Just hit the gold. Really.
Cinema Theater announced the acquisition of a 22% stake
Highcraft Mining Holding
Its 71,000-acre gold and silver mine in northern Nevada.
(Tigger: AMC) will invest $ 27.9 million in Hycroft (
) In exchange for 23.4 million warrant units, each unit has a common share of Highcraft and a common stock purchase warrant. The unit price is $ 1.193 per share, while the price of each purchase warrant is approximately $ 1.07 per share and for a period of five years. AMC was also given the right to appoint a representative to Highcraft’s board.
Eric Sprott, one of the world’s leading gold and silver investors, will make an equivalent investment in Hycroft with AMC. AMC and Sprott jointly invest $ 56 million.
The investment was made by the holding company for Sprout, not by the investor-named alternative asset manager Sprat Inc., the company clarified. Sprott Inc. No comment on investment. Eric Spratt and his holding company were not immediately available for comment on the investment.
The High Craft Mine has about 15 million ounces of gold and 600 million ounces of silver, according to AMC.
“Frankly, one would not generally think that gold or silver mining is the key to a film theater company,” said AMC CEO Adam Aron.
In fact, the news came as a surprise to Wall Street researchers.
“It doesn’t seem like a terrible negative, but at the same time, it’s bizarre,” said Whitebush analyst Alicia Reese. “At least that’s unexpected.”
Even with box office sales coming back, “with top premieres likeBatman” Earns $ 128.5 million AMC is changing its model to differentiate its stake in North American ticket sales over the film’s opening weekend, after ticket sales suffered during the epidemic.
According to Aaron, the company is using the money raised from the meme investment frenzy to invest – about $ 1.8 billion.
“Our strategic investment announced today is the result of our discovery of a company in the unrelated sector that appeared to be AMC a year ago. It also has rock-solid assets, but for a variety of reasons, it faces a severe and immediate cash crunch, ”Aaron said.
Aaron hopes the AMC mining company will help guide its cash flow problems.
“If this company makes progress again, it will have good cash flow and then create more cash flow for them,” Reese said. In the big plan, the $ 28 million would be relatively cheap if the effort went south, he added.
In the past, meme traders have flocked to cryptocurrencies and other meme stocks, but generally avoided gold, writes Onda researcher Edward Moya. The action of the AMC may change that.
“Meme stock trading with Highcraft Mining seems to be trying to come back, a little hard-working gold miner, but it should suggest that many companies follow suit,” Moya wrote.
AMC’s other investments include the addition of new theaters, IMAX (IMAX) and Dolby Cinema premium screens, and NFT plans. The chain has moved to accept cryptocurrency in theaters to increase attendance, and also has a new attempt to enter retail popcorn sales.
“Even with the public’s interest in watching movies in our theaters, it is not enough to just bring back the old AMC,” he said.
Shares of AMC rose 6.9% to $ 14.49 on Tuesday, while Hycroft shares rose 9.4% to 24% from the previous day.
Write to Sabrina Escobar at [email protected]