With Lots of Gold Sold, Hycroft Mining Could Become a High Flyer

  • Hycroft Mining (HYMC) is getting a lot of attention on Wall Street as a large movie theater chain makes a big investment.
  • Moreover, a deep dive into the company’s financials reveals that Hycroft has plenty of cash on hand, and is selling large quantities of gold.
  • Investors should add Hycroft to their gold miner watch list if they’re seeking exposure to the precious metals market.
An image of multiple gold bars

Source: Shutterstock

Hycroft Mining (NASDAQ:HYMC) is a minerals development company that operates the Hycroft Mine in the mining region of northern Nevada. HYMC stock is quite affordable and has the potential for powerful upside, especially if the gold price increases.

Gold tested the crucial $2,000 level not long ago. As a result, many investors are undoubtedly getting interested in shares of mining business. Yet, it’s not only the retail crowd that’s getting involved. In fact, a famous entertainment-related company recently took a surprising stake in Hycroft Mining.

Still, the idea isn’t just to buy shares of Hycroft because a big company made an investment. You’ll definitely want to closely examine Hycroft Mining’s financial stats. After doing that, you may decide for yourself that this intriguing mining business belongs on your watch list in 2022.

Ticker Company  Current Price
HYMC Hycroft Mining $1.98

What’s Happening With HYMC Stock?

The first thing to know is that HYMC stock is on a confirmed uptrend. Folks who bought the shares tapped into a veritable gold mine as the stock zoomed from 30 cents in early March, to the $2 level in recent weeks.

That price move surely hurt the short sellers. That’s what can happen, though, if you bet against gold mining stocks during period of high inflation. It’s undeniable that inflation is bad for most consumers. Yet, it can provide a powerful tailwind to gold as the yellow metal is often viewed as an anti-dollar-inflation asset.

Even beyond the inflation factor, what could propel HYMC stock back to its 52-week high of $4.37? Perhaps a headline-grabbing investment from a well-known movie theater business could do the trick.

In case you missed it, AMC Entertainment (NYSE:AMC) is planning to invest $56 million in Hycroft Mining. This would equate to a roughly 22% equity stake in Hycroft.

It may have seemed like a shocking thing for AMC Entertainment to do. On the other hand, a deeper dive into the facts of the matter will reveal the rationale behind AMC’s investment in Hycroft Mining.

A Bold Diversification Move

Puzzled onlookers didn’t have to wait long to discover why AMC Entertainment bought such a large stake in Hycroft.

AMC Entertainment CEO Adam Aron’s tweet spilled the beans. Evidently, Aron’s company is “playing on offense again with a bold diversification move.” In the tweet, Aron proudly cited Hycroft’s 15 million ounces of gold resources and 600 million ounces of silver resources. What else is there to know about Hycroft mining, then?

For one thing, Hycroft Mining recently completed an at-the-market equity offering program. With this program, Hycroft sold 89,553,584 for total proceeds of $138.6 million.

Next, prospective investors should know that Hycroft Mining recently filed its Form 10-K. Among the highlights was the fact that Hycroft ended 2021 with $12.3 million of cash on hand — not too shabby.

Not only that, but the company sold a whopping 56,045 ounces of gold and 397,546 ounces of silver in 2021. Plus, Hycroft’s gold production for that year totaled 57,668 ounces, a figure that “exceeded the high end of the guidance range as the process team continued to improve equipment, process control and costs.”

How to Approach HYMC Stock Today

Now, we can begin to discern why AMC Entertainment would want to own a piece of Hycroft Mining. Should you take our own stake in this mining business as well?

That’s certainly your decision to make, but the data looks highly encouraging. Hycroft is in a good capital position, and the company is mining and selling a whole lot of precious metals.

So, maybe AMC is making a smart move by investing in Hycroft Mining. As an inflation hedge or as a growth investment, feel free to consider shares of HYMC stock for your gold-focused portfolio.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

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Article printed from InvestorPlace Media, https://investorplace.com/2022/04/with-lots-of-gold-sold-hymc-stock-could-become-a-high-flyer/.

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