Gold / Industry / Silver

Movie Theater Chain AMC Invests In Gold, Silver Miner


On March 15, AMC, the world’s largest movie theater chain—which had its coffers swell when it became a meme stock in 2021—stunned investors by purchasing a 22% stake in Hycroft Mining Holding Corp., a gold and silver mining company, for $27. 9 million in cash.

“To state the obvious, one would not normally think that a movie theater company’s core competency includes gold or silver mining,” said Adam Aron, AMC’s chairman and CEO, in a statement. “[We] have been thinking creatively and boldly about our future.

“[W]e are passionately committed to orchestrating a full recovery from COVID impacts on the cinema industry,” he continued. “But even with the enthusiasm that the public has for moviegoing at our theaters, it is not enough for us to merely bring back the AMC of old.”

AMC’s press release said that the “71,000-acre Hycroft Mine in northern Nevada has some 15 million ounces of gold resources and some 600 million ounces of silver resources. It is one of North America’s largest development sites.”

Famed gold and silver investor Eric Sprott will invest an amount equal to AMC’s. The deal gives AMC the right to appoint a director to Hycroft’s board.

But what do the businesses have in common? Aron noted that, like AMC last year, Hycroft is a company that is facing serious financial challenges; in November, it shut down its mine and laid off all 109 workers.

“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,” he said in the AMC statement.

Not all analysts shared his enthusiasm.

Michael Pachter of Wedbush Securities told The Verge the move was “embarrassingly stupid. By that, I don’t mean investing in gold mining is embarrassingly stupid. I mean that it’s inappropriate for a movie theater company to step so far out of their core business.

“They have debt,” he added. “Pay down some debt.”

(Photo courtesy of AMC)

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By: Rob Bates

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