AMC is diversifying in a direction that no one saw coming. The movie theater chain announced Monday it had bought a 22% ownership stake in a Nevada-based precious metals mining company.
CEO Adam Aron, on Twitter, announced the investment in Hycroft Mining on Tuesday morning, noting that the company has 15 million ounces of gold resources and 600 million ounces of silver resources. The entertainment company spent $27.9 million in cash on the investment.
Aron said AMC plans to use “Our expertise to help them bolster their liquidity.”
“[This] is a truly terrific opportunity to potentially strengthen and enrich our company, and thereby create significant value for AMC Entertainment shareholders,” said Aron in a statement. “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.”
Hycroft is a penny stock and saw its share price soar Tuesday on the announcement, jumping more than 92% in pre-market trading.
AMC is working alongside metals investor Eric Sprott, who will buy an equal number of shares and warrants, in the deal.
The deal split the AMC Apes, the enthusiastic retail investors who drove up the company’s share prices over the past year. Some were wildly enthusiastic, while others (including investors who aren’t part of the Ape Army) were quite the opposite.
AMC shares spiked as high as $72 in the past year, but in a year-over-year basis, the company’s stock is 3.4% lower than it was on March 15, 2021.
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