AMC Theatres (NYSE:AMC) is buying 22% of Hycroft Mining Holding Corporation (NASDAQ:HYMC) and its 71,000 acre Hycroft Mine in northern Nevada. Independent third-party studies confirm that the Hycroft Mine has some 15M ounces of gold deposits and some 600M ounces of silver deposit.
It will receive an additional 23.4 million warrants in Hycroft at $1.07 per share.
"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," AMC CEO Adam Aron said. "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."
With this investment, AMC has been granted the right to appoint a representative to the Hycroft Board of Directors.
Precious metals investor Eric Sprott is also investing $27.9M 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 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.
Hycroft intends to use the net proceeds from this private placement for general corporate purposes.
HYMC +43% premarket after falling 26% yesterday. AMD +2.7% premarket.