AMC’s diversification is anything but golden

Hycroft Mining Holding

15/03/2022 16:35

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are his own.)
    By Jonathan Guilford
    NEW YORK, March 15 (Reuters Breakingviews) - The $7 bln
theater chain is taking a 22% stake in gold miner Hycroft. The
main thing the companies share is a relationship with investor
Mudrick. AMC could use a revamp and creative solutions might
work. But an idea so outlandish undermines other more plausible
possibilities.
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    CONTEXT NEWS
    - AMC Entertainment, the world’s largest operator of movie
theaters, said on March 15 that it had agreed to acquire 22% of
gold and silver miner Hycroft Mining for $28 million.
Billionaire Eric Sprott will invest an additional $28 million
alongside AMC. 
    - Formerly known as Allied Nevada, Hycroft Mining emerged
from bankruptcy in October 2015. It went public in June 2020
through a merger with special-purpose acquisition company
Mudrick Capital Acquisition. Shares have since declined, hitting
a low of around $0.28 in March. Distressed investment fund
Mudrick Capital is Hycroft’s largest shareholder, holding around
40% of the company. 
    - Mudrick previously agreed to acquire 8.5 million shares of
AMC in June 2021 for $230.5 million. The fund sold its stake
shortly thereafter, according to Bloomberg News. 

 (Editing by Lauren Silva Laughlin and Sharon Lam)
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