AMC Entertainment Mixes Popcorn, Metals in Mining Bet

AMC Entertainment Holdings Inc. said it’s buying 22% of a gold and silver mining company, marking an unorthodox move for the world’s largest movie-theater chain and a past darling of meme-stock investors.

The cinema giant is investing in Hycroft Mining Holding Corp. alongside Eric Sprott, a gold and silver investor, AMC said in a statement Tuesday. The parties’ equal stakes total $56 million, “which will help Hycroft considerably lengthen its financial runway,” AMC said.

The investment from AMC is a much-needed boost for Denver-based Hycroft Mining, which is trying to get the mine up and running on a sustainable, commercial basis. Hycroft’s 71,000-acre mine in northern Nevada has 15 million ounces of gold deposits and 600 million ounces of silver, AMC said, pointing to third-party studies.

AMC Chief Executive Officer Adam Aron, known for his brash pronouncements as his company’s shares ran up 1,183% last year in volatile trading, cited the box-office success of “Spider-Man: No Way Home” and “The Batman” as boosting AMC’s confidence in its recovery from pandemic-era struggles.

“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,” Aron said in the statement. “It, too, has rock-solid assets, but for a variety of reasons, it has been facing a severe and immediate liquidity issue. We are confident that our involvement can greatly help it to surmount its challenges — to its benefit, and to ours.”

Hycroft said in November it was halting initial mining operations due to rising costs for chemicals and other goods needed at the site, and it would change the way it processes the ore. Production in the third quarter, the most recent period reported on, was 14,831 ounces of gold and 91,437 ounces of silver.

Sprott, who is investing alongside AMC, is well-known in mining circles as the founder of Canadian money manager Sprott Inc. The firm is a long-time promoter of gold, offering investment products such as the $5.7 billion Sprott Physical Gold Trust.

In addition to buying its 22% stake, AMC said it has received an additional 23.4 million warrants in Hycroft at $1.07 a share.

John J. Edwards III reports for Bloomberg News.

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