AMC Theaters surprisingly acquires a $27.9 million stake in a gold and silver mine

Cinema chain AMC has just acquired a sizable stake in a gold and silver mining company — a surprising move for a company trying to recover from the COVID-19 pandemic.

The company announced that it is buying a 22 percent interest in Hycroft Mining Holding Corporation and its 71,000-acre Nevada mine in exchange for $27.9 million in cash. Canadian billionaire Eric Sprott invested equally in the mining company.

AMC’s recent transaction has little to do with its core business, which operates cinemas that have struggled to draw viewers back during the pandemic. AMC CEO Adam Aron acknowledged that the deal may surprise investors in the company.

“To state the obvious, one would not normally believe that a cinema company’s core competency is gold or silver mining,” Aron said in a statement. “However, in recent years, AMC Entertainment has had tremendous success, demonstrating expertise in guiding a company with otherwise valuable assets through a period of severe liquidity problems, raising capital and strengthening balance sheets, and communicating with individual retail investors.

“It’s all of that experience and skill that we bring to the table to support the talented mining professionals at Hycroft,” he added.

Despite struggling in the pandemic-era, AMC has become a prominent “meme stock” and a favorite of retail investors in recent years. Shares of the company rose nearly 7% in trading after the deal was announced.

In its announcement, AMC said the mine “has approximately 15 million ounces of gold deposits and approximately 600 million ounces of silver deposits,” according to third-party studies.

Meanwhile, Aron said he canceled a scheduled appearance on CNBC due to legal concerns, as buying AMC resulted in huge trading volume.

“I’m excited about our investment in HYMC, but there was so much volume in this stock today that attorneys have insisted I stay off the air,” Aron tweeted.

The transaction is Aron’s latest attempt to kickstart AMC’s business in an alternative way. Last week, the AMC CEO announced that the cinema chain would start accepting Dogecoin for online payments – having started taking Bitcoin and Ethereum months earlier.