UPDATE: AMC to acquire 22% of gold and silver miner Hycroft in surprise move

AMC Entertainment Holdings Inc.
AMC,
-5.17%
said Tuesday it is buying 22% of Hycroft Mining Holding Corp.
HYMC,
-26.06%
and its 71,000 acre Hycroft Mine in Northern Nevada, that is understood to have 15 million ounces of gold deposits and some 600 million ounces of silver deposit. The company will also receive 23.4 million warrants priced at a discount of $1.07 a share. Hycroft shares closed Monday at $1.37. Eric Sprott, a metals investor, will make an investment equal to AMC, the company said in a statement. Combined, the investment comes to $56 million, giving Hycroft financial runway. “To state the obvious, one would not normally think that a movie theatre company’s core competency includes gold or silver mining,” AMC Chief Executive Adam Aron said in the statement. He cited AMC’s success in recent years in guiding through a period of severe liquidity challenge, strengthening its balance sheet and communicating with retail investors as experience it can bring to Hycroft, which has seen its share price hurt by its own liquidity challenges. The investment “is a truly terrific opportunity to potentially strengthen and enrich our company, and thereby create significant value for AMC Entertainment shareholders,” he said. AMC shares were up 0.4% premarket but have lost 50% of their value in the year to date as the “meme” stock trade has faded. Hycroft shares jumped 48% premarket and are down 79% in the year to date, while the S&P 500
SPX,
-0.74%
has gained 5%.