Hycroft Mining Cash Infusion Not Near Enough To Re-Enter Production, Says BMO

This week, Hycroft Mining (NASDAQ: HYMC), a busted SPAC mining company taken public by Mudrick Capital, announced that it would be receiving a $56 million cash injection by the likes of Eric Sprott and AMC Entertainment (NYSE: AMC). (yes, the movie theatre company). Both Sprott and AMC will invest $27.9 million equally, in exchange for 23,408,240 units. With the investment, AMC will be allowed to appoint one director to the board of directors.

On top of this news, Hycroft said they have reached an agreement on pushing their debt, which is owned by Sprott, back to a single bullet payment in May of 2027.

This news comes after Mudrick Capital helped bail out AMC during the lows of Covid. Mudrick invested $230.5 million for 8.5 million shares at a price of $27.12.

Shortly after this news release, Hycroft was quick in filing a prospectus supplement, for a new at-the-market financing worth up to $500 million. This is roughly 5 times larger than their market capitalization.

In BMO Capital Markets’ note on the news, they reiterate their market perform rating while having no price target on the company. Naturally, BMO says that this $56 million investment is positive for the company, writing “the additional capital has given the company financial flexibility, and several debt instruments have been restructured as a result.”

BMO adds that this equity infusion will help Hycroft continue its studies, which could lead to Hycroft finding a more optimal production re-start. Though that’s as far as this $56 million investment will go, says BMO. They believe that the company will need a significant amount of additional capital to re-enter full-scale production.

Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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