviction that we are on a glide path to recovery. 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.”
Aron continued, “To state the obvious, one would not normally think that a movie theatre company’s core competency includes gold or silver mining. In recent years, however, AMC Entertainment has had enormous success and demonstrated expertise in guiding a company with otherwise valuable assets through a time of severe liquidity challenge, the raising of capital, and strengthening of balance sheets, as well as communicating with individual retail investors. It is all that experience and skill that we bring to the table to assist the talented mining professionals at Hycroft.”
