AMC buys $27 million stake in silver mine in Nevada

(Clay Banks/Unsplash)

Everyone’s favourite meme stock and world’s largest cinema chain, AMC (ticker: AMC), announced on Monday that it is buying a 22% stake in Nevada-based gold and silver mining company Hycroft Mining Holding Corp (ticker: HYMC).

The company’s $27.9 million cash investment in Hycroft is the company’s latest move to increase cashflow after it was hit hard during the pandemic. The company has had its fair share of media attention over the past 12 months, catapulting to fame with its meme stock status alongside GameStop (ticker: GME). After closely avoiding bankruptcy, the company has since made plans beyond the horizon of merely movie tickets.

“AMC is playing on offense again with a bold diversification move. We just purchased 22% of Hycroft Mining 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,” AMC’s CEO Adam Aron wrote on Twitter.

AMC’s investment not only includes cash but also the acquisition of 71,000-acre Hycroft Mine in northern Nevada, which houses 15 million ounces of gold and 600 million ounces of silver. Shares of the cinema giant skyrocketed 6.78% to $14.48 on Monday, while Hycroft ended the day up 9.35% to $1.52.

It seems that mining investors were taking notes, as by Tuesday AMC announced that Eric Sprott, a leading metals investor, will also be set to invest $27.9 million in cash in Hycroft in exchange for more than 23.4 million units in a deal that will make AMC and Sprott the company’s second-largest stockholders.

“Our investment to buy 22% of Hycroft Mining Holding Corp., and to receive an additional 23.4 million warrants in Hycroft at $1.07 per share is a truly terrific opportunity to potentially strengthen and enrich our company, and thereby create significant value for AMC Entertainment shareholders,” Aron said in a statement. “It is appealing that the investment requires the commitment of only a nominal amount of AMC cash.”

AMC’s massive stake in Hycroft should come as no surprise to those with their ear to the ground on precious metals investing. Amidst fears of inflation remaining strong, and as the Ukraine-Russia war continues, investors are bullish on silver as not only a stellar long-term investment but also as a short-term hedge against inflation.

Investors looking to capitalize on the booming industry need not only look to Hycroft for lucrative investment opportunities, though. Apollo Silver (ticker: APGO.V) is another company that is set for expansive growth. With the company’s projects located in two incredibly plentiful silver mining districts, investors have been piling on the bandwagon to buy up shares. Apollo’s Calico Project hosts both the Waterloo and Langtry properties in the historic Calico silver mining district located in San Bernardino County, California, which has produced a reported* 15 to 20 million ounces.

Apollo’s district-scale land packages consist of 2,950 acres at the Calico Project and another +2,000 acres in the Arizona Silver District. In addition to the already identified mineralization, there is significant exploration upside in both Calico and Arizona. San Bernardino County hosts more active mining operations, both metallic and non-metallic, than any other county within the United States.

As big players like AMC buy up shares of Hycroft, it’s evident that silver is a play that many investors are confident in right now. Investors looking to get in on the silver boom would be wise to look towards growth stocks like Apollo to buy the boom while they can.

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