AMC Entertainment Holdings Inc's (NYSE:AMC) investment in gold and silver miner Hycroft Mining Holding Corp (NASDAQ:HYMC) has already been a huge success, according to AMC CEO Adam Aron. But how did the movie theater chain come to partner with a precious metals company?
"Adam and I have a mutual colleague who introduced us ... he had a similar liquidity issue, you know, when COVID hit," Hycroft Mining CEO Diane Garrett said Thursday on "Benzinga Live."
The company's main asset, its mine, still existed, but Hycroft was met with capital challenges during the pandemic, similar to AMC, she said.
Related Link: Hycroft Mining Was 'Exactly Like AMC A Year Ago': AMC CEO Explains Miner Acquisition
"So we sort of connected through several conversations and the rest is history," Garrett said.
Following AMC's investment, the company's balance sheet is much stronger and the liquidity problem is off the table.
"Now we're able to really turn our attention to what we started last year, which is really unlocking the value of this world class asset," Garrett said.
Unlocking Value: The Hycroft Mining CEO told Benzinga she is confident in the company's process, as it has resulted in over 2 million ounces of gold since the 1980s.
"We know the process to recover the gold and silver from Hycroft. It is proven, reliable, well established. It's been used for over 40 years in our industry and that's the process we are employing at Hycroft for the larger scale," Garrett said.
Hycroft is focusing on completing feasibility studies on its scaling process, which is expected to be completed this year, she said.
What's Next: In early 2023, the company will shift its focus to detailed design work in relation to scaling operations, followed by construction. Project construction is expected to last between 18 and 24 months, Garrett said.
When asked about potential offerings, the Hycroft Mining CEO told Benzinga: "you never say never in our industry. We've got a very long project with a lot of work to do, but for right now, we've got sufficient cash to get us plenty of runway down the road and to be able to do the work we need to do, which is exploration and finalizing our technical studies for the larger commercial scale operation."
The company will likely have to raise money when it begins construction of its larger-scale operations, she said.
"We're several years out still from commercial production, but you know, keep in mind we're also conducting a big exploration program and one of the best value drivers that you see in our industry is for identification and discovery of new material," Garrett said.
See the full interview here:
HYMC Price Action: Hycroft Mining has traded between 28 cents and $4.36 over a 52-week period.
The stock was down 5.23% at $2.26 Thursday afternoon, according to Benzinga Pro.
Photo: courtesy of Hycroft Mining.
